20231107AVU to Staff 8 Supplemental.pdf

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 11/7/2023
CASE NO: AVU-E-23-05 WITNESS: N/A
REQUESTER: IPUC RESPONDER: James Gall
TYPE: Production Request DEPARTMENT: Power Supply
REQUEST NO.: Staff-008 Supplemental TELEPHONE: [phone]

REQUEST:

In the 2023 natural gas IRP filing, Case No. AVU-G-23-05, the Company included a national
carbon tax on the cost of natural gas beginning in 2030. The 2023 electric IRP at 8-15 describes a
similar tax but with a 33% chance of being implemented.
a. Please explain how the national carbon tax is modeled in the 2023 electric IRP and its impact on
the Preferred Resource Strategy;
b. Please explain the effect that the carbon tax has on each of the avoided cost value streams
presented in “Staff-PR-007 Attachment A” provided by the Company in response to Production
Request No. 7; and
c. Please provide an updated version of “Staff-PR-007 Attachment A” that has the impact of the
described national carbon tax removed from the avoided costs.

RESPONSE:

a. In this request Avista is assuming the “natural gas IRP” was meant to be “electric IRP”.
The national carbon tax is a cost-adder beginning in 2030 and is applied to load-serving
resource options in Idaho according to each option’s respective carbon intensity. The
impact on the PRS for Idaho, includes a higher avoided cost and likely resulting in slightly
more cost-effective demand side management under the UTC. This has not been analyzed
to confirm whether removal of the national carbon adder changes the Achievable
Economic potential, but it would likely shift results slightly.
b. The national carbon tax from Staff-PR-007 Attachment goes directly into each dekatherm
of the avoided cost calculation starting in 2030 and adds to the marginal cost in serving
demand.
c. Avista conducted a study in the 2023 Electric IRP removing the national carbon tax from
the Aurora model. The results of this study concluded with a lower electric wholesale
market forecast. Avista used this price forecast to populate its PRiSM model to estimate the
capacity resources required to service system load without any Washington Clean Energy
Requirements. The prices shown in the table below are a result of this study with
calculations included in Staff_PR_008 Supplemental Attachment A.
RECEIVED
Tuesday, November 7, 2023 3:54:55 PM
IDAHO PUBLIC
UTILITIES COMMISSION
$/MWh $/MWh $/MWh $/kW-yr $/kW-yr $/kW-yr $/kW-yr
Year Energy Losses Total Capacity T&D Losses Total
2023 51.44 2.70 54.14 - 25.4 1.3 26.7
2024 43.95 2.46 46.41 - 25.4 1.4 26.8
2025 36.85 2.05 38.90 - 25.4 1.4 26.8
2026 34.26 1.90 36.16 - 25.4 1.4 26.8
2027 31.28 1.74 33.02 - 25.4 1.4 26.8
2028 30.32 1.70 32.03 - 25.4 1.4 26.8
2029 30.76 1.71 32.47 - 25.4 1.4 26.8
2030 33.78 1.88 35.67 - 25.4 1.4 26.8
2031 32.99 1.84 34.84 116.4 25.4 7.9 149.7
2032 32.05 1.81 33.86 118.7 25.4 8.1 152.2
2033 31.94 1.79 33.73 121.1 25.4 8.2 154.7
2034 31.20 1.75 32.95 123.5 25.4 8.3 157.2
2035 31.16 1.75 32.91 126.0 25.4 8.5 159.8
2036 32.03 1.82 33.85 128.5 25.4 8.7 162.6
2037 32.47 1.82 34.29 131.1 25.4 8.8 165.2
2038 31.89 1.79 33.68 133.7 25.4 8.9 168.0
2039 32.26 1.82 34.08 136.4 25.4 9.1 170.9
2040 34.20 1.95 36.15 139.1 25.4 9.4 173.9
2041 34.71 1.96 36.67 141.9 25.4 9.4 176.7
2042 35.39 2.00 37.39 144.7 25.4 9.6 179.7
2043 36.51 2.07 38.58 147.6 25.4 9.8 182.8
2044 40.56 2.33 42.88 150.6 25.4 10.1 186.0
2045 41.08 2.34 43.41 153.6 25.4 10.2 189.1