20230921AVU to Staff 1-4.pdf

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 9/21/2023
CASE NO: AVU-E-23-12 WITNESS: N/A
REQUESTER: Staff RESPONDER: James Gall
TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-001 TELEPHONE: [phone]

REQUEST:

In the 2023 Electric Integrated Resource Plan (“IRP), page 4-2, it states, “Avista is using the
WRAP’s methodology for resource capacity accounting, also known as Qualifying Capacity
Credit …(“QCC”). Please respond to the following:

a. Please confirm that the proposed first deficit date of January 1, 2034, is based on QCC
determined under the WRAP methodology;

b. Please provide the load and resource balance (“L&R”) and when the first deficit date would be
under the Company’s traditional method, which was used in the Company’s previous capacity
deficiency cases;

c. Please explain any major differences between the two methodologies;

d. Please explain what causes a difference between the first deficit dates under the two
methodologies;

e. Please explain why the Company transitioned to the new method; and

f. Please explain how Company validated and verified the results of the new method.

RESPONSE:

a. At this time, the first capacity deficit begins January 1, 2034 using current QCC values for
Avista’s resources.

b. Avista’s first capacity deficit period does not change using the traditional methodology. A
monthly comparison is provided in Staff_PR_001 Attachment A.

c. Avista made the following changes to the L&R to simulate the previous L&R methodology:
• Reinstate the 16% winter and 7% summer PRM
• Add operating reserves for the entire control area load
• Remove QCC values for generators and use Avista’s prior methodology (major change
is removal of forced outage rates):
o Thermal units: Full operational capacity for the seasonal temperature
o Storage hydro: Full capacity with derate for the Mid-C Hydro from regional
studies
o Wind: 5% capacity credit, 35% for Montana Wind; Solar: 0% to 54% capacity
credit
RECEIVED
Thursday, September 21, 2023 2:10:04 PM
IDAHO PUBLIC
UTILITIES COMMISSION
o Run of River: Average 80-year hydro

d. There is no change to the first deficit year.

e. Prior to the WRAP, every utility conducted its capacity planning differently. The WRAP
methodology was developed using best industry practices, clearly defining methodologies for
both resources and loads. Avista does differ from using the WRAP’s forward showing
program methodology in three areas:

1) load forecast, the WRAP uses a historical view of peak load,1 whereas Avista uses its
forecast for planning;
2) not using the WRAP’s planning margin (see response to PR #2a) on why; and,
3) WRAP does not forecast QCC values for the 20-year IRP forecast, Avista estimates changes
(i.e., reductions) in these values in IRP planning for new resources options- this change is not
applicable to this filing.

f. Avista conducted comparative analysis of the WRAP L&R methodology to its previous
methodology to ensure the resulting planning margin used in the new WRAP methodology did
not result in a material change to the capacity position. Therefore, at the time of the change,
Avista used its own calculated PRM to not materially change the position using the new
methodology. Avista is not using the WRAP PRM for planning, and will not, until the WRAP
program is binding, if it finds the program to adequately supply capacity for Avista’s
customers.

Further, Avista shared the methodology with the IRP Technical Advisory Committee in
December 2021 and later was approved to use WRAP methodology for planning purposes in
Washington.

1 WRAP’s forward showing is typically only 18 to 24 months out.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 9/21/2023 CASE NO: AVU-E-23-12 WITNESS: N/A REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-002 TELEPHONE: [phone] REQUEST:
Response to Staff Production Request No. 2 (b) in Case No. AVU-E-23-05 states that Avista plans to continue to use the WRAP planning methodology but will not lower its current Planning Reserve Margin (“PRM”) to the WRAP level until it’s a binding program that can be counted upon for planning purposes. Please respond to the following:

a. Please explain why Avista will not lower the PRM to the WRAP level until WRAP becomes a binding program; and b. Please explain why Avista adopted the WRAP QCC before the WRAP becomes a binding
program.
RESPONSE: a. As discussed in presentations during the TAC meetings (TAC 1 on December 8, 2021) and in
chapter 4 of the 2023 IRP, the WRAP will decrease Avista’s PRM requirements by providing a reliable market to acquire sharing reserve requirements across WRAP participants who will all benefit from regional resource diversity and geographical load differences. Avista is already participating in the non-binding initial WRAP program and has determined that it would be
prudent to not lower the PRM until the program becomes binding and enforceable. The WRAP
program is expected to become binding in the summer of 2025 subject to participants acceptance. b. Avista plans for 20+ years and uses credible resource assumptions for the future performance
of resources. The WRAP’s QCC methodology uses a regional approach to identify the capacity benefits of each resource through an Effective Load Carrying Capability (ELCC) analysis. Regardless of if the WRAP succeeds or not, the QCCs identify the system benefit to the greater system. The value of the PRM in Avista’s opinion is the greatest concern to Avista with regards to transitioning to the WRAP. Whereas an uncoordinated system or a shorter
regional system suggest utilities plan for higher PRMs due to less market reliance.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 9/21/2023 CASE NO: AVU-E-23-12 WITNESS: N/A REQUESTER: Staff RESPONDER: John Lyons TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-003 TELEPHONE: [phone] REQUEST:
The application states that new resource additions include the extension of the Lancaster Power Purchase Agreement (“PPA”) through 2041, long-term capacity and energy from Chelan PUD, Columbia Basin Hydro, and a 30-year wind PPA. Please respond to the following;
a. Please confirm whether all these contracts have been signed;
b. Please provide the first operational dates, nameplate capacity, and describe the contract terms of each project; and
c. What is the name and location of the 30-year wind project? RESPONSE: a. Yes, the Lancaster PPA was signed on March 31, 2023, the additional Chelan PUD contract
was signed on May 24, 2022, the Columbia Basin Hydro PPA on December 2, 2022, and the Clearwater Wind 30-year PPA was signed on January 20, 2023. b. The current Lancaster PPA ends on October 31, 2026. The new Lancaster PPA extends the
PPA from October 31, 2026, through December 31, 2041. The plant provides 283.0 MW of
winter capacity, 231.0 MW of summer capacity and 218.0 aMW of annual energy. The Chelan PUD contract includes three parts:
1. 5.0% share of their Rocky/Reach and Rock Island hydroelectric projects from January 1, 2024, through December 31, 2033, for 87.5 MW of capability and 52.4 aMW of energy; 2. 5.0% share from January 1, 2026, through December 2030 for 87.5 MW of capability and 52.4 aMW of energy; and, 3. 10.0% share from January 1, 2031, through December 31, 2045, for 174.9 MW of
capability and 104.8 aMW of energy. The Columbia Basin Hydro PPA is for a combined 146.3 MW of capacity and 61.8 aMW of energy. The following table (Table 3.7, p. 3-10 of 2023 IRP) shows the size and timing of when each plant starts serving Avista.

Project Name Start Capacity Energy
Russell D. Smith 1/1/2023 6.1 1.5
EBC 4.6 5/1/2023 2.2 0.9
Summer Falls 1/1/2025 94 41.4
PEC 66 3/1/2025 2.4 0.5
Quincy Chute 10/1/2025 9.4 3.6
Main Canal 1/1/2027 26 11.6
PEC Headworks 9/1/2030 6.2 2.3

The 30-year Clearwater Wind PPA is for approximately 100 MW of wind beginning no later than January 1, 2026.
c. The Clearwater Wind Project being developed by NextEra Energy is located about 33 miles northwest of Miles City Montana and it will be connected to the Avista system through our present transmission rights through the Colstrip project.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 9/21/2023
CASE NO: AVU-E-23-12 WITNESS: N/A
REQUESTER: Staff RESPONDER: John Lyons
TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-004 TELEPHONE: [phone]

REQUEST:

Avista is transferring ownership of Colstrip to NorthWestern Energy at the end of 2025. Please
provide the status of the contract showing the ownership transfer.

RESPONSE:

On January 16, 2023, Avista entered into an agreement with NorthWestern under which the
Company would abandon its 15 percent ownership in Colstrip Units 3 and 4, and NorthWestern
would acquire ownership. There is no monetary exchange included in the transaction. The
transaction is scheduled to close on December 31, 2025 or such other date as the parties mutually
agree upon.