20231018AVU to Staff 5-7.pdf

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 10/18/2023 CASE NO: AVU-E-23-12 WITNESS: James Gall REQUESTER: Staff RESPONDER: John Lyons TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-005 TELEPHONE: [phone] REQUEST: Response to Staff Production Request No. 1 states "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." Company Response to Staffs Production Request No. 1 (emphasis added). The Company continued, therefore, at the time of the change, Avista used its own calculated PRM to not
materially change the position using the new methodology." Company Response to Staffs
Production Request No. 1 (emphasis added). In addition, the Company provided capacity positions determined under the two different methods in the response. Staff calculated the difference between the two capacity positions determined under the two methods and discovered that the capacity positions under the traditional method are greater than those under the WRAP method by
the following amounts.
Please respond to the following:
a. Please explain why the capacity positions determined under the two methods are
significantly different;
RECEIVED
2023 OCTOBER 18, 2023 3:31PM
IDAHO PUBLIC
UTILITIES COMMISSION
b. Please explain why capacity positions determined under the traditional method are consistently higher than capacity positions determined under the WRAP method; and
c. Given the significant difference, please justify the Planning Reserve Margins ("PRMs")
used in this filing (22% for winter and 13% for summer). RESPONSE:
a. First, the L&R used to ensure the capacity position did not change, as discussed in the question, included a different load forecast and a different set of resources, as this was conducted prior to the Avista RFP; therefore, Avista does expect changes in the net position to occur due to changes in resources and the load forecast. Avista disagrees that the two methods produce significant differences, for example in the first short fall year
(2034) which does not change, it is only different by 43 MW, this difference is 2% of load. When looking at difference in assumptions for this year, the major change is the previous methodology does not have forced outages included and has 44 MW of higher generation capability than the WRAP method.

b. The largest factor in the traditional method having higher capacity positions is due to the Mid-Columbia contracts having a higher capacity credit in the traditional method than under the WRAP.
c. Given the change in net position relative to Avista’s load is approximately 2% and the
current WRAP methodology appears to be resulting in the same position shortfall year as the previous method. The current PRM is sufficient. The question implies the PRM should be lowered, however, Avista will lower the planning margin to the WRAP value once the program becomes binding, until then the most appropriate planning margin value is a
decision based on whether or not the planning margin covers an appropriate amount of reliance on the market. At this time, Avista does not see a need to change.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 10/18/2023 CASE NO: AVU-E-23-12 WITNESS: James Gall REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-006 TELEPHONE: [phone] REQUEST:
Response to Staff Production Request No. 1 states Avista would not use the Western Resource Adequacy Program ("WRAP") PRM for planning until the WRAP program becomes binding. Please respond to the following:
a. What are the WRAP PRM values?
b. When will the WRAP program become binding based on the latest information? c. Does WRAP provide different PRM values to different utility participants based on each participant's system peaks or the same PRM values to different utility participants based on the regional peak?
RESPONSE: a. The WRAP is currently using 15% in the summer months until it completes its forward assessment. On July 31, 2023, the WRAP estimated the following PRM values for winter
2024/2025 for the Mid-C region. Staff_PR_006_Attachment A, WPP Advanced Assessment W24-25 results, includes further information.
b. Avista does not expect a binding season until winter 2026/2027 at the earliest.

c. The WRAP uses the same PRM values for all utilities in the same region. The WRAP has two regions Mid-C and Southwest.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 10/18/2023 CASE NO: AVU-E-23-12 WITNESS: James Gall REQUESTER: Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources
REQUEST NO.: Staff-007 TELEPHONE: [phone] REQUEST:
Between the capacity positions determined under the traditional method and the capacity positions determined under the WRAP method, please explain which result is more accurate and why? In the response, please include the following perspectives discussed in Response to Staff Production Request No. 1 (c):

a. PRM; b. Operation reserves; and c. Qualifying Capacity Credit (thermal units, storage hydro, wind, and run-of river)
RESPONSE: Overall, Avista prefers to use the WRAP method for capacity planning as it provides a consistent methodology using best practices across the industry.
a. The WRAP PRM is projected to achieve a regional 1-in-10 loss of load expectation. While Avista’s PRM was to approximate a loss of load of 5% for its system while allowing up to a 330 MW market purchase. Both PRMs are accurate for their intended purpose. The WRAP method is superior because it takes into account the whole region rather than just
Avista’s resources and market expectation. Avista suggests a higher PRM then the WRAP
to adjust for the program not being binding. This means regional utilities do not have the obligation to share resources during peak time periods and therefore the amount of market access could be limited.
b. The WRAP includes operating reserves within the planning margin, Avista historically separated it out. Either method is acceptable so long as the model used to determine the reserves includes this requirement. Given the WRAP calculates the PRM with an operating reserve it is easier to understand and is consistent with most utility’s methodologies.
c. The WRAP method considers energy limitations over extended peak periods for storage hydro and is superior to Avista’s method. The run-of river methodology for the WRAP is similar to Avista’s, but only relies on the last 10 years, which is a much shorter look than Avista’s 80-year history. The WRAP method provides a more recent period of time providing near term stream flows which are a better predictor of future streamflows. The
only difference in thermal units is including forced outages as a decrement to capacity, rather than implying a higher PRM, therefore the WRAP method is easier to understand.