20170801IPC to Simplot 16-21.pdf

DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@ idahopower. com
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY TO
REVIEW THE SURROGATE AVOIDED
RESOURCE (SAR) METHODOLOGY
FOR CALCULATING PUBLISHED
AVOIDED COST RATES
i?nCll\/[i)
i:,.,1J,',i;l *2 &t{ g: h[+
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISS]ON
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CASE NO. GNR-E-17-02
IDAHO POWER COMPANY'S
RESPONSE TO THE SECOND
PRODUCTION REQUEST OF
J. R. SIMPLOT COMPANY
COMES NOW, ldaho Power Company ("ldaho Power" or "Company"), and in
response to the Second Production Request of J. R. Simplot Company to ldaho Power
dated July 13,2017, but hand delivered on July 12, 2017, herewith submits the
following information :
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY - 1
REQUEST FOR PRODUCTION NO. 16: ln response to Simplot DR #11, Idaho
Power stated
The natural gas price forecast ldaho Power proposes to be
used in the Commission's determination of the published
avoided cost rates using the surrogate avoided resource
(SAR) methodology will not change the determination of
cost-effective conservation, demand-side management, and
energy efficiency programs.
Please identify the natural gas forecast currently used (and if changes are
pending in such forecast, such forecast as proposed) in the determination of cost-
effective conservation, demand-side management, and energy efficiency programs.
Please provide a copy of each forecast referenced in your answer in electronic format,
with formulae intact.
RESPONSE TO REQUEST FOR PRODUCTION NO. 16: ldaho Power's
Demand-Side Management 2016 Annual Repoft, Supplement 1: Cost-Effecfiyeness
("2016 DSM Supplement 1") states on page 4 that "the 2013 IRP remains the source of
all the financial assumptions for the cost-effectiveness analysis," noting that the 2013
lntegrated Resource Plan ("lRP") is used because energy efficiency budgets and goals
for the 2016 program year predated the Idaho Public Utilities Commission's
("Commission" or "lPUC") and the Public Utility Commission of Oregon's (.OPUC")
acknowledgments of the 2015 and 2017 lRPs. The 2013 IRP natural gas price forecast
is provided on page 96 of Appendix C to the 2013 !RP. Please note that the referenced
natural gas price forecast is expressed for the Sumas location; ldaho Power uses the
U.S. Energy lnformation Administration ('ElA") Henry Hub natural gas price forecast
and applies a Sumas basis to derive the referenced natural gas price forecast. The
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY - 2
natural gas price forecast from page g6 of Appendix C to the 2013 IRP is provided in
the following table.
Beginning with the 2017 program year, ldaho Power will use the demand-side
management ("DSM") alternate costs determined in ldaho Power's 2015 lRP. The
natural gas forecast for the 2015 IRP can be found on page 129 of Appendix C via the
following link:
http://www.puc.idaho.qov/fileroom/cases/elec/lPC/lPCE1519/201506301RP%20APPENDIX%20
C%2OTECH N ICAL%2OREPORT. PDF
20105 (ElA) Nominal S
Year
2073
2014
2015
2076
2017
2078
20]t9
2020
2027
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031.
2032
Henry Hub
s 4.06
s 4.!7
s 4.2e
s 4.26
s 4.2s
s 4.34
s 4.46
S 4.s8
s 4.82
S s.11s s.32
S s.46s s.63
S s.77s s.e4
S 6.03s 6.1ss 6.2s
s 5.42
S 6.s8
Henry Hub
S 4.M
S 4.6s
S 4.s7S s.oe
S s.28S s.so
S s.82
S 6.16
S 6.67
S 7.2e
S 7.81.
S 8.26
S 8.77
S e.26
S s.82
S to.27
S 10.78
S t1..36
S tt.s4
S 12.61,
Nominal S
Henry Hub
to Sumas
adder/basis
S o.o2S o.o7
S o.os
S o.1oS o.72
S o.14
S 0.16
S 0.18
S o.2o
S o.22
S o.24
S 0.26
S o.28
S o.3o
S o.32
S 0.34
S 0.36
S 0.38
S o.4o
S o.42
Sumas
S 4.46
S 4.76
S s.o6
S s.1s
S s.4o
S s.il
S s.s8
S 6.34
S 6.87
S 7.st
S 8.os
S 8.s2
S s.os
S s.s6
s 7O.L4
S 10.61
S tt.tq
S Ll-74
s L2.34
S 13.03
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY - 3
For DSM alternate costs, the Company utilizes the natural gas forecast from the
Company's acknowledged lRP. For published avoided cost rates, the Commission
utilizes EIA's annually published index.
The response to this Request is sponsored by Pete Pengilly, Customer Research
and Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY.4
REQUEST FOR PRODUCTION NO. 17: ls the natural gas forecast the
Company has proposed to be used in the Commission's determination of published
avoided cost rates using the SAR methodology the same as the forecast currently used
in making the determination of cost-effective conservation, demand-side management,
and energy efficiency programs?
RESPONSE TO REQUEST FOR PRODUCTION NO. 17: No. Please see the
Company's response to J. R. Simplot Company's ("Simplot") Request for Production
No. 18.
The response to this Request is sponsored by Michael Darrington, Energy
Contracts Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY - 5
REQUEST FOR PRODUCTION NO. 18: lf your answer to DR #17 above is "no"
then please explain the rationale for the use of a different natural gas forecast for the
determination of cost-effective conservation, demand-side management, and energy
efficiency programs and the determination of the published avoided cost rates using the
SAR methodology.
RESPONSE TO REQUEST FOR PRODUCTION NO. 18: The DSM alternate
costs published in the 2017 IRP are based on the same forecast that is proposed in the
surrogate avoided resource's (SAR) methodology. ldaho Power will use the 2017 DSM
alternate costs to analyze future DSM programs. As described in ldaho Power's 2016
DSM Supplement 1, page 4, "the Company freezes its assumptions when budgets and
goals are set for the next calendar year."
The new DSM alternate costs from each IRP are applied to energy efficiency
programs after an IRP is acknowledged by both the IPUC and the OPUC. For the 2017
program year, ldaho Power uses the DSM alternate costs by pricing periods as
published in the 20151RP.
The response to this Request is sponsored by Pete Pengilly, Customer Research
and Analysis Leader, Idaho Power Company, and Michael Darrington, Energy Contracts
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY - 6
REQUEST FOR PRODUCTION NO. 19: Page 61 of Appendix C to the
Company's 2017 lRP, provides that:
Idaho Power considers cost-effectiveness to be the primary
screening tool prior to demand-side management (DSM)
program implementation.
.and
lncorporated into the cost-effectiveness analysis [for DSM
program implementationl are inputs from various sources
that represent the most current and reliable information
available.
Please provide copies of the source of these statements and all Company
policies in support thereof
RESPONSE TO REQUEST FOR PRODUCTION NO. 19: The sources for in puts
into ldaho Power's cost-effectiveness calculations are described on pages 2-5 of the
2016 DSM Supplement 1 for its cost-effectiveness methodology, Idaho Power relies on
the Electric Power Research lnstitute (EPRI) End Use Technical Assessment Guide
(TAG); the California Standard Practice Manual and its subsequent addendum, the
NationalAction Plan for Energy Efficiency's (NAPEE) Understanding Cost Effectiveness
of Energy Efficiency Programs: Best Practices, Technical Methods, and Emerging
lssues for Policy-Makers; and the National Action Plan on Demand Response. All of
the sources and reports cited in the 2016 DSM Supplement 1 are publicly available.
The response to this Request is sponsored by Pete Pengilly, Customer Research
and Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY - 7
REQUEST FOR PRODUCTION NO. 20: At page 4 of "Supplement 1 Cost-
Effectiveness" to the Company's "Demand-Side Management 2016 Annual Report"
dated March 15,2017, the Company states:
[T]he 2013 lRP remains the source of all the financial
assu mptions for the cost-effectiveness a na lys is.
Please confirm that the natural gas forecast used in the 2013 IRP is among the data
included in the "financial assumptions for cost-effectiveness analysis" of the Company's
current DSM programs. Please also confirm that said natural gas forecast is the same
forecast as is found on page 96 of Appendix C to the 2013 lntegrated Resource Plan.
RESPONSE TO REQUEST FOR PRODUCTION NO. 20: As stated on page 4
of ldaho Power's 2016 DSM Supplement 1
Since ldaho Power's 2015 IRP was acknowledged by the
IPUC and OPUC after the budgets and goals were set for
2016, the 2013 lRP remains the source of a!! the financial
assumptions for the cost-effectiveness analysis.
This statement is applicable to the 2016 program year. For the current 2017
DSM programs, the Company is using the financial assumptions and DSM alternate
costs by pricing period from the 2015lRP.
The natural gas forecast for the 2015lRP can be found on page 129 of Appendix
C. This forecast is used to determine the DSM alternate costs for the 2015 !RP.
The response to this Request is sponsored by Pete Pengilly, Customer Research
and Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY - 8
REQUEST FOR PRODUCTION NO. 21: lf your answer to DR # 20, above, is to
confirm the use of the 2013lRP natural gas forecast in the Company's March 15,2017,
DSM Management Report, then please reconcile the use of a four-year-old (at a
minimum) natural gas forecast for the DSM cost-effectiveness determination with the
Company's assertion, quoted in DR # 19 above, that the Company uses the "most
current and reliable information available" in making DSM cost-effectiveness
determinations.
RESPONSE TO REQUEST FOR PRODUCTION NO. 21: Please see the
Company's response to Simplot's Request for Production No. 20.
The response to this Request is sponsored by Pete Pengilly, Customer Research
and Analysis Leader, ldaho Power Company.
DATED at Boise, ldaho, this 2nd day of August 2017.
z
NOVAN E. WALKER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY.9
CERTIFICATE OF SERVICE
! HEREBY CERTIFY that on this 2'd day of August 2017 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Daphne Huang
Deputy Attorney General
ldaho Public Utilities Commission
47 2 W est Wash i ngton (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
J. R. Simplot Company
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
Avista Corporation
Michael G. Andrea
Senior Counsel
Avista Corporation
1411 East Mission Avenue, MSC-33
Spokane, Wash in gto n 99202
Clint Kalich, Manager
Resource Planning and Analysis
Avista Corporation
1411 East Mission Avenue, MSC-7
Spokane, Washington 99202
ldahydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite 900
P.O. Box 2900
Boise, ldaho 83701
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IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY - 1O
Renewable Energy Coalition
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street
Boise, ldaho 83702
lrion Sanger
SANGER LAW, P.C.
1117 SW 53'd Avenue
Portland, Oregon 97215
Tamarack Energy Partnership
Preston N. Carter
Michael C. Creamer
GIVENS PURSLEY LLP
601 West Bannock Street
Boise, ldaho 83702
Pacificorp, dlbla Rocky Mountain Power
Yvonne Hogle
Ted Weston
PacifiCorp dlbla Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84116
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mcc@o ivenspu rslev. com
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ted.westo n @ pacificorp. com
Daniel MacNeil
PacifiCorp dlbla Rocky Mountain Power
825 NE Multnomah Street
Portland, Oregon 97232
Jeffrey K. Larsen, VP
Regulation and Government Affairs
PacifiCorp dlbla Rocky Mountain Power
201 South Main Street, Suite 170
Salt Lake City, Utah 84116
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IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF J. R. SIMPLOT COMPANY - 11
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