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Home My WebLink About20090605IPC to Staff 84, 86.pdfesIDA~PO(I RECEIVE. PH 4: 53 An IDACORP Company BARTON L. KLINE Lead Counsel June 4,2009 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilties Commission 472 West Washington Street P.O. Box 83720 Boise, Idaho 83720-0074 Re: Case No. IPC-E-09-03 LANGLEY GULCH POWER PLANT Dear Ms. Jewell: Enclosed for filing are an original and three (3) copies of Idaho Power Company's Response to the Third Production Request of the Commission Staff in the above matter. In addition, also enclosed are four (4) copies of a disk containing information responsive to Staffs requests. Please note, Idaho Powets response to Staff's Request No. 85 wil be provided tomorrow, June 5, 2009. Also, enclosed in a separate envelope are an original and three (3) copies of Idaho Power Company's Confidential Response to the Commission Staffs Third Production Request. Please note this information should be handled in accordance with the Protective Agreement in place between the parties. If you have any questions about the enclosed information, please let me know. Very truly yours, Barton L. Kline BLK:csb Enclosures P.O. Box 70 (83707) 1221 W. Idaho St. Boise. 10 83702 BARTON L. KLINE, ISB #1526 LISA D. NORDSTROM, ISB #5733 Idaho Power Company P.O. Box 70 Boise, Idaho 83707 Telephone: 208-388-2682 Facsimile: 208-388-6936 bklinecmidahopower.com Inordstromcmidahopower.com RECEfVED 2809 JUN -4 PH~: 53 IDAHO PUØUC UTILITIES COMMISSION Attorneys for Idaho Power Company Street Address for Express Mail: 1221 West Idaho Street Boise, Idaho 83702 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER COMPANY'S APPLICATION FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY FOR THE LANGLEY GULCH POWER PLANT. ) ) CASE NO. IPC-E-09-03 ) ) IDAHO POWER COMPANY'S ) RESPONSE TO THE THIRD ) PRODUCTION REQUEST OF THE ) COMMISSION STAFF TO IDAHO ) POWER COMPANY COMES NOW, Idaho Power Company ("Idaho Powet' or "the Company"), and in response to the Third Production Request of the Commission Staff to Idaho Power Company dated May 21, 2009, herewith submits the following information: IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1 REQUEST NO. 84: In Request No. 20 of the Industrial Customers of Idaho Power, the Company was asked "Given the economic conditions, has the Company made any adjustments to its load forecasts for the coming five years, and if so, what are those adjustments?" Idaho Power responded that in December 2008, it made adjustments to the load forecasts of the residential and commercial sectors. However, in its response, Idaho Power but did not provide any data quantifying the adjustments. Please quantify the adjustments made in December and provide a numerical and graphical comparison of the load resource balance for the same conditions illustrated in Idaho Powets response to Staff Request NO.2. RESPONSE TO REQUEST NO. 84:' The December 2008 adjustments to the load forecast are provided in the Excel file included on the enclosed CD. The load and resource balance for 70th percentile water and load for average energy and 90th percentile water and 95th percentie load for peak-hour capacity needs, incorporating the adjustments made to the load forecast in December 2008, is also included on the enclosed CD. In May 2009, the Company updated its load forecast again. This update incorporates changes to the special contract forecasts. A load resource balance incorporating the adjustments made to the load forecast in May 2009 is also included on the enclosed CD. The response to this Request was prepared by Karl Bokenkamp, General Manager Power Supply Operations and Planning, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2 REQUEST NO. 86: The direct testimony of Karl Bokenkamp, on page 10, lines 20-21, states "Sensitivity analyses were run for high and low gas price scenarios, but these results did not impact the price and non-price scores." Please provide a copy by year of the high and low gas prices used for the analysis. What was the source or basis for the adjustments to the gas prices? Please discuss the results of the analysis and explain why the price scores were not impacted. Please specifically contrast the effect of higher and lower gas prices on proposals with higher vs. lower heat rates. RESPONSE TO REQUEST NO. 86: The results of the AURORA analysis incorporating the expected gas forecast were used in the price scoring. Additional AURORA runs were completed using a high and low gas price forecast for the differing technology classes of combined cycle and simple cycle LMS units. The range of the price forecast was not scientifically determined, but is consistent with other natural gas sensitivity analysis done in AURORA. The high forecast is 150 percent of expected and the low forecast is 50 percent of expected for all future years and is shown below. 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 NG Price High 13.81 14.19 14.47 14.62 14.91 15.04 15.12 15.35 15.50 15.68 16.19 16.77 17.40 18.05 18.73 19.25 20.06 20.76 21.50 21.50 NG Price Low 4.60 4.73 4.82 4.87 4.97 5.01 5.04 5.12 5.17 5.23 5.40 5.59 5.80 6.02 6.24 6.42 6.69 6.92 7.17 7.17 IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3 The AURORA run outputs which incorporated these gas forecasts were used for informational purposes only and were not used in any formal scoring process. To a large degree, these sensitivity runs are a legacy of how Idaho Power evaluates portolios for the Integrated Resource Plan ("IRP"). In the IRP, the results of the various runs are weighted and included in the evaluation. The difference in the RFP and IRP evaluation treatment is the result of the underlying purpose of the analysis. In the IRP, multiple portolios are evaluated with several technologies, fuel types, and multiple varying project online dates. The RFP is evaluating a single project impact on a fixed portolio and, in this case, all the projects are fueled with natural gas. The single fuel type and consistent project online date leaves only the specific technologies to evaluate, as all projects are exposed to the same fuel price risks. As described in the Company's Response to Staff's Request No. 38 and expanded in the Company's Response to ICIP's Request No. 40, the economic dispatch of a unit is primarily dependant on three factors: (1) marginal cost of power, (2) cost of natural gas, and (3) heat rate of conversion of natural gas to power. Historically there have been correlations between the marginal cost of power and the cost of natural gas, which frequently occurs seasonally. This is especially true in the winter months in the Northwest with high power demand and less hydro output, which puts natural gas on the margin. If in the future natural gas fired units are setting the marginal cost of power for greater parts of the year, then units with the greatest efficiency of conversion of natural gas to power will be of the greatest benefit to our customers regardless of the price of natural gas. Growing loads, reduced coal fired and hydro output, and the need for reserve resources has a high potential of putting natural gas fired resource on the margin in the future. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 4 There are several items that are interesting with regards to the performance of the portolios using the different technology classes of combined cycle and simple cycle units under the gas sensitivities. In both gas price cases, the higher efficiency units produced a lower overall total portolio variable cost of production. As one would expect, the portolio with the more efficient unit participated more in providing sales to the regional market in both the high and low natural gas price cases and the less efficient unit purchased more energy from the regional market in both sensitivity cases. These results are consistent with the results from the expected case forecast. The response to this Request was prepared by Rick Haener, Planning Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. DATED at Boise, Idaho, this 4th day of June 2009. (J~ BARTON L. KLINE Attorney for Idaho Power Company IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 4th day of June 2009 I served a true and correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Scott Woodbury Deputy Attomey General Idaho Public Utilties Commission 472 West Washington P.O. Box 83720 Boise, Idaho 83720-0074 Industrial Customers of Idaho Power and Northwest and Intermountain Power Producers Coalition Peter J. Richardson, Esq. RICHARDSON & O'LEARY PLLC 515 North 27th Street P.O. Box 7218 Boise, Idaho 83702 Dr. Don Reading Ben Johnson Associates 6070 Hil Road Boise, Idaho 83703 Snake River Allance Ken Miller Snake River Allance P.O. Box 1731 Boise, Idaho 83701 Idaho Irrigation Pumpers Association, Inc. Eric L. Olsen RACINE, OLSON, NYE, BUDGE & BAILEY, CHARTERED P.O. Box 1391 201 East Center Pocatello, Idaho 83204-1391 -- Hand Delivered U.S. Mail _ Overnight Mail FAX -- Email Scott.Woodburvcmpuc.idaho.gov Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email petercmrichardsonandoleary.com Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email dreadingcmmindspring.com Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email kmillercmsnakeriveralliance.org Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email elocmracinelaw.net IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 6 Anthony Yankel Yankel & Associates, Inc. 29814 Lake Road Bay Vilage, Ohio 44140 Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email tonycmyankel.net Idaho Conservation League Betsy Bridge Idaho Conservation League 710 North Sixth Street P.O. Box 844 Boise, Idaho 83701 Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email bbridgecmwildidaho.org Northwest and Intermountain Power Producers Coalition Susan K. Ackerman 9883 NW Nottage Drive Portland, Oregon 97229 Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email Susan.k.ackermancmcomcast.net Community Action Partnership Association Of Idaho Brad M. Purdy Attorney at Law 2019 North 17th Street Boise, Idaho 83702 Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email bmpurdy((hotmail.com Cl~Barton L. Kline IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 7