HomeMy WebLinkAbout20140819IPC to RNP&AWEA Second Data Response.pdfftEcE r\i I ii
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An IDACORP Company
DONOVAN E. WALKER
Lead Counse!
August 19,2014
VIA HAND DELIVERY
Jean D. Jewell, Secretary
!daho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-13-22
Update to Wind lntegration Rates and Charges - ldaho Power Company's
Response to Renewable Northwest and American Wind Energy
Association's Second Data Request
Dear Ms. Jewel!:
Enclosed for filing in the above matter are an origina! and three (3) copies of ldaho
Power Company's Response to Renewable Northwest and American Wind Energy
Association's Second Data Request to ldaho Power Company.
DEW:csb
Enclosures
1221 W. ldaho St. (e3702)
P.O. Box 70
Boise, lD 83707
uT r tft f[boi#Lfui s s r o'o
ovan E. Walker
DONOVAN E. WALKER (lSB No. 5921)
JULIA A. HILTON (lSB No. 7740)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: (208) 388-5317
Facsimile: (208) 388-6936
dwalker@ ida hooower. com
ihilton@ idahopower.com
Attorneys for ldaho Power Company
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION TO UPDATE
ITS WIND INTEGRATION RATES AND
CHARGES.
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. |PC-E-13-22
IDAHO POWER COMPANY'S
RESPONSE TO RENEWABLE
NORTHWEST AND AMERICAN
WI ND ENERGY ASSOCIATION'S
SECOND DATA REQUEST TO
IDAHO POWER COMPANY
COMES NOW, ldaho Power Company ("ldaho Powe/' or "Comp?hy"), and in
response to Renewable Northwest and American Wind Energy Association's Second
Data Request to ldaho Power Company dated July 29, 2014, herewith submits the
following information:
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWESTAND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY - 1
REQUEST NO. 1: On an hourly basis, is ldaho Power generally surplus on
energy? !f so, does PURPA wind cause the Company to remarket the surplus energy?
Does this remarketing of surplus energy generally occur in the day-ahead market? How
often is ldaho Power surplus on energy? (Reply Comments of ldaho Power Company
at 11.)
RESPONSE TO REQUEST NO. 1: ldaho Power assesses resource adequacy
during two periods in the near term: day ahead and real time on an hourly basis. ldaho
Power balances its system consistent with approved Risk Management Policies and will
market surplus energy. Wind generation can and does affect the level of surplus;
however, surplus energy can only be sold on the market once.
ldaho Power is generally surplus during off-peak months, but deficit during peak
hours summer months. The amount of surplus or deficit depends largely on water and
weather conditions as well as availability of transmission and generation resources.
Because the variability of resources is dependent on weather and snowpack, it is
difficult to state with accuracy that the Company is surplus a specific percentage of the
time, as it changes year to year. (Requests Nos. 1-6 contain a blanket reference to
"Reply Comments of ldaho Power Company at 11." The questions asked are not all
immediately identifiable with the blanket reference to page 11 of ldaho Power's Reply
Comments. However, ldaho Power has answered the data requests without objection.)
The response to this Request is sponsored by Tess Park, Director Load Serving
Operations, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWEST AND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY.2
REQUEST NO. 2: Please list the factors that go into the Company's avoided
cost calculation under the IRP methodology. (Reply Comments of ldaho Power
Company at 11.)
RESPONSE TO REQUEST NO. 2: The incremental cost lntegrated Resource
Plan ("lRP") avoided cost methodology utilizes the hourly generation profile of the
proposed qualifying facility ('QF") project in conjunction with the AUROM model to
perform a production cost simulation for the purpose of determining the highest
displaceable, or avoidable, incremental cost incurred during each hour of a QF's
proposed contract term. The capacity component of the avoided cost rate in the lRP
Methodology is established separately from the energy component of the rate. The
energy component is based upon the proposed project's specific hourly generation
profile, which is compared to an AURORA modeled run of the Company's system. ln
this comparison, for each hour that the QF provides generation, the highest cost
Company resource serving load (generation or market purchase) for that hour is
assigned as that hour's avoided cost. These hourly incremental costs are accumulated
into monthly heavy-load and light-load prices that represent the avoided cost of energy.
The capacity component of the avoided cost rate is based upon the cost of a simple-
cycle natural gas combustion turbine and the QF's peak-hour capacity factor.
The response to this Request is sponsored by Phil DeVol, Resource Planning
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWEST AND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY - 3
REQUEST NO. 3: ln determining the avoided cost for each PURPA contract
under the IRP methodology, is it accurate to say that the Company runs through a
production cost simulation to determine the value, or avoided cost, of the PURPA
energy for every hour of the contract? lf so, how does the simulation account for the
PURPA energy if the system was surplus on energy in a given hour? How would that
circumstance impact the value, or avoided cost, of the PURPA energy? If it does not
account for this energy surplus, please explain why. (Reply Comments of ldaho Power
Company at 11.)
RESPONSE TO REQUEST NO. 3: Yes, as stated in the Company's response to
American Wind Energy Association and Renewable Northwest's Request No. 2, ldaho
Power uses the AURORA modelto determine the highest displaceable incremental cost
being incurred during each hour of a QF's proposed contract term. The lRP
Methodology calculates avoided costs on the basis of displaceable incremental costs.
When the system is surplus on energy in a given hour for the AURORA simulation, the
avoided cost is the cost of the highest cost displaceable resource that is serving load.
"fl-lhe Company's fidaho Power's] revisions properly focus the determination of avoided
costs on incremental costs, not solely on the value of potential market sales. The result,
we find, is a more accurate avoided cost. Moreover, we find that the modified
methodology comports with the definition of avoided cost contained in FERC
regulations." Commission Order No. 32697, p.21, Case No. GNR-E-11-03.
The response to this Request is sponsored by Phil DeVol, Resource Planning
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWEST AND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY - 4
REQUEST NO. 4: lf PURPA energy causes ldaho Power to remarket energy
and that remarketing incurs transactional or operational costs, would those costs reduce
the economic value that the PURPA energy provides to the system? (Reply Comments
of ldaho Power Company at 11.)
RESPONSE TO REQUEST NO. 4: The transactional costs associated with
marketing surplus energy of any type, regardless of the cause, results in a reduced
economic value of that energy. Any transactional or operational costs incurred when
moving Public Utility Regulatory Policies Act of 1978 ("PURPA") energy to the market
reduces the economic value of PURPA energy. Variable energy resources further
reduce the economic value of the energy because of their inherit variability and the
resultant operational costs to remove that variability to market the product as a firm
energy product.
The response to this Request is sponsored by Tess Park, Director Load Serving
Operations, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWEST AND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY - 5
REQUEST NO. 5: Does ldaho Powe/s 2013 Wind lntegration Study account for
the operational and cost differences between using spinning and non-spinning reserves
in the provision of integration services? What are the cost differences associated with
using spinning reserves and non-spinning reserves? (Reply Comments of ldaho Power
Company at 11.)
RESPONSE TO REQUEST NO. 5: ldaho Powe/s 2013 Wind lntegration Study
assumed generating capacity at Brownlee and Oxbow dams was available to provide
spinning and non-spinning reserves to respond to day-ahead wind forecast errors. The
Company's coal- and natural gas-fired generators under current Western Electricity
Coordinating Council definitions are not eligible for providing non-spinning reserves.
The cost differences associated with using spinning reserves and non-spinning reserves
at Brownlee and Oxbow have not been definitively identified. However, given the rapid
ramp rates of hydro generating units, even for off-line units, the cost differences are
likely relatively small.
The response to this Request is sponsored by Phil DeVol, Resource Planning
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWEST AND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY.6
REQUEST NO. 6: How does ldaho Power propose to apply its 2013 Wind
lntegration Study methodology and the integration costs estimated therein (as defined
by the Study) to (i) a situation in which the Company is in an energy deficit and is
comparing the costs of wind to other options available to serve the utility's energy needs
(i.e., in the integrated resource planning process); and (ii) an Open Access
Transmission Tariff rate schedule for generator imbalance{ype service for third-party
wind that ldaho Power's transmission business is exporting out of its Balancing
Authority Area on an hourly schedule? Does the Company see any differences in
applying its Study methodology and costs to these situations as it does to must-take
PURPA energy when the utility is in an energy surplus? Please explain. (Reply
Comments of ldaho Power Company at 11.)
RESPONSE TO REQUEST NO. 6:
i. !n a comparison of levelized costs of production between resources, such
as provided on page 67 of ldaho Power's 2013 lRP, Idaho Power proposes to include
integration costs for wind as set forth in Schedule 87 included in the Company's Reply
Comments.
The response to this portion of the Request is sponsored by Phil DeVol,
Resource Planning Leader, ldaho Power Company.
ldaho Power does not currently have any generator within its Balancing
Authority Area ("BA4") that it transfers the energy outside the ldaho Power BAA. lf a
generation interconnection request were made by a customer, the applicable generator
imbalance penalties would apply for intermittent resources, and ldaho Power would
assess the need, depending on that specific interconnection request, for additional
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWEST AND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY - 7
ancillary services for this energy and follow the Federal Energy Regulatory Commission
process for applying an additional ancillary services charge.
ldaho Power does see a difference between must-take PURPA wind energy and
a generator that is a transmission customer not sinking the generation into the ldaho
Power BM. In the case of the PURPA generator, the Company must take the resource
whether the Company is surplus or deficit. In addition, during the time period prior to
the hour impacting the generation resources on the Company's system, the Company
must deal with the variability on an hour-by-hour, minute-by-minute basis. In the case
of a generator that is a transmission customer, the Company may have to deal with the
variability during the hour, but the generator is required to true-up its schedule on an
hour-by-hour basis. This will require the Company to manage the difference between
scheduled and actual energy deliveries within the scheduling period, but not the entire
scheduled amount.
The response to this portion of the Request is sponsored by Tess Park, Director
Load Serving Operations, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWEST AND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY - 8
REQUEST NO. 7: Please explain the Company's technical justification for the
decision in the 2013 Wind lntegration Study to not net reserves for load and reserves for
generation (including wind). (Reply Comments of Idaho Power Company at 11-12.)
RESPONSE TO REQUEST NO. 7: As stated in ldaho Powe/s Reply
Comments, deviations from day-ahead forecasts for load and deviations from day-
ahead forecasts for wind are not the same thing; deviations from day-ahead Ioad
forecasts are typically less problematic, and are more readily addressed through intra-
day operational adjustments. ln contrast, ldaho Powefs experience has shown that
deviations from day-ahead wind forecasts require the system to hold generating
capacity in reserve for responding to wind variability.
The response to this Request is sponsored by Phil DeVol, Resource Planning
Leader, ldaho Power Company.
DATED at Boise, ldaho, this 19th day of August 2014.FtDONOVAN E. WALKER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWEST AND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY. 9
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 19th day of August 2014 t served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
NORTHWEST AND AMERICAN WIND ENERGY ASSOCIATION'S SECOND DATA
REQUEST TO IDAHO POWER COMPANY upon the following named parties by the
method indicated below, and addressed to the following:
Gommission Staff
Kristine A. Sasser
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
ldaho Winds LLC
Dean J. Miller
McDEVITT & MILLER LLP
420 West Bannock Street (83702)
P.O. Box 2564
Boise, ldaho 83701
Rick Koebbe, President
Idaho Winds LLC
5420 West Wicher Road
Glenns Ferry, ldaho 83623
Bob Eggers, Legal Counsel
Idaho Winds, LLC
15850 Jess Ranch Road
Tracy, Califomia 95377
Cold Springs Windfarm, LLC; Desert
Meadow Windfarm, LLG; Hammett Hill
Windfarm, LLC; Mainline Windfarm, LLG;
Ryegrass Windfarm, LLC; and Two Ponds
Windfarm, LLC
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street
Boise, ldaho 83702
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FAXX Email ioe@mcdevitt-miller.com
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FAXX Email rk@powerworks.com
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Email peter@richardsonadams.com
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWEST AND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY - 1O
Benjamin G. Huang, Manager
c/o Mountain Air Projects
6000 North FoxtailWay
Glenns Ferry, ldaho 83623
Cassia Wind Farm LLC; Hot Springs
Windfarm, LLG; Bennett Greek Windfarm,
LLG; Cassia Gulch Wind Park LLG; Tuana
Springs Energy, LLC; and High Mesa
Energy, LLG
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street
Boise, ldaho 83702
Paul Ackerman
Assistant General Counsel
Exelon Business Services Corporation
100 Constellation Way
Baltimore, Maryland 21202
American Wind Energy Association and
Renewable Northwest Project
Teresa A. Hill
K&L GATES, LLP
One S.W. Columbia Street, Suite 1900
Portland, Oregon 97258
Dina M. Dubson
Renewable Northwest Project
421 SW 6th Avenue, Suite 1125
Portland, Oregon 97204
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Email bhuano@terna-enerqv.com
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FAXX Email paul.ackerman@constellation.com
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Email teresa.hill@klqates.com
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Emai! dina@rnp.orq
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE NORTHWEST AND AMERICAN
WIND ENERGY ASSOCIATION'S SECOND DATA REQUEST TO IDAHO POWER COMPANY - 11