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HomeMy WebLinkAbout20140819IPC to RNP&AWEA Second Data Response.pdfftEcE r\i I ii ?01\ [uG 19 p5 2: 02 3Effi*. 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. RECfll,'[:t-1 ?0tq AUG t9 ?fr ? A2 lDAi-|0 i'tlL.- .- UT ILITI ES COF,4r,i I SSl Oi': 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 Hand Delivered U.S. Mail Overnight Mail FAXX Email kris.sasser@puc.idaho.qov Hand Delivered U.S. Mail Overnight Mail FAXX Email ioe@mcdevitt-miller.com Hand Delivered U.S. Mail Overnight Mail FAXX Email rk@powerworks.com _Hand Delivered U.S. Mail Overnight Mail FAXX Email re@powenvorks.com _Hand Delivered U.S. Mail Overnight Mail FAX 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 Hand Delivered U.S. Mail Overnight Mai! FAX Email bhuano@terna-enerqv.com Hand Delivered U.S. Mail Overnight Mail FAXX Email greq@richardsonadams.com Hand Delivered U.S. Mail Overnight Mail FAXX Email paul.ackerman@constellation.com Hand Delivered U.S. Mai! Overnight Mail FAX Email teresa.hill@klqates.com Hand Delivered U.S. Mail Overnight Mail FAX 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