20170911IPC to Staff 2.pdf

. .t . -;1
Donovan E. Walker
aRl)
An IDACORP Company
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
DONOVAN E. WALKER
Lead Counsel
[e-mail]
DEW:csb
Enclosures
September 11,2017
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-17-12
Capacity Deficiency to be Utilized for Avoided Cost Calculations - ldaho
Power Company's Response to the Second Production Request of the
Commission Staff
Dear Ms. Hanian
Enclosed for filing in the above matter please find an original and three (3) copies
of ldaho Power Company's Response to the Second Production Request of the
Commission Staff.
Very yours,
i:: lYlnDONOVAN 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
i I Pi{ L: l+9
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF THE CAPACIry
DEFIC!ENCY TO BE UTILIZED FOR
AVOIDED COST CALCULATIONS
CASE NO. rPC-E-17-12
IDAHO POWER COMPANY'S
RESPONSE TO THE SECOND
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Power" or "Company"), and in
response to the Second Production Request of the Commission Staff to ldaho Power
dated August 31,2017, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
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REQUEST NO. 2: Please provide and explain the major drivers causing the first
capacity deficiency date to move from the currently authorized date of July 2024 to July
2026 as proposed by the Company. Specifically, but not limited to:
a. Please explain why "Adjustments for EE Potential Study Forecast" in the
load resource balance is reduced from an average 161 MW for July peak months from
2024 through 2026 in the 2015lRP as compared to an average 18 MW in the 2017 IRP.
b. Please explain the drivers causing the difference in Market Purchase
availability/transmission import capacity in the load resource balance between the 2015
IRP and 2017 IRP for months July 2024, July 2025, and July 2026. As part of the
explanation, please describe the specific rationale for each driver and/or any changes in
assumptions between the 2015lRP and the 2017 lRP.
RESPONSE TO REQUEST NO. 2:
a. Prior to each lntegrated Resource Plan ("lRP"), ldaho Power contracts
with a third-party consultant to produce an Energy Efficiency Potential Study,
sometimes called a Conservation Potential Study ("CPA"). ln 2014 and 2016, the
Company contracted with Applied Energy Group ("AEG'). AEG's CPA analysis begins
by estimating loads by end use assuming no energy efficiency programs are offered by
ldaho Power. Each study is "re-based" at the beginning year of the study. lt is
assumed that energy etficiency's cumulative demand reduction (and cumulative energy
reduction) from previous years is embedded in the Company's load forecast. Because
of the re-basing of each study and the fact that the demand reduction is cumulative, the
load reduction from one study's calendar year to another study's calendar year is not
comparable. Additionally, the total energy efficiency peak reduction potential by month
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
is the sum of the Load Forecast-included EE (line 2) and the Ad7'ustment for EE
Potential Study Forecast (line 4) from the 2017 IRP Peak-Hour Load and Resource
Balance analysis.
To compare the magnitude of estimated peak reduction from one CPA study to
another, planning years must be considered. For instance, July 2024-2026 (planning
years 8-10) in the 2017 study would be analogous to July 2022-2024 (planning years 8-
10) in the 2015 lRP. As shown in the table below, this comparison yields an average of
220 megawatts ("MW") of estimated cumulative peak load reduction from energy
efficiency in the 2015 IRP compared to an average of 192 MWof estimated peak load
reduction from energy efficiency in the 2017 lRP, a decrease of 28 MW.
Two primary drivers in the reduction of the achievable energy efficiency potential
from the 2015 study to the 2017 study were the lower demand-side management
alternate costs, primarily caused by a lower gas price forecast, and the impact of the
Energy lndependence and Security Act ("EISA") on lighting standards affecting lighting
potential. EISA essentially removes most savings potential from energy efficiency
lighting in 2020 as efficient lighting becomes the standard. However, it should be noted
that while these may be drivers in the decrease in the estimated peak load reduction for
the years 2024-2026, AEG estimates the cumulative on-peak load reduction from the
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 3
ldaho PoweCs 2017lRP ldaho Powe/s 2015lRP
Adjustment
for EE
Potential
Study
Planning July IRP Forecastyear Year (MW)
8 2024 19I 2025 2010 2026 16
Load Forecast-
included EE
(MW)
143
172
199
Total
Total
(Mw)
168
192
215
575
132
Non- Existing
Forecasted DSM
Planning July IRP trended EE (EE)
year Year (MW) (MW)
I 2022 86 83
I 2023 125 114
10 2024 134 117
Total
1
235
251
65S
220
Total
(MW)
energy efficiency achievable potential will increase over the IRP 2}-year planning period
from 473 MW in the 2015 lRPl to 483 MW in the 2017 lRP.2
b. The peak-hour load and resource balance for the 2015 and 2017 lRPs
contains the following values for the referenced line item:
2015 !RP 2017 tRP
239 MW July 2024 487 MW
261 MW July 2025 486 MW
257 MW July 2026 616 MW
Although the magnitude of the transmission capacity values appears to have
increased between the 2015 IRP and 2017 !RP, that is not the case. The apparent
differences are primarily a result in the assumptions included in each of the two IRPs
and the way the numbers are presented in the tables. Apart from these reasons, which
are discussed in detai! below, the transmission capacity values are relatively
comparable.
For the 2017 lRP, the values shown on the line labeled "Transmission Capacity
Available for Market Purchases" include all the transmission capacity available for peak-
hour market purchases associated with the Idaho-Nevada path, the ldaho-Montana
path, and the ldaho-Northwest path. For the 2015 lRP, the values contained only the
amount of transmission capacity available and needed to eliminate or reduce the pre-
market-purchase deficit. For example, the transmission value for July 2024 shown in
the table in the 2015 IRP reflects only the amount of available transmission capacity
which was needed to eliminate the pre-market-purchase deficit, while the transmission
1 IRP 2015, Appendix C, page 79.
2 IRP 2017, Appendix C, page 67.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
value for July 2024 in the 2017 IRP reflects all of the transmission capacity available at
the time.
Another significant component of the apparent variation between the numbers in
the two lRPs is that for the 2017 IRP analysis, the Company assumed that the
transmission capacity on the ldaho-Nevada path would be available for peak-hour
market purchases following ldaho Power's exit from coal-fired operations at North
Valmy Unit 1 year-end 2019 and North Valmy Unit 2 year-end 2025. The assumed
peak-hour generating capacity of North Valmy is 263 MW, split evenly between the two
units; thus, for the 2017 lRP, the exit from each North Valmy coal unit is assumed to
make available for peak-hour market purchases half of the 263 MW of transmission
capacity (approximately 131 MW for July 2024 and July 2025 and 263 MW in July
2026). Discussion of the assumed peak-hour market purchases on the ldaho-Nevada
path is found on pages 68-69 of the 2017 lRP.
While the 2015 IRP preferred portfolio reflected ldaho Power's exit from coal-
fired operations at North Valmy year-end 2025, the Company's analysis did not include
an assumption that capacity on the ldaho-Nevada path would be available for peak-hour
market purchases in 2026.
Another component of the apparent variation between the transmission values
reflected in the 2015 and 2017 lRPs is that in ldaho Power's assessment of the regional
transmission interconnections for the 2017 lRP, the Company determined that an
additional 77 MW of transmission capacity on the ldaho-Montana path could be
assumed available for peak-hour market purchases in July 2024-2026. For the 2015
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 5
!RP, no transmission capacity on the ldaho-Montana path was included in the load and
resource balance.
The response to this Request is sponsored by Pete Pengilly, Customer Research
and Analysis Leader, ldaho Power Company, and Phil DeVol, Lead Planning Analyst,
ldaho Power Company.
DATED at Boise, ldaho, this 11th day of September 2017.
NOVAN E. WALKER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 6
CERTTFICATE OF SERVICE
I HEREBY CERTIFY that on this 11th day of September 2017 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Camille Christen
Deputy Attorney General
ldaho Public Utilities Commission
472 W est Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
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 THE COMMISSION STAFF - 7