20190708IPC to Staff 21-25.pdf

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July 8, 2019
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re:Case No. IPC-E-19-14
Power Purchase Agreement with Jackpot Holdings, LLC - ldaho Power
Company's Response to the Second Production Request of the Commission
Staff
Dear Ms. Hanian
Enclosed forfiling in the above matter please find an originaland three (3) copies of
ldaho Power Company's Response to the Second Production Request of the Commission
Staff.
Also enclosed are four (4) copies of a non-confidential disk containing information
provided in response to Staff's production requests.
lf you have any questions about the enclosed documents, please do not hesitate to
contact me.
yours,
RECEIVED
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DONOVAN E. WALKER
Lead Counsel
[e-mail]
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Enclosures
@
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
?
n E. Walker
An loAcoRP company
RECEIVED
tfilg JUL -B Pl{ l*:50
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Attorney for ldaho Power Company
BEFORE THE !DAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER FOR APPROVAL OF A
POWER PURCHASE AGREEMENT WITH
JACKPOT HOLDINGS, LLC, FOR THE
SALE AND PURCHASE OF UP TO 220
MEGAWATTS OF RENEWABLE SOLAR
GENERAT!ON
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CASE NO. IPC-E-19-14
IDAHO POWER COMPANY'S
RESPONSE TO THE SECOND
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Power" or "Comp?ny"), and in
response to the Second Production Request of the Commission Staff to ldaho Power
Company dated June 20,2019, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@ idahopower. com
REQUEST NO. 21: Please explain in detail how the Company proposes that
RECs generated by the Jackpot Solar PPA will flow through the PCA to customers,
including the sharing percentage.
RESPONSE TO REQUEST NO. 21: As described in ldaho Power's REC
Management Plan,l the Company sells Renewable Energy Certificates/Credits ('REC')
acquired in long-term power purchase agreements and returns the customers' share of
the proceeds through the Power Cost Adjustment ("PCA") mechanism, while continuing
to acquire and hold long-term contractual rights to own RECs for use in meeting
potential federal renewable energy standards. Under the current PCA treatment,
system REC sales proceeds are tracked through the PCA deferral, which applies an
ldaho sales-based jurisdictional allocation factor and 95 percent customer sharing
provision. Absent a modification to the REC Management Plan, the Company would
expect that any proceeds from the sale of RECs generated by the Jackpot Solar Power
Purchase Agreement (.PPA') would flow through the PCA in this same manner.
It should be noted, however, that in response to recent customer inquiries and
evolving customer preferences, there is the potential that ldaho Power may in the future
enter into an agreement by which the Jackpot Solar RECs could, for example, be sold,
retired, or assigned to specific customers. While no such agreement exists today, ldaho
Power will keep the Idaho Public Utilities Commission ("Commission") and Commission
Staff ("Staff') apprised in advance of any potential modifications that would impact its
existing REC management practices.
The response to this Request is sponsored by Matt Larkin, Revenue
Requirement Manager, Idaho Power Company.
1 Filed December 30, 2009, in Case No. IPC-E-08-24.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
REQUEST NO. 22: Please explain if there is an opportunity to increase the
value of the Jackpot Solar PPA RECs by bundling those RECs with energy.
RESPONSE TO REQUEST NO. 22: ldaho Power has been successful in recent
years by selling RECs combined with energy, fonruard through 2020, to qualify for
California's Renewable Portfolio Standard - Category 2 at approximately $5.00/REC.
The Company has also used this market to successfully negotiate REC sales into other
states or corporate voluntary programs for a similar premium without bundling with
energy. Alternatively, RECs sold as national Green-E Certified RECs, or generic RECs,
typically have a value of less than $1.00/REC.
Looking forward, ldaho Power believes that finding ample markets for premium
priced RECs may be challenging as ldaho Power and others bring on additional
renewable energy resources, thus exhausting the opportunities. Additionally, regulatory
uncertainty may impact REC sales and the Company's eligibility to sell RECs into
premium markets such as California Category 2.
The response to this Request is sponsored by Michael Polito, Power Supply
Operations Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 3
REQUEST NO. 23: Please provide the total cost of the Jackpot Solar PPA and
the rate impact to each customer class. Please provide supporting workpapers with
formulas intact.
RESPONSE TO REQUEST NO. 23: Please see the Company's response to
Staffs Production Request No. 17 for the estimated monthly cost of the Jackpot Solar
PPA. Please note that the Company's response to this Request is limited to only
spreading the cost of the Jackpot Solar PPA and does not reflect the overall net benefits
discussed and quantified on page 15 of Mr. Larkin's Direct Testimony.
To estimate the cost assignment to each customer class, the Company utilized
the forecast from its 2019 PCA filing, Case No. IPC-E-19-16, and assigned the PPA
costs to each customer class as a proportion of kilowatt-hour energy sales. The Excel
file provided on the enclosed CD presents the cost assignment by customer class for
the first full year (2023) estimated obligation of $5,878,055 (from Attachment 1 provided
with the Company's response to Staffs Production Request No. 17).
The response to this Request is sponsored by Matt Larkin, Revenue
Requirement Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
REQUEST NO. 24: PIease explain how the ldaho Power Solar Energy
Production Forecasting Model will be integrated with the Company's operations and risk
management planning. Agreement, Section 7.7 at34.
RESPONSE TO REQUEST NO. 24: The Solar Energy Production Forecasting
Model is a tool utilized by ldaho Power to predict the amount of solar generation output
specific to solar projects for use in day-ahead and real-time operations. Using the tool,
the Company develops forecasts on a day-ahead basis that are used for prescheduling
and balancing activities. These forecasts become part of the resource stack and are
used to balance ldaho Power's resources with load on the system. The forecast model
allows for hourly forecasts used during real-time balancing and Energy lmbalance
Market ("ElM') activities. ln addition, generation output from the Jackpot Solar facility
will be forecast every five minutes and made available to the California lndependent
System Operator to be used in EIM market operations.
Alternatively, ldaho Power's risk management planning process is a longer-term,
monthly process of identifying resource generation estimates to determine and optimize
resources to meet expected loads on the Company's electrical system and does not
utilize the Solar Energy Production Forecasting Model as an input.
The response to this Request is sponsored by Michael Darrington, Energy
Contracts Leader, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF.5
REQUEST NO. 25: Please provide the information requested in the attached
Jackpot Solar Economic Analysis Plan discussed on June 18, 2019 at the meeting
between ldaho Power and Commission Staff. See Attachment A for the Analysis Plan.
RESPONSE TO REQUEST NO. 25: ldaho Power needs additional time to
complete the requested analysis and will provide the information requested as soon as
possible.
The response to this Request is sponsored by Matt Larkin, Revenue
Requirement Manager, ldaho Power Company.
DATED at Boise, ldaho, this 8th day of July 2019.
E. WALKER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 6
GERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 8th day of July 2019 ! 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
Edward Jewell
Deputy Attorney General
ldaho Public Utilities Commission
47 2 W est Washington Street (837 02)
P.O. Box 83720
Boise, ldaho 83720-007 4
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
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