20200327IPC to Staff 1-2.pdf

IDAHO POWER COMPANY’S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]

Attorney for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF IDAHO POWER FOR A VALIDATED
ECONOMIC CLOSURE DATE FOR NORTH
VALMY POWER PLANT UNIT 2
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CASE NO. IPC-E-19-18

IDAHO POWER COMPANY’S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
THE COMMISSION STAFF

COMES NOW, Idaho Power Company (“Idaho Power” or “Company”), and in
response to the First Production Request of the Commission Staff to Idaho Power
Company dated March 6, 2020, herewith submits the following information:

RECEIVED
2020 March 27,PM3:59
IDAHO PUBLIC
UTILITIES COMMISSION
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
REQUEST NO. 1: Please provide the Net Present Value (NPV) difference and an
annual breakdown of the cost and benefit value streams (capital, fixed operation and
maintenance, Net Power Supply Expense, etc.) used to calculate the NPV differences,
between the following amended IRP portfolios and alternative futures:
a. the IRP “Preferred Portfolio” with a Valmy Unit 2 shutdown date of December
31, 2025 and the same portfolio using a Valmy Unit 2 shutdown date of
December 31, 2024 using “planning” natural gas and “planning” CO2
assumptions.
b. the IRP “Preferred Portfolio” with a Valmy Unit 2 shutdown date of December
31, 2025 and the same portfolio using a Valmy Unit 2 shutdown date of
December 31, 2023 using “planning” natural gas and “planning” CO2
assumptions.
c. the IRP “Preferred Portfolio” with a Valmy Unit 2 shutdown date of December
31, 2025 and the same portfolio using a Valmy Unit 2 shutdown date of
December 31, 2024 using “low” natural gas and “high” CO2 assumptions.
d. the IRP “Preferred Portfolio” with a Valmy Unit 2 shutdown date of December
31, 2025 and the same portfolio using a Valmy Unit 2 shutdown date of
December 31, 2023 using “low” natural gas and “high” CO2 assumptions.
e. the least cost, least risk IRP Portfolio without the Boardman to Hemingway
Transmission Project using a Valmy Unit 2 shutdown date of December 31,
2025 and the same portfolio with a Valmy Unit 2 shutdown date of December
31, 2024 using “planning” natural gas and “planning” CO2 assumptions.
f. the least cost, least risk IRP Portfolio without the Boardman to Hemingway
Transmission Project using a Valmy Unit 2 shutdown date of December 31,
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 3
2025 and the same portfolio with a Valmy Unit 2 shutdown date of December
31, 2023 using “planning” natural gas and “planning” CO2 assumptions.
g. the least cost, least risk IRP Portfolio without the Boardman to Hemingway
Transmission Project using a Valmy Unit 2 shutdown date of December 31,
2025 and the same portfolio with a Valmy Unit 2 shutdown date of December
31, 2024 using “low” natural gas and “high” CO2 assumptions.
h. the least cost, least risk IRP Portfolio without the Boardman to Hemingway
Transmission Project” using a Valmy Unit 2 shutdown date of December 31,
2025 and the same portfolio with a Valmy Unit 2 shutdown date of December
31, 2023 using “low” natural gas and “high” CO2 assumptions.
RESPONSE TO REQUEST NO. 1: As clarified with Staff via phone on March 16,
2020, the analyses performed in (c), (d), (g) and (h) use the planning natural gas
assumptions as it is the lowest case modeled in the 2019 IRP. Please refer to the
attached Excel file for the workpapers to support the responses to parts (a) through (h)
including the overall NPV differences and an annual comparison of portfolio costs
between the amended IRP portfolios and the requested alternative futures. To
summarize, under 7 of the 8 requested scenarios, the Preferred Portfolio reflected a lower
NPV than the portfolios with the exit of Valmy Unit 2 prior to 2025. Further, in all scenarios,
the early exit from Valmy Unit 2 resulted in reliability violations for each year prior to 2025
without available capacity from Unit 2. As discussed in the Company’s Response to
Staff’s Request No. 2, the cost of mitigating these violations far outweighs the NPV
reduction from the early Valmy Unit 2 exit. It should also be noted that the Company is
working with Staff to develop additional cost detail that will be provided as a supplement
to this response as soon as possible.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
a. The NPV of the Preferred Portfolio is $758,000 less than the NPV of a portfolio
using a Valmy Unit 2 shutdown of 2024 under planning natural gas and
planning CO2 assumptions.
b. The NPV of the Preferred Portfolio is $1,016,000 less than the NPV of a
portfolio using a Valmy Unit 2 shutdown of 2023 under planning natural gas
and planning CO2 assumptions.
c. The NPV of the Preferred Portfolio is $179,517,000 less than the NPV of a
portfolio using a Valmy Unit 2 shutdown of 2024 under planning natural gas
and high CO2 assumptions.
d. The NPV of the Preferred Portfolio is $179,133,000 less than the NPV of a
portfolio using a Valmy Unit 2 shutdown of 2023 under planning natural gas
and high CO2 assumptions.
e. The NPV of the least cost, least risk portfolio without the Boardman to
Hemingway Transmission Project is $941,000 less than the same portfolio
using a Valmy Unit 2 shutdown of 2024 using planning natural gas and planning
CO2 assumptions.
f. The NPV of the least-cost, least-risk portfolio without the Boardman to
Hemingway Transmission Project is $638,000 more than the same portfolio
using a Valmy Unit 2 shutdown of 2023 using planning natural gas and planning
CO2 assumptions. It should be noted, however, that the cost of mitigating the
reliability violations created by the shutdown of Unit 2 in 2023 totaled
approximately $40 million under the planning gas, planning carbon scenario,
as further detailed in the Company’s Response to Staff’s Request No. 2.
g. The NPV of the least-cost, least-risk portfolio without the Boardman to
Hemingway Transmission Project is $1,103,000 less than the same portfolio
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 5
using a Valmy Unit 2 shutdown of 2024 using planning natural gas and high
CO2 assumptions.
h. The NPV of the least-cost, least-risk portfolio without the Boardman to
Hemingway Transmission Project is $223,000 less than the same portfolio
using a Valmy Unit 2 shutdown of 2023 using planning natural gas and high
CO2 assumptions.
The response to this Request is sponsored by Jared Hansen, Resource Planning
Leader, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 6
REQUEST NO. 2: Does an earlier shutdown of the Valmy Unit 2 violate any
system reliability constraints in any of the portfolios requested to be modeled above? If
reliability constraints are violated by closing Valmy Unit 2 earlier than December 31, 2025,
please provide evidence/justification that operating Unit 2 until the end of 2025 is the least
cost alternative.
RESPONSE TO REQUEST NO. 2: Yes. A Valmy retirement prior to 2025 creates
a planning margin shortfall in each of the 8 requested scenarios, as detailed in Column D
of tabs “A” through “H.” Cells that drop below the 15 percent planning margin are
highlighted in red. These shortfalls result in the need to delay the exit of a Bridger coal
unit or accelerate the need for another resource. For this analysis, Idaho Power utilized
a delay in the exit of a Bridger coal unit to address the planning shortfall created by the
early exit of Valmy Unit 2 prior to 2025. Because this shortfall occurs in 2023 / 2024, it is
likely that resource procurement rules would prevent the Company from constructing any
additional supply-side resource in that amount of time. Therefore, the Company utilized
movement in the exit date from a Bridger unit as the next best option for meeting load if
Valmy Unit 2 were to shutdown prior to 2025. The attached Excel file illustrates the added
cost of delaying a Bridger coal unit in order to accelerate Valmy under the same four
scenarios described in Request Nos. 1 (a) through (d). It should be noted that the
attachment only models the impacts of mitigating the reliability violations for Scenarios A
through D, as the only difference between these scenarios and Scenarios E through H is
the exclusion of Boardman to Hemmingway, which occurs in 2026. Because the
mitigation action modeled by the Company reflects the delay of a Bridger unit exit to 2025,
Scenarios A through D already capture the modeling changes specific to the timing
differences associated with exiting from Valmy Unit 2 prior to 2025 and delaying the first
Bridger unit exit.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
As shown in the attachment provided in Response to Request No. 1, retiring Valmy
Unit 2 in 2025 is still the lowest cost alternative with regards to the preferred portfolio and
under planning gas and planning carbon assumptions.
The response to this Request is sponsored by Jared Hansen, Resource Planning
Leader, Idaho Power Company.
DATED at Boise, Idaho, this 27th day of March 2020.

LISA D. NORDSTROM
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 8
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 27th day of March 2020, I served a true and
correct copy of the within and foregoing IDAHO POWER COMPANY’S RESPONSE TO
THE FIRST PRODUCTION REQUEST OF COMMISSION STAFF upon the following
named parties by the method indicated below, and addressed to the following:

Commission Staff
Edward Jewell
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074

Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email [e-mail]

Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North 6th Street
Boise, Idaho 83702

U.S. Mail
Overnight Mail
FAX
X Email [e-mail]

Industrial Customers of Idaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, Idaho 83707

Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email [e-mail]

Dr. Don Reading
6070 Hill Road
Boise, Idaho 83703
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email [e-mail]

________________________________
Kimberly Towell, Executive Assistant
Total
($ x 1000)Preferred Portfolio - Valmy 2025 Valmy 2024 Planning Margin (%)
2019 463,741$ 463,741$ 28.81
2020 458,428$ 458,428$ 30.36
2021 487,660$ 487,660$ 27.19
2022 497,899$ 497,899$ 25.41
2023 503,807$ 503,807$ 20.25
2024 524,606$ 524,606$ 18.47
2025 551,048$ 552,150$ 13.43
2026 560,065$ 559,328$ 27.78
2027 571,076$ 571,650$ 21.64
2028 574,290$ 573,837$ 20.04
2029 589,918$ 589,933$ 15.34
2030 627,218$ 627,952$ 21.45
2031 616,961$ 617,490$ 15.49
2032 645,495$ 644,534$ 15.21
2033 636,925$ 636,572$ 15.15
2034 667,554$ 668,026$ 15.08
2035 701,265$ 701,593$ 16.38
2036 705,990$ 706,013$ 15.04
2037 725,711$ 726,190$ 15.05
2038 805,244$ 805,139$ 15.00
Total 11,914,901$ 11,916,547$
758$
Total
($ x 1000)Preferred Portfolio - Valmy 2025 Valmy 2023 Planning Margin (%)
2019 463,741$ 463,741$ 28.81
2020 458,428$ 458,428$ 30.36
2021 487,660$ 487,660$ 27.19
2022 497,899$ 497,899$ 25.41
2023 503,807$ 503,807$ 20.25
2024 524,606$ 525,350$ 14.90
2025 551,048$ 551,965$ 13.43
2026 560,065$ 560,698$ 27.78
2027 571,076$ 571,279$ 21.64
2028 574,290$ 574,719$ 20.04
2029 589,918$ 589,366$ 15.34
2030 627,218$ 627,196$ 21.45
2031 616,961$ 616,701$ 15.49
2032 645,495$ 644,970$ 15.21
2033 636,925$ 636,287$ 15.15
2034 667,554$ 667,152$ 15.08
2035 701,265$ 701,684$ 16.38
2036 705,990$ 705,522$ 15.04
2037 725,711$ 726,166$ 15.05
2038 805,244$ 805,582$ 15.00
Total 11,914,901$ 11,916,172$
1,016$
Total
($ x 1000)Preferred Portfolio - Valmy 2025 Valmy 2024 Planning Margin (%)
2019 463,996$ 463,741$ 28.81
2020 458,827$ 458,428$ 30.36
2021 488,534$ 487,666$ 27.19
2022 607,343$ 606,742$ 25.41
2023 629,365$ 627,179$ 20.25
2024 676,824$ 677,108$ 18.47
2025 735,226$ 743,717$ 13.43
2026 770,504$ 790,652$ 27.78
2027 806,477$ 840,877$ 21.64
2028 852,781$ 902,767$ 20.04
2029 877,550$ 950,794$ 15.34
2030 926,475$ 976,808$ 21.45
2031 899,935$ 954,989$ 15.49
2032 926,331$ 968,971$ 15.21
2033 930,874$ 963,121$ 15.15
2034 955,953$ 976,378$ 15.08
2035 983,844$ 1,002,135$ 16.38
2036 991,224$ 1,007,136$ 15.04
2037 997,292$ 1,012,898$ 15.05
2038 1,008,887$ 1,014,108$ 15.00
Total 15,988,241$ 16,426,213$
179,517$
Total
($ x 1000)Preferred Portfolio - Valmy 2025 Valmy 2023 Planning Margin (%)
2019 463,996$ 463,741$ 28.81
2020 458,827$ 458,428$ 30.36
2021 488,534$ 487,666$ 27.19
2022 607,343$ 606,742$ 25.41
2023 629,365$ 627,179$ 20.25
2024 676,824$ 677,207$ 14.90
2025 735,226$ 743,578$ 13.43
2026 770,504$ 790,354$ 27.78
2027 806,477$ 839,390$ 21.64
2028 852,781$ 903,177$ 20.04
2029 877,550$ 952,273$ 15.34
2030 926,475$ 977,439$ 21.45
2031 899,935$ 955,601$ 15.49
2032 926,331$ 968,113$ 15.21
2033 930,874$ 962,646$ 15.15
2034 955,953$ 976,061$ 15.08
2035 983,844$ 1,000,758$ 16.38
2036 991,224$ 1,006,710$ 15.04
2037 997,292$ 1,013,248$ 15.05
2038 1,008,887$ 1,014,353$ 15.00
Total 15,988,241$ 16,424,662$
179,133$
Total
($ x 1000)Non-B2H Portfolio - Valmy 2025 Valmy 2024 Planning Margin (%)
2019 464,006$ 464,006$ 28.81
2020 458,342$ 458,342$ 30.36
2021 488,496$ 488,496$ 27.19
2022 498,946$ 498,946$ 25.41
2023 504,780$ 504,780$ 20.25
2024 525,165$ 525,165$ 18.47
2025 551,168$ 551,806$ 13.43
2026 589,396$ 589,654$ 22.55
2027 596,915$ 597,671$ 16.47
2028 615,226$ 614,687$ 19.98
2029 625,015$ 624,452$ 15.12
2030 676,394$ 677,217$ 21.23
2031 665,259$ 665,504$ 15.27
2032 698,404$ 697,833$ 15.32
2033 687,437$ 688,130$ 15.26
2034 720,050$ 719,961$ 15.31
2035 751,544$ 751,509$ 16.60
2036 755,412$ 756,032$ 15.26
2037 777,053$ 777,174$ 16.36
2038 798,469$ 797,937$ 15.08
Total 12,447,477$ 12,449,299$
941$
Total
($ x 1000)Non-B2H Portfolio - Valmy 2025 Valmy 2023 Planning Margin (%)
2019 464,006$ 464,006$ 28.8058777
2020 458,342$ 458,342$ 30.3630238
2021 488,496$ 488,496$ 27.18635
2022 498,946$ 498,946$ 25.40864
2023 504,780$ 504,780$ 20.24552
2024 525,165$ 525,271$ 14.8974228
2025 551,168$ 551,103$ 13.4317436
2026 589,396$ 588,609$ 22.548233
2027 596,915$ 596,907$ 16.4696369
2028 615,226$ 614,972$ 19.97838
2029 625,015$ 624,693$ 15.1169624
2030 676,394$ 677,001$ 21.2342644
2031 665,259$ 665,152$ 15.2743454
2032 698,404$ 698,063$ 15.3216019
2033 687,437$ 687,507$ 15.2625113
2034 720,050$ 719,529$ 15.3074322
2035 751,544$ 751,975$ 16.60497
2036 755,412$ 755,911$ 15.2562332
2037 777,053$ 776,563$ 16.3586922
2038 798,469$ 798,389$ 15.0832844
Total 12,447,477$ 12,446,214$
(638)$
Total
($ x 1000)Non-B2H Portfolio - Valmy 2025 Valmy 2024 Planning Margin (%)
2019 464,006$ 464,006$ 28.81
2020 458,342$ 458,342$ 30.36
2021 488,499$ 488,499$ 27.19
2022 606,220$ 606,220$ 25.41
2023 626,643$ 626,643$ 20.25
2024 678,718$ 678,719$ 18.47
2025 742,852$ 744,784$ 13.43
2026 769,741$ 769,356$ 22.55
2027 808,463$ 808,203$ 16.47
2028 853,250$ 851,233$ 19.98
2029 887,682$ 887,185$ 15.12
2030 941,569$ 942,696$ 21.23
2031 931,287$ 932,098$ 15.27
2032 963,523$ 963,745$ 15.32
2033 967,693$ 967,206$ 15.26
2034 1,000,680$ 1,001,492$ 15.31
2035 1,034,892$ 1,035,674$ 16.60
2036 1,041,534$ 1,041,398$ 15.26
2037 1,075,583$ 1,075,510$ 16.36
2038 1,095,003$ 1,095,947$ 15.08
Total 16,436,179$ 16,438,954$
1,103$
Total
($ x 1000)Non-B2H Portfolio - Valmy 2025 Valmy 2023 Planning Margin (%)
2019 464,006$ 464,006$ 28.81
2020 458,342$ 458,342$ 30.36
2021 488,499$ 488,499$ 27.19
2022 606,220$ 606,220$ 25.41
2023 626,643$ 626,643$ 20.25
2024 678,718$ 678,440$ 14.90
2025 742,852$ 743,515$ 13.43
2026 769,741$ 770,151$ 22.55
2027 808,463$ 808,410$ 16.47
2028 853,250$ 851,226$ 19.98
2029 887,682$ 887,208$ 15.12
2030 941,569$ 941,837$ 21.23
2031 931,287$ 932,035$ 15.27
2032 963,523$ 964,169$ 15.32
2033 967,693$ 967,020$ 15.26
2034 1,000,680$ 1,000,549$ 15.31
2035 1,034,892$ 1,035,653$ 16.60
2036 1,041,534$ 1,041,395$ 15.26
2037 1,075,583$ 1,075,879$ 16.36
2038 1,095,003$ 1,095,544$ 15.08
Total 16,436,179$ 16,436,740$
223$
Total
($ x 1000)Preferred Portfolio - Valmy 2025 Valmy 2024 Planning Margin (%)
2019 463,741$ 463,741$ 28.81
2020 458,428$ 458,428$ 30.36
2021 487,660$ 487,660$ 27.19
2022 497,899$ 497,898$ 25.41
2023 503,807$ 525,347$ 25.06
2024 524,606$ 543,990$ 23.22
2025 551,048$ 569,017$ 18.11
2026 560,065$ 559,918$ 27.78
2027 571,076$ 571,751$ 21.64
2028 574,290$ 574,602$ 20.04
2029 589,918$ 589,935$ 15.34
2030 627,218$ 627,212$ 21.45
2031 616,961$ 617,026$ 15.49
2032 645,495$ 644,759$ 15.21
2033 636,925$ 637,415$ 15.15
2034 667,554$ 667,566$ 15.08
2035 701,265$ 701,734$ 16.38
2036 705,990$ 705,941$ 15.04
2037 725,711$ 726,214$ 15.05
2038 805,244$ 805,096$ 15.00
Total 11,914,901$ 11,975,251$
39,800$
Total
($ x 1000)Preferred Portfolio - Valmy 2025 Valmy 2023 Planning Margin (%)
2019 463,741$ 463,741$ 28.81
2020 458,428$ 458,428$ 30.36
2021 487,660$ 487,660$ 27.19
2022 497,899$ 497,898$ 25.41
2023 503,807$ 525,347$ 25.06
2024 524,606$ 545,148$ 19.64
2025 551,048$ 569,053$ 18.11
2026 560,065$ 559,646$ 27.78
2027 571,076$ 571,103$ 21.64
2028 574,290$ 574,704$ 20.04
2029 589,918$ 589,741$ 15.34
2030 627,218$ 627,230$ 21.45
2031 616,961$ 617,216$ 15.49
2032 645,495$ 644,436$ 15.21
2033 636,925$ 636,912$ 15.15
2034 667,554$ 667,827$ 15.08
2035 701,265$ 701,652$ 16.38
2036 705,990$ 706,055$ 15.04
2037 725,711$ 726,214$ 15.05
2038 805,244$ 805,442$ 15.00
Total 11,914,901$ 11,975,452$
40,007$
Total
($ x 1000)Preferred Portfolio - Valmy 2025 Valmy 2024 Planning Margin (%)
2019 463,996$ 463,741$ 28.81
2020 458,827$ 458,428$ 30.36
2021 488,534$ 487,666$ 27.19
2022 607,343$ 606,742$ 25.41
2023 629,365$ 652,281$ 25.06
2024 676,824$ 702,082$ 23.22
2025 735,226$ 767,169$ 18.11
2026 770,504$ 791,973$ 27.78
2027 806,477$ 839,948$ 21.64
2028 852,781$ 901,909$ 20.04
2029 877,550$ 950,678$ 15.34
2030 926,475$ 977,806$ 21.45
2031 899,935$ 954,883$ 15.49
2032 926,331$ 968,338$ 15.21
2033 930,874$ 963,402$ 15.15
2034 955,953$ 976,034$ 15.08
2035 983,844$ 1,001,255$ 16.38
2036 991,224$ 1,007,422$ 15.04
2037 997,292$ 1,013,105$ 15.05
2038 1,008,887$ 1,014,322$ 15.00
Total 15,988,241$ 16,499,184$
215,226$
Total
($ x 1000)Preferred Portfolio - Valmy 2025 Valmy 2023 Planning Margin (%)
2019 463,996$ 463,741$ 28.81
2020 458,827$ 458,428$ 30.36
2021 488,534$ 487,666$ 27.19
2022 607,343$ 606,742$ 25.41
2023 629,365$ 652,281$ 25.06
2024 676,824$ 701,991$ 19.64
2025 735,226$ 767,438$ 18.11
2026 770,504$ 790,780$ 27.78
2027 806,477$ 840,613$ 21.64
2028 852,781$ 900,882$ 20.04
2029 877,550$ 950,331$ 15.34
2030 926,475$ 977,312$ 21.45
2031 899,935$ 954,771$ 15.49
2032 926,331$ 968,618$ 15.21
2033 930,874$ 963,775$ 15.15
2034 955,953$ 976,123$ 15.08
2035 983,844$ 1,001,486$ 16.38
2036 991,224$ 1,007,874$ 15.04
2037 997,292$ 1,012,226$ 15.05
2038 1,008,887$ 1,014,248$ 15.00
Total 15,988,241$ 16,497,325$
214,426$