20200526IPC to Staff Supplemental 2.pdf

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LISA D. NORDSTROM
Lead Couneel
[e-mail]
May 20, 2020
VIA ELECTRONIC FILING
Diane Hanian, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Re Case No. IPC-E-19-18
Validation of North Valmy Power Plant Unit 2 Closure in 2025
ldaho Power Company's Testimony
Dear Ms. Hanian
Attached for electronic filing in the above matter is ldaho Power Company's Second
Supplementral Response to the First Production Request of the Commission Staff.
lf you have anyquestions aboutthe enclosed documents, please do not hesitate to
contact me.
Very truly yours,
&-!.("1-t -*,
Lisa D. Nordstrom
LDN:sdh
Enclosures
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I no rd strom @ ida h o power. co m
Attorney for ldaho 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
SECOND SUPPLEMENTAL
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Powef or "Company"), and in
response to the First Production Request of the Commission Staff to ldaho Power
Company dated March 6,2020, herewith submits the following supplemental information:
IDAHO POWER COMPANY'S SECOND SUPPLEMENTAL RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF. 1
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 lRP "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" natura! gas and "planning" COz
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 s€lme 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 SECOND SUPPLEMENTAL RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
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, Ieast 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" natura!gas and "high" CO2 assumptions.
2ND SUPPLEMENTAL RESPONSE TO REQUEST NO. 1:
Please see the aftached file for the revised Excelfile to the Company's Response
to Request No. 1. Attachment 1 includes the workpapers that support the net present
value ('NPV') difference and an annual breakdown of the costs and benefit value streams
used to calculate the NPV differences between the amended lRP portfolios and the
requested altemative futures. The following changes have been made:
o The Company has corrected for an eror in the data presented in Scenarios
C and D. The NPV of the Prefened Portfolio is $1,107,000 less than the
NPV of a portfolio using a Valmy Unit 2 shut-down of 2024 under planning
natural gas and high CO2 cost assumptions and the NPV of the Preferred
Portfolio is $724,000 less than the NPV of a portfolio using a Valmy Unit 2
shut-down of 2023.
. ldaho Power has made an adjustment to the total NPV cost of all portfolios
presented in Attachment 1 to include the net book value of the remaining
Bridger investments at the time of retirement.
IDAHO POWER COMPANY'S SECOND SUPPLEMENTAL RESPONSE TO THE FIRST
PRODUCTION REOUEST OF THE COMMISSION STAFF - 3
The correction of the error and the inclusion of the Bridger fixed costs however
does not change the conclusion to be drawn from the results; under 7 of the 8 requested
scenarios, the Prefened Portfolio reflected a lower NPV than the portfolios with the exit
of Valmy Unit 2 prior to 2025. Further, in each scenario, the early exit from Valmy Unit 2
resulted in a reserve margin deficit in at least one year prior to 2025 without available
capacity from Unit 2.
ln addition, Attachment 2 is a revised version of the addendum provided in the
Company's Supplemental Response to Request No. 1. The revisions correct for errors
in the data provided initially.
The response to this Request is sponsored by Jared Hansen, Resource Planning
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S SECOND SUPPLEMENTAL RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF.4
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? lf
reliability constraints are violated by closing Valmy Unit 2 earlierthan December 31,2025,
please provide evidence/justification that operating Unit 2 until the end of 2025 is the least
cost alternative.
SUPPLEMENTAL RESPONSE TO REQUEST NO. 2:
Please see the attached revised file that presents 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). The Company has corrected for an error found in the data
presented in Scenario C. ln addition, ldaho Power has made an adjustment to the total
NPV cost of all portfolios presented in the attachment to inctude the net book value of the
remaining Bridger investments at the time of retirement. The resulting conclusion
however does not change; retiring Valmy Unit 2 in 2025 is still the lowest cost altemative
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, ldaho Power Company.
DATED at Boise, ldaho, this 22nd day of May 2020.
X*!.4,,*t.*,
LISA D. NORDSTROM
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S SECOND SUPPLEMENTAL RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF. 5
CERTIFICATE OF SERVICE
! HEREBY CERTIFY that on this 22nd day of May 2020,1 served a true and conect
copy of the within and foregoing IDAHO POWER COMPANY'S SECOND
SUPPLEMENTAL 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 Attomey General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North 6h Street
Boise, Idaho 83702
lndustrial Customers of ldaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 837OT
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
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Sandra D. Holmes
Legal Administrative Assistant
IDAHO POWER COMPANY'S SECOND SUPPLEMENTAL RESPONSE TO THE FIRST
PRODUCTION REOUEST OF THE COMMISSION STAFF - 6