20200401IPC to Staff Supplemental Response.pdf

LISA D. NORDSTROM
Lead Counsel
[e-mail]

April 1, 2020

VIA ELECTRONIC FILING

Diane Hanian, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714

Re: Case No. IPC-E-19-19
2019 Integrated Resource Plan – Idaho Power Company’s Supplemental
Response to the First Production Request of the Commission Staff

Dear Ms. Hanian:

Attached for electronic filing in the above matter is Idaho Power Company’s
Supplemental Response to the First Production Request of the Commission Staff
(Request Nos. 5 and 9). Please handle the confidential information in accordance with the
Protective Agreement executed in this matter.

If you have any questions about the enclosed documents, please do not hesitate to
contact me.

Very truly yours,

Lisa D. Nordstrom

LDN:kkt
Enclosures
RECEIVED
2020 April 1,PM4:43
IDAHO PUBLIC
UTILITIES COMMISSION

IDAHO POWER COMPANY’S SUPPLEMENTAL 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 IDAHO POWER
COMPANY’S 2019 INTEGRATED
RESOURCE PLAN

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CASE NO. IPC-E-19-19

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

COMES NOW, Idaho Power Company (“Idaho Power” or “Company”) and
supplements its response to the First Production Request of the Commission Staff to
Idaho Power Company dated March 4, 2020, as follows:

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO
THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
REQUEST NO. 5: Please explain the formal process used by the Company to
verify each of the model runs used to develop the Company's 24 WECC optimized
portfolios. Please include any checklists or formal procedures used to ensure that
model configuration was consistent with the assumptions presented to the Integrated
Resource Plan Advisory Committee (IRPAC).
SUPPLEMENTAL RESPONSE TO REQUEST NO. 5: The majority of the
assumptions for each model simulation were stored in a single database. The
assumptions that were presented to the IRPAC were inputs to that database. Change
sets were then created outside the database to model the different gas and carbon
futures presented to the IRPAC.
Idaho Power performs a verification process at the beginning of the IRP to
ensure all flow-through inputs are entered into the model correctly, remain constant
through the modeling process, and behave as they should. For example, if the load
forecast input for January 2020 is 1,000 megawatts (“MW”), the output for January 2020
should equal 1,000 MW. The hourly system load forecast, Henry Hub natural gas price
forecast and Sumas basis adjustment, monthly hydro generation forecast, Public Utility
Regulatory Policies Act of 1978 forecasts, and fixed cost inputs are flow-through inputs
that remain constant through the modeling process. Once these flow-through inputs are
verified, the Company starts the modeling process.
Ongoing verification processes also occur with the output spreadsheets that
compile the results from Aurora. One of these verification processes in Excel is
ensuring total resource generation, plus purchased power, minus surplus sales equals

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO
THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 3
the total system load for that hour. This type of check ensures that all energy in the
model is accounted for during every hour.
Another verification process that occurs with each model run is in the analysis of
the output. One example of this analysis process is shown on pages 103 and 104 of
the IRP. Figures 8.3 and 8.4 illustrate the Western Electricity Coordination Council
(“WECC”)-optimized portfolios. Portfolio 1 and Portfolio 4 both use the same planning
gas input; however, Portfolio 1 uses a zero carbon input while Portfolio 4 uses a high
carbon input. As shown in Figure 8.3, Portfolio 1 experienced no early coal exits, while
Portfolio 4 experienced early coal exits. This review of the results validates that the
model is performing as expected. With a high carbon future, early coal exits, and
additional renewable generation builds are expected. This is just one of the many types
of analysis that is performed on the output to provide verification that the model is
performing as expected.
The response to this Request is sponsored by Jared Hansen, Resource Planning
Leader, Idaho Power Company.

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO
THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
REQUEST NO. 9: Please describe the Company's process for validating the
Aurora LTCE tool prior to development of the Company's 24 WECC optimized portfolios
for the Amended 2019 IRP. Please include the Company's procedures for determining
the following:
a. The process for validating the particular options and methods used by the
Company (Traditional, MIP Maximize Value, and MIP Minimize Cost).
b. Correspondence between IRP objectives and modeling outputs.
c. Model stability.
d. Please explain how the Company determined that the Aurora Capacity
Expansion Option and method chosen by the Company would produce portfolios with
the least cost and least risk to the Company's ratepayers.
e. Efforts undertaken by the Company to characterize the model.
f. Efforts undertaken by the Company to determine input parameter limits
that might cause the model to become unstable or unreliable.
SUPPLEMENTAL RESPONSE TO REQUEST NO. 9:
a. Please refer to the Company’s Response to Staff’s Request No. 3 for this
information.
b. The objectives that the Company focused on during the 2019 IRP were:
least-cost, least-risk, system reliability, and environmental factors. The Company
addressed all factors during the process by building a range of carbon and gas futures
with and without Boardman to Hemmingway (“B2H”) creating a wide variety of
portfolios. Some portfolios contained higher gas generation, some included higher
renewable generation, and others focused on the timing of coal exits. The Company

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO
THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 5
selected a preferred portfolio that successfully positions Idaho Power to provide reliable,
economic, and increasingly clean service to the Company’s customers into the future.
The cost and risk associated with each WECC-optimized and manually-adjusted
portfolio is calculated and discussed in the Modeling Analysis chapter of the report,
starting on page 105.
System reliability was addressed throughout the Amended 2019 IRP report
including discussions on solar capacity factors, demand-side management reliability,
transmission, and B2H impacts on reliability. Sufficient regulation reserves and planning
margin were a basic design constraint in the construction of each portfolio and were
also verified to be adequate in the consideration of the timing of coal exits in the
manually-adjusted portfolios.
Carbon emissions were forecasted for each portfolio to quantify environmental
impact as shown on Figure 9.8 on page 117.
c. The Excel file accompanying the Company’s response to Staff’s Request
No. 3c demonstrates the stability of the model by showing that the model was able to
solve for each portfolio and able to converge within the defined parameters.
As mentioned in the Company’s Supplemental Response to Staff’s Request No.
5, inputs are validated through the modeling process. In addition, Aurora has built in
processes that alert the user when stability issues are detected. For example, Aurora
will issue a time-out warning when a Long-Term Capacity Expansion (“LTCE”)
simulation cannot sufficiently solve an iteration in an allotted time period before moving
on to the next iteration. This warning alerts the analyst that the model might be
experiencing conflicting constraints. These messages help ensure all constraints in the

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO
THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 6
model are realistic and act similar to how the constraints on the Company’s system
occur. During initial testing stages, these errors would occur; however, the Company
learned and adjusted new resource selections, capabilities of resources, and constraints
to eliminate the time-out warnings.
Another example of a warning in Aurora is when the model relaxes a constraint
when performing hourly simulations. One example of this constraint relaxation occurs
with regulation reserves. There are instances when the model has an imposed
regulation requirement, but not enough resources to meet that requirement. The model
will inform the user that the constraint has been relaxed and move on to the next hour
simulation. These messages are then evaluated at the end of each simulation to
ensure that the relaxed constraints are acceptable. This step is important, because the
LTCE simulation builds resources using sample hours due to time constraints, while the
portfolio simulation evaluates every hour. If resources that were built during the LTCE
simulation are not sufficient to cover every hour of the constraints, the model will inform
the user, so they can modify the portfolio to an acceptable range that provides a reliable
portfolio.
d. Please refer to the Company’s Response to Staff’s Request No. 11 for this
information.
e. Attachment 1 to this response demonstrates how the Aurora dispatch
compares to a historical peak day. While the inputs between the two charts are
different, the charts verify Aurora dispatch is very similar to actual operations.
Confidential Attachment 2 to this response demonstrates another analysis that
was performed by the Company during the initial testing stages to evaluate natural gas
price sensitivity as it relates to resource dispatch. The comparison between the Aurora

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO
THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
dispatch and the historical peak day was used as the starting point for that analysis.
The Company started with the base, then varied gas prices to ensure the proper
resource dispatch response. As shown in this analysis, the more the natural gas price
is increased, the less natural gas generation is used; thereby pushing generation to
more economical resource types. A three-dollar natural gas price increase moves
Langley generation previously operating during all 24 hours to a mere 12 hours and
natural gas peaking resources are reduced to two hours. Other input assumptions are
also validated to ensure resources are behaving as expected. The confidential
attachment will be provided to those parties that have executed the Protective
Agreement in this matter.
When LTCE simulations are performed, resource builds are validated to ensure
the portfolios match the conditions for which they were designed. For example, an
LTCE simulation performed under a High Gas – High Carbon scenario should yield
resource builds that perform well under those conditions. Portfolio 12, which was built
under a High Gas – High Carbon scenario, selected 1,200 MW of wind, 1,170 MW of
solar and 692 MW of gas, which aligns very well with the modeled conditions. Portfolio
12 also built 720 MW of solar in year 2021, due to the Investment Tax Credit, which is
expected as resource costs are lower. Due to regulation reserve constraints, natural
gas was built under the High Gas – High Carbon scenario to help integrate variable
energy resources. Portfolio 2, which was built under a Planning Gas – Planning Carbon
scenario built no wind, 360 MW of solar and 1,044 MW of gas, which aligns well with the
expected future.
Regulation requirements by portfolio is another validation check the Company
uses to ensure portfolios are robust, and the model is performing as expected. The
regulation requirements for each portfolio varies based on the LTCE build; however, as

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO
THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 8
shown in the attachment provided with the Company’s response to Staff’s Request No.
39, the maximum percentage of unmet regulation reserves for any portfolio was 0.076
percent. The 0.076 percent is calculated by taking the total unmet regulation reserves
for the 2019 through 2038 of 269,650 megawatt-hours (“MWh”) divided by the total load
obligation of 355,832,278 MWh for the same time period. The average of unmet
regulation reserves for all 24 portfolios is a very low 0.017 percent.
Resource emissions by portfolio is another validation check the Company
performs. Portfolios with higher renewables tend to have lower carbon emissions, while
portfolios with lower renewables and more natural gas tend to have higher carbon
emissions. This is evident on Figure 9.7 on page 116 of the IRP.
f. The Company performs testing when the model is initially created, as well
as when inputs are changed to evaluate inconsistencies (please reference the
Company’s Response to Request No. 5 and Response to Request No. 9, part
“e”). Additionally, the stochastic analysis determined the impact that variations in
natural gas prices, customer load, and hydroelectric generation could have on the total
portfolio costs.
The response to this Request is sponsored by Jared Hansen, Resource Planning
Leader, Idaho Power Company.
DATED at Boise, Idaho, this 1st day of April 2020.

LISA D. NORDSTROM
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO
THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 9
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 1st day of April 2020 I served a true and correct
copy of IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER
COMPANY 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
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714

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IdaHydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite LP 103
P.O. Box 2900
Boise, Idaho 83701

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

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STOP B2H Coalition
Jack Van Valkenburgh
Van Valkenburg Law, PLLC
P.O. Box 531
Boise, Idaho 83701

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Jim Kreider
60366 Marvin Road
La Grande, Oregon 97850
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Idaho Sierra Club
Julian Aris, Associate Attorney
2101 Webster Street, Suite 1300
Oakland, California 94612

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IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO
THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 10
Gloria D. Smith, Managing Attorney
2101 Webster Street, Suite 1300
Oakland, California 94612
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Ana Boyd, Research Analyst
2101 Webster Street, Suite 1300
Oakland, California 94612
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Industrial Customers of Idaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, Idaho 83707

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Dr. Don Reading
6070 Hill Road
Boise, Idaho 83703
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Micron Technology, Inc.
Austin Rueschhoff
Thorvald A. Nelson
Holland & Hart, LLP
555 Seventeenth Street, Suite 3200
Denver, Colorado 80202

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Jim Swier
Micron Technology, Inc.
8000 South Federal Way
Boise, Idaho 83707
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Kimberly Towell, Executive Assistant