20190912IPC to Staff 2-9.pdf

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An IDACORP Company
DONOVAN E. WALKER
Lead Counsel
[e-mail]
RECEIVED
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September 12,2019
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
P.O. Box 83720
Boise, ldaho 83720
Re:Case No. IPC-E-19-20
Capacity Deficiency to be Utilized for Avoided Cost Calculations - ldaho
Power Company's Response to the Second Production Request of the
Commission Staff
Enclosed for filing in the above matter please find an original and three (3) copiesof ldaho Power Company's Response to the Second Production Request of the
Commission Staff.
yours,
E. Walker
DEW/KKT
Enclosures
Dear Ms. Hanian:
4
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwal ker@ id ahopower. com
RECEIVED
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Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UT!LIT!ES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER FOR APPROVAL OF
THE CAPACITY DEFICIENCY TO BE
UTILIZED FOR AVOIDED COST
CALCULATIONS
CASE NO. IPC-E-19-20
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
Company dated August 22,2019, 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 list and describe major causes (e.9. a change from 95th
percentile to 50th percentile, a 15 percent peak-hour planning margin, load growth, etc.)
for the difference in load used to develop the capacity deficiency period between the IPC-
E-17-12 and the current filing. Please quantify each cause.
RESPONSE TO REQUEST NO. 2: The 2019 lntegrated Resource Plan ("!RP")
uses a Long-Term Capacity ('LTC") expansion model to design portfolios under a range
of futures. ln the 2017 IRP and all previous ldaho Power lRPs, portfolio resources were
manually selected based on relative cost and reliability.
The use of a LTC expansion model is the primary driver behind the change in
planning margin approaches. The LTC produces a Western Electricity Coordinating
Council ("WECC') optimized portfolio for the future conditions defined in the model, such
as natural gas prices and carbon taxes, using a defined planning margin. The WECC
LTC portfolio has the advantage of including new resources for ldaho Power, which
honors the criteria of capacity additions and operating reserves as defined in the model.
The LTC process also simultaneously evaluates units for economic retirement like the
Jim Bridger coal units in the ldaho Power area.
The 2019 IRP is using a 15 percent peak-hour capacity planning margin under a
50th percentile load forecast, as described in the table below, which aligns with the 95th
percentile approach when fully accounting for Capacity Benefit Margin ("CBM"). The
2017 lRP and all previous ldaho Power lRPs used a 95th percentile peak-hour load
forecast combined with the system reliability CBM.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
2019 Comparison
July 2019 Peak Hour Load
15% Peak Hour Capacity Planning Margin
50th Percentile
load Forecast
with 15% Peak Hour
Capacity Planning Margin
95th Percentile
Load Forecast
Capacity Benefit Margin (330)
Planning Target + Capacity Benefit Margin (4,001)(3,954)
Several factors influenced ldaho Power's decision to move to the 15 percent peak-hour
capacity planning margin, including:
1. lt is consistent with the use and logic in the AURORA model's LTC
expansion functionality used in portfolio development.
2. lt is consistent with the North American Electric Reliability Corporation
("NERC") M-1 Reserve Margin criteria:
(https://www. nerc. com/pa/RAPA/rilPaqes/Planninq ReserveMarq in.aspx)
3. lt is more consistent with how other regional utilities perform capacity
planning:
(a) PacifiCorp 13 percent target planning margin -2017 lRP, p. 10
(b) Portland General Electric 17 percent reserve planning margin -2016
lRP, p. 116
(c) Avista 14 percent planning margin -2017 lRP, 6-1
The response to this Request is sponsored by Rick Haener, Power Supply
Planning Technical Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 3
(3,479)
(s22],
(3,634)
REQUEST NO. 3: Page 90 of the 2019 IRP states "... ldaho Power compared the
2017 IRP's 95th percentile peak-hour capacity, including the addition of 330 MW of
capacity benefit margin (CBM) to the 50th percentile peak-hour forecast with a 15 percent
planning margin being used in the 2019 lRP...the two methods do not result in significant
differences." Please provide the following:
a. Please define and explain "capacity benefit margin." What is the source of
this capacity, and how was it determined/calculated?
b. Please explain why adding 330 MW of CBM to the 50th percentile 2017 IRP
forecast is a good comparison to the 2019 IRP 50th percentile forecast plus a 15%
planning margin.
RESPONSE TO REQUEST NO. 3:
a. Below is the definition of Capacity Benefit Margin from the Glossary of
Terms used in NERC Reliability Standards
The amount of firm transmission transfer capability
preserved by the transmission provider for Load-Serving Entities
(LSEs), whose loads are located on that Transmission Service
Provider's system, to enable access by the LSEs to generation from
intercon nected systems to meet generation reliability req uirements.
Preservation of CBM for an LSE allows that entity to reduce its
installed generating capacity below that which may otherwise have
been necessary without interconnections to meet its generation
reliability requirements. The transmission transfer capability
preserved as CBM is intended to be used by the LSE only in times
of emergency generation deficiencies.
Perthe NERC definition, ldaho Power reserves 330 megawatts ("MW') of west-to-
east transmission capacity across the ldaho - Northwest transmission path. The source
of this capacity, in real-time, is any entity with available emergency power that can be
delivered to the ldaho - Northwest transmission path
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF .4
ldaho Power established CBM as equal to ldaho Power's most severe single
contingency, the loss of ldaho Power's share of two Jim Bridger units - 330 MW.
b. For clarification, ldaho Power did not add 330 MW of CBM to the 50th
percentile 2017 IRP forecast. The Company added 330 MW of CBM to the 2017 IRP 95h
percentile peak-hour load for comparison to the 2019lRP peak-hour load. The 330 MW
of CBM in the 2017 IRP was not explicitly included in the measurement of the 95th
percentile peak-hour load and available resources to serve load. For the 2019 lRP, the
CBM is included in the calculation due to the methodology change described in the
response to ldaho Public Utilities Commission ("Commission") Staff's Request No. 2.
Specifically, the 2019 IRP 15 percent capacity margin includes outage events in which
the 330 MW of CBM would be available to serve load. For this reason, it is appropriate
to include the CBM with the 2017 IRP 95th percentile peak-hour load to compare to the
2019 peak-hour load.
The response to this Request is sponsored by Jared Ellsworth, Engineering
Leader, ldaho Power Company, and Rick Haener, Power Supply Planning Technical
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 5
REQUEST NO. 4: Staff calculated the average of Cogeneration and Small Power
Production (CSPP) capacity for 2026,2027,2028, and 2029, using 2017 IRP data and
2019 IRP data, respectively. The 2019 IRP average is about 108 MW higher. Please
identify major causes for the increase and quantify each cause.
RESPONSE TO REQUEST NO. 4: The Public Util ity Regulatory Policies Act of
1978 ('PURPA") forecast for the 2019lRP includes additional installed solar capacity of
26.75 MW scheduled to be online between October 2019 and December 2019. These
projects are included on the Existing Resource Data for PURPA contracts list on pages
28-30 of Appendix C. Technical Report ("Appendix C") to the 2019 IRP and have a 47 .92
percent capacity value per IRP page 39 Table 4.1, resulting in a capacity contribution of
approximately 13 MW.
Substantially all of the remaining increase is the result of the assumed peak-hour
capacity contribution increase, consistent with the findings of the solar capacity value
analysis described on pages 37-39 of the 2019 lRP.
The response to this Request is sponsored by Rick Haener, Power Supply
Planning Technical Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 6
REQUEST NO. 5: Refe rring to the electronic workpapers provided by ldaho
Power to calculate capacity deficiency in Case No. IPC-E-17-12, the Company included
"Transmission Capacity Available for Market Purchases" to determine peak capacity.
This was changed to "Market Purchases" in this year's filing. Please answer the following
questions:
a. How are these terms defined and are they equivalent? Please explain.
b. Staff calculated the average of Transmission Capacity Available for Market
Purchases for 2026,2027,2028, and 2029 using the 2017 IRP data and the 2019 IRP
data, respectively. The 2019 IRP average is about 356 MW higher. Please identify major
causes for the increase and quantify each cause.
RESPONSE TO REQUEST NO. 5:
a.These terms are equivalent. The discussion included in the 2019lRP in the
section Power Market Purchases and Sa/es (2019 lRP, pp. 33-34) describes this load
and resource balance line item, stating.
ldaho Power relies on regional power markets to supply a
significant portion of energy and capacity needs during certain
times of the year. ldaho Power is especially dependent on the
regional power market purchases during peak-load periods.
The existing transmission system is used to import the power
purchases.
b. The average increase of about 356 MW is caused by the following changes:
(1) 98 MW lncrease Due to infrastructure improvements, the
northbound path limit of the Idaho-Nevada path will be increased in 2020 from 262
MW to 360 MW (2019 lRP, p. 60).
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
(2) 330 MW lncrease - The 2019lRP assumes the inclusion of 330 MW
of CBM as part of the planning reserve margin (see 2019 lRP, p. g0 or ldaho
Power's response to Commission Staff's Request No. 3).
(3) 72MW Decrease - The assumed transmission capacity available for
firm market purchases over combined Paths 14 (ldaho - Northwest) and 18 (ldaho
- Montana) As described on page 34 of the 2019 lRP, this amount of transmission
capacity is assumed reserved for ldaho Power to import energy for load service
(network set-aside).
The response to this Request is sponsored by Rick Haener, Power Supply
Planning Technical Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 8
REQUEST NO. 6: Please explain why the month with the largest deficit shifted to
August in the current filing from July in Case No. IPC-E-17-12.
RESPONSE TO REQUEST NO. 6: The primary factor driving the referenced
deficit shift is the relative difference between July and August peak-hour loads. For the
2017 lRP, the late 2020s 95th percentile peak-hour loads for July were about 10 percent
higher than forAugust (i.e., July 95th percentile peak-hour load = 1.10 x August 95th
percentile peak-hour load). For the 2019 lRP, the similar relative difference for 50th
percentile peak-hour loads are closer to 5 percent (i.e., July 50th percentile peak-hour
load = 1.05 x August 50th percentile peak-hour load).
ln other words, when comparing the load and resource balances in the 2019 IRP
to the 2017 lRP, August peak-hour loads grew more than July peak-hour loads, shifting
the largest deficit month from July to August.
The response to this Request is sponsored by Rick Haener, Power Supply
Planning Technical Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 9
REQUEST NO. 7: What is the justification and specific criteria ldaho Power uses
to decide whether or not to include future changes to the set of existing resources, such
as early retirements and additions of new resources, in the load and resource balance
used to calculate the deficiency period? ln addition, how are these decisions made and
who is responsible for making these decisions?
RESPONSE TO REQUEST NO. 7: The decision to include future changes to
resources in the load and resource balance for determination of the first capacity deficit
is based on the level of certainty ldaho Power has of the forecasted action. The general
rule is that only existing and committed resources are included in the load and resource
balance in determining the first deficit.
. An existing resource is available for service and has been approved by state utility
regulators.
o A committed resource is one in which a build or retirement action has been
approved or acknowledged via a public filing - usually a Certificate of Public
Convenience and Necessity or other regulatory confirmation - that gives ldaho
Power a high degree of certainty the resource action when completed will be
approved for cost recovery.
For example, retirement of North Valmy is included in the load and resource
balance developed for the capacity deficiency filings as it has been approved by the
Company's regulators, whereas the Boardman to Hemingway transmission line, although
included in the last several lRPs, does not have the same type of regulatory approval and
therefore is not included.
The response to this Request is sponsored by Rick Haener, Power Supply
Planning Technical Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1O
REQUEST NO. 8: What specific resources are included in the "New Resource-
Solar" category in Attachment 1 of the Company's Application? How are they
determined/calculated? Please explain why there is zero-peak contribution during winter
months from these solar resources?
RESPONSE TO REQUEST NO. 8: The "New Resource - Solar" category
includes the 120 MW Jackpot Solar project adding 51 MW of summer capacity beginning
in 2023, plus the 100 MW Franklin Solar project adding 33 MW of summer capacity
beginning in 2024. The calculated capacity value of these solar projects is consistent
with the solar capacity value methods described on pages 37-39 of the 2019 lRP, and as
provided in tabularform on page 25 of Appendix C of the 2019 IRP. Referencing the
table on page 25 of Appendix C, the Jackpot Solar project is assumed to comprise
projects 1-3, with capacity value totaling 51 MW. On a percentage basis, the Franklin
Solar project is assumed to provide capacity value of 33.2 percent of AC nameplate
capacity, which is the average capacity value percentage for projects 4 and 5.
ldaho Power assumes capacity value ol zero for solar photovoltaic during winter
season peak-load events, which historically have occurred in the early morning or early
evening hours, which have little or no sunlight or solar generation.
The response to this Request is sponsored by Rick Haener, Power Supply
Technical Planning Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 11
REQUEST NO. 9: Please explain why Total Coal in year 2029 changed from 527
MW in Case No. IPC-E-17-12 to 703 MW in the current filing?
RESPONSE TO REQUEST NO. 9: The 527 MW assumed for coal MW in July
2029 in the 2017 capacity deficiency filing (|PC-E-17-12) is the remaining peak-hour
output following ldaho Power's exiUretirement from Boardman, North Valmy, and one unit
at Jim Bridger (year-end 2028). The 703 MW for coal in this capacity deficiency filing (lPC-
E-19-20) reflects the status quo of ldaho Power's system of resources, excepting the
exiUretirement from Boardman and North Valmy. ln Case No. IPC-E-17-12, the Bridger
retirement assumptions were not separately presented in the load and resource balance
schedule; this difference in presentation had no impact on the determination of the
capacity deficiency date.
The capacity deficiency filing is specifically intended to identify the point in time at
which ldaho Power's existing system is projected to become capacity deficient. While the
Company explored early exit from the Jim Bridger units as part of the 2019 lRP, without
known and committed exit dates the capacity deficiency filing assumes full Jim Bridger
capacity until committed exit dates are determined,
The response to this Request is sponsored by Rick Haener, Power Supply
Planning Technical Leader, ldaho Power Company.
DATED at Boise, ldaho, this 1 2th day of September 2019.
DONOVAN E. WALKER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 12
du-
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 12th day of September 2019 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
Edward Jewell
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington Street (83702)
P.O. Box 83720
Boise, Idaho 83720-007 4
ldaHydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite LP 103
P.O. Box 2900
Boise, ldaho 83701
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North 6th Street
Boise, ldaho 83702
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IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 13