20191126IPC to Staff 1-3.pdf

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an lDAcoRP companv
26 PH l:58
OONOVAN E. WALKER
Lead Counsel
dwa lker@idahooower. com
November 26,2019
VIA HAND DELIVERY
Diane M. Hanian, Secretary.
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Re:Case No. IPC-E-19-31
Update to Load and Gas Forecast Components of the lncremental Cost
lntegrated Resource Plan Avoided Cost Methodology - ldaho Power
Company's Response to the First Production Request of the Commission
Staff
Dear Ms. Hanian:
Enclosed for filing in the above mafter are an original and three (3) coples of
ldaho Power Company's Response to the ldaho Public Utilities Commission Staff's First
Production Request.
Also enclosed is a confidential disk containing information provided in response
to Staffs requests. Please handle the confidential information in accordance with the
Protective Agreement in this matter.
lf you have any questions about the enclosed documents, please do not hesitate
to contact me.
Ve yours,
?
DEWKKT
Enclosures
Donovan E. Walker
i ll: IVE D
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S ANNUAL COMPLIANCE
FILING UPDATING THE LOAD AND GAS
FORECASTS IN THE INCREMENTAL
COST INTEGRATED RESOURCE PLAN
AVOIDED COST MODEL
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CASE NO. tPC-E-19-31
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Power" or "Company"), and in
response to the First Production Request of the Commission Staff to ldaho Power
Company dated November '19, 201 9, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
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]
[e-mail]
REQUEST NO. 1: Pages 82 and 83 of the lntegraled Resource Plan filed on
June 28, 2019 in IPC-E-19-19 states that ''ldaho Power concluded that Platts' natural
gas forecast is appropriate for the planning case forecast in the 2019 lRP. Platts' 2018
Henry Hub long-term forecast, after applying a basis differential and transportation costs
from Sumas, Washington (the location from which most of the supply is procured to fuel
the company's fleet of natural gas generation in ldaho), served as the planning case
forecast of fueling costs for existing and potential new natural gas generation on the
ldaho Power system.'' However, the Company's Application in this case states that
"ldaho Power will update the natural gas price forecast within the incremental cost
integrated resource plan (lClRP) avoided cost model to reflect the most recent EIA
Natural Gas Henry Hub Spot Price: High Oil and Gas Resource and Technology
forecast published on January 24,2019." Please answer the following questions:
a. Please explain why the Company has changed the source of the natural
gas forecast to the EIA Natural Gas Henry Hub Spot Price: High Oil and Gas Resource
and Technology forecast from the source of the forecast filed in the June 28, 2019 lRP.
b. Has the Company determined the forecast and the source to be used in
the natural gas planning cases for its supplemental IRP analysis that will be filed no
later than January 31 ,2O2O?
c. lf the Company has changed the source of the IRP forecast for its
supplemental IRP analysis, which source and forecast will be used? Please explain the
rationale for the change.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REOUEST OF THE COMMISSION STAFF - 2
d. Please provide the Platts's Henry Hub Spot Price forecast as well as the
Platts's Henry Hub Spot Price forecast adjusted for the Sumas differential and
transportation costs from 2020 through 2040.
RESPONSE TO REQUEST NO. 1:
a. ldaho Power has not changed the source of the forecast in the 2019
lntegrated Resource Plan ("lRP") which is the Platts 2018 Henry Hub long{erm natural
gas forecast.
Until the 201S IRP is acknowledged, ldaho Power will continue using the inputs
from the 2017 IRP in the ICIRP avoided cost methodology, including the load and gas
forecasts that are updated annually on October 15 in compliance with the ldaho Public
Utilities Commission ("Commission") Order No. 32697 and Order No. 32802. The
updated natural gas forecast is from the same source that was acknowledged in the
2017 lRP, the U.S. Energy lnformation Administration's ("ElA") Natural Gas Henry Hub
Spot Price: High Oil and Gas Resource and Technology forecast, but is the most recent
forecast published by the EIA on January 24,2019.
b. The forecast and source used in the supplemental 2019 IRP analysis has
not changed from the forecast and source used in the development of the 2019 lRP.
c. Please see the response to part b. above.
d. Please see the confidential attachment provided on the confidential CD.
The confidential CD will only be provided to those parties who have signed the
Protective Agreement in this matter.
The response to this Request is sponsored by Michael Darrington, Energy
Conkacts Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REOUEST OF THE COMMISSION STAFF . 3
REQUEST NO. 2: Staff understands that the natural gas forecast proposed in
this case ultimately affects the |RP-method avoided cost. Please explain in detail how
this forecast is utilized in the ICIRP model to ultimately determine an avoided cost. ln
addition to the Company's explanation, please answer the following:
A. Staff understands that Aurora uses natural gas forecasts for each hub in
the WECC to establish market electricity prices. Does the forecast in the filing establish
the basis for each of these hub forecasts or does the model use forecasts from some
other source? Please explain.
B. Please list all the natural gas hubs used in the ICIRP model and provide
the natural gas forecast for each.
RESPONSE TO REQUEST NO. 2:The Company had a phone conversation
with Commission Staff on November 21 , 2019, to address Staffs questions regarding
the natural gas price forecast used in Aurora. The Company explained that the Henry
Hub natural gas price forecast in Aurora acts as the main reference fuel for every
natural gas hub. A basis adjustment is applied to the reference fuel in order to quantify
the forecast natural gas price for each natural gas hub. Therefore, when the Henry Hub
natural gas price forecast is applied in Aurora, all the natural gas hubs are adjusted
based on that forecast.
The response to this Request is sponsored by Scott Wright, Lead Planning
Analyst, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
REQUEST NO. 3: The EIA Natural Gas Henry Hub Spot Price: High Oil and Gas
Resource and Technology forecast in the 2019 Annual Energy Outlook report published
on January 24,2019 does not match the forecast submitted by the Company in the filing
(see Table 1). Please explain why there is a difference and provide workpapers to
reconcrle the difference.
Table 1: Comparing EIA's Forecast and IPCO's Forecast
2019
2020
2027
2022
?023
2024
zo25
2026
2027
2028
2029
2030
203t
2032
2033
2034
203 5
2036
E lA's Forecast
2.90
2.90
?.8t
2.82
2.97
3.19
3.47
3.66
3.79
3.88
1.97
4.05
4.15
4.29
4.45
4.56
4.7L
4.83
IPCO's Forecast
3.01
3.07
3. 11
3.14
3.18
3.4
1.67
3.86
3.99
4.08
4.L6
4.24
4.33
4.46
4.63
4.74
4.89
5.01
RESPONSE TO REQUEST NO. 3: The table below contains the Sumas basis
and transport costs from the 2017 IRP resulting in the difference between EIA published
forecast and the forecast values ldaho Power filed in Case No. IPC-E- 19-31.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF .5
Year
Henry Hub
(Nominal S/MMBtu)
Sumas Basis
(Nominal $/MMBtu)
ldaho City Gate Transport
(Nominal S/MMBtu)
ldaho City Gate Delivered
(Nominal S/MMBtu)
20t9
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2012
2033
20v
2035
2036
2.90
2.90
2,81
2.42
2.97
3.19
3.41
3.66
3.79
3.88
3.97
4.05
4.15
4.29
4.45
4.56
4.7t
4.83
-0.37
-0.30
-0.17
-0.16
-0.27
-o.27
-0.27
-o.27
-0.27
-o.27
-0.28
-0,29
-0.29
-0.30
-0.30
-0.30
-0.30
-0.29
The response to this Request is sponsored by Michael Darrington, Energy
Contracts Leader, ldaho Power Company.
DATED at Boise, ldaho, this 26th day of November 2019.
A*-tualL-..-
DONOVAN E. WALKER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF .6
0.47
o.47
o.41
o.47
o.47
o.47
o.41
o.47
o.47
o.47
o.41
o.47
o.47
o.47
o.47
o.47
o.47
o.47
3.01
3.O7
3.11
3.14
3.18
3.40
3.61
3.85
3.S)
4.08
4.16
4.24
4.33
4.46
4.63
4.74
4.89
5.01
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 26th day of November 2019 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISSION STAFF upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Dayn Hardie
Deputy Attorney General
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
X Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
rly Towe utive Assistant
IDAHO PoWER COI\rIPANY'S RESPONSE TO THE FIRST
PRODUCTION REOUEST OF THE COMMISSION STAFF . 7