20200710IPC to Staff Second Partial Response.pdf

3Em.
RECEIVED
2020July l0,PM 4:20
IDAHO PUBLIC
ATILITIES COMMISSION
AnD [e-mail]
DONOVAN WALKER
Lead Counsel
[e-mail]
July 't O,2020
ELECTRONIC FILING
Diane Hanian, Secretary
!daho Public Utilities Commission
1 1331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Re Case No. IPC-E-20-O2
Avoided Cost Rates and Terms for Energy Storage Qualifying Facilities
Under PURPA - ldaho Power Company's Second Partial Response to
the Second Production Request of the lndustrial Customers of ldaho
Power
Dear Ms. Hanian:
Attached for electronic filing is ldaho Power Company's Second Partial Response
to the Second Production Request of the Commission Staff. The attachments that respond
to Production Requests 8 and 19 are too voluminous for e-mail transmittal and instead will
be made available to the parties on the Company's discovery FTP site. PIease contact
Mark Annis, Senior RegulatoryAnalyst, at (208) 3404404 or [e-mail] for
access to the FTP site. lf you have any questions about the attached documents, please
do not hesitate to contact me.
Very truly yours,
Mzd*L
Donovan Walker
DW:cld
Attachments
DONOVAN E. WALKER (!SB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwa [e-mail]
Aftorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITION TO ESTABLISH
AVOIDED COST RATES AND TERMS FOR
EN ERGY STORAGE QUAL! FYI NG
FACILITIES UNDER PURPA
CASE NO. |PC-E-20-02
IDAHO POWER COMPANY'S
SECOND PARTIAL RESPONSE
TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION
STAFF
COMES NOW, ldaho Power Company ("ldaho Powe/' or "Company"), and in
response to the Second Production Request of the Commission Staff to ldaho Power
Company dated June 23, 2020, herewith submits the following information:
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF. 1
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REQUEST NO. 8: Please provide all indicative pricing fumished to QFs for IRP-
based rates for the last ten years.
RESPONSE TO REQUEST NO. 8: ldaho Power has compiled the requested
information for indicative prices provided to PURPA Qualifying Facilities ('QF") using the
incremental cost lntegrated Resource Plan ("lClRP") method from August 2011 through
December 2019. Due to the voluminous and confidential nature of this information, it is
being provided via the Company's FTP site. Please contact Mark Annis, Senior
Regulatory Analyst, at [phone] or [e-mail] for access to the
FTP site.
The list below identifies QFs that entered into energy sales agreements
containing earlier versions of IRP-based rates or that were determined by the cunent
ICIRP avoided cost methodology and were approved by the ldaho Public Utilities
Commission ("Commission"). The indicative prices that became the Commission
approved contract rates are publicly available and can be found in each of the contracts
for the QFs listed that were filed with the Commission in the corresponding case
number.
Proiect Name
Tuana Springs Expansion
Rockland Wind Farm
Murphy Flats Solar Power
Project
Dynamis Ada County Landfill
Project
High Mesa Wind Project
Grand View PV Solar Two
lD Solar 1
American Falls Solar Il, LLC
American Falls Solar, LLC
Clark Solar 1, LLC
Solar 101412011 IPC-E-11-10
Nameplate
Capacitv
36
80
Resourc
e Tvpe
Wind
Wind
Contract
Date
81512009
91312010
1111612011
1111612011
711712014
711712014
1011312014
1011312014
10113120't4
IPUG Case
Number
IPC-E-09-24
tPc-E-10-24
lPc-E-11-25
lPc-E-11-26
tPc-E-14-19
tPc-E-14-20
lPc-E-14-35
tPc-E-14-34
tPc-E-14-28
20
22
40
80
40
20
20
71
Biomass
Wind
Solar
Solar
Solar
Solar
Solar
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCT]ON REQUEST OF THE COMMISSION STAFF - 2
Proiect Name
Clark Solar 2, LLC
CIark Solar 3, LLC
Clark Solar 4, LLC
Mt. Home Solar 1, LLC
Murphy Flat Power, LLC
Orchard Ranch Solar, LLC
Pocatello Solar 1, LLC
Simcoe Solar, LLC
Nameplate
Capacitv
20
30
20
20
20
20
20
20
Resourc
e Tvpe
Solar
Solar
Solar
Solar
Solar
Solar
Solar
Solar
Contract
Date
10t13t2014
1011312014
10t1312014
1011312014
1011312014
1011312014
10t1312014
1011312014
IPUC Case
Number
lPc-E-14-29
!PC-E-14-30
lPc-E-14-31
lPc-E-14-26
tPc-E-14-32
tPc-E-14-36
lPc-E-14-27
tPc-E-14-33
The response to this Request is sponsored by Michael Danington, Energy
Contracts Leader, ldaho Power Company.
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCTION REOUEST OF THE COMMISSION STAFF.3
REQUEST NO. 15: How many hours during 2018 and for 2019 and what
percentage of the time for each year was the Langley Gulch CCCT plant used as a
marginal resource in ldaho Power's actualdispatch?
RESPONSE TO REQUEST NO. 15: To determine the hours and percent of time
Langley Gulch ("Langley") was used as a margina! resource for ldaho Powe/s actual
dispatch, the schedules for Jim Bridger, Valmy, Boardman, Bennett, Danskin, and
Langley were analyzed for all hours in 2018 and 2019. Among those resources,
Langley is typically the first resource that is dispatched and the last resource to be
backed down. Therefore, the Company has classified Langley as the marginal resource
when all other listed resources are either offline or at their minimum dispatch level.
Then, the percent of time Langley was considered the margina! resource was calculated
by taking the number of hours it was considered a marginal resource and dividing those
hours by the total hours for that year. Based on this calculation, the Langley Gulch
CCCT was used as a marginal resource in ldaho Power's actual dispatch for 895 hours
and 641 hours in 2018 and 2019, respectively, representing 10.2 percent and 7.3
percent of the hours in each respective year.
The response to this Request is sponsored by Perry Kerfoot, Day Ahead
Balancing Operations Leader, ldaho Power Company.
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF .4
REQUEST NO. 16: !f the ICIRP model is run for the first two years of a new
contract, how many hours of these two years and what percentiage of the time is
Langley Gulch CCCT plant used as the marginal resource?
RESPONSE TO REQUEST NO. 16: To determine when Langley is the marginal
(i.e. displaceable) resource within the ICIRP model, ldaho Power analyzed a new solar
resource for a two-year period (2019-2020). During that two-year period, Langley Gulch
CCCT was used as the margina! resource within the model for 1,632 hours or 9.3
percent of the total hours. ldaho Power is also preparing a similar analysis using a
resource with a flat generation profile rather than a solar resource profile and intends to
provide the results by the data request deadline.
The response to this Request is sponsored by Scott Wright, Lead Planning
Analyst, Idaho Power Company.
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 5
REQUEST NO. 19: Please provide the model used to determine
incremental cost IRP-based avoided cost rates.
RESPONSE TO REQUEST NO. 19: The incremental cost lntegrated Resource
Plan ("lClRP") avoided cost methodology is a multi-step process used to determine the
avoided cost that is specific to a PURPA Qualifying Facility's ("QF") own hourly
generation profile. ln order to perform the calculations and procedures to determine an
avoided cost through the ICIRP methodology, a licensed AURORA power supply model
must be used based on inputs from the most recently acknowledged lntegrated
Resource Plan ("lRP").
The ICIRP methodology establishes both a monthly energy price component and
a capacity price component for every hour of the contract term. These hourly values
are calculated based upon the expected ability of the PURPA QF project to displace the
use of ldaho Power generation units and to delay additions of new generation capacity.
The hourly values are mathematically combined to create a monthly heavy load ("HL")
and light load ("LL") total price that is applied to the respective PURPA QF energy
deliveries in HL hours (16 hours per day excluding Sunday and North American Electric
Reliability Corporation ("NERC") Holidays) and LL hours (8 hours per day including all
hours on Sunday and NERC Holidays).
Once a QF project submits complete information in accordance with ldaho
Power's ("Company") tariff Schedule 73 and is placed into the energy sales agreement
("ESA') queue, an AURORA analysis is performed using the most recently
acknowledged IRP data (e.9. operational constraints, natural gas, energy and load
forecasts, etc.) plus any prior additional queued QF projects to determine the generation
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF.6
resources being used to meet the expected hourly energy loads for each hour of the
contract term. The generation resources are e@nomically dispatched based upon the
incrementa! cost of each resource. This information is then processed through a pricing
model that identifies for every hour of the proposed contract term the incremental
cost(s) (highest incremental cost resources being displaced first) of each displaceable
generation resource for each hour that the proposed PURPA QF project is displacing.
These hourly prices are then multiplied by the estimated PURPA QF energy deliveries
in each hour, summed together into HL and LL total energy costs for each month, then
divided by the total HL and LL energy deliveries for each respective month creating a
monthly HL and LL avoided cost of energy.
Displaceable resources have been identified as being a resource that is on-line
and capable of staying on-line and reducing its output. Potential displaceable resources
include: 1) Company-owned thermal resources (Bridger, Boardman, Valmy, Langley
Gulch, and the gas-fired peakers) that are on-line and operating at or above their
minimum load level, (2) long-term firm purchases, and (3) market purchases as
determined by AURORA. lf a long-term firm purchase or market purchase is
determined to be the displaceable resources in a given hour, the incremental cost is set
to be the market clearing price as determined by the AURORA model on an hour-to-
hour basis.
The cost of a simple cycle combustion turbine ("SCCT") natural gas unit is
allocated to each unique PURPA QF generation project based upon the project's
nameplate rating and the expected ability to be available when ldaho Power is
experiencing peak energy demand. This capacity value is then converted to a per-
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
kilowaft-hour ("kWh") value and paid to the project for each kWh the project delivers to
ldaho Power for all months after ldaho Power's capacity deficiency period has occurred.
As discussed with Commission Staff on conference calls held on June 30, 2020,
and Jufy 10, 2020, the base AURORA setup files (energy component) for the 2017 IRP
are found on the Company's FTP site. Idaho Power intends to provide additional files
related to the capacity pricing component by the data request deadline. Please contact
Mark Annis, Senior Regulatory Analyst, at [phone] or [e-mail]
for access to the FTP site.
The response to this Request is sponsored by Michae! Danington, Energy
Contracts Leader, ldaho Power Company.
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 8
REQUEST NO. 20: Please provide indicative pricing based on the Black
Mesaland2proposals.
RESPONSE TO REQUEST NO. 20: ldaho Power has not provided indicative
pricing for the Black Mesa 1 and 2 projects due to deficiencies in the Schedule 73
Qualifying Facility Energy Sales Agreement Applications ('Applications") submitted by
the projects'developer. These Applications requested published avoided cost prices for
the proposed energy storage projects available to PURPA Qualifying Facilities ("QF") in
the "Othe/'category.
On February 3,2020, ldaho Power ("Company") responded to the developer of
Black Mesa 1 and 2, explaining that in accordance with Schedule 73 Section 1.b., the
Applications are deficient as to Section 1.a.iv., which requires the schedule of estimated
QF electric output in an 8,760-hour electronic spreadsheet format. The schedule of
estimated deliveries provided with the Applications appear to have the same output
shape as that of a solar project.
The FERC Form 556 documents provided with the Applications state:
The project consists of an energy storage system Qualifying
Facility providing scheduled and dispatchable electricity in
forward-looking time blocks...The proposed electric energy
storage Qualifying Facility wil! consist of an electro-chemical
battery and will have a maximum power output capacity of
20 MWac for a sustained time period of 5 - 60 minutes.
However, based on the generation profile submitted with the Applications, the battery
storage project will be capable of producing on average 91-95% of its nameplate
capacity each hour over a continuous 7-hour period in July. ln addition, there are
several days identified in July that the battery storage project will be capable of
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCT]ON REQUEST OF THE COMMISSION STAFF - 9
providing its full output (20 MWac) over continuous 9-hour periods.
ldaho Power requested that the project developer provide an hourly generation
profile consistent with the capability of the proposed baftery storage facilities that
represents the generation output intended to be delivered. The developer of Black Mesa
1 and Black Mesa 2 has not submitted an hourly generation profile that is consistent
with the technological capability of the energy storage facilities described by the projects
according to their own documents.
The Company went on to state in its February 3 letter to Black Mesa 1 and Black
Mesa 2 that regardless of the deficiency in the Applications, ldaho Power does not
agree that the proposed projects are eligible for published avoided cost Rate Option 4,
Non-Levelized Non-Fueled Rates, with a 2O-year contract term. The Applications, as
well as the purported legally-enforceable obligation ("LEO") letter from the developer,
reference each of the proposed projects as "energy storage QFs" that "qualify for the
'Other projects' avoided costs as published by the ldaho Public Utilities Commission
(Avoided Cost Rates for Other Projects) and referenced in 1:18-cv-00236-REB (Franklin
Energy Storage v ldaho PUC & ldaho Power)." However, the order from the federal
court clearly states, "The Court specifically declines to order Defendants flPUCI to
require utilities under their jurisdiction to afford energy storage QFs all rights and
privileges afforded to 'other QFs' under the IPUC's PURPA implementation plan."
Memorandum Decision and Order, Franklin Energy Storage One, ef a// v. Kjellander ef
all and ldaho Power Company, page 37.
On January 21,2020,ldaho Power filed its current petition in Case No. IPC-E-
2O-O2 with the ldaho Public Utilities Commission to establish avoided cost rates
]DAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1O
applicable to PURPA energy storage QFs. The outcome of the filed petition is
anticipated to determine the contract term and avoided cost pricing methodology for
which the proposed project may be eligible and the resulting indicative pricing the
Company should provide.
The response to this Request is sponsored by Michael Darrington, Energy
Contracts Leader, ldaho Power Company.
DATED at Boise, ldaho, this 1Oh day of July 2020
O*"€ualL
DONOVAN E. WALKER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 11
CERTIFICATE OF SERVICE
! HEREBY CERTIFY that on this 10h day of July 20201 served a true and correct
copy of IDAHO POWER COMPANY'S SECOND PARTIAL 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 Attomey General
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
Christy Davenport, Legal Assistant
IDAHO POWER COMPANY'S SECOND PARTIAL RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF.12