20200728IPC to Staff Partial Response to PR 3.pdf

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LISA D. I{ORDSTROT
Lead Coun3el
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July 28,2O20
ELECTRONIC FILING
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Re Case No. IPC-E-20-15
2019 Demand-Side Management Eeenses - ldaho Power Company's
Response to the Third Production Request of the Commission $afi
Dear Ms. Hanian:
Attached for eledronic filing is ldaho Porver Gompany's Partial Response to the
Third Production Request of the Commission $afi, responding to questions 'l'3,14,15,1l ,19,20,21,22,26and28.The remaining responseswill be provided on orbeforeAugust4.
lf you have any questions about the attached document, please do not hesitste to conhct
me.
Very truly yours,
fr; l.Y"p,*,-
Lisa D. Nordstrom
LDN:slb
Attachment
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]
[e-mail]
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR A
DETERMINATION OF 2018 DEMAND-
SIDE MANAGEMENT EXPENSES AS
PRUDENTLY INCURRED
CASE NO. IPC-E-20-15
IDAHO POWER COMPANY'S
PARTIAL RESPONSE TO THE
THIRD PRODUCTION REQUEST
OF THE COMMISSION STAFF
COMES NOW, ldaho Power Company, and in response to the Third Production
Request of the Commission Staff to ldaho Power Company ("ldaho Power" or
"Company') dated June 25, 2020, herewith submits the following information to
Requests 13, 14, 15, 17,19,20,21,22,26and28:
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
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REQUEST NQJ3: Please provide the Company's calculations supporting the
$11.5 million Program Cost with a breakdown by Demand response (DR) program.
RESPONSE TO REQUEST NO. 13: Please see the attachment provided for this
response. As shown in the attachment, to estimate the total system-wide cost of
dispatching the DR programs for the full 60 hours allowed, the Company estimates the
variable incentive payments for the lrrigalion Peak Rewards and Flex peak programs
based on the remaining allowable dispatch hours. There are no variable incentive
payments associated with the A/C Cool Credit program.
For the Peak Rewards program, the variable incentive payment provided for in
Schedule 23 is applied to the enrolled capacity for each lnterruption Option, and a 9b
percent factor is applied to account for custromer opt-outs or zero billing demands. For
the Flex Peak program, the variable incentive payment provided for in Schedule g2 is
applied to the average weekly nominated capacity for each participant in the program.
The response to this Request is sponsored by Quentin Nesbift, Customer
Research & Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PROOUCTION REQUEST OF THE COMMISSION STAFF.2
REOUEST NO. 14: Please explain the methodology and provide workpapers by
DR program for the Company's calculations supporting the $19.8 million Value of
Demand amounts based on the full 60-hour dispatch referenced in paragraph 16 on
page I of the Application. ln addition, please provide:
the calculation of the Value of Demand based on the 2019 Amended
lntegrated Resource Plan; and
the calculation based on actual hours of avoided demand and energy
savings seen in 2019 for each of the three DR programs.
RESPONSE TO REOUEST NO. {4: Please see the attachment provided for this
response.
The methodology was developed during the settlement workshops in Case No.
IPC-E-13-14. The methodology is further described in the Seftlement Agreement
reached in that case which was accepted by the Commission in Order No. 32923. The
Settlement Agreement requires the Company to ''calculate the avoided cost used for
demand response by using the avoided capacity cost of 170 megawatt ("MW") single
cycle combustion turbine CSCCT) multiplied by the effective load carrying capacity
('ELCC), measured over 20 years, plus the corresponding defened energy savings for
60 program hours."1
ln the attachment, worksheet "14" provides the calculation of annual value of
demand, which is displayed in the Benefits table in the column labeled Total Avoided
Capacity & Shifted Energy. The formula is as follows:
Value of Demanl = (170 MW Capacity . 1000 . Awided Capacity with ELCC) +
(Program Max 390 MW. Value of Shifted Energy VMW\ * 60 Event Hours)
I Demand Response Programs Setuement Agreement, page 3
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REOUEST OF THE COMMISSION STAFF.3
a
b
a. See worksheet "14A" in the attachment. The Avoided Capacity value from the
2019 Amended IRP has been updated in cell E6.
b. See worksheet "148'in the attachment. The Company prepared a calculation
in response to 14b utilizing the actual peak demand reduction and actual
hours of events for each of the three demand response programs in 2019. ln
accordance with terms of the Settlement Agreement, the capacity value iE
based on the product of a 170 MW SCCT and the effective load carrying
capacity, thus the only change in the value of demand is in the defened
energy savings.
The response to this Request is sponsored by Quentin Nesbitt, Customer
Relations & Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF . 4
REQUEST NO. {5: Does the Value of Demand amount consider the differences
in how DR programs are implemented compared to the capacity factor of a 170 MW
Simple-Cycle Combustion Turbine (SCCT) assumed in the 2019 Amended lntegrated
Resource Plan? lf so, please explain how. lf not, please explain why not.
RESPONSE TO REQUEST NO. 15: Yes. As shown in the Attachment for the
Response to Production Request No. 14, an Effective Load Carrying Capacity ('ELCC')
of 93 percent is applied to the avoided capacity value.
The purpose of the ELCC is to reflect that while a peaking resour@ such as a
Simple-Cycle Combustion Turbine can be used year-round, the demand response
programs can only be dispatched during certain hours between June 15 and August 15
each year. At the time the ELCC was developed, the Company studied the top 100
hours of peak demand of each year over the prior five years. Of those top 100 hours,
approximately 7 percent occurred outside of program hours. As a result, the ELCC of 93
percent is applied to determine the value of demand.
This methodology of applying the ELCC to the avoided capacity value has been
used with each updated lntegrated Resource Plan ("lRP"), including the 2019 Amended
IRP.
The response to this Requesl is sponsored by Quentin Nesbitt, Customer
Research & Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REOUEST OF THE COMMISSION STAFF - 5
REQUESTNO. 17: For2019, please provide the following by event when
implemented for each DR program:
the date and time the event was initiated;
the amount of energy saved in each event hour;
the value of energy saved in each event hour; and
the corresponding market price of energy for each event hour
RESPONSE TO REQUEST NO. 17: Please see the attachment provided for this
response.
ln response to 17c, ldaho Power provided the dispatch cost of the ldaho Power
generalion resour@s backed down or not utilized during the events. Due to the
dynamic nature of hourly load requirements, generation mix, as well as change in
market prices, the dispatch of generation resources may be in response to a variety of
factors and not directly linked to the load reduction from a demand response event.
The response to this Request is sponsored by Quentin Nesbitt, Customer
Research & Analysis Leader, ldaho Power Gompany.
IDAHO POWER COMPANYS PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 6
a
b
c
d
REQUEST NO. t9r Substituting an eight-hour Li-lon battery included as a
potential resource for selection in the Amended 2019 IRP for the 170 MW SCCT, please
provide the Company's Value of Demand amount based on the full 60-hour dispatch
referenced in paragraph 16 on page I of the Application for each DR program. Please
provide all calculalions in Excel format with formulas intact and enabled.
RESPONSE TO REQUEST NO. 19: Please see the attachment provided for this
response.
The response to this Requesl is sponsored by Quentin Nesbitt, Customer
Research & Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
REAUEST NO. 20: Please explain why the Company does not use DR programs
to its fullest extent, compared to just implementing the three events for each program in
2019 as required by Commission Order No. 32923.
RESPONSE TO EST NO. 20: ldaho Power endeavors to meet system
peak demand by economically dispatching available resources. Additionally, ldaho
Power operates the three Demand Response ("DR') programs in accordance wilh its
tariff Schedules 23 (lrrigation Peak Rewards), 81 (Residential Air Conditioner ('WC")
Cycling), and 82 (Flex Peak), which requires that each program be dispalched a
minimum of three times per event season.
Each of the three DR programs have a fixed incentive payment that does not
vary with the number of events that are dispatched in a given program season.
Additionally, the lnigation Peak Rewards and the Flex Peak programs include vanable
incentive payments for all program events. Schedule 23 (lrrigation Peak Rewards)
provides for a variable payment of 14.8-19.8 cents/kWh (or $148-198/MWH) and
Schedule 82 (Flex Peak) provides for a variable payment of '16.0 cents/kWh (or
$160/MWH). ln comparison, during the 2019 program season, the maximum amount
the Company paid for a day-ahead market purchase was $59/MWh on August 5 for a
flow date of August 6.
While the Company's fuC Cool Credit program is available for additional events
during the program season without incremental expense, the program does experience
attrition after each event is run. ln order to ensure the A,/C Cool Credit program remains
sufficient and reliable to meet future capacity deficiencies, the Company does not
typically call events beyond the required three unless an operational need arises.
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 8
The response to this Requesl is sponEored by Quentin Nesbitt, Customer
Research and Analysis Leader, ldaho Power Company.
IDAHO POVI/ER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 9
REAUEST NO. 2l: Please provide the number of daily DR evenb dispatched by
DR program foreach yearfrom 2012 through 2018.
RESPONSE TO REOUEST NO.21:Please see the table belour.
Numbor of ram Events
$2 evert6 wers mostly from Timer Option which was
eliminated prior to rasuming prcgram in 2014.
"Program suEperded
The response to this Request is sponsored by Quentin Nesbitt, Customer
Research & Analysis Leader, ldaho Power Company.
IDAHO POWER COMFANYS PARTIAL RESPONSE TO THE THIRD
PRODUCTION REOUEST OF THE COMMISSION STAFF - 1O
Year
lrrigation
Peak
Rewards
Flex
Psak
AC
Cool
Credit
20't2 62'4 11
2013 J
2014 2 3 3
2015 3 3 3
20r 5 2 3 3
2011 3 3 3
2018 3 J 4
REQUEST NO. 22: ls the SCCT avoided cost value adjusted for the inability of
DR to provide Contingent Reserve Obligations (CRO) identified in the study "Demand
Response as Operating Reserves Feasibility Report" dated 09130114? Please explain.
RESPONSE TO REQUEST NO, 22: No, the SCCT avoided cost value is not
adjusted for the inability of DR to provide Contingent Reserve Obligations. The value of
Demand Response was developed through workshops in Case No. IPC-E-13-14 and its
calculation is defined in the resulting Settlement Agreement.
The response to this Request is sponsored by Quentin Nesbitt, Customer
Research & Analysis Leader, ldaho Power Company.
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REOUEST OF THE COMMISSION STAFF . 1,I
REQUEST NO. 25i Does the Value of Demand based on the 170 MW
SCCT identified in the Settlement Agreement in IPC-E-1 3-14 still represent the
most appropriate resource to determine the avoided cost for the Company's DR
programs? Order No. 32923 at 4. lf so, please explain why; if not, please explain
why not.
RESPONSE TO REOUEST NO. 26: The use ol a 170 MW SCCT as a prory
resource was established through a series of collaborative workshops and settlement
discussions in Case No. IPC-E-13-14. As noted in ldaho Public Utility Commission Staff
(.Statr') Comments in support of the Settlement Agreement, ldaho Power's 2013
lntegrated Resource Plan ("lRP") "forecasts an 89 MW capacity deficit in 2016 and a
139 MW deficit in 2017'2 and ''building one, 170 MW SCCT would meet the Company's
forecasted capacity deficit from 2016 through 2027."0 Parties to the Settlement
Agreement committed lo reevaluation of the settlement terms if ldaho Power
experiences a change in system conditions, ldaho Power's most recent IRP does not
indicate a capacity deficit until 2026 with the inclusion of current 390 MW of peak
capacity demand response during June and July throughout the IRP planning period,
with reduced amount of program potential available during August.a
ln the 2017 lRP, the least-cost, similarly sized peakJoad serving capacity
resource remained a SCCT, at a levelized capacity cost of $12Zkw-year. ln the 201g
Amended lRP, the levelized cost of a SCCT is $130/kW-year, and the levelized cost of
a similarly sized peak-load serving capacity resource, a 1 1 1 .1 MW reciprocating internal
2 StaffComments p. 5.
{ [daho Power 2019 Amended Integrated Resource Plan, p. 6l.
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - .I2
combustion engine ("R|CE'), is $121lkW-year. Because the levelized cost of a 170 MW
SCCT and a 111.1 MW RICE are similar, the Company believes continuing to rely on
the levelized cost of a 170 MW SCCT remains reasonable in the near-term.
The response to this Request is sponsored by Connie Aschenbrenner' Rate
Design Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REOUEST OF THE COMMISSION STAFF - 13
REQUEST NO.28: For each DR event over the past 5 years, how many MW
of load reduction were requested from the participants and how many of megawafts
of load were ac.tually curtailed? Please provide a breakdown by DR program.
RESFONSE TO EST NO.28: Please see the attachment provided for this
response.
The response to this Request is sponsored by Quentin Nesbitt, Customer
Research & Analysis Leader, ldaho Power Company.
DATED at Boise, ldaho, this 28s day of July 2020.
"€;
p.Y"*t *,-
LISA D. NORDSTROM
Attomey for ldaho Power Company
IDAHO POWER COMPANYS PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF . 14
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 28b day ofJuly 2020 I served a true and correct
copy of IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF upon the following named
parties by the method indicated below, and addressed to the following:
Commisslon Steff
Dayn Hardie
Deputy Aftorney General
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
ldaho lrrigation Pumperc Association,
Eric L. Olsen
ECHO HAWK& OLSEN, PLLC
505 Pershing Avenue, Suite '100
P.O. Box 61 19
Pocatello, ldaho 83205
Anthony Yankel
'12700 Lake Avenue, Unit 2505
Lakewood, Ohio 44107
lndustrial Cuttomerc of ldaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
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IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF . 15
indsDrino.com
ldaho Gonseryaton League
Beniamin J. Otto
ldaho Conservation League
710 North 6th Street
Boise, ldaho 83702
City of Boiee
Abigail R. Germaine
Deputy City Attomey
Boise City Attorney's ffice
150 North Gapitol Boulevard
P.O. Box 500
Boise, ldaho 83701-0500
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ie L. Bud<ner
Executive Assistant
IDAHO POWER COMPANY'S PARTIAL RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF . 16