20211207IPC to Staff 1-13-Redacted.pdf

DONOVAN E. WALKER
Lead Counsel
[e-mail]
December 7, 2021
VIA ELECTRONIC MAIL
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 West Chinden Blvd., Building 8
Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-21-35
Idaho Power Company’s Application to Update the Gas Forecast in the
Incremental Cost Integrated Resource Plan Avoided Cost Model
Dear Ms. Noriyuki:
Attached for electronic filing is Idaho Power Company’s Response to the First
Production Request of the Commission Staff in the above entitled matter. If you have any
questions about the attached documents, please do not hesitate to contact me.
Please handle all confidential information in accordance with the Protective
Agreement to be executed in this matter.
Very truly yours,
Donovan E. Walker
DEW:cld
Enclosures
RECEIVED
2021 DEC -7 PM 3:02
IDAHO PUBLIC
UTILITIES COMMISSION
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 1
DONOVAN E. WALKER (ISB No. 5921)
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

IDAHO POWER COMPANY’S ANNUAL
COMPLIANCE FILING TO UPDATE THE
LOAD AND GAS FORECASTS IN THE
INCREMENTAL COST INTEGRATED
RESOURCE PLAN AVOIDED COST
MODEL.
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CASE NO. IPC-E-21-35

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

COMES NOW, Idaho Power Company (“Idaho Power” or “Company”), and in
response to the First Production Request of the Commission Staff to Idaho Power
Company dated November 16, 2021, herewith submits the following information:
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 2
REQUEST NO. 1: The Application states that there is a slight increase in customer
loads when compared to the October 2020 load forecast that was provided to the
Commission for the 2020 update in Case No. IPC-E-20-35. Please explain what drives
the load increase.
RESPONSE TO REQUEST NO. 1: The change in the load forecast that is
included in the update provided in IPC-E-21-35, relative to the load forecast provided to
the Commission in Case No. IPC-E-20-35 is primarily driven by a higher migration into
the Company’s service area than expected, both during and after the recession related
to the COVID-19 pandemic.
The response to this Request is sponsored by Jordan Prassinos, Load Research
and Forecasting Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 3
REQUEST NO. 2: Please explain why the natural gas forecast in this proceeding
is lower than the natural gas forecast in Case No. IPC-E-21-15 over the next three years,
but significantly lower thereafter.
RESPONSE TO REQUEST NO. 2: In developing a response to this Production
Request, Idaho Power found an error in the natural gas forecast submitted in the initial
filing in this case (submitted on October 15, 2021). The initial filing provided a forecast
that used real pricing rather than nominal pricing. Idaho Power submitted a second
supplemental filing to the Commission on November 22, 2021, to provide the natural gas
forecast with the correct nominal pricing as has been used in prior updates (e.g., in IPC-
E-21-15). The remainder of this response provides a confidential explanation as to the
corrected forecast based on nominal pricing.
The current Platts Long Term Gas Forecast is about $0.11 per MMBtu, or 2.4
percent, on average, lower than what was provided in May and most of that decrease
appears in the back half of the forecasted curve. One of the reasons for this decrease is
that gas supply is expected to meet, then outpace gas demand in about 6 years at which
point demand is forecasted to decrease.
The response to this Request is sponsored by Andy Husted, Gas Transaction
Leader at Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 4
REQUEST NO. 3: The footnote of the October 2021 natural gas forecast states
that the forecast is based on the Henry Hub Annuals from S&P Global Platt's Long-term
Forecast adjusted for Sumas basis and transport costs for Idaho City Gate delivery
(published July 2021). Please provide the Henry Hub Annuals from S&P Global Platt's
Long-term Forecast without adjustments for Sumas basis and transport costs for Idaho
City Gate Delivery.
RESPONSE TO REQUEST NO. 3: The table below provides the requested
confidential information

Year
Platts Long Term
Henry Hub
Nat. Gas ($/MMBTU)
2021 $3.098
2022 $2.898
2023 $2.688
2024 $2.781
2025 $2.968
2026 $3.033
2027 $3.050
2028 $3.150
2029 $3.310
2030 $3.450
2031 $3.600
2032 $3.720
2033 $3.840
2034 $3.950
2035 $4.070
2036 $4.180
2037 $4.260
2038 $4.350
2039 $4.430
2040 $4.510

The response to this Request is sponsored by Andy Husted, Gas Transaction
Leader, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 5
REQUEST NO. 4: In reference to Confidential Response to Staff's Production
Request No. 4 in Case No. IPC-E-21-15, please answer the following questions:
a. Please explain if Platts uses the same method to determine the forecast
over the next five years in this proceeding. If not, please explain the method
used in this proceeding.
b. Please explain whether and how forwards prices are used to determine the
forecast over the next five years in this proceeding.
RESPONSE TO REQUEST NO. 4:
a. Platts uses the same method to determine the forecast.
b. According to the Platts Gas Coverage Guide, the forecasted “curves are
derived using a combination of Intercontinental Exchange (ICE) activity and
settlement data, broker quotes, and sophisticated quantitative techniques.”
Richard Redash, Head of Global Gas Planning for S&P Global Platts
provided this CONFIDENTIAL response: “Platts Analytics five-year forecast
is based on modeled North American natural gas demand (by country and
by sector) prospects and the related likely need and availability of supply
(by country and play/region) with a focus on the availability of gas storage
inventories and capacity, which affects near-term price formation. To the
extent that the natural gas balance is “tight” and thus surplus supply
available to fill storage is relatively limited, that backdrop will yield higher
gas prices and vice versa. With this in mind, Platts Analytics’ natural gas
price forecast is often different than the price signal from NYMEX natural
gas futures.”
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 6
The response to this Request is sponsored by Andy Husted, Gas Transaction
Leader, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 7
REQUEST NO. 5: Please explain in detail how the Peak Hours are selected based
on the 2022 Forecast Average Load data. Please explain whether these hours represent
the highest five percent of the 2022 Forecast Average Load data, similar to how the Peak
Hours were determined in Case No. IPC-E-20-02. Please provide the workpapers that
illustrate how the Peak Hours are determined based on the 2022 Forecast Average Load
data in this case.
RESPONSE TO REQUEST NO. 5: The Peak Hours were selected using the same
methodology as was used in Idaho Power’s Compliance Filing approved by the
Commission in Case No. IPC-E-20-02. The hours represent the highest five percent of
the 2022 Forecast Average Load Data. The highest five percent was derived using
Microsoft Excel functionality. Please see the attached Excel file for workpaper illustrating
the determination of Peak Hours.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 8
REQUEST NO. 6: Page 5 of the Compliance Filing in Case No. IPC-E-20-02
stated that 1) Load, Net of Solar, 2) Loss of Load Probability, and 3) Locational Marginal
Pricing from the Energy Imbalance Market were the three different metrics to identify the
Premium Peak Hours. Please explain whether these three different metrics are used to
identify the Premium Peak Hours in this proceeding.
RESPONSE TO REQUEST NO. 6: Yes. In its Compliance Filing in Case No. IPC-
E-20-02, Idaho Power used the most recent data available at the time. Consistent with
the Commission’s direction in Order No. 34913, in the present case, Idaho Power is
updating the hours, using the same methodology and the most recent available data.
As it did in Case No. IPC-E-20-02, Idaho Power used the hourly load forecast to
develop a 12x24 matrix of the average load for each month/hour in the upcoming year
and identified the five percent of hours with the highest load. These are the Peak Hours.
To identify the Premium Peak hours, Idaho Power looked at 1) the most recent actual
load, net of solar, 2) loss of load probability information from the most recently
acknowledged Integrated Resource Plan (IRP), and 3) the most recent actual locational
marginal pricing from the Energy Imbalance Market. Idaho Power uses the load, net of
solar data to identify the four-hour block of hours in which load, net of solar generation,
was highest. As stated in the Compliance Filing in IPC-E-20-02, these hours represent
the peak load hours where solar generation was less effective in reducing the net peak
loads. The loss of load probability and locational marginal pricing data is then used to
corroborate the Premium Peak hours identified in the load, net of solar data.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 9
REQUEST NO. 7: The Locational Marginal Pricing used in the Compliance Filing
in Case No IPC-E-20-02 was derived from the weighted-average hourly price comprised
of all pricing nodes in the Idaho Power Balancing Area Authority from four fifteen-minute
market price intervals and twelve real-time five-minute price intervals. Please explain
whether this methodology is used to determine the Locational Marginal Pricing in this
proceeding. If so, please list all the pricing nodes used and provide the workpapers that
derive the Locational Marginal Pricing.
RESPONSE TO REQUEST NO. 7: The methodology and source of the data is
the same. It consists of all pricing nodes in the Idaho Power Balancing Area Authority
from four fifteen-minute market price intervals and twelve real-time five-minute price
intervals. The compliance filing in Case No. IPC-E-20-02 used prices from 2020 and the
data in this proceeding uses prices from 2021.
Idaho Power does not derive or calculate the prices. The prices are calculated by
the California Independent System Operator (CAISO). Idaho Power pulls the prices
directly from CAISO’s Open Access Same Time Information System (OASIS), using the
hourly price identifier “ELAP_IPCO-APND.” The attached Excel file contains the export
of the data with formatting added by Idaho Power to highlight the hours in which the
forecasted 2022 load is highest and to circle in red the hours with the highest pricing.
Please see the response to Request No. 8 for additional information.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 10
REQUEST NO. 8: Please answer the following questions regarding the Table
2021 Average of Western Energy Imbalance Market Locational Marginal Prices in the
Supplement to Idaho Power Company's Annual Compliance Filing.
a. Please explain what ELAP stands for, what ELAP prices mean, and why it
is appropriate to use ELAP prices for determining the Premium Peak Hours
for Idaho Power's system.
b. Are the red circles intended to highlight the four-hour block hours that
represent the Premium Peak Hours, instead of the hours being highlighted
in the Table? Please explain.
RESPONSE TO REQUEST NO. 8:
a. The table of 2021 Average of Western Energy Imbalance Market (EIM)
Locational Marginal Prices reflects the California Independent System
Operator (CAISO)’s weighted average hourly price, comprised of all pricing
nodes in the Idaho Power Balancing Authority Area from four fifteen-minute
market price intervals and twelve real-time market price intervals. These
values are also referred to as the “Hourly Real-Time Load Aggregation Point
(LAP) price,” or as the EIM LAP or ELAP price for shorthand. The ELAP price
is calculated as a weighted average of the fifteen-minute and five-minute
locational marginal prices for each specific pricing node in the Idaho balancing
authority load area. The ELAP prices are calculated by CAISO and the
methodology to calculate them is found in Section 11.5.2.2 of the CAISO tariff.
Idaho Power pulls the ELAP prices directly from CAISO’s Open Access Same-
Time Information System (OASIS).
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 11
In Idaho Power’s Compliance Filing in Case No. IPC-E-20-02, these
same average EIM locational marginal prices for the calendar year 2020 period
were used to corroborate the peak load and other information that went into
determining Premium Peak Hours. This data reflects real-time prices, and the
fact that prices have been highest in the afternoon/evening hours further
demonstrates that those are the hours in which demand is highest and are
hours in which battery storage resources could potentially provide higher value.
Order No. 34813, p. 6 requires Idaho Power to update the Peak Hours and
Premium Peak Hours annually. Idaho Power used the same methodology as it
used in Case No. IPC-E-20-02 and has simply updated the analysis to reflect
the most recent data available.
b. The yellow highlighting represents the hours of the top five percent of
forecasted average load for 2022, derived from the 2022 load forecast table.
The red circles represent the hours (within that subset of hours) where the 2021
average locational marginal prices were highest. The hours in the red circles
overlap significantly with the hours in which 2021 actual load, net of solar was
highest. In other words, the average locational marginal price data
corroborates the identification of the Premium Peak Hours from the 2021 actual
load data. The presentation of the average pricing data is consistent with the
presentation of this information in the Compliance Filing in Case No. IPC-E-20-
02.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 12
REQUEST NO. 9: The Supplement to Idaho Power Company's Annual
Compliance Filing states that the Company evaluates Loss of Load Probability ("LOLP")
data from the 2019 IRP, using AURORA to analyze the likelihood of unique loss-of-load
events in the year 2025 for 100 iterations, and the results show that four unique loss-of-
load events occur in the late afternoon/evening hours in July. Please answer the following
questions.
a. Please provide the results in Excel format from the LOLP analysis
mentioned above.
b. The LOLP analysis in the Compliance Filing in Case No. IPC-E-20-02
showed results in percentages, but the Company uses the number of events
in this proceeding. Please explain the reasons for the methodological
difference.
c. Is the LOLP analysis intended to support the Peak Hours or the Premium
Peak Hours? Please explain.
d. Please explain why an analysis for year 2025 is a good indicator to support
Peak Hours or the Premium Peak Hours for year 2022.
RESPONSE TO REQUEST NO. 9:
a. Please see the attached Excel file.
b. The LOLP analysis from the 2017 IRP used in the Compliance Filing produced
a considerable amount of loss-of load events, spread sporadically throughout
the year. The 12x24 percentage matrix was shown in the Compliance Filing to
indicate the hours with the greatest frequency of events. The 2019 IRP LOLP
analysis identified a reduced number of events with only six hours in July.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 13
Updating the 12x24 percentage matrix presented in the Compliance Filing was
not necessary.
c. The LOLP data was primarily used as a check on the Premium Peak Hours
identified by evaluating the load-net-of-solar data. In this update, the LOLP
modeling shows LOLP events occurring in July in the late afternoon/evening
hours. This, along with the EIM pricing data, corroborates that Peak and
Premium Peak hours identified were the most challenging hours in which
energy storage would provide higher value.
d. There were no major resource additions or load changes between 2022 and
2025 in the 2019 Integrated Resource Plan (IRP), that would have significantly
changed the LOLP distribution, so the results of the LOLP analysis would not
have been expected to change materially between 2022 and 2025. Idaho
Power chose to use 2025 for the 2019 IRP LOLP analysis because it was the
year before the next impactful capacity addition, making it a higher risk year
than 2022.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 14
REQUEST NO. 10: Please explain why it's asserted that the 2021 actual Load,
Net of Solar data and the 2021 actual Energy Imbalance Market Locational Marginal
Prices data are good indicators for the Premium Peak Hours in 2022.
RESPONSE TO REQUEST NO. 10: In preparing this update, Idaho Power
followed the same methodology used in its Compliance Filing in Case No. IPC-E-20-02.
In other words, Idaho Power identified the Peak Hours using forecast load data for the
upcoming year, and then identified Premium Peak Hours within the Peak Hours data set
by looking to most recent actual data to identify the hours in which peak load, net of solar
may be highest and when real-time prices may be highest, and by reviewing loss of load
probability (LOLP) data from the most recent acknowledged Integrated Resource Plan.
In reviewing the actual load, net of solar data, Idaho Power identified the four-hour block
of highest load where solar was less effective in reducing net peak load. These were
considered the preliminary Premium Peak Hours. The Energy Imbalance Market location
marginal price data is used to identify the hours in which real-time prices are highest. The
real-time pricing hours were similar and overlapping with the highest load net of solar
hours, which corroborates the Premium Peak Hours that had been identified were
appropriate. The LOLP information was used in a similar manner to corroborate the
findings.
This approach – including the use of recent actual data to identify Peak and
Premium Peak Hours for upcoming periods – is the same approach the Company used
in the Compliance Filing in Case No. IPC-E-20-02, and that the Commission approved in
Order No. 34913. With this update, Idaho Power is simply complying with the
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 15
Commission’s directive in Order 34913 to update the Peak and Premium Peak hours
annually.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 16
REQUEST NO. 11: Please provide the following information for the Big Sky West
Dairy project: Resource Type, State, and Project Size.
RESPONSE TO REQUEST NO. 11: Based on Production Requests 11-13, it
appears that Staff may be interpreting the Big Sky West Dairy Digester (DF-AP #1, LLC)
as two projects. It is a single biomass project, in the state of Idaho, with a project size of
1.5 MW. Its contract with Idaho Power terminated on 11/30/2020. In other words, only
two terminated energy sales agreements are listed on Attachment 2 of the Company’s
application in this proceeding. Idaho Power has reproduced the table of Terminated
Energy Sales Agreements below with slightly revised formatting to clarify.

The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.
Resource Type Project Name State Contract Termination Date Project Size (MW)
Biomass Big Sky West Dairy Digester (DF-AP #1, LLC)ID 11/30/2020 1.5
Biomass Rock Creek Dairy ID 11/3/2020 4
TOTAL 5.50
Terminated Energy Sales Agreements
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 17
REQUEST NO. 12: Please provide the Contract Termination Date for the Digester
(DF-AP #1, LLC) project.
RESPONSE TO REQUEST NO. 12: Please refer to the Company’s Response to
Request No. 11.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 18
REQUEST NO. 13: Please confirm that the Big Sky West Dairy project, the
Digester (DF-AP #1, LLC) project, and the Rock Creek Dairy project have been removed
from the IRP model that is used to determine avoided cost rates for IRP-based projects.
RESPONSE TO REQUEST NO. 13: The two terminated projects (Big Sky West
Dairy Digester (DF-AP #1, LLC) and Rock Creek Dairy) have been removed from the IRP
model that is used to determine the avoided cost rates for the IRP-based projects. Please
also refer to the Company’s Response to Request No.11.
The response to this Request is sponsored by Lexi Juarez, Operations Analyst,
Idaho Power Company.
Respectfully submitted this 7th day of December 2021.

DONOVAN E. WALKER
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 19
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 7th day of December, I served a true and correct
copy of the within and foregoing 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:

Riley Newton
Idaho Public Utilities Commission
11331 W. Chinden Blvd.
Bldg. 8, Ste. 201-A
Boise, ID 83714
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Christy Davenport
Legal Administrative Assistant