20220211IPC to Staff 1-17.pdf

LISA D. NORDSTROM
Lead Counsel
[e-mail]
February 11,2022
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Case No. IPC-E-21-37
Application of ldaho Power Company for Authority to Establish A New
Schedule to Serve Speculative High-Density Load Customers
Dear Ms. Noriyuki:
Attached for electronic filing, pursuant to Order No. 35058, is ldaho Power Company's
Response to First Production Request of the Commission Staff in the above entitled
matter.
lf you have any questions about the attached documents, please do not hesitate to
contact me.
Sincerely,
Re
"'.r'i-i\11-ll...-rr-lErlJ
;r: ,; [I3 i I f,H 9: I3
I!,,:,. li-, i:tr;'i i.it]i ' t,,r :i r.i:i,ll.riiS$ltli
X*!.ff^l-t^--,
srm.
Lisa D. Nordstrom
rnDrcolPodnEw
P.O. Box 70 (8i1707)
tzlt W. ldahoSt.
BoL., ]D 83702
LDN:sg
Enclosure
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]
lnordstrom@ida hopower.com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO ESTABLISH NEW
SCHEDULE TO SERVE SPECULATIVE
HIGH-DENSITY LOAD CUSTOMERS.
CASE NO. |PC-E-21-37
IDAHO POWER COMPANY'S
RESPONSE TO FIRST
PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO
POWER COMPANY
COMES NOW, ldaho Power Company ("ldaho Powe/'or "Company"), and in
response to First Production Request of the Commission Staff ("IPUC or Commission")
dated January 21,2022, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 1
)
)
)
)
)
)
)
)
)
REQUEST FOR PRODUGTION NO. 1:
Please provide the workpapers used to derive the capacity costs and demand
charge discussed on page 14 of the Application. Please include any source input data
used.
RESPONSE TO REQUEST FOR PRODUCTION NO. 1:
Please see the aftachment provided for this request. The incremental addition to
the demand charge for Schedule 20 was based on reallocation of on-peak demand
charges collected from Schedule 9, and Schedule 19, respectively, in the test year used
in ldaho Powe/s most recently approved revenue requirement filing.l
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
I ln the Matter of ldaho Power Company's Application for Authoity to Decrcase lfs rafes for Electric
Servrbe for Cosfs Assocrated with the Boardman Power Plant, Case No. IPC-E-20-32, Final Order No.
34885, issued December 31,2020.
IDAHO PO\A'ER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 2
REQUEST FOR PRODUCTION NO. 2:
Please explain the rationale for the Company's proposal to reallocate the portion
of cost-of-service derived summer generation capacity costs from on-peak demand
charge to a standard demand charge.
RESPONSE TO REQUEST FOR PRODUCTION NO. 2:
Reallocation of cost-of-service derived summer generation capacity costs from
the on-peak demand charge is based on ensuring existing fixed cost collection for
capacity resources currently embedded in Schedule 9 and Schedule 19 rate design.
This proposal is also put forth in recognition that the economics of the Company's peak
capacity resources has led to cost-effective operation of those resources throughout the
year, not just during periods of peak demand. Therefore, without the proposed
treatment, Schedule 20 customers would be served in many hours with "peak capacity'
resources without paying a share of the costs of those resources.
At the next general rate case, the Company would evaluate Schedule 20 cost
assignment based on the class's usage characteristics and system requirements as a
stand-alone rate class and assign system costs and benefits incorporating the
interruption req uirement parameters.
The response to this Request is sponsored by Pau! Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO PO\A'ER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY.3
REQUEST FOR PRODUCTION NO. 3:
Please provide the workpapers used to derive the marginal energy pricing
discussed on page 15 of the Application. PIease include any source input data used.
RESPONSE TO REQUEST FOR PRODUCTION NO. 3:
Please see the attachment provided for in response to Production Request No. 1
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO PO\A'ER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 4
REQUEST FOR PRODUCTION NO.4:
Please provide an electronic copy of the workpapers used to create Attachment
2, with allformulae enabled.
:
Please see the attachment provided for in response to Production Request No. 1.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 5
REQUEST FOR PRODUCTION NO. 5:
Please provide the definitions including any applicable measurable standards for
the characteristics of a High Density Load (HDL) customer mentioned on page 12 of the
Application and included in the proposed Schedule 20tarifi.
RESPONSE TO REQUEST FOR PRODUCTION NO. 5:
"High energy use density' is energy use of 250 kilowatt-hours ('kwh") or greater
per square foot annually.
'High load facto/' is 85 percent or greater.
"Load that is portable and distributable" is a characteristic of Application-Specific
lntegrated Circuit ('ASIC') or other highly specialized cryptocurrency specific hardware.
A single machine is approximately the size of a shoe box and ranges in load from 1.3
kilowatt ('kV1f) to over 3 kW. ASIC and other mining machines have limited
infrastructure needs, namely electricity and internet, and may be disaggregated quickly.
To illustrate, machines at one central location of 1 megawatt ("MW) could easily
disaggregate to 10 locations of 100 kW each, which is not typical of traditional data
centers that are designed with more permanent placement of equipment.
Based on the significant price declines and increases for Bitcoin as documented
in the Company's Application, customer sensitivity to an asset such as cryptocurrencies
would meet the criteria for "high sensitivity to volatile commodity or asset prices."
The response to this Request is sponsored by Pau! Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO PO\A'ER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY.6
REQUEST FOR PRODUCTION NO. 6:
Please explain how the parameters for interruptible service discussed on page
14 of the Application were determined and are applicable to the proposed Schedule 20
class. Please also explain if the interruptible parameters will change if they are modified
or not approved in IPC-E-21-32.
The Company determined the parameters for interruptible service by treating the
interruptible service similar to a demand response program that must achieve a 90
percent Effective Load Carrying Capability ('ELCC") under the Company's four test
years. To achieve this ELCC threshold required 225 hours of possible curtailment. The
Company believes that the 90 percent ELCC threshold, coupled with the abili$ to also
curtailthe Schedule 20 demand during a system emergency, will be sufficient to allow
the Company to avoid the need to add an incremental capacity resource to meet the
needs of Schedule 20 customers.
Comparing the program parameters detailed in Case Nos. IPC-E-21-32 and IPC-
E-21-37, only the June 15 to September 15 parameter is the same, otherwise the
program parameters differ substantially. !t is unlikely that any changes made in Case
No. IPC-E-21-32 would impact the proposal of the Company in Case No. IPC-E-21-37.
The response to this Request is sponsored by Jared Ellsworth, Transmission,
Distribution & Resource Planning Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 7
REQUEST FOR PRODUCTION NO. 7:
ln the Application, page 16, the Company states, "Upon Commission approval of
a new schedule, the Company will transition qualifying customers the Commission-
approved Schedule 20." Please respond to the following:
a. Please explain how the Company will be able to determine if an existing
customer qualifies for Schedule 20, by including the specific measurable
standards identified above.
b. Please explain how the Company will be able to identify if an existing customer
starts cryptocurrency mining in the future.
c. Please explain if the Company has identified other business operations, besides
cryptocurrency mining, which may meet some of the criteria for Schedule 20.
RESPONSE TO REQUEST FOR PRODUCTION NO. 7:
a. The Company will be able to determine if an existing Customer qualifies for
Schedule 20 by adhering to the specific characteristics outlined on page 16 of the
Company's Application. The Company has outlined that in order to qualiff for
Schedule 20, a Customer with a registered demand not exceeding 20,000 kW
from service at one or more Points of Delivery on the same Premises must have
the ability to relocate quickly in response to short-term economic signals, and
meet four (4) or more of the following characteristics:
. High every use densi$;
o High load factor;
. Load that is portable and distributable;
o Highly variable load growth or load reduction as an individual customer and/or
IDAHO POVVER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY. S
in aggregate with similar customers in the Company's service area;
. High sensitivity to volatile commodity or asset prices;
. Part of an industry with potential to quickly become a large concentration of
power demand;
. Lack of credit history or ability to demonstrate financial viability.
The Company's Key Account Energy Advisors ('KAEA") manage large customer
accounts which take service under primary and transmission level service under
Schedule 9 or 19, and generally, the KAEA has an understanding of the
customer's business requirements at the time they apply for ldaho Power
service. At the time this response was drafted, the Company is not aware of any
existing customers taking primary or transmission level service under Schedule 9
or 19 that are involved in cryptocurrency mining. The Company continues to
receive interest from potential cryptocurrency mining customers who would be
eligible to transition to Schedule 20 upon its approva!.
b. Under Rule K, Custome/s Load and Operations, existing Customers are required
to provide the Company notice prior to making any significant change in either
the amount or electrical character of the Customer's electrical load, thereby
allowing the Company to determine if any changes are needed in the Company's
equipment or distribution system. The Customer may be held liable for damages
to the Company's equipment resulting from the Customer's failure to provide said
notice of change in electrical load. The Rule K notification requirement will enable
the Company to evaluate the characteristics of the Customer's expanding load,
which would additionally support the Company identifying new cryptocurrency
IDAHO PO\A'ER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 9
mining operations that would require the Customer to transition to Schedule 20
per the specific characteristics outlined on page 16 of the Company's Application.
c. There are likely several customers which may meet a single element of the
criteria of Schedule 20, such as high load factor which is defined as 85 percent or
greater. However, due to the totality of the requirement as outlined in response
7a, the Company does not believe there are customers at this time who both
meet the requirement to have the ability to relocate quickly in response to short-
term economic signals and meet four of the remaining seven criteria other than
cryptocurrency miners.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO PO\A'ER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY.lO
REQUEST FOR PRODUCTION NO. 8:
Please explain in detail how the design of this new customer class will prevent
disaggregation and relocation as discussed on page 4 of the Application and how the
Company plans to enforce compliance to prevent it.
RESPONSE TO REQUEST FOR PRODUGTION NO. 8:
The Company believes the combination of requirement for mandatory
interruption and marginalenergy pricing provides disincentive to large, 20 megawatt or
larger, operations from disaggregating load to circumvent the special contract
requirement. Commission approval of Schedule 20 helps ensure that should large
cryptocurrency mining operations elect to disaggregate load to less than 20 megawatts
per site, mandatory interruption may limit the need to procure new generation resources
that would impact all customer rates. To the extent residential customers or smal! and
medium commercial customers install cryptocurrency mining, they would continue to
take service under the applicable service schedule (Schedules 1, 5, 7, 9-Secondary).
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 11
:
Please provide allworkpapers supporting the figures and tables found in the
Application in Excel format with formulae intact.
:
Please see the attachment provided for this request for Figure 2 in the
Application. Figures 1 and 3 are supported by the cited hyperlinks included in the
Application.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO POVVER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 12
REQUEST FOR PRODUCTION NO. {O:
Please provide a timeline of construction for the necessary upgrades to connect
a proposed Schedule 20 customer, on average.
RESPONSE TO REQUEST FOR PRODUCTION NO. 10:
Each Schedule 20 customer connection requirement will be evaluated as part of
a study to determine what Protection Equipment, !nterconnection Facilities, and/or
Upgrades are necessary to interconnect the Customer's load to ldaho Power's system
and timeliness will be specific to that customer's requirements.
Generally, interconnection/interruption upgrades for a primary service Ievel
Schedule 20 customer are estimated to take 9 to 16 months from the time of funding to
construction completion based on current supply chain lead times.
lnterconnection/interruption upgrades for a transmission service level Schedule 20
customer are estimated to take 18lo 24 months from the time of funding to construction
completion based on current supply chain lead times.
The new customer's service request would also be studied to identiff any
capacity issues and environmental impact studies (such as work on Bureau of Land
Management land) which could result in additiona! required feeder, substation, or
transmission upgrades beyond the interconnection/interruption upgrades or additional
studies and mitigations that might impact the timelines listed above.
The response to this Request is sponsored by Jim Burdick, Engineering Leader,
ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY.l3
:
Please provide a list of current ldaho Power customers that would qualiff for the
proposed Schedule 20.
RESPONSE TO REQUEST FOR PRODUCTION NO. 11:
The Company is not aware of any existing primary or transmission service leve!
customers taking service under Schedule 9 and Schedule 19 that would qualiff for the
proposed Schedule 20.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO PO\'\'ER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY. 14
REQUEST FOR PRODUCTION NO. 12:
Please provide a list of ldaho Power customers that have interruptible service
agreements, like those proposed in Schedule 20. Do not include those that participate
in a Demand Response program.
:
No current ldaho Power customers have interruptible service agreements like
those proposed in Schedule 20.
Historically, the Company's Special Contract with Astaris LLC (fka FMC) included
interruption capability for the first energy block of 120 megawatts when Astaris was an
ldaho Power customer from the 1970s through the early 2000s. Cryptocurrency mining
represents a customer category not seen before, with load and operating characteristics
described in the Application coupled with the speculative nature of the industry, driving
the consideration to include interruptible service as part of the service requirements.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO PO\A'ER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 15
REQUEST FOR PRODUGTION NO. 13:
Please provide an average projected cost to upgrade the system to hook up a
potential high-density load customer. lnclude a list of equipment and the respective
cost in your response.
RESPONSE TO REQUEST FOR PRODUGTION NO. 13:
The Company does not yet know what an average Schedule 20 customer
requested demand would be because it hasn't connected any of these customers to its
system. Therefore, the Company is not able to estimate average projected
interconnection/interruption costs for a potential high-density load customer.
The specific interconnection/interruption upgrades for a Schedule 20 customer
would depend upon the following components of the custome/s request:
. Megawafts ("MW') of requested demand
. Service level- transmission or primary distribution
. Voltage at the point of interconnection
o Transmission - 46 kilovolts ('k\f') to 230kV
o Distribution - 12.5kV to 34.5kV
. For primary distribution, configuration of distribution circuit - overhead or
underground
The load additions would also be studied to identiff any capacity issues which
could result in required transmission upgrades.
The response to this Request is sponsored by Jim Burdick, Engineering Leader,
ldaho Power Company.
IDAHO PO\A/ER COMPANY'S RESPONSE TO F]RST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO ]DAHO POWER COMPANY.16
REQUEST FOR PRODUGTION NO. 14:
Please provide the accounting treatment of proposed Schedule 20 customers
deposits and infrastructure upgrades.
RESPONSE TO REQUEST FOR PRODUCTION NO. 14:
Schedule 20 customers will be responsible for funding 100o/o of the costs related
to the facilities needed to provide service. Accounting for the deposits and infrastructure
upgrades will follow the FERC Uniform System of Accounts. Capital costs incurred will
be recorded in FERC Account 101, Utility Plant in Service and the appropriate FERC
plant accounts. Deposits collected from the proposed Schedule 20 customers willoffset
the Capital costs recorded in FERC Account 101, for a net zero impact to rate base.
The response to this Request is sponsored by Aubrae Sloan, Accounting
Manager, ldaho Power Company.
IDAHO PO\A'ER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO PO\A'ER COMPANY.lT
REQUEST FOR PRODUGTION NO. 15:
!f a customer that qualifies for this class doesn't want interruptible service, what
options does this customer have? Please explain.
RESPONSE TO REQUEST FOR PRODUCTION NO. 15:
ldaho Power has requested the ldaho Public Utilities Commission approve
Schedule 20 as the service offering for customers which meet the criteria outlined in the
schedule. Alternative service offerings for customers who qualiff for Schedule 20 have
not been proposed by the Company.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 18
REQUEST FOR PRODUGTION NO. 16:
Could the interruptible requirement for Schedule 20 customers be replaced by a
requirement to participate in some form of Demand Response? Please provide a
discussion of the feasibility.
RESPONSE TO REQUEST FOR PRODUCTION NO. 16:
Based on the timing and magnitude of the requests for new service received by
ldaho Power, 1,950 megawatts, and the current Demand Response ('DR') parameters,
DR is not a feasible solution.
At the next general rate case, ldaho Power would evaluate Schedule 20 class
characteristics and interruptibility parameters to reflect system costs and benefits from
this class in their assignment of system costs. Alternatively, cost-of-service informed
system benefits could be evaluated through a demand response offering in place of
reduction to cost-of-service system cost assignment.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 19
REQUEST FOR PRODUCTION NO. 17:
Please provide the notice to customers prior to interruption of service.
RESPONSE TO REQUEST FOR PRODUCTION NO. 17:
The format and method of notice to customers prior to interruption of service are
currently under development, however the Company expects they will be similar to
notices currently provided to customers participating in lrrigation Peak Rewards and
Flex Peak Demand Response events. The Company anticipates that interruption event
start and end times wi!! be communicated to Schedule 20 customers two hours prior to
an event via phone call, or at the Company's discretion via an alternative, mutually
agreed upon method.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, ldaho Power Company.
IDAHO PO\A'ER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 20
DATED at Boise, ldaho, this 1lth day of February 2A22.
&L !.?("t-t -,-,
LISA D. NORDSTROM
Attomey for ldaho Power Company
IDAHO POVI'ER COMPANYS RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSTON STAFF TO IDAHO POVVER COMPANY.2l
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 11th day of February 2022,1 served a true and
correct copy of ldaho Power Company's Response to First Production Request of the
Commission Staff to ldaho Power Company upon the following named parties by the
method indicated below, and addressed to the following:
Commission Staff
Riley Newton
Deputy Attorney General
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No. 8,
Suite 201-A (83714\
PO Box 83720
Boise, lD 83720-0074
lndustrial Customers of ldaho Power
Peter J. Richardson
Richardson Adams, PLLC
515 N. 27th Street
P.O. Box 7218
Boise, ldaho 83702
Dr. Don Reading
6070 Hill Road
Boise, lD 83703
2140 Labs LLC
Elizabeth A. Koeckeritz
Givens Pursley LLP
601 W. Bannock Street
Boise, ldaho 83702
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAX
FTP SiteX Email: [e-mail]
_Hand Delivered
_U.S. Mail
_Overnight Mail
_FAX_ FTP SiteX Emai!: [e-mail]
_Hand Delivered
_U.S. Mail
Overnight Mail
_FAX_ FTP SiteX Email: [e-mail]
_Hand Delivered
_U.S. Mail
Overnight Mai!
_FAX_ FTP SiteX Email: [e-mail]
A
5fo".,+&r"t.
Stacy Gust, Regulatory Administrative
Assistant
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 22
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPG-E-21-37
]DAHO POWER GOMPANY
REQUEST NO. 1
ATTACHMENT 1
SEE ATTACHED SPREADSHEET
BEFORE THE
IDAHO PUBLIC UTILITIES COMM]SSION
GASE NO. IPC-E-21-37
IDAHO POWER COMPANY
REQUEST NO. 9
ATTACHMENT 1
SEE ATTACHED SPREADSHEET