20220216IPC to ICIP 1-10.pdf

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February 16,2022
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A(83714)
PO Box 83720
Boise, ldaho 83720-0074
Re: Case No. IPC-E-2141
ln The Mafter Of ldaho Power Company's Application For Authority to
Proceed with Resource Procurements to Meet ldentifted Capacity
Deficiencies in 2023, 2024, and 2025 to Ensure Adequate, Reliable, and
Fair-Prioed Service to its Customerc
Dear Ms. Noriyuki:
Attached for electronic filing is ldaho Power Company's Response to the First
Production Request of the lndustrial Customers of ldaho Power in the above entitled
matter. lf you have any questions about the attached document, please do not hesitate to
contact me.
Very truly yours,
Donovan E. Walker
DONOVAN E. WALKER (!SB No. 5921)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: (208) 388€936
dwalker@ idahooower. com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POVVER
COMPANY'S APPLICATION FOR
AUTHORITY TO PROCEED WTH
RESOURCE PROCUREMENTS TO MEET
IDENTIFIED CAPACIW DEFICIENCIES IN
2A23,2024, AND 2025 TO ENSURE
ADEQUATE, RELIEABLE, AND FAIR-
PRICED SERVICE TO ITS CUSTOMERS.
CASE NO. !PC,E-2141
IDAHO POVVER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REOUEST OF
THE INDUSTRIAL CUSTOMERS
OF IDAHO POWER COMPANY
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COMES NOW, ldaho Power Company ('ldaho Powed'or "Company'), and in
response to the First Production Request of the Commission Staff to ldaho Power
Company dated January 26,2022, herewith submits the following information:
IDAHO POVVER COMPANY'S RESPONSE TO THE F]RST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POVVER COMPANY - 1
REQUEST NO. 1: Please provide copies of all of the Gompany's responses to
data requests from the IPUC Staff (or any other party) in this matter. Please include
responses to informalas wellas formal requests and oral as well as written requests.
RESPONSE TO lClP REQUEST NO. ,l: The Company has previously provided:
o Response to First Production Request of the IPUC Stiaffs, filed February 3,
2022 (Slaff Data Requests 1-15).
o Note that the Company's response to IPUC Staffs Request No. 1
provides all DRs filed in connection with ldaho Powe/s resource
procurement filing in Oregon, docket UM 2210, ltems labeled as
PROTECTED INFORMATION or CONFIDENTIAL in the Oregon
docket should be treated as CONFIDENTIAL in this ldaho docket. As
of the date of this response, the Company has responded to 39
OPUC Staff data requests.
o Response to ldaHydro's First Set of lntenogatories, filed February 11,2022.
The response to this Request is sponsored by Sandra Holmes, Legal
Administrative Assistant of ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POWER COMPANY-2
REOUEST NO.2: Page 23 of the Company's Application
references "[M]odem fools used in aftempts to force deregulation onto state juisdictions
that have chosen to rctain the tnditional vertically integmted, state rcgulated seruice
providers..."later in the same sentence the Company's Application identifies some of
those modern tools, 'such as . . . [an] anticompetitive tax credit policy for renewable
energy prccurement." Please identify lhe "anticompetitive tax crcdit policy for rcnewable
eneryy procurement [that] ...forces ...deragulation onto state jurisdictions. ' Please explain
ldaho Powe/s understanding as to how said policies Tnrces . . . deregulation onto
state jurisdictions."
RESPONSE TO lGlP REQUEST NO.2: Federal and state tax policies can have
different impacts on regulated and non-regulated entities. These policies have been cited
as a factor in driving non-utility ownership of renewables, which erodes the regulatory
compact for vertically integrated utilities.
The response to this Request is sponsored by Tim Tatum, Mce President of
Regulatory Affairs of ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POVVER COMPANY.3
REOUEST NO. 3: Another'modem too!' rebrenced by ldaho Porer that is being
used to 'Torce deregulation onto state jurisdictions" is the "Federul Energy Regulatory
Commr'ssion's ("FERC") promotion of Regional Tra,nsmr'ssrbn Oryanizations ("RTO) and
lndependenf Sysfem Opentor ('rSO) opentional envircnmenfs..." Please identify those
portions of ldaho Powefs regulated state-sanctioned-monopoly service tenitory that are
currently operating inside of an RTO or ISO operational environment.
RESPONSE TO lGlP REQUEST NO. 3: ldaho Power's service area is not
currently operating within an RTO or ISO operating environment.
The response to this Request is sponsored by Mark Annis, Regulatory Consultrant,
ldaho Power Company.
IDAHO POWER COMPANYS RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POWER COMPANY -4
REQUEST NO. 4: Yet another'modern tool' referenced by ldaho Power that is
being used to Torce deregulation onto sfafe jurisdictionsu are the "competitive
procurement rules and regulations specifrcally designed to "remove the utility's
competitive advantage"'... " Please (A) specifically identifo the rules being referenced, and
(B) provide a citation for the quote "temove the utility's competitive advantage", and (C)
explain how rules that are designed to "remove the utility's competitive advantiage" are
being used to "force deregulation onto state jurisdictionsn, and (D) reconcile the concept
of the company's genera! opposition to competition in its instant Application with its
apparent opposition to rules that are designed to remove competitive advantages.
RESPONSE TO lClP REQUEST NO.4: Please see the Company's response to
IPUC Staffs Request No. 12 for a discussion and analysis of such rules and
regulations. While not directly quoted from a specific souroe, the phrase "remove the
utility's ampetitive advantage" reflects a oommon purpose identified for the rcsouroe
procurement dockets.
The response to this Request is sponsored by Tim Tatum, Vice President of
Regulatory Affairs of ldaho Power Gompany.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POVVER COMPANY - 5
REQUEST NO. 5: Wth referenced to the same provision of the Company's
Application as in No. 4 above, the Company characterizes "competitive procurement
rules and regulations specifically designed to "remove the utility's competitive advantage"
as, "(or in other wods to give competitive advantage to non-utility thir*party goneraltiwt
or PPAs, with incenfives mrs-aligned with customer benefit.)" Please explain how rules
that are "designed' to remove a utility's competitive advantage are in fact ('or in other
words" [designed] to give competitive advantage to non-utility, third-party generation or
PPAs". (B) Please provide examples of the referenced incentives that are mis-aligned
with customer benefit.
RESPONSE TO IGIP REQUEST NO. 5: Please see the Company's responses
to IPUC Staffs Request Nos. 7 and 12.
The Response to this Request is sponsored by Tim Tatum, Vice President of
Regulatory Affairc, of ldaho Pourer Company.
IDAHO POVI'ER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POVVER COMPANY - 6
REQUEST NO. 6: The Company discusses imputed debt costs to the utility and
to its customers of third party-owned assets (PPAs) beginning on page 28 and it then
purports to quantiff those costs in Exhibit 5. Please identify and quantify the benefits to
the utility and ils customers of third party PPA's shifting construction risk cost to the PPA
developer and away from the utility and its customers. Please identiff and quantify the
benefits to the utility and its customers of third pafi PPAs' shifting operating risk from the
utility and its customers to the PPA developer. Please identiff and quantiff the benefits
to the utility and customers of third party PPAs'shifting fuel risk to the PPA developer and
away from the utili$ and its customers. Please list all benefits to the utility and its
customerc of which ldaho Power is aware of third party PPAs. lf the list does not include
the three noted above, please explain why not.
RESPONSE TO lClP REQUEST NO. 6: The Company's response assumes this
request refers to Attachment 5 to the Company's application. \Mile the competitive
bidding dockets in Oregon have attempted to identiff benefits and risks of various forms
of resource procurement, Idaho Power has not independently attempted to identify such
risks and thus has not prepared any sort of quantitative analysis of the benefits to
the utility or its customers associated with the purported risk shifting described in this
request. The Company assumes that pricing agreed to by a PPA developer and paid by
a utility would incorporate a risk premium that contemplates such purported risks, if any
such risk shifting exists and is material. The Company believes several risks exist
associated with resour@s procured through a PPA, including, but not limited to, the
developer failing to meet its obligation to provide energy and/or capacity in the contractual
timeframe or at the contracted price, greater control of and flexibility to manage resources
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
]NDUSTRIAL CUSTOMERS OF IDAHO POI/\'ER COMPANY - 7
it owns and operates, as well as the risk of additional costs to customers associated with
imputed debt applied to resources not owned by the Company.
The Company's analysis of imputed debt costs for power purchase agreements,
as described and valued in Attachments 4 and 5 to the Gompany's
application, respectively, provide an analysis of the actual impac't of imputed debt costs
for third party PPAs on the Company and itrs customers.
The response to this Request is sponsored by Tim Tatum, Mce President of
Regulatory Affairc of ldaho Power Company.
IDAHO POVVER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POVGR COMPANY - 8
REQUEST NO. 7: Please state whether it is the Company's policy that all of the
benefits, risks and costs of PPAs with third parties as compared to utility-owned
generation assets should be evaluated symmetrically and comparably on a both a
quantitative and qualitative basis. lf so, then does Exhibit 5 to the Company's Application
provide such a symmetrical and comparable evaluation?
RESPONSE TO lClP REQUEST NO.7: The Company's response assumes this
request refers to Attachment 5 to the Company's application. The Gompany's resource
procurement process is intended to provide adequate, reliable, and fair-priced service to
its customers, which would include a lair evaluation of the benefits, risks and costs of
various forms of resource ownership. As stated in the Company's application, page 16,
a procurement process for resources that takes into account not only price,
but also reliability, system operation, long-term operation and maintenance of
facilities, financialviability of the utility, economicdispatch, environmentalpolicies,
real-time needs and load growth, and other attributes, is one that benefits
customers, developers, and the utility.
Attachment 5 to the Company's application presented a comparison of the cost of
ldaho Power ownership of an 80 MW resour@ compared to the lowest PPA cost for solar
from the bidders including the renewing of the PPA to match the life.of the asset of 35
years as wellas adding the impact of imputed debt. Therefore no, Attachment 5 does not
present a full evaluation of the benefits, risks and costs of various forms of resource
ownership.
The response to this Request is sponsored by Mark Annis, Regulatory Consultant
of ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUESTOF THE
INDUSTRIAL CUSTOMERS OF IDAHO PO\'\'ER COMPANY - 9
REQUEST NO. 8: At page 15 of the Company's Application ldaho Power assertrs
that it is "concemed that the OPUC Resouruu Procurement Rules do not align with the
state of ldaho's system of public utility regulation...'Please explain how the competitive
procurement of assets, such as generating assets, does not align with ldaho's system of
public utili$ regulation.
RESPONSE TO lClP REQUEST NO.8: Please see the Company's response
to IPUC Staffs Request No. 7. ln addition, please refer to Part V. of the Gompany's
Application, which discusses ldaho's utility ournership of supply-side capacity resources
and ldaho's system of public utility regulation.
The response to this Request is sponsored by Tim Tatum, Vice-President of
Regulatory Affairs of ldaho Power Company.
IDAHO POVVER COMPANY'S RESPONSE TO THE FIRST PRODUGTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POWER COMPANY - 10
REQUEST NO. 9: ln May 2017, ldaho Power filed comments at the OPUC
addressing that state's competitive procurement rules. ln its comments ldaho Power
asserted that the OPUC's competitive procurement rules "provide for a rcasonable and
fair process that does not prc-judge the outcome of the competitive bidding prccess and
that allowsfordivercity in ownerchi/o."!n the same document, ldaho Power urged the
OPUC to "convert the cunent [competitive bidding] guidelines to rules." Please explain
whether ldaho Power stil! believes the OPUC competitive bidding rules and/or guidelines
are "reasonable and fair." lf not, please provide al! interna! documentation of Idaho
Powefs position on the lack of reasonableness of the OPUC's competitive procurement
rules and guidelines.
RESPONSE TO ICIP REQUEST NO. 9: Please see the Company's response to
IPUC Staffs Request No. 7, which discusses the OPUC competitive bidding rules.
ldaho Power does not have any internal documentation of its position on the lack
of reasonableness of the OPUC's competitive procurement rules and guidelines.
The response to this Request is sponsored by Tim Tatum, Vice President of
Regulatory Affairs of ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POVVER COMPANY - 11
REQUEST NO. {0: Please provide a copy of the retention agreement(s) between
ldaho Power and Black & Veatch Management Consulting, LLC that is referenoed in the
Company's Application and a copy of all scope of work documentrs under which Black &
Veatch has been retained by ldaho Power. \l/hat are the all-in costs and fees ldaho Power
anticipates paying Black & Veatch for its services?
RESPONSE TO lClP REQUEST NO. {0: A confidential copy of the executed
contract with Black & Veatch Management Consulting, LLC ("Black & Veatch') and
executed Statement of Work(s) are attached to this Response. Rates have been
redacted due to the competitive nature of such information.
The response to this Request is sponsored by Eric Hackett, Projects and Design
Senior Manager of ldaho Power Company.
Respectfrllly submitted this 16th day of February 2022.
fuzila!4-
DONOVAN E. WALKER
Attorney for ldaho Power Company
IDAHO POV'JER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POWER COMPANY. 12
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 16th day of February 2022,1 served a true and
conect copy of the within and foregoing IDAHO POVVER 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:
Dayn Hardie
Deputy Attomey General
ldaho Public Utilities Commission
Po Box 83720
Boise, ldaho 83720-0074
lndustrial Customers of ldaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 N.27th Street
Boise, ldaho 83702
Northwest and Intermountain Power
Producers Coalition
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 N.27th Street
Boise, ldaho 83702
ldaHydro
C. Tom Arkoosh
ARKOOSH I.AW OFFICES
913 w. River Street, Suite 450
P.O. Box 2900
Boise, !D 83701
ldaho Conservation League
Benjamin J. Otto
710 North 6th Street
Boise, lD 83701
Emailed to:
davn. hardie@ouc. ldaho. gov
Emailed to:
oeter@ richardsonadams. com
Emailed to:
g req @ richard sonadams. com
Emailed to:
[e-mail]
[e-mail]
Emailed to:
botto@ idahoconservation. org
Sandra Holmes, Legal Assistant
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
INDUSTRIAL CUSTOMERS OF IDAHO POWER COMPANY - 13