20230209IPC to Staff 1-6.pdf

MEGAN GOICOECHEA ALLEN
Corporate Counsel
mgoicoecheaallenidahopower.com
February 9, 2023
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-22-30
Application of Idaho Power Company for Authority to Establish Compensation
for the Mandatory Interruption Requirement of Schedule 20 - Speculative
High-Density Load
Dear Ms. Noriyuki:
Attached for electronic filing is Idaho Power Company’s Response to the First
Production Request of the Commission Staff to Idaho Power Company in the above-
entitled matter.
If you have any questions about the attached documents, please do not hesitate to
contact me.
Sincerely,
Megan Goicoechea Allen
MGA:sg
Enclosures
RECEIVED
Thursday, February 9, 2023 11:21:36 AM
IDAHO PUBLIC
UTILITIES COMMISSION
IDAHO POWER COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 1
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO ESTABLISH
COMPENSATION FOR THE MANDATORY
INTERRUPTION REQUIREMENT OF
SCHEDULE 20 - SPECULATIVE HIGH-
DENSITY LOAD.
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CASE NO. IPC-E-22-30
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 (“IPUC or
Commission”) dated January 19, 2023, herewith submits the following information:
RECEIVEDThursday, February 9, 2023 11:21:36 AMIDAHO PUBLICUTILITIES COMMISSION

IDAHO POWER COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 2
REQUEST FOR PRODUCTION NO. 1: Please provide all workpapers in
electronic format with formulas enabled supporting the Company’s proposed
interruption compensation contained in the Application.
RESPONSE TO REQUEST FOR PRODUCTION NO. 1: Please see the
attachment provided for this request.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, Idaho Power Company.

IDAHO POWER COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 3
REQUEST FOR PRODUCTION NO. 2: Please explain if the Company
considered any other methods for determining an interruption compensation structure
for Schedule 20 besides the method discussed in the Application. If other methods
were considered, please explain the method(s) considered and why these method(s)
were not selected. If no other method(s) were considered, please explain why.
RESPONSE TO REQUEST FOR PRODUCTION NO. 2: The Company initially
evaluated interruption compensation similar to that offered to participants in the
Company’s demand response programs where interruption incentive payments are
designed to not exceed a cost-effectiveness ceiling informed by the costs and benefits
of an avoided surrogate supply-side capacity resource, adjusted for demand response
operation parameters. However, as outlined in the Application, Idaho Power concluded
that providing compensation for interruption in a similar methodology as payment for
demand response programs has the potential to double credit Schedule 20 customers
because full cost assignment for Schedule 20 customers has not yet been completed.
Compensation for load interruption, either through voluntary programs such as demand
response, or mandatory interruption, is contingent on first recognizing the full cost to
serve that customer class’s load characteristics.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, Idaho Power Company.

IDAHO POWER COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 4
REQUEST FOR PRODUCTION NO. 3: If the Commission deferred approving a
compensation structure until evaluation of cost assignment responsibility for Schedule
20 is completed in a general rate case, please explain how the Company would
evaluate the compensation structure. In addition, please explain what information is
required to perform the analysis and if the information would be available in the
Company’s next general rate case.
RESPONSE TO REQUEST FOR PRODUCTION NO. 3: Should the Commission
defer approving Schedule 20 interruption compensation until cost responsibility is
completed in a general rate case, Idaho Power anticipates it could evaluate
compensation structure under one of two different methodologies. Each of these two
methodologies must be pursued independently to prevent double compensation for the
value of interruption.
The first approach would be similar to the Company’s voluntary demand
response programs. Before compensation value is determined, the customer class’s
load statistics must first remove the impact of demand response events from the
participating customer class. This is necessary to ensure that cost assignment is
completed on the load characteristics of the class as if no demand response events had
occurred during the test year period. This approach recognizes and assigns the full cost
of system impact to serve the customers’ load as if the load was not interrupted, with
the value of interruption evaluated independently of load characteristics. The value of
interruption might follow the same underlying demand response methodology where
efficacy of the class’s interruption parameters is evaluated against an avoided surrogate
supply-side capacity resource’s costs and benefits. That interruption-parameter

IDAHO POWER COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 5
adjusted value becomes a ceiling for compensation to remain a cost-effective
alternative to the supply-side resource, and payment parameters are designed not to
exceed the ceiling should interruption events be called for the maximum allowed
duration and frequency.
In a second approach, the value of mandatory load interruption may be
recognized in the determination of system utilization and associated cost assignment
included in the customer class’s rates. Unlike the first approach, the impact of potential
load interruption would be included as a reduction to the class’s load statistics such that
the ability for Idaho Power to interrupt some or all of the class’s load results in reduced
cost assignment for generation and transmission system costs.
To complete analysis for either of the two approaches, statistical characteristics
of a future Schedule 20 cohort must exist to support evaluating Schedule 20 customers
as an independent rate class once Schedule 20 customers are part of Idaho Power’s
system. Statistical characteristics such as, but not limited to, at least twelve consecutive
months of data, and a coefficient of variation being one or less help ensure the
Company can validate the count and magnitude of customers is statistically sufficient to
complete class cost assignment at a general rate case. The statistical characteristics for
Schedule 20 being available at the Company’s next general rate case are wholly
dependent on a statistically sufficient number of Schedule 20 customers joining Idaho
Power’s system prior to development of the Company’s general rate case test year. As
of February 9, 2023, Idaho Power did not have any Schedule 20 customers.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, Idaho Power Company.

IDAHO POWER COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 6
REQUEST FOR PRODUCTION NO. 4: If the Commission deferred approving a
compensation structure until evaluation of cost assignment responsibility for Schedule
20 is completed in a general rate case, please explain how the Company would avoid
the double crediting discussed on page 6 of the Application during the evaluation.
RESPONSE TO REQUEST FOR PRODUCTION NO. 4: Please see the
Response to Request for Production No. 3.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, Idaho Power Company.

IDAHO POWER COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 7
REQUEST FOR PRODUCTION NO. 5: If the Commission were to approve the
Company’s proposed compensation structure from the Application, please explain
whether the Company would reevaluate the compensation structure during the next
general rate case. If so, please explain how the Company would evaluate the
compensation structure both with and without (no new Schedule 20 customers in the
system) actual customer data. If not, please explain why.
RESPONSE TO REQUEST FOR PRODUCTION NO. 5: Yes, however the
approach will vary depending on the number of Schedule 20 customers taking service
from the Company. If the Commission were to approve the proposal to compensate
Schedule 20 customers’ mandatory interruption at the value of peak-load serving
resources included in Schedule 9 and Schedule 19 rates, and no, or too few Schedule
20 customers were part of Idaho Power’s system to support a separate rate class, Idaho
Power anticipates updating the compensation rates based on general rate case
outcomes for peak-load serving resource allocation to Schedule 9 and Schedule 19,
respectively.
If sufficient Schedule 20 customers existed at the time of a general rate case to
support a separate rate class, Idaho Power anticipates evaluating compensation under
one of the approaches listed in the Response to Request No. 3.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, Idaho Power Company.

IDAHO POWER COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 8
REQUEST FOR PRODUCTION NO. 6: Please explain how the Company’s
proposed compensation structure from the Application avoids the double crediting
discussed on page 6 of the Application.
RESPONSE TO REQUEST FOR PRODUCTION NO. 6: Schedule 20 rates are
based on existing Schedule 9 and Schedule 19 rates, informed by costs approved in the
settlement of the Company’s 2011 general rate case. As part of the 2011 general rate
case, Schedule 9 and Schedule 19 cost assignment was completed based on adjusted
customer load characteristics first removing the impact from customer participation in
the Company’s voluntary demand response programs. Because the proposed
compensation structure is set to a maximum value if interruption was deployed for the
full 225 available hours equal to the peak-load serving costs included in Schedule 9 and
Schedule 19 rates, compensation is unlikely to result in crediting a value exceeding the
costs of peak-load serving resources included in rates.
Idaho Power highlights that while existing customer rates are not fully aligned
with cost-of-service informed rates, for example the Schedule 9 and Schedule 19 On-
Peak Demand Charge is less than the cost-of-service informed peak-load serving costs,
by only crediting costs assigned to the respective rate class, the risk of double crediting
is greatly reduced.
The response to this Request is sponsored by Paul Goralski, Regulatory
Consultant, Idaho Power Company.

IDAHO POWER COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 9
DATED at Boise, Idaho, this 9th day of February 2023.

MEGAN GOICOECHEA ALLEN
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S RESPONSE TO FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 10
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 9th day of February 2023, I served a true and
correct copy of Idaho Power Company’s Response to the First Production Request of the
Commission Staff to Idaho Power Company upon the following named parties by the
method indicated below, and addressed to the following:

Commission Staff
Riley Newton
Deputy Attorney General
Idaho Public Utilities Commission
Po Box 83720
Boise, Idaho 83720-0074

Hand Delivered
U.S. Mail
Overnight Mail
FAX
X E-mail [e-mail]

________________________________
Stacy Gust, Regulatory Administrative
Assistant

BEFORE THE

IDAHO PUBLIC UTILITIES COMMISSION

CASE NO. IPC-E-22-30

IDAHO POWER COMPANY

REQUEST NO. 1

ATTACHMENT NO. 1

SEE ATTACHED SPREADSHEET