20230630IPC to Staff 21-24.pdf

LISA D. NORDSTROM
Lead Counsel
[e-mail]

June 30, 2023

VIA ELECTRONIC FILING

Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074

Re: Case No. IPC-E-23-08
In the Matter of Idaho Power Company’s Participation in the Western
Resource Adequacy Program

Dear Ms. Noriyuki:

Attached for electronic filing is Idaho Power Company’s Response to the Second
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.

Very truly yours,

Lisa D. Nordstrom
LDN:sg
Attachments
RECEIVED
Friday, June 30, 2023 4:11:53 PM
IDAHO PUBLIC
UTILITIES COMMISSION

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 1
LISA D. NORDSTROM (ISB No. 5733)
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
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 IDAHO POWER
COMPANY’S PARTICIPATION IN THE
WESTERN RESOURCE ADEQUACY
PROGRAM

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CASE NO. IPC-E-23-08

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

COMES NOW, Idaho Power Company (“Idaho Power” or “Company”), and in
response to the Second Production Request of the Commission Staff (“Commission” or
“Staff”) dated June 14, 2023, herewith submits the following information:

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 2
REQUEST FOR PRODUCTION NO. 21: Please describe the accounting
treatment that the Company will apply to the following Western Resource Adequacy
Program ("WRAP") revenue and expenses.
a. Administrative charges (fixed and variable);
b. Energy Deployment revenue or expenses;
c. Holdback Requirement revenue or expenses;
d. Deficiency Charge; and
e. Delivery Failure Charge.
RESPONSE TO REQUEST FOR PRODUCTION NO. 21:
a. Idaho Power has incurred administrative participation fees related to the WRAP
program and charged them in accordance with the Code of Federal Regulations
to the Federal Energy Regulatory Commission (“FERC”) 561.3 Load Dispatch—
Transmission Service and Scheduling account. These incurred costs were
included in the general rate case request filed on June 1, 2023 in Case No. IPC-
E-23-11.
b-c. For Energy Deployment and Holdback Requirement expenses, the Company
anticipates also charging these to the FERC 561.3 Load Dispatch—Transmission
Service and Scheduling account. Meanwhile, for Energy Deployment and
Holdback Requirement revenues, the Company anticipates charging these to the
FERC 447— System Sales account. This is the Company’s initial determination of
accounting treatment but is subject to change upon future accounting evaluation.

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 3
d-e. As noted in the Company’s Application in this case and in the Company’s
Response to Staff’s Production Request No. 3, Idaho Power will not participate in
WRAP in a manner that would result in incurring penalties (in the form of Deficiency
or Delivery Failure Charges). However, in the extremely unlikely event that the
Company were to incur such charges, they would only be assessed once the
Company is a binding participant in WRAP (assumed to be 2027) and, with respect
to Delivery Failure Charges, engaging in a bilateral transaction with another
binding WRAP participant. Upon incurring a penalty, the Company would seek to
understand the circumstances that led to the charge to determine whether the
Company should absorb those costs or whether it would be appropriate to seek
recovery from customers. The outcome of such a review would determine the
proper accounting treatment of penalties.
The response to this Request is sponsored by Aubrae Sloan, Accounting Manager,
Idaho Power Company.

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 4
REQUEST FOR PRODUCTION NO. 22: The Company's responses to Production
Requests Nos. 6 and 7 indicate that using the WRAP once per year would avoid 14
Megawatts ("MW") of perfect generation and using the WRAP twice per year would avoid
24 MW of perfect generation. The first use is modeled to occur at the highest loss of load
probability ("LOLP") hour in the year.
The second use is modeled to occur at the second highest LOLP hour. Please
explain why the avoided capacity appears to be additive (14MW + 10MW), instead of
fixed at 14 MW by the highest LOLP hour. Please clarify if the Company thinks the
avoided capacity benefit would continue to increase for each additional 'use' of the
WRAP, and if so, why it expects that to be so.
RESPONSE TO REQUEST FOR PRODUCTION NO. 22: For this analysis, the
modeled WRAP nameplate capacity was set equal to 100 MW (the amount of capacity
needed to bring the LOLP values on the highest-risk day down to a similar risk profile as
other days in the same year). The 100 MW of WRAP capacity is modeled to be available
for the entire day in which the year’s highest LOLP value occurs. Reducing the LOLP on
the highest-risk day of the year has a more significant impact on the overall system
reliability than reducing the LOLPs on the next highest-risk days. Using test year 6 data1
as an example, the plot below shows the LOLPs for the two highest-risk days in the year
(highlighted in orange boxes) and how they differ in magnitude.

1 The Company’s Response to Staff’s Request for Production No. 6., Attachment 1 -WRAP Analysis.

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 5

Because WRAP is modeled as available capacity in Idaho Power’s reliability and
capacity assessment tool, “using” the program more than one day per year would
continue to increase the avoided capacity benefit of the WRAP. Practically, however,
WRAP is designed and priced to act like an insurance policy, making it attractive as an
option of last resort and dissimilar to a market in which frequent transactions are
economic.
The response to this Request is sponsored by Andres Valdepeña-Delgado,
System Planning Engineer, Idaho Power Company.

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 6
REQUEST FOR PRODUCTION NO. 23: Please explain how the Company would
translate the WRAP's theoretical avoided capacity benefit into actual avoided capacity
benefit. Would the Company reduce its Planning Reserve Margin ("PRM") in future
Integrated Resource Plans ("IRPs")? If so, please quantify the anticipated reduction. If by
some other method, please explain it.
RESPONSE TO REQUEST FOR PRODUCTION NO. 23: As introduced in the
Integrated Resource Plan (“IRP”) Advisory Council meeting on March 9, 2023, and further
discussed in the Company’s discussion with Staff on June 14, 2023, Idaho Power is
modeling WRAP’s benefit (associated with leveraging the program one day per year) as
a 14 MW resource starting in year 2027 of the IRP’s 20-year planning horizon. That is,
the avoided capacity benefit of WRAP will result in an approximate 14 MW reduction to
the year’s calculated resource need. The avoided capacity amount associated with
WRAP also reduces the Company’s PRM value by a small amount; WRAP will show up
as a reduction of generation need in the calculation of the PRM, rather than a direct
percentage reduction of the PRM.
The response to this Request is sponsored by Andres Valdepeña-Delgado,
System Planning Engineer, Idaho Power Company.

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 7
REQUEST FOR PRODUCTION NO. 24: Please explain what demand response
data the Company will provide to the forward showing program forward showing program
50th percentile ("P50") peak load forecast (i.e., name plate capacity, historical demand
reduction, etc.). If applicable, please explain how the provided data is different for the
historic period and forecasted adjustments.
RESPONSE TO REQUEST FOR PRODUCTION NO. 24: Idaho Power will include
its demand response programs as a load modifier, or a reduction to the P50 load forecast,
in its Forward Showing submittals. The Company intends to include a forecast value of
demand response in the Forward Showing submittal based on the nameplate capacity
and ELCC, which represents the capacity contribution of the demand response portfolio.
This information would likely stem from the Company’s most recent IRP. Idaho Power
intends for the value submitted to represent a realistic, but conservative, approximation
of what the Company might call on from the programs on any given day.
Under WRAP’s current design, the value of demand response included in the
Forward Showing submittal will be transferred to the Operations Program and will be
assumed to be available and dispatchable all hours of the day, every day.2 Idaho Power’s
demand response programs are not available all hours of the day and have limitations on
the frequency and duration of the events. As a result, to ensure WRAP can more
accurately reflect the availability of Idaho Power’s demand response programs, the
Company plans to include in the Forward Showing an amount of demand response that
could conservatively be available during capacity-critical hours on any given day, as

2 The Western Power Pool has communicated that it intends to revisit the treatment of demand response in the future
and that the current design could change.

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 8
described above. Idaho Power does not plan to include the nameplate value or historical
demand reduction value, as they may not be an accurate predictor of future program
capability.
The response to this Request is sponsored by Nicole Blackwell, Lead Operations
Analyst, Idaho Power Company.

DATED at Boise, Idaho, this 30th day of June 2023.

________________________________
LISA D. NORDSTROM
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 9
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 30th day of June 2023, I served a true and correct
copy of Idaho Power Company’s Response to the Second 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
Michael Duval
Deputy Attorney General
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No. 8
Suite 201-A (83714)
PO Box 83720
Boise, ID 83720-0074

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