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Home My WebLink About20230707IPC to Staff 1-10.pdf MEGAN GOICOECHEA ALLEN CorporateCounsel mgoicoecheaallen@idahopower.com July 7, 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-23-18 Application for Approval of Special Contract and Tariff Schedule 34 to Provide Electric Service to Lamb Weston, Inc. 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. The confidential attachments will be provided to the parties who have executed the Protective Agreement. If you have any questions about the attached documents, please do not hesitate to contact me. Sincerely, Megan Goicoechea Allen MGA:cd Enclosures RECEIVED Friday, July 7, 2023 2:56:24 PM IDAHO PUBLIC UTILITIES COMMISSION CERTIFICATE OF ATTORNEY ASSERTION THAT INFORMATION CONTAINED IN AN IDAHO PUBLIC UTILITIES COMMISSION FILING IS PROTECTED FROM PUBLIC INSPECTION Idaho Power Company’s Application for Approval of Special Contract and Tariff Schedule 34 to Provide Electric Service to Lamb Weston, Inc. Case No. IPC-E-23-18 The undersigned attorney, in accordance with Commission Rules of Procedure 67, believes that the following Attachment Nos. to Idaho Power Company’s Response to Staff’s First Set of Production Requests, dated July 7, 2023, may contain information that Idaho Power Company and a third party claims is a confidential trade secret, business records of a private enterprise required by law to be submitted to or inspected by a public agency , and/or public records exempt from disclosure by federal law (material nonpublic information under U.S. Securities and Exchange Commission Regulation FD) as described in Idaho Code § 74-101, et seq., and/or § 48-801, et seq. As such, it is protected from public disclosure and exempt from public inspection, examination, or copying:  Attachment Nos. 1-6, 8-10, and 14-15 to Response to Request No. 1  Attachment No. 1 to Response to Request No. 7 DATED July 7, 2023. MEGAN GOICOECHEA ALLEN Counsel for Idaho Power Company IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 1 MEGAN GOICOECHEA ALLEN (ISB No. 7623) LISA NORDSTROM (ISB No. 5733) Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-2664 Facsimile: (208) 388-6936 mgoicoecheaallen@idahopower.com lnordstrom@idahopower.com Attorneys for Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER COMPANY’S APPLICATION FOR APPROVAL OF SPECIAL CONTRACT AND TARIFF SCHEDULE 34 TO PROVIDE ELECTRIC SERVICE TO LAMB WESTON, INC. ) ) ) ) ) ) ) ) ) CASE NO. IPC-E-23-18 IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY COMES NOW, Idaho Power Company (“Idaho Power” or “Company”), and in response to the First Production Request of the Commission Staff (“Commission” or “Staff”) dated June 16, 2023, herewith submits the following information: IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 2 REQUEST FOR PRODUCTION NO. 1: Please provide all workpapers used to derive the two-block pricing structure discussed on pages 7-10 of the Application in electronic format with formula enabled. RESPONSE TO REQUEST FOR PRODUCTION NO. 1: Please see the Confidential and non-confidential Attachments provided for this request. Confidential and non-confidential Attachment Nos. 1-13 are the derivation of the marginal energy cost; Confidential Attachment No. 14 is the derivation of the Block 2 Monthly Billing Demand Charge as filed in the Application; and Confidential Attachment No. 15 is the corrected derivation of the Block 2 Monthly Billing Demand Charge described further below. In preparation of the Response to Request for Production No. 1, the Company identified one of the inputs to derivation of Block 2 Billing Demand was not updated with the final value. Because the 2011 general rate case class cost-of-service (“CCOS”) methodology used to develop Lamb Weston’s Block 2 pricing classifies power supply expense as both energy- and capacity-related, the marginal energy cost impacts the Block 2 Monthly Billing Demand Charge. The Monthly Contract Demand Charge that corresponds to the $0.058694/kWh marginal energy cost is $14.62/kW. In the Company’s Application, Idaho Power requested a Block 2 Monthly Billing Demand Charge of $12.67/kW, which was based on an outdated marginal energy cost of $0.043352/kWh. Please see Confidential Attachment 15 for the corrected workpaper which supports the $14.62/kW Monthly Contract Demand Charge. The marginal energy cost is entered in cells B87:B89 on the “NPSE Calc” worksheet. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 3 Idaho Power notes that derivation of the Block 2 Billing Demand proposed in the Company’s pending 2023 general rate case filed June 1, 2023, utilizes a different methodology which is not impacted by the marginal rate for energy assumption for Block 2 energy. CCOS methodology in the pending general rate case proposed a change to CCOS classification methodology for production-functionalized costs, and for special contract customers with a two-block pricing structure to have embedded cost, cost assignment completed inclusive of all embedded load statistics evaluated in the class of one. Idaho Power will file an errata to correct the Block 2 Monthly Billing Demand Charge to $14.62/kW by July 14, 2023. The response to this Request is sponsored by Paul Goralski, Regulatory Consultant, Idaho Power Company. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 4 REQUEST FOR PRODUCTION NO. 2: In reference to the proposed Block 2 Demand and Block 2 Energy Charges, please respond to the following: a. Please provide all workpapers used to determine the Block 2 Demand rates in electronic format with formula enabled. b. Please provide all model runs and workpapers used to determine the Block 2 Energy Charge. For the model runs, please provide the assumptions used for each model run. Please provide all files in electronic format with formula enabled. c. Please explain if the Company considered any other methods to determine the Block 2 Energy Charge for Schedule 34 besides the marginal cost 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 no other methods were considered. d. Please explain if the Company evaluated the proposed Block 2 Energy Charge differentiated by season and by On, Mid, and Off-peak hour pricing similar to Demand-Side Management Avoided Cost Averages. If the Company did evaluate the time periods, please explain why the time periods were not used and provide the Company's workpapers from the evaluation. If the Company did not evaluate these time periods, please explain why these time periods were not evaluated. e. Please provide a proposal for Block 2 Energy Charges differentiated by season and by On, Mid, and Off-peak hours with electronic workpapers documenting the method. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 5 RESPONSE TO REQUEST FOR PRODUCTION NO. 2: a. Please see Confidential Attachment Nos. 14 and 15 provided in Response to Request for Production No. 1. b. Please see Confidential and non-confidential Attachment Nos. 1-13 provided in Response to Request for Production No. 1 for the input data and assumptions used in the model. The marginal cost of energy was determined from the simulated hourly operation of the Company’s power supply system over the April 2023 – March 2024 Test Year. Base case net power supply expenses were quantified, and the model was run a second time with fifteen megawatts (“MW”) of load added across all hours. The difference in monthly power supply expenses between the base run and the base-plus-15-MW run was divided by the difference in monthly megawatt hours to produce a marginal cost per megawatt-hour. c. During the initial development of Lamb Weston’s Special Contract pricing, the Company also considered using fully-embedded energy pricing, and Demand-Side Management Avoided Cost Averages as a proxy for marginal energy cost for the Block 2 Energy Charge. Concurrent to the Lamb Weston Special Contract pricing development, the Company was broadly evaluating marginal energy pricing methods, as it was directed to by the Commission in Case No. IPC-E-21-37.1 Based on that analysis, Idaho Power believes the proposed marginal energy cost basis for Lamb Weston provides a reasonable basis to ensure Lamb Weston is responsible for energy costs necessary to serve its incremental load. This method is also consistent with the criteria listed in Staff’s Memo on the Investigation in 1 In the Matter of the Application of Idaho Power Company for Authority to Establish a New Schedule to Serve Speculative High-Density Load Customers, Case No. 21-37, Order No 35428, p. 7. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 6 Methods to determine Marginal Cost of Energy for Schedule 20, included as an attachment for this response. Neither of the other two methods mentioned are consistent with the criteria contained in Staff’s memo. Idaho Power also requested to make the same update to Schedule 20 marginal cost of energy as part of the Company’s pending general rate case.2 d. The Company did contemplate a time-differentiated Block 2 Energy Charge but did not propose inclusion as part of Lamb Weston’s proposed Special Contract due to the prospective nature of Lamb Weston’s load forecast for their expansion. At a future point in time if the Special Contract is modified, the Company will evaluate if time-differentiated rates should be included in the pricing structure proposed at that time. Idaho Power notes the embedded pricing block, Block 1, which covers the energy requirements of Lamb Weston’s existing load, includes Schedule 19 – Primary Service’s time-differentiated energy rates. The time- differentiated marginal energy rates are the same as those proposed for Schedule 20 in the Company’s pending general rate case;3 please see Attachment 2 provided for this response for the supporting workpaper. e. Idaho Power does not propose that Lamb Weston’s Block 2 marginal energy price be time differentiated due to the prospective nature of Lamb Weston’s load forecast and the inclusion of time-differentiated rates for the first 20 MW block of electric service as noted in response 2(d). Please see the attachment provided for 2 In the Matter of the Application of Idaho Power Company for Authority to Increase Its Rates and Charges for Electric Service in the State of Idaho and for Associated Regulatory Accounting Treatment, Case No, IPC-E-23-11, Goralski DI p. 52-53. 3 In the Matter of the Application of Idaho Power Company for Authority to Increase Its Rates and Charges for Electric Service in the State of Idaho and for Associated Regulatory Accounting Treatment, Case No, IPC-E-23-11, Goralski DI p. 53. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 7 2(d) which calculates the annual $0.058694/ per kilowatt-hour marginal energy rate by respective seasonal, time-differentiated period consistent with the season and time period definitions from the Company’s pending general rate case. The response to this Request is sponsored by Paul Goralski, Regulatory Consultant, Idaho Power Company. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 8 REQUEST FOR PRODUCTION NO. 3: In reference to the option under Section 6.4 to reevaluate the source of the Block 2 Energy Charge discussed on page 11 of the Application, please respond to the following: a. Please explain the rationale for the "at least five years" requirement. b. Please explain if other Idaho Power Special Contracts have had and/or do include a similar option. c. Please provide examples of when the Company would consider pricing Lamb Weston at its embedded cost instead of the proposed marginal cost RESPONSE TO REQUEST FOR PRODUCTION NO. 3: a. The rationale supporting the “at least five years” requirement for Block 2 energy to be priced on a marginal rate is to seek a balance between incremental costs of customer load growth in a rate class of one and upward rate pressure to all other customers, along with fair, just, and reasonable rates for standard service as part of the Company’s obligation to serve that rate class of one at a time when Idaho Power’s system is constrained. The Company’s existing customers are allocated a share of existing, embedded system costs. The combination of the 2-block pricing structure with the first block being fully-embedded, and five-year term of marginal energy cost for Block 2 recognizes the incremental cost of load growth from Lamb Weston but provides a future point in time when the load expansion may receive embedded cost assignment consistent with other existing Idaho Power customers. b. No current Idaho Power customers include marginal pricing which may transition to embedded pricing in the future. The Company’s Special Contract with Hoku IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 9 Materials Inc. included a 2-block, marginal price structure for the four-year term of the Electric Service Agreement (“ESA”), that was envisioned to transition to fully- embedded pricing when the ESA was renegotiated for the subsequent term.4 c. As outlined in section 6.4 of the Lamb Weston’s Special Contract found in Attachment 1 to the Application, Idaho Power would reevaluate the source of the Block 2 Energy Charge after the agreement has been in effect for at least a period of five years, at Lamb Weston’s request. The response to this Request is sponsored by Paul Goralski, Regulatory Consultant, Idaho Power Company. 4 In the Matter of Idaho Power Company’s Application for Approval of a Special Contract to Supply Power to Hoku Materials, Inc.; Case No IPC-E-08-21, Gale DI p. 10. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 10 REQUEST FOR PRODUCTION NO. 4: Please provide all annual and hourly load forecasts for the years 2023, 2024, and 2025 the Company has for Lamb Weston that include the expected increase in energy and demand discussed in this case. For hourly load forecasts, please include the amount of Block 2 energy in each hour. Please provide files in electronic format with formula enabled. RESPONSE TO REQUEST FOR PRODUCTION NO. 4: Please see Confidential Attachment No. 14 provided in Response to Request for Production No. 1. The load forecast for Lamb Weston includes a monthly peak demand and load factor, the Company assumed a flat hourly shape for each month to determine the energy provided under each block. The response to this Request is sponsored by Paul Goralski, Regulatory Consultant, Idaho Power Company. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 11 REQUEST FOR PRODUCTION NO. 5: Please explain how or if the Company incorporated Lamb Weston's expected increase in energy and demand represented in this case into the General Rate Case (Case No. IPC-E-23-l l) filed on June 1, 2023. RESPONSE TO REQUEST FOR PRODUCTION NO. 5: Idaho Power did not incorporate Lamb Weston’s expected increase in energy and demand represented in this case into the General Rate Case, Case No. IPC-E-23-11. The rationale for treatment of Lamb Weston’s forecast is described in Company Witness Pawel Goralski’s testimony:5 Lamb Weston is in the process of a plant expansion at its facility in American Falls and is forecast to exceed the Schedule 19 service eligibility threshold in the second half of 2023 but not complete expansion until mid-2024. Due to uncertainty associated with the exact timing of that expansion, it is appropriate to include Lamb Weston’s forecast Special Contract system utilization in a future GRC test year once that usage has been achieved. The existing account associated with Lamb Weston’s American Falls operations represents a 12MW – 14MW load (range represents variation over past five years). As such, they would be observed and included within Idaho tariff Schedule 19 – Primary Service (“Schedule 19P”). Schedule 19P would be inclusive of large load (over 1MW) customers. That forecast is not specific to each customer site within that category; however, it is forecasted as a group as a whole. The growth in that aggregated category has a forecasted sales growth rate of 2.2% for 2023 test year. The response to this Request is sponsored by Jordan Prassinos, Load Forecast Manager and Principal Economist, Idaho Power Company. 5 In the Matter of the Application of Idaho Power Company for Authority to Increase Its Rates and Charges for Electric Service in the State of Idaho and for Associated Regulatory Accounting Treatment, Case No, IPC-E-23-11, Goralski DI p. 46. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 12 REQUEST FOR PRODUCTION NO. 6: Please explain how the Company plans to incorporate the Commission's decision in this case into the General Rate Case (Case No. IPC-E-23-11) filed on June 1, 2023. RESPONSE TO REQUEST FOR PRODUCTION NO. 6: The ability for the Company to incorporate Commission decisions in this case, IPC-E-23-18, into the Company’s pending general rate case, IPC-E-23-11, is dependent on the directives ordered and timing of Commission decisions in this case. Rates in the Company’s general rate case are proposed to become effective January 1, 2024; should the Lamb Weston Special Contract rates become effective prior to January 1, 2024, Idaho Power will update Special Contract rates consistent with Commission directive in this case, and outcomes of the general rate case, in a compliance filing in the general rate case for rates effective January 1, 2024. As described by Company Witness Pawel Goralski,6 the Lamb Weston Special Contract rates determined as part of the Company’s general rate case are based on “stand-alone” analysis which does not impact the remainder of the Company’s general rate case class cost-of-service analysis. That is, the primary class cost-of-service analysis to develop cost allocation for all Idaho Power Idaho rate schedules assumes Lamb Weston’s load is based on historical actuals below the Special Contract threshold. Dependent on the Commission decisions in this case, Idaho Power would have the ability to incorporate changes into the Lamb Weston “stand-alone” analysis completed for the 6 In the Matter of the Application of Idaho Power Company for Authority to Increase Its Rates and Charges for Electric Service in the State of Idaho and for Associated Regulatory Accounting Treatment, Case No, IPC-E-23-11, Goralski DI p. 45-46. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 13 general rate case to effectuate any required updates without impacts to the remaining Idaho customer class rates proposed in the pending general rate case. The response to this Request is sponsored by Paul Goralski, Regulatory Consultant, Idaho Power Company. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 14 REQUEST FOR PRODUCTION NO. 7: Please provide a copy of the Construction Agreement dated September 20, 2022, discussed on page 8 of the Special Contract. RESPONSE TO REQUEST FOR PRODUCTION NO. 7: Please see the Confidential 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 THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 15 REQUEST FOR PRODUCTION NO. 8: Please explain if Lamb Weston's Contract Demand Ramp projection shown on page 5 of the Special Contract is still accurate based on any changes that have occurred in their schedule for expanding operations. RESPONSE TO REQUEST FOR PRODUCTION NO. 8: Lamb Weston has not provided any changes to the Contract Demand Ramp projection included on page 5 of the Special Contract. The Contract Demand represents the maximum demand Idaho Power plans to make available to Lamb Weston, and slightly exceeds the forecast actual monthly demand provided by Lamb Weston. Please see the Company’s Response to Production Request No. 1 for the Lamb Weston forecast actual monthly demand. The response to this Request is sponsored by Paul Goralski, Regulatory Consultant, Idaho Power Company. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 16 REQUEST FOR PRODUCTION NO. 9: In reference to the Initial Power Factor ("P.F.") Adjustment discussed on page 7 of the Application, please respond to the following: a. Please explain how the Company will measure the P.F., given the requirement is 90% P.F. below 20,000 kW and 95% P.F. above 20,000 kW. b. Please provide an example of the proposed Initial P.F. Adjustment calculation in electronic format with formula enabled when Lamb Weston's demand is: (1) under 20,000 kW and the P.F. is under 90%, and (2) over 20,000 kW and the P.F. is under 95%. RESPONSE TO REQUEST FOR PRODUCTION NO. 9: a. Meter data for both the aggregate 15-minute maximum average kilowatts (“kW”) and the reactive power for the same 15-minute period will be used to calculate actual power factor for that 15-minute period for total aggregate load. Next, the 15- minute maximum average kW is split between Block 1, kW up to 20,000 kW, and Block 2, kW exceeding 20,000 kW. Each block’s respective power factor threshold is compared to actual power factor recorded for total aggregate load, and Power Factor Adjustment is applied if total aggregate load actual power factor is below that block’s required power factor threshold. The formula for any block with actual power factor below threshold is as follows: ((Demand for Block / actual power factor for aggregate demand) * Block Power Factor Adjustment). b. Please see the attachment provided for this request with an example Power Factor Adjustment calculation for Lamb Weston demand of (1) 19,000 kW at 88% power factor; and (2) 24,000 kW at 92% power factor. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 17 The response to this Request is sponsored by Paul Goralski, Regulatory Consultant, Idaho Power Company. IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 18 REQUEST FOR PRODUCTION NO. 10: The Company stated that the Contract Demand will be 34,000 kW for Lamb Weston. Please explain if Lamb Weston expects its demand to exceed 34,000 kW. Please provide a 5-year forecast for Lamb Weston's load demand. RESPONSE TO REQUEST FOR PRODUCTION NO. 10: Please see the Confidential Attachment No. 14 provided in response to Production Request No. 1 for the five-year forecast of Lamb Weston’s load demand. Lamb Weston’s most-recent load forecast does not forecast demand to exceed 34,000 kW. The response to this Request is sponsored by Paul Goralski, Regulatory Consultant, Idaho Power Company. DATED at Boise, Idaho, this 7th day of July 2023. ________________________________ MEGAN GOICOECHEA ALLEN 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 July 2023, I served a true and correct copy of 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: 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 Hand Delivered U.S. Mail Overnight Mail FAX FTP Site X Email Michael.Duval@puc.idaho.gov ________________________________ Christy Davenport Legal Administrative Assistant BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT 1 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT 2 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT 3 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT 4 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT NO. 5 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT NO. 6 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY ATTACHMENT NO. 7 REQUEST NO. 1 SEE ATTACHED SPREADSHEET BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT NO. 8 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT NO. 9 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT NO. 10 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY ATTACHMENT NO. 11 REQUEST NO. 1 SEE ATTACHED SPREADSHEET BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY ATTACHMENT NO. 12 REQUEST NO. 1 SEE ATTACHED SPREADSHEET BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY ATTACHMENT NO. 13 REQUEST NO. 1 SEE ATTACHED SPREADSHEET BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT NO. 14 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT NO. 15 REQUEST NO. 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY ATTACHMENT NO. 1 REQUEST NO. 2 Memorandum Date: 2/16/2023 From: Yao Yin, Utilities Analyst, Idaho Public Utilities Commission To: Connie Aschenbrenner, Idaho Power Company Subject: Investigation in Methods to determine Marginal Cost of Energy for Schedule 20. Background Order No. 35428 directed Idaho Power to evaluate and compare other methods for determining a marginal cost of energy in addition to the use of Avoided Cost Averages in the Integrated Resource Plan for setting the Schedule 20 energy rate, before the next general rate case is developed and filed. On January 31, 2013, Idaho Power met with Staff and discussed potential methods for determining marginal cost of energy for the Schedule 20 energy rate and possibly for other customers using marginal cost of energy for their energy rates. As a result of the meeting, Staff agreed to develop some criteria for the Company to consider for developing a method. Criteria Although this list may not be exhaustive, Staff identified the following criteria that could be used for determining the final method: • The resources used in a model for determining marginal cost should be based on the resources that are highly likely to exist during the rate period. • The amount of incremental load used to determine the marginal cost rate should reflect the amount of incremental load for the portion of load that will be priced at marginal cost. • The marginal cost rates should have enough granularity to reflect time difference (e.g. seasonality, time of day) value of Marginal Cost within the Company’s system to provide accurate price signals. • If the marginal cost rates are based on a forecast, due to the lack of Marginal Costs being trued-up in the PCA, they should be updated often enough that they reflect current conditions or find a way to true up the marginal cost to actual marginal cost. • If market costs are used, cost of transmission transaction and wheeling costs should be included. BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY ATTACHMENT NO. 2 REQUEST NO. 2 SEE ATTACHED SPREADSHEET BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY CONFIDENTIAL ATTACHMENT NO. 1 REQUEST NO. 7 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-23-18 IDAHO POWER COMPANY ATTACHMENT NO. 1 REQUEST NO. 9 SEE ATTACHED SPREADSHEET