20240207IPC to Staff Supplemental 59.pdf

LISA NORDSTROM
Lead Counsel
[e-mail]

February 7, 2024

VIA ELECTRONIC EMAIL

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

Re: Docket No. IPC-E-23-23
Idaho Power Company’s 2023 Integrated Resource Plan

Dear Commission Secretary:

Enclosed for electronic filing, please find Idaho Power Company’s Supplemental
Response to the Second Production Request of the Commission Staff.

If you have any questions about the attached filing, please do not hesitate to
contact me.

Very truly yours,

Lisa Nordstrom
LDN:cd
Attachments
RECEIVED
Wednesday, February 7, 2024 4:38PM
IDAHO PUBLIC
UTILITIES COMMISSION
IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF- 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]
[e-mail]
[e-mail]

Attorneys for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S 2023 INTEGRATED
RESOURCE PLAN.
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CASE NO. IPC-E-23-23

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

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
December 14, 2023, herewith submits the following supplemental information:

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF- 2
STAFF REQUEST FOR PRODUCTION NO. 59: Response to Staff Production Request
No. 21(b) states:
"The 70th percentile energy load forecast was utilized in response to the selection of the
70th percentile peak load forecast for reliability purposes. The Company considers it important to
maintain consistency in the relationship between the energy and peak load forecast percentiles."
Please respond to the following:
a. Please explain why it is important to maintain consistency in the relationship between the
energy and peak load forecast percentiles;
b. Has the Company ever allowed inconsistency in the relationship between the energy and
peak load forecast percentiles in any past IRPs? If so, please describe when they were
different and why;
c. Please list all of the marginal cost rates, avoided cost rates, and rates for consumption
that are leveraged from the IRP that would be different depending on whether the
Company used a 50th percentile energy load forecast instead of the 70th percentile
energy load forecast (e.g. PURPA IRP-based rates, DSM avoided cost rates, Schedule
20 marginal cost rates, etc.);
d. For each of the rates listed above, please provide which percentile energy load forecast
is actually used, and explain the Company's justification for each;
e. Please explain whether using a 50th percentile energy load forecast instead of the 70th
percentile energy load forecast would cause a difference in the loss of load probability
heat maps and/or timeframes used to determine performance-based capacity payments
for CEYW-Construction customers, DR program timeframes, Time-of-Use Rates, etc.; and
f. Please confirm that all the portfolios in the Portfolio Costing Analysis use 70th percentile
energy load forecast.
SUPPLEMENTAL RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 59:
The Company provides this supplemental response as a follow-up to discussions between

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF- 3
Commission Staff and the Company that occurred on January 24, 2024, January 26, 2024, and
January 30, 2024.
c & d: The Company is providing an updated list of all contracts, schedules, or analyses
that depend on “marginal costs” or “market rates” as the basis for deriving ultimate rates or is the
input to a given analysis and has clarified whether each identified contract, schedule, or rate relies
on an output from the IRP as the basis. The Company has also clarified how selection of energy
efficiency (“EE”) potential occurs and whether it is impacted by the published Demand-Side
Management (“DSM”) avoided costs.
 Energy Efficiency Cost-Effectiveness: IRP outputs are leveraged.
The Company relies on the DSM avoided costs published in the most recently filed
IRP when it undergoes program planning for an upcoming program year (as explained in
the Response to Staff’s Production Request No. 52). For 2024 program planning, the
Company relied on DSM avoided costs published in the 2023 IRP and will use those same
avoided costs when it evaluates cost-effectiveness at the end of the program year (i.e.,
the 2024 DSM Annual Report, which will be filed on March 15, 2025, will rely on 2023
DSM avoided costs for cost-effectiveness purposes).
It is important to note the Company does not pay incentives based on DSM avoided
costs, rather in program planning it uses the DSM Avoided Costs to establish the
anticipated “value” or “benefit” associated with a given measure/program (savings * DSM
avoided costs = savings) and then evaluates whether the total anticipated costs of a given
measure/program (program administration and incentives = costs) are anticipated to be
below the total value. Then, in program evaluation, which occurs on a backwards looking
basis, the Company evaluates actual benefits against actual costs (when all factors are
known).
The Company leveraged DSM avoided costs under a P50 planning condition (see
Supplemental Response to Staff’s Production Request No. 67 for avoided cost

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF- 4
comparison under P50 versus P70) to assess whether any measures that were previously
cost-effective under the published DSM avoided costs would no longer be cost-effective
under the P50 run completed at Staff’s request and found that all measures that had a
cost/benefit ratio of 1.0 or higher continued to have a ratio of 1.0 or higher.
 Selection of Energy Efficiency in the IRP: IRP outputs are leveraged.
As part of the IRP process, the Company contracts with a third party to provide an
Energy Efficiency (“EE”) Potential Study. The contractor relies on the prior IRP’s DSM
avoided costs as part of the process for determining the achievable economic potential in
Idaho Power’s service area. That identified potential is then decremented from the load
forecast. In the case of the 2023 IRP, the EE potential relied on DSM avoided costs from
the 2021 IRP.
 Special Contract – Brisbie/Meta “Meta Special Contract”): IRP outputs are leveraged.
There are two elements of the Meta Special Contract pricing that rely on IRP
outputs: (1) excess energy and (2) Block 2 marginal pricing. Accordingly, the following
definitions from the Meta Special Contract reference updates that require use of the most
recently acknowledged IRP: “Excess Energy Price” and “Supplemental Energy Price.”
 Special Contract – Micron (“Micron Special Contract”): IRP outputs are leveraged.
The only pricing element that relies on an output from the IRP is the “Excess
Energy Price.” While the Black Mesa resource is currently on-line and generating, the
Company does not anticipate excess energy to occur because Micron’s hourly load is
forecast to exceed renewable resource generation in every hour.
 Schedule 20 (Speculative High-Density) Load: IRP outputs are not leveraged.
For background: In Case No. IPC-E-21-37, the Commission issued Order No.
35428 approving the Company’s request to rely on the DSM avoided cost averages as the
basis for marginal energy pricing. On page 7 of that same order, the Commission stated:

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF- 5
“Before it develops and files its next general rate case, we direct the Company to evaluate
and compare other methods for determining a marginal cost of energy…for setting the
Schedule 20 energy rate.” In Case No. IPC-E-23-11, the Company proposed replacing the
DSM avoided cost average-based method with an AURORA-based method, consistent
with a memo issued from Staff to Idaho Power, dated February 16, 2023. The Commission
approved the pricing in Order No. 36042 (issued on December 28, 2023).
 Special Contract – Lamb Weston (“Lamb Weston Special Contract”): IRP outputs are not
leveraged.
For background: The Lamb Weston Special Contract was negotiated after the
Commission issued Order No. 35428 in Case No. IPC-E-21-37. The Company met with
Staff during January and February 2023 to discuss marginal cost methods for use in
Schedule 20 (as described above), as well as other contracts that may require a marginal
basis for pricing. Accordingly, when it negotiated the Lamb Weston Special Contract, the
Company proposed the basis for marginal energy pricing be the simulated hourly
operation of the Company’s power supply system over expected hydro conditions for the
upcoming year. This method relies on AURORA to determine net power supply expenses
for the test year expected load, then an incremental load increase is added to determine
the resulting increase in power supply expenses and generated needed to meet the
incremental load from the customer. This method is consistent with the memo Staff issued
to the Company on February 16, 2023. The Lamb Weston Special Contract was executed
on May 5, 2023, and filed with the Commission for approval on May 23, 2023. The
Commission approved the special contract in Order No. 35929, issued on September 21,
2023.
 PURPA IRP Based Rates: IRP outputs are not leveraged.
This answer remains unchanged from what the Company filed in response to Staff
discovery on January 4, 2024: Historically, Idaho Power’s Public Utility Regulatory Policies

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF- 6
Act of 1978 (“PURPA”) IRP-based rates utilized inputs from the IRP planning process, in
accordance with Order No. 32697. However, in Case No. IPC-E-23-25, the Commission
approved Staff’s recommendation that the Company use a 50th percentile energy load
forecast for PURPA IRP-based rates, despite the IRP using a different load forecast
percentile. As such, the Company’s PURPA IRP-based rates are no longer directly
leveraged from the IRP.

DATED at Boise, Idaho, this 7th day of February 2024.

LISA NORDSTROM
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE SECOND PRODUCTION
REQUEST OF THE COMMISSION STAFF- 7
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 7th day of February 2024, I served a true and correct copy
of Idaho Power Company’s Supplemental Response to the Second Production Request of the
Commission Staff upon the following named parties by the method indicated below, and
addressed to the following:

Commission Staff
Chris Burdin
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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Micron Technology, Inc.
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart, LLP
555 Seventeenth Street, Suite 3200
Denver, Colorado 80202

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Jim Swier
Micron Technology, Inc.
8000 South Federal Way
Boise, Idaho 83707
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________________________________
Christy Davenport
Legal Administrative Assistant