20231115IPC to Staff 1-6.pdf

MEGAN GOICOECHEA ALLEN
Corporate Counsel
[e-mail]

November 15, 2023

VIA ELECTRONIC MAIL

Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 West Chinden Blvd., Building 8
Suite 201-A
Boise, Idaho 83714

Re: Case No. IPC-E-23-25
Idaho Power Company’s Annual Compliance Filing to Update the Load and
Gas Forecast in the Incremental Cost Integrated Resource Plan Avoided
Cost Model

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 sent in a separate email to the parties who
sign the Protective Agreement.

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

Very truly yours,
Megan Goicoechea-Allen

MGA:cld
Enclosures
RECEIVED
2023 NOVEMBER 15, 2023 11:27AM
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 Annual Compliance Filing to Update the Load and Gas
Forecasts in the Incremental Cost Integrated Resources Plan Avoided Cost Model

Case No. IPC-E-23-25

The undersigned attorney, in accordance with Commission Rules of Procedure 67,
believes that the Attachments to Production Request No(s). 1-3 to Idaho Power
Company’s Response to the First Production Request of the Commission Staff, dated
November 15, 2023, may contain information that Idaho Power Company and a third party
claims is a confidential trade secrets and business records of a private enterprise
required by law to be submitted to or inspected by a public agency 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.

DATED this Wednesday, November 15, 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)
DONOVAN E. WALKER (ISB No. 5921)
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

IDAHO POWER COMPANY’S ANNUAL
COMPLIANCE FILING TO UPDATE THE
LOAD AND GAS FORECASTS IN THE
INCREMENTAL COST INTEGRATED
RESOURCE PLAN AVOIDED COST
MODEL.
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CASE NO. IPC-E-23-25

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 (“Commission” or
“Staff”) dated October 25, 2023, herewith submits the following information:
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 2
STAFF REQUEST FOR PRODUCTION NO. 1: Page 3 of the Application states
that the 2023 load forecast shows a 4.86 percent average reduction over the 20-year term
compared with the 2022 load forecast proposed in Case No. IPC-E-22-26. The Company
continues to state:
The decrease — which amounts to an approximately 4.86 percent average
reduction over the 20-year term — is based on new assumptions surrounding the
Company's expected energy service agreements that offer different ramp schedules and
total peak requirements relative to October 2022. In addition, there has been a
rebalancing of commercial, industrial, and irrigation load that slightly brought down
expectations of future load levels, though the growth pattern is similar. These reductions
are slightly offset by an increase in expectations for the residential class.
Please respond to the following:
a. Please explain how the 4.86 percent reduction is calculated and provide the
workpaper that calculates it;
b. Please identify and explain the "new assumptions";
c. Please list all the "expected energy service agreements";
d. Please provide a detailed explanation on how the "ramp schedules and total peak
requirements" of September 2023 are different than that of October 2022; and
e. Please explain what "rebalancing" means and why such rebalancing can reduce
expectations of future load levels.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 1:
a. The 4.86 percent reduction value was calculated by determining the annual percent
change from the 2022 load forecast to the 2023 load forecast for each year from
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 3
2023 through 2042, and then calculating the average of those annual percent
change values. Please see the Excel spreadsheet provided as Attachment 1 to
this request.
b. Model specification and variables are predominately similar to the previous years.
However, “new assumptions” would refer to the new forecasted economic and
demographic assumptions used within the model’s framework relative to the
previous year. The new assumptions used in context of the forecast are primarily
sourced from major economic forecasting houses such as Moody’s Analytics and
Woods and Poole Economics. For context, a table of the variables used within the
models are included in the Excel spreadsheet provided as Attachment 2 to this
request.
c. The additional electric service agreements on top of the three that the Company
has historically provided service under are: Meta (Brisbee) Schedule 33, Micron
FAB (incorporated into Schedule 30), Simplot-Caldwell Schedule 32, and Lamb
Weston Schedule 34. Both Simplot-Caldwell and Lamb Weston are industrial
customers that entered into special contracts due to their expected increases in
power requirements to above 20 megawatts, the maximum allowed under the
Company’s Schedule 19, Large Power Service.
d. Throughout the course of the year, a new electric service agreement customer that
is not fully energized will provide updates to the Company regarding (but not limited
to) its total capacity requirements, anticipated load factor, and ramp date schedule.
The primary two electric service agreements in this regard are Meta and Micron
FAB. Confidential Attachment 3 to this request provides a table comparing the
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 4
Company’s 2022 forecast vintage and the 2023 forecast vintage in terms of energy
for the above-mentioned electric service agreements:
e. In the context of the statement, “rebalancing” refers to an intercept shift of the
utilized regression model’s historic data to ensure a smooth transition between the
realized actual period of last year’s prediction and the forecast period. It does not
refer to model specification or endogeneity concerns. A reduction from the termed
“rebalancing” could occur if the actual data in the year came in lower than similar
year’s forecasted data.
The response to this Request is sponsored by Jordan Prassinos, Load Forecast
Manager and Principal Economist, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 5
STAFF REQUEST FOR PRODUCTION NO. 2: Please provide Henry Hub
Annuals from S&P Global Platt's Long-term Forecast without adjustment for Sumas basis
and transport costs for Idaho City Gate delivery for the forecast proposed in this case and
for the forecast proposed in Case No. IPC-E-22-26. Also, please explain what causes the
difference between the two forecasts.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 2: Please see the
Confidential Excel file provided as an attachment to this response for the requested
information.
Since the pandemic, natural gas prices have been unpredictably volatile. When
looking at the 2022 forecast, the prices of the first 5 years were elevated due to a number
of factors amidst global macro events including the Russian Ukraine war. The impacts
from the Russian Ukraine war, which affected European gas supply and drove US gas
prices up, have subsided. This has pulled down the prices in the front half of the long-
term forecast. The back half of the long-term forecast shows gas prices increasing, when
comparing the 2022 to the 2023 forecast. Both North American domestic demand and
production are forecasted to decrease. However, the supply decrease exceeds the
forecasted demand decline, which supports and strengthens prices going into the next
decade and beyond.
The response to this Request is sponsored by Andy Husted, Gas Transactions
Leader, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 6
STAFF REQUEST FOR PRODUCTION NO. 3: Please respond to the following
regarding the proposed natural gas forecast.
a. Please explain how the Company adjusts Henry Hub Annuals for Sumas basis and
why Sumas basis annuals are not determined independently of Henry Hub
Annuals;
b. Please provide Henry Hub Annuals from S&P Global Platt's Long-term Forecast
adjusted for Sumas basis but without adjustment for transport costs for Idaho City
Gate delivery for the forecast that is proposed in this case. Please also provide the
same information proposed in Case No. IPC-E-22-26;
c. Please explain what causes the difference between the two forecasts used in the
two cases;
d. Comparing the 2022 forecast and the 2023 forecast, is the trend of Henry Hub
annuals consistent with the trend of Sumas basis annuals? If not, please explain
why not; and
e. Please explain how transport costs for Idaho City Gate delivery are determined.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 3:
a. Idaho Power financially hedges and purchases physical gas at hubs including
Sumas. The Sumas basis trades as either a premium or discount to Henry Hub.
Henry Hub is a national product and does not accurately represent the regional
prices paid for gas in the Pacific Northwest. To get an accurate forecast
representation of the price Idaho Power will pay for gas, it is necessary to take the
Henry Hub price plus the Sumas Basis price.
b. Please see the Confidential Excel file provided as an attachment to this response.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 7
c. The differences in the Henry Hub adjusted with Sumas basis forecasts include
regional, national and global supply and demand drivers. As described in the
response to Request for Production No. 2, the impacts from the Russian Ukraine
war, which affected European gas supply and drove US gas prices up, have
subsided. Regionally, storage levels in the West were 25 percent below normal
going into the winter of 2022 as the region was hit with colder-than-normal weather.
Storage levels have rebounded and reached healthier levels going into this winter,
2023-2024. These fundamentals have weakened gas prices in the front half of the
long-term forecast. The back half of the long-term forecast shows gas prices
increasing, when comparing the 2022 to the 2023 forecast. Both North American
domestic demand and production are forecasted to decrease. However, the supply
decrease exceeds the forecasted demand decline, which supports and
strengthens prices going into the next decade and beyond.
d. No. Henry Hub is a highly liquid national and even global trading hub for natural
gas and is the pricing benchmark for the natural gas markets. As such, Henry Hub
prices are often subject to different market fundamentals and price influencers
compared to regional hubs. Sumas is a Pacific Northwest regional hub that trades
at either a discount from or premium to Henry Hub. The price at Sumas is
influenced by regional factors like supply and demand, weather, pipeline events or
disruptions and outages, etc.
e. Idaho Power is charged a fuel rate, commodity rate and reservation rate by
Northwest Pipeline. The reservation rate schedule shows a forecast of future rate
increases, based off the current reservation rate of $0.3725 dekatherm/day. The
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 8
rate increases were proposed by Northwest Pipeline during the 2023 CRM
Shipper’s Meeting. The rates in the presentation are projected rates, have not been
filed, and are subject to change.
The response to this Request is sponsored by Andy Husted, Gas Transaction
Leader, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 9
STAFF REQUEST FOR PRODUCTION NO. 4: "Table 2: 2024 Forecast Average
Load" of the Application shows the proposed peak hours in 2024. Please provide a
detailed explanation for how the highlighted peak hours are identified.
Table 2: 2024 Forecast Average Load

RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 4: The highlighted
peak hours are identified through application of a conditional formatting rule in Microsoft
Excel that highlights the top 5 percent of values in the table. The approach of using the
top 5 percent of estimated average load to identify the Peak Hours originated in Case No.
IPC-E-20-02 and was discussed in the Company’s Compliance Filing in that case.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 10
STAFF REQUEST FOR PRODUCTION NO. 5: Table 3 of the Application shows
"2023 Actual Load, Net of Solar." Please confirm that the purpose of Table 3 is to support
the reasonableness of the proposed peak hours, because the red circles fall within the
proposed peak hours. Also, please explain how the locations and the sizes of the circles
are determined.
Table 3: 2023 Actual Load, Net of Solar

RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 5: As background,
in this case, the Company has continued to use the methodology for defining peak and
premium peak hours as it used and was adopted in Case No. IPC-E-20-02. As described
in the Company’s Compliance Filing in IPC-E-20-02, within the peak hours identified in
Table 2, there are certain hours that are more important for output from a battery storage
unit to be deployed. Under the methodology adopted in Case No. IPC-E-20-02, the
Company analyzes “three different metrics to characterize these more critical hours: 1)
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 11
load, net of solar, 2) Loss of Load Probability, and 3) Locational Marginal Pricing from the
Energy Imbalance Market.”1 In the current proceeding, Idaho Power has provided the
data for load, net of solar in Table 3 and the Energy Imbalance Market pricing in Table 4.
The Company discussed loss of load probability in its application. In other words, Table
2 in the present filing is used to determine Peak Hours, while the three additional metrics
and Tables 3 and 4 are used to determine Premium Peak hours.
For Table 3, load, net of solar, the Peak Hours identified in Table 2 remain
highlighted in yellow. Within that subset of hours, the hours with the highest load, net of
solar for each month are circled in red. The size and location of the red circles is
determined through visual review of the data and identification of the highest load, net of
solar values within the subset of highlighted Peak Hours in each month.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.

1 Idaho Power Company Compliance Filing, Case No. IPC-E-20-02, filed 10-30-2022, available at
https://puc.idaho.gov/Fileroom/PublicFiles/ELEC/IPC/IPCE2002/Company/20201030Compliance%20Filin
g.pdf.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 12
STAFF REQUEST FOR PRODUCTION NO. 6: Table 4 shows the 2023 Average
of Western Energy Imbalance Market Locational Marginal Prices. Please confirm that the
purpose of Table 4 is to support the reasonableness of the proposed peak hours, because
the red circles fall within the proposed peak hours. Also, please explain how the locations
and the sizes of the circles are determined.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 6: Please see the
response to Request for Production No. 5. For Table 4, Energy Imbalance Market (“EIM”)
Locational Marginal Prices (“LMP”), the Peak Hours identified in Table 2 remain
highlighted in yellow. Within that subset of hours, the hours with the EIM pricing are circled
in red. The size and location of the red circles is determined through visual review of the
data and identification of the highest priced hours within the subset of highlighted Peak
Hours.
The response to this Request is sponsored by Camille Christen, Resource
Acquisition, Planning, and Coordination Manager, Idaho Power Company.

Respectfully submitted this 15th day of November 2023.

Megan Goicoechea Allen
Attorney for Idaho Power Company
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF - 13
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on this 15th day of November 2023, I served a true and
correct copy of the within and foregoing 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:

Adam Triplett
Deputy Attorneys General
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074

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Christy Davenport, Legal Assistant