20150305Staff 1-18 to IPC.pdf

DONALD L. HOWELL, II
DAPHNE HUANG
DEPUTY ATTORNEYS GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720.0074
(208) 3 3 4-0 3 t2133 4-03 18
IDAHO BAR NOS ,336618370
Street Address for Express Mail:
472W, WASHINGTON
BOISE, IDAHO 83702-5918
Attorneys for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
coMPANy'S PETITTON TO MODTFY TERMS ) CASE NO. TPC-E-15-01
AND CONDITIONS OF PROSPECTIVE PURPA )
ENERGY SALES AGREEMENTS. ) FIRST PRODUCTION
) REQUEST OF THE
) COMMISSION STAFF TO
) IDAHO POWER COMPANY
)
The Staff of the Idaho Public Utilities Commission, by and through its attorneys of
record, Donald L. Howell and Daphne Huang, Deputy Attorneys General, request that Idaho
Power Company (Company; Idaho Power) provide the following documents and information as
soon as possible, by THURSDAY, MARCH 26,2015,
This Production Request is continuing, and the Company is requested to provide, by way
of supplementary responses, additional documents that it or any person acting on its behalf may
later obtain that will augment the documents produced.
Please provide answers to each question, supporting workpapers that provide detail or are
the source of information used in calculations. The Company is reminded that responses
pursuant to Commission Rules of Procedure must include the name and phone number of the
person preparing the document, and the name, location and phone number of the record holder
FIRST PRODUCTION REQUEST
TO IDAHO POWER MARCH 5,2015
and if different the witness who can sponsor the answer at hearing if need be. Reference IDAPA
31.01.01.228.
In addition to the written copies provided as response to the questions, please provide all
Excel and electronic files on CD with formulas activated.
REQUEST NO. 1: Idaho Power's current first capacity deficit occurs in July 2021
based on the Company's Petition in Case No. IPC-E-14-22 and Order No. 33159. What would
be the Company's new capacity deficiency period if all PURPA contracts signed subsequent to
Order No. 33159 were considered? What would the capacity deficiency period be if 885 MW of
additional proposed solar projects were also considered?
REQUEST NO. 2: Idaho Power's Petition states on page 2l "The continued and
unchecked addition of extremely large amounts of intermittent wind and solar QF generation
onto Idaho Power's system at long-term fixed rate prices when the Company has no need for
additional generation inflates power supply costs borne by customers and degrades the reliability
of the system." How does Idaho Power expect the recent addition of 461MW of solar contracts
to impact customers' retail rates? Does the Company expect rates will have to increase once the
contracted solar projects are online and Idaho Power is purchasing the energy? If Idaho Power
expects rates will increase, has the Company estimated the approximate rate or revenue
requirement increase? If so, please provide the estimate.
REQUEST NO. 3: If Idaho Power expects that customers' rates will increase in the
future in order to recover an increased revenue requirement due to new solar contracts, please
explain why the Company believes an increase in rates will be necessary. Please specifically
address whether Idaho Power believes upward rate pressure is due to inaccurate avoided cost
rates.
REQUEST NO.4: Idaho Power's Petition states on page 23, "Idaho Power's average
cost of PURPA generation included in base rates is $62.49lMWh. This price is always high
when compared to current alternatives. Idaho Power's avoided cost, established through the
avoided cost methodologies approved by the Commission, has historically exceeded market
FIRST PRODUCTION REQUEST
TO IDAHO POWER MARCH 5,2015
price, and is projected to always exceed market price into the future as shown in the graph below
which is reproduced from Mr. Allphin's ExhibitNo. 10."
a. Please explain how the PURPA prices beyond 2015 as shown on the graph on page
24 were computed or estimated.
b. Please explain how the Mid-C prices beyond 2015 as shown on the graph on page 24
were computed or estimated.
Please explain why Idaho Power believes PURPA prices are projected to "alwa)rs" exceed
market prices in the future.
REQUEST NO. 5: If Idaho Power believes that avoided cost rates are too high, please
explain why the Company is not proposing adjustments to the avoided cost rates instead of a
reduction in maximum contract length.
REQUEST NO. 6: Does Idaho Power believe that it could be faced with more PURPA
solar capacity than it needs even if avoided cost rates are accurately set and reflective of true
avoided costs throughout the contract term?
REQUEST NO. 7: Please explain how the addition of 461MW of solar contracts will
affect the need for the proposed Boardman to Hemingway and the Gateway West transmission
projects. How would the need for these transmission projects be impacted if an additional 885
MW of proposed solar projects were added?
REQUEST NO. 8: Idaho Power's Petition states on page 22"This becomes
compounded by federal constraints that prevent any update, change, or modification to the
contract rates, once locked in for the full term of the contract." The testimony of William
Hieronymus states on page 6, lines 6-l l, "The only way to limit the difference between the
actual value of QF power and prices paid for it is to keep contracts short and/or severely limit the
period for which prices are fixed. This can be done in a number of ways, including reopeners
and indexation. " On page 22,lines 9-13 of his testimony, Hieronymus states o'...it is similarly
unclear whether this can be a formula rate (e.g., one that is indexed to vary with, for example,
gas prices or inflation) or if the utility must offer a fixed schedule of rates for the term of the
FIRST PRODUCTION REQUEST
TO IDAHO POWER MARCH 5,2015
contract." Does Idaho Power believe reopeners or indexation as suggested by Dr. Hieronymus
would be permitted by FERC if both parties agreed at the time of contract signature that as a
condition of the contract, prices would be adjusted at specified intervals? Is Idaho Power aware
of price reopeners or indexing methods being employed for PURPA contracts in any other state?
REQUEST NO. 9: Please provide a copy of all2O-year levelized avoided cost
indicative prices provided to the developers of any or all of the solar projects comprising the 885
MW of potential new projects referred to in Idaho Power's Petition.
REQUEST NO. 10: Why is Idaho Power restricting its request for shorter contract
lengths to only IRP-based contracts? Does the Company believe that SAR-based rates have any
greater likelihood of being more accurate than IRP-based rates over a 2}-year contract term?
REQUEST NO. l1: What does Idaho Power believe should be the maximum contract
length for renewal contracts (expired contracts) under both the SAR and IRP methods?
REQUEST NO. 12: Please provide analysis, by year for at least the next 20 years,
showing which generation from existing resources would be offset by generation from new
contracted solar projects. In other words, in how many hours would generation from new solar
projects offset generation from Bridger, Valmy, Boardman, Langley Gulch, Danskin, Bennett
Mountain, and market purchases?
REQUEST NO. 13: Idaho Power's Petition states on pages 24-25 "This economic
relationship between PURPA and the Company's other power costs illustrates that as the
Company is required to purchase unneeded PURPA generation, it may be required to back down
or curtail other less expensive sources of generation or market purchases in order to continue
purchasing PURPA generation at a higher cost. This would mean that the Company's overall net
power supply expense, on a dollars per MWh basis, would increase, adversely impacting
customers."
FIRST PRODUCTION REQUEST
TO IDAHO POWER MARCH 5,2015
a. As modeled under the current IRP method, PURPA generation is priced at the cost of
the highest displaceable resource in each hour; therefore, why should less expensive
resources ever have to be backed down or curtailed?
b. Please explain why net power supply expense would increase if rates under the IRP
method are properly computed and implemented.
REQUEST NO. 14: Idaho Power's Petition states on page 27 "lf transmission capacity
is available to conduct off-system sales, the Company would sell at a loss." Under the IRP
methodology, what assumptions are made in assigning QF prices in hours when over-generation
occurs, transmission capacity is available and off-system sales can be made? Does the
methodology ever assume excess PURPA generation will be sold at a loss?
REQUEST NO. 15: Beginning on page 25 of the Company's Petition, system reliability
is discussed. Does Idaho Power expect curtailments of solar generation will be necessary in the
future, given that the solar generation occurs only in daytime hours?
REQUEST NO. 16: On pages 8-11 of Randy Allphin's testimony, he discusses Exhibit
6 which relates to analysis comparing estimated total system load, on an hourly basis, over 2016
and 2017, to the Company's must-run, resources, must-take PURPA generation, and must-take
non-PURPA power purchase agreements. Please clarify whether coal units are assumed to be
taken down to minimal operational levels in all hours. Are coal units ever shut down completely
at times during the year for purposes other than maintenance or unscheduled outages? If so,
discuss the circumstances.
REQUEST NO. 17: Idaho Power's Petition on page 4lists several issues that might
warrant additional examination and possible revision regarding the Commission's
implementation of PURPA. One of those issues is further modification to the existing avoided
cost pricing methodologies to more appropriately reflect need and resource sufficiency in the
price. Further, on page 2l,the Petition states that "Idaho Power shares the Commission's
concem that significant and substantial requests for additional energy sales agreements with
PURPA QFs continue, unchecked by the pricing methodology and not burdened with meeting
FIRST PRODUCTION REQUEST
TO IDAHO POWER MARCH 5,2015
any requirements of need." Does Idaho Power have any suggestions or recorrmendations on
how need and resource sufficiency might be more effectively reflected in avoided cost prices?
REQUEST NO. 18: On page 22,the Petition states that "...the risk and potential harm
increases, the longer the price estimates are locked in." Does Idaho Power believe long-term,
locked-in price estimates could potentially benefit Idaho Power in some circumstances?
Dated at Boise,Idaho, this J b auy of March 2015.
Technical Staff: Rick Sterling
Yao Yin
i :umisc: prodreq/ipce I 5. I dhdjhrpsyy prod req I
FIRST PRODUCTION REQUEST
TO IDAHO POWER
Daphne Huang
Deputy Attomey General
MARCH 5,2015
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 5,, DAY oF MARCH 2015,
SERVED THE FOREGOING FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY, IN CASE NO.
IPC-E-I5-OI, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
DONOVAN E WALKER
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: [e-mail]
dockets@idahopower. com
DR DON READING
6070 HILL ROAD
BOISE ID 83703
E-mail : [e-mail]
DEAN J MILLER
McDEVITT & MILLER LLP
420 W BANNOCK ST
BOISE ID 83702
E-mail : [e-mail]
KELSEY JAE NI.INEZ
SNAKE zuVER ALLIANCE
PO BOX 1731
BOISE ID 8370I
E-mail: [e-mail]
DANIEL E SOLANDER
YVONNE R HOGLE
ROCKY MOLINTAIN POWER
201 S MAIN ST STE 24OO
SALT LAKE CITY UT 84111
E-mail: [e-mail]
yvonne.ho geI @f acihcorp. com
PETER J RICHARDSON
GREGORY M ADAMS
RICHARDSON ADAMS PLLC
PO BOX 7218
BOISE ID 83702
E-mail: [e-mail]
gre [e-mail]
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
710 N 6TH STREET
BOISE ID 83702
E-mail: [e-mail]
LEIF ELGETHUN
INTERMOI.INTAIN ENERGY PARTNERS
LLC
PO BOX 7354
BOISE ID 83707
E-mail: [e-mail]
TED WESTON
ID REG AFFAIRS MANAGER
ROCKY MOUNTAIN POWER
201 S MAIN ST STE 23OO
SALT LAKE CITY UT 841I I
E-mail: [e-mail]
DATA REQUEST RESPONSE CENTER
E.MAIL ONLY:
datarequest@pacifi corp. com
CERTIFICATE OF SERVICE
C TOM ARKOOSH
ARKOOSH LAW OFFICES
PO BOX 2900
BOISE ID 83701
E-mail: tom.arkoosh@,arkoosh.com
ERIC L OLSEN
RACINE OLSON NYE BUDGE
& BAILEY
PO BOX 1391
POCATELLO ID 83204-1391
E-mail: [e-mail]
RONALD L WILLIAMS
WILLIAMS BRADBURY PC
IO15 W HAYS ST
BOISE ID 83702
E-mail : [e-mail]
MICHAEL G ANDREA
AVISTA CORPORATION
I411 E MISSION AVE
MSC-23
SPOKANE W A 99202
E-mail : [e-mail]
MATT VESPA
SIERRA CLUB
85 SECOND ST 2ND FLOOR
SAN FRANCISCO CA 94105
E-mail: [e-mail]
FREDERICK J SCHMIDT
PAMELA S HOWLAND
HOLLAND & HART LLP
377 S NEVADA ST
CARSON CITY NV 89703
E-mail: [e-mail]
ERIN CECIL
ARKOOSH LAW OFFICES
E-MAIL ONLY
erin. cecil @arkoosh.som
ANTHONY YANKEL
29814 LAKE ROAD
BAY VILLAGE OH 44104
E-mail: [e-mail]
IRION SANGER
SANGER LAW PC
1117 SW 53RD AVE
PORTLAND OR 97215
E-mail: [e-mail]
CLINT KALICH
AVISTA CORPORATION
1411 E MISSION AVE
MSC-23
SPOKANE WA992O2
E-mail : [e-mail]
RICHARD MALMGREN
SR ASSIST GEN COUNSEL
MICRON TECHNOLOGY INC
8OO S FEDERAL WAY
BOISE ID 837I6
E-mail : [e-mail]
SCOTT DALE BLICKENSTAFF
AMALGAMATED SUGAR CO
1951 S SATURN WAY
STE IOO
BOISE ID 83702
E-mail : [e-mail]
CERTIFICATE OF SERVICE