20211012PAC to Staff 213-228 - Redacted.pdf

Y ROCKY MOUNTAIN
PO'I'ER
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:t 1 ;../r lL ,1 4 8: C'inil J'!r,
-;lt.\t i,iv!\Jll
1407 W North Temple, Suite 330
Salt Lake City, Utah &4116
October 8,2021
Jan Noriyuki
Idaho Public Utilities Commission
472W. Washington
Boise,ID 83702-5918
ian.noriyuki@puc. idaho. gov (C)
RE ID PAC-E.21-07
IPUC Set l0 (213-228)
Please find enclosed Rocky Mountain Power's Responses to IPUC 10ff Set Data Requests
213-228. Provided via BOX is Confidential Responses IPUC 213,214,216 - 223, and225 -
228 along with Confidential Attachments IPUC 217 and22l. Confidential information is
provided subject to protected under IDAPA 31.01.01.067 and 31.01 .01.233, the Idaho Public
Utilities Commission's Rules of Procedure No. 67 - Information Exempt from Public Review,
and further subject to any subsequent Non-Disclosure Agreement (NDA) executed in this
proceeding.
If you have any questions, please feel free to call me at [phone]
Sincerely,
-Jsl-J. Ted Weston
Manager, Regulation
Enclosures
C.c.: Ronald L. Williams/PIIC ron(Ewilliamsbradbury.com
Bradley G. Mullins/?IlC brmu I I i ns @.mwanalytic s.com
Adam Gardner/PIIC [e-mail] (W)
Kyle Williams/PIIC [e-mail] (W)
Val Steiner/PIIC val. ste iner@.itafos.com (W)
Eric L. Olsen/IIPA [e-mail] (C)
Anthony Yankel/IIPA [e-mail] (C)
Randall C. Budge/Bayer randy@rac ineo lson.conr (C)
Thomas J. BudgelBayer tj @rac ineol son.com (WXC)
Brian C. Collins/Bayer [e-mail] (WXC)
Maurice Brubaker/Bayer mbrubaker@consu ltbai. com (C)
Kevin Higgins/Bayer kh i g [e-mail] (C)
Lance KaufinanlBayer [e-mail] (C)
James R. Smith/Bayer [e-mail] (C)
Brad Purdy [e-mail] (C)
Ben Otto/lCL botto@i dahoconservation. ore (C)
PAC-E-21-07 / Rocky Mormtain Power
October 8,2021
IPUC Data Request 213
IPUC Drtr Request 213
COMIDENTIAL REQIIEST - Page 13 of Mr. Eller's Confidential Direct
Testimony states that the Company's 2019 IRP preferred portfolio includes a
SCCT et Nrughton in 2026, and that as evidenced by its selection in the IRP
preferred portfolio, this resource is cost-effective and thus best represents the
Company's current cost of meeting its capacity needs. In addition, the 2019 IRP
shows that the Company's load and resource balance first becomes capacity
deficient in 2028 after early coal plant retirements. Please aoswer the following
questions:
(a) Please eplain why this resouroe best represents the Coryany's current cost
of meeting is capacity needs in the context of valuing both operating reserves
and economic curtailment, compared to other resouroes selected in the
preferred portfolio?
o)Please
reasoDs,, ora
combination of reasons?
(c)a reasonable
Response to IPUC Dete Request 213
(a) A simplecycle combustion hnbine (SCCT) cm be dispatched at short notice
to its morimtrm capacity in any hour, ufrich is comparable to offerings in the
operating reserve md economic curtailment products. In contrast, the wind
and solar resources added in the prefened portfolio thnough 2026 have
variable output based on weather conditions, and their prinary benefit is
energy production with a zero variable cost (or negative for wind quali$ing
for production tax credits). This is a very different mix of benefits from the
operating reserve and economic curtailment products.
(b) The 2026 Naughton SCCT was added to cover reliability shortfalls identified
in the reliability assessment phase of portfolio development, so it is needed to
meet capacity requirements and was also selected based on its economics. For
details on the reliability assessment in the 2019 Integrated Resource Plan
(IRP), please refer to Volume tr, Appendix R (Coal Studies), pages 609
througfi 6l l. The Company's 2019 IRP is publicly available and can be
accessed by utilizing 6e following t
"6si1s
link:
Intesrated Resource Plan (pacificorp.com)
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request 213
(c) Yes, based on the information available from the 2019 IRP at the time of the
Company's filing, the net costs (i.e., costs less benefits) of the 2026 Naughton
SCCT provide a reasonable basis for establishing the incremental cost of
capacity in2026. Consistent with past Idaho Public Utilities Commission
(PUC) orders, the Company's valuation includes compensation for capacity
in the first year of the contract, since it is a renewal of an existing agreement.
The Company notes that changing market dynamics and resource options,
such as the proliferation of battery storage or the establishment of a reserve
market, may make it appropriate to revisit incremental capacity costs before
contracting for 2024 and beyond.
Recordholder: Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request 214
IPUC Drtr Request 214
COMIDENTIAL REQUEST - In Ords No. 32196, the Commission "blends
the current condition with the longer-term capacity view that corresponds with
" Please a
Reqlonse to IPUC Drtr Request 214
The Compauy will continue to incur the costs of its existing resource fleet
whether or not it enters a cotrhact for int€mptible products. Since the decision of
entering a contract for P4 Prodrction's intemptible commiments cannot atter
ufrefter or not the Company will incur the costs of its existing resource fleet,
using such resourices in the evaluation is rmwarranted. Similarly, the decision not
to enter a contact for P4 Production's internptible commihents would not allow
the Company to replicate previously constnrcted units and the Company would
need to acquire replacement resources providing similar attributes; thereby
establishing the net costs (i.e., costs less benefits) of the incremental unit as a
reasonable pro:ry cost.
Recordholder:Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request 215
IPUC Data Request 215
Please list the resource(s) on the Company's system or those in the 2019 IRP
Preferred Portfolio menu of resources that best (the least expensive resources that
meet the performance criteria needed for each service) provide operating reserves
and economic curtailment (list resources for each service separately). Please
provide the work papers for these intemrptible credits for each resource and for
each service in the same format as Confidential Exhibit No. 36 - Intemrptible
Product Value Update.
Response to IPUC Data Request 215
Of PacifiCorp's 2019 Integrated Resource Plan (lRP) preferred portfolio
resources, the2026 Naughton simple-cycle combustion turbine (SCCT) resource
is the best aligned with the operating reserves and economic curtailment products.
For work papers supporting the intemrptible credits based on this resource, please
refer to the confidential work paper accompanying the direct testimony of
Company witness, Craig M. Eller. The Company has not prepared intemrptible
credits based on any other resource options from the 2019 IRP preferred portfolio.
Recordholder:Dan MacNeil
Sponsor Craig M. Eller
PAC-E-21-07 / Rocky Mormtain Power
October 8,2021
IPUC Data Request 216
IPUC Detr Request 216
CoMTDENTTAL REQUEST - Please describe what the
arc
describe the steps involved to
determine them.
Responsc to IPUC Detr Request 216
The referenced values are the reduction in system net power costs (NPC) as a
result of adding an operating reserve prodrct comprable to that in the proposed
intemrptible contract. The units are in dollars per megawatt-hour ($/MWh) of
operating reserves, and the value in columns D through O represent the average
value of I MWh of operating reserve provided in every horu.
The Company has sufficient rcsources which could be backed down to provide
operating reserves; however, doing so results in reduced generation from the
rmits. Higher cost market purchases or generation resources that don't have
additional operating reserve capability would then need to be dispatched to serve
load. When ao operating reserve prodtrct is added to the Company's portfolio,
more genexation can come from lower-cost resources that are freed from holding
reserves. These lower cost resources can also support incremental wholesale sales.
The referenced value of operating reserves is thus the margin between higher cost
alternative soluces of srryply (or incremental sales) and lower cost sources that are
released from holding operating teserves.
Two Generation and Regulation Initiative Decision Tool (GRID) studies were
prepared for this analysis. The first GRID study did not include any operating
rcserve capability from the P4 Prodnction facility. The second GRID study is
identical, exc€pt the reserve obligation for the PacifiCorp East (PACE) balancing
authority area @AA) was reduced by l(X) MW in every hour. This allows for
redispatch of lower cost resources as described above. The net impact of the
resulting changes in fuel costs, market purchases, and market revenues is then
reported on a monthly basis and summarized as shown in the referenced columns.
Recordholder:Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request 217
IPUC Drtr Request 217
COI\TFIDENTIAL T - Please answer the
(a)
walt
(b)Please define
(c)Please and work shown in the
(d)
was
Conlidentiel Response to IPUC Drte Request 217
(a)The
O) In the Company's 2019 lntegrated Resource Plan (IRP), duration-limited
resoluces have a lower capacity contibution than resources that can sustain
maximum output for a long time or indefinitely. This is because a resource
that can only sustain its output for one hour will not be able to cover as meny
potential loss of load hours (LOLH) as a resource that can sustain its output
for several hours in a row. As illushated in the confidential work paper
supporting the direct testimony of Conrpany witness, Craig M. Eller,
specifically "Confidential Exhibil No. 36 - Intemrptible Product Value
Ulfate", tab "Summary", colum[s Q through S, many loss of load events
(LOLE) in the 2019 IRP analysis were only one hotu long but other events
extended up to nine hours in duration. As an example, a four-hou duration
resource can only cover 4/9ths of a nine-hour event, or 44 percent. When all
of the events and durations were considered, a four-hour resource would have
ls
the
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Erili rsln Frfifl ftrffiiirilErill
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request?lT
been available during 95.8 percent of all LOLH, so this value is used to
identiff its capacity contribution.
(c) The referenced confidential work paper was provided on the confidential data
disk supporting PacifiCorp's 2019 tRP in the support of Volume I[, Appendix
N (Capacity Contribution Study), specifically file "Composite Reliability
Event Summer-WinterJ0l9 l0 04 CONF.xlsx". For ease of reference a copy
of this file is provided as Confidential Attachment IPUC 217. Discussion in
the 2019 IRP of this topic occurs in Volume II, Appendix N (Capacity
Contribution Study) on page 400. Capacity contribution values for battery
storage resources of various durations are shown in Table N.4 on page 404.
(d) The referenced value is the demand loss factor for transmission voltage from
the Company's Idaho 2018 Electric System Loss Study, which is used for line
losses in this proceeding.
Confidential information is provided subject to protection under IDAPA
31.01.01.067 and 31.01.01.233,the Idaho Public Utilities Commission's Rules of
Procedure No. 67 - Information Exempt from Public Review, and further subject
to the Non-Disclosure Agreement (NDA) executed in this proceeding.
Recordholder:Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request 218
IPUC Date Request 218
CONFIDENTIAL
(a)Please coufinn
o)
(c)
(d)Please
reserves.
(e) Please
with a
reflect
l3 of Mr. Eller's Confidential Direct
answer
cannot
are
to illustrate how the benefits associated
reserves margm
betweeu its operating cost and that of the hip&er-priced altematives.
Confidential Response to IPUC Dete Request 218
(a) Confirmed.
(b) No. In Confidential
D5 and Dl I represent the
Value cells
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request 218
(c) While the SCCT is dispatchable to its maximum output, at times it is expected
to expenence it from
(d) Prior to an hour, the Company must set aside flexible capacity to msintain
adequate operating reserves. Capacity designated as operating reserves to
cover contingency events fuenerator and nansmission outages) must remain in
a stand-by state and is therefore not available as part of the economic dispatch
in the energy imbalance market (EM).Because the referenced cell is related
to EIM dispatch benefits, it is not applicable to operating reserves used to
cover contingency events.
(e) Please refer to the Company's response to IPUC Data Request 216 for a
discussion of the value of operating reserves. The vdue of operating reserves
reflects the margin between the operating costs of the lowest cost resoruce that
would otherwise have needed to hold reserve capacity, and the lowest cost
resource (or market tansaction) that would have been needed to provide
energy in its place. In terms of the Generation and Repulation Initiative
Decision Tool (GRID) dispatch, and the value of operating resenres
themselves, the variable costs of the resource holding the reserves is not
relevant, as GRID does not deploy resoruces for reserves. In achral operation,
this is comparable to the Company scheduling capacity as reseryes as part of
its senrp for EIM going into each hour. The Company must submit balanced
base schedules that account for expected loads and resources plus operating
reserve requirements, so it must adjust its generation schedules and hourly
purchases and sales volumes to meet these requirements. The expected energy
volume on these operating resewe requirements is zero. Inside the operating
hour, resources which were made available to EIM can be dispatched up when
they are economic, as discussed above. Inta-hou dispatch results in
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request 218
additional net benefits (beyond those associated with dispatch changes
associated with balanced base schedule and operating reserve submission)
based on the difference between the market price and the resource's variable
costs.
Confidential information is provided subject to protection under IDAPA
31.01.01.067 and 31.01 .01.233, the Idaho Public Utilities Commission's Rules of
Procedure No. 67 - Information Exempt from Public Review, and further subject
to the Non-Disclosure Agreement (NDA) executed in this proceeding.
Recordholder:Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request 219
IPUC Detr Request 219
COMIDENTIAL l3 of Mr. Eller's Confidential Direct
arutwer
(a)At whet does the
o)Please of the
rs not
reserve
Responsc to IPUC Drtr Request 219
(a) The'Tront Office Model" used in Case PAC-E-I l-12 applied hourly scalars
to monthly heary load horu Gil-fD and light load hour GLID forward prices
for valuation. The scalars are for three tlpical days (Monday-Friday,
Satuday, and Smday/Holiday) per month for PacifiCorp East (PACE) and
PacifiCorp West @ACW).The "Front OI[ce Model" dso incorporated a
limited reserve stack containing primarily natural gas resources, and did not
capture the variation in reserve requirements as a result of operating reserve
requirements forwind and solar.
(b) As discussed in the Company's response to IPUC Data Request 216, the value
of operating reserves is inherently tied to the Company's resouf,ce srryply
stack, and in particular the amormt of operating reserves being assigned to
otherwise economic generating assets. While contingency reserve
requirements are tied to load, regulation reserve requirements are more
volatile as they are tied to wind and solar output, which has increased
dramatically since the prior analysis. These requirements in turn impact where
operating reserve s fall in the supply stack. Wind and solar output
also impact the supply stack because they have zero operating costs and will
be dispatched ahead ofthermal assets with variable fuel costs. As a result, it is
no longer reasonable to cdculate operating reserve vdue based on the margir
between market prices and the incnementd cost of a gas plant.
Recordholder:Alex Lee / Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-21-07 / Rocky Mormtain Power
October 8,2021
IPUC Data Request220
IPUC Detr Request 220
COMIDENTIAL Direct
use
runs to estimate the value of the Economic Cuilaihnent
product. What has
any
Reqronsc to IPUC Detr Rcquest 220
The Company's erergy valuation of the Economic Curtaihnent Product is based
on both a value for operating reserves from the Generation and Regulation
Initiative Decision Tool (GRID), plu" an energy imbalance market (EM) dispatch
value. Please refer to the confidential wort paper supporting the direct testimony
of Company wihess, Craig M. Eller, specifically file'Confidential Exhibit No.
36 - Intemrytible hoduct Value Update", cell D9.
At the time of I&ho Public Utilities Commission (tr UC) OrderNo. 32196, the
Company did not have readily available data to identiff inta-hour costs aod did
not have the opportunity to dispatch on an intra-hour basis to support tansfers to
other utilities. EIM operations began in October 2014 with the California
Independent System Operator (CAISO) and PacifiCorp.
Recordholder:Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request22l
IPUC Dete RequestZ2l
answer
(a)
work papers used to determine these amounts in
Excel format with formula intact.
O) Ulhy are there months in both tables with missing data?
Conlidentid Response to IPUC Drtr Requcst 221
(a) Referencing the confidential work papers supporting the direct testimony of
Company witness, Craig M. Eller, specifically file "Confidential Exhibit No.
36 - Internrptible Product Value Up&te", the referenced values in cells C5
through N8 represent the net benefit (in dollars per kilowaft-month ($ftW-
month) the Economic Curtaihnent Product would have provided relative to
the acnral etrergy imbalance market GnQ prices at its location over the
period 20
mar$n
the EIM price and the Schedule 400 enerly
charge
The referenced values in cells Cl7 through N20 represent the net benefit (in
$/kW-month) the proxy simple.cycle combustion turbine (SCCT) would have
provided relative to achral EIM prices over the period 2017 through 2O20.For
each interval in which the market price exceeded the SCCT strt-rry cost and
variable operating cost, the margh for the SCCT is the difference between the
EIM price and the SCCT costs.
Please refer to Confidential Aftachment IPUC 221for linked copies of the
work papers associated with the Company's analysis of the Intemrptible
Products. The file "Bayer-SCCT EIM Value 2Ol7 - 2020 CONF.xlsb" is the
source ofthe referenced values.
(b) A month with a value of zero indicates that there were no interyals in which
prices were high enoug& that it would have been economic to deploy the
resource.
PAC-E-21-07 i Rocky Mountain Power
October 8,2021
IPUC DataRequest22l
Confidential information is provided subject to protection under IDAPA
31.01.01.067 and 31.01 .01.233,tho Idaho Fublic Utilities Co:mmission's Rules of
Procedure No. 67 - Information Exempt fum Public Review, and firrther subject
to the Non-Disclosure Agreemont 0tIDA) executed in this proceeding.
Recordholder:Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-21'07 / Rocky Mormtain Power
October 8,2021
IPUC Data RequestZZ?
IPUC Dete Request222
COMIDENTIAL REQUEST - Currently, the Product
Response to IPUC Drte Request222
Please refer to the Company's response to IPUC Data Request 221which
provides details on how the vdue was determined. If the proposed Economic
Curtailment was expected to be called in additional hours, it would have resulted
in additional net benefits, based on the margin betrreen energy imbdance martet
(EM) prices in those hous and the Schedule 4fi) energy charge.
Recordholder:Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request223
IPUC Drtr Request 223
COMIDENTIAL 5 of Mr. Ellet's Confidential Direct
ls v
reserves.rt any t,rpe Please explain.
Confidentid Response to IPUC Drte Reqnest 223
Confidential information is provided subject to protection under IDAPA
31.01.01.067 and 31.01.01.233, the Idaho Public Utilities Commission's Rules of
Procedtue No. 67 - Information Exempt from hrblic Review, and further subject
to the Non-Disclosure Agreement (I{DA) executed in this proceeding.
Recordholds:Dan MacNeil
Sponsor:Craig M. Eller
larrrEr5nnfirfiill
PAC-E-21-07 / Rocky Mountain Power
Ootober 8,2021
IPUC DataRequestzz4
IPUC Deta RequqtZ24
Is the EIM ever used for the ffi of events that the Operating Reserve product is
designed to mitigate? Please explain.
Reoponse to IPUC Data Requstt24
No. As indicated in the Company's rcsponse to IPUC Data Request223,the
Opemting Reserve product is used solely for contingency reserves, which are not
visible to the elrergy imbalance market (EM) and not economically dispatched by
EIM.
Recordholder: DanMacNeil
Sponsor:Craig M. Eller
PAC-E-21-07 / Rocky Mountain Power
October 8,2021
IPUC Data Request225
IPUC Drtr Request 225
14 of Mr. Eller's Confidential Direct
answer
(a)
(b)in detail and how the
(c)
Please
Confidentirl Response to IPUC Drtr Request 225
(a)contract
(b) Capacity offered into the energy imbalance market (Etrv1) must submit bids
with capacig and prices prior to the operating hour. EIM do not
bids to be rescinded witlr;n the horu so the
a mtntmlnn, en partcrpatmg resource
rnstructrons m the lS-minute -narket, which are
interval.
(c)No.
Confidential information is provided subject to protection under IDAPA
31.01.01.067 and 31.01.01.233, the Idaho Public Utilities Commission's Rules of
PAC-E-21-07 / Rooky Mountain Power
October 8,2021
IPUC DataRequestz2l
Proccdure No. 67 - Information Exempt from Public Review, and further subject
to the Non-Disolosure Agrcernent (NDA) executed in this proceeding.
Recordholder: Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-2 1-07 1 Rocky Mountain Power
October 8,2021
IPUC Data Request226
IPUC Drtr Request 226
CONFIDENTIAL
operatmg reserves.
Conlidentid Response to IPUC Detr Request226
The North American Electric Reliability Corporation (NERC) defines operating
reserve as "the capability above firm system demand required to provide for
regulation,load forecasting error, equipmeot forced aod scheduled outages and
local area protection," Please also refer to the Company's response to IPUC Data
Request 218 subpart (d) for details on the tlpes of operating reserves.
must available and offer it into the EIM. The
Confidential information is provided subject to protection under IDAPA
31.01.01.067 and 31.01 .01.233, the Idaho Public Utilities Commission's Rules of
Procedure No. 67 - Information Exempt from hrblic Review, and frrther subject
to the Non-Disclosure Agtreement (NDA) executed in this proceeding.
Recordholder:Dan MacNeil
Sponsor:Craig M. Eller
PAC-E-21-07 / Rocky Mormtain Power
October 8,2021
IPUC Data Request 227
IPUC Dete Rcquest22T
COMIDENTIAL REQIIEST - OrderNo. 32196 states that the Commission
that an the
Rcsponse to IPUC Drtr Request22T
Please refer to the Company's teslrcnse to IPUC Data Request226.In order to
reliably serve customers, the Company is required to maintain nrfficieot
capability to sene load and hold operating reserves. The proposed Economic
CurtaiLnent prodrrct differs significantly from the Ecouomic C\rrtailment product
at the time of Idaho hrblic Utilities Commission (tr'UC) OrderNo. 32196 and
would now quali$ in its proposed form as operating reserves and thus would
count toward the Company's overall capacity requirements, avoiding the need to
acqtrire capacity from other sources.
Recordholder: Dan MacNeil
Sponsor:Craig M. Eller
fI t'r{:r: ltit tililrili rrrfl I|, NIr il!
PAC-E-21-07 / Rocky Mormtain Power
October 8,2021
IPUC Data Request22S
IPUC Drtr Request 22t
COMIDENTIAL
answef
(a)
(b)Please the rationale for
Response to IPUC Detr Request 22t
(a) The "SCCT EIM Benefit" rqresents the expected net revenues from
dispatching the simple-cycle combustion turbine (SCCT) in the energy
imbalance market (EM). The SCCT would dispatch when EIM prices
exceeded its variable costs, and would generate revenues based on the EM
pricing in those intervals. Because the resource is only dispatched when
martet prices are higher than its variable cost, this would result in a positive
net revenue, representing benefits that would flow to the Company and to
retail customers as part of net power costs (NPC).
(b) Please refer to the Company's response to IPUC Data Request 218, subpart
(b).
Recordholder:Dan MacNeil
Sponsor:Craig M. Eller
rt