20230516AVU to Staff 178 Supplemental.pdf

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 05/16/2023
CASE NO: AVU-E-23-01 / AVU-G-23-01 WITNESS: Scott Kinney
REQUESTER: IPUC RESPONDER: Ryan Finesilver
TYPE: Production Request DEPARTMENT: Energy Supply
REQUEST NO.: Staff-178 Supplmental TELEPHONE: [phone]

REQUEST:
Mr. Kalich's Direct Testimony states that the CBH was evaluated as part of Avista's 2022
Request for Proposals ("RFP") process. However, Avista's 2023 Draft Integrated Resource
Plan ("IRP") states "[a]nnouncements adjacent to the 2022 All-Source RFP include the
acquisition of power from Columbia Basin Hydro's irrigation hydro generation fleet. .."
Please respond to the following .
a. Please confirm that CBH was not a bid in the RFP but was evaluated in the
RFP with other bidding projects.
b. Mr. Kalich's Testimony states that "[a] full accounting and reporting for CBH
will be sponsored in testimony in our next Idaho general rate case, once all
resources procured as part of the RFP process are under contract". Is the
Company seeking a determination of prudence for any of the CBH projects in
this case? If so, please state which one(s).
c. If the Company is seeking a determination of prudence for any of the projects
, please provide the Company's justification of need for each of these projects.
Please provide evidence to support the justification.
d. Please provide a comparison of the contract price(s) of each CBH project
to the contract price of each selected project from the RFP on an
equivalent basis.
e. Please provide the scoring matrix used to select the short list and final
selection of resources in the RFP.

RESPONSE:
Please see Avista's response 178C, which contain TRADE SECRET, PROPRIETARY or
CONFIDENTIAL information and are separately filed under IDAPA 31.01.01, Rule 067 and
233, and Section 9-340D, Idaho Code.

Please note that the CBH project is one purchase power agreement consisting of multiple projects.
See Avista’s response to Staff_PR_177 for the contract.

a. Confirmed. CBH was not one of the proposals received as a result of the 2023 All Source
RFP. CBH had conducted their own solicitation that Avista had bid on, and so the discussions
for those contracts had run separate from the All-Source RFP Process. However, the Company
evaluated this project using the All-Source RFP process, to ensure it was competitive with
pricing in line with all other market solicitations. When compared to all other responses to the
RFP, CBHP was within the top 3 proposals received. Had the contract been part of the RFP
process, this result would also have resulted in selection of this project. Had the project not
been competitive with the other RFP projects, Avista would not have moved forward with the
contract.

RECEIVED
Tuesday, May 16, 2023 4:11:48 PM
IDAHO PUBLIC
UTILITIES COMMISSION
b. Yes, Avista is seeking a determination of prudence for this PPA. This would include the
seven projects that are included in the CBH project. The final RFP Report has yet to be
completed with a concise analysis. However, given that the first pricing for the first three
projects – Russell D. Smith (6.1 MW effective 03.01.2023), EBC 4.6 (2.2 MW effective
05.01.2023) and Summer Falls (92 MW effective 01.01.2025) were included in the rate period
in this case, the Company should have provided additional information in this case in order for
prudence to be determined at minimum for these projects. The Company apologizes for this
oversight. Please see the response to part c for additional information.

c. Avista’s 2021 Integrated Resource Plan (IRP) identified the need to procure resources to
meet capacity requirements, energy needs, and renewable energy requirements. The Company
provided updates to the Idaho Public Utilities Commission on several occasions to follow up
on the IRP identified needs, as well as updates throughout the process. A discussion of
identified projects resulting from the IRP was virtually held with IPUC on July 11, 2022. On
September 12, 2022 the Company provided an update on the RFP process to the IRP Technical
Advisory Committee which Idaho PUC typically participates in. The need for resources was
discussed with Idaho Staff in a virtual meeting held on October 12, 2022. On December 12,
2022 an update was also provided on CBH including the amount of additional generation, etc.
The Company’s IRP is filed on its website at myavista.com.

Columbia Basin Hydro, as well as all other resources were selected according to the
Company’s need and scored according to the evaluation criteria. While the smaller projects
came online prior to the identified need, these were relatively small in nature 2.2 and 6.1, with
the larger Summer Falls and Main Canal (as well as remaining others) coming on line within a
reasonable timeframe of the 2026 identified needs. The RFP allowed for that type of early
acquisition if it supported acquiring cost-effective resources for the 2026-2030 timeframe.

d. Columbia Basin Hydro is one contract, comprised of multiple projects. As such, there is
only one price for the entire contract. In terms of financial analysis, the Company does not
have a comparison of contract price for each project readily available as it is not used as a
sole factor in the financial analysis portion of the evaluation. The financial analysis is
based on the value of each project in relation to others in the bid. This value is then
translated into a score which is the basis for the Customer Energy Impact component of the
scoring impact. Staff_PR_178 Attachment B has this score, in comparison to all other
bids in the total Evaluation Matrix. (This is titled NonRFP Proposal and is rated number 3
in this analysis.) The Company will supplement this production response with offer price
by May 16, 2023. Please also see the Company’s response to part (e) below.

e. Please see Staff_PR_178C Confidential Attachment A for the evaluation methodology used
in scoring each proposal. Staff_PR_178C Confidential Attachment B includes the scoring
matrix used to select resource within the 2022 All-Source RFP.

SUPPLEMENTAL RESPONSE 05/16/2023:
Please see the Company’s attachment Staff_PR_178C Supplemental Confidential Attachment C.
The total cost per bid includes each projects associated energy costs, capacity costs transmission
capital recovery, third party wheeling/losses, variable integration costs, and net miscellaneous
charges. Note that these costs exclude carbon allowances and Non-Energy Impact values.

Note that price was only one of several factors included in the Company’s Evaluation
Methodology for resource selection and while the CBH project had a lower cost, additional factors
contributed to its ultimate selection. Please see Staff_PR_178C - Confidential Attachment B for
the scoring summary which illustrates these factors.