20230606AVU to Staff 1-3.pdf

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 06/02/2023 CASE NO: AVU-G-23-03 WITNESS: N/A REQUESTER: IPUC RESPONDER: Tom Pardee TYPE: Production Request DEPARTMENT: Gas Supply
REQUEST NO.: Staff-001 TELEPHONE: [phone] REQUEST: In reference to the Company's response to the 2021 IRP Action Item number 2 discussed on page 9-4 of Avista's 2023 Natural Gas IRP, please respond to the following items: a. Please explain the Company's process to verify the PLEXOS initial model build against Sendout;
b. Please provide any results obtained during the Company's verification process of the PLEXOS initial model build against Sendout; c. Please explain the Company's process to verify the climate policies and any other additional functionalities used in PLEXOS are providing modeling results that represent actual operations and implementation of policies; and
d. Please provide any results obtained during the Company's verification process of climate policies and any other additional functionalities used in PLEXOS. RESPONSE:

a. Avista worked directly with Energy Exemplar to model and validate the results between PLEXOS and SENDOUT. This process was nearly three months in length and included regular interactions and meetings. Below is the schedule and benchmark used in this process.

RECEIVED
2023 JUNE 6, 2023 2:45PM
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UTILITIES COMMISSION
b. Results obtained during this process are included in the following illustration and compare system demand from SENDOUT versus PLEXOS.
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c. The verification process of climate policies in Oregon and Washington were completed
during the set up as discussed in response 1a. These policies account for carbon in a binary manner meaning if natural gas is the selected fuel, it must be within the tolerance of each programs targeted reductions. If renewable natural gas or other non-carbon fuel is selected it meets the program guidelines and is excluded from the total emissions. Any emissions above the target must be offset by the program instruments. Each state is modeled
separately with only transportation or storage as the few pieces of program elements tying jurisdictions together. This means each jurisdiction now must fully comply with any program regulations or restrictions individually rather than as a system and cross over from program element is not allowed within the model.

d. Upgraded functionalities were tested within PLEXOS and accomplished by confirming the carbon intensity of renewable natural gas sources and the potential amount of hydrogen per volume in the system through the available new functionality found in PLEXOS. The inputs are illustrated in the example below. These hydrogen constraints show how we
constrict hydrogen to account for less energy per volume as compared to natural gas and
were not available in SENDOUT. Results were validated based on expected model values. Similar methods were used to validate renewable natural gas and its carbon intensity by source in the model.

Model results to climate policies were not fully completed during the build and validation
process as the Climate Protection Plan in Oregon was not complete and available until
December 2021. Also, program details for the Washington Climate Commitment Act were also not available until 2022, so validation to programs was not possible at the time of model creation.
Implementation of these climate policies can be found in Chapter 5, 6 and 7 of the 2023
IRP and were validated based on final rules in the CCA and CPP. A specific scenario was developed to test “Carbon Intensity Scenario” and ways this may affect results as compared to the Preferred Resource Strategy.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 06/02/2023 CASE NO: AVU-G-23-03 WITNESS: N/A REQUESTER: IPUC RESPONDER: Tom Pardee TYPE: Production Request DEPARTMENT: Gas Supply
REQUEST NO.: Staff-002 TELEPHONE: [phone] REQUEST: In reference to Figures 6.17 and 6.18 on page 6-23 of Avista's 2023 Natural Gas IRP, please explain the reason for the variability in energy demand shown in the years 2023-2029. RESPONSE:
Figures 6.17 and 6.18 illustrate variability for demand for two primary reasons. The first is these figures are from five stochastic futures where variability in assumptions is occurring each day for each 20-year future. Rather than use deterministic modeling where each day and future is known, with the additional functionality provided within PLEXOS, Avista chose to use a stochastic future
to avoid overestimating resource needs. The ability of the PLEXOS program to run more than five stochastic futures is limited due to the set up available at the time the model was run. The second reason is Avista utilized future climate temperatures rather than historic temperatures as in prior IRPs. These temperatures have a different profile than normal weather and are more volatile as
compared to normal weather. Figure 2.19 illustrates a 500-draw monte carlo run depicting a set of
future demand profiles that tend to fit into a normalized distribution to account for this risk of future prices and weather.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 06/02/2023 CASE NO: AVU-G-23-03 WITNESS: N/A REQUESTER: IPUC RESPONDER: Michael Whitby TYPE: Production Request DEPARTMENT: Clean Energy Strategy
REQUEST NO.: Staff-003 TELEPHONE: [phone] REQUEST: Please provide results of the Company's Renewable Natural Gas ("RNG") Q4 2022 Requests for
Proposal ("RFP"). Include a copy of the RFP, selection criteria, and copies of submittals. RESPONSE: Please see Avista's response Staff_PR_003C, which contains TRADE SECRET, PROPRIETARY or CONFIDENTIAL information and exempt from public view and is separately filed under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code. Please see Staff_PR_003 Attachment A for a copy of the RFP. Selection criteria for evaluating
RFP results is provided below and copies of submittals can be found in Staff_PR-003C
Confidential Attachment B.

RFP Review & Selection Criteria
Note: RFP sections referenced in (parentheses)
Cost per MMbtu delivered attribute only (unbundled) (section 3.4.2.1)
RISK TOTAL (WEIGHTED - VERY IMPORTANT)
Experience & Proven performance of firm/team/entity (section 3.4.2.2)
Performance history (operational facilities) (section 3.4.2.3)
Bidder, or parent company has long-term debt rating of BBB - and is willing to guarantee performance (3.3.1.1a &b)
Site Control: Financial plan to bring Project to completion (section 3.4.2.12) ESG TOTAL (WEIGHTED - VERY IMPORTANT)
Corporate Responsibility/Equity/ESG Plan/Programs serving vulnerable communities (section
3.4.2.11)
QUALITY TOTAL (WEIGHTED - VERY IMPORTANT)
Overall ability of project to successfully deliver qualifying RNG within the terms of the contract (section 3.4.2.10)
GENERAL TOTAL (WEIGHTED - LESS IMPORTANT) Demonstrated delivery solution/pathway to Avista’s natural gas distribution system. (Section 3.4.2.6)
Term of contract (initial duration of term) (section 3.4.2.7)
Term of contract / (duration of renewal term) (section 3.4.2.7)
Claims of environmental benefits or emissions reductions by this project/source to other RNG markets (section 3.4.2.8)
Counterparty performance risk/delivery risk (section 3.4.2.9) Other relevant factors/items discovered through the RFP review process (section 3.4.2.13)
General - Bidder has completed Bidder Information (Section 4.1)
General - Bidder has completed Project Information (Section 4.2)
General – Bidder has Certification & Signed the Proposal (Section 4.4)
General – Bidder has provided a signed MCA (section 3.3.3)
INFORMATIONAL TOTAL (WEIGHTED - LESS IMPORTANT )
Expected Performance forecast (planned – based on similar projects) (section 3.4.2.3)
Volume of RNG available for purchase (section 3.4.2.4) Feedstock type (section 3.4.2.5)
Carbon Intensity (CI) Score (section 3.4.2.5)