20171004notice_of_filing_order_no_33900.pdf

Office of the Secretary
Service Date
October 4,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )CASE NO.AVU-E4708
CORPORATION’S 2017 ELECTRIC )
INTEGRATED RESOURCE PLAN )NOTICE OF FILING
)
)NOTICE OF
)MODIFIED PROCEDURE
)
_____________________________
)ORDER NO.33900
On August 31,2017,Avista Corporation dba Avista Utilities filed its 2017 Electric
Integrated Resource Plan (IRP).The IRP outlines and analyzes the Company’s strategy for
meeting its customers’projected energy needs over the next 20 years.The Company files an
IRP every two years,and uses it to guide resource acquisitions.With this order,the Commission
provides notice that the Company has filed its 2017 Electric IRP,and that interested persons may
file written comments about the IRP.
NOTICE OF FILNG
YOU ARE HEREBY NOTIFIED that the Company’s 2017 Electric IRP is about 190
pages long and is accompanied by about 770 pages of appendices.The 2017 Electric IRP
includes the following sections:(1)Executive Summary,(2)Introduction &Stakeholder
Involvement,(3)Economic &Load Forecast,(4)Existing Supply Resources,(5)Energy
Efficiency &Demand Response,(6)Long Term Position,(7)Policy Considerations,(8)
Transmission &Distribution,(9)Generation Resource Options,(10)Market Analysis,(11)
Preferred Resource Strategy,(12)Portfolio Scenarios,and (13)Action Items.The information
set forth below is taken from the Executive Summary.
YOU ARE FURTHER NOTIFIED that the 2017 Electric IPR guides the Company’s
resource strategy over the next two years,and resource procurements over the next 20 years.It
provides a snapshot of the Company’s resources and loads and guides future resource
acquisitions over a range of expected and possible future conditions.IRP at 1-1.
YOU ARE FURTHER NOTIFIED that the Company states that its 2017 Preferred
Resource Strategy (PRS)includes energy efficiency,generation upgrades,and new natural gas
fired generation.PRS development depends on modeling techniques to balance cost,reliability,
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rate volatility,and renewable resource requirements.The Company’s management and
Technical Advisory Committee (TAC)guide the development of the PRS and IRP by providing
input on modeling and planning assumptions.TAC members include customers,Commission
Staff,the Northwest Power and Conservation Council,consumer advocates,academics,
environmental groups,utility peers,government agencies,and other interested parties.Id.
YOU ARE FURTHER NOTIFIED that,in describing its resource needs,the Company
reports that it experiences its highest peak loads in the winter under extreme weather conditions.
The Company explains peak-planning methodology includes operating reserves,regulation,load
following,wind integration and a 14%planning margin over winter-peak load levels.The
Company states that it can meet peak-load requirements through October 2026 using existing
resources,conservation,and market purchases.Id.
YOU ARE FURTHER NOTIFIED that the Company explains that it develops its PRS
through a multi-step approach.First the Company identifies and quantifies potential new
generation resources to serve projected electricity demand across the West,and determines the
impact of extra-regional markets on the Northwest electricity marketplace of which the Company
is a part.The Company then maps its existing resources to the transmission grid in a model
simulating hourly operations for the Western Interconnect from 2018 to 2037 —the IRP study
timeframe.The model adds new resources and transmission to the Western Interconnect as
regional loads grow and older resources are retired.Monte Carlo-style analyses vary
hydroelectric and wind generation,loads,forced outages,and natural gas price data over 500
iterations of potential future market conditions to develop the Mid-Columbia electricity
marketplace through 2037.Id.at 1-2.
YOU ARE FURTHER NOTIFIED that the Company’s 2017 IRP forecasts the Mid-
Columbia electricity price for the Expected Case,including the price range over the 500 Monte
Carlo iterations,to be a levelized price of $35.85 per megawatt hour (MWh)in nominal dollars
over the 2018-2037 timeframe.Id.The Company observes that electricity and natural gas prices
are highly correlated because natural gas fuels marginal generation in the Northwest during most
of the year.Id.The Company reports that nominal levelized Expected Case natural gas prices at
the Stanfield trading hub in northeastern Oregon,and the forecast range from the 500 Monte
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Carlo iterations performed for the Expected Case,result in an average $4.20 per dekatherm over
the next 20 years.Id.
YOU ARE FURTHER NOTIFIED that the Company’s 2017 IRP includes a 20..year
Conservation Potential Assessment to determine potential residential,commercial and industrial
energy efficiency applications.The study estimated that conservation will serve 53.3%of future
load growth.Based on the study,the Company reports that its conservation efforts since 1978
have decreased its load requirements by 12.3%.Id.at 1-3.
YOU ARE FURTHER NOTIFIED that the Company states that its management and the
TAC guided the development of the 2017 PRS after carefully considering the information
gathered and analyzed in the IRP process.Id.at 1-4.The resulting 2017 PRS meets future load
growth with upgrades at existing generation facilities,energy efficiency,and natural gas-fired
technologies.Id.
YOU ARE FURTHER NOTIFIED that the Company states its 2017 PRS describes a
reasonable low-cost plan along the efficient frontier of potential resource portfolios accounting
for fuel supply risks and price risks.Id.However,major changes from the 2015 IRP include a
reduced contribution from natural gas-fired peakers,and inclusion of demand response,solar,
and storage resources.Id.
YOU ARE FURTHER NOTIFIED that the Company also states that it values each new
resource and energy efficiency option against the Expected Case Mid-Columbia electricity
market forecast to identify its future value and inherent risk measured by year-to-year portfolio
cost volatility.The Company then inputs these values and their associated capital and fixed
operation and maintenance costs into a PRS Linear Programming Model (PRiSM)that optimally
mixes new resources along an Efficient Frontier.Id.
YOU ARE FURTHER NOTIFIED that the Company explains that its PRS provides a
least reasonable-cost portfolio that minimizes future costs and risks within actual and expected
environmental constraints.Id.An Efficient Frontier helps determine the tradeoffs between risk
and cost.The Company likens the approach to finding an optimal mix of risk and return in an
investment portfolio:as expected return increases,so do risks.Conversely,reducing risk
generally reduces overall returns.In describing the change in cost and risk from the PRS on the
Efficient Frontier,the Company notes that lower power cost variability comes from investments
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in more expensive but less risky resources like wind and hydroelectric upgrades.The PRS
selection is the location on the Efficient Frontier where reduced risk justifies the increased cost.
id.at 1-4 to 1-5.
YOU ARE FURTHER NOTIFIED that the Company notes that its IRP includes several
scenarios that help identify tipping points where the PRS could change under different conditions
from the Expected Case.The IRP also evaluates the impacts of among other things,varying
load growth,resource capital costs,and greenhouse gas policies.Id.at 1-5.
YOU ARE FURTHER NOTIFIED that the Company’s IRP describes the Company’s
plan for complying with the State of Washington’s Energy Independence Act (ETA).The
Company explains that Washington’s ETA required or requires the Company to meet 9%of retail
load from qualified renewable resources by 2016 and 15%by 2020.The EIA also requires the
Company to acquire all cost-effective conservation and energy efficiency measures.The
Company states it will satisfy its ETA obligations through the IRP timeframe by combining
qualifying hydroelectric upgrades,the Palouse Wind project,and Kettle Falls Generating Station
output.Id.
YOU ARE FURTT-IER NOTIFIED that the Company notes that regulation of greenhouse
gases.or carbon emissions,is in various stages of development and implementation throughout
the country.Some states have active cap and trade programs,emissions performance standards,
renewable portfolio standards,or a combination of active and proposed regulations affecting
emissions from electric generation resources.Id.at 1-6.The Company notes that its emissions
will decrease over the IRP timeframe,and predicts that western region emissions will also likely
fall from historic levels over the same timeframe.Id.
YOU ARE FURTHER NOTIFIED that the Company reports that its 2017 Action Items
chapter updates the Company’s progress on Action Items from the 2015 TRP and outlines
activities the Company intends to perform between the publication of the 2017 IRP and
publication of its 2019 TRP.The Company notes that the 2017 Action Items are based on input
from Commission Staff,the Company’s management team,and the TAC,and that action item
categories include generation resource-related analysis,energy efficiency,and transmission
planning.Id.at 1-7.
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YOU ARE FURTHER NOTIFIED that the Company’s 2017 Electric IRP and any
supporting workpapers and exhibits have been filed with the Commission and are available for
public inspection during regular business hours at the Commission offices,The Application and
attachments are also available on the Commission’s Website at www.puc.idaho.gov under “File
Room”and then “Electric Cases.”
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission’s Rules
of Procedure,IDAPA 31.01.01.201-.204.The Commission notes that Modified Procedure and
written comments have proven to be an effective means for obtaining public input and
participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
filing may file a written comment with the Commission no later than December 15,2017.The
comment must contain a statement of reasons supporting the comment.Persons desiring a
hearing must specifically request a hearing in their written comments.Written comments
concerning this filing may be mailed to the Commission and Avista at the addresses reflected
below:
Commission Secretary David Meyer,Vice President and Chief
Idaho Public Utilities Commission Counsel for Regulatory &Governmental
P0 Box 83720 Affairs
Boise,ID 83 720-0074 Linda Gervais,Senior Manager —Regulatory
Policy
Street Address for Express Mail:Avista Corporation
P0 Box 3727
472 W.Washington Street 1411 E.Mission Ave.,MSC-27
Boise,ID 83702-5918 Spokane,WA 99220-3727
E-mail:[e-mail]
linda.gervais(avistacorp.com
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at www.puc.idaho.gov.Click the “Case Comment or Question
Form”under the “Consumers”tab,and complete the form using the case number as it appears on
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the front of this document.These comments must also be sent to the Company at the e-mail
addresses listed above.
YOU ARE FURTHER NOTIFIED that the Company shall file reply comments,if any,
no later than January 6,2018.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set,the Commission will consider this matter on its merits and enter its
Order without a formal hearing.If written comments are received within the time limit set,the
Commission will consider them and,in its discretion,may set the same for formal hearing.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held pursuant
to the Commission’s jurisdiction under Title 61 of the Idaho Code,and specifically Idaho Code §
6 1-503.The Commission may enter any final Order consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission’s Rules of Procedure,IDAPA 31.01.01.000,et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure,Rules
201-204 (IDAPA 31.01,0l.201-.204).Interested persons shall have until December 15,2017 to
file written comments.The Company shall have until January 6,2018 to file reply comments,if
any.
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DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of October 2017.
ATTEST:
PAUL KJE ND I(JRESIDENT
KR1Z,flfrONER
Diane M.Hanian
Commission Secretary
I:Legal\LORDERS\AVUE 1708 djh Noticedoc
NOTICE OF FILING
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33900
[C ANDERSON,COMMISSIONER
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