20200819Swan Lake and FFP Project Comments.pdf

Sidney Villanueva (OSB 161653)
Troutnan Pepper Hamilton Sanders LLP
100 SW Main St., Suite 1000
Portland, Oregon 97204
s03.290.2338
sidney. villanueva@troutman. com
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Attomey for Swan Lake North Hydro, LLC and
FFP Project l0l, LLC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA'S 2O2O
ELECTRIC INTEGRATED RESOURCE
PLAN
cAsE NO. AVU-E-19-01
COMMENTS OF SWAN LAKE
NORTH HYDRO, LLC AND FFP
PROJECT 101, LLC
I. INTRODUCTION
Pursuant to Idaho Public Utility Commission ("Commission") Rules of Procedurer Swan
Lake North Hydro, LLC ("Swan Lake") and FFP Project 101, LLC ("Goldendale") submit these
comments through counsel supporting the201912020 Electric Integrated Resource Plan
("Electric IRP") filed by Avista Corporation ("Avista" or the "Company") on February 28,2020.
As Avista's analysis illustrates, pumped hydro storage is a cost effective resource that is
uniquely capable of providing dispatchable zero-emissions capacity, which can help both Avista
and the region reliably transition towards a decarbonized generation fleet. While Avista has
included up to 175 MW of long-duration pumped hydro storage in the 2020Preferred Resource
Strategy, additional clarification and/or revisions may be needed to account for the unique
benefits pumped storage projects have to offer Avista's customers. As described herein, the
rDAPA 31.01.01.043.
Commission may be in a position to ensure that the unique customer benefits of pumped storage
are fairly evaluated should Avista go forward with a request for proposal for capacity in2021
(the"202l Capacity RFP"). Swan Lake and Goldendale look forward to participating in that
process and encourage Avista to provide stakeholders additional details about the202l Capacity
RFP as early as possible due to the long lead times associated with pumped hydro storage
projects.
II. BACKGROT]NI)
After finding that Avista has sufficient resources to meet its near-term requirements,
Avista's Electric IRP focuses on meeting sizable capacity and resource needs beginning in2026
at the lowest reasonable cost to customers. Avista faces nearly 500 MW of capacity losses due
to Colstrip and natural gas-fired generation retirements, as well as potential energy resource
reductions due to expiring hydro conftacts.2 As such, the Elechic IRP calls for the addition of
long duration energy storage, additional demand response, 500 MW of new wind resources, and
upgrades to thermal and hydroelectric facilities.3 Avista's Preferred Resources Strategy includes
175 MW of long-duration pumped hydro storage by 2026, which led Avista to state that it may
issue the 2021 Capacity RFP to compare available pumped hydro projects.a
Swan Lake and Goldendale are both actively engaged in the development of pumped
storage hydroelectric projects in the region that will utilize environmentally friendly "closed
loop" technology to provide unmatched flexibility needed to integrate variable renewable
resources being added to the electric supply system, as well as stacked energy, capacity and other
reliability and economic benefits to the region. Swan Lake is developing a 400 MW project in
Avista 2020 Electric Integrated Resource Plan at l-5,4-7,4-8 (Feb. 20,2020).
Id. at l-1, l-5.
Id. at ll-5.
2
3
4
COMMENTS OF SWAN LAKE AND GOLDENDALE PAGE 2
Klamath County, Oregon, which is fully permitted, received its Federal Energy Regulatory
Commission ("FERC") license in20l9 and is scheduled to reach commercial operation by 2025.
Goldendale is developing a 1,200 MW project in Klickitat County, Washington, which is
scheduled to reach commercial operation by 2028.
III. COMMENTS
A. Avista's Resource Adequacy Analysis Warrants Immediate Action
In considering Avista's ability to provide adequate power over the 2}-year planning
period, the Electric IRP higruights serious resource adequacy risks looming in the region. Avista
provides an overview of its conclusions after participation in the Northwest Power and
Conservation Council resource adequacy forum, reviewing studies provided by Energy and
Environmental Economics ("E3"), and undergoing its own market power forecasts and studies.s
Avista's analysis concludes the region is at serious risk without new resources, unless loads fall
or the region is able to acquire winter capacity from other regions.6 For example, the E3 study
states an additional 5,000 MW of capacity will be needed by 2030 to maintain reliability.T
One aspect driving resource adequacy is the region's decarbonization efforts. Avista has
a corporate goal of providing 100 percent net clean energy by 2027, which parallels requirements
under Washington's Clean Energy Transformation Act ("CETA").8 These efforts make pumped
hydro a natural fit for Avista's future resource fleet needs. As the Electric IRP highlights, energy
storage will play a critical role in removing carbon-emitting resources from Avista's portfolio.e
Avista notes that pumped hydro could help meet system integration issues resulting from
Id. at7-9.
Id. at7-ll.
Id. at7-10.
Id. at l-6,4-16.
Id. at l-6.
5
6
7
8
9
COMMENTS OF SWAN LAKE AND GOLDENDALE PAGE 3
increased renewable, intermittent generation.lo Avista modeled long-term duration (8 hours, 12
hours, 16 hours, 24 hours,40 hours, and 80 hours), which is an area where pumped hydro tends
to outperform other storage options. Avista plans to combine long duration pumped hydro, along
with other storage products to provide the reliable capacity required to meet long cold winter
periods where weather and sun dependent renewable resources do not always contribute to load
service.rr Another benefit identified by Avista, is the ability to alleviate transmission and
distribution expansion needs, because pumped hydro can alleviate conductor overloading and
short duration load demands.l2
While the Electric IRP demonstrates that Avista does not have an immediate need for
new resources, the size of the region's mid-to-long-term need is staggering and may undercut
Avista's ability to procure capacity beyond 2025. The region's need provides an important lens
to view the Preferred Resource Strategy. Given this broader context, Avista would be well
served to contract for capacity sooner rather than later. This is especially true for resources like
pumped hydro storage, which provide particularly attractive capacity benefits, but can take
longer than other resources to come online. Swan Lake and Goldendale want to caution the
Commission that pumped hydro resources are not always available and if Avista wants to secure
pumped hydro, it will need to move quickly to do so.
B. Avista Should Provide More Details About lts202l Capacity RFP Plans
To meet its2026 capacity shortfall, Avista states that it is monitoring potential pumped
hydro storage projects in the region and is interested in pursuing one if the resource can meet
certain requiranents. The Electric IRP proposed to replace nearly 500 MW of capacity lost from
l0
ll
t2
Id. at9-10.
Id. at l-6.
Id. at9-10.
COMMENTS OF SWAN LAKE AND GOLDENDALE PAGE 4
Colstrip and Lancaster facilities with 175 MW of long duration pumped hydro.13 Avista notes
that any pumped hydro storage project must be able to meet its customers' winter peak load and
exceed the timing needs and pricing characteristics of other resource options to be selected.la
According to Avista's analysis, long duration storage assets could also allow it to replace the
need for other natural gas-fired peaking generation identified in its previous IRP. Given this
potential for storage, Avista explains that it will actively pursue storage, so long as it meets its
customers' needs, and that if it is not feasible or cost effective, the Company may pursue other
alternatives, including a gas-fired peaker. To help with its decision, Avista states it may issue the
Capacity RFP in 2021 andwill evaluate the appropriate timing of any such action in2020.
As discussed above, Avista should move swiftly to release the202l Capacity RFP if it
wants to contract for pumped hydro storage in2026. Swan Lake and Goldendale appreciate the
difficulty in modeling pumped hydro resources, given the variability in project size and
economics, but cautions that it may not be realistic to assume that pumped hydro resources will
be available to compare if Avista delays its consideration. Additionally, pursuing new gas-fired
generation may not be a tenable or a realistic alternative to pumped storage. Swan Lake and
Goldendale respectfully request the Commission urge Avista to begin providing stakeholders
with information pertaining to its plans for a2021Capacity RFP.
l3
l4
Id. at ll-5.
Id. at ll-5.
COMMENTS OF SWAN LAKE AND GOLDENDALE PAGE 5
IV. CONCLUSION
Swan Lake and Goldendale appreciate the opportunity to comment on Avista's Electic
IRP and look forward to continuing to work with Avista during the course of this proceding.
Dated this l9e day of Augus! 2020.
Respectfully zubmitted
/s/ Sidnov
Sidney Villanueva
TROUTMAN PEPPER HAMILTON SANDERS LLP
Attomeyfor Swan Lake North Hydro, LLC and
FFP Project 101, LLC
COMMENTS OF SWA}I LAKE ANID GOLDENDALE PAGE 6