20210811Comments.pdf

'.:- i:-,i\,. |., : . ]DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BARNO.9917
.,.'ii,":,1 iI Fi1 lr:31
. ;i;i0ti
Street Address for Express Mail:
I I33I W CHINDEN BLVD, BLDG 8, SUITE 2OI-A
BOISE, ID 83714
Attomey for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA
CORP ORATION'S 2O2I ELECTRIC
INTEGRATED RESOURCE PLAN
CASE NO. AVU.E.?I.O4
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Attomey of record,
Dayn Hardie, Deputy Attorney General, submits the following comments.
BACKGROUND
On March 31,2021, Avista Corporation ("Avista") dba Avista Utilities ("Company") filed
its 2021 Electric Integrated Resource Plan ("IRP"). The IRP outlines and analyzes the
Company's strategy for meeting its customers' projected energy needs over the next24 years.
The Company files an IRP every two years and uses it to guide resource acquisitions.l
On April 28,2021, the Commission issued aNotice of Filing and Notice of Intervention
Deadline. Order No. 35022. Idaho Conservation League ("ICL") intervened in this case.
I The Company was granted a six-month extension to file its 2019 IRP. Order No. 34312. The Commission changed
the caption for the Company's filing to the "2020 Electric Integrated Resource Plan" when it issued the Notice of
Filing. Order No 34609. The Company's 2020 IRP was acknowledged on October 15,2020. Order No. 34814.
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STAFF COMMENTS AUGUST II,2O2I
On April 29,2021, the Company filed an updated 2021 IRP. The updated IRP includes a
ten-year contract with Chelan PUD for five percent of its Rocky Reach and Rock Island hydro
facilities. This contract was executed prior to filing the 2021 IRP.
The Commission requires the Company to update its IRP biennially, allow the public to
participate in its development, and to implement the IRP. See Order Nos. 22299 and25260.
More specifically, the Commission has asked for the IRP to explain the Company's current
load/resource position, its expected responses to possible future events, and the role of
conservation in its explanations and expectations. The IRP should also discuss "any flexibilities
and analyses considered during comprehensive resource planning, such as: (l) examination of
load forecast uncertainties; (2) effects of known or potential changes to existing resources; (3)
consideration of demand and supply-side resource options; and (4) contingencies for upgrading,
optioning[,] and acquiring resources at optimum times (considering cost, availability, lead time,
reliability, risk, etc.) as future events unfold." See Order No.22299.
STAFF REVIEW
Staff believes the Company meets IRP minimum requirements set forth in Order Nos.
22299 and25260 and recommends the Commission acknowledge the Company's 2021 Electric
IRP. Staff s recommendation is based on its active participation in the IRP Technical Advisory
Committee ("TAC"), its review of the Company's IRP filing, the Company's responses to audit
and production requests, and its review of the customer and stakeholder feedback received
through the public input process. Staff acknowledges the Company's IRP team's work to solicit
input and feedback from parties throughout the IRP process. Staff regularly observed the
Company encouraging participation from a diverse array of stakeholders, including those new to
the IRP process, and believes the Company considered all feedback.
Staff identified several topic areas it believes require additional review or focus in the next
Electric IRP cycle. These include:
. Reliability Analysis
o Market Reliance
o Colstrip Economic Analysis
o Portfolio Optimization by State and System
. Energy Efficiency and Demand Side Management Programs
2STAFF COMMENTS AUGUST II,2O2I
Staff s comments are organized to address the topic areas described above.
Reliability Analysis
Staff is still concerned with the Company's reliability analysis in the 2021 IRP. In the
2020 tRP, Staff was concemed with assigning a single Planning Reserve Margin to all portfolio
scenarios and the Company not verifying reliability across multiple years and portfolios. See
Staff Comments in Case No. AVU-E-19-01. The Company made progress to address these
concerns, but Staff expects the reliability analysis to receive increased focus in the next IRP cycle.
Specifically, Staff would like to see a reliability analysis that measures the resulting Loss of Load
Probability ("LOLP") or Loss of Load Expectation ("LOLE") of all its portfolios under evaluation
across the full planning time horizon.
Changing environmental policy and economics are driving the addition of variable and
energy-limited resources included in the Company's resource mix and driving accelerated coal
plant retirements. These changes can create reliability issues due to reduced firm capacity
available at system peak under certain operating conditions. Recently, more frequent extreme
weather conditions, a transition toward renewables and away from fueled generation resources,
have created issues affecting reliability and market availability of firm generation and
transmission across the western United States.
The 2020IRP reliability analysis only evaluated the resulting LOLP for the Preferred
Resource Strategy ("PRS") portfolio for one-year. In the 2021 IRP, the Company increased the
number of portfolios it evaluated for the resulting LOLP, but still only for a single year.
However, to understand the reliability performance of the Company's Clean Resource Plan
portfolio, the Company evaluated its reliability across an additional year. These are
improvements to Staff s concems from the 2020 IRP, but they do not fully address Staffls lack of
confidence in the Company's reliability evaluations for its portfolios. Staff acknowledges the
Company's work on reliability analysis and looks forward to continuing improvements in the
future.
Coverage of reliability analysis in the IRP process is often limited and presented at the end
of the IRP cycle. In the 2021 IRP, the results of the reliability analysis were presented after the
draft IRP was sent out for review. Performing reliability analysis at the very end of the process
can result in portfolios that appear promising from a cost standpoint, only to end up unreliable.
JSTAFF COMMENTS AUGUST 1I,2O2I
Staff believes evaluating scenarios that are not known to meet reliability standards is inefficient
and has limited value to the overall IRP objectives. Staff understands the202l IRP cycle was
shortened due to the extension of the 2019 IRP, but Staff believes reliability analysis should be a
larger priority in the IRP process due to the increasing number of factors potentially affecting
reliability of the system.
In a meeting with the Company on July 21,2021, Staff expressed concems with the
reliability analysis. In the meeting, the Company stated its plan to start testing a new modeling
software called PLEXOS that will replace its current reliability modeling software if it performs
as expected. Staff is encouraged by the Company's efforts to improve reliability analysis in the
IRP and looks forward to reviewing the results from testing the PLEXOS software. Staff
recommends the Company take sufficient time testing the new software to veriff the results are
accurate for the Company's system before fully implementing it into the IRP process.
Market Reliance
The Company changed the market reliance assumption from 250 MW in previous IRPs to 330
MW in this IRP. This change was driven by load changes and reduced resource capacity contributions
based on new analyses and data. See Response to Staff s Production Request No. 5 (c). It was
determined 330 MW was necessary during regionally stressed hours to maintain a So/oLOLP with a
16% planning margin. See Response to Staffls Production Request No. 5 (b). However, Staff has two
concerns. First, as discussed earlier, Staff is concerned with the Company's reliability modeling.
Second, the Company has not determined if it can rely on this additional level of market availability
on a long-term basis.
To determine a reasonable level of market reliance, the Company should evaluate import
capability considering market availability of both firm generation and transmission capacity. The
Commission shared this view in previous orders. Order No. 33425 states that a utility's import
capability-its ability to make short-term purchases using its transmission capacity-should be
included in the load and resource balance. Recently, changes in market conditions for hrm
transmission have caused availability to tighten considerably across the Western Interconnection.
These conditions were not expected by most utilities' long-term plans and may affect their ability
to rely on the market in the future.
4STAFF COMMENTS AUGUST II,2O2I
The Company participates in the Northwest Power Pool's Resource Adequacy ("RA";
Program development effort. The Company expects to set future market reliance based on the
information provided by the program. See Response to StafPs Production Request No. 5. Staff
believes the main benefit of the program is to provide a process for participating utilities to
reserve capacity, ensure that it will be there when needed, and to provide visibility to the amount
of capacity available across the region for making future reservations.
Colstrip Economic Analysis
Staff believes the Colstrip economic analysis performed in the IRP continues to be
important and has expressed concem with the Company's Colstrip analysis in the last three IRP
cycles. In the 2021 IRP, the Company changed how Colstrip is modeled to help address one of
Staff s concerns. Staff appreciates the change and believes it is an improvement over previous
IRP modeling methods. However, Staff remains concerned with Colstrip being removed in202l
in the PRS and how removing Colstrip in202l may affect reliability. In addition, Staff would
like to see more progress toward a Colstrip analysis that accurately quantifies the impact of
different exit dates on reliability, cost, and risk to Idaho customers.
In previous IRPs, the Company chose a limited number of years to evaluate the retirement
of Colstrip. Staff has recommended evaluating more years for retirement or allowing the model
to evaluate every year possible. In the 2021 IRP, the Company allowed the Colstrip plant to
remain in the Idaho portfolio in any year it remains economic. IRP at 2-18. Staff believes this
modeling change is an improvement because it provides a resource portfolio and coal-plant exit
scenario that serves as a least-cost bookend to compare against environmental policy-driven
scenanos
Staff s concem with Colstrip being removed in202l in the PRS is related to the Company
not providing evidence that retiring Colstrip in2021is possible. Staff does not believe the PRS
should include resource retirements that are not feasible, especially for a large capacity resource
that rely on unrealistic lead times to close the plant. Staff is also concerned that by making
unrealistic exit date assumptions, portfolios will likely reflect incremental replacement resources
that are not optimal for the system by limiting the types of replacement resources to those that
only require a short lead time to implement. Staff believes it is appropriate to evaluate retiring
5STAFF COMMENTS AUGUST II,2O21
Colstrip in202l as a scenario for comparison pu{poses, but the Company should not include
unrealistic retirement dates for Colstrip in its PRS portfolios.
An additional concern related to removing Colstrip in202l is how this would impact
reliability. The Company's reliability analysis focuses primarily on a single year--2030-which
Staff believes is a flaw in the current reliability analysis. Staff believes if the Company is going
to retire Colstrip in the coming years, the Company should do more analysis to ensure retiring
Colstrip early will not aflect reliability.
Staff understands the Company's status as a minority partner in the Colstrip plant and its
existing contractual obligations create a difficult situation for modeling Colstrip in the IRP.
Commission Order No. 34814 requires the Company to file an annual update on its Colstrip
ownership interest by October I . See Case No AVU-E- I 9-01 . Staff looks forward to reviewing
the updated Colstrip economic analysis that will be provided in the annual update later this year
and would like to see progress in understanding the reliability, cost, and risk impacts to Idaho
customers across altemative Colstrip exit dates.
Portfolio Optimization by State and for the System
The IRP portfolio optimization model changed in the 2021 IRP allowing new resources to
be added to the system or assigned to a specific state to understand the drivers and cost
responsibility of state specific resource decisions. IRP at 2-19. The Company states the reason
for the modeling change was, "to better understand the impacts of Washington State policies'
effect on Idaho." IRP at 1l-3. Staff believes the modeling changes improve the IRP and will
help to better understand the impacts of those policies. However, Staff has concerns with the
method the Company used to divide load and resources in the IRP and believes that whatever
methods are used, they should maintain the benefits of the system but allow for state-by-state
needs and constraints.
Loads and resources are divided using the Production-Transmission ("PT") ratio in the
2021 IRP. IRP at 2-18. The PT ratio is the current state allocation method used for generation
and cost allocation and is based on the breakdown of load between states. See Response to Staff s
Production Request No. 2 (a). Staff believes using the PT ratio to divide existing resources is
reasonable but believes using the PT ratio to divide all state specific attributes may need to be
reevaluated in future IRPs. The Company is developing a multi-jurisdictional workshop to
6STAFF COMMENTS AUGUST LI,2OZI
discuss and consider alternative methods to allocate costs and benefits of resources between Idaho
and Washington. See Response to Stafls Production Request No. 2 (b). Staff believes this
workshop is important to developing methods of resource planning that maintain the benefits of
planning and operating as a system, identify state specific resource needs, and aid in the update of
the current state allocation methods as state specific policies continue to change in the coming
years.
Energy Efficiency and Demand Response Programs
In Staff s 2019 IRP Comments, Staff outlined concems that the Company's method for
energy efficiency savings overstated the peak load reduction obtained from the energy efficiency
programs. Since that filing and the Settlement and Stipulation of AVU-E-18-12, the Company
has significantly improved its accuracy in providing reliable estimated energy efficiency savings.
Staff appreciates the Company's efforts to improve the accuracy of its estimated energy efficiency
savings from these programs and believes the results from the most recent prudency filing-Case
No. AVU-E-20-13-will assist the Company in accurately quantifying energy efficiency's
contribution to reducing peak load.
In the Company's PRS, energy efficiency will reduce the Company's future load growth
by 68%by 2045,with23Yo of the new energy efficiency savings coming from Idaho customers.
In total, 47%o of energy efficiency savings are set to be achieved by the Company's commercial
customers and3TYo to be achieved by the residential customers. Additionally, in the PRS,
demand response programs are estimated to reduce 16 MW of peak load by 2024 for the
Company's Idaho service territory with 8 MW peak load reduction to be achieved from Third
Party Contracts and another 8 MW to be achieved from Variable Peak Pricing and Time of Use
Rates. Staff looks forward to reviewing how the Company can utilize demand response programs
to mitigate the need for additional supply-side capacity resources.
Public Participation
The Company conducted six virtually held TAC meetings. During these meetings, the
Company provided details on the mechanics of its planning strategies, tools, and results.
Meetings were conducted in an interactive manner to include feedback and input from TAC team
7STAFF COMMENTS AUGUST II,2O21
members and stakeholders. Topics presented and discussed were made available on the
Company's website.
In addition to TAC meetings, the Company conducted an electronic IRP public outreach
meeting and a virtual meeting with the Washington UTC where interested Idaho parties could
participate. Both meetings allowed participants to ask questions about the IRP and provide
feedback.
STAFF RECOMMENDATION
Staff recommends the Commission acknowledge Avista's 2021 IRP filing. Additionally,
Staff recommends improvements toward the following goals as discussed above:
. Improving the IRP reliability analysis to include resulting LOLP/LOLE of all
competing portfolios across the planning time horizon;
o Evaluating and determining the amount of market purchases the Company can rely on;
. Improving the Colstrip analysis to quantify the impact of different exit dates on
reliability, cost, and risk;
o Evaluating how load and resources are divided in the portfolio optimization to
maintain the benefits of the system but allow for state-by-state needs/constraints; and
o Accurately quantifuing energy efficiency and determining how to utilize energy
efficiency and demand response to help meet future load growth.
ltbRespectfully submitted this day ofAuglst2}2l.
Dayn
Deputy Attorney General
Technical Staff: Michael Eldred
Kevin Keyt
Josh Haver
Yao Yin
Taylor Thomas
i: umisc/comments/avue2 l.4dhmekkjh comments
8STAFF COMMENTS AUGUST II,2O2I
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE TI{IS IIth DAY OF AUGUST 202I,
SERVED TIIE FOREGOING COMMEI{TS OF Tm COMIIflSSION STAFF, IN
CASE NO. AW.E-zt-M, BY E.MAILING A COPY TIIEREOF, TO THE
FOLLO\MING:
SHAUIT{ BONFIELD
DAVID JMEYER
AVISTA CORPORATION
POBOX3727
sPoKAl{E WA99220-3727
E-MAIL: [e-mail]
david.me]rer@avistacom. com
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
TION 6TH ST
BOISE tD 83702
E-MAIL : [e-mail]
CERTIFICATE OF SERVICE