20220505Comments.pdf

RILEY NEWTON
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. II2O2
IN THE MATTER OF AVISTA
CORPORATION'S COMPLIANCE FILING
TO UPDATE AND ESTABLISH ITS
CAPACITY DEFICIENCY PERIOD TO BE
USED FOR AVOIDED COST
CALCULATIONS
CASE NO. AVU-E-22-02
COMMENTS OF THE
COMMISSION STAFF
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Street Address for Express Mail:
1 I33I W CHINDEN BLVD, BLDG 8, SUITE 2OI-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Riley Newton, Deputy Attomey General, submits the following comments.
BACKGROUND
On February 22,2022, Avista Corporation dlblaAvista Utilities ("Company") applied to
the Commission for approval of its capacity deficiency period used for its avoided cost
calculations, with a first deficit occurring November 1,2026.
Under the Public Utility Regulatory Policies Act of 1978 ("PURPA"), the Commission
has established a surrogate avoided resource ("SAR") method and an Integrated Resource Plan
("IIU"'; method to calculate avoided cost rates for qualiffing facilities ("QFs"). Under both
methods, a QF receives capacity payments only after the applicable capacity deficit date is
reached. Order Nos. 33377,33159, and 33898. The first deficit date under the IRP method will
1STAFF COMMENTS MAY 5,2022
float to reflect the changes in the QF queue, while the first deficit date under the SAR method
will not float to reflect the changes in the QF queue. Order No. 33933.
The capacity deficiency period is determined through the IRP planning process and is
submitted to the Commission in a proceeding separate from the IRP docket. The capacity deficit
date determined in the IRP process is presumed to be a correct starting point but will be subject
to the outcome of the capacity deficiency case. Order No. 32697. The capacity deficiency case
is required to be filed after the Commission has acknowledged a utility's IRP, rather than upon
its IRP filing. Order No. 33917.
On February 22,2022, the Company filed the Compliance Filing Application
("Application") to establish the first deficit date of November 1,2026, primarily driven by the
expiration of the Lancaster Power Purchase Agreement ("PPA") on October 31,2026.
Application at 4.
STAFF REVIEW
Staff reviewed the Company's Application, the associated Load and Existing Resource
Balances ("L&Rs") of four scenarios using different Colstrip retirement dates, and the responses
to Staff s production requests. Based on this review, Staff recommends the Company: 1) use the
most recent load forecast; 2) update the Colstrip Losses Adjustment in the load forecast; and 3)
use the Colstrip retirement dates of 2034 and 2036 for Units 3 and 4, respectively, as used for the
capacity deficiency date in OrderNo. 34981.
Staff also reviewed the new method used to produce the L&Rs. Staff believes that it
provides neither clear evidence of the Company's proposed first capacity deficiency date of
November 1,2026, nor a means to determine the specific deficiency date impacts of its
recommended adjustments. Staff recommends that the Company provide an updated L&R at a
monthly level that incorporates Staff s recommended adjustments.
Finally, Staff recommends that if the Commission decides to re-evaluate when the
capacity deficiency date case should be filed in Case No. IPC-E-21-09, a generic docket should
be opened because the decision may need to consider factors affecting all three Idaho electric
utilities.
2STAFF COMMENTS MAY 5,2022
Load Forecast
The load forecast used in the L&R was developed for the202l IRP, which was filed with
the Commission on March 31,2021. Staff recommends that the Company update the L&R using
the latest load forecast available. The Commission finds it appropriate for a utility to use the
most updated information available in calculating its capacity deficiency date. See Order
No. 33958. Staff requested the latest load data in Production Request No. 2 but did not receive it
and was not provided an explanation why one was not available or provided. Staff believes that
a more recent load forecast should be available because the Company stated that it planned to
have an updated load forecast in November of 2021 . See Page 2 of the Application in Case
No. AVU-E-21-14.
The Company's load forecast includes a transmission loss adjustment associated with
Colstrip generation. Staff recommends that the Company update the adjustment to reflect the
retirements of Colstrip Units 3 and 4 in 2034 and 2036 for Idaho, as used for the capacity
deficiency date in Order No. 34981.
Resources in the L&R
Staff s evaluation of resources in the L&R is based on the principle of whether a resource
is "available" and/or "existing"l, unless exceptions are justified. Staff s review focused on the
Chelan Public Utility District ("PUD") hydro contract, Colstrip retirement dates, and recent
PURPA contracts submitted to the Commission.
Chelan PUD Hydro Contract
The Chelan PUD Hydro Contract is not included in the proposed L&R. The Company
signed a hydro contract with Chelan PUD in December 2021, which is not included in the
proposed L&R. Response to Staff s Production Request No. 4. Because this project has not
been approved by the Washington Utilities and Transportation Commission, it should not be
included in the L&R until the contract is approved.
I The Commission expressed its expectation for focusing on "available" and/or "existing" resources when deciding
whether transmission capacity should be included in the L&R in Order No. 33425.
aJSTAFF COMMENTS MAY 5,2022
Colstrip Retirement Dates
The Company uses four different scenarios of Colstrip retirement dates in the Application
and develops four different L&Rs, all of which show the same first annual deficit of 2027. The
Commission established the capacity deficiency date based on Colstrip exiting in2025 for Units
3 and 4 for Washington and exiting in2034 and2036 for Idaho. See Order No. 34981 .
Recently Submitted PURPA Contracts
University of Idaho's PURPA contracts are not included in the proposed L&R. Staff
agrees with this treatment, because the Commission has not approved them and even if they are
approved, Staff does not believe the energy supplied to the system should be included as a firm
resource. Since the L&R was developed, the Company has signed two "as-available" PURPA
contracts with the University to purchase excess energy from its solar facility and cogeneration
facility, after the energy generated by the facilities is used to meet the University's load. See
Case Nos. AYU-E-22-03 and AYU-E-22-04. Because these projects have not been authorized
by the Commission, Staff agrees that they should not be included in the L&R until the
Commission approves them. Staff further believes that, because the energy from these projects
will be purchased on an as-available basis, the energy is considered non-firm, which cannot be
relied on to contribute capacity and should not be included as a resource to meet future capacity
needs.
L&R Method
The Company changed its method for developing the L&R in this filing and used the
PRiSM model to generate the capacity deficiency date. However, the PRiSM model does not
have the capability to provide the deficiency information on a monthly level and instead only
reports a first full dehcit year of 2027, which does not support the Company's request for a first
capacity deficiency date of November 1,20262. Staff recommends that the Company provide a
new L&R, incorporating the load adjustments and the required Colstrip retirement dates at a
monthly level, as done in previous capacity deficiency cases. Staff believes that this will ensure
the data supports the capacity deficiency date result.
2 The Company believes November 1,2026, is the first capacity deficiency date because the Lancaster PPA expires
on October 31,2026. Seethe Application.
4STAFF COMMENTS MAY 5,2022
Filing Schedule
If the Commission decides to re-evaluate when the capacity deficiency date case should
be filed in Case No. IPC-E-21-09, Staff believes that a generic docket should be opened to
ensure all three utilities can provide input. The Company compared the advantages and
disadvantages of filing the deficiency date case at the time when the IRP is submitted, and it
concluded that the advantages outweigh the disadvantages. See Response to Staff s Production
Request No. 1. The Company stated that the advantages include: l) the information would be
current; 2) the filing would be added as a part of the IRP submission process; and 3) the filing
date would be known. The main disadvantage is the Company's heavy workload during that
timeframe.
First, Staff continues to believe that regardless of when the first capacity deficiency date
case should be filed, the date should be determined based on the latest and most accurate
information. The Commission has expressed this expectation in prior orders. Order No. 32697
("The capacity deficiency determined through the IRP planning process will be the starting point
and will be presumed to be correct subject to the outcome of the proceeding.""); Order
No. 33958 (It is appropriate for a utility to use the most updated information available in
calculating its capacity deficit date.); Order No. 34918 (PacifiCorp is required to use the most
recent peak-load forecast when its next capacity deficiency case is filed.)
Second, Staff believes the case does not have to be part of the IRP submission process,
because the first capacity deficiency case can be a separate case from the IRP case. Order
No. 32697 states that the capacity deficit date determined in the IRP process is presumed to be
correct as a starting point but will be subject to the outcome of the capacity deficiency case.
Third, Staff agrees with the Company that if the case is filed with the IRP, it would be
filed on a known date, whereas filing after the acknowledgement of the IRP relies on the
Commission's schedule for processing the IRP case.
STAFF RECOMMENDATIONS
Staff recommends that the Company file an updated L&R as a compliance filing that
incorporates the following changes:
1. Use the most recent load forecast;
2. Update the Colstrip Losses Adjustment in the load forecast; and
5STAFF COMMENTS MAY 5,2022
3. Use the Colstrip retirement dates of 2034 and 2036 for Units 3 and 4 in Idaho as
used for the capacity deficiency date in Order No. 34981.
Staff also recommends that the Company present the updated L&R on a monthly level
instead of an annual level so that the L&R data can accurately support the new first capacity
deficiency date that is ultimately determined.
Lastly, Staff recommends that if the Commission decides to re-evaluate when the
capacity deficiency date case should be filed in Case No. IPC-E-21-09, a generic docket should
be opened because the decision may need to consider factors affecting all three Idaho electric
utilities.
*Respectfully submitted this day of May 2022.
Riley ewton
Deputy Attorney General
Technical Staff: Yao Yin
i :um isc/commens I av w22.2myy comments
6STAFF COMMENTS MAY 5,2022
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 5th DAY OF MAY 2022, SERVED
THE FOREGOING COMMENTS Of,' TIIE COMIITSSION STAFF, IN CASE
NO. AVU-E-22-02, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
SHAWN BONFIELD
SR MGR REGULATORY POLICY
AVISTA CORPORATION
PO BOX3727
SPOKANE WA99220-3727
E-MAIL: [e-mail]
MICHAEL G ANDREA
SENIOR COUNSEL
AVISTA CORPORATION
PO BOX3727
SPOKANE WA99220-3727
E-MAIL : [e-mail]
CERTIFICATE OF SERVICE