20231204Reply Comments.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane, Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170

December 4, 2023

Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd. Bldg. 8, Ste. 201-A
Boise, Idaho 83714

RE: Case No. AVU-E-23-05 - Avista Utilities 2023 Electric Integrated Resource Plan – Reply
Comments

Dear Commission Secretary:

Avista Corporation, dba Avista Utilities (Avista or the Company), submits the following comments
in response to comments received from the Idaho Public Utilities Commission Staff (Staff) in the
matter of the Company’s 2023 Electric Integrated Resource Plan (IRP) in Case No. AVU-E-23-05.
Avista appreciates the time and diligence of Idaho Staff and the valuable inputs given during the
Technical Advisory Committee (TAC) process and looks forward to continued collaboration for
planning in future IRPs.

The following comments are in response to Staff’s recommendations.

1) Report to the Idaho Commission regarding the status of the CCA rules and its
impact on Idaho customers, in a timely manner.

Response: Avista agrees with Commission Staff that increased communication, especially for
the CCA impacts, would be beneficial. Avista proposes to set up a re-occurring meeting with
Staff to discuss any IRP related issues, including CCA or other topics of interest. Avista will
reach out to staff and plan its first meeting in January 2024.

2) Demonstrate through evidence that the QCC values of its resources are
representative of the capacity contributions of its resources at the Company's
system peak loads in the next IRP.

Response: Avista agrees the WRAP QCCs are determined using regional loads and resource
portfolio. This objective is required to ensure there is enough resources within the region to
meet both peak load and loads during potential resource deficiencies. Avista will be asked to
bring resources to the region to meet region peak load. The program is designed to ensure the
region’s resources are also available to meet Avista’s own load. This program is similar to the
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Monday, December 4, 2023 3:28:47 PM
IDAHO PUBLIC
UTILITIES COMMISSION

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Western Power Pool’s operating reserve sharing mechanism, where if the region plans
together, the entire system will lower costs by not planning and relying on individually owned
resources. Once the WRAP program is binding, the region and Avista will require less
resources to meet load than historical resource planning methodologies where the utility did
not plan on mutual assistance.

As discussed in the capacity deficiency comments addressing a similar concern,1 Avista
proposes to continue to use the WRAP accounting mechanism for the load and resources
balance and continue to use the WRAP’s QCC values for its resources. Although Avista will
conduct an Avista load only reliability study to determine an appropriate Planning Reserve
Margin (PRM) to serve its loads while limiting market purchase during peak load hours to
330 MW. Avista would then select new resources meeting this target PRM rather than the
WRAP’s PRM in the 2025 IRP.

3) Improve the IRP reliability analysis to measure resource adequacy metrics on all
portfolios under evaluation across the full planning horizon.

Response: Staffs request to conduct reliability planning for all years and all portfolios is a
useful and interesting request, but unfortunately the time and computing capability to fulfill
the request would be difficult to achieve. For example, in the 2021 IRP, it to took two days of
computing time to conduct one year of reliability analysis for one portfolio. At this time, the
model used to conduct this analysis was a single year model and would require significant
resource time to reconfigure it to run for multiple years. Using this historical view and the 17
portfolio scenarios of 22 years of the 2023 IRP forecast would take 748 computing days to
complete this task, plus resource time for model development and de-bugging. While Avista
could employ multiple computers or the cloud to complete such a task, it would be at a
significantly increased cost to customers. Avista instead chose to use sample years for specific
scenarios to ensure reliability at the lowest cost for customers.

Avista did forgo this analysis in the 2023 IRP due to moving to a WRAP designed resource
adequacy metric. Given the agreement to conduct additional reliability work for the 2025 IRP,
Avista will likely have to limit this analysis given the time to conduct this work and budget
constraints. Avista will update the TAC on the progress of this study at the July 2024 meeting.
It is worth noting Avista acquired the Plexos Model from Energy Exemplar to assist in
streamlining these studies. Avista has yet to test the software in this capacity but anticipates
significant time to conduct such analysis and meeting this request could be a challenge.
Further, reliability planning is relative to what level of reliability is acceptable. Avista seeks
staff’s opinion on what level of reliability is acceptable.

4) Develop a method to determine the PRMs that are explicitly derived from the
Company's reliability target using appropriately developed capacity contribution
values.

Response: As discussed in the prior response, Avista will select new resources meeting a new

1 AVU-E-23-12.

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PRM based on Avista’s loads rather than the WRAP’s PRM, Avista believes this change will
satisfy Staff’s request.

5) Model future Idaho DR programs within the WRAP as a reduction to P50 peak
load.

Response: The issue to treat DR as a load reduction or a resource has been an ongoing debate
in load and resource balance accounting. For modeling purposes, Avista’s 2023 IRP chose to
treat DR as a resource rather than a load reduction. The resulting effect of this choice is
deciding whether or not DR receives a QCC for its ability to reduce load or the load
reduction’s QCC plus the planning reserve margin. If DR is modeled as a load reduction,
Avista would then have lower planning reserves. While Avista believes DR should be treated
as a resource and not reduce the planning reserve requirements, the WRAP’s methodology
allows this reduction in the P50 peak load. Given Avista intends to follow the WRAP’s
accounting methodology, Avista will make this change in the 2025 IRP.2

6) Consider and use the avoided costs provided in Supplement to Production Request
No. 8 as the most recently filed avoided costs for the purposes of program planning
and future cost-effectiveness calculations.

Response: Avista agrees with this request for avoided cost calculation related to acquiring
resources or energy efficiency. Avista has reservation regarding the full impact of this request
as discussed in the Company’s response to No. 7 below.

7) Exclude the national carbon tax and similar national environmental adders that are
not known and final from its baseline portfolio.

Response: IRPs are intended to select a resource strategy to meet future unknown loads in an
unknown future of market conditions and public policy. At this time, it is unknown if there
will be a national carbon tax, cap and trade, or any other environmental regulation will impact
Idaho customers. It is Avista’s opinion to include all potential costs given their probability of
happing in the future. In this case, Avista assumed there is a 33% probability of a national
carbon policy being enacted in 2030. If Avista does not include this risk, it may select
resources that will negatively impact Idaho customer if such a policy is enacted.

Given Avista does not currently see the need for new generation resource until the mid-
2030’s, this change will only impact energy efficiency selection until a generation resource
need is closer. The resulting impact is Avista’s demand will be higher and make it more
challenging for the Company to meet the potential future policy. Further, Avista’s IRP
represents meeting system loads for both Idaho and Washington customers. Input from
various interested parties do not always align with Idaho’s desires. If the IRP is to be kept as
a single document and analysis for both states with shared resources, it may be impossible to
separate interests of some parties in each state. Given these concerns, Avista is willing to
explore with Staff the implications and options of separating resources and/or resource plans

2 In modeling practice, DR will be modeled as a resource, but receive its QCC value plus the PRM.

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from Washington.

8) Exclude other state's environmental adders, known or otherwise, that do not apply
to Idaho from its baseline portfolio.

Response: Avista agrees Idaho should not pay for other states specific requirements unless
the cost is specifically related to doing business within the state (i.e. taxes). The challenge
with limiting impacts of others states in planning, power supply operations, and cost recovery
points of view is Avista’s generation system is shared with Washington. All resource costs
and benefits are split using the PT ratio, thus Avista is unable to isolate costs to each state
unless it allocates resources to each state’s customers in a way that is not a ratio. Given these
concerns Avista is willing to explore with Staff the implications and options of separating
resources and/or resource plans from Washington. As shown in Production Request No. 8 and
other analysis, Avista is able to separate costs and plan resources on an individual state point
of view, but when it comes to actual operations/cost recovery of assets it will be challenging
to protect Idaho customers from all impacts of not-least cost resource decisions from other
states. By continuing to model Avista’s system as separate in planning, it does not represent
the true cost to Idaho customers unless resources are no longer allocated using the PT ratio in
the future.

If you have any questions regarding these comments, please contact James Gall at 509-495-2189 or
[e-mail], or myself at 509-495-2782 or [e-mail].

Sincerely,

/s/ Shawn Bonfield

Shawn Bonfield
Sr. Manager of Regulatory Policy & Strategy