20170807Response to Expedited Protest.pdf

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DONOVAN E. WALKER
Lead Counsel
[e-mail]
August 7,2017
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington
Boise, ldaho 83702
Re: Case No. GNR-E-17-02
Review of Surrogate Avoided Resource (SAR) Methodology
Case No. IPC-E-17-07
Update to Published Avoided Cost Rates Based on the Updated Natural
Gas Price Forecast of the U.S. Energy lnformation Administration (ElA)
Dear Ms. Hanian
Enclosed for filing in the above matters please find an original and seven (7)
copies of the Response to Expedited Protest and Motion of the Joint Parties and ldaho
Power Company's Motion for Clarification.
yours,
Donovan E. Walker
An IDACORP Company
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
(il/
DEW:csb
Enclosures
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
!N THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY TO
REVIEW THE SURROGATE AVOIDED
RESOURCE (SAR) METHODOLOGY
FOR CALCULATING PUBLISHED
AVOIDED COST RATES
CASE NO. GNR-E-17-02
?P t.j4.
*i*.'r
IN THE MATTER OF THE ANNUAL
UPDATE TO PUBLISHED AVOIDED
COST RATES BASED ON THE
UPDATED NATURAL GAS PRICE
FORECAST OF THE U.S. ENERGY
TNFORMATTON ADMr NTSTRATTON (ErA)
CASE NO. IPC-E-17-07
RESPONSE TO EXPEDITED
PROTEST AND MOTION OF THE
JOINT PARTIES AND IDAHO
POWER COMPANY'S MOTION
FOR CLARIFICATION
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ldaho Power Company ("ldaho Power" or "Company") hereby respectfully
submits the following response to the Expedited Joint Protest and Joint Motion in
Opposition to Modified Procedure and Joint Motion to Convene Technical Hearing filed
by J. R. Simplot Company ("Simplot"), Renewable Energy Coalition, and Tamarack
Energy Partnership (hereafter, "Joint Parties") on August 4, 2017. Additionally, ldaho
Power herein respectfully moves the ldaho Public Utilities Commission ("Commission")
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 1
DONOVAN E. WALKER (!SB No. 5921)
ldaho Power Company
1221\Nest ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwa lker@ id a hopower. com
for an order clarifying the scope of this proceeding and the issue or issues for
consideration contained therein.
ldaho Power agrees that Modified Procedure is appropriate for the Commission
to consider the limited issue that was initially raised by Idaho Power in its Response and
Objection to the natural gas forecast proposed by Commission Staff ("Staff') in Case
No. IPC-E-17-07. However, if the Commission's intent is to conduct a proceeding with a
much broader scope regarding changes to the surrogate avoided resource ("SAR")
methodology, then a new matter supported by testimony and a technical hearing may
be appropriate.
t.
THE SCOPE OF THIS PROCEEDING IS PROPERLY LIMITED TO WHICH
SUBSET OF THE U.S. ENERGY INFORMATION ADMINISTRATION ("EIA")
ANNUAL ENERGY OUTLOOK'S NATU L GAS FORECAST IS APPROPRIATE
FOR IDAHO POWER IN THE 2017 ANNUAL UPDATE OF SAR PUBLISHED
AVOIDED COST RATES.
As referenced in ldaho Power's Response and Objection initially filed in Case
No. IPC-E-17-07
Prior to the ldaho Public Utilities Commission's
("Commission") Order No. 32697 (December 18,2012), the
surrogate avoided resource ("SAR") avoided cost
methodology utilized the natural gas forecast published by
the Northwest Power and Conservation Council ('NPCC').
However, because updates to NPCC's forecast were
relatively infrequent in a volatile natural gas price market, the
Commission, with Order No. 32697, moved to annual natural
gas forecast updates using the EIA natural gas forecast.
The Commission directed, "lT lS FURTHER ORDERED that
natural gas prices utilized in the SAR Methodology be
updated annually, on June 1 of each year, with the most
recent natural gas forecasts provided by EIA's Annual
Energy Outlook." Order No. 32697, p. 52; See a/so, Order
No. 32697, pp.7-11, 16.
pp. 1-2
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 2
ln each subsequent year thereafter, the Commission would update the SAR
avoided cost rates for each utility by initiating a case for each utility with a letter from the
Deputy Attorney General representing Commission Staff proposing the adjustment to
published avoided cost rates based upon the updated natural gas forecast from the EIA
Annual Energy Outlook. Staffs 2017 letter to the utilities states
ln accordance with the methodology approved in Order No.
32697, the "reference case" natural gas price forecast for the
Mountain Region's Electric Power sector included in EIA's
Annual Energy Outlook serves as the basis for computing
avoided cost rates. ln Order No. 32697, the Commission
also found that the final release of Annual Energy Outlook
automatically triggers a recalculation of the published
avoided cost rates. ln Order No. 32802, the Commission
clarified that an update should occur on June 1 or within 30
days of the final release of the Annual Energy Outlook,
whichever is later.
EIA released the Annual Energy Outlook 2017 on January 5,
2017. Staff has used this forecast to compute the new
published avoided cost rates. A copy of the relevant natural
gas price forecast is attached.
Also attached are updated published avoided cost rates for
all three utilities. Please review the rates and file your
respective responses (either written or via e-mail) with the
Commission on or prior to June 10,2017.
Letter from Daphne J. Huang, Deputy Attorney General, May 16,2017, p.2.
As evidenced in the above-quoted letter, the process utilized by the Commission
is that the annual update is an automatic recalculation of the published avoided cost
rates initiated by the final release by EIA of the Annual Energy Outlook natural gas
forecast. ln all prior years since 2012, ldaho Power has responded that it agrees with
the calculations performed by Staff. However, for this year's update, ldaho Power did
not agree, and thus filed its Response and Objection to Staffs proposed calculation.
ldaho Power's Response and Objection does not contest the underlying
methodology used to update SAR avoided cost prices with the most recent gas
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 3
forecast, nor does ldaho Power's Response and Objection contest the SAR
methodology itself. Equally inapplicable is Simplot's claim that somehow issues related
to the prudence of energy conservation and demand-side management are relevant in
this proceeding. Petitions to intervene do not expand the issues in a case. ldaho
Power's Response and Objection points out that the Commission's prior orders directed
the use of "EtA's Annual Energy Outlook"l but did not further specify the data subset of
EIA's Annual Energy Outlook, and the Annual Energy Outlook contains several data
subsets. ldaho Power has not always used the EIA Annual Energy Outlook in its
lntegrated Resource planning process, but for the 2017 lntegrated Resource Plan
('lRP"), it does. The EIA Annual Energy Outlook natural gas forecast subset used by
ldaho Power in its 2017 lRP, updated with the January 2017 EIA Annual Energy
Outlook, would result in published avoided cost rates that are approximately $8 per
megawatt-hour lower than those proposed by Staff, and subsequently implemented by
the Commission, in the annual update based upon the Mountain Region subset of EIA's
Annual Energy Outlook. However, in both of those scenarios-that used by ldaho
Power's 2017 IRP and that used by Staff in IPC-E-17-07-the Commission's ordered
EIA Annual Energy Outlook is utilized.
Because the Commission has not specified which specific natural gas forecast is
to be used other than "ElA's Annual Energy Outlook" and both Commission Staff and
ldaho Power use a natural gas forecast from the 2017 EIA Annual Energy Outlook, the
issue and question raised by ldaho Power in its Response and Objection was and is
limited to the Commission's determination as to which subset of the EIA Annual Energy
Outlook is appropriate for use in the Commission's automatic annual recalculation of
'Order No. 32697, pp. 16, 52; Oder No. 32802, p. 3
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 4
published avoided rates for ldaho Power for the 2017 update. ldaho Power has raised
no issue other than which EIA Annual Energy Outlook data subset is appropriate.
It should be noted that ldaho Power's Response and Objection is specific to
ldaho Power. The Commission opens a utility-specific case simultaneously for each
utility for the annual published avoided cost rate update. ln this instance, coincident
with the May 16, 2017, initiating letter from the Deputy Attorney General, the
Commission initiated Case No. IPC-E-17-07 for ldaho Power, Case No. PAC-E-17-05
for Rocky Mountain Power, and Case No. AVU-E-17-02 for Avista Utilities. ldaho
Power is not aware of whether the use of EIA's Annual Energy Outlook Mountain
Region subset natural gas forecast does or does not correspond to the other utilities'
updates, but ldaho Power does note that both Rocky Mountain Power and Avista
Utilities filed letters agreeing to Staffs calculated rates.
When contacted by counsel for Commission Staff regarding the process for
addressing ldaho Power's Response and Objection in Case No. IPC-E-17-07, counsel
for ldaho Power agreed that it would be fair for the Commission to take comments from
interested parties under Modified Procedure regarding the issue raised by ldaho
Power's Response and Objection, noting that neither party could recall any objection
beyond simple mathematical corrections being raised in relation to the annual SAR
published avoided cost rate updates in the past. However, ldaho Power is unclear, as
apparently are the Joint Parties, as to what the Commission intends with the treatment
of ldaho Power's Response and Objection in Case No. !PC-E-17-07, used as an
application to open a general case for all three utilities in Case No. GNR-E-17-02.
The proper scope of this proceeding is limited to the Commission determining
what EIA Annual Energy Outlook natural gas forecast should be applied to the SAR
published avoided cost rates for ldaho Power with the 2017 annual update. As stated,
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 5
this is an automatic annual update, calculated and published by the Commission itself.
Neither the utilities nor the qualifying facility parties conduct this calculation.
Commission Staff maintains the SAR model, conducts the published avoided cost rate
calculations for each utility, and the Commission publishes the rate tables itself. The
Commission would be well within its rights and authority to determine which EIA Annual
Energy Outlook natural gas forecast it intends to use, and publish its standard SAR
based rates accordingly with no further process and procedure under its previously
directed automatic update of published avoided cost rates. lf the Commission intends
some broader examination of the SAR methodology by use of the GNR-E-17-02 case,
ldaho Power respectfully asks for clarification as to what issues the Commission wishes
to examine with regard to the methodology. Depending upon the nature of such issues,
a proper determination can then be made as to whether it is appropriate to process
such a case by Modified Procedure or with testimony and a technical hearing
ll.
THE COMMTSSION SHOULD VACATE AND CLOSE CASE NO. GNR.E.17.O2
AND PROCEED PURSUANT TO MODIF D PROCEDURE UNDER THE LIMITED
SCOPE OF IDAHO POWER'S RESPONSE AND OBJECTION TO STAFF'S USE
OF THE MOUNTAIN REGION SUBSET OF EIA'S ANNUAL ENERGY OUTLOOK
NATURAL GAS rN CASE NO. !PC-E-17-07.
ldaho Power attempted to clarify with the parties that the scope of this matter did
not include a request to change the methodology, but was limited to the Commission's
determination as to the appropriate EIA Annua! Energy Outlook natural gas forecast.
See the July 1 1, 2017, e-mail from Donovan E. Walker submitted as Attachment 1
hereto and incorporated herein by this reference.2 Mr. Richardson, on behalf of the
Joint Parties, replied that they agreed with ldaho Power's e-mail, but then proceeded to
misstate the scope as "input values to the avoided cost calculation." (July 12, 2017,
2 Also included in Attachment 1 are the subsequent responses and e-mails from various parties.
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION .6
e-mail from Peter Richardson, included in Attachment t hereto). ldaho Power stated in
its July 11, 2017 , e-mail-and the Company maintains the position it expressed in 201 1
in Case No. GNR-E-11-03-that use of the SAR methodology for the establishment of
proper avoided cost rates should be abandoned. However, the Company
acknowledges that the Commission rejected that position in Order No. 32697 from Case
No. GNR-E-11-03, and the Company's Response and Objection filed in this matter was
and is not intended to challenge the methodology itself. As stated to the parties, should
the parties and the Commission wish to pursue a case about changing the SAR
methodology, ldaho Power's position in such a case would be to abandon the use of the
SAR methodology altogether. Attachment 1, July 11, 2017 e-mail from Donovan E.
Walker. ldaho Power does not believe that is the current scope of this proceeding, but
admittedly it is now somewhat unclear what the Commission's intent is as to the proper
scope of this proceeding given the treatment of ldaho Power's Response and Objection
as an application to open Case No. GNR-E-17-02.
Consequently, ldaho Power agrees with the Joint Parties that the Commission
should not only vacate the Notice of Modified Procedure issued in Case No.
GNR-E-17-02, but, further, ldaho Power proposes that the Commission should also
vacate the initiation of Case No. GNR-E-17-02 and that portion of Order No. 33773
which directed, 'lT !S FURTHER ORDERED that the Commission Secretary shall
accept ldaho Power's objection in this case [Case No. IPC-E-17-O7l as an application,
and open a separate generic case in which the Commission will issue notice of
appfication and a 14-day period for petitions to intervene therein." Order No. 33773, p.
3. ldaho Power proposes that the Commission clarify that the limited scope of this
proceeding is, as described above, Iimited to which subset of the previously ordered EIA
Annual Energy Outlook's natural gas forecast is appropriate for ldaho Power in the 2017
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION .7
annual update of SAR published avoided cost rates. The Commission already has a
case which was opened and dedicated to the purpose of the annual update to ldaho
Power's published avoided cost rates, IPC-E-17-07, and ldaho Power's Response and
Objection could properly be processed by Modified Procedure comments from
interested parties within that case. Determination of this issue is neither "complex" nor
"factually intense," as maintained by the Joint Parties. lt is simply a matter of what the
Commission intends by use of "ElA's Annual Energy Outlook" in its annual automatic
recalculation of published avoided cost rates for ldaho Power. There has been no more
explanation offered for Commission Staff's use of the Mountain Region subset of EIA's
Annual Energy Outlook than there has been for any other subset, including the EIA
Annual Energy Outlook subset which ldaho Power has used for the 2017 lRP, which is
the process designed to look at the prudent acquisition of generation resources among
other things.
The Commission initiated a docket, Case No. IPC-E-17-07, with the title: Update
to Published Avoided Cost Rates to Reflect an Updated Natural Gas Price Forecast of
the U.S. Energy Information Administration (ElA), by letter from the Deputy Attorney
General. That letter provided Commission Staffs proposed updated published avoided
cost calculations for ldaho Power and stated, "Please review the rates and file your
respective responses (either written or via e-mail) with the Commission on or prior to
June 10,2017." Letter from Daphne J. Huang, Deputy Attorney General, May 16,2017,
p. 2. ldaho Power had previously sent an e-mail to Staff raising the issue as to the
proper use of the 2017 EIA Annua! Energy Outlook naturat gas forecast3 and
subsequently filed its Response and Objection to Staff's proposed avoided cost rates on
May 24, 2017. lt naturally follows that it would be proper to process ldaho Power's
3 See Attachment 2 hereto, incorporated herein by this reference.
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 8
Response and Objection in the case that was initiated for consideration of that particular
issue, and to which ldaho was directly responding.
m.
CONCLUSION
ldaho Power respectfully asks the Commission to clarify the proper scope of this
matter. ldaho Power, as wel! as the Joint Parties, appear unsure and without sufficient
guidance and direction as to what the proper scope of this proceeding is and should be.
ldaho Power believes that the scope of this matter is limited to the narrow issue as to
which subset of the EIA Annual Energy Outlook's natural gas forecast is appropriate for
ldaho Power in the 2017 annual update of SAR published avoided cost rates. As such,
it should properly be pursued by Modified Procedure as an ongoing part of the case
initiated for that purpose, IPC-E-17-07. Should the Commission desire and intend a
broader proceeding that examines and/or challenges the methodology itself or as the
Joint Parties propose, the "input values to the avoided cost calculation" or the prudence
of energy conservation and demand-side management, then these issues should be
pursued separately from the annual update based upon EIA's Annual Energy Outlook
natural gas forecast for ldaho Power. Modified Procedure is appropriate for the narrow
scope of determining the proper subset of EIA's Annual Energy Outlook natural gas
forecast. lf, however, the Commission intends a broader scope, then it may be more
appropriate to have a more formal process and procedure including testimony and a
technical hearing.
Respectfully submitted this 7th day of August 2017 .
DONOVAN E KER
Attorney for ldaho Power Company
RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 9
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 7th day of August 2017 I served a true and
correct copy of the RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE
JOINT PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION
upon the following named parties by the method indicated below, and addressed to the
following:
Gommission Staff
Daphne Huang
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-0074
J. R. Simplot Company
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
Avista Corporation
Michael G. Andrea, Senior Counsel
Avista Corporation
1411 East Mission Avenue, MSC-33
Spokane, Wash i ngto n 99202
Clint Kalich, Manager
Resource Planning and Analysis
Avista Corporation
1411 East Mission Avenue, MSC-7
Spokane, Washington 99202
Idahydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite 900
P.O. Box 2900
Boise, ldaho 83701
X Hand Delivered
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RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION - 1O
Renewable Energy Coal ition
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street
Boise, ldaho 83702
!rion Sanger
SANGER LAW, P.C.
1117 SW 53'd Avenue
Portland, Oregon 97215
Tamarack Energy Partnership
Preston N. Carter
Michael C. Creamer
GIVENS PURSLEY LLP
601 West Bannock Street
Boise, ldaho 83702
PacifiGorp, dlbla Rocky Mountain Power
Yvonne Hogle
Ted Weston
PacifiCorp dlbla Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84116
Daniel MacNeil
PacifiCorp dlbla Rocky Mountain Power
825 NE Multnomah Street
Portland, Oregon 97232
Jeffrey K. Larsen, VP
Regulation and Government Affairs
PacifiCorp dlbla Rocky Mountain Power
201 South Main Street, Suite 170
Salt Lake City, Utah 84116
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ted .weston @ pacificorp. com
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com
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RESPONSE TO EXPEDITED PROTEST AND MOTION OF THE JOINT
PARTIES AND IDAHO POWER COMPANY'S MOTION FOR CLARIFICATION . 11
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. GNR.E.I7.O2
AND
GASE NO. IPC-E-17-07
IDAHO POWER COMPANY
ATTACHMENT 1
Walker Donovan
From:
Sent:
To:
Walker, Donovan
Tuesday, July 1 1 ,2017 9:09 AM
'Daphne Huang'; MichaelAndrea; Tom Arkoosh; Sangerlaw; Peter Richardson;
[e-mail]; Greg Adams
RE: GNR-E-17-02, SAR avoided cost published rate reviewSubject:
All,
ldaho Power agrees that modified procedure is appropriate. There appears to have been some confusion, and so to
clarify, the Company's request in this matter is related to selecting the proper input, i.e., the appropriate EIA natural gas
forecast for the annual avoided cost update, and is not a request to change the methodology at this time.
Should the parties wish to pursue a case about changing the methodology, ldaho Powe/s position in such case would be
to abandon the use of the SAR methodology all-together. ldaho Power would agree that a case such as this would
require a full schedule of testimony and technical hearing. However, because our filing at present is limited to the
proper EIA gas forecast input, we believe modified procedure is appropriate for consideration of that issue.
Thanks,
Donovan E. Walker
LEAD COUNSEL
ldaho Power I Legal
208-388-5317
From: Daphne Huang [mailto:Daphne. Hua ng@ puc.ida ho.gov]
Sent: Monday, July LO,2017 11:23 AM
To: MichaelAndrea <[e-mail]>; Tom Arkoosh <[e-mail]>; Sangerlaw
<[e-mail]>; Peter Richardson <[e-mail]>; [e-mail]; Walker, Donovan
<DWalker@ ldahopower.com>; Greg Ada ms <G [e-mail]>
Subject: IEXTERNAL] GNR-E-17-02, SAR avoided cost published rate review
Good morning,
Petitions have been granted for the following parties, whose representatives l've included in this email
Avista
ldaHydro
Renewable Energy Coalition
Simplot
Tamarack Energy Partnership
Staff has conferred and proposes that we process the case by modified procedure. lf all are in agreement, we can
discuss a comment schedule. lf any party believes a process other than modified procedure is warranted, I will set up a
meeting for parties to confer in person and/or by telephone.
Please respond to all, indicating whether you agree with Staffs proposal of modified procedure, or if you believe a
conference is needed to discuss whether a technical hearing is appropriate.
Thank you,
Daphne Huang ! Deputy Attorney General
Office of the Attorney General
1
ldaho Public Utilities Commission
472 W. Washington
P.O. Box 83720
Boise, ldaho 83720-OO7 4
Direct: [phone] | Fax: (2O8)334-3762
da phne.huang@ puc.ida ho.gov
NOTICE: This email may be confidential, privileged, and exempt from public disclosure, and is intended for use only by
thenamedrecipient(s). lfyouarenottheintendedrecipient,thenyoumaynotuse,disclose,copy,ordistributethe
email or its contents. lf you believe you received this email in error, please immediately notify the sender and delete the
copy you received.
2
Walker Donovan
From:
Sent:
To:
Peter Richardson <peter@richardsonadams. com>
Wednesday, July 12,2017 2:34 PM
Daphne Huang; MichaelAndrea; Tom Arkoosh; Sangerlaw; [e-mail];
Walker, Donovan; Greg Adams
IEXTERNALI RE: GNR-E-17-02, SAR avoided cost published rate reviewSubject:
Thank you Daphne; all of the non-utility intervenors have conferred and we are in agreement that modified procedure is
not appropriate for this docket. We believe there are significant technical and factual issues implicated such that a
technical hearing is warranted.
In fact, at least two of the parties have already retained an expert witness who has agreed to review the case and prepare
testimony (after an appropriate discovery opportunity) for filing.
We do not believe a conference is needed to discuss whether a technical hearing is appropriate as we are in unanimous
agreement that one is, indeed, appropriate. That said, obviously if Staff believes further discussion on this question is
warranted we are prepared to participate in an appropriately noticed prehearing conference to discuss. We are also
prepared to participate in a prehearing conference for establishing a schedule for discovery, prefiling testimony, rebuttal
testimony and hearing dates.
Finally, as a point of clarification, we do agree with Donovan's email in which he states that this docket is not about
methodology, but is restricted to input values to the avoided cost calculation.
Peter Richardson
Richardson Adams, PLLC
515 N.27th Street
Boise, Idaho 83702
[phone] office
[phone] cell
peter@richardsonadams. com
From: Daphne Huang [mailto:Daphne.H [e-mail]]
Sent: Monday, July 1O,207711:23 AM
To: MichaelAndrea <[e-mail]>; Tom Arkoosh <[e-mail]>; Sangerlaw
<[e-mail]>; Peter Richardson <[e-mail]>; [e-mail]; Walker, Donovan
<DWa [e-mail]>; Greg Adams <[e-mail]>
Subiect: GNR-E-L7-02, SAR avoided cost published rate review
Good morning,
Petitions have been granted for the following parties, whose representatives l've included in this email:
Avista
ldaHydro
Renewable Energy Coalition
Simplot
Tamarack Energy Pa rtnership
Staff has conferred and proposes that we process the case by modified procedure. lf all are in agreement, we can
discuss a comment schedule. lf any party believes a process other than modified procedure is warranted, I will set up a
meeting for parties to confer in person and/or by telephone.
1
Please respond to all, indicating whether you agree with Staffs proposal of modified procedure, or if you believe a
conference is needed to discuss whether a technical hearing is appropriate.
Thank you,
Daphne Huang I DeputyAttorneyGeneral
Office of the Attorney General
ldaho Public Utilities Commission
472W. Washington
P.O. Box 83720
Boise, ldaho 83720-007 4
Direct: [phone] | Fax: [phone]
da [e-mail]
NOTICE: This email may be confidential, privileged, and exempt from public disclosure, and is intended for use only by
thenamedrecipient(s). lfyouarenottheintendedrecipient,thenyoumaynotuse,disclose,copy,ordistributethe
email or its contents. lf you believe you received this email in error, please immediately notify the sender and delete the
copy you received.
2
Walker Donovan
From:
Sent:
To:
Peter Richardson <[e-mail]>
Wednesday, July 19, 2017 10'.11 AM
Daphne Huang; MichaelAndrea; Tom Arkoosh; SangerLaw; [e-mail];
Walker, Donovan; Greg Adams; Preston N. Carter
IEXTERNALI RE: GNR-E-17-02, SAR avoided cost published rate reviewSubject:
Rather than crowding the Commission's schedule with a formal motion on a process question, I think it would be
valuable to, as Daphne initially suggested, "l will set up a meeting for parties to confe/'.
Peter Richardson
Richardson Adams, PLLC
515 N. 27th Street
Boise, Idaho 83702
[phone] office
[phone] cell
peter@richardsonadams. com
From: Daphne Hua ng [mailto:Daphne. Hua [e-mail] ho.gov]
Sent: Wednesday, July 19, 2017 9:59 AM
To: Peter Richardson <[e-mail]>; MichaelAndrea <[e-mail]>; Tom
Arkoosh <[e-mail]>; SangerLaw <[e-mail]>; [e-mail]; Walker,
Donovan <[e-mail]>; Greg Adams <[e-mail]>; Preston N. Carter
< prestonca [e-mail] >
Subject: RE: GNR-E-17-02, SAR avoided cost published rate review
Preston Carter, forTEP, was inadvertently omitted from the emailchain and has thus only recently been apprised of the
parties' positions on how to process this case.
To recap:
ldaho Power's filing specifically addresses the natural gas forecast input for the SAR avoided cost calculation,
and not the SAR methodology.
Staff, ldaho Power, and Avista believe the issue can be adequately addressed through comments in modified
procedure.
Simplot has represented that "allof the non-utility intervenors" agree a technicalhearing is needed.
I suggested that Simplot file a joint motion requesting a technical hearing to which any party may respond. I
have not received a response.
Alternatively, I could put the question before the Commission based on the parties' informal
representations. Let me know how the parties wish to proceed.
Thank you,
Daphne
Daphne Huang I Deputy Attorney General
Office of the Attorney General
ldaho Public Utilities Commission
472W. Washington
P.O. Box 83720
Boise, ldaho 8372O-OO7 4
Direct: [phone] | Fax: QAS\334-3762
1
da phne. h ua ng(@ puc. ida ho.gov
NOTICE: This email may be confidential, privileged, and exempt from public disclosure, and is intended for use only by
thenamedrecipient(s). lfyouarenottheintendedrecipient,thenyoumaynotuse,disclose,copy,ordistributethe
emailoritscontents. lfyoubelieveyoureceivedthisemailinerror,pleaseimmediatelynotifythesenderanddeletethe
copy you received.
From: Daphne Huang
Sent: Wednesday, July 72,2017 4:34 PM
To:'Peter Richardson'<[e-mail]>; MichaelAndrea <[e-mail]>; Tom
Arkoosh <[e-mail]>; Sangerlaw <[e-mail]>; [e-mail]; Walker,
Donova n <DWal ker@ lda hopower.com>; Greg Ada ms <G reg@ richa rdsonadams.com>
Subiect: RE: GNR-E-17-02, SAR avoided cost published rate review
Thank you, Pete. I propose that Simplot file a joint motion to set a technical hearing, setting forth the reasons why the
agreeing-parties' positions cannot be adequately presented in comments.
Any opposing party may file an answer (we could agree to have such answers filed within 7 days?). The pleadings would
be put before the Commission as a matter in progress at a decision meeting.
Thoughts?
Daphne
From: Peter Richardson [mailto:peter@richardsonada ms.com]
Sent: Wednesday, July L2,2Ot7 2:34 PM
To: Daphne Huang <[e-mail]>; MichaelAndrea <[e-mail]>; Tom Arkoosh
<[e-mail]>; Sangerlaw <[e-mail]>; [e-mail]; Walker, Donovan
< DWalker@ ldahopower.com>; Greg Adams <Greg@ richardsonadams.com>
Subject: RE: GNR-E-17-02, SAR avoided cost published rate review
Thank you Daphne; all of the non-utility intervenors have conferred and we are in agreement that modified procedure is
not appropriate for this docket. We believe there are significant technical and factual issues implicated such that a
technical hearing is warranted.
In fact, at least two of the parties have already retained an expert witness who has agreed to review the case and prepare
testimony (after an appropriate discovery opportunity) for filing.
We do not believe a conference is needed to discuss whether a technical hearing is appropriate as we are in unanimous
agreement that one is, indeed, appropriate. That said, obviously if Staff believes further discussion on this question is
warranted we are prepared to participate in an appropriately noticed prehearing conference to discuss. We are also
prepared to participate in a prehearing conference for establishing a schedule for discovery, prefiling testimony, rebuttal
testimony and hearing dates.
Finally, as a point of clarification, we do agree with Donovan's email in which he states that this docket is not about
methodology, but is restricted to input values to the avoided cost calculation.
Peter Richardson
Richardson Adams, PLLC
515 N.27th Street
2
Boise, Idaho 83702
[phone] office
[phone] cell
peter@richardsonadams. com
From: Daphne Huang Imailto:[e-mail]]
Sent: Monday, July 10,2OL7 11:23 AM
To: MichaelAndrea <[e-mail]>; Tom Arkoosh <[e-mail]>; Sangerlaw
<irion @sanger-law.com>; Peter Richardson <peter@richa rdsonada ms.com>;
<DWalker@ ldahopower.com>; Greg Adams <Greg@richardsonada ms.com>
Subject: GNR-E-17-02, SAR avoided cost published rate review
purslev.com;Walker, Donovan
Good morning,
Petitions have been granted for the following parties, whose representatives l've included in this email:
Avista
ldaHydro
Renewable Energy Coa lition
Simplot
Tamarack Energy Partnership
Staff has conferred and proposes that we process the case by modified procedure. lf all are in agreement, we can
discuss a comment schedule. lf any party believes a process other than modified procedure is warranted, I will set up a
meeting for parties to confer in person and/or by telephone.
Please respond to all, indicating whether you agree with Staff s proposal of modified procedure, or if you believe a
conference is needed to discuss whether a technical hearing is appropriate.
Thank you,
Daphne Huang I Deputy Attorney General
Office of the Attorney General
ldaho Public Utilities Commission
472W. Washington
P.O. Box 83720
Boise, ldaho 83720-007 4
Direct: [phone] | Fax: (2O8) 334-3762
daphne.huang@ puc.ida ho.gov
NOTICE: This email may be confidential, privileged, and exempt from public disclosure, and is intended for use only by
thenamedrecipient(s). lfyouarenottheintendedrecipient,thenyoumaynotuse,disclose,copy,ordistributethe
email or its contents. lf you believe you received this email in error, please immediately notify the sender and delete the
copy you received.
mcc@givens
3
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. GNR.E.17.O2
AND
GASE NO. IPC-E-17-07
IDAHO POWER COMPANY
ATTACHMENT 2
Walke Donovan
From:
Sent:
To:
Cc:
Subject:
Darrington, Michael
Thursday, May 11 ,2017 4:38 PM
Polito, Michael; Walker, Donovan
Haener, Rick
FW: SAR ModelUpdate
From: Yao Yin Ima i lto :Yao.Yi n @ puc.ida ho.gov]
Sent: Thursday, May tL,2017 3:56 PM
To: Da rrington, M ichael <M Da rringto n @ ida ho powe r.com>
Cc: Randy Lobb <[e-mail]>; Youngblood, Mike <[e-mail]>; Mike Louis
<[e-mail]>
Subject: [EXTERNAL] RE:SAR Model Update
Hello Michael,
Thanks so much for your email on the use of Mountain Region natural gas forecast in the SAR model. Since this is a
generic price forecast for all ldaho electric utilities, not just ldaho Power, we believe we should not change the forecast
unilaterally. But if ldaho Power would like to change the source of the forecast, it can file an application before the
Commission.
Thanks,
Yao Yin
Utilities Analyst
ldaho Public Utilities Commission
Tel: [phone]
From: Darrington, M ichael Imailto : M Da rrineton @ida hopower.com]
Sent: Thursday, May 4,2O\7 11:20 AM
To: Yao Yin <[e-mail]>
Cc: Randy Lobb <[e-mail]>; Youngblood, Mike <[e-mail]>
Subject: SAR Model Update
Hi Yao,
ldaho Power anticipates that pursuant to IPUC Order No. 32697, Staff will soon be updating the Surrogate Avoided
Resource ("SAR") model with the updated Energy lnformation Administration ("ElA") natural gas price forecast that was
released on January 5,2017. Since the issuance of Order No. 32697, Staff has utilized the EIA forecast as an input to the
SAR methodology, and specifically applied the Mountain Region natural gas forecast under the table titled Electric
Prices: Energy Prices by Sector and Source.
ldaho Power understands that Order No. 32697 generically requires the use of the EIA forecasts as an input to the SAR
methodology, but that order and subsequent errata orders do not specify the data series that is to be applied to the SAR
methodology. Idaho Power is concerned that the use of the Mountain Region forecast is not a representative forecast
for natural gas prices as it represents pricing in a higher priced supply basin than where ldaho Power holds firm pipeline
1
capacity and performs natural gas transactions, and consequently its use unreasonably inflates the avoided cost prices
calculated under the SAR Methodology.
ln accordance with Commission orders, the lncrementalCost lntegrated Resource Plan ("lClRP") methodology utilizes
the natural gas price forecast that ldaho Power uses in its IRP process. The Company's IRP model uses the EIA natural
gas price forecast for Henry Hub, adjusted for pricing at Sumas and ldaho City Gate, where ldaho Power holds firm
pipeline capacity and does perform natural gas transactions. Specifically, in the development of the 2017 lRP, ldaho
Power is using EIA's Natural Gas Spot Price at Henry Hub: High oil and gas resource and technology (nom $/MMBtu)
forecast. ldaho Power has presented this forecast at the IRP Advisory Council ("lRPAC") meetings, and believes the
forecast consists of a more accurate expectation of long term natural gas prices that are accessible to ldaho Power. As
presented at the January !2,2O\7,lRPAC meeting, and included below, analysis of this forecast demonstrates it follows
recent history and is in close alignment with ICE settled transactions, which are based on actualwilling buyer/willing
seller transactions.
ldaho Power recommends that pursuant to Staff s update to the SAR methodology in accordance with Order No. 32697,
that Staff use the Natural Gas Spot Price at Henry Hub: High oil and gas resource and technology (nom S/MMBtu)
forecast, that is more applicable to prices that are based on real and expected natural gas prices. ldaho Power
appreciates your consideration of this suggestion and believes that using this forecast will result in the determination of
more appropriate published avoided cost pricing.
Henry Huh Natural6as Prices (Nominal $lmmhtul
e
Please contact me with any questions.
Sincerely,
Michae! Darrington
ENERGY CONTRACTS
ldaho Power I Power Supply
Work 208-388-5946
Emai I mdarrington (oidahopower.co m
2
Walker, Donovan
From:
Sent:
To:
Cc:
Subiect:
Darrington, Michael
Thursday, May 04, 2017 11:20 AM
Walker, Donovan; Polito, Michael
Youngblood, Mike
FW: SAR ModelUpdate
From: Darrington, Michael
Sent: Thursday, May 04,2OL7 11:20 AM
To:'Yao Yin' <[e-mail]>
Cc: '[e-mail]' <[e-mail]>; Youngblood, Mike <[e-mail]>
Subject: SAR Model Update
Hi Yao,
ldaho Power anticipates that pursuant to IPUC Order No. 32697, Staff will soon be updating the Surrogate Avoided
Resource ("SAR") model with the updated Energy lnformation Administration ("ElA") natural gas price forecast that was
released on January 5,2017. Since the issuance of Order No. 32697, Staff has utilized the EIA forecast as an input to the
SAR methodology, and specifically applied the Mountain Region natural gas forecast under the table titled Electric
Prices: Energy Prices by Sector and Source.
ldaho Power understands that Order No. 32597 generically requires the use of the EIA forecasts as an input to the SAR
methodology, but that order and subsequent errata orders do not specify the data series that is to be applied to the SAR
methodology. ldaho Power is concerned that the use of the Mountain Region forecast is not a representative forecast
for natural gas prices as it represents pricing in a higher priced supply basin than where ldaho Power holds firm pipeline
capacity and performs natural gas transactions, and consequently its use unreasonably inflates the avoided cost prices
calculated under the SAR Methodology.
ln accordance with Commission orders, the lncrementalCost lntegrated Resource Plan ("lClRP") methodology utilizes
the natural gas price forecast that ldaho Power uses in its IRP process. The Company's IRP model uses the EIA natural
gas price forecast for Henry Hub, adjusted for pricing at Sumas and ldaho City Gate, where ldaho Power holds firm
pipeline capacity and does perform naturalgas transactions. Specifically, in the development of the 2017 lRP, ldaho
Power is using EIA's NaturalGas Spot Price at Henry Hub: High oil and gas resource and technology (nom S/MMBtu)
forecast. ldaho Power has presented this forecast at the IRP Advisory Council ("lRPAC") meetings, and believes the
forecast consists of a more accurate expectation of long term natural gas prices that are accessible to ldaho Power. As
presented at the January L2,2OL7,lRPAC meeting, and included below, analysis of this forecast demonstrates it follows
recent history and is in close alignment with ICE settled transactions, which are based on actual willing buyer/willing
seller transactions.
ldaho Power recommends that pursuant to Staffs update to the SAR methodology in accordance with Order No. 32697,
that Staff use the Natural Gas Spot Price at Henry Hub: High oil and gas resource and technology (nom S/MMBtu)
forecast, that is more applicable to prices that are based on real and expected natural gas prices. ldaho Power
appreciates your consideration of this suggestion and believes that using this forecast will result in the determination of
more appropriate published avoided cost pricing.
1
Henry tlub l[atural Sar Pricss {ltlominal$/mmbtu}
.:.
-
ffi
Please contact me with any questions.
Sincerely,
Michael Darrington
ENERGY CONTRACTS
ldaho Powerl Power Supply
Work 208-388-5946
Email [e-mail]
2