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Home My WebLink About20220421Application.pdfDAYN HARDIE DEPUTY ATTORNEY GENERAL IDAHO PUBLIC UTILITIES COMMISSION P.O. BOX 83720 BOISE, IDAHO 83720-0074 (208)334-03t2 IDAHO BAR NO. 9917 ,'. ,',; ,. J i iil I, i I Street Address for Express Mail: I 133I W CHINDEN BVLD, BLDG 8, SUITE 2OI-A BOISE, tD 83714 Attorney for the Commission Staff BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF COMMISSION STAFF'S APPLICATION TO UPDATE INPUTS TO THE "SURROGATE AVOIDED RESOURCE" METHOD AVOIDED COST RATES CASE NO. GNR.E-22.01 APPLICATION Commission Staff, pursuant to Commission Rule of Procedure 52, the applicable provisions of the Public Utility Regulatory Policies Act of 1978 ("PURPA"), and as directed by Order No. 34628, hereby respectfully applies to the Idaho Public Utilities Commission ("Commission") for an order updating inputs to the surrogate avoided resource method ("SAR Method") model, making administrative changes to the SAR Method model, and approving the SAR Method avoided cost rates attached to this Application to be effective June 1,2022. In support of this Application, Commission Staff represents as follows: I. BACKGROUND The Commission calculates and publishes SAR Method rates for qualifuing facilities ("QF" or "QFs") that are under the applicable resource type project eligibility cap. In Order No. 32697, the Commission found that the final release of U.S. Energy Information Administration ("EIA") Annual Energy Outlook automatically triggers a recalculation of published avoided cost rates. [n Order No. 32802, the Commission clarified that an update should occur on June I or within 30 days of the final release of the Annual Energy Outlook, whichever is later. Following ) ) ) ) ) ) IAPPLICATION the issuance of Orders No. 32697 and32802, Staff annually entered the updated natural gas price inputs into the SAR Method model and a Staff attomey sent letters to the utilities requesting each utility verifu that Staff updated and calculated the published avoided cost rates correctly. The letters were filed with the Commission and served to open the dockets for the annual updates. Notices were not generally issued. The Commission stated, "The Commission has consistently held that this annual update is a simple arithmetic re-calculation to an established methodology that is accomplished administratively as a matter of course." Order No. 34350 at I citing Order Nos. 33305, 33538, and33773. In2020, the Commission approved a more formal process to update inputs to the SAR Method. Order No. 34628. The Commission stated, "Subsequent annual SAR updates will be initiated with an Application to the Commission. Despite the change in procedure to allow for better tracking and transparency, this update is still intended to be a simple arithmetic calculation to an established methodolo gy." Id. TI. THE UPDATES Staff updated the natural gas forecast in the SAR Method model to the "reference case" natural gas price forecast for the Mountain Region's Electric Power sector included in the Energy Information Administration ("EIA") Annual Energy Outlook 2022 released on March 3, 2022. A copy of the relevant natural gas price forecast is included on the AEO2022- EnergyPricesMountain tab in the attached SAR Method model. Staff has also improved how avoided costs of capacity data is presented for Idaho Power's Energy Storage QFs, with rates presented for online years2022 through 2021. Attached to this Application are the following: An updated SAR model incorporating all the updates mentioned above Attachment A (IPCO Avoided Cost Rates for New Contracts). Attachment B (IPCO Avoided Cost Rates for Renewal Contracts). Attachment C (Avista Avoided Cost Rates for New Contracts). Attachment D (Avista Avoided Cost Rates for Renewal Contracts). Attachment E (PAC Avoided Cost Rates for New Contracts). Attachment F (PAC Avoided Cost Rates for Renewal Contracts). a. b. c. d. e. f. ob. 2APPLICATION TII.NATURAL GAS PRICE FORECAST COMPARISON Staff compared the 2022 natural gas forecast and the 2021 natttral gas forecast published by the EIA. See Table No. 1, below. Although the two forecast trends are similar overall, new avoided cost of energy based on the 2022 natttral gas forecast will be higher than current avoided cost of energy until around 2049, because the new forecast is slightly higher until2049. Table No. 1: Comparison of 2021Natural Gas Forecast and 2022 Natural Gas Forecast 2027 Natural Gas Forecast and 2022 Natural Gas Forecast 10.00 9.OO 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 : co E vt N {n + |jl 10 r- 6 01 (} F{ N fi1 < lf) (D F CO 6r O t-l N fn r+ la € F" A 6) ON N N Fl N N N N fO d) fO (O .n dl d) .r) .n m + { !+ $ sf + t sf r+ <l l.,)oo o oo ooooooo a o oo o o o o oo o oc) o oo orT N'\I N N N N N T1 (r.] FI N N N N N N N N iI T{ N N (\J'\T h, N N "I - - - 6as Nominal Prices t2021) Gas Nominal Prices {2022) IV. MODIFIED PROCEDURE Commission Staff believes that a hearing is not necessary to consider the issues presented herein and respectfully requests that this Application be processed under the Commission's rules of Modified Procedure; i.e., by written submissions rather than by hearing. IDAPA 31.01.01 .201-204. If, however, the Commission determines thatatechnical hearing is required, the Commission Staff stands ready to prepare and present its testimony in such hearing. V. COMMIINICATIONS AND SERVICE OF PLEADINGS Communications and service of pleadings, exhibits, orders, and other documents relating to this proceeding should be sent to the following: JAPPLICATION Dayn Hardie Deputy Attorney General P.O. Box 83720 Boise,lD 83702-0074 dayn.hardie@puc.idaho. gov Mike Louis Idaho Public Utilities Commission P.O. Box 83720 Boise, \D 83702-0074 mike.louis@puc.idaho. gov vI. REQUEST FOR RELIEI' Commission Staff respectfully requests the Commission issue an order: (1) authorizing this matter to be processed by Modified Procedure; (2) updating the SAR Method model as described herein and (3) after tlre record is fully submitted approving the updated SAR Method avoided cost rates shown in the attachments to this Application with an effective date of June 1, 2022. Respecttully submitted this 21't day of April2022. Dayn Deputy Attomey General I :\LegaI\ELECTNC\GNR-E-22-0 I \GNRE220 l_App_dh.rtf 4APPLICATION CERTIX'ICATE OF SERVICE I HEREBY CERTIFY that on this 2lst day of April 2022, I served the foregoing APPLICATION, in Case No. GNR-E-22-01, Via Electronic Mail to the following: Donovan E. Walker Energy Contacts Idaho Power Company 1l2l W.Idaho Street 83702 P.O. Box 70 Boise,ID 83707-0070 dwalker@idahopower. com dockets@ idahopower.com energycontracts@idahopower. com David Meyer Michael Andrea Avista Corporation P.O.Box3727 l4l1 East Mission Avenue Spokane, WA99220-3727 david. meyer@avistacom. com michael.andrea@avistacorp.com avistadockets@ avistacorp.com Ted Weston Emily Wegener Rocky Mountain Power 1407 WestNorth Temple, Ste. 330 Salt Lake City, UT 84116 ted.weston@pacifi corp.com emily. weeener@pacifi corp. com |(ln; /Y.frA\,{t<tN Keri J. Hadlbr Legal Assistant to Dayn Hardie 5APPLICATION