HomeMy WebLinkAbout20150630IRP Application Letter.pdf3Effi*
An IDACORP CompanY
LISA D. NORDSTROM
Lead Counsel
June 30, 2015
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-15-19
2OlS lntegrated Resource Plan - ldaho Power Company's Application
Dear Ms. Jewell:
Enclosed forfiling in the above matter please find an originaland seven (7) copies
of ldaho Power Company's Application.
Very truly yours,
axu-ta/(^u,*uLa"rD. Nordstrom
LDN:csb
Enclosures
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702')
P.O. Box 70
Boise, ldaho 83707
Telephone: (208) 388-5825
Facsimile: (208) 388-6936
I no rd stro m @ ida hopowe r. co m
Attomey for ldaho Power Company
!N THE MATTER OF IDAHO POWER
COMPANY'S 201 5 INTEGMTED
RESOURCE PLAN.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. IPC-E-15-19
APPLICATION
COMES NOW ldaho Power Company ("ldaho Powe/' or "Company'), and in
accordance with ldaho Public Utilities Commission ("!PUC" or "Commission") Order No.
22299, hereby requests that the Commission accept for filing the Company's 2015
lntegrated Resource PIan ("lRP"). ln support of this request, ldaho Power states as
follows:
I. BACKGROUND
1. As required by Commission Order No. 22299 and the Public Utility
Commission of Oregon's ("OPUC") Order Nos. 89-507,07-OO2, 07-042, and 12-013, the
Company prepares and files a biennia! IRP with both the IPUC and the OPUC setting
forth how ldaho Power intends to serve the electric requirements of its customers.
APPLICATION - 1
ldaho Powefs 2015 IRP addresses available supply-side and demand-side resource
options, planning period load forecasts, potential resource portfolios, a risk analysis,
and an action plan that details the steps the Company plans to take to implement the
2015lRP.
2. The complete 2015 IRP consists of four separate documents: (1) the
2015 lntegrated Resource Plan; (2) Appendix A-Sales and Load Forecast; (3)
Appendix B-Demand-Side Management 2014 Annual Report; and (4) Appendix C-
Technical Appendix. A copy of the complete 2015lRP is provided as Attachment 1 and
can also be found on the Company's website at www.idahopower.com. Interested
persons may also request a printed copy of the 2015 IRP by contacting
irp@idahooower.com.
3. ldaho Power has worked with stakeholders over the last year to develop
the 2015 lRP. To incorporate stakeholderand public input, the Companyworked with
the lntegrated Resource Plan Advisory Counci! ("|RPAC'), comprised of members of the
environmental community, major industrial customers, agricultural interests,
representatives of the OPUC and IPUC staffs, representatives from the ldaho ffice of
Energy Resources and the Northwest Power and Conservation Council, and others. A
list of the 2015 IRPAC memberc can be found in Appendix C-Technical Appendix. For
the 2015 lRP, ldaho Power conducted 12 IRPAC meetings, including a resource
portfolio design workshop. Public working group meetings to address the specific topics
of energy efficiency, solar resources, and the study of coal resources were also held.
4. Following the filing of the 2015lRP, ldaho Power will present the resource
plan at public meetings in various communities around the Company's service area. !n
APPLICATION - 2
addition, ldaho Power employees will present the plan and discuss the planning process
with various civic groups and at educational seminars, as requested.
II. IRP GOALS AND ASSUMPTIONS
5. The primary goals of ldaho Powe/s 2015 IRP are to: (1) identify sufficient
resources to reliably serve the growing demand for energy within ldaho Powe/s service
area throughout the 2O-year planning period; (2) ensure the selected resource portfolio
balances cost, risk, and environmental concerns; (3) give equal and balanced treatment
to both supply-side resources and demand-side measures; and (4) involve the public in
the planning process in a meaningfulway.
6. The 2015 IRP assumes that during the 2O-year planning period in the IRP
(2015-2034), ldaho Power will continue to be responsible for acquiring resources
sufficient to serve all of its retail customers in its Idaho and Oregon service tenitories
and wil! continue to operate as a vertically-integrated electric utility. During this period,
load is forecasted to grow by 1.2 percent per year for average energy demand and 1.5
percent per year for peak-hour demand. The total number of customerc is expected to
increase lo 711,OOO by 2034 from 515,OOO in 2014. ldaho Power continues to use 70h
percentile water conditions and 70h percentite average load for energy planning. For
peak-hour capacity planning, ldaho Power uses gOh percentile water conditions and
95h percentile peak-hour !oad. ln combination with demand-side measures, additional
Company-owned resources will be needed to meet these increased demands.
III. IRP METHODOLOGY
7. Preparation of ldaho Powe/s 2015 IRP began with the forecast of future
customer demand. Existing generation resources, demand-side resources, and
transmission import capacity were combined with customer demand to create a load
APPLICATION - 3
and resource balance for energy and capacity. The Company then evaluated new
energy efficiency programs and the expansion of existing programs to revise energy
and capacity deficits. Finally, ldaho Power designed and analyzed supply-side and
transmission resource portfolios to address the remaining energy and capacity deficits.
The Company evaluates resources and resource portfolios using a financial analysis.
8. Idaho Power evaluates the costs and benefits of each resource type. The
financial costs include construction, fuel, operation and maintenance, transmission
upgrades, and anticipated environmental controls, and emission costs. The financial
benefits include economic resource operations, projected market sales, and the market
value of renewable energy certificates.
9. ldaho Power is part of the larger northwestern and westem regional
energy markets, and market prices are an important component of evaluating energy
purchases and sales. ldaho Power faces transmission import constraints and, at times
of peak customer load, must rely on its own generation resources regardless of regiona!
market prices. Likewise, there are times when the generation connected to the
ldaho Power system exceeds customer demand and the transmission export capacity,
and the Company must curtail generation on its system.
10. An additional transmission connection to the Pacific Northwest has been
part of the ldaho Power prefened resource portfolio since the 2006 lRP. By the 2009
lRP, Idaho Power determined the approximate configuration and capacity of the
transmission line now known as the Boardman to Hemingway ("B2H") transmission line
project. ldaho Power again evaluated the B2H transmission line in the 2015 resource
plan to ensure the transmission addition remains a prudent resource acquisition.
APPLICATION - 4
IV. PREFERRED PORTFOLIO (2015.2034)
11. A fundamental goal of the IRP process is to identify a selected, or
prefened, resource portfolio. The preferred portfolio identifies resource options and
timing to allow ldaho Power to continue to reliably serve customer demand, balancing
cost, risk, and environmental factors over the 2015 to 2034 planning period. The 2015
IRP presented by this Application provides the Company's estimate of future loads and
sets forth how the Company intends to serve the electrica! requirements of its native
load customers over the next 20 years. While the proposed preferred resource portfolio
represents current resource acquisition targets, it is important to note that the actual
resource portfolio may differ from the quantities and types of resources outlined in the
IRP depending on the changing needs of ldaho Power and its customers.
12. Analyses conducted for the 2015 IRP consistently indicate favorable
economics associated with two significant resource actions: the B2H transmission line
and the early retirement of the North Valmy power plant. The IRP analyses suggest a
strong connection between these resource actions, both of which are characterized by
uncertain timetables. Specifically, acceleration in the completion of the B2H line can be
expected to provide the system reliability and access to markets, allowing for a
coresponding acceleration in the early retirement of North Valmy.
13. The B2H transmission line and early North Valmy retirement are two key
resource actions contained in portfolio P6(b), the 2015 IRP's prefened resource
portfolio. 2015lRP at 141-143. Portfolio P6(b) contains both actions in the year 2025,
with the completion of the transmission Iine preceding the end-of-year coal plant
retirement. Portfolio P6(b) contains no other resource actions through the end of the
2020s, adding 60 megawatts ("MW") of demand response and 20 MW of ice-based
APPLICATION - 5
thermal energy storage in 2030 and a 300 MW combined cycle combustion turbine in
203',1.
14. The absence of resource needs in portfolio P6(b) prior to the 2025
retirement of North Valmy is noteworthy. The resource sufficiency through the early
2O2Os shields portfolio P6(b) from risk exposure associated with the following factors:
. Uncertainty related to planned but yet-to-be-built solar under the
.Public Utility Regulatory Policies Act of 1978; further project
cancellations beyond those already observed will have a greater
impact on portfolios, requiring capacity additions in the early 2O2Os.
. Uncertainty related to the Environmental Protection Agency's
('EPA") proposed regulation of COz emissions from existing power
plants under Clean Air Act ("CAA') Section 111(d), particularly the
effect of the final regulation on operations at coal and natural gas-
fired power plants in the proposed interim compliance period
beginning in 2020.
. Uncertainty related to the completion date of the B2H line due to
permitting issues and needs of project partners.
o Uncertainty related to retirement planning for the jointly-owned
North Valmy power plant, specifically the challenges associated
with aniving at a mutually feasible retirement date.
15. Uncertainty is a common part of long-term integrated resource planning.
Even with the increased uncertainty sunounding the 2015 lRP, the analysis indicates
completion of the B2H transmission line and early retirement of the North Valmy power
plant are prudent actions. The timing of the actions can be appropriately adjusted as
conditions related to the four factors listed above become actionable.
v. AGTTON PLAN (2015-2018)
16. The action plan for the 2015 to 2018 period includes items specifically
related to the preferred portfolio P6(b) and other items irrespective of the portfolio
selected. The P6(b) action items include continued permitting and planning for the B2H
APPLICATION - 6
transmission line and investigation of North Valmy retirement in collaboration with plant
co-owner NV Energy. The pursuit of these items over the action plan period is critical to
the successful and timely implementation of the preferred portfolio.
17. The Gateway West transmission Iine remains a key future resource to
ldaho Power and the region, promoting continued grid reliability in a time of expanding
variable energy resources. Therefore, the plan includes continued permitting and
planning associated with the Gateway West project.
18. CAA Section 111(d) will potentially have a pronounced impact on coal and
natural gas-fired power plant operations on ldaho Powe/s system and throughout the
nation. ldaho Power will remain involved as a stakeholder as CAA Section 111(d)
moves toward finalization and implementation. As stipulations of the final regulation
become clearer, and as implementation planning is developed, ldaho Power will assess
the impacts of CAA Section 111(d) on the prefened portfolio.
19. ln addition to continued transmission permitting efforts and evaluation of
potential changes in thermal fleet operations, the action plan also includes the following
items:
. Continued pursuit of cost-effective energy efficiency, working with
stakeholder groups, such as the Energy Efficiency Advisory Group
("EEAG") and regional groups such as the Northwest Energy
Efficiency Alliance.
o Filing to amend the Federal Energy Regulatory Commission
('FERC') license to adjust the 50 MW Shoshone Falls project
expansion and efforts related to the study and construction of a
smaller project upgrade with a scheduled on-line date in the first
quarter of 2019.
. Completion of selective catalytic reduction ('SCR') retrofits for Jim
Bridger Units 3 and 4.
APPLICATION - 7
. Begin economic evaluation of SCR retrofits for Jim Bridger Units 1
and 2 (SCR installation required for Unit 1 in 2022 and for Unit 2 in
2021).
Table 10.1 on pages 142-143 provides actions with dates for the 2015 to 2018 period.
Table 10.1 Action plan (201S2018)
Resource
Action
Number
201*2018
201*2018
201*2019
82H
Gateway West
Energy efficiency
Ongoing permitting, planning studies, and regulatory filings 'l
Ongoing permitting, planning studies, and regulatory filings 2
Continue the pursuit of cost-effective energy effciency. 3
The forecast reduction lor201*20'19 programs is 84
average megawatts (aMW) for energy demand and 126 MW
for peak demand.
2015-2016
2015
2015
201*2016
2016
2016
2017
2017
2019
N/A
Shoshone Falls
Jim Bridger Unit 3
Shoshone Falls
Jim Bridger Unit 4
North Valmy units 1 and 2
Shoshone Falls
Jim Bridger units 1 and 2
Shoshone Falls
Coordinate with govemment agencies on implementation
planning for CAA Section 1 1 1(d).
File to amend FERC license regarding 50-MW expansion
Complete installation of SCR emission-control technology
Study options for smaller upgrade ranging in size up to
approximately 4 MW
Complete installation of SCR emission-control technology
Continue to work with NV Eneryy to synchronize
depreciation dates and determine if a date can be
established to cease coal-fired operations
Commence construction of a smaller upgrade
Evaluate the installation of SCR technology for units 1 and 2
at Jim Bridger in the 2017 IRP
On-line date for smaller upgrade during first quarter
4
5
6
7
8
I
10
11
12
VI. RESPONSE TO ORDER NO. 32980
20. ln Order No. 32980, the Commission accepted the Company's 2013 lRP.
ln so doing, the Commission stated on page 16 severa! expectations for ldaho Power
going forward. First, the Commission expected the Company to monitor developments
at the national level and to account for their impact in its resource planning. As
discussed in Chapter I and in Appendix C-Technical Appendix, ldaho Powe/s 2015
IRP incorporates the cost and long-term efFects of carbon regulation by modeling
several scenarios based on the EPA's proposed CAA Section 111(d) regulations and
the impact they would have on the Company's operations. Although the optimization of
APPLICATION - 8
coal unit shutdown alternatives using computer modeling tools will not be possible until
the proposed CAA Section 111(d) regulation is finalized sometime in the second half of
2015, trends in the modeling results indicate a portfolio with an earlier North Valmy unit
shutdown coupled with the completion of the B2H project, which performs well on a 20-
year net present value basis.
21. Second, the Commission expected ldaho Power "to collaborate with
stakeholders on how best to use energy efficiency as a resource." Order No. 32980 at
16. ln December 2014, ldaho Power organized the Energy Efficiency Working Group
inviting members of the IRPAC, the EEAG, and public participants in the IRP process.
The Company then hosted two meetings with this working group, as described on
pages 47-48 of the lRP. As a result of the meetings, the Company committed to
continue investigating the extent to which transmission and/or distribution benefits result
from energy efficiency measures and programs, as well as the approximate value of
such benefits. Idaho Power presented a status update of this ongoing investigation at
the May 7, 2015, IRPAC meeting. Actions to be taken as part of the ongoing study
include a review of transmission and distribution investments related to growth, an
evaluation of the effectiveness of energy efficiency measures and programs in defening
transmission and distribution investment, and an estimate of the deferral value for those
instances with the potential for transmission and/or distribution investment deferment.
22. Idaho Power is also committed to continuing discussing the energy
efficiency and demand response program delivery issues identified by Commission Staff
and by some intervenors in comments filed in Case No. IPC-E-14-04. Because the IRP
process does not address program delivery issues, the Company plans to use the
EEAG as the forum to provide customers, regulatory staff, and other interested
APPLICATION - 9
stakeholders an opportunity to provide advice and recommendations to ldaho Power on
formulating, implementing, and evaluating energy efficiency and demand response
programs and activities.
23. The Commission also indicated that ldaho Power should be actively
involved in matters relating to the North Valmy power plant and "to promptly apprise us
of developments that could impact the Company's continued reliance on that coal-fired
resource." Order No. 32980 at 16. Although no agreement has been reached to date,
ldaho Power has been in discussions with the joint owner of the North Valmy plant
regarding the future of that plant. As explained on pages 83-84 of the 2015lRP, ldaho
Power seeks to balance the impacts of carbon regulation with the economic impact to
customers, as well as customer needs for reliable service. Cost and risk will continue to
be important factors in the utilities' discussions and decision processes.
Vll; COMMUNICATIONS AND SERVIGE OF PLEADINGS
24. ldaho Power requests that any notices, inquiries, and communications
regarding this request be provided to:
Lisa D. Nordstrom
Regulatory Dockets
ldaho Power Company
P.O. Box 70
Boise, ldaho 83707
Telephone: (208) 388-5825
Facsimile: (208) 388-6936
I no rd strom @ id aho powe r. co m
dockets@ idahopower. co m
Gregory W. Said
Michael Youngblood
ldaho Power Company
P.O. Box 70
Boise, ldaho 83707
Telephone: (208) 388-2288
Facsimile: (208) 388-6449
osaid@idahopower.com
mvo u noblood @idahopower. com
VIII. REQUEST FOR ACCEPTANCE
25. ldaho Power respectfully requests that the Commission issue its order
accepting the Company's 2015 IRP and finding that the 2015 IRP meets both the
procedural and substantive requirements of Commission Order No. 22299.
APPLICATION - 1O
DATED at Boise, tdaho, this 30h dayof June 2015.
APPLICATION.ll
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
cAsE NO. IPC-E-I5-19
IDAHO POWER COMPANY
ATTACHMENT 1
2015 INTEGRATED RESOURCE PLAN