20161123Anderson Direct Corrected Pages 22-24.pdf

JULIA A. HILTON
Senior Counsel
[e-mail]
November 22, 2016
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
RECE IVED
Re : Case No. IPC-E-16-19
An IDACORP Company
Deferral and Recovery of Costs Associated with Participation in Energy
Imbalance Market -Corrected Pages 22-24 of the Direct Testimony of
Kathleen Anderson
Dear Ms. Jewell:
In the process of preparing the response to Staff's Request No. 30 of its Second
Production Request, Idaho Power Company ("Idaho Power") discovered that the answer
provided on page 22, lines 18-23 of the Direct Testimony of Kathleen Anderson is
incorrect. Idaho Power regrets the confusion that this may cause and assures the Idaho
Public Utilities Commission that the change in testimony has no impact on the economic
analyses presented in this case or conclusions contained in Idaho Power's Application.
In order to reflect this change, enclosed are 10 copies of corrected page 22 of
Ms. Anderson's testimony. Because of the deletion of the majority of the answer on
page 22, the pagination and line numbering changed on the subsequent pages.
Therefore, 10 copies of corrected pages 23-24 showing the new pagination are also
provided. Redlined copies of the change are enclosed for reference.
As noted on the Certificate of Service, the corrected pages have been served on
the parties in this case.
If you have any questions regarding the enclosed corrected pages or this matter,
please do not hesitate to contact me.
JAH:csb
Enclosures
cc: Service List (w/encls.)
Very truly yours ,
Julia A. Hilton
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 22nd day of November 2016 I served true and
correct copies of the CORRECTED PAGES 22-24 OF THE DIRECT TESTIMONY OF
KATHLEEN ANDERSON upon the following named parties by the method indicated
below, and addressed to the following:
Commission Staff
Brandon Karpen
Deputy Attorney General
Idaho Public Utilities Commission
4 72 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-007 4
Industrial Customers of Idaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 2ylh Street (83702)
P.O. Box 7218
Boise, Idaho 83707
Dr. Don Reading
6070 Hill Road
Boise, Idaho 83703
Snake River Alliance
Ken Miller, Energy Program Director
Snake River Alliance
223 North Sixth Street, Suite 317
P.O. Box 1731
Boise, Idaho 83701
Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North 6th Street
Boise, Idaho 83702
CERTIFICATE OF SERVICE
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1 Q. Please describe the investments in metering
2 equipment the Company will be required to make prior to
3 participation in the western EIM.
4 A. The majority of the meters on Idaho Power's
5 generating units cannot provide the data granularity that
6 will be required for CAISO settlement purposes. The
7 Company will examine all existing meters and determine
8 whether or not they meet CAISO's requirement for providing
9 five-minute, 15-minute, or 60-minute data and update as
10 necessary. In addition, Idaho Power has identified a few
11 instrument transformers feeding these generation meters and
12 some instrument transformers at several power plant
13 locations that are not revenue quality and will need to be
14 replaced.
15 Q. Will revenue quality meters be required on
16 generation units that Idaho Power chooses not to be
17 available for dispatch in the western EIM?
18
19
A.
Q.
No.
What is the Company's estimate of the total
20 costs of all required metering investments?
21 A. Idaho Power estimates investing approximately
22 $1.48 million in required metering equipment for
23 participation in the western EIM.
24
25
CORRECTED ANDERSON, DI 22
Idaho Power Company
1 Q. Does the benefits study performed by E3 factor
2 in the costs Idaho Power expects to incur as a participant
3 in the western EIM?
4 A. No. Company witness Mr . Tatum has performed a
5 revenue requirement analysis that describes the net impact
6 of the upfront and ongoing costs and NPSE benefits
7 associated with participation in the western EIM and the
8 Company's proposed accounting treatment of those costs .
9
10
11
12
Q.
A.
IV . CONCLUSION
Please summarize your testimony.
Idaho Power currently manages energy
imbalances within its BA . However, participation in the
13 western EIM to manage supply and demand could result in
14 lower costs due to the reduction in the need for reserves
15 and the efficient use of the transmission system, while
16 also helping to reduce carbon emissions and more
17 efficiently use and integrate intermittent renewable
18 energy. Absent Idaho Power's participation in the western
19 EIM, market liquidity in the bilateral real -time market
20 will likely continue to decline and additional reserves
21 will likely need to be maintained, resulting in increased
22 NPSE for the Company's customers. It is estimated that
23 Idaho Power's participation in the western EIM would result
24 in sub-hourly dispatch cost savings of $4.1-$5.1 million
25
CORRECTED ANDERSON , DI 23
Idaho Power Company
1 per year, resulting in a lower-priced energy imbalance
2 management option.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
2 2
23
24
25
Q.
A.
Does this complete your testimony?
Yes, it does.
CORRECTED ANDERSON, DI 24
Idaho Power Company
1 Q. Please describe the investments in metering
2 equipment the Company will be required to make prior to
3 participation in the western EIM.
4 A. The majority of the meters on Idaho Power's
5 generating units cannot provide the data granularity that
6 will be required for CAISO settlement purposes. The
7 Company will examine all existing meters and determine
8 whether or not they meet CAISO's requirement for providing
9 five-minute, 15-minute, or 60-minute data and update as
10 necessary. In addition, Idaho Power has identified a few
11 instrument transformers feeding these generation meters and
12 some instrument transformers at several power plant
13 locations that are not revenue quality and will need to be
14 replaced.
15 Q. Will revenue quality meters be required on
16 generation units that Idaho Power chooses not to be
17 available for dispatch in the western EIM?
18
19
20
21
22
23
24
A. No .Yes. Even though Idaho Power will identify
which Company owned generating units will be considered
participating units and available for dispatch in the
market and which will be non participating units , CAISO
requires that both are able to provide interval data but at
different levels of granularity .
Q. What is the Company's estimate of the total
25 costs of all required metering investments?
CORRECTED ANDERSON, DI 22
Idaho Power Company
1 A. Idaho Power estimates investing approximately
2 $1.48 million in required metering equipment for
3 participation in the western EIM.
4 Q. Does the benefits study performed by E3 factor
5 in the costs Idaho Power expects to incur as a participant
6 in the western EIM?
7 A. No. Company witness Mr. Tatum has performed a
8 revenue requirement analysis that describes the net impact
9 of the upfront and ongoing costs and NPSE benefits
10 associated with participation in the western EIM and the
11 Company's proposed accounting treatment of those costs.
12
13
14
15
Q.
A.
IV. CONCLUSION
Please summarize your testimony.
Idaho Power currently manages energy
imbalances within its BA. However, participation in the
16 western EIM to manage supply and demand could result in
17 lower costs due to the reduction in the need for reserves
18 and the efficient use of the transmission system, while
19 also helping to reduce carbon emissions and more
20 efficiently use and integrate intermittent renewable
21 energy. Absent Idaho Power's participation in the western
22 EIM, market liquidity in the bilateral real-time market
23 will likely continue to decline and additional reserves
24 will likely need to be maintained, resulting in increased
25 NPSE for the Company's customers. It is estimated that
CORRECTED ANDERSON, DI 23
Idaho Power Company
1 Idaho Power's participation in the western EIM would result
2 in sub-hourly dispatch cost savings of $4.1-$5.1 million
3 per year, resulting in a lower-priced energy imbalance
4 management option.
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Q.
A.
Does this complete your testimony?
Yes, it does.
CORRECTED ANDERSON, DI 24
Idaho Power Company