20190628Application.pdf

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An IDACORP Company
LISA D. NORDSTROM
Lead Counsel
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June 28, 2019
VlA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. !PC-E-19-19
2019lntegrated Resource Plan - ldaho Power Company's Application
Dear Ms. Hanian:
Enclosed for filing in the above matter please find an original and seven (7) copies
of Idaho Power Company's Application.
Very truly yours,
Kt*ofl.'**-
Lisa D. 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
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I n o rd strom @ id a h opower. co m
RECEIVED
z0l9 JUH 28 Pl{ h: 35
ji ili;i{f;tul?&l8r'o*
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
!N THE MATTER OF IDAHO POWER
COMPANY'S 201 9 INTEGRATED
RESOURCE PLAN.
CASE NO. tPC-E-19-19
APPLICATION
COMES NOW, ldaho Power Company ("ldaho Power" or "Comp?ny"), and in
accordance with ldaho Public Utilities Commission ("Commission") Order Nos. 22299
and 30317, requests that the Commission accept for filing the Company's 2019
lntegrated Resource Plan ("!RP"). ln support of this request, ldaho Power states as
follows:
I. BACKGROUND
1. ldaho Power's 2019 IRP undertakes a comprehensive analysis of the
optimal mix of both demand- and supply-side resources available to meet the
Company's resource needs over the IRP's 2O-year planning horizon. To this end, the
2019 IRP assesses available demand-side and supply-side resource options, load
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APPLICATION - 1
forecasts, and current and expected economic, market, and regulatory conditions.
Based on these assessments, the Company used long-term capacity expansion
software to develop potential resource portfolios consisting of a mix of different
resource types and timing. The portfolios were then subjected to rigorous financial and
sensitivity analysis to identify the preferred portfolio, which represents the best
combination of cost and risk for ldaho Power and its customers. Based on the
preferred portfolio, the 2019 IRP also identifies an action plan ("2019 lRP Action Plan"),
which details the specific steps the Company plans to take in the near term to
implement the preferred portfolio.
2. The complete 2019 !RP consists of five separate documents: (1) the 2019
lntegrated Resource Plan; (2) Appendix A: Sales and Load Forecast; (3) Appendix B:
DSM Annual Report; (4) Appendix C: Technical Report; and (5) Appendix D: B2H
Supplement. A copy of the complete 2019 lRP is provided as Attachment 1 and can
also be found on the Company's website at www.idahopower.com. lnterested persons
may also request a printed copy of the 2019 IRP by contacting [e-mail].
3. ldaho Power engages with public stakeholders when developing its lRP.
To incorporate stakeholder and public input, the Company worked with the IRP
Advisory Council ('lRPAC"), comprised of members of the environmental community,
major industrial customers, agricultural interests, representatives from both this
Commission and the Public Utility Commission of Oregon, representatives from the
Idaho Governor's Office of Energy and Mineral Resources, representatives from the
Northwest Power and Conservation Council, and others. ln addition, many members of
the public participated even though they are not members of the IRPAC. A list of the
2019|RPAC members can be found in Appendix C: Technical Report.
APPLICATION.2
4. For the 2019 lRP, ldaho Power conducted eight IRPAC meetings. The
Company also maintained an on-line forum for stakeholders to submit requests for
information, and for the Company to provide responses to information requests. The
forum allows stakeholders to develop their understanding of the IRP process,
particularly its key inputs, which enables more meaningful stakeholder involvement
during the process.
II. IRP GOALS AND ASSUMPTIONS
5. The primary goals of ldaho Power's 2019lRP are to: (1) identify sufficient
resources to reliably serve the growing demand for energy within ldaho Power's
service area throughout the 20-year planning period (2019-2038); (2) ensure the
selected resource portfolio balances cost, risk, and environmental concerns; (3) give
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 2019 IRP assumes that during the 20-year planning period, ldaho
Power will continue to be responsible for acquiring resources sufficient to serve its
retail customers in its ldaho and Oregon service areas and will continue to operate as a
vertically integrated electric utility. During the 20-year planning period, ldaho Power's
load is forecasted to grow by 1 .0 percent per year for average energy demand and 1.2
percent per year for peak-hour demand. Total customers are expected to increase
from 550,000 in 201 8 to 775,000 by 2038.
7. Hydroelectric generation remains a large part of ldaho Power's generation
fleet; however, hydroelectric plants are subject to variable water and weather
conditions. ln response to public and regulatory input, ldaho Power continues to
develop more conservative streamflow projections and planning criteria for use in
resource adequacy planning.
APPLICATION - 3
8. The 2019 IRP examined demand-side management ('DSM") and
transmission resources. DSM programs are designed to achieve prudent, cost-
effective energy efficiency savings and provide an optimal amount of peak reduction
through demand response programs. ldaho Power also continues to provide
customers with tools and information to help them manage their own energy usage.
The Company achieves these objectives through the implementation and careful
management of incentive programs and through outreach and education.
9. ldaho Power's resource planning process also evaluates additiona!
transmission capacity as a resource alternative to serve retail customers.
Transmission projects are often regional resources, and ldaho Power coordinates
transmission planning regionally as a member of the Northern Tier Transmission
Group. The delivery of energy, both within the ldaho Power system and through
regional transmission interconnections, is of increasing importance as regional
penetration of variable energy resources and their associated intermittent production
continues to increase. The timing of new transmission projects is subject to complex
permitting, siting, and regulatory requirements and coordination with co-participants.
III, IRP METHODOLOGY
10. ldaho Power's IRP is designed to ensure the Company has sufficient
resources to reliably serve customer demand and flexible capacity needs over the 20-
year planning period. ln prior !RPs, the Company developed portfolios to eliminate
resource deficiencies identified in a 2}-year load and resource balance, using both
demand and supply-side resources. The portfolios were designed to quantitatively
eliminate the identified resource deficiencies, and they were qualitatively varied by
resource type based on assessments that different resource types would perform
differently depending on future conditions in energy markets and energy policy.
APPLICATION - 4
A. Capacitv Expansion Modelins.
11. !n response to feedback received during the 2017 lRP, the Company
made a fundamental change to its lRP methodology. Specifically, it used the AURORA
model's capacity expansion modeling capability to develop the portfolios for the 2019
IRP. !n this process, the Company formulated future scenarios based on economic,
market, and regulatory considerations and then allowed the AURORA model to select
the optimal resources to address the conditions in each future scenario. The model
selected from a wide variety of supply- and demand-side resource options to develop
optimal portfolios that meet a 15 percent planning margin and regulating reserve
requirements associated with balancing load, wind plant output, and solar plant output.
The model can also simulate retirement of existing generation units if economic and
acquire resources that are economic to displace otherwise available resources that are
higher cost.
12. ln meeting the objectives for planning margin and regulating reserve
requirements, the AURORA model accounts for the capability of the existing system to
meet the objectives and selects from the poo! of new supply- and demand-side resource
options only when the existing system comes short of meeting the objectives. Existing
supply-side resources include generation resources and transmission import capacity
from regional wholesale electric markets. Existing demand-side resources include
current levels of demand response and savings from current energy efficiency programs
and measures.
13. ldaho Power conducts a financial analysis evaluating the costs and
benefits of the developed portfolios. The financial costs include construction, fuel,
operations and maintenance, transmission upgrades associated with interconnecting
new resource options, projected wholesale market purchases, and anticipated
APPLICATION - 5
environmenta! controls. The financial benefits include economic resource options that
displace higher cost alternatives, projected wholesale market sales, and the market
value of renewable energy certificates ("REC") for REC-eligible resources.
B. Boardman-to-Hemingwav.
14. ldaho Power's 2019 IRP analyzes the addition of the Boardman-to-
Hemingway transmission line project ('B2H"). That transmission addition has been a
component of ldaho Power's preferred resource portfolio since 2006. The Company
has continued to analyze B2H to ensure that it remains a prudent resource acquisition.
A detailed update regarding B2H is provided as Appendix D.
C. Natural Gas Forecast.
15. Forthe 2019 IRP, ldaho Power has made the decision to rely on a third-
party vendor for its natural gas forecast-S&P Global Platts North American Gas
Analytics. Platts provides energy consulting services for 12,000 companies worldwide.
For its natural gas forecasting, Platts developed a model that it refers to as the Gas
Pipeline Competition Model. To verify the reasonableness of Platts' forecast, ldaho
Power compared Platts' forecast to Moody's Analytics and the NYMEX natura! gas
futures settlement and concluded that Platts' forecast is appropriate for the planning
case forecast for the 2019 !RP.
D. Garbon Cost.
16. ldaho Power's 2019 IRP accounts for the expected costs of carbon
regulation and the Company's long-standing commitment to reduce its carbon
emissions. Since 2009, the Company has met various voluntary goals, initiated by
shareholders, to realize its commitment to COz reduction. As of 2018, ldaho Power's
carbon emissions intensity, expressed as pounds of COz per megawatt-hour generated,
has decreased by 46 percent compared to 2005. Carbon emissions intensity averaged
APPLICATION - 6
over 2010-2018 is 27 percent below the 2005 level. And, in March 2019, the Company
announced a goal to provide 100 percent clean energy by 2045. ldaho Power remains
committed to decreasing carbon emissions and that commitment is reflected in the 2019
IRP.
IV. PREFERRED RESOURCE PORTFOLIO
17. A fundamental goal of the IRP process is to identify a selected, or
preferred, resource portfolio. The preferred portfolio identifies resource options and
timing to allow ldaho Power to continue to reliably serve customer demand, balancing
cost and risk over the 2019 to 2038 planning period. Although the Company has
identified a preferred portfolio, "an IRP is a working document that incorporates many
assumptions and projections at a specific point in time"; it is a plan that can respond to
changing conditions, not a fixed blueprint.l
18. The AURORA model produced 24 dlfferent portfolios based on three
natural gas and four carbon emissions adders all under two futures-one with B2H and
one without. The 24 portfolios include an increase in the types of resource additions
and a wider range of quantities of those resources compared to the 2017 lRP. The 24
portfolios tor 2019 include varied amounts of nameplate generation additions:
. Wind (between 0 and 1,100 megawatts ("MW"))
. Solar (between 0 and 1,190 MW)
. Natural Gas Reciprocating Engines (between 0 and 614 MW)
Natural Gas Combined-Cycle Combustion Turbine (between 0 and
1,200 MW)
DSM (between 0 and 50 MW)
1 ln the Matter of ldaho Power Company's 2017 lntegrated Resource Plan, Case No
IPC-E-17-1 1, Order No. 33983 at 18 (February 9, 2018).
a
APPLICATION - 7
. Battery storage (between 0 and 105 MW)
o Pumped Storage (between 0 and 500 MW)
o Biomass (between 0 and 150 MW)
o Additional accelerated Jim Bridger power plant ("Jim Bridger") coal unit
retirements (between 0 and 708 MW)
19. Portfolio P14 was selected as the 2019 preferred portfolio ("Preferred
Portfolio"). This portfolio continues the trend away from existing coal units, consistent
with the 2015 and 2017 lRPs. The 2019 IRP recommends early exit from two units at
Jim Bridger and confirms previous lRPs' conclusion that the Company should exit from
the North Valmy power plant ("Valmy") Unit 2 in 2025. The 2019 Preferred Portfolio
identifies the acquisition of two solar resources in 2022 and 2023 as Ieast-cost, least-
risk resources to serve ldaho Power customers as well as a B2H in-service date of
2026. lt also has the following key attributes:
. Optionality. Preserving optionality is critical to prudent long-term
planning. Optionality is particularly critical in a future where the reassessment of
resource choice may be necessary in response to changing energy policy (e.9., carbon
cost) or planning assumptions (e.9., natural gas prices). Here, optionality means
conducting the required studies and preparatory efforts to shorten lead times of
potentia! resources to mitigate quantitative and qualitative risks.
o Flexible Capacitv. With the addition of 220 MW of photovoltaic
("PV') solar, the ldaho Power system will have over 1,200 MW of on-line variable
energy resources ("VER") (wind and solar) installed capacity. While ldaho Power is
developing operational experience integrating VERs and is a participant in the
integration-abetting Western Energy lmbalance Market, the Company remains
concerned about maintaining adequate flexible capacity to ensure VER integration
APPLICATION .8
without compromising system reliability. The continued monitoring of VER variability,
particularly coupled with studied effect of the added solar PV capacity in the early
2020s, may indicate that the Preferred Portfolio's flexible capacity additions are needed
earlier than the late 2020s to maintain adequate system reliability.
v. 2019 rRP ACTTON PLAN (2019-2026)
20. IRP action plans typically identify resource activities that the Company
plans to take in the next four years.2 For the 2019 lRP, the Company expanded the
2019 IRP Action Plan through 2026 to reflect the completion of the B2H project and
addition additional coal plant retirements. These core resource actions include:
o The Addition of 220 MW of Solar PV Capacitv (2022-2023). This
capacity is associated with a power purchase agreement ldaho Power signed to
purchase output from the 120 MW Jackpot Solar facility and the adjacent 100 MW
Franklin Solar facility, which have projected commercial on-line dates of 2022 and 2023,
respectively.
o Exit from Three Coal-Fired Generatins Units bv Year-End 2022.
and from Two More Coal-Fired Generatino Units (Five Total) bv Year-End 2026. The
Preferred Portfolio includes ldaho Power's exit from its share of Valmy Unit 1 by year-
end 2019, Boardman power plant by year-end 2020, a Jim Bridger unit during 2022,
Valmy Unit 2 by year-end 2025, and a second Jim Bridger unit during 2026. Achieving
these coal-unit exits will require substantial coordination with unit co-owners, regulators,
and other stakeholders. The Company also recognizes the need to ensure system
reliability is not jeopardized by coa!-unit exits.
2 ln re ldaho Powels 2013 lntegrated Resource Plan, LC 58, Order No. 14-253 at 17
(July 8, 2014).
APPLICATION .9
o B2H on-line in 2026. The Preferred Portfolio includes the B2H
transmission line with an on-line date during2026. The 2019 IRP Action Plan includes
both permitting and construction activities. Consistent with the 2017 lRP, the Company
has included a longer action plan "window" for B2H given the length of time required to
permit and construct the 300 mile 500 kilovolt transmission line. The pursuit of
permitting and construction over the relevant action plan periods is critical to the
successful and timely implementation of the Preferred Portfolio.
21. The 2019 IRP Action Plan is summarized below.
Year Action
2019-2022
2019
2019
2019-2021
2019-2026
2019-2020
2020
2020
2021-2022
Plan and coordinate with PacifiCorp and regulators for early exits from Jim Bridger units. Target dates
for early exits are one unit during2022 and a second unit during 2026.
Jackpot Solar Power Purchase Agreement (PPA) regulatory approval---on-line 2022 and 2023
(Franklin Solar).
Exit Valmy Unit 1 by December 31,2019.
Conduct ongoing 82H permitting activities. Negotiate and execute B2H partner
construction agreement(s).
Conduct preliminary construction activities, acquire long-lead materials, and construct the
B2H project.
Monitor VER variability and system reliability needs, and study projected effects of additions of
22O MW of PV solar (Jackpot Solar and Franklin Solar). Prepare to issue a request for proposal (RFP)
contingent on timing of Jim Bridger unit early exits and reliability needs. Resource on-line dales 2023-
2028. 100-900 MW flexible capacity and energy (ability to shift from P14 to P16).
Exit Boardman December 31,2020.
Bridger Unit 1 and Unit 2 Regional Haze Reassessment finalized.
Continue to evaluate and coordinate with PacifiCorp and regulators for timing of exiUclosure of
remaining Jim Bridger units.
Exit Jim Bridger unit by December 31,2022.
Jackpot Solar 120 MW on-line.
Franklin Solar 100 MW on-line.
Procure or construct resources resulting from RFP (if needed).
Exit Valmy unit 2 by December 31,2025.
Exit Jim Bridger unit by December 31,2026.
Demand response resource added (5 MW).
2022
2022
2023
2023-2026
2025
2026
2026
APPLICATION - 1O
VI. COMMUNICATIONS AND SERVICE OF PLEADINGS
22. ldaho Power requests that any notices, inquiries, and communications
regarding this request be provided to:
Lisa D. Nordstrom
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I nordstrom @ idahopower. com
dockets@ idahopower. com
Timothy E. Tatum
Matthew Larkin
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
ttatu m@ idahopower. com
m larkin@ idahopower. com
VII. REQUEST FOR ACCEPTANCE
23. ldaho Power respectfully requests that the Commission issue its order
accepting the Company's 2019 IRP and finding that the 2019 IRP meets both the
procedural and substantive requirements of Commission Order Nos. 22299 and 30317.
DATED at Boise, ldaho, this 28th day of June 2019.
LISA D. NOR
Attorney for ldaho Power Company
APPLICATION - 11
BEFORE THE
GASE NO. IPC-E-I9-19
IDAHO POWER COMPANY
ATTACHMENT 1
2019 INTEGRATED RESOURCE PLAN
IDAHO PUBLIC UTILITIES COMMISSION