20200601IRP Replacement Pages.pdf

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LISA D. NORDSTROM
Lead Counsel
[e-mail]
May 29,2020
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Re: Case No. !PC-E-19-19
2019 Amended lntegrated Resource Plan ('lRP") - Replacement Pages
Dear Ms. Hanian:
The Company is writing to provide notice that a correction to certain cost
information contained in the Company's Amended 2019 lRP ('!RP") filed January 31,
2020 is necessary to properly reflect the final present value resource portfolio costs
presented in the plan. The need for this change was discovered while preparing
information fora discovery request in a separate docket, and is related to costs associated
with the Jim Bridger Power Plant ("Bridge/'). While reviewing the modeling output, the
Company determined that certain Bridger-related costs were inadvertently excluded from
portfolios in which a Bridger unit was exited prior to the existing shutdown date of 2034.
After correcting this issue within all impacted portfolios and performing a page-by-
page review of the lRP, the Company has determined that a total of seven pages require
replacement. However, it is important to note that the Company's Preferred Portfolio is
still identified as least-cost and least-risk, and the conclusions drawn from the analysis
have not changed.
The remainder of this letter details the discovery of the omission, the impact of the
conection, and the final conclusions to be drawn from the updated figures. The Company
has also provided two attachments containing the corrected pages for the lRP, in both
legislative and clean format.
l. BackEround
In Case No. IPC-E-19-18, ldaho Public Utilities Commission ("Commission") Staff
("Staff') requested that the Company provide a detailed annua! breakdown of costs
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May 29,2020
Page 2 of 8
included in the Company's resource modeling associated with the Bridger plant. When
the Company was preparing this information, it was determined that the fina! reported
portfolio costs within the IRP inadvertently truncated the recovery of existing capital
investment for portfolios in which a Bridger unit was retired early.l
To arrive at total portfolio costs within the IRP, two genera! steps are performed in
sequence: 1) resource portfolios are developed, then 2) net power supply expenses
("NPSE") are calculated for each of the constructed portfolios to determine total portfolio
costs.
ln the first step, portfolios are constructed through a combination of the AURORA
model's Long-Term Capacity Expansion ("LTCE') functionality and subsequent manual
refinements. Due to computing bandwidth and model capabilities, this step is performed
by analyzing one week per month per year for 20 years within the LTCE model. Then, as
further discussed in Chapter 9 of the !RP, starting from the LTCE portfolios, manual
refinements are applied to determine if portfolios can be further optimized for ldaho
Power's service area. As discussed further below, this step properly modeled Bridger
end-of-life costs.
In the second step, once the portfolios are constructed, more granular hourly
interval modeling is performed to determine the NPSE associated with each of the
portfolio buildouts. Because this second step is not making resource decisions while
simultaneously calculating portfolio @sts, the computing requirements are less
substantial, thus allowing the Company to utilize a more granular 8,760-hours-per-year
approach.
The truncation of costs occuned in the second step and resulted from the way
AURORA accounts for fixed costs in the modeling process, and how these costs are
ultimately reflected in the modeling output. Under the standard modeling logic used by
AURORA, fixed costs must be input in the model as annual amounts. Therefore, costs
associated with existing capital investment at the various Bridger units were required to
be converted to annual recovery amounts between 2019 and the cunent Bridger end-of-
life date of year-end 2034. To account for the accelerated recovery of existing
investments in the event of a unit shutting down prior to 2034, an additional input was
required that represents the net book value ('NBV") of existing capita! at the end of each
year in the modeling period. The inclusion of the NBV input is necessary to ensure that
the final present value portfolio costs reflect all associated non-avoidable costs when
determining whether or not a unit should be shut down early.2
1 Within the context of this letter, the reference to an 'early" Bridger unit retirement means any unit that is
retired prior to the existing shutdown date of 2034.
2 This methodology reflects the standard regulatory cost recovery approach of recovering the costs of an
asset over its useful life. As discussed with the IRP Advisory Council, the Company believes this
modeling approach is appropriate given the lack of an existing alternative cost recovery mechanism.
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ldaho Public Utilities Commission
May 29,2020
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The NBV of certain retired Bridger units was inappropriately excluded from the tota!
portfolio costs reported in the IRP thereby understating the tota! portfolio costs. ln the
event that a unit was shut down early, the costing model simply zeroed out the annual
cost associated with that unit for each year after the shutdown date, without taking into
account the NBV of existing capital at that time, even though cost recovery would still be
required for the uncollected portion of existing capital. ln other words, the annual cost
recovery stream for existing capital was truncafed rather than accelerated. This resulted
in these costs being excluded from portfolios that contained early Bridger unit retirements.
!n examining the output of the AURORA costing model through the aforementioned
discovery process, the Company determined that the truncated fixed costs should have
been added back to the modeling output after-the-fact to reflect all costs associated with
these portfolios.
It is important to note that the truncation of costs existed in the second step in the
process when the Company was performing the more granular NPSE runs to determine
total portfolio costs. This omission did not impact the optimization of resource portfolios
determined by the LTCE modeling nor the resource decisions made in the subsequent
manual portfolio development process.
l!. Corrected Results
As mentioned previously, ldaho Power's correction of the cost omission impacts
seven pages of the IRP that included or were based on tota! portfolio costs. Upon
recognition of the omission, the Company performed a thorough review of the revised
results to determine components of the IRP impacted by the correction. The intent of this
review was to determine whether any of the conclusions or decisions from the IRP
required revision. As discussed further in this section, the Company has determined the
conected analysis does not impact the final conclusions contained in the lRP. To make
this determination, the Company revisited the three primary steps in the decision-making
process that were based on total portfolio cost: 1) portfolios selected for manual
optimization, 2) selection of the Prefened Portfolio, and 3) development of the near-term
action plan.
1. Portfolios selected for Manual Optimization
The selection of portfolios forfurther manual optimization was based in part on the
information provided in Figure 9.1 of the lRP, which contains two axes: one reflecting tota!
portfolio cost, and the other reflecting risk variance as determined by the standard
deviation of each portfolio modeled under four different futures. The original chart is
provided below:
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ldaho Public Utilities Commission
May 29,2020
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Figure 9.1 - Amended 2019 IRP
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Fou.Scensnos NPV Vad.rce (S x 1,O@)
31 250.OOO $1.450 OOO
As described in more detail on pages 108 and 109 of the lRP, the Company
selected portfolios 2, 4, 14, and 16 for further evaluation given their relative performance
from both a total cost and risk perspective.
Because Figure 9.1 is based on total portfolio cost and variance, it was impacted
by the conected data. Therefore, the Company developed the conected chart, as
provided below:
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ldaho Public Utilities Commission
May 29, 2020
Page 5 of 8
Gorrected Figure 9.1
The above information demonstrates that the selection of the prefened portfolio
would have been the same had the conected information been known at the time the lRP
was developed. As shown on this chart, Portfolios 2,4,14, and 16 still perform wel! with
regard to both total cost and risk relative to other portfolios. While the conection caused
some movement in the data points plotted within this figure, the Company's initial
conclusions remain valid.
2. Selection of the Prefened Portfolio
Following the selection of Portfolios 2,4,14, and 16, the Company performed the
manual optimization process that was primarily based on preserving the 1S-percent
planning margin while modifying the exit datesforthe various Bridger units. Because total
portfolio costs were an output of this step rather than an input, the modeling decisions
made in this step were not impacted by the new data. However, once the manual
adjustments were complete, the final portfolios were compared utilizing total cost as a key
metric, thus having the potential to impact the Company's selection of its Preferred
Portfolio. Ultimately, as discussed further below, the Company determined that the same
Preferred Portfolio identified in the IRP remains the least-cost, least-risk option once all
costs are appropriately considered.
The table below contains a summary of total net present value portfolio costs
utilizing the conected data, as compared to the original amounts contained in the lRP.
While this table contains summary data under the Planning Gas-Planning Carbon
scenario, the full corrected table under each of the modeled scenarios (Planning Gas-
Panning Carbon, High Gas-Planning Carbon, Planning Gas-High Carbon, and High Gas-
High Carbon) is provided in the attached replacement pages.
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Filing Center
ldaho Public Utilities Commission
May 29,2020
Page 6 of 8
Total Portfolio Cost Comparison
Ranked by Total Cost
Corrected vs. Amended IRP
Planning Gas-Planning Garbon
($000's)
Corrected Amended IRP
P16-4 $6.127.043 P16-4 ;5.996.478
P16-2 $6,128,474 P14-4 $6,012,329
P14-3 $6.132.463 P14-5 $6.026,339
P16-1 $6.139.322 P16-2 $6.033.966
P16-3 $6,140,885 P14-6 $6,040,012
P14-4 $6.142.894 P14-2 $6.050.117
P14-2 $6.144.625 P14-3 $6.068.301
P14-1 $6,148.128 P16-1 $6,069,778
P14-5 $6.150.717 P16-3 $6.076.723
P14-6 $6,158,834 P14-1 $6,078,583
P2-3 $6.207.994 P2-4 $6,103,118
P2-1 $6.214.646 P2-5 ;6.117.622
P2-2 $6.224.380 P2-6 $6.129.786
P2-4 $6,233,683 P2-2 $6,129,872
P4-3 $6,234,937 P2-3 $6,143,832
P2-5 $6.241.999 P2-1 $6.145.102
P2-6 $6,248,609 P4-4 $6,151,167
P4-1 $6,252,296 P4-2 $6.160,188
P4-2 $6.254.696 P4-3 $6.170.775
P4-4 $6.281.731 P4-1 $6.182.752
The column titled "Corrected" contains the corrected total portfolio costs ranked by
relative performance, while the column titled "Amended lRP" contains total portfolio costs
as included in the 2019 Amended lRP. While the "Amended lRP" values contain the
aforementioned omission and should not be compared to the absolute costs contained in
the "Corrected" column, the Company is providing this side-by-side comparison to support
the following discussion of why the corrected information does not result in a modification
of the Prefened Portfolio.
For a number of reasons, the Company determined that it still would have selected
Portfolio 16(4) as the Preferred Portfolio had the conected total portfolio costs been
known at the time the Amended IRP was prepared. First, Portfolio 16(a) remains the least-
cost portfolio under planning assumptions. The margin between this portfolio and the
next-best option is smaller: in the 2019 Amended !RP, Portfolio 16(4) outperformed
Portfolio 14(4') by approximately $16 million, while in the conected results, Portfolio 16(4)
outperformed the next-best performing Portfolio 16(2) by $t.4 million. While this gap is
Filing Center
ldaho Public Utilities Commission
May 29,2020
Page 7 of 8
relatively narrow, the only differences between the corrected 16(4) and 16(2) are related
to the retirement timing of the final Bridger unit in the 2030's. Examining the next-best
option not based on Portfolio 16 (i.e. Portfolio 14(3)), the cost gap widens to $5.4 million.
Similarly, the primary differences between Portfolio 14(3) and the Preferred Portfolio are
also related to Bridger unit retirement decisions beyond 2030. While the cost margins are
relatively less under the conected results, Portfolio 16(4) is still the least cost option, and
other high-performing options presented no compelling reason to consider a shift in the
preferred choice.
The Company also examined the significance of the corrected information with
regard to the Boardman-to-Hemingway transmission line ("82H"), and determined that
the corrected results still support the selection of the Preferred Portfolio. To support this
conclusion, the Company considered the cost differences between the lowest cost
portfolios with and without B2H. ln the 2019 Amended lRP, the difference between the
Prefened Portfolio and the best-performing non-B2H portfolio was $106.6 million, while
after the correction this gap narrowed to $81 million; these results still support the
selection of Portfolio 16(4) as the prefened option for Idaho Power and its customers.
3. Evaluation of the Near-Term Action Plan (2019-2026)
After performing the step-by-step review detailed above, the Company determined
that the Near-Term Action Plan for the time period 2019-2026 is not impacted by the
conected information. While the margins between the top-performing portfolios narrowed
relative to what was included in the IRP filing, Portfolio 16(4) was still the top performer,
with the next best option being identical within the action plan window. Aside from Bridger
unit exit dates, another key component of the action plan is the construction of the B2H
transmission line, which is supported by a margin of over $80 million over the best
performing non-B2H option.
lll. Conclusion
The Company strives to produce accurate and reliable planning results and regrets
any impact that this required correction may have on the IRP review process. ldaho Power
would however like to emphasize that this conection is solely related to the total portfolio
costs presented on the seven pages included in the attachments, while all other
components - including the LTCE modeling and manual portfolio construction, as wellas
associated inputs - remain valid. The conclusions drawn by the Company as discussed
in the 2019 Amended IRP have not changed, as the Company still believes that Portfolio
16(4) is the least-cost, least-risk option to reliably serve ldaho Power's customers into the
future.
Please contact me at [phone] if you have any questions
Filing Center
ldaho Public Utilities Commission
May 29, 2O2O
Page 8 of 8
Very truly youlls,
&" !.(r"t-t*-*,
Lisa D. Nordstrom
LDN:sdh
cc: SeMce List
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC.E.I9.19
IDAHO POWER COMPANY
ATTACHMENT
LEGISLATIVE FORMAT
9. Modeling Analysis ldaho Power Company
Table 9.2 AURORA hourly simulations
Planning Garbon High Carbon
Planning Gas
High Gas
X
x
X
x
The purpose of the AURORA hourly simulations is to compare how portfolios perform under
scenarios different from the scenario assumed in their design. For example, a portfolio designed
under Planning Gas and Planning Carbon should perform better relative to other portfolios under
a Planning Gas and Planning Carbon scenario than under a High Gas and High Carbon scenario.
The compiled results from the four hourly simulations are shown in Table 9.3.
Table 9.3 2019 IRP WECC-optimized portfolios, NPV years 2019-2038 ($ x 1,000)
NPv ($ x 1000)
Planning Gas-
Planning Carbon
High Gas-
Planning Carbon
Planning Gas-
High Garbon
High Gas-
High Carbon
Portfolio 1
Portfolio 2
Portfolio 3
Portfolio 4
Portfolio 5
Portfolio 6
Portfolio 7
Portfolio 8
Portfolio 9
Portfolio 10
Portfolio 11
Portfolio 12
Portfolio 13
Portfolio 14
Portfolio 15
$6.262.350$ffi
s6,223,789
$H€O3e8
$6.874.144$ffi
$6,842,290
$#11.725
$6.247.134
$624?-134
$6.300.335
$H95"506
$7.127.612
$6ps7p47
$7.051,976
$6p2+4r-r
$6,351.648$ffi
$6,B57,192$w
$8.046,481
$7p36J26
$7.971.543
$7S66,893
$6.298.486w
$6.174.321$ffi
$6.614.981
$6148+416
$6.983.921$w+
$7.093.879
$7S50,988
$7.341,288
$7??-10J23
$7.316.957$++W
$6,965.305$ffi
$6.995.951
$opea-122
$7.465.617$#2
$7.439.290$ffi
$6.960.567$ffi
$7.075.085
$7p75p85
$8.000,950
$7*90504
$7,955,809
$7,951,'159
$7.084,234
$7p84*34
$7.124.752
$7S8+€€4
$7.316,209
$+185$44
$8.615.746
$8,6{sJqo
$8.311.531
$8*€e€40
$7,889.371
$7J58€06
$7.895.248
$7J64i683
$8.640.298
$&so+s8
$8.675.861
$8S7+032
$8,013.583
$7S83p48
$7.976.251
$7;845i686
$8,563,652
$es$s52
$8.319.929$W
$8,622,632
$8512371
$8.513.342
$81409.693
$8.966.855
$8,966S55
$8.469.873$W
$7.91 '1.042
$7,789,477
$9.785.216
$gJ8q2_i€
$9.526.968
$si484#71
$8.448.550
$83++p85
$8.484,150$ffi
$9.783.543
$9J83r543
$9.772.529
$sJ67+O+
$8,429,0s9
$8*981494
$8.460.322
$8329J57
$9,640,438$sffi
$9.006.307
$sp06307
$8,669,388
$8,559333
$8,608.133
$9503,484
$10,'126.243
s14Jr6,?43
$9.764,847
$c#+e56
$8,760.622$&w
Page 106 Amended 2019 IRP
ldaho Power Company 9. Modeling Analysis
Portfolio 16
Portfolio 17
Portfolio 18
Portfolio 19
Portfolio 20
Portfolio 21
Portfolio22
Portfolio 23
Portfolio 24
$6.763.329$WH€4
$6,306.492
$630614S2
$6.1 98.529
$6J€5S38
$6.901,220
$6J7OS55
$6.942,680$w
$6.483.530$ffi
$6.511.244W
$7.361 .418
$7+301953
$7.511.054$ffi
$7.335,705s@40
$7.084.799
$7S84+se
$7,100.577
$7S57$85
$7.417.954
$7+87p8s
$7.401.825$##Je7
$7.074.327
$7$74,"27
$7,064,598$7+ffi
$7.715.737
$7#85J+2
$7.811.640
$7$81i975
$L932Jr_9
$7*0+154
$8.943.907
$8n943p07
$8.684.580
$8$4+S8e
$8.009.460
$7S78€95
$8.1 70.1 1 7
$8,O8qO7g
$8.795,307
$8J95307
$8.722.004w
$8.281.876
$8J51-+t+
$8.359.016
$8+28+5+
$8.646.724
$8'5+eJ59
$10.093.639
$1+0931639
$9,817.930
$9J75p39
$8.644.820$8$+ffi
$8.830.530
$8J4O,492
$9.733,627$w
$9,634,701$s,ffi4+
$8,705,303
$8r574J38
$8,761,633
$&€1+68
Under the Planning Gas and Planning Carbon scenario, Pl4 has the lowest NPV value of the
24 WECC -optimized portfolios at 96,1 7 4]+,43e32 1,000.
Figure 9.1 takes the information in Table 9.3 and compares all24 portfolios on a two-axis graph
that shows NPV cost under the plaruring scenario and the four-scenario standard deviation in
NPV costs. The y-axis displays the NPV values under Planning Gas and Planning Carbon, and
the x-axis displays the four-scenario standard deviation in NPV costs for the four scenarios
shown in Table 9.3. Note that all cost scenarios are given equal weight in determining the four-
scenario standard deviation. Idaho Power does not believe that each future has an equal
likelihood, but for the sake of simplicity presented the results assuming equal likelihood to
provide an idea of the variance in NPV costs associated with the four modeled scenarios.
Figure 9.1 shows that P14 is the lowest-cost portfolio under Planning Gas and Planning Carbon,
although its four-scenario standard deviation is higher than some other portfolios. Conversely, P
24has the lowest four-scenario standard deviation, but the highest expected cost under Planning
Gas and Planning Carbon. Portfolios plotted along the lower and left edge of Figure 9.1 represent
the efficient frontier in this graph of cost versus cost standard deviation. Moving vertically,
portfolios plotting above the efficient frontier are considered to have equivalent cost variance,
but higher expected cost. Moving horizontally, portfolios plotting to the right of the efficient
frontier are considered to have equivalent expected cost, but greater potential cost variance.
Amended 2019 IRP Page 107
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10. Prefened Portfolio and Action Plan ldaho Power Company
Based on these results, Idaho Power selected the following four WECC-optimized portfolios for
manual adjustmant with the objective of further reducing Idaho Power-specific portfolio costs:
Portfolio 2 (Planning Gas, Planning Carbon, without B2H)
Portfolio a (Planning Gas, High Carbon, without B2H)
Portfolio 14 (Planning Gas, Planning Carbon, with B2H)
Portfolio 16 (Planning Gas, High Carbon, with B2H).
Manually Built Portfolios
The manual adjustments to the selected four WECC-optimized portfolios specifically focused on
evaluating Jim Bridger coal unit exit scenarios. In addition, a l5-percent planning margin was
preserved while generally retaining the resource mix of the WECC-optimized portfolio.
Table 9.4 shows the six selected Jim Bridger exit scenarios studied.
Table 9.4 Jim Bridger exit scenarios
Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 Scenario 6
2022
2026
2034
203/
2022
2026
2028
2034
2022
2028
2034
203r',
2022
2026
2028
2030
2023
2026
2028
2030
2024
2026
2028
2030
The Jim Bridger exit scenarios (1), (2), (3), and (4) focused on evaluating exit scenarios for the
second, third and fourth units, while scenarios (5) and (6) focused on evaluating the exit date
associated with the first Jim Bridger unit. Scenarios (5) and (6) centered on portfolios developed
under a planning natural gas, planning carbon future, or P2 and P14. Thus, the complete set of
manually built portfolios consists of the following:
o P2 derived portfolios-P2(l), P2(2), P2(3), P2(4), P2(5), P2(6)
o P4 derived portfolios-P4(l),P4(2), P4(3), P4(4)
o Pl4 derived portfolios-P14(1), Pl4(2), P14 (3), Pl4 (4), Pl4 (5), Pl4 (6)
o P16 derived portfolios-P16(1), Pl6(2), P16(3), Pl6(4)
Manual adjustments yielded the portfolio cost changes for P2 (decreases and increases).
Table 9.5 Jim Bridger exit scenario cost changes tor P2
Scenarios 1 2 3 4 5 6 Average
Planning Gas, Planning Carbon
High Gas, Planning Carbon
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s.3%- 9_4%- 91%-1& 03% 0J%
3_J-%ZS 3.6o/o2-5 Z6%1=Mol o/frff
Page 1 10 Amended 2019lRP
ldaho Power Company 10. Preferred Portfolio and Action Plan
Planning Gas, High Carbon
High Gas, High Garbon
Average
2=0%.-
-1 5%-1=*
-0.9%
-3.s%-+&
-2J%-3&
-'1.70/o
-1J%-&
-:_!%-&
-1.0o/o
-1,4%-
c Eot
-2.e%.-
33%
'2.Oo/o
-1_3%:
53%
-2s%-
3J%
-1.9o/o
-!.2%-
5,%
-+6y"-'l.go/o
-3.4o/o'
4A%
-asyo-'|.50/o
As demonstrated in the tables above, the LTCE model performed reasonably well in developing
low cost portfolios for Idaho Power's service area. However, Idaho Power was able to further
lower overall portfolio costs through the manual refinements detailed above. Based on these
results, the company is confident that its preferred portfolio detailed in Chapter 10 achieves the
low cost, low risk objective of the IRP.
Manual adjustrnents yielded the following portfolio cost changes for P4 (decreases and
increases):
Table 9.6 Jim Bridger exit scenario cost changes for P4
Scenarlos 1 2 3 4 Average
Planning Gas, Planning Garbon
High Gas, Planning Carbon
Planning Gas, High Carbon
High Gas, High Garbon
Average
-8.6%-7&
-25%-
1.8%2f%
8s%w
-p.2%ee
-8.6%-8%
-1 8%-1=*
q !%s5%
9.8%ru
-0s%-w
-B_9%-gJ%
-37%-
7f,%7.W
gJ%:se
-94%se
-3_,zu--g4%
-9.M-w
-!.2%-o&
6.6%W
-01%-
e€%
:9.0%-c+%
-2_,0%_-
1,4%
0.9%+A%
2.6%w
-01%o.o%
Manual adjustrnents yielded the following portfolio cost changes for Pl4 (decreases and
increases):
Table 9.7 Jim Bridger exit scenario cost changes lor P14
Scenarios 1 2 3 4 5 6 Average
Planning Gas, Planning Garbon
High Gas, Planning Carbon
Planning Gas, High Carbon
High Gas, High Carbon
Average
-!,4%.-
0s%
1.4%+O
'J-3%.-
1-7%
-0p%-w
-0_3%-w
--01%-&
2_.1%.14
-31%:
33%
-2,1%-H
-1-1%-
43%
-e,!%-
1=O%
1.0%,u
-1 .0%-
1-3%
-!,2%-
a4%
-0,2%.-
os%
-01%-&
2.9%1=f
-4.M-
54%
-3.6%-M
-1-4%:
a Eo/
-0.4%-
2.Bo/o11
-3.,2"k.-
-3,6%.-
44%
24r/,
-0.3%-
I EOl
2_J%,L6
-!.2%-
5=1%
-3,5%:&
-1-3%:2&
-01%-
1=4%
2j%+M
-3 0%-
3-7%
-2.4Yo-
33%
-0-9%-
lJ%
Manual adjustments yielded the following portfolio cost changes for P16 (decreases and
increases):
Amended 2019 IRP Page 111
Table 9.8 Jim Bridger exit scenario cost changes for P16
10. Preferred Portfolio and Action Plan ldaho Power Company
Scenarios 2 3 4 Average
Planning Gas, Planning
Carbon
High Gas, Planning Carbon
Planning Gas, High Carbon
High Gas, High Carbon
Average
-s.2%4& -3.M4.e% -3.2%1e -9.4%€$% -9.3%-8*%
-2.3%1=*
2__&etx
10.0%1&8%
9.2%1.1%
-1-l%1.-2%
9f,%1ax
EJ%8€%
-0.5%0s%
4.8%1M
2_.5%3#
10.1%114%
9.M1&
{3%+e%
-9:1%41%
7.4o/o&
-0.9%43%
-1.9%4-e
1.4%2e
gs%e-s%
-0.2%w
The costs for the manually built portfolios under the four natural gas and carbon scenarios are
provided in Table 9.9.
Table 9.9 2019 lRP manually built portfolios, NPV years 2019-2038 ($ x 1,000)
NPv ($ x
1000)
Planning Gas-
Planning Carbon
High Gas-Planning
Garbon
Planning Gas-High
Garbon
High Gas-
High Carbon
P2-1
P2-2
P2-3
P24
P14-1
P1+2
P14-3
P14-4
P4-1
P+2
P+3
P44
P1&1
P16-2
P16-3
P16-4
P2-5
P2-6
P14-5
P14-6
$6.214.646$ffi
$6.224.380$W
$0.zoz.gga$6Ja3s32
$6.233.683$&+0311{€
$6.148.128$6p78f83
$6.144.625$W
$6.132.463$6p6H+
$6.142.894$6342329
$6.252.296$ffi2
$6.254.696$6J€OJ€8
$6.234.937$€#7€*75
$6.281.731$€#51+€7
$6,139.322$€S€€F+8
$6.128.474$6p33p66
$6.140.885$6pffi3
$6.127,043$5p9+4+8
$6. 24 1, 999$€r1-1+i€e2
$6.248.609$6J29J86
$6.150.717$6S26338
$6.158.834$6p4OB{+
$7.191,103$7J2{+,58
$7.277j39s;]48E€g?
$7.133.215$7p69,O53
$z.gos.oz0$7+3+055
$7.223.413$7r+53€69
$7.272.O17$t+4a50g
$7,1 93.333$#2€r{+2
$7.332.295$4?0i1r73o
$7.133.892$7€641347
$7.186,760$7S92+52
$7.089.312$7S25J50
$7.285.775$#55*40
$7.164.787$7€95343
$7.212.430$t+]g-$22
$7127.226s7#3W
$7.274.178$#431613
$7.358.157$7+33J79
$7.34e.519$7+30Ss7
$7.325.242$7+00€64
$7.317.331$+{A8SO8
$8.143,812$8S74*€8
$7.986.643$7*92S
$8.1 73,037$8J€8S75
$7.946.693$7€1ffi
$8,356.333$8+86J89
$8.203.655$&1€€f147
$8.384.001$831a339
$8.101.415$7J+€r85O
$8.040.012$+ng70r4€8
$z.ags.st s$7€o{roos
$8.032.887$7S68J25
$z.egz.+s8$7+54*93
$8.137.558$8p€9,O14
$7.991.379$7p9W2
$8.129,659$8p6W
$7.922.348$;71791+83
$z.gsz.gz5$7s2+p98
$7.959.204$7"84e392
$8,1 09.990$7p85${2
$8.118.130$499W
$9.386.183$9316S39
$9.265.187$+17Oi6.79
$9.394.39W34
$9.247.321$gJ{€J5€
$9.678.095$s€08S5+
$9.498,540$q4O4+32
$9.743.204$9rw
$9.+ra.osa$9#8as89
$9.204.273sp1434+29
$e.058,868$sp64360
$9.218.379$€H€'4+{+
$9.043.868$8p13r303
$9.507.231$q€7n687
$e.362.875$s*€e#
$9.51 5,841$9145{1679
$9.283.140$9J52ffi
$9.254,151$g+2AJ74
$9,257.987$9J3sJ€4
$9,416.194$ffi
$9.421 . 1 22$9302+99
Under the Planning Gas and Planning Carbon scenario, Pl6(4) has the lowest NPV value of the20a portfolios at865,ry6127,478Q4tr000.
Page 112 Amended 2019 IRP
ldaho Power Company 10. Prefened Portfolio and Action Plan
.hfrh5
. hfth lt
x.X..
xx
,.
x.X
X..
x..X ..
a aaaa a aaa .
X.
x
.x
t<
x a a a a aa-aa
$,ooqm
x,'
ts,54m t6,00,m t4$qm sr0qo iino aEm@
x
mFrt@l
.x
x.
s,5@.000
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xx
x
x
.X
X.
X
x.
x. . X.
X
x
x
X
.x
.x ..
. .X
17 5mom
Figure 9.5 Portfolio stochastic analysis, total portfolio cost, NPV years 2019-2038 ($x 1,000)
The horizontal axis on Figure 9.5 represents the portfolio cost (NPU in millions of dollars,
and the 24 ponfolios are re,presented by their designation on the vertical axis. Each portfolio has
20 dots for the 20 different stochastic iterations scattered across different NPV ranges. The Xs
designate the Planning Gas Planning Carbon scenario that was performed for each portfolio.
The distribution of 20-year NPV portfolio costs for the set of 20 manually built portfolios is
shown in Figure 9.6.
Amended 2019 IRP Page 115
10. Prefened Portfolio and Action Plan ldaho Power Company
.rl.l
.tt-l
. P2.l
. tr{
. [+l
. a+,
a tt&t
.Fl
. P1CI
.nH
r n6i
rEH
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xx.x.x
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Xr
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xx.
X.x.
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x
x
X
x
3i,E@ 36e@ 5u@ g,.q@ t50@ t.aq,o
mlSrwl
Page 114 Amended 2019 IRP
ldaho Power 10. Prefened Portfolio and Action Plan
oP2-1
cP2-2
tP2-3
tP24
oP141
oP142 o
oP1L3
cP1S4
c P4-1
oP4-2
o P4-3
oP44
r P1&1
cP1G2
o P1&3
o PlG4
oP2-5
oP2$
oP1*5
oP14-6
$5,500,000
Figure 9.6
o!
x
oN
{o
X
\o
x
X.
o\
X
rN
x
\o
X.
r!
X.
X.
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t aa a
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oa aa o
aa a a a
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ao a aa a
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a a a aa
a- aa
aa a a
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aa
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a-
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aaa
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a aa
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aa a a-
o aa a
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a aa a
a -a a
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oao
a aa
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a a
o
o
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a
a
a oa
a
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a
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a a- aa
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a
a
o
a
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a aa
aa
-
aa
a
a
a
a a a
a
a o
$6,000,000 $6,500,000 $7,000,000 $7,500,000
NPV ($ x 1000)
ilanually built portfolio stochastic analysis, tota! portfolio cost, NPV years
2019-2038 ($x 1,000)
Amended 2019 IRP Page 115
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-I9-19
IDAHO POWER COMPANY
ATTACHMENT
CLEAN FORMAT
9. Modeling Analysis ldaho Power Company
Table 9.2 AURORA hourly simulations
Planning Carbon High Garbon
Planning Gas
High Gas
X
X
X
X
The purpose of the AURORA hourly simulations is to compare how portfolios perform under
scenarios different from the scenario assumed in their design. For example, a portfolio designed
under Planning Gas and Planning Carbon should perform better relative to other portfolios under
a Planning Gas and Planning Carbon scenario than under a High Gas and High Carbon scenario.
The compiled results from the four hourly simulations are shown in Table 9.3.
Table 9.3 2019 lRP WECCoptimized portfolios, NPV years 201F2038 ($ x 1,000)
NPv ($ x 1000)
Planning Gas-
Planning Garbon
High Gas-
Plannlng Garbon
Planning Gas-
Hlgh Carbon
High Gas-
High Carbon
Portfolio 1
Portfolio 2
Portfolio 3
Portfolio 4
Portfolio 5
Portfolio 6
Portfolio 7
Portfolio 8
Portfolio 9
Portfolio 10
Portfolio 11
Portfolio 12
Portfolio 13
Portfolio 14
Portfolio 15
Portfolio 16
Portfolio 17
Portfolio 18
Portfolio 19
Portfolio 20
Portfolio 21
Porllolio22
Portfolio 23
Portfolio 24
$6,262,3s0
$6,223,789
$6,874,14
$6,842,290
$6,247,1v
$6,300,335
$7,127,612
$7,051,976
$6,351,6/A
$6,857,192
$8,046,481
$7,971,543
$6,298,486
$6,174,321
$6,614,981
$6,763,329
$6,306,492
$6,198,s29
$6,901,220
$6,942,680
$6,483,530
$6,511,2214
$7,361,418
$7,511,054
$6,983,921
$7,093,879
$7,U1,2U
$7,316,957
$6,965,305
$6,995,951
$7,465,617
$7,439,290
$6,960,567
$7,075,085
$8,000,950
$7,955,809
$7,08/,2u
$7,',t24,752
$7,316,209
$7,335,705
$7,084,799
$7,100,577
$7,417,gil
$7,401,825
$7,074,327
$7,004,598
$7,715,737
$7,811,640
$8,615,746
$8,311,531
$7,889,371
$7,895,2/A
$8,O40,298
$8,675,861
$8,013,583
$7,976,251
$8,563,652
$8,319,929
$8,622,632
$8,513,342
$8,966,855
$8,469,873
$7,911,042
$7,932,719
$8,943,907
$8,684,580
$8,009,460
$8,170,117
$8,79s,307
$8,722,0M
$8,281,876
$8,359,016
$9,785,216
$9,s26,968
$8,448,550
$8,484,1s0
$9,783,543
$9,772,529
$8,429,059
$8,460,322
$9,640,438
$9,006,307
$8,669,388
$8,608,133
$10,126,243
$9,764,847
$8,760,622
$8,646,724
$10,093,639
$9,817,930
$8,il4,820
$8,830,530
$9,733,627
$9,634,701
$8,705,303
$8,761,633
Page 106 Amended 2019 IRP
ldaho Power Company 9. Modeling Analysis
Under the Planning Gas and Planning Carbon scenario, Pl4 has the lowest NPV value of the
24 WBcc-optimized portfolios at $6,17 4,321,000.
Figure 9.1 takes the information in Table 9.3 and compares all24 portfolios on a two-axis gaph
that shows NPV cost under the planning scenario and the four-scenario standard deviation in
NPV costs. The y-axis displays the NPV values under Planning Gas and Planning Carbon, and
the x-axis displays the four-scenario standard deviation in NPV costs for the four scenarios
shown in Table 9.3. Note that all cost scenarios are grven equal weight in determining the four-
scenario standard deviation. Idaho Power does not believe that each future has an equal
likelihood, but for the sake of simplicity presented the results assuming equal likelihood to
provide an idea of the variance in NPV costs associated with the four modeled scenarios.
Figure 9.1 shows that Pl4 is the lowest-cost portfolio under Planning Gas and Planning Carbon,
although its four-scenario standard deviation is higher than some other portfolios. Conversely, P
24has the lowest four-scenario standard deviation, but the highest expected cost under Planning
Gas and Planning Carbon. Portfolios plotted along the lower and left edge of Figure 9.1 represent
the efficient frontier in this graph of cost versus cost standard deviation. Moving vertically,
portfolios plotting above the eflicient frontier are considered to have equivalent cost variance,
but higher expected cost. Moving horizontally, portfolios plotting to the right of the efficient
frontier are considered to have equivale,nt expected cost, but greater potential cost variance.
Amended 2019 IRP Page 107
(Lt
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ldaho Power Company 10. Prefened Portfolio and Action Plan
Based on these results, Idaho Power selected the following four WECC-optimized portfolios for
manual adjustment with the objective of further reducing Idaho Power-specific portfolio costs:
Portfolio 2 (Planning Gas, Planning Carbon, without B2H)
Portfolio 4 (Planning Gas, High Carbon, without B2H)
Portfolio la (Phnning Gas, Planning Carbon, with B2H)
Portfolio 16 (Planning Gas, High Carbon, with B2H).
Manua!!y Built Portfolios
The manual adjustrnents to the selected four WECC-optimized portfolios specifically focused on
evaluating Jim Bridger coal unit exit scenarios. In addition, a 15-percent planning margin was
preserved while generally retaining the resource mix of the WECC-optimized portfolio.
Table 9.4 shows the six selected Jim Bridger exit scenarios studied.
Table 9.4 Jim Bridger exit scenarios
Scenario 1 Scenario2 Scenario 3 Scenario 4 Scenario 5 Scenario 6
2022
2026
2034
2034
2022
2026
2028
203/.
2022
2028
2034
2034
2022
2026
2028
2030
2023
2026
2028
2030
2024
2026
2028
2030
The Jim Bridger exit scenarios (1), (2), (3), and (a) focused on evaluating exit scenarios for the
second, third and fourth units, while scenarios (5) and (6) focused on evaluating the exit date
associated with the first Jim Bridger unit. Scenarios (5) and (6) centered on portfolios developed
under a planning natural gas, planning carbon future, or P2 and P14. Thus, the complete set of
manually built portfolios consists of the following:
o P2 derived portfolios-P2(l), P2(2), P2(3), P2(4), P2(5), P2(6)
. P4 derived portfolios-P4(l),P4(2), P4(3), P4(4)
o Pl4 derived portfolios-P14(l), Pl4(2), Pl4 (3), Pl4 (4), Pl4 (5), Pl4 (6)
o Pl6 derived portfolios-Pl6(l), Pl6(2), Pl6(3), Pl6(4)
Manual adjustments yielded the portfolio cost changes for P2 (decreases and increases).
Table 9.5 Jim Bridger exit scenario cost changes lor P2
Scenarios 12 3 4 5 6 Average
Planning Gas, Planning Carbon
High Gas, Planning Carbon
Planning Gas, High Carbon
High Gas, High Carbon
-O.1Yo
1.4o/o
-2.OYo
-1.5o/o
0.0olo
2.6Yo
-3.9%
'2.7o/o
-0.3%
0.6%
-'|.70/a
'1.4o/o
0.2Yo
3.8Yo
-4.4Yo
-2.90/
0.3%
3.lYo
4.3o/o
'2.9o/o
0.4Yo
3.6%
-4.2o/o
-2.BYo
0.1Yo
2.6Yo
-3.40/o
-2.40/
Amended 2019lRP Page 109
10. Preferred Portfolio and Action Plan ldaho Power Company
Average -0.9% '1 .7o/o -1 .Oo/o -2.0o/o '1.9% '1 .8o/o -1 .5o/o
As demonstrated in the tables above, the LTCE model performed reasonably well in developing
low cost portfolios for Idaho Power's service area. However, Idaho Power was able to further
lower overall portfolio costs thrcugh the manual refinements detailed above. Based on these
results, the company is confident that its preferred portfolio detailed in Chapter l0 achieves the
low cost, low risk objective of the IRP.
Manual adjustments yielded the following portfolio cost changes for P4 (decreases and
increases):
Table 9.6 Jim Bridger exit scenario cost changes tor P4
Scenarios 1 2 3 4 Average
Plannlng Gas, Planning Garbon
High Gas, Planning Garbon
Planning Gas, High Carbon
High Gas, High Carbon
Average
-8.6Yo
-2.5!o
1.8Yo
8.5To
-0.2Yo
-8.6%
-1.8Yo
O.OYo
6.8To
-0.9o/o
-8.9o/o
-3.1o/o
'l .70/o
8.7Yo
-O.4o/o
-8.2Yo
-0.40/o
-0.2o/o
6.6%
-O.SYo
'8.60/0
-2.OTo
0.9%
7.6Yo
-0.5Yo
Manual adjustments yielded the following portfolio cost changes for P14 (decreases and
increases):
Table 9.7 Jim Bridger exat scenario cost changes tor P14
Scenarios 2 3 4 5 6 Average
Planning Gas, Planning Carbon
High Gas, Planning Carbon
Planning Gas, High Carbon
High Gas, High Carbon
Average
-O,4Yo
1.4Yo
-1.3o/o
-O.9Yo
-0.3%
-0.5%
2.1Yo
-3.1Yo
-2.7o/o
-1 .1o/o
-0.7o/o
1.OYo
-1.OYo
-O.2Yo
-0.2o/o
-0.5olo
2.9Yo
4.4o/o
-3.60/o
-1.4o/o
-0.4o/o
2.8To
4.2o/o
-3.6%
-1.3to
-O.3o/o
2.7o/o
4.2o/o
-3.5%
-1.3Yo
-0.5To
2.1o/o
-3.iYo
-2.4o/o
-0.9%
Manual adjustrnents yielded the following portfolio cost changes for Pl6 (decreases and
increases):
Table 9.8 Jim Bridger exit scenario cost changes for P16
Scenarios 1 2 3 4 Average
Planning Gas, Planning
Carbon
High Gas, Planning Garbon
Planning Gas, High Garbon
High Gas, Hlgh Carbon
Average
-9.2Yo
-2.3o/o
2.6Yo
10.0%
o.2%
-9.4Yo
-1.7o/o
O.7o/o
8.3o/o
-0.5%
-9.2Yo
-2.$Yo
2.SYo
'i.0.10/o
o.1%
-9.4Yo
-O.8o/o
-O.1o/o
7.4o/o
-0.8%
-9.3%
-1.9o/o
1.4o/o
8.9%
-o.20h
Page 1 10 Amended 2019 IRP
ldaho Power Company 10. Prefened Portfolio and Action Plan
The costs for the manually built portfolios under the four natural gas and carbon scenanos are
provided in Table 9.9.
Table 9.9 2019 IRP manually built portfolios, NPV yeas 2019-2038 ($ x 1,000)
NPv ($ x 1000)
Planning Gas-
Planning Carbon
High Gas-
Planning Garbon
Planning Gas-
High Carbon
High Gas-
High Carbon
P2-',1
P2-2
P2-3
P2-4
P14-1
P14-2
P14-3
P14-4
P+1
P+2
P4-3
P4-4
P16-1
P16-2
P1G3
P164
P2-5
P2-6
P14-5
P14-6
$6,214,646
$6,224,380
$6,207,994
$6,233,683
$6,148,128
$6,144,625
$6,132,463
$6,142,894
$6,252,296
$6,254,696
$6,234,937
$6,281,731
$6,139,322
$6,128,474
$6,140,885
$6,127,043
$6,241,999
$6,248,609
$6,150,717
$6,158,834
$7,191,103
$7,277,139
$7,133,215
$7,363,620
$7,223,413
$7,272,017
$7,193,333
$7,332,295
$7,133,892
$7,186,760
$7,089,312
$7,285,775
$7,1il,787
$7,212,4n
$7,',t27,226
$7,274,178
$7,358,157
$7,349,519
$7,325,242
$7,317,331
$8,143,812
$7,986,643
$8,173,037
$7,946,693
$8,356,333
$8,203,65s
$8,384,001
$8,101,415
$8,040,012
$7,895,513
$8,032,887
$7,882,458
$8,137,558
$7,991,379
$8,129,659
$7,922,348
$7,952,375
$7,959,204
$8,109,990
$8,1 18,1 30
$9,386,183
$9,265,187
$9,394,396
$9,247,32',1
$9,678,095
$9,498,540
$9,743,204
$9,414,654
$9,204,273
$9,058,868
$9,218,379
$9,043,868
$9,507,231
$9,362,875
$9,515,841
$9,283,1ZCI
$9,254,151
$9,257,987
$9,416,194
$9,421,122
Under the Planning Gas and Planning Carbon scenario, Pl6(4) has the lowest NPV value of the
20 manually built portfolios at $6,127,043,000.
Amended 2019lRP Page 111
10. Prefened Portfolio and Action Plan ldaho Power Company
Figure r; ,.*ilL""n"",il"rv"i", tilJ#li,"'1",, Npv yearc 2oi$2038 ($x i,000)
The horizontal axis on Figure 9.5 represents the portfolio cost (NPV) in millions of dollars,
and the 24 portfolios are represented by their designation on the vertical axis. Each portfolio has
20 dots for the 20 different stochastic iterations scattered across different NPV ranges. The Xs
designate the Planning Gas Planning Carbon scenario that was performed for each portfolio.
The dishibution of 2O-year NPV portfolio costs for the set of 20 manually built portfolios is
shown in Figure 9.6.
xx x.
,..
.. X.x
..X..
x
.X .
X.
t
9(x,
X..
.ttl
.ll t
. ?l+l
.It
.Ba
.116t
.rlta
.tlar
ttH
. tl.t
. tl{
)<.
x
x
x
x
x
x
x
x
x
x
x
x
.X
x
x
X
x
x
$.so @o 5s@ E6r@r 37mm 37s@
Manually built portfolio stochastic analysis, total portfolio cost, NPV years
2019-2038 ($x 1,000;
,a,m@
Figure 9.6
Page 1 14 Amended 2019 IRP