20200701Motion and Update Boardman Project.pdf

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LISA D. NOROSTROT
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July 1,2020
VIA ELECTRONIC FILING
Diane Hanian, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Re: Case No. IPC-E-19-19
2019 lntegrated Resource Plan
ldaho Power Company's Motion to Suspend and
Update Regarding Boardman to Hemingway Transmission Line Project
Dear Ms. Hanian
Attached for electronic filing in the above matter is ldaho Power Company's
Motion to Suspend and Update Regarding Boardman to Hemingway Transmission Line
Project.
lf you have any questions about the enclosed documents, please do not hesitate to
contact me.
Very truly yours,
X; !.z("t-t -*,
Lisa D. Nordstrom
LDN:sdh
Aftachment
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
! n ordstrom @ id ahop ower. com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBL!C UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S 201 9 INTEGRATED
RESOURCE PLAN
CASE NO. IPC-E-19-19
IDAHO POWER COMPANY'S
MOTION TO SUSPEND
PROCEDURAL SCHEDULE
AND
UPDATE REGARDING
BOARDMAN TO HEMINGWAY
TRANSMISSION L]NE PROJECT
ldaho Power Company (ldaho Power or Company), in accordance with Procedural
Rule 056, hereby moves the ldaho Public Utilities Commission (Commission) suspend
the procedural schedule in the above-captioned case. ldaho Power seeks this
suspension to allow time for ldaho Power to conduct a comprehensive review of the
Company's Integrated Resource Plan (lRP) modeling. As described in more detail below,
ldaho Power has experienced complications in its efforts to implement a new modeling
approach in this proceeding. While ldaho Power has previously amended the initialfiling,
IDAHO POWER COMPANY'S MOTION TO SUSPEND SCHEDULE AND B2H UPDATE - I
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and has provided further corrections and revisions, the Company has identified additional
issues that require additional diligence to ensure accuracy of certain aspects of the IRP
analysis. For this reason, ldaho Power has initiated a systematic audit of the Company's
IRP modeling in consultation with ldaho Powe/s internal audit division, to ensure the
reliability of the IRP results. ldaho Power commits to concluding this audit and proposing
a revised procedural schedule in this proceeding by no later than July 31 ,2A2O. ldaho
Power has consulted with Commission Staff and they do not oppose the Company's
requested suspension.
ln addition, ldaho Power wishes to provide an informational update related to the
Boardman to Hemingway S00-kilovolt transmission line project (B2H). The B2H co-
participants are exploring several scenarios of asset and service arrangements aimed at
maximizing the value of the project to each of the co-participants' customers. Those
negotiations are ongoing, and ldaho Power expects those discussions to continue for the
foreseeable future. However, as part of the negotiations, the B2H co-participants are
exploring a potential change in the project's ownership arrangement, whereby ldaho
Power would acquire Bonneville Power Administration's (BPA) ownership share and
provide transmission service to BPA's southeast ldaho customers. Because this
ownership arrangement would include a commitment by BPA to fund the incremental cost
of ldaho Power's increased ownership percentage through a long-term purchase
agreement, the 21 percent ownership percentage assumed in the Amended 2019 IRP
continues to provide a reasonable basis for least-cost, least-risk planning for the time
being. While the negotiations are still in an exploratory stage, ldaho Power is providing
this update at this time because BPA plans to discuss the possible ownership
IDAHO POWER COMPANY'S MOTION TO SUSPEND SCHEDULE AND B2H UPDATE - 2
arrangement with its southeast ldaho customers and ldaho Power believes the
Commission would benefit from the background information provided herein.
I. MOTION TO SUSPEND PROCEDURAL SCHEDULE
1. ldaho Powerfiled its original IRP on June 28, 2019. Atthe recommendation
of ldaho Power's lntegrated Resource Planning Advisory Council, ldaho Power's IRP
used a Capacity Expansion Modeling (CEM) approach to build and optimize alternative
portfolios. Specifically, the Company employed the Long-Term Capacity Expansion
(LTCE) tool in AURORA, which allows for portfolios to dynamically adjust based on the
impacts of new capacity additions and other factors.
2. Subsequent to this initial filing, the Company identified an issue related to
the CEM approach, which required the Company to perform additional modeling to
confirm the accuracy of the IRP's conclusions. The LTCE model had optimized portfolios
for the entire Western Electricity Coordinating Council WECC) region, rather than for
ldaho Power's system in particular. For this reason, on July 19, 2019, ldaho Power
notified the Commission of the need to perform supplemental analysis to ensure that the
IRP yielded a leastcost, least-risk solution specific to ldaho Power's service area, and
asked thatthe Commission refrain from adopting a proceduralschedule untilan amended
IRP could be filed.
3. ldaho Power filed its Amended lRP on January 31,2020. This Amended
IRP identified eight modifications to the original lRP,1 and implemented a new manual
modeling step to ensure that the LTCE results yielded the best possible economic and
reliability outcomes for ldaho Power's system and customers. lmportantly, these changes
1 See Cover Letter to Amended 2019 IRP at 1-2 (Jan. 31,2020) (setting out the eight specific changes).
IDAHO POWER COMPANY'S MOTION TO SUSPEND SCHEDULE AND B2H UPDATE - 3
resulted in only two modifications to the preferred portfolio's near-term 2019-2026 Action
Plan: (1) the removal of the Franklin Solar facility, and (2) the addition of 5 megawatts
(MW) of demand response in 2031, rather than in 2026.
4. Subsequently, on May 29, 2020, the Company provided a correction to the
IRP related to the costs associated with the Jim Bridger Power Plant (Bridger). The need
for this correction was identified while preparing a response to a discovery request in a
separate docket before the ldaho Public Utilities Commission. While reviewing the
Company's modeling outputs, it became clear that certain Bridger-related costs had
inadvertently been excluded from portfolios in which a Bridger unit was exited prior to the
existing shutdown date of 2034. This correction required the replacement of seven pages
in the Company's Amended IRP but did not impact the Company's recommendation of
the Preferred Portfolio-which remained the least-cost, least-risk solution to serve
customers.
5. ln recent weeks, the Company has identified necessary changes in the
Amended lRP. These newly discovered issues have prompted ldaho Power to initiate a
comprehensive review of its Amended lRP. The review is being performed by a
multidisciplinary team of Company subject matter experts (lRP Review Team), including
participants from the Company's internal audit division.
6. This new internal review and audit process is carefully analyzing allaspects
of the Company's modeling. This process involves the following general steps:
e First, the IRP Review Team is examining how specific inputs-such as
forecast data, operational constraints, and financial assumptions-are
developed for inclusion in the AURORA model.
IDAHO POWER COMPANY'S MOTION TO SUSPEND SCHEDULE AND B2H UPDATE - 4
. Secon4 the IRP Review Team is investigating how inputs are adjusted or
converted for incorporation into the AURORA model and that the inputs
were correctly entered. For instance, some inputs must be converted from
one type of measurement to another in order to accommodate the AURORA
program, and the review team is checking to ensure that all such
conversions were performed correctly.
o Third, the IRP Review Team is analyzing how the AURORA model handles
the various inputs within the model itself (i.e., the modeling logic), to make
sure that the model is using the proper data inputs in the proper processes
and that the modeling settings and options are suitably selected.
o Fourth, the review team is examining the consistency and accuracy of the
AURORA model's outputs, to ensure that the model produces logical and
consistent results.
The Company anticipates that this review and audit process will take approximately 2-3
weeks.
7. Once ldaho Power's internal review and audit is complete-and no later
than July 31,2020-the Company will provide a status update to the Commission and
will propose a corresponding new pro@dural schedule. Until the results of this analysis
are complete, however, the Company is unable to accurately forecast the time necessary
to provide any revised modeling and analysis that. may be required. As a result, ldaho
Power respectfully requests that the procedural schedule be suspended until the
Company has provided a further update by no later than July 31 ,2020.
IDAHO POWER COMPANY'S MOTION TO SUSPEND SCHEDULE AND B2H UPDATE - 5
II. UPDATE REGARDING B2H PROJECT
8. The B2H project's co-participants are ldaho Power, BPA, and PacifiCorp.
To date, the co-participants' contemplated interests in B2H have generally corresponded
with their capacity needs, and with the current allocation of permitting costs borne by each
co-participant as follows: ldaho Power: 21 percent; BPA: 24 percant, and PacifiCorp:
55 percent.2 However, as described in ldaho Power's Reply Comments, the B2H co-
participants are exploring severa! alternative asset, service, and ownership
arrangements.
L Under one of the scenarios being discussed, ldaho Power would assume
BPA's previously-contemplated ownership share, ldaho Power would serye BPA's
southeast ldaho customers, and BPA would pay the equivalent of its previously-
contemplated ownership through the Open Access Transmission Tariff (OATT) for service
to BPA's southeast ldaho customers. As part of the next steps in the discussions, BPA
intends to reach out to its customers in southeast ldaho to solicit feedback on this potential
arrangement. ln light of this impending outreach, ldaho Power wishes to ensure that the
Commission also possesses all relevant current information, despite the fact that the
agreement remains under negotiation at this point.
10. BPA's interest in B2H is related to its need to provide service to BPA's
customers in southern ldaho. Under the contemplated arrangement, ldaho Power would
assume BPA's ownership share in the project, while BPA would be responsible to pay the
costs of that increased share through a Network lntegration Transmission Service
Agreement (NITSA). Under the OATT, as a NITSA customer BPA would repay the full
2 These percentages are rounded.
IDAHO POWER COMPANY'S MOTION TO SUSPEND SCHEDULE AND B2H UPDATE - 6
cost of the project necessary to meet BPA's needs-which, as noted above, equates to
roughly 24 percent of the total costs of B2H-+ver the life of the project.
11. ldaho Power believes that the practical implications of this potential
ownership arrangement for the Company's Amended IRP are limited. While ldaho
Power's formal ownership interest would increase, the Company's original 21 percent
ownership share would continue to reflect the Company's approximate share of the costs
for B2H. Thus, ldaho Power's share of the financial responsibility for B2H, as analyzed
in the Amended lRP, would remain unchanged. As a result, the Amended IRP's use of a
21 percent ownership share for purposes of the IRP's least-cost, Ieast-risk analysis is still
appropriate. However, if ldaho Power determines that its customers will experience
additional benefits by virtue of owning 45 percent of B2H, then the Company will evaluate
these net benefits in a future proceeding.
12. While ldaho Power believes that the current discussions are very promising,
the B2H co-participants must still work through the details of the proposed ownership
arrangement-as well as numerous other aspects of the negotiations-to ensure that it
is in the best interests of each party's respective customers. ldaho Power will continue
to provide updates as more information becomes available.
fl. coNcLustoN
ldaho Power has commenced a comprehensive review and audit of its Amended
IRP modeling, and asks that the Commission suspend the procedural schedule in this
docket until the Company provides a further update by no later than July 31 ,2020.
ln addition, the Company is pleased to report that BPA remains committed to the
construction of B2H and the co-participants have tentatively agreed to an ownership
IDAHO POWER COMPANY'S MOTION TO SUSPEND SCHEDULE AND B2H UPDATE. T
structure that wil! maintain the co-participantrs' approximate financial responsibility for the
proiect. These negothtions reprcsent a positive step in the development of B2H.
DATED at Boise, ldaho, this 1d day of July 2020.
X;!.fla*+**,*,
LISA D. NORDSTROM
Attorney for ldaho Power Company
IDAHO POTA'ER COMPANYS MOTION TO SUSPEND SCHEDULE AND B2H UPDATE.8
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 1st day of July 2020I served a true and correct
copy of IDAHO POWER COMPANY'S MOTION TO SUSPEND SCHEDULE AND
UPDATE REGARDING BOARDMAN TO HEMINGWAY TRANSMISSION LINE
PROJECT upon the following named parties by the method indicated below, and
addressed to the following:
Commission Staft
Edward Jewell
Deputy Attorney General
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
IdaHydro
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite LP 103
P.O. Box 2900
Boise, ldaho 83701
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North 6th Street
Boise, ldaho 83702
STOP B2H Coalition
Jack Van Valkenburgh
Van Valkenburg Law, PLLC
P.O. Box 531
Boise, ldaho 83701
Jim Kreider
60366 Marvin Road
La Grande, Oregon 97850
ldaho Sierra Club
Julian Aris, Associate Attomey
2101 Webster Street, Suite 1300
Oakland, California 94612
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IDAHO POWER COMPANY'S MOTION TO SUSPEND SCHEDULE AND B2H UPDATE - 9
Gloria D. Smith, Managing Attorney
2101 Webster Street, Suite 1300
Oakland, California 94612
Ana Boyd, Research Analyst
2101 Webster Street, Suite 1300
Oakland, California 94612
lndustrial Customerg of ldaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
Micron Technology, lnc.
Austin Rueschhoff
Thorvald A. Nelson
Holland & Hart, LLP
555 Seventeenth Street, Suite 3200
Denver, Colorado 80202
Jim Swier
Micron Technology, !nc.
8000 South FederalWay
Boise, ldaho 83707
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tnelson@hollandhart. com
aclee@holland hart.com
o lqarqanoamari@holla ndha rt.com
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Sandra D. Holmes
Legal Admin istrative Assistant
IDAHO POWER COMPANY'S MOTION TO SUSPEND SCHEDULE AND B2H UPDATE. IO