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An DACORP Coripany
DONOVAN WALKER
Lead Gounsel
dwal ker@ida hopower.com
October 30,2020
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Re Case No. IPC-E-20-02
ldaho Power Company's Petition to Establish Avoided Cost Rates and Terms
for Energy Storage Qualifying Facilities under PURPA
Dear Ms. Noriyuki:
Attached for electronic filing in the above matter is ldaho Power Company's
Compliance Filing To UpdateThe lncrementralCost Integrated Resource PlanAvoided Cost
Model To Pay Capacity During Peak Hours. lf you have any questions about the enclosed
documents, please do not hesitate to contiact me.
Very truly yours,
E*^tadL
Donovan Walker
DEW cld
Enclosures
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: (208) 388-5317
Facsimile: (208) 388-6936
dwa lker@idahopower.com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITION TO ESTABLISH
AVOIDED COST RATES APPLIACABLE
TO PURPA ENERGY STORAGE
QUALIFYING FACILITIES.
CASE NO. |PC-E-20-02
]DAHO POWER COMPANY'S
COMPLIANCE FILING TO UPDATE
THE INCREMENTAL COST
INTEGRATED RESOURCE PLAN
AVOIDED COST MODEL TO PAY
CAPACITY DURING PEAK HOURS
ldaho Power Company ("ldaho Powe/') hereby respectfully submits to the ldaho
Public Utilities Commission ("Commission") this filing in compliance with Order No. 347g4
to update the avoided cost of capacity component of the lncremental Cost lntegrated
Resource Plan ("lClRP") avoided cost methodology to pay energy storage Qualifying
Facilities ("QF") for capacity only during peak hours.
I. INTRODUCTION
On October2,2020,the Commission issued Order No. 34794, which states, "...the
avoided cost of capacity should be paid only on production during the hours identified as
the company's peak hours." order No. 34794, p 14. ln the order, the commission
references the "Duke Energy Method", to be used as a method for compensating the
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 1 of 17
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avoided cost of capacity during those peak hours. Based on ldaho Power's
understanding of Duke Energy's implementation of PURPA1 specific to the avoided cost
of capacity, there are a number of differences between what Duke Energy is required to
offer in its PURPA energy sales agreements and what ldaho Power is required to pay as
the avoided cost of capacity. However, Idaho Power's understanding of Order No. 347g4
is that no changes to the avoided cost of capacity in the ICIRP Methodology are to be
made, except that the capacity portion of the avoided cost rate is to be paid only during
peak hours. The Commission stated in Order No. 34794, "we direct the Company to
make a compliance filing within 30 days implementing this new method." ld.
ldaho Power has utilized the same load forecast that is currently utilized by the
ICIRP Methodology and updated annually, as the basis for establishing the peak hours
for this filing. Additionally, ldaho Power utilized information from: 1) toad, net of solar; 2)
Loss of Load Probability; and 3) Energy lmbalance Market Locational Marginal Pricing to
inform a higher tier of capacity payment during a subset of critica! peak hours identified
as Premium Peak Hours. ldaho Power has identified the Peak Hours for inclusion in the
ICIRP Methodology as occurring from 1:00 pm - 10:00 pm in July and from 3:00 pm -
8:00 pm in August, and the Premium Peak Hours occurring from 6:00 pm - 10:00 pm in
July and from 4:00 pm to 8:00 pm in August. The following discussion outlines the
Company's proposed implementation of its determination of Peak Hours and capacity
pricing methodology as directed by the Commission. This methodology will be utilized by
ldaho Power for the negotiation of its avoided cost rates for energy storage QFs upon the
Commission's approval of the same.
' Public Utility Regulatory Policies Act of 1978
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 2 of 17
II. PEAK HOURS
The actual peak hours that will occur on ldaho Power's system are subject to
change day-to-day and year-to-year due to numerous factors including, but not Iimited to:
customer operations, load, precipitation and water conditions, temperature and weather
conditions, etc. ldaho Power believes that the appropriate estimation of peak hours as it
relates to the avoided cost of capacity for PURPA QFs should be based upon the IRP
derived load forecast, that is part of the ICIRP Methodology and updated annually to
reflect the most recent data and information available that can be used to predict future
peak hours.
Under the ICIRP Methodology, ldaho Power submits an annual compliance filing
to the Commission that updates the load and gas forecasts in the ICIRP Methodology.
See Case No. IPC-E-20-35. ldaho Power believes that the load forecast that is updated
annually for modeling the Company's avoided costs available to PURPA QFs should also
serve as the basis for identifying the peak hours to be used in the calculation of the
avoided cost of capacity. Therefore, the Company proposes to file annual updates to the
peak hours in conjunction with the annual October 15 update to the ICIRP Methodology'
The following table presents the 2021 Load Forecast in a 12-month by 24-hour
average load format. The month/hours representing the highest five percent of estimated
average load are highlighted (boxed).
il
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il
il
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 3 oI17
TABLE 1:202f Load Forecast
Hour
1
2
3
1
5
6
7
8
9
t0
11
12
t3
11
15
16
17
18
19
20
21
22
23
21
January
1,645
1,560
't,524
1,518
1,529
1,582
'1,706
1,920
2,101
2,137
2,115
2,077
2,0't4
1,936
1,878
1,836
't,826
1,884
2,039
2,152
2,'.t11
2,057
1,950
1,781
February
1,523
1,441
1,411
1,412
1,430
'1,486
1,626
1,859
2,038
2,038
1,994
1,935
1,869
1,788
1,739
1,689
1,666
1,694
1,775
1,923
1,952
1,916
1,822
1,664
March
1,360
1,324
1,309
1,317
1,343
1,421
1,568
1,726
1,775
'1,759
1,722
1,676
1,628
1,584
1,551
1,525
1,514
1,527
1,548
r,598
1,671
1,639
1,546
1,432
April
1,314
't,272
1,261
1,268
1,306
1,405
1,594
1,716
1,727
1,716
1,703
1,675
1,643
1,615
1,595
1,577
1,574
1,575
1,586
1,592
1,653
1,660
1,535
1,399
May
1,414
1,317
1,276
1,263
1,2U
1,379
1,566
1,722
1,803
1,858
1,889
1,900
1,897
1,901
1,904
1,904
1,922
1,934
1,943
1,944
1,942
1,957
1,796
1,560
June
1,802
1,661
1,576
1,513
1,489
1,529
1,627
1,809
1,977
2,100
2,209
2,302
2,383
2,466
2,546
2,606
2,647
2,675
2,688
2,661
2,583
2488
2,319
2,039
Augu!t
1,985
1,874
1,807
1,762
1,746
1,788
1,900
2p04
2,117
2,217
2,310
2,390
2,475
2,570
2,673
October
1,244
1,187
1,166
1,165
1,195
1,291
1,481
1,648
1,694
1,711
1,712
1,694
1,678
1,671
1,670
1,677
'1,697
1,724
1,742
1,792
1,762
1,656
1,497
1,U4
July
2,026
1,846
1,732
1,649
1,608
't,632
1,718
1,887
2,082
2,248
2400
2,539
2,679
September
1,506
1,441
1412
1,390
r,406
1,480
1,654
1,791
1,837
1,877
1,906
1,921
1,925
't,955
1,980
2,004
2,045
2,061
2,062
2,042
2,057
1,961
1,788
1,612
November December
1,366 1,685
1,281 1,593
1,246 1,541
1,240 1,528
1,262 1,539'1,332 1,596
1,488 1,715
1,723 1,909
1,889 2,074
1,902 2,'t37
1,875 2,131
1,828 2,113
1,769 2,038
1,710 1,976
1,661 1,916
1,627 1,876
1,623 1,873
1,690 1,958
1,U7 2,1541,917 2,205
1,872 2,163
1,810 2,115
1,690 2,016
1,528 1,857
2,656
2,322
2,720
2,625
2,407
2,165
The Company believes these peak hours identified in the load forecast will not
change dramatically from year-to-year, and that the consistent use of this data within the
ICIRP Methodology is desirable. However, within the range of hours identified in the
system peak data, the Company looked at additional metrics to develop a methodology
to apply a premium rate to certain peak load hours with the potential to be allocated a
premium capacity value.
ldaho Power appreciates Staffs recommendation and the Commission's directive
of establishing paymentfor capacity during peak hours to provide a significant price signal
for an energy storage QF to deliver its energy during periods of time that it can provide
the most benefit to the Company's system. Within the peak hours identified for ldaho
Power, there are a certain number of hours that are more important for output from a
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 4 of 17
2,
2,838
2,878
2,885
2,825
2,964
3,085
3,173
3,218
3,228
3,178
3,043
2,883
battery storage unit to be deployed. The Company analyzed three different metrics to
characterize these more critical hours: 1) load, net of solar, 2) Loss of Load Probability,
and 3) Locational Marginal Pricing from the Energy lmbalance Market. The results of
those three metrics are presented below'
The following table presents the Company's actua! loads, net of generation by
solar PURPA projects, forJanuary through September202O. The table shows the highest
load hours identified in the prior illustration (boxed), and within that set of hours, a four-
hour block of hours that represent the highest loads net of solar generation (circled in
red). These hours represent the peak load hours where solar generation was Iess
effective in reducing the net peak loads. ldaho Power targeted a four-hour block as that
is representative of a typical output duration for a battery energy storage facility.
TABLE 2: 2020 Load'Net'Solar Generation
Hour
t
2
3I
5
6
7
8
9
l0
11
'12
t3
14
15
16
17
't8
t9
20
21
22
23
21
January
1,625
1,607
't,616
1,644
1J02
1,8,l9
1,990
2,226
2,227
2,140
1,995
1,881
1,802
1,802
1,866
1,882
1,926
2,025
2,080
2,049
2,009
1,914
1,790
't,687
February
1,671
1,67s
1,682
1,694
1,765
1,886
2,0u
2,223
2,131
1,993
1,936
1,866
'1,798
1,790
1,806
1,829
1,885
'1,954
2,038
2,040
2,000
1,933
1,814
1,714
llarch
1,482
1,463
1,476
1,510
1,552
1,671
1,866
't,970
1,865
't,736
1,641
1,542
1,533
1,482
1,488
1,503
1,524
't,585
1,729
1,762
1,729
1,685
1,584
1,502
Apdl
1,618
1,573
1,507
1,489
1,473
1,560
1,677
1,786
1,679
1,719
1,689
1,674
1,755
1,756
1,791
1,740
1,807
1,912
2,006
2,028
2,056
2,024
1,889
1,729
May
2,113
1,969
1,870
1,807
1,773
1,772
1,918
1,848
1,900
1,995
2,094
2,115
2,228
2,325
2,465
2,552
2,617
2,660
2,6U
2,744
2,754
2,654
2,507
2,283
July
2,457
2,290
2,171
2,097
2,065
2,074
2,122
2,212
2,309
2,398
2,468
2,569
2,737
June
2,324
2,185
2,092
2,023
1,983
1,984
2,040
2,106
2;112
2,234
2,326
2,479
2,629
2,717
2,720
2,739
2,810
2,837
2,8v
2,890
2,935
2,861
2,7',13
2,499 2,669
3,010
2,785
2,549
August September Oc'tober November December
2196 1,991
2,255 1,881
2,163 1,808
2,102 1,754
2,069 1,710
2,082 1,729
2,142 1,810
2,238 1,903
2,274 1,860
2,152 1,832
2,454 1,908
2,610 2,031
2,749 2,153
2,879 2,307
2,983 2477
2,610
2,694
2;150
2,826
2,832
2,776
2,571
2,364
2,164
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 5 ol17
2,874
2,944
2,935
2,979
3,044
3,077
r.sI g,zss
\s,zrg/3,193
3,233
3,1 l5
The next source of information ldaho Power utilized was the Company's hourly
loss-of load probability ('LOLP") data provided in ldaho Power's 2017 lRp (the most
recently acknowledged IRP), showing the hours with the greatest potential loss of load
from the solar capacity credit analysis performed for that lRP. This data suggests a
moderate amount of conelation between LOLP and peak load hours.
TABLE 3:2017lRP LOLp Data
Hour January
1 0.007o
2 0.000/0
3 0.00%
1 0.00%
5 0.19%
6 0.00%
7 0.687o
I 1.25Yo
9 2.41o/o
l0 1.450/o
11 0.87o/o
12 0.770/0
13 0.29Yo
11 0.10%
15 0.10o/o
16 0,00%
17 0.10o/o
18 0.58%
19 2.03Yo
20 1.64Yo
21 0.970/0
22 0.39%
23 0,00%21 0.00%
February
0.007o
0,00%
0.00%
0.00%
0.00%
0.00%
0.48%
2.600/"
3.470/o
2.51o/"
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.10%
2.220/o
3.180/o
1.250/0
1.35o/o
0.58%
0.00%
$eptember
0.00%
0.00%
0,00%
0.00%
0.00%
0.00%
0,007o
0.00%
0.00%
0.10%
0.100/o
0.'t0%
0.00%
0.10%
0.00%
0.58%
0.77Yo
1.350/o
0.96%
0.96%
0.77o/o
0.'t9%
0.00%
0.007o
October
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.007o
0.00%
0.00%
0,00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0,00%
0.00%
0.00%
0.00%
0.00%
0.00%
llarch
0.00%
0.00%
0,00%
0.00%
0.00%
0.00%
0.00%
0.00o/o
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0,00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.100/o
0.00%
0.007o
April
000%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.19%
0.107o
0.39%
0,3970
0.39%
0.10%
0,19%
0.290/0
0.480/o
0.29o/o
048%
0.39%
0.10Yo
0.'t9%
0|190/o
0.00%
llay
0.00%
0.00%
0.00%
0.00%
0.000/o
0.00%
0,00%
0.19%
0.19%
0.00%
0.19%
0.00%
0.39%
0.'t9%
0.39%
0.19%
0.19Yo
0.480/0
0.480/0
0.290/o
0.'t9%
0.290/6
0.00%
0.'t0%
June
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.007o
0.00%
0.00%
0.00%
0.19%
0.10o/o
0,480h
0.96%
1.06%
2.51o/o
1,06%
1.54%
0.870/o
0.49o/o
0.19%
0.10%
July
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.39%
0.68%
Augurt
0.00%
0.00%
0.00%
0,00%
0.000/o
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0,00%
0.00%
0.00%
0.19%
0.00%
0.
0.190/o
0,00%
0,00%
0.
l{oYember December
0.00% 0,00%
0.00% 0.00%
0.0070 0.00%
0.00% 0.00%
0.00% 0.00%
0.00% 0.00%
0.00% 0.0070
0.00% 0.100/o
0.00% 0.00%
0.00% 0.00%
0.007o 0.007o
0.00% 0,10%
000% 0.00%
0.00% 0.00%
0.00% 0.00%
0.00% 0,00%
0.00% 0.00%
0,00% 0.100/0
0.00% 0.100/o
0.00% 0.100/0
0.00% 0.'t9%
0.00% 0.00%
0.00% 0.00%
0.00% 0.00%
The following table presents actual 2020 western Energy lmbalance Market
("ElM') average locational marginal prices ("LMP') for ldaho Power. This data is derived
from the weighted average hourly price comprised of all pricing nodes in the ldaho power
Balancing Area Authority from four fifteen-minute market price intervals and twelve real-
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 6 ot 17
2.80Yo
5.30%
5,79Yo
1.160/0
0.96%
3.28Y0
2.220/o
time five-minute price intervals. This data suggests a stronger correlation between LMP
prices and peak load hours.
TABLE 4:20 20 LMP EIM
Hour
1
2
3
1
5
6
7
8
9
10
11
12
13
11
't5
16
17
18
19
m
21
22
23
21
January
$21.16
$20.81
$2046
$21,06
$22.82
$26.65
$29.70
$27.96
$24.33
$22.15
$21.83
$19.'19
$14.44
$16.94
$19.70
$2572
$32.13
$28.19
$27.04
$25.81
$25.67
$2572
$24.38
$22.05
February
$19.60
$19.34
$1s,38
$19.91
$22.92
$27.78
$27.41
$27 A3
$17.74
$15.94
$'15.20
$12.79
$1 1.67
$10.16
$6.03
$16.37
$26.10
$40.63
$23,88
$22.90
$36.47
$23.s4
$21.73
$19.53
ilarch
$20.70
$18.76
$19.19
$20.16
$22.24
$22.s0
$22.91
$22.47
$24.33
$18.83
$17.44
$16.82
$16.20
$15.00
$13.83
$15.38
$17.06
$23.26
$2s.08
$24.46
$2772
$22.75
$22.57
$20.77
April
$19.17
$18.1 1
$17.48
$18.1 1
$18.76
$18.22
$18.54
$16.09
$14.72
$15.05
$1s.18
$15.52
$15.46
$15.22
$14.34
$14.23
$15.73
$20.68
$21.89
$20.65
$20.53
$21.51
$20.70
$18.53
llay
$1737
$16.91
$15.67
$1s.29
$16.34
$16.16
$15.77
$9.41
$9.23
$6,42
$14.27
$1 1.73
$14.26
$17 A7
$14.46
$17,04
$23.34
$24.43
$2838
$20.79
$19.34
$20.06
$21.16
$18.24
June
$17.58
$17.07
$17.06
$17.25
$18.30
$19.15
$18.79
$12.52
$1 1.20
$11.27
$12.27
$16.20
$'15.91
$1846
$18.27
$22.04
$45.61
$37,00
$30,06
$29.04
$32.11
$20.46
$22.36
$17.38
July
$18.02
$17.29
$17.37
$17.18
$17.60
$18.15
$17.42
$14.49
$13.81
$1s.87
$18.71
$20.34
$20.s9
August
$24.78
$22.33
$20.76
$20.12
$20.20
$21.19
$18.68
$16.99
$17,97
$20.20
$22.48
$26.8s
$3't.22
$38.75
$72.40
$21.07
$20.28
$19.62
$18,84
$19.63
$20,51
$21.30
$20.51
$20.38
$20.47
$20.27
$23,41
$23.86
$26,17
$35.29
$34.84
$35.80
$37.97
$34.71
$27.98
$2s.16
$26.90
$26.11
$21.79
September October ilovember December
$18.09
$28.98
$32.22
$25.70
Based on the preceding information, Idaho Power believes that applying a
premium price to certain hours will further incent a battery energy storage QF to provide
its stored energy when it is of most value to the Company and its customers. These
higher value hours occur during peak hours but when generation output from solar
generation resources begins to decline later in the day, while load continues to persist at
a high level. Providing a price signalto a battery energy storage QF to dispatch its output
during these hours is likely to provide more of the benefits that a battery storage facility
can deliver.
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 7 of 17
$24.34
$23.88
$22.31
$80.36
$1 15.42
19.84
$77,01
$28.84
III. AVOIDED COST OF CAPACITY
The following discussion describes how ldaho Power will include Peak Hours in
the calculation of the avoided cost of capacity to be included in PURPA Energy Sales
Agreements ("ESA") for energy storage QFs under the ICIRP Methodology. The starting
point for establishing ICIRP-based pricing is an hourly generation profile provided by the
QF. The following table presents an assumed load profile of a hypothetica! 2o-megawatt
("MW') battery storage facility charged by solar generation and designed to maximize
production at peak load hours. Total estimated annual generation of the facility is 53,230
megawatt-hours ("MWh'). Under the Company's version of the Duke method, capacity
value will be paid during a subset of these generation hours conesponding with the
Company's greatest need for capacity. The hours with capacity payments and premium
capacity payments are indicated in the table. As stated in the table, estimated generation
during Peak Hours is 8,339 MWh. Generation during other nJurs would receive no
compensation for capacity.
il
il
lt
il
lt
il
il
il
il
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 8 o117
TABLE 5: Sample 20 MW Batterv Storaqe+Solar QF
February llarch Aprll ltay June July August Septembel Octobrr l{ovember lhcembcrJanurry
U
0
0
0
0
0
0
10
5
0
0
0
0
1
3
5
2
0
15
12
0
0
0
0
0
0
0
0
0
0
0
0
0
1
1
0
1
5
I
7
3
15
14
13
6
0
0
0
0
0
0
0
0
0
0
0
0
1
2
2
5
I
11
13
13
11
18
15
15
8
0
0
0
0
0
0
0
0
0
0
0
3
4
E
12
15
16
16
17
17
20
17
t5
14
0
U
0
0
0
0
0
0
0
0
I
6
11
15
18
18
't8
0
0
0
0
0
0
0
n
0
0
14
11
1
1
1
1
6
8
10
10
3
16
15
0
0
0
0
0
0
0
0
0
0
0
12
7
0
0
0
I
1
3
5
4
1
15
15
0
0
0
0
0
0
0
0
0
0
0
0
3
1'l
15
17
't8
0
0
0
0
0
0
0
0
5
11
13
16
18
19
19
20
20
20
20
18
14
0
0
0
0
0
0
0
0
0
0
7
14
3
4
4
5
14
16
17
17
't6
14
20
17
15
13
0
0
0
0
0
0
0
0
3
11
4
4
4
5
14
't6
t6
15
14
't3
19
16
15
I
0
0
0
0
0
0
0
0
10
11
3
3
2
3
11
14
14
14
10
4
16
15
15
n
0 0
Hour
1
2
3
1
5
6
7
8
I
l0
fi
12
13
11
l5
i6
17
t8
t9
20
2'.1
22
2t
21
t9
19
18
18 20
2A
20
20
20
20
20
20
tYIt pcr D.y
oryr ln tonth
tu5t per tonth
tWr hryear:
Pcrk ltltth per Dry
Pcrk ilWr pu llon0t
Pc.k illh per Yoll
64
31
1,984
s3,230
8,339
97
28
2,716
196 213
30
6,390
?35
31
7,285
53
31
1,643
74
30
2,220
123
31
3,8't3
171198
6,076
178
30
s,340
145
31
4,495
98
3,038
3'r 31
6,138
30
5,130
'1lir
5,30'r
The currently approved calculation of the avoided cost of capacity using the ICIRP
Methodology is based on a combination of inputs from the IRP and the generation profile
provided by the QF. Again, ldaho Power has made no changes to the underlying
methodology that calculated the avoided cost of capacity, and only changed the payment
of that capacity amount to being paid only during peak hours rather than being paid upon
every kwh of QF generation. One of the key inputs of the IC|RP Methodology is the Peak
Hour Capacity Factor. This value is determined by dividing the average MW hourly
generation amounts from the QF's generation profile by the QF's Nameplate Capacity'
The Peak Hour Capacity Factor in the ICIRP Methodology is the average of the hourly
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page I of 17
capacity factors from 3:00 PM to 6:59:59 PM. These hours have been identified in the
IRP process as the time period that ldaho Power has historically experienced peak loads.
The avoided cost of capacity used to determine the capacity component of the price to
the QF is then calculated using assumptions from the lRP. ldaho Power does not propose
making any changes to the assumptions as cunently applied in the ICIRP Methodology
in this filing. Table 6 below demonstrates the Peak Hour Capacity Factor from the
generation profile depicted in Table 5.
TABLE 6: Sample 20 MW Batterv Storaqe+Solar QF Peak Hour Gapacitv Factor
tunual CapacityFactor:
Peak Hour Capacity Facbr:
30.30/o
91.3o/o
Hour Stail Hour End
12:00 /$,il 1:00 AIU
1:00 A[4 2:00 /tltl
2:00 A[4 3:00 Atvil
3:00 A[4 4:00 /t[4
4:00 Alvl 5:00 /$rl
5:00 AII 6:00 AIr,l
6:00 A[4 7:00 /tlril
7:00 A[4 8:00 AIr4
8:00 AIvl 9:00 A[,1
9:00 An4 10:00 /&l
10:00All 11:00AJr4
11:00 A[4 12:00 PM
12:00 PM 1 :00 PM
1:00 PM 2:00 PM
2:00 PM 3:00 PM
3:00 PM 4:00 PM
4:00 PM 5:00 PM
5:00 PM 6:00 PM
6:00 PM 7:00 PM
7:00 PM 8:00 PM
8:00 PM 9:00 PM
9:00 PM 10:00 PM
10:00 PM 11 :00 PM
11:00 PM 12:00 /rI{
Hour
1
2
3
1
5
6
7
8
9
10
11
12
13
14
15
16
17
18
t9
20
21
t2
23
24
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.50
0.25
0.00
030
0.00
0.00
0.05
0.15
0.25
0.10
0.00
0.75
0.60
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.05
0.05
000
0.05
0.25
0.40
0.35
0.'15
0.75
0.70
0.65
0.30
0.00
0.00
0.00
000
0.00
0.00
0.00
0.00
000
0.00
0.00
0.05
0.30
0.55
0.75
0.90
0.90
0.90
0.90
1.00
1.00
1.00
1.00
0.65
0.00
0.00
0.00
January February March Aprll llay June0.00 0.00 0.00 0.00 0.00 0000.00 0.00 0.00 000 0.00 0.00000 0.00 0.00 0.00 0.00 0.000.00 0.00 0.00 0.00 000 0.000.00 0.00 0.00 0.00 0.00 0.000.00 000 0.00 0.00 0.00 0000.00 0.00 0.00 000 000 0.000.60 0.70 0.50 0.15 0.35 0.000.35 0.55 0.55 0.55 0.70 0.250.00 0.05 0.15 0.20 0.15 0.550.00 0.05 0.15 0.20 0.20 0.650.00 0.05 0.10 020 020 0.80005 0.05 0.15 0.2s 0.2s 0.900.05 0.30 0.55 0.70 0.70 0.950.15 0.40 0.70 0.80 0.80 0.950.25 0.50 0.70 0.80 0.85 1.000.20 0.50 0.70 0.75 0.85 1.00005 0.15 0.50 0.70 0.80 1.000.75 0.80 0.20 0.65 0.70 1000.75 0.75 0.80 0.95 1.00 0.900.00 000 0.75 0.80 0.85 0.700.00 0.00 0.75 0.7s 0.75 0.000.00 0.00 0.00 0.45 0.65 0.000.00 0.00 0.00 0.00 0.05 0.00
July
0.00
0.00
0.00
0.00
0.00
000
0.00
0.00
0.15
0.55
0.75
0.85
0.90
0.95
0.95
't.00
1.00
0.00
0.00
0.00
0.00
0.00
000
0.00
0.00
0.00
0.00
0.00
0.15
0.20
0.25
0.60
0.75
0.80
0.80
0.85
0.85
1.00
0.85
0.75
0.70
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.05
0.10
0.10
0.25
0.45
0.55
0.65
0.65
0.55
0.90
0.75
0.75
0.40
000
0.00
August September October NovemberDecember
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 10 of 17
0.90
0.85
1.00
Table 7 below lists the IRP assumptions used in the determination of capacity
value for a battery energy storage QF and Table 8 demonstrates the QF's Peak Hour
Capacity Credit that is applied to the pricing calculations'
TABLE 7: Assumotions used in ICIRP Avoided Cost of Gapacitv
Assumptions
O&M escalation rate:2.10Y0
$8,64
$1.59
2017 IRP - Technical Appendix, page 71
2017 IRP - Technical Appendix, page 76
2017 IRP - Technical Appendix, page 76
SCCTlndusfial Frame 170 MW(Capital Cost kWlvlonth):
SC0Tlndustial Frame 170 MW(Non-Fuel O&M):
Benchmark Type:
Benchmark July3 - 7 PM Awrage:
LandfillGas or Digester
100,0%
92.00/oPeak Hour CapacityFactor (90ft Percentile):
An important component used to calculate the capacity value of a proposed QF
project under the !CIRP Methodology is the proposed QF's Contribution to Peak ("CTP").
CTP is the unique QF project's expected contribution of capacity (MWs) to ldaho Power
during ldaho Power's peak customer load period. The CTP value is initially calculated as
a percentage and then this percentiage is applied to the Nameplate Capacity of the
proposed QF project to establish the project's MW CTP value.
ln the ldaho Power IRP process, as applied to the ICIRP Methodology, a 90th
percentile exceedance factor is used to determine each resource's CTP percentage. The
gOth percentile means that a QF's generation is expected to exceed the planning criteria
g0 percent of the time. For proposed QF's , the only information ldaho Power has is an
hourly generation profile of estimated generation provided by the project for a one-year
period. Therefore, the following benchmarking process, inputs, and formula were
developed for the ICIRP Methodology to calculate the CTP values for each proposed QF.
This process provides CTP values for the proposed PURPA QF that is consistent with
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 11 of 17
similar values assigned to ldaho Power owned and operated generation resources in the
IRP process.
Battery Storage facilities are an emerging technology. There are curenfly very
few actual projects that are operating and delivering energy to utilities and there is limited
information available to determine a battery storage QF's CTP. Therefore, in the sampte
calculations contained herein, ldaho Power has utilized a landfill gas or anaerobic
digester baseload benchmark resource from the ICIRP Methodology. As more battery
storage data becomes available, ldaho Power will continually evaluate the appropriate
battery storage CTP and will update the benchmark resource accordingly.
Once the hourly estimated generation provided by the pQect is used to calculate
the average Peak Hour Capacity Factor for the proposed QF, the proposed eF's average
Peak Hour Capacity Factor: is compared to a Benchmark Resource Average peak Hour
Capacity Factor. A ratio is calculated by dividing the QF average Peak Hour Capacity
Factor by the benchmark resource capacity factor. This ratio is then multiplied by the
Benchmark Peak Hour Capacity Factor used in the gOth percentile planning criteria
resulting in the Peak Hour Capacity Factor Credit used in the determination of the
Capacity Prices applicable to the QF, as shown in Table g below.
Table 8 - Sample 20 MW Batterv Storaoe+Solar QF Peak Hour Gapacitv Credit
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 12 of 17
Peak Hour FactorCredit
July 3 .7 Pt Average Ratio with Benchmark Peak Hour Gapacity Factor (90fi percentile)
or Digester 100.0%N/A 92.lYo
Peak Hour Capacity Facbr Crcdit 9't,3%0.91 84.0o/o
Using the assumptions described above, the Capacity Price is calculated. Table
g demonstrates how the avoided cost of capacity results in a Capacity Price allocated
across generation to be delivered by the QF during Peak Hours.
TABLE g: Sample 20 MW Batterv Storaqe+Solar QF Capacitv Price Calculation
Year
Capital
(Levelized)
Fixed
o&M Total
QF Nameplate
Capacity (kW)
SCCT Annual
Total
QF Generation
Delivered during
Peak Hours (kWh)
Gapacity Price
($ftun1
(a)(b)(c)(d)(e)(0 (s)
(a +b)(cx12)x(d)
(e x PHCFC.)/
0
2017 $8,64
$8.64
$8.64
$8,64
$8,64
$8.64
$8.64
$8.64
$8.64
$8,64
$8,64
$8.64
$8,64
$8.64
$8.64
$8.64
$8,64
$8.64
$8.64
$8.64
$1.59 $10.23
$1.62 $10.26
$1,66 $10.30
$1.69 $10.33
$1.73 $10.37
$1.76 $10.40
$1.80 $10.44
$1,84 $10.48
$1.88 $10.52
$1,92 $10.56
$1.96 $10.60
$2.00 $10.64
$2.04 $10.68
$2.08 $10.72
$2.13 $10.77
$2.17 $10,81
$2.22 $10.86
$2.26 $10,90
$2.31 $10.95
$2.36 $11.00
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
20,000
2018
201 I
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
203'l
2032
2033
2034
2035
$2,563,285.53
$2,573,568,93
$2,584,068.27
$2,594,788.11
$2,605,733.06
$2,616,907.85
$2,628,317.32
$2,639,966.38
8,339,000
8,339,000
8,339,000
8,436,000
8,339,000
8,339,000
8,339,000
8,436,000
$0.2s82
$0.25e2
$0.2603
$0.2584
$0,2625
$0,2636
$0.2648
$0.26292036
*Peak Hour Capacity Factor Credit (PHCFC)
IV. ENERGY SALES AGREEMENT PROVISIONS
ln order to include designated Peak Hours and base the Capacity Price for a QF
on these hours, certain provisions will need to be included in a PURPA Energy Sales
Agreement. Updating the Peak Hours on an annual basis, or when a new IRP is
acknowledged, will require the Company to allow the QF under contract to submit a
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 13 of 17
revised generation profile. Allowing the QF to update its generation profile on an annual
basis willfurther increase the QF's ability to dispatch the battery during Peak Hours. The
IRP inputs applicable to the fixed capital costs from the IRP would not change during the
term of the ESA but the Capacity Price would be updated annually to coincide with any
changes to the Company's designated Peak Hours and the generation expected to be
supplied during Peak Hours.
As discussed earlier, ldaho Power believes that a premium adjustment should be
included for energy delivered during the designated Premium Peak Hours. This is similar
to the seasonality adjustment that has been included in ESAs based on published avoided
cost rates. The Company has established two pricing tiers during the peak hours as
defined below: Peak Hours and Premium Peak Hours. The tota! amount of annual
capacity as established by the existing avoided cost methodology is first spread across
the Peak Hours, resulting the base Capacity Price as shown in Table 10 below. Then for
the Premium Peak Hours, the rate is set at 12Oo/o of that base price. For all other peak
Hours, the rate is adjusted to the remaining annual capacity amount minus the amount
paid during the Premium Peak Hours. This is reflected in the representative definitions
below which are potential definitions based on the sample solar plus storage eF used
throughout this Application.
Peak Hours: Hours that occur in July starting at 1:00 pM and
ending at 9:59:59 PM, and hours that occur in August
starting at 3:00 PM and ending at 7:59:59. peak Hours are
subject to change annually and when a new lRp is
acknowledged.
Premium Peak Hours: Hours that occur in July, starting at
6:00 PM and ending at g:59:59 PM, and hours in that occur
in August, starting at 4:00 PM and ending at 7:5g:5g pM.
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 14 of 17
Premium Peak Hours are subject to change annually and
when a new IRP is acknowledged.
Capacity Price: For all generation received during Premium
Peak Hours, ldaho Power shall pay 120o/o of the calendar
year price specified in Appendix - multiplied by all kWh
delivered to ldaho Power during Premium Peak Hours for
the applicable month. For al! other generation delivered to
ldaho Power during Peak Hours, ldaho Power shall pay the
calendar year price specified in Appendix _ multiplied by all
kwh delivered during Peak Hours for the applicable month,
less the total amount paid for generation delivered during
Premium Peak Hours for the applicable month.
A new Appendix that identifies the applicable Capacity Price will be added to an
ICIRP-based ESA that includes pricing derived from the QF's initial generation profile. A
sample new Appendix is included in Table 10
TABLE 10: Sample Appendix - Capacitv Price
Year
Capacity Price
(millslkWh)
201
201
201
7
2021
2022
2023
2024
2029
2030
2031
258.20
259.20
260.30
258.40
262.50
263.60
264.80
262.90
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 15 of 17
The following table demonstrates how the preceding contr:actual provisions would
be applied to determine capacity the component of the sample QF's monthly payment.
ln the example for this Application the resulting Peak Hour rate is $212.80/MWh, and
$309.84/MWh for the Premium Peak Hour rate.
TABLE 11: Samole Capacitv pavment Calculation
V. CONCLUSION
ldaho Power hereby respectfully submits this Application and avoided cost
capacity calculations in compliance with the Commission's directives in Order Nos.34794
and asks the Commission to approve the same for use in the mandatory purchases of
battery storage PURPA generation as directed in that Order.
Respectfully submitted this 30h day October 2020.
Mfdalq.
DONOVAN E. WALKER
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S
COMPLIANCE FILING - Page 16 of 17
Jury z0z9
Capacig Prlce
Premlum
Factor
lwn ueflYe]ed
dudng Peak Hours
f,rm uerrvereo ounng
Premium Peak Hourr
Fremium Pea[
Hour Payment
ilon'Premlum Peal(
Hour Payment Tota! Payment
(a)(b)(c)(d)(e)0 (s)
(axb)x(d)(a x c)- (e)
$0,2582 120o/o 5,301,000 2,480,000 $768,403.20 $600,318.00 tliosrim
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 30th day of October, 2020,1 served a true and
correct copy of the within and foregoing IDAHO POWER COMPANY'S COMPLIANCE
FILING TO- UPDATE THE INCREMENTAL COST INTEGRATED RESOURCE PLAN
AVOIDED COST MODEL TO PAY CAPACITY DURING PEAK HOURS UPON thE
following named parties by the method indicated below, and addressed to the following:
Edward Jewell
Deputy Attomey General
ldaho Public Utilities Commission
11331W. Chinden Blvd., Bldg. No. 8
Suite 201-A(83714
PO Box 83720
Boise, lD 83720-0074
_Hand Delivered
_ U.S. Mail
-Overnight
Mail
_FAXX Email
edwa rd. iewell@ puc. idaho.qov
Christy Davenport, Legal Assistant
IDAHO POWER COMPANY'S
MOTION AND REPLY COMMENTS -Pagel7 of 11