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HomeMy WebLinkAbout20210311Attorney General Letter.pdfVIA E-MAIL Idaho Power Company Donovan E. Walker DWalker@idahopower.com Idaho Power Company P.O. Box 70 Boise, ID 83707-007 STATE OF IDAHO OFFICE OF THE ATTORNEY GENERAL LAWRENCE G. WASDEN March 11, 2021 Michael Darrington MDarrington@idahopower.com Idaho Power Company P.O. Box 70 Boise, ID 83707-0070 PUBLISHED A VOIDED COST RATES FOR ENERGY STORAGE QUALIFYING FACILITIES; ORDER NO. 34913 IN CASE NO. IPC-E-20-02. In compliance with Order No. 34913 in Case No. IPC-E-20-02, Staff calculated published avoided cost rates for new Energy Storage Qualifying Facilities (QFs) using the Company's Peak Hours. Staff started with the published avoided costs in the Surrogate A voided Resource (SAR) model approved in Order No. 34683 effective June 1, 2020. Next, Staff separated the avoided cost of energy and the avoided cost of capacity. Seasonalization Adjustments and Heavy Load/Light Load Adjustments are maintained for avoided cost of energy. Then, Staff spread the avoided cost of capacity over Peak Hours as contained in the Company's Compliance Filing per Commission Order No. 34913. Staff also calculated the levelized avoided cost of energy and the levelized avoided cost of capacity separately. Consequently, four additional tabs were created in the SAR model: Contracts & Administrative law Division/Idaho Public Utilities Commission P.O. Box 83720, Boise, Idaho 83720-0074 Telephone: (208) 334-0300, Fax: (208) 334-3762 11331 W. Chinden Blvd., Bldg. 8, Suite 201-A, Boise, Idaho 83714 Page 2 of2 March 11, 2021 1. IPCOStorage(Energy)Non-LevelADJ: This tab calculates the non-levelized avoided cost of energy after Seasonalization Adjustments and Heavy Load/Light Load Adjustments for Energy Storage QFs. 2. IPCOStorage(Capacity): This tab calculates the non-levelized and levelized avoided cost of capacity rates for Energy Storage QFs. 3. IPCOStorage(Energy)Levelized: This tab calculates the levelized avoided cost of energy for Energy Storage QFs before Seasonalization Adjustments and Heavy Load/Light Load Adjustments, which will be used in the last tab. 4. IPCOStorage(Energy)LevelizedADJ: This tab calculates the levelized avoided cost of energy after Seasonalization Adjustments and Heavy Load/Light Load Adjustments for Energy Storage QFs. Included is an updated copy of the SAR model. Attachment A is a detailed protocol that documents how Staff modified the model. Attachment B is the final published avoided cost rates for Energy Storage QFs. Attachment C is an analysis that illustrates the difference in rates between IRP Method rates and rates produced by the attached SAR model using the example supplied in the Company's Compliance Filing. Please review these attachments and file a response with the Commission by March 25, 2021 , stating whether the updates to the SAR model and the calculations were made correctly. Staff will update Peak Hours annually when the Company files its annual update to load forecasts, natural gas forecasts, and contract information for IRP Method rates as required by Commission Order No. 34913. Thank you for your cooperation. Please contact Yao Yin (yao.yin@puc.idaho.gov) if you have any questions. Sincerely, ~~l( Edward Jewell Deputy Attorney General Enclosures l:\Legal\ELECTRICIZZZ_CLOSED ELECTRIC\2020\Jdaho Power\lPC-E-20-02\Published Avoided Cost Rates\JPC_Ltr_3. I l.2021.docx Contracts & Administrative Law Division/Idaho Public Utilities Commission P.O. Box 83720, Boise, Idaho 83720-0074 Telephone: (208} 334-0300, Fax: (208) 334-3762 11331 W. Chinden Blvd., Bldg. 8, Suite 201-A, Boise, Idaho 83714 Attachment A Protocol for Updating SAR Model in Compliance with Order No. 34913 Current Structure Description On "A VOID NEW" tab, Column AD contains avoided cost of energy. Column AG contains avoided cost of capacity after peak capacity factor adjustment, while Column T contains avoided cost of capacity before peak capacity factor adjustment. Column AH is the sum of Column AD and Column AG, which then will be seasonalized and adjusted by heavy load/light load hours. Modification Overview Separate avoided cost of energy and avoided cost of capacity, spread avoided cost of capacity over peak hours, and adjust avoided cost of energy for seasonalization and heavy load and light load hours. Detailed Steps Development o{Non-Levelized Rates for Avoided Capacity and Energy A voided Cost of Energy: Reference the values in Column AD on the A VOID NEW tab into Column C on the IPCOStorage(Energy)Non-LevelADJ tab. All technology categories have the same avoided cost of energy. A voided Cost of Capacity: 1. Annual value of CCCT in Column D on the IPCOStorage(Capacity) tab is equal to Column Ton the A VOID NEW tab multiplied by 365, by 24 and then by the chosen technology's annual capacity factor. All technology categories have the same annual value ofCCCT. 2. Subsequently, values in Column Don the IPCOStorage(Capacity) tab are spread over the total number of Peak Hours in a year. Development o{Levelized Rates for Avoided Capacity and Energy A voided Cost of Energy: 1. An intermediate tab of IPCOStorage(Energy)Levelized is created to contain levelized rates before seasonalization and heavy load and light load adjustments. 2. IPCOStorage(Energy)levelizedADJ tab shows the seasonalization and heavy load and light load adjustments. A voided Cost of Capacity: 1. The levelized avoided costs of capacity included in Column G on the IPCOStorage(Capacity) tab are the result of dividing the $/MW in Column F by the number of peak hours in the year included in Cell L8. Attachment A 2. The contract period for levelized avoided costs of capacity starts after the first deficit year. The formula in Column A on the IPCOStorage(Capacity) tab reference the "Input - Load and Resource" tab, where the capacity deficiency data is contained. AVOIDED COST OF CAPACITY FOR ENERGY STORAGE (IPCO) Years of Levelized Levelized Avoided Avoided Cost Non-levelized Avoided Cost of Capacity of Capacity Cost of Capacity during during Peak Hours Payment Online Year Peak Hours ($/MWh) ($/MWh) 0 2021 0 2022 0 2023 0 2024 0 2025 1 2026 427.79 427.79 2 2027 434.07 430.81 3 2028 440.44 433.77 4 2029 446.91 436.68 5 2030 453.47 439.53 6 2031 460.13 442.33 7 2032 466.89 445.06 8 2033 473.75 447.74 9 2034 480.71 450.36 10 2035 487.78 452.92 11 2036 494.95 455.42 12 2037 502.23 457.86 13 2038 509.62 460.24 14 2039 517.12 462 .56 15 2040 524.73 464.82 16 2041 532.46 467.02 17 2042 540.30 469.15 18 2043 548.26 471.23 19 2044 556.34 473.24 20 2045 564.54 475.20 21 2046 572.86 477.10 S.HonalluiCion Factor• ......,, ......,, IN.sons 7UO% ~toMatc:h•Mloy) 1211.00% ~to.,,_,,,,~NowMMlr,sndO.e.Mlllr) 100,00% ~toJanuary,Februsry, June, Sepk,Mlllr,andOdlllber) --..._,"'klntcn.s,r.1 IOAHO POWER AvotOED COST MlEI OF ENERGY FOR ENERGY STORAGE PROJECTS IDAHOPOWER NON-UVEL.IZED MTES S..-:tl"fklntl1:tft) ..._,l"tk .. 11to"JI.I -------------------------..... vy. 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JS.oe 31.33 37.34 3&.11 31.U 39.1◄ 39.11 40.10 ..... 41.07 .,.., 42.01 42.AII 42.95 .,.,. 27.10 29.05 30,0, ,.., ,,.,. ,, ... ,,,, 32.82 33>2 33.7' ,..,. 34.73 ,.,, 35.97 :M.10 ,..., -NA = NA = NA -NA -NA -NA -NA -NA = NA -NA ~ NA = NA ~ NA = W. = NA ~ NA = NA -NA -NA -NA -NA -NA -NA -NA -NA -NA -NA = NA -W. -W. = NA = W. -NA -NA = NA -NA -.. = .. -.. -.. -.. ~ .. = .. -.. = -~ NA = NA -W. -W. -NA = NA ~ W. = NA -NA 28.73 NA 29.11 NA 23.7& NA ◄US NA 47.53 NA 3U0 NA Je.37 NA 39.11 NA 32.33 NA -NA -NA = W. -W. = NA -NA -W. -NA = NA -NA -W. ~ W. = W. ~ W. -W. ~ W. -NA = W. -NA -W. -NA -W. = NA -NA = NA = NA = NA = NA -NA = NA -NA -NA -NA -NA = NA = NA -NA -NA -NA = NA -NA ~ NA = NA -NA = NA -NA = NA -NA = NA -NA = NA = NA = NA = NA -NA -NA = NA ~ NA = NA -NA ~ NA -NA -NA -NA = NA -NA = NA -NA = NA -NA = NA ~ NA -NA = NA -NA -• = NA = NA -W. -NA -NA = NA = NA = NA = NA -NA -NA -NA = NA -NA -NA = NA = NA -NA = NA = -= NA -NA = NA .___1!!__ 41.74 ..... '4.20 ..... ..... ,.., 37.31 37,70 -• -NA = NA -NA -NA = NA = NA ..... 37.70 ...... , ..... .._p~ ..__,.,...._,1,..,.. ...... ,Ncl-a~ .....,._. 11.21 .... ................. lJllltLNII.... ....., ..... ..._ U.,.LNII._ 1"11111 ..._,..,_.._ UIMLNII..._ ---------11----~-= ... =,-+----~ ... "',""-,,--t----,-=~-=-ll----~ ... ~.""-,,--t-----=~ •• ,,..+---~ ... = .... ~. 1------=c-=0n=,-+-----=~-,,..+---~-=-=-;1 ........ $U4 jk.MJ .... .... w1H ..... w1H ...i __, wlN .... -~~.=~-c-=-~~-~-=~1-=-=-=-=---=-=-=-= 10 .. " " 33.51 36.75 2tA7 24..13 NA 27.01 NA 21.M NA 40.21 NA 44.10 NA 35.H NA 33.51 NA 38.75 NA 29.47 NA MM 37.89 30.61 25.47 NA 27.15 NA 22.50 NA 41.58 NA <t5.47 NA 31.74 NA 34.M NA 37.U NA 30.11 NA 35.511 3&.11 31.53 28.15 NA 11.53 NA 23.11 NA 42M NA 48.58 NA 37.8-4 NA 35.58 NA 3&.t1 NA 31.53 NA 38.25 39.49 32.21 26.65 NA 29.03 NA 23.M NA 43.51 NA 47.39 NA 31,H NA 36.25 NA 39.49 NA 32.21 NA 311.n 39.N 32.68 26.99 NA 29.37 NA 24.02 NA 44.N NA 47.95 NA 39.21 NA 36.72 NA lt.N NA 32.M NA 37.12 40.3& JJ.N 27.21 NA 29.M NA 24.31 NA 44.54 NA 48.<43 NA 39.69 NA 37.U NA 40.36 NA 33.08 NA 37.55 '40,71 33.50 2UO NA 29.18 NA 24.13 NA 45.0S NA O .M NA 40.21 NA 37.55 NA «>.71 NA 33.SO NA 31,01 41.25 JU7 27.t,4 NA 30.32 NA 207 NA 45.62 NA 49.50 NA 40.77 NA l&.01 NA 41.25 NA lJ.97 NA 31.50 41.74 34M 21.29 NA 30.U NA 25.32 NA 46.20 NA 50.0I NA 41.35 NA 31.50 NA 41.74 NA 34.46 NA 31.M 42.20 34.92 2U4 NA 31.02 NA 25.87 NA 46.7ll NA 50.14 NA 41.111 NA 31.N NA 42.20 NA 34.92 NA 39.42 42.M 35.31 215.97 NA 31.35 NA a.oo NA 47.30 NA 51.19 NA 42.45 NA 39.42 NA 42.M NA 35.Je NA 39.91 43.15 35.17 29.33 NA 31.71 NA 2ll.J6 NA 47.19 NA 51.71 NA 43.04 NA Jt.91 NA 43.15 NA JS.17 NA 40.39 43.1,J Je.35 29.U NA 32.07 NA 2'.n NA 41.47 NA 52.Je NA 43.fi2 NA 40.Jt NA 43.IJ NA J&.JS NA 40Mi 44.10 Je.12 JO.OJ NA 32.41 NA 27.0fi NA 49.0J NA 52..92 NA 44.18 NA 40..M NA 44.10 NA 35.12 NA 41.31 44.54 37-26 J0.36 NA 32.74 NA 27.39 NA 49.57 NA 53.45 NA 41.73 44.97 37.69 J0.17 U.05 NA 27.70 NA 50.ot NA 53.N NA 44.72 45-23 NA NA 41.31 41.73 NA NA .. .. .. ., NA NA 37-26 37.69 NA NA w . ' 20 ~-14 42.55 ., ... .,.,. 45.38 45.79 48.19 48.58 38.10 , .. , , .. , ,,.,. 30.97 31..27 31.57 ,. ... NA NA NA NA ,,.,. 33.65 ,, ... ,.,. NA NA NA NA 28.00 28.30 28.60 ,. .. NA NA NA NA 5057 51.08 ..... ,,., NA NA NA NA ...... ..... 55.43 ..... NA NA NA NA 45.72 .. ,, 4U9 47.18 NA NA NA NA 42.14 42.55 42.95 .,,. NA NA NA NA .. .,. 45.711 46.1'1 .... NA NA NA NA 38.10 38.51 38.91 39.30 NA NA NA NA Staff Published Rate Analysis• Difference between IRP·based Rates and Published Rates using Company's IRP-based calculations from Compliance FIiing. The capacity Price comparison Is for year 2029. l Surroaate 2 Annual Peak Hours -IPC Complia~ Filing (hrs) 3 Ulpita1 Cost {$/kw/month) 4 Fixed O&M j$/kw/month} 5 Cost of Surrogate ($/kw/month) 6 Cost of Surrogate ($/kw/year) 7 Nameplate Capacity (kW) 8 Peak-hour Ca ad Factor 9 Effective capacity at peak (kw) 11 Annual Avoided Cost ($/year) 12 QF Generation during Peak Hours (kwh) 13 Year 2029 Capacity Price ($/kwh) 14 Difference between Scenario 2a and Scenario 2 15 Difference between Scenario la and Scenario 1 16 Difference between Scenario lb and Scenario 1 17 Difference between Scenario 2 and Scenario la 18 Total Difference between IRP and SAR (Difference between Scenario 2 and Scenario l) 19 Percent contribution of the total difference Scenario 1: IRP-based Scenario -Scenario la: !RP-based Scenario lb: IRP-bued Scenario 2: SAR-based Scenario 2■: SAR-based Example from Company's Scenario • Replilce 2017 IRP Scenario • Replace QF Annu•I Scenario -SAR-bas@d cccr Scenario -Published Rate Compllance Filing for Year 2029 SCCT Surrogate with SAR-based Generation durfn1 Peak Hours Surrogate -QF Generation CCCT Surrogate• Different (SCCT Surrogate from 2017 IRP • CCCT Surrogilte QF Generation during Peak Hours based on aeneratlon profile) seer 434 8.64 2.04 10.68 128.16 20000 0.84 16800 2,153,088 8339000 $ Is o.2s82 is Is for genen1t1on based on during Peak Hours calculated Peak-hour Capadty Factor. generation profile with value using Nameplate Capacity, calculated using Nameplate Peak Hour Capacity Factor, and Capacity, Peak Hour Capacity Annual Peak Hours. Factor, and Annual Peak Hours. CCCT SCCCT CCCT CCCT 434 434 434 434 14.32 8.64 14.32 14.32 1.84 2.04 1.84 1.84 16.16 10.68 16.16 16.16 193.95 128.16 193.95 193.95 20000 20000 20000 20000 0.84 0.84 0.84 16800 16800 16800 20000 3,258,378 $ 2,153,088 $ 3,258,378 $ 3,879,022 8339000 7291200 7291200 8680000 o.3907 is 0.2953 1 $ 0.4469 1 $ 0.4469 1 0.1325 I$ 0.0371 1~ 0.0562 1 0.1887 '"" 30% NOie I The Qf .,...•lion durlncpe•k houn lor tN lRP-memod (Sun•rio I •nd h)UMS tM •mount of -•lion duri"I peak hours,., lhe,.._•llon profile t,....,, the lb.I,..,,.. 11..d ;., tile Cotnp&r,y",c«npla""• fill,,.; Hol•2: TI,eQF....-•llondurln&PHkHourslr\Sc-rlolb,2and2•1tcalculatadbymul!lplyl,.lheNamaplai.Capo,ciTybythePnk-hourcal)Kltyfac1orandbylheAnn,..IPNkHoun. Nola 3: n.. S,U...,.t:hod Cal)Klty Pnc<II Jn Scanarlo 2 don not chantt ,..-rdlt-uol tht paak-tk>ur capacity lac1or whk:h IJ •lustratad by lhed(ffwenc:a i..a.,..,.. Sc ...... rlo 2 and la. n.. puk-ft<>Ur capad!y IKl<>f ca""ail out whan dat«mr.,!n1Clpacl!yPtlul Jlnca II: is uMd •• • mult!pliat tod•*min• lhe Annu•l Avoided Cos! (Ina nu....,•10< of the Clpaclt-. Prk:• lf'Qllflion) •"d IJtllC u..d Ha multlpUer to detatmin• lh•CIF JeM<•tlon durln1Pnk Houn (tha"-<>m!nalor of!M Capaaiy Prtu equaliclf>). Att.lchmentC IPC-E-20-02