20220602Comments.pdf

\:','j r'i
Benjamin J. Otto (lSB No. 8292)
710 N 6ft Street
Boise, tD 83701
Ph: [phone]
[e-mail]
Attorney for the ldaho Conservation League
BEFORE THE IDAIIO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO
POWER COMPATIY'S 2021
INTEGRATED RESOURCE PLAN
CASE NO. IPC.E-21.43
IDAHO CONSERVATION LEAGUE
COMMENTS
The ldaho Conservation League (ICL) submits the following comments on Idaho
Power's 2021lntegrated Resource Plan (RP).
While the Commission review is limited to the ongoing planning process and not the
conclusions reached, we agree that "the planning process is worthwhile when Idaho Power
strenuously evaluates model inputs, verifies the model logic, and collaborates with engaged
stakeholders."l With a few notable exceptions, the 2021 IRP is an incremental improvement in
each ofthese areas.
The Good
Improved assessment of Bridger coal exit dates
While we explain our concerns about the proposed gas conversion below, regarding coal
burning, we appreciate ldaho Power's collaborative approach to assessing the future of Bridger.
Idaho Power continued to refine the inputs and logic in the Long-Term Capacity Expansion
1 OrderNo 34959 at26.
ICL Comment
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model by taking into account stakeholder comments on the 2019 IRP as well as Advisory
Committee input. ICL in particular notes the Company's work with the vendor to enable the
model to optimize portfolios for Idaho Power's service territory instead ofjust the larger western
interconnection. We appreciate the verification test that compares model runs where Bridger exit
dates are optimized for Idaho Power against model runs that force alignment with PacifiCorp's
proposed exit dates. We want to emphasize that these results show that exiting Bridger earlier
than PacifiCorp results in a lower cost portfolio while maintaining sufficient reliability metrics.
While we have significant concerns described below about the assessment of converting Bridger
units to gas, overall the 2021 IRP process to assess Bridger exits is a substantial improvement
over prior years.
Improved assessment of clean energ/ options
The202l IRP is the first in many IRP cycles to conclude that adding new clean energy
resources is the preferred avenue for creating an affordable and reliable energy system. ICL
generally supports the Company's use of the Effective Load Carrying Capacity method to assess
contributions to peak loads. Of course, the implementation details matter, but overall, the focus
on specific hours rather than broader averages is an incremental improvement to the process. We
also appreciate Idaho Power's improved assessment of storage resources which have the
potential to provide clean, flexible, and reliable service without the cost and environmental risks
of gas peaker plants. The superiority of clean resources is further shown by [daho Power's
request to quickly add solar resources through the Clean Energy Your Way program as well as
the Company's request for a Certificate of Public Convenience and Necessity for storage
resources. During a period of rapid load growth, the ability to quickly add cost effective
resources that meet flexible siting needs is a valuable attribute of solar and storage projects.
ICL Comment June2,2022tPc-E-21-43 )
Leveraging ldaho's clean energy resources to meet our needs just makes sense. The
following graph uses data from the 2021 IRP and reveals that as Idaho Power looks into the
future, building new wind and solar energy resources is always lower in cost than building new
gas plants.
Projected Costs of Future Energa Resources
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Improved modeling of Demand-Side Resource Potential
ICL appreciates Idaho Power's collaboration with the IRP Advisory Committee to refure
the methodology for assessing energy conservation targets in the IRP. We support the approach
of including the cost-effective energy conservation potential that is assumed to be achievable as a
decrement to the load forecast. And, because the Company's own potential studies show that
more energy conservation opportunities exist, we support the approach of bundling the additional
potential measures by load profile and pricing as an input to the IRP modeling process. This
approach treats conservation similar to generation resources in the modeling process by using
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objective criteria in addition to subjective assumptions about "achievability." Allowing the
model to assess the optimal amount of energy conservation can reveal additional conservation
resources the Company should endeavor to acquire in the future and reduces the influence of
subjective assumptions about the achievable levels of efficiency. This improved approach
addresses many of the concerns ICL has raised over the years and we recommend the
Commission encourage Idaho Power to continue this in future planning cycles.
The Bad
The202l IRP contains four major flaws in the planning process that the Commission
should direct Idaho Power to address in the future.
Bridger conversion was late in the process and used speculative inputs
The202l IRP process started by building on the 2019 preferred portfolio that included
exiting the Bridger units between2022 and 2030, primarily replaced with wholesale energy via
the Boardman transmission and new solar generation. At the May 13, 2021 IRP Advisory
meeting, the Company described the future supply-side resource options which did not include
any coal to gas conversions. At the June 10, 2021 meeting, the Company described the modeling
scenarios, which included manually built portfolios with various coal retirement dates, but no
indication of coal to gas conversion scenarios. In a late-breaking plot twist announced during the
second to last meeting on October 2l,202l,ldaho Power changed the Bridger coal analysis to
include converting Units I and 2 to gas. This last-minute change to how a major resource is put
into the model hindered stakeholders' ability to collaborate with the Company.
Prior IRPs document that gas conversion is not necessary to create an optimal portfolio
without Bridger. The20lT IRP specifically considered the future of Bridger units I and2 and
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concluded that early exit, without gas conversion, was the least-cost, least-risk option.2 The 2019
IRP documented that exiting the entire Bridger plant by 2030 and pivoting to increased
wholesale energy through the Boardman transmission line was the preferred option.3 ln both
cases neither new gas or gas conversion were tied to the Bridger exits. While ICL recognizes the
load forecast has increased since these prior IRPs, we also recognize that Idaho Power continues
to assert that increased transmission and wholesale markets are the primary preferred resource
and that clean options like solar, wind, and storage show continuing cost declines and
performance gains. Probably the strongest evidence that gas conversion is not necessary over the
long term is the fact that Idaho Power intends to shutter even this new gas by 2034. One need
only look at the overall preferred portfolio to see that expanding the clean options is the primary
basis for creating a reliable and affordable resource portfolio.
Even more worrisome is the speculative nature of the modeling inputs to assess the coal
to gas conversion. According to Idaho Power's response to ICL production requests, as of April
2022, the Company was still in discussion with plant owner Pacificorp about the necessary
permits, infrastructure, and timeline needed to convert Bridger to gas. Without this basic
information it is simply not reasonable to conclude Idaho Power rigorously evaluated the model
inputs nor collaborated with stakeholders, which this Commission describes as necessary for a
worthwhile planning process.4 Because of the speculative nature of the gas conversion costs and
last minute nature of the analysis, ICL recommends the Commission instruct Idaho Power to
implement a transparent and rigorous process before any further action on the proposed gas
converslon.
2 zoll IRP at 133-134.
3 zotg mB at r3r-r32.
a Order No. 34959 at 26.
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The gas priceforecast is wrong and the ldaho Power's secret method of analysis prevents
rigorous evaluation
Idaho Power explains that'oresources requiring purchased fuels like natural gas have a
higher exposure to fuel price risk."s This is a significant risk for customers that will only
increase if the Company adds more gas generation to the system. The Power Cost Adjustment
(PCA) provides stark examples of how forecasting errors and volatility directly impact
customers. For the part of the PCA that looks at the past year, Idaho Power explains actual costs
were 55olo more than they expected.6 Looking ahead to the coming year, the Company expects
another 52%oincrease over forecasted prices.T Customers shoulder a disproportionate share of
this risk when the Company passes this nearly 100% forecast error to customers who have no
ability to mitigate this risk themselves. Due to this risk and potential customer impact, Idaho
Power's IRP should strenuously evaluate both the gas prices put into the model as well as the
risks of increased reliance on a volatile fuel.
Idaho Power explains that expected gas prices "are a significant driver of costs in the IRP
process."8 Unfortunately tdaho Power's insistence on using a gas price forecast created through a
highly confidential methodology makes any assessment of this dynamic exceedingly difficult.
Despite clear and broad-based skepticism by the IRP Advisory Committee, Idaho Power chose to
use a highly confidential gas price forecast methodology purchased from Platts. These expected
gas prices appear in Appendix C and range from roughly $2.75 MMBTU in 2023 to nearly $5
s zozt mp atr34.
6 Brady, DI at 18, IJlC-E-2z-ll
7 td arl2.
8 mP at l05.
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MMBTU in2040.e Beyond expected prices, Idaho Power's stochastic analysis of gas price risk
misses the mark by a wide margin. The Company's gas price sampling shows both expected
prices and various iterations ranging from $2 - $5 per MMBTU between 2022-2026.10 But
actual gas prices are already way above this level, according to the US EIA short-term energy
outlook of May 2022.1I The Wall Street Journal further reported on May 26,2022 that methane
prices for June delivery "have tripled over the past year and haven't been so high since 2008."t2
This mismatch between Idaho Power's IRP inputs and reality undercuts all of the Company's
analysis of the Bridger coal to gas conversion.
What is worse is that while we can see that Idaho Power's gas price forecast is very
wrong, we cannot understand what factors are behind this difference between the forecast and
reality. Gas forecasts are complicated and must account for a wide range of national and global
dynamics. But, the public-facing portion of the IRP merely lists the factors that the vendor,
Platts, considered in their secret method.13 What is missing from this list is any discussion of
how Platts weighs those factors, how each factor influences the final price, whether the
assumptions derived from considering the factors tum out to be accurate or not, or any other
useful information to assess the accuracy of this model input. By stark contrast, using a publicly
available methodology, such as the US Energy lnformation Administration gas price forecast,
would allow stakeholders to strenuously evaluate model inputs and collaborate with the
e zozt IRP Appendix C at92.
10 IRP AppendixC at92.
11 U.S. EIA Short-term Energy Outlook, Mray 2022. Available here:
https://www.eia.gov/outlooks/steo/report/natgas.php#:-:text:We%20expect%o20theoh}0Herry%o20Hub,ohE2o/o80o/o9
3202 l)o/A0 av er ageoh20thisTo2 0 summ er.
12 Natural-Gas Prices Surge as Summer Cooling Season Switches On, Wall Street Journal ,May 26,2022. Available
here: https://www.wsj.com/articles/natural-gas-prices-surge-as-summer-cooling-season-switches-on-11653537481
13 zozr IRP at lo4-105.
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Company and other customers, as this Commission noted is the basis for a worthwhile planning
process.l4
Customer-Owned Solar
Idaho Power's 2021 IRP neglects to model the resource capacity of customer-owned
solar and storage resources, despite customer-owned solar's potential to make the grid more
reliable and lower costs to customers as well as strong customer interest in both rooftop and
community solar options.ls Although increasing distributed energy buildout may raise overall
costs in the short term, high levels of distributed generation result in significant cost savings to
both customers and utilities in the long term.16 Increased distributed generation buildout also
helps reduce demand peak variability which both lowers costs to the grid overall and increases
the profitability and feasibility of large, utility-scale and utility-owned renewable energy
projects.lT Lastly, Customer-owned solar can infuse income into local economies and provide
electricity bill relief to lower-income customers.l8 Idaho Power's customers have also submitted
a variety of formal and informal public comments in Idaho Power's Value of Solar and Clean
Energy Your Way proceedings expressing their interest in participating in expanded solar
options and realizing the above benefits of customer generation.
Idaho Power has an obligation to ensure that its IRP models incorporate all potential
forms of generation, including customer-owned solar, in order to ensure that its resource
portfolio is as cost-effective and reliable as possible. Given that Idaho Power will likely find that
1a See Order No. 34959 at 26.
1s IRP at 106-l l4 (describing "IRP Resources" to include utility-scale solar and storage only).
16 Clack, C., et al., Why Local Solar for AII Costs Less: A New Roadmap for the Lowest Cost Grid, Vibrant Clean
Energy,33 (Dec. 2020).
17 Id. at 48.
18 Farrell, J., Advantage Local: Why Local Ownership Matters, Institute for Local Self-Reliance,2-3 (Sep.2014).
ICL Comment 1une2,2022
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customer generation is beneficial for customers and the grid, it should design policies that will
support more customer generation. These policies include a value of solar that accounts for all of
the grid reliability and environmental benefits of customer-owned solar and is stable over the
long term in order to support solar investments. Idaho Power should also develop a customer-
owned community solar program in which groups of customers can subscribe to an off-site solar
array and receive the financial and energy benefits of that solar through virtual net metering. The
IRP should account for increased resource capacity from these types of customer generation
programs.
Looking ahead
The part of the 2021 IRP that best accommodated the interests and input of stakeholders
is Idaho Power's modeling of alternative future scenarios for clean energy goals, climate change
impacts, and growing electrification by customers. Traditionally, the IRP process included a
narower range of future scenarios limited to hydroelectric conditions, gas prices, and customer
loads, along with discrete questions about the Boardman to Hemingway line and the future of
Bridger coal. While these factors are both uncertain in the future and influence the optimal
portfolio of resources, they are not the only uncertain and influential factors at play today. The
primary example of this is Idaho Power's own corporate clean energy commitment - a policy
choice that will influence the future portfolios that should be modeled in the planning process.
ICL appreciates Idaho Power's collaboration to assess four future scenarios that help inform the
Company, stakeholders, and this Commission about attributes and costs for the energy system of
the future.
To develop these future scenarios ICL worked with Advisory Committee members and
Idaho Power to define four scenarios. The 1007o clean energy by 2045 scenario matches Idaho
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Power's corporate commitment. The 100% clean energy by 2035 scenario tests how ldaho Power
could align with federal goals and policies in neighboring states. The Rapid Electrification
Scenario examined the impacts to ldaho Power by switching heating and transportation fuels
away from imported fossil fuels and towards Idaho's clean electricity resources. And the Climate
Change scenario tested the impacts to electric loads and hydro-generation due to science derived
expectations about temperatures and precipitation patterns. Each of these scenarios address
future scenarios that Idaho Power, customers, and regulators can build towards if they reveal
beneficial outcomes.
This graphic built from the IRP modeling results show that small changes to the preferred
portfolio can enable Idaho Power to prepare for these futures.
ldaho Power Potential Resources By Scenerio
E
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=
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4000
3000
2000
1000
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E I
-
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r Energy Efficiency
I Coal
I Demand Response
I Transmission
I Storage
r Solar
Wind
r GasJJ
Scenario Name
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ICL recommends the Commission encourage Idaho Power to continue to model this type
of policy-driven futures along with the traditional assessment of differing assumptions about
loads, gas prices, and hydro generation.
Conclusion
Overall, the202l IRP represents an incremental improvement from the 2019 IRP,
especially in how the Company refined the capacity expansion modeling approach. We
appreciate ldaho Power's assessment of Bridger closure dates and clean energy options. And the
inclusion of alternative future scenarios allows for a useful assessment of how to build resource
portfolios that address e probable policy outcomes. But we strongly question the Bridger gas
conversion assessment due to its last minute nature and speculative model inputs, as well as
Idaho Power's insistence on using a gas price forecast based on a secret methodology that results
in already out-of-date prices. We also urge ldaho Power to model the potential of customer
generation for its resource portfolio. ICL recommends the Commission acknowledge these
improvements and direct Idaho Power to rectify the flaws in future IRPs.
Respectfully submitted this 2nd day of June 2022,
E^tr
Benjamin J. Otto
Idaho Conservation League
ICL Comment
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CERTIFICATE OF SERVICE
I hereby certify that on this 2nd day of June 2022,1delivered true and correct copies of
the foregoing COMMENTS to the following persons via the method of service noted:
H6
Electronic mail only (See Order 35058):
Idaho Public Utilities Commission
Jan Noriyuki, Secretary
secretarv@puc. idaho. gov
Dayn Hardie,
Deputy Attomey General
Dayn.hardie@puc. idaho.gov
Idaho Power
Lisa D. Nordstrom
Timothy E. Tatum
Allison Williams
[e-mail]
[e-mail]
awil I [e-mail]
dockets@ idahopower.com
Individual
Kiki Leslie A. Tidwell, pro se
Ktidwel 12022@ gmai l.com
Industrial Customers of ldaho Power
Peter J. Richardson
Richardson, Adams, PLLC
peter@richardsonadam s. com
Dr. Don Reading
Benjamin J. Otto
Clean Energt Opportunityfor ldaho
Michael Heckler
Courtney White
m ike@c leanenergyoDDortunity. com
Courtney@c leanenergyopportun ity.com
Kelsey Jae
Law for Conscious Leadership
[e-mail]
Micron Technologt
Jim Swier
Micron Technology, Inc
[e-mail]
Auston Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart, LLP
d aruesc h h o ff@ ho I I andhart. com
tnelson@hol landhart.com
awj en sen @ ho I I andhart. c om
gl garganoamari @ho I landhart.com
StopB2H
Jim Kreider
StopB2H Coalition
[e-mail]
Jack Van Valkenburgh
Van Valkenburgh Law, PLLC
[e-mail]
dreadin g.com