20230810Reply Comments REDACTED.pdf

DONOVAN WALKER
Lead Counsel
[e-mail]

August 10, 2023

VIA ELECTRONIC FILING

Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074

Re: Case No. IPC-E-23-05
In the Matter of Idaho Power Company’s Application for a Certificate of
Public Convenience and Necessity to Acquire Resources to be Online by
2024 and Approval of a Power Purchase Agreement with Franklin Solar LLC

Dear Ms. Noriyuki:

Attached for electronic filing, please find Idaho Power Company’s Redacted Reply
Comments in the above matter.

Please feel free to contact me directly with any questions you might have about
this filing.

Very truly yours,

Donovan E. Walker
DEW:sg
Enclosures
RECEIVED
2023 AUGUST 10, 2023 4:53PM
IDAHO PUBLIC
UTILITIES COMMISSION
IDAHO POWER COMPANY’S REPLY COMMENTS - 1
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]

Attorney for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR A
CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY TO
ACQUIRE RESOURCES TO BE ONLINE
BY 2024 AND FOR APPROVAL OF A
POWER PURCHASE AGREEMENT WITH
FRANKLIN SOLAR LLC.
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CASE NO. IPC-E-23-05

IDAHO POWER COMPANY’S
REPLY COMMENTS

Idaho Power Company (“Idaho Power” or “Company”) respectfully submits these
Reply Comments in response to Reply Comments filed by the Idaho Public Utilities
Commission (“Commission”) Staff (“Staff”), on August 8, 2023. Idaho Power appreciates
Commission Staff’s support of an order (1) granting the Company a Certificate of Public
Convenience and Necessity (“CPCN”) to acquire 72 megawatts (“MW”) of dispatchable
energy storage necessary to meet the identified capacity deficiency in 2024 and (2)
approving the 25-year Power Purchase Agreement (“PPA”) between Idaho Power and
Franklin Solar LLC (“Franklin Solar”), with modifications. In these Reply Comments, Idaho
IDAHO POWER COMPANY’S REPLY COMMENTS - 2
Power will respond to concerns raised by Commission Staff regarding the competitive
resource procurement process used to evaluate various resources that competed to
provide a capacity resource to help meet Idaho Power’s peak capacity needs in 2024 and
the resulting least-cost, least-risk capacity resources selected through that fair and
competitive Request for Proposal (“RFP”) process.
I. BACKGROUND
1. Idaho Power has been generally resource-sufficient since the addition of
the Langley Gulch natural-gas fired power plant almost a decade ago until recently. The
load and resource balance from the Second Amended 2019 IRP did not show a capacity
deficiency occurring until the summer of 2028. However, several converging factors
outside of the Company’s control, including limited third-party transmission capacity, load
growth, and a decline in the peak serving effectiveness of certain supply-side and
demand-side resources caused Idaho Power to rapidly move to a near-term capacity
deficiency starting in 2023. These dynamic circumstances led the Company to
immediately file a request for a CPCN to acquire resources to be online in 20231, and
Idaho Power expects to acquire additional resources each year thereafter through (at
least) 2027.
2. Under Idaho law, Idaho Power has an obligation to provide adequate,
efficient, just, and reasonable service on a nondiscriminatory basis to all those that
request it within its service area. Idaho Power has experienced and expects sustained
load growth, thereby requiring the addition of new resources. To meet its obligation to
reliably serve customer load and fill the 2024 capacity deficiency, the Company
conducted a competitive solicitation through an RFP seeking to acquire energy and

1 Case No. IPC-E-22-13.
IDAHO POWER COMPANY’S REPLY COMMENTS - 3
capacity to help meet Idaho Power’s previously identified capacity needs of 85 MW to be
online by June of 2024 and an incremental 115 MW in 2025. The procurement process
resulted in the acquisition of least-cost, least-risk resources necessary to fill the 2024
capacity deficiency.
3. The competitive RFP process resulted in a least-cost, least-risk selection of
two projects to meet the 2024 capacity deficiency: (1) a combination 100 MW solar PV
PPA along with an Idaho Power-owned 60 MW energy storage project; and (2) an Idaho
Power-owned 12 MW energy storage project. During contract negotiations, the load and
resource balance was refreshed again and it was determined that, even with the
combined 100 MW solar PV facility and 60 MW energy storage facility, a 7 MW capacity
shortfall still existed in 2024. The Company identified the next most cost-effective project
able to meet the 2024 capacity deficit, the Idaho Power battery storage benchmark
resource. Idaho Power can economically and efficiently add 12 MW of battery storage at
the Hemingway substation, the site for which 80 MW of battery storage has been installed
to meet the 2023 capacity deficiency without requiring infrastructure upgrades and
ensuring maximum investment tax credit benefits. Idaho Power’s fair and competitive
resource acquisition procurement process resulted in a least-cost, least-risk procurement
of 72 MW of energy storage capable of being operational to meet the 2024 deficit.
II. IDAHO POWER’S REPLY
A. The Commission Should Adopt Staff’s Recommendation to Grant the
Company a CPCN.

4. In order to comply with its continuing obligations to serve customers, the
Company must at times acquire additional resources to meet the identified capacity
deficits on its system when the need arises, and potentially outside of the formalized IRP
IDAHO POWER COMPANY’S REPLY COMMENTS - 4
process. Given the short turn-around to construct a resource to meet deficits identified in
2023, coupled with global supply-chain disruptions stemming from the COVID-19 health
crisis and other events, it was imperative that the Company move forward quickly on the
resource procurement process. Idaho Power performed a quantitative and qualitative
evaluation with an objective scoring methodology to reasonably evaluate the price and
non-price attributes of each project proposal submitted through the RFP process. The
request for a CPCN to acquire 72 MW of dispatchable energy storage is the result of
those efforts.
5. Idaho Power appreciates Staff’s analysis of the Company’s request in this
case and their recommended “[a]pproval of the CPCN to acquire 72 MW of BESS
capacity.”2 Staff performed an extensive review in this proceeding of the capacity
deficiencies identified at different times during the RFP process, evidence of the fluidity
of those deficiencies during the near-term resource decision making phase, concluding
that the “capacity needs that drove the proposed resources are justified.”3 Further, Staff
agrees with Idaho Power’s identification of its 103 MW of capacity needs in 2024
concluding “the amount of the deficit is reasonable”.4
B. Idaho Power Completed a Robust Competitive Resource Procurement
Process for Identifying the Least-Cost, Least-Risk 2024 Resource
Acquisitions

6. The Company’s rapid change in the capacity deficiency was the result of
several converging factors, including limited third-party transmission capacity, load
growth, and a decline in the peak serving effectiveness of certain supply-side and

2 Staff Comments, pg. 3.
3 Staff Comments, pg. 4.
4 Staff Comments, pg. 4.
IDAHO POWER COMPANY’S REPLY COMMENTS - 5
demand-side resources. In order for Idaho Power to meet its obligation to reliably serve
customer load in a least-cost, least-risk manner, a competitive solicitation for the
acquisition of resources was conducted through an RFP. This competitive RFP process
allowed the Company to access the broader peak capacity and energy market to obtain
the best resources for Idaho Power’s customers, providing access to a spectrum of
potential resources and developers. Staff “believes the Company generally conducted a
fair and transparent RFP process.”5 However, Staff indicated questions as to whether the
RFP process resulted in projects that are least-cost, least risk resources due, in part, to
Idaho Power’s “restricted ownership types and resource types that could be submitted for
bid”6 when the RFP was issued, suggesting the bid pool was limited.
7. The formal request for competitive proposals for the acquisition of electric
energy and capacity delivered from electric resources did require that the resources
employ certain qualifying technologies under varying ownership arrangements as those
were the products that would have the most realistic potential to be in-service by June
2024. Staff believes the limited size of the bid pool resulting from the restricted ownership
and resource types may have prevented Idaho Power from identifying the least-cost,
least-risk resource. In support of their concerns, Staff identifies a data response provided
by the Company, indicating the RFP limited the ownership of the Battery Energy Storage
System (“BESS”) to only a standalone BESS, not Solar + BESS or Wind + BESS projects.
Idaho Power would like to clarify that although not specifically identified in Addendum No.
7 to the RFP, the Company did allow for the PPA-based storage component of the Solar
+ BESS and Wind + BESS resource types to be a BESS structure. Project No. 7 identified

5 Staff Comments, pg. 5.
6 Id.
IDAHO POWER COMPANY’S REPLY COMMENTS - 6
in Confidential Exhibit No. 4 included a Solar + BESS Battery Storage Agreement
proposal to meet the identified 2024 capacity deficiency.
8. Moreover, the Company’s assumption that certain resource types could not
be constructed in such a short timeline is supported by respondent proposals received
through the RFP process for capacity deficiencies identified in 2023, 2024 and 2025; the
number of viable projects grew as construction timelines expanded. As evidenced in Case
No. IPC-E-22-13 for which the Commission granted a CPCN for 2023 resources, only
one project was able to meet the commercial operation date of June 2023, for project
submittals necessary to meet the 2024 capacity deficiency, 17 projects were initially
identified as able to meet the commercial operation date of June 2024, and, as seen in
Case No. IPC-E-23-20,7 the number of project proposals able to meet the commercial
operation date of June 2025 grew to 36. The bid pool identified those resources that could
be constructed in the short timeframe and did not hinder Idaho Power’s ability to identify
the least-cost, least-risk resource for meeting the 2024 capacity deficiency.
9. It is worth noting that some of the concerns Staff raised regarding the RFP
solicitation and resulting selection of the least-cost, least-risk resources are actively being
addressed. The Company has begun the competitive procurement process under the
Oregon RFP guidelines, issuing an RFP for 2026 resources on June 8, 2023. Because of
the probable longer construction time frame, the solicitation broadened potential eligible
products which should alleviate Staff’s apprehensions associated with a limited bid pool.
In addition, Staff noted that although they believe “the scoring process was likely

7 In the Matter of Idaho Power Company’s Application for a Certificate of Public Convenience and Necessity to
Acquire Resources to be Online in Both 2024 and 2025 and for Approval of an Energy Storage Agreement with Kuna
BESS, LLC.
IDAHO POWER COMPANY’S REPLY COMMENTS - 7
conducted in a fair and impartial manner,”8 Idaho Power should include as part of the bid
solicitation materials the weighting factors for the evaluation metrics and criteria.
Understanding the importance of inclusion of the weighting factors for respondents of
RFPs, the Company has included a description of the non-price factor weighting as a
component of the RFP for 2026 resources, as well as the inclusion as Exhibit D to the
RFP of the Non-Price Scoring Matrix the non-price evaluation rubric that illustrates the
weightings where applicable. As Idaho Power gains experience with the development and
issuance of RFPs, future RFPs are refined, becoming more robust and ensuring a
continued competitive resource acquisition process.
C. Idaho Power Will Justify All 2024 Resource Costs as Part of a Future
Proceeding.

10. Due to their concerns about whether or not the RFP process resulted in
projects that are least-cost, least risk resources, Staff recommends the Commission
establish a soft cap, stating that “[b]ecause of the issues identified in the RFP process,
Staff believes it is reasonable to cap the proposed BESS facilities’ turn-key prices at the
lowest unit price . . . “9 Idaho Power does not believe a soft cap is necessary. As explained
in the Company’s Application, Idaho Power is not requesting binding ratemaking
treatment in this case, rather the Company’s request in this case is that the Commission
find Idaho Power has met the requirements of Idaho Code § 61-526 and issue an order
granting a CPCN to acquire 72 MW of energy storage necessary to meet the identified
capacity deficiency in 2024. The Company will make a future filing to address the cost
recovery associated with these projects. It is in this future proceeding that Idaho Power

8 Staff Comments, pg. 8.
9 Id.
IDAHO POWER COMPANY’S REPLY COMMENTS - 8
will justify all costs associated with the 2024 resources, not just those costs over the soft
cap, if any.
11. If, however, the Commission finds it necessary to implement a soft cap, the
Company would like to correct a component of Staff’s computation of the soft cap for the
BESS projects of $ for the 12 MW BESS and $ for the 60 MW BESS.
“Because of the issues identified in the RFP process, Staff believes it is reasonable to
cap the proposed BESS facilities’ turn-key prices at the lower unit price identified”10 in
Confidential Attachment A to their Comments, or Project No. 10, Idaho Power’s battery
storage benchmark resource. However, Project No. 10 is not the most cost-effective
project identified to meet the 2024 capacity deficit – Project No. 8 is, the combined 100
MW solar PV plus 60 MW energy storage facility. Staff’s analysis of the final short list
projects only captures the unit price associated with the BESS and fails to account for the
benefit associated with low PPA costs of Project No. 8.
12. As a resource addition, AURORA continually selected the combined solar
PV and battery storage in the Long-Term Capacity Expansion analysis, indicating the low
solar PPA price of Project No. 8 is contributing to the value the project provides as
compared to the other final short list projects. In addition to being a lower cost resource,
when compared to standalone battery storage systems, the combined solar PV plus
energy storage of Project No. 8 better meets the Company’s capacity needs, resulting in
a higher Effective Load Carrying Contribution than would exist as a standalone energy
storage system. This is further evidenced in the additional AURORA modeling scenario
runs the Company performed for Staff in Response to Staff’s Request for Production No.

10 Staff Comments, pg. 8.
IDAHO POWER COMPANY’S REPLY COMMENTS - 9
15. The runs, performed under a low carbon, low gas scenario, a planning carbon,
planning gas scenario, and a high carbon, high gas scenario selected the same 2024
resources in each of the three futures, confirming the 2024 resources reflect the least-
cost, least-risk option under a wide range of future assumptions. As such, when
computing a soft cap, it is more appropriate to holistically consider Project No. 8’s value
and base the soft cap of the 60 MW BESS on the unit price associated with that project,
as Project No. 8 is the least-cost resource selected. Under this methodology, the soft cap
associated with the 60 MW BESS would be approximately $.
III. CONCLUSION
13. Idaho Power appreciates the opportunity to respond to Staff’s comments
filed in this case and for Staff’s review of the history of the identification of a 2024 capacity
deficiency and understanding of the urgency for acquisition of the summer 2024 resource.
The Company respectfully requests the Commission (1) accept Staff’s recommendation
to grant a CPCN to acquire 72 MW of dispatchable energy storage necessary to meet the
identified capacity deficiency in 2024, (2) approve the 25-year PPA between Idaho Power
and Franklin Solar, with an amendment to reflect Staff’s proposed changes, and (3) reject
Staff’s proposed establishment of a soft cap to be applied to project costs, or in the
alternative, correct Staff’s calculated soft cap according to the Company’s clarification
provided in these comments.
DATED at Boise, Idaho, this 10th day of August, 2023.

________________________________
DONOVAN E. WALKER
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S REPLY COMMENTS - 10
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 10th day of August 2023 I served a true and correct
copy of IDAHO POWER COMPANY’S REPLY COMMENTS upon the following named
parties by the method indicated below, and addressed to the following:

Commission Staff
Chris Burdin
Deputy Attorney General
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No. 8
Suite 201-A (83714)
PO Box 83720
Boise, ID 83720-0074

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City of Boise
Darrell Early
Deputy City Attorney
Boise City Attorney’s Office
150 N. Capitol Blvd.
PO Box 500
Boise, ID 83701
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Wil Gehl
Energy Program Manager
Boise City Dept. of Public Works
150 N. Capitol Blvd.
P.O. Box 500
Boise, Idaho 83701-0500
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__________________________________
Stacy Gust, Regulatory Administrative
Assistant