20230314Application.pdf

LISA D. NORDSTROM
Lead Counsel
[e-mail]

March 14, 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-23-08
In the Matter of Idaho Power Company’s Participation in the Western
Resource Adequacy Program

Dear Ms. Noriyuki:

Enclosed for electronic filing, please find Idaho Power Company’s Application in the
above matter.

In addition, attached is the Direct Testimony of Alison Williams and the Direct
Testimony of Nicole Blackwell filed in support of the Application. Word versions are also
attached for the Reporter.

If you have any questions about the attached documents, please do not hesitate to
contact me.

Very truly yours,

Lisa D. Nordstrom
LDN:sg
Attachments
RECEIVED
2023 March, 14 9:15AM
IDAHO PUBLIC
UTILITIES COMMISSION

APPLICATION - 1

LISA D. NORDSTROM (ISB No. 5733)
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]

Attorneys for Idaho Power Company

Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S PARTICIPATION IN THE
WESTERN RESOURCE ADEQUACY)
PROGRAM

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CASE NO. IPC-E-23-08

APPLICATION

Idaho Power Company (“Idaho Power” or “Company”), in accordance with Idaho
Code § 61-524 and -525 and RP 052, submits to the Idaho Public Utilities Commission
(“Commission” or “IPUC”) this Application respectfully requesting that the Commission
issue an order (1) acknowledging the potential for long-term cost savings associated with
participation in the Western Resource Adequacy Program (“WRAP”) and (2) allowing the
Company to recover WRAP-associated costs in a future rate proceeding.
Resource adequacy is the cornerstone of Idaho Power’s ability to provide
customers with reliable electric service. Considering the vital nature of resource
adequacy, the Company’s participation in WRAP will not only provide insight into resource
adequacy across the Western United States (“US”) but will give participants a mechanism

APPLICATION - 2
to secure energy and capacity in times of extreme need. Further, the Company estimates
that WRAP participation will result in annual net savings, thereby allowing Idaho Power
to provide reliable service to customers at lower costs.
Idaho Power files with this Application the accompanying direct testimony of Alison
Williams, Regulatory Policy and Strategy Leader, regarding the structure, governance,
and status of WRAP, as well as the estimated costs and benefits of the Company’s
participation in the effort. The direct testimony of Nicole Blackwell, Senior Energy
Settlement Analyst, then details how WRAP will operate.
In support of this Application, Idaho Power presents as follows:
I. WRAP OVERVIEW
1. Overseen by the Western Power Pool (“WPP”), WRAP is the first regional
reliability planning and compliance program in the western US. At its simplest, WRAP is
an insurance program of sorts that makes reserved resources available to participants
during short-term periods of resource deficiency.
2. WRAP seeks to provide benefits through enhanced coordination and
increased visibility across the regional power system. The program is intended to increase
reliability of the regional system while maintaining participants’ existing responsibilities for
reliable operations and observing existing frameworks for planning, purchasing, and
delivering energy. By supplementing these existing frameworks, WRAP will provide
insight into the region-wide status of resources and transmission to identify gaps and then
provide coordination as the region collectively plans for the future.

APPLICATION - 3
3. WRAP is comprised of two parts—a forward-showing program and an
operations program—across two program seasons; the summer season runs from June
1st to September 15th and the winter season from November 1st to March 15th.
4. Each program plays an important role in assessing and addressing
resource adequacy and reliability for participating systems across the region, as detailed
in the Direct Testimony of Nicole Blackwell.
5. The forward-showing program functions as the near-term planning
component of WRAP and establishes reliability metrics for the region. More precisely,
forward-showing ensures the regional footprint has enough demonstrated capacity to
meet WRAP-established reliability metrics seven months in advance of the applicable
WRAP operating season.
6. Meanwhile, the operations program facilitates the identification of real-time
capacity needs and the sharing of energy and capacity between participants during the
summer and winter seasons.
7. As of January 2023, WRAP’s participants include 20 utilities, including
Idaho Power, from the northwest, parts of the southwest, Canada, and northern
California. To date, Idaho Power has participated in WRAP’s non-binding, forward-
showing program. The Company submitted forward-showings for the Winter 2022/2023
and for Summer 2023 seasons. These first non-binding forward-showings serve as
verification that participants are able to meet capacity requirements for the upcoming
season. Next, the Company will participate in testing the operations program in Summer
2023 to facilitate the sharing of resources during peak summer conditions.

APPLICATION - 4
8. The Company tentatively plans to begin binding participation in the summer
of 2027, giving the Company ample time to adjust to WRAP processes and requirements
during the no-penalty phase of WRAP operations.
II. COSTS & BENEFITS ASSOCIATED WITH WRAP PARTICIPATION
9. To estimate cost savings, Idaho Power anticipates leveraging WRAP one
time per year—an approach consistent with the design of WRAP as a program of last
resort. As detailed in the Direct Testimony of Alison Williams, the Company determined
that levering WRAP to significantly reduce the risk on its highest-risk day each year is the
equivalent of avoiding 14 megawatts (“MW”) of perfect generation available across the
whole year. This 14 MW translates to 15.58 MW of natural gas capacity, valued at
$2,145,678. Stated another way, the 14 MW that WRAP represents is equivalent to 15.58
MW of natural gas capacity, resulting in an estimated annual avoided resource investment
of $2.1 million.
10. The Company estimates that the annual cost of WRAP participation will be
between $537,420 and $744,555, along with a one-time charge of $152,856. The
derivation of estimated annual cost savings from WRAP is provided in the Direct
Testimony of Alison Williams.
11. If the Company incurred the high end of the program costs, Idaho Power’s
annual net savings from WRAP would be $1.4 million. Further, if the Company were not
able to realize savings from WRAP until 2027 (the Company’s anticipated fully binding
year), participation would result in cumulative net savings by 2028. That is, the cumulative
savings for 2027 and 2028 would exceed the cumulative program costs from 2023-2028
by more than $500,000.

APPLICATION - 5
12. As noted, these cost savings assume the Company will rely on the WRAP
operations program’s resource sharing only once per year. Geographical diversity is
expected to be a major benefit of WRAP, especially if the Company’s peak needs occur
at times that are diverse compared to the other WRAP participants. Leveraging the
program more frequently would potentially result in additional avoided cost savings.
Operational experience gained this summer, and as the program approaches the binding
phase, will help Idaho Power better understand when and how often the Company may
be likely to use WRAP—and the cost savings that would result.
III. MODIFIED PROCEDURE
13. Idaho Power believes that it would be appropriate to process this case by
means of modified procedure (i.e., by written submission rather than by hearing) in
accordance with the provisions of RP 201-210. However, if the Commission prefers
another procedure for processing this case, Idaho Power will present its case in support
of the relief requested in this Application.
IV. COMMUNICATIONS
14. Communications and service of pleadings, with reference to this
Application should be sent to the following:
Lisa D. Nordstrom
Megan Allen Goicoechea Alison Williams
Lead Counsel Regulatory Policy & Strategy Leader
Idaho Power Company Idaho Power Company
P.O. Box 70 P.O. Box 70
Boise, Idaho 83707 Boise, Idaho 83707
[e-mail] [e-mail]
[e-mail]

Idaho Power Dockets: [e-mail]

APPLICATION - 6
V. REQUEST FOR RELIEF
15. As described above, Idaho Power’s participation in WRAP will give the
Company insight into regional resource adequacy, along with an ability to procure energy
and capacity—thereby preserving reliability—in times of extreme need. The Company
conservatively estimates that WRAP participation will yield annual net savings of $1.4
million, based on the amount of resources that can be avoided using WRAP one time per
year.
16. With potential WRAP-related savings far exceeding participation costs,
Idaho Power considers WRAP participation both prudent and necessary to ensure the
Company can continue to deliver low-cost and reliable electricity to customers into the
future. Therefore, Idaho Power respectfully requests that the Commission issue an order
(1) acknowledging the potential for long-term benefits related to Idaho Power’s
participation in WRAP and (2) authorizing the Company to recover WRAP-related costs
in an upcoming rate proceeding.

DATED at Boise, Idaho, this 14th day of March 2023.

________________________________
LISA D. NORDSTROM
Attorney for Idaho Power Company