HomeMy WebLinkAbout20230314IPC Direct A. Williams.pdf
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
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
ALISON WILLIAMS
RECEIVED
2023 March, 14 9:15AM
IDAHO PUBLIC
UTILITIES COMMISSION
Williams, DI 1
Idaho Power Company
Q. Please state your name, address, and present 1
occupation. 2
A. My name is Alison Williams. My business 3
address is 1221 West Idaho Street, Boise, Idaho 83702. I 4
am employed by Idaho Power as the Regulatory Policy and 5
Strategy Advisor. 6
Q. Please describe your educational background. 7
A. In June 2003, I received a Bachelor of Arts 8
degree in Political Science from the University of 9
California at Davis. In May 2009, I earned a Master of 10
Public Policy degree with a concentration in energy and 11
natural resource economics from the American University's 12
School of Public Affairs in Washington, DC. In addition, I 13
have attended the electric ratemaking courses “Basics: 14
Practical Regulatory Training for the Electric Industry,” 15
offered through New Mexico State University's Center for 16
Public Utilities and the Edison Electric Institute's 17
(“EEI”) “Electric Rates Advanced Course,” hosted by the 18
University of Wisconsin - Madison's Wisconsin Public 19
Utility Institute. 20
Q. Please describe your work experience with 21
Idaho Power Company. 22
A. I joined Idaho Power in December 2019. As 23
the Regulatory Policy and Strategy Leader, my primary 24
Williams, DI 2
Idaho Power Company
responsibilities include providing regulatory support and 1
strategic guidance to business units on a variety of 2
regulatory policy topics, including resource adequacy, 3
integrated resource planning, distribution system planning, 4
and large customer pricing. 5
Prior to joining Idaho Power, I served as the Senior 6
Director of State Energy and Regulatory Policy at EEI, the 7
trade association for the nation's investor-owned electric 8
utilities. Prior to EEI, I was the Vice President of Energy 9
Services at Garten Rothkopf consulting, where I provided 10
business strategy and economic consulting to electric 11
utilities and international corporations in energy-12
intensive industries. 13
Additionally, I previously served as an analyst at 14
the U.S. Department of Energy, conducting energy system 15
modeling to advise on Department policy and budget 16
decisions. Other work experience includes energy market 17
financial analysis for Bloomberg Government, and energy and 18
environmental research at the World Resources Institute and 19
the Woodrow Wilson International Center for Scholars, both 20
located in Washington, DC. 21
Q. What does the Company request in this case? 22
A. Idaho Power makes this filing with the Idaho 23
Public Utilities Commission (“Commission”) to ensure a 24
Williams, DI 3
Idaho Power Company
public opportunity for review and comment about the 1
Company’s participation in the Western Resource Adequacy 2
Program (“WRAP”). Specifically, the Company requests that 3
the Commission acknowledge the potential long-term 4
operational and cost saving benefits associated with Idaho 5
Power’s participation in the WRAP and authorize the Company 6
to recover costs associated with joining WRAP in a future 7
rate proceeding. 8
Q. What is the purpose of your testimony? 9
A. My testimony in this case describes the 10
function and value of participating in a regional resource 11
adequacy program. Specifically, my testimony explores Idaho 12
Power’s involvement to date in WRAP, and the anticipated 13
benefits associated with the Company’s participation. My 14
testimony is organized into five (5) sections: 1) 15
Introduction to resource adequacy and WRAP; 2) Current 16
status of the WRAP and Idaho Power’s involvement; 3) Costs 17
and benefits of WRAP participation specific to Idaho Power; 18
4) WRAP’s governance structure; and 5) Next steps. 19
I. INTRODUCTION TO RESOURCE ADEQUACY & WRAP 20
Q. What is resource adequacy? 21
A. Resource adequacy refers to having sufficient 22
resources available to reliably meet system load under a 23
range of conditions. The North America Electric Reliability 24
Corporation (“NERC”) defines resource adequacy as “the 25
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Idaho Power Company
ability of the electric system to supply the aggregate 1
electric power and energy requirements of the electricity 2
consumers at all times, considering scheduled and 3
reasonably expected unscheduled outages of system 4
components.”1 5
Resource adequacy can refer to an individual 6
utility’s resource sufficiency to meet load, or it can 7
refer to the broader resource sufficiency of an entire 8
region working in partnership. In this testimony, resource 9
adequacy is discussed in the broader context. 10
Q. What is WRAP? 11
A. Overseen by the Western Power Pool (“WPP”), 12
WRAP is the first regional reliability planning and 13
compliance program in the western United States (“US”). At 14
its simplest, WRAP is like an insurance policy that allows 15
for available resources to be shared among participants 16
during short-term periods of resource deficiency. 17
Q. How is WRAP structured? 18
A. WRAP is organized into two parts and two 19
seasons (summer and winter): an advanced viewing of 20
resources—called the forward showing—and an operations 21
phase during which resources can be shared in times of 22
need. Each season has its own forward showing and 23
1 North American Electric Reliability Corporation, “Reliability
Terminology,” August 2013.
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Idaho Power Company
operations program. The Direct Testimony of Nicole 1
Blackwell discusses the forward showing and operations 2
programs in detail. 3
Q. Is WRAP a market? 4
A. No. Distinct from the function of Regional 5
Transmission Organizations and Independent System Operators 6
that manage wholesale energy markets, WRAP facilitates the 7
seasonal coordination and sharing of resources across a 8
region to help ensure resource adequacy and reliability for 9
participating utilities. 10
WRAP’s goal is to maintain reliability across all 11
participants’ systems over the course of an operating 12
season; markets, which exist to facilitate daily and hourly 13
energy transactions, serve an entirely different function. 14
As a result of these distinct functions, the Company 15
considers WRAP a complement to—not antagonistic to or a 16
replacement for—market participation. 17
Q. Will the Company’s Boardman to Hemingway 18
(“B2H”) transmission line and other transmission enhance 19
resource adequacy? 20
A. Yes. Incremental transmission capacity, 21
including B2H, will support resource adequacy by providing 22
direct access to energy markets and incremental pathways on 23
which to import purchases. As discussed in the Direct 24
Testimony of Nicole Blackwell, energy purchases generally 25
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Idaho Power Company
must be paired with firm transmission within WRAP. Firm 1
transmission capacity is therefore a requirement, 2
particularly as the Company's resource mix changes and 3
market purchases become a larger portion of the resource 4
stack. Incremental transmission such as B2H or transmission 5
from strategic locations, such as Four Corners, provides 6
additional capacity to associate with market purchases and 7
diversifies the paths on which the Company can import, 8
which also provides significant benefits to reliability. 9
Q. Why is Idaho Power interested in WRAP? 10
A. WRAP will facilitate transparent collaboration 11
and partnership among participating Load Responsible 12
Entities (“LRE”) in the region. The program provides a 13
consistent method of measuring resource adequacy across 14
participants and offers a backstop opportunity to share 15
resources in times of need. With the changing resource 16
landscape across the West, this kind of consistency and 17
collaboration is necessary and timely. WRAP is designed to 18
allow participants to make use of regional diversity in 19
resources and load and enhance reliability for customers 20
across the footprint. With the Company’s own changing 21
resource and load mix, WRAP will provide significant 22
benefits through the evaluation of resource adequacy ahead 23
of peak seasons and opportunities for sharing in times of 24
need. 25
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Idaho Power Company
Q. How will WRAP result in benefits for Idaho 1
Power and its customers? 2
A. WRAP leverages regional operating efficiencies 3
and geographic diversity through the comprehensive “forward 4
showing” evaluation of each participant’s available 5
resources and capacity to meet its needs for the upcoming 6
operating season. Ultimately, this forward showing, 7
combined with the ability within the operations program to 8
rely on others’ available capacity in times of need, 9
affords participants, including Idaho Power, an opportunity 10
to plan for and procure fewer incremental resources to 11
reliably meet forecast system load. 12
Considering the benefits of regional resource and 13
load diversity provided by WRAP participation, Idaho Power 14
can achieve cost savings that exceed the cost of WRAP 15
participation by reducing the planning reserve margin 16
(“PRM”) used in long-range planning and thus avoiding the 17
purchase or procurement of some amount of resources needed 18
to serve the Company’s highest risk hours. A detailed 19
discussion of the costs and benefits of WRAP participation 20
is provided in Section III of my testimony. 21
II. STATUS OF WRAP 22
Q. What is the status of WRAP operations and 23
implementation? 24
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Idaho Power Company
A. On February 10, 2023, the Federal Energy 1
Regulatory Commission (“FERC”) approved WRAP’s governing 2
tariff (“WRAP Tariff”), which prescribes the general 3
provisions of WRAP, its governance structure, and the 4
details of the forward-showing and operations programs.2 5
With the WRAP Tariff approved, the program can now 6
begin to transition from a non-binding to a fully binding 7
program. This transition will occur in three phases. First, 8
from Winter 2022/2023 to Winter 2024/2025, all 9
participation is non-binding. Second, from Summer 2025 to 10
Winter 2027/2028, participation will be binding with 11
transitional provisions, such as the ability to defer a 12
participant’s first binding season to a later date. 13
Finally, Summer 2028 marks the beginning of fully binding 14
WRAP participation. 15
Starting as early as Summer 2025, participants can 16
sign a WRAP agreement to officially transition to binding 17
participation. While participation is voluntary, binding 18
participants must meet capacity and delivery requirements 19
and pay participation costs. Participation and non-20
compliance costs are discussed in detail in Section II of 21
my testimony. 22
Q. What is the difference between binding and 23
non-binding participation? 24
2 Exhibit 1 of the Direct Testimony of Nicole Blackwell.
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Idaho Power Company
A. The key difference between binding and non-1
binding participation is the applicability of non-2
compliance penalties and access to capacity in the 3
operations program. Non-binding participants are exempt 4
from the non-compliance penalties enforced for binding 5
participants but, in the operations program, only have 6
access to capacity that is voluntarily offered by 7
participants and in excess of the needs of binding 8
participants. Further, if some participants are binding 9
while others are still non-binding—as allowed in the 10
transition phase of WRAP—the program continues to function 11
as non-binding. 12
For example, if a binding participant fails to 13
supply generation to a non-binding participant, no delivery 14
failure charge will be incurred because the recipient was a 15
non-binding participant. Essentially, non-compliance 16
penalties can neither serve to penalize nor protect non-17
binding participants. Stated another way, obligations and 18
requirements are waived for both non-binding participants 19
and any participant they deliver to or receive capacity 20
from, regardless of the other participant’s binding status. 21
In short, the greater the number of binding 22
participants, the greater the volume of resources available 23
for sharing in the operations program. Therefore, the 24
Williams, DI 10
Idaho Power Company
benefits of WRAP cannot be fully realized until all 1
participants are binding. 2
As discussed further below, Idaho Power is 3
considering the date at which it will be able to go binding 4
and is planning to do so no later than Summer 2027. 5
Q. What is Idaho Power’s status with respect to 6
WRAP participation? 7
A. On December 19, 2022, the Company announced 8
its plans to move forward with WRAP.3 To date, Idaho Power 9
has participated in WRAP’s non-binding, forward-showing 10
program. The Company submitted forward-showings for the 11
Winter 2022/2023 and Summer 2023 seasons. These non-binding 12
forward-showings serve as verification that participants 13
are able to meet capacity requirements for the upcoming 14
season. 15
Next, the Company will work with other participants 16
to test the operations program in the summer of 2023, and 17
then, starting in Winter 2023/2024, will participate in the 18
first non-binding operations program to facilitate the 19
sharing of resources during peak winter conditions. 20
Q. When will Idaho Power become a binding 21
participant in WRAP? 22
3 Idaho Power news release, “Idaho Power Moves Forward with Regional
Energy Adequacy Group,” December 19, 2022.
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Idaho Power Company
A. The Company tentatively plans to begin binding 1
participation in the summer of 2027, giving the Company 2
ample time to adjust to WRAP processes and requirements 3
during the no-penalty phase of WRAP operations. 4
However, the Company will continue to evaluate the 5
feasibility of an earlier binding date, as WRAP benefits 6
are only fully realized through collective binding 7
participation. In such a circumstance, the Company would 8
not select a binding date that would precede the conclusion 9
of this docket. 10
Q. How many utilities are participating in WRAP? 11
A. Currently, 20 utilities, including Idaho 12
Power, have announced their formal participation in the 13
non-binding phase(s) of WRAP.4 Current participants are from 14
the northwest, parts of the desert southwest, Canada, and 15
northern California. Additional participants may join WRAP 16
at any point as long as they are within WPP’s regional 17
footprint. WPP’s and WRAP’s respective footprints are shown 18
in the image below. 19
4 WRAP website, “WRAP FAQs”
(https://www.westernpowerpool.org/news/wrap-faqs)
Williams, DI 12
Idaho Power Company
1
Image 1: Map of WPP and WRAP Footprints (December 2022) 2
III. COSTS & BENEFITS 3
Q. What are the costs associated with WRAP 4
participation? 5
A. To cover the costs of administering and 6
operating WRAP, WPP charges participants a WRAP 7
Administration Charge and a one-time Cash Working Capital 8
Support Charge. These two charges reflect all of WPP’s 9
operating expenses, general and administrative expenses, 10
Williams, DI 13
Idaho Power Company
costs of outside services, taxes, fees, capital costs, 1
depreciation expense, interest expense, working capital 2
expense, and other financing costs. 3
Q. How is the WRAP Administration Charge derived? 4
A. Each participant is assessed a monthly WRAP 5
Administration Charge that is equal to the sum of fixed and 6
variable costs. Administration costs, the fixed component, 7
are allocated equally across all participants. Operating 8
costs, the variable component, are allocated based on each 9
participant’s percentage of total monthly 50th percentile 10
(“P50”) peak load. Therefore, the larger the participating 11
LRE, the larger the total WRAP Administration Charge will 12
be and vice versa. 13
Q. How is the Cash Working Capital Support Charge 14
derived? 15
A. Each WRAP participant must pay a Working 16
Capital Charge to support WPP’s ability to make payments 17
for the operation and administration of the WRAP on a 18
timely basis. Each participant will pay the Cash Working 19
Capital Support Charge no later than 30 days after signing 20
a WRAP Agreement. Like the Administration Charge, the 21
Working Capital charge is proportional to the size of a 22
participant’s P50 peak load relative to the entire program. 23
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Idaho Power Company
So, the larger the load, the larger the Working Capital 1
Charge and vice versa. 2
Q. What are the Company’s estimated costs of WRAP 3
participation? 4
A. The Company estimates that the annual cost of 5
participation, or the annual sum of WRAP Administration 6
Charges will be between $510,133 and $744,555. 7
Administration Charges are subject to change based on 8
participant count and P50 peak load. Additionally, in 2022, 9
the Company incurred a one-time Cash Working Capital 10
Support Charge of $152,856 after signing the WRAP 11
agreement. 12
Q. How will WRAP participation result in cost 13
savings? 14
A. Understanding the financial benefits of WRAP 15
first requires understanding how WRAP will be used. As 16
described in the Direct Testimony of Nicole Blackwell, WRAP 17
is designed to be a program of last resort. Considering 18
this, and in the absence of firsthand experience in the 19
operations program, the Company assumes it will leverage 20
WRAP one day per year. As Idaho Power gains operational 21
experience with WRAP, the Company will develop a more 22
refined understanding of how often it is likely to leverage 23
the sharing opportunities in the WRAP operations program. 24
Williams, DI 15
Idaho Power Company
To assess WRAP’s potential cost savings associated 1
with use one day per year, the Company first performed a 2
loss-of-load probability (“LOLP”) analysis on six test 3
years of the Company’s load and resource data and 4
identified the highest-risk day of each year. Idaho Power 5
then performed an analysis using the Company’s Reliability 6
and Capacity Assessment Tool to identify the amount of 7
capacity needed to bring the LOLP of the highest-risk day 8
down to a similar risk profile as other days in the same 9
year. 10
The Reliability and Capacity Assessment Tool 11
analysis found that WRAP, by providing capacity resources 12
to the Company on that single worst day, resulted in the 13
Company needing 14 megawatts (“MW”) less of perfect 14
generation to meet an annual Loss of Load Expectation 15
(“LOLE”) of 0.1 event-days per year. In other words, 16
leveraging WRAP to significantly reduce the risk of the 17
highest-risk day each year is the equivalent of avoiding 14 18
MW of perfect generation-and the associated costs-available 19
across all hours of the year. 20
Q. How much cost savings does Idaho Power 21
anticipate from WRAP? 22
A. Using the analysis above, Idaho Power valued 23
the 14 MW of avoided perfect generation by converting it to 24
an equivalent amount — 15.58 MW — of natural gas capacity 25
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Idaho Power Company
from a simple cycle combustion turbine (“SCCT”). The 15.58 1
MW of natural gas capacity reflects 14 MW of perfect 2
generation “grossed up” by an Equivalent Forced Outage Rate 3
on demand (“EFORd”) of 10.15 percent (14 MW/(1-0.1015) = 4
15.85 MW). 5 Using 2021 IRP resource cost information, the 5
annual value of 15.58 MW of natural gas capacity is 6
$2,145,678.6 7
Stated another way, the 14 MW that WRAP represents 8
is equivalent to 15.58 MW of SCCT capacity, resulting in an 9
estimated $2.1 million of annual avoided resource 10
investment. 11
Q. What is Idaho Power’s estimated net savings 12
from WRAP participation? 13
A. Even assuming that Idaho Power would pay the 14
high end of annual WRAP Administration Charges, the 15
Company’s annual net savings from WRAP would be $1.4 16
million. 17
Q. When does the Company expect to realize these 18
savings? 19
A. As noted earlier in testimony, the benefits of 20
WRAP are expected to materialize when the program becomes 21
fully binding. If the Company were not able to realize 22
savings from WRAP until 2027 (the Company’s anticipated 23
5 10.15% is the EFORd of a smaller simple cycle combustion turbine.
6 See the 2021 IRP, Appendix C, p. 38. Two years of inflation at 2.3
percent was applied to get 2023 dollars.
Williams, DI 17
Idaho Power Company
fully binding year), participation would result in 1
cumulative net savings by 2028. That is, the cumulative 2
savings for 2027 and 2028 would exceed the cumulative 3
program costs from 2023-2028 by more than $500,000. 4
Q. How could WRAP result in larger cost savings? 5
A. The cost savings presented above assumes the 6
Company will rely on the WRAP operations program’s resource 7
sharing only once per year. Geographical diversity is 8
expected to be a major benefit of WRAP, especially if the 9
Company’s peak needs occur at times that are diverse 10
compared to the other WRAP participants. Leveraging the 11
program more frequently would potentially result in 12
additional avoided cost savings. Operational experience 13
gained this summer, and as the program approaches the 14
binding phase, will help Idaho Power better understand when 15
and how often the Company may be likely to use WRAP. 16
Q. Are the cost savings associated with WRAP 17
“real”? 18
A. Yes. The cost savings associated with WRAP 19
participation are real because they represent the costs the 20
Company would have otherwise incurred to procure capacity 21
for times of extreme need. 22
Q. How will cost savings be realized for 23
customers? 24
Williams, DI 18
Idaho Power Company
A. Customers will experience cost savings in the 1
same way that Demand Response (“DR”) lowers costs for all 2
customers. DR programs, such as the Company’s Irrigation 3
Peak Rewards Program, allow the Company to procure fewer 4
resources because some amount of DR is expected to be 5
available. 6
Similarly, WRAP participation will allow the Company 7
to plan to procure fewer resources. 8
Also like DR, the expected cost savings associated 9
with WRAP will be real. They will be passed on to customers 10
through avoided investment in new resources and, as a 11
result, not accounted for directly in the Company’s Power 12
Cost Adjustment. 13
Q. How will WRAP be treated in the Company’s 14
upcoming 2023 Integrated Resource Plan (“IRP”)? 15
A. To be conservative, the Company’s assumption 16
is that it will leverage WRAP only once per year, beginning 17
in 2027, when the Company expects to become a binding WRAP 18
participant. 19
Considering the last-resort nature of WRAP, the 20
Company will not model WRAP as a typical resource in 21
AURORA. That is, WRAP will not be a selectable resource 22
within AURORA’s long-term capacity expansion model. 23
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Idaho Power Company
Instead, the Company will reduce its PRM starting in 1
2027 in AURORA to account for the 14 MW reduction in 2
capacity need that results from leveraging WRAP once per 3
year, consistent with how the Company assessed the cost 4
savings associated with WRAP. 5
Q. Does this PRM reduction equate to the Company 6
procuring fewer resources? 7
A. Yes. Through WRAP, the Company believes it can 8
avoid 14 MW of capacity need. WRAP will, therefore, be 9
listed in the Load and Resource Balance as providing 14 MW 10
of capacity beginning in 2027. 11
Q. Will WRAP have any additional impacts on the 12
Load and Resource Balance? 13
A. Yes. As explained in Case No. IPC-E-23-05,7 14
Idaho Power‘s capacity benefit margin (“CBM“) will not have 15
the same value in WRAP. When evaluating resource adequacy 16
planning requirements under WRAP, quantification of firm 17
resources will not allow for the inclusion of CBM to 18
demonstrate adequacy. The Company must acquire firm 19
resources on firm transmission well in advance of each 20
season to meet WRAP forward-showing requirements. CBM, by 21
7 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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Idaho Power Company
definition, is only available as firm transmission when the 1
Company is in an energy emergency and cannot be utilized 2
for WRAP forward-showing purposes. This, coupled with an 3
evaluation of the difficulties acquiring transmission under 4
emergency conditions, resulted in the reduction of the 5
resource availability associated with CBM in the Load and 6
Resource Balance utilized for acquisition of 2024 resources 7
from 330 MW to 200 MW. Idaho Power will make the same 8
adjustment in the Load and Resource Balance used for the 9
2023 IRP. 10
Q. How will WRAP be treated in future IRPs? 11
A. Idaho Power intends to use operational WRAP 12
knowledge to inform how WRAP will be modeled in future 13
IRPs, beyond the 2023 IRP. The Company may identify a more 14
optimal approach to reflecting WRAP within its long-term 15
planning. 16
Q. Will participation costs and cost savings 17
change customer rates immediately? 18
A. No. The Company respectfully requests the 19
Commission approve its request to recover costs associated 20
with WRAP participation in a future rate proceeding or in 21
the next general rate proceeding. As a result, there would 22
be no immediate impact on customer rates. 23
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Idaho Power Company
Q. Would the addition of participants to WRAP 1
reduce the expected cost savings for existing participants? 2
A. No. Additional participants in WRAP should not 3
reduce expected cost savings. In fact, as more LREs join 4
WRAP, more capacity will be available to share during tight 5
conditions, so program benefits and reliability may 6
increase with wider participation. 7
Q. Under what scenario would Idaho Power look to 8
withdraw from WRAP? 9
A. The Company’s participation in WRAP is 10
grounded in the expected benefits of cost savings and 11
improved system reliability, as outlined above. However, if 12
these benefits were to be compromised or the expected cost 13
savings did not materialize, the Company would evaluate 14
withdrawing from WRAP. 15
Withdrawing, however, would require the Company to 16
maintain system reliability without the regional support 17
provided by the program. Such a “go-it-alone” approach 18
would isolate Idaho Power from many of its partners in the 19
region that have opted into WRAP. As such, the Company 20
would need to conduct a robust cost-benefit analysis before 21
making the decision to withdraw from the program. 22
Q. What kinds of penalties could Idaho Power be 23
exposed to through participation in WRAP? 24
Williams, DI 22
Idaho Power Company
A. As mentioned in the Direct Testimony of Nicole 1
Blackwell, WRAP participants must pay non-compliance 2
charges if they fail to meet the requirements of the 3
forward-showing and operations programs. These non-4
compliance charges include Deficiency Charges and Delivery 5
Failure Charges, and they are designed to result in 6
compliance from all participants. Penalties are set at a 7
high enough price to ensure that participants are not 8
tempted to default on their requirements. 9
Q. Is the Company confident in its ability to 10
remain compliant and not incur any penalties? 11
A. Yes. To be clear, Idaho Power does not intend 12
to operate in a manner that would ever result in non-13
compliance penalties. 14
IV. WRAP GOVERNANCE 15
Q. How is WRAP governed? 16
A. WRAP is governed by several supervisory and 17
advisory entities: WPP, WPP’s independent Board of 18
Directors (“Board”), an Independent Evaluator, and a 19
series of committees. 20
Upon FERC’s approval of the WRAP Tariff, the 21
governance structure is now finalized, allowing WPP to 22
move forward with establishing—or approving—the various 23
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Idaho Power Company
governing bodies. The purpose and status of each is 1
described below. 2
Q. What is the relationship between WPP and WRAP? 3
A. WPP serves as WRAP’s program administrator and 4
employs a program operator to oversee WRAP’s forward-5
showing and operations programs. WPP also provides legal, 6
regulatory, and accounting support for WRAP. 7
Additionally, WPP, working under the Board, has the 8
authority to submit to FERC amendments to the rates, 9
terms, and conditions in the WRAP Tariff. 10
Q. What is WPP’s independent Board and what is 11
its role? 12
A. WPP existed prior to WRAP and, as such, had 13
its own existing Board of Directors. Under the FERC-14
approved WRAP Tariff, WPP is required to have an 15
independent Board of Directors. To prevent conflicts of 16
interest, Board members must maintain financial 17
independence from all WRAP participants. 18
The Board has ultimate authority over all aspects of 19
WRAP, including the exclusive authority to direct WPP to 20
file amendments to the WRAP Tariff and approve the 21
Business Practice Manuals.8 The Business Practice Manuals 22
compile details, guidance, and information about the 23
8 WRAP Tariff, Section 2.
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Idaho Power Company
implementation of the rules, requirements, and procedures 1
stated in the WRAP Tariff. 2
Q. What is the status of the Board? 3
A. In October 2022, WPP’s nominating and search 4
committee, along with a national search firm, approved 5
nominees for the new independent Board. These members 6
include WPP Board Chairperson Bill Drummond, along with 7
four new members: Susan Ackerman, former Public Utility of 8
Oregon Commissioner and former Chief Energy Officer at 9
Eugene Water and Electric Board; Michelle Bertolino, 10
former Executive Utility Director of Roseville Electric 11
Utility; Doug Howe, Consultant for the Western Public 12
Utility Commission Joint Action Framework on Climate 13
Change; and Andrew Ott, former CEO of PJM.9 Following 14
FERC’s approval of the WRAP Tariff, these nominees were 15
officially seated on the Board on February 21, 2023. 16
Q. How does the Board receive information and 17
recommendations? 18
A. A series of committees, as well as an 19
appointed Independent Evaluator, provide the Board with 20
stakeholder input and policy guidance. The committees 21
include the Resource Adequacy Participants Committee 22
(“RAPC”), Program Review Committee (“PRC”), and Committee 23
9 WPP news release, “Western Power Pool Approves Nominees for New
Independent Board of Directors,” October 14, 2022.
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Idaho Power Company
of State Representatives (“COSR”). Each committee is 1
discussed in turn below. 2
Q. What is the function and purpose of the RAPC? 3
A. The RAPC represents the interests of WRAP 4
participants directly to the Board. It is the sole 5
committee that can consider, recommend, and vote that the 6
Board approve or reject amendments to the WRAP Tariff or 7
Business Practice Manuals. Additionally, the RAPC can 8
provide input to the Board on any proposed WRAP rules. 9
Q. Who are the members of the RAPC? 10
A. The RAPC includes one representative from each 11
WRAP participant. Each representative is expected to be in 12
senior management of the participating entity and have 13
decision-making authority on behalf of the entity. If the 14
senior management official is unable to attend a meeting, 15
a designated representative of the senior management 16
official can attend the meeting instead, provided the 17
representative has binding decision-making authority and 18
all voting rights have been delegated from the senior 19
management official. 20
Q. Who is Idaho Power’s RAPC representative? 21
A. Ben Brandt, Director of the Company’s Load 22
Serving Operations, serves on RAPC for Idaho Power. 23
Q. How does RAPC voting work? 24
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Idaho Power Company
A. While each RAPC representative gets one vote, 1
RAPC voting utilizes a “House and Senate” model, like the 2
US Congress. 10 Each participant’s “House” vote represents 3
the proportion of the participant’s monthly P50 peak load 4
compared to the total monthly P50 peak loads of all WRAP 5
participants. As a result, participants with relatively 6
larger peak loads will have more weight in the House vote. 7
On the “Senate” side, each participant will receive a 8
single, non-weighted vote. 9
The bicameral-style voting system ensures that all 10
participants have an equal voice, while also recognizing 11
the importance of participant size. 12
For any action to be approved by the RAPC, the vote 13
must pass both the “House” and “Senate”. However, specific 14
percentage thresholds of the entire committee are required 15
for passage of specific actions. For example, approval to 16
amend any of the limitations on Board authority requires 17
an 80 percent affirmative vote in both the House and 18
Senate.11 19
Q. What is the function and purpose of the PRC? 20
A. The PRC is responsible for receiving, 21
considering, and proposing amendments to the WRAP Tariff 22
10 WRAP Tariff, Section I.
11 WRAP Tariff, Section 3.4.
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Idaho Power Company
and Business Practice Manuals.12 The PRC serves as an 1
advisory group to the RAPC and, when applicable, the Board. 2
Q. Who are the members of the PRC? 3
A. The PRC is comprised of 20 representatives 4
from the following ten sectors:13 5
1. Four representatives of the RAPC-participant 6
investor-owned utilities; 7
2. Four representatives of the RAPC-participant 8
publicly owned utilities, such as consumer or 9
municipal utilities; 10
3. Two representatives of RAPC-participant retail 11
competition LREs; 12
4. Two representatives from RAPC-participant 13
Federal Power Marketing Administrations; 14
5. Two representatives of independent power 15
producers; 16
6. Two representatives of public interest 17
organizations; 18
7. One representative of retail consumer advocacy 19
groups; 20
8. One representative of industrial customer 21
advocacy groups; 22
12 WRAP Tariff, Section 4.2.
13 Id.
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Idaho Power Company
9. One representative of load-serving entities 1
with loads in the WRAP that are represented by 2
other LREs and are not otherwise eligible for 3
any other sector; and 4
10. One representative from the COSR. 5
WRAP participants and other entities are limited to 6
participating in one PRC sector, even if they are eligible 7
to participate in more than one sector. 8
Q. Does Idaho Power serve on the PRC? 9
A. Yes. Camille Christen, the Company’s Resource 10
Acquisition, Planning, Coordination Manager, sits on the 11
PRC as the representative for WRAP participating investor-12
owned utilities in the Rockies region (Northwestern Energy, 13
PacifiCorp, and Idaho Power). 14
Q. How does PRC voting work? 15
A. The PRC operates under consensus voting, in 16
which each of the ten sectors casts one vote, with an 17
affirmative vote of six sectors constituting approval.14 For 18
sectors with four representatives, three representatives 19
must agree with the action for the sector to be considered 20
an affirmative vote. Similarly, sectors with two 21
representatives must have both representatives agree with 22
14 WRAP Tariff, Section 4.2.5.
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Idaho Power Company
the action for the sector to be considered an affirmative 1
vote. 2
Q. What is the function and purpose of the COSR? 3
A. The COSR serves as a check-and-balance for 4
proposals submitted to the Board by the RAPC. If the RAPC 5
submits a proposal that is significantly different than a 6
proposal suggested by the PRC, the COSR may engage in 7
public review and comment before the proposal is officially 8
submitted to the Board. Additionally, if the COSR opposes 9
or appeals a proposal submitted by the RAPC, the Board will 10
not consider the proposal until the RAPC engages with the 11
COSR in at least two public discussions.15 12
Q. Who are the members of the COSR? 13
A. The COSR is comprised of one representative 14
from each state or provincial jurisdiction that regulates 15
at least one WRAP participant. These jurisdictional 16
representatives may come from either a public utility 17
commission or a state or provincial energy office.16 As of 18
March 2023, the COSR is in the process of being formed. 19
Q. What is the function and purpose of the 20
Independent Evaluator? 21
15 WRAP Tariff, Section 4.3.
16 WRAP Tariff, Section 4.3.1.
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Idaho Power Company
A. The Independent Evaluator, which will report 1
directly to the Board, is responsible for assessing WRAP’s 2
performance and recommending potential design 3
modifications. The Independent Evaluator will have no 4
decision-making authority but will present an annual report 5
of its findings to the WRAP committees and the Board. All 6
data in the report will be reported on an aggregated basis, 7
as the evaluator is prohibited from evaluating individual 8
participants.17 9
Q. Who is the Independent Evaluator? 10
A. As of March 2023, the search for an 11
Independent Evaluator is still underway. 12
Q. Will WRAP participation impact the 13
Commission’s role as Idaho Power’s state regulator? 14
A. No. Idaho Power’s participation in WRAP will 15
not change the Commission’s regulatory review and approval 16
role. WPP’s governance proposal clearly articulates the 17
preservation of jurisdictional authority: 18
The WRAP is not intended to pre-empt, 19
supplant, or otherwise circumvent state 20
jurisdiction, including state regulatory 21
process, determinations of resource adequacy 22
planning, resource choice, or resource 23
procurement. Any state agency that has 24
statutory jurisdiction over the rates charged 25
or services provided by a participating 26
utility reserves the right to exercise any and 27
17 WRAP Tariff, Section 5.
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Idaho Power Company
all lawful means to preserve its state 1
jurisdiction and authority. It is the 2
expectation of the designers of the WRAP that 3
the overall governance structure for the WRAP 4
facilitates state process and outcomes that 5
can operate jointly with a regional resource 6
adequacy program.18 7
8
V. NEXT STEPS 9
Q. What are the next steps for current WRAP 10
participants? 11
A. In mid-December 2022, WPP gathered all 12
commitments from potential WRAP participants for the next 13
phase of implementation. This next phase will largely be a 14
trial period for participants to practice how the fully 15
binding program will operate. Essentially, the non-binding 16
transitional phases serve the purpose of further 17
introducing the program to participants and giving them an 18
opportunity to practice and plan for how they will leverage 19
the full value of WRAP. As noted earlier, Idaho Power is 20
participating in the summer 2023 non-binding operations 21
program for testing. 22
Q. Please summarize your testimony. 23
A. Idaho Power currently determines resource 24
adequacy and reliability on its own, within its balancing 25
authority. Participation in WRAP will give Idaho Power 26
insight into regional resource adequacy, along with the 27
18 Western Resource Adequacy Governance Program – Governance Proposal
(January 2022), p. 4.
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Idaho Power Company
ability to procure energy and capacity and preserve 1
reliability in times of extreme need. 2
Idaho Power conservatively estimates that 3
participation in WRAP will result in annual net savings of 4
$1.4 million, based on the amount of resources that can be 5
avoided by using WRAP only one time per year. With 6
potential WRAP savings far exceeding annual participation 7
costs, the Company considers WRAP participation both 8
prudent and necessary to ensure that the Company can 9
continue to deliver low-cost and reliable electricity to 10
customers into the future. 11
Q. Does this complete your testimony? 12
A. Yes, it does. 13
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Idaho Power Company
DECLARATION OF ALISON WILLIAMS 1
I, Alison Williams, declare under penalty of perjury 2
under the laws of the state of Idaho: 3
1. My name is Alison Williams. I am employed 4
by Idaho Power Company as the Regulatory Policy and 5
Strategy Leader in the Regulatory Affairs Department. 6
2. On behalf of Idaho Power, I present this 7
pre-filed direct testimony in this matter. 8
3. To the best of my knowledge, my pre-filed 9
direct testimony is true and accurate. 10
I hereby declare that the above statement is true to 11
the best of my knowledge and belief, and that I understand 12
it is made for use as evidence before the Idaho Public 13
Utilities Commission and is subject to penalty for perjury. 14
SIGNED this 14th day of March 2023, at Boise, Idaho. 15
16
Signed: 17
18
19
Alison Williams 20
21
22