HomeMy WebLinkAbout20230518Reply Comments.pdf
MEGAN GOICOECHEA ALLEN
Corporate Counsel
mgoicoecheaallen@idahopower.com
May 18, 2023
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-23-12
Application of Idaho Power Company for Authority to Implement Power Cost
Adjustment (“PCA”) Rates for Electric Service from June 1, 2023, through May
31, 2024
Dear Ms. Noriyuki:
Attached for electronic filing is Idaho Power Company’s Reply Comments in the
above-entitled matter.
The confidential attachment will be provided separately to the parties who sign the
Protective Agreement.
If you have any questions about the attached documents, please do not hesitate to
contact me.
Sincerely,
Megan Goicoechea Allen
MGA:sg
Enclosures
RECEIVED
2023 May 18, 4:27PM
IDAHO PUBLIC
UTILITIES COMMISSION
IDAHO POWER COMPANY’S REPLY COMMENTS - 1
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: (208) 388-2664
Facsimile: (208) 388-6935
mgoicoecheaallen@idahopower.com
lnordstrom@idahopower.com
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO IMPLEMENT POWER
COST ADJUSTMENT (“PCA”) RATES
FOR ELECTRIC SERVICE FROM JUNE
1, 2023, THROUGH MAY 31, 2024.
)
)
)
)
)
)
)
)
CASE NO. IPC-E-23-12
IDAHO POWER COMPANY’S
REPLY COMMENTS
COMES NOW, Idaho Power Company (“Idaho Power” or “Company”), and,
pursuant to Idaho Public Utilities Commission’s (“Commission”) Rule of Procedure1 203
and the Notice of Modified Procedure, Order No. 35756, hereby respectfully submits the
following Reply Comments in response to Comments filed by Commission Staff (“Staff”)
and the Industrial Customers of Idaho Power (“ICIP”) in the matter of the Company’s
1 Hereinafter cited as RP.
IDAHO POWER COMPANY’S REPLY COMMENTS - 2
application for authority to implement Power Cost Adjustment (“PCA”) rates for electric
service from June 1, 2023, through May 31, 2024.
I. BACKGROUND
On April 14, 2023, Idaho Power applied to the Commission for an order
approving an update to Schedule 55 based on the quantification of the 2023-2024 PCA
to become effective June 1, 2023, for the period June 1, 2023, through May 31, 2024.
As filed, the 2023-2024 PCA would result in an overall revenue increase of
approximately $200.2 million, or a 14.68 percent increase over the current billed
revenue.
On May 11, 2023, Staff and ICIP filed comments in this case. Staff’s comments
recommended approval of the PCA amount of $200.2 million, but recommended that
the Commission withhold its decision on determining the prudency of the filed net power
supply expense (“NPSE”) until Idaho Power, with Staff’s review, fully investigates the
circumstances that led to the lack of coal supply. In addition, Staff recommended that
the Commission should reserve the right to adjust recovery of NPSE until next year’s
PCA filing, if the Commission finds that the Company was not prudent in its
management of coal supply.
Staff also recommended that the Company keep the Commission and Staff
apprised of any adjustments to the forecast that may warrant an out-of-cycle PCA
adjustment. Lastly, Staff recommended that the Company notify the Commission of the
outcome of the liquidated damages claim for Hells Canyon Unit 3. ICIP’s comments
largely centered around rate mitigation, proposing to spread the requested PCA
increase over a two- or three-year period.
IDAHO POWER COMPANY’S REPLY COMMENTS - 3
II. REPLY COMMENTS
Idaho Power appreciates and acknowledges Staff’s review of the Company’s
filing and agrees with Staff’s conclusion that the filed PCA components appropriately
calculate the 2023-2024 PCA rates under the currently approved methodology. In
addition, Idaho Power supports Staff’s recommendations related to continued
communication regarding material changes to the PCA forecast and the outcome of the
liquidated damages claim for Hells Canyon Unit 3.
Idaho Power recognizes the limited amount of time available to Staff to fully
investigate the circumstances that led to the Company’s limited coal supply, and is not
opposed to Staff’s recommendation to continue this investigation, which would include
Idaho Power preparing a report of its findings for the Commission. However, Idaho
Power believes that the information provided to Staff in this case sufficiently
demonstrates that the Company’s actions were prudent, and the April 2022 through
March 2023 NPSE were prudently incurred.
Lastly, while Idaho Power is not necessarily opposed to rate mitigation measures
as discussed in its initial Application, the Company remains concerned with the risk of
future compounding effects that may result from the ICIP’s proposal to spread the PCA
rate increase over a two- or three-year period. Each of these issues is discussed in
more detail below.
A. PCA Forecast
On page 5 of Staff’s Comments, Staff recommends that the Company “keep Staff
apprised of how the forecast changes during the PCA year and if an adjustment to the
forecast rate is warranted, the Company should make an off-cycle filing with the
IDAHO POWER COMPANY’S REPLY COMMENTS - 4
Commission.” Idaho Power supports Staff’s recommendation, and will communicate
with Staff regarding material changes to the PCA forecast.
B. Hells Canyon Unit 3 Downtime
Pages 10 and 11 of Staff’s Comments discuss their analysis of the outage at
Hells Canyon Unit 3. Staff notes that the impact to the historical PCA year is minimal,
and that the Company acted prudently to bring the unit back online. Staff recommends
that the Company notify the Commission of the outcome of its liquidated damages
claim. The Company is supportive of Staff’s recommendation, and will notify the
Commission of the outcome when the claim is resolved.
C. Lack of Coal Supply
Pages 7-10 of Staff’s Comments discuss their analysis related to the
circumstances that led to the lack of coal supply during the 2022-2023 PCA year. Based
on their analysis, Staff has recommended that the Company conduct a full investigation
into these circumstances and provide a report to the Commission. While the Company
is not opposed to further investigation of these issues, Idaho Power believes the
information provided to Staff in this case sufficiently demonstrates that the actions of the
Company were prudent based on what was known, or should have been known, prior to
the costs at issue being incurred. As part of the discovery process in this case, Idaho
Power provided to Staff a report that detailed the events and decisions related to limited
coal availability and turbulent market conditions before and during the 2022-2023 PCA
year. To ensure the Commission is informed as to the Company’s knowledge and
actions in this regard, the referenced report is included with these Reply Comments as
Confidential Attachment 1.
IDAHO POWER COMPANY’S REPLY COMMENTS - 5
Further, it appears that Staff may have misinterpreted information in Confidential
Attachment 1 and other discovery responses to reach their conclusions. For example,
some of the statements made in Staff’s Comments incorrectly characterize the actions
the Company took in response to the limited coal supply. Staff states that while the
Company was aware of the coal shortage in April 2022, leadership was not made aware
until September, and actions were not taken to remedy the situation until later in the
calendar year, which Staff describe as “mostly unsuccessful.” Staff’s assertion is not
supported by the facts presented in discovery. When the Company and its management
became aware of the limited supply of coal in April 2022, it immediately initiated efforts
to procure additional coal. Ultimately, these efforts did not result in an adequate supply
of coal, driving the need to optimize available coal to ensure the most cost-effective
operation of the coal plants under these constrained circumstances. This optimization
method resulted in additional hedge transactions in the fall of 2022. It would not have
been prudent, as implied by Staff, to initiate this optimization strategy any earlier until all
reasonable efforts to procure additional coal had been exhausted.
Sustained price escalation and volatility in the natural gas and energy markets,
stemming from global natural gas supply and demand disruptions, combined with poor
hydrological conditions, led to the increased economic dispatch of coal-fired resources
during the winter and spring months of 2022. In addition, coal production in the U.S. has
been ramping down, limiting the supply of third-party coal available to Idaho Power, and
production capabilities at Bridger Coal Company (“BCC”) decreased due to the closing
of the underground mine at the end of 2021. In its responses to Staff’s First Production
Request, filed May 4, 2023, the Company provided a timeline of monthly changes to its
IDAHO POWER COMPANY’S REPLY COMMENTS - 6
Bridger and Valmy fueling plans as a result of the decrease in coal supply. In addition,
the Company provided a summary of Request for Proposal (“RFP”) and procurement
activities for Valmy. These have been included with these Reply Comments as
Attachments 2-5.
The Company took action to secure additional coal at Bridger beginning April
2022, when coal inventory began to decline as a result of actual coal generation being
44 percent higher than forecast. At that time, the Company allocated 133,000 additional
tons of coal from BCC. In May 2022, Idaho Power and PacifiCorp began negotiations
for a new 18-month coal contract from Black Butte Coal Company, which was secured
in July 2022.
At the end of May 2022, published Mid-Columbia (“Mid-C”) forward market prices
for the remainder of the PCA year had increased 36 percent from forecast prices two
months prior. The actions Idaho Power took to secure additional coal allowed the
Company to continue operating Bridger unconstrained through the summer peak
season and avoid some of the increased prices. In September 2022, the Company
began exploring options to secure coal from the Powder River Basin, and in October
2022, Idaho Power began optimizing its coal generation in order to reduce coal burn
due to the limited coal supply remaining.
At Valmy, Idaho Power contacted western coal suppliers in May 2022 seeking
additional coal for the balance of 2022. However, no additional coal was available for
purchase that met plant coal quality specifications. As a result, in June 2022, NV Energy
and Idaho Power issued a joint RFP to procure additional coal supply. However, coal
bid into this RFP failed to meet quality specifications for mercury and sulfur content
IDAHO POWER COMPANY’S REPLY COMMENTS - 7
required for Valmy to comply with its emissions permit. As a result of the knowledge
gained regarding the availability and quality of coal for future use at Valmy, an
independent engineering firm was commissioned to evaluate the feasibility of enhancing
the controls at Valmy to allow the plant to burn higher mercury and sulfur coals. Based
on the information obtained from the engineering firm, plant specifications for mercury
and sulfur were refined, and NV Energy and Idaho Power issued an RFP in November
2022, seeking coal for 2023. A contract has been negotiated with a new fuel source,
which Idaho Power expects to be available by summer 2023.
Next, Staff quantifies the additional expenses associated with the less-than-
forecasted coal generation, stating that the increase in NPSE as a result of the
decrease in generation is $114 million. Staff also notes that “the Company may have
been able to take more effective action early in the calendar year to increase its quantity
of coal or to hedge for additional gas and market energy, thereby avoiding some of the
$114 million in additional cost.”2 As stated previously, Idaho Power first acted to
increase its quantity of coal for the balance of 2022 in April at Bridger and in May at
Valmy. In addition, the Company executed its hedging transactions in accordance with
the risk guidelines outlined in the Company’s Energy Risk Management Standards.
These guidelines identify both the volumetric and financial exposure limits that dictate
the Company’s allowed hedging activity, as well as the timing of when the Company can
execute a hedge transaction. While the Company began optimizing its coal generation
in October 2022, which resulted in additional hedge transactions in the fall, as
previously noted, it would not have been prudent to initiate this optimization strategy any
2 Staff’s Comments at 9.
IDAHO POWER COMPANY’S REPLY COMMENTS - 8
earlier until all reasonable efforts to procure additional coal had been exhausted.
Idaho Power acknowledges the short amount of time available to Staff to analyze
this issue. Should the Commission determine additional time to work with Staff on a full
investigation is warranted, the Company is confident that it will demonstrate that it acted
prudently.
D. Rate Mitigation
ICIP’s Comments proposed to spread the requested PCA rate increase over a
two- or three-year time period3. While Idaho Power is amenable to rate mitigation if the
Commission deems some form of measure to be prudent, after reviewing ICIP’s
proposal, the Company’s concerns with rate pancaking remain.
In requesting the Commission adopt PCA-related rate mitigation measures, ICIP
raises the concern that if approved as filed, the PCA “will punish industrial and special
contract customers. . .”. Discussing the per-kilowatt-hour (“kWh”) recovery method of
the PCA, ICIP states that “high load factor customers (customers who impose relatively
fewer peak demand-related costs on the Company) are disproportionally hurt by the
PCA.” This statement incorrectly characterizes the PCA mechanism, of which costs are
driven by energy consumption. Because costs included in the PCA are driven by energy
consumption, they are appropriately assigned based on kWh usage, reflecting the fair
assignment of costs rather than a “punishment” of high load factor customers.
In proposing a two- or three-year deferral of recovery of this year’s PCA balance,
ICIP acknowledges that the Commission has consistently rejected customer requested
rate mitigation proposals in the past: “In the thirty-year history of the PCA the
3 ICIP Comments at 7 and 8.
IDAHO POWER COMPANY’S REPLY COMMENTS - 9
Commission has never adopted an overall rate mitigation measure.”4 While the ICIP
may disagree with this approach, it does not provide any compelling justification for
deviating from the Commission’s longstanding precedent.5 While the Company is not
opposed to discussing rate mitigation measures if the Commission determines they may
be appropriate, the Company believes the oft-cited concerns6 remain and the potential
longer-term downside risks outweigh the near-term relief of deferring all or a portion of
the requested increase.
III. CONCLUSION
Idaho Power appreciates the thorough audit performed by Staff, and the
comments filed by both Staff and ICIP. The Company respectfully requests that the
Commission approve its filing to implement PCA rates effective June 1, 2023. Idaho
Power supports Staff’s recommendations to continue communications regarding the
Hells Canyon Unit 3 liquidated damages claim and material changes to the PCA
forecast. In addition, while Idaho Power is not opposed to Staff’s recommendation to
fully investigate the circumstances that led to the lack of coal supply, the Company
believes that the information provided to Staff in this case sufficiently demonstrates that
the Company’s actions were prudent.
4 ICIP Comments at 5.
5 See, e.g., In the Matter of the Application of Idaho Power Company for Authority to Implement Power
Cost Adjustment (PCA) Rates for Electric Service From May 16, 2002 Through May 15, 2003, Case No.
IPC-E-02-03, Order No. 29026, p. 15-16 (May 13, 2002); In the Matter of the Application of Idaho Power
Company for Authority to Implement Power Cost Adjustment (PCA) Rates for Electric Service From June
1, 2008 Through May 31, 2009, Case No. IPC-E-08-07, Order No. 30563, p. 6-7 (May 30, 2008); In the
Matter of the Application of Idaho Power Company for Authority to Implement Power Cost Adjustment
(PCA) Rates for Electric Service From June 1, 2009 Through May 31, 2010, Case No. IPC-E-09-11,
Order No. 30828, p. 10-11 (May 29, 2009); In the Matter of the Application of Idaho Power Company for
Authority to Implement Power Cost Adjustment (PCA) Rates for Electric Service from June 1, 2013
Through May 31, 2014, Case No. IPC-E-13-10, Order No. 32821, p. 10-11 (May 31, 2013).
6 In considering the use of rate mitigation measures in prior PCA cases, the Commission has repeatedly
declined to spread recovery of amounts into subsequent years citing concerns surrounding rate
pancaking, appropriate matching of costs and recovery, and the overall intent of the PCA mechanism.
IDAHO POWER COMPANY’S REPLY COMMENTS - 10
DATED at Boise, Idaho, this 18th day of May 2023.
________________________________
MEGAN GOICOECHEA ALLEN
Attorney for Idaho Power Company
IDAHO POWER COMPANY’S REPLY COMMENTS - 11
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 18th day of May 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
Claire Sharp
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
Hand Delivered
U.S. Mail
Overnight Mail
FAX
_____ FTP Site
X Email: Claire.Sharp@puc.idaho.gov
Industrial Customers of Idaho Power
Peter J. Richardson
515 N. 27th Street
Boise, Idaho 83702
Hand Delivered
U.S. Mail
Overnight Mail
FAX
_____ FTP Site
X Email: peter@richardsonadams.com
Dr. Don Reading
6070 Hill Road
Boise, Idaho 83703
Hand Delivered
U.S. Mail
Overnight Mail
FAX
_____ FTP Site
X Email: dreading@mindspring.com
________________________________
Stacy Gust, Regulatory Administrative
Assistant
CERTIFICATE OF ATTORNEY - 1
CERTIFICATE OF ATTORNEY
ASSERTION THAT INFORMATION CONTAINED IN AN IDAHO PUBLIC UTILITIES
COMMISSION FILING IS PROTECTED FROM PUBLIC INSPECTION
Idaho Power Company’s Reply Comments
Case No. IPC-E-23-12
The undersigned attorney, in accordance with Commission Rules of Procedure 67,
believes that the Attachment No. 1 to Idaho Power Company’s Reply Comments, dated
May 18, 2023, may contain information that Idaho Power Company claims is a
confidential trade secret as described in Idaho Code § 74-101, et seq., and/or § 48-801,
et seq. As such, it is protected from public disclosure and exempt from public inspection,
examination, or copying.
DATED May 18, 2023.
Megan Goicoechea Allen
Counsel for Idaho Power Company
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-23-12
IDAHO POWER COMPANY
CONFIDENTIAL
REPLY COMMENT
ATTACHMENT NO. 1
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-23-12
IDAHO POWER COMPANY
REPLY COMMENT
ATTACHMENT NO. 2
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 1
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: (208) 388-2664
Facsimile: (208) 388-6935
mgoicoecheaallen@idahopower.com
lnordstrom@idahopower.com
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO IMPLEMENT POWER
COST ADJUSTMENT (“PCA”) RATES
FOR ELECTRIC SERVICE FROM JUNE
1, 2023, THROUGH MAY 31, 2024.
)
)
)
)
)
)
)
)
CASE NO. IPC-E-23-12
IDAHO POWER COMPANY’S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
THE COMMISSION STAFF TO
IDAHO POWER COMPANY
COMES NOW, Idaho Power Company (“Idaho Power” or “Company”), and in
response to the First Production Request of the Commission Staff (“Commission” or
“Staff”) dated April 20, 2023, herewith submits the following information:
REQUEST FOR PRODUCTION NO. 1: Please provide the monthly number of
megawatt-hours ("MWh") associated with the system base and with the actual net power
costs, for all Net Power Supply Expense ("NPSE") Accounts including Federal Energy
Regulatory Commission ("FERC") accounts 501 (Coal), account 536 (Water for power),
account 547 (Gas), account 555 (Non-PURPA), account 565 (3rd party transmission),
account 447 (Surplus Sales), account 555, (PURPA), and account 555 (Demand
Response Incentives).
RESPONSE TO REQUEST FOR PRODUCTION NO. 1: Please see Confidential
Attachment 1 for monthly PURPA generation in megawatt-hours (“MWh”) associated
with the system base net power costs. Please see Attachment 2 for monthly generation
associated with system base net power costs for all non-PURPA Federal Energy
Regulatory Commission (“FERC”) accounts. Docket No. IPC-E-13-20 contains
additional detail regarding the Company’s base net power supply costs.
Please see Attachment 3 for monthly generation associated with actual net
power supply costs for April 2022 – March 2023. There are no MWhs associated with
FERC accounts 536 (Water for Power), 565 (3rd Party Transmission) and 555 (Demand
Response Incentives).
The response to this Request is sponsored by Jessi Brady, Regulatory Analyst,
Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 2
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 3
REQUEST FOR PRODUCTION NO. 2: In a manipulatable spreadsheet, please
provide the daily totals for November, December, and January of the deferral period for
the following items:
a. MWh and run hours for each natural gas plant;
b. MWh and run hours for each coal plant;
c. MWh and run hours for each major hydro plant;
d. MWh and price for non-firm power purchases; and
e. MWh of total native load.
RESPONSE TO REQUEST FOR PRODUCTION NO. 2: Please see Attachments
1-3 for the data requested above. Please note that non-firm power purchases, as
requested in Part d, contain many purchased power components, which are summarized
in Attachment 1. Details associated with bi-lateral transactions and energy imbalance
market (“EIM”) transactions are included separately in Attachments 2 and 3, respectively.
Not all of these components have MWh’s and/or daily prices associated with them. In
addition, the MWh’s related to the EIM purchases are representative of the net activity
that occurred each day, but the dollars are settled on a weekly basis and include
adjustments outside of the period associated with the corresponding MWh’s and should
not be viewed as dollars associated with the MWh’s reported during this same time period.
The response to this Request is sponsored by Aubrae Sloan, Accounting Manager,
and Camille Christen, Resource Acquisition, Planning, and Coordination Manager, Idaho
Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 4
REQUEST FOR PRODUCTION NO. 3: Please confirm if the Company
redistributed or smoothed base NPSE in Exhibit No. 2 from the Aurora-generated NPSE
that was last authorized by the Commission. If so, please provide workpapers that reflect
the calculations/method used to derive the redistributed base. Please include all
workpapers in electronic format with calculations intact.
RESPONSE TO REQUEST FOR PRODUCTION NO. 3: Base NPSE in this filing
are shaped according to base rate revenues from the Company’s last general rate case,
in accordance with Commission Order No. 33307 issued in Case No. IPC-E-15-15. The
shaping of base NPSE has remained consistent with each PCA filed since the
conclusion of that case. Please see Attachment 1, which details the shaping of base
NPSE by retail revenues.
The response to this Request is sponsored by Jessi Brady, Regulatory Analyst,
Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 5
REQUEST FOR PRODUCTION NO. 4: Please provide an electronically sortable
list of forced downtime (unscheduled) events that Company-owned generation
facilities/units experienced each month during the deferral period. For each forced
downtime event, please include the facility/unit name, the facility/unit nameplate capacity,
the type of generation, the length of downtime, the amount of lost production in MWhs,
and the cause and resolution of the event.
RESPONSE TO REQUEST FOR PRODUCTION NO. 4: Please see Attachment
1.
The response to this Request is sponsored by Jessi Brady, Regulatory Analyst,
Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 6
REQUEST FOR PRODUCTION NO. 5: Please provide an electronically sortable
list of all Company-owned facility/unit unforced downtime (scheduled) events during the
deferral period. For each event, include the facility/unit name, the facility/unit nameplate
capacity, the type of generation, the date range, length of time, and purpose.
RESPONSE TO REQUEST FOR PRODUCTION NO. 5: Please see Attachment
1.
The response to this Request is sponsored by Jessi Brady, Regulatory Analyst,
Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 7
REQUEST FOR PRODUCTION NO. 6: Please describe when the Company knew
that shortages of coal were going to occur for the Bridger Coal Plant. Please provide all
coal delivery schedules that were developed for the Bridger Coal Plant starting January
1, 2022, through March 31, 2023. For each schedule, please provide the following
information:
a. Scheduled deliveries for at least each month across the delivery schedule
time horizon including both available-to-promise (committed) and
forecasted amounts.
b. For each month, please provide the amount of coal in tons and the
approximate amount of MWh the amount should produce; and
c. For each schedule, please provide the reason, with documentation, for any
changes in the monthly amounts from the previous month’s schedule.
RESPONSE TO REQUEST FOR PRODUCTION NO. 6: Idaho Power first became
aware of the potential for shortages of available coal supply for the Bridger Coal Plant
in April 2022 Price escalation and volatility in the gas and power markets drove
generation at Bridger higher while at the same time coal supplies were becoming more
constrained. The decision was made in April to nominate additional delivery of
stockpiled coal at Bridger Coal Company to the plant for the balance of 2022.
a-c.) Coal delivery plans for the Jim Bridger plant prepared during the January
2022 through March 2023 period are provided in Attachment 1. Significant
changes in the plans are described in the workbook.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 8
REQUEST FOR PRODUCTION NO. 7: Please provide the actual amount of coal
delivered, the amount of coal consumed and the ending inventory in tons for each month
from January 1, 2022, through March 31, 2023, for the Bridger Coal Plant.
RESPONSE TO REQUEST FOR PRODUCTION NO. 7: Coal delivered and
consumed by month for January 2022 through March 2023, as well as monthly ending
inventory balances for the Bridger Plant are provided in Attachment 1.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 9
REQUEST FOR PRODUCTION NO. 8: For the alternative source of coal from
Powder River Basin for the Bridger plant, when did the Company begin considering it and
actively establishing it? Please provide evidence.
RESPONSE TO REQUEST FOR PRODUCTION NO. 8: Idaho Power and
PacifiCorp began taking steps to secure coal supply from Powder River Basin (“PRB”) in
early September 2022. The partners issued a joint request for proposal (“RFP”) in late
September seeking coal to be delivered to the plant as soon as November 2022. Due to
the challenges securing leased coal rail cars and finalizing firm rail transportation service
with Union Pacific, coal deliveries from the PRB did not commence until April 2023. Idaho
Power and PacifiCorp executed a contract with a PRB supplier in April securing up to
600K tons (200K tons Idaho share) for delivery for the remainder of 2023.
The confidential RFP packet (Confidential Attachment 1) that went to suppliers in
September 2022 is provided with this response as evidence of Idaho Power’s efforts to
acquire PRB coal.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 10
REQUEST FOR PRODUCTION NO. 9: When did the Company know that
shortages of coal were going to occur for the Valmy Coal Plant? Please provide all coal
delivery schedules that were developed for the Valmy Coal Plant starting January 1, 2022
through March 31, 2023. For each schedule, please provide the following information:
a. Scheduled deliveries for at least each month across the delivery schedule
time horizon including both available-to-promise (committed) and
forecasted amounts;
b. For each month, please provide the amount of coal in tons and the
approximate amount of MWh the amount should produce; and
c. For each schedule, please provide the reason, with documentation, for any
changes in the monthly amounts from the previous month’s schedule.
RESPONSE TO REQUEST FOR PRODUCTION NO. 9: Idaho Power became
concerned about low inventory balances at Valmy in May 2022, as price escalation and
volatility in the gas and power markets began to impact generation. Due to these rapidly
changing conditions, Idaho Power contacted western coal suppliers seeking additional
coal for the balance of 2022. No additional coal was available for purchase in 2022 that
met plant coal quality specifications.
Historically, Valmy coal RFPs for the upcoming year are issued in the fall of the
preceding year. For 2023, however, efforts to procure supply were accelerated, and NV
Energy and Idaho Power issued a joint RFP in June 2022.
Coal delivery plans for the Valmy plant prepared during the January 2022 through
March 2023 period are provided in Attachment 1. Significant changes in the plans are
described in the workbook.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 11
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 12
REQUEST FOR PRODUCTION NO. 10: Please provide the actual amount of coal
delivered, the amount of coal consumed and the ending inventory in tons for each month
from January 1, 2022, through March 31, 2023, for the Valmy Coal Plant.
RESPONSE TO REQUEST FOR PRODUCTION NO. 10: Coal delivered and
consumed by month for January 2022 through March 2023, as well as monthly ending
inventory balances for the Valmy Plant are provided in Attachment 1.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 13
REQUEST FOR PRODUCTION NO. 11: Please provide the order lead time for
coal deliveries to the Valmy plant from all established vendors. Please provide evidence
of the lead times including how the lead times changed starting January 1, 2022, through
March 31, 2023.
RESPONSE TO REQUEST FOR PRODUCTION NO. 11: Power and gas prices
during Spring 2022 were higher than typical seasonal prices. As a result, Valmy was
operated throughout Q2 2022, depleting plant inventory. In response, Idaho Power took
steps to acquire more coal.
Difficulties acquiring additional coal for Valmy during 2022 beyond initially
contracted amounts were not driven by typical order lead time issues. Suppliers did not
have sufficient uncommitted production capacity and stockpiled coal available for Valmy
that met plant quality specifications. Recent coal RFP activities, volumes, and timelines
are summarized in Attachment 1.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 14
DATED at Boise, Idaho, this 4th day of May 2023.
________________________________
MEGAN GOICOECHEA ALLEN
Attorney for Idaho Power Company
IDAHO POWER COMPANY’S REPLY COMMENTS - 11
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 18th day of May 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
Claire Sharp
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
Hand Delivered
U.S. Mail
Overnight Mail
FAX
_____ FTP Site
X Email: Claire.Sharp@puc.idaho.gov
Industrial Customers of Idaho Power
Peter J. Richardson
515 N. 27th Street
Boise, Idaho 83702
Hand Delivered
U.S. Mail
Overnight Mail
FAX
_____ FTP Site
X Email: peter@richardsonadams.com
Dr. Don Reading
6070 Hill Road
Boise, Idaho 83703
Hand Delivered
U.S. Mail
Overnight Mail
FAX
_____ FTP Site
X Email: dreading@mindspring.com
________________________________
Stacy Gust, Regulatory Administrative
Assistant
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-23-12
IDAHO POWER COMPANY
REPLY COMMENT
ATTACHMENT NO. 3
SEE ATTACHED SPREADSHEET
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-23-12
IDAHO POWER COMPANY
REPLY COMMENT
ATTACHMENT NO. 4
SEE ATTACHED SPREADSHEET
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-23-12
IDAHO POWER COMPANY
REPLY COMMENT
ATTACHMENT NO. 5
SEE ATTACHED SPREADSHEET