20231023Application.pdf

MEGAN GOICOECHIA-ALLEN
Corporate Counsel
[e-mail]

October 23, 2023

VIA ELECTRONIC MAIL

Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 West Chinden Blvd., Building 8
Suite 201-A
Boise, Idaho 83714

Re: Case No. IPC-E-23-27
Idaho Power Company’s Application for Approval of the Capacity Deficiency
Period to be Utilized for Avoided Cost Calculations

Dear Ms. Noriyuki:

Attached for electronic filing is Idaho Power Company’s Application in the above-
entitled matter. If you have any questions about the attached documents, please do not
hesitate to contact me.

Very truly yours,
Megan Goicoechia-Allen

MGA:cd
Enclosures
RECEIVED
2023 October 23, AM 11:53
IDAHO PUBLIC
UTILITIES COMMISSION
NEW Case No. IPC-E-23-27
APPLICATION - 1
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
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]
[e-mail]

Attorneys for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
APPROVAL OF THE CAPACITY
DEFICIENCY PERIOD TO BE UTILIZED
FOR AVOIDED COST CALCULATIONS.
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CASE NO. IPC-E-23-27

APPLICATION

Idaho Power Company (“Idaho Power” or “Company”), in accordance with the
applicable provisions of the Public Utility Regulatory Policies Act of 1978 (“PURPA”),
Idaho Public Utilities Commission (“Commission”) Rule of Procedure1 52, and Order Nos.
32697, 33159, and 35810, hereby respectfully submits this Application requesting an
order for approval of the capacity deficiency period to be utilized for the Company’s
avoided cost calculations. As more fully set forth herein, Idaho Power asks for
Commission approval of the capacity deficiency period identified in Idaho Power’s 2023

1 Hereinafter cited as RP.
APPLICATION - 2
Integrated Resource Plan (“IRP”), which indicates a first capacity deficit of July 2026, as
shown in Attachment 1. In support of its Application, Idaho Power states as follows:
I. INTRODUCTION
1. In Order No. 32697, the Commission set forth parameters for the surrogate
avoided resource (“SAR”) and Incremental Cost Integrated Resource Planning (“ICIRP”)
methodologies for calculating avoided cost rates under PURPA including the timing and
sources to be used in updating the input variables and price assumptions for each
methodology to maintain an accurate and up-to-date reflection of a utility’s avoided cost.
2. In considering a Qualifying Facility (“QFs”) ability to contribute to a utility’s
need for capacity in computing avoided cost rates, the Commission determined that
payment for capacity should be included only when the utility becomes capacity deficient,
which helps to ensure the rates are a more accurate reflection of true avoided cost for the
QF power. Order No. 32697, p. 21.
3. Though the starting point for setting a utility’s capacity deficiency date is the
IRP planning process, the Commission directed that a case be initiated outside of each
utility’s IRP filing for the establishment of the capacity deficiency period. Order No. 32697,
p. 23.
4. Originally, the separate proceeding established the capacity deficiency
period to be utilized only in the SAR methodology, though the Commission subsequently
found it just and reasonable to utilize the same first capacity deficit determination for
purposes of the ICIRP methodology. Order No. 33159, p. 9.
5. Most recently, in Order No. 35810, the Commission found it reasonable that
each utility file its application for a new capacity deficiency date within 30 days of the filing
APPLICATION - 3
of that IRP with the Commission. Linking the timing of the capacity deficiency case to the
filing of the IRP by the utility rather than its acknowledgement by the Commission, as was
done previously, is intended to ensure that the capacity deficiency is based on the most
recent information identified in that utility’s IRP and enable the utility to incorporate any
new information and data that may have changed while preparing its IRP during that
utility’s development cycle.
II. CAPACITY DEFICIENCY PERIOD
6. Idaho Power’s current approved capacity deficiency date, as identified in
the 2021 IRP and approved by the Commission in the Company’s most recent capacity
deficiency case, is July 2023.2
7. As described in the Company’s latest IRP filed on September 29, 20233
(“2023 IRP”), Idaho Power has been working to acquire resources since 2021 to meet the
deficiencies identified in the 2021 IRP.4 These acquisitions have met the deficiencies in
2023, 2024, and 2025.
8. The annual capacity position used in the Company’s 2023 IRP incorporates
the most up-to-date resource and load inputs. Based on the current IRP analysis and as
a result of the Company’s recent resource procurement, the Company’s first capacity
deficiency date is now July 2026.
9. More specifically, the 2023 IRP shows a first annual capacity deficiency of
approximately 22 megawatts (“MW”) in 2026, as reflected in the excerpt from the IRP
provided as Attachment 1, which is primarily driven by a need for peaking capacity in the

2 See Case No. IPC-E-21-09, Order No. 35415.
3 Idaho Power Company’s 2023 Integrated Resource Plan, Case No. IPC-E-23-23 (filed Sept. 29, 2023).
4 See, e.g., Case Nos. IPC-E-22-13; IPC-E-23-05; and IPC-E-23-20.
APPLICATION - 4
month of July. The Company's annual capacity deficit is identified separately from the
Preferred Portfolio of the 2023 IRP, i.e., consistent with the resource assumptions prior
to AURORA model optimization and selection of resources. The capacity deficiency date
identified in the 2023 IRP is based on the most recent, relevant, and accurate information
available, and the Company therefore requests that the Commission set a first capacity
deficit of July 2026 to be utilized for avoided cost calculations for both the SAR and ICIRP
methodologies.
III. MODIFIED PROCEDURE
10. Idaho Power believes that a hearing is not necessary to consider the issues
presented herein and respectfully requests that this Application be processed under
Modified Procedure, i.e., by written submissions rather than by hearing. RP 201 et seq.
If, however, the Commission determines that a technical hearing is required, the
Company stands ready to prepare and present its testimony in such hearing.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
11. Communications and service of pleadings with reference to this Application
should be sent to the following:

Donovan E. Walker Camille Christen
Megan Goicoechea Allen Energy Contracts
Regulatory Dockets 1221 West Idaho Street (83702)
1221 West Idaho Street (83702) P.O. Box 70
P.O. Box 70 Boise, ID 83707
Boise, ID 83707 [e-mail]
[e-mail] [e-mail]
[e-mail]
[e-mail]

APPLICATION - 5
V. CONCLUSION
12. Idaho Power respectfully requests that the Commission issue an order
approving the first capacity deficiency date of July 2026 to be utilized in the Company’s
avoided cost determinations under the SAR and ICIRP methodologies.
Respectfully submitted this 23rd day of October 2023.

MEGHAN GOICOECHEA ALLEN
Attorney for Idaho Power Company

BEFORE THE

IDAHO PUBLIC UTILITIES COMMISSION

CASE NO. IPC-E-23-27

IDAHO POWER COMPANY

ATTACHMENT 1

Excerpt from Idaho Power 2023 IRP, pp. 173 - 175.

Resource Procurement
Idaho Power’s capacity shortfall identified for 2026 through 2028 will require incremental
generating capacity. Idaho Power issued an all-source 2026 RFP in spring 2023. This RFP is for
resources to come online by summer 2026 or summer 2027. The all-source 2026 RFP is
ongoing. An additional RFP may be necessary to acquire resources for summer of 2028. For
more information on Idaho Power RFPs visit idahopower.com/about-us/doing-businesswith-
us/request-for-resources/.
Annual Capacity Positions Replace Traditional Load and Resource Balance
To better align with and represent the probabilistic reliability analyses used in the 2023 IRP,
the company provides annual capacity positions in place of the deterministic load and resource
balance used in previous IRP cycles. The annual capacity position is a better indication of
resource reliability.
The annual capacity position used in the 2023 IRP (Table 11.15) incorporates the most
up-to-date resource and load inputs. The resulting capacity deficiency (approximately 22 MW
in 2026, 44 MW in 2027, and 182 MW in 2028) clearly demonstrates capacity needs.
Table 11.15 Pre and post Preferred Portfolio annual capacity positions
Annual Capacity Position (MW)
Year Existing & Contracted Resource Only Add Preferred Portfolio Resources
2024 11 Length 11 Length
2025 3 Length 3 Length
2026 (22) Shortfall 224 Length
2027 (44) Shortfall 284 Length
2028 (182) Shortfall 211 Length
2029 (324) Shortfall 126 Length
2030 (693) Shortfall 134 Length
2031 (767) Shortfall 131 Length
2032 (796) Shortfall 157 Length
2033 (869) Shortfall 137 Length
2034 (891) Shortfall 126 Length
2035 (913) Shortfall 117 Length
2036 (938) Shortfall 108 Length
2037 (1006) Shortfall 111 Length
2038 (1317) Shortfall 45 Length
2039 (1347) Shortfall 54 Length

Annual Capacity Position (MW)
Year Existing & Contracted Resource Only Add Preferred Portfolio Resources
2040 (1377) Shortfall 62 Length
2041 (1415) Shortfall 56 Length
2042 (1456) Shortfall 49 Length
2043 (1568) Shortfall 57 Length

The first month of deficiency was determined to be the first month that exceeded a
0.0083 event-days per year LOLE (or 0.1 divided by 12) on the first year of capacity deficiency
(2026). For this IRP, the first month over that threshold was July 2026, as shown in Figure 11.1.

Figure 11.1 First month of capacity shortfall
An in-depth discussion of the reliability LOLE calculation process can be found in the Loss of
Load Expectation section of Appendix C—Technical Report.

0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
2026 Monthly Loss of Load Expectation
Monthly LOLE Shortfall Threshold