20190717Petition for Extension.pdf

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1407 West North Temple, Suite 330
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July 17,2019 lr.ji:.1'iJ rLli l-iC
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Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise,ID 83702
Re CASE NO. PAC.E-19-01
IN THE MATTER OF ROCKY MOUNTAIN POWER'S PETITION FOR AI\
EXTENSION TO FILE THE 2Ol9INTEGRATED RESOURCE PLAI\
Dear Ms. Hanian:
Please find enclosed an original and seven (7) copies of Rocky Mountain Power's petition in the
above referenced matter.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
Cc
Vice President,
Jim Yost, Idaho Govemor's Office (without enclosures)
Benjamin Otto, Idaho Conservation League (without enclosures)
Mark Stokes, Idaho Power Company (without enclosures)
Terri Carlock,Idaho Public Utilities Commission staff
Mike Louis,Idaho Public Utilities Commission staff
Randall Budge, (Monsanto) (without enclosures)
Nancy Kelly, Western Resource Advocates (without enclosures)
Yvonne R. Hogle (ISB # 8930)
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone: [phone]
FAX: [phone]
v vo n ne. ho s le(Eoac ifi com. com
Attorneyfor Roclqt Mountain Power
IN THE MATTER OF THE FILING OF
ROCKY MOUNTAIN POWER OF ITS
2019 ELECTRIC INTEGRATED
RESOURCE PLAN
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. PAC-E.19.01
PETITION FOR EXTENSION
COMES NOW Rocky Mountain Power, a division of PacifiCorp ("Rocky Mountain
Power" or the "Company"), pursuant to Rule 53 of the Rules of Procedure of the Idaho Public
Utilities Commission ("RP"), and hereby petitions the Idaho Public Utilities Commission
("Commission") for an extension of the August l, 20191 filing date of the Company's 2019
Integrated Resource Plan ("IRP"). In support of this request Rocky Mountain Power states as
follows:
I. BACKGROUND
On January 28, 2019, Rocky Mountain Power filed a Petition seeking to extend the
March 29, 2019 filing date for the Company's 2019 IRP. The Company identified potential
reliability challenges that had to be resolved before the Company's coal studies could be
completed. In its Petition, the Company indicated that it needed additional time to work through
I The IRP is due on the last business day of March which, in this case, was March 29,2019. On March 19,2079,the
Idaho Public Utilities Commission granted the Company's request for an extension to file the 2019 IRP by no later
than August 1,2019.
IPETITION OF ROCKY MOLTNTAIN POWER
the identified challenges. On February 7,2019, the Commission issued a notice for comments and
both the Staff of the Commission and the Idaho Conservation League recommended the
Commission grant the Petition. The Commission subsequently granted the Petition on March 19,
2019.
While the Company continues to actively and diligently work on its 2019 IRP through a
robust and transparent public input process with stakeholders that began as early as June 2018 with
state-specific meetings followed by all-state public input meetings starting in July 2018, it is unable
to file its 2019 IRP in August 2019 as intended due to a modeling issue that was recently discovered
by the IRP modeling team, as set forth below.
I. IRP MODELING ISSUE
In the Company's on-going efforts to review and validate model results, the IRP modeling
team discovered that coal-cost assumptions for the Jim Bridger units, which drive variable fuel
costs, included forward-looking fixed-cost assumptions required to fund mine reclamation. While
costs to fund mine reclamation are included in fuel costs as an element of net power costs in rates,
combining these mine-reclamation funding costs in the Jim Bridger coal cost can influence
modeled dispatch of the Jim Bridger units. By including a fixed cost (mine-reclamation funding)
as a variable cost model input (coal costs), the System Optimizer (SO) and Planning and Risk
(PaR) models can avoid the funding cost for mine reclamation by reducing dispatch of the Jim
Bridger units even though these costs are realistically unavoidable.
Historically, the dispatch cost of the Jim Bridger units has been low enough relative to
market prices that the coal-cost adder intended to capture the costs to fund mine reclamation has
not significantly altered generation levels and, consequently, has not led to a potential
understatement of costs to fund mine reclamation. However, base case assumptions adopted in the
PETITION OF ROCKY MOLTNTAIN POWER 2
2019 IRP for natural gas prices and power prices are relatively low, and the Company confirmed
that the Jim Bridger units are reducing dispatch in a manner that understate the cost to fund mine
reclamation. Considering that early retirement assumptions for Jim Bridger units vary among
cases, mine closure and associated mine reclamation funding assumptions vary by case as well.
Consequently, the impact of this issue will vary from one case to the next, which could affect the
comparative analysis of the costs and risks of each portfolio that is used to select the preferred
portfolio.
Plan to Remedy the Modeling Issue
The Company will remedy this modeling issue by changing how it applies mine-
reclamation costs in the SO and PaR models by removing the costs to fund mine reclamation from
Jim Bridger coal costs while concurrently adding these costs as a fixed cost that will be constant
for a given case regardless of unit dispatch. Because this remedy will affect Jim Bridger dispatch,
it cannot be accurately calculated as an out-of-model adjustment because a change in dispatch can
influence the dispatch and associated operating costs at other generating facilities, market
purchases and market sales. Most, if not all, cases will need to be re-run through both modeling
tools.
2019 IRP Filing Extension
The Company has spent the last couple of months developing modeling analysis for over
50 different portfolios. For any given market price and COz price scenario, the development of
system cost and risk metrics requires two SO model runs, three one-year deterministic PaR model
runs, and one 20-year stochastic PaR model run. Over the past couple of months, the Company
has been able to complete approximately l0 to 12 cases per week. Considering the need to re-run
at least 50 cases, complete sensitivities, allow time for rescheduled public-input meetings, and
PETITION OF ROCKY MOLNTAIN POWER J
draft the 2019 IRP document, Rocky Mountain Power is requesting an additional extension, to file
the2019IRP by October 18,2019.In the interim, the Company proposes to host additional public-
input meetings on September 5-6,2019, to provide stakeholders an update on modeling progress
and results completed atthat time and on October 3-4,2019, to present final modeling results, a
draft preferred portfolio, and a draft action plan.
In the process of re-running and finalizing the modeling analysis for the 2019 IRP, the
Company will also incorporate updates consistent with feedback and discussion during the June
2019 public-input meeting. Specifically, the model runs will be updated to enable selection of
Energy Gateway South in January 2024 (as a proxy for year-end 2023) with a consistent set of
assumptions for cost, interconnection capability, and transfer capability across all cases. The
updated model runs will also be configured to enable selection of solar resources in northern Utah.
Request to Commission
To enable the Company to re-run and finalize its analysis for the 2019 IRP, Rocky
Mountain Power respectfully requests an extension of the filing of its 2019 IRP from August l,
2019 to no later than October 18, 2019. The Company communicated its intent to seek this
extension to stakeholders on July 15,2019. The extension will enable the Company to complete
its analysis with accurate information. The Company will continue its robust and transparent
stakeholder input process by holding two additional public input meetings on September 5-6,2019
and October 3-4,2019.
[. COMMUNICATIONS
Service of pleadings, exhibits, orders and other documents relating to this proceeding
should be served on the following:
PETITION OF ROCKY MOTINTATN POWER 4
Yvonne R. Hogle
Assistant General Counsel
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake city, Utah 841l6
Yvonne.ho gle@pacifi com.com
Ted Weston
Manager, Idaho Regulatory Affairs
Rocky Mountain Power
1407 West North Temple, Suite 330
salt Lake city, uT 84116
Ted. Weston@Pacifi Corp.com
In addition, it is respectfully requested that all formal correspondence and Staff requests
regarding this material be addressed to:
By E-mail (preferred): [e-mail].
By regular mail:Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
III. CONCLUSION
WHEREFORE, based on the foregoing, the Company respectfully requests an extension
of the filing of its 201 9 IRP from August I , 2019 to October I 8, 201 9.
Respectfully submitted this lTth day of July, 2019.
By
R. Hogle
for Rocky Mountain Power
PETITION OF ROCKY MOUNTAINPOWER 5