20200819Reply Comments.pdf

Y ROCKY MOUNTAIN
POWER
A DIVISION S PAC1FICORP
August 19,2020
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1407 W. North Temple, Suite 330
Salt Lake City, Utah 84116
VU ELECTRONIC DELIVERY
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
l13l W. Chinden Blvd
Building 8 Suite 20lA
Boise,lD 83714
Re:CASE NO. PAC.E.19-16
IN THE MATTER OF PACIFICORP'S APPLICATION FOR
ACKNOWLEDGEMENT OF TIIE 20lg INTEGRATED RESOURCE PLAI\
Dear Ms. Noriyuki:
Please find attached Rocky Mountain Power's reply comments in the above referenced matter.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
"^..D
Joelle R. Steward
Vice President of Regulation
Emily Wegener
1407 West North Temple, Suite 320
Salt Lake Ciry, Utah 84il6
Telephone No. [phone]
Mobile No. [phone]
Email: [e-mail]
Attorneyfor Rocly Mountain Power
BEFORE TIIE IDAIIO PUBLIC UTILITIES COMMISSION
rN THE MATTER OF PACIFTCORP'S ) CASE NO. PAC-E-19-16
APPLICATION FOR ACKNOWLEDGEMENT )
OF THE 2019 INTEGRATED RESOURCE ) REPLY COMMENTS OFPLAII ) ROCrff MOUNTAIN POWER
In accordance with Rule 202.01(d) of the Rules of Procedure of the Idaho Public Utilities
Commission ("Commission") and the Commission's April 30, 2020 Order 34654 - Notice of
Modified Procedure, Rocky Mountain Power a division of PacifiCorp (the "Company'') hereby
submits reply comments in the above-referenced case.
I. BACKGROIIND
1. On October 25,2019, Rocky Mountain Power filed its 2019 Integrated Resource
Plan ("2019 IRP" or "IRP") with the Idaho Public Utilities Commission pursuant to Order ZZ2gg
that requires utilities to file bi-annual Integrated Resource Plans.
2. On Decernber 3,2019, the Commission issued Order 34494, Notice of Filing and
Notice of Intervention. Interested parties were given 2l days to intervene in the case. On
January 7,2020, a Notice of Parties was provided. The Company and Commission Staffwere the
only parties to the case.
3. On April 30, 2020, Commission Order 34654 - Notice of Modified Procedure,
informed the parties that the case would be processed under the Rules of Procedure 201 through
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204 and established a procedural schedule for interested parties to file comments by
August 5,2020, with the Company's reply comments due onAugust 19,2020.
4. OnAugust 5,2020, Commission stafffiled comments with the Commission. Staff
found that the Company's 2019 IRP satisfied all the requirements in Order No. 22299; and
recoilrmended that the Commission acknowledge the2}l9IRP. Staffalso recommended continued
attention to: (l) Capacity Deficiency Date in the Load and Existing Resource Balance; (2)
Integrating updated coal unit decommissioning cost studies into the planning process; (3) Long-
range gas cost assumptions, noting that the Company's 2019 IRP gas cost forecast was significantly
higher than the Company's 2017 forecast; (4) Transmission Planning; and (5) Continuation of
DSM and time-of-use efforts.
5. While not an intervenor in this proceeding, Sierra Club submitted public comments
on August 5, 2020, claiming to represent the interests of supporters in PacifiCorp's service
territory. Sierra Club's comments focused on four trreas: (l) Idaho customers should not subsidize
the continuation ofuneconomic coal units; (2) Securitizationof non-economic coal fleet should be
investigated, not excluded; (3) Disconnect between transmission and generation resource Action
Plan items; and (a) PacifiCorp should remove coal-favoring biases.
II. REPLY COMMENTS
Capacitv Deficiencv Date in the Load and Existine Resource Balance
6. Staff has expressed concern that the timing and the amount of the capacity
deficiency identified in the 2019 IRP will be used to determine when new Public Utility Regulatory
Policies Act of 1978 (*PURPA") contracts will be eligible to receive capacity payments, and that
this may be impacted by coal plant retironents. The Company notes that the 2028 deficiency date
indicated in Table No. 5.12 of the 2019 IRP is largely an outcome of the preferred portfolio
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selection process, rather than an input to that process. As a result, Staffs concerns about the
characterization of a deficiency date would not have impacted the analysis in the 2019 IRP and the
selection of the preferred portfolio. Within the 2019 IRP modeling process, planning reserve
requirements, portfolio optimization, and reliability assessment combine to identifu the least-cost,
least-risk portfolio of resources across time, rather than resources to meet a specified capacity
deficit in a particular year. This portfolio view is also relevant to early retirement analysis, as the
IRP results do not identifr one for one replacement resources, but rather reflect an optimized
combination of resources that can vary by type, location, and start date.
In Commission Order No. 33917, issued on October 23,2017, the Commission directed
Idaho electric utilities to submit a separate capacity deficiency filing for use with new PURPA
contracts after the Commission acknowledges its IRP. Staffs concerns about deficiency period
timing for PURPA contracts would be better addressed in the capacity deficiency filing that will
be made after Commission acknowledgement of the Company's 2019IRp.
Integratine updated coal unit decommissioning cost sfudies into the plannins process
7. The Company's IRPs utilize the most current information available at the time the
analysis is performed. The decommissioning studies were not finalized until January and March
of 2020, after assumptions for the 2019 IRP were established .T\e 2021IRP will incorporate the
latest coal unit decommissioning cost information. This timing will atlow intervening parties in
the Company's jurisdictions to review the decommissioning studies before they are included in
the IRP.
Long range qas cost assumptions
8. Staff compared natural gas price assumptions from PacifiCorp's 2019 IRP with
forecasts from theAnnual Energy Outlook ("AEO") 2020 reporton energy consumption from the
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U.S. Energy InformationAdministration. This report was issued in early 2020-after assumptions
for the 2019 IRP were established and after the 2019 IRP was filed. The figure below replicates
the graph in Staffs comments using data from the AEO 2019 report on energy consumptionr from
the U.S. Energy Information Administration, which was issued in early 2019. This release date
aligns more closely with the timing in which PacifiCorp established its natural gas price forecast
for the 2019 IRP, which is based on a price curve developed in September 2018. As can be seen
in the following graph, based on more contonporaneous data, the Company's forecast is
reasonable.
2019 IRP Gas Price Forecast vs EIA Cases
(SMMBtu)
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s8.oo
s7.00
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s 1.oo
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"dC"d)"dP"Srd}"ol9.tp""S"&."or?Ct"^.f "dryrd".r"rd"&"rdC."d
o o o o EIA Ref EIA Lower Price - - - EIA Higher Price
-2019
IRP
Tiansmission Plannine
g. The Company acknowledges Staffs Boardman to Hemingway (*82H") related
comments and agrees that the Company will focus additional attention on B2H in the 2021 IRP,
including quantification of benefits, as necessary. The Company notes that the project is
currently in the permitting/preliminary engineering phase, and that the Company has not
a a a a a a a a a a a a a a a o
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committed to construction of the project at this time and has not entered into a constnrction
agreement with the other partners. B2H has been a long standing action itern from a permitting
perspective, which has not changed significantly since the20l7IRP. The Company is currently
awaiting the final Enerry Facility Siting Council ("EFSC') permit in Oregon, which is expected
to be received mid-2021.
Continuation of DSM and time-of-use efforts
10. The Company appreciates Staffs inclusion of a description of the Company's
efforts in dernand-side management and time-of-use in its comments. The Company plans to
continue to support, evaluate, and evolve these offers to maintain cost effectiveness.
Idaho customers should not subsidize the continuation of uneconomic coal units
11. The Company uses its IRP to evaluate the most cost-effective options to serve
customers on a system-wide basis to reduce costs for all its customers. The Company plans to re-
evaluate the economics of its coal units in the 2021 IRp analysis.
Securitization of non-economic coal fleet should be investisated not excluded
12. As noted earlier, the Company uses the IRP to evaluate cost-effective altematives
which includes continuing to be responsive to legislation and regulatory guidance within its
operating territory.
Disconnect between transmission and generation resource Action Plan items
13. The Company has maintained that specific resource determinations and economics
will be tied to its request for proposal ("RFP") process. The 2021IRP, as with past IRPs, continues
to model proxy resources and an aggregated transmission topology.
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PacifiCorp should remove coal-favorine biases from IRP analvsis
14. The Company disagrees with Sierra Club's assertion that the IRP analysis is biased.
The Company's goal has always been and continues to be to produce an unbiased IRP.
M. CONCLUSION
After the Commission acknowledges the 2019IRP, the Company will file for a capacity
deficiency determination pursuant to Commission Order No. 33917. The Company will use the
most currently available coal unit decommissioning costs in its202l IRP. The Company believes
the Annual Energy Outlook ("AEO") 2019 report on energy consumption2 from the U.S. Energy
Information Administration aligns better with the information available at the time the 2019 IRP
was developed. The Company will focus additional attention on B2H project in the 2021 IRP and
continue to support, evaluate, and evolve its DSM and time-of-use programs.
The Company disagrees with Sierra Clubs assertions that the IRP contains coal biases.
The Company plans to re-evaluate the economics of coal units in the 2021 IRP.
IV. REOUEST FOR RELIEF
As supported by Commission Staffs comments the Company's 2019 IRP satisfies all the
requirements in Order No. 22299; therefore, the Company respectfully requests that the
Commission acknowledge PacifiCorp's 2019 IRP filing.
2 https://www.eia.gov/outlooks/aeo/data/browseri #/'/id- I J-AEO20l9&sid-ret2020-dl l2 I 19a.60- l3-
AEO2Q20:-re:2828d1 L2l l9a4Q.!3 4LQ2Q20:ref2020-dI 12ll9a.l9 l3-AEO2O2O&sourcekey-Q
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Dated this 196 day ofAugust 2020.
Respectfully submitted,
ROCKYMOUNTAIN POWER
a
EmilyWegener
1407 West Norttr Temple, Suite 320
Salt Lake City, Utah 84116
Telephone No. (801) 2204526
Mobile No. [phone]
Email: Emil)[e-mail]
Attorneyfor Roclcy Mountain Power
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