20230106Comments.pdf

MICHAEL DUVAL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE,IDAHO 83720-0074 S!ON
[phone]
IDAHO BAR NO.11714
Street Address for Express Mail:
11331 W CHINDEN BLVD,BLDG 8,SUITE 201-A
BOISE,ID 83714
Attorneyfor the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN )POWER'S APPLICATION FOR APPROVAL )CASE NO.PAC-E-22-14
OF A CAPACITY DEFICIENCY PERIOD TO )BE USED FOR AVOIDED COST )COMMENTS OF THE
CALCUATIONS )COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission,by and through its Attorneyof record,
Michael Duval,Deputy Attorney General,submits the followingcomments.
BACKGROUND
Order No.33917 required each Idaho electric utility to submit a capacity deficiency
period filing after the Commission has acknowledged its Integrated Resource Plan ("IRP").A
capacity deficiency period determined in the IRP process is presumed to be correct as a starting
point but will be subject to the outcome of the capacity deficiency period case.Order No.32697.
On September 1,2021,the Company filed its original 2021 IRP in Case No.PAC-E-21-
19.
On September 15,2021,the Company filed an updated IRP ("2021 IRP"or "IRP")for
the purpose of clarifying some changes in the IRP filed on September 1,2021.
On March 15,2022,Commission Staff ("Staff')and Intervenors submitted comments on
the 2021 IRP.
STAFF COMMENTS 1 JANUARY 6,2023
On April 4,2022,the Company submitted the "2021 IRP Update,"which included an
updated load and resource balance ("L&R").
On August 30,2022,the Commission acknowledged the Company's 2021 IRP (not 2021
IRP Update)in Order No.35514.
On October 4,2022,Rocky Mountain Power ("Company"),a division of PacifiCorp,
applied for Commission approval of a capacity deficiency period beginning in the summer of
2023,to be used in avoided cost calculations using the Surrogate Avoided Resource ("SAR")
method.
STAFF ANALYSIS
Staff reviewed the Company's Application and recommends that the Company make the
followingchanges to the proposed L&R and First Capacity Deficit Date through a compliance
filing:
1.The capacity deficiency period should be used to determine when capacity
payments begin for both IRP-based and SAR-based contracts;
2.Provide the L&R using the 20-year IRP planning horizon,instead of the 9-year
timeframe submitted with the Company's filing;
3.Provide the L&R reflecting both summer and winter peak;
4.Use the 2021 IRP Method,instead of the 2021 IRP Update Method,to determine
capacity contributions of all resources;
5.Assume renewal of PURPA projects located in the State of Idaho,unless the
Company has information from specific qualifyingfacilities ("QFs")to the
contrary;
6.Update the L&R to include all contracts executed by the date of the Commission
order that are eligible for rate recovery;
7.Include the additional 3%contingency reserves above the Front Office
Transaction ("FOTs")limit only if it increases the amount of available FOTs that
the Company can rely on to meet its load obligations;
8.Include projected growth in existing Demand Response ("DR")programs;
9.Among the selected DR programs from the 2021 Request for Proposals ("RFP"),
only include approvedprograms in the L&R;
STAFF COMMENTS 2 JANUARY 6,2023
10.Include existing DR programs and approved new DR programs consistently in the
L&R such that they are both treated either as a decrement to load or as a resource;
and
11.Verify the value of the existing Energy Efficiency ("EE")in the load forecast,
ensuring 68 megawatts ("MW")is used.
Determination of the First Capacity Deficit Date throughthe L&R
The Company's L&R shows the relationship between the Company's capacity
contribution of its existing resources includingavailable FOTs and its future peak load
obligations.When these obligations exceed the capacity contribution of the Company's existing
resources with FOTs,it identifies when the Company becomes capacity deficient,referred to as
the First Capacity Deficit Date.It is at this point when new QFs begin avoiding capacity cost for
the system and are eligible to start receiving capacity payments.See Order No.32697.
In examining the Company's overall proposed L&R,Staff identified three major issues:
(1)the Company requested that the capacity deficiency period be used only for SAR-based
contracts;(2)the Company only included a 9-year L&R instead of a full 20-year L&R;and (3)
the Company only provided a L&R for the summer peaks,but not for winter peaks.
First,the Company requested that the capacity deficiency period be used only for SAR-
based contracts.Application at 6.However,prior Commission orders require the capacity
deficiency period to be used for both SAR and IRP-based contracts.See Order Nos.33377,
33159,33898,and 33933.Regardless of the method,QFs should only begin receiving capacity
payments starting on the First Capacity Deficit Date authorized at the time when a contract is
executed.
Second,the proposed L&R uses a 9-year timeframe from 2023 through2031.Staff
recommends that the timeframe of the L&R be aligned with the planning horizon used in the IRP
because the SAR model uses not onlythe first deficit year information (i.e.,when capacity
payments will be made),but also deficit values of each year.For example,if a deficit value is
smaller than a QF's capacity size,partial capacity payments will be made.Ideally,20 years of
surplus/deficit values are available for a contract term of 20 years.
STAFF COMMENTS 3 JANUARY 6,2023
Third,the Company only filed a L&R for summer peaks in the Application.Order
No.34918 requires the Company to file a L&R for both summer and winter peaks.Staff
recommends that the Company file an updated L&R for both peaksi in a compliance filing.
Peak Load Forecast and Future Obligationsfor Incremental Resources
The proposed L&R uses the Company's latest peak load forecast,which was developed
for the 2021 IRP Update.See Application at 4 and Response to Staff's Production Request
No.3.Staff believes using the latest forecast provides the most accurate prediction of future
loads because it incorporates the latest inputs and assumptions.Staff believes the proposed load
forecast is reasonable and complies with Order Nos.33958,34918,and 35415.
The Company added a 13%planning reserve margin ("PRM")to the load forecast.The
sum of these amounts represents the load obligation the Company must meet by planning a
sufficient level of resources necessary to meet a Loss of Load Hours ("LOLH")target of 2.4
hours per year,which equates to one day in ten-year Loss of Load Expectation,a common
reliability target in the industry.The PRM reflects capacity the Company needs to hold in
reserve to manage uncertain events such as weather changes and generationoutages and known
requirements such as contingency reserves required by North American Electric Reliability
Corporation ("NERC").
ExistingResources and Available FOTs in L&R
As discussed earlier,the existing resources and available FOTs are compared against
future peak load obligations in the L&R to determine the timing and extent of deficiency that
will occur in the Company's system.Staff reviewed all of the existing resources and available
FOTs and believes they are reasonable except for issues discussed in further detail below
including:(1)the method used to determine the capacity contribution of some resources;(2)
assumptions about PURPA renewals;(3)contract updates since the filing of this case;(4)an
additional amount of contingency reserves associated with FOTs;(5)issues related to DR
programs;and (6)verification of EE amounts decremented from the load forecast.
I The SAR model uses the greater of summer deficit and winter deficitto calculate each year's deficit.See Tab"Input-Loadand Resource"in the SAR model.
STAFF COMMENTS 4 JANUARY 6,2023
Capacity Contribution Determination
The proposed L&R uses two different methods to determine capacity contributions for
different resources:the method used in 2021 IRP and the method used in the 2021 IRP Update.
Staff believes that only one method should be used for all resources for consistency and
recommends that the Company use the 2021 IRP Method,because the 2021 IRP Update Method
has not been fully vetted.
The fundamental difference between the two methods is how capacity is allocated to
various resources to determine each resource's overall capacity contribution.The 2021 IRP
Method allocated capacity on an hourly basis.Whereas,the 2021 IRP Update Method allocated
capacity using the top 5 percent net load hours.See Responses to Staff's Production Requests
Nos.9 and 33.The capacity allocation under the 2021 IRP Method uses significantlymore
hours beyond the top 5 percent net load hours used in the 2021 IRP Update.As a result,
different weightings of the time periods lead to different capacity contributions of resources.See
Response to Staff's Production Request No.33 (b).
Some resources (such as certain small contracts)in the proposed L&R use the 2021 IRP
Method,while others (such as certain larger resources)use the 2021 IRP Update Method.2 Staff
recommends that only the 2021 IRP Method be used for all resources until the 2021 IRP Update
Method has been sufficiently verified to be accurate and then can be consistently applied to all
resources.
In addition,the 2021 IRP Update was filed after Idaho parties submitted comments on the
2021 IRP in Case No.PAC-E-21-19.Staff did not perform a review of the different method
used in the 2021 IRP Update and the Update has not been vetted by stakeholders through a
subsequent case.Until the 2021 IRP Update Method has been vetted through a full IRP process,
Staff recommends that the Company use the 2021 IRP Method to determine capacity
contributions of all resources for the purpose of this case.
PURPA Renewals
The proposed L&R does not assume PURPA contracts will be renewed.See Responses
to Staff s Production Request Nos.4 and 28.However,Order No.34918 required that "all
2 Staff obtained this information from the Company through email on December 22,2022.
STAFF COMMENTS 5 JANUARY 6,2023
current PURPA contracts will be renewed unless the Company has information about specific
contracts to the contrary."Staff recommends that PURPA projects located in the State of Idaho
be renewed in the L&R,unless the Company has information to the contrary.
Contract Updates
Since the filing of the Application,there have been some contract changes,such as the
recently signed contracts highlightedin green in Confidential Attachment IPUC 1 provided in
Response to Staff s Production Request No.1.Staff recommends that the Company file a
compliance filing including all contract updates in the L&R that have occurred since the
Application was filed.
Specifically,if a contract requires pre-approval3 from the appropriate state commission,it
should not be included in the updated L&R unless authorized.If a contract does not require pre-
approval from a Commission,it should be included as long as it is executed by both parties and
is eligible for rate recovery.
Available FOTs
The available FOTs determined in the proposed L&R include a 3%contingency reserves
held by the counterparty to the transaction,which is required by NERC Regional Reliability
Standard BAL-002-WECC-2.4 See Responses to Staff's Production Request Nos.l(b)and 25.
Staff believes the additional 3%contingency reserves above the FOT limits should be included in
the L&R only if it increases the amount of available FOTs that the Company can rely on to meet
its load obligations.It should not be included in the L&R,if the 3%is only used to ensure the
available FOTs can be delivered on a firm basis.
3 Supplemental Response to Staff's Production Request No.16 states that,generally,the only contracts subject topre-approvalby a commission are PURPA contracts.Response to Staff's Production Request No.27 states that (1)PURPA contracts in Idaho and Utah are subject to approvals from their respective commissions;(2)PURPA
contracts in Wyoming are accepted for filing and are not generally subject to additional process or approval;and (3)
PURPA contracts in the Company's other jurisdictions do not need approvals from their respective commissions.
4 This standard applies to balancing authorities and reserve sharing groups in the Western Electricity Coordinating
Council ("WECC")region and is intended to specify the quantity and types of contingency reserve required for
maintaining reliability under normal and abnormal conditions.See
https://www.federalregister.gov/documents/20l3/l1/29/2013-28626/regional-reliability-standard-bal-002-wecc-2-
contingency-reserve
6 The 2021 IRP states that the FOT limits are 500 MW in the summer and 1,000 MW in the winter.See the 2021
IRP at 114.
STAFF COMMENTS 6 JANUARY 6,2023
DR Programs
Existing DR Programs
The existing DR programs were included in the proposed L&R as a decrement to load.
See Response to Staff's Production Request No.10.These existing programs only included
existing participants without considering projected growth in these programs.See Supplemental
Response to Staff's Production Request No.9 (c).Staff recommends that projected growth in
existing DR programs be added in the L&R.
In Case No.PAC-E-20-13,Staff believed that existing DR programs can use current
levels into the future or reflect forecasted changes in the amount based on forecast levels of
participation or known changes to the existing programs.Order No.33159 allowed current DR
participation to be used as a reasonable estimation of participation into the future for existing
programs.However,the new DR programs from the 2021 Request for Proposals ("RFP")
included projected growth in those programs over time.Application at 5.Staff believes that a
same treatment should be applied to existing DR programs.Therefore,Staff recommends that
projected growth in existing DR programs be added in the L&R.
New DR Programs included in 2021 RFP
The proposed L&R includes all the selected DR programs from the 2021 DR RFP.Staff
recommends that only approved programs be included in the L&R.There are two categories of
the selected DR programs:those implemented by a third party and the WattSmart battery
program implemented by the Company.See Response to Staff's Production Request No.32.
Those that will be implemented by a third party include:
Commercial and industrial curtailment (all states)
Irrigation load control (Oregon,Washington,and California)
Residential smart thermostats load control (Oregon,Washington,and California)
Residential water heater direct load control (Oregon,Washington,and California)
The Company has signed contracts with third parties managingthe Company's
commercial and industrial curtailment programs and irrigation load control program.In addition,
the Company expects to sign contracts with third parties for residential DR programs by the end
of 2022.The Company is seeking commission approval of all these programs in their respective
STAFF COMMENTS 7 JANUARY 6,2023
states.Among these programs,Staff recommends that only approved programs be included in
the L&R.
Besides the programs mentioned above,the WattSmart battery program was selected for
all states in the 2021 RFP but has only been approved Utah and in Idaho as a pilotprogram.
Staff recommends that only the WattSmart battery programs in Idaho and Utah be included in
the L&R.
Treatment ofDR Programs in L&R
The proposed L&R includes existing DR programs as a decrement to load but includes
selected DR programs from the 2021 DR RFP as a resource.Staff believesthat these DR
resources should be treated in a consistent manner or be broken out in the L&R to ensure that the
PRM is applied appropriately.
For example,if DR programs are treated as a decrement to load,the L&R needs to ensure
that the PRM is not being applied to the decremented load obligation.Instead,the PRM should
be applied to the original load forecast before DR resources are decremented.This ensures that
the capacity contribution of DR programs are treated mathematically the same as DR programs
treated as a resource.
Existing EE
The 2021 IRP Update states that existing EE is 73 MW.However,the value should have
been 68 MW.See Supplemental Response to Staff's Production Request No.13.Because
existing EE is embedded in the load forecast instead of being singled out as a line item,Staff
recommends that the Company verify the value of the existing EE used in the load forecast and
make sure 68 MW is decremented.
STAFF RECOMMENDATION
Staff recommends that the Company file a compliance filing to update the proposed L&R
and First Capacity Deficit Date reflecting the followingchanges:
1.The capacity deficiency period should be used to determine when capacity
payments begin for both IRP-based and SAR-based contracts;
STAFF COMMENTS 8 JANUARY 6,2023
2.Provide the L&R using the 20-year IRP planning horizon,instead of only
submitting a 9-year timeframe;
3.Provide the L&R reflecting both summer and winter peak;
4.Use the 2021 IRP Method,instead of the 2021 IRP Update Method,to determine
capacity contributions of all resources;
5.Assume renewal of PURPA projects located in the State of Idaho,unless the
Company has information from specific QFs to the contrary;
6.Update the L&R to include all contracts executed by the date of the Commission
order that are eligible for rate recovery;
7.Include the additional 3%contingency reserves above the Front Office
Transaction ("FOTs")limit only if it increases the amount of available FOTs that
the Company can rely on to meet its load obligations;
8.Include projected growth in existing DR programs;
9.Among the selected DR programs from the 2021 RFP,only include approved
programs in the L&R;
10.Include existing DR programs and approved new DR programs consistently in the
L&R such that they are both treated either as a decrement to load or as a resource;
and
11.Verify the value of the existing EE in the load forecast,ensuring 68 MW is used.
Respectfully submitted this day of January 2023.
Michael Duval
Deputy AttorneyGeneral
Technical Staff:Mike Louis
Yao Yin
i:umisc/comments/pace22.l4mdmlyy comments
STAFF COMMENTS 9 JANUARY 6,2023
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 6th DAY OF JANUARY 2023,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF,IN CASE
NO.PAC-E-22-14,BY E-MAILING A COPY THEREOF,TO THE FOLLOWING:
TED WESTON RON SCHEIRER
ROCKY MOUNTAIN POWER ROCKY MOUNTAIN POWER
1407 WEST NORTH TEMPLE STE 330 825 NE MULTNOMAH ST,SUITE 2000
SALT LAKE CITY UT 84116 PORTLAND OR 97232
E-MAIL:[e-mail] E-MAIL:[e-mail]
DATA REQUEST RESPONSE CENTER
E-MAIL ONLY:
[e-mail]
SEC Y
CERTIFICATE OF SERVICE