20221205Comments.pdf

MICHAEL DUVAL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. II7I4
IN THE MATTER OF ROCKY MOUNTAIN
POWER'S APPLICATION TO UPDATE
LOAD AND GAS FORECASTS USED IN TTIE
INTEGRATED RESOURCE PLAN AVOIDED
COST MODEL
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Street Address for Express Mail:
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BOISE,ID 837I4
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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CASE NO. PAC.E.22-I6
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Michael Duval, Deputy Attomey General, submits the following comments.
BACKGROUND
On October 20,2022, Rocky Mountain Power, a division of PacifiCorp ("Company")
applied to the Commission to update the load forecast, natural gas forecast, and long-term
contracts used in the Integrated Resource Plan ("IRP"; avoided cost model. IRP avoided cost
rates are available to qualifuing facilities ("QFs") that exceed the resource-specific project
eligibility caps for published avoided cost rates under Idaho's implementation of the Public
Utility Regulatory Policies Act of 1978 ("PURPA").
STAFF ANALYSIS
Staff has reviewed the Company's Application and recommends approval of the
proposed load forecast and the natural gas forecast to be used in the IRP model to determine
ISTAFF COMMENTS DECEMBER 5,2022
avoided cost rates, with an effective date of January l, 2023. Staff also recommends that the
Company continue to include contract updates in future annual filings, even though contract
updates are incorporated on a continuous basis in the IRP model used to determine avoided cost
rates.
Load Forecast
Staff compared the proposed load forecast to the load forecast currently approved in
Order No. 35317, illustrated in Figure No. I below, and believes the proposed load forecast is
reasonable. Staffjustifies its conclusion based on the small amount of change from the previous
year's forecast over the next few years of the forecast time horizon, a period most critical to IRP-
based PURPA contracts.
Over the long-term, the proposed load forecast grows faster than last year's load forecast.
However, the most important time period of the forecast relevant to this filing is during the next
few years. This is because only the first few years of the forecast will be used to develop
avoided cost rates for IRP-based PURPA contracts until the next annual update, since lRP-based
PURPA contracts are limited to 2-year contract terms.
The Company anticipates an overall increase in load over the previous year's forecast
driven by increased loads from air-conditioning and vehicle electrification for the residential
class and an increase in commercial class and the industrial class loads. See Response to Staff s
Production Request No. 3 (c). Staff believes that the proposed load forecast is reasonable and
reflects modest load growth trends within the Company's service territory.
2STAFF COMMENTS DECEMBER 5,2022
Fisure No. 1: Load Forecast Comparison
Rocky Mountain Power Load Forecasts
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2021 Load Forecast
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Load Forecast
Natural Gas Forecast
Staff conducted two analyses on the natural gas forecast: (1) a comparison of the
proposed Henry Hub forecast and last year's forecast approved in Order No. 35317; and (2) a
comparison of the Company's proposed Henry Hub forecast to the Henry Hub forecasts of
Avista and Idaho Power. Based on the results, Staff believes the proposed natural gas forecast is
reasonable.
Staff compared the Company's proposed Henry Hub forecast to last year's forecast
approved in Order No. 35317 . See Figure No. 2. This year's Henry Hub forecast is significantly
higher than last year's Henry Hub forecast. Staffbelieves the difference between the two
forecasts is primarily driven by the increasing prices in the natural gas markets over the past
yoil,l and thus Staff believes the proposed Henry Hub forecast is reasonable.
I See natural gas market trends on Stats Tab at https://tradingeconomics.com/comrnoditv/natural-gas
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JSTAFF COMMENTS DECEMBER 5,2022
Figure No. 2: Comparison of Companv's Henrv Hub Forecasts
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Comparison of Company's Henry Hub Forecasts
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Staff also compared Henry Hub forecasts used by the Company, Idaho Power, and
Avista. The results show similar trends between the three utilities. Although these utilities use
different methodologies to determine Henry Hub forecasts, all three forecasts reflect a high level
of similarity for the next few years; therefore, Staff believes the Company's proposed natural gas
forecast is reasonable. Figure No. 3 below shows a comparison of Henry Hub forecasts used by
Avista and the Company. Because ldaho Power's Henry Hub forecast is confidential, it was not
included in the graph.
Figure No.3: Henrv Hub Forecasts Used bv Avista and Rockv Mountain Power
Comparison of Henry Hub Gas Forecasts Used by Avista and
Rocky Mountain Power
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4STAFF COMMENTS DECEMBER 5,2022
Contract Updates
Although contract updates are incorporated on a continuous basis in the IRP model, Staff
believes the annual filing is a good opportunity for the Commission to review and monitor these
updates. Therefore, Staffrecommends that the Company continue to include contract updates in
future annual filings. For this case, Staff believes the contract updates included in the
Application are reasonable.
Contract updates are incorporated into the IRP model on a continuous basis. Order No.
32697 required that long-term contracts be considered in the IRP methodology at such time as
contracts were signed and when they had terminated or expired. Later, Order No. 33357 found
the "signed contract" language in Order No 32697 did not achieve its intended result and
required utilities to create a queue to track the order in which QF projects have entered
negotiations with a utility.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the following updates to be used in the
Company's IRP model for determining avoided cost rates, with an effective date of January l,
2023 as required by Order No. 35317:
L The proposed May 2022load forecast as filed;
2. The proposed natural gas forecast as filed.
5t\Respectfully submitted this day of December2022
Michael
Deputy Attorney General
Technical Staff: Yao Yin
Kevin Keyt
i : um isc/commentsl pace22. I 6mdyykk comments
5STAFF COMMENTS DECEMBER 5,2022
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 5th DAY OF DECEMBER 2022,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. PAC-8.22-16, BY E.MAILING A COPY THEREOF, TO THE
FOLLOWING:
TED WESTON
ROCKY MOUNTAIN POWER
I4O7 WEST NORTH TEMPLE STE 330
SALT LAKE CITY UT 84I 16
E-MAIL: ted.weston@pacifi corp.com
DATA REQUEST RESPONSE CENTER
E.MAIL ONLY:
datareq uest@nacifi corp.com
JOE DALLAS
ROCKY MOUNTAIN POWER
825 NE MULTNOMAH ST, SUITE 2OOO
PORTLAND OR97232
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE