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IRP Public Draft July 2004

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IRP Public Draft July 2004 2004 INTEGRATED RESOURCE PLAN Providing a foundation for a bright future. 2004 INTEGRATED RESOURCE PLAN July 2004 Idaho Power Company 2004 Integrated Resource Plan August 2004 Idaho Power Company 2004 Integrated Resource Plan Table of Contents 1. Integrated Resource Plan Summary ........................................................................................ 1 Introduction .............................................................................................................................................1 Potential Resource Portfolios .................................................................................................................2 Risk Management....................................................................................................................................2 Near-Term Action Plan...........................................................................................................................3 2. Idaho Power Company Today .................................................................................................. 7 Customer and Load Growth ..................................................................................................................7 Supply-Side Resources............................................................................................................................9 Transmission Interconnections ............................................................................................................18 Off-System Purchases, Sales, and Load-Following Agreements.......................................................24 Demand-Side Management ..................................................................................................................25 3. Planning Period Forecasts ..................................................................................................... 29 Load Forecast ........................................................................................................................................29 Hydro Forecast ......................................................................................................................................33 Generation Forecast..............................................................................................................................35 Transmission Forecast ..........................................................................................................................35 Fuel Price Forecasts ..............................................................................................................................36 4. Future Requirements .............................................................................................................. 39 Water Planning Criteria for Resource Adequacy ..............................................................................40 Planning Scenarios ................................................................................................................................41 5. Potential Resource Portfolios ................................................................................................. 49 Resource Cost Analysis.........................................................................................................................49 Supply-Side Resource Options.............................................................................................................52 Demand-Side Management and Pricing Options ...............................................................................56 Social Costs ............................................................................................................................................59 Resource Portfolios ...............................................................................................................................60 Portfolio Selection .................................................................................................................................61 Idaho Power Company iii 2004 Integrated Resource Plan 6. Risk Analysis ........................................................................................................................... 63 Capital Risk ...........................................................................................................................................67 Production Tax Credit Risk .................................................................................................................69 Natural Gas Price Risk .........................................................................................................................70 Carbon Tax Risk ...................................................................................................................................71 Market Risk ...........................................................................................................................................73 Risk Analysis Summary........................................................................................................................74 7. Ten-Year Resource Plan......................................................................................................... 77 Introduction ...........................................................................................................................................77 Market Purchases..................................................................................................................................80 Transmission Resources .......................................................................................................................80 Demand-Side Management and Pricing Options ...............................................................................81 8. Near-Term Action Plan .......................................................................................................... 83 Introduction ...........................................................................................................................................83 Near-Term Action Plan.........................................................................................................................83 Generation Resources ...........................................................................................................................84 Renewable Energy.................................................................................................................................85 Transmission Resources .......................................................................................................................86 Demand-Side Management and Pricing Options ...............................................................................86 Risk Mitigation ......................................................................................................................................87 Appendices: Appendix A 2004 Economic Forecast Appendix B 2004 Sales and Load Forecast Appendix C 2004 Demand Side Management Annual Report Technical Appendix Idaho Power Company iv 2004 Integrated Resource Plan Glossary of Acronyms A/C – Air Conditioning AEO – Annual Energy Outlook AIR – Additional Information Requests aMW or MWa – Average Megawatt BPA – Bonneville Power Administration CCCT – Combined-Cycle Combustion Turbine CHP – Combined Heat and Power CO2 – Carbon Dioxide CT – Combustion Turbine DOE – Department of Energy DG – Distributed Generation DSM – Demand-Side Management EA – Environmental Assessment EEAG – Energy Efficiency Advisory Group EIA – Energy Information Administration EIS – Environmental Impact Statement ESA – Endangered Species Act FERC – Federal Energy Regulatory Commission IOU – Investor-Owned Utility IPC – Idaho Power Company IPUC – Idaho Public Utilities Commission IRP – Integrated Resource Plan IRPAC – Integrated Resource Plan Advisory Council kV – Kilovolt kW – Kilowatt kWh – Kilowatt hour LIWA – Low-Income Weatherization Assistance MAF – Million Acre Feet MMBTU – Million British Thermal Units MW – Megawatt MWh – Megawatt hour NEEA – Northwest Energy Efficiency Alliance NWPCC – Northwest Power and Conservation Council NOx – Nitrogen Oxides OPUC – Oregon Public Utility Commission PM&E – Protection, Mitigation and Enhancement PTC – Production Tax Credit QF – Qualifying Facility RFP – Request for Proposal RTO – Regional Transmission Organization SO2 – Sulfur Dioxide WACC – Weighted Average Cost of Capital WECC – Western Electricity Coordinating Council Idaho Power Company v 2004 Integrated Resource Plan Idaho Power Company vi 2004 Integrated Resource Plan 1. Integrated Resource Plan Summary Introduction The 2004 Integrated Resource Plan (IRP) is Idaho Power Company’s (IPC or the Company) seventh resource plan prepared to fulfill the regulatory requirements and guidelines established by the Idaho Public Utilities Commission (IPUC) and the Oregon Public Utility Commission (OPUC). Idaho Power Company worked with representatives of major stakeholders to develop the 2004 Integrated Resource Plan. Members of the environmental community, major industrial customers, irrigation representatives, state legislators, PUC representatives, the Governor’s office, and others formed the Integrated Resource Plan Advisory Council (IRPAC) and made significant contributions to this plan. The 2004 IRP reflects the combined knowledge and input from the representatives and some of the IRPAC members may submit separate documents
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