Avista Corporation · NYSE:AVA
Avista — Technical Presentation (December 2022)
42 slides from Avista's technical presentation, Dec 14, 2022
Slide 1: 2023 Electric Integrated Resource Plan
2023 Electric Integrated Resource Plan Technical Advisory Committee Meeting No. 8 Agenda Wednesday, December 14, 2022 Microsoft Teams Virtual Meeting Topic Time Staff Introductions 9:00 John Lyons Resource Acquisitions 9:05 Chris Drake Placeholder Resource Strategy 9:40 James Gall • Energy Efficienc
Slide 2: IRP Introduction
IRP Introduction 2023 Avista Electric IRP TAC 8 – December 14, 2022 John Lyons, Ph.D. Senior Resource Policy Analyst
Slide 3: Remaining 2023 Electric IRP TAC Meeting Schedule
Remaining 2023 Electric IRP TAC Meeting Schedule • Virtual Public Meeting Gas & Electric IRPs: March 8, 2023 (12 to 1 pm and 5:30 to 6:30 pm PST) • TAC 9: March 15, 2023 (9 am to 4 pm PST) Other Important Dates • Washington Progress Report – January 3, 2023 • External IRP draft released to TAC – Mar
Slide 4: Today's Agenda
Today’s Agenda 9:00 Introductions, John Lyons 9:05 Resource Acquisitions, Chris Drake 9:40 Placeholder Resource Strategy, James Gall - Energy Efficiency - Demand Response - Resource Selection - Avoided Cost 10:10 CBI Forecast, Mike Hermanson 10:35 Progress Report Outline, Lori Hermanson 10:50 Next S
Slide 5: 2022 RFP Resource Acquisitions
DRAFT 2022 RFP Resource Acquisitions Chris Drake, Manager of Resource Optimization and Marketing Technical Advisory Committee Meeting No. 8 December 14, 2022
Slide 6: Avista's Kettle Falls Biomass upgrade
Avista’s Kettle Falls Biomass upgrade Capacity, Energy, Environmental, Financial Community • 11 MW net capacity • ~100,000 CO2e increase sequestered annually • 18 MW from 3rd party steam • ~30% reduction in annual • ~$50 Levelized Cost of NOX emissions, CO, and Energy over 20 years VOCs intensity •
Slide 7: Irrigation Hydro Facilities
Irrigation Hydro Facilities • 23-year supply deal in total • Main Canal Headworks • Projects ramping in between • Summer Falls 2023 and 2030 • Russell D. Smith • 100% of the output from 7 • Eltopia Branch Canal (EBC) hydro projects throughout • Potholes East Canal (PEC) central Washington (3 BPA, 2
Slide 8: 2023 Placeholder Resource Strategy
2023 Placeholder Resource Strategy James Gall, Manager of Integrated Resource Planning Technical Advisory Committee Meeting No. 8 December 14, 2022
Slide 9: Safe Harbor Statement
Safe Harbor Statement This document contains forward-looking statements. Such statements are subject to a variety of risks, uncertainties and other factors, most of which are beyond the Company’s control, and many of which could have a significant impact on the Company’s operations, results of opera
Slide 10: Other Caveats
Other Caveats • Avista is negotiating with 2022 All-Source Request for Proposals (RFP) shortlist bidders. The Placeholder Resource Strategy will significantly change to include new resources after RFP negotiations conclude. Changes will be reflected in the June 2023 IRP Filing. • IRP resource option
Slide 11: Capacity Needs and Energy Needs
4 Megawatts - 1,000 500 (1,500) (1,000) (500) 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Capacity Needs 2034 2035 2036 2037 January 2038 April 2039 2040 2041 August 2042 2043 2044 November 2045 Megawatts - 1,000 500 (1,500) (1,000) (500) 2024 2025 2026 2027 2028 2029 2030 2031 Resource Needs
Slide 12: Clean Resource % of Retail Load
CETA Renewable Energy Goal 100% Clean Resource % of Retail Load 10% 5% 0% 90% Primary Target % 20% 15% 100% 95% 80% Alternative Compliance % 90% 85% 70% 80% 77% 73% 60% 70% 66% 63% 50% 55% 40% 48% 30% 20% 10% 0% 2030-2033 2034-2037 2038-2041 2042-2044 2023 2024 2025 2026 2027 2028 2029 2045 5
Slide 13: Named Community Investment Fund Projects
DRAFT Named Community Investment Fund Projects • Methodology – Spending constraints • $2 million annually in low-income energy efficiency beyond cost effective programs. • $500k distributed energy resources ($100k for program administration). – Results • 2.4 GWh additional EE though 2033 (0.7 percen
Slide 14: Cumulative Energy Efficiency Supply Curve
2024-2045 Cumulative Energy Efficiency Supply Curve Washington Jurisdiction Comparison between 2021 IRP $500 2021_IRP $450 2023_PR 2021_IRP_Selection $400 2023_PR_Selection Levelized TRC $/MWh $350 $300 $250 $200 $150 $100 $50 $0 -$50 0 200 400 600 800 1,000 1,200 1,400 Cumulative GWh 7
Slide 15: Cumulative Energy Efficiency End Use Results (GWh)
DRAFT Cumulative Energy Efficiency End Use Results (GWh) Washington Idaho End Use 2024 2033 2045 2024 2033 2045 Appliances 0.5 6.2 8.2 0.2 1.5 1.9 Electronics 0.2 6.4 13.3 0.1 3.0 6.3 Exterior Lighting 6.0 77.5 164.3 3.1 40.1 83.0 Food Preparation 0.1 2.6 11.2 0.0 0.0 0.0 Interior Lighting 0.2 1.4 1
Slide 16: Cumulative Energy Efficiency Segment Results (GWh)
DRAFT Cumulative Energy Efficiency Segment Results (GWh) Washington Idaho Segment 2024 2033 2045 2024 2033 2045 College 0.7 7.5 12.2 0.4 3.7 5.7 Grocery 1.1 15.2 23.9 1.2 16.9 26.3 Health 0.6 5.3 7.4 0.0 0.4 0.6 Industrial 2.5 32.5 48.5 2.0 25.3 35.3 Large Office 0.7 7.2 12.1 0.6 5.8 9.8 LI - Mobile
Slide 17: Lower Washington Energy Efficiency Goals
DRAFT Lower Washington Energy Efficiency Goals Lower Avoided Costs & Lower Potential 350.0 Selected EE 323.3 300.0 2024-2025 Biennial Conservation Target (MWh) 10 Yr Pro Rata 292.5 CPA Pro-Rata Share 64,667 250.0 258.1 EIA Target 64,667 Gigawatt Hours Decoupling Threshold 3,233 222.0 200.0 Total Uti
Slide 18: 24-yr Levelized Avoided Cost for Energy Efficiency
DRAFT 24-yr Levelized Avoided Cost for Energy Efficiency Washington Idaho Energy Value Capacity Value Energy Value Capacity Value $90 $120 $140 $100 Losses, $5.04 $80 $90 Preference, $120 SCC, $100 $9.51 $80 T&D, Levelized 20yr $/MWh Levelized 20yr $/kW-yr Levelized 20yr $/kW-yr Levelized 20yr $/MWh
Slide 19: Demand Response
DRAFT Demand Response • 30 MW of industrial demand response already contracted • Avista is preparing 3 opt-in pilot programs: – Time of use rates – Peak time rebate – CTA-2045 water heaters • 2023 IRP Progress Report Results – 2025 start date, only Washington programs selected (2045 cumulative savin
Slide 20: "Placeholder" PRS Selection (MW)
DRAFT “Placeholder” PRS Selection (MW) 2024- 2034- 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 2033 2045 Washington Demand Response 0.0 6.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 7 0 Natural Ga
Slide 21: Transmission Needs
Transmission Needs • Most generation selection is off-system or up to interconnection limits before major transmission upgrades needed. • 2045 renewable & long-duration storage requirements will require significant build outs in Big-Bend and Rathdrum areas. • Earlier construction may be necessary if
Slide 22: Washington CETA Clean Energy Comparison (aMW)
DRAFT Washington CETA Clean Energy Comparison (aMW) 1,000 Clean Gen =< monthly net load Clean Gen > monthly net load 900 Idaho Hydro Net Retail Load Primary Compliance Target 800 Average Megawatts 700 600 500 400 300 200 100 - 2030- 2034- 2038- 2042- 2023 2024 2025 2026 2027 2028 2029 2045 2033 2037
Slide 23: CETA Cost Cap Analysis
CETA Cost Cap Analysis • Cost cap compares utility’s strategy to an “Alternative Least Reasonable Cost Portfolio” – How do we define this portfolio? – When does “alternative” begin? • For example, should this portfolio exclude past decisions to acquire resources used to comply with CETA? – Without e
Slide 24: CETA Cost Cap Analysis Example
CETA Cost Cap Analysis Example • Assumes No Columbia Basin Hydro. (Chelan PUD #2/#3 can be added for final IRP) • Assumes CS2 available in 2045. • Assumes no CETA compliance requirements. • Includes Social Cost of Greenhouse Gas. • Cost cap reached in final compliance period. 2026- 2030- 2034- 2038-
Slide 25: CBI Forecast
CBI Forecast Mike Hermanson, Senior Power Supply Analyst Electric IRP, 8th Technical Advisory Committee Meeting December 14, 2022
Slide 26: Background
Background • Customer Benefit Indicators (CBIs) are required to ensure equitable distribution of energy and non-energy benefits and reductions of burdens to highly impacted communities and vulnerable populations. 2
Slide 27: Background
Background • CEIP includes 14 CBIs: 1. Participation in Company Programs 8. Energy Generation Location 2. Number of households with a High Energy Burden (>6%) 9. Outdoor Air Quality 3. Availability of Methods/Modes of Outreach and Communication 10. Greenhouse Gas Emissions 4. Transportation Electrif
Slide 28: Number of households with a High Energy Burden (>6%)
Number of households with a High Energy Burden (>6%) • High energy burden is annual energy cost (electric & gas) greater than 6% of annual income. • Forecasted by: (PRS rates x annual energy usage)/annual income • Forecast includes: • Reductions in energy usage from low-income energy efficiency prog
Slide 29: Number of households with a High Energy Burden (>6%)
Number of households with a High Energy Burden (>6%) • Excess energy burden amount in excess of 6% of annual income. 5
Slide 30: Named Community Clean Energy
Named Community Clean Energy • DER generation includes: • PURPA generation in named communities • Community solar • Customer net metering • Community solar selected between 2024 – 2033 supported by tax incentives. • Community solar with battery storage selected after 2034. 6
Slide 31: Investments in Named Communities
Investments in Named Communities • Includes low-income EE investment and likely named community demand response investment. • Annual NEI and utility benefit is the market value or established NEI unit rate of energy associated with EE and named community demand response. • Investment declines as EE
Slide 32: Energy Availability
Energy Availability • Energy availability is related to energy resiliency. • Planning margins: • Winter – 22% • Summer – 13% • Energy needs drive selection so resources exceed the planning margin. • After resource additions planning margin decreases but does not reach target. 8
Slide 33: Energy Generation Location
Energy Generation Location • Energy generation location and connectivity is related to customer energy security. • As a % of load, WA located and/or connected to Avista transmission system decreases as more off system wind generation is added over the planning horizon. 9
Slide 34: Outdoor Air Quality
Outdoor Air Quality • Emissions related to thermal generation located in WA. • SO2 results related to non- detect field measurements. In the process of confirming results. • NOx emissions reduce over time as a result of decreased emission rates from Kettle Falls upgrade and decreased dispatch of Ket
Slide 35: Outdoor Air Quality
Outdoor Air Quality • Emissions related to thermal generation located in WA. • Small reduction in Mercury emissions. • VOC emissions reduce 60 #9d: VOC over time as a result of 50 decreased emission rates Metric Tons 40 from Kettle Falls upgrade and decreased dispatch of 30 Kettle Falls. 20 10 0 201
Slide 36: Greenhouse Gas Emissions
Greenhouse Gas Emissions • Direct emissions are the WA portion of total system emissions. • Net emissions are the WA portion of total system emissions net of market transactions. • Significant reduction in 2025 from use of Colstrip for WA retail load. • Net emissions begin to exceed direct emissions
Slide 37: Greenhouse Gas Emissions
Greenhouse Gas Emissions • Agriculture & large sources held constant over forecast period. • Electric power from IRP modeling. • Waste Management increases in proportion to population. • Residential & commercial fuels from Gas IRP forecast. • Transportation: • Rail held constant • Air increases in p
Slide 38: Greenhouse Gas Emissions
Greenhouse Gas Emissions • Electric vehicle forecast from load forecast. • In 2045 28.6% of vehicles are electric. • Forecast includes increased gas efficiency over the planning horizon. • 0.12 MMT increase over planning horizon. • 1.16 reduction over no electric vehicle scenario. *Emission estimate
Slide 39: 2023 Progress Report Outline
DRAFT 2023 Progress Report Outline Lori Hermanson, Senior Power Supply Analyst Technical Advisory Committee Meeting No. 8 December 14, 2022
Slide 40: Progress Report Outline
Progress Report Outline • Chapter 1 - Progress Report Introduction • Chapter 2 - Economic and Load Forecast • Chapter 3 - Existing Supply-side Resources • Chapter 4 - Long-term Position • Chapter 5 - Distributed Energy Resources (includes EE and DR) • Chapter 6 - Supply-side Resource Options • Chapt
Slide 41: Next Steps
DRAFT Next Steps James Gall, Manager of Integrated Resource Planning Technical Advisory Committee Meeting No. 8 December 14, 2022
Slide 42: Next Steps
Next Steps • Washington Progress Report to be filed January 3, 2023 • Virtual Public Meetings on March 8, 2023 • Schedule Changes – Combines February and March meetings • Next TAC meeting March 15, 2023, 9am to 4pm (in person/ Teams) – Draft IRP release moved to March 31, 2023 • File final IRP on Ju