Avista Corporation · NYSE:AVA
Avista — Technical Presentation (September 2024)
55 slides from Avista's technical presentation, Sep 17, 2024
Slide 1: 2025 IRP TAC 13 Introductions
2025 IRP TAC 13 Introductions John Lyons, Ph.D. Technical Advisory Committee Meeting No. 13 September 17, 2024
Slide 2: Today's Agenda
Today’s Agenda Introductions, John Lyons PRS Update and Scenario Analysis, Planning Team IRP Next Steps, James Gall 2
Slide 3: Remaining 2025 Electric IRP TAC Schedule
Remaining 2025 Electric IRP TAC Schedule • Virtual Public Meeting – Electric IRP (November 13, 2024) o Recorded presentation o Daytime comment and question session (7:30 am to 8:30 am, PTZ) https://us02web.zoom.us/j/82646796064?pwd=PeQBOudUk4HQCOajIb516GwK9DawJX.1 Meeting Topic: Avista Energy Resour
Slide 4: Remaining 2025 Electric IRP TAC Document Schedule
Remaining 2025 Electric IRP TAC Document Schedule Section Chapter Availability Executive Summary October 1, 2024 1 Introduction, Involvement, and Process Changes October 1, 2024 2 Preferred Resource Strategy Available 3 Economic and Load Forecast Available 4 Existing Supply Resources Available 5 Res
Slide 5: Remaining 2025 Electric IRP TAC Document Schedule
Remaining 2025 Electric IRP TAC Document Schedule Section Appendix Availability A TAC Presentations IRP website B Work Plan IRP website C Draft AEG EE/DR Potential Assessment Available D 10-year Transmission/Distribution Plan Available E Transmission Generation Integration Study Available F DER Stud
Slide 6: 2025 Electric Integrated Resource Plan PRS Update and Scenario Analysis
2025 Electric Integrated Resource Plan PRS Update and Scenario Analysis James Gall Technical Advisory Committee Meeting No. 13 September 17, 2024
Slide 7: PRS Changes Since Last TAC Meeting
PRS Changes Since Last TAC Meeting • Line losses were double counted in the energy efficiency analysis. • Does not affect generation resource portfolio. • Economic potential in 2045 is 7.7% lower. Energy Efficiency Comparison 1,000 900 800 700 Gigawatt-Hours 600 500 400 300 200 PRS 100 TAC Draft - 2
Slide 8: Portfolio Risks
Portfolio Risks Nuclear Availability Northeast CT Availability Economic Growth Data Center Clean Energy Preferences Power to Gas Availability Future Weather Regional Transmission Building Electrification CETA Rules Transportation Electrification Reliability Objectives Climate Commitment Act IRA Tax
Slide 9: Scenario Analysis Insights
Scenario Analysis Insights • Demand response and energy storage are best resources to quickly add capacity. • Due to limits on power-to-gas (P2G) resources, nuclear is go to resource for higher loads in Washington. – May create cost concerns as nuclear energy is estimated at $144/MWh in 2030 and $20
Slide 10: Portfolio Scenarios
Portfolio Scenarios Methodology Load Scenarios Resource Availability Other 2- Alternative Lowest 5- Low Growth 4- Clean Resource Portfolio by 10- Maximum Washington Reasonable Cost 2045 Customer Benefit 3- Baseline Least Cost Portfolio 6- High Growth 11- 500 MW Nuclear in 2040 12- 17% PRM 15- Minima
Slide 11: Preferred Resource Strategy
Preferred Resource Strategy Nameplate MW 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Total Shared System Resource Mrkt/Trans 39 4 10 0 0 0 0 300 0 0 0 0 0 0 0 0 0 0 0 0 353 Natural Gas 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - Solar 0 0 0 0 0 0
Slide 12: Methodology Scenarios
Methodology Scenarios
Slide 13: 2- Alternative Lowest Reasonable Cost
2- Alternative Lowest Reasonable Cost • Purpose: Understand impact of CETA for the 2% cost cap calculation. Used for CEIP analysis for the first 4 years. • Assumption Changes: Removes CETA clean energy targets and Named Community spending assumptions and allows natural gas CTs. • Results Summary: –
Slide 14: 3- Baseline
3- Baseline • Purpose: Understand cost impact of CETA going forward, assists in determining avoided costs. • Assumption Changes: Removes CETA targets, NCIF spending minimum, SCGHG, NEI, allows natural gas in Washington in 2045. Energy efficiency is not changed. • Results Summary: – Renewable generat
Slide 15: 15- Minimal Viable CETA Targets
15- Minimal Viable CETA Targets • Purpose: Supports CEIP Condition 33 “Avista agrees to model a scenario in the 2025 Electric IRP meeting the minimum level of primary compliance requirements beginning in 2030 that will create the glide path to 2045. If the results of this modeling differ from the Co
Slide 16: 16- Maximum Viable CETA Targets
16- Maximum Viable CETA Targets • Purpose: Supports CEIP process to estimate resource portfolio changes to support CEIP. • Assumption Changes: Uses CETA Targets: 2026 2027 2028 2029 2030-2033 2034-2037 2038-2041 2042-2044 2045 #16 Primary 70.0% 73.0% 75.0% 78.0% 81.8% 86.8% 92.2% 97.1% 100.0% #16 Al
Slide 17: 17- PRS Constrained to the 2% Cost Cap
17- PRS Constrained to the 2% Cost Cap • Purpose: Due to uncertainty of cost cap calculation for 2045 and the 2045 PRS rate increase projection, this scenario offers up a lower 2045 rate impact replicating a potential cost cap. • Assumption Change: PRS between 2026-2043 is unchanged, but the model s
Slide 18: Load Scenarios
Load Scenarios
Slide 19: 5- Low Load Growth
5- Low Load Growth • Purpose: Understand resource selection impact if loads take lower trajectory. • Assumption Change: Uses lower load growth forecast (0.34% per year vs. 0.85%) • Results Summary: – No resource changes as compared to PRS until 2033. – Long term less wind (93 MW), 162 MW less solar,
Slide 20: 6- High Load Growth
6- High Load Growth • Purpose: Understand resource selection impact if loads take higher trajectory • Assumption Change: Uses higher load growth forecast (1.75% per year vs. 0.85%) • Results Summary: – Short-term- increase demand response and acquire wind earlier. – Long-term for Washington, acquire
Slide 21: 7- 80% Washington Building Electrification by 2045
7- 80% Washington Building Electrification by 2045 • Purpose: Understand resource selection and cost impact if 80% of 2026 natural gas demand moves to electric service. • Assumption Change: Natural gas LDC load converts to electric demand and assumes 75% former natural gas load becomes Avista electr
Slide 22: 8- 80% Washington Building Electrification & High Transportation Electrification
8- 80% Washington Building Electrification by 2045 & High Transportation Electrification • Purpose: Understand resource selection and cost impact if 80% of 2026 natural gas demand is moved to electric service and higher electric transportation trajectory occurs. • Assumption Change: Uses same electr
Slide 23: 9- 80% System Building Electrification, High Transportation, No New NG CTs
9- 80% System Building Electrification by 2045 & High Transportation Electrification, No New NG CTs • Purpose: Simulates highest load possible. Similar to scenario #8, but Idaho building and transportation loads are electrified. • Assumption Changes: Disables new natural gas generation, uses scenari
Slide 24: Electrification Cost Summary
Electrification Cost Summary Avg Cost (2043-2045) Millions $5,000 $4,500 $4,000 $3,500 $3,000 $2,500 $2,000 $1,500 $1,000 $500 $0 9- Building 20- Building 8- WA Building 1- Preferred 7- WA Building Electrification & High Electrification & High Electrification & High Resource Strategy Electrification
Slide 25: Greenhouse Gas Emission Savings
Greenhouse Gas Emission Savings 3.5 • Includes both Electric 3.0 and Natural Gas LDC • Washington and Idaho 2.5 Metric Tons (millons) Only 2.0 • Does not include transportation 1.5 emissions • Incremental Cost for #7 1.0 1- Preferred Resource Strategy is $828/metric ton 7- WA Building Electrificatio
Slide 26: 19- RCP 8.5 Weather
19- RCP 8.5 Weather • Purpose: Understand impact of warmer winters to the resource strategy. • Assumption Change: Uses RCP 8.5 future temperatures instead of RCP 4.5 for winter seasons for energy and peak weather normalization. • Results Summary: – Reduces need for winter peaking generation. – Resou
Slide 27: 20- 80% System Building Electrification, RCP 8.5 Weather
20- 80% System Building Electrification by 2045 & High Transportation Electrification, No New NG CTs, w/ RCP 8.5 Weather • Purpose: Evaluates highest load obligation with warmer winter weather forecast. • Assumption Change: Combines scenarios 9 and 18. • Results Summary: – Comparing to scenario #9:
Slide 28: 18- 200 MW Data Center in 2030
18- 200 MW Data Center in 2030 • Purpose: Understand implications of large data center in Washington. • Assumption Change: Adds 200 MW of load to Washington in 2030, assumes PT ratio allocates more existing resources to Washington. • Results Summary: – With PT ratio impact, 90 MW of additional natur
Slide 29: Resource Availability Scenarios
Resource Availability Scenarios
Slide 30: 4- Clean Resource Portfolio by 2045
4- Clean Resource Portfolio by 2045 • Purpose: Determine resource selection and cost impacts of not adding natural gas resources and removing all gas generation by 2045. • Assumption Change: No natural gas as an option and retires Coyote Springs 2 in 2044. • Results Summary: – Significant portfolio
Slide 31: 11- 500 MW Nuclear by 2040
11- 500 MW Nuclear by 2040 • Purpose: Understand resource impact of large nuclear facility in 2040. • Assumption Change: 500 MW nuclear forced into model in 2040 as a system resource, does not retire any resources (such as Coyote Springs 2). • Results Summary: – Removes 185 MW of new natural gas for
Slide 32: 14- Power to Gas Unavailable
14- Power to Gas Unavailable • Purpose: Understand impacts if hydrogen and ammonia are not available as a fuel. • Assumption Change: Disable ammonia and hydrogen resource options. • Results Summary: – Reduces shared wind resources and increases Idaho’s need for natural gas by 72 MW. – Washington’s r
Slide 33: 21- Regional Transmission not Available
21- Regional Transmission not Available • Purpose: Removes the 300 MW regional transmission. The scenario helps understand resource portfolio impacts rather than cost impacts due to arbitrage benefits not include in the PRS. • Assumption Change: Removes the 300 MW transmission and associated market
Slide 34: 24- No IRA Tax Incentives
24- No IRA Tax Incentives • Purpose: Useful in determining if IRA is responsible for the early wind acquisition in the PRS and determines portfolio/cost impacts if the IRA is repealed. • Assumption Change: Changes resource costs to reflect IRA expiration in 2026. • Results Summary: – No system wind
Slide 35: 23- On-System Wind Limited to 200 MW
23- On-System Wind Limited to 200 MW • Purpose: Understand resource portfolio changes if wind connected to Avista’s transmission system is wheeled off system rather than to serve Avista customer load. • Assumption Change: Limits on-system wind to 200 MW without building large transmission infrastruc
Slide 36: 22- Northeast CT's Retire in 2026
22- Northeast CT’s Retire in 2026 • Purpose: Determine resource portfolio change without Northeast CTs available. • Assumption Change: Disable Northeast CTs. • Results Summary: – Immediate need for 79 MW energy storage as a system resource and 100 MW system wind earlier. – Idaho portfolio needs 32 M
Slide 37: 25- Northeast CT's Retire in 2035
25- Northeast CT’s Retire in 2035 • Purpose: Determine resource portfolio change with Northeast CTs extended 5 years. • Assumption Change: Disable Northeast CTs in 2035. • Results Summary: – Defers need to build Idaho’s new natural gas CT, in its place is 36 MW of energy storage between 2030 and 203
Slide 38: "Other" Scenarios
“Other” Scenarios
Slide 39: 10- Maximum Washington Customer Benefits
10- Maximum Washington Customer Benefits • Purpose: Washington IRP rules require a scenario intended to maximize customer benefit indicators. • Assumption Change: – DERs: Solar (164 MW) and 38 MW of energy storage. – No new air emitting resources are allowed in Washington (i.e., no P2G CT or biomass
Slide 40: Customer Benefit Indicator Comparison (2045)
Customer Benefit Indicator Comparison (2045) Customer Benefit Indicator Measurement PRS Max Change Customer Benefits #2a: WA Customers with Excess Energy Burden Customers 59,696 59,143 (553) #2b: Percent of WA Customers with Excess Energy Burden % Customers 21.2% 21.0% -0.2% #2c: Average Excess Ener
Slide 41: 12- 17% PRM
12- 17% PRM • Purpose: Illustrates resource portfolio relying on increased market for resource adequacy. Resembles potential future where the WRAP enables utilities to plan for fewer resources. • Assumption Change: Adjusts winter PRM from 24% to 17%, summer remains at 16%. • Results Summary: – Near
Slide 42: 13- 30% PRM
13- 30% PRM • Purpose: Illustrates resource portfolio relying less on market resources for resource adequacy. Resembles potential future where LOLP should be near zero. • Assumption Change: Adjusts winter PRM from 30% to 17%, summer remains at 16%. • Results Summary: – Near term changes: Adds 100 MW
Slide 43: 26- PRS w/CCA Repealed
26- PRS w/CCA Repealed • Purpose: Understand impact to PRS if CCA is repealed in November 2024 election. • Assumption Change: removes CCA from market price forecast, results in lower wholesale price forecast. • Results Summary: – Near term changes: The first wind acquisition moves from 2029 to 2030,
Slide 44: All Scenario Comparisons
All Scenario Comparisons
Slide 45: Portfolio Cost Comparison
Portfolio Cost Comparison Scenario WA- PVRR ID-PVRR ($ TOTAL WA 2030 WA 2045 ID 2030 ID 2045 ($ Mill) Mill) PVRR ($ Rate Rate Rate Rate Mill) ($/kWh) ($/kWh) ($/kWh) ($/kWh) 1- Preferred Resource Strategy 10,924 4,758 15,682 0.130 0.248 0.112 0.180 2- Alternative Lowest Reasonable Cost Portfolio 10,
Slide 46: Washington 2030 and 2045 Average Energy Rates
Washington 2030 and 2045 Average Energy Rates 3- Baseline Portfolio 0.205 0.131 2- Alternative Lowest Reasonable Cost Portfolio 0.208 0.130 17- PRS Constrained to 2% Cost Cap 0.225 0.130 18- Data Center in 2030 0.237 0.131 5- Low Economic Growth Loads 0.242 0.131 12- 17% PRM 0.244 0.130 19- RCP 8.5
Slide 47: Idaho 2030 and 2045 Average Energy Rates
Idaho 2030 and 2045 Average Energy Rates 6- High Economic Growth Loads 0.167 0.109 12- 17% PRM 0.180 0.112 10- Maximum WA Customer Benefits 0.180 0.112 1- Preferred Resource Strategy 0.180 0.112 15- Minimal Viable CETA Target 0.180 0.112 16- Maximum Viable CETA Target 0.180 0.112 21- Regional Transm
Slide 48: Cost (PVRR) vs. Risk (2045 Tail Var)
Cost (PVRR) vs. Risk (2045 Tail Var) $180 3- Baseline Portfolio $160 6- High Economic Growth Loads 8- WA Building Electrification & High 14- Power to Gas Unavailable Trans. Electrification $140 2- Alternative Lowest Reasonable Cost 7- WA Building Electrification Portfolio 21- Regional Transmission n
Slide 49: Present Value of Revenue Requirement (2026-2045)
Present Value of Revenue Requirement (2026-2045) 5- Low Economic Growth Loads $10,641 $4,711 $15,352 3- Baseline Portfolio $10,851 $4,655 $15,506 2- Alternative Lowest Reasonable Cost Portfolio $10,796 $4,766 $15,562 12- 17% PRM $10,880 $4,734 $15,614 21- Regional Transmission not available $10,902
Slide 50: Risk Adjusted PVRR
Risk Adjusted PVRR 5- Low Economic Growth Loads $1,313 $46 $1,360 3- Baseline Portfolio $1,327 $53 $1,380 2- Alternative Lowest Reasonable Cost Portfolio $1,331 $50 $1,381 12- 17% PRM $1,336 $46 $1,382 21- Regional Transmission not available $1,336 $47 $1,383 17- PRS Constrained to 2% Cost Cap $1,33
Slide 51: Greenhouse Gas Emission 2045 vs. 2026 Change
Greenhouse Gas Emission 2045 vs. 2026 Change 3- Baseline Portfolio (0.24) 0.27 2- Alternative Lowest Reasonable Cost Portfolio 0.42 0.88 17- PRS Constrained to 2% Cost Cap 0.64 0.84 6- High Economic Growth Loads 0.50 0.84 18- Data Center in 2030 0.81 0.93 21- Regional Transmission not available 0.79
Slide 52: Change in Emissions vs. PVRR Cost
Change in Emissions vs. PVRR Cost 5,000 4,000 Change in System PVRR (Millions) 3,000 9- Building Electrification & High Trans. Electrification w/o NG 8- WA Building Electrification & High Trans. Electrification 2,000 10- Maximum WA Customer Benefits 11- Least Cost + 500 MW Nuclear in 2040 7- WA Buil
Slide 53: Natural Gas Price Sensitivity Analysis
Natural Gas Price Sensitivity Analysis
Slide 54: PVRR Impact of Change in Natural Gas Prices
PVRR Impact of Change in Natural Gas Prices Change in PVRR vs Expected Case Market Pricing Washington Idaho System High NG Low NG High NG Low NG High Low NG Prices Prices Prices Prices NG Prices Portfolio Prices 1- Preferred Resource Strategy 0.8% -0.1% 3.1% -1.7% 1.5% -0.6% 3- Baseline Portfolio 2.
Slide 55: GHG Emissions Sensitivity to Natural Gas Prices
GHG Emissions Sensitivity to Natural Gas Prices Total GHG Emissions vs Expected Prices High NG Low NG Portfolio Prices Prices 1- Preferred Resource Strategy -13.0% 7.7% 3- Baseline Portfolio -14.0% 8.8% 4- Clean Resource Portfolio -9.4% 5.7% 11- Least Cost + 500 MW Nuclear in 2040 -11.8% 6.8% Total