HomeMy WebLinkAboutBURTON.txt
1 (The following proceedings were
2 had in open hearing.)
3 MR. ERIKSSON: And I also offer
4 Exhibit 1, which is attached to his testimony.
5 COMMISSIONER HANSEN: Okay, Exhibit 1
6 be identified on the record if there's no
7 objection. So ordered.
8 (PacifiCorp Exhibit No. 1 was
9 marked for identification.)
10 MR. ERIKSSON: If I could just follow
11 up with a couple of questions, supplemental?
12 COMMISSIONER HANSEN: You may.
13 Q. BY MR. ERIKSSON: Mr. Burton, since
14 the filing of your rebuttal testimony, have you
15 participated in discussions with the Bear River
16 Water Users Association?
17 A. Yes, I have.
18 Q. And has the topic of those discussions
19 been subordination of water rights?
20 A. Yes.
21 Q. And has the Water Users Association
22 taken a position with respect to whether or not
23 subordination by PacifiCorp --
24 A. Yes, it has.
25 Q. -- should be sought?
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1 A. Yes.
2 Q. And what is their position?
3 MR. NYE: Objection: Hearsay.
4 COMMISSIONER HANSEN: Mr. Nye.
5 MR. NYE: I object to this testimony
6 as calling for hearsay, asking what someone said.
7 COMMISSIONER HANSEN: I'll give you a
8 chance to respond.
9 MR. ERIKSSON: Mr. Chairman, hearsay
10 is admissible before the Commission.
11 Mr. Burton has firsthand knowledge of
12 what the action of the Bear River Water Users
13 Association was.
14 COMMISSIONER HANSEN: We'll consider
15 the objection that you make in the record. I will
16 allow that question; I think we need to know that.
17 THE WITNESS: On July 1st of this
18 year, I attended a meeting of the board of directors
19 of the Utah -- or, I mean of the Bear River Water
20 Users Association, and at that meeting, a resolution
21 was passed and the Association went on record as
22 opposing the idea of subordination of PacifiCorp
23 water rights on the Bear River; and also went on
24 record supporting, in lieu of the subordination, a
25 Bear River operating plan which would be implemented
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1 for future operation.
2 MR. ERIKSSON: Thank you. That's all
3 I have. He's available for cross.
4 COMMISSIONER HANSEN: Okay. We'll
5 start with you, Mr. Budge.
6 MR. BUDGE: No questions, Chairman.
7 COMMISSIONER HANSEN: Mr. Nye.
8 MR. NYE: No questions.
9 COMMISSIONER HANSEN: Mr. Ward.
10 MR. WARD: No questions. Thank you.
11 COMMISSIONER HANSEN: Mr. Richardson.
12 MR. RICHARDSON: No questions,
13 Mr. Chairman.
14 COMMISSIONER HANSEN: Mr. Purdy.
15 MR. PURDY: Thank you.
16
17 CROSS-EXAMINATION
18
19 BY MR. PURDY:
20 Q. In your rebuttal testimony, page 2, if
21 you need a reference, you referred to an operating
22 plan for the Bear River/Bear Lake system that you've
23 been asked to prepare for PacifiCorp. What is the
24 purpose of that plan?
25 A. Well, the purpose of that plan is to
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1 basically document and identify historical operation
2 of the river within all of the constraints and all
3 of the uses that I have already described, to ensure
4 that the future operation will continue to the
5 benefit and with the same degree of care and
6 consideration that's been given to the irrigators
7 and flood control needs and all the other needs as
8 has been given in the past. And that's been my
9 assignment and that's what I am currently preparing.
10 Q. What is the current status of that
11 plan? Is it completed?
12 A. No, it's not completed yet, but I
13 anticipate that a draft document will be ready for
14 internal review probably by the end of July or early
15 August; and after that review, it will be submitted
16 to Idaho Department of Water Resources Compact
17 Commission and the other interested groups -- the
18 irrigators and so forth -- for comment.
19 Q. Do you know -- do you know what
20 prompted your employment in preparing this plan?
21 A. Well, that's secondhand information,
22 but I was told the issue of subordination of water
23 rights was discussed in other committee meetings
24 that I did not attend and had no knowledge of; but
25 in lieu of the subordination concept, an operating
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1 plan was what was a preferred alternative, and that
2 was the assignment that I was given.
3 Q. So if you know -- and I can anticipate
4 some of the boundaries of your ability to answer
5 some of these questions, but let's give it a shot
6 anyway -- if you know, does PacifiCorp intend to
7 bind itself then to -- well, let me strike that.
8 Back up.
9 You indicated that PacifiCorp would
10 offer the plan to the Idaho Department of Water
11 Resources. Correct?
12 A. Yes.
13 Q. And do you know if then there will be
14 some kind of give and take in terms of perhaps
15 modifying or working the plan out somehow with
16 Water Resources?
17 A. Well, I'm -- I'm convinced that there
18 will be comments made by Idaho as well as other
19 groups. And I think the whole idea is to develop a
20 plan that will be consistent with the past
21 operation, that will take the operation into the
22 future to the benefit of all the concerned
23 entities. And that's I think where it's going.
24 Now, as far as modifications, yeah, I
25 expect modifications to occur at the recommendation
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1 of all the interested parties.
2 Q. And forgive me if you've already
3 indicated this, but did you state that other
4 states -- Wyoming and Utah -- would be involved in
5 the putting together of this plan or the
6 implementation of the plan?
7 A. Well, since both Idaho, Utah, and
8 Wyoming are parties to the Bear River Compact, I
9 would suspect that there would be some review and
10 input by those states as well.
11 Q. Do you know if PacifiCorp intends to
12 enter -- oops, ScottishPower, assuming the merger
13 goes through -- intends to bind itself through some
14 type of a memorandum of understanding or compact
15 with the State of Idaho somehow incorporating this
16 plan?
17 A. That's my understanding, yes.
18 Q. Do you know if, for instance, the
19 irrigators or other parties that are affected
20 that -- by the operation of the Bear River system
21 are participating in this process in a way that
22 would bind them to the plan, if you know?
23 A. Well, the irrigators are beneficiaries
24 of this plan and they would certainly have comment;
25 but the greatest obligation on the Bear River system
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1 operation is for delivery of irrigation water, and
2 so -- so since they're the beneficiaries, their
3 comments would certainly be considered in the, you
4 know, development of the final plan.
5 Q. And is the reason that you
6 characterize the irrigators as the beneficiaries of
7 the plan because PacifiCorp intends to essentially
8 memorialize its past practice of operating the
9 Bear River system primarily for the benefit of
10 irrigators over other uses, including hydropower?
11 A. Yes.
12 Q. That has been ScottishPower's past
13 practice, has it not? I'm sorry, PacifiCorp's past
14 practice?
15 A. Yes.
16 Q. And you intend to continue that
17 practice into the future, merger or no merger?
18 A. Yes.
19 Q. All right. Without the plan in place
20 and presumably approved by whatever regulatory
21 bodies will ultimately approve it, without that
22 plan, in your mind, would PacifiCorp have the
23 ability to change the way that it has historically
24 operated the Bear River system?
25 A. In my judgment, PacifiCorp would
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1 continue to operate the system as the system has
2 been operated in the past, and that commitment has
3 been given; and, in fact, one of my primary
4 responsibilities for the past year since my
5 retirement has been to conduct an ongoing training
6 program with PacifiCorp employees in gaining
7 knowledge about the operation of the system, both in
8 the field, on the Bear River, in the hydro staff
9 office in Salt Lake, and the hydro staff office in
10 Portland. So that commitment is there, and that
11 training is ongoing to ensure that that operation
12 will continue in the future.
13 Q. Well let me take another approach:
14 Just from a purely physical standpoint
15 in terms of operation of the Bear River facilities
16 as a whole, is it physically possible to operate the
17 system in a way that is different than how you have
18 operated it in the past, and, for example, might
19 benefit hydropower uses over irrigation uses?
20 A. It's physically possible.
21 Q. And, again, my question then is do you
22 see the plan as essentially prohibiting you from
23 doing that in the future, assuming the plan is
24 approved?
25 A. Well, I see the plan as -- as
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1 commiting the Company, whether you call it
2 PacifiCorp or ScottishPower, committing the Company
3 to the same level of operation as in the past; and
4 that -- that means consistent with all the legal
5 constraints in the system from State water rights
6 compact and even self-imposed constraints internally
7 in terms of water levels in Bear Lake. And so I
8 just see this plan going forward to commit the same
9 level of operation and consideration as we've had in
10 the past.
11 Q. Could -- PacifiCorp's Ashton and
12 St. Anthony project, now those are located on the
13 Upper Snake River. Is that correct?
14 A. Henry's Fork of the Snake River, yes.
15 Q. Thank you. Do you know if there are
16 similar operating constraints that affect those
17 projects as the ones that affect the Bear River in
18 the system?
19 A. No, really the operation of the Ashton
20 project in particular is really dictated by the 1935
21 agreement between Utah Power, United States Bureau
22 of Reclamation, Fremont/Madison Irrigation Company,
23 and City of Idaho Falls; and basically that
24 agreement constrains the operation at that project
25 to basically operate as a run-of-the-river project
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1 during the irrigation season.
2 There is also an agreement with the
3 Egan Canal Company from the St. Anthony project
4 which limits the operation there as well. That
5 project is built on an irrigation system, and so
6 irrigation water rights and all the other priorities
7 fit right into that.
8 Q. So if I understand you correctly then,
9 in that respect, it's -- it is different from the
10 Bear -- from the constraints that may or may not
11 exist with respect to the Bear River system?
12 A. Yes.
13 Q. So to back up then to my previous
14 topic then: In fact, PacifiCorp could operate the
15 Bear River system if it wanted to in a manner that
16 benefitted primarily hydropower?
17 A. It could modify its operation, but
18 that operation is still subject to State water
19 rights laws and historical water rights that are in
20 place in priority, as well as the Bear River Compact
21 requirements. But there is still some flexibility
22 within all of those constraints to operate
23 differently than has been operated in the past.
24 Q. Fair enough. Now, in your rebuttal
25 testimony -- I just want to clear this up for the
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1 benefit of my own witness who, granted his testimony
2 has not been put on the record yet -- but you seem
3 to indicate that Staff witness Sterling has
4 suggested that PacifiCorp has somehow allowed its
5 water rights to be subordinated or given away
6 without compensation to junior rights.
7 Do you really believe that that's what
8 his testimony that's been prefiled states, or were
9 you just simply --
10 A. Well, it was probably more of a
11 misunderstanding, but the fact remains that
12 PacifiCorp has taken a very active role in
13 protecting its water rights by filing protests, and
14 we've petitioned the Idaho Department of Resources
15 for a groundwater management plan in Idaho, and
16 we've taken every action to protect Company water
17 rights on the Bear River.
18 Q. All right. Well then will you agree,
19 subject to check, and we'll hear later that, in
20 fact, Staff witness Sterling indicated that the
21 Staff has no evidence one way or another that
22 PacifiCorp has failed to protect its water rights?
23 A. Yes.
24 Q. Thank you. Now, in your rebuttal
25 testimony at page 4, you state that it's your
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1 understanding that PacifiCorp will continue to
2 remain in existence, and that it is committed to
3 operate Bear Lake pursuant to existing guidelines,
4 regardless of the ScottishPower transaction.
5 And I just wanted to be sure I
6 understood what you mean by "existing guidelines."
7 A. Well, as I stated before, regardless
8 of the merger, PacifiCorp has committed to operate
9 the system as it has operated in the past, within
10 the constraints that have been established both by
11 State law and compact, as well as internal
12 guidelines and internal criteria that have been
13 established and have been long-standing. And so the
14 operation, in my opinion, will not change.
15 Q. Were it not for the consideration,
16 given whether it's through a -- because of a water
17 right, a legal binding agreement, or what have you
18 to irrigation uses, if the Bear River facilities
19 were simply hydropower facilities -- in other words,
20 that was their exclusive purpose -- would PacifiCorp
21 operate the Bear River system as a whole differently
22 than it has historically done?
23 A. If there -- I'm sorry, I didn't quite
24 understand your question.
25 Q. I'm not surprised. Were not for the
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1 consideration that's given to irrigation customers
2 in Bear River system -- PacifiCorp didn't have to
3 worry about that, whether it's because of a water
4 right or agreement or just a general willingness --
5 would the Company operate the system any differently
6 for its hydropower facilities do you think?
7 A. Well, I would almost have to give a
8 hypothetical answer to that.
9 I suppose they would. There are
10 existing contracts that really drive the system for
11 irrigation, and that's really where I have to take
12 the position that this operation goes back 80 years
13 and really that those irrigation contracts have
14 driven the entire system. In fact, there are two
15 separate operations on the Bear River, and two
16 separate conditions that we consider in our
17 regulation. One part is the Bear Lake operation,
18 the other part is the hydro operation, and those are
19 entirely different. The decisions that are made at
20 Bear Lake are made independently of the hydro
21 generation that occurs downstream, and primarily,
22 the decisions are based on flood control needs or
23 irrigation needs within the system. They are
24 independent concerns. They always have been. At
25 least in the 26 years that I've been involved, that
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1 has been the case.
2 Q. For all intents and purposes, those
3 downstream hydro projects are operated as
4 run-of-the-river, are they not?
5 A. That's correct.
6 Q. Now, did you give me a time frame as
7 to when you think this operating plan will be
8 completed and when you might enter into some type of
9 agreement with the Department of Water Resources?
10 A. Well, that's difficult to predict a
11 completion date. I can predict that a draft will be
12 ready in early August that will be reviewed
13 internally. That may take a few weeks. But the
14 time frame when it's submitted to the agencies for
15 comment and when we get that back, it's kind of
16 unpredictable. I'm hoping for a document -- final
17 document ready to submit sometime this fall. Fall
18 is not very far away, I realize, but hopefully
19 that's -- it's on the fast track. It's my highest
20 priority right now.
21 Q. Do you have any reason to believe one
22 way or another whether the merger -- the proposed
23 merger that we're discussing here in this case --
24 prompted the putting together of this operation plan
25 on your part?
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1 A. Well, what prompted the plan was this
2 idea of subordination of the rights that PacifiCorp
3 has on the Bear River. That's what prompted it.
4 Now, whether that's merger-related, I wasn't privy
5 to that discussion, so I don't know.
6 Q. It's fair to say that there might be
7 those out there who are concerned that the merger
8 not adversely affect, for example, irrigation rights
9 in the Bear River system?
10 A. Yes.
11 MR. PURDY: One minute, Mr. Chairman.
12 (Discussion off the record.)
13 MR. PURDY: That's all I have. Thank
14 you very much.
15 COMMISSIONER HANSEN: Thank you.
16 Let's see if we have any questions
17 from the Commissioners.
18 COMMISSIONER KJELLANDER: No.
19 COMMISSIONER HANSEN: I have none
20 either.
21 Thank you, Mr. Burton.
22 THE WITNESS: Thank you.
23 MR. ERIKSSON: Mr. Chairman, I have a
24 few redirect questions.
25 COMMISSIONER HANSEN: Oh, I'm sorry,
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1 redirect. Okay.
2 MR. ERIKSSON: Looks like we have some
3 questions here.
4 THE WITNESS: Oops.
5
6 REDIRECT EXAMINATION
7
8 BY MR. ERIKSSON:
9 Q. Mr. Burton, there was a question or
10 two regarding what prompted the preparation of the
11 plan. Was part of your responsibilities as a
12 consultant to prepare a plan even prior to this
13 issue arising with this case?
14 A. Well, there has been some discussion
15 for some time as far as consolidating all of the
16 documents, incorporating all of the agreements and
17 all of the technical issues that it takes to run a
18 river of this size. But the directive to complete
19 that hadn't been given to me and it's something that
20 needs to be done, regardless. So that's kind of
21 where it's at.
22 MR. ERIKSSON: May I approach the
23 witness?
24 Q. BY MR. ERIKSSON: Mr. Burton, there
25 was also a question regarding your testimony on
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1 page 4 where you refer to the existing guidelines,
2 and I'd like to refer you to Mr. O'Brien's rebuttal
3 testimony, page 4, lines 8 through 9 -- actually,
4 7 through 9.
5 A. Okay.
6 Q. And could you read that then for those
7 who might not have it?
8 A. This plan, the preliminary draft of
9 which will be completed within the next four months,
10 will direct future operations consistent with the
11 Company's long-standing operation.
12 Q. And is your testimony that it was
13 referred to where you discuss the existing
14 guidelines, is it your understanding that that is
15 consistent with what Mr. O'Brien said?
16 A. Yes.
17 Q. There were also some questions
18 regarding the Company's operations on the Bear River
19 if it didn't have to essentially provide water to
20 the irrigators. Do you recall those questions?
21 A. Yes.
22 Q. Is it your understanding that the
23 Company would have the rights that it has on the
24 Bear River for the operation of its hydro facilities
25 had it not undertaken the contracts with the
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1 irrigators?
2 A. Well, the development of the
3 facilities had to be consistent with irrigation on
4 the river. Irrigation had the prior rights anyway
5 to the water, and so I don't think that the
6 operation of the hydros would have -- would have
7 been what they are without the irrigation component
8 in them.
9 I don't know if that answers the
10 question very well.
11 Q. Well enough.
12 MR. ERIKSSON: Thank you. That's all.
13 COMMISSIONER HANSEN: Thank you,
14 Mr. Burton.
15 THE WITNESS: Thank you.
16 (The witness left the stand.)
17 COMMISSIONER HANSEN: Before we recess
18 for lunch, just a couple of things:
19 First of all, I don't really want to
20 make a big thing of this, but I do want to mention
21 in regard to Mr. Nye's objection on hearsay, we here
22 at the Commission have very rarely had that
23 objection; but I would like to also note for his
24 benefit as well as anybody else as we go along, our
25 Rules No. 261, if you would like to review those,
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1 allows -- on evidence allows the Chair to allow
2 hearsay evidence in cases if he so rules. So you
3 might want to look at that in the future.
4 The second thing is that we will
5 recess till 1:30, and one of the reasons being is
6 the Commission normally, on a weekly basis, we have
7 what we call Decision Meetings where we have to rule
8 on sometimes minor things, sometimes more complex;
9 but we don't have a big agenda today, but we do have
10 a Decision Meeting scheduled at 1:00 which will be
11 in our conference room. And so you can still leave
12 your stuff here and there won't be people coming
13 in. But because of that, we will have to resume
14 this hearing at 1:30.
15 So we will now recess until 1:30.
16 MR. VAN NOSTRAND: Mr. Chairman?
17 COMMISSIONER HANSEN: Yes.
18 MR. VAN NOSTRAND: Before we break for
19 lunch, could I ask that Mr. Kelly be excused?
20 COMMISSIONER HANSEN: Is there any
21 objections from any of the parties of Mr. Kelly
22 being excused for the remainder of the hearing?
23 Being none, that's fine.
24 (Noon recess.)
25
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