20240905IPC to Staff 11-17.pdf

DONOVAN WALKER
Lead Counsel
[e-mail]
September 5, 2024
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-24-22
In The Matter of Idaho Power Company’s Compliance Filing to Update the
Customer Surcharge to Collect Incremental Costs of Distribution
Undergrounding of the New 138 kV Transmission Line in the Wood River
Valley and Establish Necessary Regulatory Accounting Treatment
Dear Commission Secretary:
Attached for electronic filing is Idaho Power Company’s Response to the Second
Production Request of the Commission Staff in the above-entitled matter.
If you have any questions about the attached filing, please do not hesitate to contact
me.
Sincerely,
Donovan Walker
DEW:cd
Enclosures
RECEIVED
THURSDAY, SEPTEMBER 5, 2024
IDAHO PUBLIC
UTILITIES COMMISSION

CERTIFICATE OF ATTORNEY

ASSERTION THAT INFORMATION CONTAINED IN AN IDAHO PUBLIC UTILITIES
COMMISSION FILING IS PROTECTED FROM PUBLIC INSPECTION

Idaho Power Company’s Compliance Filing to Update the Customer Surcharge to
Collect Incremental Costs of Distribution Undergrounding of the New 138 kV
Transmission Line in the Wood River Valley and Establish Necessary Regulatory
Accounting Treatment

Case No. IPC-E-24-22

The undersigned attorney, in accordance with Commission Rules of Procedure 67,
believes that the Attachment No. 12 to Idaho Power Company’s Response to the Second
Production Request of the Commission Staff dated August 15, 2024, may contain
information that Idaho Power Company and a third party claims is a confidential trade
secret and business records of a private enterprise required by law to be submitted to or
inspected by a public agency as described in Idaho Code § 74-101, et seq., and/or § 48-
801, et seq. As such, it is protected from public disclosure and exempt from public
inspection, examination, or copying.

DATED this Thursday, September 5, 2024.

Donovan Walker
Counsel for Idaho Power Company

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 1
DONOVAN E. WALKER (ISB No. 5921)
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]

Attorneys for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF IDAHO POWER
COMPANY’S IN THE MATTER OF IDAHO
POWER COMPANY’S COMPLIANCE
FILING TO UPDATE THE CUSTOMER
SURCHARGE TO COLLECT
INCREMENTAL COSTS OF DISTRIBUTION
UNDERGROUNDING OF THE NEW 138 KV
TRANSMISSION LINE IN THE WOOD
RIVER VALLEY AND ESTABLISH
NECESSARY REGULATORY
ACCOUNTING TREATMENT

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CASE NO. IPC-E-24-22

IDAHO POWER COMPANY’S
RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE
COMMISSION STAFF

COMES NOW, Idaho Power Company (“Idaho Power” or “Company”), and in
response to the Second Production Request of the Commission Staff (“Commission” or
“Staff”) dated August 15, 2024, herewith submits the following information:
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 2
STAFF REQUEST FOR PRODUCTION NO. 11: Paragraphs 31 and 32 of the
Company’s Filing explain the method used to estimate the incremental costs of the
hypothetical distribution line approved in the 2017 CPCN. Filing at 12. Please explain the
following:
a. Please explain why the Company removed “most of the distribution poles,”
rather than all the poles; and
b. Please explain why the Company added the following two items:
i. The replacement of a portion of the existing wood poles with taller,
steel poles; and
ii. Distribution intersect poles.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 11:
a. In order to estimate the incremental costs associated with the modified
distribution line configuration, a cost estimate was prepared of what the
distribution costs would be if it were underbuilt on planned overhead
transmission poles. As such, the primary costs are equipment such as cross-
arms, insulators, conductor/wire, and distribution equipment such as
transformers. As a result, very few distribution poles are required for an
underbuilt distribution line. However, transmission line routing and pole
placement are designed to minimize transmission poles, thus leaving potential
gaps where distribution equipment may be required. In this scenario, a
distribution “intersect” pole may be required (for example, to install a
transformer for a customer that is not otherwise able to be accommodated on
the transmission pole). The modified distribution line configuration accounts
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 3
for some intersect poles.
b. Replacement of wood poles with taller, steel poles and the addition of intersect
poles is described in part a. Specifically, in an “all overhead” transmission line
design with accommodations for distribution underbuild, the height of the
conductor likely would have required some distribution intersect poles to
accommodate equipment where applicable and the intersect poles are
assumed to be taller steel poles compared to the existing overhead distribution.
The response to this Request is sponsored by Eric Hackett, Projects and Resource
Development Director, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 4
STAFF REQUEST FOR PRODUCTION NO. 12: In Attachment 1 of the
Company’s response to Production Request No. 1, please explain why transmission
costs, like labor for “[Transmission and Distribution (“T&D”)] Reliability Engineering,”
“Transmission Line Design,” “Transmission Line Maintenance,” and “T&D Line
Operations,” are included in the distribution project cost estimate ($19,994,550).
Additionally,
a. If transmission costs are also included in other categories, please provide
only the distribution-related project cost, removing any transmission cost
from the actual cost.
b. Please provide any documents such as service agreements, and invoices
to match total cost of each cost category in Response to Production
Request No. 1 Attachment 1, including the work description and scope.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 12:
a. The minimal labor associated with these labor categories is reflected in the
construct of a project team and those individuals who support the individual
project’s design and construction. The cost center name, although it is defined
with “Transmission” does not only apply to transmission-related projects but
rather a total project, which will include transmission and distribution. For
example, a resource in the Transmission Line Design department may have to
coordinate the structural analysis of the transmission poles to support the
distribution line and equipment. Therefore, the project team is comprehensive,
and labor is charged to the specific and applicable tasks associated with
different types of plant accounts. The information in Attachment 1 of the
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 5
Company’s response to Production Request No. 1 is reflective of the
appropriate distribution line account.
b. The total forecasted “Purchased Services” identified in Attachment 1 of the
Company’s response to Production Request No. 1 is approximately $8.5
million. Confidential Attachment 1 to Staff Request for Production No. 12 –
Construction amounts to approximately $8.3 million and includes the contract
for underground distribution line construction and is a lump sum contract that
was competitively bid and awarded to the least-cost service provider. Invoices
to date amount to approximately $3.8 million and copies can be found in
Confidential Attachment 2 to Staff Request for Production No. 12 –
Construction Invoices. Confidential Attachment 3 to Staff Request for
Production No. 12 – Inspection is a time and materials contract in which
contract inspectors provide onsite inspection and construction management
oversight. Confidential Attachment 4 to Staff Request for Production No. 12 –
Inspection Invoices includes copies of invoices to date and reflects costs of
approximately $51,000. Confidential Attachment 5 to Staff Request for
Production No. 12 – Landscaping is a time and materials contract in which the
service provider completes landscape repair. Confidential Attachment 6 to Staff
Request for Production No. 12 – Landscaping Invoices includes copies of
invoices to date and amount to approximately $68,000. Additional
miscellaneous services such as equipment rental, storage on site, and design
services make up the remainder of the actual and forecasted Purchased
Services for the project. “Other Expenses” are primarily made up of company
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 6
vehicle usage and land and easement purchases. The “Materials” category is
comprised of material purchases of standard material that were procured
through Idaho Power’s typical procurement and sourcing efforts that maintain
stocking levels to meet project demands. There were no individual purchase
orders solely for this project. All material is considered a “catalog” item and are
routinely purchased standard equipment. The material primarily consists of
cable, conduit, vaults, and devices/equipment.
The response to this Request is sponsored by Eric Hackett, Projects and
Resource Development Director, Idaho Power Company.

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 7
STAFF REQUEST FOR PRODUCTION NO. 13: Please explain why the base
year is 2023 for the Net Present Value (“NPV”) calculation of the 20-year surcharge
collection, although the in-service year and surcharge collection year are 2024, as shown
in the attachment in the Company’s Response to Production Request No. 5.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 13:
Idaho Power used 2023 as the base year because it aligns with the most recent
full year of billed revenue for Blaine County on which the surcharge calculation is derived.
The response to this Request is sponsored by Alison Williams, Regulatory Policy
and Strategy Leader, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 8
STAFF REQUEST FOR PRODUCTION NO. 14: In the attachment included in
Response to Production Request No. 5, the administration fee is included in the NPV
calculation of the annual surcharge collection ($6,553,200), even though the Company
noted the fee is excluded in the Response to Production Request No. 5. Please provide
a detailed explanation of this discrepancy and make any corrections to the Company's
responses through an amendment.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 14:
As a clarifying point, Idaho Power’s total request for incremental distribution
surcharge collection is not $6.5 million but, rather, $6.2 million—this amount is shown in
cell C36 of the Company’s attachment to Staff’s Production Request No. 5 and captures
“Funding, net of admin fee” as noted in cell A36.
The response to this Request is sponsored by Alison Williams, Regulatory Policy
and Strategy Leader, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 9
STAFF REQUEST FOR PRODUCTION NO. 15: For the actual underground
distribution project underway in Blaine County please provide the following:
a. Please provide the initial project management Gantt chart at the start of
construction. It should show the major elements of work, their expected
duration and dependencies, and the work-in-place monetary values
assigned to each element; and
b. Please provide the most current project management Gantt chart showing
the actual work completed and the remaining work schedule.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 15:
a. Construction of the underground distribution project began in September 2023
and was planned to be complete in November 2024. As projects progress, the
project schedule and Gantt chart are continuously updated to reflect work
completed and work outstanding, and each month the then current schedule
replaces the previous version. This is true of the Wood River Valley project, as
well. Therefore, a specific project schedule and Gantt chart are not available
from September 2023. However, each month a current forecast of remaining
estimated costs is captured and retained. The detail below is the record from
September 2023, which shows that construction was anticipated to be
complete in November 2024. The major forecasted cost elements include
Labor, Materials, Purchased Services, and Other and are summarized below.
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 10

b. See Attachment 1 to Staff Request for Production No. 15.
The response to this Request is sponsored by Eric Hackett, Projects and
Resource Development Director, Idaho Power Company.
.
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 11
STAFF REQUEST FOR PRODUCTION NO. 16: The Company's Response to
Production Request No. 5 assumes a discount rate of 8.91%. Please explain the
Company's reasons for selecting this value and provide worksheets for any related
calculations.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 16:
Idaho Power’s explanation of the 8.91 percent discount rate is provided on page
15 of the Company’s filing in this case:
Regarding the discount rate, the Company’s 2021 analysis
used a 9.59 percent discount rate for its 20-year net present value
calculation. That discount rate was the Equity Gross Up Rate derived
from Idaho Power’s general rate case (“GRC”) in 2011. However,
because the Company settled a new GRC in 2023, it changed its
assumed discount rate to 8.91 percent for the updated revenue
projection analysis. This discount rate, once again, is based on the
Equity Gross Up Rate from Idaho Power’s settlement in Case No.
IPC-E-23-11.

The response to this Request is sponsored by Alison Williams, Regulatory Policy
and Strategy Leader, Idaho Power Company.
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 12
STAFF REQUEST FOR PRODUCTION NO. 17: The Company's Response to
Production Request No. 9 provided historical customer data for Blaine County. The
average year-over-year change between 2012 and 2023 is 0.2 percent. Please explain
why the Company assumes 1.0 percent customer growth for the next 20 years in its
calculation of the surcharge.
RESPONSE TO STAFF’S REQUEST FOR PRODUCTION NO. 17:
Idaho Power considers the 1 percent customer growth rate for Blaine County
reasonable in comparison to the 1.1 percent residential growth rate, 0.8 percent
commercial growth rate, and 1.3 percent industrial growth rate used in the Company’s
2023 Integrated Resource Plan.1 The Company did not feel comfortable making an
assumption lower than 1 percent customer growth, considering the lumpy nature of
historic growth in Blaine County, which exceeded 1 percent in 2015, 2017, and 2020.
Notably, 2020 customer growth was 2.13 percent over the prior year.
More important, Idaho Power assumed that variability in Blaine County growth
would occur, as forecasting customer counts for a particular region is difficult and beyond
the utility’s control. To account for this assumed variability, the Company has stated it will
adjust the surcharge period based on actual surcharge collections, meaning the Company
could extend the collection period beyond 20 years if customer growth does not continue
or holds flat or, alternatively, the Company could shorten the collection period if Blaine
County growth exceeds 1 percent over time.
The response to this Request is sponsored by Alison Williams, Regulatory Policy
and Strategy Leader, Idaho Power Company.

1 Idaho Power, 2023 Integrated Resource Plan, p. 99.
IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 13

Respectfully submitted this 5th day of September 2024.

DONOVAN WALKER
Attorney for Idaho Power Company

IDAHO POWER COMPANY’S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF - 14
CERTIFICATE OF SERVICE

I HEREBY CERTIFY that on the 5th day of September 2024, I served a true and
correct copy of the within and foregoing IDAHO POWER COMPANY’S RESPONSE TO
THE SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF upon the
following named parties by the method indicated below, and addressed to the following:

Michael Duval
Deputy Attorneys General
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg. No. 8,
Suite 201-A (83714)
PO Box 83720
Boise, ID 83720-0074

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Christy Davenport, Legal Assistant