20150715Hearing Transcript Volume II.pdf

BEFORE THE ]DAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S PETITION TO MODIFY
TERMS AND CONDIT]ONS OE PURPA
PURCHASE AGREEMENTS
CASE NO. IPC-E-15-01
IN THE MATTER OF AVISTA
CORPORATION'S PETITION TO MODIFY
TERMS AND CONDIT]ONS OF PURPA
PURCHASE AGREEMENTS
CASE NO. AVU-E-15-01
IN THE MATTER OF ROCKY MOUNTAIN
POV'IER COMPANY ' S PETITION TO
MODIFY TERMS AND CONDITIONS OF
PUR.PA PURCHASE AGREEMENTS
CASE NO. PAC-E_15-03
BEFORE
COMMISSIONER PAUL KJELLANDER (Presiding)
COMM]SSIONER KRISTINE RAPER
:'s
i-=." ;;lfr(-PLACE: Commj-ssion Heari-ng Room ;-\, E l-
412 West Washington Street :;r:. : ',
Boise, Idaho ::r- il"I
.'i .#
DATE: June 29, 2Ot5 i.:. ?b
::1' la\)
VOLUME Ir Pages 81 283
CSB REPORTING
C ert{ie d S h orth an d Reporters
Post Office Box9774
Boise, Idaho 83707 XryTl,_^[e-mail] Lonstance Eucy'
Ph: 208-890-5198 Fax: [phone] CSR
ORIGINAL
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CSB REPORTING(208) 890-5198
For the Staff:
For Idaho Power Company:
For Rocky Mountain Power:
For Avista Corporation:
For Clearwater Paper:
For Intermountain Energy
Partners:
Eor J.R. Simplot Company:
Eor Idaho Irrigation
Pumpers:
APPEARANCES
Doaal.d Eowe1J., Esq.
and Daphne Euang, Esq.
Deputy Attorneys General
472 West Washington Street
Boise, ldaho 83720-0074
Donovan E. Ilalker, Esq.
Idaho Power Company
Post Office Box 70
Boise, Idaho 83707-0070
Yvonne R. Eogle, Esq.
Rocky Mountain Power
20L S. Main Street, Ste. 2400
SaIt. Lake City, Utah 84111
MichaeJ. Andrea, Esg.
Avj-sta Corporation
Post Office Box 3727
Spokane Washington 99220
RICHARDSON ADzu{S PLLC
by Peter iI. Richardson, Esq.
515 North 27Eh StreetBoise, Idaho 83702
McDEVITT & MI],LER
by Dean iI. MiJ.J.er, Esq.
420 West Bannock StreetBoise, Idaho 83702
RICHARDSON ADAIUS PLLCby Gregory M. Adams, EEg.
515 North 27th. StreetBoise, Idaho 83702
RACINE OLSON NYE BUDGE
& BAILEY
by Eric L. O1sen, Esq.
Post Office Box 1391Pocatello, Idaho 83204-1391
APPEARANCES
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CSB REPORTING(208) 890-s198
A P P E A R A N C E S (Continued)
Eor Idaho Conservation
League & Sierra Club:
Eor Snake River
Alliance:
For Renewable EnergyCoalition:
Eor Snake RiverAlliance:
For Mj-cron Corportion:
Northside and Twi-n Falls
Canal Compani-es:
Eor Ecoplexus:
Benjamia g'. Otto, Esq.
Idaho Conservation League
710 North 6th StreetBoise, Idaho 83702
Kelsey ilae Nunez, Esq.
Snake River Alliance
Post Office Box 1731
Boise, Idaho 83701
Williams Bradbury PC
by Roaald t. WilJ.iams, Esq.
1015 West Hays Street
Boise, Idaho 83702
-and-
SANGER LAVI PCby Irion Sanger, Esg.
L11"7 SW 53rd Avenue
Port1and, Oregon 91215
Kelsey ilae Nunez, Esq.
Snake Ri-ver Alliance
Post Office Box L13tBoise, Idaho 83701
HOLLAND & HART LLPby PaoeJ-a S. Eowland, Esq.
317 S. Nevada Street
Carson City, Nevada 89703
ARKOOSH LAW OFFICES
by C. Ton Arkoosh, Esq.
Post Office Box 2900Boise, Idaho 83701
FISHER PUSCH LLPby .Iohn R. Eamoad, ilt. , Esq.Post Offi-ce Box 1308Boise, Idaho 83701
APPEARANCES
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INDEX
WITNESS EXAMINAT]ON BY PAGE
Lisa A. Grow(Idaho Power)
Mr. V[aIker (Direct )Prefiled Direct Testimony
Mr. Adams (Cross)
Mr. Otto (Cross)
Mr. Hammond (Cross)
Ms. Nunez (Cross)
Mr. Mil-ler (Cross )
Commissioner Raper
Commissioner Kj ellander
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105
136
142
749
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151
164
1,66
Randy Allphin(Idaho Power)
Mr. Wal-ker (Direct) 171Prefil-ed Direct Testimony 175
Prefil-ed Rebutt.al- Testimony 1,94
Ms. Nunez (Cross) 224Mr. Mil-l-er (Cross ) 227Mr. Otto (Crossl 250Mr. Adams (Cross) 254
INDEX
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Wilder, Idaho
EXHIBITS
NUMBER DESCRIPTION PAGE
FOR IDAHO POWER COMPANY:
1. PURPA Pro;ects Under Contract Premarked
& Proposed
2. Renewable Energy Contracts List Premarked
3. Proposed PURPA Solar - Premarked
As of l/20 /15
4. Cogeneration and Small Power Premarked
Production, Contract Obligations
As of L/9/15
5. Idaho Power Compared to Regional Premarked
Renewab]e Portfol-io Standard/
Renewabl-e Portfolio Goal
6. Estimated Load, Must run Premarked
Resources, Utility PPAs and
PURPA for 20]-6 and 2017
1. Idaho Power PURPA Payments Premarked
8. Approved Net Power Supply Expense Premarkedin Base Rates (Normal-ized)
9. PURPA Solar projects under Premarkedcontract - As of 7/20/15
10. Average PURPA Price vs. MidC Index Premarked
11. PURPA Solar projects under Premarkedcontract - As of 4/22/15
FOR J.R. SIMPLOT COMPANY:
205. Request for & Response to Admitted 258
Production No. 22
8361 6
EXHIBITS
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CSB REPORTINGWilder, fdaho
EXHIBITS (Continued)
NUMBER DESCRIPTION PAGE
FOR J.R. SIMPLOT COMPANY: (Continued)
207. Request for & Response to Admitted 26L
Production No. 11
208. IPCo Avoided Cost Rates for Admitted 274
Wlnd Projects, 6/L/!5
FOR ICLISIERRA CLUB:
305. Excerpt from IPUC Order No. 33159, Identified 147
pages 1 & 7
FOR SNAKE RIVER ALLIANCE:
501. Environmental Rules for Hydropower Identified 224in State RPSrs
EOR ECOPLEXUS:
1501. Draft Integrated Resource Pl-an for Admitted 152
20L5 for Idaho Power Company
8367 6
EXH]BITS
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BOISE, IDAHO, MONDAY, JUNE 29, 20t5, 9:30 A. M.
COMMISSIONER KJELLANDER: Wel-I, good morni-ng.
This is the time and place for a hearing in Case Nos.
IPC-E-15-01, AVU-E-15-01, and PAC-E-15-03, al-so referred
to as in the matter of Idaho Power Company's, Avista
Corporation's, and Rocky Mountain Power Company's
petition to modify terms and conditlons of PURPA purchase
agreements.
Good morning, ffiy name is Paul Kjellander. I'11-
be the Chairman of todayrs proceedings. To my left is
Commissioner Kristine Raper. To my right we normally
have Mack Redford, he is excused, and for those of you
who need more details about Mack's status, you could
contact our public information officer. Additionally,
Mack wil-l- have access to the transcript of this case and
any of the public hearings that we have and that wil-L be
made availabl-e to him prior to any deliberation the
Commission undertakes
So with that, then, today we are prepared to
move directly to the appearances of the parties and letrs
begin with the Applicants. Idaho Power.
MR. WALKER: Thank you, Mr. Chai-rman. Donovan
E. Wal-ker representing Idaho Power Company.
CSB REPORTING
(208 ) 890-s198
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COMMISSIONER KJELLANDER: Thank you, and
PacifiCorp.
MS. HOGLE: Good morning, Chairman Kjellander
and Commj-ssioner Raper, my name j-s Yvonne Hogle and I'm
here on behalf of the Rocky Mountain Power, and with me
here are Mr. Paul- Clements to my left, who is the
director of commerciaf services, and behind me is Mr.
Brian Dickman, who is the director of net power costs.
Thank you.
COMMISSIONER KJELLANDER: Thank you. Avista
Corporation.
MR. ANDREA: Good morni-ng, Mr. Chai-rman,
Commissioner Raper, Mike Andrea for Avista, and I've got
Clint Kal-ich with me this morning.
COMMISSIONER KJELLANDER: I apologize for
Iooking around, I heard a voice, didn't see a face.
Someone of your size shouldn't be abl-e to hide behind
some of our smaller Staff members in front of you. Let's
move now to the Staff from the Idaho Public Util-ities
Commi-ssion.
MR. HOWELL: Good morning, Mr. Chairman. My
name is Don Howell and with me is my colleague Daphne
Huang and we are Deputy Attorneys General representing
the Commission Staff.
COMMISSIONER KJELLANDER: J. R. Simplot Company
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(208 ) 890-s198
and Clearwater Paper Corporation.
MR. ADAMS: Good morning, Mr. Chairman. My
name is Greg Adams. I'11 be representing the J.R.
Simplot Company. Peter Richardson to my right wiII be
representing Clearwater Paper and we have with us here
Dr. Don Reading, the witness for both parties.
COMMISSIONER KJELLANDER: Thank you very much.
Idaho Conservation League and Sierra Club.
MR. OTTO: Good morning, Commissioners. This
is Benjamin J. Otto wlth the Idaho Conservation League
and the Sierra CIub, and I have with me today my
witnesses Mr. Adam Wenner and Mr. Tom Beach.
COMMISSIONER KJELLANDER: Thank you and
welcome. Intermountain Energy Partners.
MR. MILLER: Thank you, Madam -- Mr. Chairman,
did it again. Dean J. Mill-er appearing on behal-f of
Intermountain Energy Partners, and al-so with me today 1s
our witness Mr. Mark Van Gu]ik.
COMMISSIONER KJELLANDER: Mr. Mil-Ier, I'm
starting to develop somewhat of a complex. Snake River
Alliance.
MS. NUNEZ: Good morning, Commissioners. I'm
Kelsey Nunez with the Snake River All-lance and with me is
my witness Ken Miller.
COMMISSIONER KJELLANDER: Thank you. Idaho
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Irrigation Pumpers.
MS. OLSEN: Eric Ol-sen here for Idaho
Irrigation Pumpers, along with our witness Anthony
Yankel-.
COMMISSIONER KJELLANDER: Welcome. Renewable
Energy Coal-ition.
MR. WILLIAMS: Mr. Chairman, Ron WiIliams,
Will-iams Bradbury, oo behal-f of Renewable Energy
Coalition. Also with me who wifl be conducting the
hearing is Mr. Irion Sanger from Sanger Law. Mr. John
Lowe, our witness, will be arriving shortly, and I would
al-so ask permission from the Commission at some point to
be excused from attending both days of the hearing on
behalf of the Coal-ition. Mr. Sanger wil-I be conducting
the hearing.
COMMISSIONER KJELLANDER: Thank you, and
without any objection, which f hear none, that was your
chance, certainly no problem at a1l with you leaving at
your convenience. Thank you.
MR. WILLIAMS: Thank you, Mr. Chairman.
COMMISSIONER KJELLANDER: Ecoplexus.
MR. HAMMOND: Chairman Kjel-lander and
Commissioner Raper, hy name is John Hammond. I'm with
the firm Fisher Pusch and we represent Ecoplexus today.
COMMISSIONER KJELLANDER: Thank you very much.
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Are there any parties to the case that we have
overl-ooked? Yes.
MR. ARKOOSH: Tom Arkoosh, North Side Canal-
Company, Twin Fa1ls Canal Company. With me today is Alan
Hansten from North Side and Louis Zamora from Twin Ealls.
COMMISSIONER KJELLANDER: Okay, if you could
for us down the road, I think you were close enough to
our court reporter for her to hear you, but you'll need
to turn that on. You'Il know that it's on when the
l-ittle red light pops up.
MR. ARKOOSH: Thank you.
COMMISSIONER KJELLANDER: Thank you. Anyone
el-se? Mr. MiIler.
MR. MILLER: Mr . Chairman, f ' ve al-so appeared
on behalf of AgPower, which is a company that was granted
intervenor status. Given, however, the current state of
the record, I do not anticipate any cross-examination
during the hearing on behal-f of AgPower.
COMMISSIONER KJELLANDER: Thank you very much
for the notice. Yes.
MS . HOWLAND: Good morni-ng, Commissioners . My
name is
COMMISSIONER KJELLANDER: Yourre going to have
to step up to a microphone, make sure a lj-ttl-e red light
is on and make sure that you're speaking in it.
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MS. HOWLAND: Good morning, Commissioners. My
name is Pam Howland. Irm here on behalf of Mi-cron. I'm
appearing today and Fred Schmidt wil-I be present tomorrow
and the next day.
COMMISSIONER KJELLANDER: Okay, are you an
official party to the case?
MS. HOWLAND: As an intervenor.
COMMISSIONER KJELLANDER: Okay, thank you.
MS. HOWLAND: Thank you.
COMMISSIONER KJELLANDER: Do you anticipate any
cros s -examinati-on ?
MS. HOWLAND: I do not, Commissioner, but Mr.
Schmidt may well when he arrives tomorrow.
COMMISSIONER KJELLANDER: Okay, thank you. Is
there anyone el-se that we need to recognize with regards
to your presence as a party to the case? Seeing none,
then, we're ready to move on to any initial motions,
preliminary matters before the Commission. Yes.
MS. HUANG: Yes, good morning, Mr. Chairman.
There are pending
COMMISSIONER KJELLANDER: Can you please
recognize yourself?
MS. HUANG: Sorry, ffiy apologies. Daphne Huang
representing Commission Staff. There are two pending
motions before the Commission, from Commissi-on Staff and
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CSB REPORTING
(208 ) 8e0-s198
also Idaho Power has filed one. These are motions to
strike the testimony of Adam Wenner, a witness for Idaho
Conservation League and Si-erra Club. The Commj-ssion has
the motions before it and it either may address those,
rul-e on them later, defer them, or if the Commission
wishes to hear any reply arguments, I'm prepared to make
that at this time.
COMMISSIONER KJELLANDER: Ms. Huang, are you
introducing both of the motions that were made by various
parties or just your own?
MS. HUANG: I will- only speak on behalf of
Commission Staff for our motion, just to advise the
Commissi-on that there are these two motions and I'm sure
Idaho Power Company can speak to their motion as well.
COMMISSIONER KJELLANDER: Wel-l-, it would be my
intent to go ahead and deal- with that now as a
preliminary matter, so if we could tee up those issues
and get the point, counterpoint ro11ing, Iet's do so.
MS. HUANG: And we do have so fil-ed we have
Staff's motion, Idaho Power's motion. There is a
response that has been fil-ed by Mr. Otto on behalf of the
Idaho Conservation League and Sierra Cl-ub, but in very
brief reply to the response that was fiIed, Staff will-
assert today or puts forth two points, really; the first
being in response to the motion, Idaho Conservation
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League and Sierra Cl-ub have asserted that there are other
witnesses al-so testifying to the same types of
j-nformation that Mr. Wenner is testifying to, to which
Staff objects.
Those witnesses, Mr. Sterling, Mr. Clements,
Mr. Dickman, and Mr. Yankel are distinguishabl-e from
those of Mr. Ii'Ienner. The experts Sterling, Clements,
Dickman, and Yankel- are not putting themsel-ves forward as
1egal experts. They are instead engineering, business,
accounting expertsr so they're not putting themselves
forward as experts in the law. To the extent that they
are addressing the legalities or the valj-dity of certain
aspects of federal regulations and 1aw, they are mixed
questions of l-aw in fact and they're putting them forth
more as policy arguments; whereas Mr. Wenner holds
himself out as a 1ega1 expert only, and that has been
found to be, os set forth in Staff's motion is found to
be, impermissible and not able to be considered.
Secondly, to the extent that Mr. Otto has put
forth authority that legal opinion is admissible before a
trlbunal, those cases are from outsj-de of this
jurisdiction. They are not controlling authorj-ty for
this Commission. They also have addressed an Eighth
Circuit decision, a Van Dyke cited in Mr. Ottors
response, which invol-ves very complex 1ega1 issues
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invol-ving banking, in other instances on tax law, where
the abilities of parties' counsel is inadequate to
articulate the 1ega1 positions for the decision makers
and I would put forth that that is not the case here.
Unless the Commission feels that counsel are
unable to set forth the arquments about how to interpret
case law and the regulations having to do with PURPA in
this tribunal, I would argue that they are not, so for
those reasons, Staff does request that this Commission
strike Mr. Wenner's direct testimony on1y.
COMMISSIONER KJELLANDER: Thank you very much.
Mr. Otto, w€ wil-l- give you an opportunity to respond, but
before we do So, I know we have another motion to strike
and if we could move forward and hear the argument there,
and by the way, thank you to all parties who gave us the
prefiled motions. That makes it easj-er for us as a
Commission to dlg through this and we do appreciate that,
al-so recognizinq wefve had an opportunity to read it, to
the extent you have new things to add, if you coul-d sort
of condense your message instead of going through the
entire argument, thank you.
MR. WALKER: Thank you, Mr. Chairman. Donovan
Vrlalker on beha1f of Idaho Power Company. As referenced
on June 23rd, Idaho Power did file a motion to strike the
direct and rebuttal testimony of Adam Wenner, the witness
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on behalf of Idaho Conservation League and Sierra Club,
and so as not to be overly repeti-tive, I think it's
extremefy clear that Mr. Wenner's testimony as an
attorney holding out as an expert in the l-aw and as a
former staffer on FERC offering his interpretation of
what those rul-es mean and making legal concfusions
therefrom, it's very cfear that that's not admissible
testimony in front of this Commissj-on.
It may be appropriate legal argument, analysis
and concl-usions, but that's not proper for a factual
witness in front of the Commission. As outl-ined in our
written motion, there are several cases indicating that
that type of test.imony is not admissible offered either
from a 1ay witness or an expert witness, and we went
further that even if it was admissible, it's irrel-evant
and not helpful to this Commission.
The case Iaw, we recite -- we've broken it out
into two fines of case l-aw. One line deals specifically
with a lawyer as a witness, which is relevant to the way
that t.he testimony is laid out and the context of the
testj-mony in addressing the very legal conclusions that
this Commission is called upon to make as part of this
proceeding.
Furthermore, even if the Commission were to
determi-ne 1t admissi-bIe, essentially the recoll-ections of
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a former staffer of FERC do not form a proper basis for
statutory interpretatlon and are not necessary for thj-s
Commisslon who may review the documents, the historical
documents, as wel-I as statutory and administrative law
that's applicable and reach its own conclusions of law,
which is your duty, so with that, we ask that both his
direct and rebuttal be stricken.
COMMISSIONER KJELLANDER: Thank you very much.
Is there anyone el-se who wishes to weigh in in support of
the motion to strike? If not, then, we'II move to Mr.
Otto.
MR. OTTO: Thank you, Mr. Chairman.
COMMISSIONER KJELLANDER: Could you please turn
on your mi-crophone or at l-east get cl-oser?
MR. OTTO: Ben;amin Otto with the Idaho
Conservation League and the Sierra CIub. We did fiIe, I
did file, our response in responding to both the Staff
and Idaho Power and we stand by that response, but to
briefly summari-ze, the core objection to offering
testimony regarding the law is the ability to confuse or
infl-uence the jury i-n an improper manner and we don't
have a jury here. The Commission is wel-l suited to look
at this evidence and give it the weight you feel it
deserves.
We filed this in an attempt to be helpful;
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could have done so 1n a legal briefing. The schedul-e
calIed for witness testimony. We fol-l-owed that schedul-e.
The fact that Mr. Wenner is an attorney is a distinction
without a difference. That woul-d be very true if this
was a jury trial, because the jury would see the witness
as a J-awyer and maybe give the evidence a littl-e more
credibility than it might deserve, you know, because they
are a lay jury.
As a CommJ-ssion, that's l-ess of a worry.
You're well- suited to understand whether, just as in a
legal brief, this an opinion or some evidence that you
could put a l-ot of weight to or not. By statute and by
Supreme Court i-nterpretation, thi-s Commissj-on is not
bound by the technical- rules of evidence and you have
substantial dlscretion to al-l-ow things into the record
and to af f ord it weight. That' s been the tradj-ti-onal
course of action at this Commission and I would ask that
you continue to fo1low that traditional- course.
The fact that we cite to Eighth Circuit cases,
yes, they're outside this jurisdiction. I think they're
informative. PURPA is a complex statute. I think it's
appropriate to have, you know, some evidence, some
weighing, dt least setting forth what the law says.
There may be some sentences that come to a conclusion,
but, again, the Commj-ssion is well- suited to give that
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the weight you feel- it deserves.
Idaho Power's argument that it's not relevant
seems to miss the mark. PURPA 1aw appears to be relevant
in this case. Many parties address it and the statutory
interpretation argument, that's not why the Idaho
Conservation League puts forward this argument or this
evidence. This is merel-y to help inform and assist the
fact finder, so, again, you're not bound by the technicaf
rul-es of evidence. You have plenty of discretion to
allow evidence in and can create a robust record and then
give that record the weight that you feel 1t deserves, So
we ask that you allow Mr. Wenner's testimony into the
record. Thank you.
COMMISSIONER KJELLANDER: Thank you, Mr. Otto.
Is there anything else that needs to come before the
Commission before we take a brief recess to di-scuss
MR. ADAMS: Mr. Chairman, Greg Adams on behal-f
of the J.R. Simplot Company. We didn't file any formaL
position on this particular motion to strike, but we do
oppose the motion to strike. We think it's clear from
the cases that were cited that a lawyer can in fact be a
witness if he's qualified, and if you're talking about a
complex regulatory structure, we donrt see how this is
different than banking regulations or something complex
of that nature.
CSB REPORTING(208) 890-s198
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CSB REPORTING(208) 890-s198
These FERC regulations and what a long-term
contract means, what the regulation means, what Order 69
means are all relevant issues that are complex regulatory
issues and we believe Mr. Wenner's testimony was proper
to respond to the utilities' testj-mony and the Staff
testimony, afso, which included Iegal conclusions, so we
do support leaving Mr. Wenner's testimony in the record,
so we would request that the Commission deny the motion
to strike. Thanks.
COMMISSIONER KJELLANDER: Thank you. Is there
anything el-se that needs to be presented to the
Commissioners? Mr. Mill-er.
MR. MILLER: Thank you, Madam or Mr. Chairman.
I won't repeat the arguments that have been made. The
only additional point, observation I would make is that
neither the Staff objection nor Idaho Power's objectj-on
allege the existence of any prejudice; prejudice in the
sense that the testimony is beyond the scope of the case;
prejudice in the sense that it broadens, unduly broadens,
the issue; prejudice in the sense it introduces topics
beyond the expertise of the Staff or Idaho Power Company.
It seems to me that certainly neither the Staff
nor Idaho Power like Mr. Wenner's testimony. That
doesn't establish the exist.ence of prejudice and I would
ask the Commission to take into account whether any party
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CSB REPORTING
(208 ) 890-s198
is truly prejudiced by the admission of this testimony.
COMMISSIONER KJELLANDER: Thank your
Mr. Mil-l-er. Any further comments before the Commission?
So it's fuIly before us and I guess I'l-1 weigh in first
and we'11- go ahead and do this l-ive. First of all,
again, I appreciate the prefiling. It gives us an
opportunity to go back through and l-ook at all the
testimony and see how interwoven a l-ot of rebuttal
testimony and reply comments were, and with that in mind,
I believe, at least from my perspective, that it would be
very different and l-aborious to try to unwind a lot of
the other testimony that's already been submitted in the
record.
Personally, itrs very difficult to unread what
Ifve already read, but more importantly, recogni-zinq, and
I think everyone agrees, that we ul-timately as a
Commission will be the trier of facts, drawing the
concl-usj-ons of Iaw, and we can give it the appropriate
weight it deservesr so that's my general comment with
that. Commlssioner Raper.
COMMISSIONER RAPER: It wou]d seem that the
parties generally agree that if it's a matter of fact and
Iaw, then it shoul-d be something that appears on the
record. If it's a matter of purely 1aw and it's
somethj-ng pursuant to the rul-es, then it is not permitted
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CSB REPORTING
(208 ) 890-s198
to be incl-uded in the case. I think that in an abundance
of caution, it would be appropriate to presume that in
the breadth of the testimony that's given that there are
probably some factual- arguments in there that are part of
the interpret.ations of the l-aw. I thlnk that going with
the traditlon of the Commj-ssion in allowing us to give it
the weight it deserves upon fu1l consideration of the
entire record at the conclusion of the case is the
appropriate way to go, and I make a motion to deny the
Staff and ldaho Power's motion to strike,
COMMISSIONER KJELLANDER: So we have a motion
before us to deny the motions to strike. A11 those in
favor signify by aye.
COMMISSIONER RAPER: Aye.
COMMISSIONER KJELLANDER: Aye, and that motion
carriesr so we will reject those motions to strike and we
will- move forward, then, to the first witness, and unless
there is any objection, let's begin with Idaho Power.
MR. WALKER: Thank you, Mr. Chairman. fdaho
Power calls as its first witness Lisa Grow.
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CSB REPORTING
(208 ) 890-s198
GROW (Di)
Idaho Power Company
LISA A. GROW,
produced as a wj-tness at the instance of Idaho Power
Company, having been first duly sworn to tell- the truth,
the whol-e truth, and nothing but the truth, was examined
and testif ied as fol-l-ows:
DIRECT EXAMINAT]ON
BY MR. WALKER:
O. Would you please state your name and speJ-1 your
Iast name for the record?
A. My name is Lisa Grow, G-r-o-w.
0. And by whom are you employed and in what
capacity?
A. I'm employed by Idaho Power Company and I'm the
senior vj-ce president of power supply.
O. Are you the same Lisa Grow that filed direct
testimony on January 3Oth, 2075?
A. I am.
O. And do you have any corrections, changes, or
additions to your testimony?
A. I do. If you can go to page 3, l-ine l, there's
the end of a sentence that's actually over on page 3 or
2, excuse me, the words were "two yearsr" I would like to
add "for projects above the published rate eligibility
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CSB REPORTING(208) 890-s198
GROW (Di)
Idaho Power Company
cdp, " so that sentence woul-d read, "Therefore, Idaho
Power requests that the ldaho Public Util-ities Commission
j-ssue an order directing that the maximum required term
for an ldaho Power PURPA energy sal-es agreement to be
reduced from 20 years to two years for projects above the
published rate eligibility cap. "
And then again on page L6, it is basically the
same sentence and at the end on line 1 fol-lowing the
words "two yearsr 'r it would be again "for projects above
the published rate eligibility cap. "
O. If f were to ask you the questions set out in
your corrected prefiled testimony, would your answers be
the same here today?
A. Yes, they woul-d.
MR. WALKER: Mr. Chairman, f move that the
prefiled direct testimony of Lisa Grow be spread upon the
record as if read.
COMMISSIONER KJELLANDER: And without
objection, we wil-l spread the prefil-ed testimony across
the record as if read.
(The fol-l-owing prefiled testimony of
Ms. Lisa A. Grow is spread upon the record.)
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GROW, Dr 1
Idaho Power Company
O. Pl-ease state your name and business address.
A. My name is Lisa A. Grow and my business address
is L22l West Idaho Street, Boise, Idaho 83702.
O. By whom are you employed and in what capacity?
A. I am employed by Idaho Power Company ("Idaho
Power" or "Company" ) as the Senior Vice Presj-dent of
Power Supply.
Please describe your educational background and
work experience with Idaho Power.
A. I graduated from the University of Idaho in
7981 with a Bachelor of Science in Electrical
Engineering. I received an Executive Masters of Busj-ness
Administration from Boj-se State University in 2008. I
began my career at Idaho Power after graduating from the
University of Idaho in 1981, and have held several
engineering positlons before moving into management in
2005. In 2005, I was named Vice President of Delivery
Engineering and Operations. fn 2009, T was appolnted to
my current position as Senior Vice President of Power
Supply. My current responsibil-ities incl-ude overseeing
the operation and maintenance of Idaho Power's generation
fleet, power plant engineering and construction,
envj-ronmental affairs, water management, power supply
pJ-anning, and wholesal-e el-ectricity and gas operations.
I also oversee Idaho Power's Load Serving Operations
Group, which j-s responsible for delivering
a.
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GROW, Dr 2
Idaho Power Company
reliable energy to customers through the Company's
electrical- grid using its generation portfol-io and system
purchases. The management and administration of Public
Utility Regulatory Policies Act of !918 ("PURPA")
cogeneration and smaIl power production facil-ities is
within Idaho Powerrs Load Serving Operations Group.
O. What is the purpose of your testimony in this
matter?
A. The purpose of my testimony is to present the
Company's request to modify terms and conditions for
PURPA energy sales agreements that the Company is
required to enter into pursuant to federal l-aw. More
specifically, Idaho Power believes the current 2}-year
authorized contract term places undue risk of power
supply cost increases on customers at a time when Idaho
Power has sufficient resources to meet customer demands.
The Company's required Integrated Resource Pl-an ("fRP")
process is fll-ed and updated every two years. Non-PURPA
purchase and sales transactions are limited to less than
two years pursuant to the Company's approved risk
management policy. Avoided cost rates are updated at
least every year. Therefore, Idaho Power requests that
the Idaho Public Util-ities Commission ( "Commission" )
issue an order directing that the maximum required term
for an Idaho Power PURPA energy safes agreement be
reduced from 20 years to
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GROW, Dr 3
Idaho Power Company
two years for projects above the published rate
eligibility cap. I wil-I provide an overview of the
Company's case and describe the composition of Idaho
Power's generation resources, including its carbon
emissions and renewabl-e generation.
O. Are you sponsoring any exhibits?
A. No. However, Idaho Power is contemporaneously
filing the Direct Testimony of Randy A11phin. Mr.
Allphin is sponsoring l-0 exhlbits in support of Idaho
Power's Petition and request in this matter.
I. IDAHO POI{ERI S GENERATION RESOT'RCES
O. Could you describe Idaho Power and its
generation resources?
A. Yes. Tdaho Power is a vertically integrated
electric utility wlth operations beginning in 1916.
Idaho Power serves more than 513r 000 customers throughout
a 24,000 square mile area in southern Idaho and eastern
Oregon. fdaho Power owns and operates 71 hydroelectric
generating facilities, primarily on the Snake River,
which provide the bul-k of the Company's generating
ability. Idaho Power has a nameplate generatlon capaci-ty
of nearly 3,600 megawatts ("MW"). Idaho Power's peak
system load is just over 3,400 MW, which occurred on July
2, 201,3. The Company's peak system load for 2074 was
approxi-mately 3r184 MW. fts minimum system load for 2074
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was approximately 1,,013 MW. Idaho Power residential,
business, and
GROW, DI 3a
Idaho Power Company
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GROW, Dr 4
Idaho Power Company
agricultural customers consj-stently pay some of the
nation's lowest prices for electricity.
Idaho Power's five-year average fuel mix consists of
over 58 percent renewables, which is primarily hydro and
wind. Idaho Power has always been a low carbon emitting
and primarily renewabl-e energy electric utility. Idaho
Power is nearly 100 years oId, and its first power plant
was hydroelectric. Idaho Power believes in a balanced
generation portfollo, including renewable energy that
blends demand-side management and energy efficiency
programs to meet the needs of all its customers. As
shown in Mr. Allphin's Exhibit No. 2, as of January 26,
2015, Idaho Power had 1,428 MW of renewable energy (PURPA
and non-PURPA purchases) on its system or under contract,
excl-uding the Company's hydro resources. This renewabl-e
generati-on consists of : 128 MW of wi-nd, 46L MW of soIar,
35 MW of geothermal, and 184 MW of small PURPA hydro and
other. Because Idaho Power does not receive the
Renewabl-e Energy Certificates/Credits ("RECs") from most
of its Qualifying Facility ("QF") generation, this
generation cannot be used to meet any potential renewabl-e
portfolio standard requj-rements. Idaho Power cannot
represent to customers that they are receiving renewable
energy from the QFs, or from generation, for which it
does not receive the RECs, and is not making any such
representation here.
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GROW, Dr 5
Idaho Power Company
However, these are the renewables that operate on the
Company's system and which the Company must integrate.
O. Cou1d you describe Idaho Power's current
portfolio of generation resources?
A. Idaho Powerrs current resource portfolio
consists of a diverse mlx of l-ow-cost generation types
totaling nearly 3,600 MW of nameplate capacity. Idaho
Power's resource portfolio is anchored by the Company's
hydroelectric system consisting of 77 projects located on
the Snake River and its tributaries. These 77 projects
provide l,-109 MW of nameplate capacity and approximately
I . 4 mill-ion megawatt-hours ("MWh" ) annual-1y under medj-an
water conditions. Idaho Power is the non-operating
partner in three coal--fired power plants that provide the
Company with 1,,1!9 MW of nameplate capacity. Idaho
Power's share of these resources includes the Jim Bridger
power plant at 711 MW, the North Valmy power plant
l"Valmy") at 284 MW, and the Boardman power plant
("Boardman") at 64 MW. Idaho Power's resource portfolio
also includes three natura1 gas-fired combustion turbine
plants. Langley Gu1ch, a combined-cycIe pIant, provJ-des
318 MVI of nameplate capacity. The Company's two
simple-cyc1e "peaker" plants, the Danskin power plant and
Bennett Mountain power p1ant, provide a combined 444 MW
of nameplate capacity. Idaho Power al-so owns a small
diesel--fired generator 1ocated in
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GROW, Dr 6
Idaho Power Company
Salmon, Idaho, that provides approximately 5 MW of
nameplate capacity.
O. In addition to energy from its own resources,
does Idaho Power obtain generation from any other
sources ?
A. Yes. The Company currentl-y has power purchase
agreements with one wind project and two geothermal
projects. Elkhorn Va11ey wind project, Iocated in
northeastern Oregon, provides 101 MW of nameplate wind
generation. The Raft River geothermal power pIant,
Iocated in southern Idaho, provides 13 MW of nameplate
capacity. The NeaI Hot Springs geothermal project,
located j-n eastern Oregon, provides 22 MW of nameplate
capacity.
fdaho Power al-so contracts with QFs for energy
purchases under PURPA. As shown in Mr. Allphinrs Exhibit
No. 2, Idaho Power currently has 133 PURPA contracts for
approximately 1,302 MW of nameplate capacity. The PURPA
generation facil-ities consj-st of low-head hydroelectric
projects on various irrigation canafs, cogeneration
projects at industrial facilities, wind projects, solar
projects, anaerobic digesters, Iandfill gdsr and wood
burning facilities.
O. How does a diverse generation portfolio benefit
Idaho Power and its customers?
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A. Idaho Power has learned from nearly a century
of operations that energy diversity means energy
security.
GROW, Dr 6a
Idaho Power Company
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Idaho Power Company
The Company's resource portfolio is among the most
diverse and therefore secure in the nati-on. The Company
Ieverages its hydro, coaI, and natural gas resources to
provide dependable "basefoad" energy to customers, along
with purchased renewabl-e resources and a robust set of
energy efficiency programs. It is the same principle as
maintaining a diversified investment portfolio to manage
risk; a variety of resources minimizes the risk that
comes with having all your eggs in one basket.
O. Could you describe Idaho Power's carbon
emissions?
A. Idaho Power is one of the lowest carbon
emitting utilities in the industry. Based upon 2012
emissions, for overall- emissJ-ons, Idaho Power is ranked
among the 36 lowest and, for emission intensity (MWh), it
is among the 38 l-owest carbon dioxide emitters among the
nation's 100 largest electricity producers. Idaho Power
charts its carbon intensity in its annual sustainabllity
reports, ds wel-1 as tracking and displaying its progress
on its website. Idaho Power established a carbon
emission intensity goal in 2009 to reduce average carbon
dioxide emission intensity for the 2010 to 2013 period by
10 to 15 percent bel-ow its 2005 intensity of L,194 pounds
per MWh. fn November 2012, Idaho Power's Board of
Directors approved extending that goal through 20L5. Bythe end of 2073,
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GROW, DI B
Idaho Power Company
Idaho Power had reduced j-ts average carbon dioxide
intensity over the 2010 to 2013 period to 929 pounds per
MWh, a 22 percent reduction from 2005 carbon dioxide
intensity. Preliminary results for the year ending 2014
show that the Company remains on track with approximately
944 pounds per MWh, which is a 27 percent reduction from
2005 l-eveIs.
Being a predomi-nately hydro-based system, Idaho
Power's carbon intensity varies based upon the hydroJ-ogic
conditions; that is, good water years help reduce carbon
emissions. However, Idaho Power has taken other steps to
reduce emission intensity. The most recent addition to
Idaho Power's generation is t.he Langley Gulch natural
gas-fired pIant, which was originally planned to be a
coal plant, generates with about half of the carbon
dioxide intensity of a coal--fired p1ant, helps with
integration of intermittent renewabl-e energy, and
provides an option to further reduce carbon dioxide
emissions and intensity by fuel- switching from coal to
natural gas. Idaho Power has also been working to
maximize effective utilizatj-on of 1ts existing
hydroelectric resources. Recent turbine upgrades have
seen efficlency gains of 3 to 5 percent increases in MW
generated with the same amount of water. This includes
cloud seeding and effective water leasing practices.
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Idaho Power's current cloud seeding project includes 36
ground
GROV0, Dr 8a
Idaho Power Company
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Idaho Power Company
generators and an aircraft, which resul-ts in an estimated
193,000 MWh of additional hydroelectrj-c generation.
ExpansJ-on of the cloud seeding program coul-d produce an
estj-mated additional 277,000 MWh of hydroelectric
generat j-on.
O. Are there other considerations with the
continued operation of coal plants besides carbon
emissions ?
A. Beyond carbon dioxide, Idaho Power has been
working to reduce NO; and SO2 emj.ssions from coal-fired
plants and has seen a dramatic decrease in those
emissions since 1998 because of enhanced operating
efficiencies at the plants, improvements in pollution
control equipment, and increased integration of renewable
energy. In testimony from Case No. IPC-E-13-16 during
2013, Idaho Power discussed a path for the eventual
retirement of coal resources. As the Company seeks to
ba.l-ance the impacts of carbon with the economic real-ities
of its customers, it knows that it cannot immediately
terminate operation of coal-fired plants. As the Company
contj-nues to evaluate its coal- plants from an economj-c
standpoint, from the context of 111 (d) , and from all
relevant considerations, it is mindful that those plants
have a finite life. The Company has no new coal plants
in its IRP. The Company is shutting down coa1-flred
operations at the Boardman plant
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GROW, Dr 10
Idaho Power Company
in 2020. Idaho Power has been in discussions with the
joint owner of the Valmy plant regarding the future of
that plant and the resource al-ternatives that could
replace the generation from that pIant. Cost is, of
course, dr important factor, and the state public utility
commissions and Idaho Power's customers demand that risk
be considered and that future rate increases be mitlgated
where possible. Idaho Power currentl-y benefits from the
diversity of its generation resources, and that diversity
helps mitigate the power supply cost risk borne by
customers as the Company transitions to the new energy
landscape.
At the end of the day, the Company is still
obligated to produce rel-iabl-e, fair-prlced energy for its
customers. Moreover, it has to operate within its
regulatory framework, but whil-e doing so must be
conscientious as to environmental- issues, cost recovery
risk, and other various issues that must be considered
when striking an appropriate bal-ance.
II. OVERVIEII OF THE COMPA}IY I S CASE
O. What does Idaho Power see as the major issues
in this case?
A. Several- things: (1) the continuing and
unchecked requirement for the Company to enter into
long-term, flxed-price agreements to acquire QE
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generation with no regard for the Company's need for
additional generation
GROW, Dr 10a
Idaho Power Company
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GROW, Dr l_1
Idaho Power Company
on its system; (2) the contj-nued acquisition of large
amounts of unneeded intermittent PURPA generation
pursuant to long-term, fixed-price agreements which
inflate power supply costs and degrade the reliabil-ity of
Idaho Power's system,' (3) the continuing requirement to
acquire generati-on outside of the Commission's
established IRP process; (4) the fundamental-
disconnection between the way a regulated monopoly
service provider, like Idaho Power, must plan for and
acquire generation resources and the PURPA mandatory
purchase requirement; and (5) the unnecessary risk that
is entirely borne by Idaho Power and its customers of
Iocking 1n a long-term, fixed-price agreement, with no
ability to al-ter, change, update, or adjust the pricing,
terms, and conditions therein for the duration of the
agreement.
O. Why is the Company bringing another PURPA
rel-ated matter before the Commission at this time?
A. Idaho Power's requested modificatj-on of terms
and conditions of required PURPA energy sal-es agreements
is in response to the overwhelming amount of continued
PURPA requests for long-term, fixed-prlce contracts with
fdaho Power and in response to the Commissj-on's recent
statements in orders approving contracts for upwards of
500 MW of new PURPA solar generation.
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GROW, DI 72
Idaho Power Company
Idaho Power has a long history of active PURPA QE
projects. The first QF projects were constructed and
started selling their output to Idaho Power under PURPA
in approximately 7982. For about the next 20 years,
Idaho Power accumulated a large number of predominately
smal-l- hydro PURPA QF projects that steadily increased and
maintained energy deliveries under 200 MW total
generation, as shown in Mr. Allphin's Exhibit No. 1.fn
fact, to this d"y, small hydro QEs make up the majority
of PURPA projects under contract with ldaho Power, but
provide a relatively small amount of the total PURPA
generation. However, since about 2002, and after the
Commission increased the maximum contract term from 5
years back to 20 years (Case No. GNR-E-O2-01), Idaho
Power has experienced rapid and large additions of
predominately wind, and now soIar, QF projects coming
on-Iine and under contract.Idaho Power currently has a
total of L,302 MW of PURPA QF projects under contract,
with lBl MW of those projects constructed and operating
today, as shown in Mr. Allphinrs Exhibit No. 2. In
addition, Idaho Power has current requests, received over
the last several months, for an additional- BB5 MW of
PURPA sol-ar generation.
Upon review of the Commission's recent approval of
t.he l-ast 11 PURPA solar energy sales agreements in thelast two months, the Commission questioned the continued
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GROW, Dr 13
Idaho Power Company
acquisition of such large amounts of PURPA generation
when there is no assocj-ated need for that generation, and
a concern for passing those substantial- costs on to Idaho
Power customers. The Commission stated in those orders:
To encourage the development of
renewabl-e energy resources/ PURPA
requires that e1ectric utilities
purchase generation produced by QFsunder a federal rate mechanism(i. e. , avoj-ded cost ) that is
establ-ished and implemented by state
utility commissions. Unfortunately,
PURPA does not address and FERC
regulatj-ons do not adequatelyprovide for consideration of whetherthe utility being forced to purchase
QF power is actually in need of such
energy.
Idaho Power's 2013 Integrated
Resource Pl-an does not reflect that
the utility is in need of energy to
reliably serve its customers. Andyet, in l-ess than four months tj-me,
13 QFs have contracted with Idaho
Power for nearly 400 MW of solargeneratj-on all expected to be on-
Iine and producing power by the end
of 20L6. The combined 2O-year
contractual obligation of these 13projects is approximately $1.4billion. As we have previously
stated, 100% of the costs of QEgeneration are passed on to
ratepayers.
We recently undertook a detailedreview of the implementation of
PURPA in Idaho. See generaTTy GNR-
E-11-03. This Commissi-on considered
changes to numerous terms and
conditions contained in PURPA
agreements. Recent modi-fications ofvariables within the incremental
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cost IRP methodology confirm that
the methodology provides flexibility
that al-Iows us to accurately value
each QF's unique capability to
deliver its resources. However, QEscontinue to request contracts with
Idaho Power j-n significant enough
numbers that we remain concerned
about the Companyrs abiJ-ity to
balance the substantial- amount of
must-take intermittent generation
and stil1 reliably serve customers.
Whil-e we are pleased with theprogression of the IRP methodology,
avoided cost rates are not the only
terms to a PURPA contract. Theutilities are in the best position
to inform the Commission if reviewof additional PURPA contract terms
and conditions is warranted.
Order Nos. 33198, pp. 5-7 ; 33799, pp. 5-'7 ; 33200, pp.
5-1; 33201, pp. 5-6; 33202,
33205, pp. 6-1; 33206, pp.
pp. 5-6; 33204, pp. 6-1;
1-8; 33207, pp. 6-8; 33208,
pp. 6-8; 33209, pp. 6-8.Idaho Power agrees with and
concerns, and thus be1ieves it isshares the Commission's
necessary to bring the current actj-on to the Commission
for its determination.
O. What issues does Idaho Power
reviewed by the Commission in response
believe shoul-d be
to its concerns?
(1) further modification to
pricing methodol-ogies to more
A. Severa] issues related to the Commission's
implementation of
warrant additional
These items could i-ncl-ude:
the existing avoided cost
appropriately
PURPA in the state of Idaho could
examinatj-on and possibl-e revlsion.
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reflect need and resource suffj-ciency in the price; (2)
implement new avoided cost pricing methodol-ogj-es which
move to a market-based or competitively bid-based avoided
cost mechanism, such as that util-ized in Washington; (3)
exemption from PURPA under S 270, part M; (4) Commission
pursuit of a waiver from the requirements of S 210,
subpart C, for Idaho Power pursuant to 18 C.F.R. S
292.402; (5) refinement of the Commission's 902/110?
definition of firmness to require firm schedul-ed
deliveries for entitlement to rates established at the
tlme of contracting or lega11y enforceable obligation, as
opposed to rates determi-ned at the time of delivery,
similar to the impJ-ementation in Texas; (6) further
refinement of the eligibility for rates establ-ished at
the time of contracting or 1ega1Iy enforceabl-e obligation
by requiring QFs to be within 90 days of delivering power
before the utility is obligated to the price, again
simil-ar to the implementation in Texas; (7 ) contractual-
term limitations; and (8) caps, or MW targets, upon the
amount of new or repowered projects a utility is required
to procure over a given period of time, similar to those
in place in California. However, at this time, Idaho
Power's specific request with its Petition is that the
Commission modify the terms and conditions of prospective
purchases from PURPA QFs by reducing the current 2}-year
contract term for Idaho
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Power energy sales agreements to a maximum of two years
for projects above the published rate eligibility cap,
and direct any other rel-ief it deems appropriate and in
the public interest.
O. Has the Commission changed the maximum term of
required PURPA energy sal-es agreements in the past?
A. Yes. I am generally aware that the Commission
has changed the authorized maximum term of a required
PURPA purchase several times throughout its
implementation of PURPA in the state of Idaho. The
varj-ous changes to the maximum contractual- term have
resulted from the Commission's eval-uation of changing
conditions in the energy and utility environment and 1ts
attempts to balance the promotion of the development of
QF resources with the cost and risk borne by Idaho Power
and its customers in the transaction. Erom 1980 when
PURPA was first implemented in the state of Idaho through
1,987, utilities were obligated to provide QFs with a
35-year contract. In 1987, the Commission shortened the
maximum term to 20 years based primarily upon the
inherent uncertainty in long-term forecasting. Order No.
21,630. In 1996, the Commission further reduced contract
term to five years for QFs of 1 MW and larger, the
published rate eligibility cap at that time. Order No.
26516. In L991, the Commission extended the five-year
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contract term limitation to include QEs under the 1 MV{
published rate eligibility cap as weII. Then, in
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2002, the Commission went back to a 20-year contract
term, which has been in place to the present. Order No.
29029.
O. What factors does Idaho Power believe support
its request to reduce the maximum term of a PURPA energy
sales agreement to a maximum of two years?
A. Several- things establ-ish that the long-term
l-ock-in of contractual rates, and the bearing of that
risk entirely by customers, for 20 years is unjust,
unreasonable and contrary to the public interest. The
acquisition of any Company-owned generation resource, dS
well- as the Company's purchase and sal-e of non-PURPA
generation, is either ]imited to terms of two years or
l-ess or 1s subject. to intensj-ve Commission and public
participation, scrutiny, process, and proceedings to
determine that the Company is acting prudently, in the
public interest, and fulfil-ling a need in the l-east cost,
most rel-iabl-e manner possible. These requirements,
particularly that of establishing need for the resource,
are absent in a mandatory PURPA QE purchase. The further
constraint imposed by PURPA that el-iminates any ability
to modify, adjust, or change the prices that are l-ocked
into a PURPA energy sal-es agreement for the duration of
that conLract's Lerm, regardless of whether all costs
were included or whether actual costs and conditions
changed or varied, makes long-term, 2)-year
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contract terms at best risky, and in Idaho Power's case
harmful.
The Company's required IRP is fil-ed with and
reviewed by the Commission every two years. Changes in
condJ-tions, positions, market prices, 9as forecasts, load
forecasts, etc., are incorporated and captured
continually as they happen during the development of the
IRP and its biennial- filing. Those decisions and inputs
are not 1ocked in for 20 years with no ability to adjust,
update, or change, like PURPA transactions.
With regard to market purchases of generation
resources to serve l-oad or any other energy market
transactions of purchases and sal-es that the Company
conducts, it must comply with the Commission-approved
risk management policy. The Company's risk management
policy, set up to govern the risk and customer exposure
to market fluctuations when the Company makes power
purchases and sal-es on the market, has short-term
limitations. Under its authorized and required risk
management policy, the Company does not enter into
transactions beyond 18 months. If the Company were to
desire to transact for any periods of two years or more,
speci-fic Commisslon authorization and approval is
required. This policy has been deemed a prudent process
for managing customer exposure to the market and
transactional- risk with making generation
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purchases and sales, and the prudent term is far below
the 20 years required for mandatory, unchangeable PURPA
purchases.
The Company is not abl-e to acquire any other
generation or purchased power that is indiscriminately
l-ocked in for such long terms. If the Company does
acquire any non-PURPA generation or purchases longer than
two years, it comes with specific Commission
determinations of meeting a need in the least cost, most
reliable manner avail-able. These determinations are made
only after careful examination and process, including
various public processes and proceedings such as through
the IRP process, a certificate of public convenience and
necessity proceeding, rate base proceedings, and other
specific Commission proceedings and determinations that
assure customers are protected and the Company meets its
obligations to reliably serve. It does not foll-ow that a
PURPA transaction, that does not have the beneflt,
requirement, or prot.ections associated with all of the
prevlously mentioned Commission processes and procedures,
and must be acquired regardless of need, woul-d be
indiscriminately locked in with long-term, fixed costs
that cannot be changed.
O. You previously mentioned an inflation of power
supply expenses. Could you explain?
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A. Yes. As shown in Mr. Allphinrs Exhibit No. J,
PURPA power supply expenses are growing at a very rapid
pace and becoming quite Iarge. In sum, Exhibit No. 1
shows an alarming 575 percent increase in PURPA power
supply expense from 2004 through 2024. Additionally,
Exhibit No. 10 shows that Idaho Power's average cost of
PURPA generatj-on sj-nce 2001 has always exceeded the Mid-C
index price and is projected to always exceed the Mid-C
index price through 2032.
Moreoverr ds il-l-ustrated in Mr. Allphin's Exhibit
No. 8, which shows net power supply expenses in base
rates, the average cost of PURPA purchases, at $62.49 per
MWh, is greater than the average cost of coal- at $22.19
per MWh, greater than gas at $33.57 per MWh, greater than
non-PURPA purchases of $50.64 per MWh, and significantly
greater than what is being sol-d as surplus safes at
$22.41 per MVrIh. If and when the Company is required to
purchase PURPA generation when it is not needed, the
Company may be required to back-down or curtail other
less expensive sources of generation or market purchases
in order to continue purchasing PURPA generation at a
higher cost. This woul-d mean that the Company's overal-l-
net power supply expense, oD a dol-l-ars per MWh basis,
woul-d increase, adversely impacting customers.
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O. You al-so previously mentioned a degradation of
the reliability of Idaho Power's system. Could you
explain?
A. Yes. Idaho Powerrs hydroelectric and coal-
generation has must-run l-evel-s that the Company cannot go
bel-ow without viol-ating environmental regulations
relating to the hydro facilities or taking the coal
generation off-line and thus making it unavail-abl-e to
meet required l-oads until- it coul-d be restarted. With
the addition of the must-take PURPA generation, which is
less predlctable than firm generation and does not equate
to non-firm generation as it is unscheduled and delivered
:-f, when, and in whatever amount the QF determines, the
Company's system can rapidly move to an imbal-ance
position, in this case, primarily to an over-generation
position, and the Company must take remedial actions to
balance the system. If remedial actions are not
available, or not employed in a timely manner, then the
Company can have system reliability violations, events,
and/or outages and damage. In fact, over the l-ast
several- years, reliability curtail-ments of PURPA
generation have been necessary in order to maintain the
integrity of Idaho Power's system. For the period from
May 20Ll through December 2074, the Company had at least
15 rel-iability events that resulted in wind generation
GROW, Dr 2l
Idaho Power Company
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operation of
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the Company's electrical system. These curtailments, or
generatj-on limitation set points, have been relatively
j-nfrequent, for relatively short durations, and are
removed as soon as possible once it can safely be done
and maintain a ba1anced system.
O. Has the Company done any analysis as to what
effect the continued acquisition of large amounts of
unneeded must-take PURPA generation has upon the
rel-iability of the system?
A. Yes. As previ-ously noted, the Commission
expressed concern with this issue stating, "we remaj-n
concerned about the Company's ability to balance the
substantial amount of must-take intermittent generation
and still reliably serve customers." Mr. Allphin's
Exhibit No. 6 contai-ns a summary of the Company's
analysis estimating the frequency of hours, over the
years 2076 and 2011, in which Idaho Power's must-run and
must-take resources exceed total system load.
O. What are the results of that analysis?
A. The resul-ts are summarized on page 1 of Exhiblt
No. 6. The results generally show an alarming amount of
hours throughout 2076 and 2017 where must-run and
must-take generation exceeds total- system load.
Without the incl-usion of any gas-fired generation,
and including only the Company's must-run coal- and hydro
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Idaho Power Company
generation, without any of the must-take PURPA generation
whatsoever, that generation is projected to exceed l-oad
for 74 percent of all- hours during 2076 and 2071. The
Company's must-run hydro and coal generatj-on combined
with existing must-take PURPA, but without any of the
recently approved PURPA sol-ar generation, exceeds total
system load for approximately 29 percent of al-l- hours
during 2076 and 2017. When the 467 MW of PURPA sofar
that is under contract and schedul-ed to be on-line in
2076 is included, Idaho Power's must-run and must-take
generation exceeds total- system load for approxi-mately 32
percent of all- hours in a year. Flna11y, inclusion of
the additional- 885 MW of proposed PURPA sol-ar generation
increases the frequency of must-run and must-take
generation i-n excess of l-oad to 40 percent of all hours
during 201,6 and 2077 .
O. What is significant about the hours in which
must-run and must-take generation exceeds total- system
l-oad?
A. It is significant because the system has
already been backed down as far as it can without
shutting something off or sending generatlon off-system.
Each one of these hours creates a potential
over-generation event where remedial- action of some kind
wil-l be necessary to keep the system in balance and meet
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the obligation to reliably serve customers. The
historical and projected
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market price for surplus sal-es has always been, and j-s
projected to always be, much lower than the price the
Company pays for PURPA. A11phin, Ex. 8; Ex. 10. If
transmission capacity is availabl-e to conduct off-system
sales, the Company woul-d sell- at a loss. When the
Company has no identifiable need for any additional-
generation, each one of these potential reliabitity
events is a completely unnecessary destabil-ization of
Idaho Power's system, putting its required service to its
customers at risk.
O. Is it your opinion that the granting of the
requested relief proposed by the Company is in the public
interest ?
A. Yes. The Company's requested rel-ief is in the
pubJ-lc interest, is within the authority and discretion
of the Commission, and the Company respectfully asks the
Commission to implement the same.
O. Does this conclude your testimony?
A. Yes, it does.
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CSB REPORTING(208) 890-s198
GROVI (X)
Idaho Power Company
(The following proceedings were had in
open hearing. )
MR. WALKER: Thank you, Mr. Chairman. The
witness is avai-Iable for cross-examination.
COMMISSIONER KJELLANDER: Thank you very much.
Let's look to Avista, any questions?
MR. ANDREA: No questions.
COMMISSIONER KJELLANDER: PacifiCorp.
MS. HOGLE: No questions.
COMMISSIONER KJELLANDER: Staff from the Public
Utilities Commission.
MS. HUANG: No questions.
COMMISSIONER KJELLANDER: J.R. Simplot Company.
MR. ADAMS: Yes, Mr. Chairman, we have some
questions.
COMMISSIONER KJELLANDER: Please proceed.
CROSS-EXAMINATION
BY MR. ADAMS:
O. Good morning, Ms. Grow.
A. Good morning.
O. On page L4 of your direct testimony, you
discuss eight different potentl-aI ways the Commission
could address the percelved problem with large PURPA
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CSB REPORTING
(208 ) 890-s198
GROW (x)
Idaho Power Company
solar projects, and the very first that you suggest is
"further modification to the existing avoided cost
pricing methodologies to more appropriately ref1ect need
and resource sufficiency in the price"; do you remember
that ?
A. Yes.
O. fsn't it true that the IRP method used by Idaho
Power was proposed by Idaho Power just a few years ago?
A. It was.
O. It was. Isn't it true that that method
excludes capacity payments to the QF durlng the utility's
capacity surplus period?
A. Correct.
O. Isn't 1t true that under that method as
prospectlve QFs in the queue request prices that the
prices that are provided to them go down because there's
prior QFs ahead of them in the queue?
A. That's correct.
O. Woul-dn't you agree that at some point the
avoided cost rates to a new QF would get so low that a QF
project would be unable to be buil-t?
A. I don't know that.
O. You don't know?
A. I don't know what would cause a facillty to be
built or not.
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CSB REPORTING(208) 890-s198
GROW (x)
Idaho Power Company
O. If the price got to zero dol-lars per
megawatt-hour, do you thlnk a solar QF could build the
project and sel-I it?
A. I woul-d find that difficult, but, again, I
don't know.
O. So would you agree, dt l-east, at some point
between zero and the price in the existing contracts the
projects would become uneconomical and not be able to be
developed?
A. I imagine that would be true.
O. Later on in your testimony on page 16, you
testify regarding the Commission's prior Orders where it
shortened the contract term to five years from the period
1996 until 2002, including Order No . 29029. Do you
recall that?
A. Uh-huh, yes.
O. Did you read those orders?
A. Yes.
O. Okay; so then you're aware that in the period
between 7996 and 2002, only one QF contract was signed
whil-e the contract length was limited to five years?
A. Thatrs correct.
O. Is that the goal with the application in this
case, to el-iminate future PURPA contracts?
A. Actuallyr ho. The goal of this case is to
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CSB REPORTING
(208 ) 890-s198
GROW (x)
Idaho Power Company
l-imit the term from 20 to two years because we believe
that 20 years is too 1ong. It's too much risk placed on
our customers at a time when we don't need it.
O. Okay, and on page 18 of your testimony, you
discuss the IRP process and how thatrs a two-year process
and you discuss the IRP-derived resources and you state,
"Those decislons and lnputs are not l-ocked in for 20
years with no ability to adjust, update r or change, like
PURPA transactions. "
Isn't is it true, though, that the capital
costs of the Company's rate base resources are in fact
"locked in" for the life of the project, not for just two
years ?
A. That comparison, that isn't an accurate
comparison of the two. The PURPA rules are for
accordi-ng to the PURPA law. The way that things are rate
based for utilities is very different and it's been
differentiated that way.
O. But you would agree that the rate-based
resources' capital costs are 1n fact locked in for more
than two years, aside from the comparison?
A. They are in our rate base.
O. For longer than two years?
A. Correct.
O. Would Idaho Power had built the Langley Gul-ch
139
gas plant with rate recovery terms of only two years?
A. Againr we go through a very different process.
We have to go through the IRP process. We demonstrate
that there's a need. We demonstrate what type of
resource; what reliability objectives are. We have to go
through, now we have to go through, competitive bidding
to demonstrate that's the most economic solution. We
have to go through a CPCN where it's a very public
process that the decision is scrutj-nized once again, and
then we go in for a rate case where we actually then have
another very public process where it is scrutinized and
put into rates if this Commission bel-ieves it was done so
prudently.
O. And those CPCNs provide recovery for longer
than two years; right?
A. They do. We1l, tf it is given with
pre-approval. CPCN doesn't necessarily guarantee
approval.
O. Okay, and if the Company moves forward with the
Boardman to Hemingway transmission 1ine, it will probably
ask for more than two years of recovery; right?
A. That's correct.
O. On page 18 of your testimony, you discuss your
risk management policy and say that the Company does not
enter j-nto transactions beyond 1B months in duration; do
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CSB REPORTING(208) 890-s198
GROW (x)
Idaho Power Company
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CSB REPORT]NG(208) 890-s198
GROW (x)
Idaho Power Company
you recal-1 that?
A. Without approval.
O. Without approval. fsnrt it true that each of
your rate-based resources are transactions that invol-ved
transactions beyond 18 months?
A. That's not these are for energy
transactions.
O. Not long-term resources?
A. Correct.
O. Okay, on page 20, you discuss Mr. Allphin's
Exhibit No. B and you assert that the average cost of
Idaho Power's coal- resources is $22.1 9 per megawatt-hour
and the average cost of Idaho Powerrs gas resources is
$33.57. Do you see that?
A. Yeah.
O. fsn't it true that these figures do not include
the capital costs, Idaho Power's return on investment,
the operatj-on and maintenance costs r or any reasonable
estimates for capital upgrades for these coal and qas
plants ?
A. Well-, ds noted, these are the net power supply
expenses that are put into base rates. That's what
those those were the numbers from 201,3, the l-ast time
we updated net power supply costs in base rates.
O. So it's only the fuel- cost; right? It actually
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CSB REPORTING(208) 890-5198
GROW (x)
Idaho Power Company
didn't even j-nclude the fuel- transportation costs?
A. That's correct.
O. Can you generate electricity wlth just fuel- and
no other costs?
A. Of course not.
MR. ADAMS: No further questions, Mr. Chair.
COMMISSIONER KJELLANDER: Thank you. Let's
move to Idaho Conservation League/Sierra C1ub, any cross?
MR. OTTO: Yes.
COMMISSIONER KJELLANDER: Please move the
microphone close.
CROSS-EXAMINATION
BY MR. OTTO:
O. Good morning, Ms. Grow.
A. Good morning.
O. On page 10 of your testimony and into 71, you
cite to five major issues in the caser so I want to
explore just a couple of those. We're going to start
with No. 3, so that starts on page 1\, l-j-nes 5 through 1,
and it's the continuing requirement to acquj-re generation
outside the IRP process. Are you there in your
testimony?
A. I see that.
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O. Are you with me?
A. Uh-huh.
O. So the avoided cost model is cal-l-ed the IRP
method; is that correct?
A. Correct.
a. And so the IRP, that begins with identifying
the existing resource stack; correct?
A. Correct.
O. And then this IRP applies this resource stack
to a forecast of l-oad and hydro conditions to determj-ne
the utility's need for additional- resources; is that
correct?
A. That's correct.
O. And so that need, it identifies the timing,
correct, Iike what date you are resource deficient?
A. For a given scenarr-o, ye s.
O. And it identifies the size of the need; is that
correct?
A. That's correct.
O. And 1t identifies the basic shape, like is it a
base load or an intermediate or a peaking need; is that
correct?
A. Correct.
O. So then after identifying this need, you use
these data, the exlsting resources, the forecast for
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Ioads, and hydro, and gas prj-ces, theyrre input to an
hourly dispatch modeI, the AURORA model-, to compare
dlfferent options; is that correct?
A. Basically, yes.
O. And these are 20-year forecasts for these
inputs and a 20-year kind of resul-t stream; is that
correct ?
A. That's correct.
a. So when you're doing the avoided cost modeI,
aren't these the same is it the same computer model
and the same inputs that go into the avoided cost
model ?
A. Basically, yes.
O. So isn't it fair to say that whil-e the resource
decision or acquiring the output may be outside the IRP,
al-l- the pricing components come directly from the IRP; is
that a fair statement?
A. No. It comes from -- the same model is used in
the calculatj-on, but the determination of need for our
customers, these come whenever they want, in whatever
amount, the PURPA projects do, j-n whatever amount they
want to come, whatever type of technology, fuel source,
any type of dispatch not even dispatch, just any type
of generation pattern, so no, itrs very different.
O. But the IRP defines the resource deficiency
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date; correct?
A. For the given scenario, yes.
O. Ri-ght, and that date then out of the IRP
defines when the capacity payment starts for a QF
projecti is that correct?
A. That's correct.
O. And, you know, essentially the avoided cost for
energy, that comes out of the IRP,' isn't that correct?
A. Wel-l-, it doesn ' t there isn' t an established
needs test. ft's a model- that produces a price, but at
no time it really assesses whether or not the resource is
needed. It is merel-y a pricing mechanism.
COMMISSIONER RAPER: Mr. Otto, if I coul-d
interrupt for ;ust a minute, can you make a distinction
for me going forward between whether yourre talking about
the integrated resource plan or the IRP methodology?
MR. OTTO: Yes, I wil-I. I recognize that that
can be confusing. I'l-1 do my very best.
COMMISSIONER RAPER: Thank you.
O. BY MR. OTTO: So less than a year ago the
Company filed a case asking to update the capacity
deficiency date for the IRP methodology and that was Case
74-22. Do you recall that?
A. f do.
O. Did you read the final Order in that case,
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Order 33159?
A. I did, at the time.
O. So on page 7 that Order states, "The IRP
methodology at j-ssue here" and I can give you a copy
of this. Would you like that?
A. I don't have one if you want me to
O. Yes, l-et me do that.
MR. OTTO: I'm going to offer thls as
ICllSierra Club Exhibit 304, and this is the Commission's
Order 33159, whlch you can take official notice of. This
is just the first page and the seventh page.
(Mr. Otto distributing documents. )
MR. OTTO: So on the back side there's a
highlighted section and it says
MR. WALKER: Excuse me, Mr. Chairman, I'd like
to be heard regarding the request to admit this as for
the Commission to take offlcial notice of this document,
and Idaho Power's request would be that if it chooses to
admit thls under those grounds that it admit the entire
document, the entire Order No. 33519, rather than the
excerpted portions offered by Mr. Otto.
COMMISSIONER KJELLANDER: Is there a response,
Mr. Otto?
MR. OTTO: Of course, of course, you want to
recognize or take official notice of the whole entire
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Order. I just used this excerpt so we could just cut to
the chase of the operative part of the Order. This is
the Commission's findings and concl-usions, but I have no
objection to admitting the whole entire Order.
COMMISSIONER KJELLANDER: So with no objection,
then we'lI consider that a piece of it. In terms of
proceeding at this point, though, I feel pretty confident
having signed this Order that I can easily find it and be
reminded of all the wonderful-, glorious things that we
put in it, so j-f there's no further objection, please
proceed.
(ICtlSC Exhibit No. 305 was marked for
identification. )
O. BY MR. OTTO: So the highlighted sentence says,
"The IRP methodology, at issue here, takes into account
many different variables and produces a result based on
the characteristics of the generation and each individual-
utility's needs for the resources." Do you see that?
A. f do.
O. Do you disagree with this Commission Order?
A. I bel-ieve that it is much better than the
surrogate avoided resource that was used before, but I
stil-l- think there's issues and that's why we've not
realIy asked to open up the avoided or the IRP
methodology and we just asked for the term to Iimit the
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risk.
O. So on page 10, l-ine 20 and 2L, you say that
price agreements to acquire QF generation with no regard
for the Company's need.
A. Correct.
O. That seems to be in confl-ict with this
Commission Order.
A. Wel1, I bel-ieve that it takes it into account,
but if you don't need it, the resources can stil-l- come,
so there's still- an issue. It doesn't necessarily
address the need questlon, So it does better than the
methodol-ogy that was used before, but, again, w€ felt
like it was a much better approach to go for the reduced
term to l-imit the rj-sk rather than reopening thls at this
time, unless the Commission would find that to be a
remedy they wou1d l-ike to explore, then we woul-d take
that up.
O. Just two last questions. Idaho Power customers
need capacity when the Company is capacity deficient; is
that correct?
A. That's correct.
O. And Idaho Power customers need energy every
minute of every day; is that correct?
A. I would say so.
MR. OTTO: Thank you. That's all.
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COMMISSIONER KJELLANDER: Thank you. Mr.
Hammond, since you are sitting next to the microphone,
does Ecoplexus have any cross-examination?
MR. HAMMOND: I have some questions,
Commissioner Kjellander. I do have an exhibit. I may
not have given it to everybody as the room kept filling
up. I do believe most people have it. If you don't have
it, l-et me know, and I don't believe you have a copy, so
may I approach?
COMMISSIONER KJELLANDER: You may approach if
you can find a path.
(Mr. Hammond approached the witness.)
CROSS-EXAM]NAT]ON
BY MR. HAMMOND:
O. He11o, Ms. Grow. My name is John Hammond. I
work for Fisher Pusch and we represent Ecoplexus today.
A. Good morning.
O. Thank you for taking the time to come today and
testify. I've handed you a document that's marked
Exhibit 1501. Do you recognize that document?
A. I do.
O. And let me qualify that first. The document
that I've handed you, is that a complete copy oh, can
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you identlfy what this document is?
A. This is the draft of our integrated resource
plan that was just recently filed for 2075.
O. And what I've handed you, that's not a complete
copy of the entire document; is that correct?
A. It doesn't appear to be, Do.
O. With that, Lf there's any objection, you know,
I don't have any objection to admitting the entire IRP
document. I tried to keep it short and pointed to what
our questlons were. f don't have any objection if the
Company wishes to have the entire document in or notr so
just with that, I'd offer this.
Are you familiar with this document?
A. I am.
a. Did you participate in creating this
document?
A. Not directly, no. I oversee it, though. My
team does it.
O. What do you do what are your
responsibilities in overseeing the creation of this
document ?
A. I make sure that we foll-ow the process, that
timelines are met, that the team has the resources they
need to complete the analysis. I do engage in
discussions along the way on policy issues, et cetera.
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O. Woul-d you be abl-e to answer questions about
data in this document do you believe?
A. Perhaps, perhaps.
O. Or would Mr. Allphin be the more appropriate
witness? Do you have an opinion on that?
A. Depending on your question.
MR. HAMMOND: I'd like to ask that this exhibit
be admitted to the record and then open that up for any
objection that someone might have.
COMMISSIONER KJELLANDER: Wlthout objection
MR. WALKER: Once again, Mr. Chai-rman, f
believe that the draft IRP is a publicly available
document and would note that this exhibit contains
selected excerpts from that.
COMMISSIONER KJELLANDER: Thank you, and also
to the extent that the Commission needs to take note,
Mr. Hammond, you said that the entire document would be
incl-uded as part of the exhibit, and I would appreciate
that, so if you could make sure the entire document is
incorporated into thls exhibit, the draft, and make that
availabl-e to the court reporter, that would be
appreciated.
MR. HAMMOND: I wil-l- do so.
COMMISSIONER KJELLANDER: Thank you.
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(Ecoplexus Exhibit No. 1501 was admitted into
evidence. )
COMMISSIONER KJELLANDER: Please proceed.
O. BY MR. HAMMOND: Can you proceed to it's
page No. 125 in that document. Thatrs the page number in
the IRP itself . Are you famil-iar with this tabl-e?
A. I am.
O. Can you tell me what it describes?
A. It describes a variety of the portfol-ios that
were analyzed and it goes through a variety of fixed and
variable costs, and it's sort of the total- summary, the
total cost of each portfolio and compares them to a base
CASC.
0. And can you just describe for the record what
the portfolio is?
A. The portfolio is basically a sel-ection of
resources that would be analyzed meeting the needs of
our our forecasted customer need.
O. fsn't it true that looking at this tab1e,
there's an option P6 (b) , are you aware whether t.hatrs the
Company' s sel-ected portfolio?
A. It is.
O. Can you describe what makes up that part of
that portfolio?
A. So in this portfolio, it shows retirement of
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both units at Valmy in 2025. It shows the addition of
the Boardman to Hemingway line also in 2025. It contains
some demand response, dS wel-l- as an ice technol-ogy that
is sort of an energy efficiency load shifting technology
and combined cycle combustion turbine.
O. And in the next column over there is an
operating cost; is that correct?
A. In
O. Where it says "Variabl-e Costsr" the next
column; is that correct?
A. Well-, ye s.
O. Can you descrj-be what those variables costs
are, just generally?
A. Generally, those are fuel costs, maintenance
costs, et cetera.
a. And then can we move down to portfol-io P3?
A. Yes.
0. And in that portfolio, does that portfol-io
contain solar generation as an option?
A. It does.
0. And in that, moving over to the operating cost
for that, is the operating cost with that portfolio
including sol-ar fess than the Company's selected
portfolio?
A. It is, slightly.
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O. Can you describe do you have any knowledge
why that is?
A. Mostly it was the retirement of Valmy in 201,9
was my recol-lection.
O. Can you move to page 732, that's L32 as marked
in the IRP document? Now, I'm going to represent that
this didn't turn out like I wanted it to.
A. Yeah, I was hoping you weren't going to ask me
to point out anything.
0. Do you recognize this page?
A. I do.
O. Now, are you familiar with it?
A. I am. Not in bfack and whi-te, but
O. I wish it was in color, so if you cannot answer
the question, I understand and I I II offer the document in
the record, of course, with a color copy. There are a
number of in this graph can you see the box that has,
for example, P2a? P3? P6?
A. Yes.
O. Are those portfolios that Idaho Power was
examining to determine whether or which portfolio wou1d
be preferred?
A. lt was.
O. Is there without colors, and I appreciate
this, are you able to identify which line on the graph
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matches up with those?
A. I'm sorry, Irm not.
O. Okay, that's fair, and I apologize for that.
Now, let's move to go page 137. Is it true that in the
preferred portfolio, P6, Boardman to Hemingway or
Boardman is part of that mix or that portfolio?
A. Were you talking about the power plant when you
said Boardman the second time?
O. Yeah, I'm sorry.
A. Actua1ly, Do. The Boardman power plant is
scheduled to be cease coal fire operations at the end
of 2020.
o. 2020?
A. Yes.
O. Are there any proposed transmission upgrades
for Boardman to Hemingway that you are aware of?
A. frm not sure I understand your question. It in
itsel-f is a new transmission line.
O. Boardman to Hemingway is a new transmission
line; correct?
A. Yes.
0. Okay. On page L37 you dJ-scuss the Boardman to
Hemi-ngway transmissi-on line risk. Can you summarize
those for the Commission?
A. Well, dt this point siting and permitting is
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proving to be difficult, so that is the risk at this
point in time.
O. And is Boardman to Hemingway included in the
portfolj-o P6 (b)?
A. It is.
O. With those risks, are those risks, let's sdy,
acceptable or strike that. Given those risks, why is
portfolio P6 (b) still preferred rather than one that
doesn't have those risks in it, Iike P3 that has sol-ar?
A. Wel-l-, P3 does not sol-ar doesn't mitigate all
risk for there's risk in everything that we do, and so
ror I don't think that the comparison of those two the
bigger risk is the ability to actually shut down Valmy in
'19. Itrs not about Boardman to Hemingway versus PV, and
just in general, transmission is a very different
resource than PV. It works at night. It works when it's
cloudy, so it's a very dlfferent resource. It has a very
different performance.
O. Certainly, but the costs of that arenrt known
at this point, are they?
A. We have estimates.
a. And even with those estimates, is that still a
cheaper resource in the portfolio than other options?
A. It is.
O. And by what degree?
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A. Wel-I, it's shown in that chart.
O. But isn't it true that the operating costs for
P3, whj-ch include sol-ar, are less than that for P6(b)?
A. For the variables that were in that, y€s, but
it's a slight difference and it's not really attributable
to the difference of risk between Boardman to Hemingway
and PV. ft's more about the Valmy timing.
MR. HAMMOND: I don't have any further
questions.
COMMISSIONER KJELLANDER: Thank you. Let's
move to the Renewable Energy Coal-ition.
MR. SANGER: No questions.
COMMISSIONER KJELLANDER: Thank you. Idaho
Irrigation Pumpers.
MS. OLSEN: No questions, Your Honor.
COMMISSIONER KJELLANDER: Thank you. Letrs
see, Snake River Alliance.
MS. NUNEZ: Thank you, Commissloner.
CROSS-EXAMINATION
BY MS. NUNEZ:
O. Good morning, Ms. Grow.
A. Good morning.
O. I wanted to ask you a few questions about risk
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management of the customers. Would you agree that your
testimony and the Company's application express the goal
to reduce carbon emi-ssions and work towards the closure
of coal plants?
A.
o.
that or
A.
That this filing is about that?
That the filing expresses a preference to do
an intention to do that.
WeII, I think the filing is about reducing the
term of PURPA from 20 to two years.
O. Yes, there are several pJ-aces in your testimony
and also in the filing that discuss the carbon intensi-ty
and emissions reduction moves that the Company has taken
and also insinuates that there will- be closures of coal-
plants in the future.
A. I do discuss that, yes.
O. Okay; so I was asking if you agree that that is
expressed in the filing. Just real- quick, is there
anything about the integrated resource plan that's been
drafted thatfs changed any of your testimony, which was
filed before the IRP process concluded?
A. I don't bel-ieve so.
O. Okay, ;ust wanted to check; so how does
does, and if so, how does the Company cal-culate and
manage the environmental and economic consequences of
generating electricity from coal-? ls that a factor in
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your cal-cul-ations of the impacts of coal plants?
A. At this point we had previously we have
compared or used carbon taxes as a way of sort of valuing
that and this year was the first year we did not do that.
Instead, we tried to model the portfolios for 111 (d)
compliance as it was written in its linaudib]-el . We
don't know what those rules are going to be yet, so this
version of the IRP was a l-ittl-e interesting because we
didn't have a final order, so we did the best we coul-d
with the information we had.
O. Has the Company been able to measure impacts to
the hydropower resources, changes in fl-ow that some have
said are attributed to cl-imate change from fossil- fuel-
combustion?
A. We do not have an analysis that can attribute
that. There's many factors that go 1n.
O. Has the Company began looking into how those
measurements might be done?
A. We have not.
O. Do you think that Idaho Power and 1ts customers
are exposed to risk from some of these unknown factors
associated wlth large investments 1n coal facilities that
the Commission did acknowledge were facing an uncertain
future?
A. Could you ask your question again?
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O. Putting it back in context, it seems like a lot
of this case is about managing risks to Idaho Power and
the customers and wanting to protect the customers from
risks associated with investments and these types of
PURPA projects, So what f'm asking j-s do you think that
Idaho Power and 1ts customers are also exposed to unknown
risks associated with large investments 1n coal- plants,
which the Commission has acknowledged have very uncertain
future economically and the environmental- consequences of
which are not readily subject to cal-culations at this
point?
A. WeIIr we 've been maklng significant j-nvestments
in reducing the pollution and emissj-ons from the coal
plants, and we go through a process -- in fact, I recall
sitting on this very stand talking about that not too
long ago, so we go through an approval process and have
an open dialogue about thatr so it is not the same as
just having over 2,000 megawatts show up overnight in
resources that we don't need and lock up our customers
for an obligation of 20 years of fixed prices, so they're
very different risks.
MS. NUNEZ: Okay, thank you.
COMMISSIONER KJELLANDER: Mr. Arkoosh, since
we're in your neighborhood, do you have any cross?
MR. ARKOOSH: No, thank you.
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COMMISSIONER KJELLANDER: Thank you. Let's go
to Intermountain Energy Partners.
MR. MILLER: Thank you, Mr. Chairman, just a
few, if you don't mind.
CROSS-EXAMINATION
BY MR. MILLBR:
O. On the first page of your testimony, Ms. Grow,
you te1I us that your current position with the Company
is vice president of delivery engineering and operations;
is that correct?
A. No, that's not correct. If you l-ook on page Ll
or lj-ne lJ, excuse me, at the end, in 2009, I was
appointed to my current position of senior vice president
of power supply.
O. There you go. My apologies for failing to
recognize your advancement.
A. That's okay.
O. So in your current position as senior vice
president of power supply, you also tel-l- us that you are
responsible for overseeing the operation and maintenance
of Idaho Power's generation fl-eet?
A. I am.
0. And based on your responsibilities in that
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GROW (X)
Idaho Power Company
area, oo page 3 you tel-l- us that ldaho Power currently
has a nameplate generation capacity of nearly 3,600
megawatts?
A. Correct, the Company-owned resources, yes.
O. fn your capacity as senior vice president of
power supply, you also oversee in the Company persons
responsible for the Company's compliance with the Publ-ic
Utility Regulatory Policy Act of 1918, also known as
PURPA?
A. I do oversee that, yes.
O. And in your capacity as senior vice president
of power supply, do you execute on behalf of the Company
energy safes agreements with qualifying facilities under
PURPA?
A. I do.
O. In the course of your responsibilities as
senior vice president, are you famillar with the phrase
"PURPA sofar QF"?
A. As a term, sure.
O. And what would you understand that phrase to
mean?
A. I would take that to mean a solar facility that
qualifies for QF status.
O. For discussion purposes, could we understand
that to mean qualifying facil-1ties under PURPA that
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GROW (x)
Idaho Power Company
generate electrical- energy through sofar generation?
A. I guess so.
O. Okay. With that understanding in mind and
taking into account your knowledge of the Idaho Power
system, what is the number of solar QFs in the State of
Idaho currently connected to the Idaho Power system and
capable of del-ivering energy to the Idaho Power system?
A. At thls point there are none online.
0. That would be zero?
A. That would be zero.
MR. MILLER: That's all I have.
COMMISSIONER KJELLANDER: Thank you, and f know
that in our initial proceedings Micron said that they
didn't have any cross, is that stil-l- the case?
MS. HOWLAND: Yes.
COMMISSIONER KJELLANDER: Thank you. Are there
any questions from the Commisslon? Commissloner Raper.
COMMISSIONER RAPER: I'm going to ask a
compound question. I'l-l- tell Mr. Walker in advance so he
can object if he wants to.
COMMISSIONER KJELLANDER: It wou]d be unwise.
MR. WALKER: Noted.
THE WITNESS: I wil-f have to answer, then.
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CSB REPORTING
(208 ) 890-s198
GROW (Com)
fdaho Power Company
EXAM]NATION
BY COMMISSIONER RAPER:
O. Ms. Grow, in your testimony you talk about
111(d) and the implications of your system on l-11- (d) and
specifically on page 10 you Sdy, li-ne 3, that your
we}l, 1et me read the whol-e sentence from line 1. "Idaho
Power has been in discussions with the joint owner of the
Valmy plant regarding the future of that plant and the
resource alternatlves that coul-d replace the generati-on
from that pIant"; so my question is based on what we have
now as the proposed rul-e for 111(d) , can QF energy of any
type, 1et's just say any IRP resource, be used to offset
the coal capacity that might be l-ost as a result of Idaho
Power's compliance with 111(d) and why or why not?
A. WeI1, it would be hard for me to sdy, because
there is no cap or limit to the amount of PURPA that
would show up, so if we're going to retire Va1my, that's
about 280 megawatts on our system and right now we have
PURPA contracts or requests all in, signed contracts,
those that are wj-nd and smal-l- hydro that's already there,
over 2,000 megawatts, and so the fact that there's a
disconnect between need, what we might need to replace
Va1my, versus how much can just show up in PURPA is why
we're asking for the limit, so with two-year l-imits for
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GROW (Com)
Idaho Power Company
contracts, we believe it would better put the risk over
on the developers, and to the extent there is the
intermittent nature is the other complicating factor.
A coal plant can run 24/1 under al-most any
conditions, in fact, under all conditions, occasionally
they breakdown, but it wou1d you'd have to build a l-ot
more resources in PURPA to cover that. and even then,
again, dt night, during cloudy days, there wou1dn't be
enough capacity to be abl-e to bring it on and be abl-e to
dispatch it and be able to put it into our portfol-io in a
reliable way that we could cal-I on it or turn it off as
needed, l-ike we do our resources, so it woul-d be there
is some energy that you could say fil-Is a need, but it
rea11y does not have the same operating characteristics
as a base load, nor does it have any limit that reaIIy
covers how much we woul-d need to repJ-ace.
It makes it very uncertain and that uncertainty
is why we're here is that we're trying to reduce the
uncertainty that our customers would have to sign up for
and bear for 20 years. Again, we go back to the 111(d),
we don't know what those rul-es are going to be, and we're
continuing to discuss the Va1my shutdown with our
partners, but we're not sure when it will be, how much it
will be, so there's just a lot of uncertainty out
there.
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GROW (Com)
Idaho Power Company
O. Thank you; so one last question, it wouldn't
change or, I guess, instead of leading you into
anything, would your testimony change or your position to
reduce contract l-imits change based on a final rul-e from
the EPA that wou1d require earl-ier shutdown of the coal
plants ?
A. No, it would not.
COMMISSIONER RAPER: Thank you.
EXAMINATION
BY COMMISS]ONER KJELLANDER:
O. Ms. Grow, I just have a couple of clarifying
questions. You were asked a lot of questions from Mr.
Hammond in reference to the exhibit he presented and it
says draft all over it, draft IRP. Vf,hen is the IRP
expected to be fil-ed at the Commission?
A. That is in a matter of days, actually
tomorrow.
O. Tomorrow?
A. Yes.
O. Okay; so based on the version that you saw
there and based on the areas in which you were
questioned, is 1t likeJ-y that the areas that you were
asked to respond to wiff in fact be in the final IRP
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GROW
Idaho Power Company
that's presented to the Commission?
A. I bel-ieve so, yes.
COMMISSIONER KJELLANDER: Okay, thank you.
Let' s move now to redi-rect.
MR. RICHARDSON: Mr. Chairman, before you go to
redirect, Peter Richardson with Cl-earwater Paper.
COMMISSIONER KJELLANDER: Oh, my apologizes. I
didn't know you were separated out, So my apologizes for
ignoring you. That was not my intent. Mr. Richardson.
MR. RICHARDSON: I just wanted to note that we
do not have any questions of Ms. Grow.
COMMISSIONER KJELLANDER: Thank you, Mr.
Richardson. I'11 try not to skip over you next time, but
if I do and the response is the same, maybe f wi11.
Let' s l-ook now to redirect.
MR. WALKER: No redirect, Mr. Chairman.
COMMISSIONER KJELLANDER: Thank you very much.
Ms. Grow, at l-east for now, you are excused and unless
your attorney woul-d l-ike to have you excused, without
objection, we'lf have to wait for that; otherwise, you
may stand by just in case.
MR. WALKER: Mr. Chairman, we would ask, if we
couId, that Ms. Grow be excused, if there's no
obj ection.
COMMISSIONER KJELLANDER: Is there any
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CSB REPORTING
(208 ) 890-s198
objection? If not, then you can be excused. Thank you.
THE WfTNESS: Thank you.
(The witness left the stand. )
COMMISSIONER KJELLANDER: Would you l-ike to
call- your next witness?
MR. WALKER: Thank you, Mr. Chairman. Idaho
Power would like to cal-I as 1ts next witness Mr. Randy
A1Iphin.
COMMISSIONER KJELLANDER: As you are moving up,
before we swear you in, I've been told perhaps we might
want to take just a quick break, so why don't we do so
and we'fI take about 10 minutes.
MR. WALKER: Thank you, Mr. Chairman.
(Recess. )
COMMISSIONER KJELLANDER: We wil-l- be back on
the record and as we return to the record, the second
witness for Idaho Power has been call-ed forward and we're
ready now for Randy Allphin to take the stand.
RANDY ALLPHTN,
produced as a witness at the instance of Idaho Power
Company, having been first duly sworn to tel-l- the truth,
the whole truth, and nothing but the truth, was examined
and testif ied as foll-ows:
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MS. OLSEN: Mr. Chairman, before you get
started with questioning, the Idaho Irrigation Pumpers
wondered if we cou1d just tal-k about some witness
scheduling issues.
COMMISS]ONER KJELLANDER :ExceIlent, Mr. Ol-sen.
Pl-ease proceed.
MR. OLSEN: At least with our witness, Mr.
Yankel has some back issues and we would appreciate the
Chair's indulgence of allowing him to get on as soon as
possible so we could certaj-nIy spread his testimony and
see j-f there's any questions so he could be in a more
comfortable situation with his medical issues.
COMMISSIONER KJELLANDER: Certainly, thank you.
Are there any objections to movj-ng Mr. Yankel upon the
concl-usion of this witness? None? Thank you. If you
could just remind me that that is the case. Are there
any other witnesses as far as the order that we have in
reference to their avail-ability today or any other
considerations as we
MR. SANGER: Yes, Chairman Kjel-l-ander, this is
Irion Sanger with the Renewable Energy Coal-ition
COMMISSIONER KJELLANDER: Yes.
MR. SANGER: -- and Mr. Lowe, John Lowe, is our
witness and he also has some heal-th issues and we would
l-ike to get him on the witness stand as soon as possj-b1e
L69 COLLOQUY
today.
COMMISSIONER KJELLANDER: That is good. Anyone
else?
MR. OTTO: Yes, Benjamin Otto with the
Conservation League and Sierra Cl-ub. Both of my
witnesses are from out of town, one from D.C. and the
other from Oakland, they're avail-able all day, so
hopefully, we can have them on at some point today.
COMMISSIONER KJELLANDER: The Tourism Bureau
would l-ove it if they didn't come up until tomorrow.
MR. OTTO: Yes, I understand that.
COMMISSIONER KJELLANDER: AI1 right.
MR. MILLER: Mr. Chairman, our witness, Mr. Van
Gu1ik, is availabl-e at the cal-l- of the Commission. He
has some other matters he's attendlng to at the moment
and he's completely flexibl-e, but if I just had a l-ittle
bit of an advance notice of when you'd l-ike to hear from
Mr. Van Gu1ik, that woufd be appreciated.
COMMISSIONER KJELLANDER: And is Mr. Van Gulik
here today?
MR. MILLER: He was here and had to leave for a
few mj-nutes, but he can be back kind of basically at the
cal-l of the Commissi-on.
COMMISSIONER KJELLANDER: Remind me to remind
you.
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ALLPHIN (Di)
Idaho Power Company
MR. MILLER: I'11 1et you know.
COMMISSIONER KJELLANDER: Thank you. Anything
el-se? Okay, thank you, l-etrs proceed.
DIRECT EXAM]NATTON
BY MR. WALKER:
O. Could you please state your name and spe1I your
last name for the record?
A. Randy A'11phin, A-l-I-p-h-i-n.
O. And by whom are you employed and in what
capacity?
A. Irm employed by Idaho Power Company as the
energy contracts coordinator l-eader.
O. Are you the same Randy Allphin that filed
direct testimony on January 3Oth, 2075, and prepared
Exhibits No. 1 through 10?
A. Yes.
O. And are you the same Randy Allphin that filed
rebutta1 testi-mony on June 11th, 2075?
A. Yes.
a. And did you also fil-e an Exhiblt No. 11 on June
19th, 20L5?
A. Yes.
MR. WALKER: And Mr. Chairman, 1et the record
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CSB REPORTING
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reflect that Idaho Power prefiled on June 19th Mr.
Allphin's Exhibit No. 11 and I've also handed the court
reporter a copy of that Exhibit No. 11 at hearing.
COMMISSIONER KJELLANDER: Duly noted, thank
you -
O. BY MR. WALKER: Mr. Allphin, coul-d you please
tell- us what is contained in Exhibit No. 11?
A. Exhibit 11 consists of three pages that provide
updated values corresponding to my Exhibits 7, 3, and
9.
O. And excuse me, but doesn't Exhibit 11 actually
contaj-n four pages?
A. Yes, I'm sorry, back to back.
O. And your testimony and Exhibits 1 through 10
contain certain numbers and val-ues as of January 2075?
A. Yes.
O. And Exhibit 11 provides certain numbers and
val-ues as of April 20L5?
A. Yes.
a. And Mr. A11phin, the four pages of Exhlbit
No. 17, do they have any relation to Exhibits 1 through
10?
A. Yes, the pages in Exhibit l-1 reflect updated
val-ues that will be carried through all the exhibits, but
specifically Exhibit 7, 3, and 9.
Idaho
ALLPHTN (Di)
Power Company
L72
O. So page 1 generally corresponds to Exhibit
No. t?
A. Yes.
O. And what about page 2, is there a corresponding
exhibit that that corresponds to?
A. Yes, page 2 corresponds to Exhibit 9.
O. And what about page 3 and 4?
A. Page 3 and 4 correspond to Exhibit 3.
O. Do you have any corrections or changes to your
testimony or exhibits?
A. No. My testimony and Exhibits 1 through 10 are
correct as of January 2015 and Exhibit 11 updates the
total megawatts and dollars of projects under contract
and seeking contracts as of April 2015.
O. If I were to ask you the questions set out in
your prefiled testi-mony, would your answers be the same
here today?
A. Yes.
MR. WALKER: Mr. Chairman, f'd move that the
prefiled direct and rebuttal testimony of Mr. Randy
Allphin be spread upon the record as if read and that
Exhibits 1 through 11 be marked for identification.
COMMISSIONER KJELLANDER: Without objection,
then, the exhibits will be marked for identificatlon and
the rebuttal and direct will be spread across the record
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ALLPHIN (Di)
Idaho Power Company
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as if read.
MR. WALKER: Thank you, Mr. Chairman.
(The followi-ng prefiled direct and rebuttal
testimony of Mr. Randy Allphin is spread upon the
record. )
CSB REPORTING
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ALLPHIN (Di)
Idaho Power Company
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ALLPHIN, DI 1
Idaho Power Company
O. Please state your name and business address.
A. My name is Randy A11phin. My business address
is L22L West Idaho Street, Boise, Idaho 83102.
0. By whom are you employed and in what capacity?
A. I am employed by Idaho Power Company ("Idaho
Power" or "Company" ) as the Energy Contracts Coordinator
Leader.
O. Please describe your educational background and
work experience with Idaho Power.
A. I graduated in t9B2 from Boise State University
with a Bachelor of Business Administration. In June
L982, I accepted a position as a Customer Service
Specialist with Idaho Power. In 1986, I accepted a
positlon as an Operations Accountant in the Operations
and Fuel-s Management accounting group. My specific
responsibilities were accounting for and performing
economic analyses of the Company's agreements with
QuaIif ying Facilities ("QF" ) , as wel-l- as fuels accounting
and thermal- operations and maintenance accounting. In
1998, in addition to the responsibility of performing the
accounting and economj-c analysis of QF agreements, I was
also assigned the responsibillty of administering all
aspects of existing and new QF agreements as the
Cogeneration and Small- Power Production ( "CSPP" ) Contract
Adminlstrator. In 2070, I was promoted to Senior Energy
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Contracts Administrator and was assigned two direct
reports to manage the large number of Idaho Power QF and
other renewable energy agreements. I have been involved
with accounti-ng, economic analysis, contract
administration, and contract negotiations of fdaho Power
QF and renewable energy agreements for approximately 30
years. In addition, I was responsible for the initial
implementation of Idaho Powerrs Oregon Sol-ar Photovoltaic
Pil-ot Program and currently am assigned supervisory
oversight of the adminlstration of that program.
O. What is the purpose of your testimony in this
matter?
A. The purpose of my testimony 1s to provide a
summary of the development of Public Utility Regulatory
Pol-icies Act of 7918 ("PURPA") QF generation projects on
Idaho Power's system and to summarj-ze the current status
of contracts, requests for contracts, inquiries, pricing
requests, etc., related to PURPA energy sal-es agreements,
obligations, and proposed QF projects with Idaho Power.
My testimony is submitted in support of Idaho Powerrs
Petition to Modify Terms and Conditions of Prospective
PURPA Energy Sal-es Agreements asking to reduce the
maximum term of prospective PURPA energy sales agreements
wlth Idaho Power from 20 years to a maximum of 2 years.
O. Have you prepared any exhibits?
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ALLPHIN, DI 2
Idaho Power Company
776
A. Yes. f am sponsori-ng 10 exhibits that were
either prepared by me or prepared at my direction.
O. Could you describe those exhlbits?
A. Yes. Exhibit No. 1 is a graphical depiction of
the current and historical- energy safes agreements that
Idaho Power has been required to enter into with QP
generati-on projects pursuant to PURPA. This graph
identifies the amount, in megawatts ("MW"), by year and
by resource type of signed and approved energy sal-es
agreements with PURPA QFs. It also identifies current
requests for contracts from proposed PURPA solar QFs.
This graph separately identifies the MW leve1s of PURPA
projects under contract and operational- as of January 9,
2075 781 MW; the additional PURPA solar projects that
are under contract as of January 9, 2015, but not yet
operational 467 MW; and the additional PURPA projects
that as of January 9, 2015, have made formal-, written
requests for PURPA energy sal-es agreements with Idaho
Power 885 MW. Exhibit No. 1 ldentifies the total-
amount of PURPA projects, 2,787 MW, that have formally
requested contracts, are under contract, and are under
contract and operational-.
Exhibit No. 2 is a complete listing of all actj-ve
renewable energy contracts that Idaho Power has as of
Janoary 26, 2075. Page 1 of Exhibit No. 2 is a summary
page showing the total number and total- MW of renewabl-e
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ALLPHIN, DI 3
Idaho Power Company
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energy contracts, breaki-ng those total-s down by resource
type and jurisdiction, showing which projects are
operational, and separately identifying PURPA QF projects
and non-PURPA projects. The remaining pages of Exhibit
No. 2, pages 2 through '7, provide the detail summarized
on page 1. Each indivj-dual project is listed by project
number (which is an internal tracking number for Idaho
Power) and identified by resource type, project name,
locati-on by state and county, and the MVI nameplate
capacity. The individual projects are grouped by
resource type, with subtotal-s for the number of
individual projects and the total- MW for each resource
type.
a. Do you have any information concerning any
additional PURPA QF projects seeking to contract with, or
obligate, Idaho Power to PURPA energy sales agreements?
A. Yes. Exhibit No. 3 shows each individual
proposed PURPA QE solar project that has submitted a
written request for indicative prlclng from Idaho Power
for an energy sales agreement. There are 48 individual
projects, for a total- of 885 MW that have submitted such
requests. Because the identity of the project developers
and their specific projects are not public record prior
to such time as they have obtained an executed contract
that is filed with the Idaho Publ-ic Utillties Commission
ALLPHIN, DI 4
Idaho Power Company
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for its approval or rejection, the project developers'
identities
ALLPHIN, DI 4A
Idaho Power Company
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ALLPHIN,
Idaho Power
DI 5
Company
and names of projects have been removed. However,
because in almost al-l- cases a single developer has
proposed several separate projects, a generic identifier;
i.e., Developer A, Project A1, Prolect 42, etc.,
Developer B, Project 81, Project 82, etc., has been used.
Exhibit No. 3 also shows each project's size in MW, the
project's requested contractual term, the location by
state, the project's estimated operation date, and the
estimated 20-year and 2-year contractual obligation in
doIlars.
O. Does Idaho Power have any other requests for
PURPA energy sales agreements besldes those shown in
Exhibit No. 3?
A. Yes. In addition to those 48 projects that
have submitted written requests for indicative pricing
pursuant to Schedul-e 73, Idaho Power has received
numerous other inquiries requesting energy sales
agreements for signlficant amounts of PURPA generation.
However, in the preparation of my exhibits, it was
necessary for the Company to sel-ect a point. in time and
take a snapshot of the current proposed projects at that
point in time. This snapshot was at the time when the
Company had 48 sol-ar project requests for a total of 885
MW, which are depicted in Exhibit No. 3. Since that
point in time, the Company has continued to receive
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numerous requests for additional PURPA QF energy sales
agreements.
ALLPHIN, DI 5A
Idaho Power Company
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ALLPHIN, DI 6
Idaho Power Company
O. What are some of those additional- requests that
are not shown in Exhibit No. 3?
A. Over the last several- weeks, Idaho Power has
received requests for eight additional PURPA solar
agreements totaling 186 MW, a request from a single
developer for five 80 MW pumped storage hydroelectric
PURPA energy sales agreements totaling 400 MW, and
numerous other energy sales agreement inquires.
Additional project requests for generator interconnection
have also been received, in excess of an additional 200
MW, in which the projects have stated their desire to
sell QE energy to the Company; however, these projects
have not yet requested QF energy sales agreements.
O. Do you have other exhibits?
A. Yes. Exhibit No. 4 shows the estimated
contractual obligations of Idaho Power's cogeneration and
small power production QF contract obligations. This
exhibit is broken out by time period, by signed and
proposed contracts, and by resource type.
O. Has Idaho Power done any comparj-sons of its
renewable generation to the renewable portfolio standards
of other states?
A. Yes. Exhibit No. 5 is a chart that depicts a
comparison of Idaho Power renewable generation resources
to the renewable portfolio standard ("RPS") or renewable
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ALLPHIN, DI 1
Idaho Power Company
portfolio goal ( "RPG" ) of Idaho Power's neighboring
states of Montana, Washj-ngton, Utah, Nevada, and Oregon
and to that of California.
a. Could you further describe what is shown in
Exhibit No. 5?
A. Yes. Idaho Power does not have any current
requirements for a RPS or RPG in the state of Idaho, but
what is shown by Exhibit No. 5 is that with only its
currentfy existing PURPA and utility renewable energy
power purchase agreement ("PPA") resources, the Company
woul-d meet a renewable energy standard of 20 percent of
retail load (megawatt-hours ("MWh") ) supplied by
renewable energy (MWh) .Exhibit No. 5 also depicts an
estimated renewabl-e energy 1evel for Idaho Power,
calcul-ated as percent of retail load in MWh supplied by
renewabl-e energy in MWh, for four additional scenarios:
Idaho Power's actual PURPA and utility renewabl-e energy
PPAs plus the 461 MW of PURPA solar under cont.ract 24
percent; Idaho Power's actual PURPA and util-ity renewabfe
energy PPAs plus the 467 MW of PURPA sofar under contract
plus the BB5 MW of PURPA sol-ar proposed - 31 percent;
Idaho Power's actual PURPA and utility renewabl-e energy
PPAs, 467 MW of PURPA sofar under contract, plus Tdaho
Powerrs Company-owned hydro generation 11 percent, and,
finally, Idaho Power's actual PURPA and util-ity renewable
energy PPAs, 46L MW of PURPA solar under
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ALLPHTN, DI 8
Idaho Power Company
contract, BB5 MW of PURPA sol-ar proposed, plus all- of
Idaho Power's Company-owned hydro generation 90
percent. The latter two scenarios depict that if Idaho
Power's 1,,709 MW of hydroelectric nameplate capacity were
combined with the Company's acquired renewable capacity,
which would represent over 3,100 MW of renewable
generation capacity, it would equate to 90 percent of
retail- load supplied by renewabl-e energy. In fact, af
the Company's PURPA generation, including PURPA sol-ar
under contract and proposed, were considered, Idaho Power
would exceed the RPS requirements of its neighboring
western statesr ds well as California, at 31 percent of
retail l-oad supplied by renewable energy.l
O. Have you conducted, or directed, any analysis
of Idaho Power's PURPA generation?
A. Yes. Using information from Idaho Powerrs Load
Serving Operations Group, I have prepared Exhibit No. 6.
Exhibit No. 6 is a serj-es of graphs consisting of 24
separate graphs, one per page, which depict the first
week of each month for the years 2016 and 2077 and one
summary page. These graphs depict an analysis conducted
by Idaho
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1 this comparison is done to show the magnitude of QE
development and Company-owned hydro compared to varj-ous mandatory RPS
requirements. Because ldaho Power does not receive the Renewable
Energy Certificates,/Credits ("RECs") from most of its QF generation,
this generation cannot be used to meet any potential RPS requirements
and Idaho Power cannot represent to customers that they are receivj-ng
renewabfe energy from the QFs, or from generation, for which it does
not receive the RECS, and is not making any such representation here.
ALLPHTN, Dr 8a
Idaho Power Company
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ALLPHIN, DI 9
Idaho Power Company
Power which compares estimated total system Ioad, on an
hourly basis, over 2016 and 2011, to the Company's
must-run resources, must-take PURPA generation, and
must-take non-PURPA power purchase agreements. The
estimated load 1s taken directly from the Company's
operational forecast. The must-run Company-owned
resources are comprised of Idaho Power's hydro and coal
generation, and are represented at must-run minimum
Ievel-s. This means that they are taken down to minimum
operational levels where they cannot be backed down any
further without violating environmental- regulations for
hydro, and without being shut down for coal. Must-take
PURPA and non-PURPA purchases are taken from Idaho Power
forecasted generation from the various PURPA projects
currentl-y under contract with ldaho Power. This forecast
j-s a combination of historical generation information
from existing projects and project-provided estimated
generation as contained within the contracts. There is
no 9ds, market purchases, market saIes, or other
generation depicted on the graphs or analysis.
O. What is shown by this analysis?
A. This analysis shows the frequency with which
Idaho Power's system, when in a state where it cannot be
backed down any further, wiIl have generation resources
in excess of its system load. This wiII put the system
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into an imbalanced, over-generat.ion state unless some
remedial
ALLPHTN,
Idaho Power
DI 9a
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ALLPHIN, DI 10
fdaho Power Company
action is taken to balance the system. If remedial-
actions are not available, or not employed in a timely
manner, then the Company can have system reliability
violations, events, and/or outages and damage. In fact,
over the l-ast several years, reliability curtail-ments of
PURPA generation have been necessary in order to maintain
the integrity of Idaho Power's system. Eor the period
from May 2011 through December 20L4, the Company has had
at least 15 reliability events that resulted in wind
generation output reductions in order to maintain the
rel-j-able operation of the Company's electrical system.
These curtail-ments, or generation l-imitation set poj-nts,
have been relatively infrequent, for relatively short
durations, and are removed as soon as possible once it
can safely be done and maintain a bal-anced system.
O. What is the frequency of hours, over the years
2016 and 201,1, in which fdaho Power's must-run and
must-take resources exceed total system load?
A. The summary page of Exhibit No. 6 shows the
frequency of hours in which must-run and must-take
generation will exceed total system load, and is broken
out into four categories:(1) Idaho Power's
Company-owned must-run hydro and coal- plus non-PURPA
must-take power purchases, without the addition of any
PURPA generation 2,492 hoursr or 74 percent, of al-I
L7,544 hours during 20L6
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ALLPHIN, DI 11
Idaho Power Company
and 2071; (2) everything included in category 1 plus all
existing PURPA generation (excluding solar) - 5,720
hours, or 29 percent, of al-l 77,544 hours during 2016 and
20L7; (3) everything included in category 2 plus all-
PURPA under contract (including PURPA solar under
contract - 46t. MW) 5,'109 hoursr or 33 percent, of al.l-
L1 ,544 hours during 2076 and 20!1 ; and l-ast , (4)
everything in category 3 plus the 885 MW of proposed
PURPA sol-ar - 6,952 hours, or 40 percent, of all 7'l ,544
hours during 2016 and 2017. Each one of these hours
creates a potential over-generation event where remedial
action of some kind wil-l- be necessary to keep the system
in balance and meet the obligation to reliably serve
customers.
0. Can you describe your remaining exhibits?
A. Yes. Exhibit No. 7 shows the annual actual and
forecasted PURPA expense from 2004 through 2025, which
increases from approxlmately $40 million in 2004 to
approximately $230 mil-l-ion in 2025. This is an
approximate 575 percent increase over those 22 years.
Exhibit No. 8 shows the approved net power supply expense
incl-uded in Idaho Power's base rates on a normalized
basis for 20L0, 2072, and 2013.
O. What costs have been included in base rates for
net power supply expenses over those years?
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ALLPHIN, DI 12
Idaho Power Company
A. Exhibit No. B shows the major Federal Energy
Regulatory Commission ("FERC") accounts for net power
supply expenses that have been i-ncluded in base rates
since 20L0. The ma;or FERC accounts include Account 501,
Coal-; Account 541, Gas; Account 555, Purchases; and
Account 447; Surplus Sales. Account 555, Purchases, has
been split into two separate line items, one for
purchases that are non-PURPA related and the other for
purchases of PURPA generation.
O. What do these numbers refl-ect with regard to
the relationship of purchases for PURPA compared to the
other cost components of net power supply expense?
A. It has been suggested that even though PURPA
generation may not be needed to meet current customer
load, it can be assumed that the excess generation could
be sold as surplus sales, and therefore benefit the
customer by a reduction on net power supply expense.
Based upon the dollars included in base rates that are
refl-ected in Exhibit No. 8, this assumption would not. be
accurate. In fact, even though net power supply expenses
assoclated with the purchase of PURPA have increased,
surplus safes have decreased, both in vofume and in
doll-ars. The gap between the cost per MWh of PURPA and
the price for surplus sales has wi-dened, meaning that the
average price lncl-uded in base rates that the Company
must pay to purchase PURPA
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generation even though it is not needed to meet load is
greater than the price the Company could sel-l- that same
generation on the market. Customers are adversely
impacted by having to pay for generation that is not
needed to serve load whil-e decreasing the amount of the
surplus sales credit offset.
0. Why have surplus sales decreased so much in
recent years, both in terms of doll-ars and volume?
A. There may be a number of reasons for the
reduction in surplus sales. One reason may be the
increased amount of avaj-1able generation in the Pacifj-c
Northwest, much of it due to the increase in wind and
solar generation. Another major reason for the lower
price of surplus sales may be the cost of 9ds, whj-ch has
decreased significantly over the past several years. The
bottom line is that it may not be prudent to lock in
long-term pricing for generation at a time when overall
costs for technology and fuel are decreasing.
O. What is the relat.ionship of the cost for PURPA
generation compared to the costs of the other components
of net power supply expense?
A. As shown in Exhibit No. 8, the cost of
purchases of PURPA generation cont.aj-ned in base rates, or
a dol-lars per MWh basis, is now greater than al-l the
other cost components. At. $62.49 per MWh, the averagecost of
ALLPHIN, DI 13
Idaho Power Company
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ALLPHIN, DI 14
Idaho Power Company
PURPA purchases is greater than the average cost of coal
at $22.19 per MWh, greater than gas at $33.57 per MWh,
greater than non-PURPA purchases of $50.64 per MWh, and
significantly greater than what is being sold as surplus
sales at $22.41 per MWh.
O. What is the implication of these pricing
differences and the potential impact on the Company's
customers?
A. If the Company is required to purchase PURPA
generation when it is not needed, the Company may be
required to curtail- other less expensive sources of
generation or market purchases in order to continue
purchasing PURPA generation at a hi-gher cost. This woufd
mean that the Company's overall net power supply expense,
on a dollars per MWh basis, wouJ-d increase, adversely
impacting the customer.
O. Are you presenting any other exhibits?
A. Yes. The l-ast two exhibits f am sponsoring are
Exhibit Nos. 9 and 10. Exhibit No. 9 is similar to
Exhibit No. 3, except the information is for PUPRA solar
projects that are under contract as of January 20, 2075.
Each project is listed individually by name. Exhibit No.
9 shows each project's size in MW, the term of the
contracts (which are al-l for 20 years), the location by
state, the schedul-ed operation date (which is 201,6 for
a1l- projects) ,
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and the estimated contractual obligatlon for both a
2l-year term and 2-year term in dollars.
Exhibit No. 10 is a graphical depiction of the average
actual per MWh cost of PURPA energy purchases and Mid-C
market prices through year-end 201,4 and the same two
val-ues forecasted through 2030.
O. Does this conclude your testimony?
A. Yes.
ALLPHTN, Dr 15
Idaho Power Company
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ALLPHIN, REB 1
Idaho Power Company
O. Please state your name and business address.
A. My name is Randy Al1phin. My business address
is L22l West Idaho Street, Boise, Idaho 837A2.
O. By whom are you employed and in what capacity?
A. I am employed by Idaho Power Company ("Idaho
Power" or "Company" ) as the Energy Contracts Coordinator
Leader.
O. Are you the same Randy AIIphin that previously
provided direct testimony for Idaho Power in this matter?
A. Yes.
O. What is the purpose of your rebuttal testimony?
A. My rebuttal testimony will provide Idaho
Power's response and rebuttal to the testimony offered by
the other parties in this proceeding.
O. Have you had the opportunity to review the
pre-fi1ed direct and rebuttaf testimony of the other
parties to this proceeding, incl-uding the Idaho
Conservation League and the Sierra Club's witnesses R.
Thomas Beach and Adam Wenner; the fdaho PubIic Util-ities
Commission ("Commission") Staff r s ("Staff") witnesses
Rick Sterling and Yao Yin; J. R. Simplot Company
("Simp1ot" ) and Cl-earwater Paper Corporat j-on' s
("Cl-earwater") witness Mr. Don Reading; Intermountaln
Energy Partners, LLC's witness Mark Van Gul-ik; Renewable
Energy Coalition's witness John
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R. Lowe; Snake River Al-l-iance's witness Ken Mil-ler; and
the Idaho Irrigation Pumpers Association, fnc.'s ("IIPA")
witness Anthony J. Yankel-?
A. Yes, f have. I have
testimony offered by the other
Corporation and Rocky Mountain
also reviewed the
utilities, Avista
Power, d/b/ a Pacif iCorp.
your rebuttal- testimony0. Pl-ease summarj-ze what
will address.
A. Commission Staff supported the Company's
request to reduce the maximum contract term, but suggests
a maximum term of five years, ds opposed to Idaho Power's
requesLed maxi-mum term of two years. IfPA also supported
Idaho Power's request to reduce the maximum contract term
to two years. In general, the remaj-nj-ng parties opposed
Idaho Power's request. Several fntervenors question the
Commission's authority to reduce the maximum contract
term, present argument that a shorter term will- prevent
Qualifying Facility ("QF") financing for new projects,
and argue that granting a shorter term for QF contracts
would resul-t in unequal treatment between QFs and
utility-owned resources, along with several other
arguments. Various Intervenors proposed, as an
alternative, a 2)-year contract term with a fixed-price
portion of the 2)-year term and the remaining term having
some type of price adjustment.
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ALLPHIN, REB 2
Idaho Power Company
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ALLPHIN, REB 3
Idaho Power Company
wil-l- address many of these j-ssues in this rebuttal-
testimony.
O. Do the parties that oppose reduction in the
contract term address the issues raised by fdaho Power
related to no current need for additional- generation
resources?
A. No. None of the parti-es opposing the requested
reduction in maximum authorized contract term have
addressed the larger j-ssues related to need for
additional generation resources and the dj-sproportionate
amount of risk that long-term, fixed-rate, unchangeabl-e
QF contracts place upon Idaho Powerrs customers without
the benefit of the Commission's or the public's scrutiny
of its acquisition, like Company-owned resources must
endure.
O. Staff references in its rebuttal, testimony the
fact that various wj-tnesses have suggested there is
unequal treatment between QFs and util-ity-owned
resources, and Mr. Reading, on page 9 of his direct
testJ-mony, states, "Treating PURPA resources on an equal
footing with utility-owned resources would mandate they
al-so should receive longer-term contracts." What is
Idaho Power's positlon and response on this issue?
A. Idaho Power generally agrees with the
statements and position of Staff, which acknowledges that
QFs and utility-owned resources are not treated the same.
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ALLPHIN, REB 4
Idaho Power Company
The other parties make the erroneous assumption that QFs
are to be treated exactly the same as utility-owned
resources. However, Staff points out that QFs are
treated differently primarily because of the unique
requirements of the Public Utility Regulatory Policies
Act of 1978 ("PURPA") and that this di-fferent treatment
is very much to the benefit, rather than to the
detriment, of the QF. Idaho Power submits that lfaQE
and itswere subjected to the same regulatory standards
acquisition and cost was scrutinized in the same manner
as a utility-owned resource, then it coul-d expect similar
treatment. However, that is not the present reality. A
utility-owned resource is only considered in the first
j-nstance if there is a aeed for the acquisition of
additional- generation resources to reliably serve
customers. Presently, a QF project woul-d fail- this
initial standard and thus would not be purchased.
AdditionaIIy, beyond an initial identification of need,
utility-owned resources are subjected to further
evaluations of selecting the appropriate type of
resource. The operational characteristics, reliability,
costs, and other relevant aspects of whether any
particular resource is the most appropriate resource must
be determined before seeking Commission approval to
construct such resource. Even further, once constructed,
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the utility-owned resource is subjected to further
Commission and public scrutiny in a
ALLPHTN, REB 4a
Idaho Power Company
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ALLPHIN, REB 5
Idaho Power Company
proceeding to place it into the utility's rate base, and
on an on-going, annual basis with regard to the fuel and
variable cost, which are subject to annual- adjustment
through the Power Cost Adjustment. Consequently, the
argument that the QF is somehow entitled to the same type
of capital cost recovery as a utility-owned resource
simply does not logica11y make sense.
O. Are there other examples of the parties'
inappropriate comparison of QF resources to util-ity-owned
resources ?
A. Yes. Mr. Reading, oD pages 24 through 26 of
his direct testlmony, attempts to argue that because
PURPA projects get paid onJ-y when they supply power to
the utility, they are somehow a better val-ue and "risk
hedge" than a utility-owned resource. This may seem to
make sense on the surface, but Mr. Readlng l-eaves out an
important aspect of the operational differences between a
PURPA project and a utility-owned resource, whi-ch makes
al-l the difference. Utility-owned resources are
economically dispatched, or only run when they are l-ess
costly that other al-ternatives or when they can be sold
at a profit. However, a PURPA generator will- run as
much, and as often, as it can to maximize its
profits-without regard to whether 1t is needed and
without regard to the avail-ability of other lower-costresources. Utility-owned resources are
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ALLPH]N, REB 6
Idaho Power Company
only constructed and operated to serve the public
lnterest, a factor that is closely monitored, regulated,
and control-l-ed by the Commission. QF resources are
constructed and operated solely to make a profit for its
owners/investors, with no constraint or obligation to
serve in the public interest. Because of PURPATs
must-purchase obllgation-and because the QF is motivated
to maximize its profits and not concerned with meeting
need on a least-cost, reliable basis-the utility must
accept the QE generation tf, when, and in whatever
amounts the QF decides to put to the utility. This can
result in the utility foregoing the operation of its
Iower-cost resources, acquired after careful Commission
scrutiny to serve the public, in order to take the power
that is put to it by the QF. This situation can only
grow in magnitude as more must-take PURPA is forced onto
the system at a time when the utility's Integrated
Resource Plan ("fRP") shows no need for additional
generation resources to meet need/l-oad.
O. Mr. Reading attempts to make a cost comparison
of PURPA resources and Idaho Power's thermal generation
resources on pages t4 and 15 of his direct testimony.
Has Idaho Power reviewed Chart I on page 15 of Mr.
Reading's direct testimony?
A. Yes.
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ALLPHIN, REB 1
Idaho Power Company
O. Was Idaho Power able to replicate all of the
values presented by Mr. Reading in that chart?
A. No, not all of them. Idaho Power was able to
replicate al-1 of the val-ues except the val-ue presented
for the Bennett Mountain generation unit. Mr. Reading's
Chart 1 presents a cost per megawatt-hour ("MWh") for the
Bennett Mountain generation unj-t of $253.87. He cites
the sources of the numbers as being from the Companyrs
2013 Federal Energy Regulatory Commission ("FERC") Form 1
as well as some Company responses to Simplot's production
requests. Using those same resources, Idaho Power was
able to validate all- of the other numbers in Chart 1-, but
for the Bennett Mountaj-n generation unit. Using the same
assumptions as Mr. Reading, fdaho Power cal-culated a cost
per MWh of $171.28.
O. What is Mr. Reading attempting to demonstrate
with the numbers shown in Chart 1 of his testimony?
A. Mr. Reading is responding to Exhibit No. 10 of
my direct testimony, which is a graphical depiction of
the average actual cost per MWh of PURPA energy purchases
and Mid-C market prices through year-end 201,4 and the
same two vafues forecasted through 2030. I provided
Exhibit No. 10 as support for the statement that if the
Company is required to purchase PURPA generation when it
is not needed, the Company may be required to curtai1
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Idaho Power Company
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expensive sources of generati-on or market purchases in
order to continue purchasing PURPA generation at a higher
cost. Al1phin, DI p. t4. Exhibit No. 10 shows that the
average PURPA price is greater than the Mid-C Index in
al-l- years, both historically and forecasted.
Does Mr. Reading agree with the Company's
concfusion?
A. No. Mr. Reading claims that the Company is
only "telling hal-f of the story. " Mr. Reading does not
dispute the j-nformatj-on provided in Exhlbit No. 10, which
shows that historical- Mid-C prj-ces have been lower than
PURPA prices since 2002 to the present and are projected
by Idaho Power to be l-ower over the next 20 years.
However, Mr. Readlng cl-aims that is just the first hal-f
of the story. He claims this comparison fails to
recognize that capital costs are incl-uded in the per MWh
price of PURPA, and suggests that Mid-C prices are market
prices and are more reasonably related to the variable
running costs of existing generating resources that do
not contain capital costs.
O. What does Mr. Reading believe is the
appropriate comparison to PURPA prices?
A. Mr. Reading believes a more appropriate
analysis would be comparing PURPA rates to what he cl-aj-ms
customers pay for in the Company's own generation
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ALLPHIN, REB B
Idaho Power Company
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ALLPHIN, REB 9
Idaho Power Company
facilities, by including rate-based capital costs along
with fixed and variable operating costs.
O. Is this an appropriate comparison?
A. No, not at all. Mr. Reading is attempting to
mislead the Commission by uslng an inappropriate
comparison of the cost for the must-take PURPA energy on
a cost per MWh basis compared to all of the Company's
thermal generating resources, regardless if they provide
baseload generation or are a peaking resource, which are
only used when needed to meet system load and/or are
economically viable to run. Mr. Reading provides his
Chart 1 (including the erroneous Bennett Mountain
calculation) to t.ry and demonstrate his assertion that if
you incl-ude the capital costs of the Company's thermal-
resources, it would show PURPA is lower cost than many of
the Company's generating resources. However, the
Company's peaking resources were planned to operate only
on an as-needed basis, dt times when it is necessary to
meet the Company's system peak and/or they are
economically viable to run. Consequently, when you
incl-ude the capital costs of a peaking resource with the
variable costs of running the plant, divided by the net
generation for the p1ant, the average cost per MWh for
the peaking resource w11I be greater than other resources
with greater MWh of output.
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The peaking resources were specifically buil-t to meet
capacity, rather than energy needs.
O. Does Mr. Reading discuss the various processes
undertaken by the Company in determining the need for an
additional generation resource or the type of resource
needed?
A. No. Mr. Reading completely ignores the fact
that, unlike PURPA resources, the Company's generation
resources, like the peaking pJ-ants I just described, were
determined to be needed prior to being buil-t and endured
significant public scrutiny through the required IRP
planning process, ds wel-l- as achieving regulatory
approval through a Certificate of Publ-ic Conveni-ence and
Necessity (CPCN) hearing that determined the need for
that resource at the time it was built. Further, before
being placed into rates, Idaho Power has to prove before
the Commission that the expenditures in these plants were
prudently incurred. As I referenced earl-ier in my
testimony, PURPA projects are not subject to this same
scrutiny and determination of need.
O. Does Mr. Reading's comparison appropriately
ref1ect the potential customer impact of fdaho Power's
forced purchase of unneeded PURPA generation?
A. No. My testimony and this filing address the
future impact to customers' rates, and the undue
inflation
ALLPHIN, REB 10205
Idaho Power Company
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ALLPHIN, REB 11
of those rates if the Company is forced to purchase
energy it does not need at prices higher than those of
alternative resources. The capital costs for existing
resources that Mr. Reading includes in his analysis are
inappropriate given current operating conditions, and
distort potential customer impacts in a manner that
inaccurately depicts PURPA as a relatively low-cost
option.
0.
A.
Pl-ease explain.
The capital costs associated with ldaho Power's
existing generation facilities are already embedded in
rates and, as described above, were only authorized for
recovery after thorough regulatory revJ-ew and scrutiny by
the Commission, the public, and intervening parties.
These facilities were ul-timately determined to be in the
public interest, and currentl-y operate to reliably meet
Idaho Power' s l-oad requj-rements 24 hours a day, 7 days a
week, 365 days a year.
On a going forward basis, ds identified in Idaho
Power's recent draft of its 2015 IRP just released on the
Company's website, the IRP analysis has identified for
the preferred portfoli-o no need for additional generation
resources in the near term. The first year a capacity
deficiency exists is in 2025, while the first energy
deficient period is in 2026. Therefore, the true impact
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to customers' biIls over that time period will reflect
how
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ALLPHTN, REB 72
Idaho Power Company
Idaho Power utilizes existing generation resources
(Company-owned, existing PURPA, market purchases) to meet
customer need, as well as any additional PURPA generatj-on
it is required to purchase. An accurate cost comparison
should reflect current operating conditions and the
reality of these circumstancesr do area in which Mr.
Reading's analysis fail-s.
By including capital costs associated with plants
that are already meetlng customer need, Mr. Reading's
analysis distorts the potentlal- impact to customers by
inappropriately combining embedded capital costs
associated with existing facil-ities and i-ncremental- costs
associated with new unneeded PURPA resources. In doing
so, the resul-tant prices do not indicate the lowest-cost
future course of action, because they inc1ude
construction costs associ-ated with resources that have
already been constructed, and compare them to incremental
costs that have yet to be incurred. When evaluating
future customer impacts, embedded costs should not be
compared to i-ncremental- costs, ds they do not reflect
cost increases customers wil-l- face if Idaho Power is
forced to purchase unneeded PURPA generation.
O. Why should the figures in your Exhibit No. 10
table be rel-led upon by the Commission rather than Mr.
Reading's analysis?
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ALLPHIN, REB 13
A. Unlike Mr. Reading's flgures, the cost
comparison provided in Exhibit No. 10 reflects a
realistic expectation of the future lmpact to customers.
Given the l-ack of need for new capital resources in the
next 10 years, the cost to serve customers over that time
period wil-l- reflect how Idaho Power operates existing
Company-owned resources in conjunction with must-take
PURPA and market purchases. For comparison purposes,
Idaho Power provides historical and forecast prices for
the Mid-C market, which is frequently utilized by Idaho
Power for off-system market purchases. On a going
forward basis, these figures provide a real-istic
estimation of the costs Idaho Power would incur to serve
customers absent additional 2)-year, fixed-price PURPA
contracts, and can be relied upon by the Commission as an
expectation and approximation of the future impact to
customers.
O. Several of the opposing parties argue that QF
projects will not be abl-e to obtain financing with a
reduction of the maximum contract term to two years.
Does Idaho Power agree?
A. I do not think the term reduction w111
absol-ute1y prevent any kind of financing for QF projects.
Certainly, the same type of financing, and the terms of
the fi-nancing, will 1ikely be different than today where
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QF projects are able to finance a risk-free guarantee of
a 20-
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year stream of prices and income. However, the argument
of the parties that PURPA and FERC requj-re the Commission
to provide QF projects with a contract that enab1es
risk-free financing for their projects is incorrect.
Everyone knows that one purpose and intent of PURPA is to
promote the development of additional cogeneratlon and
smal-I power production. However, PURPA also requires
that the utility's retail customers, who pay for PURPA
purchases, be held neutral- as to whether that generation
was acquired from PURPA or otherwise provided by the
utility. The promotion of the development of additional
cogeneration and small power production QFs required by
PURPA is accomplished by use of the mandatory purchase
obligation. Promotion is not to be provided with the
rates, terms, and financing available for QF projects.
PURPA directs that the purchase price is not to exceed
the utility's avoided cost, and must be just and
reasonabl-e to the utility's customers. This
determination was given to the state Commission to
establish. The Commission recognlzed this concept j-n its
order from Phase II of the previous generic avoided cost
and PURPA contracting case, Case No. GNR-E-11-01. The
Commission found:
Avoided cost rates are to be just and
reasonable to the utility's ratepayers.
PURPA entitl-es QFs to a rate equivalent tothe utility's avoi-ded cost, a rate that
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ALLPHIN, REB 14
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ALLPHIN, REB 15
Idaho Power Company
hol-ds utility customers harmless not arate at which a project may be viabl-e. If
we al-l-ow the current trend to continue,
customers may be forced to pay for
resources at an infl-ated rate and,potentially, before the energy is actually
needed by the utility to serve itscustomers. This is clearly not in thepublic interest.
Order No. 32262, p. 8 (lnternal citations omitted).
Idaho Power's position is that the must-take obllgation
of PURPA does not require a proposed QF project be
provided with risk-free financing by the Company and its
customers.
The must-take, or mandatory purchase, obligation of
PURPA is the way PURPA was designed to promote the
development of additional cogeneration and smal-l power
production facil-ities. This mandatory purchase
obligation does not go away with the expiration of a
contract term, and, once the contract term expires, the
QF project can then enter into a new contract wj-th the
utility; the utility is still obligated to purchase.
However, in order to protect customers from paying
infl-ated, outdated costs that exceed avoided cost, or
from shouldering the entire risk of such which i-s
associated with a long-term, fixed-price contract, the
best viable alternative is to set a shorter maximum
contract term. It is in thj-s way that the Commission can
assure an updated avoided cost rate is implemented for
individual projects. The Company has
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ALLPHTN, REB 76
Idaho Power Company
proposed a two-year contract term, the same time frame
used by the Company in its determination of the need for
additional resources carried out through the IRP process.
0. Some of the parties have proposed to retain
long term, 20-year contracts but to have a portion of the
term with fixed prices and the remaining term with an
adjustable rate portion of the long-term contracts. What
is Idaho Power's positi-on with regard to these proposals?
A. Such arrangements have been implemented to some
extent in the past, where different mechanisms were
implemented that provided some portion of adjustable
rates in a PURPA contract. The Company believes this to
be slightly better than the current implementation where
the entire 2O-year contract term is at fixed rates, with
Idaho Power's customers shouldering the entire risk.
However, this sol-ution has at least two major problems
assocj-ated with it. First of all, from the past
arguments put forth by many QF parties, the ability to
adjust prices in a PURPA contract, once that contract is
execuLed, approved, and put into place, is questionable.
The Commission and the Company have both faced
substantial- opposltlon to the legality of any kind of
"contract reopener" that would adjust the avoided cost
rate during the term of a contract. Whether a contract
that contained adjustable avoided cost rates would be
considered valid is questionable, ds FERC
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ALLPH]N, REB L7
has opined that once the rates are established in the
contract, they cannot be changed, even in the face of
dlrect evj-dence that they are grossly out of sync with
the utility's avoided costs in the future. As referenced
above, a short-term contract woul-d not abrogate the
utility's must-purchase obligation. Once the current
contract term expired, the utility would be required to
enter lnto a new contract-but at the current calculation
of its avoided costs. In this wdy, the Commission could
mJ-tigate the long-term risk shouldered by customers, and
assure that the rates are refreshed to current rates at
least every two years, which is consistent with both the
Company's IRP process as wel-l- as its Commission-approved
Risk Management PoIicy for power purchases.
Secondly, retention of a long-term contract, even
with an adjustable portion of the rate, if such were
determined to be legal, would still expose the Company's
customers to unreasonable rj-sk. Moreover, given the
mandatory purchase requirement of PURPA, j-s rea11y
unnecessary. Additionally, if there was a legislative
change in PURPA affecting the mandatory purchase
obli-gation, or if a viable RTO, ISO, or other PURPA
exempt market developed in Idaho Power's service
territory, customers would be locked into long-term
contracts, and potentially not able to benefit from these
changes for the
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ALLPHIN, REB 18
Idaho Power Company
next 20 years. Retention of a long-term obligation on
customers would continue to allocate a disproportionate
and harmful amount of ri-sk to Idaho Power customers.
O. The testimony of Mr. Wenner on behalf of the
Sierra Club and the Idaho Conservation League states his
legal opinion that a two-year contract term "does not
satisfy the EERC's regulations and is inconsistent with
PURPA." Wenner, DI p. 2. Have you reviewed Mr. Wenner's
testimony?
A.
o.
Wenner's
Yes, I have.
Does Idaho Power have any response to Mr.
testimony?
Yes. Mr. Wenner's testimony is somewhat odd inA.
that Mr . Wennerr ds an attorn€y, appears to provide his
own legal opinion, argument, and anal-ysis regarding an
argument that FERC somehow has prescribed or intended
long-term contracts to be in excess of 10 years and that
two year contracts would be iIIega1. Although Idaho
Power intends to ask the Commission to strike Mr.
Wenner's testimony as improper, it is important to note
that even Mr. Wenner, oo page 5 of his direct testimony,
acknowl-edges that there is no FERC regulation specifying
the number of years or requi-red term for a contractuaf or
lega11y enforceable obligation by which QFs are entitled
to receive avoided cost rates.
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Mr. Reading al-so argues that FERC's regulatj-ons
requj-re long-term contracts. These arguments attempt to
create something that simply is not there. As
acknowl-edged by Mr. Wenner, and stated by Mr. Sterling on
behalf of Staff beginning on page 10 of his direct
testi-mony, FERC's regulations lmplementing PURPA are
silent on contract length. The partles' attempts to
create a required long-term contract length where none
exists is unpersuasive. The Commission has from
time-to-time adjusted the maximum contract term avail-abl-e
to QFs in the state of Idaho. The Commission approves
and/or directs the use of many different contractual
terms and conditions contained in the Energy Sales
Agreement contracts that are individually approved or
rejected on a case-by-case basis in PURPA purchases. In
doing So, the Commission ba1ances the protection of
utility customers and the promotion of sma1l power
production and cogeneration facil-ities. However, ds
discussed above, the Commission has recognized that the
promotion of QF projects through PURPA is accomplished by
the mandatory purchase obligation, not a promotional- rate
and/or promotional terms and financing arrangements.
Smal-I generators, partlcularly renewabl-e generators, have
other avenues outside of PURPA designed to promote
development.
ALLPHTN, REB 79
Idaho Power Company
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Some parties, such as Mr. Reading
behalf of Simplot/Clearwater and t
and Mr.
he IfPA,
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ALLPHTN, REB 19a
Idaho Power Company
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ALLPHIN, REB 20
respectively, have offered criticism of your Exhibit No.
6. Does fdaho Power have a response?
A. Yes. Mr. Reading, in particular, argues that
the information can be configured or re-displayed in
different ways to make it look different, or appear that
it is the Company's resources contributing more to
over-generation events than PURPA projects. However, no
matter how the information is displayed, Idaho Power does
not dispute the fact that over-generation occurs, even
with its own must-run resources, just as with the
must-take PURPA generation. That was not the point. One
point and purpose for the information in this exhibit is
to provide evidence of instances in which the Company
must manage through over-generation events on its system.
Typically, the Company's resource planning, the IRP
process, looks at peak hour capacity and energy deficits
to make sure the Company adequately plans to meet its
obligation to reliably serve all l-oad on its system.
This exhibit provides val-uabl-e j-nformation about system
operations and resource suffi-ciency for other times of
the day and year, somewhat on the other end of the
spectrum from the typical IRP anal-ysis.
Exhibit No. 6 shows the frequency with which Idaho
Power's system, when in a state where it cannot be backed
down any further (on1y must-run and must-take generation
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ALLPHTN, REB 27
Idaho Power Company
is running) , wil-l- have generation resources j-n excess of
its system load. As discussed in my direct testimony
startj-ng on page 8, this puts the system into an
imbalanced, over-generation state that requi-res remedial
action to balance the system. The addition of more
must-take PURPA generation wil-l- exacerbate the problem
and increase the number of over-generation events that
Idaho Power must manage, ds can be seen on the summary
page of Exhibit No. 6 (ranging from a 29 to 40 percent
increase). Additionally, Idaho Power wil-l- have no
ability to dispatch these must-take PURPA QF resources;
thus, the management of this increased number of
over-generation events will- have to be absorbed and
managed by existing Idaho Power generation resources.
This can result in more costly and l-ess efficient
operations of the Company's resources, and increased
costs passed on to Idaho Power customers.
O. Commission Staff supported the Company's
request to reduce the maximum contract term, but suggests
a maximum term of five yearsr ds opposed to Idaho Power's
requested maximum term of two years. What is Idaho
Power t s response?
A. Idaho Power apprecj-ates and agrees with Staff 's
analysis and recommendations. The Company is very
cognizant of the fact that the Commission has util-ized a
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but
ALLPHTN, REB 2ta
Idaho Power Company
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the Company maintains its request for a two-year maximum
term. A two-year term is consistent with the
Commlssionfs existing determination of reasonable risk
exposure to customers in both the IRP process and the
Company's Risk Management Policy. As stated in the
Company's Petition and direct testimony, the IRP is
updated with a new planning document that is fil-ed with
the Commission every two years.In l-ike manner, under
the Commission-approved Risk Management Policy, which
governs the Company's purchase and sales of generation,
typical transactions do not exceed 18 months, and any
transactions longer than two years require specific
Commisslon approval. The Commission has determined that
two years is the reasonable and prudent period of time in
which to update forecasts and to not expose customers to
undue market and transactional- risk associated with the
purchase of generation. This should also be applied to
the undue risk and burden placed upon customers with the
must-take PURPA obligation.
O. Do you have any surnmary or concluding
statements for the Company's rebuttal- testimony?
A. Yes. As stated in the Company's Petition and
direct testimony, Idaho Power continues to believe the
continued creation of 2O-year, fixed-price contracts
pJ-aces undue risk on customers at a tlme when fdaho Power
has sufficient resources to meet customer demands. The
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ALLPHIN, REB 23
Idaho Power Company
Company's required IRP process is filed and updated every
two years. Non-PURPA purchase and sales transactions are
limited to l-ess than two years pursuant to the approved
Risk Management Policy. Avoided cost rates are updated
at l-east every year. Idaho Power has no current
identifiable need to acquire any additional generation
resources through 2021, and likely out to at least 2025,
as noted in the upcoming 2075 IRP. The requirements for
acquiring additional generation resources, particularly
that of establishing need for the resource and meeting
that need in the least cost, most rel-iable manner, are
absent 1n the mandatory PURPA QE purchase. The furt.her
constraint imposed by PURPA that el-iminates the ability
to modify, adjust, or change the prices that are 1ocked
into a PURPA contract for the duration of its
term-regardless of whether all costs were included
whether actual- costs and conditions changed or
varied-makes long-term, 2)-year contract terms ris
harmful to Idaho Power customers. The Commission
reduce the maxlmum term to two years to match the
determj-nation of prudent updates and risk exposure
have been established for the IRP and non-PURPA
purchases.
or
ky and
should
that
o.
A.
Does this conclude your testimony?
Yes.
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CSB REPORTING
(208 ) 890-5198
ALLPHIN
Idaho Power Company
(The following proceedings were had in open
hearing. )
MR. WALKER: Mr. Allphin is avail-abl-e for
cross-examination.
COMMISSIONER KJELLANDER: Thank you. Mr.
Richardson, since I skipped you the first go-around,
Iet's start with you.
MR. RICHARDSON: I'm going to take a pass,
Mr. Chairman.
COMMISSIONER KJELLANDER: Thank you. We1l,
we're looking for folks that will likely pass, we 'l-1 move
to Micron quickly.
MS. HOWLAND: Correct.
COMMISSIONER KJELLANDER: Thank you.
Mr. Arkoosh.
MR. ARKOOSH: Pass, Your Honor, thank you very
much.
COMMISSIONER KJELLANDER: Ecoplexus.
MR. HAMMOND: If I may, could I defer for a
minute? I'm waJ-ting for a response from our client.
COMMISSIONER KJELLANDER: Sure, we'11 pass on
you for now. Let's move to the Renewable Energy
Coafition.
MR. SANGER: Pass.
COMMISSIONER KJELLANDER: Idaho Irrigation
223
Pumpers.
MS. OLSEN: No questions, Mr. Chair.
COMMISSIONER KJELLANDER: Snake River
Al-l-iance.
MS. NUNEZ: We do have a few questions.
COMMISSIONER KJELLANDER: Pl-ease move the
microphone close.
CROSS-EXAMINATION
BY MS. NUNEZ:
O. Good morning, Mr. A1lphin.
A. Good morning.
O. fn your testimony, you discuss comparisons made
to our nei-ghboring states' renewable portfol-io standards.
I just wanted to explore that a little bit with you.
I do have a report that we would like to submit
as an exhibit.
COMMISSIONER KJELLANDER: What number is that?
MS. NUNEZ: This is going to be Snake River
A111ance Exhibit 501.
(Ms. Nunez distributing documents. )
(Snake River Al-llance Exhibit No. 501 was
marked for identificatlon. )
MS. NUNEZ: And I have a stack f or t.he other
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CSB REPORT]NG
(208 ) 890-51-98
ALLPHIN (X)
Idaho Power Company
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CSB REPORTING
(208 ) 890-s198
ALLPHIN (X)
Idaho Power Company
parties. I'm not sure if there's enough, but take one if
you want one.
O. BY MS. NUNEZ: Mr. A11phin, this a report from
the Cl-ean Energy States Alfiance entitled, "Environmental
Rules for Hydropower in State Renewabl-e Portfol-io
Standards" and as you acknowledge in your testimony and
in the Companyrs application, Idaho does not have a
renewable portfolio standard or any statute that mandates
a certaj-n percentage of renewable energy or a certain
percentage of our el-ectricity comes from renewables.
Can you comment on why you included that
discussion of renewabl-e comparj-sons in your testi-mony,
please ?
A. That comparison was included to indicate the
amount of renewable energy that Idaho Power Company is
currentl-y integrating lnto our system. You're correct,
Idaho Power does not currently have an RPS and not
required to those standards.
O. One of the most slgnificant comments that you
make was that Idaho Power woul-d comply with the 90
percent RPS if al-I of the hydropower resources were
incl-uded. Did you make any distinctj-ons between the
various sizes of renewable energy projects that Idaho
Power Company owns in coming up with that comparison, so
megawatt size?
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Idaho Power Company
A. No.
O. So the purpose of this report that we're
submitting today is itrs an analysis of the different
renewable portfolio standards in the states that have
them. For the most part, RPS's in states, they cap
hydropower projects at 30 megawatts and many of them also
Iimit the age of the hydropower project, so I'd like to
refer you to the table that starts it's Tabl-e 1 that
starts on page 8 of the report, which lists the different
states that have hydropower qualifications in their
RPS's.
A. Okay.
a. Do you see California? What 1s Cal-ifornia's
capacity limit?
A. It looks like California on the table it says a
capacity limit of 30 megawatts.
O. So I don't know if you have al-f of your hydro
projects in your head memorj-zed, but would you change
your analysis that you would have a 90 percent RPS
compliance if there was a 30 megawatt cap and do you know
how that number wou1d change?
A. I'm not I donrt have specific information
for you.
O. Is that something I could fol-l-ow up with you in
the future?
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Idaho Power Company
A. Sure.
MS. NUNEZ: Okay, thank you. I don't have any
further questions.
COMMISSIONER KJELLANDER: Thank you. Let's
look to Snake River Alliance. We just did you. Hey, I
feel good about that. Intermountaj-n Energy Partnersr dny
questions ?
MR. MILLER: Thank you, Madam -- Mr. Chaj-rman.
I don't know why I do that.
COMMISSIONER KJELLANDER: Is it the hair?
MR. MfLLER: I will not do it agaj-n, I
promase.
CROSS_EXAM]NATION
BY MR. MILLER:
O. Good morning, Mr. A11phin. Could I direct
your attention to your Exhibit No. 11 which was filed
with the Commissi-on recently? And this exhibit updates
exhibits that accompanied your prefiled testimony; 1s
that correct?
A. Yes.
O. Could I direct your attention to page 2 of
Exhibit No. 7L? Are you with me?
A. Yeah.
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O. Does the exhibit here update the number of
PURPA solar projects under contract compared to January
20th, 2015, to April 22nd, 20L5?
A. Yes.
0. Does this indicate that during that period of
time the number of megawatts under contract went from 401
to 260?
A. Now, you're speaking specj-ficalIy Idaho?
O. Idaho.
A. Yes.
O. Does it indicate that as of January 201h, there
were 13 projects under contract and that between January
2Oth and April 22nd, four of those projects terminated
their contracts?
A. Actua11y, I just need to count the lines there,
just one second, to see if there are 13. Yes, there were
13 in Idaho.
O. As of January 20th?
A. Yes.
O. And as of April 22nd, there were nine?
A. Yes, four contracts were terminated.
a. Can we. infer from this that the fact that a
project has a signed contract is not a necessary
indication that it wil-l- ultimately construct its
proj ect ?
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Idaho Power Company
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Idaho Power Company
A. We can infer from this that clearly once a
project si-gns a contract, there is still uncertainty
whether that project wil-l- be developed.
O. Coul-d I direct your attention now to page 3 of
Exhibit No. 11?
A. Ifm there.
O. And before I ask questions with respect to this
exhibit, couJ-d I direct your attention to Intermountain
Energy Partners Exhibit 401 which I believe is on the
witness stand in front of you?
A. Yes, Ifve got it.
O. I believe I've distributed copies to the
Commission and parties. Directing your attention to
Exhibit 401, has Idaho Power Company published written
contracting procedures for persons or entities wishing to
obtain an energy sales agreement with the Company?
A. As your Exhiblt 401, the Schedule 73 which is
our currently approved process.
O. Those contracting procedures are contaj-ned in
Schedule 73 which is Exhibit 407; is that correct?
A. Yes.
O. I'd l-ike to review with you those procedures so
we have them in mind before discussing page 3 of Exhibit
lL, so if we turn to the page starting on page 3 of 10
of Exhibit 407, that's the start of the contracting
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ALLPHIN (X)
Idaho Power Company
procedure sectj-on?
A. Yes, it appears there at the bottom of the
page. It start with contracting procedures.
0. So if we try to understand these procedures,
the first step is in section 1a which requires a project
to submit identified information i-n order to obtain
indicative pricing; is that correct?
A. Yes.
O. So we'l-I refer to that as step 1.
A. Okay.
O. Then if we refer to section 1c foll-owing the
receipt of that information, the Company would provide
indicative pricing to the requesting project; is that
correct ?
A. Yes, once that information is provided in a
complete manner.
O. And does section 1d make 1t cl-ear that from the
Company's point of view, those prices are not fina] or
binding?
A. They are indicative prices.
O. Then if we go to section lg -- pardon me, 7e,
if after receiving the indicative pricing the customer
desires to proceed further, it reguests 1n writing that
the Company prepare a draft energy sal-es agreement,' is
that the next step?
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ALLPHIN (X)
Idaho Power Company
A. Yes, uh-huh.
O. So we'd call that step 3?
A. f sort of lost track of the steps, but I'l-l-
assume step 3 is the right step.
O. I think that's 3.
A. Okay.
O. And at that poi-nt the Company requests that the
customer provide additional- information as outlined in
section 1e?
A. Yes, that's correct.
O. And then in paragraph 7q, if satisfactory
information is received, the Company provides a draft
energy sal-es agreement?
A. Yes, that's correct.
O. So that, I think, wou1d be step 4.
A. Okay.
O. And then under section th, the customer then
submits written comments or accepts the draft as
submitted by the Company; is that roughly correct?
A. Yeah, brlefly scanning "h, " that appears to be
correct.
O. So that would be step 5. Then under paragraphs
wi, and ")," the parties then proceed to negotiate the
f inal- contract terms.
A. Yes.
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Idaho Power Company
O. So that woul-d be step 6?
A. I hope you're writing down all these steps
because Ifm not.
O. I've got them right here, and then finally
under sections k-n, the agreement is executed and
submi-tted to the Commission for review.
A. Yes.
O. Okay, thatfs step 1. A11 right, now that we
have those steps in mind, perhaps we could now go back to
Exhibit No. 77, page 3. Of the projects that are llsted
there, can you teI1 us how many submitted enough
information to receive lndicative pricing under step 7?
A. Step 3 -- I mean, this exhibj-t that you're
referri-ng to includes projects that have requested
indicative prices and other forms of inquiry, which Idaho
Power Company considers to be serious inquiries to move
forward with projects. I don't have in front of me the
precise number of projects that requested indicative
prices.
O. Do you recal-l answeri-ng a production request
from J.R. Simplot Company? Itfs production request
No. 4.
A. Yes.
O. And in that production response, do you recal-l-
providing information that indicates that of the projects
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that were lj-sted now in Exhlbit No. 3, 74 projects had
submitted enough information to obtain indicative
pricing?
A. As I recalI, that number sounds approxj-mately
correct. f'd have to check the response.
O. Would you l-ike to -- would you agree to that
number, subject to check?
A. Yes, yes.
O. That response was with respect to Exhibit No. 3
as it existed when you filed your testimony. Are you
abl-e to update that number with respect to your Exhibit
No . 11?
A. I don't have that information available.
O. So the projects listed on exhibit just a
second here. Of the 47 projects listed on Exhibit No.
LL, page 3, your best lnformation at this time is 17 of
those got to the first step?
A. Now, you're identifying 17. Where did the
number 1,7 come from?
O. I thought we just establj-shed that in your
response to Simplot request No. 4, 77 projects submitted
enough information to get to the first step.
A. I may have mj-sheard, but I thought you quoted
!4 in your previous statement.
O. And now f can't hear you, I'm sorry.
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ALLPHIN (X)
Idaho Power Company
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Idaho Power Company
A. In your previous I may have mlsheard, but
thought in your previous statement you said that that
response stated 14 projects.
O. Eourteen, I'm sorry, youtre correct. I was
thinking of perhaps some updated number for Exhj-bit No.
3, so just so we're cfear, then, of the projects listed
on page 3 of Exhlbit No. LL, L4 of the 41 made it to
step l?
A. Yes, Irm not aware of any projects that
previously requested indicative prices to wi'thdraw their
requestr so yeS, it would be safe to assume at least 74
are stil-l- within it.
a. So of the L4 who received indicative pricJ-ng,
how many made it to step 3 of requesting a draft energy
sal-es agreement?
A. Again, f don't have that. That question was
asked in a production request. I don't have that right
in front of me and I'm sure you wlll tel-l- me what that
production request answer was.
O. If I told you that your previously provided
information indicated that zero projects made it to
step 2 --
A. I don't recal-l-. I thought there was at l-east
one project, I thought, that had made it to requesting a
draft ESA. As far as your step numbers, I think step 2
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ALLPHIN (X)
Idaho Power Company
as you're referri-ng to it, j-t's a point of being able to
receive a draft energy sal-es agreement and if I recaIl, I
think at .l-east one project made it to that point.
O. I was referring to the step in which the
project makes a written request to the Company to receive
a draft energy sales agreement.
A. And, again, I guess as I stated, if I recall
that production request, I think we identified one had
received an energy sal-es agreement, so obviously, they
would have made the request.
O. So to the best of your recol-l-ection, then, one
project made it to the step of requesting a draft energy
sales agreement?
A. Yes, to the best of my recol-l-ection.
O. So how many projects, then, made it to the next
step, which was submitting comments or accepting the
draft?
A. I donrt recall any projects making it to that
point.
O. So if I understand your testimony correctly,
then, zero projects made it to the step of acceptj-ng the
draft or submitting comments to the draft?
A. Yes.
O. Now, you have labeled page 3 of 4 of the
exhibit "Proposed PURPA Solar. "
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ALLPHTN (X)
Idaho Power Company
A. You're referring to Exhibit 17, f assume? Page
3 of 4, you're referring to Exhibit 11?
a. Page 3 of 4.
A. Yes, right.
O. Do you think it's accurate to characterize this
as a list of proposed PURPA solar when not one of the
projects has made it to the stage of entering into
contract negotiations?
A. Yes, it's stil-l- an accurate statement to say
the proposed PURPA sol-ar.
O. Do you think j-t's accurate to characterize the
l-1st as a list of proposed PURPA solar when only L4 of
these projects have made it past stage 1 of the contract
procedures ?
A. Yes, it's still accurate.
O. Let me direct your attention to the fj-nal two
columns of Exhibit No. 77, page 3, where you have
cal-culat j-ons of estimated obligations.
A. Yes, I see that.
O. And I think we previously establ-ished that in
Idaho Power's view anyway, it does not have any
obligation until a contract is signed and approved by the
Commission.
A. Yes.
O. So as things currently stand now, Idaho Power
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ALLPHIN (X)
Idaho Power Company
has no contractual obligation to pay any of the dollar
amounts listed in columns in the final two columns?
A. No, these values are calculated based upon the
proposed projects that have been submitted to us.
O. So there's no current existing obligation;
correct?
A. No.
0. A11 right. Now, Ifd llke to direct your
attention to your rebuttal testimony, 1f I can find it.
My apologles here.
(Pause in proceedings. )
O. By MR. MILLER: Do you have your rebutta1
testimony with you?
A. Yes, I do.
O. Now, in preparation for a couple of questions
on your rebuttal testimony, would you look at
Intermountain Energy Partners Exhibit No. 402?
A. Yes, I have it.
O. Are you with me?
A. Yes, I am.
O. And Ir11 represent to you that this is a firm
energy sales agreement entered into between Idaho Power
Company and Clark Solar 1.
COMMISSIONER RAPER: We're going to put you on
a Jeopardy c1ock.
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Idaho Power Company
O. BY MR. MILLER: In your position with Idaho
Power Company, are you generally responsible for the
preparation and negotiation and execution of firm energy
sales agreements?
A. T am responsible for the coordination,
negotiation. I and my team that I oversee is responsible
for that. I do not execute these agreements. That's a
senior vice president that executes these agreements.
a. And I think you indicate in your testimony that
you have been responsible or involved in the area of
PURPA broadly speaking for a long perlod of your career.
A. Yes, many, many years.
O. So you're familiar with the evolution of firm
energy sales agreements as they have sort of evolved over
time?
A. Yes.
O. And is Exhibit No. 402 representative of what
we coul-d cal-l- the current generation of energy sal-es
agreements?
A. This woul-d be representative of the energy
safes agreement that existed at the time this agreement
was signed, which f see was 1n October of 2014. I'm not
actually sure if there's been additional evol-utions that
have occurred since then.
O. But at least as of October 2074, this was sort
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Idaho Power Company
of the current standard agreement?
A. It was the current agreement, yes.
a. All- right. Now, if we could go to your
rebuttal- testimony at page 13 and f '11- direct your
attentlon to line 25 following on to the next page, and
to paraphrase, there you characterize the current state
of affairs as being one that enables the QF to finance a
risk-free guarantee of a 20-year stream of prices and
income.
A. Yes.
COMMISSIONER KJELLANDER: Gene, do you think
this is something you coul-d correct? We're off the
record for a little blt.
(Pause in proceedlngs. )
COMMISSIONER KJELLANDER: So we are back on the
record and Mr. M111er, I think you had ;ust asked some
extraordinarily intriguing question, which sort of
comports with the fact the music was there and it sounded
a little bit 11ke what Commissioner Raper was advocating
that we have some kind of, l-ike, Jeopardy music, but
we've got to keep things moving a1ong.
MR. MILLER: Leading and suggestive questions
are the best kind.
COMMISSIONER RAPER: Can you restate for the
record?
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Tdaho Power Company
O. BY MR. MILLER: A11 right; so we had just
paraphrased and agreed to your testimony on page 13 and
74.
A. Would you care for me to paraphrase it or you
previously paraphrased it?
O. WeII, did I accurately summarj-ze your testimony
as paraphrasing the current circumstances as enabling a
QF to finance a risk-free guarantee of a 2O-year stream
of prices and income?
A. Yes, I think in that answer we're referring to
the term reduction wil-1 not absolutely prevent any kind
of financing. C1ear1y, the financing would be different.
The two-year the 2O-year contract term currently
provides and locks in a set price for the full 20 years
to be risk free to the project.
O. A11 right, just to go a little bit further with
that, 1et's go back, then, to Exhiblt 402 and can I
direct your attention to
COMMISSIONER KJELLANDER: You mean 407?
MR. MILLER: 402.
COMMISSIONER KJELLANDER: 402, okay, thank you.
O. BY Mr. MILLER: f'11 direct your attention to
page 9 of Exhibit 402 and what is shown on the exhibit as
paragraph or section t.46 entitl-ed "Surplus Energy."
A. Now, you're referring to page 9; is that what
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you stated?
O. Page 9 of Exhibit 402.
A. f don't have that item on page 9 of 402.
COMMISSIONER KJELLANDER: It's actually page 8.
It's page 9 of 34.
THE WITNESS: Irm sorry, yeah, you have
different page numbers. Okay, correct, it's page I of
the contract, page 9 of your exhlbit.
a. BY MR. MILLER: Right, why don't we refer to
the exhibit page numbers just to make 1t clear.
A. Okay, thatrs fine.
O. All- right; so there we see a paragraph entitled
"!.46 Surplus Energy"?
A. Yes.
O. Could you just roughly explain for the
Commj-ssion what is conveyed in that paragraph?
A. In !.46 the project is required to deliver
energy within specific boundaries of what it has stated
it would deliver in the contract, and if they fail to
del-iver within those boundaries, there is a it's
classified as surplus energy which may result in a
slightly modified price. The performance under this
provisi-on is totally in control- of the project.
O. This is what's commonly referred to as the
91- 10 ?
ALLPHIN (X)
Power Company
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Idaho Power Company
A. Yes.
O. So it's true, isn't it, then, that the seller
has the risk that energy del-ivered outside the 9l-!0 band
wil-l be priced at a value l-ess than the full price the
seIler would otherwise receive?
A. The price may be adjusted if the sel-ler fails
to perform as they said they woul-d.
0. So that the seller faces the risk of producing
outside of this performance band?
A. Again, the seller has control- over their
performance of the facility.
O. Now, if we could go to paragraph -- page 11 of
the exhibit and there we see paragraph 6.3.
A. Yes.
O. And could you explain generally for the
Commission what is conveyed by this paragraph?
A. Again, that paragraph 6.3 establishes a very
low floor that if the project does not perform and
deliver at least 10 percent, a minimal- 10 percent, of
their energy they estimated to deliver, it will be an
event of default.
O. So the seI1er, isn't it true, then, faces the
risk of being declared in defaul-t for fail-ure to comply
with paragraph 6.3?
A. Yes, again, if the seller fails to operate the
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applicable.
O. Could we go now to paragraph or page !4 of
Exhibit 402 and look at paragraphs 5.3 and 5.4?
A. I've got those.
O. Could you explain for us what is conveyed by
these two paragraphs operating in tandem?
A.As it states there, the project is required to
achieve its operation date within the deJ-ay cure period,
which I believe is 720 days in these contracts. Tf the
project fails to achieve their operation date within 120
days of when they have stated they would, the scheduled
operation date being the date that the project at their
sol-e discretion elected and chose , af they fail- to meet
that, it can be a material breach of contract.
O. So it woul-d be fair to say looking at these two
paragraphs the seller faces a risk of liability for
damages if it does not achieve its scheduled operation
date?
date
cure
OCCUT
402?
A. If the sel-ler fails to achieve the operation
that they have sol-e control of setting within the
period, y€S, there is potential damages that could
O. Right. Now, could we go to page 24 of Exhibit
I'm sorry, page 23 woul-d be the better page. If
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Idaho Power Company
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Idaho Power Company
you would look at paragraph 12.2.1(b), is it fair to say
Iooking at this paragraph that the seller faces the risk
of curtailment in the event of certain oversupply
circumstances?
A. What this specifically reads, "If interruption
of energy deliveries is allowed by Section 2L0 of the
Public Utility Regulatory Policies Act of 1978 and 18 CFR
292.304," 12.2.1 applies, whj-ch ldaho Power Company shal-I
be excused from accepti-ng and paying for net energy.
O. It is it your general understanding that 18 CFR
292.304 permits curtailment in certain oversupply
circumstances?
A. Itrs been a while since Irve looked at that
specific paragraph, so I cannot say.
O. WeII, for some reason the contract contains a
footnote which is a citation to Section 304; right?
A. Yes, I see the footnote.
O. So to phrase it j-n a way that's slightly
differently, then, it's true, is it not, the sel-l-er faces
the risk of curtail-ment in circumstances permitted by
Section 292.304?
A. Yes.
O. Could we go now to page 10 of Exhibit 304 [sic]
and look at paragraph 3.4?
A. f 've got it.
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ALLPHIN (X)
Idaho Power Company
O. And can you just generally describe for us
what's conveyed by section 3.4?
MR. WALKER: Mr. Chairman, at this point I'm
going to lodge an objection as to Mr. Miller having Mr.
Allphin simply read and interpret this contract which has
been filed and approved with the Commission, and
certainly the provisions of the contract are avail-abl-e
for anybody to read and it speaks for itself.
COMMISSIONER KJELLANDER: Mr . Mil-l-er .
MR. MfLLER: Wel1, Mr. Chairman, Irm just
asking for clarity and expedlency sake for the witness
who is aware of these terms to provide an explanation of
what is being conveyed, and as you will recall, I haven't
done this for the purpose of disputing his
characterization. I have accepted his characterization
in every event, but I'm merely asking the questions for
purposes of clarity. If we all want to just read the
paragraph, I guess we could do that.
COMMISSIONER KJELLANDER: What specifical-ly was
your question again?
BY MR. MILLER:CouJ-d you convey f or us, Mr
A1lphin, generally what is conveyed by paragraph 3.4?
COMMISSIONER KJELLANDER: And please proceed.
THE WITNESS: Paragraph 3.4 within the contract
to develop the pricing, the project is required to
o.
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ALLPHIN (X)
Idaho Power Company
provide an hourly energy shape that is a key component in
calculating the price. This section of the contract
establishes that energy shape that the project has
provided, that the project at their discretion provided,
as that is how they expected to perform and it becomes an
element of the contract, and the pro;ect is then held to
some level of performance on those numbers for the term
of the contract.
O. BY MR. MILLER: And then does the paragraph
provide that materj-al- deviations from those estimates
will- be considered a material breach of the agreement?
A. Yes, the last sentence of that paragraph does
read, "Material deviations from these hourly energy
estimates will be a material- breach of this agreement. "
O. So the sel-l-er under this agreement faces a risk
of material breach if its actual generation materially
deviates from its estimates?
A. Yes.
O. I'm al-most through. Can we go now to
paragraph I'1I find the page for you -- page 15 of 34
having to do with sel-l-er adjustments of energy amounts?
Could you explaln for us generally whatfs conveyed by
paragraph 6.2.2?
A. To get the context of 6.2.2, you al-so have to
understand paragraph 6.2, the previous paragraph, which
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establishes, again, dt the time the contract is executed,
the project has provided us monthly energy estimates,
those monthly energy estimates being the monthly values
of the hourly energy estimates the project previously
provided. If the pro;ect were to not meet those monthly
estimates, the project has the ability to modify those
estimates prior to the occurrence of the month to avoid
any possibl-e, ds you previously referred, 91-10
rami-f lcations.
O. And does this paragraph operate 1n conjunction
with other paragraphs, which we don't need to go j-nto,
such that if the sel-1er does adjust its projected energy
amounts, Idaho Power may adjust the price that will be
paid for those adjusted amounts?
A. Yes, there is a potentlal risk if the project
deviates from its original hourly estimates that were
used to create the pricing, there could be a penalty in
regards to this 91-10.
O. So the sel-l-er faces a risk that if it does have
to adjust its estimates that it will also face a price
adj ustment?
A. Yes. Again, Lf the seller does not perform as
they estimated and sald they would, there woul-d be
possible price adjustments within the contract.
a. WeII, perhaps this has been a long walk down a
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ALLPHIN (X)
Idaho Power Company
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ALLPHIN (X)
fdaho Power Company
short pier, but in light of the risks that we have
identified arising out of Exhibit 402, would you like to
reconsider your testimony that a QF contract is a
ri-sk-free guarantee of a 20-year stream of prices and
income?
A. No, I think as that testimony states, the risk
free, the risk free is the 2)-year contract price that is
Iocked within the contract. All of the items you
identlfied in the contract are things wlthin the control-
of the seller that would cause a change in the income.
The actual pricing stream that is locked in at the time
the contract is executed is fixed and is unab]e to be
changed for the term of the contract.
O. Let me just ask one l-ast question. We're
talking about rj-sk and it seems like there are a couple
of steps. The first is to identify how a risk j-s
allocated and then the second question is whether that
al-location is fair or not, but we have identified how
risks are allocated in Exhibit 402, correct, some of them
anyway?
A. Yeah, Exhibit 402, again, walks through the
various performance requirements that a project must
adhere to.
O. So is it still your testimony that a QF
contract is a risk-free guarantee of a 20-year stream of
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ALLPHIN (X)
Idaho Power Company
prices and income?
A. It's a risk-free guarantee of a 2O-year stream
of pri-ces, yes .
O. I coul-dn't quite hear you.
A. ftrs a risk-free guarantee of a 2l-year stream
of prices, yes.
O. Wel-l, 1et me wrap it up this wdy, then: We can
agree that we have identified risks that the seller
assumes under a contract like Exhibit 402?
A. There are the seller establishes different
parameters and provides dlfferent information on how they
wil-l perform and if the seller does not perform
accordingly, y€s, a sel-l-er may -- the contract does have
provi-sions that would trigger different pricing
mechanisms.
MR. MfLLER: Al-1 right, I think we've probably
taken this as far as we can take it. That's all I have,
Mr. Chairman.
COMMISSIONER KJELLANDER: Thank you,
Mr. Mil-]er. Let's move to the Idaho Conservation
League.
MR. OTTO: Thank you, Mr. Chairman. I do have
a few questions. This should not take very 1ong.
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ALLPHIN (X)
Idaho Power Company
CROSS-EXAMINATION
BY MR. OTTO:
O. Mr. A1lphin, in your rebuttal testimony on page
3, 7 through 14, you make the point that no other party
has addressed the bigger issue of the need and the risk.
Do you recall that part of your testimony?
A. You said rebuttal- on page 3; is that correct?
a. Yes.
A. Yes, I see it here.
O. Okay, did you review Mr. Beach's testimony,
direct and rebuttal?
A. Yeah, I generally did, yes.
O. And pages 13 through 16 where he talks about
the IRP method?
A. I don't have his testimony in front of me. I
don't recal,l- what's on pages 13 through 16.
O. But you did review those?
A. Generally, yes.
O. Incl-uding the parts that discuss risk and
reliability?
A. Yes, I believe so.
O. Okay, we're going to move on. Page 4 of your
direct testimony, it goes through, generally goes
through, the steps that a utility -- the steps to build a
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ALLPHTN (X)
Idaho Power Company
utility-owned resource. Therers identificatj-on of need,
RFP process, CPCNs, ongoJ,ng revi-ews. Do you see that
part of your testimony?
A. Cou1d you please refer me to the l-ine number on
page 4?
O. Just one moment. I'm referring to l-j-nes 72
through it continues on page 5, Iine 7.
A. Oh, yes, okay, I see it there.
COMMISSIONER RAPER: Are you in direct or
rebuttal?
MR. OTTO: Rebuttal, I apologize.
COMMISSIONER KJELLANDER: Thank you for the
cl-arif icati-on.
MR. OTTO: Thank you for that.
THE WITNESS: Okay; so now what page, again, in
rebuttal?
O. BY MR. OTTO: Page 4 of your rebuttal
testimony.
A. Okay, and what line number?
O. It begins at line 72 and continues on page 5
through l-ine 7 .
A. Yes, okay, I see that.
O. And it just generally goes through the steps of
a utility-built resource, to make the decision and to get
approval; is that a correct characterization?
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Idaho Power Company
A. Yes.
O. And you kind of make the point that a PURPA
project or a QF doesnrt go through a similar set of
ri-gor, I guess.
A. They go through none of that rigor.
O. Okay; so the IRP defines the capacity
deficiency date; is that correct?
A. Yes, the IRP establ-ishes the needs of the
Company.
O. And that's a public process?
A. Yes, it is.
O. With Commission approval?
A. Yes.
O. And the energy components of the avoi-ded cost
inputs, those are updated annua11y, is that correct? The
load forecast? The gas price forecast?
A. Yes.
O. And that's a public process with Commission
approval?
A. Yes.
O. And then the capacity position can actually --
it begins with the IRP; correct?
A. Yes.
O. And every time a QF contract is signed and
approved by the Commission, the Company is able to update
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ALLPHIN (X)
Idaho Power Company
the capacity position; is that correct?
A. Yes, that capacity position moves as projects
are proposed to the company.
O. So it's fair to say the energy components are
updated annually through a public process, and the
capacity component is updated even more frequently; is
that a fair statement?
A. Yes.
O. And then the Commi-ssion reviews each QF
contract and approves that; is that correct?
A. Yes.
O. Wou1d you agree that that is several steps of a
public process with Commission approval?
A. The inputs into the pricing model, yes.
O. And each contract as well-; correct?
A. The final- contract, yeS, has to receive
Commission approval.
O. Okay, now we're golng to move to your direct
testimony, Exhibit 2, page 6. In the final so thls
exhibit is all the currently approved PURPA and non-PURPA
prolects, contracts; is that correct?
A. As of January, yes.
O. Yes. I want to make sure I have it right in
front of me. Here it is; so the very last section you
have three non-PURPA projects online?
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ALLPHIN (X)
Idaho Power Company
A. Yes, we do.
O. Are those long-term power purchase
agreements?
A. Yes, they are.
O. What's the term of those agreements?
A. I don't recall- specifically. I believe they're
20 or 25 years.
O. And do those long-term contracts benefj-t
customers?
A. Yes, they do.
MR. OTTO: Thank you. That's all.
COMMISSIONER KJELLANDER: Thank you very much.
Mr. Adams, dny questions on behal-f of the Simplot
Company?
MR. ADAMS: Yes, Mr. Chairman, we're going to
have several questi-ons. f donrt know if you want to take
a break now or
COMMISSIONER KJELLANDER: Let's go ahead and
give it a whirl.
MR. ADAMS: Okay.
CROSS-EXAMINATION
BY MR. ADAMS:
O. Good morning, Mr. Allphin.
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A. Good morning.
a. On page 3 of your direct testimony, you discuss
your Exhibit No. 1 and you assert that there's 885
megawatts of solar QEs that "made formaf, written
requests for PURPA energy sales agreements with Idaho
Power." That was at l-ine L6 to 18.
A. Uh-huh. Yes, I see that.
O. So what constitutes a formal, written request
for a PURPA energy sales agreement?
A. Through the process of making inquiries to
Idaho Power Company, those forms of requests can take on
different shapes. After approval of Schedule f3,
Schedule 13 provided an appllcation that projects must
provide in order to receive indicative pricing. Prior to
Schedul-e f 3, that form of request coul-d come j-n varlous
forms. It could come in the form of written requests,
emails requesting basically enough information to provide
Idaho Power Company some level of being able to produce
indicative price reports.
O. So you're not alleging, then, here that there
were BB5 megawatts worth of solar projects that were
ready to sign contracts at the indicatlve prj-ces that
Idaho Power Company provided to them; correct?
A. No.
O. Because it's a Iittle confusing, isn't it,
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Idaho Power Company
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because on page 4, then, at line 16 to 20, you say
Exhibit No. 3 shows that each individual proposed PURPA
project, solar project, that had submitted a written
request for indicative pricing, so you're kind of mixing
and matching requesting a formal request for a contract
with indicative pricing here, arenrt you?
A. WelI, again, as Schedu1e 73 points out, the
first step in a project movi-ng forward is a request for
indicative pricing and the request for a formal- contract
then comes l-ater.
O. Righti so then your earl-ier testimony on page 3
overstated the case a little bit, then, too, to state
that they had requested -- issued a forma1, written
request for power purchase agreements,' correct?
A. Yes, I coul-d agree with that.
O. Okay, and would you also agree that there's no
way currently if you're an IRP methodology sol-ar QF to
obtain the prices without contacting fdaho Power and
providing that list of information to request the
indicative prices?
A. Woul-d you please repeat that?
O. WeIl, f'm just asking, these aren't published
rates; right? They have to contact you, a developer has
to contact you, to get those indicative prices;
correct ?
ALLPHTN (X)
Power Company
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CSB REPORTING(208) B9o-s198
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Idaho Power Company
A. Yes, that's correct.
O. So none of those 885 megawatts of projects
could have known what the price would be to move forward
with their project or whether they want to move forward
with it without actually making that request for the
pricing?
A. Yes.
a. Mr. Allphin, is it your position that we should
assume that every QF, prospective QE, that contacts fdaho
Power to request indicative pricing will ul-timately build
and construct a QE?
A. Idaho Power has no information to the contrary.
We have to assume that the projects are moving forward
with their projects.
MR. ADAMS: Mr. Chaj-rman, can I approach the
witness with a document?
COMMISSIONER KJELLANDER: What's the document?
MR. ADAMS: It is a discovery production
request, response of Idaho Power's that we're going to
propose to admit as an exhibit.
COMMISSIONER KJELLANDER: Without objection.
(Mr. Richardson distributing documents.)
O. BY MR. ADAMS: So Mr. A11phin, this is your
response to Simplot's production request No. 22, and this
is actually an updated response to request No. 4 that
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ALLPHIN (X)
Idaho Power Company
Mr. MiIIer asked you several questions about, and on the
l-ast page it says that you're the person from the Company
who can sponsor that witness, correct, or that exhibit;
correct ?
A. Yes, thatrs correct.
MR. ADAMS: So I want to admit that exhlbit
into the record. It would be SimpJ-ot Exhibit 206.
COMMISSIONER KJELLANDER: Okay, without
objection, it is identified and admitted.
(J.R. Simplot Company Exhibit No. 206 was
admitted into evidence. )
O. BY MR. ADAMS: So Mr. A11phin, can you turn to
what's noted at the bottom as page B? It's a tabl-e.
A. Yes.
O. So that's the table that Mr. Mil-l-er was
actually asking you questions about, except it says at
the top it was updated as of April 22nd; correct?
A. Yes, it appears so.
O. And in the second column, is that al-I the
projects that have progressed far enough to get an energy
sales agreement from Idaho Power?
A. Yes.
O. And looki-ng at that, it appears that only one
project has gotten far enough to obtaln a draft energy
sales agreement as of April; correct?
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ALLPHIN (X)
Idaho Power Company
A. Yes.
O. And Mr. Miller went through the steps to get a
draft energy safes agreement. There was additional
information that you had to provlde after you had
obtained the indicative prices; correct?
A. Yes.
O. And does that incl-ude site control_?
A. In the current Schedule J3, yes.
O. What woul-d a QF developer have to provide Idaho
Power j-n order to satisfy that requirement?
A. Generally speaking, that would probably be some
demonstration, dS the term says, they have some control
of the site either by ownership or lease.
O. Like a l-ease or even an option?
A. Again, generally speaklng.
O. Okay, can you turn to the last page of that
exhibit, please? So at the top there doesn't it state
that Idaho Power doesn't possess any informatj-on from any
of these prospective QEs that they even possess site
control- under subpart b?
A. Yes, let me see. Again, ds I stated, though,
the site contro1 condition was required at the time
Schedule 13 was approved. Prior to J3, I'm not
absolutely sure as to what requirements there were for
site control, that this project that had requested a
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ALLPHIN (X)
Idaho Power Company
contract very wefl could
the formal establishment
0. Yeah, I think
discovery response, that
l<
have made that request prior to
of Schedule 13.
you did explain that in the
that proj ect predated Schedu1e
A. Okay.
O. But the point f'm asking is Idaho Power doesn'
have any evidence that any of these 885 megawatts of
projects even have a l-ease or an option to develop the
facility?
A. I don't have any information that it wil-I be
dlfferent than I responded in this production request.
O. WeIl, how do we have any indication that these
are serious projects and not just people who are trying
to determine what the prices might be before they move
forward?
A. AgaJ-n, fdaho Power Company has to take all-
inquiries seriously. A project can move through a
Schedul-e 13 process in a matter of days, from an inquiry
to a request of the final project, and so Idaho Power
Company has no informatlon to not assume that they are
serious inquiries when they're received.
O. Okay, isn't it true, though, Mr. Allphin, that
the avoided cost price under the IRP methodology will
decrease generally for each new prospectlve QF?
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ALLPHTN (X)
Idaho Power Company
A. That's a reasonable assumption, yes.
MR. ADAMS: Mr. Chairman, I'd like to provide
another document, another exhibit, to the witness.
COMMISSIONER KJELLANDER: Is this going to be a
potentiaf new exhibit?
MR. ADAMS: Yes, it is.
COMMISSIONER KJELLANDER: So that woul-d be 201?
MR. ADAMSz 201, correct.
COMMISSIONER KJELLANDER: And it is what?
MR. ADAMS: This is also Idaho Powerrs
responses to production requests, two responses, to the
Idaho Irrigation Pumpers request 11 and to the Staff
productlon request 9.
(Mr. Richardson distributing documents.)
a. BY MR. ADAMS: So did you help prepare those
responses, also, Mr. AIlphln?
A. Yes.
MR. ADAMS: f'II move to admit those into the
record as Exhibit 201.
COMMISSIONER KJELLANDER: Wlthout objection,
Exhibit 201 has been identified and admitted.
(J.R. Simplot Company Exhibit No. 207 was
admitted into evidence. )
O. BY MR. ADAMS: Okay, Mr. AIIphin, could you
turn to the l-ast page of the Irrigation Pumpers request
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ALLPHIN (X)
Idaho Power Company
No. 7l?
A. No . 11?
O. It woul-d be the second to the l-ast page of the
exhibit that I handed to you.
A. Yes, f bel-ieve I'm there.
O. Okay; so in that tabl-e there, it provides the
prices that were on a levelized basis, correct, of the
IRP methodology contracts --
A. Yes.
O. existing?
A. Yes, it does.
O. Okay, and so in terms of the solar contracts,
which one was the fi-rst? Wasn't it Grand View PV Sol-ar
Two?
A. I believe so, yes.
0. And the price was $73.41?
A. Yes, thatrs the cal-culated levelized value.
O. And the Cl-ark 1 through 4, they were l-ater on
in the queue; correct?
A. Yes.
O. And the price for them was in the range of
59-$61.00; correct?
A. Yes.
O. Can you turn to the last page of the exhibit,
the Staff production request 9, so this states that it is
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Idaho Power Company
the 2)-year avoided cost indlcative pricing for the next
two projects in the queue of that 885 megawatts;
correct?
A. This is the pricing, the 2)-year l-evel-ized
pricing, that was provided to two solar projects that
were part of that 885 megawatts.
O. Correct, and the price was in this case $52.00
and $54.00 per meqawatt-hour?
A. Yes.
O. So it's gone down further still?
A. Yes.
O. And as you mentioned earl-ier, itrs correct that
the Solar, the Cl-ark Solar, 1 through 4 contracts were
ultimately terminated.
A. Yes, they were.
O. And why was that?
A. They fail-ed to comply within requirements in
the contract.
O. They failed to post their security deposit;
correct?
A. That's correct.
O. Do you know how much the security deposit
was ?
A. I don't have the precise number in my head. I
don't recall- the size of those projects.
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ALLPHIN (X)
Idaho Power Company
O. It woul-d have been a few mill-ion dollars,
maybe?
A. Absolutely.
O. Do you thj-nk that the l-ower rate had anything
to do with that? Do you think it wou1d be harder for a
QF to develop the project at a fower rate and submit the
security deposit?
A. I have no information as far as what a QE's
economi-cs are in regards to these projects. We don't
know what their capital costs are or any of their costs
to develop these projects.
a. Okay, f 'm goj-ng to move on to your rebuttal-
testimony, Mr. A1lphin, at page 5. You assert that the
argument you're responding to Dr. Reading here and you
assert the argument that the QF is somehow entitled to
the same type of capital cost recovery as a utility*owned
resource simply does not make logical sense. Do you
remember that?
A. f don't recall ever using the word "Iogical" in
that section.
O. Okay, well-, i-t's in lines 4 to 1.
A. You're saying lines 4 through '7?
O. On page 5 of your rebuttal testimony.
A. Line 4 would read, the first full- sentence,
"Consequently, the argument that the QF is somehow
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Idaho Power Company
entitl-ed to the same type of capital cost recovery as a
utility-owned resource simply does not make logical
sense," I stand corrected.
O. Okay, thank you; so QFs donrt 1n fact have the
same type of capital cost recovery of rate-based
resources, do they?
A. Repeat that question.
O. Do QFs get the same type of payment for
capacity and capital investment as a rate-based utility
resource ?
A. A QF is paid for the energy that it del-ivers to
the utility.
O. But they don't get paid their capital costs
when they don't deliver l-ike a rate-based resource;
correct?
A. The QF is paid based upon the avoided cost that
has been calculated for that project. It has no
relationship to what the capital cost of that project may
be.
O. Well, they're not paid when they don't deliver
electricity,' correct?
A. Absolutely, they get paid per megawatt-hour.
O. And under the fRP methodology, isn't it correct
that new QEs don't get paid the capacity costs durlng the
utility's capacity surplus period?
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Idaho Power Company
A. Yes, you're correct.
O. Moving on to page 5 of your rebuttal testimony
at the bottom and running on to page 6, you testify
utility-owned resources are "on1y constructed and
operated to serve the pubJ-ic interest. " Do you remember
that ?
A. Yes, I see that.
O. That's not entirely true, is it? Aren't they
al-so constructed in order for Idaho Power to earn a
return on its investment?
A. A11 utility-owned resources, the need has to be
identlfied through the IRP process. Once that need is
identified to serve our customers' load, then that
project, the Publ-lc Utility we have to go through a
process of submitting that resource out for an RFP to
requJ-re it to request bids, a competj-tive bid process, so
then only after that bid process has gone through and a
project is selected by which then the Publ-ic Utilities
Commission approves the project movj-ng forward, and then
ultimately once it's built, the Publ-ic Utilities
Commission approves any cost recovery that may occur for
that prolect.
O. Isn't Idaho Power Company a for-profit Company,
though?
A. Yes.
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O. And doesn't it make money off of the projects
that it buil-ds and rate bases?
A. Idaho Power's profits are governed by what's
all-owed by the Public Utilities Commission.
O. And if the Public Utll-ities Commission al-l-ows
it, they wil-l, Idaho Power Company wj-l-l, earn a proflt on
rate-based generation resources; correct?
A. Yes.
O. And doesn't Idaho Power Company have the
fiduciary obligation to its shareholders to earn as much
profit as it can reasonably?
A. fdaho Power has shareholders. As far as the
motivation, Irm not part of that department.
O. Okay, but would you agree that. Idaho Power does
not ever earn any profit off of purchaslng generation
from a PURPA project?
A. No, Idaho Power receives no benefits from a
PURPA project.
O. Okay, moving on to page 9 of your rebuttal, you
criticize Dr. Reading's Chart 1 where he was comparing
the capital on energy costs per megawatt-hour of the
Company's resources to historic market prices and average
PURPA prices.
A. Yes, I see that.
O. And you' re critical- of Dr. Reading' s test j-mony
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Idaho Power Company
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or his chart because he included peaking resources 1n the
chart and your position is that a peaking resource is
difficult to evaluate on a dol-1ar per megawatt-hour
basis; right?
A. Yes, that's true.
O. But arenrt there also non-peaking resources in
Dr. Reading's Chart L?
A. Yes, I be1ieve so.
O. Right, it included the Langley Gulch power
plant that had an average cost of $84.98 per
megawatt-hour versus the histori-c PURPA price of $62.30
per megawatt-hour?
A. I believe those numbers are accurate, yes.
O. Okay, and the Va1my coal- plant was $74.88 per
megawatt-hour versus the PURPA price in the range of
$62.00 per megawatt-hour?
A. Again, subject to check, f don't have the chart
here in front of me.
O. Okay, and with regard to the peaking plants,
you were critical that Dr. Reading apparently made a
calcul-ation error for the Bennett Mountai-n plant;
correct ?
A. Yes.
O. And he said that that woul-d cost $250 per
megawatt-hour, somethj-ng in that range?
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Idaho Power Company
A. Yes, I recal-I that.
O. And you corrected it to SL77.2B per
megawatt-hour?
A. Yes, I believe so.
O. So you agree, then, that the cost to supply
your customers with electricity from the Bennett Mountain
plant was $171 per megawatt-hour from the Bennett
Mountain plant?
A. At the time when we need to run the Bennet.t
Mountain pIant, because we can dispatch it to meet our
needs, yes, that ' s the calcul-ated price .
0. Right, and I understand it's a peaking
resource, but don't you think you could secure a cheaper
source of capacity today than $171 per megawatt-hour?
A. I don't have any --
MR. WALKER: Objection, that's a
mischaracterization of what that testimony says. It does
not say that it agrees with that cal-culation of
Dr. Reading. It says that re-creating the calculation as
Dr. Reading has described it in his testimony arrives at
these numbers, but his testimony does not agree with the
accuracy of that as itrs being portrayed by that
question.
MR. ADAMS: I disagree. I think hls testimony
corrected the calculation, the mathematics of the
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ALLPHIN (X)
Idaho Power Company
calculation. Mr. Allphin disagreed with the
characterization of the significance of the number $171
per megawatt-hour, but I'm i-nquiring into his
disagreement.
MR. WALKER: Once agal-n, the testimony speaks
for itself. It's not an acknowledgment that Mr.
Reading's comparison is an accurate comparison. It
simply says he cal-cul-ated the number the way he described
calculating it incorrectly.
COMMISSIONER KJELLANDER: Thank you, and I'm
incl-ined to agree with Mr. Walker, and if you'd like to
maybe take another approach, another angJ-e of your
questlon.
MR. ADAMS: Okay.
O. BY MR. ADAMS: Mr. Allphin, do you think
potentially customers would be wil-l-ing to curtail- their
generation if you paid them $171 per megawatt-hour?
A. I have no idea. There's many assumptions
behind that question.
O. Wel-I , if that price were higher than what you
get on the market today, woul-d you agree that that wou1d
be above the current market prices?
A. Are you saying is the L71- above the current
market prices?
O. Yes, do you agree that that number is a high
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Idaho Power Company
number to pay for peaking capacity in today's market?
A. I donrt have specific information to know for
sure how that would relate to peaking capacity in todayrs
market.
O. Okay, let's move on to your rebuttal- testimony
at pages L2 to 13. You're still criticizing
Dr. Reading's Chart t here and arguing that your Exhibit
No. 10 is superior. Could you turn to your Exhibit No.
10?
A. Yes, I have that.
O. So in the there's two halves to that
exhibit; correct?
A. Yes.
A. And in the second half at this poJ-nt in time
it's projecting prices going forward; right?
A. Yes.
O. And in your testimony on pages L2 to 13, you
testify that these dotted l-ines going forward provide a
realistj-c estimation of the costs Idaho Power Company
would incur to serve customers absent the additional
2}-year, fixed price PURPA contracts. That was your
testimony; correct?
A. Could you please reference me to the line
number?
0. Certainly. Itrs page 73, l-ines 8 to 76.
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Idaho Power Company
A. Yes, that's what the testimony reads.
O. Okay; so you're suggestj-ng that that dotted
bl-ue line is the price that the QFs shoul-d be seJ-Iing to
Idaho Power at?
A. What I am suggesting is that dotted blue line
is the forward-Iooking Mid-C forecast prices for that
same period of time.
O. But your testimony was that thatrs a realistic
estimation of the costs Idaho Power wou]d incur to serve
customers absent additional 20-year, fixed price PURPA
contracts; right?
A. Yes, thatrs the testimony.
O. Okay; so what was the market price in the
dotted bl-ue line for 2078, can you guess that?
A. I don't have it specifically in front of me. I
would just be interpreting the graph here.
O. Do you think that $35.00 a megawatt-hour l-ooks
accurate?
A. That looks approximately correct, y€s.
O. Okay, and for 2020, does $43.00 l-ook
approximately accurate?
A. I woul-d agree.
MR. ADAMS: Okay, Mr. Chairman, I woul-d l-ike to
present another exhibit.
COMMISSIONER KJELLANDER: And this would be
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ALLPHTN (X)
Idaho Power Company
208?
MR. ADAMSz 208, yes.
COMMISSIONER KJELLANDER: Can you describe it?
MR. ADAMS: This exhibit is Idaho Powerfs
currently approved published avoided cost rates.
COMMISSIONER KJELLANDER: Thank you.
(Mr. Richardson distributing documents. )
MR. ADAMS: I'11- move to admit this into the
record.
COMMISSIONER KJELLANDER: And so it is
identified as 208 and admitted without objection.
MR. WALKER: Excuse me, Mr. Chairman?
COMMISSIONER KJELLANDER: Yes.
MR. WALKER: Perhaps counsef could identify
what this is and where it came from before it's admitted
into the record.
COMMISSIONER KJELLANDER: Ealr enough.
MR. ADAMS: Certainly. Our office downloaded
it from the Commission's website under the link for
avoided cost rates. ft's the currently effective avoided
cost rates for Idaho Power.
MR. WALKER: Mr. Chairman, I would simply note
that I believe the Commission if the representation is
that this is the currently available published avoided
cost rates, I think the Commission can take notice as
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Idaho Power Company
it's the organization that calculates and publishes those
rates and f can't necessarily verify that this is the
same here, but we'lI accept that representation.
MR. ADAMS: If Mr. Walker is suggesting that
this not be admitted into the record but be officially
noticed, I have no objection to that. I just want to ask
some questions about it.
COMMISSIONER KJELLANDER: f think he was going
to allow it to be admitted as an exhibit. I don't think
he was objecting specifically to that, so let's move
forward. I've already got 208 down. I've already
marked it up. I feel comfortable with that.
MR. ADAMS: Okay.
(J.R. Simplot Company Exhibit No. 208 was
admitted into evldence. )
O. BY MR. ADAMS: So Mr. Allphin, could you please
turn to the last page, the base load rates?
A. Now, you're saying the very l-ast page of what
you provlded to me?
O. Correct. Thatrs the other projects; correct?
That woul-d be base load projects?
A. Yes. Okay, there's the word "other," yes.
O. Okay, and what is the avoided cost rate for
201-B?
A. $69.13.
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Idaho Power Company
O. No, the non-level-ized avoided cost rate.
A. The non-leve]ized? $35. 69.
O. Okay, and whatrs the avoided cost rate for 202A
for a new QF?
A. $43.05.
O. Okay. Now, let's go back to your Exhibit 10.
Those are the same numbers as the dotted blue line;
correct?
A. It l-ooks l-ike they're approximately the same,
yes.
O. Okay, but you used the hlstoric PURPA prj-ces in
the dotted red l-ine, didn't you? That wasn't the current
PURPA pri-ces for new addltional- QF projects, was it?
A. This exhibit that you've handed out is the
published avoided cost which is cal-cul-ated using the
surrogate avoided cost methodology which is a
considerably different calcul-ation than the incremental
cost methodology. The projects that have been
represented in Exhibit 10 are the projects, are the solar
projects, that are eligible for the IRP methodology and
not the published avoided cost methodology.
O. How wou1d the IRP methodology rates be higher
during those years than the published avoided cost rates?
Don't they both have the same capacity and efficiency
rate ?
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Idaho Power Company
MR. WALKER: Excuse me, Mr. Chairman, I need to
object, aqain, because Exhibit 10, once agaln, is being
mischaracterlzed. Mr. Allphin's direct testimony on page
15 says that Exhibit No. 10 is a graphical depiction of
the average actual per megawatt-hour cost of PURPA energy
purchases and Mid-C market prices through year-end 20L4
and the same two val-ues forecasted through 2030, and the
continued misrepresentation of those as somethj-ng that it
is not is not fair to the witness.
MR. ADAMS: That's correct, but his rebuttal
testimony stated on page 13 at lines B to 16 that on a
going-forward basls, these are realistic estimations of
the costs Idaho Power would i,ncur to serve customers
absent additional 2)-year, fixed price PURPA contracts.
MR. WALKER: Well-, and that's what the
testimony states, but he's representing that these are
somehow a representation of current published avoided
cost rates, which they are not. Clearly, they're the
average actual per megawatt-hour prj-ces paid PURPA
projects and based upon that.
COMMISSIONER KJELLANDER: Mr. Adams, f'm
inclined to agree with Mr. Wal-ker on that. Is there
another way to get to your l-ine of questioning?
MR. ADAMS: No, I think that we've gotten
through that issue. Thank you.
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Idaho Power Company
COMMISSIONER KJELLANDER: Thank you.
O. BY MR. ADAMS: Mr. A11phin, moving on to page
16 of your testj-mony, you discuss Dr. Reading's proposal
to adjust the energy portion of the long-term PURPA
contract after 10 years and you indicate that it might be
illegal to update the rates after 10 years; is that
correct ?
A. Yes.
O. But isn't your proposal in this case to curtail
the fixed rates to two years?
A. No, what we're suggesting -- Mr. Reading had
suggested that a 20-year contract still- be executed with
the ability to adjust the rates after a 1O-year period of
time. Vrlhat we're suggesting is only a two-year contract
is executed.
O. But under your two-year contract, the QF would
be only aflowed two years of fixed rates; correct?
A. Yes.
O. And under Dr. Reading's proposal, they woul-d
get 10 years of fixed rates before the rates got updated;
correct ?
A. Yes.
0. So isn't it contradictory to suggest that you
coul-d do a you could curtail the right to flxed rates
to two years, but you coul-dn't update them after 10
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ALLPH]N (X)
Idaho Power Company
years ?
A. No, not at all. A two-year contract, dt the
end of that two-year period of tlme, that project woul-d
be eligible for a new contract based on the current PURPA
rul-es and regulations after the two-year period of time.
By committing and signing a 20-year contract today that
has a 10-year fixed price and then an adjustable
component after that 10 years, that is the question
whether that is permissible.
0. And you don't think it would be permissible or
legal to update the rates if both parties agreed ahead of
time that the rates coul-d be updated?
A. f 'm not an attorney, so I wouldn't be abl-e to
make an assessment on that.
O. Well-, that's what you suggested in your
testimony.
A. Again, I bel-ieve as various parties in this
case have stated that there appears to be some question
whether or not the rate could be, a contract could be,
entered into that provided an adjustable component after
a 10-year period of time.
O. Okay, didn't another Idaho Power witness
testify that a proposal l-ike Dr. Reading's could be lega1
updating the rates?
A. I don't you'd have to read me back that
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ALLPHTN (X)
Idaho Power Company
testimony. I don't recall- hearing that.
O. Did you review Dr. Hieronymus's testimony?
A. Oh, yes. Pl-ease repeat your question again.
O. Didn't another Idaho Power Company witness in
this case or in a recently decided case suggest that the
Commission shoul-d do adjustable rates in long-term
contracts?
A. I briefly scanned through hls testimony, but I
do not recal-l- the specific section you're referring to.
O. Do I need to provide you with a copy of his
testimony?
A. That wou1d be fine, yes.
COMMISSIONER KJELLANDER: Mr. Adams, as we have
a brief pause, what do you anticipate in terms of
continuation of your cross-examination length-wise?
MR. ADAMS: I have one more line of questions,
so maybe five or ten minutes after this.
COMMISSIONER KJELLANDER: Okay, thank you.
P1ease proceed.
MR. WALKER: Mr. Chairman, if it helps speed
things along, I know that Mr. Hieronymusrs testimony was
fil-ed as an attachment to the petition and we'11 agree
that i-t says what it says and the Commission can l-ook at
it if Mr. Adams would provide us the cltation.
COMMISSIONER KJELLANDER: f think Mr. Adams is
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ALLPHIN (X)
Idaho Power Company
about to do so. While we're at a brief pause before Mr.
Adams picks up, just out of fo11ow-up, did Ecoplexus
decide, Mr. Hammond, if they had any questions?
MR. HAMMOND: You should have seen the 1i-st of
questions that I'm kidding, I'm kldding. We don't
have very many quest j-ons.
COMMISSIONER KJELLANDER: But do you have some,
okay, thank you. That's what I was asking. Thank you
very much. Mr. Adams, please proceed.
O. BY MR. ADAMS: So to speed things up in 11ght
of Mr. Walker's comments, oo page 15 of Mr. Hieronymus's
testimony at lines 3 to J, he says the ldaho utilities
currentfy different.iate between fueled and non-fueled QFs
with the former receivj-ng prices that change year by year
based on actual gas prices. Later on at page 105, at
line 23, to page 106, line 6, he suggests that perhaps
the Commission could implement a formula rate that woufd
update.
Later on at page 772 of his testimony at lines
l7 to 20, he suggests that fixing the terms at the time
of signing does not necessarily require fixing the
prices, so he did in multiple places state that the rates
could be adjusted and suggests that was one proposal,
don't you agree, Mr. Allphin?
A. Yes, I see that.
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Idaho Power Company
O. Okay; so under your proposal for two-year
contracts, Mr. A1lphin, under the current avoided cost
rates, would the QF be compensated for capacity in that
two years?
A. A QF would be compensated for capacity
beginning in the year when Idaho Power Company was
capacity deficit.
O. And what year is that today?
A. Currently, I believe that's approximately 2024,
202s.
O. So a two-year contract that was executed, sdy,
j-n 20L6 woul-d expire before then and the QF woul-d not get
the capacity payment; correct?
A. Yes.
O. How about a five-year contract executed in
2016?
A. Again, you just have to do the math. That
woul-d be 2027 and if our deficit period is 2024, again,
they would not get a capacity payment.
A. Okay. On your rebuttal testimony at page L9,
you testify regardlng EERC's rul-es regarding contract
length, and you state Mr. Reading aLso argues that FERC's
regulations require long-term contracts. These arguments
attempt to create something that simply is not there. Do
you recal-l- that?
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Idaho Power Company
A. Yes.
O. So itrs your testimony, then, that the FERC
rul-es all-ow the Commission to set a contract term of any
length that it wlshes?
A. It's my understanding the EERC rul-es do not
establish a minimum contract period.
O. So you don't believe that the QFs have the
right to sel-ect a term that would allow them to be
compensated for capacity?
A. Agaj-n, I do not believe the FERC rules
establish a minimum contract term.
MR. ADAMS: Okay, no further questions.
COMMISSfONER KJELLANDER: Thank you very much.
ft appears as if we are at a good polnt to break for
l-unch. I think one l-esson I've l-earned is next time I
will- ask what you anticipate for length of questloning.
You did warn me you had several questions.
MR. ADAMS: f did warn you. Wel1, you never
know, because yes or no questions, sometimes they're not
yes and no answers questions.
COMMISSIONER KJELLANDER: l'11 do a better iob
of asking an estimated time on that, but thank you, Mr.
Adams, for being brlef when you had the opportunity and I
appreciate that.
Why don't we break until about is it 100
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t1
18
t9
20
2t
22
23
24
25
CSB REPORTING
(208 ) 890-5198
degrees outside yet, probably about a quarter to 2200
and we'11 resume, then. Mr. Al1phin, you'11 be back on
the stand. You'lJ- be remj-nded that you are under oath
and then we'11 fol-low up with any additional cross, and
then we'l-l- try to get some of the witnesses that counsel
had mentioned had a desire to get in and out, try to get
those up immediately foll-owing Mr. A1lphin, so with that,
then, well go off the record and return after l-unch.
(Lunch recess. )
283 COLLOQUY