20160906AVU to Staff 130.doc

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 09/02/2016
CASE NO.: AVU-E-16-03 WITNESS: Scott Kinney
REQUESTER: IPUC RESPONDER: Karen Schuh
TYPE: Production Request DEPARTMENT: Rates
REQUEST NO.: Staff - 130 TELEPHONE: [phone]

REQUEST:

In AVU-E-15-05, the Company did not estimate any costs for the Cabinet Gorge Unit 1 Refurbishment or the Post Falls South Channel Replacement in 2016 or 2017. Both projects now have 2016 transfer to plant amounts over $14 million. Please provide a detailed explanation of these costs.

RESPONSE:

Cabinet Gorge Unit 1 Refurbishment and Post Falls South Channel Replacement were expected to transfer to plant during 2015, and had to be shifted to a 2016 in service date. Therefore, these costs were reflected in 2015 rather than 2016 in the Company’s filed AVUE-15-05 case. However, just as in this case, the Company provided updates to actual and expected transfers to plant during the process of the case.

Please refer to Company witness Kinney’s testimony at page 16, where he discusses reasons for the Cabinet Gorge Unit 1 Refurbishment delay’s where he states:

The initial completion date for this project was May of 2015. This project is now estimated to be on-line in May of 2016. The Company encountered several issues during construction of Unit #1 causing this delay, such as issues with the supply schedule from the manufacturer and construction quality issues with the turbine resulting in delivery delays and additional site work, and an unforeseen governor upgrade required to ensure reliable operation of the new turbine.

Post Falls South Channel Replacement was delayed from 2015 to 2016 due to conditions of the dam once construction started. Please also refer to Company witness Kinney’s testimony at page 16, where he states:

The initial estimated completion date for this project was May of 2015. This was based on our observation of the dam condition, dive inspections, and estimates of the concrete suitability for rehabilitation. Once construction started, the Company encountered several unforeseen issues directly related to working in areas that are normally submerged and part of a 100 year old structure. For example, during installation of the coffer dam, the north bank was found to have a severe undercut that required significant efforts to secure before any reconstruction work could begin. Once removal of the existing concrete began, the poor condition of the concrete required further extraction to provide an adequate foundation for the new concrete. This significantly impacted the scope of project, requiring additional design, permits, and construction work. These delays resulted in concrete work being performed later in the year, further slowing construction as winter pouring is a slower process. This project went into service in February of 2016.

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