HomeMy WebLinkAbout20171213Hearing Transcript Vol I.pdfORIGINAL
BEFORE THE IDAIIO PT'BLIC UEILITIES COMMISSION
IN THE IdATTER OF THE APPLICATION
OF AVISTA CORPORJATION DBA AVISTA
UTILITIES FOR AUTEORITY TO
INCREJASE ITS RATES A}ID CIIARGES FOR
ELECTRIC A}.ID NATURJAL GAS SERVICE
IN IDAIIO.
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Case Nos.AVU-E-17-01AW-G-17-OL
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BEFORE
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4-COMMISSION PAt L K.TELLAI{DER (CHAIRIIA]I)
COUMISSIOIIER K TSTIIIE RAPER
COMMISSIOIIER ERIC A}IDERSON
E:RIDAY, DECEMBER 8 ,
BOTSE, TDAIIO
VOLT'ME I OF I
. Pagesl-87
20L7
Reported liy: Lori A. Pu1sifer, RDR, CRR, CSR No. 354
HEDRIGK
COURT REPORTING
POST OFFICE BOX 578
BOISE, IDAHO83701
20&33e9208
Srnlgtl"fr$wxuqatut98
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BE IT REMEMBERED that the hearing before the
Idaho Public Uti].ities Comission was taken at the
Commissionrs Hearing Room, 472 WesE Washington Street,
Boise, Idaho, before Lori A. Pulsifer, a Court Reporter
(Idaho Certified Shorthand Reporter No. 354) and Notary
Public in and for the County of Ada, State of Idahor oD
Friday, Deceuber 8, 2OL7, commencing at the hour of 9:30
a.m., in the above-entitled matter.
***
APPEARANCES
FOR AVISTA CORPORATION :!dr. David Meyer
Vice President and Chief Counse].of Regrulatory & Governmental AffairsAvista Corporation
Post Office Box 3721
Spokane, llashington 99220-3727
Enail : david.meyerOavistacorp. com
FOR SIERRA CLTIB:ffiieStaff AttorneySierra Club Envirorunental Law Prog,ram
2LOL Webster Street, Suite 1300
OakJ.and, California 946L2
Email : travis . ritchie@ sierraclub . or€I
FOR COMMT'NITY ACTION PARTNERSHIP
ASSOCIATION OF IDAHOMr. Br M. PurdyAttorney at Law
2OL9 North 17th StreetBoise, Idaho 83702Email: bmpurdy@hotnaiJ..com
CAPAI
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A P P E A R A N C E S (continued)
FOR IDAHO CONSERVATION LE"AGIIE:
L{r. tlatthew NykieJ.
Conservation Associate
Idaho Conservation Leagrre
Post Office Box 2308Sandpoint, Idaho 83864
Email : mnykiel-Gidahoconservation.orEl
FOR IDAHO FOREST GROUP LLC:
Mr. Rona].dAttorney at Lawllilliams Bradbury, P. C.
Post Office Box 388Boise, Idaho 83701EnaiJ.: ronOwilliamsbradbury.com
FOR CLEAR}IATER PAPER CORPORJATION:Mr. Peter iI. RichardsonStaff Attorney
Richardson Adams PLLC
515 North 27t,}e StreetBoise, Idaho 83702Emai].: peterOrichardsonada:ns.com
FOR COMMISSION STAFF:
Ms. Cani].]-e Christen
Deputy Attorney General
Contracts & Administrative Law Division
Pub].ic Utilities Comission
472 WeaL llashington StreetPost Office Box 83720Boise, Ida,ho 83720-0074
Email : ca'nille. christenGpuc. idaho . gov
HEDRICK COURT REPORTTNG (208) 336-9208
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INDEX OF EXAMINATION
}Iitness's Name Page Number
ELIZABETH M. A}IDRETISBy: Mr. Meyer 8
PATRICK EHRBAR
By: Mr. Meyer (Direct)11
CHRISTINA ZAIUORABy: Mr. Purdy (Direct)13
RJA}IDY LOBB
By: Ms. Christen (Direct)15
EZRA HAUSIIA}.I Ph.DBy: Mr. Purdy rect)L7
BENJAMIN OTTOEffiTer (Direct)
Mr. WiJ.J.iams (Cross)
Mr. Ritchie (Cross)
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ELIZABETH M. A}IDREVIS REBUTTAI)
By: Mr.25
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49
50
Mr. Ritchie (Cross)
Mr. Nykie1 (Cross)
Mr. tliJ.J.ians (Cross)
Mr. Meyer (Redireet)
iIASON THACKSTON (REBUTTAL)
By Mr. Meyer (Direct)
Mr. Ritchie (Cross)
Mr. Meyer (Redirect)
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55
77
***
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BOTSE, TDAIIO
FRIDAY, DECEMBER 8, 2OL7
***
COMMISSIONER KJELLANDER: Good morning. This
is the time and place for the hearing, technical
hearj-ng, in Case No. AVU-E-11-01,, AVU-G-17-01. It is
al-so known as In the Matter of the Application of Avista
Corporation, d/b/a Avista Utilities for Authority to
Increase Its Rates and Charges for Electric and Natural
Gas Service in Idaho.
My name is
chairman today for
Commissioners Kris
Kjellander. I wil-l- be the
proceedings. I am joined by
and Eric Anderson.
Paul-
these
Raper
Why don't we begin, fj-rst, with the appearance
of the parties. Letrs begin with Avista.
MR. MEYER: Thank you, Mr. Chairman. David
Meyer for Avista.
COMMISSIONER KJELLANDER: Thank you, David.
And Commission Staff?
MS. CHRISTEN: Camill-e Christen representing
Commission Staff. With me I have Randy Lobb.
COMMISSIONER KJELLANDER: Good morning,
CamilIe.
Cl-earwater Paper Corporation?
MR. RfCHARDSON: Peter Richardson of the firm,tr
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Richardson Adams on behal-f of Clearwater Paper
Corporation. With me it is Dr. Reedy.
COMMISSIONER KJELLANDER: Good mornj-ng, Mr.
Richardson.
Idaho Eorest Group?
MR. WILLIAMS: I am Ron Williams, Williams
Bradbury, oo behalf of Idaho Forest Group. Wj-th me is
Larry Crowley.
COMMISSIONER KJELLANDER: Thank you, Mr.
Wil-l-iams.
Let's go to the Idaho Conservation League.
MR. NYKIEL: Matthew Nykiel on behalf of the
Idaho Conservation League.
COMMISSIONER KJELLANDER: Thank you, Matthew.
Good morning.
Community Action Partnership?
MR. PURDY: Brad Purdy appearing on behalf of
CAPAI. To my lower right is Christina Zamora.
COMMISSIONER KJELLANDER: It is good to see
you, Brad.
And Sierra Club?
MR. RITCHIE: Good morning. Travis Rj-tchie on
behalf of the Sierra Cl-ub.
COMMISSIONER KJELLANDER: Wel-come, Travis.
The first item that I think I want to cover25
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this morning is just
witnesses. I sort of
f wou1d be will-ing to
interested in.
the order of appearances of
have a preference; but, of course,
entertain what others are
My preference woul_d be to
dj-rect testimony and then move to
start with Avista's
CAPAI and then have
by the
and then
the IPUC staff direct testimony, followed up
Sierra Club, the
round it up with
fdaho Conservatlon League,
rebuttal testimony of Avista.
Does that work for everyone?
It works for Avista. Thank you.MR. MEYER:
COMM]SSIONER KJELLANDER :
I see heads nodding. So
we will- take this morni-ng.
With that, then, Avista,
Thank you.
that is the approach
if you would l-ike to
call your dlrect testlmony witness,
here. Commissioner Raper w1ll- get
wil-I move forward.
we wil-l- get them up
them sworn in, and we
MR. MEYER: Very good. Thank you.
We call to the stand Ms. Liz Andrews.
ELIZABETH M. ANDREWS,
having been first duly sworn, testified as foffows:
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DTRECT EXAMINATION
QUESTIONS BY MR. MEYER:
O. Are you ready?
A. I am.
O. Thank you.
For the record, please state your name and your
employer.
A
testimony
A.
El-izabeth Andrews, Avista
And have you prepared, in
1n
Corp.
this proceeding,
stlpulation?
f won't offer it into
al-so prepared
that correct?
support of the settlement
I have.Yes,
Ando
evidence at
you have
this time.
al-so and
You have
additional rebuttal testimony,' is
A. Correct.
O. As to your direct testimony in support of the
stipulation, if I were to ask you the questions that
appear in that testimony, would your answers be the
same, except for one or two corrections?
A. Correct.
Would you identify those?
The two corrections are in the rebuttal-
(2
A
testimony.
MR.
later? Let's
Correct those now?
MEYER: Wou1d you prefer to do that now or
do that later?25
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COMMISSIONER KJELLANDER: Let' s do that .l-ater.
MR. MEYER: Let ' s do that l-ater .
O. BY MR. MEYER: Very wel-l. So if I were to ask
you the questions, your answers would be the same?
A. Yes, they would.
O. And you are sponsoring what has been marked --
or premarked as Exhibit 77; is that correct?
A. Correct.
O. Any corrections to make to that?
A. No.
O. Does that contaj-n true and correct information,
to the best of your belief?
A. Yes, it does.
MR. MEYER: Thank you. With that, the witness
is avail-abl-e.
COMMI SSIONER KJELLANDER :Thank you.
spread the direct
record as if read.
Without objection, we wil-l
testj-mony and Exhibit L1 across the
We w1l-l- move first to cross-examination from
the Sierra CIub.
MR. RITCHIE: Mr. Chairman, thank you. Travis
Ritchie with Sierra Cl-ub.
I have
just wanted to
no questions on Ms.
clarify. I do have
Andrews' direct. I
some questions on
we have norebuttal. As long as she is recalled,25
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questions right now.
COMM]SS]ONER KJELLANDER :Absolutely. That's
fine. Thank you for that cl-arification.
Let's look to the Idaho Conservatlon League.
MR. NYKIEL: We also don't
the direct testimony, but we have a
COMMISS]ONER KJELLANDER :
just save sometime.
Does anyone have questions
10
have questions as to
few on rebuttal.
Excellent. So l-et me
on t.he direct
testimony?
MR. RICHARDSON: No, Mr. Chairman.
MR. WILLIAMS: No.
MR. PURDY: No.
MS. CHRISTEN: No questions.
COMMISSIONER KJELLANDER: AII right. Any
questions from members of the Commission?
If not, it sounds like you will have some fun
on rebuttal-.
THE WITNESS: Irm looking forward to it.
COMMISSIONER KJELLANDER: And letrs move,
then l-et's conc1ude your direct testimony -- is that
correct? -- for Avista.
MR. MEYER: We have one more. We have Mr.
Ehrbar.
COMMISSIONBR KJELLANDER: I shoul-d have known25
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you woul-d,that. I was getting anxious and excited. If
call your next witness.
***
PATR]CK EHRBAR,
having been first duly sworn, testified as follows:
DIRECT EXAMINATION
QUESTIONS BY MR. MEYER:
O. Are you ready?
A. I am.
O. Thank you. For the record, please state your
name and your employer.
A. Patrick Ehrbar, Avista Corporation.
O. And have you prepared and pre-filed direct
testimony in support of the settl-ement stipulation?
A. Yes, I have.
0. Do you have any corrections to that?
A. I do not.
O. If f were to ask you the
in that pre-fiIed testimoDy, woul-d
same?
A
you?
questions that appear
your answers be the
o
They would.
And you are not sponsoring exhibits? Or are
A. I am not sponsoring any exhibits.25
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MR. MEYER: So with that, I woul-d ask that Mr
as 1f read and make himEhrbar's testimony be spread
available for cross.
COMMISSIONER KJELLANDER: Thank you.
Without objection, we wil-l- spread the testimony
as if read across the record.
Does anyone have any cross-examination on the
direct testimony?
MR. RICHARDSON: No, Mr. Chairman.
MR. WILLIAMS: No, Mr. Chairman.
MR. RITCHIE: No, Mr. Chairman.
MR. PURDY: No.
MR. NYKIEL: No, Mr. Chairman.
MS. CHRISTEN: No.
COMMISSIONER KJELLANDER: Any questions from
members of the Commission?
COMMISSTONER ANDBRSON: No.
COMMISSIONER RAPER: No.
COMMISSIONER KJELLANDER: Thank you very much.
It l-ooks like I could have skipped over you.
I believe that does conclude your direct?
MR. MEYER: Yes. Thank you.
COMMISSIONER KJELLANDER: Thank you.
And in keeping with the earlier approach that
we had to the order of witnesses, CAPAfT we would move25
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to you.
MR. PURDY: CAPAI cal-l-s Chrlstina Zamora.
COMMISSIONER KJELLANDER: ff we couJ-d get you
near a microphone I apologize.
are one mic short.MR. PURDY: WC
COMMISSIONER KJELLANDER: I apologize.
Absolutely.
MR. PURDY: Thank you.
CHRISTINA ZAMORA,
having been first duly sworn, testified as follows:
DIRECT EXAMINATION
QUESTIONS BY MR. PURDY:
o
A
Woul-d you please state your name?
Christina Zamora.
O. And what role do you play with Community Action
of Idaho?Partnershlp
A. I
Association
am the executive director.
O. And have you previously filed in this case
direct testimony consi-sting of el-even pages and no
exhibits ?
A. Yes.
a. If I were to ask you those same questions today
as contained in your previously filed direct testimony,25
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woul-d your answers be substantially the same?
A. Yes.
MR. PURDY: Thank you.
With that, Mr. Chairman, I have nothing further
and would tender her for cross.
COMMISSIONER KJELLANDER: Thank you.
Without objection, we will- spread the testimony
across the record as 1f read.
We will see if there is anyone that has any
cros s-examination .
No?
MR. RICHARDSON: No, Mr. Chairman.
COMMISSIONER KJELLANDER: MT. Wi]-Iiams? No?
MR. WILLIAMS: No questlons.
MR. RITCHIE: (Shakes head negatively. )
MR. NYKIEL: (Shake head negatively. )
MS. CHRISTEN: No.
COMMISSIONER KJELLANDER: Anythlng from members
of the Commission?
No.
Thank you very much for your presence today.
Moving now and that concl-udes your direct
for CAPAI.
Let's move to the IPUC staff. If you could,
cal-l- your witness.
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MS. CHRfSTEN: Yes. Staff call-s Randy Lobb.
COMMISSfONER KJELLANDER: Thank you.
***
RANDY LOBB,
having been first duly sworn, testifj-ed as follows:
DIRECT EXAMINATION
QUESTIONS BY MS. CHR]STEN:
O. Good morni-ng, Mr. Lobb.
A. Good morning.
0. Coul-d you please state your fuII name and spelI
your l-ast name for the record?
A. My name is Randy Lobb, L-o-b-b.
O. And who is your employer, and in what capacity
are you employed?
A. I am employed by the Idaho Publ-ic Utilities
Commission as the Utilities Division Administrator.
O. And are you the same Mr. Lobb who pre-filed
direct testimony and sponsored Exhibit 101 in this
matter?
A. Yes.
O. Do you have any changes or corrections?
A. I do not.
O. And if I were to ask you the same questions set
forth in your testimony today, woul-d your answers be the25
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same?
A. Yes, they would be.
MR. CHRISTEN: Thank you.
Mr. Chairman, I move to spread Mr. Lobb's
direct testimony and Exhibit 101 on the record.
COMMISSfONER KJELLANDER: Without objection, we
wiIl spread the testimony and his exhibit across the
record as if read.
MS. CHRISTEN: Thank you. The witness is
available for cross.
COMMISSIONER KJELLANDER: Do we have any cross
for Mr. Lobb?
MR. NYKIEL: No, Mr. Chairman.
MR. RICHARDSON: No questions, Mr. Chairman.
MR. WILLIAMS: No questions, Mr. Chairman.
MR. RITCHIE: No questions.
MR. PURDY: I have no questions.
COMMISSIONER KJELLANDER: Avista?
MR. MEYER: No questions.
COMMI SSIONER KJELLANDER :
Thank you.
Are there any
questlons by members of the Commission?
COMMISSfONER RAPER: No.
COMMISSIONER ANDERSON: No.
COMMISSIONER KJELLANDER: Thank you, Mr. Lobb.
Let's move now to Sierra Club.25
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EZRA D HAUSMAN, Ph. D.,
sworn, testif ied as f ol-l-ows:having been first duly
DIRECT EXAMINATTON
QUESTIONS BY MR. R]TCH]E:
O. Good morning, Dr. Hausman.Can you please
record?name and employer for the
name is Ezra Hausman, H-a-u-s-m-a-n; first
state your
A. My
name, E-z-r-a. I am
O. And on whose
A. On behalf of
an independent consultant.
behalf are you testifying?
Sierra Cl-ub.
well
this
O. And did you provide the
as Exhibits 601 through 613
proceeding?
A. Yes.
direct testimony as
that have been fil-ed in
O. And do you have any corrections or changes to
that testimony?
A. No.
O. If I asked you those same questions today,
woul-d your answers be the same?
A. Yes.
MR. HAUSMAN: Mr. Chairman, Dr. Hausman is
availabl-e for cross-exami-nation. I would move to admit
his direct testimony and Exhibits 601 through 613 into
the record.25
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COMMISSIONER KJELLANDER: Thank you.
Without objection, hls direct testj-mony and the
across the recordaforementioned exhibits will be spread
avail-abl-eas 1f read. We wiII have him now for
cross-examination .
Let's begin first with Avista.
MR. MEYER: Thank you, Mr. Chairman. Avista
has no cross-examinati-on.
COMMISSIONER KJELLANDER: Mr. Richardson?
MR. RICHARDSON: We have no questions, Mr.
Chairman.
COMMISSIONER KJELLANDER: Let's save some time.
Is there anyone who has any questj-ons of this witness?
None.
Any questions from members of the Commission?
COMMISSIONER RAPER: I have a quick quick.
COMMISSIONER KJELLANDER: Commissioner Raper.
COMMISSIONER RAPER: Welcome, Dr. Hausman.
THE WITNESS: Thank you.
COMMISSIONER RAPER: I wanted to clarj-fy, for
the benefit of the record, Sierra Club did not
participate, nor did you in any fashion, in the
settlement discussions is that correct? -- in this
case?
THE WITNESS: f certalnly did not. To the best25
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of my knowledge, Sierra
MR. RITCHIE:
CIub did not.
Commissioner
t9
Raper, I may have
approprj-ate for me tobetter knowledge of that, if it is
respond.
COMM]SSIONER RAPER:You are not actually
for your willingness.al-lowed to testify, but thanks
the role
THE WITNESS: My answer is I am not aware of
the Sierra Cl-ub played in the settl-ement
j-f any.
COMMISSIONER RAPER: But you were not a part of
proce s s ,
that ?
THE WITNESS:
COMMISS]ONER
Thanks.
COMMISSIONER
I don't know
redi-rect on that. So
much for your presence
THE WITNESS:
No, I was not a part of it.
RAPER: That's all I have.
KJELLANDER: Thank you.
need forthat there is any
with that, then,
here today.
thank you very
Thank you.
ThankCOMM]SS]ONER RAPER:you.
Let's move to theCOMMISS]ONER KJELLANDER :
Idaho Conservation League.
MR. NYKIEL: The Idaho Conservation League
calfs Benjamin Otto to the stand.
25
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BENJAMIN OTTO,
having been first duly sworn, testified as foll-ows:
QUESTIONS
DIRECT EXAMINATION
BY MR. NYKIEL:
Ready?
Yes.
Eor the record, please state your name andO.
employer.
A.My name is Benjamin Otto,
u
A
B-e-n-j -a-m-i-n,
for the IdahoO-t-t-o. I am the energy
Conservation League.
O. Are you the same
testimony in the present
A. I am.
associate
Benjamin Otto that pre-fi1ed
20L1 ?case on November 74,
Do you have
I do not.
If f were to
any corrections to make?
ask you the same questions today,
would you answer them any differently?
A. I woul-d answer them the same.
MR. NYKIEL: Mr. Chairman, Mr. Otto is
availabl-e for cross-examination. I would ask that his
testimony be spread across the record as if read.
COMMISSIONER KJELLANDER: And without
objection, we wil-l- spread the testimony across the
\J
A
o
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record as if read.
for Mr
Is there anyone who has any cross-examination
Otto? Let's begin with Mr. Williams.
MR. WILLIAMS: Thank you, Mr. Chairman.
CROSS.EXAMINATION
QUEST]ONS BY MR. WILLIAMS:
O. Ben, it's good to see you today. I just have a
couple of questions. The first question is f assume
you are famillar with Dr. Hausman's testimony where he
was asked: Why do you conclude that rates are 1ike1y to
go up in Avistars next depreciation case?
And essentially -- in the next case, he
essentially says that is because of the depreciation
re1ated to Colstrip.
Do you recall or did you review his
testimony on that?
A. Yes, I reviewed his testimony. f am here to
talk about my testimony, though.
O. I understand. So my question to you: On page
three and four of your testimony, you state your
opposition to the two-year stay-out provlsion of
paragraph six.
One of the reasons that you give is that you
don't support the stay-out provision because it limits25
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saylng that you believe
in l-ower rates, yet Dr.
2020 because of the
seem to hear you
depreciation studies
Hausman is implying
the abillty
anticipated
So
to reduce rates before
depreciation study.
I just was curious. I
22
wil-l- result
that they
one of thosewil-l- l-ead to higher retail- rates.
is correct?
A. So if I l-ook on the bottom
state: "I don't know if the revenue
So which
of page three, I
requirement wil-l-
rj-se or fall. I just know that it wil-l- be different."
But, then, I recommend -- f donrt support a provision
that limits the ability to reduce base rates.
I mean, that's a Iittle bit self-serving. I
don't know if j-t's going to be different; but if rates
Iower, I want the ability to make them lower. That's
all I am recommending.
O. But, again, you seem to imply the depreciation
study will l-ead to a lowering of retail rates. Did I
read that incorrectly?
A. You did read that incorrectly. What I said is
I don't know i-f it will ri-se or faIl.
MR. WILLIAMS: I have no further questj-ons,
Mr. Chalrman.
COMMISSIONER KJELLANDER: Thank you.
Mr. Ritchie?25
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I haveMR. RITCHIE: Thank you, Mr. Chairman.
just a couple of questions that I hope can clarify
Commissioner Raper's question from before.
cRoss EXAMINATION
QUESTIONS BY MR. R]TCH]E:
O. Mr
discussions
Otto, did you participate in settlement
in this proceeding?
A. r did.
O. Is it correct that there was both
there was an
an in-person
additionalsettl-ement meeting and, a1so,
phone meeting some days l-ater;
A. That's correct.
is that correct?
a. And was Sierra Cl-ub present, to your knowledge,
at the in-person settl-ement meeting, the first one?
A. Sierra Cl-ub was not person at the in-person
meeting.
O. And did Sj-erra Club communj-cate with you at all
about their posj-tion in their absence?
A. Yes. Myself and Matt and the counsef for
Sierra Cl-ub had a conversation before that settlement
negotiation.
O. And did Sierra Club participate in the
follow-up phone settl-ement discussion?
A. Yes.25
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No
Is
who has questions of this
MR. RICHARDSON:No questions, Mr. Chaj-rman.
MR. MEYER: No questions.
MS. CHRISTEN: No questions.
COMMISSIONER KJELLANDER: Any questions from
members of the Commission?
COMMISSIONER RAPER: No.
COMMISSIONER ANDERSON: No.
COMMISSIONER KJELLANDER: Letrs see if there is
any redirect.
concludes
MR. NYKIEL: No. Thank you.
COMMISSIONER KJELLANDER: No redirect.
Thank you, Mr. Otto.
THE WITNESS: You're wel-come.
COMMISSfONER KJELLANDER: I believe that that
the direct testimony. So now we are ready, I
for Avista's rebuttal- witnesses.
MR. MEYER: I will recal-l- to the stand
believe,
Ms. Efizabeth Andrews.
MR. RITCHIE: Thank you.
COMMISS]ONER KJELLANDER :
partJ-cu1ar
24
further questions.
there anyone el-se
witness ?
***
ELIZABETH M. ANDREWS,
having been recall-ed, testif ied further as fol-lows:
COMMISSIONER KJELLANDER: And, Ms. Andrews, you25
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are already sworn in. So once you
ready, we wil-l- allow your attorney
your rebuttal on the record, along
changes that I believe you alluded
Mr. Meyer, you're up.
MR. MEYER: Thank you.
sit down and
to go
with
ahead
you t re
and get
the recommended
to earli-er.
DIRECT EXAMINATION
QUESTIONS BY MR. MEYER:
O. Ms. Andrews, are you ready?
A. I am.
O. Okay. Thanks.
You have pre-filed some rebuttal- testimony,
have you not?
A. Yes, I have.
O. Do you have changes to make to that?
A. Yes. Two changes.
0. Okay.
A. Eirst
O. Read slowly, please.
A. Yes. Firstr orr page seven, footnote nine, that
sentence should say --
O. HoId on a second.
A. Okay.
O. Let everybody get there.25
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n AJ-I right.
COMMISSIONER KJELLANDER: Sorry. The page
number, again?
THE itflITNESS:Seven, footnote nine.
COMMISSIONER KJELLANDER: Okay.
THE WITNESS: That sentence should say
for
the
first sentence shoul-d say: The overall cost the
SmartBurn on uni-t four in 2016 was more
expens]-ve.
O. BY
second one.
MR. MEYER: Al-l- right. Let's go to your
A. The next correction or the second correction
is on page nine, footnote thirteen.
O. Give us a moment.
A. Okay.
O. A11 right.
A. The second and last sentence of that
footnote that should say: That settlement has now
been approved by the Washington Utilities and
Transportation Commission. And strike "yet."
O. So re-read the sentence as it shoul-d read.
A. It should say: That settlement has now been
approved by the Washington Utilities and Transportation
Commission, and the shortened period is not otherwise
supported by the depreciation study.
pro j ect install-
Not l-ess.
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O. Very well. Any other changes?
A. No, there's not.
O. So with those changes having been made, Lf I
were to ask you the questions that appear in your
rebuttaf testimony, would your answers be the same?
A. Yes, they would.
O. And this testi-mony, to the best of your
knowledge, conveys true and correct information?
A. Yes, it does.
MR. MEYER: Thank you.
With that, I ask that it be spread as if read
and tender the witness.
MR. RICHARDSON: Mr. Chairman?
CHAIRMAN KJELLANDER: Yes, Mr. Richardson?
MR. RICHARDSON: Just a housekeeping matter.
Andrews, REB not
is rebuttal on not
The footnote rea11y should read:
DI on her testimony because it
direct.
COMMISSIONER KJELLANDER: That's a good catch.
Thank you. I appreciate that.
Well, since you are close to your microphone,
l-et's see if you have any cross-examination.
MR. RICHARDSON: No, I don't, Mr. Chairman.
COMMISSIONER KJELLANDER: Mr. Rlchardson, thank
you.Z5
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Let's look to the Slerra CIub. Mr. Ritchie?
MR. RITCHIE: Thank you, Mr. Chairman. I do
have some questions.
CROSS.EXAMINATION
QUESTIONS BY MR. RTTCH]E:
O. Good morning, Ms. Andrews.
A. Good morning.
O. How are you? Travj-s Ritchie with the Sierra
Club.
Ms. Andrews, I would l-ike to
just the
First,
one at the top there.
O. Now, Ms. Andrews, the capital projects that
Sierra Club challenged in this proceeding are the
SmartBurn NOx controls at the Colstrip generating
station; is that correct?
A. Correct.
the issues that I think was
footnote that you corrected.
six of your testimony, tabl-e
A. Yes. I'm there.
start on one of
subject of the
let's turn to page
out in this table and
separate projects. One
o
Avista's
And these are separated
cost accounti-ng on two
is for unit three, and one
A. Correct.
O. Is that correct?
is for unit four?
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A Yes.
On that top lj-ne,
unit three; is
the l-ess expensive project,
that correct?that is for
A. Yes.
o. And
project, is
that bottom l-ine, the more expensive
for unit four?
A. That's correct.
O. And unit four was instalfed first,' correct?
A
U
A
o
A
n
That's correct.
In 20L6?
Yes.
And 2017 is when unit three
That's correct.
So can you please elaborate
was instal-l-ed?
on the explanation
unit four athat you had in your
l-ittl-e roughly, a
as uni-t three?
footnote ?Why is
thanIlttIe l-ess twice as expensive
A. Okay. Well, it
in the footnote, that the
is my understanding,
unit 1s when
SmartBurn and
as I noted
first they did
how tomost of the design work of
build it into the Colstrip
four.
the
project, unit three and unit
Unit four happened to be first because it
was they did
normal outage.
the work during the time of unlt four's
Both unit three and unit four, every25
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three years, have their normal- outage time period to do
their upgrades.
So to save money, they did the SmartBurn at the
same time. And that's where most of the design work was
done with unit four, but 1t was compatible with unit
three. So it was cheaper unit three was somewhat
less because the desi-gn work was already completed with
the previous install.
O. And when was that design work completed? What
year?
A. Wel-l-, the project went lnto service in June of
2075 for unit four. So I am assuming it's somewhere in
there. I don't have any more specifics than that.
O. Ms. Andrews, do you have a copy of Dr.
Hausman's testimony and exhiblts?
A. I do not.
MR. MEYER: May I approach the witness?
THE WITNESS: I do have his testimony, but I do
not have the exhibits.
COMMISSIONER KJELLANDER: Without objection,
you can approach the
information.
MR. RITCHIE:
copy.
witness to provlde that
If you prefer, I have a clean
THE WITNESS: Great.25
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COMMISSIONER KJELLANDER: Thank you for your
cooperat j-on.
O. BY MR. RITCHIE: Ms.
direct you and I apologize.
just handed you is not tabbed.
Exhibit 605?
Andrews , Lf I coul-d please
I real-ize the copy I
If I could direct you to
A. Let me see if I can find it.
MR. RITCHIE: Now, Mr. Chairman, this is a
conf identlal-
THE WITNESS: I'm there.
MR. RITCHIE: Thank you.
This is a confidential document. I bel-ieve I
can ask aII of my questions j-n a broad way so that folks
looking at the document can understand what we are
talking about without actually divulging any
confidential material.
To the extent we approach anything that is
tricky, I will- rely on Mr. Meyer to make sure that we
are not saying anything confidential- on the record. I
think we'fl- be I think we will- be okay.
O. BY MR. RITCHfE: So, Ms. Andrews, have you seen
this document before?
A. I have.
O. Are you familiar with what this is?
A. Yes, I am.25
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O. Without reveal-ing any confidential- information,
can you tell me what this document is?
A. This document is the original budget expected
for the unit four SmartBurn project that was going to
occur in '16. And, then, the second page to that
document is the unit three SmartBurn project that was
going to
o.
has the
be completed
And without
authorized
in '7J .
reveal-ing the amount, this document
for both of those
projects; is that
A. It does.
capital amount
correct ?
O. And are those numbers roughly the same?
A. Yes. I do bel-ieve yes. It l-ooks 11ke they
are close, yes.
O. They are certainly not the factor of difference
that you had in table one of your testimony; is that
correct?
A. That's correct.
O. If I could, Irl-1 direct you about a third of
the way down the page. Under "Description, " there is a
descriptj-on of cash f1ow. Do you see that?
A. Uh-huh. I do.
O. So if f was to ask you the same question agai-n
about the preliminary work done on unit on the unlt
for SmartBurn technofogy, does this inform your answer25
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of when that work started?
A. No. This was the original cash flow budget.
So f am not exactly sure when the timing was.
Obviously, the transfer to plant happened in June of
20L6.
33
the cash flow coufd have
that for sure. It
So it is possible that
started in '15, but I don't know
woul-dn't have transferred until
20L1 ?
This
the project was
1n June of '7J .complete, and that would have been
O. f am sorry. For unit four?
A. I'm sorry. For unit four.
O. For unit four, would it have been June of
A. No. Unit four went in in June of 20L6, and
unit three went in in June of 2077.
O. And there is that there was also a
description of the years of cash flow; is that
correct ?
A. Correct, the estimated or the expected time
frame.
O. And the initial- values for both of those
O. Thank you.
So, now, if you cou1d, turn
is the same form for unit three;
A. Yes.
to page two of two.
correct ?
q-
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the first year of
A. Correct.
expense
Uh-huh.
O for unit three and unit four are exactly the
same; is that correct?
A. As I saj-d,
estimate. So that
I bel-ieve this was thelr original
estimate probably woul-d have changed
after they had completed
So as the design
know that, with Colstrip,
unit four.
work I think until I
a lot of times they
until
are not
always aware
in and start
what the total cost wil-l- be they get
whendoing the project because, obviously,
a project that size, there
changes.
you get
going to
o.
in and open up
be additionaf
are
Thank you.
I please now direct you to Exhibit 6O't ,
nine on that exhibit?
Coul-d
page eight of
A. Okay.
0. On the bottom of first of all, can you
thisdescribe what this is? Are you famil-iar with
exhibit ?
A This 1s dependj-ng on what
be better for Mr. Thackston.
your
He
question is,
this may is probably
more famifiar with these documents than I am.
O. But you have seen the documents?
A. I have.25
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O. Just very broadly, what is the correspondence
on the bottom of the page, oD page eight of nine there,
without revealing any confldential- information?
A. Right. ft is talking about regional haze
guidance. It says: "I wanted to check in after the
owners' meeting l-ast week about a decision to defer
SmartBurn on unit three. As you know, unit four was
instal1ed and is being tuned for guarantees. The budget
item. . . "
MR. MEYER: Stop, please.
THE WITNESS: Irm sorry.
MR. MEYER: I think we are gettj-ng into
conf idential- inf ormat j-on at this point.
THE WITNESS: Oh, I'm sorry. Okay.
O. BY MR. RITCHIE: So this is an e-mail-; correct?
A. It is.
O. And this is from an Avista employee; correct?
Correct.
I believe what you
A
u
was that unit
just stated,
thls e-maiI
without going
says that unitany further,
four was just install-ed
A. Uh-huh.
and was compJ-eted?
Uh-huh.
But, now, that next sentence, without reading
o
A
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that sentence or any of the numbers in
discusses a budget item for unit three
authori-zation form that we were
36
there, that
that matches the
just looking at;capital
is that
A
correct ?
Uh-huh. Uh-huh.
O. And so the date of this e-mail was July 26,
2016; 1s that correct?
A. Uh-huh.
0. So even after unit four was completed, Avista's
own description of this budget
which the cash fl-ow for which
item and the years in
this budget item would be
coming out remain the same; is that correct?
A. It was. At this point as it is noted here,
this was June of f16. So the unit four excuse me.
The unit three that was to be completed in 20\1 would
not have been started.
And until they would get into that project,
they may not have realized that the desj-gn was going to
be exactly the same. I don't know. I'm not an
engineer, and so I canrt specifically answer that
question.
O. Okay. I wil-l move on. Thank you.
Ms. Andrews, can I please direct you to page
six of your rebuttal- testimony?
A. Yes. frm there.
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O. And starting at l-ine nineteen, can you read
that last sentence there, please? It starts with the
word "essential1y. "
A. Okay. "Essentia1ly, the Sierra Cl-ub is seeking
to col-Iatera11y attack a prior Commission determination
approving rates as just and reasonable, dt l-east as to
the SmartBurn install on unit four. "
a. Thank you, Ms. Andrews.
A. Uh-huh.
O. Did you review Dr. Hausman's testimony?
A. r did.
o.
is asking
A.
And is it your understanding that Dr. Hausman
for any retroactive change in rates?
He
the company
project that
case, then,
A. so
rates ?
A. He aski-ng
he is
is, in the
el-iminate
fact that
or write off,
was previously completed
he was.
in the previous
f woufd say
foras king a retroactive change j-n
l_s
YES,
he is
by asking to have
essentially, the
-- well, I see what you're saying.
retroactively requesting that a
prevj-ously approved by the
As far as the
project that had
Commission to be
forward.
O. okay.
been
not allowed to be recovered going
So the rates going forward for recovery25
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of that project would change?
A. Correct.
O. But none of the rates that were approved from
2076 to today would change?
A. No.
0. He is not seeking to return any of that
money --
A. No.
O. col-lected by the company to customers?
A. No.
O. Okay. Do you have your Exhiblt LJ, the
settlement, in front of you?
A. I do.
O. Bear with me one moment. Can
you to
this is
A.
o.
A.
o.
paragraph
Exhibit
26 of the settl-ement?
I please direct
For the record,
of 59.lJ, Schedufe I, page 2L
You said what paragraph?
Paragraph 26.
I'm there.
ft's right at the bottom.
that flnal- sentence of paragraph
findings..."?
A. "No findings of fact or
And can you read
26 starting wi-th, "No
concfusions of law
other than those stated herein shall be deemed to be
impliclt in this stipulation."25
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Is that a pretty standard provision
Yes, it is.
that is put into settlement agreements?
it is.
to your knowledge, was that put ln the 2016
settlement agreement?
Yes, it was.
O
A
(2
A
O
Yes,
And
So a determination that a capital project is
Iaw, is it not?
A.
0.
prudent
A.
o.
invol-ved
A.
that's a
Yes.
Now, in the
in that?
I was.
conc]usion of
o. Did
technology?
A. No.
that explicitly address SmartBurn controf
Typically,
Avista has
with the number of capltal
pro j ects l-i ke
the Commission does not necessarily opine on al-l
projects. So 1t was not specifically spelled out, no.
0. But isn't it your testimony today that the
Sierra Club is collaterally attacking the 2076
testimony -- or the 2016 settl-ement because that
settlement had an implicit finding of prudence about the
SmartBurn technology?
A. This was a project that it is my
2076 settlement agreement, were you
in both the '16 and '7J CASC,
capital
25
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understanding -- was the company responded to data
requests that included the information related to
SmartBurn. It was provided to al-l- parties to the case,
which ICL was actually a party to that case as well.
So the informatj-on was provided and cou.l-d have
been reviewed by all parties. There were no red fIags,
to my knowledge, that were raised around the SmartBurn
project. So it was a part of the settlement. ft was a
part of the capital projects that were included and
included in that case.
MR. NYKIEL: Mr. Chairman, I would just object
and correct the record that ICL was not a party to that
case.
COMMISSIONER KJELLANDER: Thank you for the
clarification.
MR. MEYER: Which case are you referring to?
THE WITNESS: The 2076 case?
MR. NYKIEL: Yes.
MR. RITCHIE: Bear with me a moment,
Chairman, ds
o. BY MR.
I check my notes.
RITCHIE: Now,
settlement before
changes the rate
correct?
A. It does.
us today, the
base from what
40
Ms. Andrews, the
2071 settlement, this
the 20L6 settlement was,'
Mr
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O. And so rates going forward will- change based
off of that changed base rate; is that correct?
A. That's correct.
O. Okay. Ms. Andrews, can I please dj-rect to you
page nine of your testj-mony?
A. I rm there.
O. And starting at line nine, can you please read
the sentence starting with, "Dr. Hausman. . . "
A. "Dr. Hausman assumes a new depreciation study
may have an j-mpact on the depreciable lives of the
Colstrip units three and four assets due to the
4l
you did
is that
shortened depreciable life
a recent Puget Sound Energy
Washington. "
O. And I believe you
of these assets agreed to in
case in the state of
testified before that
review Dr. Hausmanrs testi-mony in its entirety,'
correct?
A. r did.
O. Is the
evidence that Dr
Washington case
. Hausman cites
the only piece of
to support his
for Colstrip mayconclusi-on that the depreciation
accelerate ?
A. No. I bel-ieve there is other information that
he cites to.
O. Do you happen to know who the other co-owners25
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of the
n
trylng
Colstrip units three and four
Yes. Puget Sound Energy.
to think if Tal-en I thlnk
42
are ?
PacifiCorp. I'm
it's just the three.
O.
A.
o.
A.
o.
Electric,
A.
a.
correct ?
A.
o.
A.
o.
A.
o.
Portl-and
A.
o.
A.
o.
Hausman t s
A.
Do you
General
Is Portl-and General- El-ectric?
I 'm sorry. Yes . Portl-and General Electric .
And is Northwestern?
Yes.
So Puget Sound Energy, Portl-and General
PacifiCorp, and Northwestern?
Yes.
Those are all regulated utl1ities; is that
Yes, they are.
And Talen is a merchant?
Correct.
They are not a regulated utility?
Correct.
know the depreciation schedule that
El-ectric currently uses
I do not.
for Col-strip units three and four?
I do not.
Could I please direct you to Exhibit 513 in Dr.
testimony? That's the l-ast exhibit.
I rm there.25
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O. Now, isn't it true that Dr. Hausman provided
this document as evidence for his assertion that
Portl-and General uses a date of 2030 for the depreciable
life of Colstrip?
A. Yes.
O. So after reviewing that document, af I asked
you that question again, what depreciable l-ife does
Portl-and General Electric use?
A. Yes. f understand they use 2030. I dfr,
obviously, not a deprecj-ation expert; but I do know that
there are a l-ot of differing reasons, depending on when
upgrades and things like that go into pIace. That can
have a varying degree on the depreciable l-ives for the
projects by the indlvldual utilities.
a. Eair enough. We wonrt go into those issues
with your testimony.
A. Okay. Good.
O. Are you aware, as Dr. Hausman provided in his
testimony, that for its Oregon and Washington utilitj-es,
PacifiCorp uses a depreciation date of 2032
A. Yes.
O. for Colstrip three and four?
A. Yes.
O. And do you know what Northwestern uses?
A. I do not.
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O. So at least those three Puget Sound
rephrase it.which let
You
with respect
Utilities and
correct ?
me back up. Let me
corrected your second correction was
to the decision from the Washington
Transportation Commission; is that
A. That's correct.
O. And that decision came out recently; is that
correct?
A. rr did.
O. And it sounds l-ike you are aware of the
decision?
A. I am.
O. Can you to the extent you have reviewed it
broadly, can you say what it said?
A. It's my understanding that the settlement
agreed to shorten the depreciabl-e l-ife for Colstrip
three and four to 2027 | I bel-ieve; but, there, it did
not outl-ine the actual- timing or cl-osure of that p1ant.
So thatrs the extent that I know of that.
O. So of those utilj-ties, Puget Sound is now at
2027, following that?
A. Correct.
O. And you know what? We don't
these. You testified to each of them.
need to go through
That's fine.
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A. I will- add that, you know, we also have a
depreciation study, as determined -- or as discussed
already in our testimony.
And we have recently received a letter from
John Spanos at Gannett Eleming; and they are still
saying that, based on his recent review and the study
will be filed in Q-1 of '18 that the expectation j-s
stil-l that Colstrip's l-if e is years.
provides a
and 2036 for unit
And for Avista, that
Colstrlp
I can't
fifty
stilI
retirement date of 2034 for
four. So that's attest to the other
and the
our study.
reasons whystudies
are, but
be.
O.
those dates are what they
I can at l-east attest to what we expect ours to
You are later than each of those utilities?
MR. MEYER: Mr. Chaj-rman, I have l-et the
questioning go on for a little while; but I object to a
contlnuation of this line of questioning. The Sierra
Cl-ub, through its witness, is not proposing a specifj-c
change to
MR. PURDY: Your Honor, I can end this
questioning. I don't think Mr. Meyer needs to go on
here.
COMMISSIONER KJELLANDER: Okay. Let's see if
we can do that, then.25
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Mr. Meyer, we will wait on that objection and
46
my
think
see if we can wrap this up.
O. BY MR. RITCHIE: A11 right. Ms. Andrews,
it my final- because Ifinal- topic
you might want
Mr. Thackston
and Irve made
talked about the 2072
it to your colleague,
page five, line three, where you
decision time frame for the
to punt
is on
SmartBurn t.echnology.
Yes.
The details about that decision would that
be best for Mr. Thackston, or would that be best for
you?
A. That woul-d be best for Mr. Thackston.
MR. RITCHIE: Okay. Thank you.
Mr. Chairman, I have no further questions.
COMMISSIONER KJELLANDER: Thank you.
Mr. Meyer, I think that resolved the issue at
hand.
Let's move into the next in line for
cross-exami-nation. We will move to the Idaho
Conservation League.
MR. NYKIEL: Thank you, Mr. Chairman. Just
briefly.
A
0
25
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CROSS-EXAMINATION
QUESTIONS BY MR. NYK]EL:
0. Ms. Andrews, hello.
A. Hel-l-o.
O. Avista instal-l-ed SmartBurn emissi-on control
technology in unit four j-n June of 2076; right?
A. Yes.
O. And did the same for unj-t three in June 20L1?
A. Correct.
O. The declsion to install that technology was
made tn 2072?
A. Yes. There was some discussi-ons around that.
I think that was the initial. And, you know, any more
detail- than that should probably be directed to
Mr. Thackston.
O. Thank you. I can direct you to page four of
your provided testimony, l-ines two through seven.
A. I 'm there.
just read, starting with, "These
sentence there.
O. If you
two projects. . .
A. Yes.
in the rebuttal
Mr. Thackston,
47
projects, ds dj-scussed further
of company witness
to the installation of
of nitrogen oxide (NOx)
of a strategic decision
cou1d,
" That
"These two
testimony
both rel-ate
SmartBurn controls for emissions
at the Colstrip facility as part25
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to satisfy environmental- objectives.'r
0. Thank you.
And to your knowledge, from 2072 to today, did
state or federal 1aw require install-ation of SmartBurn
at units three and four?
A. I think Mr. Thackston should answer that. It
woul-d be more directed for him.
O. Okay. Thank you.
And I would direct you to page four, same pa9e,
Iine fifteen.
A. Okay.
O. Woul-d you please read the sentence that begins
wi-th, "As dj-scussed..." at line fifteen?
A. "As discussed by Mr. Thackston, these projects
were done in an effort to proactively instal-l- SmartBurn
as the l-ast avail-abl-e low-cost NOx pollution prevention
emissj-on control prior to the expected installation of a
very expensive emission, closed-combustion, control-
technology called sel-ective catalytlc reductj-on (SCR) in
future years. "
O. It may be the same answer, but I will ask you
just in case. To your knowledge, does the record
include analysis or eval-uation conducted by Avj,sta to
determj-ne SmartBurn was the last avai1able NOx pollution
prevention?
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A That should be directed
MR. NYKIEL: Thank you.
COMMI SS IONER KJELLANDER :
MR. WILLIAMS: Yes, Mr.
to Mr. Thackston
No further questions.
Mr. WiIIiams?
Chairman.
CROSS.EXAMINATION
QUESTIONS BY MR. WILLIAMS:
0. I have one question on page eight of your
testimony.
A. Yes.
A. And at lines eighteen through twenty, you talk
about the finishing of the depreciation study in l-ate
2011, with Commission filings and expected changes in
rates in each of the company's jurisdictions in 2078.
When you refer to "ratesr " I assume you are
talking about depreciation rates and not retail rates?
A. Yes.
MR. WILL]AMS:
COMMISSIONER
Mr. Purdy?
MR. PURDY: I
COMM]SSIONER
No further quest j-ons.
KJELLANDER: Thank you.
have none. Thank you.
KJELLANDER: Any questions from
Staff?
you.
COMMISSIONER CHRISTEN: No questions. Thank
25
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COMMISSIONER KJELLANDER: Any there any
questions from the Commj-ssion?
No.
Redirect ?
MR. MEYER: Just briefly. Thank you.
REDIRECT EXAMINATION
QUESTIONS BY MR. MEYER:
There was a series
50
of questions relating to the
the installation of SmartBurn
O.
timing and of
technology
correct ?
rel-ationsh j-p
in both units four and three in Colstrip;
A. Yes.
O. And as you testified again today, unit four was
installed -- the technology for SmartBurn was installed
in 201,6, and unit three was installed in 2011 i is that
correct?
A. Correct.
O. Now, to the
agree that the same
for the instal-l-ation
four and unit three?
A. Yes.
O. And to the
Slerra Club, in this
best of your knowledge, would you
rational-e and the same justification
of SmartBurn applied to both unit
best of your knowledge, has the
docket, suggested that there shoul-d25
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51
be a different prudency determj-nation for SmartBurn
technol-ogy with respect to the instalfation of SmartBurn
in unj-t three as opposed to unit four?
A. No, I am not.
O. Okay. So no one has, to the best of your
knowledge, raised a question as to whether or not the
Commission ought to view the SmartBurn instal-Iation
di-fferently for those two projects? Am I correct?
A. That's correct.
O. A11 right. Now, when the Commission l-ooked
and when the parties examined -- l-et's start there.
When the parties examj-ned the information in
connection with the prior case, the 2076 case in which
the SmartBurn technology
unit four,for Colstrip parties have avail-able
identified the costs
was reflected in a rate base
did the
to it discovery
associated with
A. Yes.
information that
this technology?
The pages that were
in Dr. Hausmanrs exhiblts that
-- we pointed to it
information was
included in the data response to aI1 partj-es from the
company to all- parties in that 2016 case. That
inf ormation was avail-able.
O. And would you agree, prior to settlement in
that document, that that discovery had taken place and
that the parties, lncluding Staff and other interested25
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parties, had familiarized
investment ?
A. I believe so. f
provided to the parties;
52
themselves with this SmartBurn
mean, the
and 1t is
information was
understandlng that
there were no red
my
the information was reviewed and that
flags raised at that time.
O. Is it your understanding that the settlement in
the 201,6 proceeding reflected a l-evel- of rate base that
included the SmartBurn investment?
A. Yes, it did.
O. A11 right. Now, let's rol-l- ahead to this case.
In this case, has the company, with respect to the
SmartBurn technofogy investment for unit three,
provided, through discovery, information pertaining to
its investment?
A. Yes, it did.
O. And has that information been provided to all
parties in this docket?
A. Yes. It is incl-uded as an exhibit in Dr.
Hausman's testimony.
O. And did al-l parties have that information
avaj-l-able to it before certain, but not all, partles
agreed to the settlement agreement?
A. Yes, it did.
MR. MEYER: A1l- right. I believe that's all I25
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have. Thank you.
COMMISSIONER KJELLANDER: Thank you.
And, Ms. Andrews, I believe that al-l-ows you to
take a seat outside of that seat.
THE WITNESS: Thank you.
COMMISSIONER KJELLANDER: And I bel-ieve you
have one more witness?
MEYER: We do. Mr. Thackston.
PURDY: Mr. Chairman? Mr. Chairman, ildy I
MR
MR
53
Zamora to
Without
although I
ask a quick question? Is it all- right for Ms.
leave at this point?
COMMISSIONER KJELLANDER: Certainly.
objection, Ms. Zamora, you are free to leave,
can tel-l that you rea1ly want to stay.
MR. PURDY: She has other obllgations. Thank
you.
***
JASON THACKSTON,
having been first duly sworn, testified as foflows:
QUESTIONS
DIRECT EXAMINATION
BY MR. MEYER:
Are you ready?
I'm ready.
A11 right. For the record, would you please
O
A
o25
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state your name and your empl-oyer?
My name is Jason Thackston.A Last name,
Corporation.T-h-a-c-k-s-t-o-n. And I work
O. Thank you.
And are you the same
pre-fi1ed testimony, rebuttal
A. Yes, I am.
for Avista
Jason Thackston who
testimony, in this case?
MR. MEYER Irm sorry. The reason
way down, I said I was
I am kind of
goj-ng to ask
a month
chuckling is,
that question,'
ol-der. So he
on the
and Jason reminded me he is
is not the same Jason Thackston.
THE WITNESS: Ol-der and wiser.
MR. MEYER: Older and wiser. He added the
"wiser. " With that clarification, he is, essentially,
the same.
THE WITNESS: Thatrs correct.
O. BY MR. MEYER: Now, do you have any changes to
make to that?
A. I do, yes. I have two changes to make. The
first is on
change that
to ttnowtt and
So
has now been
page
Ms.
to
that
seventeen, l-ine fifteen. It's the same
Andrews made, to change the word "not"
ttrra.F ttJUU.remove the word
the sentence reads: "That settlement
otherwise not
approved by the WTC, and the date is
supported by a depreciation study. "25
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The second change that I have was brought to
our attention in Ms. Andrews' testj-mony, which is the
footnote. Instead of "Thackston DI, " it is "Thackston
REB" in the footnote of the testimony.
O. Thank you. With those changes, if I were to
ask you the questions that appear j-n your rebuttal-
testimony, wou1d your answers be the same?
A. Yes, they would.
O. And it conveys true and correct information, to
the best of your belief?
A. Yes.
MR. MEYER: With that, I ask that it be spread
as if read and make him available.
COMMISSIONER KJELLANDER: And without
objection, the testimony will be spread as if read.
And we wil-l- make him avail-able, beginning with
the Sierra CIub.
MR. RITCHIE: Thank you, Mr. Chairman.
CROSS-EXAMINATION
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QUESTIONS BY MR. RITCHIE:
O. Good morn j-ng, Mr. Thackston.
A. Good morning.
O. How are you?
A. I'm fine. Thank you.
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O. Mr. Thackston, was this
are aware of that Avista had --
owners installed a SmartBurn
units ?
56
the first time that you
and the other Colstrip
technology on those
A. For units three and four, yeS.
O. So you weren't replacing them?
A
o
No, we were not.
And what was
Avista was required to
the compliance deadl-ine by which
install- the SmartBurn controls?
A. The compJ-iance deadline for the SmartBurn
control-s ?
O. Correct.
A. This rel-ated to the regional haze rul-e which
actually has an alternate complj-ance deadline of 2064,
with a glide path between now and then, for the region
that is affected by the regional haze rul-e.
O. So you had to instal-l- SmartBurn by 2064?
A. No. The compJ-J-ance deadl-ine is 2064 to achieve
zero NOx emissions, and there is a reasonable progress
rule which requires that power generators in that
attainment area make reasonable progress between the
time the rul-e is promulgated and 2064.
O. Okay. So back to my first question: What was
the compliance deadline by which Avista was requj-red to
install the particul-ar SmartBurn?25
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A. We don't have a compliance deadline associated
with installlng SmartBurn.
O. And was there, in any statute or rul-e or Iaw,
an emissions limit that was required to be met that the
SmartBurn was intended to achieve?
A. There's a glide path that is attributed to
toward an ultimate 2064 deadline ofreasonable progress
having zero
attainment
So that glide
is what informs us, j-n
of emissions
NOx emissions coming from wj-thin the
area.
path and
terms of
the reasonable progress
the timing and magnitude
control equipment.
as you sit here today, though, in 2076 ando
201,1 ,
l-imit
that
A
So
O. Are
testimony in
there is no specific
that Colstrip three
necessitated SmartBurn?
No
unit-appl-icabl-e emissions
and four are required to meet
record, if
testimony.
you
the
familiar with Mr. Kinney's direct
application?
reviewed it,yes.
to the
A.
o.
on page
happen
A.
I have
I can provide
thirty of Mr.
to have that?
f do not.
MR. RITCHIE:
a cite I may,
Kj-nney' s direct Do you
With counsel's permission, if I25
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could read it and --
MR. MEYER: Surely.
O. BY MR. RITCHIE: Mr. Kinney states: "The
mandatory and complj-ance capital investment driver
typically includes projects done for compliance with
laws, ru1es, and contract requj-rements that are external
to the company. (e.9. state and federal, Iaws,
settlement agreements, FERC, NERC, and ECC rul-es and
Commisslon orders, etc. ) "
Based on what you just testified, that there
was no compliance deadline for SmartBurn and, then,
there was no emissions limit for SmartBurn, was there
any external-
required
20!6 and
A.
20L6 or
you
It was in our judgment and
other owners that SmartBurn al-l-owed
1aw, ru1e,
to install-
path and to make reasonable
or contract requirement that
SmartBurn control technology in
the judgment of the
US to stay within
progress in
20!7 ?
No, not specifically SmartBurn technology in
20L1. But, again, I wil-l- point to the regional
haze rule which requires reasonable progress
reasonable progress made toward el-iminating NOx
emissions in that attainment area.
the glide
addition to having the ability
information and data about the
to collect important
performance of the25
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SmartBurn controls so that, when
instal-l SCR in the future, also
59
it comes times to
a requirement associated
woul-d be able to scopewewlth the regional haze ruIe,
and size that SCR equipment
O. So of f of that l-ast
and size that SCR. . . " So it
more accurately.
answer, you said ". . . scope
would save you money?
A. It would save our customers money, yes.
O. So is j-t fair to characterize using the
company's judgment to install something that you have
determined saves money as a mandatory compl-iance
obligation?
A. I started with the justification associating it
with the regional haze rufe, which was the primary
driver. There are other benefits, including the things
that I l-isted, also including reducing the costs
overal-1.
O. So you still- think that this was mandatory to
instal-I SmartBurn in 20!6 and 2011?
MR. MEYER: I object. This question has been
asked and answered.
COMMISSIONER KJELLANDER: I have heard it asked
and answered. It may not be to your satlsfaction, but
it has been asked and answered.
MR. RITCHIE: Fair enough, Mr. Chairman. I
wil-I move on.25
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60
O.
question
instal-1ed
You said
BY MR. R]TCHIE:
to you today was
SmartBurn before
it had not.
fs it fair to charactertze the instal-lation of
SmartBurn as a routine expenditure?
A. I woul-d need you to define what a routine
expenditure is.
MR. RITCHIE: IrII move on.
We1l, Mr. Chairman, may I introduce a cross
exhibit?
COMMISSIONER KJELLANDER: You can try.
MR. RITCHIE: May I offer an exhibit for cross?
COMMISSIONER KJELLANDER: Yes.
COMMISSIONER RAPER: What number?
MR. RITCHTE: 674.
COMMISSIONER KJELLANDER: 6L4. Do you have
enough for everybody?
MR. RITCHIE: Mr. Chairman, would you like me
to have the witness identify --
COMMISSIONER KJELLANDER: Yes, please.
MR. RITCHIE: -- and describe it before I move?
COMMISSIONER KJELLANDER: That woul-d be
helpfuI.
0. BY MR. RITCHIE: Mr. Thackston, can you please
Mr. Thackston, my first
about whether you had ever
or the Colstrip owners.
25
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6l
identify the document that I have put in front of you?
A. Yes. Thj-s is a fiJ-ing that Mr. Meyer made with
the Commission, objecting to the Sierra Club's motion to
petition to intervene 1n this rate case.
O. And are you familiar with this document?
A
0
A
Yes, I am.
And was it fll-ed
To the best of my
MR. RITCHIE: Mr.
on the docket?
knowledge, it was.
Chairman, I would l-ike to
move this document label- this document as Exhlbit 614
and move to enter it into the record.
COMMISSIONER KJELLANDER: Without objectlon?
MR. MEYER: No objection.
COMMISS]ONER KJELLANDER: NO
So Exhibit 614 is officially
MR. RITCHIE: Thank you, Mr.
o. BY MR. RrrCHrE:
obj ection.
in the record.
Chairman.
Mr. Thackston, if I could
two of the brief? It is
document but page two of the
you to
three
page
of the
please direct
actually page
brief.
o
on that
A
Okay.
If you could,
page, starting
"These are the
A
that are in the ordinary course
please read that final sentence
with the words, ttThese are. . . tt
capital expenditures
of busi-ness and have
types of
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62
been routinely incurred over many years and are made for
the purpose of keeping the plant in compliance with
applicable regulations and operating standards, as shown
below. tt
0. And Mr. Meyer, here, is describing
expenditures which incl-udes the
is that correct?
bel j-eve So, yes.
before handing you
the category
SmartBurnof Colstrip
technology;
A. I
O. so this document, I asked
you whether you thought this was the type of capital
expenditure that was routine; and you asked me, I
bel-ieve, "ft depends on your definition of the word
t routi-ne t tt ?
A. I wanted to know your definition of "routj-ner"
yes.
0. I woul-d ask you: As you believe Mr. Meyer is
using that "routinely" here, do the SmartBurn
technologies fal-1 within the -- within that definition
of "routine"?
A. Yes, they do.
O. And so how let me ask you: Why j-s it -- why
is this a routine capital expenditure?
MR. MEYER: Just so the characterizati-on of
what I drafted up is clear, let's make sure that the
context is complete. It's routine and I lost I25
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think 1t was routine and --
THE WITNESS: Ordinary course of bus j-ness.
MR. MEYER: -- in the ordinary course of
business. Correct. So with that cl-ari-f ication
THE WITNESS: Yes. And I was going to go right
there as wel-l-.
With respect to al-l- of our power plants, all of
our facilities, we are routinely and in the ordi-nary
course of business making decisj-ons to both ensure the
reliabil-ity of the plant and the efficiency of the plant
and, aIso, to ensure that we are in compliance with
exj-sting regulations, rul-es, and laws.
So from that perspective, in the ordinary
course of business, as we l-ook at the regional haze rul-e
or we look at any other environmental rul-e, law, or
regulation, we are making
prudent way to achieve and
rules and regulations.
0. BY MR. RITCHIE:
decisions on the best and most
be in compllance with those
So is
described in
expenditure?
A. That
your testimony
an SCR, which you
is that a routine capital
is a much more significant decision; but
if that's what would be required and it was the least
cost and best availabfe technology at the time that we
made the decision, I would consider that in the ordinary25
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64
course of busi-ness.
When do you have to instal-l the SCR?
We don't know.
What is your best guess today?
Mi-d 2020s.
O
A
o
A
o
A
Can you be more
It moves aff of
time frame. I
speci fic?
the tlme potentlally, the
2027 -2028 bel-ieve
but,
thatf s what we filed in
our IRP earlier this year.
O. Now, Ms. Andrews testified before you that
Puget Sound Energy has moved their accel-erated
depreciation date to 2027; is that correct?
A. That is my understanding, yes.
O. Would you expect Puget Sound Energy to
authorize an SCR the same date that they expected the
plant to end i-ts useful life?
MR. MEYER: Object to the questlon. It call-s
for speculation. This witness can't answer that on
behal-f of Puget.
MR. RITCHIE: I can rephrase.
COMMISSIONER KJELLANDER: Let's try 1t.
O. BY MR. RITCHIE: Mr. Thackston, as a utllity
executive, if your estimated end-of-life date for a
pJ-ant was the same date as an SCR expenditure or a
different capital expenditure of a simil-ar magnitude,25
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woul-d you expect to make that expenditure?
MR. MEYER: f would object further because the
predicate of the prior question is whether if the
depreciation rate for Puget, by agreement, was reduced
to 2021, what impact woul-d that have on the instal-l-ation
of SCR?
But what this questioning assumes is that
merely because there is accelerated depreciation to 2021
that the plant would necessarily close in 2021. That's
not what the Puget settlement agreement says.
So I object to the implication here that a mere
change in depreciation rates woul-d somehow, A, result in
cfosure; and, B, woul-d result j-n a change in assumptions
around SCR.
COMMISSIONER KJELLANDER: And I appreciate the
objection. f am going to all-ow the witness to try to
answer the question to the best of his ability. The
objection is duly noted.
MR. MEYER: Thank you.
THE WITNESS: I almost forgot the question.
As a utility executive, if I bel-ieved that the
plant was at the end of its life, dt the end of its
useful l-ife, then, any material and significant
investment woul-d have to be scrutinized quite a bit.
O. BY MR. RITCHIE: Now, Mr. Thackston, you
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mentioned the regional haze rul-e and the glide path
before?
A. Yes.
O. Are you familiar with the best available
retrofit technol-ogy phase of that rul-e , or BART
technology?
A. I am familiar with it conceptually. I am not
an expert on it.
I will turn
starting at
tlme frame;
66
you to page eight of
fine eighteen, you talk
is that correct?
O. If I could,
your testimony. And
about a 2072 decision
A. Yes.
v
ordered
(2
of the
A
And you sdy, after that, that SCRs were belng
in many surrounding states; is that correct?
That's my testimony.
To your knowledge, was that largely based off
BART compliance obligations under the regional
haze rule?
A.
o.
Colstrip
A.
o.
That's my
And what
understanding.
was the BART compliance obligation for
units three and four?
None at that time, to my understanding.
So the next step is reasonable progress; is
that correct?
A. Yes.25
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O. Now, af, and when, SCRs are ordered
67
at Colstrip
and fourthree and four required at Colstrip
that will be that will like1y be the
rule promulgated either by the state or
subject of a
the federal
the process.
the process provides
by a comment period,'
the process.
rule SCRs or
three
government; is
A. That's my understanding of
process al-l-owsO. And the
for a proposed rule flrst, followed
1s that correct?
O. Fair enough.
How many years of data
technol-ogy do you need in order
A. I don't think there is
data. I do
that correct?
A. I am not aware of the specifics of
O. Do you know how long after a final-
simiIarly large capital expenditures are generally
required to be installed?
A. I know it's a number of years. f don't know
the specifics.
A. Does five sound right, give or take?
A. I don't know the specifics.
years or months of
data we have under
from the SmartBurn
to optimize the SCR?
a specj-fic number of
believe that the more
different operating conditions the
more informed we are about the ul-timate configuration of
SCR.25
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O. On the statement you made about the 2012
decision time frame,is it your testimony that the
SmartBurn was irrevocable after
68
change
ends up
parties
decision to instal-l-
2012?
A. No.
O. What options did you have to revoke or
that declsion?
A. It would be -- ultimately, the decision
in the budget process for the next year; and the
can vote not to include that in the budget and to
re-submit the budget. So we continually monitor
conditions.
O. So if there were changed circumstances or if
better technology came
Yes.
out, you could change course?
As a prudently managed uti11ty,
to investigate those options and
you would
change course
when appropriate; correct?
A. Thatrs our general practice, yes.
MR. RITCHIE: Mr. Chaj-rman, I have no further
questions.
Thank you, Mr. Thackston.
COMM]SSIONER KJELLANDER :Thank you.
A
n
continue
Mr
MR
Purdy, do
PURDY: ]
you have
do not.
any cross?
Thanks.25
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COMMISSIONER KJELLANDER: Thank you, Mr. Purdy.
Mr. Williams?
MR. WILLIAMS: No questions.
COMMISSIONER KJELLANDER: Mr. Richardson?
MR. RICHARDSON: No questions, Mr. Chairman.
COMMISSIONER KJELLANDER: Let's move, then, to
Mr Nykiel.
MR. NYK]EL:
COMM]SSIONER
No further questions.
KJELLANDER: No further questions.
Erom Commission Staff?
COMMISSfONER CHRISTEN: No questions.
COMMISSIONER KJELLANDER: Are there any
questions by members of the Commisslon?
COMMISSIONER RAPER: f have a couple.
COMMISSIONER KJELLANDER: Commissioner Raper.
COMMISSIONER RAPER: I couldn't, Mr. Thackston,
Iet you get away without it, after twenty -- more than
twenty years with Avista and never on the stand.
THE WITNESS: Thank you.
general
record,
want to
that Sierra
So
a synopsis based on
Club was doing.
Colstrip's useful
COMMISS]ONER RAPER:
questJ,ons. If I were
I am sure I woul-d find
do
I have a couple of really
to flip back through my
the answer; but I kind of
some of the questioning
life is what? I mean, in25
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Avj-sta's record, what is Colstrip's useful l-ife?
Well, af I may clarify, theTHE
depreciation
Colstrip?
WITNESS:
the current depreciation schedule for
COMMISS]ONER RAPER: No.
THE WITNESS: No? Colstrip's useful Iife?
COMMISSIONER RAPER: Yes.
THE WITNESS: We don't we don't have a
specific date that we attribute to Col-strip's usefuf
l-ife because it depends on what decisions are made in
terms of maintenance and operation and upgrades at the
p1ant.
It would be similar to asking what the useful-
life what the useful- l-1fe of a car is. That useful
regularly or 1f you
if you upgrade or
Iife differs if you
donrt, if you change
not.
change the oiI
the tires, or
COMMISSIONER RAPER: Fair enough.
Your mic is oflr Mr. Meyer.
MR. MEYER: Thank you.
COMMISSIONER RAPER: You' re wel-come .
Okay. How about in the last IRP? In Avista's
l-ast IRP, how did it categorize Colstrip?
THE WITNESS: In our last IRP, we projected
that Colstrip wou1d be avail-able for our customers all,25
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the way through the twenty-year horizon of the IRP.
COMMISSIONER RAPER: And to clarify -- because
I feel like the haze rule and SCRs are getting a little
convol-uted here is the investment Avista is seeking
in this case related to compliance with haze rul-es?
I can clarify in order for you not to have to
parse your answer so much. I understand there is a
glide path. You know, I appreciate the glide path
testimony and what that means for the regional haze
rules as wel-l-.
But this investment is this done in
furtherance of meeting a haze rule or ultimate SCR
requirements ?
THE WITNESS : Wel-l-, theyr re both they are
combined, which causes some of the confusion. Both
SmartBurn and the SCR are tied to the regional haze
rule.
It's the timing of when those when SCR
ultimately would need to be instal-l-ed that is informed
by the instal-lation -- we1l, both informed by the
installatj-on of the SmartBurn technofogy which all-ows us
to from our posJ-tion and perspective, it allows us to
stay within the reasonable progress in the glide path.
And it al-so potentially defers the need to
install- SCR, beyond what we -- when we otherwise would25
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have had to instal-l- SCR, had we not invested j-n
SmartBurn technofogy, because
COMMISSIONER RAPER:
THE WITNESS: I think
COMM]SSIONER RAPER:
presumption that Colstrip was
then I understand the concerns
THE WITNESS: Uh-huh.
COMM]SSTONER RAPER:
of that glide path.
Done?
I am.
Okay. So if there were a
going to be closed early,
of investment now.
presumption
rRP,1s
next twenty
to assume that
ti-me, based on
made regarding
process that we went through
installation.
talked about the timing it's in
But with a
that Colstrip, dt least i-n Avj-sta's last
presumed to continue to operate for the
years, then is it reasonable for Avista
this is a reasonable investment at this
the other determinations the company has
its fl-eet?
THE WITNESS: Yes. That's the main thatrs
the main decision-making
rel-ated to the SmartBurn
Ms. Andrews
her testimony -- the
taking installing
had a major outage at
of lnstaJ-1ing SmartBurn and
the time, we had already
of the units, which saves us
to having a separate outage
the timing.
timing
it. At
each
significant money rel-ative
for that. So that affected
It al-so results in a significant reduction in25
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nitrogen oxide emissions. Pre-SmartBurn installation to
post-SmartBurn installation is a twenty-six percent
reduction in nitrogen oxide emissi-ons.
And thatrs lost in the numbers that are in the
testimony because, as you see, we go from an eighty
percent reduction in NOx emissions to an eighty-six
percent reduction in NOx emissj-ons. Wel-I, that's a
six-percent difference.
That's six percent of a
start out up here, and you have
reduction. You start up here.
eighty-si-x percent reductj-on, it
reduction. So we have achieved
very large number.
an eighty percent
When you go to the
is a significant
a significant reduction
of that installation.
that will
You
in NOx emissj-ons today as a result
We are gathering the data
determine the
technology in
And
help us
the SCR
we wil-l- be able to l-ower operating costs
associated with the SCR equipment because we wil-l- have
less nitrogen oxide emissions that we are trying to
mitigate.
And whether we look at a time]ine of useful
Iife that goes out the full twenty years, like our IRP
shows r or if you l-ook at a tj-mel-ine of useful life that
is more reflective of the other utilities' depreciation
proper sizing configuration of
the future.
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schedul-es,
three and
of those
more to how that
74
what you
significance.
is measuredMy question, though, goes
and by whom.
THE WITNESS: It
have monitoring equipment
the decision to instalf SmartBurn in uni-ts
four, from our perspective,
scenarios.
was prudent in all
COMMISSION RAPER: So even at my -- if I heard
you correctly with that statement, then, even if, sdy,
CoJ-strip retired by 2030, Avlsta stil-l- believes that
this is a reasonable investment at this time?
THE WITNESS: Yes, because of the reasonabl-e
progress rul-e between now and then the glide path.
COMMISSIONER RAPER: Gotcha. Okay. Thatfs all-
I have. Thank you.
THE WITNESS: You're welcome.
COMMISSIONER KJELLANDER: Mr. Thackston, just a
follow-up. You touched on an area that I have an
interest in, and that was with the six percent
improvement.
I am not going to ask you to backtrack through
that. I
perceive
think you answered thatr ds far as
that to be in relationship to its
is my understanding that we
on site. We measure that, and
we report that. That is my understanding.
COMMISSIONER KJELLANDER: And who do you report25
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that to?
THE WITNESS: I bel-ieve it's to the EPA.
COMMISSIONER KJELLANDER: So this is something
that if somebody wanted to get access to that
information, they could get access to that?
THE WITNESS: I believe so.
COMMISSIONER KJELLANDER: So in the course of
some transparency, as it refates to those NOx emissions
and what may have been reduced through this, those might
be avail-able through other public documents?
THE WITNESS: Yes. They would be availabl-e
through other documents.
COMMISSIONER KJELLANDER: Do you know, in any
other circumstances in which this technology has been
deployed, what the improvement percentages have been
like?
THE WITNESS: What I do know i-s that even
though we don't own portions of units one and two,
SmartBurn was installed in unit two in 2015.
So the benefit that we have from that having
occurred is that the two owners of units one and two are
also owners of units three and four. So they were abl-e
to bring that experience and knowledge and share the
success of those resul-ts.
And I al-so had conversations wlth other owners
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who
with
question
This is
76
have coal- plants in their fl-eet who have experience
SmartBurn and were showing me or telling me that
had achieved what had been guaranteed, from athey
performance
So the executive responsible
for this decision, comfort that we woul-d achieve what we
were bei-ng told we would achieve.
COMMISSIONER KJELLANDER: Thank you.
Commissioner Anderson?
COMMISSIONER ANDERSON: ThanK you.
have a
perspective.
that gave me, as
Thank you, Mr. Thackston. I
in reference to page twelve
where the subject matters are
page.
Do you believe that the si-x percent improvement
in NOx reduction does satisfy the reasonable progress
rule?
THE WITNESS: Yes. For the foreseeabl-e future,
yes.
COMMISSIONER KJELLANDER: Are there any further
questions from members of the Commission?
If not, redirect, Mr. Meyer?
MR. MEYER: Thank you.
of your
on the
quick
rebuttal.
top of that
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REDIRECT EXAMINATTON
QUESTIONS BY MR. MEYER:
O. Let's
testj-mony that
Sierra Club.
first turn back to page eight of your
counsel for theyou were directed to by
A
o.
Would you
A.
I 'm there.
Turn to fines elghteen through twenty-one.
that sentence?read those four Iines, please,
Yes. "fn the 2072 decision time frame, SCRs
were being
Si-erra CIub
ordered in many surrounding states; and the
was also in litigation against Colstrip to
violations. "
that appears
require
o.
in your
is that
A
SCR or alleged 'new source review'
Thank you. And in that sentence
testimony, you underscored
correct ?
Thatrs correct.
the word "require; "
0. And that was for emphasis?
A. That was for emphasis.
O. Al-1 right. So you mentioned
colloquy with the Commissioners that
during your
other owners,
including Puget,
technol-ogies; is
A. That's
had had experience installing SmartBurn
that correct?
correct.
a. A11 right. And it is al-so your understanding
Dr. Hausman participated in the rate case thatthat25
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resulted in the settl-ement that was just approved for
Puget ?
A. That is my understanding.
O. And to the best of your knowledge, did the
Sierra Cl-ub or any other or any witness representing
the Sierra C1ub, including Dr. Hausman, object to
Puget's investment in SmartBurn technologies in any of
its Colstrip plants?
A. No. We reviewed the testimony of both Dr.
Hausman and Doug Howel-l- of the Sierra Club and didn't
find any objection to your reference to the SmartBurn
technology investment that Puget made.
O. A11 right. Let's put your let's now turn to
the six percent question, and let's put the reduction in
NOx j-nto some sort of meaningful context for the, you
know, layperson, like me, to understand.
It sounds like a modest reduction and, yet, I
think your testimony said it satisfied the performance
assurances by the manufacturer of the SmartBurn
equipment; is that correct?
A. That's correct.
O. Okay. Six percent transl-ate that lnto tons
of NOx and then translate that into something that I can
understand.
A. So the information I have been provided is that
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our base]ine emissions for units three and four for
nitrogen oxide emissions, prior to the installation of
SmartBurn, is about 11r 600 tons per year of NOx
emission. Thatrs 11, 600 tons.
With the instal-l-ati-on of the SmartBurn
technol-ogy on both units, our expectation is that the
emissions wil-l- be 8,540 tons per year of nitrogen oxide
emissions.
That is a 3,000 that
79
over 3,000 tons
Andrews. So I
is just
l-ike Msper year.
asked for a
that is.
I am not an engineer,
littl-e more context of how much of what
Our estimate is that that's about
161r 000 dollars or 161r 000-cars-per-year equivalent
of NOx emissj-ons that we have reduced by installing the
SmartBurn technofogy.
O. Each and every year?
A. Each and every year. So in addition to all of
the logic around our decision-making process to install-
SmartBurn, we are pleased that we are reducing emissions
from the plant by that amount of nitrogen oxide
em1 ssr_ons.
O. Does
steward of the
it surprise you that Sierra Cl-ub, who is a
environment., is challengj-ng that
investment?25
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A. f am -- yes.
MR. RITCHIE:
speculati-on.
MR. MEYER:
Objection. Cafls for
I wiII withdraw
COMM]SSIONER KJELLANDER: I
the question.
was waiting for
that.
o. BY MR. MEYER:
may be finished.
Just to clear
with Commissioner Raper
depreciation. They are
MR. MEYER: No.
Let me just review my notes. I
up I appreciate the exchange
about useful l-ife versus
not -- wel-I, they are not one in
When you plan to cl-ose it may bethe same, necessarily?
a different date than when the depreciation schedules
run out; correct?
MR. RITCHIE: Objection, Your Honor. Mr. Meyer
is both leadlng quite a bit and, I think, getting a
l-ittl-e far afield of where the direct examination or
the further cross-examination.
MR. MEYER: Well, this was actually in response
to Commissioner Raper's coJ-1oquy.
COMMISSfONER KJELLANDER: You almost didn't
want to go there, didn't you?
I wanted to go there.
COMMISSIONER KJELLANDER: Would you rephrase
the question?25
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MR. MEYER: Surely.
BY MR. MEYER: What do you understand the
present depreciation
four?
A. For Avista?
O. Yes.
schedule to be for units three and
A. Our present depreciation schedule for units
three and four are 2034 and 2036. f can't remember
whi-ch unit is which.
O. Is it your understanding, based on -- well, I
think you heard it today from fell-ow witness Andrews
that that depreciation schedul-e is not expected to
change when the final depreciation study is done?
A. That is my understanding.
MR. MEYER: That is aII I wanted to establish.
Thank you.
COMMISSIONER KJELLANDER: Thank you.
Does that conclude?
MR. MEYER: It does. Thank you.
COMMISSIONER KJELLANDER: Thank you. You are
o
free to walk away.
I believe that
MR. MEYER: It
concludes your case as well?
does. Thank
COMMISSIONER KJELLANDER: At
you.
this point, is
there anything that needs to come before the Commission?25
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MR. RITCHIE: Mr. Chaj-rman, just a quick
question. I am not as famil-lar wlth your procedures
here. In the rul-es, it indlcated that briefing 1s
sometimes allowed. What is your preference with that?
COMMISSIONER KJELLANDER: Wel-l-, we can have
that discussion; and now is the time to have that. We
have in the past allowed for briefs. That is sometimes
typical. Oftentimes, though, the parties don't believe
it is necessary.
Sometimes we al-l-ow for
think that perhaps a brief might
clos ing
be more appropriate
than closing statements since I thj-nk that several of
you, as legal counse1, are new to the process.
To put you on the front line with trylng to
make some kind of closing comment might not necessarily
be fair. So if you want to have a discussion about
briefs, I think we shoul-d have that now.
I think we should recognj-ze that briefs should,
in fact, be brief. While I don't choose to put a page
Iimit on it or a word l-imit, if we go down that path, I
would appreciate it if you could be as concise as
possible, should we go down that path.
So the question 1s with regard to brj-ef s. Is
that something that people feel comfortable with?
MR. RITCHIE: Mr. Chairman, f rom Sierra Cl-ubr s
statements. I
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paper in front
it; but in this
ir.
MR. RITCHIE:
questions around how
well- as the emissions
MR. MEYER:
filing a brief, but
constraint because
1st. That doesn't
benefit from some brief briefing.
be i-n f avor of a short brief .
I think there are some tricky
the regional haze rule works as
from Colstrip that I think would
So Sierra Club wou]d
I shoul-d have and we are fine
we do have a blt of a time
point of view,f am very aware
of Commissioners
particular case
the rates, if
give you much
of not wanting to put
readwho don't want to
approved, are January
time to
r_s very,
that here we
process of
record, I
to get this
for a
COMMISSIONER KJELLANDER: We would love to read
COMMISSIONER KJELLANDER: And that
very lmportant and duly noted, recognizing
are heading toward the hol-iday season.
While that shoul-d not impede the
putting together the most ful1y developed
think we need to keep in mind that we need
moving as quickly as possible.
So would seven days be too quick
turn-around?
MR. RITCHIE: Your Honor, I could do
Wednesday.25
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COMMISSIONER KJELLANDER: Wednesday is even
better. Wednesday would be the 13th. What
d"y, the
birthday,
cake and
question.
today, the
If
13th of December. It is my mom's
because I
a perfect
B2nd
have to qo eat
Does the 13th work for everyone? Excellent.
MR. PURDY: Mr. Chairman, excuse me. Would
that, then, tol-l- the date by which intervening funding
petitions are required?
COMMISSIONER KJELLANDER :That is a valid
typical as of
done.
you don't intend to file you could
request asgo ahead and submit your interveni-ng
soon as possible.
MR. PURDY:Okay.
KJELLANDER:Why don't we have
make sense for you?
so keep it very brief
ace cream.
Let's see. What is the
publj-c comment period is
COMMISS]ONER
briefs,
funding
that be the same date? Does that
MR. PURDY: The 13th?
COMMfSSIONER KJELLANDER: Yes. Do you need
more time?
MR. PURDY: That's fine.
COMMfSSIONER KJELLANDER: So the 22nd -- that
is closer to Christmas -- is typically the date which I
have been informed that we would aflow for the
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85
lntervening funding.
BUt, certainly, get it in as quickly as
possible so that we can move forward on that.
MR. PURDY: The 22nd being the outside limit?
COMMISSIONER KJELLANDER: I be1ieve that is day
fourteen from today.
MR. PURDY: That sounds right. Yes. Okay.
COMMISSIONER KJELLANDER: Does that present a
problem for you?
MR. PURDY: No. No. Thatr s f i-ne. I will- try
to get it done much sooner than that.
I have one other kind of ticky-tacky matter. I
forgot to request that Ms. Zamora's testimony be spread
upon the record.
COMMISSIONER KJELLANDER: I appreciate that. I
think I did include that. We have a wonderful rule at
the Commission. If I fail to do so, it automatically
hearing. So that is our
for bringing that up.
occurs at the cl-osure of our
protect-a11
MR.
rule. Thank you
PURDY:
COMMISSIONER
further that needs to
Thank you.
KJELLANDER:
come before
Is there anything
the Commission?
rf
willingness
It
not, then, I appreciate everyone's
and participation today.
is good to see some new 1ega1 counsel- in theLJ
HEDRTCK COURT REPORTTNG (208) 336-9208
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hearing room and some old faces as wel-l-. I didn't mean
that in terms of "old. " I meant it as "familiar. "
Thank you, everyone. I hope you have a great
holiday season. We appreciate your participation today.
We are adjourned.
(The f orego j-ng hearing concluded at 11 : 0 0 a . m. )
***
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HEDRICK COURT REPORTING (208) 336-9208
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CERTTFICATE
STATE OF IDAHO )
)
)
ss.
County of Ada
I, Lori A. Pulsifer, a Notary Pubtic in and
for the State of ldaho, do hereby certify:
That said hearing was taken down by me in
shorthand at the time "rrd nr""e therein named and
thereafter reduced to computer t1pe, and that the
foregoing transcript contains a true and correct record
of the said hearing, all done to the best of my skiJ.J.
and ability.
I further certify that I have no interest in
the event of the action.
YIITNESS my hand and seal this 10th day of
December 2OL7.
Lori A. Pu].siferNotary PubJ.ic in andfor the State of Idaho
!d1' connission November 7, 2O2O
25
HEDRICK COURT REPORTTNG (208) 336-9208
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