0128ariz.txt

293

1 BEFORE THE

2 FEDERAL ENERGY REGULATORY COMMISSION

3

4 - - - - - - - - - - - - - - - - - - x

5 IN THE MATTER OF: :

6 ARIZONA PUBLIC SERVICE COMPANY : Docket Number

7 vs. : EL99-44-003

8 IDAHO POWER COMPANY :

9 - - - - - - - - - - - - - - - - - - x

10

11 Hearing Room 6

12 Federal Energy Regulatory

13 Commission

14 888 First Street, N.E.

15 Washington, D. C.

16

17 Friday, January 28, 2000

18

19 The above-entitled matter came on for hearing,

20 pursuant to notice, at 9:35 a.m.

21 BEFORE:

22 HONORABLE PETER H. YOUNG

23 ADMINISTRATIVE LAW JUDGE

24 APPEARANCES:

25 (AS HERETOFORE NOTED.)

294

1 P R O C E E D I N G S

2 (9:35 a.m.)

3 PRESIDING JUDGE: Go on the record, please.

4 Mr. Durick, you remain under oath.

5 Good morning.

6 MR. WEIR: May I proceed, Your Honor?

7 PRESIDING JUDGE: Yes, you may.

8 MR. WEIR: Your Honor, may I approach the

9 witness? I want to hand him the Exhibits he was looking at

10 yesterday.

11 (Handing document to witness.)

12 Whereupon,

13 H. CHARLES DURICK

14 was recalled as a witness herein, and having previously duly

15 sworn, was examined and testified further as follows:

16 CROSS EXAMINATION (Continued)

17 BY MR. WEIR:

18 Q And I want to go back to 51. We did them

19 backwards yesterday.

20 Mr. Durick, before you get to that Exhibit, did

21 you speak with anyone after we closed yesterday about the

22 subject matter of your testimony today?

23 MR. MORGANS: Objection, Your Honor.

24 The question, as posed, is not limited to

25 conversations not in the presence of his attorney. Any

295

1 conversations that Mr. Durick had in the presence of counsel

2 are subject to the attorney/client privilege and are beyond

3 the scope of cross examination.

4 PRESIDING JUDGE: He just asked if he had any.

5 Overruled.

6 BY MR. WEIR:

7 Q Have you?

8 A Yes.

9 Q With whom did you speak?

10 MR. MORGANS: Your Honor, I raise the same

11 objection. The individuals with whom Mr. Durick spoke in

12 the presence of counsel is a privileged matter, and I

13 object.

14 PRESIDING JUDGE: The parties he spoke to are a

15 privileged matter?

16 MR. MORGANS: I think the individuals he spoke to

17 in the presence of counsel are.

18 MR. WEIR: Your Honor, my view on that has always

19 been, it's just like you're doing a privilege list. You

20 need to know with whom the witness spoke or the documents

21 went to. It doesn't disclose any privilege. It just lets

22 us know whether these conversations took place.

23 PRESIDING JUDGE: I agree. Overruled.

24 THE WITNESS: Yes. Yesterday evening with

25 counsel, Gary Morgans, and -- with there was a group of us

296

1 and a general discussion at dinner. Gary Morgans was there

2 and Jim Thompson, our counsel from Idaho was there, and Ron

3 Schellberg and Vern Porter and Ajay Sood, and I think, from

4 time to time, Dave Raskin was there at discussions before

5 dinner.

6 BY MR. WEIR:

7 Q Did you also at the dinner meetings discuss the

8 subject matter of Mr. Ajay Sood's testimony in this

9 proceeding?

10 MR. MORGANS: Your Honor, I don't mean to be

11 obstreperous. I think your prior ruling in response to Mr.

12 Weir's statement was that this is an acceptable question. I

13 don't want to object if Your Honor has already ruled that it

14 is acceptable.

15 PRESIDING JUDGE: You may object any time you

16 want to object, and I'll rule on them seriatim. We are

17 getting closer to objectionable material, but we're not

18 there yet.

19 Overruled.

20 THE WITNESS: Could you repeat the question,

21 please?

22 BY MR. WEIR:

23 Q Yes.

24 During this course of the dinner meeting that you

25 had with your counsel and your colleagues, was the subject

297

1 matter of Mr. Ajay Sood's testimony in this proceeding

2 discussed?

3 A The subject matter of his testimony would be the

4 purchasing of power, what part of the system power can be

5 purchased from and stuff like that.

6 Q And undue influence, I think that was another one

7 of his topics?

8 A Was that one of his topics? We possibly did talk

9 about those topics.

10 Q Did you discuss these topics with anyone outside

11 the group that met over dinner yesterday evening?

12 A No.

13 Q Did you make any phone calls to anyone outside

14 the group yesterday evening or this morning, in which you

15 discussed the subject matter of your testimony?

16 A No.

17 Q Did you change your testimony, did your testimony

18 change in any way as a result of your discussions over

19 dinner with your colleagues and your counsel?

20 A My testimony, you mean?

21 Q The written testimony, yes, sir.

22 A You mean did I try to revise my written

23 testimony? No, I'm not trying to revise the written

24 testimony.

25 Q Not whether you're trying to revise it but

298

1 whether you have indeed revised it?

2 A No, I have not revised my written testimony.

3 Q Your testimony remains the same?

4 A Yes.

5 Q If you recall, we were speaking yesterday about

6 the status of your delivery systems following the summer of

7 1996 outages.

8 Do you remember that?

9 A Yes.

10 Q We went over a proposal that is Exhibit 51, I

11 believe, that Mr. Hagen had made.

12 Do you remember that?

13 A Mr. Hagen? Was that 51 or 52?

14 Q I believe that's 52. Am I correct?

15 PRESIDING JUDGE: Yes, it's APS-52.

16 MR. WEIR: We did this backwards, as I recall.

17 BY MR. WEIR:

18 Q Now, Mr. Hagen's proposal was never implemented,

19 was it?

20 A No, I don't believe so.

21 Q Now do you recall a subsequent proposal to

22 implement upgrades on the fifth Brownlee line by the summer

23 of 2000?

24 A Yes, we had discussions as part of what Mr.

25 Hagen's proposal was. I'm wondering whether we should try

299

1 to get the line completed in advance of the summer.

2 Q Do you recall, in October 1998, receiving an e-

3 mail from a Mr. Collingwood, tasking you to look into

4 whether the fifth line, the 230 kv line, could be

5 implemented by the summer of 2000?

6 A Are you talking about do I recall this item 51

7 here?

8 Q No, no. Forget item 51 just for a moment.

9 Do you have an independent recollection of having

10 Mr. Collingwood task you to look into bringing that line

11 earlier, that fifth 230 kv line?

12 A I remember that we were considering that line,

13 and this item that you put in front of me is an e-mail from

14 Mr. Collingwood saying, Chuck, will you have somebody look

15 into this; have Ron look into this.

16 Q Did you have somebody look into it?

17 A Yes. We did spend time considering the

18 advancement of the line.

19 Q Didn't you determine that it was possible to have

20 the line up and running by the summer of 2000, that delivery

21 could build it?

22 A We were certainly inquiring about that

23 possibility. And we had, at that time, a proposal from our

24 construction department for how much they thought it would

25 cost.

300

1 In fact, we had a couple of different proposals,

2 I think, at various times in here for what it would cost to

3 advance it. We never had a firm conclusion that it could be

4 advanced because we didn't have the right-of-way for it.

5 And so what we were dealing with was more like a set of

6 speculations, if we could kind of push ahead with this

7 right-of-way, and spend this money to do some wintertime and

8 springtime construction and stuff like that. You know,

9 maybe we could get this line in early.

10 Is it worth trying to do that, was more the

11 decision we were struggling with.

12 Q Wasn't the real problem that the Merchant Group

13 wouldn't pay for it? They wouldn't pay to have the line

14 done by the summer of 2000?

15 A I would not characterize that as the real

16 problem. The real reason why we didn't meet that kind of a

17 date is because we failed to get the right-of-way. We still

18 don't have the right-of-way completely acquired. And that's

19 still kind of hanging us up.

20 At this time, we were looking into a whole

21 variety of considerations of why we should advance the line,

22 and reliability was one of our main considerations in that;

23 as was, in addition to reliability, are there other

24 considerations that weigh in saying, yes, it is worth it to

25 advance this line, it is worth it to spend extra money and

301

1 go to extra effort.

2 The benefit to our power supply cost was one of

3 the things that we were interested in, saying okay, does

4 that weigh in on the side of advancing the line.

5 I would not characterize that as the deciding

6 factor. As I say, we still haven't built the line because

7 we still haven't got the right-of-way.

8 Q Didn't you make a proposal, an inquiry, if you

9 will, to your Merchant side asking them if they'd be

10 interested in paying for the implementation of that fifth

11 line by the summer of 2000?

12 A We definitely inquired of them about can you

13 folks justify, can you help with the economic justification,

14 can you in effect put some money on the table to help

15 justify this line.

16 I know by the way they described this that they

17 took it to mean you're asking us to pay for the line. No,

18 you're not going to put that under my budget group, and that

19 kind of thing.

20 I was more thinking of it in the context of from

21 the delivery side, since we're not in the power market, we

22 really don't have a very clear idea of is there, in addition

23 to reliability benefits and other things, is there a money

24 benefit. Is this going to reduce our power supply costs?

25 Is this going to provide other benefits?

302

1 And so we asked them.

2 Q You asked who?

3 A We asked the Merchant Group.

4 Q You asked the Merchant Group?

5 A Yes, we did.

6 Q You made a proposal to them and inquired whether

7 they, the Merchant Group, would be interested in using a

8 line that came on, that fifth line that came on in the

9 summer of 2000, and they told you they were not interested

10 in paying for it, didn't they?

11 Whatever other considerations there may be about

12 that line, my question has to do with whether the Merchant

13 Group told you they were not interested in paying for that

14 service by the summer of 2000?

15 A I recall the Merchant Group did not come forward

16 with a money benefit -- you know, an offer to pay for the

17 line or an offer to justify the cost in terms of power

18 supply cost.

19 Q This line, if it had been in, who would it have

20 been of benefit to?

21 A Well, it would have benefitted our reliability,

22 and it would have created benefits for whoever could have

23 used it. And I expect in there, there would have been some

24 benefits to our Merchant Group.

25 Q Exactly. It would have benefitted the

303

1 reliability of your native load, wouldn't it?

2 A Yes, it would.

3 Q Now, in 1997, the Delivery Group was also, had on

4 the drawing board, if you will, this RAS shunt capacitor

5 projects. Some of your engineers had come up with this

6 idea, this remedial action, an additional capacitor bank I

7 think at Brownlee, but it may have been somewhere else.

8 That would have provided an additional 150

9 megawatts of service.

10 Do you recall that?

11 MR. MORGANS: Your Honor, can I ask that question

12 be broken up? I heard two distinct questions I feel that

13 were proposed to Mr. Durick. I want to be sure the record

14 is clear.

15 PRESIDING JUDGE: Do you have an objection?

16 MR. MORGANS: I object to the question on the

17 grounds that it's a compound question.

18 PRESIDING JUDGE: Read back the question, please.

19 (The Reporter read the record as requested.)

20 PRESIDING JUDGE: The objection's overruled.

21 Do you understand the question, Mr. Durick?

22 THE WITNESS: I do recall that we had considered

23 this remedial action shunt capacitor kind of scheme for

24 additional transfer capability. I don't recall that the

25 incremental addition that it would provide was 150

304

1 megawatts. In fact, I doubt that -- I don't know.

2 I know that when we proposed it later on, I don't

3 remember the date when we proposed it later on, I don't need

4 that right now. At that time we did extensive study on it

5 when we proposed it in this December business plan here. We

6 did extensive study on it to assess its ability to produce

7 that, and I'm sure we did not do extensive study on it back

8 in '97 when we first surfaced the idea.

9 So right now, I can't recall whether it was the

10 150 or not. I'm leaning away from that.

11 BY MR. WEIR:

12 Q Fair enough, you don't know one way or another.

13 Eventually you know, after further study, it was determined

14 that the project would yield 150 megawatts, the studies you

15 did in 1998, correct?

16 A Yes.

17 Q In any event, it didn't go forward with the RAS

18 shunt capacitor studies in '97. Those were shelved, were

19 they not?

20 A That's right.

21 Q And they were shelved in favor of the Brownlee

22 fifth 230 kv line, were they?

23 A We didn't really go through a formal process of

24 shelving or that kind of thing. We had talked about it

25 early on, and then when we were talking about building the

305

1 Brownlee fifth line, it was more a matter of that replaced

2 in our thinking what it was we were going to do as a next

3 step for the system.

4 We certainly decided I guess our next step is

5 going to be the fifth Brownlee line that we anticipated the

6 400 megawatts from, and we didn't include it, I don't think,

7 in that shunt capacitor project.

8 I don't recall a decision where we decided, well,

9 let's not do that. It was more like we kind or forgot about

10 it when the new project came along.

11 Q You forgot about it?

12 A Well, we weren't terribly interested in it. The

13 new project was larger capacity, it was more likely to fill

14 our needs, and if we thought about it at all, and perhaps we

15 did, we didn't see it as a matter of needing both.

16 Q Well, is it correct that you believe that the

17 project, this RAS shunt capacitor project that you'd studied

18 in '97, that you had set aside in favor of the 400 megawatt

19 Brownlee Boise project scheduled for 2001, is that correct?

20 A That's effectively what happened. We ended up

21 not doing that one, being replaced by the larger project.

22 Q I read from your testimony. Do you agree with

23 that testimony, sitting here today?

24 PRESIDING JUDGE: Was that "yes?"

25 THE WITNESS: Yes. I'm sorry.

306

1 BY MR. WEIR:

2 Q The Reporter, as good as he is, doesn't record

3 nods. We need a yes or a no.

4 A I'm sorry, thank you.

5 Q So let's see if I understand the situation in the

6 summer of 1998 across Brownlee.

7 You've got, what, 1850 megawatts of capacity

8 there?

9 A I believe that's correct.

10 Q But at that time, you still believed that

11 capacity was deficient?

12 A At that time, I'm not quite sure when exactly in

13 the sequence of events we'd be talking about here, but as we

14 were doing the earlier efforts at the, you know, the work

15 that led up ultimately to the July peak analysis and trying

16 to figure out what the capacities and obligations of the

17 path were, I think we were more seeing as the early results

18 of that were showing that we were about neutral.

19 Certainly we were at some risk possibly, but we

20 did not see ourselves as in that much of a hole. Prior to

21 that we had not done a very thorough analysis of that, and

22 we thought we were -- we weren't quite sure where we were,

23 but we certainly felt justified in building that line

24 because we did have growing load.

25 Ultimately, you know, we did decide that by

307

1 improving the capacity of the system a little bit, we'd have

2 a little bit of capacity for sale.

3 Q On your oasis in the summer of '98, it showed

4 zero capacity, didn't it?

5 A We certainly thought that we did not have spare

6 capacity to sell.

7 Q I misunderstood you. I thought you said you

8 thought maybe you had a little bit of capacity for sale.

9 A No, I'm sorry. I said that we thought that by

10 improving the capacity of the system by a little bit, then

11 we'd have a little bit of capacity to sell.

12 Q And what was this improvement?

13 A Ultimately, we were looking at the RAS shunt

14 capacitor project.

15 Q The only reason you pulled that off the shelf,

16 wasn't it, is because my client made a request for service?

17 That's the only reason, right?

18 A That, and we were looking around for capacity for

19 sale.

20 Q You pulled the 1997 off the shelf, had your

21 engineers study it, right?

22 A Yes, sir.

23 Q And your engineers concluded that those upgrades

24 could yield 150 megawatts in additional capacity, correct?

25 A That's right.

308

1 Q Now, at the time this RAS shunt capacitor had

2 been shelved, you hadn't had a request, had you, from the

3 Merchant Group for additional service?

4 A I don't know about the timing of events in that

5 time frame. I understand that there was a time that we had

6 a request from our Merchant Group but I don't know whether

7 we had that at the time of that decision or not.

8 Q What did you do with that request from the

9 Merchant Group?

10 A I understand that we had a request that we

11 denied.

12 Q Remember we were talking a little earlier about

13 that line, that fifth line that people in transmission

14 wanted to bring up in either the summer of '99 or the summer

15 of 2000, it doesn't matter which.

16 Was that line implemented in the summer of '99?

17 A I'm sorry, which line?

18 Q I'm sorry, I apologize. The fifth Brownlee added

19 230 kv line?

20 A No, it was not built in '99.

21 Q Was it built in the summer of 2000?

22 A No, it was not

23 Q Has it been built, as we are sitting here today?

24 A No, it has not.

25 Q When do you expect it to be built?

309

1 A We're still thinking in 2001. I believe that the

2 date has slipped back into late 2001 by now. I think I

3 heard recently that it's maybe been as late as December from

4 right-of-way delays.

5 Q This is all right-of-way?

6 A I believe so.

7 Q All right-of-way.

8 You've got the funding and everything?

9 A Yes, sir.

10 Q Where did the funding come from? Which side of

11 the company did the funding come from?

12 A We have that in the budget of the Delivery Group.

13 Q That's your group?

14 A Yes, on the delivery side, my group.

15 Q Now, let's change gears a little bit.

16 I want you to focus on APS' request for service.

17 (Pause.)

18 Now in the summer of 1998, APS requested

19 transmission service of Idaho over at the Lola to Borah

20 path, didn't it?

21 A Lola to Borah, correct.

22 Q There were other requests but this is really what

23 we're speaking of, this is the issue today, right?

24 A That's correct.

25 Q At that time, on that path, Idaho's ATC was zero,

310

1 right?

2 A I believe it was.

3 Q In order to provide APS additional service, given

4 that the oasis was posted as zero, additional facilities

5 were going to have to be constructed to accommodate APS'

6 request, right?

7 A Yes.

8 Q In fact, FERC Ruling 888 requires a utility to

9 provide service, if it can be built, does it not?

10 A I believe it does.

11 Q The parties APS and Idaho decided to enter into

12 some studies to determine whether your group could come up

13 with additional transmission capacity that APS wanted,

14 correct?

15 A Yes. We did have a study group.

16 Q And APS gave you around $150,000, $200,000 or

17 something like that to fund one of the studies, the study

18 we're concerned with?

19 A That could be. I don't remember the amount.

20 Q Actually I think it was $156,000. It was some

21 sum of money, correct?

22 A There was some money.

23 Q And your people studied this and determined that,

24 well, we can use the remedial action/shunt capacity scheme

25 to provide 150 megawatts of additional capacity, correct?

311

1 A We did not reach that conclusion when we had

2 completed the studies. During the course of the studies, we

3 had that brought and we had internal reports that said we

4 thought we had that much capacity. Ultimately we determined

5 that we did not have that much capacity, and that that

6 project would not provide the capacity for Arizona.

7 Q Didn't you determine if you implemented the RAS

8 shunt capacitor project -- forget Arizona's request, forget

9 what your Merchant Group might want -- just technically

10 those upgrades would produce an additional 150 megawatts in

11 capacity to your system?

12 A Yes, we did do the studies to conclude that there

13 were 150 megawatts from those facilities.

14 Q That's all I'm getting at. I think you

15 misunderstood my question. It's just as simple as that.

16 A Okay. I thought that you said for Arizona.

17 Q What I meant, just so we're clear, what I meant

18 was that the studies were conducted pursuant to Arizona's

19 request?

20 A Yes, I believe they were.

21 Q Nobody else had requested you to do this, had

22 they?

23 A We did not have another request.

24 Q And they paid the money?

25 A And they paid the money.

312

1 Q Now, when you informed-- Strike that. Your

2 group informed my client that our engineers have come up

3 with this possible way to get you, Arizona, 150 megawatts of

4 power over the Brownlee-East constraint.

5 A I understand there were informal discussions that

6 we thought that that was going to be the case or that that

7 would likely be the case.

8 Q You weren't in on the discussions?

9 MR. MORGANS: Again, I am not sure the witness

10 had finished his answer.

11 MR. WEIR: I thought he had.

12 PRESIDING JUDGE: I thought he had as well.

13 BY MR. WEIR:

14 Q Do you want to add anything? I'm sorry.

15 A I heard that there were discussions that we had

16 with Arizona where we thought we may end up having that much

17 capacity.

18 Q You weren't involved in these discussions, I take

19 it.

20 A I don't believe that I directly discussed that

21 with Arizona.

22 Q How did you come to learn of those discussions?

23 A Ron Schellberg would have told me about at least

24 the general content of ongoing discussions. I doubt that he

25 would have told me about all of the discussions on a one-

313

1 for-one basis kind of thing.

2 But, I am sure he would have kept me generally

3 informed.

4 Q Did he keep you informed, Mr. Durick, to the

5 extent that you did know that your engineers had located 150

6 megawatts of additional capacity through these upgrades?

7 A Oh, yes, I was aware of the run studies that

8 showed that the upgrade would produce 150 megawatts.

9 Q Who was your boss at this time--this Fall or so

10 of '98?

11 A Mr. Collingwood.

12 Q Is he still with the company?

13 A Yes, he is.

14 Q What was his position in '98?

15 A He's the General Manager of Grid Operations and

16 Planning.

17 Q Did you have direct report to him?

18 A Yes.

19 Q Did you discuss with Mr. Collingwood the fact

20 that engineers in his group had located 150 megawatts of

21 potential additional capacity for the system?

22 A I don't recall specific discussions, but I

23 probably would have kept him generally informed of what was

24 going on.

25 Q Just in the ordinary course of business?

314

1 A In the ordinary course of business I think he

2 probably was aware of it.

3 Q Because this is the way you guys work?

4 A Yes. It's a very collaborative process.

5 Q This was not an insignificant project, was it,

6 finding 150 megawatts on a system that's currently posting

7 zero on oasis.

8 A No, it was a significant project.

9 Q To the best of your knowledge, sitting here

10 today, this is something that Mr. Collingwood would have

11 been aware of shortly after you were apprised of the

12 upgrades?

13 A I don't know about the time. It was shortly

14 after, but somewhere in the timeframe he probably was aware

15 of this.

16 Q Now, I know you weren't in on the telephone

17 calls, but you do know, don't you, that APS said: Yes, we

18 would like to have this additional service that will be

19 provided through the shunt capacitor and the remedial action

20 upgrade. They told you they wanted it?

21 (Pause.)

22 A They had an outstanding request for wheeling

23 service, so I don't know specifically whether they said they

24 wanted this.

25 I imagine that it was that they considered it

315

1 evident.

2 Q Let me, if you will--

3 PRESIDING JUDGE: Mr. Weir, are you going to

4 pursue this question further?

5 MR. WEIR: I am, Judge.

6 PRESIDING JUDGE: Because, if you weren't, I was.

7 Go ahead.

8 (Pause.)

9 MR. WEIR: Judge, may I approach the witness?

10 PRESIDING JUDGE: Yes.

11 (Handing document to witness.)

12 BY MR. WEIR:

13 Q Mr. Durick, let me show you what has been entered

14 into evidence as APS-6.

15 PRESIDING JUDGE: 6?

16 MR. WEIR: Yes, sir. It's in that first

17 submission of direct testimony.

18 BY MR. WEIR:

19 Q I would like you, sir, to please read that. Let

20 me describe it for the record. It is a letter on APS

21 stationery from a Michelle Gettinger, Manager, Northwest

22 Energy Accounts at APS, to the Manager of Network Operations

23 at Idaho Power Company.

24 That happens to be Vern Porter. Actually, it is

25 addressed to an individual, Vern Porter, who testified

316

1 yesterday.

2 What I would like you to do--and hopefully this

3 will move it along--is review Exhibit 6 and tell me if it

4 refreshes your recollection whether APS, indeed, said:

5 Please go forward with the RAS shunt capacitor project. We

6 want it.

7 A This does appear to say that APS expressed

8 interest in the option and would like Idaho to proceed.

9 Q Do you have any doubt, sitting here today, Mr.

10 Durick, that this is, indeed, what happened? You can just

11 keep that up there. We may come back to it.

12 Strike that. Sitting here today, do you have any

13 doubts that, indeed, what happened is your people, whether

14 Mr. Porter or whoever, made an approach to APS, said:

15 Yes, we found a potential upgrade. The upgrade

16 is 150 megawatts. Here is what the upgrade is. Do you want

17 it?

18 And, APS said: Yes, please. Maybe they didn't

19 say please. They said yes. Would you agree with me?

20 A I would agree that we must have discussed the

21 upgrade with them, and that they expressed an interest in

22 it.

23 The letter doesn't cite the amount, 150, but I

24 think that was fairly well known.

25 Q You don't have any doubt if it is $150-something

317

1 for this study that APS paid?

2 A I don't remember the amount, but I don't dispute

3 that.

4 Q Once APS said they wanted the service, then what

5 happened, wasn't it, that somebody in your group--in this

6 case, Ron Schellberg, who is sitting back there somewhere--

7 had to come up with a business plan to present to management

8 to justify the expense of constructing this upgrade, right?

9 A Yes.

10 Q That's normal company practice, isn't it?

11 A At this time, we commenced to develop a proposal

12 for proceeding with the upgrade and selling service to APS.

13 MR. WEIR: Judge, this has already been entered

14 into evidence. I just thought it might be more convenient

15 for him to have just the plan.

16 PRESIDING JUDGE: That's Exhibit 9? I have it.

17 Everyone, including the court reporter, has it.

18 MR. WEIR: Does anyone want separate copies? If

19 you do, you're welcome to them.

20 BY MR. WEIR:

21 Q Please turn to Exhibit 9.

22 PRESIDING JUDGE: APS-9.

23 BY MR. WEIR:

24 Q I think it would be better for you to do it like

25 this rather than push open that binder.

318

1 Do you recognize--now take your time looking

2 through this--but do you recognize this as the APS

3 transmission service business plan prepared by Systems,

4 Planning, Engineering, Finance on or about December 24,

5 1998?

6 A Yes, I recognize this. That's when this is.

7 Q The principal author of this plan was Mr. Ron

8 Schellberg, was he not?

9 A Yes.

10 Q You supervised Mr. Schellberg, to some degree, in

11 the preparation of the plan, did you not?

12 A I supervised Mr. Schellberg.

13 Q Do you recall how many people, other than

14 yourself, assisted Mr. Schellberg in preparing the APS

15 transmission service business plan?

16 A I do not recall. On page three of the plan, it

17 has a list of people there that apparently contributed to

18 it, but I don't know if anybody else did.

19 Q So we have what -- let's see, 11 people from

20 various disciplines -- Systems Planning, Network Operations,

21 Construction, Engineering, Finance. Do you see that?

22 A Several people.

23 Q Is it 12? You're right. It's-- So Mr.

24 Schellberg had you helping him on this, and you didn't get

25 any credit, apparently.

319

1 A Well, I supervised him. I didn't say how much I

2 helped.

3 (Laughter.)

4 BY MR. WEIR:

5 Q But all the other folks got credit, so it's a

6 sizable number of folks, would you agree?

7 A Yes, sir.

8 Q Now, let's focus on your role in assisting Mr.

9 Schellberg in finalizing this plan. He's your direct

10 report, right?

11 A Yes, he does report to me.

12 Q To this day, does he report to you?

13 A He still reports to me.

14 Q Now, when he gave you the plan, do you know how

15 many generations of the plan he gave you? Did he give you a

16 series of drafts or was it just one plan, do you recall?

17 A I expect that I saw drafts of the plan, but I

18 don't know how many.

19 Q You reviewed certain materials that went in the

20 plan, didn't you?

21 A I believe I did.

22 Q And you discussed the content of that material

23 with Mr. Schellberg, didn't you?

24 A In general.

25 Q You reviewed drafts of the plan, didn't you?

320

1 A I probably saw drafts of the plan. I don't

2 remember the exact level of comment that I had offered at

3 the time.

4 Q You reviewed appendices for the plan, too, didn't

5 you?

6 A The appendices are--

7 Q Certain of the appendices.

8 A Certain of the appendices, yes.

9 Q Turn to your appendix, if you would, and the

10 appendices. You reviewed Appendix 4, did you not? That's

11 entitled ATC Calculation Methods.

12 PRESIDING JUDGE: Page 13 of 24?

13 MR. WEIR: It is, Judge, page 10 of Exhibit 9, if

14 I am counting correctly.

15 MS. HUNTINGTON: It's page 13 of 24.

16 MR. WEIR: Oh, it's page 13 of 24. I don't know

17 where that 10 came from.

18 PRESIDING JUDGE: Thank you.

19 BY MR. WEIR:

20 Q You reviewed that with him, didn't you? By that,

21 I mean Appendix 4, ATC Calculation Method.

22 A I believe I would have reviewed that with him.

23 Q Do you recall testifying in your deposition that

24 you did?

25 A I probably did.

321

1 Q Who created this appendix?

2 A I believe Ron Schellberg did.

3 Q Do you know if anybody assisted him in that?

4 A I do not know specifically who would have

5 assisted him in this.

6 Q But you know Mr. Schellberg certainly worked on

7 this calculation?

8 A Yes, I do.

9 Q And you reviewed his calculation, didn't you,

10 because ATC was an essential factor in determining whether

11 your company could provide service?

12 A Yes, I would have reviewed it, because ATC is

13 important to us.

14 Q Are you competent to make that kind of assessment

15 in 1998?

16 A I believe I'm competent.

17 Q In 1998, you were?

18 A I believe so.

19 Q Didn't you discuss with Mr. Schellberg his ATC

20 calculations?

21 A I would have discussed the ATC calculations.

22 Q Didn't you also ask him--I want you to turn to

23 Figures 1 and 2 for that calculation. Figure 1 is on the

24 first page.

25 The second page has Figure 2--and look them over

322

1 if you need to. Didn't you ask Mr. Schellberg about the

2 content of Figures 1 and 2?

3 A Yes, I would have talked to him about the content

4 of these figures.

5 Q Didn't Mr. Schellberg, in this conversation,

6 provide you with a description of the components of this

7 methodology, such as native load, reserve requirements, and

8 generation assumptions?

9 A Yes, he would have described that to me.

10 Q After you finished this more detailed review of

11 your discussion with Mr. Schellberg, were you satisfied the

12 calculations were done appropriately, or did you want a

13 little more detail?

14 (Pause.)

15 A I probably was both in that I was satisfied

16 enough with his discussion of the ATC calculation that I was

17 willing to let him go ahead and publish his report for the

18 folks in the business unit.

19 I also said, would I have liked more detail--I

20 probably would have liked more detail, too--but I wasn't

21 letting the desire for more detail stand in the way of

22 saying: Yeah, go ahead and publish this.

23 Q Actually, didn't you get more detail? You asked

24 for it, and didn't he give you the actual numbers that went

25 into the components of his ATC calculations?

323

1 In other words, you had asked him what the

2 numbers were, and Mr. Schellberg told you what the numbers

3 were in oral conversation?

4 A In oral conversations, I remember him going

5 through numbers with me.

6 Q After you had your initial review with Mr.

7 Schellberg, and after he gave you these numbers, were you

8 satisfied with his explanation of ATC?

9 A As I said, I was satisfied enough with it to tell

10 him to go ahead and publish this--an oral description of

11 what's in here and what's not in here.

12 I don't remember the level of detail that he went

13 into all of the numbers, so I probably would have preferred

14 to see written tables, but, as I say, I didn't let that

15 stand in the way of releasing this.

16 Q You were satisfied with the numbers you got

17 orally, right?

18 A Satisfied enough.

19 Q And you didn't ask him for the numbers in

20 writing, did you?

21 A I did not require additional information before

22 saying to release this.

23 Q And you supported, didn't you, the submission of

24 this APS transmission business plan to your managers?

25 A I supported that.

324

1 Q Didn't that report advise management that there

2 was sufficient capacity with the upgrades to provide the

3 service that APS had requested?

4 A That was the general conclusion of the report.

5 MR. WEIR: Judge, can we take a break right now?

6 PRESIDING JUDGE: This would be a good time to

7 take a break. Why don't we take a 10-minute break?

8 (Recess.)

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

325

1 BY MR. WEIR:

2 Q Mr. Durick, when we broke, we were talking about

3 the APS transmission business plan having been presented to

4 management.

5 As I understand it, management didn't accept that

6 plan, is that correct?

7 A Management had a lot of questions and primarily

8 our management, Mr. Collingwood and Runyan, were wanting to

9 see better validation of reliability service, reliability of

10 load, and did I guess basically ask to have it redone. So

11 you can call it rejected.

12 Q Let me ask you to turn to page 10 of your

13 testimony.

14 PRESIDING JUDGE: Exhibit IPC-1?

15 MR. WEIR: That's IPC Exhibit 1, page 10. It's

16 right at the top, and I'll read it so everybody can hear.

17 Before presenting the final conclusion to APS --

18 BY MR. WEIR:

19 Q Do you see where I am, Mr. Durick?

20 A Yes, I do.

21 Q At senior management's request, we took a closer

22 look at whether we had properly taken into account the

23 transmission needed to serve native load and other existing

24 obligations.

25 Do you see that?

326

1 A Yes.

2 Q Who's the senior management you're referring to?

3 Let's get that straight.

4 A That would have been Mr. Collingwood and Mr.

5 Runyan.

6 Q How do you know that?

7 A In the delivery business, they're the management

8 that's senior to me. And I do believe this went as far as

9 Mr. Runyan's attention.

10 Q Is this your belief just based on past practice,

11 or do you have actual personal knowledge?

12 For example, Mr. Collingwood told you that

13 management wanted you to take a closer look at the

14 transmission needed to serve native load, or did Mr. Runyan

15 tell you something to that effect?

16 A They both told me and others that we needed to

17 take a closer look at the requirements for native load.

18 Q Jim Packwood, at this time who was he?

19 A Mr. Packwood is our CEO.

20 Q He's not part of the senior management that

21 directed you to reexamine the ATC calculations?

22 A No.

23 Q The senior management that you think directed you

24 to look at this ATC calculations and the business plan were

25 Mr. Collingwood and Mr. Runyan.

327

1 Do I have that right?

2 A That's right.

3 Q What did they tell you to do?

4 A The best I recall was looking at this report.

5 They were concerned that it wasn't clear enough, that the

6 native load was going to be, that we were going to meet our

7 reliability requirements for native load.

8 Plus I think Mr. Runyan also had some concerns

9 over the financial presentations in the report. I'm not

10 sure who all else may have asked about it, you know.

11 Q Did you tell them, either Mr. Collingwood or Mr.

12 Runyan, I've spoken to Mr. Schellberg about these figures.

13 I've looked at these figures, they look good to me.

14 Did you tell them that?

15 A I don't recall the specifics of what I said. I

16 may have said, I think Ron probably did it right, but

17 ultimately what I said was, yes, if you'd like us to put

18 together more detail on that, we'll do that for you.

19 Q Did Mr. Collingwood speak to anyone in the

20 Merchant Group about the proposal to sell transmission

21 service to APS right around this period, December, January

22 or so? December '98, January '99.

23 Did Mr. Collingwood, to your knowledge, speak to

24 anyone in the Merchant Group about this proposal?

25 A I don't know.

328

1 Q Do you know whether Mr. Collingwood spoke to Mr.

2 Sood about this proposal?

3 You know Mr. Sood, don't you?

4 A Oh, yes.

5 Q He's back there?

6 A He's back there.

7 Q What's his position?

8 A He works in our Power Marketing Group.

9 Q Do you know who Joe Holmes is?

10 A Yes.

11 Q Who's Joe Holmes?

12 A Joe Holmes I believe is Ajay's supervisor. He

13 works in Power Marketing.

14 Q Have you ever heard Mr. Collingwood speaking to

15 Mr. Holmes about APS' request for transmission service?

16 A I don't remember now having heard from Mr.

17 Collingwood about conversations with them, or whether he may

18 have spoken to them or they may have spoken to him about it.

19 They were aware from having seen it on the oasis that there

20 was a consideration going on. I don't think that had we

21 ever intended, for example, this business plan to be

22 discussed with marketing.

23 Q Do you know if Mr. Collingwood spoke with Mr.

24 Rich Riozzi about APS' request for transmission service

25 that's the subject of this proceeding?

329

1 A Right now, I don't know.

2 Q Right now you don't know?

3 A I don't remember hearing, one way or another, as

4 to whether they had the conversations about it.

5 As I said, if -- I don't know if they may have

6 asked him about it or they brought the subject up with him.

7 Q Who is Mr. Rich Riozzi?

8 A Mr. Riozzi is our vice president of marketing, I

9 guess.

10 Q As you're sitting here today under oath, you're

11 telling this Court that you do not recall or haven't any

12 knowledge of a conversation between Mr. Collingwood and Mr.

13 Riozzi concerning APS' request for transmission service.

14 Is that your testimony?

15 A I'm saying right now I don't remember if there

16 was one. I may have been informed of it at some time, and

17 forgot it.

18 Q Other than Mr. Sood, Mr. Holmes, and Mr. Riozzi,

19 do you recall anyone from the Transmission Group speaking

20 with anyone from the Merchant Group about APS' request for

21 transmission service in this December/January period?

22 A I don't recall us speaking to marketing

23 specifically about the APS request for service, at least us

24 ever going to marketing and saying, here's what we're doing,

25 and here's -- basically negotiating APS' service with them.

330

1 Q And you're certain Mr. Collingwood never did

2 this?

3 A I can't be certain that Mr. Collingwood never did

4 that.

5 Q Are you certain Mr. Runyan never did that?

6 A I can't be certain.

7 Q When you prepared your testimony, in order to

8 address the issue of undue influence by the Merchant Group

9 on the Transmission Group in connection with Arizona's

10 service, did you read any depositions that had been taken in

11 this proceeding?

12 A I read some of the depositions, not all of them.

13 Q Did you read your own deposition?

14 A I read my own deposition.

15 Q And you signed it?

16 A Yes.

17 Q Under oath?

18 A Yes, sir.

19 Q Did you read Vern Porter's deposition?

20 A I do not think so.

21 Q Did you read Ron Schellberg's deposition?

22 A Not all of it.

23 Q Did you read Kip Runyan's deposition?

24 A I believe I did.

25 Q Did you read A.J. Sood's deposition?

331

1 A I believe I did.

2 Q In 1998, what was Runyan's position with Idaho

3 Power?

4 A He was vice president of delivery.

5 Q Vice president of the Group, wasn't he?

6 A Yes.

7 Q He was Mr. Collingwood's boss, right?

8 A Yes.

9 Q Did you know Mr. Runyan, anything about his

10 educational background?

11 He's a civil engineer, isn't he?

12 A I believe he is.

13 Q Of a construction type as opposed to an

14 engineering type, electrical engineering type?

15 A Yes.

16 Q A construction engineering type as opposed to a

17 double E?

18 A I believe so.

19 Q You and Mr. Schellberg are both double Es, right?

20 A Yes.

21 Q Where's Mr. Runyan today?

22 A I don't know.

23 Q He's no longer with the company?

24 A He's no longer with the company.

25 Q Are you aware that Mr. Runyan -- I think your

332

1 prior testimony indicated this but let me be clear -- are

2 you aware that Mr. Runyan reviewed the business case?

3 A I think he did.

4 Q Are you aware that Mr. Runyan even reviewed

5 earlier drafts of the business case?

6 A Right now, I don't remember whether he had

7 earlier drafts or not. But I'm sure he would have seen

8 this.

9 Q Were you aware that at least for Mr. Runyan, this

10 was his normal procedure when somebody presented him with a

11 business case, he would work with it, look through the first

12 draft and the second draft so that he at least was

13 comfortable with what was in it?

14 Are you aware, having worked with him, that

15 that's the way he worked?

16 A He was very thorough, but I don't know that he

17 routinely went through initial drafts of material that

18 people were preparing for him

19 Q Are you aware that he testified that he did go

20 through drafts of each business case? You read his

21 deposition I suppose. Do you recall that?

22 A I don't recall that now. It was a long time ago

23 when I read his deposition, and so I don't remember it very

24 well.

25 Q Are you aware that Mr. Runyan testified in his

333

1 deposition that in reviewing the business case, his focus

2 was on the financial conclusions in the business case, the

3 financial aspects?

4 A I do think that he said that.

5 I mentioned also that he was also concerned about

6 the financial aspects of it. I know he had also expressed

7 interest in the reliability to our native load.

8 Q How do you know that?

9 A Because he had talked to Mr. Collingwood and me

10 about his concerns about reliability to native load.

11 Q Were you there, Mr. Durick, when Mr. Runyan had

12 this conversation with Mr. Collingwood about the reliability

13 aspects of the system as it impacts on the native load?

14 A He described it as a single event, and I remember

15 it more as we interacted with each other several times

16 during this time frame. And there would have been short

17 visits, hallway conversations and things like that.

18 I think more that it probably came up several

19 times.

20 Q Search your memory. Is this something that you

21 heard with your own two ears rather than somebody else

22 telling you?

23 A I believe I heard it from Mr. Runyan that he was

24 concerned about native load, and whether we had reserved,

25 whether we had all the necessary reservations lined up for

334

1 native load.

2 Q You're sure of that?

3 (Pause.)

4 A Can I explicitly cite a specific instance where

5 Mr. Runyan said rerun those numbers and show me the native

6 load set asides? I don't remember it exactly that

7 explicitly. I more remember that we had multiple

8 conversations and probably a broader level of concern for

9 native load.

10 Certainly I would have thought that one way to

11 address those concerns is to back up and do a more careful

12 and thorough analysis and lay all the numbers out so that

13 everybody could see it.

14 Q When were these concerns expressed to you? What

15 would be the closest date?

16 Will it help if we say that the business plan was

17 on Christmas Eve, it was dated Christmas Eve?

18 A I can't get down to an exact date on that. I

19 think it was right around the time when we had released this

20 plan, there or shortly thereafter.

21 Q Now you say you did read Mr. Runyan's deposition?

22 A Some time ago I read it.

23 Q How long ago?

24 A I don't remember when I read it.

25 Q For what purpose did you read it?

335

1 A I was interested in what he said.

2 Q If Mr. Runyan had testified in his deposition

3 that he was satisfied that the business plan had covered the

4 ATC calculations in the business plan had covered the native

5 load reliability issues, that's something you'd remember?

6 (Pause.)

7 A I guess I don't remember it that way. I remember

8 more like he was concerned about the native load

9 reliability.

10 Q Are you aware that Mr. Runyan actually testified

11 that nothing in the business plan raised questions about

12 native load service?

13 A I don't remember the deposition that well.

14 Q Now you know that Idaho's Merchant Group -- I

15 think you mentioned this earlier -- knew about Mr.

16 Schellberg's plan to sell this 150 watts of power over

17 Brownlee to Arizona, right, because it was on the oasis.

18 Do you remember that?

19 A No. I think what was on the oasis was Arizona's

20 request for service, and so I think Marketing knew that the

21 request had been made but I don't think that they were aware

22 of our business plan or our anticipation of how to serve

23 that request. I don't remember any of us telling them and I

24 don't think that was on oasis.

25 Q You don't remember that?

336

1 PRESIDING JUDGE: Was that a no?

2 THE WITNESS: I'm sorry, that's a no.

3 BY MR. WEIR:

4 Q At least you'll agree with me that the business

5 plan was on the oasis?

6 A The business plan?

7 Q Not the business plan but Idaho's request for

8 services on the oasis.

9 A I believe Arizona's request --

10 Q Arizona's, yes.

11 A -- had been posted to the oasis.

12 Q Are you aware that Mr. Runyan has testified that

13 Mr. Richard Riozzi came to him and raised concerns about

14 this proposal to sell the 150 megawatts to Arizona?

15 Are you aware of that?

16 Are you aware he testified to that?

17 A Like I say, I don't remember the deposition that

18 well.

19 Q Do you have any knowledge that would allow you to

20 dispute that that happened? That Mr. Rich Riozzi, Vice

21 President of the Marketing Group, went to Mr. Runyan and

22 raised concerns about the impact of the sale of the 150

23 megawatts to Arizona on native load?

24 A I don't know about things that may have happened

25 when I wasn't there.

337

1 Q That's fair enough, that's certainly fair enough.

2 But people hear things in a company like yours, don't they?

3 A Well, we try to avoid having the Merchant Group

4 hear about our plans for service, our plans for transmission

5 service.

6 Q Fair enough.

7 Why do you do that?

8 A The joint conduct requires that we not pass any

9 transmission information over to the marketing side.

10 Q So if Mr. Riozzi and Mr. Runyan had this

11 exchange, this would not have been an exchange that at least

12 you, yourself, would have been in favor of, correct?

13 A I don't know about an exchange right now.

14 Q Talking about Arizona's request and how it's

15 going to impact service to native load, do you think that's

16 proper?

17 A I don't know what the content of their

18 discussions would have been if Mr. Riozzi had simply seen

19 the posting from Arizona that they had requested service,

20 and Mr. Riozzi having seen denials of Idaho Power's Merchant

21 request for service in prior times, if he had approached Mr.

22 Runyan and said, I expect that these guys are going to get

23 the same treatment, they might get denied also, and I'm

24 concerned that anything else would impair our ability to

25 serve native load, I don't know whether something like that

338

1 would be objectionable or not.

2 As I said, at my level, it was not our intention

3 to present the business plan to Marketing or give them

4 copies of it, or discuss it with them.

5 Q I'm not talking about your level, I'm talking

6 about management people who had directed you all to go back

7 and study this.

8 Strike that.

9 Would you be in favor of the type of conversation

10 we've just been talking about between Mr. Riozzi and Mr.

11 Runyan?

12 A Which conversation?

13 Q Where Mr. Riozzi goes to Mr. Runyan and says

14 what's going on here, you're getting ready to sell 150

15 megawatts of power to Arizona. I don't think that's the

16 right thing to do. We need that power.

17 Do you think that's a proper conversation?

18 PRESIDING JUDGE: I think that's a yes or no

19 question. I'd like it answered yes or no. You have beaten

20 around the bush on that question. Now I'd like you to

21 answer it yes or no, now that you've had ample opportunity

22 to give it your nuances, and I understand what those are.

23 But at this point, I think it's a very direct

24 question which deserves a yes or no answer on the record.

25 THE WITNESS: I guess I would say that it is not

339

1 proper for Mr. Riozzi and Mr. Runyan to have a conversation

2 that spoke to a proposal to serve APS.

3 PRESIDING JUDGE: Thank you.

4 BY MR. WEIR:

5 Q Assume with me, if you will, that Mr. Runyan did

6 not have a problem with the ATC calculations that Mr.

7 Schellberg performed.

8 Assume with me that.

9 A Assume that?

10 Q Assume that, that he had no problem with those

11 calculations, but some time later you tell me that Mr.

12 Runyan wants you to go back, or Mr. Collingwood wants to go

13 back and review these calculations. Assume that with me,

14 okay?

15 A Okay.

16 Q Doesn't that lead to the conclusion that the

17 Merchant Group, someone in the Merchant Group, put the idea

18 in Mr. Runyan's head where it had never been before that

19 those calculations needed to be reviewed in order to come up

20 with a way to deny service to Arizona?

21 A I guess I don't know how to conclude how the idea

22 got into Mr. Runyan's head, even making those assumptions.

23 For example, in the same time frame, Mr.

24 Collingwood was concerned about this.

25 Q Mr. Collingwood was concerned about what?

340

1 A Concerned about the reliability of service to

2 native load also.

3 Q He was, was he?

4 A I believe he was.

5 Q How do you know that?

6 A As I say, we had conversations during the time

7 frame after that. Mr. Runyan and Mr. Collingwood had both

8 expressed that, as I recall.

9 Q What's Mr. Collingwood's background, professional

10 background?

11 A Professional background? I'm sorry, I don't know

12 his educational background. His professional background is

13 that he has been in operations for many years and is now the

14 general manager of Grid Operations and Planning.

15 Q So you think he evaluated these numbers, do you?

16 A No, I don't believe that he did.

17 If he expressed concerns about that, it's more

18 general. The thing we have to be very careful is making

19 sure that the native load reliability is satisfied.

20 Q So we have Mr. Runyan, who's satisfied. Now you

21 think Mr. Collingwood's not satisfied?

22 Don't you find it remarkable that here we have

23 two electrical engineers, yourself and Mr. Schellberg

24 somewhere around here, who've looked at this thing for some

25 time. They formalized this and presented it to management,

341

1 and you've got one manager, the vice president, who says,

2 looks good to me, let's have maybe some more input on the

3 financial.

4 And you've got another guy, Collingwood, and we

5 don't know exactly what he said, do we, Mr. Runyan?

6 A I don't know.

7 Q And then we have, all of a sudden there is this

8 investigation launched into whether two senior engineers are

9 right on these calculations.

10 Don't you find that remarkable?

11 MR. MORGANS: Objection, Your Honor. Assumes

12 facts not in evidence. The very first part of the question

13 Mr. Weir proposed was the specification that Mr. Runyan had

14 no concerns with the business plan. That was the assumption

15 that counsel gave the witness and asked him to assume. He

16 didn't establish it through the witness, which now turns

17 that assumption into a fact and assumes a fact not in

18 evidence.

19 MR. WEIR: Judge, the facts can be an assumption.

20 I don't really care.

21 PRESIDING JUDGE: Why don't you rephrase the

22 question?

23

24

25

342

1 MR. WEIR: I have forgotten the question. Could

2 you read it back?

3 (The Reporter read the record as requested.)

4 BY MR. WEIR:

5 Q Given that question, you can substitute

6 assumption for my statement. He's concerned that that's not

7 been established as a fact.

8 So, I will just make that hypothetical. Assume

9 Mr. Runyan had no problems with the calculations on native

10 load.

11 Don't you find it remarkable that an

12 investigation would be launched into the work of two of the

13 most senior electrical engineers in the company by someone--

14 Mr. Runyan--who is basically, his background is in civil

15 engineering. Don't you find that remarkable?

16 A This was a particularly important issue to us,

17 given the background of reliability concerns within the

18 system, and the background of our belief that we were short

19 of, or at best, neutral, on capacity in the system.

20 So, we were coming forward with something here

21 that was, I think, in the middle of saying that we needed

22 this new line for native load use and reliability.

23 We were coming forward with something here that

24 was saying: Let's build 150 and sell it to Arizona.

25 So, I think they were cautious in saying: Well,

343

1 we need to be real sure here.

2 If there's other things that provoked that

3 response, I don't know what the other conversations were.

4 PRESIDING JUDGE: Mr. Durick, let me try to

5 understand what you're saying. Is what you're saying that,

6 in light of all the circumstances as you understand them,

7 no, you would not find that remarkable, or, yes, you would

8 find it remarkable in light of all the circumstances if you

9 understand them?

10 THE WITNESS: In light of all the circumstances,

11 given the prior concerns about reliability and all of that,

12 I think that there's other ways besides marketing that--

13 other reasons why they may have been concerned and other

14 reasons why they may have said:

15 Let's take a final look. Let's be really sure

16 here.

17 PRESIDING JUDGE: So, no, you would not find that

18 remarkable?

19 THE WITNESS: I guess I wouldn't find that

20 impossible or out of line. I'm not sure what "remarkable"

21 means -- surprising or impossible?

22 PRESIDING JUDGE: Out of the ordinary.

23 THE WITNESS: I think everybody was being fairly

24 cautious at this time.

25 PRESIDING JUDGE: Thank you. I'm sorry to

344

1 interrupt, Mr Weir.

2 MR. WEIR: No, Your Honor. Any time.

3 BY MR. WEIR:

4 Q So you don't find this remarkable? You don't

5 find it remarkable or surprising, or to use a fourth word,

6 unusual, that you had already done all these transmission

7 studies over the years right on up to '98, and nobody, not

8 one person in the merchant group, said anything about:

9 We've got to get that extra 150, and we've got to get it

10 today. Did they?

11 A My recollection was most of the rush to get

12 through the interest in bringing that project in was from

13 the delivery side.

14 We were very concerned about native load

15 reliability.

16 Q You were also concerned about selling from the

17 delivery side--selling that 150 megawatts to Arizona and

18 making a buck, right?

19 A We were concerned about that, too.

20 Q You were under pressure from your management to

21 come up with a way to increase your earnings, to do just

22 this sort of thing, weren't you?

23 A Our management had expressed an interest in

24 growing the revenues.

25 Q So you were satisfied that native load was going

345

1 to be served? You were satisfied when you submitted that

2 business plan to your management, and Mr. Runyan was

3 satisfied that it was going to be served?

4 Where did this re-examination come from? Tell me

5 who ordered it?

6 MR. MORGANS: Objection. Compound question.

7 There are three questions there, and I want to make sure

8 that Mr. Durick's response is clear.

9 PRESIDING JUDGE: That's sustained. There are

10 three questions in there. Why don't you either split them

11 up or just ask the last one.

12 BY MR. WEIR:

13 Q Who ordered this?

14 A Who ordered the review of this?

15 Q Yes.

16 A I don't have a recollection of a specific person

17 or during review. As I said, we had numerous conversations

18 on it.

19 My recollection is more one of lingering concern

20 expressed by a couple of people.

21 Q Did you and Mr. Schellberg just take this review

22 on your own? You all were satisfied with the numbers,

23 weren't you?

24 A As I said, I was satisfied enough to let the

25 report be released, and, although I hadn't actually drilled

346

1 down to all the numbers behind the bar charts, but I had

2 oral descriptions of that.

3 When we were starting to hear these concerns,

4 then our response was: Let's drill down to the numbers.

5 Q So you just heard these concerns, and then you

6 decided to drill down to the numbers?

7 A I thought the concerns were serious and serious

8 enough to justify us making an effort to validate where we

9 were on this.

10 Q Are you aware that, before senior management--

11 Wait a minute. I don't understand your testimony you just

12 gave, how that jibes with your written testimony.

13 Your written testimony says: Before presenting

14 the final conclusions to APS at senior management's request,

15 we took a closer look whether we had properly taken into

16 account the transmission needed to serve native load and

17 other existing obligations.

18 That's on page 10 at the top. I have read that

19 before, right?

20 A Yes, sir.

21 Q That says senior management told you to do it,

22 right?

23 A As I said, through this timeframe, we had

24 numerous conversations with--several conversations with Mr.

25 Runyan and Mr. Collingwood--and I heard these concerns

347

1 expressed.

2 I guess I responded to them saying we needed to

3 drill down more carefully into the numbers, and treated it

4 as a request.

5 Q When you say "request," this is what I am puzzled

6 about. You say senior management requested that you take a

7 closer look at this.

8 Are you telling me that's not what really

9 happened? You just kind of read their attitudes and did it.

10 So, which is right?

11 A They expressed concerns about whether we had

12 adequately covered native load requirements, and I took it

13 as a request.

14 Q But it wasn't a formal request?

15 A It wasn't particularly formal. I don't remember

16 the specifics of somebody saying: Go prepare a table that

17 details out these numbers and things.

18 Q Why, in your written testimony, did you say: At

19 senior management's request, we took a closer look.

20 Sometime in early January, call a meeting of the merchant's

21 groups and the delivery group to discuss this issue and a

22 meeting that would have been held in the ninth-floor

23 conference room at the Tower.

24 Your conference room. Do you recall that

25 meeting?

348

1 A I understand there was such a meeting. I was not

2 present at that meeting.

3 Q Why weren't you there?

4 A I was out of the office that day.

5 Q How did you hear about the meeting?

6 A I heard about it from Mr. Schellberg.

7 Q And Jim Collingwood, as well?

8 A Probably. I don't remember exactly how I heard

9 about it. I heard about it multiple ways.

10 Q What was your understanding of the purpose of

11 this meeting between the merchant group and the delivery

12 group?

13 A This is a case where, not being there, I think I

14 had a misunderstanding of the purpose of that meeting. I

15 believe that, when we talked about this in the deposition, I

16 had thought that the meeting was about--

17 I described the meeting-- As I recall, I

18 described it generally as it was about the business plan

19 service to APS, because, at that time, I knew we were trying

20 to button up conclusions on this.

21 In my mind, we were kind of filling in the other

22 facts and things. As I subsequently heard--also read in

23 someone else's deposition--I think it may have been Ajay's--

24 the business plan wasn't really discussed at the meeting,

25 that the meeting was more a matter of do we have adequate

349

1 capacity and reserves and all for native load use.

2 Q And you think that no one at that business

3 meeting knew anything about Arizona's request for service?

4 A Since the request for service had been on oasis,

5 I expect that probably pretty much everybody at the meeting

6 knew that Arizona had made a request for service.

7 Q Do you think all these engineers and executives

8 didn't have an absolutely clear idea that Arizona had

9 requested service, and that the reason this meeting was

10 being held was to find a way for the merchant group to

11 obtain that service?

12 A I guess I don't interpret the meaning of the

13 meeting that way. As I said, in what I've heard about the

14 meeting since my deposition, it sounded more like an effort

15 to clarify the capability in the system for handling native

16 load.

17 As I recall, one of the depositions--I think it

18 was Ajay's--described the meeting as starting off with a

19 discussion of the code of conduct.

20 Q Which said we're not going to talk about third-

21 party requests, right?

22 A I guess that was the gist of it.

23 Q There was only one third-party request on the

24 oasis though, right?

25 A I guess that's true.

350

1 Q You know that's true.

2 A I guess that's true.

3 Q So there was sort of a ghost at the meeting,

4 wasn't there, this third party whose name shall not be

5 mentioned, but everybody knew it was Arizona--people that

6 have known that Arizona had a request.

7 A They would have had to have known that, and now

8 they would have also known that their service, 150

9 megawatts, that had been freed up through the good work of

10 your group of people knew that, too?

11 MR. MORGANS: Your Honor, could we have a

12 clarification?

13 PRESIDING JUDGE: If the witness needs

14 clarification on the question, the witness will ask for

15 clarification on the question. You may not do so. That's

16 in the rules.

17 THE WITNESS: I've kind of forgotten that. I got

18 distracted there.

19 MR. WEIR: Read the question back, please, Mr.

20 Reporter.

21 (The Reporter read the record as requested.)

22 PRESIDING JUDGE: Does that make sense to you?

23 THE WITNESS: The question is about the

24 availability of the 150 megawatts of additional capacity and

25 whether everybody knew about that.

351

1 Not being there, I guess I don't really know. I

2 don't know how the discussion was conducted in terms of the

3 specifics of the capacity of the system versus the

4 obligations on the system, and whether they had talked about

5 another 150 being available and whether the native load was

6 using that up or not.

7 PRESIDING JUDGE: May I interrupt?

8 MR. WEIR: Excuse me, Judge. Absolutely.

9 PRESIDING JUDGE: What Mr. Weir asked, and what I

10 would like to know for the record, is a pretty simple

11 question, I think.

12 In addition to the fact that there were people at

13 this meeting who were aware of the posting on oasis, were

14 there people present at the meeting who knew about the

15 potential availability of 150 megawatts of capacity? Were

16 there people there who knew that?

17 THE WITNESS: I'm sorry, I misunderstood. Yes,

18 sir.

19 PRESIDING JUDGE: Yes, there were?

20 THE WITNESS: Everybody from the delivery side

21 would have known that.

22 PRESIDING JUDGE: Thank you. I'm sorry to

23 interrupt again. That was your question, wasn't it?

24 MR. WEIR: Better phrased. Yes.

25 (Laughter.)

352

1 BY MR. WEIR:

2 Q Also people from the merchant side knew that?

3 A I don't know.

4 Q You don't know. Do you think it was appropriate,

5 from the merchant side, to have this information--that is,

6 the 150 watt availability that you're planning to sell to

7 Arizona--to have that information in advance at the meeting.

8 A I guess I don't really know. It is something

9 that came up in the course of a review of the APS request.

10 I guess my knowledge of the standard of conduct

11 is soft enough that, when we're reviewing the requirements

12 for native load service with our merchant folks, who are

13 partly responsible for that service, are we able to talk to

14 them about the potential improvements in the system or not?

15 I guess I don't know the standard of conduct well

16 enough to really be able to interpret which side of the line

17 that would lie on.

18 Q Let me make this more personal. Did you, Mr.

19 Durick, give anyone in the merchant group information which

20 showed that there were 150 megawatts of service available in

21 1999 through this remedial action in the addition of the

22 capacitor bank?

23 A I don't remember doing that. I don't think I

24 did.

25 Q Is this something you would do under oath?

353

1 A I guess, thinking about it today, again, like I

2 say, I'm not real sure which side of the line that this

3 would fall on.

4 If I thought it was in a conversation that had to

5 do strictly with native load, that there were concerns about

6 are we going to have an adequate system, maybe I would say:

7 Hey, there is opportunities in the system to make an

8 improvement in capacity by 150 megawatts.

9 Q But you didn't do that, did you?

10 A I don't remember doing that.

11 Q Sitting here today, you don't remember?

12 A Sitting here today, I don't remember doing that.

13 Q You seem to have some difficulty answering that

14 question. Why did the question pose you difficulties?

15 A As I said, sitting here today, there is cause for

16 concern, because it does speak to communication between the

17 merchant group and the delivery group, and I understand

18 that's a very sensitive issue.

19 Q It was more than just a communication, wasn't it?

20 If the delivery group says: Look, we've got this third

21 party out there that wants this power and we're going to

22 give it to them unless you guys want it.

23 That's the kind of communication I'm talking

24 about. Do you think that's a proper communication--that

25 kind of communication--not just: We've got some extra

354

1 service here--because you've been doing that all along?

2 You were always saying: Here's the Brownlee

3 line. We could bring it in early.

4 You have had those kind of communications, right?

5 A We had been having that kind of communications

6 about is the Brownlee line available and should we

7 accelerate it or not accelerate it.

8 But, in your question, you said-- I forget

9 exactly how you phrased it.

10 Q Let me try it again. Isn't that situation, where

11 you're communicating with the merchant group because you are

12 trying to tell them: Look, we've got some extra capacity

13 here. We can do it earlier.

14 Isn't this situation different where another

15 party--you have a contract with them to do work, and you

16 know they want the service, and you have done a study that

17 they've paid for and you've learned you can provide them the

18 service, and you tell them you can provide them the

19 service--isn't this a lot different, because you then go

20 over to somebody in the merchant group and say:

21 Look, we've got this service here, and APS wants

22 it. What do you want to do about it?

23 Isn't that very different?

24 A The part that you put in there about we've got

25 this service and APS wants it and what are we going to do

355

1 about it.

2 That's the part that I don't know that ever

3 happened. It was in conversations with the merchant

4 function.

5 Did somebody say we've got this and APS wants it,

6 something we can sell to APS unless you guys want it?

7 That's the part that I have no knowledge of

8 something like that happening.

9 Q Assume with me it did.

10 A Assume with me it did.

11 Q Would there be trouble?

12 A It would be trouble if we were that blatant about

13 saying: Here's something we cooked up for APS unless you

14 guys want it. You could take it.

15 Or, something like that.

16 Q Why would that be trouble?

17 A Again, I think there's supposed to be an arm's-

18 length separation.

19 MR. WEIR: Judge, is this a good time for a

20 break?

21 PRESIDING JUDGE: How much longer do you have

22 with the witness?

23 MR. WEIR: I've got a bit. It will be a couple

24 of hours.

25 PRESIDING JUDGE: You have a couple of hours?

356

1 Are we still on course to finish today?

2 MR. MCGRANE: It's going to be close today, Your

3 Honor. I think it's probably going to be Monday.

4 PRESIDING JUDGE: Okay. If it's going to be

5 Monday, I guess we're not in a big hurry. If we could

6 finish up today and send the witnesses and the parties back

7 from whence they came, it would be ideal, but apparently

8 that's not going to happen.

9 MR. MCGRANE: Your Honor, I think there's still a

10 possibility-- In fact, what we were going to suggest is

11 possibly a shortened lunch hour.

12 PRESIDING JUDGE: I was thinking about half an

13 hour.

14 MR. WEIR: That's fine with me, Judge.

15 PRESIDING JUDGE: Would this be a good time to

16 break for that half an hour?

17 MR. WEIR: I think it would.

18 PRESIDING JUDGE: Is there anyone who doesn't

19 think it would?

20 MR. REUSCH: Your Honor, are we on the record?

21 PRESIDING JUDGE: Yes, would you like to go off

22 the record?

23 MR. REUSCH: It just seems to me that, if we take

24 lunch now, it would make for an awful long afternoon. If we

25 had a 10-minute break now, then a half-hour break for lunch,

357

1 around 12:30 or 12:45, or 1:00 o'clock, I think that would

2 break the day up better.

3 PRESIDING JUDGE: We'll take a 10-minute break

4 now, and, at a logical breaking point for the lunch. I am

5 assuming you'll let us know.

6 MR. WEIR: Yes, Your Honor.

7 PRESIDING JUDGE: And we'll confine that to half

8 an hour. I'd still like to have a chance to get done today.

9 Thank you.

10 (Recess.)

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

358

1 MR. WEIR: May I proceed, Judge?

2 PRESIDING JUDGE: Please do.

3 BY MR. WEIR:

4 Q Mr. Durick, I want to go back to this idea of

5 what Marketing knew before they had this meeting with

6 Delivery in January or so of 1999 in a conference room in

7 your building.

8 Refresh my memory. Did you read Mr. Sood's

9 deposition? Do you recall? I thought I asked you.

10 A I think I did.

11 Q Did you look at the Exhibits?

12 A No, I don't remember seeing Exhibits to Mr.

13 Sood's deposition.

14 MR. WEIR: Judge, that'll be 53.

15 PRESIDING JUDGE: What is this, Mr. Weir?

16 MR. WEIR: This is an exhibit to Mr. Sood's

17 deposition.

18 PRESIDING JUDGE: Why does it have this cover

19 page on it?

20 MR. WEIR: It appeared to be an e-mail that

21 attached that information. That's my understanding.

22 PRESIDING JUDGE: All right.

23 Is there any objection to marking for

24 identification purposes a three-page document which is

25 represented as two pages of an Exhibit to Mr. Sood's

359

1 deposition testimony with an e-mail coversheet.

2 MR. RASKIN: Your Honor, could we take a second

3 and review, please?

4 PRESIDING JUDGE: Sure.

5 (Pause.)

6 MR. MCGRANE: Just to clarify the record, Your

7 Honor, I think all three pages were an Exhibit to Mr. Sood's

8 deposition.

9 PRESIDING JUDGE: All three pages were? Thank

10 you.

11 (Pause.)

12 MR. MORGANS: No objection.

13 PRESIDING JUDGE: Hearing no objection, the

14 previously-referenced document is marked for identification

15 purposes APS-53 at this time.

16 (The document referred to was

17 marked for identification as

18 Exhibit Number APS-53.)

19 BY MR. WEIR:

20 Q Mr. Durick, I ask you to refer to what has been

21 marked as Exhibit 53 for identification. It's an e-mail

22 from Dave Hagen, dated Monday, December 14, 1998, and it's

23 to Ron Schellberg, and also to Mr. Ajay Sood.

24 For whom did Dave Hagen work at the time of this

25 e-mail, sir?

360

1 A This is right about the time when he would have

2 transferred to working for Ajay Sood and he might well have

3 been working for Ajay Sood. I don't know exactly remember

4 the date that he transferred.

5 Q Mr. Hagen transferred from Delivery to Marketing

6 some time in this period, correct?

7 A Yes.

8 Q And Ron Schellberg is still working for you,

9 correct?

10 A That's correct.

11 Q Who is Ajay Sood, aside from a gentleman sitting

12 in the back, what did he do at this time?

13 A He was in Marketing.

14 Q Now I'd ask you to look at the document.

15 First, do you know what this document is about?

16 MR. MORGANS: Your Honor, objection. No

17 foundation. Counsel needs to establish through the witness

18 a foundation of the witness' familiarity with the document.

19 MR. WEIR: This is cross.

20 PRESIDING JUDGE: He's also establishing it,

21 isn't he? He's asking him what it's about. It seems to be

22 exactly what you're looking for.

23 MR. MORGANS: From my understanding of

24 foundation, he can read the document and determine what it's

25 about, but I think the initial question is, has he ever seen

361

1 the document before.

2 MR. WEIR: It doesn't have to be done in any

3 order, I don't believe.

4 PRESIDING JUDGE: Mr. Durick, have you looked at

5 this document, APS-53?

6 THE WITNESS: I don't remember seeing it before

7 today.

8 PRESIDING JUDGE: You have looked at it today?

9 THE WITNESS: Just now, yes.

10 PRESIDING JUDGE: Do you understand it? Do you

11 understand what it is?

12 THE WITNESS: I'm not entirely sure what it is,

13 but I can see generally what it seems to be about. It

14 appears to be speaking to the delay in the fifth line and a

15 justification for making efforts to advance the

16 construction.

17 BY MR. WEIR:

18 Q This is a document, would you agree with me, that

19 is created in the ordinary course of business in your

20 company?

21 A We commonly have documents like this.

22 Q And they are maintained in your files, are they

23 not?

24 A Often. They're often maintained.

25 Q And Mr. Schellberg works for you?

362

1 A Yes.

2 Q Do you recall an attempt to move up the

3 implementation date of the Brownlee East 230 kv line?

4 A Yes, we did have a debate on whether it was worth

5 it to try to advance that construction.

6 Q And that's what this is about?

7 A That's what this is about, what it appears to be

8 about, yes.

9 Q Now doesn't this document advise the reader --

10 correct me if I'm wrong -- that through the use of elaborate

11 remedial actions, the nominal Brownlee East capacity is

12 increased to 1600 mw without the fifth line in order to sell

13 capacity to a third party?

14 MR. MORGANS: Your Honor, I don't want to be

15 difficult. I object on the lack of establishing a

16 foundation, but I think you may have already ruled.

17 PRESIDING JUDGE: No. The document has been

18 identified. The document says what it says.

19 Quite frankly, Mr. Weir, if you can't come up

20 with some other way to question the witness about this

21 document, you're going down a dead end here.

22 MR. WEIR: I'll try not to go down a dead end.

23 Do you mind if I make a turn, Your Honor?

24 PRESIDING JUDGE: I would prefer that you make a

25 turn.

363

1 MR. WEIR: The turn would be, we've been going

2 back and forth as to whether who knew in the Merchant Group

3 about this 150 kv fifth line.

4 He, as I recall, didn't recall whether anyone

5 knew. This is a document created by someone or sent to

6 someone who reports directly to him, Mr. Schellberg. This

7 is a project that they have been working on for many years,

8 and the issue we've had testimony on it before, of bringing

9 this kv line 2000, up to the summer of 2000.

10 I'm using the document to refresh his

11 recollection as to whether he recalls the Merchant Group

12 having certain information that he claims he doesn't recall

13 right now before they had this hearing in January.

14 If it doesn't refresh his recollection, it

15 doesn't.

16 PRESIDING JUDGE: I don't see how it can since he

17 hasn't seen it before today.

18 MR. WEIR: Your Honor, it's created by people

19 that are -- sent to people in his group. You could have

20 heard about a document. People could have told you about

21 it. And you read the substance of it, and you say, yes,

22 that's right. I know this was going on, and it's perfectly

23 appropriate to refresh a witness in that manner.

24 Even if the witness has not seen the document,

25 the words themselves, the concepts themselves may trigger

364

1 something. And the witness goes, yes, now I remember that.

2 Mr. Schellberg and I discussed this, and I said don't send

3 this over to Ajay Sood, or something like that.

4 PRESIDING JUDGE: For that limited purpose, I'll

5 allow you to proceed, but not very far.

6 MR. WEIR: Thank you, Your Honor.

7 BY MR. WEIR:

8 Q Now do you see that section which says "through

9 use ..." in Exhibit 53, "through use of elaborate remedial

10 actions, the nominal Brownlee East capacity is increased to

11 1600 mw, without the fifth line, in order to sell capacity

12 to a third party."

13 Do you see that?

14 A I see that.

15 Q Now turn over to the last page of the document,

16 which says, sale of transmission capacity to third parties.

17 Do you see that?

18 A I see it.

19 Q That says, in order to sell capacity to a third

20 party before the transmission necessary to support

21 additional transactions is in place, an elaborate remedial

22 action scheme is being proposed to mitigate outages in the

23 East of Brownlee system. Because use of this scheme will

24 result in the sale of annual transmission capacity, it is

25 worthwhile to the extent that we can minimize the length of

365

1 time that we are exposed to the scheme, hence going through

2 the summer of 1999 seems like an acceptable risk. But from

3 a reliability point of view, this is not acceptable if it

4 extends into or beyond the summer of 2000.

5 Now let me ask you, reading those and anything

6 else in the document you feel you should read, reading those

7 paragraphs or hearing those paragraphs which I've just read

8 you, does that refresh your recollection as to whether

9 members of the Merchant Group had knowledge that this 150 kv

10 line was going to be sold to a third party?

11 PRESIDING JUDGE: Before you answer that, sir,

12 let me clarify what's being asked of you.

13 Counsel is not asking you about the document

14 itself that you've just read. He's asking you if, in

15 reading what is in that document that triggers your own

16 independent recollection that other people had this

17 knowledge -- not what it says in the document, but your own

18 independent recollection.

19 Do you understand?

20 THE WITNESS: I believe I do, sir.

21 I don't remember talking about this document, and

22 I guess in spite of what the document says, it doesn't

23 trigger additional memories about that time frame, and in

24 particular who knew what. So I may or may not have known

25 that this was going on.

366

1 BY MR. WEIR:

2 Q Do you doubt the accuracy of what's being stated

3 in the document?

4 MR. MORGANS: Objection, Your Honor. No

5 foundation for that question. Counsel has just expressed

6 that he was going to use the document strictly for purposes

7 of refreshing the witness' recollection.

8 When he said that did not refresh his

9 recollection, counsel's not moving into cross examining him

10 about the document and has not established a proper

11 foundation.

12 MR. WEIR: He's the supervisor of all these

13 individuals. He ought to know if these people write

14 accurate stuff or not.

15 MR. MORGANS: It doesn't establish an evidentiary

16 foundation.

17 PRESIDING JUDGE: The objection is sustained.

18 BY MR. WEIR:

19 Q You weren't at this meeting where senior

20 management asked you to take a closer look at the ATC

21 calculations, were you?

22 A Are you talking about that meeting?

23 Q The big meeting.

24 A The big meeting.

25 Q Where we had the Merchant people there and the

367

1 Delivery people there.

2 A I believe that we were taking a closer look at

3 those calculations at the suggestion of, as I say, Mr.

4 Runyan and Collingwood, even before that meeting. But I was

5 not at that meeting.

6 Q Did you speak with anyone when we broke?

7 A I spoke to Mr. Raskin and Mr. Morgans.

8 Q Did you speak about the subject of your

9 testimony? I don't care if you talked about if the coffee's

10 too hot.

11 A We talked about what's going on here.

12 Q The subject of your testimony?

13 A I'm not quite sure what the subject --

14 Q Your testimony?

15 A I think we spoke more about my conduct and I

16 guess you'd call it testimony, more about conduct, more

17 about the way things are going.

18 Q Conduct's fine. All right.

19 Now, were you involved in assisting Mr. Ronald

20 Schellberg to evaluate the ATC calculations that currently

21 existed?

22 A Yes, sir. Ron and I worked together on ITC

23 calculations.

24 Q And you found errors in those calculations?

25 A I don't think I found the errors, I think Ron

368

1 found the errors.

2 Q Did Marketing have anything to do with the

3 discovery of the errors?

4 A I don't know. Ron said to me that he found the

5 errors.

6 Q Do you know Vernon Porter?

7 A Yes, I know Vern Porter.

8 Q How do you come to know Mr. Porter?

9 A He's the manager of Grid Operations.

10 Q That's his position at Idaho?

11 A Yes, sir.

12 Q How long have you known Mr. Porter?

13 A I don't know. Probably at least ten years.

14 Q Have you found Mr. Porter to be a truthful

15 person?

16 A Yes.

17 Q Can you explain to me why Mr. Porter testified in

18 his deposition that Marketing found the errors in the ATC

19 calculations?

20 MR. MORGANS: Objection. Assumes facts that have

21 not been established in evidence.

22 PRESIDING JUDGE: Sustained.

23 Mr. Weir, you can ask the question the way you've

24 been asking them and probably get a response. That just

25 wasn't quite the way you've been asking them.

369

1 MR. WEIR: I thought I'd take a chance, Judge.

2 BY MR. WEIR:

3 Q Are you aware that Mr. Vernon Porter testified

4 that Marketing found the error?

5 A No, I'm not.

6 Q Did you read Mr. Porter's deposition?

7 A No.

8 Q You did not read Mr. Porter's deposition?

9 A I did not read Mr. Porter's deposition.

10 Q Let's turn to your CBM calculations.

11 You testified about that.

12 Is it your testimony --

13 A Am I supposed to be looking at it?

14 Q No, you don't need to. I'll direct you. You can

15 open your testimony up if it assists you. I don't care.

16 I don't suspect -- unless I direct you to a

17 portion of your testimony, I think you'd just be wasting

18 your time.

19 Now I understand that it's your testimony that

20 the 330 megawatt CBM figure that you and Mr. Schellberg came

21 up with is reasonable. Is that correct?

22 A Yes.

23 Q Is it also correct that this additional capacity

24 that your delivery group found via the RAS shunt capacitor

25 work that's now gone to the Merchant Group, hasn't it?

370

1 A That's been used to serve native load.

2 Q Who serves the native load?

3 A The Merchant Group serves the native load.

4 Q What is CBM?

5 A CBM? Capacity benefit margin.

6 Q Is there a uniform method for calculating CBM?

7 A Not to make the specific calculation, but there

8 is a well-established basis for what CBM is, which is the

9 transmission capability or at least includes transmission

10 capability for access to generation reserves.

11 Q Well, the Western Systems Coordinating Council,

12 they don't prescribe exact methods to calculate CBM, do

13 they?

14 A No, not to make the calculation.

15 Q Not to make the calculations.

16 In fact, didn't the WSCC find that a prescriptive

17 approach to calculating CBM was unworkable?

18 A Yes. The prescriptive approach was not put into

19 the policies.

20 Q Because it wasn't working, correct?

21 A Probably.

22 Q Do you have all of Idaho's submission in front of

23 you, or do you only have your testimony?

24 A I have the Exhibits too.

25 MR. WEIR: I'm handing the witness what is

371

1 entitled "Direct Testimony of H. Charles Durick, Ajay Sood

2 and N. Vernon Porter on Behalf of Idaho."

3 I'm asking Mr. Durick to please refer to a

4 document, which is Exhibit IPC-16.

5 (Handing document to witness.)

6 BY MR. WEIR:

7 Q That document is entitled "Determination of

8 Available Transfer Capability Within the Western

9 Connection."

10 A Yes.

11 Q You've been involved in creating the text of this

12 document?

13 A I did attend some of the early meetings when we

14 created the document.

15 Q Are you familiar with this document? You've read

16 it before?

17 A I've read it before.

18 Q How did you come to read the document?

19 A We used this as part of the basis of establishing

20 our 330 megawatts for CBM.

21 Q Look on 6.3.1, page 5 of the document, principles

22 for determination.

23 Would you agree with me that this document states

24 that a prescriptive approach based on uniform rules,

25 planning criteria, and assumptions is held unworkable in the

372

1 near term and unnecessary in the long term?

2 A That's what it says.

3 Q Do you see that?

4 And do you agree with that proposal?

5 A Generally I agree with that.

6 Q Because you follow this document, don't you?

7 A Yes, I do.

8 Q Would you also agree with me that the

9 determination of CBM --

10 Strike that.

11 In determining CBM, the service provider, that

12 would be you, is expected to use good faith assumptions in

13 determining CBM?

14 A Yes.

15 Q Would you agree that the determination of CBM

16 contains a large subjective component?

17 A I believe that our determination was fairly

18 objective. We did our best to spell out a very explicit

19 basis for what reserves are being addressed and what the

20 basis for those reserves are. I'm not sure that this

21 methodology required us to be that objective or explicit.

22 Q So is it your testimony that your calculation of

23 CBM has no subjective components? Is that your testimony?

24 A We certainly had to exercise the judgment of what

25 sort of outage to base it on, things like that. But once we

373

1 exercised that judgment, I believe based on the application

2 of criteria, then we went forward from there.

3 Q Now the Brownlee constraint is Idaho's path to

4 northwestern power services, is that right?

5 A It's part of it, yes.

6 Q It's a significant part of it?

7 A Imports from the northwest have to pass through

8 that constraint, yes.

9 Q And that path has great value to Idaho, doesn't

10 it?

11 A Yes, it certain does.

12 Q One of the reasons is because all things

13 considered, the northwestern imports are relatively

14 inexpensive, correct?

15 A I've heard that they are. Our side of the

16 business doesn't get any power marketing information.

17 Q But you've heard they're inexpensive?

18 A I've heard they're inexpensive.

19 MR. WEIR: Judge, can we break now?

20 (Pause.)

21 MR. MORGANS: May I make the suggestion that we

22 try to go a little longer?

23 PRESIDING JUDGE: If it's a logical place to

24 break, if you have a long --

25 MR. WEIR: It is a logical place, Your Honor.

374

1 PRESIDING JUDGE: Then I really don't have a

2 problem with that.

3 Why don't we break until precisely at 1:00

4 o'clock.

5 Could we go off the record, please?

6 (Discussion off the record.)

7 PRESIDING JUDGE: One o'clock.

8 (Whereupon, at 12:30 p.m., the hearing was

9 recessed for lunch, to reconvene the same day, Friday,

10 January 28, 2000, at 1:00 p.m., in the same place.)

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

375

1 AFTERNOON SESSION

2 (1:05 p.m.)

3 Whereupon,

4 H. CHARLES DURICK,

5 resumed the stand and, having previously been duly sworn,

6 was examined and testified further as follows:

7 CROSS-EXAMINATION -- Continued

8 BY MR. WEIR:

9 Q Mr. Durick, earlier this morning, you were

10 testifying about a meeting in January of '99 between the

11 merchant's group and the delivery group. Do you recall that

12 testimony?

13 A Yes.

14 Q Do you recall testifying that you later learned,

15 after your deposition had been taken, you had later learned

16 that certain things that you had testified about in your

17 deposition had not actually happened. Did I get that right?

18 A Yes.

19 Q If I gave you your deposition, would you be able

20 to point to me exactly what you believed, you said in your

21 deposition, that you learned subsequently was not correct?

22 Do you think you would be able to do that?

23 A I'll try.

24 MR. WEIR: Your Honor, may I approach?

25 PRESIDING JUDGE: Yes. It sounds like a pretty

376

1 time-consuming process, doesn't it?

2 MR. WEIR: This man is an engineer, Judge. He'll

3 flip right through it. Do you think it's going to take you

4 a long time, because I need to get to the bottom of this if

5 his testimony has changed.

6 THE WITNESS: I don't know.

7 PRESIDING JUDGE: Let's give it a go.

8 THE WITNESS: I may not be able to find quickly

9 all the possible places that I've changed it. I can

10 probably find something that I've changed.

11 PRESIDING JUDGE: That's not really realistic to

12 expect the witness to be able to do that on the stand like

13 this.

14 MR. WEIR: Here's the problem, Judge. I've got

15 the witness saying: I've learned that my testimony was

16 incorrect.

17 PRESIDING JUDGE: I understand the problem. I

18 also understand the inefficiency and the burden on the

19 witness.

20 You or I could not possibly do that going through

21 a transcript without going through it word by word, and you

22 wouldn't do it without going through it word by word.

23 MR. WEIR: I think perhaps, Your Honor, though,

24 that he has in his mind and he can tell us he has it in his

25 mind certain subjects.

377

1 PRESIDING JUDGE: You could ask him about the

2 certain subjects and go about it that way.

3 MR. WEIR: I'm not trying to unnecessarily

4 prolong this, but I do want to get at the truth.

5 PRESIDING JUDGE: I understand. I think we all

6 do.

7 BY MR. WEIR:

8 Q Mr. Durick, let's start it this way. You had

9 some conversations with some individuals at Idaho Power that

10 led you to think that your deposition testimony had been

11 inaccurate in certain respects. Is that correct?

12 MR. MORGANS: Objection to the extent the

13 question seeks discovery of communications with counsel.

14 Beyond that, I have no objection to the question.

15 PRESIDING JUDGE: Read the question back for me,

16 please.

17 (The Reporter read the record as requested.)

18 PRESIDING JUDGE: You may answer the question.

19 THE WITNESS: I think, initially, I caught it by

20 reading Ajay Sood's deposition and noticing that he

21 described the meeting differently. Then, I confirmed it

22 with Ron Schellberg.

23 BY MR. WEIR:

24 Q If you recall sitting here today, how did Mr.

25 Sood describe the meeting as you understand it?

378

1 A It was something about, when he was asked about

2 that meeting that he attended, if it was about the business

3 plan, and apparently something like they had a business plan

4 in the deposition room, and asked for a copy and said he

5 hadn't seen that before.

6 So, it seemed that, if the meeting was about the

7 business plan, he would have seen it or gotten a copy.

8 Then, I asked Ron Schellberg was it about the

9 business plan. No, it was more about native load.

10 Q Anything else?

11 A Not that I recall right now.

12 Q But you talked to someone else who led you to

13 believe differently, did you not?

14 A I don't understand the question.

15 Q In your deposition, you said you learned--

16 Strike that. In your testimony earlier today, you said that

17 you learned, from some individuals, that there were things

18 that were in your deposition that were incorrect.

19 A I probably had several conversations. I remember

20 learning it from Ajay's deposition and talking to Ron

21 Schellberg about it. Were there other people I may have

22 talked to?

23 Q What do you recall in your deposition that is at

24 odds with what Mr. Sood has testified in his deposition and

25 Mr. Schellberg testified in his deposition?

379

1 A I think my recollection of my deposition was

2 having described the meeting as a meeting to discuss the

3 business plan.

4 But, the other people talked about it as a

5 meeting to discuss the native load requirements.

6 Q From whom did you get the idea that the meeting

7 was to discuss the business plan?

8 A I'm not sure. I knew that we had the business

9 plan, and we were trying to get things sorted out and

10 finished.

11 I may have simply assumed that the meeting was

12 about the business plan. Maybe somebody told me that it

13 was.

14 I really don't remember exactly how--when the

15 thought entered my head.

16 Q So you think the thought entered your head

17 because it was an assumption, or because somebody told you?

18 A I can't remember right now.

19 Q My question is it's either--

20 A It's one or the other.

21 Q It's one or the other. Did Mr. Collingwood tell

22 you this?

23 A I really don't remember very clearly who was

24 saying what. I knew that the meeting was going on, and I

25 knew I was interested in the business plan. We had the

380

1 business plan, and I don't remember whether people went

2 through me, with me: Hey, this is what we're going to

3 discuss, or yeah, we've got this meeting going on, and we're

4 generally trying to get information to complete the business

5 plan or make decisions from our side relative to the

6 business plan.

7 Q How did you know the meeting was going on?

8 A I don't remember whether I got an E-mail, an

9 invitation, or whether somebody had told me. I knew it was

10 going on.

11 Q You just don't know how?

12 A I just don't remember.

13 Q This was a significant meeting, wasn't it?

14 A Yes.

15 Q But you can't recall how you found out about it?

16 A Right now I can't remember whether it was orally,

17 whether I was told about it, or whether I had gotten an E-

18 mail. I didn't know what was going on.

19 Q Can you remember who you talked about the meeting

20 to?

21 A I am sure I would have talked to Ron Schellberg

22 about it and possibly also Jim Collingwood about it.

23 Q They gave you a description of what the meeting

24 was about, I take it?

25 A Prior to the meeting?

381

1 Q After the meeting.

2 A Oh, after the meeting.

3 Q After the meeting, who'd you talk to about it?

4 A I'm sure I would have talked to Ron Schellberg

5 about what happened, and things.

6 I think, prior to the meeting, he had already

7 been doing some work on the July peak analysis and may have

8 already found the error.

9 I don't remember exactly whether he found the

10 error there. The upshot of it was that we said it looks

11 like the native load requirements -- we confirmed that the

12 native load requirements are going to use up the capacity.

13 Q Stay with me a minute. What I am asking is,

14 after the meeting was over, to whom did you speak that was

15 at the meeting?

16 A I'm sure I would have talked to Ron Schellberg.

17 Q Anyone else?

18 A Probably Jim Collingwood, although I don't

19 remember specifically.

20 Q Do you remember any specific conversations with

21 Mr. Schellberg about the meeting after the meeting occurred?

22 A My memory of it is pretty hazy about that, but I

23 know I would have talked to them about the meeting, and that

24 my recollection is that we would have to go back and publish

25 these figures.

382

1 It was looking like we've got a problem here. As

2 I say, I know we were working on it before the meeting and

3 after the meeting.

4 I am a little out of sequence, I guess, as to

5 exactly was the problem discovered before, during, or after.

6 Q Remember, we started this-- Maybe this will help

7 you. We started this discussion because you had some

8 reservations about what you had said in your deposition

9 about what had happened in the meeting, versus after reading

10 Mr. Sood's deposition, you understood happened at the

11 meeting. That's what I am focusing on.

12 A I see.

13 Q That's all I'm focusing on, so please pay

14 attention. Your information I am trying to learn

15 immediately after the information occurred, from whom did

16 you get your information about the meeting?

17 As I understand your testimony, it was Ron

18 Schellberg and maybe Mr. Collingwood. That's who you got

19 your information from, and this is the information, you

20 relied on in your deposition that you got from Mr.

21 Schellberg and Mr. Collingwood?

22 A Right.

23 Q Then you read Mr. Sood's deposition and concluded

24 they were wrong, is that it?

25 A Okay.

383

1 Q Yes or No. Is that it? Did you conclude they

2 were wrong after you read Mr. Sood's deposition?

3 A I don't remember discussing with Ron, after the

4 meeting, what all the content of the meeting was. For

5 example, was the business plan discussed explicitly, or

6 things like that.

7 It was more I was interested in where are we in

8 terms of the work to do next and how to conclude this and

9 get the analysis done and a report back to APS.

10 Q Have you ever been in a meeting like this at APS,

11 where you have the merchant side get together with the

12 transmission side when there is no request pending from the

13 merchant side for service?

14 A Have we discussed with our merchants?

15 Q No, have you ever attended a meeting like the

16 meeting called by Mr. Runyan on the ninth conference floor

17 with the merchant side there and the delivery side there?

18 A I don't remember the meeting clearly.

19 Q You've never attended a meeting like that, have

20 you, so weren't you curious about what went on? Didn't you

21 say:

22 Ron, what happened at this meeting? I would have

23 loved to have been there, but I wasn't, so tell me what

24 happened.

25 You didn't ask him that?

384

1 A I would have asked him: Ron, tell me what

2 happened, and tell me more about what we're talking about --

3 as I recall was the conclusions of the meeting.

4 I certainly left with the impression it didn't

5 change my perception of the meeting, that there was still

6 about the business plan or something.

7 As I said in deposition, it was generally about

8 the business plan.

9 Q But then you read Mr. Sood's deposition later,

10 and that changed your mind?

11 MR. MORGANS: Objection. Asked and answered.

12 PRESIDING JUDGE: Sustained.

13 BY MR. WEIR:

14 Q Who did you think was right, Mr. Sood or Mr.

15 Schellberg, or you don't know?

16 MR. MORGANS: Objection. Assumes facts not in

17 evidence.

18 PRESIDING JUDGE: Sustained.

19

20

21

22

23

24

25

385

1 MR. WEIR: Can I ask the grounds, Your Honor?

2 PRESIDING JUDGE: I thought that was obvious.

3 MR. MORGANS: The witness has repeatedly stated

4 that he did not know whether Mr. Schellberg told him that

5 the business plan, in his discussions with Mr. Schellberg

6 and Mr. Collingwood, I believe, he did not know whether they

7 told him that the meeting was discussed, or whether there

8 was an inference from them.

9 He said that about ten minutes ago.

10 MR. WEIR: He's been changing as we're moving

11 along.

12 PRESIDING JUDGE: Actually, he hasn't been

13 changing as we're moving along. He's been saying the very

14 same thing. We have not been moving along, and we will now

15 move along.

16 You have asked him the same set of questions

17 about five different ways and I've been patient with it, as

18 has the witness.

19 And at this point, we need to move along.

20 I think the record is adequate for your purposes.

21 BY MR. WEIR:

22 Q Mr. Durick, would you turn to your testimony.

23 You have it up there, don't you?

24 I'd like you to look at page 23 of your

25 testimony.

386

1 Are you there?

2 A I'm here.

3 Q Good.

4 You state in your testimony, and I'll quote:

5 "Providing reliable electric service to our native load

6 customers is the most fundamental obligation we have."

7 Is that correct, that's your testimony?

8 A Yes.

9 Q Do you believe that?

10 MR. MORGANS: Your Honor -- I'll let it go.

11 PRESIDING JUDGE: Do you have an objection.

12 MR. MORGANS: Yes, asked and answered. This is

13 the third time. Asked and answered.

14 PRESIDING JUDGE: I've never heard that

15 particular question or that particular sentence referenced.

16 MR. MORGANS: He just asked if that's his

17 testimony.

18 MR. WEIR: I asked him did he believe that to be

19 true.

20 PRESIDING JUDGE: You may answer the question.

21 THE WITNESS: Yes, I do believe that reliable

22 service is a fundamental obligation.

23 BY MR. WEIR:

24 Q Is that company policy?

25 A I'm not sure it's expressed as written policy

387

1 kind of thing. I certainly believe it.

2 Q Is it your sworn testimony that your company

3 followed this rule of providing reliable electric service to

4 our native load customers in determining that it could not

5 provide Arizona 150 megawatts of service that Arizona had

6 requested?

7 A I certainly believe that was the basis for our

8 decision to, as it was -- are you asking for a quote from my

9 testimony?

10 Q I just want to know if that's your testimony.

11 A That's certainly what I believe, that we're

12 basing it on reliable service.

13 Q The failure to provide Arizona the requested

14 service, that was based solely on a concern of reliability,

15 was it?

16 A Ultimately I believe that's the case.

17 Q Why do you say ultimately?

18 A When we got to the end and found the errors, we

19 corrected the errors because without having done that, we

20 would have had inadequate transmission capacity for our

21 reserves.

22 Q You already knew, didn't you, in the summer of

23 '98, you were deficient, right? Yes or no?

24 A In the summer of '98, certainly prior to that, we

25 knew we were deficient. We were building this project.

388

1 As we begain this analysis in response to the

2 Arizona request for service, we started preliminary

3 iterations and running through the available capacity

4 calculation. Initially when we'd done it, we were thinking

5 we were about even, but for being able to create the extra

6 150. Whereabouts in this time frame -- I'm not quite sure

7 any more exactly when in the time frame which conclusions

8 were reached, but certainly there was a point in there where

9 we thought were about neutral and had the capacity for APS.

10 Q In the summer of '98, you had zero posted on your

11 oasis?

12 MR. MORGANS: Objection. Asked and answered.

13 PRESIDING JUDGE: Were you finished with your

14 question?

15 MR. WEIR: I'm taking him through a line of

16 questions, Judge. This is classic cross examination that

17 leads to a conclusion.

18 MR. MORGANS: Your Honor, I apologize.

19 MR. WEIR: Now I forgot where I was.

20 PRESIDING JUDGE: You were on the asked and

21 answered question.

22 BY MR. WEIR:

23 Q Some time in April of 98, though, Dave Hagen, and

24 we can quibble whether the service he wanted was, as he

25 said, the fifth line up and running by June 1st, '99.

389

1 In June 1st, '99 that this recommendation was on

2 the table, was it not?

3 MR. MORGANS: Objection. Asked and answered

4 repeatedly yesterday.

5 MR. WEIR: Of course it was.

6 PRESIDING JUDGE: I think we're just trying to

7 get a summary here, so I'll allow this line of questioning.

8 I'll assume that you have a continuing asked-and-answered

9 objection.

10 THE WITNESS: You're talking about some time in

11 April.

12 BY MR. WEIR:

13 Q It was Exhibit 52.

14 A That Dave Hagen was concerned about it? Yes, he

15 was.

16 Q And nothing happened? That was not implemented?

17 A That was not implemented.

18 Q Nor was the line that you all investigated the

19 same line having that line on in-service in the year 2000,

20 that wasn't implemented either, the fifth line?

21 A The fifth line for 2000 that was not.

22 Q The Merchant Group wouldn't give you the money,

23 would they? And you had your 150 megawatt remedial action

24 scheme that RA shunt capacitor that was discovered in 1997,

25 correct? And that wasn't implemented in '97?

390

1 A That's correct.

2 Q And that wasn't implemented in '98?

3 A Right.

4 Q When it was discovered and made available for

5 Arizona, the Merchant Group had to pay the capital cost of

6 implementing that. The RAS upgrade, that was coming out of

7 your pocket, right?

8 A That's right.

9 Q The funds came from you?

10 A Yes.

11 Q So the Merchant Group gets it now without paying

12 any capital costs, don't they? They've got to pay a tariff

13 but they don't have to pay capital costs?

14 A It's there for native load. The company's paying

15 the costs.

16 Q Your group's paying the cost, not their group,

17 correct?

18 A It was in our budget group. In retail service,

19 I'm not sure how that applies to them versus us.

20 Q But the money to put up the lines or put in the

21 capacitor or buy the capacitor, that came out of your

22 budget, not the Merchant?

23 A Out of delivery budget, yes.

24 Q They hadn't wanted to pay for that line, do you

25 remember that?

391

1 A I remember it more as a question of being asked

2 about whether there was additional money benefits for

3 advancing the line. I don't recall it as another did we

4 ever ask them to put the line in their budget.

5 Q An issue of money benefits.

6 A Money benefits.

7 Q Isn't this what this is all about? It's not

8 about reliability, it's about money, isn't it?

9 A The question about advancing that line was are we

10 willing to pay the extra cost of advancing it? Is it worth

11 it to our reliability to advance the construction of that

12 line? And also certainly then would part of that cost of

13 advancing the line be offset by lowering our retail power

14 supply costs? And we were trying to roll the whole thing

15 into a package of, is the reliability benefit worth it?

16 So the money got considered.

17 Q Money drove reliability in this case, didn't it?

18 A The cost of the overall project was under

19 consideration and whether they were willing to advance that

20 construction for an improvement in reliability.

21 Q And money was the driving force in the

22 determination of whether to provide Arizona 150 megawatts of

23 service?

24 A How do you mean? Do you mean money was --

25 Q The Merchant Group didn't have to pay for it, did

392

1 it? They didn't have to pay that cost?

2 A The delivery business would have paid the capital

3 cost of the loan.

4 MR. WEIR: I don't have any further questions.

5 PRESIDING JUDGE: I assume there will be

6 redirect?

7 (Laughter.)

8 MR. MORGANS: Yes, Your Honor.

9 PRESIDING JUDGE: Are you prepared to go forward

10 with redirect now? Would you like five minutes?

11 MR. MORGANS: I'd appreciate your indulgence,

12 Your Honor. May I have five minutes?

13 PRESIDING JUDGE: Certainly.

14 (Recess.)

15 REDIRECT EXAMINATION

16 BY MR. MORGANS:

17 Q Mr. Durick, with respect to the Brownlee Boise

18 project which Mr. Weir asked you about, has that project

19 been delayed?

20 A Yes.

21 Q Why was it delayed?

22 A So far, we do not have the right-of-way for it.

23 Q Was it delayed because of the Merchant Group

24 failing to advance money for the construction of the line?

25 A At this point it was delayed because we don't

393

1 have the right-of-way. Finally, it would have been a right-

2 of-way problem.

3 Q With respect to the RAS shunt capacitor project,

4 first, as an initial matter, how many megawatts of capacity

5 did that project add to Idaho Power's transmission system?

6 A A hundred-and-fifty.

7 Q A hundred-and-fifty?

8 A Megawatts.

9 Q As another matter, how many megawatts of transfer

10 capability will the Brownlee Boise project add on top of

11 that?

12 A A hundred-and-seventy-five megawatts on top of

13 that.

14 Q So the two projects combined will add 325

15 megawatts, am I correct in my understanding of that?

16 MR. WEIR: Objection. Leading.

17 BY MR. MORGANS:

18 Q How many megawatts of capacity will the two

19 projects add?

20 A A hundred-and-seventy-five plus 150. That's 325.

21 Q With respect to the RAS shunt capacitor project,

22 for whose benefit was that project built?

23 A Ultimately we built it to provide reliability for

24 native load.

25 Q Who bears the cost of that project?

394

1 A That will roll into the total cost of our

2 transmission system, most of which is paid for by our retail

3 service.

4 Q Does that have anything to do with whether the

5 construction money for the line comes out of the Merchant

6 Group's budget or the Delivery Group's budget?

7 A I don't think so.

8 Q Mr. Durick, if I could direct your attention to

9 Exhibit APS-16, which is an excerpt from the deposition of

10 Kip Runyan, dated September 15th, 1999.

11 Do you have that available to you in the

12 courtroom, sir?

13 A Maybe I do. I do have a copy.

14 PRESIDING JUDGE: Do you have APS-17 over there?

15 THE WITNESS: Is this it?

16 MR. MORGANS: Yes.

17 THE WITNESS: What am I looking for?

18 BY MR. MORGANS:

19 Q Exhibit APS-16, and I will direct your attention

20 in particular to pages 34 and 35 of the deposition, which is

21 page 4 in Exhibit APS-16.

22 A I've found 34 and 35.

23 Q Do you have that, sir?

24 A Yes.

25 Q Mr. Weir asked you a number of questions this

395

1 morning about Mr. Runyan's concerns about the business plan.

2 Does the transcript, on page 34 and 35, refresh

3 your recollection of Mr. Runyan's concerns about native load

4 reliability?

5 A I see a question here about did you raise issues,

6 serious concerns about native load. It looks like Mr.

7 Runyan: I raised concerns that we appropriately treated all

8 of our contracts, including the most important in my mind,

9 which is our contract with native load. And yes, I was

10 concerned about it.

11 I believe at and around this time, I was hearing

12 from Mr. Runyan and Mr. Collingwood that we had concerns,

13 that we were interested in making sure that native load

14 reliability was not impaired.

15 PRESIDING JUDGE: This is your independent

16 recollection not based on pages 34 and 35?

17 THE WITNESS: As I said before, I repeatedly

18 believed that I was hearing from Mr. Runyan and Mr.

19 Collingwood, their concerns about native load. This would

20 serve to confirm that.

21 BY MR. MORGANS:

22 Q Just to button that down. Well, I think you did

23 button that down. You may put that aside.

24 Mr. Durick, let me refer you to Exhibit APS-9.

25 This is a 24-page document, referred to as the Business

396

1 Plan.

2 Was the analysis in the Business Plan correct,

3 Mr. Durick?

4 A No. Ultimately we found there was an error in

5 the calculation of the CBM.

6 Q Can you explain that error, sir?

7 A The error that we found was that we had

8 understated the CBM by not counting both parts of it. The

9 CBM not only moves the imported reserves from the northwest,

10 but also moves our own internal reserves to our load.

11 And as I recall, Mr. Schellberg's calculation at

12 that time subtracted the internal reserves out of it. This

13 was an error, and -- I shouldn't have just said Mr.

14 Schellberg's calculation, his group or whoever it was in the

15 gourp that performed that, they made that error.

16 What it did was, it's an appropriate calculation

17 if you're looking at the west side of Brownlee. But if

18 we're looking on the east side, it's not an appropriate

19 calculation, and we all failed to catch it. And I believe

20 that error was identified in my testimony and could be seen,

21 that 150 megawatt subtraction could be seen in some of the

22 earlier worksheets.

23 Q Can you show us on a map what you mean when you

24 say the west side of the system?

25 A On the map that I put in, in my testimony there

397

1 under Exhibit 2.

2 Q Do you mean Exhibit IPC-2?

3 A Yes, IPC-2, page number 1.

4 Q If you could give us all a second so we can take

5 a look at that.

6 Go ahead.

7 A The west side of that would be the transmissions

8 lines to the northwest that go on up to Bonneville Power and

9 Pacific Core.

10 Q Can you identify those with a little more

11 particularity on that page?

12 A This would include lines like the line from

13 Brownlee West up to LaGrande. It's a little hard to read.

14 It says Pacific Core West to Enterprise, and there's another

15 line going north, it says to Washington Water Power. The

16 Summer Lakeland would be a part of that.

17 There's another lower-voltage line in here that's

18 also a part of the northwest interconnection.

19 Q Can you relate the area you've just described to

20 this map?

21 A The lines identified here as the Brownlee East

22 constraint need to accommodate all of the reserves coming in

23 from a Bridger outage both from northwest that come in on

24 these 230 kv lines through there, plus what we generate at

25 our plants at Brownlee Oxbow and Hells Canyon.

398

1 So those two have to sum together, add up

2 together, and they come through these lines identified as

3 Brownlee East.

4 If you're looking at the lines on the other side,

5 the only part that comes through there is what's being

6 imported from the northwest.

7 The part that's generated at Brownlee is just

8 generated there, so it doesn't have to come in through the

9 lines that go on over to the northwest.

10 Q How does that discussion relate to the error that

11 you just discussed?

12 A When we look at the lines east of Brownlee, we

13 have to add both components into it. In this calculation,

14 we didn't have both components in there, and none of us

15 caught it. I should have taken a more careful review of

16 that and caught it, but I didn't.

17 Q Just to button this down, when you say both

18 components, what do you mean?

19 A Both the imported reserves and the reserves

20 generated at Brownlee.

21 PRESIDING JUDGE: What made you catch it?

22 THE WITNESS: Mr. Schellberg caught it when he

23 was going through the revision in the calculations. When we

24 had done it in that service plan our presentation consisted

25 of those bar charts. When we were going through it for the

399

1 second pass kind of thing, we decided those bar charts that

2 had everything kind of lumped together were just not telling

3 the story, because people reading it couldn't really see all

4 of the components or see that everything had been accounted

5 for right.

6 So we decided to abandon the bar charts on that,

7 and then go to a table format like we'd published in the

8 final report, that July peak analysis table.

9 And as Ron was completing the work to do that,

10 that's when he caught it, because it laid out all the items

11 more explicitly.

12 PRESIDING JUDGE: I'm sorry.

13 BY MR. MORGANS:

14 Q Did you change the CBM number because of the

15 influence of the Merchant Group?

16 A No. We changed it because it was wrong.

17 Q Now you referred to a table, I believe, a second

18 ago. Is the table you're referring to, is that table

19 included in your testimony?

20 A It is in IPC-3.

21 MR. WEIR: Judge, I'm going to object. This

22 seems like we're getting now far afield from the cross. It

23 seems like we're going back and re-exploring the direct.

24 MR. MORGANS: Your Honor, I think this is

25 following up on the cross examination that Mr. Weir

400

1 conducted. He took us all the way up to this point and

2 discussed the errors, and then we discussed the changes, but

3 we never got quite to the final point which is the

4 correction of the analysis and what Idaho Power believes to

5 be the correct depiction of the Brownlee East capacity.

6 I think it's perfectly appropriate for me to

7 inquire, with Mr. Weir having taken us that far, what the

8 final results were.

9 MR. WEIR: I didn't take him through those

10 errors, Your Honor.

11 MR. MORGANS: I think counsel, by taking him

12 halfway, was not giving the witness the opportunity, through

13 questioning, to explain his analysis of the final result.

14 PRESIDING JUDGE: Well if, as you say, he took

15 him halfway, you can't take him further, can you?

16 MR. MORGANS: I think you can, Your Honor.

17 PRESIDING JUDGE: I don't think you can. You

18 have just told me that he took the witness halfway, and

19 you're not entitled to take the witness any further. You

20 had your opportunity to do that with direct testimony.

21 You do have an opportunity to clarify anything

22 which Mr. Weir went into on cross examination, but not to go

23 beyond that point.

24 MR. MORGANS: Thank you.

25 (Pause.)

401

1 BY MR. MORGANS:

2 Q Mr. Weir asked you about the final calculation of

3 CBM that you arrived at. What was the final CBM number that

4 you arrived at?

5 A 330 megawatts.

6 Q Was that calculation correct?

7 A I believe so.

8 Q Turning back to the business plan that Mr. Weir

9 asked you about, if Idaho Power provided the transmission

10 service to APS, as set forth in the business plan, would, in

11 your opinion, Idaho Power's native load reliability be

12 affected?

13 A I believe it would be. We would again have had

14 not enough reservation in the transmission system to import

15 the entire 330 megawatts of required reserve for a major

16 outage.

17 MR. MORGANS: If I could have a moment, Your

18 Honor?

19 (Pause.)

20 BY MR. MORGANS:

21 Q Mr. Weir asked you either yesterday afternoon or

22 this morning about the deposit that Arizona Public Service

23 provided for the studies in connection with this request for

24 service.

25 Do you recall that?

402

1 A I recall that, yes.

2 Q Was that deposit exclusively for the service at

3 issue in this proceeding, do you know?

4 A I guess I don't know what all was in it.

5 Q Do you know if Idaho Power kept all that money?

6 A No, I believe we returned some of it.

7 Q Why would some of that money have been returned,

8 do you know?

9 A No.

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

403

1 (Pause.)

2 MR. MORGANS: I have no further questions of Mr.

3 Durick. Thank you, Your Honor.

4 PRESIDING JUDGE: Is there any other examination

5 for this witness?

6 (No response.)

7 PRESIDING JUDGE: Hearing no response, that

8 concludes your testimony, Mr. Durick. Thank you for your

9 time.

10 MR. WEIR: Judge, at this time, just before he

11 gets off the stand, I'd like to move in APS exhibits, APS-

12 51, 52, and 53, I believe.

13 MR. MORGANS: I was about to rise. I don't think

14 we moved the admission yet of the Exhibits IPC-1 through 9.

15 If we could take care of that first. I don't care.

16 PRESIDING JUDGE: Since we have 51, 52, and 53

17 moved, is there any objection to receiving into evidence

18 exhibits previously marked for identification APS-51, APS-

19 52, or APS-53?

20 MR. MORGANS: Yes, Your Honor. I object to

21 Exhibit APS-53. No foundation was established from the

22 cross-examination of the witness.

23 It was used in an attempt to refresh the

24 witness's recollection. It would be inappropriate to

25 include the exhibit in the record with regard-- Maybe we

404

1 should just take them--

2 PRESIDING JUDGE: I'll just deal with them one at

3 a time if you have more than one objection.

4 MR. MORGANS: I was just taking a look here at

5 the transcripts for Exhibits 51 and 52. We can take care of

6 Exhibit 53 while I do that.

7 PRESIDING JUDGE: Mr. Weir, do you have any

8 response?

9 MR. WEIR: I put it in as a business record, Your

10 Honor.

11 PRESIDING JUDGE: For what purpose?

12 MR. WEIR: For impeachment purposes. For the

13 purposes of imputing the credibility of this witness. It

14 demonstrates clearly that the merchant group knew all about

15 the proposal to sell this transmission service to Arizona

16 back in December.

17 Then, lo and behold, there's this meeting in

18 January, and the service evaporates.

19 PRESIDING JUDGE: My understanding was you

20 offered this to refresh the witness's recollection.

21 MR. WEIR: I did, but it still comes in as a

22 business record, Your Honor.

23 MR. MORGANS: Your Honor is exactly right. It

24 was only offered for the purposes of refreshing the

25 witness's recollection.

405

1 Counsel expressly stated that, and, in that

2 regard, it failed to refresh the witness's recollection.

3 Counsel's attempt to now get it in the record, I think, is

4 improper.

5 Certainly, if counsel wanted to include it as

6 part of his direct case or his rebuttal case, he could have

7 done so.

8 PRESIDING JUDGE: Mr. Weir did reference the fact

9 and did, I believe, question the witness, at the time, if

10 this type of thing was prepared in the ordinary course.

11 MR. WEIR: That's why I did that, Your Honor.

12 PRESIDING JUDGE: So I will overrule the

13 objection and admit APS-53 as a business record.

14 (Exhibit No. APS-53 received.)

15 MR. MORGANS: Your Honor, no objection to APS-52.

16 PRESIDING JUDGE: Hearing no objection, the

17 document previously marked for identification APS-52 is

18 admitted into evidence at this time.

19 (Exhibit No. APS-52 received.)

20 (Pause.)

21 MR. MORGANS: No objection to APS-51, either.

22 PRESIDING JUDGE: Hearing no objections, the

23 document previously marked for identification as APS-51 is

24 also admitted into evidence at this time.

25 (Exhibit No. APS-51 received.)

406

1 MR. MORGANS: Your Honor, I would move into

2 evidence, at this time, Exhibits IPC-1 through 9 inclusive.

3 PRESIDING JUDGE: Is there any objection to

4 admitting into evidence at this time the Exhibits IPC-1

5 through IPC-9?

6 (No response.)

7 PRESIDING JUDGE: Hearing none, the documents

8 previously marked as Exhibits IPC-1 through IPC-9 are

9 admitted into evidence at this time.

10 (Exhibit Nos. IPC-1 through IPC-9

11 received.)

12 PRESIDING JUDGE: I think I will let you go now.

13 (Witness excused.)

14 PRESIDING JUDGE: Let's go off the record for

15 just a minute.

16 (Discussion off the record.)

17 MR. MORGANS: Your Honor, Idaho Power calls as

18 its next witness Dr. Ajay Sood.

19 Whereupon,

20 AJAY K. SOOD

21 was called as a witness in the above-entitled matter and,

22 having been first duly sworn, was examined and testified as

23 follows:

24 DIRECT EXAMINATION

25 BY MR. RASKIN:

407

1 Q Dr. Sood, do you have in front of you a document

2 identified as Exhibit IPC-10, the prepared direct testimony

3 of Ajay K. Sood in these proceedings?

4 A Yes.

5 Q Do you have any corrections to make to that

6 testimony?

7 A No.

8 Q Do you also have in front of you supporting

9 Exhibits IPC-11 and 12, which are referenced in that

10 prepared direct testimony?

11 A I do.

12 Q Is that testimony true and correct to the best of

13 your knowledge, information, and belief?

14 A It is.

15 Q If you were asked the questions that you were

16 asked in that testimony today, would your answers be the

17 same?

18 A The same.

19 MR. RASKIN: Your Honor, the witness is tendered

20 for cross-examination.

21 PRESIDING JUDGE: Any objection to marking for

22 identification the exhibits designated IPC-10 through IPC-

23 12?

24 (No response.)

25 PRESIDING JUDGE: Hearing none, those exhibits

408

1 are marked for identification purposes IPC-10 through IPC-12

2 at this time.

3 (The documents referred to were

4 marked Exhibit Nos. IPC-10 through

5 IPC-12 for identification.)

6 MR. WEIR: May I proceed, your Honor?

7 PRESIDING JUDGE: Yes, you may.

8 CROSS EXAMINATION

9 BY MR. WEIR:

10 Q Mr. Sood, good afternoon.

11 A Good afternoon.

12 Q What's your current position with Idaho?

13 A I'm Director of Power Transmission and Energy

14 Analysis for the merchant group.

15 Q When did you assume that position?

16 A Sometime in early 1980. Oh, no, I have had two

17 changes.

18 I moved to the merchant group in '97 as a

19 consulting engineer in probably early '98. Within months, I

20 was Director of Power Transmission and then, in a few

21 months, got the extra responsibilities for energy analysis.

22 Q You came over from the delivery side of the

23 company in 1997, did you not?

24 A Yes.

25 Q Your current duties are what, to evaluate the

409

1 marketing group's transmission needs? Is that one of your

2 current duties?

3 A Part of it.

4 Q Part of it. Request transmission service.

5 A Request transmission service is part of it.

6 Q What does that involve, requesting transmission

7 service?

8 A Request transmission service from other entities.

9 Q What other entities? Give me an example.

10 A Pacific Core, BPA, Avista, Montana Power, anybody

11 that I want the transmission from I request.

12 Q A wide range of companies, potentially?

13 A A wide range of companies, yes.

14 Q Is part of your duties to also determine the

15 system resource needs of your group?

16 A To an extent, yes.

17 Q What does that entail, sir?

18 A It entails making arrangements--the resource

19 arrangements for the native load.

20 Q With whom do you make those arrangements?

21 A Under our current integrated resource plan, we

22 have a set of given generating resources, and the plan calls

23 for seasonal market purchases to make up for the

24 deficiencies.

25 So, we go into the marketplace and buy those

410

1 resources.

2 Q Does the marketplace also include Idaho Power?

3 Do you make purchases from Idaho Power?

4 A I am Idaho Power. You have to tell me.

5 Q From the transmission service.

6 A Resource purchases from the transmission side?

7 Q No, transmission purchases.

8 A Transmission purchases? I purchase it.

9 Q You do, don't you?

10 A Yes. I thought we were on the resource side, and

11 you jumped to the transmission, so I couldn't--

12 Q I see. I apologize.

13 A I couldn't follow you where you were going.

14 Q I apologize.

15 A I should be apologizing, because I couldn't

16 follow you.

17 Q I'm often hard to follow. All right, now, is

18 there some way that your group--the merchant group--lets the

19 transmission group--the delivery group, I guess you would

20 call it now--at Idaho know what your group's needs are every

21 year in terms of transmission capacity?

22 A We identify the network resources. The known

23 resources are already there.

24 If we make a purchase for the native load, we

25 identify it as a network resource, and if we are wanting

411

1 point-to-point transmission, we go in on the oasis and ask

2 for point-to-point transmission.

3 Q Is your transmission--I probably shouldn't use

4 that word, but I will use it anyway--the transmission of

5 your group's need for transmission resources, how is that

6 transmitted to the delivery group?

7 Is it by a formal document? Could it be

8 something as simple as an E-mail?

9 A I told you there are two different-- We make

10 requests on the delivery under their tariff two ways. One

11 is for the native load, basically for the network service,

12 and we make for our power sales, under the point-to-point

13 transmission.

14 Now, point to point is over the oasis. We make

15 the reservations, the network requests. We send-- When we

16 want to designate a network resource, we send an E-mail.

17 Q You do that by E-mail?

18 A An E-mail or a letter or something.

19 Q Just leaving the oasis aside for a minute,

20 there's no form that's been created within the company to

21 kind of fill in the blanks.

22 Then it goes over to the transmission people from

23 your group and says: Here's what we need. Reserve it.

24 A You mean a standard form?

25 Q A standard form, yes.

412

1 A I don't think so. We haven't used a standard

2 form. It's mainly E-mails. I would be hard-pressed to tell

3 you where those E-mails are.

4 But, under the data request, you have gotten all

5 the requests. You had a request in '97, a request in '98,

6 requests in '99, all of which were denied because our

7 capacity wasn't available.

8 Q You submitted written testimony, which you have

9 before you, on two issues, as I understand it. You're going

10 to explain how Idaho Power relies on purchases west of the

11 Brownlee-East constraint to meet reserve needs, is that

12 right?

13 A Why we would like to go to the northwest, why we

14 feel--at least I feel--comfortable that I can go to the

15 northwest to buy the reserves and other resources, and why I

16 feel uncomfortable relying on going to the east side for the

17 reserves.

18 Q You're also going to testify in response to

19 Arizona's charge that the merchant group exerted undue

20 influence on the delivery group's capacity benefit margin

21 decision. Is that right?

22 A Yes. Undue influence? We didn't have any

23 influence.

24 Q Let me ask you to look at page--

25 (Pause.)

413

1 PRESIDING JUDGE: Page 2, is that what we're

2 looking for?

3 MR. WEIR: Page 2, Exhibit 10.

4 BY MR. WEIR:

5 Q Are you with me there, doctor, yet--page 2. Page

6 2, kind of the middle paragraph: What is the purpose of

7 your testimony?

8 Are you there?

9 A Yes.

10 Q Don't you also say that: I will respond to Mr.

11 Hansen's allegations that the Idaho Power marketing business

12 unit influenced the Idaho Power delivery business unit's

13 determination of Idaho Power's capacity benefit margin.

14 Do you see that?

15 A Yes.

16 Q So that's the other part of your testimony?

17 A That's the other part of the testimony. If I may

18 add, IPC-11 showing in '97 if we had any influence in March

19 1997 we were telling the delivery business unit that the

20 prudent reserves are 352.

21 Q We'll get there. In preparation for your written

22 testimony, which is Exhibit 10, did you read Vernon Porter's

23 deposition that was taken in this case?

24 A No, I haven't read his deposition.

25 Q Did you read Mr. Chuck Durick's deposition

414

1 testimony?

2 A No, I haven't read it.

3 Q Did you read Mr. Ron Schellberg's deposition

4 testimony?

5 A No, I haven't.

6 Q Did you read Mr. Kip Runyan's deposition

7 testimony?

8 A No.

9 Q Did you read Ms. Lisa Dunlop's deposition

10 testimony?

11 A I don't know if it is in here in the tape

12 transcription, or if it is-- It must have been in the

13 tapes, the day she was leaving and all she had. Somebody

14 showed me that at one time.

15 But, I'm sorry, you must not have asked for that,

16 so, no, I haven't.

17 Q I was talking about testimony that was taken in a

18 proceeding similar to the one when I deposed you. Did you

19 read anything like that for Ms. Lisa Dunlop?

20 A No. The only thing I have done is, last night

21 for about-- Maybe for about half an hour, I went through

22 each one and looked at what were the attachments to, I

23 guess, Ron Schellberg, and somebody else's, too.

24 Q For what reason did you do that?

25 MR. RASKIN: Objection, Your Honor. That would

415

1 count as part of the meeting with counsel, and I think I've

2 got to believe it's privileged, the reason for what he did

3 in those meetings.

4 MR. WEIR: I believe he has opened the door.

5 PRESIDING JUDGE: You may answer that question.

6 Why did you review those materials?

7 (Pause.)

8 THE WITNESS: I was just curious what's in there.

9 PRESIDING JUDGE: You reviewed the materials,

10 because you were curious as to what was in the attachments?

11 THE WITNESS: Yes.

12 BY MR. WEIR:

13 Q No other purpose?

14 A No other purpose. It wasn't anything more than

15 going through and flipping through them.

16 Q Let me direct you, doctor, to page nine of your

17 testimony. Your written testimony is that the delivery unit

18 needs information from the marketing unit about the

19 marketing unit's transmission capacity, is that right?

20 A Yes.

21 Q And that sort of communication between the two

22 units is okay? Is that correct?

23 A That's correct.

24 Q Now, in support of your statement, you cite an

25 exhibit--and if I can find it, I believe it is IPC-11. Am I

416

1 correct about that? Do you have that there?

2 A Yes.

3 Q What is IPC-11?

4 A It's showing what the marketing group's

5 expectations are on the reserves' delivery business shown at

6 peaks.

7 Q This IPC Exh. 11, this is from a Mr. Vern Porter.

8 A Who was, at that time, in the marketing business

9 unit.

10 Q It's sent to you, is it not?

11 A It's sent to me, because I was in the delivery

12 business unit. I'm not sure where I was. It would have

13 been close to--which place it was.

14 But, I would have gotten it either way, whichever

15 position I was.

16 Q Why would you have gotten it either way no matter

17 what your position was?

18 A Because, if I was in the marketing business unit,

19 then--and I handled the transmission and the system

20 aspects--the one who was a power trader at that time would

21 have told me about it or informed me about it.

22 If I was in the transmission business, my

23 responsibilities would have been similar to Ron Schellberg's

24 now.

25 I would have gotten it that way, too, so it

417

1 really doesn't matter with which business unit I was, I

2 would have gotten it.

3 Q Is it your testimony that this E-mail is one way

4 in which--well, you're not in this group--that the merchant

5 group reserved so much capacity with the transmission group?

6 A That is the way the merchant group reserves or

7 designates the network resource that, in the question you

8 had something about: But you are not in that group now.

9 I'm not sure what you meant with that.

10 Q Excuse me, that's a good point. By now, I meant

11 you were not in the merchant group at the time this E-mail

12 was sent, I thought you said, or that you didn't know.

13 A No. If I didn't make myself clear at that time,

14 what I said was I do not--we're looking at the date, and

15 right now I couldn't tell you whether I was in the merchant

16 group or I was in the transmission group, but I would have

17 gotten that E-mail either way.

18 Q Now, one of the focuses of the E-mail is on

19 marketing's purchase for July and August for native load,

20 correct?

21 A Yes.

22 Q Those are critical months?

23 A July and August are critical months.

24 Q And the E-mail notes that the marketing is still

25 deficient for those two months, even with the purchases. Do

418

1 you see that?

2 A Yes.

3 Q And the E-mail states that marketing is going to

4 cover those deficiencies from purchases from the northwest,

5 correct?

6 A On a non-firm basis.

7 Q Where does it say non-firm? Explain that to me.

8 A Replaced firm and non-firm transmission. Non-

9 firm was there.

10 Q I am looking at the last paragraph that says:

11 Even with the above purchases, we are still deficient in

12 July and August to the extent possible our intent is to

13 cover the remaining deficit from the northwest.

14 Do you see that?

15 A Right.

16 Q You say that's a non-firm purchase.

17 A You would have to define what you mean by non-

18 firm. I will tell you why I asked that question. How much

19 deficit will be got after the '96.

20 It was sure that the request we were putting in

21 transmission can't meet it with a firm transmission from the

22 northwest.

23 So, we are saying anything I import from the

24 northwest I know it's going to come over the non-firm

25 transmission.

419

1 That's an assumption in there telling them our

2 deficit.

3 Q Then the memo says: When northwest transmission

4 is completely utilized, we'll purchase from the east side.

5 Correct?

6 A Correct.

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

420

1 Q So there are resources available?

2 A Sometimes. But remember, look at my choices, or

3 look -- if the internal resources are not there,

4 transmission is booked up, I can't bring it from the west.

5 What else I'm going to do?

6 If the resources are available from the east,

7 I'll bring it from the east. If the resource is not

8 available in the east, I know I'm in a hole. I have no

9 choice.

10 So what we will do is do our best to get it from

11 the east if it's available.

12 Q You'll get it from the east?

13 A Yes, if it's available, we'll buy it from the

14 east.

15 Q Now page 9 of your testimony, if you'd turn

16 there, the second-from-the-last sentence at the bottom, you

17 state, Mr. Porter, Mr. Schellberg and Mr. Durick all

18 explained in their depositions that the changed the CBM

19 number included in their prior analysis because they

20 concluded that it was wrong.

21 Do you see that?

22 A Yes.

23 Q I thought you didn't read those depositions?

24 A They told me.

25 Q They told you?

421

1 A I didn't read the depositions.

2 Q Did somebody give you this piece of paper, this

3 page, and say sign it?

4 A No.

5 Q These are your words in here?

6 A Yes.

7 Q You wrote that sentence -- Mr. Porter, Mr.

8 Schellberg and Mr. Durick all explained in their

9 depositions --

10 MR. RASKIN: I object, Your Honor. There's no

11 obligation that he's written every word of that testimony.

12 MR. WEIR: Whether there's an obligation or not,

13 the question is perfectly appropriate.

14 PRESIDING JUDGE: It's an appropriate question.

15 Did you write that sentence, sir?

16 THE WITNESS: Not that exact sentence.

17 PRESIDING JUDGE: You did not?

18 THE WITNESS: I did not.

19 BY MR. WEIR:

20 Q You didn't read the depositions either, did you?

21 A What was that?

22 Q You did not read those depositions, Mr. Porter,

23 Mr. Schellberg and Mr. Durick, did you?

24 A I did not read their depositions. I think it

25 should have been --

422

1 Q So if you didn't read the depositions, how did

2 you know that they changed the CBM number included in their

3 prior analysis because they concluded it was wrong?

4 (Pause.)

5 A I can't recall who told me that, that in their

6 depositions they have said that the CBM number was wrong, or

7 they had made the calculation error before.

8 Q Mr. Sood, in your testimony, that I just read,

9 you say Mr. Porter, Mr. Schellberg, and Mr. Durick all

10 explained in their depositions. You don't say that somebody

11 told you that, do you?

12 A It doesn't.

13 Q You don't perform CBM calculations on a regular

14 basis, do you?

15 A I don't.

16 Q You say also in your testimony that the CBM

17 number should have reflected a two-unit Jim Bridger outage

18 as set forth in Vern Porter's e-mail to Delivery.

19 A That's IPC-11.

20 Q If you'd look at page 4, the top question: APS

21 has alleged that this is a new arrangement.

22 A The top of page 4? Which line are you on, line

23 4?

24 Q Line 4. It says there, the testimony is that, as

25 I understand it, consistent with that. In March 1997, after

423

1 Order 889 took effect, the Marketing Business Unit wrote a

2 memorandum advising the Delivery Unit to reserve 352 mw,

3 representing the loss of two Jim Bridger units of

4 transmission capacity from the northwest for prudent

5 reserves.

6 Then you cite IPC-11, don't you?

7 A Right.

8 Q Now that number, that 352-megawatt number, is

9 that a substantial number in the context of Idaho's system?

10 Is that a lot of transmission?

11 A The transmission system is close to 2000

12 megawatts so, yes, it is substantial.

13 Q And this is the number they should have

14 reflected, that Mr. Porter and Mr. Schellberg and Mr. Durick

15 should have reflected in their CBM calculations, right, the

16 352?

17 A Remember, CBM is a new term coined by the

18 industry. Before that, we used to use the reserves. All

19 Idaho Power was doing and the Marketing Unit was telling the

20 Delivery Business Unit that we want to serve the native

21 loads for loss of two Bridger units, our share of the loss

22 of two Bridger units.

23 I don't want to be confused between the CBM and

24 the reserves.

25 Q Whatever the number was, it should have been

424

1 reflected in that July peak analysis, shouldn't it, the 352,

2 or I think it was later changed to 330, but that number?

3 A That number should have been in the reserves.

4 Just like Chuck Durick in the cross is saying, that 352

5 could have come from either Brownlee, our internal resource,

6 or from the Northwest Power Pool.

7 Q So you think they just forgot that number?

8 A That's very reasonable to assume.

9 Q It's reasonable that two men with collectively 50

10 years -- two men with transmission planning experience, that

11 kind of experience, it's reasonable that they forgot that

12 number?

13 A Being in the business, having been in the

14 business for 25 years or more, in the transmission planning

15 business, I think it is very possible because you are doing

16 analysis. Most of your analysis you do, you do it at your

17 interconnections. And at your interconnections, what they

18 wanted to bring in it was 220, you get used to looking if

19 you are doing the same calculation at the interconnection

20 between northwest and Idaho, how much CBM you need there.

21 You need 220 CBM there. How much CBM you need between -- on

22 the Brownlee East path, you've got to get that amount and

23 add on whatever the generation is.

24 Q So you say errors happen all the time, this is

25 not unusual?

425

1 A No, I didn't say that. I said it is possible and

2 it doesn't matter whether you have one year of experience of

3 transmission planning or you have 30 years of experience in

4 transmission planning.

5 Q It could happen to anyone?

6 A It could happen.

7 Q It could happen to you?

8 A I'm sure I have made my mistakes.

9 Q No, no. Does this sort of thing happen to you?

10 A This exact thing?

11 MR. RASKIN: Your Honor, I object to the

12 question. It's just not a relevant question whether Dr.

13 Sood has made this mistake.

14 PRESIDING JUDGE: He just said it could happen to

15 anybody. It's a perfectly logical question to me.

16 THE WITNESS: If I have made the exact same

17 mistake? I'm sure in my lifetime I have made that I wanted

18 to pick a number from two series and have picked the number

19 from the wrong series.

20 PRESIDING JUDGE: Could this mistake happen to

21 you, Mr. Sood, is the question, yes or no?

22 THE WITNESS: What I'm saying is I'm not beyond

23 making this mistake.

24 PRESIDING JUDGE: So, yes, it could happen?

25 THE WITNESS: It could happen to me.

426

1 PRESIDING JUDGE: Thank you.

2 BY MR. WEIR:

3 Q Has it happened to you?

4 A That's what I was trying to answer. That if you

5 look at in my life time if there are two sets of numbers you

6 are using to plug in at a third place, I probably made the

7 mistake of plugging a wrong number in there.

8 Q Let me make it real clear.

9 Sitting here today under oath, are you aware of

10 an event, such as you claim happened to Mr. Durick and Mr.

11 Schellberg, has an event like that happened to you? Yes or

12 no?

13 A Under oath I can only tell you that it probably

14 happened to me, but I can't recall an instance.

15 PRESIDING JUDGE: Mr. Weir, would this be a

16 convenient place to give the Court Reporter maybe a ten-

17 minute break? We've gone on quite a while at this point.

18 MR. WEIR: I was hoping you were going to say

19 that, Judge.

20 PRESIDING JUDGE: I guess it would.

21 (Recess.)

22 BY MR. WEIR:

23 Q Mr. Sood, weren't you the one who found the so-

24 called CBM error in the calculations that Ron Schellberg

25 performed?

427

1 A No.

2 Q Are you aware that Mr. Porter has testified in

3 his deposition that you were that individual?

4 A No.

5 Q Did Mr. Porter give you for review the July peak

6 analysis prepared by Mr. Schellberg in connection with

7 evaluating APS' request for service?

8 A July peak analysis?

9 What time frame?

10 I don't think I've ever gotten a July peak

11 analysis from anybody in Delivery.

12 Q Are you aware that Mr. Porter testified in his

13 deposition that you did have that July peak analysis?

14 MR. RASKIN: Objection. Your Honor, the witness

15 has already testified that he didn't read that deposition.

16 MR. WEIR: So what?

17 PRESIDING JUDGE: He asked if he was aware.

18 Could you read the question back for us, please?

19 (The Reporter read the record as requested.)

20 THE WITNESS: What do you mean when you say the

21 July peak analysis? To me, it means the one sheet. I think

22 it is in both APS' direct and Idaho's. It's one sheet and

23 goes out by the years, that one.

24 If you mean that one --

25 BY MR. WEIR:

428

1 Q That one meaning the one I have in my hand?

2 PRESIDING JUDGE: Why don't we identify it.

3 MR. WEIR: Can I approach the witness, Your

4 Honor?

5 PRESIDING JUDGE: Yes. Where are we looking.

6 MR. WEIR: What is this, John? It is IPC Exhibit

7 3.

8 PRESIDING JUDGE: Page?

9 MR. WEIR: Sorry, Judge. The very first page.

10 PRESIDING JUDGE: IPC-3, page one. This is the

11 July peak analysis to which you are referring?

12 MR. WEIR: That's the final one, Judge. I'm not

13 sure he saw the final one.

14 BY MR. WEIR:

15 Q Do you recall seeing the final one, or do you

16 recall seeing any of the drafts?

17 A Anything with these kind of numbers?

18 Q Yes, doctor.

19 A No.

20 Q And you didn't provide changes to any of the July

21 peak analyses, is that your testimony?

22 A Yes.

23 Q Are you aware that Mr. Porter testified in his

24 deposition that you did provide such changes?

25 A The only reason I'm thinking is is that the same

429

1 question you asked, or you just switched something on me?

2 Q I switched something on you.

3 THE WITNESS: Could you please repeat the

4 question again?

5 (The Reporter read the record as requested.)

6 THE WITNESS: I'm not aware.

7 BY MR. WEIR:

8 Q Let's look, doctor, back in time a little while

9 to the time of August to December '98. At that time, you

10 were back on the Merchants Group, were you not?

11 A Yes.

12 Q Nonetheless, even though you were back on the

13 Merchant Group, you knew that in the summer of 1998, APS had

14 made a request of Idaho for transmission service, didn't

15 you?

16 A I'm sure I knew as soon as it hit the oasis.

17 Q That's because you monitor the oasis on a fairly

18 regular basis to learn what's on it, right?

19 A Right.

20 Q You also told your superiors in the Marketing

21 Group that Arizona had made this request for transmission

22 service that showed up on the oasis, didn't you?

23 A Yes.

24 Q At this time, who was your direct report? To

25 whom did you directly report? Excuse me, sir.

430

1 A Joe Holmes.

2 Q What was Joe Holmes' position at this time?

3 A He's the general manager.

4 Q Of your unit?

5 A Yes, supply and logistics.

6 Q Did you also tell a Mr. Richard Riozzi about

7 Idaho -- excuse me -- Arizona's posting on the oasis?

8 A Knowing me, either I told him or Joe told him.

9 He would have known.

10 Q How do you know he would have known?

11 A That's how I operate. I tell my superiors what I

12 find.

13 Q You don't tell them every little thing you find,

14 do you? It has to be something that you think that they'd

15 be interested in, correct?

16 A We are talking about a Merchant Group, a merchant

17 side. And in the merchant side, when you make decisions,

18 you want to know about all the information you have. So

19 that's like another company was merging or something, and it

20 was relayed someplace. I want to make sure that everybody

21 knows about it.

22 We don't, we get all the trade journals and

23 things. We don't expect everybody to read them, but we have

24 a network so everybody knows about that.

25 Q So you're confident that in 1998, the summer of

431

1 1998, a number of people in the Merchant Group knew that

2 Arizona had made a request for transmission service that

3 showed up on the oasis?

4 A Yes.

5 Q Did any one in Idaho's Merchant Group raise a

6 concern with anyone about the effect of Arizona's request on

7 native load?

8 (Pause.)

9 A I can tell you my response. I don't know. And

10 that wouldn't have raised even a hair. I don't know what

11 other people's thinking was because my response, after '96,

12 when we lost the capacity in '97, we invited or Idaho Power

13 invited all WSCC companies to come into a regional planning

14 process and tell how much capacity they need through each

15 path.

16 And I was the only one saying go build. And my

17 request hasn't been completed or been fulfilled and here --

18 that is for the native load and here comes another offer.

19 What was I going to think? I'm thinking, let them finish my

20 offer first before they do --

21 Q Did you finish?

22 A Yes.

23 Q What was your offer?

24 A If I said offer, I made a mistake. It was my

25 request.

432

1 Q What was your request?

2 A To meet, build transmission to meet the native

3 load network service.

4 Q Was there anything in place at the time that you

5 made that request? Going on, was somebody honoring your

6 request in the company?

7 A My perception is, under 888 it is Delivery's

8 responsibility to honor the requests. It's just we got in

9 '96 -- if the '96 reduction wouldn't have happened, we would

10 have been whole. You have gone down, while I was in

11 Delivery and even when I got in the marketing, the

12 expectation has been that Delivery will try to build

13 themselves up to get even.

14 Q Let's take this in baby steps.

15 Did you make a request between 1996 and 1998 for

16 transmission service to the Delivery Group?

17 A I'll take it in two parts.

18 The first part about the deficiency and telling

19 the company to go and build the transmission for native

20 load. If you're saying in writing if we made the request,

21 no. But if you're saying in a meeting where you go and ask

22 everybody who wants this, and in the meeting I think APS was

23 there but I'm not a hundred percent, but there were a number

24 of WSCC companies.

25 So that's on the first part.

433

1 On the second part, in '97, we did designate

2 network resources and that's how you request transmission

3 service for network load. That's what my understanding is,

4 and we did that.

5 Q You made two requests. One was to a general

6 council meeting, a WSCC meeting?

7 A It's not a WSCC meeting because a member calls

8 that meeting, and invites everybody from WSCC to basically a

9 planning process so that we can know how much capacity

10 should be added in a path.

11 Everybody's requests come in when you build a

12 project of that size to get there.

13 Q What exactly -- what concrete request did you

14 make at that, I'll call it a council meeting, for service,

15 and to whom did you make it?

16 A The question was who wants to pay or participate

17 in a transmission addition, and the only one who said

18 participate was network load.

19 Q How much did you ask for?

20 A 400 megawatts.

21 Q You asked for 400 megawatts.

22 A Yes. The project was, at that time, supposed to

23 increase the capacity by 400.

24

25

434

1 Q When did you make this request for 400 megawatts?

2 A That meeting was in '97 sometime.

3 Q What response did you get to your request for

4 this 400 megawatts?

5 A The response was that delivery unit make the

6 upgrade to meet the requirements.

7 Q Is this all that you needed, 400 megawatts to

8 satisfy any type?

9 A We had at that time lost about 500 I think, or

10 close to 500 in transmission capacity, and we were saying at

11 least, as a first step, we were looking for a 400 increase.

12 Q And then you made a request for a 400-megawatt

13 increase in 1997. When did you make the next request for an

14 increase?

15 A The next request is a network designation.

16 Q You say this network designation. This is IPC-

17 11. That was your next request?

18 A Yes.

19 Q What happened to that request, if anything?

20 A We were told there wasn't transmission available

21 all the time to give us a firm capacity to import that, and

22 sometimes we may have to import it on a non-firm basis.

23 Q So you got construction going on for a 400-

24 megawatt line, right?

25 A For further proceeding, that's fair.

435

1 Q Is this that fifth Brownlee-Paddock 230 KV line,

2 and then you made a request through this network and nothing

3 happened, right?

4 A I told you what response I got.

5 Q What was that response?

6 MR. RASKIN: Objection, Your Honor. Asked and

7 answered.

8 PRESIDING JUDGE: I'd like to hear it again

9 myself. I'm a little muddled.

10 MR. RASKIN: Withdraw the objection.

11 THE WITNESS: I was told that the transmission

12 capacity is not available to bring that resource on a firm

13 basis.

14 So, we are taking a risk that it will be-- At

15 least part of it will be curtailed at some time.

16 BY MR. WEIR:

17 Q Who's taking the risk?

18 A The importer. We are trying to import from the

19 northwest, and all it's saying is that the imports can be

20 cut if the transmission is limited.

21 Q You say the import's taking the risk. Who is the

22 import? The import can't take the risk. People take risks.

23 Companies take risks.

24 A The company is taking the risk.

25 Q So you found out--

436

1 A Maybe I can clarify. The native load is taking

2 the risk.

3 Q So this was in 1997, was it not, that you found

4 out you couldn't get this additional transmission service?

5 Look at IPC-11.

6 A Yes, '97 request.

7 Q Okay. When did your merchant group put in its

8 next request for transmission service to the delivery group?

9 A It did that in '98, too.

10 Q 1998? How did you do that?

11 A I wrote a letter or an E-mail.

12 Q It's not on E-mail?

13 A I could not tell you whether it's on a letter or

14 an E-mail.

15 Q How much was the request for?

16 A 200 megawatts.

17 Q When in 1998 did you make the request?

18 A I think it's in one of the data requests. I

19 can't tell you.

20 Q You made the request in 1998. What response, if

21 any, did you get to that request?

22 A Similar to '97.

23 Q No capacity?

24 A No capacity to bring all 200 megawatts on a firm

25 basis for network load.

437

1 Q Now, when you heard that APS was making a request

2 of Idaho for service, you didn't think Idaho would grant APS

3 that request for service, did you?

4 A The evidence I had, that was my assumption, not

5 that Idaho grants-- The assumption was the system doesn't

6 have the capacity to do that.

7 Q That's because your prior request for services

8 hadn't been granted?

9 A Because I'm getting-- I had been requesting-- I

10 know the native load has a higher priority, and its requests

11 have been getting rejected.

12 So, I am assuming--I am going to--

13 Q I'm sorry, were you finished with your answer,

14 doctor?

15 A Yes.

16 Q Well, later in 1998--December, 1998--you learned,

17 didn't you, that Idaho's request was going to be granted.

18 A Idaho's request was going to be granted? Which

19 Idaho's request?

20 Q I'm sorry. APC's. I keep confusing them.

21 MR. WEIR: What was my last question?

22 (The Reporter read the record as requested.)

23 BY MR. WEIR:

24 Q Answer the question.

25 A I thought you were going to rephrase the

438

1 question.

2 Q I will rephrase it.

3 A I appreciate that, because you asked something

4 and then it got changed, and I wasn't sure what it got

5 changed to.

6 Q That's not unusual. When you found out-- I'll

7 have to back up just a little bit.

8 When you found out about Arizona's request for

9 service, you didn't think that was going to be granted

10 because your request was granted, correct?

11 A Yes.

12 Q Now, didn't, sometime in December of 1998, you

13 learn that there was a very good chance that Idaho's request

14 for service, whatever that was, or APS's request for

15 service, was going to be granted. Did you learn that

16 sometime?

17 A No.

18 Q Let me show you what's been marked and admitted

19 into evidence as APS-53. It's an E-mail from a Dave Hagen

20 to Ron Schellberg and Ajay Sood, subject: BLPR pad

21 justification. It's dated December 14, 1998.

22 (Handing document to witness.)

23 BY MR. WEIR:

24 Q Tell me if you recognize that document.

25 A You want me to read the whole thing, or do you

439

1 want me to show where does it say about APS requesting

2 this--

3 PRESIDING JUDGE: He wants to know if you

4 recognize the document. Have you ever seen it before?

5 (Pause.)

6 THE WITNESS: Was this the same one in my

7 deposition, or is it different?

8 BY MR. WEIR:

9 Q No, it was the same one in your deposition. You

10 can see that you have the sticker down there on the front

11 page. It's got your name on it.

12 A All right, I did see it in my deposition.

13 Q Did you see it before it was addressed to you.

14 It's an E-mail that's addressed to you.

15 A Yes.

16 Q You have?

17 A Yes.

18 Q Doesn't this document advise you--

19 MR. WEIR: Can I approach the witness, Your

20 Honor?

21 PRESIDING JUDGE: Yes.

22 BY MR. WEIR:

23 Q --Through the use of elaborate remedial actions,

24 the nominal Brownlee-East capacity is to be increased to

25 1600 megawatts without the fifth line in order to sell

440

1 capacity to a third party.

2 Do you see that?

3 (Pause.)

4 A I see that.

5 Q What do you understand that to mean?

6 (Pause.)

7 A It says: in order to sell, that something is

8 being done for the third party.

9 Q Elaborate remedial action. What do you think

10 that phrase means?

11 A It means that some kind of remedial action was

12 being implemented to increase the capacity to 1600 to make a

13 sale on the other path.

14 PRESIDING JUDGE: Is remedial action a term of

15 art?

16 THE WITNESS: Remedial action.

17 PRESIDING JUDGE: What does it mean?

18 THE WITNESS: It means for some kind of a

19 disturbance, you trip a line, trip a generator, trip a load,

20 to protect the transmission.

21 BY MR. WEIR:

22 Q This remedial action, is it not, doctor, for

23 whatever might be designed for the purpose of selling

24 capacity to a third party, is that right?

25 A It did, but I think I told you, in my deposition,

441

1 that, by the time I got this memo, it was already sent out

2 of the department, and I didn't pay very much attention to

3 it.

4 Q That's not my question, doctor. We'll move along

5 a lot faster if you answer my question.

6 The question this elaborate remedial action

7 refers to is referred to in the document. It's designed to

8 increase the capacity of the Brownlee-East constraint in

9 order to sell capacity to a third party, correct?

10 A When you say "correct," that's what it says, yes.

11 I think this is in the-- We're really asking, because it's

12 already written there.

13 Q Why don't you answer my questions, and then we'll

14 be able to move on. Don't try to get into my head about

15 what I'm looking for.

16 Answer my questions. It's written there, right?

17 This was the proposal, right?

18 A This was a proposal for what? This was a

19 proposal, as I understand, to accelerate the construction on

20 the Brownlee bypass.

21

22

23

24

25

442

1 Q A proposal made by Dave Hagen, right?

2 A A proposal, not a proposal made by Dave Hagen.

3 Q Do you see on the third?

4 A The justification for going ahead and accelerate

5 the line.

6 Q Dave Hagen created this document. You see his

7 name on the third page?

8 A Dave Hagen created this.

9 Q There's no question about that, is there?

10 A There's no question about it.

11 Q This document talks more than about just a third

12 line, it talks about doing remedial actions that will allow

13 capacity to be sold to a third party, correct?

14 A Yes.

15 Q I want you to be very clear about this. Look at

16 the final paragraph on the last page. Sell transmission

17 capacity to third parties.

18 In order to sell capacity to a third party,

19 before the transmission necessary to support additional

20 transactions is in place, an elaborate remedial scheme is

21 being proposed to mitigate outages in the East of Brownlee

22 system. Because use of this scheme will result in the sale

23 of annual transmission capacity, it is worthwhile to the

24 extent that we can minimize the length of time that we are

25 exposed to the scheme. Hence, going through the summer of

443

1 1999 seems like an acceptable risk, but from a reliability

2 point of view, that's not acceptable if it extends into or

3 beyond the summer of 2000.

4 Do you see that?

5 A Yes.

6 Q And are you able to understand from this that

7 what is being proposed is to sell this additional

8 transmission that's going to come about because of this

9 elaborate remedial action scheme to a third party.

10 Do you understand that from this document?

11 A What I understand from that part is that some

12 kind of remedial action scheme is being proposed, and Dave

13 Hagen is not, doesn't feel that that scheme is very reliable

14 and he is making an extra case, let's accelerate. He's

15 making an additional point, let's accelerate the

16 construction of the line so that we don't have to rely on

17 that remedial action scheme.

18 Q Your company's not relying on the remedial action

19 scheme, are they, doctor? That power is going to be sold to

20 a third party. That's what the document says, right?

21 A The remedial action scheme controls schemes which

22 when they work increase the transmission capacity, and when

23 they don't work jeopardize the transmission system.

24 In WSCC, if you look at the history of remedial

25 action schemes, it's not very good, and it doesn't surprise

444

1 me that Hagen, all it's telling me is that Hagen is feeling

2 uncomfortable with what is being proposed.

3 Q So you knew from this document that through a

4 remedial action scheme, additional megawattage was going to

5 be sold to a third party and you knew that as of the date of

6 this document, didn't you?

7 MR. RASKIN: I object, Your Honor. The witness

8 didn't say that. The witness just said very different about

9 this document.

10 PRESIDING JUDGE: Yes, the witness did, and the

11 witness did not answer the question in saying what he said

12 about the document.

13 MR. RASKIN: Your Honor, I think maybe there's a

14 language problem here.

15 PRESIDING JUDGE: There's clearly a language

16 problem here, and we're going to have to work with it.

17 MR. RASKIN: I think the witness just got through

18 saying that this document says that the person who wrote it

19 was not comfortable with the remedial action scheme.

20 PRESIDING JUDGE: That's exactly part of what he

21 said, but he did not answer the question that was put to

22 him, did he?

23 MR. RASKIN: I guess I thought he did. But if

24 you didn't, you're the one who counts.

25 PRESIDING JUDGE: He did not.

445

1 MR. WEIR: I think if you read the question back,

2 it will clearly show that the Judge is right. That the

3 question you think I asked is not the question he answered.

4 Could we have the question read back, Your Honor?

5 (The Reporter read the record as requested.)

6 MR. RASKIN: Your Honor, may I explain better

7 what my concern is about the question?

8 PRESIDING JUDGE: You may not.

9 Do you understand the question, Mr. Sood?

10 Would you like me to give you my explanation of

11 the question?

12 THE WITNESS: I would appreciate that.

13 PRESIDING JUDGE: What counsel is asking you is,

14 from this document did you understand that Idaho Power had a

15 plan using an elaborate remedial action scheme to provide

16 capacity which it intended to sell to a third party?

17 That's all he wants to know, irrespective of what

18 anybody else thought, irrespective of any capacity

19 deficiency that was perceived for the company.

20 Did you understand that simple fact?

21 THE WITNESS: From this document, it does look

22 like that. But Dave Hagen, who wrote the memo, knew that

23 Delivery has a plan or a remedial action plan and his

24 understanding is that they are going to sell that capacity

25 to a third party.

446

1 And I may add --

2 PRESIDING JUDGE: You may not add.

3 MR. WEIR: That was my question.

4 PRESIDING JUDGE: I know it was. I think we got

5 a clear answer now.

6 Is the answer clear enough for you? I'm sorry, I

7 didn't mean to usurp your position, but you were not getting

8 anywhere.

9 MR. WEIR: It was a well-put question, Judge, and

10 I got the answer I wanted. I appreciate it, and I think it

11 will help us move this proceeding on.

12 BY MR. WEIR:

13 Q Mr. Sood, isn't Idaho using the remedial action

14 scheme referenced in Exhibit 53 now, the shunt capacitor?

15 A They are using some remedial action scheme. If

16 it is the same or different I to this day don't know what

17 that remedial action scheme is.

18 Q You attended a meeting, did you not, in early

19 January of 1999 between Marketing representatives and

20 Delivery representatives in the ninth floor conference room

21 at Idaho's headquarters to discuss native load?

22 A Yes. I don't know if it was --

23 Q You tell me what the meeting was about.

24 A The meeting was about service to native load.

25 Q Anything else?

447

1 A Nothing else.

2 Q Who called the meeting?

3 A I don't know who called the meeting because the

4 meeting didn't show up on my calendar, so I would assume it

5 was word-of-mouth.

6 Q Who told you?

7 A I don't recall.

8 Q Was it Richard Riozzi?

9 MR. RASKIN: Objection, Your Honor.

10 THE WITNESS: I don't know.

11 MR. RASKIN: Ajay, when I object, please don't

12 answer.

13 Your Honor, the witness answered that he doesn't

14 recall --

15 PRESIDING JUDGE: That's twice you've done that,

16 counsel. Don't do it again.

17 MR. WEIR: Your Honor, if I may explain.

18 PRESIDING JUDGE: Speaking or giving instruction

19 to the witness, that is not for the hearing room.

20 MR. RASKIN: I apologize.

21 MR. WEIR: If I may explain? He says he doesn't

22 know --

23 PRESIDING JUDGE: There is no need to explain. I

24 understand what you're doing. You may proceed.

25 BY MR. WEIR:

448

1 Q If you don't recall the individual, do you recall

2 what group the individual that apprised you of the meeting

3 belongs to?

4 By that, I mean Merchant versus Delivery, as you

5 all call it.

6 A The most likely would be Regional Council, but

7 I'm guessing.

8 Q All right, I don't want you to guess.

9 Who do you recall being at the meeting?

10 A Jim Thompson was there.

11 Q Kip Runyan?

12 A Kip Runyan was there. Ron Schellberg was there.

13 Q Rich Riozzi?

14 A I'm not sure whether he was there or not.

15 Q How about Jim Collingwood?

16 A I don't recall. I can tell you there were a

17 number of people in the meeting but, you know, it's one of

18 those meetings which is a short meeting and we are talking

19 about almost a year ago. The people who spoke, I could at

20 least have some idea about the people who didn't even speak

21 in the meeting.

22 Q Wasn't this an important meeting for your

23 company?

24 A Important for what, for network service? I mean

25 go through the IRP process or something. There's enough

449

1 meetings in there.

2 Q How many meetings of this type have you been to

3 since you've been employed by Idaho Power?

4 A The way the meeting went probably maybe none, or

5 just one because I'm not used to getting in a meeting in

6 which you are told what you can discuss and what you can't

7 discuss, and what the code of conduct is.

8 Q So it was an unusual meeting?

9 A It was unusual in that respect.

10 Q It lasted, what, 15 to 30 minutes?

11 A Fifteen to 30 minutes.

12 Q Are you aware that Mr. Runyan has testified that

13 the meeting was an hour to an hour-and-a-half? Are you

14 aware of that?

15 A I'm not aware of that.

16 Q Who spoke the most at the meeting? Was it Ron

17 Schellberg?

18 A No, it was Jim Thompson.

19 Q After the lawyer, put the lawyer away in this

20 box. I'm talking about operational people. Who spoke the

21 most?

22 A Ron Schellberg.

23 Q Did you speak at all?

24 A Ron Schellberg.

25 Q No, no. Did you speak at all?

450

1 A I did speak.

2 Q How much did you speak?

3 A Not very much.

4 Q Are you aware that Mr. Runyan testified that you

5 spoke the most at that meeting?

6 Did you?

7 A No, that's not my recollection.

8 Q You don't talk a lot of those meetings?

9 A Most meetings I don't; some I do.

10 Q Didn't you question at that meeting the

11 reliability of the transmission system to serve native load?

12 A From my recollection, no.

13 Q Are you finished with your answer?

14 A Yes.

15 Q Are you aware that Mr. Runyan said you did,

16 testified in his deposition that you did?

17 A I'm not recollecting that.

18 Q You knew this meeting had to do with Arizona's

19 request for transmission service, didn't you?

20 A No, I was not.

21 Q You knew Arizona, from the oasis, that Arizona

22 had made a request?

23 A I knew that.

24 Q And you knew at the meeting you weren't supposed

25 to discuss services to third parties, didn't you?

451

1 A I did, yes.

2 Q And there was no other third party on the oasis

3 but Arizona, wasn't there?

4 A At that time, I don't think there was anybody

5 else on the oasis.

6 Q So what request for service did you think the

7 meeting had to do with? Alabama Power?

8 A I thought the meeting was to discuss the native

9 load request so why should it be -- I took it that if there

10 was anything going on on the Delivery side, that Jim

11 Thompson's instructions were to the Delivery side; don't let

12 anything out to the Merchant people in the meeting. Don't

13 have an accident and spill something out.

14 Q It's your testimony sitting here today under oath

15 that you had no idea at that meeting that the request that

16 had been made by a third party for transmission service was

17 APS?

18 A Can you please repeat the question?

19 Q Is it your testimony sitting here today under

20 oath that at that meeting, you had no idea that a third

21 party who had requested service from Idaho was Arizona

22 Power?

23 A The reason I'm lost is I'm telling you the

24 meeting is for native load, and you in your question are

25 asking something about a third party. Which third party are

452

1 we talking about?

2 PRESIDING JUDGE: It doesn't really matter, sir.

3 You have been asked, and you have answered that question.

4 Let's move on.

5 MR. WEIR: Can we take a short break, Your Honor?

6 I'll try to finish up.

7 PRESIDING JUDGE: Why don't we take a break until

8 5 after.

9 (Recess.)

10 PRESIDING JUDGE: Let's go on the record and see

11 if we can finish. I have been advised, while we were off

12 the record, that there is no redirect for Mr. Sood.

13 Is that correct?

14 MR. RASKIN: That's correct, Your Honor.

15 PRESIDING JUDGE: And there is no other cross

16 examination for Mr. Sood, is there?

17 MR. REUSCH: No, Your Honor.

18 MS. COPSEY: No, Your Honor.

19 PRESIDING JUDGE: Would you like to move in Mr.

20 Sood's Exhibits?

21 MR. RASKIN: Yes, Your Honor.

22 I move the introduction into evidence IPC-10, 11,

23 and 12.

24 PRESIDING JUDGE: Is there any objection to

25 receiving into evidence the Exhibits previously marked IPC-

453

1 10 through IPC-12?

2 (No response.)

3 PRESIDING JUDGE: Hearing none, Exhibits

4 previously marked for identification as IPC-10 through

5 IPC-12 are received into evidence at this time.

6 (The documents previously

7 identified as Exhibits

8 Numbers IPC-10 through IPC-12

9 were received in evidence.)

10 PRESIDING JUDGE: That concludes your testimony,

11 Mr. Sood. Thank you very much for your time. You're

12 excused.

13 (Witness excused.)

14 PRESIDING JUDGE: Who's next?

15 MS. COPSEY: Your Honor, the Idaho Public

16 Utilities Commission would like to call its witness,

17 Stephanie Miller.

18 Whereupon,

19 STEPHANIE MILLER

20 was called as a witness herein, and having been first duly

21 sworn, was examined and testified as follows:

22 DIRECT EXAMINATION

23 BY MS. COPSEY:

24 Q State your name for the record and by whom you're

25 employed?

454

1 A My name is Stephanie Miller. I'm employed by the

2 Idaho Public Utilities Commission.

3 Q Could you state your position, please?

4 A I'm the administrator of the Utilities Division.

5 Q Are you the same Stephanie Miller who has

6 prepared and submitted prefiled testimony marked as Exhibit

7 IPU-1?

8 A I am.

9 MS. COPSEY: For the record, I have given two

10 copies to the Court Reporter and everyone else has copies.

11 BY MS. COPSEY:

12 Q Do you have any corrections, deletions or

13 additions to your direct filed testimony?

14 A I do.

15 The first correction is on page 4, line 12, typo.

16 The second word in line 12 for is, i-s, instead of "in."

17 The second correction is on page 7, line 19, the

18 word "concurred" should be "occurred."

19 And the final correction is on page 8, line 10,

20 strike the word "both assertions" and insert "the first

21 assertion" and take no position on the second.

22 So that sentence would read, "I disagree with the

23 first assertion and take no position on the second.

24 That's all.

25 Q With those corrections and changes, do you adopt

455

1 your direct filed testimony, which has been labeled Exhibit

2 IPU-1, as your testimony in this proceeding?

3 A Yes, I do.

4 MS. COPSEY: Your Honor, I would like IPU-1 to be

5 marked for identification. IPU-1 consists of the prefiled

6 testimony of Stephanie Miller on behalf of the Idaho Public

7 Utilities Commission.

8 PRESIDING JUDGE: Is there any objection to

9 marking for identification as IPU-1 the direct testimony of

10 Stephanie Miller?

11 (No response.);

12 PRESIDING JUDGE: Hearing no objection, the

13 direct testimony of Stephanie Miller is marked for

14 identification purposes as IPU-1 at this time.

15 (The document referred to was

16 marked for identification as

17 Exhibit Number IPU-1.)

18 MS. COPSEY: She's now available for cross

19 examination.

20 PRESIDING JUDGE: Who intends to cross examine

21 this witness?

22 MS. HUNTINGTON: I do, Your Honor.

23 CROSS EXAMINATION

24 BY MS. HUNTINGTON:

25 Q My name is Mary Ann Huntington with Morgan, Lewis

456

1 & Bockius, who are representing Arizona Public Service in

2 this proceeding.

3 MS. HUNTINGTON: May I approach the witness, Your

4 Honor?

5 PRESIDING JUDGE: You may.

6 (Handing document to witness.)

7 BY MS. HUNTINGTON:

8 Q I just wanted to make sure you were familiar with

9 the FMC contract that is included as Exhibit number 21 of

10 APS' testimony.

11 A Yes.

12 PRESIDING JUDGE: APS-21?

13 MS. HUNTINGTON: APS-21.

14 BY MS. HUNTINGTON:

15 Q That is the contract between FMC and Idaho Power

16 Company, is it not?

17 A That's correct.

18 Q Was the Idaho Public Utilities Commission a named

19 party to the FMC contract?

20 A They are not a named party, they are named in the

21 contract.

22 Q But they are not a named party?

23 A That's correct.

24 Q If you could refer briefly to page 6 of your

25 testimony, which is IPU-1.

457

1 A I have it.

2 Q On line 21, you state, if APS were sold non-firm

3 transmission service in the exact amount of transmission it

4 now requests as firm transmission, presumably it would

5 receive power just as requested until one of those adverse

6 events occurs, correct?

7 A That's right.

8 Q When you say "would receive power just as

9 requested until one of those adverse events," I assume you

10 mean that it would be firm just until one of those adverse

11 events occurs, is that correct? Is that what you intended

12 to mean?

13 A I think if APS, I think this may be a

14 misstatement. If APS were sold non-firm transmission under

15 the open access tariff, I think it could be interrupted for

16 reasons other than just system disturbance. But this is

17 what my testimony says. This is what I wrote.

18 Q Do you think non-firm service is the same as firm

19 service that is curtailable for specified conditions?

20 A I don't think so.

21 Q Are you familiar with the provisions of Idaho's

22 open access transmission tariff, which gives Idaho priority

23 for secondary network service, and that these tariff

24 provisions allow Idaho to bump APS' non-firm service for

25 non-firm or economy purchases for Idaho's native load?

458

1 A I am not that familiar with the open access

2 tariff.

3 Q Just to clarify, when you say you're not that

4 familiar with the open access tariff, you're not familiar

5 with that provision?

6 A With that provision, that's correct.

7 Q So you don't know whether there's a provision

8 like that or not?

9 A I know there's a whole section on network access

10 service, but I am not really comfortable claiming that I'm

11 an expert on it.

12 Q Thank you.

13 If you can turn to page 11 of your testimony,

14 IPU-1, on line 7, you state that terms like "interruptible"

15 and "curtailable" were sometimes used interchangeably even

16 by the IPUC. Is that correct?

17 A That's correct.

18 Q Do you know the date of the FMC contract that is

19 currently in effect?

20 A The effective date is May 1st, 1998.

21 Q Do you know the date that the contract was

22 executed?

23 A It was executed, I believe the application was

24 filed with the Commission --

25 Q Actually, I think maybe I could help you along.

459

1 I think if you look at the top of the contract, I think it

2 has the date that it was executed.

3 A Right, December 30th, 1997, it was filed with the

4 Commission on the 31st.

5 Q And both the effective date and the execution

6 date are after the Federal Energy Regulatory Commission

7 issued Order Number 888, is that correct?

8 A That's correct.

9 However, this isn't an open access contract.

10 This is a contract for firm native load service. So whether

11 the contract was signed before or after FERC Order 888 came

12 out is really, in my estimation the way I think, is probably

13 irrelevant.

14 MS. HUNTINGTON: Your Honor, can I move to strike

15 the last portion of her answer?

16 PRESIDING JUDGE: Which portion?

17 MS. HUNTINGTON: The portion which was beyond,

18 yes, I think. I just wanted to get on the record that she

19 understood that the contract effective date was executed and

20 effective after the date of Order 888.

21 She obviously is familiar with the date of Order

22 888.

23 PRESIDING JUDGE: I'm going to let the whole

24 answer stand.

25 MS. HUNTINGTON: That's all I have.

460

1 MS. COPSEY: Your Honor, I only have a few

2 questions on redirect.

3 REDIRECT EXAMINATION

4 BY MS. COPSEY:

5 Q In your cross examination, there was a question

6 as to whether the IPUC actually was a party to this

7 contract. And you answered, no.

8 What is the role that IPUC has with respect to

9 this contract?

10 A The IPUC approved the contract. It was a

11 contract between a jurisdictional utility and one of their

12 retail customers, so it had to be approved by the Idaho

13 Commission.

14 The Idaho Commission, when it approved the

15 contract, specifically retained jurisdiction over it to

16 ensure the interests of native load customers, the company's

17 other customers besides FMC.

18 Q In reviewing a retail contract, what authority

19 does the IPUC have?

20 A The IPUC can approve the contract.

21 MS. HUNTINGTON: May I object, Your Honor. I

22 think that's beyond the scope of the cross examination.

23 MS. COPSEY: Your Honor, she opened the question

24 as to whether IPUC was actually a party to the contract.

25 This explores what the relationship is to the contract

461

1 because that's what she was asking.

2 PRESIDING JUDGE: Would you please read the

3 question back?

4 (The Reporter read the record as requested.)

5 MS. COPSEY: She specifically put in the question

6 the role the IPUC has with respect to this contract, and I'm

7 not going very far with this. It's probably my last

8 question. It's exactly what that role is.

9 MS. HUNTINGTON: I didn't ask the role, I just

10 wanted to know if they were a party to the contract.

11 PRESIDING JUDGE: I'll allow this one question.

12 You may respond.

13 THE WITNESS: Could you repeat the question, Ms.

14 Copsey?

15 BY MS. COPSEY:

16 Q With respect to the FMC contract, what specific

17 role does the Commission have with respect to this contract?

18 What action can it take?

19 A When it was presented to it?

20 Q Yes.

21 A Okay.

22 It could have approved the contract, it could

23 have denied the contract, it could approve the contract with

24 conditions.

25 Q In fact, what did the IPUC do?

462

1 A It approved the contract under the conditions

2 that it would retain authority to protect the continuing

3 interests of the company's other customers.

4 Q I just want to clarify one thing with respect to

5 your statement at page 6. This is line 21 and 23.

6 When you wrote this testimony, beside the fact

7 that you were home sick in bed half the time, which is not

8 relevant, when you wrote this testimony, were you aware of

9 the offer that APS had made to Idaho Power as part of the

10 settlement?

11 A No.

12 Q Let's turn to page 11, line 7. You were

13 questioned about your statement about terms of interruptible

14 curtailment were sometimes used interchangeably.

15 As you noted, the FMC contract went into effect

16 after Order 888. In preparing your testimony, have you

17 looked at other retail contracts that have been approved by

18 the IPUC after Order 888?

19 Have you done that?

20 A Are we on page 11?

21 MS. HUNTINGTON: Again, I think this is beyond

22 the scope of the direct, I mean of the cross, excuse me.

23 MS. COPSEY: In her cross, she is suggesting that

24 FERC Order Number 888 somehow operated to change the words

25 interruptible, curtailable, and that that was somehow

463

1 applicable to retail contracts in Idaho.

2 And I'm trying to elicit from this witness

3 whether it is only FMC contracts that have used these words

4 interchangeably? Or whether she has observed other retail

5 contracts before the IPUC that have also done that.

6 PRESIDING JUDGE: I understand your inference,

7 and I probably even agree with it, but that's inadequate.

8 MS. COPSEY: Actually, that's my last question.

9 Thank you.

10 I need to move have IPU-1, that has been marked

11 for identification, if I can move that into evidence.

12 PRESIDING JUDGE: Is there any objection to

13 receiving the document previously marked for identification

14 as IPU-1 into evidence?

15 (No response.)

16 PRESIDING JUDGE: Hearing none, the Exhibit

17 marked for identification IPU-1 is received into evidence at

18 this time.

19 (The document previously

20 identified as Exhibit Number

21 IPU-1 was received in

22 evidence.)

23 PRESIDING JUDGE: I don't believe there's any

24 other examination for Ms. Miller?

25 (No response.)

464

1 PRESIDING JUDGE: Thank you very much for your

2 time.

3 You're excused.

4 (Witness excused.)

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

465

1 MR. REUSCH: Staff calls its first witness,

2 Willie L. Oxendine.

3 Whereupon,

4 WILLIE L. OXENDINE

5 was called as a witness in the above-entitled matter and,

6 having been first duly sworn, was examined and testified as

7 follows:

8 DIRECT EXAMINATION

9 BY MR. REUSCH:

10 Q Would you state your name for the record, please?

11 A My name is Willie L. Oxendine.

12 Q Are you the same Willie L. Oxendine who prepared

13 direct testimony in this proceeding, labeled Exhibit S-1?

14 A I am.

15 Q Did you prepare or have prepared under your

16 supervision documents labeled S-2 through Exhibit S-6, which

17 are attached to your prepared direct testimony?

18 A Yes, I am.

19 Q With respect to S-1, are there any typographical

20 errors you would like to note for the record?

21 A Yes, I have five minor typos at page three, line

22 six, after Exhibit-- Add "and."

23 Page three, line six, add "and." Between

24 exhibits and responses. At page five, line one, strike out

25 "reserve" and add "reliability."

466

1 At page eight, line six, change "loses" to

2 "losses."

3 PRESIDING JUDGE: Not "losses" to "loses"?

4 THE WITNESS: Right. Page nine, line 27, change

5 "loses" to "losses." Page 13, line 17, change "reliability"

6 to "reliable." That's all.

7 BY MR. REUSCH:

8 Q Mr. Oxendine, with these typographical errors

9 corrected, do you adopt Exhibit S-1 through Exhibit S-6 as

10 your sworn testimony in this proceeding?

11 A I do.

12 PRESIDING JUDGE: If I asked you the same

13 questions today that are contained in that testimony, would

14 your answers be the same?

15 A They would be.

16 MR. REUSCH: Your Honor, I have handed the

17 reporter two copies of Mr. Oxendine's testimony with the

18 errors corrected.

19 I move that Exhibits S-1 through S-6 be marked

20 for identification.

21 PRESIDING JUDGE: Is there any objection to

22 marking for identification exhibits designated S-1 through

23 S-6?

24 (No response.)

25 PRESIDING JUDGE: Hearing none, the exhibits

467

1 designated S-1 through S-6 are marked for identification

2 purposes at this time.

3 (The documents referred to were

4 marked Exhibit Nos. S-1 through S-

5 6 for identification.)

6 MR. REUSCH: Thank you, Your Honor. The witness

7 is available for cross-examination.

8 PRESIDING JUDGE: Who will be examining Mr.

9 Oxendine?

10 CROSS-EXAMINATION

11 BY MS. HUNTINGTON:

12 Q Good afternoon, Mr. Oxendine. I am Mary Ann

13 Huntington. I represent Arizona Power. You testified about

14 Idaho's CBM in this matter, is that right?

15 A That's correct.

16 Q Are you aware that Idaho had been setting aside

17 CBM on eight different paths, some to the east, some to the

18 north, and some to the south, prior to the time APS

19 requested transmission service?

20 A That's what I've gleaned from the documents that

21 have been submitted.

22 Q So you are aware, at least at some point prior to

23 the time that Idaho completed or submitted its July peak

24 analysis to APS in this matter, that Idaho had set aside CBM

25 on eight different paths and not all entirely on the

468

1 Brownlee-East path?

2 A Based on one person's deposition, that's my

3 understanding.

4 Q In addition to that one deposition, there were

5 documents provided in the prefiled testimony. Did you

6 review the documents?

7 A I reviewed the documents generally, yes.

8 Q I don't mean to belabor the point, and I

9 apologize, but I just want to be absolutely clear that you

10 do understand that, between the documents you reviewed and

11 the deposition transcripts that you've reviewed, that you

12 were aware that Idaho had been setting aside transmission

13 for operating reserves on more than just the Brownlee-East

14 path, and then, in responding to APS's requests, they

15 changed that methodology and reserved CBM only the Brownlee-

16 East path. Is that correct?

17 A CBM, yes.

18 Q Thank you. Have you reviewed Idaho Power

19 Company's transmission tariff?

20 A Yes, I'm familiar with it.

21 Q Have you Attachment C to Idaho's tariff that sets

22 forth a methodology of calculating ATC?

23 A Yes, generally I'm familiar with it. It doesn't

24 vary from other open-access tariffs.

25 Q Attachment C is one of the ones that does vary.

469

1 Are you aware that Attachment C to Idaho's tariff contains

2 no reference to CBM or operating reserves?

3 A Generally, tariffs will not. Open access

4 generally do not specify-- Are you talking about the amount

5 of CBM?

6 Q No, the methodology Attachment C sets forth the

7 methodology that the utility will use in determining ATC,

8 and Idaho's does not contain any reference to CBM, doesn't

9 contain anything that would allow Idaho to set aside ATC for

10 CBM. Is that your understanding what Idaho's attachment

11 says?

12 A You would have to refer me to the specific

13 document.

14 (Pause.)

15 MS. HUNTINGTON: May I approach the witness, Your

16 Honor?

17 PRESIDING JUDGE: Yes.

18 MS. HUNTINGTON: Since we included Idaho's tariff

19 as an item by reference, I don't think we need to mark this,

20 but I will just hand out copies.

21 PRESIDING JUDGE: I'll take your word for it that

22 this is in here somewhere.

23 MS. HUNTINGTON: Yes.

24 BY MS. HUNTINGTON:

25 Q If you could take a minute to review this

470

1 Attachment C, Mr. Oxendine.

2 (Pause.)

3 Actually, we have provided a redline copy, too.

4 (Pause.)

5 A Okay, so what's your question again?

6 Q After reviewing this, does this Attachment C

7 anywhere allow or provide for any-- Strike that. Excuse me.

8 Is there any provision in this Attachment C which

9 would allow Idaho to calculate its ATC by deducting

10 transmission capacity for CBM from operating reserves?

11 A Well, on the second page here on the black-line

12 provision, I guess, if you look at Form 715, it provides

13 basically-- No, it does not.

14 Q Thank you.

15 MS. HUNTINGTON: That's all I have.

16 (Pause.)

17 MR. REUSCH: Your Honor, I have one question on

18 redirect.

19 REDIRECT EXAMINATION

20 BY MR. REUSCH:

21 Q Mr. Oxendine, I call your attention to page one

22 of Attachment C. On the eighth line through the tenth line,

23 starting with the words "That capacity needed to meet," and

24 ending with the words "network customers" at the end of line

25 nine and beginning of line 10. Do you see that?

471

1 A Yes.

2 Q On the sixth line and seventh line, do you see

3 the words "The transmission provider may exclude"?

4 A Yes.

5 Q Taking those two clauses together, what do they

6 define?

7 A The available transmission capacity on the

8 system.

9 Q Is there any word therein connected with capacity

10 benefit margin?

11 A No, it's not, but included in your ATC will be

12 any amounts, which is CBM, that will be necessary for the

13 services provided to native load and network customers.

14 MR. REUSCH: Thank you, Mr. Oxendine. Thank you,

15 Your Honor. Staff has no further redirect.

16 PRESIDING JUDGE: I assume there's no other

17 cross-examination for this witness.

18 MR. REUSCH: Your Honor, I move the readmission

19 of Exhibits S-1 through S-6.

20 PRESIDING JUDGE: Is there any objection to

21 receiving into evidence documents previously marked for

22 identification S-1 through S-6?

23 (No response.)

24 PRESIDING JUDGE: Hearing none, exhibits

25 previously marked for identification S-1 through S-6 are

472

1 received into evidence at this time.

2 (Exhibit Nos. S-1 through S-6 were

3 received.)

4 PRESIDING JUDGE: Thank you, Mr. Oxendine.

5 You're excused.

6 (Witness excused.)

7 MS. GOVAN: Your Honor, the Commission staff

8 would call Richard Mabry to the stand.

9 Whereupon,

10 RICHARD MABRY

11 was called as a witness in the above-entitled matter and,

12 having been first duly sworn, was examined and testified as

13 follows:

14 DIRECT EXAMINATION

15 BY MS. GOVAN:

16 Q Mr. Mabry, would you please state your name and

17 business address for the record?

18 A My name is Richard P. Mabry. I am with the

19 Federal Energy Regulatory Commission, 888 First Street,

20 Northwest, Washington, D.C.

21 Q Are you same Richard Mabry who prepared the

22 direct testimony in this proceeding labeled as Exhibit

23 number S-7, consisting of a cover page and 15 pages of

24 testimony?

25 A Yes, that's correct.

473

1 Q Did you prepare or have prepared under your

2 supervision document S-8, which is an attachment to your

3 testimony?

4 A Document S-8 is a response to a data request.

5 Q With respect to Exhibit S-7 and S-8, are there

6 any corrections or modifications you would like to make to

7 that testimony or exhibits?

8 A Yes, I have one. On page 10 of my written

9 testimony, line 10, next to "Averages of 300 megawatts"

10 should be "330 megawatts."

11 Q Thank you. With those corrections or

12 modifications, if I were to ask you those questions today,

13 would your answers be the same?

14 A Yes, they would.

15 MS. GOVAN: Your Honor, this witness is available

16 for cross-examination. I am sorry, Your Honor. I provided

17 two copies to the court reporter and would like to have

18 those copies marked for identification as Exhibit S-7 and

19 Exhibit S-8.

20 PRESIDING JUDGE: Is there any objection to

21 marking for identification documents previously designated

22 S-7 or S-8?

23 (No response.)

24 PRESIDING JUDGE: Hearing none, those documents

25 are marked for identification purposes Exhibit S-7 and S-8

474

1 at this time.

2 (The documents referred to were

3 marked Exhibit Nos. S-7 and S-8

4 for identification.)

5 CROSS-EXAMINATION

6 BY MS. HUNTINGTON:

7 Q Hi. I assume I don't need to introduce myself.

8 Mary Ann Huntington. If you could refer to page seven of

9 your testimony, which is S-7.

10 On lines 12 to 13, you state that IPC supports

11 its current need to reserve TRM on the basis of adverse loop

12 flow which occurred over the Brownlee-East path during the

13 summer of 1998 and 1999. Is that correct?

14 A Yes, that's what it states.

15 Q And Idaho supports its current need to reserve

16 TRM through information that is included in IPC-20. That

17 information reflects only July out of this loop flow, is

18 this correct?

19 A Is there somewhere else in my testimony you're

20 referring to besides lines 12 and 13?

21 Q No, I'm not. I was just referring to that and

22 then asking you whether the method that Idaho used to

23 support its current need for TRM was based on July hourly

24 loop flow. Is that your understanding?

25 A It was based on July hourly loop flow.

475

1 Q In other words, not the months of June, July, and

2 August -- just July?

3 A That's correct.

4 (Pause.)

5 Q On page eight, lines 18 to 20, you also state:

6 Although it was not well documented, IPC claims, and

7 evidence seems to suggest, that IPC reserved 150 megawatts

8 on the Brownlee-East path for the summer of 1998 based on

9 curtailment exposure associated with nomogram operations.

10 Is that correct?

11 A That's correct.

12 Q Were you here yesterday for Mr. Porter's

13 testimony?

14 A Yes, ma'am.

15 Q Did you hear Mr. Porter confirm that Idaho had

16 three different methods for calculating TRM in the last one

17 and a half to two years?

18 A Yes, I heard him say that.

19 Q Do you agree with Mr. Porter's response, in other

20 words, that Idaho had used three different methods in the

21 past one and a half to two years?

22 A Not entirely. I think the first listing of the

23 150 megawatts, from nomogram exposure, I don't think they

24 were on the TRM.

25 That is a TRM component. This dates back to the

476

1 summer of 1998. It appears they set aside 150 megawatts of

2 capacity for nomogram.

3 That is a TRM component. They were not listing

4 it as TRM, though. You said TRM, so I am clarifying.

5 Q That's correct. That's a good point, but, in

6 other words, in the past one and half to two years, they

7 have set aside capacity for nomogram limits in the Spring

8 and summer of 1998 then for TRM based on a 200-megawatt

9 average method in evaluating APS's request.

10 Then, now they are supporting the method--the

11 super-peak method--where they look only at certain hours,

12 loop flows, average adverse hourly flows.

13 A That's correct.

14 Q So that's three different deductions for APC--

15 three different methods?

16 A They have calculated three different numbers,

17 correct.

18 Q Thank you. If you would also turn to page 12,

19 line 17 of your testimony, in the middle of line 17, you

20 state:

21 IPC has now provided sufficient support for its

22 200-megawatt loop flow component using two years of data --

23 July 1998 and July 1998.

24 Is that correct?

25 A Yes.

477

1 Q Do you think Idaho's methodology for determining

2 TRM at the time they denied APS's request for service was

3 appropriate?

4 A I assume you're referring to the averaging

5 methodology, where they are averaging beneficial and adverse

6 loop flows.

7 Q And where they used monthly data for one year.

8 A With respect to their methodology of averaging

9 adverse--

10 MS. GOVAN: Your Honor, if I could object at this

11 point, it is not clear to me from the question when APS's

12 request was actually denied. Could I get a clarification?

13 She asked whether the methodology--the first

14 methodology that they put forth in the direct testimony--was

15 the methodology they were using and whether he agreed with

16 it at the time the APS request was denied.

17 I just wanted to get a timeframe as to when she

18 was speaking in terms of when the request was actually

19 denied.

20 MS. HUNTINGTON: I'll rephrase the question.

21 BY MS. HUNTINGTON:

22 Q Do you think that Idaho's methodology for

23 determining TRM in February of 1998, in response to APS's

24 request for service, was appropriate?

25 A I'm still trying to go back and figure out when

478

1 they did their actual analysis. I think they did their peak

2 analysis in the Fall of '98.

3 Q The July peak analysis on which they relied is

4 dated February 5th, 1998.

5 MS. GOVAN: Your Honor, you say "on which they

6 relied." Are you speaking in terms of which IPS was

7 relying--IPC with respect to relying.

8 I am sorry. I didn't understand the question.

9 PRESIDING JUDGE: Does the witness understand the

10 question?

11 THE WITNESS: The dates are confusing me, that's

12 all, Your Honor. I don't think that the peak analysis was

13 dated February, 1998.

14 BY MS. HUNTINGTON:

15 Q It's not February, 1998.

16 PRESIDING JUDGE: Do you want to try one more

17 time?

18 MS. HUNTINGTON: I do. I apologize.

19 (Handing document to witness.)

20 MS. GOVAN: Can I ask what you are referring the

21 witness to.

22 MS. HUNTINGTON: It's IPC Exhibit number 3.

23 BY MS. HUNTINGTON:

24 Q Would you agree that that is an analysis

25 performed by Idaho Power Company in evaluating APS's request

479

1 for service?

2 A Yes, it was performed in conjunction with the

3 Brownlee-East facilities.

4 Q And the methodology that is reflected in that for

5 TRM was a 200-megawatt-- They reflected 200 megawatts for

6 TRM at that time, is that right?

7 A That's correct.

8 Q Do you know how Idaho came up with that 200-

9 megawatt figure?

10 A Yes, based on my analysis of this case, they used

11 an averaging methodology which averaged adverse and

12 beneficial loop flows over the month of July, 1998.

13 Q Do you think that methodology is an appropriate

14 methodology for determining TRM?

15 A No. As I have stated in my testimony, I do not.

16

17

18

19

20

21

22

23

24

25

480

1 Q And that is methodology Idaho used to evaluate

2 APS's request for service?

3 A That's their initial methodology they used to

4 support the 200 megawatts that went into this peak analysis.

5 MS. HUNTINGTON: That's all.

6 MS. GOVAN: Your Honor, I have a few questions on

7 redirect.

8 REDIRECT EXAMINATION

9 BY MS. GOVAN:

10 Q With respect to the methodology that Idaho

11 initially used to arrive at their TRM component of the July

12 peak analysis, although they proposed to change that

13 methodology, what is your position with respect to the

14 appropriate methodology for calculating TRM, and what level

15 of TRM do you think is appropriate?

16 A I'll answer your first question.

17 MS. HUNTINGTON: I'm sorry, I have an objection

18 to that question as beyond the scope of the cross-

19 examination.

20 MS. GOVAN: I thought you were asking about the

21 methodology that Idaho used with respect to the July peak

22 analysis.

23 I was just asking him-- You asked him whether he

24 agreed with it, and I would like to find out, if he doesn't

25 agree with it, what methodology does he support and what TRM

481

1 does that support.

2 MS. HUNTINGTON: He has already testified that it

3 is not appropriate. I only asked about the methodology

4 Idaho used in initially evaluating APS's request, not the

5 methodology Idaho used in their submittal.

6 MS. GOVAN: Your Honor, the purpose for staff

7 filing testimony in this case is to determine what the

8 appropriate level of TRM is.

9 To leave the suggestion that Idaho put forth a

10 methodology that we did not agree with doesn't mean we don't

11 necessarily agree with that level of TRM being used.

12 PRESIDING JUDGE: But, as Ms. Huntington points

13 out, that is in your witness's direct testimony, and your

14 question does exceed the scope of her cross-examination.

15 She specifically limited her cross-examination to

16 whether the witness thought that single methodology that was

17 used was appropriate.

18 She, I assume, purposely did not go into what the

19 appropriate one would be, because she didn't necessarily

20 want to hear that--

21 (Laughter.)

22 PRESIDING JUDGE: --and since she was already

23 aware that, from his direct testimony, so I am going to

24 sustain the objection. It is already in the record.

25 MS. GOVAN: I know it is. So is his position

482

1 that he didn't agree with the methodology.

2 BY MS. GOVAN:

3 Q Mr. Mabry, did the methodologies that Idaho

4 initially used overstate TRM?

5 A No, it didn't. In fact, the revised methodology,

6 which I supported, provides even more justification for a

7 higher TRM value.

8 MS. GOVAN: Thank you, Your Honor. No further

9 questions. Your Honor, we would like to move into evidence

10 the exhibits identified as Exhibit S-7 and S-8.

11 PRESIDING JUDGE: Is there any objection to

12 receiving into evidence the exhibits previously marked for

13 identification S-7 or S-8?

14 (No response.)

15 PRESIDING JUDGE: Hearing none, the exhibits

16 previously marked for identification S-7 and S-8 are

17 received into evidence at this time.

18 (Exhibit Nos. S-7 and S-8 are

19 received.)

20 (Witness excused.)

21 PRESIDING JUDGE: Is that it? Well, we did get

22 done.

23 MR. MORGANS: Your Honor, we do have-- Both Mr.

24 McGrane and I have a correction to an exhibit that both of

25 us admitted into evidence, or we had admitted into evidence.

483

1 We discovered there was a transcription error in

2 a tape recording, and we wanted to correct the exhibits.

3 PRESIDING JUDGE: What are they?

4 MR. MORGANS: For Idaho Power, it concerns

5 Exhibit IPC-13, page 16, line 13. The sentence should end

6 at the words "nomogram A" and the words "at Idaho" should be

7 struck.

8 In its place should be put the words "I don't

9 know, semicolon" and then, of course, at line 14, the word

10 "We're" should be lower case.

11 PRESIDING JUDGE: Where are we?

12 MR. MORGANS: I have a handwritten change that I

13 could show you. It might be easier.

14 (Handing document to Presiding Judge.)

15 PRESIDING JUDGE: That's fine. Thank you. Is

16 that all?

17 MR. MORGANS: That's it. That's the only change

18 to Exhibit IPC-13.

19 PRESIDING JUDGE: And on APS exhibits, which one

20 is that?

21 MR. MCGRANE: Your Honor, Mr. Morgans has caught

22 me unawares. He had given me a sheet yesterday, and I

23 misplaced it. Here it is -- APS-5.

24 It's the one that's actually referred to in this

25 Idaho Power attachment.

484

1 PRESIDING JUDGE: Where?

2 MR. MCGRANE: It's the same change. It is on Mr.

3 Hagen at the bottom. The last line should read: Borah, or

4 this nomogram A.

5 Then strike "at Idaho" and add-- Put a period

6 after A, and then add "I don't know, semicolon" and change

7 "WEIR" to lower case.

8 MR. MORGANS: Your Honor, I ask that I be

9 permitted to hand two copies of the corrected page to the

10 reporter for inclusion in the official record.

11 MR. REUSCH: Your Honor, may we have the page in

12 Exhibit APS-5?

13 MR. MCGRANE: Page number eight.

14 PRESIDING JUDGE: Are there any other

15 housekeeping matters to take care of?

16 MR. MCGRANE: Your Honor, can we go off the

17 record?

18 PRESIDING JUDGE: Certainly.

19 (Discussion off the record.)

20 PRESIDING JUDGE: Go back on the record, please.

21 I am going to require transcript corrections to be submitted

22 within 10 days of today.

23 Please submit only substantive and important

24 transcript corrections. There is no need for minor or

25 typographical corrections.

485

1 I do want to establish a briefing schedule, but,

2 before we do that, I want to emphasize the brief format must

3 follow the joint statement format, which should be easy in

4 this case, because there are only three main issues.

5 I refer the parties to the hearing rules,

6 particularly my rules 1C and 6A.

7 Nonconforming briefs will not be accepted, and no

8 extra time will be granted to correct them.

9 Also, I think it would be appropriate in this

10 case to establish page limitations, which we will also do,

11 and, before we adjourn, I do want to emphasize that the

12 briefs should contain appropriate signals on citations as

13 well as accurate citations to authorities, exhibits, and to

14 the transcript.

15 Evidence should be accurately characterized and

16 not used out of context. I do want to emphasize that the

17 parties' credibility and your ultimate client satisfaction

18 will decrease in direct proportion to any unreliability you

19 demonstrate in your written briefs.

20 Do we have proposals for page limitations on the

21 briefs? Ten pages?

22 (Laughter.)

23 PRESIDING JUDGE: Any proposal?

24 MR. MCGRANE: Initial briefs 50 pages, Your

25 Honor?

486

1 PRESIDING JUDGE: Do you need 50 pages?

2 MR. MCGRANE: That's safe, at least.

3 PRESIDING JUDGE: Why don't we make it 35. Is

4 that inadequate?

5 MR. REUSCH: For reply briefs?

6 PRESIDING JUDGE: For initial briefs. Reply

7 briefs, I am hoping, are going to be much shorter than that.

8 35? Not adequate?

9 MR. MCGRANE: Your Honor, I'd just as soon try to

10 have 50 just to make sure we have enough.

11 PRESIDING JUDGE: 50?

12 MR. MCGRANE: We'll try to do it as short as

13 possible.

14 PRESIDING JUDGE: 50. Replies?

15 MR. MCGRANE: 30?

16 MR. RASKIN: I was going to say 20, but I'll

17 accept 25.

18 PRESIDING JUDGE: 25 sounds good to me.

19 MR. MCGRANE: That's fine, Your Honor.

20 PRESIDING JUDGE: Briefing schedule.

21 MR. REUSCH: February 25, Your Honor, for

22 initial. March 16 for reply briefs.

23 MR. MCGRANE: Actually, Your Honor, we were

24 thinking of something shorter than that.

25 Because of our desire to try to get at least some

487

1 resolution of this in time for some action by the summer

2 season, we have already lost one whole summer season.

3 PRESIDING JUDGE: Let me ask you this. We did

4 touch on it briefly many months ago, but I have forgotten,

5 quite frankly.

6 I know that you want a decision, whatever way it

7 goes, as soon as possible. What are all the parties'

8 estimations of the last date on which my decision will be

9 meaningful as far as--

10 MR. MCGRANE: It depends on which way you rule,

11 Your Honor.

12 (Laughter.)

13 PRESIDING JUDGE: If I rule in favor of Idaho, I

14 l guess I could do it anytime.

15 MR. MCGRANE: That's correct.

16 PRESIDING JUDGE: If I were to rule in favor of

17 APS, what is the outside? No matter how I rule, that's when

18 I will try to issue the decision.

19 MR. MCGRANE: As a practical matter, Your Honor,

20 the summer will start in May--May 1st--the summer season.

21 That's when this transmission begins to have value.

22 Again, we would be paying on an annual basis for

23 stuff that's valuable over the summer season, so, even if a

24 few weeks' delay--

25 Actually, if you'll look at it in the context of

488

1 a delay into that summer season, makes a big difference.

2 PRESIDING JUDGE: So where does that leave us?

3 MR. MCGRANE: What I was suggesting is a schedule

4 of the 18th for initial brief.

5 PRESIDING JUDGE: I am talking about the ID.

6 MR. REUSCH: Your Honor, we went through some

7 kind of an analysis with Judge Cintron in the RA docket, and

8 the Commission had asked that it be available for a March

9 29th Commission meeting.

10 They requested that Judge Cintron have a decision

11 to them by sometime around February 15th, so I have a six-

12 week period there.

13 Assuming the Commission were to act within six

14 weeks, it would seem to me, if the summer season starts

15 around June 1st, you would need an initial decision by April

16 15th or so.

17 MR. RASKIN: And that doesn't count the briefing

18 schedule.

19 MR. REUSCH: The Judge is asking-- My

20 interpretation of what the Judge is asking is when does he

21 need to have his initial decision issued.

22 PRESIDING JUDGE: I don't need to have my initial

23 decision issued at a time that-- This is not an expedited

24 case.

25 But, as a practical matter, I am going to

489

1 expedite it, because, assuming I grant some relief, it's not

2 going to be effective if I do it in July.

3 MR. RASKIN: Either way you go, Your Honor, I

4 assume, if you rule for us, they are going to appeal that to

5 the Commission.

6 So, either way you rule, I agree with you. You

7 need to rule quickly.

8 MR. MCGRANE: Yes, Your Honor, and, frankly, if

9 you rule in our favor, we will immediately bring the ruling

10 to the attention of the Commission and ask for some sort of

11 expedition--some further actions that may be extraordinary

12 relief.

13 PRESIDING JUDGE: Is this going to be a case

14 where, if that happens, then, assuming the Commission found

15 in APS's favor--and I assume that will be appealed--what

16 does APS get out of that?

17 MR. MCGRANE: If the Commission rules, presumably

18 we would get service at that point.

19 PRESIDING JUDGE: Do you agree with that?

20 MR. RASKIN: I think a Commission order is final

21 pending rehearing and appeal unless you get a stay grant.

22 PRESIDING JUDGE: So, in this case, it would be

23 effective, and they would get whatever was granted if

24 something was granted, at least in the interim until the

25 rehearing and appeal.

490

1 MR. RASKIN: It depends on what the Commission

2 says in its order, Your Honor. The Commission will decide.

3 PRESIDING JUDGE: It's possible.

4 MR. RASKIN: Yes.

5 PRESIDING JUDGE: Okay, so, taking all that into

6 consideration, I should have an ID by April 15th. Will that

7 do it?

8 I am assuming I can do it. I have,

9 unfortunately-- It's going to be really tough, because I've

10 got two hearings taking up all the month of March.

11 I'll do what I can. I will try. Now,

12 engineering back from April 15th and giving me as much time

13 as I can, what can we do for the briefs?

14 Staff has proposed February 25th and March 16th,

15 and it will help me if somebody or the parties together can

16 come up with a usable background section, so that I don't

17 expend a lot of my time and my law clerk's time coming up

18 with a background.

19 If you can stipulate, that would be ideal, but

20 you may not be able to do that, so we have, on the table

21 February 25th and March 16th, APS indicates that they would

22 like something sooner. What do you propose?

23 MR. MCGRANE: What we had proposed initially,

24 Your Honor, was February 18th for initial briefs, and March

25 3rd for reply.

491

1 What we might do, Your Honor, again, in order to

2 assist, is to extend the date--each of those dates by one

3 week to give us more of an opportunity to come up with a

4 common background that would be useful for Your Honor.

5 PRESIDING JUDGE: So then there would be

6 agreement on the 25th date?

7 MR. MCGRANE: And on the 10th for the reply

8 briefs.

9 PRESIDING JUDGE: How is staff with that?

10 MS. GOVAN: If we could push it-- Mr. Reusch

11 will be out of town that week. If we could push it to the

12 following Tuesday--

13 PRESIDING JUDGE: What would that be, the 16th?

14 MS. GOVAN: No, it would be the 15th--14th.

15 PRESIDING JUDGE: I'm going to set it at the

16 10th. I just have to set it at the 10th, because I am not

17 even going to see it until the 13th, anyway.

18 So, let's make it the 10th. Initial briefs will

19 be due February 25th. Reply briefs, March 10th, and, as I

20 said, I'll do my best to get an ID out by April 15th,

21 although I can't guarantee anything. Complaints?

22 (No response.)

23 PRESIDING JUDGE: Anything else anyone would like

24 to raise?

25 MR. MORGANS: Do we need to move the admission of

492

1 those corrected pages to IPC-13?

2 MR. MCGRANE: Actually, Your Honor, I have some

3 pages. These are replacement pages to APS-5.

4 MR. MORGANS: I'd ask that the replacement page

5 16 to IPC-13 be admitted into evidence.

6 PRESIDING JUDGE: Is there any objection to the

7 replacement pages indicating the corrections already made on

8 the record--strike that--being admitted into evidence?

9 MR. MCGRANE: Your Honor, does that include the

10 APS-5 corrections?

11 PRESIDING JUDGE: Yes, it includes for the IPC

12 and APS corrections. Hearing none, those pages are admitted

13 into evidence at this time.

14 (Correction Pages for IPC-13 and

15 APS-5 are received.)

16 PRESIDING JUDGE: I believe we stand adjourned.

17 Thank you very much.

18 (Whereupon, at 5:15 p.m., Friday, January 28,

19 2000, the hearing was adjourned.)

20

21

22

23

24

25

493

1 (FERC - ARIZONA PUBLIC SERVICE COMPANY vs. IDAHO POWER

2 COMPANY; DOCKET NUMBER EL99-44-003; WASHINGTON, D.C.;

3 FRIDAY, JANUARY 28, 2000; VOLUME 4)

4 C O N T E N T S

5 WITNESS DIRECT CROSS REDIRECT RECROSS

6 H. Charles Durick

7 by Mr. Weir 294

8 by Mr. Morgans 392

9 Ajay K. Sood

10 by Mr. Raskin 406

11 by Mr. Weir 408

12 Stephanie Miller

13 by Ms. Copsey 453

14 by Ms. Huntington 455

15 by Ms. Copsey 460

16 Willie L. Oxendine

17 by Mr. Reusch 465

18 by Ms. Huntington 467

19 by Mr. Reusch 470

20 Richard Mabry

21 by Ms. Govan 472

22 by Ms. Huntington 474

23 by Ms. Govan 480

24

25 -- continued --

494

1 (FERC - ARIZONA PUBLIC SERVICE COMPANY vs. IDAHO POWER

2 COMPANY; DOCKET NUMBER EL99-44-003; WASHINGTON, D.C.;

3 FRIDAY, JANUARY 28, 2000; VOLUME 4)

4

5 RECESSES: A.M. - 324, 357

6 NOON - 374

7 P.M. - 392, 452

8

9

10 E X H I B I T S

11 NUMBER DESCRIPTION IDENTIFIED RECEIVED

12 APS-53 E-Mail from Dave Hagen, 359 405

13 dated Monday, December 14,

14 1998 to Ron Schellberg and

15 Ajay Sood

16 APS-52 405

17 APS-51 405

18 IPC-1 through IPC-9 406

19 IPC-10 through IPC-12 Prepared direct 408 453

20 Direct Testimony of Ajay

21 K. Sood

22 IPU-1 Prefiled testimony of Stephanie 455 463

23 Miller on behalf of Idaho Public

24 Utilities Commission

25 -- continued --

495

1 (FERC - ARIZONA PUBLIC SERVICE COMPANY vs. IDAHO POWER

2 COMPANY; DOCKET NUMBER EL99-44-003; WASHINGTON, D.C.;

3 FRIDAY, JANUARY 28, 2000; VOLUME 4)

4 NUMBER DESCRIPTION IDENTIFIED RECEIVED

5 S-1 through S-6 Direct testimony of 467 472

6 Willie L. Oxendine

7 S-7 through S-8 Prepared direct testimony 474 482

8 of Richard Mabry

9 CORRECTED PAGES FOR IPC-13 and APS-5 492

10

11

12

13

14

15

16

17

18

19

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