20040928Vol I Boise.pdf

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ORIGIN'
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
, Idaho Pu~lc UtfllU.. Qomml8lion
Office of the StoretaryRECEiveD
SEP 2, 7 2004IDAHO POWER COMPANY
Complainant I Boise, Idaho
vs.CASE NO. tpC-E- 04-
CITY OF EAGLE I IDAHO
Respondent.
BEFORE
, .
COMMISSIONER PAUL KJELLANDER (Presiding)
COMMI S S lONER MARSHA H. SMI TH
COMMISSIONER DENNIS HANSEN
PLACE:Commission Hearing Room
472 West Washington
Boise I Idaho
DATE:September 9 I 2004
VOLUME I - Pages 1 - 135
CSB: REpORTING
Constance S. Bucy, CSR No. 187
17688 Allendale Road * Wilder, Idaho 83676
[phone] *[phone]
Email csb(fYspro.net
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For the Staff:Donald Howell, Esq.
Deputy At torney General
472 West Washington
Boise , Idaho 83720-0074
For Idaho Power:Monica B. Moen, Esq.
and Barton L. Kline, Esq.
Idaho Power Company
Post Office Box Boise, Idaho 83707 - 0070
For Ci ty of Eagle:MOORE SMITH BUXTON & TURCKE
by Bruce M. Smith, Esq.
and Susan E. Buxton, Esq.
255 North 9th Street
Suite 420
Boise, Idaho 83702
For Eagle River , LLC:HOLLAND & HART LLP
by B. Newal Squyres, Esq.
Post Office Box 2527
Bo is e , Idaho 8 3 7 0 1
CSB REPORTING
Wilder , Idaho
APPEARANCES83676
WITNESS EXAMINATION BY PAGE
David L. Sikes
(Idaho Power)
Gregory W. Said
(Idaho Power)
Ms. Moen (Direct)
Prefiled Direct Testimony
Ms. Buxton (Cross)Mr. Squyres (Cross)Mr. Howell (Cross)
Commissioner Smith
Commissioner Hansen
Ms. Moen (Redirect)
Ms. Moen (Direct)
Prefiled Direct TestimonyMs. Buxton (Cross)Mr. Howell (Cross)Mr. Squyres (Cross)
Commissioner Hansen
Commissioner Smith
101
103
113
125
127
130
133
CSB REPORTING
Wilder , Idaho 83676 INDEX
PAGE
Premarked
Admitted
Premarked
Admi t ted
Premarked
Admi t t ed
Premarked
Admitted
NUMBER DESCRIPTION
Premarked
Admi t ted
Premarked
Admi t t ed
FOR IDAHO POWER COMPANY:
Marked
1 - City of Eagle, Conditional Use
Staff Report
Premarked
Admitted
2 - Eagle to Star 138 kV Line Options
3 - City of Eagle, Conditional Use
Staff Report
4 - Route options, with costs included
5 - Findings of Fact & Conclusions of
Law , Case No. CU-
10 - Aerial map of Eagle
FOR THE CITY OF EAGLE:
100 - Ci ty of Eagle, Findings of Fact
& Conclusions of Law, October 30,
1995
114 - The 10 - Year Transmission Plans
of the Treasure Valley, etc.
CSB REPORTING
Wilder , Idaho 83676
EXHIBITS
BOISE , IDAHO, THURSDAY , SEPTEMBER 9, 2004 , 9:30 A.
COMMISSIONER KJELLANDER:Good mornlng.
This is the time and place for the technical hearing in
Case No. IPC-E- 04 -, referred to as Idaho Power Company,
Complainant , versus the Ci ty of Eagle.My name is Paul
Kj ellander.To mym the Chairman of today' s case.
right is Commissioner Dennis Hansen and to my left is
Commissioner Marsha Smith.Today' s proceedings are set
for the technical hearing.We have several prefiled
mot ions and i t would be my desire to first move to the
appearances the part ies and 1 e t 'begin wi th the
Complainant.
MS.MOEN:Appearing on behalf Idaho
Power Company is Monica Moen.
COMMISSIONER KJELLANDER:The mi rophone s
for those of you who have not appeared at the Commission
before require that you touch them and a little red light
will come on.When the red ight comes on , just speak
clearly.When your done, though, please turn it off.
Thank you.
Let I S move now to City of Eagle.
MR. SMITH:Good morning, Mr. Chairman.
I m Bruce Smi th , Moore Smi th Buxton & Turcke , on behal
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of the City of Eagle.
MS. BUXTON:Mr. Chairman , I'm Susan
Buxton , al so Moore Smi th Buxton & Turcke, on behal f of
the City of Eagle.
COMMISSIONER KJELLANDER:And is it your
intent to do cross-examination as well?
Tha t is correct.MS. BUXTON:
Okay.COMMISSIONER KJELLANDER:Let'
move now to Eagle River , LLC.
Good morning, Mr. Chairman.MR. SQUYRES:
My name is Newal Squyres.m with the firm of Holland &
Hart here in Boise and we re here on behalf of Eagle
Ri ver , LLC.
COMMISSIONER KJELLANDER:Thank you, and
let's move now to the attorney representing the Staff of
the Idaho Public Utilities Commission
Mr. Chairman , I'm DonaldMR . HOWELL:
Howell , Deputy Attorney General, representing the
Commission Staff.
COMMISSIONER KJELLANDER:I think the
first motion that we would like to take up would be the
motion to dismiss that was filed earlier this morning
9: 23 and we'll begin with the City of Eagle.
Thank you, Mr. Cha i rman .MR. SMITH:
Again , Bruce Smith on behalf of the City of Eagle.The
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motion that we filed this mornlng to dismiss is a
jurisdictional procedural motion.Our percept ion is that
what is going on here is that the Power Company
seeking to challenge a conditional use permit denial
decision by the City of Eagle.The proper procedure for
challenging the denial of its CUP application is through
the Administrative Procedure Act as dictated by the
legislature and Ti tIe 67.That is what the Power Company
should have done if they did not like the decision on the
They did not do that.CUP.
This case is unique and it's unique
because of some of these procedural questions.Wha t the
Power Company is asking you to do is reconcile three sets
of statutes:Title 50 which deals with municipal powers;
Title 61 which deals with utility regulation; and Title
67 which deals wi th the Land Use Planning Act.
part i cuI ar , we've got even in the Power Company'
submittals, we all recognize that there are two statutes
that come into play here:50-328 which deals and
legislates to the City authority to regulate transmission
lines through the City; up against that is 67-6528 which
deals wi th the problem that we have when decisions by a
governmental agency conflict with a specific decision
issued by the Public Utilities Commission , so we've got
this interface between Title 50 and Title 67 to deal
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with.
Now, if you look at 6528, it says that
a utili ty has been ordered to do something pursuant to a
specific order issued by this body, then a decision by
any other agency under Title 50 in particular is null and
void insofar as it conflicts with the order issued by the
Commission.The key thing here is that the Commission
has not issued any specific order and what we've got is a
dispute between the Power Company and the City of Eagle
over pole heights and cost allocation for underground
burial of transmission lines.
Idaho Power by filing its complaint
asking you to now create the conflict between the City
decision and a decision by this body.There has been no
specific order issued by the Commission regarding these
issues.What has happened is that the process has been
turned around.The legislature set out a process in
these statutes by which conflicts get resolved and that'
in 6528.What it requires, though , is that the
Commission have issued an order , so what the Power
Company did was go to the City first and ask for a
conditional use permit and eventually that permit was
denied , so now that the permit has been denied, instead
of appeal ing it through the APA provi ions, they come to
the Commission seeking a different order from the
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Commission that effectively negates the decision by the
Ci ty .
The process that we think should be taking
place is for the Commission to issue an order , then the
Power Company would come to the ci ty, apply for a
condi tional use permi t, the Ci ty would then have
available to it the order issued by the Commission in
which to review and to make sure that the processing of
the conditional use permit is consistent with the PUC' s
order.That's why thisThat's not what took place here.
matter , whether it's before you or in the three to four
years that has taken place outside the Commission , has
taken such a bizarre set of twists and turns.The City
is processing a conditional use application under its
authority, under its ordinances , under its regulations
and it's doing so in a vacuum of any decision or devoid
of any decision by the PUC.
It has no way of knowing what the PUC' s
thoughts are, what the orders are, what the PUC would
dictate to the Power Company, so the Ci ty gets a
conditional use application and it's got to process
and the only thing it's got to process it with is its
ordinances and its procedures; therefore, we don't think
today's hearing in the context of challenging the City
conditional use application decision is appropriate.
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That's why we filed the motion to dismiss; however , I
recognize that you may choose to proceed wi th the hearing
and subsequently issue an order and if you do that, the
Ci ty would ask that in that order , you respect the
sovereignty and the authori ty of the Ci ty as expressed
under Title 50 to process its conditional use
applications in light of the Commission's order, and what
that means is that if you issue an order to the Power
Company directing them to whatever it is that they'
requesting and the Commission agrees with it that they
come to the Ci ty wi th that order , apply for a condi tional
use permit and the City will process that permit
consistent wi th the PUC' s order.
I would close with just saying the City
had no direction from the PUC, nor did the Power Company.
All we had was a conditional use application , we
processed it pursuant to our authorities and the only
thing that we had to deal wi th there was the demands by
Idaho Power which conflicted with the interests of the
Ci ty.Thank you.
COMMISSIONER KJELLANDER:Thank you.
Ms. Moen.
MS. MOEN:Thank you, Mr. Cha i rman .With
all due respect to the Commission and the parties
present , Idaho Power received this motion to dismiss
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9: 25 this morning and Idaho Power respectfully requests
that the Commission proceed wi th this hearing, give Idaho
Power the opportunity to react to the arguments made and
to present its posi tion on this motion.
At first blush , the conflict that Idaho
Power sees is that the City of Eagle is basically
requesting or suggesting that Idaho Power needs to come
to the Commission prior to extending any transmission
line through any jurisdiction governed by Title 50 of the
Idaho Code and only when the Company bears a particular
order from the Commission does the Company have the right
to go before any jurisdiction that needs to review any
conditional use permit and we will address those issues,
if necessary, in any briefing associated with this.
COMMI S S lONER KJELLANDER:Is there anyone
else who would like to weigh in?
MR. SQUYRES:Mr. Chairman, one comment.
The Ci ty
- -
Idaho Power seeks two routes:the Bypass
route and the State Street route.The Ci ty has not acted
on the State Street route.Idaho Power filed an
application for a conditional use permit on the State
Street route, that application was withdrawn , so the only
conflict that could arise out of the proceedings today
based on the Ci ty' s motion is wi th respect to the Bypass
route; so if the Commission orders the State Street
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COLLOQUY83676
route , then we would be in exactly the position that the
City suggests which is that the Commission would have
acted first to order the State Street route, then that
order could be taken to the Ci ty and a condi tional use
permit issued consistent with the first order from this
Commission.
Thank you.
COMMISSIONER KJELLANDER:Thank you.
Mr. Howell.
Thank you, Mr. Cha i rman .MR . HOWELL:
the City points out, under their authority under 50-328,
the City has the authority to regulate the erection and
placement and removal of utility transmission systems.
That City Code at 50-328 was enacted in 1967.The Land
Use Planning Act was enacted in 1975.The Land Use
Planning Act in 67-6528 has the statute that Idaho Power
has said has brought it to the Commission's doorstep and
that statute, al though not a model of clari ty, does say
that the Commission -- that a utility can seek an order
and if that order is in conflict with a city or county
order promulgated under either the city's authority under
Title 50 , county's authority under Title 31 or the Land
Use Planning Act under Title 67 and the Commission'
order is in conf 1 i ct wi th the act ion of the c i t Y , then
that action of the city may be "null and void if prior to
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COLLOQUY
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entering said order the PUC has given the effective
government agency an opportuni ty to appear before or
consult with the Commission with respect to such
conflict.
Now , it seems to me that what Idaho Power
is asking you to do is for an order.Now , whether that
sets up a conflict remains to be seen.Clearly, the
advocacy and the positions of the parties are in
conflict.The other thing that troubles me somewhat is
the timing of the motion to strike.If the Commission
were to look at its Order 29465 on page 2 which set out
the parties' schedule , we convened or the Commission
convened a prehearing conference in this matter on March
the 31st.The parties agreed to this schedule that we
are now embarking in.The Commission's Order
specifically at page 2 says, "The parties proposed that
the Commission adopt the following schedule to process
this case.
Now , if the City thought that the
Commission had to issue an order first , that's what we'
doing or that's what the parties are seeking, but if they
thought that this process was jurisdictionally defective,
why have they waited until 10 minutes in front of the
hearing to tell you that?The City agreed to this
process.All the parties here agreed, wi th the exception
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COLLOQUY83676
of Eagle River which wasn't a party at the time, to this
process and this process is what brings us here, and
think with that, Mr. Chairman , I'll conclude.
COMMISSIONER KJELLANDER:Thank you.
Mr. Smi th, any response to what you'
heard?
MR. SMITH:Yes, Mr. Chairman.With
regard to the Power Company s request to be able to
respond , I have no problem with that.I am fully
cognizant of the problems associated with last-minute
filings and as a matter of fairness, which we believe all
hearings should be fair , let them have a shot at
responding to this.
With regard to Mr. Howell's comments, I am
somewhat empathetic wi th that because these issues, some
of these issues, have evolved; however , jurisdiction
one of those issues that can be raised at any time.For
purposes of appeal, we are raising it now so as to
preserve the record if this case goes up to the Supreme
Court; so wi th all due respect to the Commission , we
apologize for filing it late, but we have no choice but
to raise that at this point and the fact is that we
appear here because we were sued and we have to raise the
jurisdictional question for you with regard to these
issues and yes, we have a schedule.
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There are things that happen during
litigation that schedules don't necessarily fit, so if
the Commission Staff and counsel needs time to respond to
this motion , I fully understand.I am fully in agreement
that they should have that time.These questions of
jurisdiction , we've been looking at them , trying to
figure out if in fact this does apply.We think it does.
We feel it is our duty to bring this to the Commission'
attention and we will respect any decision you issue with
regard to this motion and we're fully prepared,
necessary, to go forward wi th the hearing today.
Thank you.
COMMI S S lONER KJELLANDER:Thank you.
Mr. Smith , just one question that I have and if other
Commissioners would like to ask a question , I'm curious
on the last
- -
page 4 of your motion in the paragraph
before the heading Conclusion there I s a sentence that
begins "Nor is there any statutory authority allowing
the PUC to assess a surcharge against the Ci ty.
question is what surcharge is being proposed within this
that we would somehow impose upon the City?
MR. SMITH:I think that was thrown in
a caveat because of the Power Company's pleadings in this
case in which they are suggesting that the Ci ty would
bear the cost of any burial of underground transmission
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and distribution lines, and one of the things that
they've indicated was that we could pay for it through an
LID or through a surcharge and again , appreciate the
vacuum in which we are operating.The City is looking at
a condi t ional use appl i ca t ion.In that conditional use
application, I don't believe there was anything, as I
recall, that dealt with a surcharge by the Commission.
COMMISSIONER KJELLANDER:Are there any
other questions?Commissioner Smi th.
COMMISSIONER SMITH:Yes, Mr. Smi th , I
don't know how long it is that you've been pondering
these jurisdictional issues and deciding whether or not
you needed to raise it, but I would just suggest that as
a matter of courtesy to this body you could have filed
earlier so that we could have made a research of the
statutory provisions that you believe are an impediment
and come to our own conclusion before we sat here at this
hearing.It's just courteous to do that.
MR. SMITH:Yes, Commissioner Smith.
Thank you.
COMMISSIONER KJELLANDER:Thank you.
think at this point it would be the pleasure of this
Commission to move forward with the hearing and allow for
the appropriate response from Idaho Power and I believe
it was ment ioned as a brief , but, Ms. Moen , I won't box
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you into that.I f you have some other approach you'd
like to take, let us know the end of the hearing and
we'll accommodate that request.
MS. MOEN:Thank you , Mr. Cha i rman .
COMMI S S lONER KJELLANDER:Thank you.
Let's move on now to the next set of motions that we have
and those are motions to strike.The first one filed was
filed by Idaho Power , so we'll go by the date stamp on
that, but I think it would also be my pleasure since both
of the motions are similar to just handle them
concurrently.Does anyone obj ect to that?
MS. MOEN:No obj ection from Idaho
Power.
COMMISSIONER KJELLANDER:Fine , let'
begin wi th Ms. Moen.
MS. MOEN:Thank you, Mr. Cha i rman .
indicated by Mr. Howell , in March of 2004 , the parties at
the direction of the Commission established a schedule
which determined the manner in which this particular
matter was going to proceed, and included in the
Company's motion and memorandum , it set forth the varlOUS
dates by which the parties were going to be filing
certain documents with this particular Commission.
As is also common in courses of action
before the Commission , generally the complainant has the
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opportunity to submit the first information and also to
file rebuttal testimony in response to any of the other
information that has been filed by the other parties.
this particular case, Idaho Power had the obligation to
submit rebuttal testimony on August 16th.That was
subsequently changed to no later than August 6th or 7th
(sic) The Company did timely file its rebuttal
testimony.On August 7th (sic), Idaho Power received the
rebuttal testimony of the City of Eagle, contrary to the
schedule set out and approved by the parties and also by
this particular Commission - - I'm sorry, September.
Idaho Power respectfully requests under
these circumstances that the rebuttal testimony submitted
by the City on September 7th be stricken.If the
Commission is not inclined to strike that testimony,
Idaho Power respectfully requests that it be given the
opportunity consistent with the procedure before this
Commission to provide live rebuttal testimony or
surrebuttal of the rebuttal testimony filed by the City
of Eagle just a couple of days before this proceeding.
Thank you.
COMMISSIONER KJELLANDER:Thank you, Ms.
Mr. Howell.Moen.
Thank you, Mr. Cha i rman .MR . HOWELL:
not going to belabor the point, except page 2 of my
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motion to strike does set out the Staff's reasons why the
rebuttal and supplemental testimony of Mr. Teinert and
Dr. Reading should be stricken.Clearly, the
Commission's schedule, again, that all parties agreed to
did not contemplate any rebuttal filing by the City and
if you were to look at the rebuttal filing, you will see
that what they're rebutting is not the Complainant in
this case but the Staff, and as I point out on page 2 of
my motion , the City in this case as well as the Staff
both filed subsequent motions asking for extensions of
time in which to file.The Staff had requested July
Oth.The Ci tyOur motion was filed before the City'
filing their motion about five days after us asked for an
extension of time until July 2nd , so as of that time, the
Ci ty was well aware that what the Staff was asking for
was to file on July 30th after the City.
Now , what's not explained in any way or
manner lS why the City first disregarded the schedule and
second, feels the need or that it's appropriate to file
rebuttal or supplemental testimony directed at the Staff.
Probably more importantly in this case as we set out
again in our motion, the City's rebuttal testimony was
filed 41 days after the Staff filed its testimony.
barely - - we received it the day before yesterday.
have barely had time to go into the details of that.
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think it's prejudicial to the Staff's position and case
in this matter to file rebuttal testimony last minute.
It is not unusual , as the Commission
well aware, to offer parties some latitude with
supplemental , but this is extensive and detailed
engineering-based rebuttal for the most part and I think
it's well within the Commission's discretion to strike
rebuttal testimony if it's out of order or not provided
for in the schedule and with that, I'd close.
COMMISSIONER KJELLANDER:Thank you,
Mr.Howell.Mr.Smith.
MS.BUXTON:Mr.Chairman,my name
Susan Buxton.I'll addre s this one.
COMMISSIONER KJELLANDER:Ms. Buxton.
Again, with all due respectMS. BUXTON:
to the Commission and to all the parties with regard to
this, the Ci ty is certainly a novice wi th regard to any
PUC hearings and any PUC procedures and in agreeing to a
schedule, again as litigation goes on , certain issues
arise that need to be addressed and we would like to make
sure that we provide the Commission with all the
information and all of the positions that the City may
have with regard to the petition filed against it in this
matter and so we felt that in all fairness that we would
provide what we would otherwise try and provide in live
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cross or somehow to address what Mr. Lobb had said in his
testimony as well as the testimony of Idaho Power , so
that's why we filed it that way, and with regard to the
timing, the timing, I think you need to also understand
what was going on the month of August wi th regard to the
parties.No one was just sitting around with regard to
this matter.
Everybody was trying to work on trying to
get it resolved and the City truly wanted to try and
resolve it , so they spent all of their efforts in doing
Mr. Lobb's testimony was filed on the 30th of July,so.
which was a Friday, and we hustled that next week on the
3rd and 4th of August to try to get together a meeting
wi th all the parties to try and see what we could work
That meeting was held on the 4th of August and out.
that meeting, everybody decided to try and take a time
out and try and work on this, so Idaho Power was directed
by Mr. Howell to come back to the parties on the 18th
August wi th some information for a method by which to
work these things out.
There was extensive work done all day on
the 20th of August and all the way through the week of
the 24th and 25th of August to try and see what we could
work out and ultimately were unable to come to an
agreement, but it was not a si tuation where the Ci ty was
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just sitting on its hands, and the City's staff and
experts as well as attorneys were working with all the
other parties to work this out.The City is not trying
to sandbag anybody.The City is trying to address these
issues.The City thinks that there is some information
that needed to be clarified with regard to what Mr.
Lobb's understanding of the Ci ty' s posi tion was.The re
were a lot of documents that were filed with the direct
testimony as well as in discovery in this matter , so we
felt that it was only fair to everybody to provide that
information as quickly as we could.
Yes, it did come on the eve of this
hearing and we do apologize for that , but at the same
time, we do not have any problem wi th agreeing to Idaho
Power 's al ternati ve to allow them to provide any live
rebuttal testimony they would like to provide today with
regard to that and if they would like to provide even
surrebuttal , written rebuttal , and present that to this
Commission later , we wouldn't obj ect to that ei ther.
just were trying to be fair , trying to make the record
clear what the City's position is and what the City'
concerns are and how the City has addressed this
conditional use permit, and as Mr. Smith has already
described the problems the Ci ty has had in trying to deal
with this type of application and in trying to work
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through these issues, we only felt that that would be the
most full and fair disclosure to this Board , so with
that.
. .
COMMISSIONER KJELLANDER:Thank you.
Mr. Squyres , is there anything you would
like to add?
MR. SQUYRES:No, nothing to say.
COMMISSIONER KJELLANDER:Okay.
Ms. Moen.
MS. MOEN:I have no further comments
Mr. Chairman.
COMMISSIONER KJELLANDER:Mr. Howell.
MR . HOWELL:Nothing further.
COMMISSIONER KJELLANDER:Ms. Moen , if we
do decide to allow the rebuttal to remaln on the record
and give you an opportunity to put up a witness to
respond to that, do you have any preference as to how
you'd like to proceed if that were an option?
MS. MOEN:m not quite yet familiar with
the order in which the Commission intends to proceed wi
respect to wi tnesses, but I presume Idaho Power would be
permitted to present its case in chief followed by the
other parties , at which time Idaho Power would be
permitted to present its rebuttal testimony, then we
would be presenting the rebuttal testimony of the City
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and it would be at that time that I believe Idaho Power
should have the opportuni ty to introduce a wi tness to the
Commission to respond to rebuttal testimony filed by the
Ci ty
COMMISSIONER KJELLANDER:Okay.I think
at this point
- -
are there any questions from members of
the Commission?Commissioner Hansen.
COMMISSIONER HANSEN:Yes, Ms. Buxton, I
just had a question I wanted to clarify.Are you saying
at the prehearing conference you didn't understand the
hearing process here at the PUC?
MS. BUXTON:Mr. Commissioner , I'd be
happy to address that.At the time it was very difficult
for us to try and even schedule the prehearing
conf erence I was in the middle of a seven-week jury
trial in Federal Court.That was during a break week and
I think it was, ike, a Friday or something and we did
coming to the meeting in order to set a schedule.
that meeting the Ci ty did not agree to being subj ect
the proceedings.We were sued, so we were here to try
and set up a schedule, and that being said, in reviewing
your own rules, I mean , we certainly have reviewed your
rules , one of the things that comes to my mind in looking
at that is that one of the things that we think that you
look for is to try and get written testimony whenever
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possible instead of trying to present that in a
cross-examine situation during the hearing, so agaln,
with regard to the scheduling
- -
and I also don't quite
understand because I'm more used to regular litigation
that if testimony comes in that it needs -- there's other
rebuttal for that there is also an opportunity to do that
to make a record in case there's information that needs
to be rebutted.
And additionally, I would also like to say
that with the rebuttal testimony we just received on
September 7th from Idaho Power , there is new information
with regard to the direct testimony that was made.
Mr. Sikes brings in new arguments wi th regard to a study
that while we did receive it in discovery in June, he did
not ever address that Star area study in his direct
testimony, so that's new information with regard to his
rebuttal testimony as well as the information regarding
the events in August , the load events that he was talking
about in his rebuttal which is also new testimony that we
feel that the City should have the opportunity to
address.
COMMISSIONER HANSEN:But at the
prehearing conference did you realize that Idaho Power
was going to provide rebuttal?
MS. BUXTON:Certainly.
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83676
COMMISSIONER HANSEN:And did you real i
you had agreed not to provide any supplemental or
rebuttal testimony at that time?
MS. BUXTON:I did not realize that by
participating in that scheduling conference that the City
would be precluded from providing rebuttal testimony and
I did not understand that that scheduling conference
funct ioned in such a manner.
COMMISSIONER HANSEN:Thank you.
COMM IS S lONER KJELLANDER:Thank you
Commissioner Hansen.
Are there any other questions?If not , it
would be the Commission's pleasure at this time to take a
short recess to deliberate on the motion and then return.
It would be my recommendation for none of you to leave
your seats.
MR. SMITH:Mr. Chairman , may I make one
more comment?In response to Commissioner Smith'
comments about filing this late motion, none of the
parties here today show up not having invested a great
deal of time and energy in trying to resolve this.
don't think any of us are particularly happy about having
to bring this dispute to the Commission.The Power
Company, their staff , their attorneys, Mr. Howell
Mr. Lobb, the Ci ty have invested huge amounts of time
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COLLOQUY
83676
trying to avoid this and everybody worked extremely hard
to do that.
I compliment the Commission Staff on all
the effort that they put into it, so I hope that somewhat
sets the stage for why we are here today.It is because
we have this conflict.We have to deal wi th these
lssues.As Mr. Howell pointed out, some of these things
are not models of clarity, so Commissioner Smith, for the
late filing on the motion to dismiss , I apologize
directly, but I want you to understand how it is we got
here today and the effort and investment everyone has
made prior to getting here.
Thank you.
COMMISSIONER KJELLANDER:At this point
we'll take a short recess and we'll be back momentarily.
(Recess.
COMMISSIONER KJELLANDER:And we're back
on the record.It clearly is within the Commission'
discretion to strike the testimony that has been filed
rebuttal by the City of Eagle; however , given the fact
that we're all here , given the fact that we've all had an
opportuni ty to read it and given the fact that the
Complainant is willing to put up some live rebuttal as
well as Staff in response to the rebuttal testimony that
was late filed , the Commission is going to allow that
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Wilder, Idaho
COLLOQUY83676
testimony to be placed on the record , but the Commission
is going to require the City to put both its direct and
rebuttal on simultaneously and we're going to allow Idaho
Power to decide when it would like to put on its live
rebuttal or if it would be like to be live at all since
it does have some discretion and option.
We also look at our calendar and note that
tomorrow is wide open, so if for some reason there needs
to be some additional time, we do not want to put Idaho
Power at an extreme disadvantage given the situation we
f ace today.The same goes wi th Staff in reference to
live rebuttal.If it would like to do it simultaneous
that is certainly within its prerogative, just let us
know in advance; however , if there's a need for any live
rebuttal to be used as a follow-up, you can pick the time
in which that makes good sense and apprise the Commission
sometime during the hearing.
Are there any other preliminary matters
that need to come before us?Ms. Moen.
MS. MOEN:This may not be the appropriate
time, but when we get into the beginning of the hearing
on this matter before us , Idaho Power does have one
exhibi t that the parties have stipulated to and I'd to
just put that on the record.
COMMISSIONER KJELLANDER:Certainly.
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there anything else that needs to come before the
Commission before we begin?
If not, then , Ms. Moen , if you would like
to call your first wi tness.
MS. MOEN:The first witness is David Kip
Sikes.
While Mr. Sikes is taking his seat , I
would respectfully request that Idaho Power submit to
this body its Exhibit No. 10 which is an illustration of
the proposed routes and the parties have all stipulated
and consented to the use of this exhibi t
COMMISSIONER KJELLANDER:Okay.
DAVID L. SIKES,
produced as a witness at the instance of Idaho Power
Company, having been first duly sworn , was examined and
testified as follows:
DIRECT EXAMINATION
BY MS. MOEN:
Mr. Sikes, would you please state your
full name and spell your last name for the record?
David L. Sikes , S-k-e-s.m also known
as Kip, K- i -p, as a first name.
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SIKES (Di)
Idaho Power Company83676
you work.
Power?
And Mr. Sikes, please identify for whom
I work for Idaho Power Company.
And in what capacity do you work for Idaho
I am the team leader of the distribution
planning department as well as the customer and load
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Wilder , Idaho
research department.
And could you please identify for this
body your business address?
1221 West Idaho Street , Boise, Idaho.
And Mr. Sikes, have you previously filed
written direct testimony consisting of 21 pages and
Exhibits 1 through 5 on behalf of Idaho Power Company in
Yes , I have.
Do you wish to make any corrections to the
written testimony that you prefiled?
No.
If I were to ask you the same questions
today that are contained in your prefiled testimony,
would your responses to those questions be the same?
Yes, they would.
MS. MOEN:I move that the prefiled
testimony of David L. Sikes consisting of 21 pages be
this matter?
SIKES (Di)
Idaho Power Company83676
spread on the record as if read in its entirety and that
Exhibits 1 to 5 be marked for identification.
COMMISSIONER KJELLANDER:Wi thout
obj ection, the testimony will be spread across the record
as if read and the exhibi t s wi 11 be admi t ted .
(Idaho Power Company Exhibi t Nos. 1- 5 were
admi t ted into evidence.
MS. MOEN:I further request that Exhibit
10 be marked for identification.
COMMISSIONER KJELLANDER:And without
objection , it will be marked and also admitted.
(Idaho Power Company Exhibit No. 10 was
marked for identification and admitted into evidence.
(The following prefiled direct testimony
of Mr. David L. Sikes is spread upon the record.
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Wilder, Idaho
SIKES (Di)
Idaho Power Company83676
Please state your name and business address.
My name is David L. Sikes and my business
address is 1221 West Idaho Street , Boise, Idaho.I am
also known as Kip Sikes.I would like to disclose that
my personal residence is at 1577 N. Chaucer Way in Eagle,
located north of Floating Feather Road , between
Ballantyne Lane and Meridian Road.I am not personally
or directly affected by any of the proposed facility
routes under consideration in this case.
By whom are you employed and in what capacity?
I am employed by Idaho Power Company as the
Leader of the Distribution Planning and Customer & Load
Research Departments.
Please describe your educational background.
In May of 1982, I received a Bachelor of
Science Degree with honors from the University of Idaho
in Electrical Engineering.I have also taken
non-matriculated graduate level courses.In 1991 , I took
and passed the Professional Engineer's exam and I am a
licensed engineer in the State of Idaho.
Please describe your work experience wi th Idaho
Power Company.
During my college education , I was employed at
Idaho Power Company for three consecutive years as a
summer engineering student.Upon my graduation in 1982
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SIKES (Di)
Idaho Power Company83676
the Company hired me to work in the System Planning
Department where I participated in both distribution and
transmission
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Wilder, Idaho
SIKES (Di)
Idaho Power Company83676
planning.I performed system studies for new load and
generation requests, provided operations support and
developed most of the methods and approaches currently
used in Distribution Planning at the Company.
Beginning in 1988 until 1991 , I worked as a System
Planning Engineer conducting transmission transfer
capaci ty studies on the interconnected grid.
In 1991, I was promoted to Distribution Planning
Supervisor and was responsible for expansion plans for
substations, distribution and sub-transmission systems.
I was named National Chair of the Edison Electric
Institute Distributed Resource Committee in addition to
having a lead role in development of the Company'
Reliability Management Process.In 1995, those
responsibilities were further expanded due to an internal
re-alignment.I also developed a methodology and
submitted a technical paper on stochastic reliability
assessment on vol tage sags, customer impact and
mitigation methods that was published by the Institute
Electrical and Electronic Engineers.
Beginning in 2001 , my responsibilities were again
increased as the Customer & Load Research Department was
al igned under me.
Please briefly summarlze the present need for a
138-kV sub-transmission line from the vicinity of the
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Wilder, Idaho
SIKES (Di)
Idaho Power Company83676
City of Eagle to the new Star Substation that is located
between Plummer Lane and Highway 16, approximately 625
feet north of Highway 44.
Several years ago, Idaho Power's long-range
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SIKES (Di)
I daho Power Company83676
planning process identified the need for additional
transmission facilities in western Ada County.The areas
around Eagle and Star continue to experience significant
growth.This area is currently served from the east by
the Eagle Substation in downtown Eagle and from the west
by the Lansing Substation located along Highway 44 just
east of Middleton. The Star Substation is complete and
providing limi ted service that is constrained by the
69-kV temporary source.
Historically, both the Lansing and Eagle substations
were supplied by a 69-kV sub-transmission line located
along State Street/Highway 44 between downtown Boise and
Caldwell.Due to increasing growth , the City of Eagle
and the surrounding area required increased capaci ty in
both the Eagle Substation and the 69-kV sub-transmission
ine.This work was completed in 1996 with the addition
of transformer capacity in the Eagle Substation and
conversion of the existing sub-transmission line to
138-kV operation along State Street from the Glenwood
intersection to the Eagle Substation.
The existing 69-kV sub-transmission line between the
Eagle and Lansing substations remained in place for
future upgrade to 138 -kV when required.Additionally, in
the fall of 1999, the Lansing Substation capacity was
upgraded and two distribution feeders were added to
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
support area growth.
The Company's service terri tory in western Ada
County is experiencing substantial real estate
development and commercial growth.Wi th that growth and
development
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
comes rapidly- increasing electrical loads.
Idaho Code ~ 61-302 obligates Idaho Power to serve
those loads in a manner that is efficient , just and
reasonable.Idaho Power has identified the area
surrounding the Ci ty of Star, Idaho as particularly
vulnerable to service degradation because the facilities
serving that area are severely strained by existing and
continuing development.
While growth in the Star area is materializing at a
slightly slower rate due to the smaller size of the
community and the additional commute distances from Star
to the Boise and Meridian commercial hubs, wi
increasing housing costs in Ada County and , specifically,
in the Eagle and Meridian areas, development in Star
accelerating.Furthermore , electric growth in the entire
Meridian-Eagle-Star area has been substantial.
As growth has continued, the distribution feeders
from the Lansing and Eagle substations have reached their
1 i mi t s to serve the area.Numerous distribution proj ects
on feeders from the Eagle and Lansing substations have
been completed in the past five years to support the
growth but, due to the distances and loads involved, they
cannot continue to be reasonably modified.In 1999, the
Company decided to construct the Star Substation by the
summer of 2004 in order to maintain adequate service in
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Wilder, Idaho
SIKES (Di)
Idaho Power Company83676
the area.
Due to delays in siting and permitting the 138-
line to provide service to the Star Substation , the Star
Substation was recently completed with a temporary supply
CSB REPORTING
Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
69-kV from the Caldwell-Lansing line.This was achieved
to provide adequate service through the summer of 2004.
This configuration is expected to only provide adequate
service until early 2005, as the 69-kV line from Caldwell
cannot support vol tage to the Star Substation beyond that
expected load level.
This solution also required additional
reconstruction of some existing lines to re-extend the
69-kV service that had temporarily been operating as a
distribution circui t to support the Star area.These
temporary mi tigation measures would have been unnecessary
had the proposed 138-kV line from Eagle been timely
approved and constructed in accordance wi th ei ther CUP
application filed with the City of Eagle.
Please summarize the history and events
surrounding Idaho Power Company's efforts to construct a
138-kV sub-transmission line from the vicinity of the
City of Eagle to the Star Substation located west of the
intersection of Highway 44 and Highway 16.
As early as 1999, Idaho Power began meeting
wi th the Ci ty of Eagle to discuss the need to upgrade the
existing 69-kV structures that run through the City to a
138 - kV conf igura t ion to provide a source for the proposed
Star Substation and to accommodate continued growth and
development in the Meridian , Eagle and Star areas.The
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SIKES (Di)
I daho Power Company83676
specific facility at issue in this proceeding is a single
pole, single circuit 138-kV sub-transmission line
originating from the Eagle Substation and extending to
the
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Wilder , Idaho
SIKES (Di)
I daho Power Company83676
Star Substation.
To comply with the requirements of the National
Electric Safety Code , a 138-kV line with distribution
line under-build requires structures that will exceed the
City's 35-foot building height zoning restriction.
December 2000, after numerous discussions wi th the Ci
of Eagle planning staff , Idaho Power applied to the City
for a conditional use permit (CUP) for an exception to
the City 's 35-foot height restriction and for the
reconstruction , upgrade and re-routing of an existing
69-kV power line to accommodate a 138-kV sub-transmission
line from the Eagle Substation on State Street west to
Ballantyne Road.See the City of Eagle Application No.
CU-23-00 attached hereto as Exhibit
Representatives of the City of Eagle expressed
dissatisfaction with the visual impact of the 138-
structures in the downtown business district.In an
attempt to reduce the overall height of the structures
and to eliminate the number of visible conductors in the
downtown business district, the Company, in its CUP
application , proposed to replace the existing 69-
structures with the 138-kV line within the existing
corridor containing the 69-kV structures.The Company
also offered to reconstruct a number of distribution
lines along the 69-kV route to an underground
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
configuration from the Eagle Substation to the present
location of Jackson Square at no additional cost to the
Ci ty.
Addi tionally, the Company proposed to bury the
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
overhead distribution lines along the alley located south
of State Street between the Eagle Substation and Eagle
Road and to eliminate the overhead distribution lines
crosslng State Street at Second Street and at Eagle Road.
By burying the distribution lines , the total height of
the 138-kV structures could be reduced by several feet.
The Company met with City planning staff on several
occaslons in the year 2000 to explain and discuss its
proposal.
On February 20 , 2001 , the Eagle Planning and Zoning
Commission conducted a public hearing on the Company'
CUP application.A number of residents testified in
opposition to the proposed 138-kV routing along the
existing 69-kV route.Their opposition was primarily
based on the perceived adverse aesthetics of the line
within the City's downtown business district.At the
February 20 , 2001 , meeting, the Eagle Planning and Zoning
Commission formally recommended that the City Council
deny the Company's application.
Was Idaho Power's CUP application forwarded to
the Eagle City Council for the Council's consideration?
No.In March 2001, the Company withdrew its
CUP application from further consideration by the City of
Eagle.
Why did Idaho Power withdraw its CUP
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
application from City Council consideration?
The City of Eagle suggested that the Company
withdraw its pending CUP application and, instead,
recommended that the Company obtain additional public
i npu t
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
from Eagle residents regarding residents' preferred route
for the 138-kV line through the City.
Did Idaho Power follow this recommendation?
Yes.In April 2002 , Idaho Power formed a
Community Advisory Committee (CAC) to assist the Company
in evaluating potential routes and in identifying
important criteria for selecting the eventual preferred
route.The Company held a series of meetings on April
April 24 , May 22 and June 12 , 2002 with the CAC to
discuss and explain the proj ect scope and need for the
138 -kV line.
In the course of the meet ings wi th the CAC, the
Company received valuable input from the community
representatives regarding the criteria that they believed
were important for rating various line route
al ternati ves.In conj unction wi th the CAC, the Company
conducted quantitative and subjective evaluations of
approximately sixteen different route configurations.
Did the CAC make any recommendations?
Yes.On or about June 12 , 2002 , the CAC first
advised the Company that it preferred that the 138-
line be constructed underground through the City of
Eagle.However , when Idaho Power advised the CAC that
the addi tional cost for underground construction would be
extremely high , in the range of $5-6 million , and that
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Wilder, Idaho
SIKES (Di)
Idaho Power Company83676
by necessity, the additional cost would have to be borne
by the residents of the City, they agreed that the
unde rground
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
al ternati ve was not a viable option.The CAC strongly
advised the Company to avoid locating the line adjacent
to residential properties.
When the CAC considered the potential routes using
overhead construction through commercial areas, the CAC' s
preferred route was to tap the existing 138-kV line at
Edgewood, extend the line to State Highway 44 (the Eagle
Bypass) and proceed west within the Highway
right -of -way through the commercial areas along Highway
44 to Ballantyne Lane.The line would then follow the
existing power line corridor from Ballantyne Lane to the
Star Substation.This line route is identified as
Alternative #1 on Exhibit 2 that is attached hereto.
Once the CAC identified this preferred route,
did Idaho Power solicit any additional input from Eagle
residents?
Yes.Based on the guidance received from the
CAC, the Company sent a newsletter to all of the owners
of property along the alternate routes that were
considered by the CAC.
Did Idaho Power ever submit another CUP
application to the Ci ty of Eagle following the Company'
meetings with the CAC?
Yes.On September 9, 2002 , the Company
submitted another CUP application to the City requesting
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SIKES (Di)
I daho Power Company83676
permission to site the 138-kV line on the CAC-preferred
Eagle Bypass route.See the City of Eagle Application
No. CU-02 that is attached hereto as Exhibit The
Planning and Zoning Commission held a public meeting on
the proposal on October 28, 2002.The hearing was
continued until November 13, 2002 to allow the Commission
to gather addi tional information.
The Planning and Zoning Commission requested that
the City Council authorize funding for a study by an
independent engineering consul ting firm to evaluate the
costs and feasibility of constructing the 138-kV line
underground.The Ci ty hired Black and Veatch to conduct
the study.Black and Veatch is a well-respected
engineering and construction management firm that
conducts significant business in the electric utility
industry.
Black and Veatch's study was presented to the Eagle
City Council on July 15 , 2003.In its study, Black and
Veatch advised the City that 1.6 miles of 138 -
underground construction would cost approximately $9.
million or approximately $9 million more than the
overhead al ternati ve.
Following receipt of the Black and Veatch
study, did the Eagle Planning and Zoning Commission
continue its consideration of Idaho Power's latest CUP
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Wilder, Idaho
SIKES (Di)
Idaho Power Company83676
application?
Yes.On July 15,2003, the City's Planning and
Zoning Commission held a public hearing in which the
resul ts of the Black and Veatch study were considered in
conjunction with the Company's CUP application.
September 8, 2003, the City's Planning and Zoning
Commi s s ion
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Wilder , Idaho
SIKES (Di) lOa
Idaho Power Company83676
issued its recommendation that the City Council deny the
Company's application generally on the grounds that the
line would be unsightly and would have an adverse affect
on the commercial development taking place at the
junction of Highway 44 and Eagle Road.
Did the Eagle City Council consider the
Company I s CUP application following consideration of that
application by the Planning and Zoning Commission?
Yes.On October 14 , 2003, the Eagle City
Council took up the Company's application , including the
Planning and Zoning Commission's recommended denial of
the application.A public hearing was held and testimony
was received.A number of citizens and commercial
developers testified that the Bypass route was
aesthetically unfavorable and, in their opinion, could
adversely affect commercial property values in the area.
The public hearing was continued until October 28,
2003.At the October 28 meeting, the City Council
remanded the application back to the City Planning Staff
for further evaluation of alternatives and information
gathering.At that time, Idaho Power representatives
advised the City Council that construction lead times
would not allow for extensive evaluations.Because four
years had elapsed since Idaho Power's ini tial contacts
with the City on this matter , the situation had become
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
critical.
Did the Company meet wi th Eagle representatives
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Wilder , Idaho 83676
as suggested by the Eagle City Council?
SIKES (Di) lla
Idaho Power Company
Yes.On January 12, 2004 , representatives of
Idaho Power and the City of Eagle met informally with
representatives of the Idaho Public Utilities Commission
Staff to discuss the situation.At the conclusion of the
meeting, Idaho Power agreed to immediately meet with
representatives from the City to address alternative
routes one more time and to present updated cost
estimates for these al ternati ve routes.
On January 21 , 2004 , representatives of Idaho Power
again met wi th the Mayor and members of the Ci ty' s land
use planning staff to discuss the routing alternatives
and their associated costs.A copy of the information
presented to the City at that time is attached hereto as
Exhibits 2 and
What alternatives were presented to the City
the January 21 , 2004 meeting?
As shown on Exhibit 4 , Idaho Power presented
SlX alternative proposals to the City.In developing its
proposals, Idaho Power maintained that, if the Ci
desired to have the line located on a route that
increased the cost to Idaho Power above the level of a
prudent investment, then the City and its citizens should
bear the incremental difference in cost between routing
the line in an overhead configuration on one of the two
current transmission corridors and the cost of
underground construction or
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
overhead construction on one of the more aesthetically
acceptable al ternati ve routes preferred by the Ci ty.
As shown on Exhibi t 4 , al ternati ves 1 , 2 and
invol ve no addi t ional cost to the Ci ty of Eagle.
Alternatives 4 , 5 and 6 involve a contribution from the
City to offset the additional cost associated with the
City's preferred routing.Alternatives 5 and 6 involve
routing the line adj acent to residential properties.
The alternative of constructing the 138-kV line
underground was not discussed wi th the Ci ty at the
January 21, 2004 meeting.If the City wishes to pursue
underground construction , the additional incremental cost
would not be less than $5-6 million and could be as much
as $9 million as indicated in the City-funded Black and
Veatch study.
Did the Eagle City Council take action on the
Company's CUP application , specifically, Case No.
CU - 9 - 0 2 ?
Yes, it did.On March 23 , 2004, the Eagle City
Council denied the Company's CUP application determining
that " (t) he proposed conditional use permit for the
construction of an overhead sub-transmission line and
height exception for utility poles to exceed the maximum
of 35-feet is not in accordance with the general
obj ecti ves of the Comprehensive Plan nor Eagle Ci ty Code
CSB REPORTING
Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
Title 8.See The Findings of Fact and Conclusions of
Law , Case Number
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SIKES (Di) 13a
Idaho Power Company83676
CU-, attached hereto as Exhibit 5, page 12 (emphasis
in original)
Are all six of the options presented to the
City Council on January 21 , 2004 viable today?
No.Options 5 and 6 are no longer considered
viable because of the amount of time required to obtain
rights -of -way for those routes.Considering the
continuing permitting delays, the total distance of those
options and the number of individual property owners with
whom the Company would be required to negotiate the
purchase of rights-of -way, these two routes are not
prudent al ternati ves.
The line is required to be in service in May 2005.
The uncertainty surrounding agreement and approval of any
option prior to fall of 2004 would require pursuing and
purchasing rights-of-way on all possible routes in order
to possibly meet the required in-service date.It is
untenable and unreasonable to expend scarce financial and
technical resources to pursue mul tiple options, of which
only one would be utilized.
In addition , this would unnecessarily require the
residents of the Ci ty of Eagle and surrounding areas to
consider offers which would likely not be pursued.
Furthermore, Options 5 and 6 impact significantly more
residential areas than other options which is in direct
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
contradiction to the guidance and recommendations the
Company received from the Community Advisory Committee
and feedback Idaho Power has received in similar
experiences.
Can Options 2 , 3 and 4 be constructed within
the time remaining?
The Company's current analyses indicate that,
unless the 138-kV line is constructed and available for
service in May 2005 , the risk of service degradation in
the Star-Eagle area in the summer of 2005 is material.
Final design , materials procurement and construction of a
138-kV line, depending on the route, can require a year
or more from start to finish.
Of Options 2 , 3 and 4, only Option 2 is deemed
viable in the time remaining. Options 3 and 4 require
addition under-grounding of distribution circuits that
must be sequentially completed prior to any construction
of the 138-kV facilities.This requires significant
additional construction that must be completed in a very
limited period of time.
Option 2 is also hampered by required reconstruction
of existing facilities already in place while, at the
same time, maintaining service to existing customers.
This requires more expensive and time-consuming work
processes than unencumbered construction along the BypassRoute (Option 1) .
CSB REPORTING
Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
Did the Company consider other al ternati ves
such as converting the 69-kV line from Caldwell through
Lansing Substation to 138-kV operation?
Yes.As part of the long-range plan for the
area , the portion of the 69-kV line located between the
Caldwell , Lansing, and Star substations will also be
converted to 138-kV. As the area matures and additional
electrical load materializes, the capability of this
69-kV sub-transmission line will be exceeded.
A 69-kV sub-transmission line's ability to serVlce a
substation is limited by load or ampacity and
distance-constrained by vol tage support.This line
limited by both conditions and will require a capacity
upgrade in the future.This will be deferred by serving
part of the load currently sourced from the Lansing
Substation from the distribution system out of the Star
Substation.
In addition, as illustrated on Exhibit 2, another
substation is proposed at the southeast corner of Beacon
Light and Linder.To provide reliable and adequate
servlce, additional 138 kV sub-transmission lines are
required to connect and supply these load centers.
Why does Idaho Power prefer to construct a line
through Eagle when several other routes might work
equally well?
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Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
An obj ecti ve of the planning process is to
produce low- cost and reI iable electrical service in a
timely manner.To accompl i sh these goal s , the Company
monitors and forecasts growth and the impact it has on
existing and
CSB REPORTING
Wilder , Idaho
SIKES (Di) 16a
I daho Power Company83676
future infrastructure requirements. While there are
generally multiple alternatives that will satisfy a
defined problem for a set period of time, the Company'
planning engineers must look beyond the immediate concern
to provide an overall future configuration.
The overall costs of the required infrastructure
needed in the area can be affected by the sequence
construction selected for these proj ects.The shortest
and least expensive options are typically constructed
first to minimize the costs to ratepayers of serving new
load growth. As an area develops, the increase in
electrical load requires the construction of more
facilities, which , in turn, are supported across a larger
revenue base.
In this specific case, the other options such as
building from the Locust Substation along Chinden and
then north on Linder or convert ing the 69 - kV 1 ine to
138-kV from the Caldwell substation through Lansing to
Star would not eliminate the need for a line between
Eagle and Linder/Highway 44 , but only delay or change the
order of construction of that segment of line.
Why doesn't Idaho Power change the sequence
when public opposition to a proposed facility is so
great , and then try again later when it is the only
remaining option?
CSB REPORTING
Wilder , Idaho
SIKES (Di) 1 7
Idaho Power Company83676
Idaho Power recogni zes that the maj ori ty of
complaints and opposi tion to infrastructure is from
residents who have either recently located in an area or
have 1 i ved in an area for an extended period.Residents
who
CSB REPORTING
Wilder, Idaho
SIKES (Di) 1 7 a
Idaho Power Company83676
locate near these types of facilities after those
facilities are in place have the knowledge of their
existence before making their locational decisions.For
these reasons, Idaho Power attempts to communicate its
future plans to both the local jurisdictions and through
public meetings. This message of "get there first"
also managed with building facilities that are used and
useful.
In other words , Idaho Power at tempts to plan and
construct facilities only when there is substantiated
need , and as early as reasonable to minimize the number
of existing populace who experience the "after the fact"
impact of new facilities being constructed after they are
already there. We also find that even though the plans
and timelines have been communicated, the reality of the
project and opposition only materializes when
implementation begins.
Delays in the process with the City of Eagle has
again demonstrated that the process does not get easier
the longer the Company waits.It is for these reasons
Idaho Power began pursuing the construction of this line
first.
What is the expected cost of building a portion
of the 138-kV line underground as desired by the City of
Eagle?
CSB REPORTING
Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
While precise costs cannot be determined until
after construction or at the time an engineered design
completed, in the study it completed at the City of
Eagle's request, Black and Veatch determined that a 1.
mile, 138 kV underground sub-transmission line
constructed from the Eagle Substation and along State
Street to the
CSB REPORTING
Wilder , Idaho
SIKES (Di) 18a
Idaho Power Company83676
vicinity of the State Street's intersection with
Ballantyne Road would cost approximately $9.5 million.
In discussions with Idaho Power and the IPUC Staff
on March 31 , 2004 , representatives from the City of Eagle
indicated that the City might also consider the
alternative of undergrounding the 138-kV line from the
Eagle Substation to a location just west of Eagle Road
and the Highway 44 Bypass , then proceeding overhead along
Highway 44 to the Star Substation.
This alternative would requlre approximately 0.
miles of underground versus the 1.6 miles in the
aforementioned study.However , due to termination costs
related to the transition points between the overhead and
underground portions of the line, design costs,
construction mobilization costs, and potential costs to
bore under maj or roadways due to different route
requirements, the costs cannot be considered to be a
linear ratio to the total distance.
Wi thout hiring an engineering firm to produce
another study, a reasonable estimate for the reduced
length from 1.6 miles to 0.75 of a mile can be produced
by assuming that approximately 25% of the costs are fixed
for the terminations and transi tions, along wi th the
other considerations just mentioned.The rest of the
costs may be assumed as a linear ratio to the distance.
CSB REPORTING
Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
The fixed costs in this case , irrespective of length
of the line , would then be approximately 25% of $9.
million or $2.375 million.
CSB REPORTING
Wilder , Idaho
SIKES (Di) 19a
Idaho Power Company83676
The remainder of the costs assumed to be linear
related to distance can be approximated by a ratio
75 of a mile divided by 1.6 miles times 75% of the $9.
million , or $3.34 million. An approximate cost of this
alternative would be the sum of the fixed costs and the
distance related costs or $2.375 million plus $3.
million for a total estimate of $5.715 million.
While the actual construction costs could easily
vary by 20% from this estimate depending upon conditions
and time constraints experienced during construction, a
reasonable range for expected construction costs
between $4.5 million and $7 million.
A simple ratio of the entire $9.5 million costs by
75 of the 1.6 miles would yield an estimate of $4.
million , which would, at best, be a minimum estimate
given the total costs are not all directly related to the
distance involved. This seems to support a mlnlmum
"bookend" that matches closely to the low end of the
range estimated above and supports the expected cost of
$5.75 million for the underground portion of the
alternative.
This is not the total cost of the al ternati ve.
only represents the underground portion desired by the
City of Eagle. Approximately $2 million in additional
construction costs would be incurred for the remaining
CSB REPORTING
Wilder , Idaho
SIKES (Di)
Idaho Power Company83676
overhead portion of the line to Star Substation.
The total costs of this option would be
approximately $7.75 million , or $5.25 million more than
the proposed al ternati ve offered by Idaho Power Company
and
CSB REPORTING
Wilder , Idaho
SIKES (Di) 2 Oa
Idaho Power Company83676
supported by the Citizens Advisory Committee.
What is the expected cost of the 138-
overhead Bypass Route recommended by the Citizen'
Advisory Committee and Idaho Power's preferred route?
The estimate which was provided to the City of
Eagle for this option was $2.5 million , or about $5.
million less than any route which includes an underground
portion and deemed acceptable by the City of Eagle.
Is there disagreement between the City of Eagle
and Idaho Power on the need of the proj ect?
No one disputes the amount of growth in the
area or the demands being placed upon the Company'
electrical infrastructure.However , there wi 11 always be
the perception that different al ternati ves could solve
the problem and no impact a specific area or group of
people.
Idaho Power acutely aware that the solutions
prescribes will not always be welcomed.To that end,the
Company seeks publ ic involvement , input and
recommendations.The Company also provides education in
the route selection process.Prior to making application
for a conditional use permit, Idaho Power must make its
best decision based upon the facts and information at
hand.
Does this conclude your testimony?
Yes, it does.
CSB REPORTING
Wilder , Idaho
SIKES (Di)
I daho Power Company83676
open hearing.
(The following proceedings were had in
MS. MOEN:The witness is available for
cross - examinat ion.
COMMISSIONER KJELLANDER:Okay, let's move
to the Ci ty of Eagle.
CSB REPORTING
Wilder , Idaho
MS. BUXTON:Mr. Chairman , just one
second, please.
CROSS - EXAMINATION
Good morning, Mr. Sikes, how have you?
Grea t .
Mr. Sikes , as you know, I'm Susan Buxton
and we've had a couple of conversations before in the
last several years; is that correct?
Yes.
Mr. Sikes, I just have a couple of
questions for you.In your direct testimony, you
reference the Company's long-range planning.Is that
located in the 10-year transmission plan , is that what
you're referring to?
The 10 -year transmission plan is a subset
of some of those other documents and planning studies as
BY MS. BUXTON:
SIKES (X)
Idaho Power Company83676
well as the other more detailed local area studies that
are some of the other documents and exhibits in this
case.
Was the 10-year transmission plan , it was
not an exhibit to your direct testimony, was it?
I don't believe so.
Did you review the 10-year transmission
plan that was an exhibit to Mr. Teinert' s direct
testimony?
I have reviewed that in the past.
Okay.
Mr. Chairman , I need to ask a point of
clarification.With regard to this proceeding, I would
like to ask Mr. Sikes some cross-examination questions
with regard to that exhibit that is part of the testimony
of somebody else, is that more proper now or in rebuttal?
COMMISSIONER KJELLANDER:This would
probably be fine and if there's an obj ection to when that
would be best , his attorney will make the appropriate
obj ect ion; however , be prepared that there's always an
opportunity he may not be as familiar with the exhibit as
you would ike him to be.
BY MS. BUXTON:Mr. Sikes, I'd like to
hand you what has been marked previously as Exhibit 114
to the testimony of , direct testimony of , Mr. Pike
CSB REPORTING
Wilder, Idaho
SIKES (X)
Idaho Power Company83676
Teinert.
(Ms. Buxton approached the wi tness
. )
BY MS. BUXTON:Mr. Sikes, can you
identify that document for the record, please?
Yes, wi thout reviewing every page, this
appears to be the report that was produced by my
depart men t .
MS. BUXTON:Mr. Chairman, I would ask
that Exhibit 114 be admitted into the record for purposes
of cross-examination of Mr. Sikes.
COMMISSIONER KJELLANDER:Without
obj ect ion , we wi 11 admi t the exhibi t .
MS. MOEN:No obj ect ions.
(The City of Eagle Exhibit No. 114 was
admi t ted into evidence.
BY MS. BUXTON:Mr. Sikes, could you
please refer to page 11 of Exhibit 114?
m there.
Could you read the paragraph in the middle
of the page under the ti tIe Locust Loop No.2 for the
record , please?
Locust No."The Locust-Eagle 138 will
be built when the reliability of service is at risk or
when the Gary tap is opened because of the State 138 kV
conversion.The Star tap is a tap in the Locust-Eagle
CSB REPORTING
Wilder, Idaho
SIKES (X)
Idaho Power Company83676
line for temporary service to Star.The Locust No.2 is
completed with the Locust-Eagle 138 kV construction and
will serve HP , Joplin , Eagle loads and loads north of the
Beacon Light area.The Eagle-Ustick 138 kV line serves
as a tie to the Cloverdale source.A source in the north
Star area will serve the Star substation.
Thank you.Does that statement still
reflect the current status of Idaho Power's position with
regard to the Locust Loop No.
Yes, it does.
And that the State 138 kV converSlon
that's the subj ect of this matter would benefit this
Locust Loop No.2; is that correct?
The State 138 kV conversion referenced in
here is a converSlon of State Street substation in Boise
to 138 kV.
So then isn't it true that your testimony
and attached exhibits identify the function of the
proposed 138 kV line upgrade from Eagle to Star as
temporary service?
It will provide temporary service to Star
substation until the loop is completed and the other
sources buil t for Star.Its long-term function is as
described here.
Mr. Sikes , do you have your direct
CSB REPORTING
Wilder , Idaho
SIKES (X)
I daho Power Company83676
testimony in front of you?
Yes, I do.
On page 3, lines 22 and 23 of your direct,
could you take a look at that , please?
CSB REPORTING
Wilder, Idaho
Page 3, lines 22 , 23?
Tha t 's correct.
Okay.
You use the term future upgrade to 138 kV;
Yes.
And that refers to the proj ect the Company
is proposing in this case, does it not?
Correct.
Can you describe the type of upgrade the
Company is proposing to make to this existing facility?
Yes , it's to convert and rebuild a line
along the existing alignment to provide the 138 kV
transmission line through the area.
Mr. Sikes, I'm going to hand you what has
been marked in this case, it's been marked Exhibit 100
and it was attached to Dr. Don Reading's direct
(Ms. Buxton approached the wi tness
. )
BY MS. BUXTON:Are you familiar with
can you identify that document for the record, please?
is that correct?
testimony.
SIKES (X)
Idaho Power Company83676
This is the -- from the City of Eagle, the
Findings of Fact and Conclusions of Law in the matter
Idaho Power an application for a rezone and conditional
use permi t
MS. BUXTON:Mr. Chairman , if there's no
objection, I would ask to admit Exhibit 100 for the
record.
COMMISSIONER KJELLANDER:And without
obj ect ion
MR . HOWELL:Mr. Chairman , just for point
of clarification , I'm a little bit uncomfortable about
admitting exhibits that really belong to another party.
I f counsel would ike to mark the exhibi t , have it marked
and identified for purposes of cross-examination , I think
that's probably a cleaner way to do it.
COMMISSIONER KJELLANDER:So we have an
objection to admitting it, instead looking at marking it,
would you like to mark it?
MS. BUXTON:m happy to mark it as
Mr. Howell suggests , no problems.
COMMISSIONER KJELLANDER:Okay, then
consider it marked.
(The City of Eagle Exhibit No. 100 was
marked for identification.
BY MS. BUXTON:Mr. Sikes, could you
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
please turn to the last page of Exhibit 100?Could you
please look at under the Recommendation portion and read
items 1 , 2 , 3 and 4 for the record , please?
" 1 .An additional CUP must be applied
for , for the substation.
2 .No further expansion once they upgrade
this location , the next upgrade needed will require a
different location.
3 .Addi tional design review and landscape
reVlew will be necessary.Additional screening against
the fence on the State Street is required.
4 .To grant the CUP for the lines only.
Additional CUP necessary to comply with Title 8.
Thank you.Did the Company have any
concerns - - actually, really quickly, strike that
question.Can you look at the bottom of the last page
and for the record tell the date that this conditional
use permit was issued?
Dated the 12th day of December , 1995.
Did the Company have any concerns wi th the
conditions that the City of Eagle put on this conditional
use permi t in Exhibi t 100?
This conditional use permit in the
paragraph - - in the recommendations is the findings and
fact and conclusions of law for the zonlng of C3 on the
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
substation property, so my interpretation of this
related to the substation property.
Now , could you read item No., the first
sentence again , please?
"To grant the CUP for the lines only.
So it included the ines, too, didn't
it?
My understanding is you don't rezone a
transmission line, just a parcel of property.
Isn't this a rezone and a conditional use
permit?Looking at the front page of it, isn't this an
application for a rezone and a conditional use permit?
For a rezone and a conditional use
permi t.
So two items happened, then, a rezone and
a condi t ional use permi t allowing the ines; is that
correct?
I have an obj ect ion.MS. MOEN:That'
argumentative.Al though the application reads as an
application for a rezone and conditional use permit, it'
apparent from the recommendations that counsel asked my
witness to read that the findings and conclusions were
for the rezoning only and that conditional use permits
were going to be, had to be requested at a later date.
COMMISSIONER KJELLANDER:Ms. Buxton , a
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
response?
MS. BUXTON:Mr. Chairman , I would ask the
witness to again read No.2 of the recommendation that
would address further upgrades of this site that would
requlre an additional conditional use permit, so I
believe that this does in fact put a conditional use
permit requirement on the site in 1995.
COMMI S S lONER KJELLANDER:Ms. Moen.
MS. MOEN:If Ms. Buxton is argulng that
the purpose of these findings and facts in the
recommendation is for rezoning the site identified as the
substation site, I have no objections.I f she'
suggesting that these particular findings of fact go
beyond the substation site to include the power lines, I
obj ect to that because that is not what this particular
exhibi t represents.
COMMISSIONER KJELLANDER:Ms. Buxton.
MS. BUXTON:Mr. Chairman, I believe that
we're probably at the point where this would be more of a
legal argument.m actually not asking Mr. Sikes for a
legal conclusion.I think that this is something maybe
we should address in a posthearing memorandum , the legal
effect of this conditional use permit in 1995.
COMMISSIONER KJELLANDER:Ms. Buxton , it
would be my desire to go ahead and allow you proceed.
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
think the Commission will be able to weigh the evidence
that's revealed from any response and then we can deal
with any briefing lssues at the end of the hearing.
BY MS. BUXTON:Mr. Sikes , do you know
whether the Company sought an order from the Public
Utilities Commission approving the facilities' conditions
described in Exhibit 100?
That's the same exhibit?m unaware
we brought this matter before the PUC.I don't believe
so.
Did the Ci ty have to pay any contribut ion
ln aid of construction for the facilities requested and
CSB REPORTING
Wilder , Idaho
required in Exhibit 100?
Not that I'm aware of.
Mr. Sikes, you live in the city limits of
Eagle, do you not?
I was annexed after I had moved into the
How long have you been a resident of the
I believe six years.
Your testimony advocates upgrading the
existing Company facilities in such a manner that your
personal electric franchise fee would not increase; is
area.
City of Eagle?
that correct?
SIKES (X)
Idaho Power Company83676
Let me rephrase that for you.The Company
is advocating a proj ect that would not require any
additional or increase in the franchise fee at this
point; is that correct?
That's typically how we approach
everything, yes.
And your testimony also advocates
upgrading the existing Company facility in such a manner
that your real property would not be assessed wi th a
local improvement district assessment to pay for any
addi tional costs for this proj ect; is that correct?
I don't think the Company is necessarily
saying whether we would or would not agree to an increase
in the franchise fee.
If a franchise fee was increased, would
that affect you personally in the City of Eagle?
Yes, it would.
Okay.
I f I could confer wi th counsel for one
minute.
COMMISSIONER KJELLANDER:Sure.
(Pause in proceedings.
MS. BUXTON:Mr. Chairman , I have no
further questions on cross-examination.
COMMISSIONER KJELLANDER:Thank you, Ms.
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
Buxton.Let's move to Mr. Squyres.
MR. SQUYRES:Thank you, Mr. Cha i rman .
CROS S - EXAMINA T I ON
BY MR. SQUYRES:
Good morning, Mr. Sikes.
Good morning.
I'd ike to begin by talking about Idaho
Power's complaint in the State Street and Bypass routes
for just a moment if we could, please.You're familiar
wi th the complaint filed by Idaho Power in this
proceeding?
Yeah , I am.
And it's true, isn't it, that the Company
requested the Commission to issue an order directing
Idaho Power to construct a 138 kV transmission facility
on either one of two transmission corridors?
I believe that's how the complaint
crafted, yes.
On page 1 of the complaint, I think it is,
isn't it?Do you have that in front of you?
Yes.
And let'look at Exhibi t just a minute
if we could,please,and you refer to those corridors
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
Exhibit 10 in what is in yellow the Eagle substation, the
Eagle substation through Jackson Square down past
Ballantyne Road, that's what we've referred to as the
State Street route; is that right?
Tha t 's correct.
And what's in blue or turquoise or at
least something close to one of those, that's the route,
that's the Bypass route , along State Street/ 44, but we'
been referring to that as the Eagle Bypass route, have we
not?
Tha t 's correct.
And so - - and while we're talking about
Exhibit 10 , let's just stay on that a minute.Do you
know when this aerial photograph was taken about?
My guess would be sometime in around 2003.
I m not sure, though.
Okay.Just with respect to the Eagle
River Development, there has been a substantial amount
development in Eagle River since the date of this
photograph , has there not?
Tha t 's correct.
I mean , there's been landscaping;
correct?
I believe most of the landscaping Yes.
in place in this photograph.I see the ponds.
CSB REPORTING
Wilder, Idaho
SIKES (X)
Idaho Power Company83676
The ponds are there, but the sod that'
been laid in , the greenbelt , that walkway area across the
northern boundary of the property has been put in;
correct?
I t appears so.
And since this photograph was taken , the
Bardenay Restaurant has been buil t, the Westmark Credi
Union has been buil t , Wendy's, several other buildings;
right?
Correct.
Okay, and the State Street corridor which
is marked in yellow on Exhibit 10, it has existing
structures on it now , does it not , for a 69 kV line?
Correct.
Some have been repl aced
traverse there.
from the 69 kV line that used to
Those structures are left over.
But they're there today?
Yes.
And in existence and being used?
Correct.
And so the State Street route would use
existing utility rights of way and then perhaps some
upgrade to existing facilities; is that correct?
Yes.
And the Bypass route as it exists today
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
has no poles on it, does it?
Not in thi s area.
And no lines or other utility structures
or facilities of any type run along the Bypass route; is
CSB REPORTING
Wilder , Idaho
There are some poles and street lights
near the intersection , et cetera , but there is not an
existing transmission line along that section of the
There are street light poles; right?
And some distribution power poles as
Not running down , not running east and
that right?
west from the point of Edgewood to Eagle Road?
There are a few distribution structures
running west of Edgewood on the south side of the
On the south side, not on the north
Correct , but basically along the alignment
here and maybe three or four structures, roughly
equivalent to across from where Les Schwab Tires is , but
across the street.
m sure you've got bet ter eyes than me,
road.
where is Schwab Tires?
we 11 .
Bypass.
side?
SIKES (X)
I daho Power Company83676
Just where Edgewood comes ln , you can see
a building there with a white roof and a red roof.
Right at the beginning of the Bypass
route?
That is correct.
Okay, and if the Bypass route were to be
used for the 138 kV line, the 69 kV structures on the
State Street route would remain in place, would they
not?
That is correct.
Do you have Idaho Power's complaint in
front you sir?
Yes,do.
And Exhibi t
a group opt ions
3 to that complaint, those are
Correct.
- -
for the routes; correct?
Yes.
And just for the record, I think Exhibi
to Idaho Power's complaint is exactly the same as Exhibit
4 to your testimony; isn't that right?
I believe so.
And again , just for the record, I think on
your direct testimony at page 12 , line 17 , you talked
about Exhibi t 4 , so anything you said about Exhibi t 4
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
would have been the same thing you would have said about
Exhibit 3 Slnce they're the same documents?
Yes.
Okay, and option 1 , that's the Bypass
Correct.
And that's the route that the conditional
use permi t application was denied?
Correct.
In other
the process of pursuing
CSB REPORTING
Wilder, Idaho
words , the Company went through
the conditional use permit to its
final conclusion and the City denied that conditional use
Correct.
Okay, and the total cost for the Bypass
route is 2.5 million?
That's the estimate on this sheet.
route, isn't it?
And there's no cost to the Ci ty, is
No.
And option 2 , that's the State Street
permit?
Yes.
And the conditional use permit application
there?
for that route was withdrawn sometime 2000 , 2001 , in that
route?
SIKES (X)
Idaho Power Company83676
time frame,wasn'it?
Yes.
And no decision was formally made by
the City of Eagle on the conditional use permit
application for the State Street route?
That's correct.
And the cost of that route is also 2.
million and there's no cost to the City, is there?
Tha t 's correct.
And option 3, that's the State Street
route with some underground construction?
Of distribution facilities.
Of distribution facilities; in other
words, the option 3 you were going - - Idaho Power
proposed to bury some distribution facilities or put
distribution facilities underground from the Eagle
substation to Jackson Square?
Tha t 's correct.
And the cost of option 3 was 2.8 million
but again , no cost to the City of Eagle?
Tha t 's correct.
So just to summarize, none of the three
options we've just discussed involved an effort by Idaho
Power to pass any costs to the City?
Correct.
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
Thus, it I S true, isn't it , that these
three options would not increase the cost to Idaho Power
above what Idaho Power considers to be a level of prudent
investment for the Company?
And I would ike to make one point of
clarification on this exhibit
Sure.
- -
too, that when asked about corrections
I had forgotten about this.Subsequently I consulted
with our tax department and it was determined for a
requesting party to bury, a municipality to bury, the
distribution lines that they would not be subj ect to the
IRS tax gross-up, so that column and the figures
resul ting from that in here should be deemed as zeroed
out.
So the third column , I guess it would be
the fourth column from the left, the tax gross-up column
you'd just pull that out of that exhibit?
Correct, and that would affect some of the
figures in the after tax cost and goodwill figures.
Fair enough , thank you, sir.My question
about the three options not increasing the cost to Idaho
Power above the level of a prudent investment for the
Company, you answered that question in the aff irmati ve,
did you not?
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
I think given the contention and trying to
get this proj ect done in a timely manner , Idaho Power is
exposed to additional cost risks that if we could agree
to thi s we deemed it as prudent.
Now , let's talk about your rebuttal
testimony for a few minutes, please.I believe you filed
that rebuttal testimony
MS. MOEN:Obj ect ion.
COMMI S S lONER KJELLANDER:Mr. Squyres, I'
not even going to wait for the objection.This witness
rebuttal testimony has not been spread across the record
yet and he'll be back up a little bit later.
MR. SQUYRES:I apologi ze
COMMISSIONER KJELLANDER:Not a problem.
MR. SQUYRES:Thank you.That's all the
questions I have.Let me make sure.
(Pause in proceedings.
BY MR. SQUYRES:Exhibi t 5 to your
testimony, those are the Findings of Fact and Conclusions
of Law entered by the City of Eagle on the conditional
use permit application for the Bypass route; correct?
Yes.
MR. SQUYRES:Thank you, sir.That's all
the questions I have.Thank you, Mr. Cha i rman .
COMMI S S lONER KJELLANDER:Thank you,
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Powe r Company83676
Mr. Squyres.Let's move to Mr. Howell.
MR . HOWELL:Thank you, Mr. Cha i rman .
CROSS -EXAMINATION
BY MR.HOWELL:
Good mornlng,Mr.Sikes.Do you have
Exhibi t there with you?
Yes, I do.
Sticking with that for a moment, in the
yellow line that more or less follows State Street , can
you explain to the Commission why there is a jog in the
route that moves northward from the Eagle substation and
then westerly and then links back up with State Street?
Yes.The 69 kV transmission line that
once extended from Boise all the way through Caldwell , in
comlng past Eagle substation there, it goes northerly
across State Street which at that time was still the
highway through town and proceeds down the alley to the
corner where Jackson Square is.Further kind of westerly
from Eagle Road to the corner at Jackson Square, I
believe that that alleyway has subsequently been
abandoned and is not an official alleyway even though the
utility easement is still through there, and then
comes back out to the old highway alignment and proceeds
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
down , I believe, what is our inner urban right of way
that the line exists on.
Do you know why the Company put that line
down the alley instead of right on State Street?
CSB REPORTING
Wilder , Idaho
That was way before my time.I don't
know.
on it from the
Does that line presently have a 69 kV line
substation westerly to Ballantyne Road?
The top conductors on the ine used to be
energized at 69 kV and except for where some of the poles
or facilities have been modified still has the 69 kV
insulators on there.Currently those wires are energized
at 12.5 kV rather than 69 kV as was done to extend
addi tional feeder capaci ty to the western region of
So in other words , the 12.5 kV , that'
what would normally be called distribution?
Tha t 's correct.
Okay, and sticking wi th those poles, what
other facilities are typically on those poles along the
State Street route?
Well, in some instances in addition to the
existing distribution circuits, there are two of those
stacked on top of each other , then there's a neutral
Wlre.Where we have customers taking electric service,
Eagle.
SIKES (X)
Idaho Power Company83676
locally there may be overhead distribution transformers
also mounted on those poles with 120/240 volt service
drops overhead to those residences or establishments.
There are some street lights at some intersections.
There is also, I believe , cable TV and phone company
cables attached to those poles and the occasional placard
and yard sale sign.
So is there currently 69 kV service out of
the Eagle substation?
, there is not.
Okay.If the Commission were to order or
the Company to construct a 138 kV line on this route,
could you use the current poles?
, we could not.
And do you know the height of the current
poles generally along that route?
Generally, I believe they're somewhere
between 45 and 50 feet.They vary a little bit.
And if you were to restring the 138 kV
line along this route, what would cause you to need
taller poles?
Well, for one, there is meeting the NESC,
the National Electric Safety Code, clearances for
surrounding structures and other attachments to the poles
and those drive the heights of the poles up.
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
Additionally, the strength requirements of the poles to
lncrease that, you know , there's kind of a little give
and take there , but to meet safety requirements typically
is what requires the poles to go up in height.
And isn't it true that the Commission
requlres Idaho Power as well as other utilities to comply
with the National Electric Safety Code?
Yes.
Now, when we're talking about clearances
which you just mentioned under the National Code, we'
talking about vertical clearances from grounds for , like,
vehicles?
That's one consideration, yes.
Isn t another consideration vertical
safety clearances between distribution lines and, for
instance , the 12.5 that's there now and a new 138 kV?
Yes.There also has to be working
clearances for personnel, utility personnel , to work on
those facili ties in a safe area.
And when we're talking about a 138 kv
line, aren't we really talking about three conductors?
Tha t 's correct.
So there would be three lines that
comprise the 138 kV line or three conductors?
Tha t 's correct.
CSB REPORTING
Wilder , Idaho
SIKES (X)
I daho Power Company83676
And those conductors could be either
stacked vertically on one side or staggered on one side
or the other; isn't that true?
Tha t 's correct.
And each of those conductors would be
required to have a certain minimum level of clearance
called out by the National Electric Safety Code?
Yes.
And it's the combination of all the
clearances that would determine the pole height?
Tha t 's correct.
And then finally, at the top of the pole
is it not the Company's practice to have a shield line?
Yes , it is.
And could you explain to the Commission
what a shield line is?
A shield wire is typically placed over
transmission lines to provide isochronic protection or
lightning strike protection such that if lightning
directed theoretically and ideally to that line and
shunted to ground rather than hitting the electrified 138
kV line as would be in this case and causing that line
trip and cause a service interruption.
And do you know the clearance requirements
between the shield and the top conductor of the 138 kV?
CSB REPORTING
Wilder , Idaho
SIKES (X)
Idaho Power Company83676
I don't know that off the top of my
Again , referring you to Exhibit 10, aren'
there pluses and minuses about using either of these two
CSB REPORTING
Wilder , Idaho
Absolutely.
For instance , the yellow route along State
Street would be shorter and the Company already has a
right of way along that route?
Tha t 's correct.
Versus the Eagle Bypass route where there
are conceivably no facilities and it would be cleaner to
That's correct.
MR. HOWELL:Thank you , Mr. Cha i rman .
head.
have no further questions.
COMMISSIONER KJELLANDER:Thank you,
Are there any questions from members of
COMMISSIONER SMITH:Yes.
routes?
COMMISSIONER KJELLANDER:Commi s s i one r
install?
Mr. Howell.
the Commission?
Smi th.
SIKES (X)
Idaho Power Company83676
EXAMINATION
COMMISSIONER SMITH:
Mr. Sikes, looking at Exhibi t 4 , I guess
needed some clarification on the column that is labeled
IPCO Goodwill Incentive.Can you tell me what that is?
That was an issue that the Idaho Power
Company was willing to negotiate with the City of Eagle
to expedi te approval in cleaning up part of the downtown
area to get this proj ect buil t in a timely manner.
So is it related or not to the amount that
you have in a column labeled Ci ty of Eagle Cost?
For al ternati ve 3, yes, that's where that
basically was derived from and as I recently explained,
the tax gross-up really wouldn't apply.
So it's 340 000 in No.
Correct.
Can you tell me, did the Company percelve
this as an above-the-line or below-the-line cost?
The Company perceived this as a cost that
were we not able to get this proj ect approved in this
manner that our actual costs would exceed this
allowance.
, I'm asking whether the Company
intended it be above the ine or below the ine
CSB REPORTING
Wilder , Idaho
SIKES (Com)
Idaho Power Company83676
And by that do you mean rate based?
Tha t 'what I mean.
t h i nk we would appreciate it being rate
based.I think that's what our intent would be.
Do you think the Commission is in the
practice of giving away $340 000 of ratepayer money for
Idaho Power's goodwill?
When we're faced wi th higher costs for a
different alternative , this would have been a lower cost
option.
Well , why would you take the higher cost
alternative when you had a lower cost option?It seems
like that might be imprudent.
We did not have an approved lower cost
opt ion.
All right.Could you tell me looking
Exhibit 10 how the Eagle River Development is served?
it underground?
There is a distribution feeder that comes
westerly down the alley from Eagle substation and I
real i it'kind of hard to point and talk at the same
time follow along,but maybe it'easier to start
the corner of Eagle Road and the Bypass, there's an
overhead distribution pole kind of right there on the
corner by the pond.
CSB REPORTING
Wilder , Idaho
SIKES (Com)
Idaho Power Company83676
So that would be the southeast?
Yes.
All right.
And it's at that point where the
distribution service goes underground and serves the
CSB REPORTING
Wilder, Idaho
And who paid for that to be underground?
I believe that Eagle River developers
Okay; so we've got distribution lines
going down Eagle Road?
Yes.
And you have distribution lines going down
State Street and/or the alley that's shown by this
looks like goldenrod line to me; is that correct?
Tha t 's correct.
All right, and does growth continue in the
Eagle River Development area?
Yes, it is.
And in the City of Eagle generally?
Yes.
COMMISSIONER SMITH:Thank you,
That's all I have.
COMMI S S lONER KJELLANDER:
Commissioner Hansen.
development.
did.
Mr. Cha i rman .
SIKES (Com)
Idaho Power Company83676
COMMISSIONER HANSEN:Just a couple of
questions and kind of a follow-up where Commissioner
Smi th was coming.
EXAMINATION
BY COMMISSIONER HANSEN:
CSB REPORTING
Wilder , Idaho
On Eagle Road as you're coming down to
Highway 44 and maybe you're not the person to ask on
this , but would you have distribution poles like there in
front of Wendy I s and that hotel that was built, the
Hil ton there, that isn't underground in front of those
facili ties right now, is it?
Right now I believe it is.
, it is?
Yes, and that was paid for by the
So it starts there by the river?
I bel ieve it comes back up overhead, I
can't remember if it's on the north side or the south
side of the river where it comes back up overhead.
Okay, just a couple other quest ions.You
say on page 6, lines 19 and 20, that burying transmission
lines is not an industry standard.Do you recall that?
Yes, I do.
developer.
SIKES (Com)
Idaho Power Company83676
Is it cost or reliability or maintenance
or is it some other reason why it is not a standard or
accepted in the industry in your opinion?
Primarily it's due to the higher cost of
equivalent facilities.
So as far as to serve and as far as
maintenance and the reliability, underground is every bit
as good as overhead?
There are trade-offs, again , between
overhead transmission facilities and underground
transmission facilities on maintenance.Obviously, with
an overhead transmission line you have to maintain the
poles.On an underground transmission line if there is a
cable failure, it takes much longer to repair it and is
more costly work , so they are really not apples together.
They're slightly different animals, but typically it is
the industry experience that underground facilities cost
more to construct , own and operate.
Are you aware , has Idaho Power been
involved in burying transmission lines in other cities in
Idaho?
, we have not.
So in areas like, say, Ketchum or Sun
Valley area or these areas, you're not aware that you'
been involved in any buried transmission?
CSB REPORTING
Wilder , Idaho
SIKES (Com)
Idaho Power Company83676
We have not buried any of those areas,
no.
On page 7 , line 18, you state that Idaho
Power discussed 16 alternatives with the CAC which is a
group composed of Eagle residents, I guess, picked by the
Ci ty Council; is that correct?
Yeah , I'm not sure exactly how they were
all selected, but a number of alternatives were discussed
wi th them.
In your opinion , you talk about
alternatives were discussed , in your opinion, why was
narrowed down to just two?Are the other 14 just not
acceptable?I mean , we're kind of before us here in this
case wi th two al ternati ves and yet, you had 16 that was
discussed.m just kind of curious, in your opinion
were the other 14 just not acceptable, not economical to
do?
As the findings from the Citizens Advisory
Commi t tee kind of narrowed things down , all of the
factors that they were looking at, cost and number of
residences and line lengths, all of those things were
factored into that, so basically these options kind of
bubbled to the top as the best of those al ternati ves.
The Citizens Advisory Committee's first choice was to
bury it, but recognizing the additional costs said well
CSB REPORTING
Wilder , Idaho
SIKES (Com)
Idaho Power Company83676
in lieu of that , then according to the criteria they had
established and worked through, they recommended the
Bypass route.
And just one last question.In the
testimony it states that the cost is estimated between
million and $9 million to bury that, is that still in
your mind a realistic number?Has Idaho Power received
any other information through different types of
technology that would reduce the cost of burying the
cable?
, we have not.It's still our best
estimate.
COMMISSIONER HANSEN:Thank you.That'
all I have.
COMMI S S lONER KJELLANDER:We'll move now
to redirect.
REDIRECT EXAMINATION
BY MS. MOEN:
Mr. Sikes, I have a couple of questions.
In response to a question posed by Ms. Buxton , you
responded that the Eagle to Star line that we'
proposing is to be a temporary service to the Star
substation until a loop is completed.Do you recall that
CSB REPORTING
Wilder , Idaho
SIKES (Di)
I daho Power Company83676
testimony?
Yes.
And what period of time does Idaho Power'
reference indicate that that loop might be completed such
that that temporary service wouldn't be required to serve
Star?
The way for Star to be served by some
other facility coming from the north of there requires a
future proposed substation north of Star , so until at
such time that that is driven by additional load growth
requirements, the timing of that is still uncertain, but
it's probably at least a decade off at this point.
Let's assume we've got 10 years out now
and now the Star substation is going to be served from a
different source, does that make the source that we'
looking at now between Eagle and Star an obsolete line or
will that continue to provide services?
No, that will continue to provide services
to the Eagle area and the way the power would then flow
as described in the documents as has been referred to as
the Locust Loop No., power would flow in both
directions from Locust substation north to Beacon Light
substation back towards Eagle as well as from the east
side through Hewlett-Packard and Joplin substations
toward Eagle.
CSB REPORTING
Wilder, Idaho
SIKES (Di)
Idaho Power Company83676
So systemically, that particular line will
always serve an important part of the Company's overall
electrical system?
Yes , to provide the reI iable service to
the area.
And is it prudent electrical practices to
design facilities in that manner?
Yes.What we strive for and many times
it's a timing lssue as to when facilities get constructed
and in what order , but provide some contingency backup to
ideally have more than one source to an area such that if
a truck hits a pole or if maintenance needs to be
performed, some facilities can be taken out of service
without causing a service interruption to the
customers.
Also, Ms. Buxton suggested that you might
have some personal reasons for recommending these
particular routes because it would avoid you personally
having to pay ei ther a surcharge or some franchise fee.
Are the recommendations in which you participated the
recommendations of you personally or of the Company as a
whole?
m trying to represent the Company'
viewpoint.I don't view myself as having a personal
stake in this.
CSB REPORTING
Wilder, Idaho
SIKES (Di)
Idaho Power Company83676
And is the Company's recommendation in
this particular instance consistent with its
recommendations for other transmission corridors?
Yes, it is.
Regarding a question that
Commissioner Hansen raised, is it completely possible
that with underground transmission , system outages could
be of a longer duration than outages on transmission
lines that are overhead?
They can be to repair and spl ice cables
and, you know , that's one of the benefits of coming
through this area to have a loop.Even if it were
undergrounded through here, which the Company is not
opposed to having it being undergrounded through here, if
the loop is in fact intact or in place , then that segment
of the ine should be able to be taken out to be
repaired.
MS. MOEN:I have no further quest ions.
COMMI S S lONER KJELLANDER:Thank you , and
so Mr. Sikes, we'll excuse you until your rebuttal and
believe we're ready for a ten-minute break , so we'll go
off the record.
(Recess.
COMMISSIONER KJELLANDER:And we'll go
back on the record and I bel ieve we're ready for Ms.
CSB REPORTING
Wilder , Idaho
100 SIKES (Di)
Idaho Power Company83676
Moen's second direct wi tness
MS. MOEN:Idaho Power's second direct
witness is Greg Said.
CSB REPORTING
Wilder , Idaho
GREGORY W. SAID
produced as a wi tness at the instance of Idaho Power
Company, having been first duly sworn , was examined and
testified as follows:
DIRECT EXAMINATION
Mr. Said, would you please state your full
name and spell your last name for the record?
Gregory W. Said, S-a-
And would you please tell the Commission
your business address?
1221 West Idaho Street , Boise, Idaho.
And by whom are you employed?
Idaho Power.
And in what capacity are you employed by
m the manager of revenue requirement.
Have you previously filed direct testimony
consisting of nine pages on behalf of Idaho Power Company
BY MS. MOEN:
Idaho Powe r?
101 SAID (Di)
Idaho Power Company83676
in this matter?
Yes.
And you are sponsoring no exhibi t s;
Tha t 's correct.
Do you wish to make any corrections to the
written testimony that you prefiled in this matter?
CSB REPORTING
Wilder, Idaho
No.
I f I asked you the same quest ions today
that are contained in your prefiled testimony, would your
responses to those questions be the same?
Yes , they would.
MS. MOEN:I move that the prefiled
testimony of Gregory W. Said consisting of nine pages be
spread on the record as if read in its entirety.
COMMISSIONER KJELLANDER:And without
objection, we will spread the testimony as if read in its
(The following prefiled testimony of
Mr. Gregory Said is spread upon the record.
that correct?
entirety.
102 SAID (Di)
I daho Power Company83676
Please state your name and business address.
My name is Gregory W. Said and my business
address is 1221 West Idaho Street, Boise, Idaho.
By whom are you employed and in what capacity?
I am employed by Idaho Power Company as the
Manager of Revenue Requirement in the Pricing and
Regulatory Services Department.
Please describe your educational background.
In May of 1975, I received a Bachelor of
Science Degree in Mathematics with honors from Boise
State Uni versi ty.In 1999 , I attended the Public Utility
Executives Course at the University of Idaho.
Please describe your work experience wi th Idaho
Power Company.
I became employed by Idaho Power Company in
1980 as an analyst in the Resource Planning Department.
In 1985 , the Company applied for a general revenue
requirement increase.I was the Company wi tness
addressing power supply expenses.
In August of 1989 , after nine years in the
Resource Planning Department, I was offered and
accepted a position in the Company's Rate Department.
With the Company's application for a temporary rate
increase in 1992 , my responsibilities as a witness
were expanded.While I
CSB REPORTING
Wilder , Idaho
103 SAID (Di)
Idaho Power Company83676
continued to be the Company witness concerning power
supply expenses , I also sponsored the Company's rate
computations and proposed tariff schedules in that case.
In 1994 , I was asked to become the Meridian District
Manager for a one-year cross-training opportunity.
1995, I returned to my position in the Rate Department.
In October 1996 , I was promoted to lead a team of
analysts in the newly reorganized Pricing & Regulatory
Services Department, formerly known as the Rate
Department.In that role, I became the Company contact
for line installation disputes concerning Company
compliance with tariff provisions.
As the Manager of Revenue Requirement, I continue to
be the Company contact for line installation disputes
before the Idaho Public Utilities Commission.
Why has Idaho Power Company filed a complaint
against the City of Eagle?
As Mr. Sikes has testified, the Company has
been seeking approval from the Ci ty of Eagle to construct
a transmission line through the City of Eagle for a
number of years now.While the Company has attempted to
identify a route and design al ternati ve acceptable to all
interested parties, the City has rejected all of the
economically prudent al ternati ves.Mr. Sikes has also
stated that the Company is concerned that future service
CSB REPORTING
Wilder , Idaho
104 SAID (Di)
Idaho Power Company83676
to the Eagle area may be degraded by the inability of the
Company and the City of Eagle to identify a route and
design acceptable to all parties.Idaho Power has been
diligent and prudent in its efforts to site new
transmission facilities.However, by denying the
Company's applications, the City of Eagle has jeopardized
the Company's ability to meet its obligation to provide
adequate electrical service to its Eagle area customers.
I have been advised by my legal counsel that , under these
circumstances , Idaho law provides the Idaho Public
Utilities Commission with the authority to direct Idaho
Power to construct the facilities required to serve
customer loads.
Mr. Sikes testifies that the City of Eagle has
requested that the Company use underground construction
techniques to mi t iga te the perceived adverse aesthet ics
of overhead construction but that Idaho Power maintains
that the additional cost of alternative routes or
underground construction would be the responsibility of
the Ci ty of Eagle.Why does the Company believe that the
City of Eagle should pay for the additional costs that
may be required to satisfy their aesthetic concerns?
Ul timately, costs borne by Idaho Power are paid
for by its customers.If Idaho Power initially bears the
cost of facilities, that cost is included in the
CSB REPORTING
Wilder, Idaho
105 SAID (Di)
Idaho Powe r Company83676
Company's rate base as an investment that is funded by
the
CSB REPORTING
Wilder , Idaho
106 SAID (Di)
Idaho Power Company83676
Company's customers.The Company earns a return on the
undepreciated investment balance. The return on the
Company's investment is also funded by customers.Idaho
Power strives to provide reliable and reasonably priced
electrical service to its customers.
When a ci ty, such as the Ci ty of Eagle , determines
that Idaho Power must meet standards for aesthetics that
are more stringent than the standards in place throughout
Idaho Power's service territory and the result of the
application of the more stringent standard is higher
cost, the question then becomes "who should pay for the
additional costs attributable to the City of Eagle's more
stringent aesthetics,the City of Eagle other Idaho
Power customers being served by facilities bui 1 t unde r
different standards?"Idaho Power believes
inappropriate for the City of Eagle to pass the costs of
its aesthetic standards onto other customers who are
willing to be served at lower costs under different
standards.
Does this Commission have the authority to
decide who should pay for the transmission solution that
it directs the Company to pursue?
Yes.I am advised by Idaho Power legal counsel
that the Idaho Public Utilities Commission has the
authori ty to determine the prudence of Company investment
CSB REPORTING
Wilder , Idaho
107 SAID (Di)
Idaho Power Company83676
in facilities to be included in the Company's revenue
requi remen t
In this case, the Company believes that $2.5 million
is the prudent investment level that should be made by
the Company.When costs of facilities exceed the prudent
level of investment that should be included in revenue
requirement , the Commission requires that the Company
seek contributions in aid of construction (CIACs)
this case, it is the Company's posi tion that if the
Commission directs the Company to pursue any al ternate
transmission proj ect wi th a cost greater than $2.
million , then it is appropriate for the City of Eagle to
be responsible for the additional cost.Typically, CIACs
are paid prior to construction of facilities.
Has the City of Eagle expressed any willingness
to have Eagle residents pay the additional costs
associated wi th al ternates to the Company's proposed
route?
No.The City of Eagle has never expressed a
willingness to pay for any additional expenses.Howeve r ,
as Mr. Sikes has stated in his testimony, the Company has
discussed a number of funding al ternati ves available to
the City.
What are some of the ways that the City of
Eagle could fund a required CIAC?
CSB REPORTING
Wilder , Idaho
108 SAID (Di)
Idaho Power Company83676
Idaho Code Title 50 allows mayors and city
councils to create local improvement districts to fund
line extensions or to fund conversion of existing
overhead electric facilities to an underground
conf igura t ion.The City of Eagle could create a local
improvement district to fund a required CIAC.
In the alternative, Idaho Power would be willing to
accept installment payments, including interest, to
recover any required CIAC.The City could apply the
proceeds of the franchise fees it collects from Idaho
Power to make the installment payments.The City
currently levies a franchise fee at the 1% level , but
that level could be increased if such an increase
acceptable to the citizens of the City.
This is the procedure Idaho Power followed with the
City of Ketchum, Idaho, when Ketchum desired to relocate
Idaho Power's overhead power ines in downtown Ketchum to
an underground configuration.The City of Ketchum
continues to collect franchise fees, and as funds are
available, directs Idaho Power to underground selected
distribution circuits they have prioritized and
coordinated with the Company. The City of Ketchum has not
chosen to have any portion of the 138 -kV transmission
ine placed underground.
Q. What is the annual revenue received by Idaho
Power for serVlce to the Ci ty of Eagle?
CSB REPORTING
Wilder , Idaho
109 SAID (Di)
Idaho Power Company83676
In 2003 , Idaho Power received approximately
million for electric service provided to customers within
the Ci ty of Eagle.Eagle currently requires a 1 percent
franchise fee that collected $70,000 from City of Eagle
residents in 2003.
If the franchise fee was increased to
percent, how much additional revenue would be generated?
If the franchise fee was increased to
percent, the additional revenue above the 1 percent level
would be approximately $140,000.
Assuming the Commission would allow the Company
to finance a CIAC for the City of Eagle for 5 years, what
level of CIAC could be financed by $140 , 000 recovered via
an increased franchise fee?
Assuming equal monthly payments and an interest
rate at the Company's currently authorized rate of return
of 9.199 percent, the $140,000 annual revenue received by
increasing the Ci ty' s franchise fee from 1 percent to
percent would fund a CIAC of approximately $560,000 to be
recovered over 5 years.
Would the Company be willing to finance a CIAC
for more than five years?
No.The Company prefers not to finance CIACs
and believes financing of a CIAC for longer than 5 years
to be unreasonable.
CSB REPORTING
Wilder , Idaho
110 SAID (Di)
Idaho Power Company83676
Has the City of Eagle identified a preferred
route?
No.As I have stated , the route supported by
Idaho Power and the Citizen's Advisory Committee was
denied by the Ci ty of Eagle.While the City of Eagle
continues to desire evaluation of additional
alternatives, none have been identified by the City as a
preferred route.
What does the Company recommend that the
Commission direct the Company to do in this case?
Based upon the Ci ty of Eagle's refusal to
commi t to any expenses to be borne by the Ci ty' s
residents,the Company
direct the Company to
described Option on Exhibit 2 that was previously
recommends that the Commission
construct the transmission proj ect
denied by the Ci ty of Eagle.The $2.5 million cost
associated wi th that proj ect is a reasonable investment
for the Company to make.Any other plan would resul t
additional costs that the City of Eagle seems unprepared
to accept and that would inappropriately be funded by the
greater body of Idaho Power customers.
If the Commission does not direct the Company
to construct the transmission proj ect previously denied
by the City of Eagle , what does Idaho Power recommend
that the Commission do in this matter?
CSB REPORTING
Wilder , Idaho
111 SAID (Di)
Idaho Power Company83676
If the City is willing to fund a CIAC required
as a resul t of the selection of an al ternate transmission
path or design , Idaho Power respectfully requests that
the Commission issue its order specifying how the City of
Eagle will pay for the CIAC.The al ternati ves in order
of preference are as follows:
The Ci ty can acquire independent financing and1 .
pay the CIAC up front,
The City can increase franchise fees (if2 .
sufficient) to pay the CIAC plus carrying charges over a
five-year period of time, or
The Commission can order the Company to create3 .
new tariffs that would be applicable to customers within
the City of Eagle that would include a surcharge to
recover the CIAC wi th carrying charges wi thin five years.
Does this conclude your testimony?
Yes, it does.
CSB REPORTING
Wilder , Idaho
112 SAID (Di)
Idaho Power Company83676
open hearing.
(The following proceedings were had in
MS. MOEN:The witness is available for
cross-examination.
COMMISSIONER KJELLANDER:Okay, let's move
to the City of Eagle.
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Wilder, Idaho
MS. BUXTON:Thank you , Mr. Cha i rman .
BY MS. BUXTON:
CROSS - EXAMINATION
Mr. Said, I'm Susan Buxton.I don't think
If I ask you any questions and you don't
understand the question , just tell me you don't and I'll
try and rephrase it.
Okay.
Okay, Mr. Said, you don't have any
background as a land use planner , do you?
No, I don't.
And you don't have any experience
purchasing utility right of ways from private property
No, I don't.
Do you have any experlence evaluating
economic impacts to real property from the installation
we've met.
owners, do you?
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of high transmission lines?
do.
Would
through 24 please?
No.
You're not an economist, are you?
No, I'm not.
Do you have your direct testimony in front
of you?
you refer to page 2 , lines 21
m there.
In that you state that the City has
rej ected all of the economically prudent al ternati ves; is
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Wilder, Idaho
That's correct.
And you're just talking from Idaho Power
that correct?
Company's perspective; isn't that correct?
That's true.
Did you evaluate whether there exists any
different economic impacts between construction of new
high transmission lines through , say, potato fields
versus high value commercial areas like Eagle River and
the City of Eagle?
No, I didn'
Did you determine, then, whether the
proposal that you've done would be economically prudent
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for the impacted properties in that area?
In a farm area as opposed to the City of
Eagle?
Either one.
I didn't perform any studies regarding the
siting of the transmission line , no.
Did Idaho Power perform any studies in
siting the transmission line?
Yes.Mr. Sikes has testified to the
al ternati ves presented.
And did those -- are you familiar with
those studies?
I have not reviewed the studies.
talked with Mr. Sikes.
And in your discussions with Mr. Sikes,
did he tell you whether he felt that the alternatives
were economically prudent for the affected properties?
I think my understanding from discussions
wi th Mr. Sikes is that the economic choice was ul timately
that of the City and whether or not they would be willing
to pay the addi tional costs of al ternati ves that were
other than the least cost alternatives identified by the
Company.
You testified that you felt the City of
Eagle could pay the increased costs; is that correct?
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No, I made no judgment as to the Ci ty' s
ability or willingness to pay for additional costs.
testimony is that there is a reasonable level of costs
that would be incurred by the Company and if an
al ternati ve were selected that was more costly than one
of those alternatives , then it would be the City'
responsibility to bear the cost, but I did make no
assessment of the City's willingness to pay.
Would you please look at page 6 of your
direct testimony, lines 7 through
m there.
You say, "In the al ternati ve, Idaho Power
would be willing to accept installment payments,
including interest, to recover any required CIAC.
First of all , what is a CIAC for the
record?
Contribution in aid of construction.
Do you know whether cities in the State of
Idaho can enter into contracts to pay installment
payments over time?
My testimony basically says that if the
City were willing to have a franchise fee that they could
do that.They could enter into what other arrangement
may be required to provide the funds of a CIAC or they
could have an LID to fund such a mechanism.
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So you really don't know how cities can
finance long-term debt, do you?
, I'm not directly involved in ci ty
financing.
On page 2 , lines 21 through 24 of your
direct testimony, you considered Eagle River as an
interested party in this matter; is that correct?
Yes , they filed as such.
Were you aware that Eagle River paid Idaho
Power to bury its underground distribution lines?
I was not aware of that.
Were you aware that nei ther Eagle River
nor its representatives were included in or notified of
the existence of the Citizens Advisory Committee?
m not aware of that.
You've not provided the Ci ty wi th any
detailed costs for this proj ect , have you?
MS. MOEN:I obj ect to these questions.
This goes beyond the testimony provided by Mr. Said.
MS. BUXTON:Your Honor , Mr. Said has
testified , however, that the City should pay anything in
excess of $2.5 million.
MS. MOEN:The testimony - - Mr. Said also
indicates that he's relied upon information supplied by
Mr. Sikes in his testimony.Mr. Said is only reiterating
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information he has received from other Company experts
regarding the actual costs and the determination of those
costs.
MS. BUXTON:Then I would move that that
information in the direct testimony be stricken as it'
hearsay.
COMMISSIONER KJELLANDER:Wha t we're going
to do at this point is allow Mr. Said to attempt to
answer to the degree he can and we'll weigh
accordingly, but before we move there, there was a
question that was asked , one previous, that I wanted to
rehear the question and Connie, would that be best for
you to read that or would it be easier for Ms. Buxton to
just for my sake repeat the previous question, not the
one that's the question now?It was about the advisory
council.
MS. BUXTON:Mr. Chairman , my question,
believe, was were you aware that neither Eagle River nor
its representatives were included in or notified of the
existence of the Idaho Power Citizens Advisory
Commi t tee.
COMMISSIONER KJELLANDER:Okay, thank you.
I just needed to rehear the question and we're going to
allow the question to move forward and the witness can
respond accordingly.
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Ms. Buxton , you may want to restate the
question since I probably confused the issue by asking
you to move back two questions.
BY MS. BUXTON:Your direct test imony
indicated that the Ci ty should pay for anything
- -
for
any additional costs over $2.5 million; is that correct?
Tha t 's correct.
And to your knowledge, Idaho Power has not
provided the City with any detailed cost analysis for
CSB REPORTING
Wilder, Idaho
this proj ect at all; is that correct?
I believe that the Company has provided
cost estimates, the level of detail I'm not familiar
So it's your testimony that they are cost
estimates; is that correct?
Yes.
Are you aware of the constraints on cities
to pay for costs that are not otherwise accounted for for
the benefit of a private company like Idaho Power?
I don't know what "not otherwise accounted
Would you be surprised to know that the
pay funds out of public or out of public
funds, tax money or otherwise, to private companies
without detailed costs associated with the benefits the
with.
for"means.
City cannot
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City is deri vlng,does that surprlse you?
guess that doesn't surpri se me.don'
know when that information might be requi red.
Would reasonabl e for the Ci ty to
expect a detailed cost analysis in analyzing a proj ect
like that?
MS. MOEN:I obj ect to that question.
lacks foundation.This witness has already testified he
has no knowledge of the constraints upon cities to pay
costs.
COMMI S S lONER KJELLANDER:Ms. Buxton.
MS. BUXTON:Mr. Chairman , Mr. Sikes has
testified that he believes the City has rejected all of
the economically prudent alternatives, so he's testified
with regard to what he thinks is economically prudent for
the Ci ty to look at.He has testified that he believes
the City should pay any costs over and above $2.5 million
and I believe that he has said that the City has options
to pay for that and has opined as to what he thinks those
options should be under Idaho law , so I think he has made
some testimony with regard to what Idaho Power's position
lS on how the City should try and fund these costs in aid
of construction.
COMMISSIONER KJELLANDER:And Ms. Moen.
MS. MOEN:One observation I' d ike to
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make in response to a question from Ms. Buxton.
Mr. Sikes indicated that his reference to economically
prudent al ternati ves was from the Company's perspective
and not that of the City, so his judgment was not from
the Ci ty' s perspective.
COMMISSIONER KJELLANDER:With that , then
m going to sustain the obj ection.If you'd like to
continue wi th your questioning.
BY MS. BUXTON:Is it your understanding
that the Public Utilities Commission can order Idaho
Power to construct the facilities in spite of the City'
denial of the Company's condi t ional use permi t
application?
That is my testimony based on
conversations with my counsel.
And you have no personal knowledge or
personal basis for that testimony other than your
conversations with your own legal counsel; is that
correct?
Tha t 's correct.m not an attorney.
Is it your testimony, then , that Idaho
Power really does not have any legal obligation to comply
with municipal ordinances, including its permitting
procedures?
, that is not my testimony.
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Didn't you just say that it was your
understanding that Idaho Power can seek an order from
this Commission to construct the facilities in spite of
the City's denial of this Company's conditional use
application; is that correct?
That's true.We can seek authori ty from
the Commission.I think your second question was whether
Idaho Power Company could ignore the abilities of the
Ci ty .I think we are not ignoring the abilities of the
City to put requirements out there, although my
understanding is that the Commission has jurisdiction to
override the Ci ty in this instance.
Then it's fair to say that coming to the
City is probably a waste of everyone's time in your
opinion; is that correct?
I obj ect to that question.MS. MOEN:
It's argumentative.
THE WITNESS:No, that's not my opinion.
BY MS. BUXTON:If the Commission rules in
favor of Idaho Power , what incentive does Idaho Power
have to protect property owners' value in planning and
building the power system; in other words, let me
rephrase it.If the Commission rules in favor of Idaho
Power , what incentive does Idaho Power have to protect
the property owners that are affected by your
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SAID (X)
Idaho Power Company
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facilities?
MS. MOEN:I obj ect to that.It'
speculati ve and it lacks foundation.This particular
witness is here for the purposes of addressing the
financial mechanisms available and the manner in which
Idaho Power has received CIACs in preVlOUS cases and not
for the purposes of the questions asked.
COMMISSIONER KJELLANDER:Ms. Buxton , in
the context of rebuttal , if you could perhaps to move
things along, if there's a specific sentence or line
within the testimony that you would like to do rebuttal
, that may move us forward a little more quickly.
MS. BUXTON:One minute, please.
(Pause in proceedings.
BY MS. BUXTON:Mr. Said, I would direct
you to page 4 , please.If you could look at lines
through 18.Do you have any knowledge whether cities
other than Eagle have development standards that limit
the height of poles?
No, I do not have knowledge of that.
Do you have any knowledge whether cities
other than Eagle have development standards that address
aesthetics?
No, I don'I could add , though , that
we've never had a hearing before the Commission to
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123 SAID (X)
Idaho Power Company83676
address how those might be in conflict with the standards
for constructing a new transmission line as we do in this
case.
Is it your belief that it's inappropriate
for Idaho Power to view any of the development standards
that a ci ty may have wi th regard to the impact of your
facilities on their ability to govern and have a vision
for how their city will look?
No, that's not my testimony.
I would have you read lines 15 through 18,
please, starting wi th "Idaho Power believes.
. . "
"Idaho Power believes it is inappropriate
for the City of Eagle to pass the costs of its aesthetic
standards on to other customers who are willing to be
served at lower costs under different standards.
So back to my earlier question , then, if
you believe that it's inappropriate for the City of Eagle
to pass the costs of its aesthetic standards on to
others, then why would Idaho Power even waste its time
golng to the City to get a conditional use permit when
could just come to the Commission?
Well , generally we have not had problems
going to the cities to get conditional use permits.
Their standards traditionally have been consistent with
the standards that we have for construction and,
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124 SAID (X)
Idaho Power Company83676
therefore, coming to the Commission is a rare event.
This is the only time I'm aware that it has happened.
And you earlier testified that you have no
experience evaluating economic impacts to real property
from the installation of high transmission lines; isn't
tha t correct?
Tha t 's correct.
MS. BUXTON:I have no further
questions.
COMMI S S lONER KJELLANDER:Thank you, Ms.
Buxton.Let's move to Mr. Howell.
MR . HOWELL:Thank you , Mr. Cha i rman .
CROS S - EXAMINA T I ON
BY MR. HOWELL:
Mr. Said, on page 7 of your testimony
through the upper part of the page, you discuss what
different levels of franchise fees from one percent to
three percent would generate in terms of revenue.When
this testimony was filed in April , have you had an
occasion to recompute any revenue levels associated with
either the one or the three percent levels?
I personally did not do that, although
it's my understanding that in some discussions that went
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Idaho Power Company83676
on between the Company and the City a more detailed
evaluation may have been done.
But you don't know what those one percent
or three percent detailed evaluations would produce in
terms of revenue?
No, I did not review those.
All right, let me have you turn to page
On lines 14 through 22 , you discuss a situation involving
Idaho Power and the City of Ketchum that resulted, as I
understand, the Company putting its distribution lines
unde rground Are you familiar with that circumstance?
Yes, somewhat.
And isn't it true that in discussions
between Idaho Power and the City of Ketchum that the
utility and the City eventually reached an agreement to
install six blocks of distribution line underground?
I believe that's correct.
And do you know how the city paid for
that?
My understanding of the way that the city
has gone about paying for those contributions in aid of
construction is that they increased their franchise fee
in advance of the time that the work would be done and
when amounts were collected through that franchise fee
that would pay the incremental cost of undergrounding
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that at that point in time they made the payments and
Idaho Power performed the undergrounding.
Do you have any knowledge about the
duration of those terms of payments?
No, I don'
And you wouldn't know the exact amount
that the ci ty paid Idaho Power?
I don't know how much they paid, but to go
back one question , I guess my understanding was that the
payments were upfront rather than over time.
MR . HOWELL:All right, no further
quest ions.Thank you.
COMMISSIONER KJELLANDER:Thank you,
Mr. Howell.Let's move to Mr. Squyres.
CROSS - EXAMINATION
BY MR. SQUYRES:
As I understand it , it is Idaho Power'
position that to require any of its ratepayers outside
the City of Eagle to contribute to the cost of an
underground construction scheme, that assumes that only
the City and its residents would benefit from such an
act i vi t y; correct?
Well , I think the City is the primary
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127 SAID (X)
Idaho Power Company83676
beneficiary of that from an aesthetics standpoint.The
thing to really hone in on is that the cost of overhead
facilities would be passed on to all ratepayers through
allocation.It's only the incremental costs of
undergrounding that is being asked for as a contribution
in aid of construction.
I understand, but it's the Company'
position that the reason it would be inappropriate to
pass those incremental costs on to any of its ratepayers
outside the City of Eagle is because no one outside the
City of Eagle would benefit economically from an
underground construction scheme; correct?
I don't know if that's entirely the
rationale behind charging an overhead/underground
differential.That exists in our tariff schedule Rule H
for distribution facilities as a Commission-ordered
practice.There lS no corresponding rule associated with
transmission; however , as Mr. Sikes has testified,
have not undergrounded any transmission and so partially
the rationale is that for consistency of distribution and
transmission applications , a contribution in aid of
construction for undergrounding would be required.
Well, you know the Commission's rules and
your tariffs far better than me, but am I just totally
off base in concluding that the premise for not passing
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SAID (X)
I daho Power Company
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underground construction costs on to a broader base of
ratepayers would have to be that they don't benefit from
that activity in Idaho Power's view?
Well, first you asked if it was reasonable
to expect that as a rationale and I think the answer
yes, that it would be , but the end of the question
that the only consideration in determining that an
overhead/underground differential is a required
contribution in aid of construction , I don't know that
that's the only reason.
But I believe you testified in response to
some of Ms. Buxton's questions that Idaho Power has not
engaged in any analysis, any study, anything at all to
evaluate whether the benefit of underground construction
economically to a city like Eagle might provide benefits
broader outside the Ci ty; is that correct?
Tha t 's correct.Idaho Power's perspective
has been from the standpoint of the direct costs
associated with undergrounding that get passed on to
customers who have no say in the request.
And you talked about things being
aesthetically pleasing, basically Idaho Power's posi tion
is that there is no economic benefit to a broader
community, a group of folks outside the City of Eagle,
from land uses that might enhance commercial acti vi ty and
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129 SAID (X)
Idaho Power Company83676
economic development wi thin the Ci ty?
No, that is not my testimony.
I have no further questions.MR. SQUYRES:
Thank you.
Thank you,COMMISSIONER KJELLANDER:
Mr. Squyres.
Are there questions from members of the
Commission?Commissioner Hansen.
EXAMINATION
BY COMMISSIONER HANSEN:
Just a couple of quick questions here, so
in the Ketchum case, the City of Ketchum , are they paying
for the costs that Idaho Power determined exceeded the
prudent level of investment to install these underground
lines?
Yes.
Are you aware of any other cases where the
costs exceeded the prudent level of investment determined
by Idaho Power and the cost was passed on to the
requesting parties?
That happens with distribution facilities
on a regular basis and again, Rule H addresses the
appropriate level of contribution by the Company as
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SAID (Com)
I daho Power Company
130
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overhead facilities.
But on transmission?
On transmission we have not had requests
for undergrounding that came to this point in time or
this action.
In Mr. Lobb' s testimony - - are you
familiar with it?
Yes, I read his testimony.
Okay, he states that the State Street
alignment makes the most economic sense.Are you
familiar that he made that statement?
Yes.
So my question would be based on that,
does Idaho Power agree that that would be , if he is
correct , that's the prudent level of investment to be
made here?
Yes, I think the prudent level of
investment was the same for either the State Street route
or the Bypass at $2.5 million.
Okay, but we're looking at two different
corridors here and let's say if the other corridor was
picked and it isn't quite as economical , then should the
City of Eagle be required to pay the difference there
even though it's aboveground?If another route is picked
that costs a little bit more, then is this -- I guess the
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question I'm asking if you agree wi th Mr. Lobb and you
talked in your testimony about the $2.5 million, any
other corridor picked over that, then , are you saying
that the City of Eagle if another corridor was picked,
then they should pay that difference, that's it?
Yes, in essence.There was a question of
Mr. Sikes relating to route option No.3 by Commissioner
Smith asking about the goodwill incentive and basically
that identification of $340,000 while termed goodwill
here might in regular terminology be considered a
betterment or an improvement to the system that
somewhat subj ect to judgment.
In this particular instance, Mr. Sikes has
identified two routes that are $2.5 million or are
estimated to be $2.5 million and the third route with
some addi tional costs of undergrounding could
theoretically be viewed as betterment on the system;
however, as Commissioner Smith suggested in her response
to Mr. Sikes, we recognize that that sort of a betterment
determination is at risk of not being rate based and not
being viewed as prudent, so there is some judgment that
goes into the negotiations and the determination of what
that appropriate level of investment would be.
Thank you.That'COMMISSIONER HANSEN:
all I have.
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Idaho Power Company
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questions?
COMMI S S lONER KJELLANDER:Further
Commissioner Smi th.
EXAMINATION
BY COMMISSIONER SMITH:
CSB REPORTING
Wilder , Idaho
So you anticipated my question which was
going to start with you know the difference between above
the line and below the line?
I do.
So you would try for above recognizing
that it might end up below?
Tha t 's correct.
All right.The Company I would say almost
always is probably in some phase of constructing
transmission somewhere in its service area; is that
That's true.
And so you have an idea of about what
Yes.
And when you determine these costs, then
is it even necessary to think about some broader economic
benefit or impact of anyone anywhere?
I don't believe that that's normally a
correct?
should cost?
133 SAID (Com)
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course of action taken by the Company.
So you're looking at the costs of
constructing your physical plant in order to carry out
your statutory mandate which is to provide service that
is adequate, safe and in all respects just and
reasonable?
Tha t 's correct.
COMMISSIONER SMITH:Thank you
Mr. Cha i rman .
COMMISSIONER KJELLANDER:Let's move now
to redirect.
MS. MOEN:I have no redirect questions.
COMMISSIONER KJELLANDER:Right answer.
Well, it's now five minutes after 12:00 o'clock.
would be our intent to take a lunch break and come back
at 1:15.It's also , I think , just in terms of where
we're headed, we'll be looking at putting on the City of
Eagle's witnesses next, both direct and the rebuttal
testimony that we mentioned earlier , then we would move
to Mr. Squyres and your witness and then go to Staff.
Staff at that point after your direct, we can have a
discussion about any live rebuttal you may want to do and
what your preference is and then it would be the intent
to move to Idaho Power with its rebuttal witness, so
we'll go off the record and we'll come back at 1: 15 and
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Mr. Said , thank you for your testimony.
THE WITNESS:Thank you.
(The wi tness left the stand.
(Noon recess.
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