Loading...
HomeMy WebLinkAbout20040928Vol II Boise.pdf. ~. !! .~- '""\ ORIGINAL - BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION Idaho Public Utilities Commission Office of the Secretary RECEIVED I DAHO POWER COMP AN~ Complainant, SEP 2 7 2004 Boise, Idaho vs.CASE NO. .IPC-04- CITY OF EAGLE , IDAHO, Re sponden t . BEFORE COMMISSIONER PAUL KJELLANDER (Presiding) COMMISSIONER MARSHA H. SMITH COMMISSIONER DENNIS HANSEN PLACE:Commission Hearing Room 472 West WashingtonBoise, Idaho DATE:September 9, 2004 VOLUME II - Pages 136 - 409 CSB: REpORTING Constance S. Bucy, CSR No. 187 17688 Allendale Road * Wilder, Idaho 83676 (208) 890-5198 *(208) 337-4807 .. Email csb~spro.net 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 i s e , Idaho 83 7 0 1 CSB REPORTING Wilder , Idaho AP PEARANCE S83676 WITNESS EXAMINATION BY PAGE Nancy C. Merrill (City of Eagle) Ms. Buxton (Direct) Prefiled Direct Testimony Ms. Moen (Cross)Mr. Squyres (Cross)Mr. Howell (Cross)Commissioner Kj ellander Commissioner Hansen Commissioner Smith Commissioner Kj ellanderMs. Buxton (Redirect) 136 139 151 166 177 184 185 188 189 190 Don C. Reading (Ci ty of Eagle) Ms. Buxton (Direct) Prefiled Direct Testimony Prefiled Rebuttal Testimony Mr. Howell (Cross) Ms. Moen (Cross) Commissioner Hansen Commissioner Smith Ms. Buxton (Redirect) 195 198 223 230 235 248 252 255 Pike Teinert (City of Eagle) Ms. Buxton (Direct) Prefiled Direct Testimony Prefiled Rebuttal TestimonyMr. Howell (Cross)Ms. Moen (Cross) Ms. Buxton (Redirect) 258 261 286 305 309 329 Charles Carlise (Eagle River)Mr. Squyres (Direct) Prefiled Direct Testimony Ms. Buxton (Cross)Ms. Moen (Cross) Commissioner SmithMr. Squyres (Redirect) 333 336 361 367 372 373 Randy Lobb (Staff)Mr. Howell (Direct Prefiled Direct Testimony Ms. Buxton (Cross)Mr. Squyres (Cross) Commissioner Smith 374 376 397 404 406 CSB REPORTING Wilder , Idaho 83676 INDEX Admitted Premarked Admitted Premarked Admitted Premarked Admi t t ed Premarked Admitted Premarked Admitted Identified Admitted Premarked Admitted Premarked Admitted Premarked Admitted Premarked Admi t t ed Premarked Admi t t ed PAGE 197 197 197 197 197 197 152 197 197 260 260 260 260 NUMBER DESCRIPTION FOR THE CITY OF EAGLE: 100 - 101 - Eagle, Idaho , City Code 102 - Populations of Idaho Cities,1990-2000 103 - Profile of Selected Housing Charactistics, 2000 Census 104 - Pat Summerall, Champions of Industry, Best Managed Cities in America 105 - Memo from Ken Harwood to Nancy Merrill , June 11 , 2004 with attached Architecture & Site Design Book 106 - City of Eagle , The 2000Comprehensive Plan , Land Use Map, November 9, 1999 107 - Development Agreement between Eagle River Development & The City of Eagle , January 25, 2000 108 - Idaho Power Company, 2002 Integrated Resource Plan 109 - Idaho Power Company, January , 2003, Annual Demand Side Management Report 110 - Demand-Side Management at Idaho Power , A Business Plan 2003-2005 III - Idaho Power Company, ConservationPlan, April 15 , 2003 CSB REPORTING Wilder , Idaho 83676 EXHIBITS (Continued) NUMBER DESCRIPTION Premarked Admitted Premarked Admi t t ed Premarked Admitted Premarked Admi t t ed Premar ked Admitted Premarked Admi t ted Premarked Admi t t ed Premarked Admi t t ed Premar ked Admitted Premarked Admitted Premarked Admitted PAGE 260 260 260 260 260 260 138 138 138 138 138 FOR THE CITY OF EAGLE:(Continued) 112 - Idaho PUC Order No. 28583, Idaho Power 2000 Electric Integrated Resource Plan 113 - Response to Interrogatory No. 115 - City of Eagle, Underground Sub- Transmission Line Alternative Assessment , etc. 116 - Electric Transmission Week April 7 , 2003 , etc. 11 7 - Innovations wi th EPRI Technology, June 2001 , etc. 118 - ACSS/TW - An Improved Conductor for Upgrading Existing Lines , etc. 119 - May 11 , 2004 , Eagle Findings of Fact & Conclusions of Law , Case No. CU - 0 - 02 , e t c . 120 - Development Agreement between Albertson's and City of Eagle, August 26 , 1997 121 - Development Agreement between Eagle Gravel and Ci ty of EagleOctober 28, 1998 122 - April 11 , 2000 , Eagle "Findings of Fact & Conclusions of Law, Case No. CU - 8 - 9 9 , e t c . 123 - March 12, 2002, Eagle Findings of Fact & Conclusions of Law , Case No. CU - 11 - 01 , e t c . CSB REPORTING Wilder , Idaho 83676 EXHIBITS E X H I B T S (Continued) NUMBER DESCRIPTION Premarked Admitted Premarked Admi t t ed Premarked Admitted Premar ked Admitted Premarked Premarked Premarked Premarked Premarked Premarked Premar ked Premar ked Premarked PAGE 138 138 138 138 FOR THE CITY OF EAGLE:(Cant inued) 124 - September 12 , 2000, Eagle Findings of Fact & Conclusions of Law , Case No. CU - 3 - 00, e t c . 125 - August 28 , 2001 , Eagle Findings of Fact & Conclusions of Law , Case No. CU-10-96 MOD , etc. 126 - October 14 , 2003 , Eagle CityCouncil Minutes, etc. 127 - July 15 , 2003, Eagle Planning & Zoning Minutes , etc. 128 - January 30 , 2004 , Idaho Power' own depiction of the proposedpoles, etc. 129 - January 30, 2004 , Idaho Power' own depiction of the proposedpoles, etc. 130 - Eagle Comprehensive Plan in effect in 1995 131 - Eagle City Council Meeting Minutes, January 9 , 1996 132 - Eagle Planning & Zoning Meeting Minutes, August 11, 2003 133 - Kline letter dated Nov. 12?2002 134 - Whelan letter dated Nov. 15, 2002 135 - Applicable Sections of the Eagle Ci ty Code 136 - Facilities map CSB REPORTING Wilder , Idaho 83676 EXHIBITS E X H I B T S (Continued) PAGE 236 236 335 335 NUMBER DESCRIPTION FOR THE CITY OF EAGLE:(Cont inued) 137 - Eagle Planning & Zoning Meeting Minutes, December 4, 1995 Premarked 138 - Correspondence with Black & Veatch Premarked 139 - 2001-2003 Energy Efficiency & Conserva t ion Programs Premarked 140 Study prepared by Hamilton &Premarked Schwann Admi t t ed 141 Study prepared by Haider &Premarked Haroun Admi t t ed FOR EAGLE RIVER , LLC: 201 - Eagle River , Idaho's Premier Business Address Premarked Admitted 202 - Development Agreement Between Ci ty of Eagle & Eagle River LLC, January 25, 2000 Premarked Admitted CSB REPORTING Wilder , Idaho 83676 EXHIBITS BOISE , IDAHO, THURSDAY, SEPTEMBER 9, 2004 , 1: 15 P. M. COMMISSIONER KJELLANDER:We'll go back on the record and before we broke for lunch , we were ready to begin with the witnesses for the City of Eagle. MS. BUXTON:Mr. Chairman, Susan Buxton for the Ci ty of Eagle.We would like to call to the stand Mayor Nancy C. Merrill. NANCY C. MERRILL produced as a wi tness at the instance of the Ci ty of Eagle, having been first duly sworn , was examined and testified as follows: DIRECT EXAMINATION BY MS.BUXTON: Mayor Merrill would you state your full name,spelling your last name for the record? Nancy C. Merrill , M-e-r-r- And would you provide the record wi th your business address, please? 310 East State Street , Eagle, Idaho. CSB REPORTING Wilder , Idaho 136 MERRILL (Di) Ci ty of Eagle83676 And who do you represent in this proceeding? I represent the citizens of the City of Eagle as their Mayor. Have you previously filed written direct testimony in this proceeding? have. Do you wish your direct testimony? to make any correct ions to I do not.I do.On page - - I do. page -- where is it , Susan? I believe page 7 , line 15. Line 15 on page 7.It states that I am currently the president elect of the Association of Idaho Cities.I won't beI am the second president elect. president this year but the following year. Is that the only amendment to your direct testimony that you're suggesting today? Yes. If I asked you the same questions today, would you answer them the same as you did in your direct testimony? Yes. MS. BUXTON:Mr. Chairman, I request that the direct testimony of Nancy Merrill , pages 1 through 7 CSB REPORTING Wilder , Idaho 137 MERRILL (Di) Ci ty of Eagle83676 be spread over the record as if read in its entirety and that Exhibi ts 1 through 7 be marked for the record. COMMISSIONER KJELLANDER:Without obj ection , we would spread the testimony across the record as if read and I believe it's Exhibits , what, 119, 120 -- MS. BUXTON:I apologize , 119 through 127. I apologi ze , it's pages 1 through 7 of her direct testimony and Exhibits 119 through 127. COMMISSIONER KJELLANDER:Okay, and we would mark those exhibits and also admit them at this point as well wi thout obj ection. (The City of Eagle Exhibit Nos. 119-127 were admi t ted into evidence. (The following prefiled testimony of Ms. Nancy Merrill is spread upon the record. CSB REPORTING Wilder , Idaho 138 MERRILL (Di) City of Eagle83676 Would you please state your name and address? Nancy C. Merrill , Mayor , City of Eagle. The address is City Hall , 310 E. State Street , Eagle, Idaho 83616. Does your testimony include any attachments? Yes. Exhibits 119 through 127 are included the end of my testimony. What is the purpose of making your appearance at this hearing? As the Mayor of the Ci ty of Eagle, I am testifying to explain the impact on Idaho Power Company'(the Company, IPC) proposed 138 kV power line through the Ci ty of Eagle , the Ci ty' s denial of their request (Exhibit 119) and the efforts the City has made over the years to establish and maintain a viable residential and business community with the changing expectations of the citizens of Eagle. I will also testify that IPC failed to provide the City with viable al ternati ves regarding the concerns raised about the adverse impact of the high transmission lines. How is your testimony organized? I provide a brief description of my own participation in Eagle City government , describe changes made to Eagle's Ordinances and Policies to meet the considerable growth and development Eagle has experienced CSB REPORTING Wilder , Idaho 139 MERRILL (Di) City of Eagle83676 while maintaining its rural residential feel , and the analysis undertaken by the City in denying IPC' s request for the high transmission lines. Can you describe your business prior to your work in Eagle City government? In 1988 I first became involved with the City of Eagle as a citizen , business and property owner that had recently been annexed into the Eagle City limits. Our family business consisted of an egg farm consisting of approximately 500,000 chickens. I also had my own business teaching art classes, selling retail art supplies , and traveling with a local designer around the Pacific Northwest painting murals and faux finishes in homes and commercial businesses. What was Eagle like at that time? CSB REPORTING Wilder , Idaho 140 MERRILL (Di) Ci ty of Eagle83676 Eagle had a population of approximately 3,000 but had been discovered and began to grow. When and how did you get involved in Eagle City government? I was appointed to the Planning and Zoning Commission in 1993 and served on the Downtown Task Force as well as the Design Review Committee. I was appointed to the City Council in 1994 , and was elected to that position in 1995. Also , in 1995 while serving on the City Council was given the job of the City Council's liaison to the Design Review Commission. I was Council President for four years before being appointed to the office of Mayor in December 2002 and elected to that position in 2003. What was Eagle's vision for its future development? In 1994 , Mayor Steve Guerber (he is presently a member of the Eagle Ci ty Council) appointed me as the City Council's liaison to the Design Review Committee. was during my tenure with this committee that it became evident that Eagle should focus on becoming a full- service community, different from other cities close to Boise. We needed to create a commercial area that could support and balance residential taxes , provide jobs in town instead of just being a bedroom communi ty to larger CSB REPORTING Wilder , Idaho 141 MERRILL (Di) City of Eagle83676 business hubs like Boise, Meridian , and Garden City. How did Eagle change its regulatory scheme to meet its vision? Eagle began the process by creating fairly strict Design Criteria that included detached sidewalks with planting strips for tree lined streets trees were required to be of a three inch cal iper to provide for a city that did not look like it was entirely new. We created a tree ordinance that makes it difficult to remove old growth trees and established a tree fund replace these trees if they were removed or damaged. We removed signs from poles and required them to be replaced wi th non- illuminated monument signs. We required lights to be shielded and directed downward to prohibit light pollution at night. CSB REPORTING Wilder , Idaho 142 MERRILL (Di) City of Eagle83676 We created scenlC corridors along Eagle Road and State Street , as well as addi tional landscape requirements at key entrances into our city. Those entrances are the corner of Eagle Road and the Bypass State 44 and Edgewood, State 44 and Highway 55 , State 44 and Old Hill Road , State 44 and Ballantyne, and Eagle Road and Chinden. We have required developers at these sites to provide additional street corner landscaping along our scenic corridors as identified in our Comprehensive Plan. Exhibit 106, p. 48 and Land Use Planning Map indicating the scenic corridors.This provides a beautiful entrance into our city.We have also gone to great lengths to ensure that development has adhered to Eagle's unique rural/urban feel. Examples of the City's high standards for design cri teria are contained in the numerous development agreements. See, Exhibi ts 120 & 121. We adopted a height limit of 35 feet to protect our view corridor of the mountains. See, Exhibi t 101. We have allowed additional height in only three locations of the city: one was an uninhabited tower , a small part of an archi tectural feature of the Two River Club House. Exhibit 122 , pp. 5 & The other was a 5 foot addi tion for the Hil ton Hotel that backs up to the Boise River. Exhibit 123, pp. 1 , 5-7.This addition was allowed CSB REPORTING Wilder , Idaho 143 MERRILL (Di) City of Eagle83676 because of gradient changes in the road that placed the Hotel well below the regular grade for a building. The same is true for the Con Agra building that is also placed along the Boise River and was allowed an addi tional 5 feet to conceal the mechanicals on the roof. This building is in a setting that does not block the view corridor of the mountains. Exhibi t 124 , pp. 5 - 6. St. Alphonsus Medical Office Building recently requested additional height at the new Eagle River site, but was limited to the 35 foot standard. See , Exhibit 107 , Eagle River Design Review Guidelines p. When did the City first become aware that pole heights would adversely impact its vision? I was serving on the Eagle Planning and Zoning Commlssion that two new issues arose. One was CSB REPORTING Wilder , Idaho 144 MERRILL (Di) City of Eagle83676 a cell tower that requested to be located at the back of the Container and Packaging building located along State Street and backing up to the Rocky Mountain Business Park. The second issue was the CUP request from Idaho Power to allow for additional pole height along State Street from Edgewood to the existing substation across from Ci ty Hall. The cell tower was denied because of the requested height and because it was also too prominent an intrusion into the view corridor.In contrast , in 1995 the Idaho Power poles were allowed , but the discussions were long and lengthy, and because promises were made that these would be the only completing circuit that Eagle would ever need. The CUP also conditioned the sub-station such that if upgrades were ever requested the sub-station would be removed from the City center. See , Exhibit 100. In the mid 1990' s the Planning and Zoning Commission was fairly new and the members and had never dealt with a public utility. The desire of the Commission was not to have ugly poles along State Street. I believe that if we had had any idea that this was only the beginning of many tall poles being requested within the city limits, we would have recommended denial of the 1995 Condi tional Use Permi t. See , Exhibi t 101. A cell tower was later permitted at the Republic CSB REPORTING Wilder , Idaho 145 MERRILL (Di) City of Eagle83676 Storage Site along Highway 55 however it was limited to a 135 foot height and also allowed co-locations for additional services on the same pole. See, Exhibit 125 pp. 1 , 4 - 7 . In Eagle we strategically place cell towers away from residences and provide for a fall zone as well as limiting their height and prohibiting them along our scenic corridor. See, Exhibi t 101. Explain the history of IPC' s Conditional Use Permit Application? IPC received a CUP from the City in 1995 for the upgrade of the public utility substation primarily to update the transmission power lines from 69kV to 138kV.See , Exhibit 100.In its CSB REPORTING Wilder , Idaho 146 MERRILL (Di) Ci ty of Eagle83676 Findings of Fact and Conclusions of Law , the Ci ty placed condi t ions on the CUP which required future upgrades to be made at a different location , outside of the City. When IPC came to the City for a new CUP the Council was gravely concerned about how this application would impact property values , how it would fit into Eagle' rural/urban set t ing, af f ect our tax base, revenues, job opportunities and inhibit future development.Numerous public hearings were held before both the Planning and Zoning Comission and the City Council. See , Exhibit 126 pp. 3-9, Exhibit 127 , pp. 1-The public repeatedly obj ected to the proposed pole heights and the impact they would have on Eagle's skyl ine , the view corridor , and the rural feel of the City. As elected officials, we were frustrated with the lack of options presented by IPC and felt powerless to address the concerns of our citizenry.The City was unfamiliar with available alternatives or any options might have to alleviate these concerns. As a resul t, the City hired Black and Veatch to evaluate the costs and feasibility of constructing an underground 138kV line. What Black and Veatch did not disclose to Eagle was the fact that they had done significant work for IPC in the past.We are concerned that this influenced the work they did for us.Nevertheless the Black and Veatch CSB REPORTING Wilder , Idaho 147 MERRILL (Di) Ci ty of Eagle83676 report is a narrow evaluation of overhead lines vs. underground lines.The study contained no examination of modern technologies and how they might be used to reach a viable solution or any alternative routes suggested by the City Council.Instead the Black and Veatch study only examined IPC' s suggested alternatives.It did not address innovations or al ternati ve technology.See Teinert 's Direct Testimony.This may be due in part to the City's unfamiliarity with the intricacies of public utilities and utility planning.We were relying on IPC to identify different options for us to consider.They did not give us information on al ternati ve technologies. Explain Eagle's goal in having such development standards? The City of Eagle has established high design criteria for both the residential and CSB REPORTING Wilder , Idaho 148 MERRILL (Di) City of Eagle83676 commercial developers. This has been a good partnership and has given the citizens high property values while keeping the property tax base one of the very lowest of all the ci ties in Idaho. Large overhead power lines through the scenlC corridors of our City will absolutely destroy everything we have tried so hard to create since we were incorporated in 1972. We recently received the Pat Summerall Champions of Industry Award for one of the Best Small Managed Ci ties in America. See , Exhibi t 104. Much of this was based on our planning and design cri teria efforts.We also just received from the Association of Idaho Cities two awards for being a Community of Promise. See , Exhibi t 105.The Eagle Archi tecture and Design Book was created for the purpose of ensuring that developments follow these guidelines. Our future could very well be defined by this very important decision. With three state highways intersecting our community - all with utility easements we will be forever impacted if the PUC allows for this to happen. There just simply must be a bet ter way. As second President elect of the Association of Idaho Cities (AIC) what concerns do you have for the cities of Idaho? I plan to educate growing cities like Eagle CSB REPORTING Wilder , Idaho 149 MERRILL (Di) City of Eagle83676 about the dangers of how public utilities can affect property values, result in adverse health perceptions, has impacts on years of careful planning and zoning, and stunt future development.Clearly, utility corridors need to be planned well in advance.Since the cities are given little or no help in this area I would like to see the AIC take a more active role in helping to address this problem. I am also the legislative chair for the AIC and will encourage a review of relevant statutes addressing large utility poles in the territorial limits of Idaho Ci ties. Does this conclude your direct testimony? Yes. CSB REPORTING Wilder , Idaho 150 MERRILL (Di) 7 a City of Eagle83676 open hearing. (The following proceedings were had in MS. BUXTON:Mr. Chairman , I'd present the witness for cross. Ms. Moen. COMM IS S IONER KJELLANDER:Let's move to BY MS. MOEN: MS. MOEN:Thank you , Mr. Cha i rman . CROSS - EXAMINATION direct testimony in front of you? Mayor Merrill , do you have a copy of your and 5? I do. Could you please turn to page 7 , lines 4 Okay. I believe you've testified that large overhead power lines through the scenic corridors of our CSB REPORTING Wilder , Idaho City will absolutely destroy everything we have tried so hard to create Slnce we incorporated in 1972 is that Tha t is correct. Dr. Reading is sponsoring Exhibits 100 to 107 .m going to make reference to that.Mr. Cha i rman , correct? 151 MERRILL (X) City of Eagle83676 I request that Exhibit 106 from the direct testimony of Mr. Reading be marked. plan? Do you have a copy of the comprehensive I don', of the comp plan , yes, do. COMM IS S IONER KJELLANDER:Without objection , we will mark the exhibit. (The City of Eagle Exhibit No. 106 was marked for identification. BY MS. MOEN:Could you please turn to page 2 of 54 of the comprehensive plan? CSB REPORTING Wilder , Idaho My comprehensive plan goes to 51 of 51 and then it has maps.Are you referring to the maps? Overview. Page 2 of 54.It's the Chapter Page 2 of 54? MS. BUXTON:Mr. Chairman , may I approach the wi tness? obj ection. COMMISSIONER KJELLANDER:Without (Ms. Buxton approached the wi tness . ) THE WITNESS:Okay. BY MS. MOEN:As you can see under Overview in Section 1., there are a list of statements 152 MERRILL (X) Ci ty of Eagle83676 of purpose am I correct? That is correct. And if we go to Purpose B , that purpose says that one of the purposes of the comprehensive plan is to ensure that adequate public facilities and serVlces are provided to the people at a reasonable cost.Am I correct in reading that? Tha t is correct. Now , if the City could be assured of having adequate public facilities provided to its residents at a cost of $500 000, would it be reasonable for the Ci ty to endorse a design that would provide an identical level million? No. Now when the comprehensive plan makes of service at a cost of $5 to reference to public facilities and services, that would include Idaho Power I s electrical facilities, too, wouldn't it? Would you say that agaln , please? When the comprehensive plan makes reference to public facilities, as it does in Purpose B public facilities includes reference to Idaho Power' electrical facilities, wouldn't it? It does. CSB REPORTING Wilder , Idaho 153 MERRILL (X) City of Eagle83676 Therefore , consistent wi th the purpose of the comprehensive plan , you'd agree, wouldn't you, that Idaho Power's electrical facilities should be provided to the City of Eagle at a reasonable cost? I believe that the Idaho Power lines should be provided to the citizens of Eagle at a reasonable cost , but I also think that we have to look all of the items in the comprehensive plan that deals with that and there's other items besides just reasonable cost that we have to look at. Okay, but even taking all those other costs into consideration , you've already testified that if a cost were 500 000, it wouldn't be reasonable to have an identical level of service and charge 10 to 18 times that amount. Yes, based on cost only. Would you please refer to page 4 of your testimony?On page 4 of your testimony, I'll give you the specific lines , you on line 13 begin to make reference to 35-foot height limitations is that correct? Tha t 's correct. And I believe in Exhibit 2 to your direct testimony, the last page, you make - - there's an excerpt attached from the zoning ordinance that deals with CSB REPORTING Wilder , Idaho 154 MERRILL (X) City of Eagle83676 archi tectural appurtenances.Have you found that? , I don't have that document in front of me.I just have my testimony and the comprehensive plan. Do you recall in your testimony that you've identified certain instances on page 4 where there have been exceptions made to the Ci ty I S height restrictions? Limi ted exceptions , yes. In particular , on page 4 you talk about an uninhabi ted tower.You talk about an addition to the Hil ton Hotel and I believe you refer to an entranceway the Con Agra building? Correct. And these based on exhibits that you have identified are appurtenances to a facility; is that right? They are appurtenances to a facility for uninhabi ted occupation of which to hide mechanicals on the roofs. And it I s the same reference to archi tectural appurtenances that you're applying the 35-foot height restriction in your testimony for Idaho Power's power poles? , we're not applying the same - - well the same standard is 35 feet, but we also have that CSB REPORTING Wilder , Idaho 155 MERRILL (X) City of Eagle83676 limitation with our cell towers, also, so towers , poles, spirals and those kinds of things are what we look at. For example, if a church has a spiral on it , it is sometimes allowed and sometimes not.We just had one removed because it was too tall and the adj acent or the kitty-corner church , we made them take it off and put down on the ground, so we've those kind of si tuations. All right.Mayor Merrill , would you agree that with the proposed extension of a 138 kV transmission line from the Eagle substation , Idaho Power is not requesting that alterations be made to the substation; is tha t correct? That is correct. Now , on page 5 of your testimony, lines to 9, you indicate that a condition of approval of the 1995 CUP for the substation was that if upgrades were ever requested , the substation would be removed from the Ci ty center.Am I reading that correctly? Tha t 's correct. Your counsel has already introduced into evidence what I s been identified as Exhibit 100 , I think to Dr. Reading I s testimony.It's the Findings of Fact and Conclusions of Law.Do you happen to have a copy of that in front of you? I don 'You can read it to me, though. CSB REPORTING Wilder , Idaho 156 MERRILL (X) City of Eagle83676 Among the recommendations I'm going to read you and if you'd take this at face value MS. BUXTON:Mr. Chairman, with permission , I'll give a copy to the witness. COMMISSIONER KJELLANDER:That's fine. THE WITNESS:Thank you.Tell me where you're at, please. BY MS. MOEN:Please turn to the last page of that exhibit. Okay. Now , in your testimony you said if upgrades were ever requested, the substation would be removed from the City center.Could you read , please Recommendation No. "No further expansion once they upgrade this location , the next upgrade needed will require a different location. Okay, you'd agree, wouldn't you, that that restriction or condition doesn't obligate the City to abandon that substation , does it? It doesn't require us to abandon it? Yes. , I don't think that was ever the intent.I think the intent was that if it was going to get bigger and have more stuff in it that it would need CSB REPORTING Wilder , Idaho 157 MERRILL (X) Ci ty of Eagle83676 to be relocated outside of the Ci ty center. Okay; so it's not that it has to be removed and relocated? At this time? Yes. , because it was our indication that there wasn't golng to be additions or any upgrades to that substation , that we were just going to be taking the ines from there. Okay.Hang on to that exhibit , but go to page 6 of your testimony, lines 1 and 2. Of my testimony? Yes , please. Okay. You refer to the 1995 substation CUP and you testify that, 1'm quoting, "the City placed conditions on the CUP which required future upgrades to be made at a different location , outside the City," and then referring to that same exhibi t, can you tell me among the four conditions placed upon the Company with regard to their application for a rezonlng where indicates that any new substation facility would have to be located outside the City? It doesn't say outside the Ci ty. Different location would indicate because of the zoning CSB REPORTING Wilder , Idaho 158 MERRILL (X) City of Eagle83676 that the City had that it would not be allowed within the Ci ty limi ts. So contrary to your testimony, it wouldn't have to be located outside the City?There's nothing in this -- There's nothing in this that says that. Okay, thank you.If you refer , please , to page 6 of your testimony, lines 2 to 5 , you indicate that when IPC came to the City for a new CUP , the Council was gravely concerned about how this application would impact property values , how it would fit into Eagle' urban/rural setting, affect our tax base, revenues , job opportunities and inhibit future development.Did I read that correctly? Tha t is correct. And I think when you're referring to that particular CUP , in all fairness, you were referring to the transmission route along either State Street or the Bypass; correct? Yes, I was.This whole thing had to do wi th jus t the t ransmi s ion 1 ines , not wi th the substation , so our focus has never been really on the substation at this point but only on the transmission ines Okay, let's look at the comprehensive plan CSB REPORTING Wilder , Idaho 159 MERRILL (X) City of Eagle83676 again please, page 54. Exhibit 106, and I'd like you to refer to Okay. And if you begin with the third paragraph am I characterizing this right that the comprehensive CSB REPORTING Wilder, Idaho plan that guides development in your community and specifically with regard to electricity says that appropriate placement of electrical utility facilities on public rights of way is encouraged; is that right? Tha t is correct. And let's keep on going.Isn't it also correct that the plan says that public streets and road rights of way typically serve as corridors for electric Tha t is correct. And in the next paragraph it al so says that additions and improvements to electric utility facilities that enhance the capacity and reliability of regional resources , particularly when multi-jurisdictional benefits within the region can be achieved, should be accommodated? Well , that's not in that sentence.The sentence you skipped was that the transmission lines are usually located on easements that Idaho Power acquires from private property owners and then it also goes down facilities? 160 MERRILL (X) City of Eagle83676 to limitations as may be prescribed by applicable law which is the Ci ty law , and then we go down to your next sentence of additions and improvements. And in all fairness, too, where you stopped reading about prescriptions by applicable law , it is also guided by prudent utility practice for existing and proposed utility facilities; correct? Correct. So we have a lot of interests here to juggle? Yeah. Based on your testimony that the City was gravely concerned about how this application would impact property values , why didn't the City go ahead and amend its comprehensive plan to make reference to additional requirements or why did it retain language that use of public rights of way was appropriate or private easements for transmission facilities? Well , because all of the easements in the City have public utilities in them and some of them are owned by Idaho Transportation Department, so they' allowed for that.We also were hoping and our law also requires that most of the utilities be buried underground , so the cable, the phones and those things go into underground.A lot of the distribution lines , we CSB REPORTING Wilder, Idaho 161 MERRILL (X) Ci ty of Eagle83676 were hoping in the future to get those buried underground.Those underground corridors would be in those easements.That's where they would most likely be, so that's why that's recognized as those areas. It al so says in general in our comprehensi ve plan that these are the areas and not to be specific in the area and so as the City grows, we were looking at, we'll look at development and where those things are occurring and then we will juggle the plan as it occurs. But in the section specifically identifying and referring to electricity, there's no language in your comprehensive plan that recommends that Idaho Power's electrical transmission ines have to be placed underground, is there? Not in the comp plan.The comp plan is a vlslon for the future.It's not the law.The law is in our ordinances and our ordinances and our conditional use permits is where those finer details and the law applies. But also it's a vision that public rights of way can be used for utility facilities? Correct. It's a vision that rights of way serve as corridors for electric facilities? CSB REPORTING Wilder, Idaho 162 MERRILL (X) Ci ty of Eagle83676 Yes,that'for that.doesn'VlSlon tell how those are to occur.doesn't say whether they'above ground or below ground. But on public rights of way rather than in public rights of way maybe is a distinction with a difference here. Coul d be. MS. BUXTON:I obj ect The question has been asked and answered. COMMISSIONER KJELLANDER:Well , it's just been asked and answered again , so we I 11 move forward. BY MS. MOEN:On page 6 of your testimony, Mayor Merrill , you criticize the work that Black and Veatch completed on the City's behalf; am I right? We did.We very disappointed with it. In lines 15 to 16 you say, "the Black and Veatch report is a narrow evaluation of overhead lines versus underground lines"; isn't that right? Tha t 's correct. And you admit, I think , in your testimony that the Ci ty contacted Black and Veatch to conduct the study on its behalf; correct? Yes. And so by contacting them , did you give Black and Veatch any guidance as to what you wanted the CSB REPORTING Wilder , Idaho 163 MERRILL (X) Ci ty of Eagle83676 company to evaluate on We did.We gave them a scope of work and when we got it back , we didn't believe that they had met to the letter of what we were requesting them to do. performed? Did you pay them for the services they We had entered into a contract, But you think they breached the contract because they didn't satisfy CSB REPORTING Wilder, Idaho I wouldn't go that far, no. So you've paid for their services? We paid for their services. So the constituents of the City of Eagle have to surmise that because the City Council chose to pay for those services that the City Council was happy wi th those services? I think we made it perfectly clear that the City Council was not happy with those services, that if we had to do it again, we would not have chosen that company and that we were very disappointed wi th the But you paid full price for services that We certainly did.We didn't breach our unfortunately. resul ts. you received? 164 MERRILL (X) Ci ty of Eagle83676 contract. And you spent - - and the money belonged to the constituents for those services? We would have to say at this point we made a mistake. Okay.Would you please turn to page 5 of 54 of the comprehensive plan , and that page at the top identifies section 2., Implementation Strategies.Would you please read section "Land use development regulations should be designed to protect the heal th, safety and welfare of the communi ty, avoiding unnecessary condi tions , delays and costs. Based on this implementation strategy adopted by the Ci ty of Eagle, wouldn't you agree wi th me that it's in the interests of the residents of the City of Eagle that Idaho Power provide reliable electric servlce to them? I believe it I S important that Idaho Power provide service to everyone.I think it's really important for that , but I think we also have to look at the health , safety and welfare of the community in that and that's where our conflict has arisen. Wouldn't you agree with me that it's in the interests of the residents of the City of Eagle that CSB REPORTING Wilder , Idaho 165 MERRILL (X) City of Eagle83676 reliable electric service be provided to the residents the City without imposition of unnecessary conditions delays and costs? I would agree with that; however , we don ' believe that what's being asked by Idaho Power is for the citizens of the City of Eagle and that's where a conflict has arisen. But in your comprehensive plan you also indicate on page 10, I believe, that it's also important that additions and improvements to electric facilities, particularly when multi-jurisdictional benefits within the region can be achieved, should be accommodated; correct? Correct. MS. MOEN:I have no further questions. COMMISSIONER KJELLANDER:Thank you, Ms. Moen.Let I S move to Mr. Squyres. MR. SQUYRES:Thank you. CROSS - EXAMINATION BY MR. SQUYRES: Mayor Merrill , mention was made this morning of the Citizens Advisory Committee, the CAC. Correct. CSB REPORTING Wilder , Idaho 166 MERRILL (X) Ci ty of Eagle83676 You're familiar with that , whatever it is? am. Who put together that CAC? Idaho Power. Were any of the members of the CAC selected or chosen by the City Council? , that's an interesting process.What usually happens with any kind of an advisory committee in the City of Eagle is that the Mayor appoints a committee and the Council confirms.They work under the direction of the City Council.They go to whatever activity that they're advising or researching out, bring that information back to the City Council.We review it and then we take action on that.That was not that process here.This was solely isolated with Idaho Power doing the selection , running the - - facilitating it and directing it.We also had of the 14 people that were there, seven of them were on the State Street route and the rest of the seven were spread throughout the community, including one from Star.There was no representation from anyone on the Bypass route. And there was no representation on the CAC from the City's Planning and Zoning staff; is that right? CSB REPORTING Wilder , Idaho 167 MERRILL (X) Ci ty of Eagle83676 No. Okay, and so the report or the conclusions of the CAC don't represent the posi tion of the governing elected body of the Ci ty of Eagle; is that correct? Tha t 's correct. You've been a member of the Planning and Zoning Commission and the Design Review Commission and the City Council and now the Mayor since, what, about 1973? , thank you , but no.Since about ' 89. About ' 89 , even longer than I thought and during that time period you've been actively involved in the activities of the Design Review Committee and the development of the Ci ty' s design cri teria? I have been. And what was the purpose, the Ci ty' s purpose, in having strict design cri teria? Well , when we very first started to become a city, we were between Boise and Meridian and just a little farming town out there.In fact, our only stoplight happened to be an old black lab that came from the blacksmi th there and he'd come and lay in the street and everybody would stop and slow to go around him and that's how our traffic moved in our community and we had a chicken farm there and had 500 000 birds in the middle CSB REPORTING Wilder , Idaho 168 MERRILL (X) Ci ty of Eagle83676 of town , so Eagle started to grow and because of the way it I s situated , it sits kind of in a valley along both sides of the Boise River.It has some bluff areas and some large farmland. It became desirable for people to come out there and move and it wasn't that far from Boise or from Meridian , so at that point we decided gosh , if we' going to grow , we better decide whether we want to be a bedroom community or whether we want to be a full-service communi ty and we started working towards can we provide servlces , can we be a sustainable communi ty if we can find jobs and commercial base here , do we send everybody else on the roads to do their shopping and work outside of our Ci ty, so if we were going to be a full- service community, then we needed to also be different than Boise or Meridian, why else would anybody want to come here we weren't different, and we decided the way that we could be different was to maybe have little higher standards or different standards.I don't want to say higher because we've never intended to be a city better than anybody else. We just wanted to have our own standards and be different with our architecture and our streetscapes and create an ambience and a feeling of a place to be , a sense of communi ty and a place where CSB REPORTING Wilder , Idaho 169 MERRILL (X) City of Eagle83676 people would want to live and shop and raise their families and we wanted to be a community where people could have a little more elbow room and the lots maybe could be a little bit larger so they could throw a ball instead of say please pass the butter to the guy next door , so those are kind of the things that we tried to do as we started creating our design criteria for our communi ty . We started out with some pretty extensive landscaping.We increased our trees to three inch cal ipers We had a beautiful vista of the mountains as well as the river.We limited heights of our buildings to 35 feet.We wrestled wi th the cell towers as to where to place those outside of corridors and vistas so they wouldn't be obstructive to the views.We worked hard on the archi tecture and mechanicals , did a lot of things wi th the outsides of our buildings in our comprehensive plan. We had a bypass coming through our communi ty .We wanted to retain our downtown heri tage and still allow for viability at the Bypass with those businesses not to compete but to compliment , so we spent a lot of years trying to create these areas.At that bypass intersection we created what we called an entrance corridor to the Ci ty and a scenic corridor up and down CSB REPORTING Wilder , Idaho 170 MERRILL (X) Ci ty of Eagle83676 Eagle Road, up and down the bypass, as well as the historic part of downtown Eagle which was State Street which would be our main street or our Warm Springs Avenue, if you will. We wanted to protect those historic areas and those scenic views and those corridors , so we put some pretty strict criteria on those for people to come in on how that was to be developed.We've had some beautiful developments come into the communi ty and we' embraced that and they've embraced what we have had. It's been a win-win situation.The property values have produced just from January to June of this year , we have produced with 300 permits, which isn't very many for a small ci ty, we've produced over $91 million of property val ues in the Ci ty of Eagle of which goes to the state coffers of the State of Idaho to help increase the economy and also the tax bases for it, so we play a large part, even though we're a small ci ty, of the economic viability of the State of Idaho as well as the Treasure Valley. So let me ask you, there is an economic relationship between the design cri teria that you've been discussing, I mean , there was economic , the Ci ty was trying to achieve economic goals through those design cri teria? CSB REPORTING Wilder , Idaho 171 MERRILL (X) City of Eagle83676 Yes.We also had a limitation in that we are the third lowest taxed levy city in the State of Idaho , so we have really low taxes and the only way that we could offset that was to have great property values and high property values , so economic viability extremely important , part of our comprehensive plan and part of our condi t ional use permi t You mentioned design or entry corridors, scenic corridors, one of those scenic corridors is at Eagle Road and State Street; correct? Tha t 's correct. And another one is at Edgewood and the Bypass? Tha t 's correct. So if the 138 kV line we're talking about here were buil t along the Bypass route, it would have a detrimental impact on two of the Ci ty' s scenic corridors; correct? Yes, it would and you see those beautiful entrance signs out in those areas out there for that , so it would conflict with that. And that would have a detrimental impact on the goal that the City had been working so hard to achieve? It would. CSB REPORTING Wilder , Idaho 172 MERRILL (X) Ci ty of Eagle83676 And that was one of the reasons that Idaho Power's conditional use permit for the Bypass route was denied? Tha t 's correct. Let's talk about the State Street route for just a minute and I think I understand that the Ci CSB REPORTING Wilder , Idaho would prefer that this 138 kV line not be built anywhere, either State Street or the Bypass; is that fair? Ul timately, that would be wonderful.It I s kind of like choosing between your favorite child. Let's just assume hypothetically if we need to that this line will be built either down State Street or the Bypass , okay? Okay. The State Street route already has existing structures and existing utilities currently in use? Tha t 's correct. And they've been there a long time? That's right. And they're shielded in part and mitigated by trees and buildings? canopy? Tha t 's correct. I think it's called, what, a tree 173 MERRILL (X) Ci ty of Eagle83676 Yes. There are poles already there that exceed 35 feet? Yes. So if this line were put down the State Street route, what you would be doing is increasing the height, perhaps , of already existing structures? That I S correct. As opposed to if the route down the Bypass were put on there , you've got brand new poles in places where there is nothing right now except some light poles that had to be erected in accordance with the City' comprehensive plan? Correct. And those light poles and everything that was done on the Eagle River Development was done in conformance wi th a very strict development agreement entered into between the Ci ty and Eagle River? Yes , and those poles are historic type of poles. And so , if you will , the lesser of two evils , the Ci ty would prefer that , again assuming my hypothetical , the lesser of two evils here would be for the State Street route to be used for the proj ect that Idaho Power is seeking; is that right? CSB REPORTING Wilder , Idaho 174 MERRILL (X) City of Eagle83676 This is the question that the City Council has wrestled with in which we almost had an agreement with Idaho Power on it.It is obvious to us that that probably the most feasible route to take.The manner in which it happens is what we're concerned about.It is we realize that we need to provide power.Everyone likes to cook , bake a pan of cookies or turn on your electric toothbrush in the morning.We understand what Idaho Power is trying to do.It's the manner in which we can make it happen and make it work. We have explored everything out here wi them.Undergrounding with transmission lines does not seem to be in the cards at this point and this time.Our citizens have asked us if not now , when.We can't answer that.That is a question that the PUC has to answer or Idaho Powe r .We don't have those answers, but they have asked us to stand wi th them.They are very adamant about this.As a Council , we have a lot of opportunities to see more of the information than the citizens do and we understand a lot more than the citizens do of the need and what is trying to happen here , so we're trying really hard to work with Idaho Power and to make something work here wi th them.It's just the manner of how and where. It's been a difficult process? It's been a painful process for all of CSB REPORTING Wilder , Idaho 175 MERRILL (X) Ci ty of Eagle83676 us. But as we sit here today, from the City' standpoint , the most feasible route would be down the State Street? The most feasible route is, like I said having to choose between which child do I like the best or least.It would have to be down State Street I would imagine; however, the two reasons why it's so difficult is because one is where the c i t i zens 1 i ve , the other is where the businesses are.Both are important In our city and both have desires and needs and both have concerns about these poles and so for us to choose between our businesses which we need for the economic viability or the citizens which have a perceived economic impact on their homes as well what they perceive is their health really very real to us as a communi ty and we've been elected by nearly 17 , 000 people to represent out here , to try to choose and try to do the best , to follow our plan is what they've asked us to do, follow our plan and yes, there's some differences in our comprehensive plan.You can always pick something out of any part of the law and use it whether it's the law or the comprehensive plan but in general , we know what our comprehensive plan says, we know what our citizens expect from us and that's why we're here today. CSB REPORTING Wilder , Idaho 176 MERRILL (X) Ci ty of Eagle83676 And the application for a conditional use permit which the City denied was along the Bypass CSB REPORTING Wilder , Idaho Yes. And the City has never issued a decision on a conditional use permit along the State Street route; No. MR. SQUYRES:Thank you.That's all the route? questions I have , Mr. Chairman. COMMISSIONER KJELLANDER:Thank you, Mr. Howell. CROS S - EXAMINA T I ON Good afternoon , Mayor. Good afternoon. Let me follow up on just an issue that Mr. Squyres was talking about.Do all condi tional use permi ts have to be approved by the Council? Yes , and Planning and Zoning most often. And usually Planning and Zoning first and then on to the Council? is that right? Mr. Squyres. BY MR. HOWELL: 177 MERRILL (X) Ci ty of Eagle83676 Uh-huh. Okay, I'd ike to ask you one or two quest ions about the comp plan.On page 3 of the comp plan , it discusses Eagle's hopes to have a distinctive downtown economic center.Could you explain to the Commission where the Ci ty' s downtown economic center is? Our economic center runs from , gosh probably Bosanka Village which is out by - - would be on West State Street and that's about where our commercial ends and residences start and it will go clear to Edgewood , in that area , and then probably two blocks north and south of State Street. So we're generally talking about the intersection of Eagle Road and State Street and off to the east? East and west, yes. Okay, what would you say to those who suggest that maybe the economic center of Eagle is now the intersection of the Bypass and Eagle Road? Well , I I d say that we have two economic centers and they're both very viable.Like I said, again , the whole idea of the comprehensive plan is not to compete but to compliment and that's why the conditions wi th the Development Agreement which is going out by the CSB REPORTING Wilder , Idaho 178 MERRILL (X) City of Eagle83676 Bypass is very different from what is in the downtown area, even the design criteria is different. I'd next like to ask you also a few questions about the Black and Veatch study.It's true, isn't it , that Black and Veatch was not the only bidder to perform the study for the City? Tha t 's correct. And isn't it true that the City solicited bids and obtained bids from at least two other bidders? Yes. And isn't it true that the City whether you retained or used Hol iday Engineering to perform an analysis of the bids for you? That's correct. And then Hol iday or Hall iday recommended the Black and Veatch over the other two bidders? Tha t 's correct. And isn't it true that the City called out the subj ects that you wanted evaluated in that study? We called out the subj ects, but I don't believe that we gave them a big enough scope.I think that it was too narrow in what we did.In fact , I' sitting here telling you we didn't do due diligence on this, on that Black and Veatch study. Okay.Let me move on to something else. CSB REPORTING Wilder , Idaho 179 MERRI LL (X) Ci ty of Eagle83676 Has the Ci ty ever considered the use of an LID or local improvement district to convert aerial lines or overhead lines to underground construction? We've briefly talked about it. actually even talked about it with Idaho Power in some the alternatives we tried to talk about.Our concern was where do we put it and do we have enough time to implement it to what they needed to do , so an LID is something we have discussed briefly, not full bore. And under the LID concept, doesn't a city or a county typically go to the utility and ask the utility to calculate the exact cost that it would expend to do an underground conversion or an extension? Gosh , I don't know.We've never done one like that.The only LID that I know the City has ever undertaken was at the very beginning of the City when we did one for just a small area in the downtown improvement That's the only LID we've ever done.area.ve never personally been involved in one of those , but it sounds like a good idea. Assume for a moment that the Commission would be inclined to order Idaho Power to construct overhead aerial line down from the Eagle substation to the alley in Jackson Square, back around Jackson Square, onto State Street , onto Ballantyne Road, would the City CSB REPORTING Wilder , Idaho 180 MERRILL (X) Ci ty of Eagle83676 still like to see the other two distribution lines, the cable line and the telephone line , would you like to see that buried? We'd love to see it buried , yes.That' been our whole issue.In fact , we were so close to our agreement, I know that's not part of my testimony, but we were so close and it just boiled down to dollars. just couldn't figure out how we were going to pay for that and make it work. Was it the question of how to pay for that was the stumbling block? Yes. I have one final question.Thi s morning Mr. Smith was suggesting that once the Commission issues its order in this proceeding that the Company take the order , go to the City, file a conditional use permit and then the City would review that new conditional use permi t wi th the Commission's order in hand.Can you tell the Commission what types of conditions you might or the City might want to apply to that conditional use permit? Sure , I sure will. MR. SMITH:Wai t, I want to obj ect this.The question is calling for speculation.Until the condi tional use application is filed and the scope CSB REPORTING Wilder , Idaho 181 MERRILL (X) City of Eagle83676 that conditional use application is identified , it is calling for speculation to assume what type of conditions might be appl ied. MR . HOWELL:I'll wi thdraw the question. BY MR. HOWELL:As a former Planning and Zoning Commissioner , Councilwoman and Mayor , does the City have a set of boiler plate conditions? For conditional use permits , standard condi t ions? Yes. We always have our standard conditions and then we have site specific conditions additional. Can you tell us what your standard condi t ions would be or are? , goodness , it depends on the application for sure.I don't have any of those before me on that.It would just be the boiler plate regular condi tions of approval.Site specific conditions of approval would be additional requirements that are placed on them.Sometimes those are even in the form of a development agreement. In the Planning and Zoning staff of the work-up of the CUP that was denied by the City Council, were there included recommended standard conditions? m sure there are.They always put those CSB REPORTING Wilder , Idaho 182 MERRILL (X) Ci ty of Eagle83676 standard condi tions in.There's usually a staff report and in the findings and facts there's an overVlew there's a recommendation from the Planning and Zoning and then the recommendation from the City Council with the site specific conditions as well as standard conditions of approval. Mr. Howell , I would also tell you that in a conditional use permit that we have the opportunity as well as with our permits to direct our staff to expedite to sometimes enj oin the findings and facts and conclusions of law together with the application. have some ways that we can have some special meetings to expedite these conditional use permits or any of the applications that we can and we try real hard to work with an applicant to get those things through , especially if there's a time limit on something. Would this be the kind of case that you would consider expediting? I would. MR . HOWELL:All right, thank you. further quest ions. COMMISSIONER KJELLANDER:Thank you, Mr. Howell. I think we're ready now for questions from the Commission and I'll lead off with one. CSB REPORTING Wilder , Idaho 183 MERRILL (X) Ci ty of Eagle83676 EXAMINATION BY COMMISSIONER KJELLANDER: Good afternoon Mayor Merrill. Good afternoon. Sort following up on the two assumptions that were similarly proposed by both Mr. Squyres and Mr. Howell and also recognizing that this is the best of the worst options in your Vlew , but State Street was identified and assuming, then, that it's going to be overhead and the Ci ty or the money doesn't show up today or tomorrow to make it go underground, from your testimony, you've already submitted that you don't like the large overhead power lines and would like to really bury all of them if you could.If that money should materialize in four to five years after the transmission lines are up down State Street , would you consider it to be more cost effective if your goal is to try to eliminate the overhead power lines to have it down one corridor and then have that money and then bury them all at once? I think that's probably a better idea. we'd had the money, if we I d thought that we needed to, we maybe could have done ike Ketchum had done and increase those franchise fees and had it in hand and been able to CSB REPORTING Wilder , Idaho 184 MERRILL (Com) Ci ty of Eagle83676 move that through. So then a single corridor is your preference? Yes. COMMISSIONER KJELLANDER:Thank you. Are there other questions?Commissioner Hansen. EXAMINATION BY COMMISSIONER HANSEN: Mayor , just a couple of quest ions.Do you believe there is an urgency to construct this proposed transmission line between Eagle and the Star substation? m sure in the Idaho Power's view it is. You know , for the Ci ty of Eagle there isn't an urgency, of course, because we don't think that that's to serve us.We know that that's to Star , but we are also part of a regional group that we understand each other's needs so we understand the needs that power needs to go and be transmitted down the road. Another question I had was , did you have an opportunity as a city back in April of 2002 or since that time when the CAC was formed and meeting to give CSB REPORTING Wilder , Idaho 185 MERRILL (Com) City of Eagle83676 your input and guidelines of what you as a city would hope the guidelines would be in picking a route? No. One last question.ve got to ask you this question , I guess , because I years ago served on the ci ty council and I'm just kind of curious , in this case m kind of surprised that you would rather have the PUC make the decision on the route rather than the City Council make that decision; am I correct in this case? You know , it's really a chicken way out the whole thing, on this whole thing, no doubt.Wha t has happened is because of the extensive public comments and unhappiness wi th our ci tizens, as well as the business people out here and as we've tried to work wi th the Idaho Power trying to come up wi th a route, a payment , an underground distribution , myriads of different things out here , size of poles to types of poles , it became very clear to us and I have to tell you our Council has not been unanimous on this and we have flip-flopped as we' wrestled with this and wrestled with this and we came to the conclusion at the last minute before we could sign the agreement that we were in a no win situation. If we signed the agreement with Idaho Power , we would make the people that lived on the State Street corridor very angry, that we had not allowed them CSB REPORTING Wilder , Idaho 186 MERRILL (Com) Ci ty of Eagle83676 to go through the public process of being able to express to the Public Utilities Commission because they knew that's where this was coming and be able to testify and we would circumvent a public hearing process and that would make them very angry.The second thing that would make them very angry would be over the whole City that if we had taken the agreement with the franchise fees and spread them out over three years - - increase them to three percent over a six-year period of time and ask all the citizens to pay for that that would make everybody else mad at us, so we said, you know , what the citizens had asked us to do was please don't sell us out , stand with us as citizens and let's go together to the PUC and explain our plight and lay it at their feet and let them make that decision for us, and as elected officials, tha t 's what we were asked to do.Typically, we try to do that. I apologize for the pressure it puts you under.We know that , but it's like I told the folks last night , the PUC are good people, good hearts , they understand a bigger , broader picture.They understand power , they understand all the needs of the citizens for all the State of Idaho.They are a bet ter board to make this decision.We ul timately would have loved to have had it go around the Ci ty and that was some of the routes CSB REPORTING Wilder , Idaho 187 MERRI LL ( Com) Ci ty of Eagle83676 that we looked at and we thought that that would better serve up into the future wi th Star and some of those developments that are going up into the foothills and was just economically unfeasible, but we could never get the real costs on it , so there were a lot of things out there that we looked at, but as a Council member, you' right, it was a very difficult decision on it and we will stand by the PUC' s decision on that.We know that thi decision is not easy for you, too, and we feel a little bit like David and Goliath coming into the fight here, but we've never done this and we hope that you make the right decision for us. COMMISSIONER HANSEN:Thank you very much, Mayor. THE WITNESS:Thank you. COMMI S S IONER KJELLANDER:Commissioner Smith. COMMISSIONER SMITH:Thank you. EXAMINATION BY COMMISSIONER SMITH: And thank you, Mayor, and I guess the first thing you should have told your citizens is that we're cheap and there won't be one more dime that goes CSB REPORTING Wilder, Idaho 188 MERRILL (Com) City of Eagle83676 into this, but I was glad you mentioned the citizens coming to you and asking you , because I've recently become aware of a statute that you've probably known about for a long time and that is Chapter 25 of Title of the Idaho Code and there's a whole section in here on underground conversion of utilities and I guess my question is when the citizens came to you m not aware of it. -- did you show them Title 50, Chapter 25 and say if our community wants to underground our facilities, the legislature has told us the process by which we can do that and here it is? No, I did not even know that.We' pretty much ingrained in our little City codes. Well , and I was pretty much ingrained in Title 61 and 62 , but now I've branched out into Title 50. I will too now. COMMISSIONER SMITH:Thank you. EXAMINATION BY COMMI S S IONER KJELLANDER: Okay, I'll give it one shot.I'll just ask , if the Commission were to issue an order to do the overhead lines down State Street, you had mentioned CSB REPORTING Wilder, Idaho 189 MERRI LL ( Com) Ci ty of Eagle83676 earlier in your testimony that there had been an attempt to deal with franchise fees to bury those lines.I f you have a Commission order in hand, does that then potentially go back to reopen that discussion to look the franchise fee for burying a portion of this line? I bel ieve so. COMMISSIONER KJELLANDER:Okay, thank you. redirect. Anything else?Redirect. BY MS. BUXTON: MS. BUXTON:Mr. Chairman, just some minor REDIRECT EXAMINATION Mayor Merrill, would it surprise you to know that Title 50, Chapter 25 is the LID statute to bury CSB REPORTING Wilder , Idaho It would surprise me, yes.Thank you. underground lines? And you did ment ion that we had talked LIDs for this purpose in the past; is I just didn't know it fit under a Title Mayor , when Ms. Moen was asking you questions about the comp plan, she was asking you about about potential that correct? law, sorry. 190 MERRILL (Di) Ci ty of Eagle83676 the camp plan's provisions regarding accommodating other areas, other areas in the region outside of the Ci limits with regard to public utilities and other public facilities.Does that also mean to you that the City Eagle should have to pay for those benefits to those areas outside of the Eagle City limits if they're going to allow them to go through our town? No, Ms. Buxton , that does not mean that we should have to pay for that.What it means is that we should cooperate with adj acent cities as well as the Treasure Valley as we look at regionalization throughout the Treasure Valley, whether it's sewer or water or power or roads or however those as we connect to one another that we should all be working cooperatively towards all of these things for the betterment of all of the Treasure Valley. Mayor Merrill , wi th regard to the Black and Veatch study, the engineers that were selected by the Ci ty, you discussed that the Ci ty went through a bid process and advertised for request for proposals; is that correct? Tha t 's correct. I direct you to your testimony on page ines 15 through 21.When you were saying that you didn't do , the City didn't do, and I'll quote you, "your CSB REPORTING Wilder , Idaho 191 MERRILL (Di) Ci ty of Eagle83676 due diligence," were you really meaning, like you say on lines 20 and 21 , that, and I quote , "this may be due in part to the City's unfamiliarity with the intricacies of public utilities and utility planning" with regard to knowing how to set forth the scope of work that we asked Black and Veatch to do? Yes, I think I explained that.I do not believe that we asked the right questions, that we got the right answers that we needed.The report was just a tiny little booklet of maybe 10 pages for the whole thing, and for the dollars that we paid them, it just blew our mind away that that's all that we got. But do you believe the City acted in good faith with regard to trying to get an outside consultant to look at these questions on the Ci ty' s behalf? We were trying to come up wi th an al ternati ve or come up wi th some ideas.We were trying to get some costs and find out what was being done around the United States as well as around the rest of the world for underground transmission lines.We just have heard, we've read from other cities out there that it is being done and we wanted to see how feasible it was and if we could bring that information to Idaho Power that maybe we could help in the process and that was our desire out here was to say and here's some other ideas that we' CSB REPORTING Wilder , Idaho 192 MERRILL (Di) Ci ty of Eagle83676 come up wi th , al so. So to summarize that, you wanted other alternatives and you were looking for an expert to give us some more ideas of al ternati ves; is that correct? Exactly. In response Kj ellander you men t i oned we never got the real costs to a question from Chairman wi th regards to trying to work this out.Can you elaborate on what the City requested from Idaho Power and whether Idaho Power would or would not give us specific costs that we were asking for? Yeah , can I do just a little analogy? would be something like if I went to a car lot and looked at a car sticker on a car and said how much is this car and they said - - had one item on it that said $25,000, you're going to pay $25,000 for this car , and I'm saying yes,but does have air condi t ioning,how much the air condi t ioning going cost me?Does have an extra sound system,what'that going cost me,and how did get to the $25, OOO?I s there extra shipping and handl ing and all the other things that go wi th a car, and when we looked at these routes, all these different routes, the six inc uding going on up Highway 55, we were given will cost you the same to go down parallel to the Ci ty, but it will cost you a million dollars a mile to go up CSB REPORTING Wilder, Idaho 193 MERRILL (Di) Ci ty of Eagle83676 and a million dollars a mile to go down, but there was never any basis for it. Break it down, what is it a linear foot to What are the real costs on this , and the same thingme? with the lines going down , burying the distribution lines down State Street, we had a cost out here, a $340,000 cost , that was going to be spread and pushed on down and they were going to bury that, but then the actual cost where we came up with a million something dollars, we couldn't get what is that paying for , what is the cost on those, and when we budget, is this a real cost?Is this a not-to-exceed cost?Is it a cost plus?Is it cost plus labor?We couldn't get anything out of it as far as what are the real costs on this thing, so if we were to go for a franchise fee or an LID or that, we would have to have some dollar amounts in our budget to say this is what we have to budget for the next year or the next so many years in order to do that. MS. BUXTON:I have no further questions. COMMI S S IONER KJELLANDER:And thank you Mayor Merrill. (The wi tness left the stand. COMMI S S IONER KJELLANDER:I believe we' ready for your next wi tness CSB REPORTING Wilder , Idaho 194 MERRILL (Di) City of Eagle83676 MS. BUXTON:Mr. Chairman , we would next call Mr. Don Reading. DON C. READING, produced as a witness at the instance of the City of Eagle , having been first duly sworn , was examined and testified as follows: BY MS.BUXTON: you? DIRECT EXAMINATION Good afternoon, Dr. Reading, how are Fine. State your full name, spelling your last name for the record, please. CSB REPORTING Wilder , Idaho Don C. Reading, R-e-a-i-n- Could you provide us wi th your business 6070 Hill Road, Boise , Idaho. Could you tell the Commission who you represent in this matter? City of Eagle. And are you paid a consultant? Yes. address, please? 195 READING (Di) Ci ty of Eagle83676 Have you previously filed written direct testimony in this matter? Yes. Have you previously filed written rebuttal and supplemental testimony in this matter? Yes. Do you wish to make any corrections to ei ther your direct or your rebut tal and supplemental testimony? Not at this time. I f I were to ask you the same quest ions today for either your direct or your rebuttal and supplemental testimony, would your answers be the same? Yes. MS. BUXTON:Mr. Chairman , I would request that the direct testimony, pages 1 through 13, Exhibi 100 through 107 - - let's see, excuse me, I'm going to back up - - be spread over the record as if read in its entirety and that Exhibits 1 through 13 (sic) be marked and admi t ted for the record. COMMISSIONER KJELLANDER:Without objection , without restating previous objections , we'll spread the testimony of both direct and rebuttal as read and also mark and admit Exhibits 1 through (sic) CSB REPORTING Wilder , Idaho 196 READING (Di) Ci ty of Eagle83676 MS. BUXTON:For the record, the rebuttal testimony was pages 1 through 4. COMMISSIONER KJELLANDER:That's fine. We'll just call it rebuttal. Is it 100 through 107? MS. BUXTON:Exhibits 100 through 107. COMMISSIONER KJELLANDER:Well , then I was wrong and we'll just the say the associated exhibits. (The City of Eagle Exhibit Nos. 100-107 were admi t ted into evidence. (The following prefiled direct and rebuttal testimony of Dr. Don Reading is spread upon the record. CSB REPORTING Wilder, Idaho 197 READING (Di) Ci ty of Eagle83676 Would you please state your name and address? Don Reading, Ben Johnson Associates, Boise, Idaho. The address is 6070 Hill Road, Boise, Idaho. Have you prepared an appendix that describes your qualifications in regulatory and utility economics? Yes. Appendix A , attached to my testimony, serves this purpose. Does your testimony include any attachments? Yes. Exhibits 100 though 107 are included at a the end of the testimony. Wha t is your purpose in making your appearance at this hearing? Our firm has been retained by the Ci ty of Eagle (the City, Eagle) to examine the impact on Idaho Power Company'(the Company, IPC) proposed 138kV power line through the Ci ty of Eagle. How is your testimony organized? First , I give a brief history of the conflict between Idaho Power and the City of Eagle. Second, is a presentation of census data that shows the City has the highest median property value among non-recreation based ci ties in the state. One of the reasons for these high property values has is the development strategies and development restrictions of the City over the past CSB REPORTING Wilder , Idaho 198 READING (Di) City of Eagle83676 15 years. The City has managed its growth with award winning strategics that led to its rejection of Idaho Power's proposal. Third I show , using econometric studies of what common sense tells us, that high vol tage power lines reduce property values and that IPC' s proposal will devalue some of the City's most value real estate. CSB REPORTING Wilder , Idaho 199 READING (Di) Ci ty of Eagle83676 Third, the 90 acre Eagle River Development at the intersection of Eagle road and Highway 44 is used as an example of the type of development that has been occurring throughout the Ci ty. The developers have expended significant sums to build an aesthetic business park - including paYlng Idaho Power $100,000 to bury it own electric lines. This development along with other Eagle properties will see lower property values should the line be build as proposed by Idaho Power. This will not only hurt property owners but also the property tax base of the City and it ability to attract the type of businesses its planning efforts are aimed at. Fourth lS a discussion of the fact that what is happening in Eagle will occur throughout the state as cities attempt of follow Eagles pattern and prepare their communities to meet the economic development demands of Idaho's changing economy. Could you please briefly outline the dispute between Idaho Power and the City of Eagle? Idaho Power Company has ask the Idaho Public Utilities Commission,(the Commission , IPUC) to issue an Order directing it to construct a 138kV transmission line through the Ci ty of Eagle. The Ci ty of Eagle's concern over a maJor electric facility in the City began in 1995 when the IPC applied for a rezone and a conditional use CSB REPORTING Wilder , Idaho 200 READING (Di) Ci ty of Eagle83676 permit (CUP) to upgrade its substation in Eagle from 69kV to 138kV. The City approved IPC' s application with the provisions that, No further expansion once they upgrade this location , the next upgrade needed will require a different location. Additional design review and landscape review will be necessary. Additional screening against the fence on State Street is required. (Ci ty of Eagle, Finding of Fact and Conclusions of Law Recommendations, Oct. 1995., Exhibit 100) 2 . 3 . CSB REPORTING Wilder, Idaho 201 READING (Di) Ci ty of Eagle83676 The restrictions indicated the City's concern about maintaining aesthetics within the City of Eagle and desire to keep unsightly power facilities at a minimum. In late 2000 Idaho Power applied for a permit to install a 138kV line that would run from the Eagle substation through downtown along State Street to Highway , then to Ballantyne Road. Since the time of the original application the Company has withdrawn and resubmitted its application. There have been numerous meetings, public hearing, and discussions that have invol ved the Ci ty, the Company and the I PUC Staf f in an effort to resolve the issue. The City has rejected the Company's latest request for a Conditional Use Permit and an exemption to exceed the 35-foot building height restriction , and negotiations have stalled. In essence this application is the Company asking the IPUC to override Eagle's rej ection of the CUP and order IPC to construct the 138Kv line through the City in violation the Ci ty 's own ordinances.(Eagle City Code 8- General Standards for Condi tional Uses; Design Requirements, Objectives and Considerations, 8-2A- Exhibit 101) Could you please provide a profile of the City of Eagle? Eagle has been one of Idaho's fastest growing CSB REPORTING Wilder , Idaho 202 READING (Di) City of Eagle83676 communities in one of the nations fastest growing states. The City of Eagle was the 3rd fastest growing city in Idaho between 1990 and 2000 increasing its population by 233%. This growth has continued since 2000 increasing by nearly 2 200 residents or an additional 23%.(Population of Idaho Cities , 1990-2000. Exhibit 102) The City also has some of the highest property values in the state. How do you know the City of Eagle has relatively high property values? According the 2000 Census the Ci ty of Eagle, as measured by median house value, has the lOth highest value among Idaho cities. CSB REPORTING Wilder , Idaho 203 READING (Di) Ci ty of Eagle83676 Top 10 Idaho Cities Median House Value 2000 Sun Valley ernan Lake Village $200 000 $400 000 Dollars $600 000 $800 000 Note that all of the communities that rank above Eagle are ei ther located on a lake or are resort based. This means the Ci ty of Eagle has the highest property values in the state among residential communi ties.(Profile of Selected Housing Characteristics, 2000 Census. Exhibit 103) Are you saying the population growth has driven up property values? , for a city like Eagle it is hard to CSB REPORTING Wilder, Idaho 204 READING (Di) City of Eagle83676 pinpoint cause and effect for increasing property values. What is clear is that people want to move to Eagle and are willing to pay premium prices to live there. When you see both high property values and high growth for a city it is an indication of its desirability and economic prosperi ty. It is also an indication that the Ci ty ' s growth has been well managed and that its development strategies have been successful. CSB REPORTING Wilder , Idaho 205 READING (Di) Ci ty of Eagle83676 If fact the City was named one of the "Best Managed Small Ci ties in America" last year.(Pat Summerall , Champions of Industry, "Best Managed Ci ty in America", CD Exhibit 104.) The Association of Idaho Cities (AIC) has picked Eagle as a 2004 recipient of the City Achievement Award for creating an "Architectural & Site Design Book" and establishing a "City Forester/Code Enforcement Officer". The AIC praised Eagle for "paving the way for other cities to follow suit"(Memo, Ken Harwood, AIC to Nancy Merill , Mayor City of Eagle, June , 2004. Book attached, Exhibit 105) During the Planning and Zoning hearings dealing with IPC' s application a number of protestants indicated they felt property values in the city could be decreased if Idaho Power were to build the line as proposed. Do you agree? According to Idaho Power, On October 14, 2003, the Eagle City Council took up the Company's application , including the Planning and Zoning Commission' 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. (Idaho Power Direct Testimony of David Sikes, pg. 11) Econometric studies have shown that there is a direct relationship between lower property values and the CSB REPORTING Wilder, Idaho READING (Di) City of Eagle 206 83676 proximity to high-voltage powerlines. For example a University of Toronto study found, This research offers conclusive evidence to the claim that propinquity to high-voltage powerlines capitalises into lower property values. Results from OLS models estimated for freehold properties within 1-km of the power-lines suggest a loss of 4% to 6.2% in value. Loss in value decreases with distance from power-l ines. At an average proximity tohigh-vol tage power lines resul ted in a decline of $11 000 to $27 000 in property values. CSB REPORTING Wilder , Idaho 207 READING (Di) Ci ty of Eagle83676 (Impact of Power Lines on Freehold Residential Property Values in the Greater Toronto Area, Uni versi ty of Toronto, Haider, Murtaza and Antoine, Haroun , Department of Civil;Engineering, 1992. (Canadian dollars)) Stanley Hamilton and Gregory Schwann in a 1995 Land Economics article concluded, High voltage electric transmission lines do have an effect on property value. We find thatproperties adj acent to a line lose 6.3 percent of their value due to proximity and the visualimpact. (Hamil ton , Stanley and Gregory Schwann Land Economics, 71 (4): 436-44, November 1995. These studies confirm common sense. Unsightly structures on or near property will make the property less desirable and thus reduce land value. What important for land values is the perception of society. There is a fear - rational or irrational - that high voltage powerlines are a potential health hazards. This is an additional factor in lowering the worth of a property located near high vol tage power lines. There of course many factors that influence property values that make it difficult to sort out all the factors that influence value. The econometric studies cited above have attempted to do this and in my opinion are a reliable indication of the impact of high voltage power lines on the value of property. The planned Bypass route proposed by Idaho CSB REPORTING Wilder , Idaho 208 READING (Di) City of Eagle83676 Power runs along Highway 44 and through the intersection on Eagle Road. In general what is the value of property along this corridor? As pointed out above the land along the proposed powerline route would have some of the highest non-resort values in the state. The fact that it is the entry corridor to one fastest growing cities in the state with some of the highest property values make this property extremely valuable. The proposed line bisects the land between Boise River frontage and CSB REPORTING Wilder, Idaho 209 READING (Di) City of Eagle83676 developing downtown Eagle diminishing property values on both sides of highway 44. The City has designated this area its ' Scenic Corridor'(City of Eagle Land Use Map, part of The City of Eagle 2000 Comprehensive Plan, as amended. Exhibit 106). The City s 2000 Comprehensive Plan states that, "The City of Eagle has the responsibility to guide development and redevelopment that occurs along these entryway corridors.(The 2000 Comprehensive Plan; pg. 45. Exhibit 106) In rejecting IPC's proposal that exactly what the City is doing. As pointed out above resul ts indicate growth management has been a success in Eagle. Placinghigh vol tage poles in the middle of the mostimportant land in the Ci ty would be a maj or step backwards in that management process. Has there been significant development effort in property along the proposed route of the 138kV line? Yes. One example is the Eagle River Development located at the southeast corner of Eagle Road and State Highway 44. The Eagle River Development is a 100-acre planned mixed-use commercial development that incorporates retail and office space with water amenities, bike paths, open spaces and Boise River frontage. The Eagle River Development was specifically designed to be compatible with the City of Eagle' comprehensive plan , which emphasizes the importance of CSB REPORTING Wilder , Idaho READING (Di) City of Eagle 210 83676 preserving the rural elements of the communi ty and the nature aesthetic of the area through pedestrian- friendly, livable spaces, scenic views and open spaces. To create its development in accordance wi th the Ci ty ' s development goals and objectives, Eagle River and the City entered into a Development Agreement.(Development Agreement between Eagle River Development and the Ci ty of Eagle. Exhibit 107) In accordance wi th the Development Agreement and consistent with the City's development goals, Eagle River invested more than $3,000,000 in system beautification efforts. Eagle River has developed an integrated pathway CSB REPORTING Wilder , Idaho READING (Di) 7 a City of Eagle 211 83676 throughout the development that connects wi th the River Front Green Belt and Pathway. It has installed extensive landscaping throughout the development with water features, ponds and fountains. In addition , it installed vintage-style street lighting along all on the internal roads within the Development. Significantly, to protect the thematic integrity and aesthetic of its development Eagle River buried all of its utility lines and additionally paid to Idaho Power more than $100,000 to bury its own power lines along Eagle Road. Is the Eagle River Development finished at this time? Presently, the Eagle River Development is not fully developed. However, as of the date of this filing, there is approximately $20 million in building construction on site, and an additional $24 million of planned construction to begin wi thin the next 12 months. The construction of the 138 kV transmission line along State Highway 44 as proposed by Idaho Power will have a direct negative impact on the Eagle River Development. Consistent with the power line studies discussed above, Eagle River's land values will be significantly diminished as a result of the transmission line. With the diminished land values, the quality of the development will decrease, and the market exposure time CSB REPORTING Wilder , Idaho READING (Di) Ci ty of Eagle 212 83676 for its property listings will be extended. Instead of a high-quality commercial development consisting of retail and office space, the development will attract more industrial and flex- space uses. Certainly, the Eagle River developers would not have invested so heavily in the property had they known an unsightly, high vol tage transmission line would be placed adj acent to their land. From the Ci ty of Eagle's perspective, the devaluing of the Eagle River Development will impact the City's development plans, and perhaps more importantly, will affect it tax base and revenues. Not only will the City have a CSB REPORTING Wilder , Idaho READING (Di) Ci ty of Eagle 213 83676 more industrial-looking commercial center, with the lower land values, it will lose tax revenues. Are you saying only those who own property along the proposed route will have their property values diminished should the proposed powerline be buil There certainly will be a significant impact on adj acent property values. However because the proposed line will impact the entry corridors to the City it may well have an impact on potential development. Impressions are important for potential business's and well as prospecti ve home buyers and an unsightly entry corridor will tend to dampen the desirability to locate there. What is Idaho Power's rational for running this high voltage line in the middle of such prime real estate? According to the Direct Testimony of Greg Said, When a city, such as the City of Eagle, determines that Idaho Power must meet standards for aesthetics that are more stringent than the standards in place throughout Idaho Power' service territory and the result of the application of the more stringent standard higher cost, the question them becomes "who should pay for the additional costs attributable to the City of Eagle's morestringent aesthetics, the Ci ty of Eagle or other Idaho Power customers begin served by facilities build under different standards?" Idaho Power believes it is 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 underdifferent standards. (Idaho Power Direct Testimony of Greg Said, pg. 11) CSB REPORTING Wilder , Idaho READING (Di) Ci ty of Eagle 214 83676 The specific "more stringent" aesthetic standards that Mr. Said refers to are the City's 35-foot building height restriction and standards for a conditional use permit (CUP)Among other things for the City to issue a CUP needs to determine that the proposed proj ect, CSB REPORTING Wilder, Idaho READING (Di) Ci ty of Eagle 215 83676 Wi 11 be harmonious with and in accordance wi th the general obj ect i ves or wi th any specific objective of the Comprehensive Plan and/or this title; Will be designed, constructed, operated and maintained to be harmonious and appropriate in appearance wi th the existing or intendedcharacter of the general vicini ty and that such use will not change the essential character of the same area; Will not hazardous disturbingexistingfutureneighborhood use; (Exhibi t 101) Gi ven these conditions hard to see how the City could approve Idaho Power's CUP and still maintain it own standards. Nor are these restrictions unusual for cities throughout Idaho. This is especially true when applied to important entry corridors that lead to the city core. The problem is that Eagle happens to be locate between two of the maj or growth areas in the state and Idaho Power has right - of -way through the Ci ty. The Company has chosen to solve its load problems by put ting a high vol tage line through Eagle's most expensive real estate and scenic corridors rather than a different route. Or for that matter obtaining generation to the west of Eagle such as the failed Middleton plant. While Boise City has high power voltage lines running through it none are along important corridors such as Warm Springs, Harrison Boulevard, and Capitol Boulevard. CSB REPORTING Wilder, Idaho READING (Di) Ci ty of Eagle 216 83676 Mr. Said states that it is inappropriate for the City of Eagle to pass the cost of its aesthetic standards onto those who are willing to accept lower aesthetic standards for power at a lower cost. Do you agree? No. In this case it is the citizens of Eagle who are paying the cost of serving Idaho Power' customers to the east through lower property values and degraded visual entry corridors. It is customers to the east of Eagle that will have the benefit of the electric power wi thout having their views degraded or their property values lowered. CSB REPORTING Wilder , Idaho 217 READING (Di) lOa City of Eagle83676 The Company suggests Eagle form a LID and/or lncrease franchise fees to pay for rerouting or burying the line. Is this a fair approach? Who should pay is a key element in this dispute. The Company's approach appears to be, "if they (the City of Eagle) don't want these large power ines through their Ci ty then let them pay for burying or moving the line"Historically this has been business as usual for the Company.However delivering electric power in a growing state like Idaho should be borne by all ratepayers in a case where a powerline will do as much economic harm as the one proposed by Idaho Power in the City of Eagle. As pointed out below Idaho is a state in economic transition where aesthetics are an important part of development plans. At a minimum , because the line is to provide power in the rapidly growing "electric load growth in the entire Eagle-Star-Meridian area"(Complaint To Obtain Commission Order Directing Idaho Power to Construct Improvements To Secure Adequate Services To Its Customers , IPC-E- 04 - 04 , page 2.) ratepayers in this wider area should share in the costs of either burying the line or the extra costs of rerouting. Dr. Reading, lets shift gears and look at the bigger picture. Given Idaho Power's posi tion in this case do you think Commission is likely to see other cases CSB REPORTING Wilder , Idaho READING (Di) Ci ty of Eagle 218 83676 similar to this one? Yes. Idaho is a state in economic transi tion. The state is rapidly evolving from a agricul ture and natural resource based economy to one of services, light manufacturing, technology, and electronics. One economist dubbed the change in Idaho's economy as evolving from potato chips to computer chips. Governor Kempthorne I s Task Force on Rural Development stated, "The new economy is also resource-based. But this time the resource knowledge. "(Governor's Task Force On Rural Development, Findings and Recommendations, http: / /www. idoc. state. ide us/idcomm/ruralinit/index. html) In order for the state to prosper in the new economy means attracting a knowledgeable labor force that is the most important factor input for service and technological firms. It is clear that the many of the rapidly growing sectors of our economy are footloose" and can locate CSB REPORTING Wilder, Idaho READING (Di) 11a Ci ty of Eagle 219 83676 anywhere in or outside the state. These firms will locate in places where there owners want to live and where they can attract a quality workforce. This means for communities to be competitive in this new economy they will need to be places where people want to life, work and raise their families. More and more ci ties like Eagle will work to improve, as Greg Said phased it , their aesthetic standards". As stated earlier most other growing communities have development restrictions like those of Eagle. As the AIC stated Eagle is a City that is "paving the way for other cities". That means, among other things, restricting unsightly power lines through city cores and entry corridors. Innovative solutions, like those suggested by City witness Teinart need to be developed or this case will be only the start of more filings at the Commission. Are there economic benefits to the state in general to build cities that are aesthetically pleasing? Yes. As indicated above the state is evolving where quality of life issues are important for economic development. Many "business as usual" approaches - be they from the power company or elsewhere - need to be modified. While one may want to make the argument that the cost of burying or al tering the route of the power CSB REPORTING Wilder, Idaho 220 READING (Di) Ci ty of Eagle83676 line should fall only on the City of Eagle the economlCS of the state are not so easily segmented. Having communities like Eagle is attempting to build benefit the region and the state. Its higher property values generate higher tax revenues. Its ambiance generates economic vitality and attract businesses that will add jobs to the state economy. These benefits extent to more than just the people who own property or live within the City. The state and individuals gain value through improved aesthetic standards", but does this also help the Company? It is in Idaho Power's best interest to have a growlng and economically viable service terri tory. The more the Company can aid in the economic development of the state and make it a place where firms want to locate increase value for shareholders. Certainly low CSB REPORTING Wilder , Idaho READING (Di) 12a Ci ty of Eagle 221 83676 cost power is an important development tool and it is incumbent on the Company to provide reliable power at a reasonable price. However it also means providing that power with that will satisfy the aesthetic and development needs of the state along with the provision of electric power. Does this end your testimony as of July 2 2004 ? Yes. CSB REPORTING Wilder , Idaho READING (Di) Ci ty of Eagle 222 83676 Would you please state your name and address? Don Reading, Ben Johnson Associates, Boise, Idaho. The address is 6070 Hill Road, Boise, Idaho. Are you the same Don Reading who filed direct testimony and exhibits in this docket? Yes. What is the scope of your rebuttal testimony? I have reviewed the direct testimony of Staff Witness Randy Lobb and I have three observations in relation to his positions.First, Mr. Lobb makes no distinction between the potential loss between higher and lower valued properties from the installation high voltage transmission lines.He goes on to say the utility should be able to put in its transmission lines where it "deems appropriated"This approach leaves no incentive for the power company to look at its impact on property values and to weigh only its own benefits. Second, by quoting the Idaho Land Use Planning Act, he states that it is appropriate to place transmission lines in existing utility easements.What he does not recognlze is that utilities have easements along virtually all roads in cities like Eagle.Third, he agrees with Mayor Merrill and recommends city comprehensive plans include designated transmission corridors.I agree, and cities need to be informed about CSB REPORTING Wilder , Idaho 223 READING (Di-Reb) Ci ty of Eagle83676 a utilities long-run transmission plans.Unless there better coordination between city and utility planning the Commission can expect more cases like this one. Could you please discuss your first point dealing with the economic impact of high voltage transmission ines on high valued property? On page 3 of his direct testimony Mr. Lobb states: "While I do not necessary dispute the potential economic impact such overhead ines may have on adj acent property, I believe it is inappropriate to require the general body of Idaho Power customers to pay significantly higher rates to provide underground facilities CSB REPORTING Wilder, Idaho READING (Di-Reb) Ci ty of Eagle 224 83676 for the aesthetic benefit of local communities and landowners.(Direct Testimony of Randy Lobb, p. 3, lines 8-13. He also states: "I believe it likely that large overhead power lines can negatively affect local propertyvalues wherever they are located.(Direct Testimony of Randy Lobb, p .10, lines13 -15. ) As I stated in my direct testimony there are no high voltage transmission lines along important corridors such as Warm Springs, Harrison Boulevard, and Capitol Boulevard in Boise.Property values in areas such as this are too valuable to be spoiled by transmission lines.A blanket policy that does not recognize this will only lead to more confrontations between cities and utilities and to more hearing like this one. Does the power company have any incentive to recognize this difference between higher and lower valued properties? According to Mr. Lobb Idaho Power should beNo. able to: "In my opinion , the Company should be allowed in situations like these to reasonably extend and upgrade its transmission/distribution facilities, as it deems appropriate. (Direct Testimony of Randy Lobb, p.9, lines 4- CSB REPORTING Wilder, Idaho READING (Di -Reb) City of Eagle 225 83676 The problem is the Company's only incentive to meet its obligations as a service provider is what it "deems appropriate" This does not include the value of adjacent property or a cities existing comprehensive plan.Mr. Lobb also states: "However , I believe overhead transmission facilities are the standard of construction for Idaho Power Company.(Direct Testimony of Randy Lobb, p. 12, lines 2- Wi th this standard of construction" the Company has only the benefit to its system without considering the costs it is imposing on property owners or the development CSB REPORTING Wilder , Idaho 226 READING (Di-Reb) Ci ty of Eagle83676 opportunities of cities.Mr. Lobb appears to find this appropriate without taking into account the degree of potential harm done to the ci ty and its property owners. What is missing is any attempt at a rational cost/benefit analysis.The power company is looking only at the most inexpensive way to meet its needs wi thout regard to any level of costs imposed on the city and property owners. Lets turn to your second point. What does Mr. Lobb say about the Company's planned route along highway 44 or bypass routes and the Idaho Land Use Planning Act? On page 10 of his Direct Testimony Mr. Lobb states that both State Street and the bypass routes are along public roadways and thus are consistent with the Idaho Land Use Planning Act.What he fails to recognize that the Company has a utility right of way along almost all roads within the City.This is to be expected and true with other cities as well. This approach does not deal wi th the essence of the dispute in this Docket. What is important is that growing cities understand that they need to understand utilities transmission plans and establish utility corridors to route high voltage power lines around their visual entry corridors and high value downtown areas. That leads us to your third point.Do you agree with Mr. Lobb that cities need to include utility CSB REPORTING Wilder , Idaho 227 READING (Di-Reb) Ci ty of Eagle83676 corridors in their comprehensive plans? Yes.As Mayor Merrill stated in her role as President of the Association of Idaho Cities: "I plan to educate growing cities like Eagle about the dangers of how public utilities can CSB REPORTING Wilder, Idaho READING (Di-Reb) Ci ty of Eagle 228 83676 affect property values, resul t in adverse heal th perceptions, has impacts on years of careful planning and zoning, and stunt future development. Clearly, utility corridors need to be planned well in advance. Since the cities are given little or no help in this area would like to see the AIC take a more active role in helping to address this problem. I am also the legislative chair for the AIC and will encourage a review of relevant statutes addressing large utility poles in theterritorial limits of Idaho Cities. "(Direct Testimony of Nancy Merrill , p. 7, lines 17-23. I recommend the Commission support this effort by instructing the Staff and ordering the Company to participate in this effort.I believe without a serlOUS effort by all parties that the contested issues in this case will continue to occur with cities throughout the state.The Company and Staff are concern about any extra costs from transmission construction be passed on to all It should be remembered that all ratepayers share in the cost of hearings like this and any litigation that may follow.Resolving these issues in a less contentions manner will be essential for the cost expansion of transmission facilities. this end your testimony as of September 1 ratepayers. effecti ve Does 2004? Yes. CSB REPORTING Wilder , Idaho 229 READING (Di-Reb) City of Eagle83676 open hearing. (The following proceedings were had in MS. BUXTON:We'd present Dr. Reading for cross. COMMISSIONER KJELLANDER:Thank you. Mr. Howell. Let's start wi th Mr. Squyres. MR. SQUYRES:No questions. BY MR. HOWELL: COMMISSIONER KJELLANDER:Let's move to CROS S - EXAMINA T I ON Dr. Reading, on page 6 of your testimony, you discuss the resul ts of a Stanley Hamil ton analysis in CSB REPORTING Wilder , Idaho Yes. Have you read that article? Yes. And isn't it true that the majority of they were using to determine how transmission lines affect property values had to do with transmission towers? Yes. In 1 ieu of poles? a 1995 article. samples that 230 READ ING (X) Ci ty of Eagle83676 Yes. You note on page 10 of your testimony that Eagle River paid more than $100,000 to bury its distribution lines.Was that a requirement of the Development Agreement? I guess I can t answer that.It was certainly a choice, I think, that they made.I would have to look at the Development Agreement.I don't believe it was. Even if it wasn't included in the Development Agreement, wouldn't the Company's Rule H cover that? You'losing me,m sorry. Rule H deal ing wi the burial distribution lines a customer'request. At the customer's request and if it' buried , they negotiate with the Power Company and whatever it costs, then they pay the Power Company what that cost is, and as I stated in my testimony, they would do that because they felt it would make the property more valuable, economic decision. On page 10 on lines 25 through 28, you were saying that Eagle ratepayers are paYlng the cost of servlng Idaho Power customers to the east. Yes. CSB REPORTING Wilder, Idaho 231 READING (X) City of Eagle83676 Wha t do you mean by that? That my understanding the transmission line is to get power into the Star substation and those customers would be served in that area from that transmission line.Did I say to the east? Yes, you did. , I should say to the west, so I have a correction in my testimony.It should say west. Turning to page 11, on lines 3 through 14 you re responding to a question about the Company suggestion about forming an LID or using franchise fees to reroute or bury. Yes. Are you suggesting that the ratepayers of Eagle, Star and Meridian should share in the cost if the Commission were to order this line to be buried? m suggesting that as a potential option. What I see occurring in the dispute in this case is a bright line being drawn that if this particular power line or facility goes here, these people pay for it. it goes there, those people pay for it and so it's very cut and dried.The development and economic viability of a city like Eagle if it is successful, if it continues to be successful as it has, it will economically help and a development not only for the City of Eagle itself but CSB REPORTING Wilder, Idaho 232 READING (X) Ci ty of Eagle83676 for the whole surrounding area. As part of that, what they re trying to do, as I made statements, as I discussed in my testimony, that the construction of the power lines would be an item which could be a detriment to that development and so the benefit is to the wider area and so in that sense, then the economic engine for the region is being asked to pay for something that will benefit a wider region , so the bright lines here, at least in my looking at this, aren't as I've heard discussed earlier today here.They are a lot fuzzier in my mind, so to answer your question directly, that would be an option. You indicated in your testimony that the overhead transmission lines along Highway 44 Bypass will lower the property values for Eagle River. I think they absolutely would. Has the existing 138 kV transmission line from Edgewood to the Eagle substation lowered Eagle River's property values? I haven't looked at that particularly. know the Company's - - I think Mr. Sikes in his rebuttal testimony at the very end makes a statement about they haven't found that these power lines affect property values.I looked at the econometric studies, whether they be towers or poles or whatever.I think it's common CSB REPORTING Wilder, Idaho READING (X) City of Eagle 233 83676 sense that your property certainly isn't more valuable with something ugly right in front something ugly alongside it.For purposes of my testimony, got some studies which showed that, But in response - - I'm sorry, I didn' mean to cut you off. - - the specific line you're talking about m not sure where that is in relation to the Eagle property and so I can't specifically state.Certainly, power lines sure don't increase the value of property and I can't imagine in most cases they wouldn't be a detriment to the value. MR . HOWELL:No further questions. further questions, Mr. Chairman , I'm sorry. COMMISSIONER KJELLANDER:I apologize. saw Mr. Woodbury walk in with a blue back, so I think this point , let's see , it is our turn , okay, let's go through that. MS. MOEN:May I have an opportunity to cross-examlne, please? COMMI S S IONER KJELLANDER:No, we're not going to give you an opportunity. THE WITNESS.Thank you, Mr. Cha i rman . COMMISSIONER KJELLANDER:It can only get worse from here, so we're going to stop. CSB REPORTING Wilder , Idaho 234 READING (X) Ci ty of Eagle83676 MS. MOEN:Is it to the Company' betterment I don't cross? COMMISSIONER KJELLANDER:m not quite sure , but we'll find out.It is your turn. CSB REPORTING Wilder , Idaho MS. MOEN:Thank you very much Mr. Cha i rman . CROSS - EXAMINATION Dr. Reading, in your direct testimony, you cite two studies concerning the relationship of property values in proximi ty to high vol tage transmission towers; Correct. One was conducted by Hami ton and Schwann Yes. And the other one was conducted by Haider and Haroun I believe in '99; is that right? I would have to check the dates.I'll BY MS. MOEN: accept those dates. Okay.Mr. Chair, in response to a is that correct? production request , the Ci ty of Eagle did produce copies of both the Hamil ton and Schwann and the Haider and in 2001? 235 READING (X) City of Eagle83676 Haroun studies.They re identified as Exhibits 140 and I request that those particular exhibits be141. admi t ted to the record. MS. BUXTON:No obj ect ion. COMMISSIONER KJELLANDER:Thank you, and they will be admitted. (The City of Eagle Exhibit Nos. 140 & 141 were admi t ted into evidence. BY MS. MOEN:Dr. Reading, you 'd agree with me, wouldn't you, that Hamilton and Schwann in their examination of literature that was conducted on this subj ect matter , that is, the relationship between property values and transmission towers, noted that in all studies other neighborhood factors dominate the explanation of variations in property values.Do you recall that statement? I can't remember which study, but I recall a statement in one of them like that, yes. In that same study, Hamil ton and Schwann al so say that the general 1 i tera t ure on thi s subj ect , bearing in mind that the Hamilton and Schwann study was done in 2001 , that they say that studies of transmission line extensions report that impacts are initially significant but quickly diminish over time; isn't that correct? CSB REPORTING Wilder, Idaho 236 READING (X) City of Eagle83676 Yes. And would you also agree with me that the studies done by both Hamilton and Schwann and Haider and Haroun analyze the impact of high vol tage transmission towers on residential real estate? I will accept that.I know the one was residential. And that the literature cited by both of those groups of researchers determined that the extent of impact could be anywhere from 4 to around 6 percent? Yes, there was a several percentage difference in the impact. You're not testifying, then, are you, as to the impact on commercial real estate, are you? Yes, I am. Are you suggesting that the impact on commercial real estate would also then have potentially an effect of 4 to 6 percent? Not a particular percent.As I stated a few minutes ago, when I taught statistics in the uni versi ty was back when the tobacco companies were claiming that smoking didn't harm your heal th and they had statistical studies to show that.I look at whether or not high vol tage transmission lines running in front of or down the side of your property, be it residential CSB REPORTING Wilder , Idaho READING (X) City of Eagle 237 83676 or commercial, that that has no impact on the value think doesn't pass common sense.m not testifying to what that exact percent is, but to say that big, ugly things don't make a property less valuable, to me, it doesn't pass the laugh test. Here it's kind of in the eye of the beholder , wouldn't you say? I assume there are certain individuals who, I see Mr. Teinert an engineer back there who, may look at a power pole and think how gorgeous it is. would think that that wouldn't necessarily go to everyone in society.There could be some electrical engineers who would believe that, but I don't think society in general does and society in general are the ones who look property as desirable or not desirable and reflect a market value on it. Are you familiar with the transmission lines that go down Eagle Road in the vicinity of the Meridian Crossings Development, commercial development? Oh, I'm trying to remember.I can't remember specifically, but I'm sure they re there. Do you go down Eagle Road? Yes. But you haven't really noticed them , have you? CSB REPORTING Wilder , Idaho 238 READ ING (X) Ci ty of Eagle83676 I certainly have, especially since this case started.I know there's - - is it Eagle Road there's some as you head down towards the freeway, yes. There also seems to be a pretty successful commercial development, wouldn't you say, along either side of Eagle Road in Meridian? Sure, there's commercial development in those areas.You have to look at - - again , commercial development is in the eyes of the beholder.I see commercial development down Capi tal Boulevard in Boise, but I don't see any transmission lines there.The commercial development I see on Eagle Road is Bed, Bath and Beyond and some big box stores.The City of Eagle in their comprehensive plan to the extent I understand and the development agreements that they've entered into, for instance, wi th the people from Eagle River restrict that kind of development, so again, development is in the eyes of the beholder, so the fact there's big stores and commerc ial development along wi th power 1 ines, of course, there is. So there are fast food developments in some of these suboptimal developments in Meridian, but Wendy's in Eagle is, what, a higher level of development? It depends on where you are.When I look CSB REPORTING Wilder, Idaho 239 READING (X) Ci ty of Eagle83676 at some of that development that I see in Eagle, when look at some of the development I see around Ketchum when I look at some of the development I see around Park Ci ty, Utah , there's an upscale kind of development and most often you do not see a lot of commercial lines there.Eagle River, for instance, paid to bury their lines so they wouldn't have to look at them.That tells me that they're the kind of development that finds least more than $100, 000 worth of value or they wouldn't have paid to do it. And property taxes are less in the City Eagle, too; right? Yeah. So people have more discretionary income perhaps to use their funds for other improvements? I obj ect MS. BUXTON:That calls for speculation. MS. MOEN:I'll wi thdraw that question. BY MS. MOEN:Are you familiar also along Front Street here in Boise we've got some transmission lines, would you agree with me that the vicinity of where the Ada County Administration building is that that is to be an attractive development despite the presence of transmission lines in that corridor? I don't find it particularly attractive. CSB REPORTING Wilder , Idaho 240 READING (X) Ci ty of Eagle83676 I don't find it bad and I certainly find the poles there not attract i ve . And you've indicated, I think , on page of your rebuttal testimony that streets such as Warm Springs, Harrison Boulevard and Capital Boulevard in Boise don't have the presence of those lines; is that correct? Yes. And are you saying that Warm Springs, Harrison and Capital Boulevard are the same types of corridors as the Eagle Bypass? m not sure I would say they're the same "types of corridors," but they're visual corridors. Certainly, Capi tal Boulevard has been designated as a visual corridor and it's of a value to a community to have an attractive entry corridor that will then attract development.The point I made in my testimony is, you know , Eagle happens to be geographically situated between two growing areas and so the Power Company says oh, we' going to run big lines right through you and I think that those power lines will detract from property values just the way if they would happen to run down Capi tal Boulevard, they would detract from those values. Would you regard Warm Springs in the vicinity of the golf course, for example, as an entryway CSB REPORTING Wilder, Idaho READING (X) City of Eagle 241 83676 into Boise? No, but I'd consider Warm Springs as one of the - - between downtown and where you get to the gol f course as one of the premiere streets.You have guests come to town , you want to show them how nice Boise is, you drive them down Warm Springs, you drive them down Harrison and you drive them around town. Would it surprise you if I told you that along Warm Springs in the vicinity of the Mesa subdivision that there are high power transmission lines, overhead lines , in that area? No. Would it surprise you that within a kilometer, which is less than a mile, of Warm Springs Avenue in those residential subdivisions there are also transmission lines? There could be. You haven't noticed them , have you? You know, you asked me if I've noticed, certainly since this case, but I've noticed power lines. But based on your testimony that there are no such high voltage transmission lines along Warm Springs, obviously, you must not have noticed the presence of those transmission lines either on Warm Springs or near Warm Springs? CSB REPORTING Wilder, Idaho READING (X) City of Eagle 242 83676 In that vicinity.You mentioned the courthouse, I've noticed them there. Okay.On page 6 of your testimony, Dr. Reading, lines 16 to 18, I think your quote is, "There is of course many factors that influence property values that make it difficult to sort out all of the factors that influence value.Am I describing that correctly? Perfectly. Okay, and you also in Exhibit 141 that' been admitted into testimony, you cite the Haider and Haroun studies.Do you recall that Haider and Haroun have noted that even in their study area, which was the greater Toronto area , that the relationship between proximity to power lines is not uniform throughout that study area? , sure. Okay, and in fact, didn't Haider and Haroun discover in their in analysis that, and I' quot ing ,certain localities within the GTA, or the greater Toronto area, where properties abutting the power lines were of greater value than the rest of the sample in the locality"? That's what they said in their study. Okay, and didn't they conclude that for CSB REPORTING Wilder , Idaho READING (X) Ci ty of Eagle 243 83676 municipalities where average price of properties proximate to power lines is higher than the rest of the sample, the adjacent units are of better quality and larger in size than the rest? I can remember that statement, sure. So in other words, there could be a whole host of factors that determine the value of property and it's not just their proximity to a large power line? That's what I said in my testimony, yes. In fact, Haider and Haroun also observed that for numerous indicators of social quality, Census Tracts with power lines out-performed Census Tracts wi thout power ines, didn't they say that? Yes. Okay.In your testimony on page 4, lines 22 to 23 , you say, and I'll quote, "for a ci ty like Eagle it is hard to pinpoint cause and effect for increasing property values"; so you 'd agree , wouldn't you, that there are a host of variables that determine high property values? Certainly. And would you agree that low cost electrical power is a factor that's attractive to potential commercial and residential development? It's one of the factors, sure. CSB REPORTING Wilder, Idaho READING (X) Ci ty of Eagle 244 83676 Would you also agree that maybe low cost electrical power can lead to the development of higher end residential and commercial development? Wow , in general, when you look at any factor input, be it electric power or anything else, you look at where that fits in the scale of production inputs.I f you re an elemental phosphorus or aluminum factory, electrici ty is certainly very, very important. If you re another kind of an enterprise that produces whatever it is and electricity is a very small input, then it's not important, so I guess I couldn't answer. Generally, it would depend on the kind of input it is. I f you're a hospi tal, I don't think you would particularly go where it would be low electric price, you would go where you would perceive a need and where you would have the ability to attract the kind of doctors, nurses and those kinds of people to your hospital to serve their needs, so electrici ty would have a very, very low input and the kind of community around that hospital would be a very high input. Okay, thank you.On page 3 of your rebuttal testimony, you indicate that cities need to corridors in their comprehensive plans;include utility that true? Yes. CSB REPORTING Wilder, Idaho 245 READING (X) Ci ty of Eagle83676 I think you also indicated that this Commission should order Idaho Power to participate with ci ties in establishing corridors; correct? Yes. What would you say Idaho Power has been attempting to do since 1999 with the City of Eagle? I wouldn't - - I am not familiar with that. I am familiar with the fact that since this case has gone forward that the Ci ty of Eagle is certainly now paying attention to utility corridors.They had proposed a plan for establishing a utility corridor and I can't remember the names exactly, but it's running up Highway 55 up north of Floating Feather somewhere and then straight over to the Star substation, and the City of Eagle has received a letter from Idaho Power saying gosh , we don't like it, we don't think that's necessarily the most economic, efficient place to put it and that's kind of one of my problems with , as I explained in my testimony, wi th thi s case. Certainly, as Mr. Said indicated in his testimony, what I see happening is Idaho Power in my mind putting blinders on and saying our only responsibility to put in the lines where they re the cheapest and it's where there's high value property, so be it. it's where there's low value property, so be it.Wha t CSB REPORTING Wilder, Idaho 246 READ ING (X) Ci ty of Eagle83676 care about is doing it by our definition of the cheapest and I don't think that that's necessarily in a cost-benefit sense , as I said in my rebuttal, the proper policy position or the best for the state or the region or any city. But by citing Hamilton and Schwann, you have to agree with their statement, don t you, that the impacts may be initially significant but diminish over time? That's certainly what their study had. You're indicating I should - - I've got a couple of acres on Hill Road, maybe I should ask the engineering department to put a big pole in front of my property and it wouldn't matter after 10 years.Well , I think it would matter after 10 years.I understand the position of the Company and I understand what they re saying. just cannot accept that high voltage transmission lines do anything but be a detriment, be it small, be it large, be it the type of development. Even though the experts that you cite indicate that there are a host of variables that affect property values? There's a whole bunch of variables that affect it, of course. MS. MOEN:Okay, I have no further CSB REPORTING Wilder, Idaho 247 READING (X) City of Eagle83676 questions. COMMISSIONER KJELLANDER:Thank you, Ms. Moen. Let's now look to the Commission to see there are questions from members of the Commission. Commi s s i one r Hans en . EXAMINATION BY COMMISSIONER HANSEN: Dr. Reading, just a couple.Do you think that most people detest having poles running down their street and think they are unsightly? I guess I would say yes.I certainly think poles around my house are unsightly. So then do you think the maj ori ty ratepayers would be willing to double or triple their rates to have those poles removed so it would all be underground? Commissioner, it would depend, I think, on obviously it's a cost-benefit, it would be where it would be appropriate and where it wouldn't be appropriate.The position I've tried to take in my testimony is that in certain specific areas where there is development that dependent on being attractive that in a cost-benefit CSB REPORTING Wilder , Idaho 248 READING (Com) Ci ty of Eagle83676 sense not having big poles or having the smaller or most visually pleasing poles would increase those values. So you're saying in a development area as being a factor , so would you think the Idaho Power customers in Pocatello would be very supportive to having their rates increase because the development Eagle, over there and we'rates in thewe go lncreas lng base and we say well,one the reasons in the rate base we have this increased cost for the Ci ty of Eagle and it's going to help the development in that area , do you think the ratepayers in your mind , you've been invol ved wi th rate cases, do you think the Pocatello ratepayers of Idaho Power would embrace that? Having lived in Pocatello, no, they wouldn't, but let me answer a little further and it goes to the same geographic bright line that I talked about the potential economic development in a city like Eagle helping southwest Idaho, not southeast , as I said in my testimony, and that is my experience is the Commission and intervenors often make decisions to raise rates and have higher rates based on other factors and one of them would be conservation and renewable.I think it's fairly common for intervenors and the commissions to say okay, all ratepayers in the whole area tend to benefit and they're non-rate benefits that I can specifically place CSB REPORTING Wilder , Idaho 249 READING (Com) City of Eagle83676 somewhere. I think another example would be the recent rate case that was just completed with Idaho Power where the irrigation customer class did not pay its full cost of service to help subsidize or help the farm economy, which I can't remember what you said In your most recent Order , I can remember orders that were wri t ten when I was here that said due to the economic farm condition and the best interests of the whole state, we're not going to raise irrigation rates, so I think that what I tried to say in my testimony and what I see coming is as the economy transitions in Idaho and we become more of a service footloose industry to attract industry that what's happening in Eagle is going to happen in other places , so if you ask me specifically do the people in Pocatello embrace that , no.Certainly, the intervenors in the rate case didn't embrace the irrigators not receiving their full share , but it was deemed as something that was important to the state and something important to an important economlC sector within the state to have rates that the rest of us pay to help that particular sector out , so it's fuzzy to me. So how would you give other ratepayers an opportuni ty to have their opinions given in this and evaluated so the Commission would know whether there' CSB REPORTING Wilder , Idaho 250 READING (Com) Ci ty of Eagle83676 support for certain ci ty development?For the ratepayers to participate , don't you think they should have an opportunity to be heard? Yes , I do and that's what went to the last part of my supplemental/rebuttal testimony where I talked about the fact that I think that there needs to be some forum , some workshop, some kind of communication set up, because what I see has happened - - and have it on either a statewide basis or utility service area basis or something.What I've seen in this case is a real clash of cuI tures where the Ci ty of Eagle doesn't know the utility game and at , least in my mind, the utilities aren't being as sensitive as they should be to the needs of the Ci ty of Eagle and so I look around the state, Donnelly, we've got not West Rock, Tamarack , Tamarack now , and I drive around Donnelly and I look at it and can imagine something like this happening in Donnelly as Tamarack develops , as those upscale people come in and people around Donnelly say oh , we want to build some local upscale developments so that we can take some of their dollars and the area would grow and the Power Company would say gosh , I've got to run a power line from here to here and that would then be a conflict , so you asked a very important question that's very hard to answer and that's what I was attempting to get at at the CSB REPORTING Wilder , Idaho 251 READING (Com) City of Eagle83676 end of my testimony is that there needs to be some real communication set up so that things like utility corridors can be established and set up, the Power Company knows it , the city knows it, all the ratepayers know it, the PUC has a feel for what these extra costs may or may not be in the planning process so that something like this doesn't happen again fairly soon which I see a very high potential for. COMMISSIONER HANSEN:Thank you.That' very helpful.That's all I had. COMMI S S IONER KJELLANDER:Commissioner Smi th. COMMI S S IONER SMI TH :Thank you. EXAMINATION BY COMMISSIONER SMITH: So taking Commissioner Hansen' hypothetical , I guess my solution would be we just put all those charges on energy and run it through the PCA how would that work? I tend to represent to industrial customers. Maybe you shouldn't answer that. m going to get on an airplane wi CSB REPORTING Wilder , Idaho 252 READING (Com) Ci ty of Eagle83676 Mr. Hawk next week , I'll ask him that question. You do , run that by him. All right. Looking at page 3 of your testimony where you discuss how Eagle is fast growing and how it has high CSB REPORTING Wilder , Idaho and median house value, it occurred to me that maybe houses in Eagle are larger than the average house built elsewhere in the Treasure Valley. , I'm sure that's true. And so probably they use more energy? m sure that's true. And could you have any of this growth wi thout electrici ty? Could you have any growth without electrici ty? Could you have this growth if there wasn ' adequate power available? , of course not. I noticed in the comprehensive plan something I highly applaud and I think it's very forward looking, the Ci ty of Eagle currently requires the installation of pressurized irrigation systems for the irrigation of landscaping when new development is within an irrigation district and water rights are available. m wi th you, that is very good. 253 READING (Com) Ci ty of Eagle83676 Yes, and I was wondering, do you know whether they've made similar progressive positions with regard to the use of energy, for example, encouraging energy efficiency in these large houses, encouraging the use of maybe off -grid technologies like solar or wind? I cannot answer that. All right. Without confusing the record , I see the Mayor shaking her head no. And I guess it occurs to me that this ike so many other things I've seen happen where I Ii ve because I live in an area that's transitioning from farm land to large houses. Yes. Society seems to want to consume and they want serVlces, like they want milk, but they don't want flies or smells that comes with having a dairy. Absolutely. And they want meat, but they don't want to step in a cowpie , so is this electrici ty like that, they want big houses, they want to consume, they want their hot tubs, their heated pools, their air conditioning, but they don't want to see the power pole? Sure. COMMISSIONER SMITH:Okay.That's all CSB REPORTING Wilder, Idaho 254 READING (Com) Ci ty of Eagle83676 have. COMMISSIONER KJELLANDER:Let's move now to redirect. REDIRECT EXAMINATION BY MS. BUXTON: Dr. Reading, if increased property values in Eagle help keep the overall taxes down for ratepayers in Pocatello or other reaches of the state , do you think they'd obj ect to that? No. Wouldn't it be reasonable to think that big homes with fewer inhabitants who are gone all day may use less electricity than small homes with more people in it that are home all day? That could be true , yes. Is it your testimony that power lines have impacts on the value of the land in which they are adj acent? Yes. So did you misquote those studies in Exhibi ts 140 and 141?They actually did agree that they would have impacts; isn't that correct? Yes , and as was pointed out, it's hard to CSB REPORTING Wilder , Idaho 255 READING (Di) Ci ty of Eagle83676 get a clean study and there's lot of factors, but they indicated that power poles, power towers, power lines tended to impact property values.Mr. Lobb states that in his testimony, also. Is it your testimony that if there is an al ternati ve to really high, obtrusive power lines wi lower and less obtrusive power lines using different technology that that would be something that would be reasonable to look at with regard to whether it should be placed in rate base or not? Yes, and that's one of the things that it's not my testimony, Mr. Teinert is coming up, but one of the things that's been hard about this case is the fact that there's kind of two al ternati ves, very high 138 poles or buried and I haven't seen until Mr. Teinert filed his testimony a lot of effort to look at those newer technologies that could provide the electricity in a cost-effective , efficient, reliable manner without those kind of power poles that are being proposed in this case. You discussed hospi tals, for instance, and where they would be sited, do you know whether there's a hospital or other medical facility that's going to be sited somewhere along the route on Exhibit 10? Saint Alphonsus has purchased land and has CSB REPORTING Wilder , Idaho 256 READING (Di) Ci ty of Eagle83676 a proposed medical facility in Eagle River. Do you know whether they feel ike they' going to be impacted by these proposed high transmission lines? I obj ect to that question.MS. MOEN: requlres speculation. THE WITNESS:I was going to say I haven't talked to them. COMMISSIONER KJELLANDER:Excuse me, we have an obj ect ion. MS. BUXTON:I'll withdraw it. COMMISSIONER KJELLANDER:It's been wi thdrawn Okay, let's continue. MS. BUXTON:I have no more questions. COMMISSIONER KJELLANDER:And Mr. Reading, we are going to allow you to leave the stand and we' also going to take a ten-minute break. THE WITNESS:Thank you. MS. BUXTON:Could Mr. Reading be excused? COMMISSIONER KJELLANDER:Before we officially go off the record, does anyone obj ect? MS. MOEN:No obj ect ions. COMM IS S IONER KJELLANDER:That would be fine. THE WITNESS:Thank you. CSB REPORTING Wilder, Idaho 257 READING (Di) Ci ty of Eagle83676 (The wi tness left the stand. (Recess. COMMI S S IONER KJELLANDER:We're back on the record and we're ready now for the Ci ty of Eagle to call its next witness. MS. BUXTON:Mr. Chairman , the Ci ty of Eagle would call Mr. Pike Teinert to the stand. PIKE TEINERT produced as a wi tness at the instance of the Ci ty of Eagle , having been first duly sworn , was examined and testified as follows: DIRECT EXAMINATION BY MS. BUXTON: Mr. Teinert , can you state your full name, spelling your last name for the record, please? My full name is Herbert Pike Teinert.The last name is spelled T-i-n-e-r- Could you give your business address, please? My business address is 834 Harcourt Road, Boise, Idaho, 83702. And who are you representing in this CSB REPORTING Wilder, Idaho 258 TEINERT (Di) Ci ty of Eagle83676 proceeding? m representing the Ci ty of Eagle. And what is your business address - - oh, you already gave me that.Have you previously filed written direct and written rebuttal testimony in this matter? Yes,have. Do you wi sh make any corrections either your direct written rebuttal testimony? Yes , I have a couple of minor typos in my direct that I would like to correct.In the direct on page 12 , line 13 , the next to the last word on that line is "that," t-h-a-t, it should be "than " t-h-a-n; and then on page 14 , line 6, the second word in that sentence was" should be stricken. Are there any further amendments? No, I do not have any. If I asked you the same questions today for either your direct or rebuttal testimony, would your answers be the same? Yes, they would. MS. BUXTON:Mr. Chairman , I would request that the direct and supplemental testimony, pages through 19 for the direct and 1 through 14 of the rebuttal testimony, be spread over the record as if read CSB REPORTING Wilder , Idaho 259 TEINERT (Di) City of Eagle83676 in its entirety and that Exhibits 108 through 117 be marked and admitted for the record. COMMISSIONER KJELLANDER:Then without obj ection , we'll spread the testimony, both direct and rebuttal , across the record as if read and mark and admit the associated exhibits. (The City of Eagle Exhibit Nos. 108-118 were admi t ted into evidence. (The following prefiled direct and rebuttal testimony of Mr. Pike Teinert is spread upon the record. CSB REPORTING Wilder , Idaho 260 TEINERT (Di) Ci ty of Eagle83676 ADDRESS. address 834 PLEASE STATE YOUR NAME AND BUS INESS My name is Pike Teinert and my business Harcourt Road Boise , Idaho 83702. WHAT IS YOUR OCCUPATION? I am a principal consultant for Energy Strategies Group LLC, a consulting firm that provides CSB REPORTING Wilder , Idaho servlces to clients in the utility industry. ARE YOU SPONSORING ANY EXHIBITS WITH THI S Yes. I am sponsoring Exhibit Nos. 108 PLEASE DESCRIBE YOUR QUALIFICATIONS TO TESTIFY AS AN EXPERT IN THIS PROCEEDING. I am an electrical engineer and I have thirty- four years experience in the energy industry in positions ranging from design engineer to Vice President. As an engineer for Texas Power and Light Company, I designed and managed the construction of 138KV and 345KV swi tchyards. Over 20 years of my experience were in customer relations positions that included responsibility for negotiating customer service contracts including line extension and system betterment provisions. From 1996 through January 2003 I was with the Electric Power Research Institute , EPRI' s, client relations division and was responsible for collaborative research TESTIMONY? through 118. 261 TEINERT (Di) Ci ty of Eagle83676 and development coordination including transmission and distribution R&D , for several of North America's largest utilities. My complete resume, including educational background and employment history, is presented as Appendix A. HAVE YOU PREVIOUSLY APPEARED AS AN EXPERT WITNESS BEFORE THIS COMMISSION? Yes. I have provided direct and rebut tal testimony in the Idaho Public Utilities Commission Case No. IPC-00-12 regarding an industrial class customer and line extension policy within Schedule 19. I have also provided direct and rebuttal testimony in the Idaho Public Utilities Commission Case No. IPC-E- 03 -13, Idaho Power Company's most recent general rate case. WHY ARE YOU TESTIFYING IN THIS CASE NO. IPC-E- 04 - 04? I have been retained by the City of Eagle as an expert witness to assist in the analysis of Idaho Power's complaint filed in this case. The City of Eagle and Idaho Power began discussing the Ci ty' s concerns about upgrading the 69KV line to 138KV between the Eagle substation and the new Star substation in 1999. Although the Company has proposed several al ternati ve routes for the 138KV sub-transmission upgrade, methods and technologies other than a 138KV upgrade that can address CSB REPORTING Wilder, Idaho 262 TEINERT (Di) Ci ty of Eagle83676 the City's concerns and could have been considered, were not explored by Idaho Power and proposed to the City. CSB REPORTING Wilder, Idaho TEINERT (Di) City of Eagle 263 83676 testimony will outline technology that Idaho Power could have proposed that can offer the Ci ty an acceptable option to those currently offered by the Company. silence on other lssues in this case does not necessarily imply acceptance of the Company's posi tion. PLEASE DESCRIBE HOW YOUR TESTIMONY ORGAN I ZED. My testimony and exhibits will address demand side al ternati ves that coul d impact the proposed upgrade to the 69KV line from Eagle substation to the new Star substation and also delivery technologies that were not included as alternatives by the Company to the City of Eagle. YOU SAY THAT DEMAND S IDE ALTERNATIVES WERE NOT INCLUDED IN THE COMPANY'S PLANS TO UPGRADE THE 69KV LINE FROM THE EAGLE SUBSTATION TO THE STAR SUBSTATION. CAN YOU GIVE EXAMPLES? Yes. Al though Idaho Power Company's 2002 Integrated Resource Plan , 2002 Demand Side Management Report, DSM 2003-2005 Business Plan and 2003 Conservation Plan , Exhibit Nos. 108 , 109, 110 and III respectively all include discussions of load reduction benefits gained from demand side resources , the benefits of these resources were not explained and identified to the City by Idaho Power as alternatives that could help diminish CSB REPORTING Wilder , Idaho 264 TEINERT (Di) Ci ty of Eagle83676 the rate of load growth in the Eagle and Star servlce areas.Examples of programs included in these documents that could have CSB REPORTING Wilder , Idaho 265 TEINERT (Di) Ci ty of Eagle83676 been discussed to slow load growth in Eagle and Star are found on page 18 of the Company's DSM 2003-2005 Business Plan , Exhibit No. 110. They include residential and commercial programs, important in this case, such as the Lighting Coupon Program , Residential new Construction Program , AC Direct Load Control Program and the Residential Air Conditioning Cycling Pilot Program. Additionally, Idaho Power's 2002 Demand Side Management Report, Exhibit No. 109, that includes Idaho Power' September 12 , 2002 , Residential Time-of Use Study quantifies significant load reduction potential from AMR/TOU. When the Company was ordered by the Commission in its Order No. 29196, in March, 2003 to submit a plan to replace the current meters of Idaho Power wi advanced meters , the Company subsequently proposed its Emmett service area as an area for AMR technology deployment. Given the substation and 69KV constraints in Eagle and Star , the Company should have proposed Eagle and Star as locations to initiate AMR that would demonstrate both the load reduction and delivery asset management benefits of AMR/TOU in the Eagle and Star area and help resolve the 69KV sub-transmission issues in this complaint. HAD THE COMPANY CONSIDERED DEMAND SIDE INITIATIVES AS POSSIBLE SOLUTIONS TO ADDRESS DELIVERY CSB REPORTING Wilder, Idaho TEINERT (Di) Ci ty of Eagle 266 83676 CONSTRAINTS PRIOR TO THE DEVELOPMENT OF THE DOCUMENTS YOU'VE CITED? Yes. In the Company's 2002 IRP filing, the IPUC's Order No. 28583 , dated December 18, 2000, Exhibit CSB REPORTING Wilder, Idaho No. 112 , page 5, the 267 TEINERT (Di) City of Eagle83676 Company indicates it will "Perform and present a feasibility study on the near-term application of mobile generators to provide not only additional power and energy but also to provide reinforcement to the delivery system and potentially defer or avoid capacity upgrades to delivery facilities-November 2000 (emphasis added)" It is clear that the Company is and was aware of the potential of demand side initiatives to defer or avoid capacity upgrades to delivery facilities like the 69KV line from the Eagle substation to the new Star substation. Yet , the Company did not offer demand side initiatives to the City as alternatives to upgrading the 69KV line between Eagle and Star. IF THE CITY HAD BEEN INFORMED IN 1999 OF THE POTENTIAL TO AVOID OR DEFER THE UPGRADE OF THE 69KV EAGLE/STAR LINE USING DEMAND SIDE INITIATIVES , COULD THE CITY AND THE COMPANY HAVE COOPERATED TO DEVELOPED AND EXECUTE THE PROGRAMS. Yes. Clearly there was time to develop and initiate demand side programs. In his testimony Idaho Power's David Sikes' Exhibit No., estimates the cost of the 69KV to 138KV upgrade to range from $2 500 000 to $2,840,000 with no additional cost to the City. Clearly if that level of funding had been budgeted for demand side programs they would yield significant long-term load CSB REPORTING Wilder , Idaho 268 TEINERT (Di) Ci ty of Eagle83676 reduction benefits and avoid or defer capacity upgrades to the del i very system.Based on the Expendi t ure Chart of the Company's DSM 2003-2005 Business Plan, Page 6 Exhibi t No. 110 , the CSB REPORTING Wilder , Idaho 269 TEINERT (Di) City of Eagle83676 estimated cost of the sub-transmission upgrade in this case would exceed the total system DSM program expenditures for Idaho Power in each year from 1999 through 2002. Also , the general public was certainly sensitive to the exceptionally high and volatile energy prices at that point in the 2000-2001 energy crisis and would have been very receptive to demand side programs that would not only have avoided or deferred delivery upgrades but would also have helped mitigate large future PCA increases necessi tated by record high prices in the wholesale market. WOULD DEMAND SIDE PROGRAMS HELP DIMINISH THE RATE OF LOAD GROWTH IN EAGLE AND STAR? Yes. The Company would have had almost four and one hal f years to plan and execute DSM programs that would have deferred or avoided the need for the Eagle to Star 69KV to 138KV upgrade. MR. TEINERT, HAVE YOU REVIEWED IDAHO POWER COMPANY DOCUMENTS THAT PROVIDE SUBSTATION CAPACITY AND LOADING FOR THE EAGLE SUBSTATION? Yes. The document is identified as Exhibit No. 113 provided by the Company in the IPUC Commission Case No. IPC-00-12. CSB REPORTING Wilder , Idaho TEINERT (Di) City of Eagle 270 83676 BASED ON THE COMPANY'S INFORMATION PROVIDED IN EXHIBIT NO. 113 WHAT IS YOUR ASSESSMENT OF THE LOADING ON THE EAGLE SUBSTATION? As shown in Exhibit No. 113, the Eagle substation 2000 summer peak demand was 33.3 MW. The substation capacity was 65 MVA and therefore was loaded to about 60% of its capacity at a load factor of 85%. SINCE THE EAGLE SUBSTATION WAS ONLY 60% LOADED IN THE SUMMER OF 2000, COULD IDAHO POWER HAVE MANAGED THE GROWTH AT THIS SUBSTATION WITH DEMAND SIDE PROGRAMS AND DEFFERED OR AVOIDED THE CAPACITY UPGRADE TO THE EAGLE/ STAR 69KV LINE. Yes. In the summer of 2000 given the heightened awareness of the soaring price of wholesale electricity, demand side programs would have been especially effective and would have been a huge public relations opportunity for the Company to demonstrate its support for sustainable energy DSM practices specifically in Eagle and Star and would also have been a model for the remainder of Idaho Power's system. SINCE THE STAR SUBSTATION WAS NOT BUILT UNTIL 2004 , COULD IDAHO POWER HAVE MANAGED THE GROWTH IN STAR USING DEMAND SIDE PROGRAMS AND DEFFERED OR AVOIDED THE CAPACITY UPGRADE TO THE EAGLE/ STAR 69KV LINE. CSB REPORTING Wilder , Idaho 271 TEINERT (Di) Ci ty of Eagle83676 Yes. As I've stated previously in my testimony, in the summer of 2000 given the heightened awareness of the soaring price of wholesale electrici ty, demand side programs would have been especially effective and would have been a huge public relations opportunity for the Company to demonstrate its support for sustainable energy practices. FOCUSING ON THE COMPANY'S ASSERTION THAT THE STAR SUBSTATION MUST BE BUILT BY THE SUMMER 2005 TO AVOID SERVICE DEGRATION IN THE EAGLE STAR AREA, HOW DOES IDAHO POWER'S DAVID SIKES CHARACTERIZE THE GROWTH IN STAR? Mr. Sikes in his direct testimony, page beginning at line 9 , states that: "While the load growth in Star is materializing at a slightly slower rate due to the smaller size of the community and the additional commute distances from Star to Boise and Meridian commercial hubs, wi th increasing housing costs in Ada County and, specifically in Boise and Meridian, development in Star is accelerating. Q .DOES MR. SIKES INDICATE WHY THE COMPANY DECIDED TO BUILD THE STAR SUBSTATION EVEN THOUGH THE GROWTH IN STAR WAS MATERALIZING AT A SLOWER RATE THAN EXPECTED? CSB REPORTING Wilder, Idaho 272 TEINERT (Di) Ci ty of Eagle83676 No. Mr. Sikes simply says on page, 4 beginning at line 23: "In 1999 the Company decided to construct the Star substation by the summer of 2004 in order to maintain adequate service in the area. There is no explanation of the need to complete the Star substation in the summer of 2004 regardless of the slower growth. Q .DID THE COMPANY CONTINUE WITH ITS PLAN TO BUILD THE 138KV STAR SUBSTATION EVEN THOUGH THERE WERE DELAYS IN PERMITTING THE 138KV LINE TO SERVE THE STAR SUBSTATION? Yes. MR. TEINERT , WAS BUILDING THE STAR SUBSTATION IN THE SUMMER OF 2004 PRUDENT SINCE THERE WAS NOT A 138KV SOURCE AVAILABLE FOR THE NEW 138KV STAR SUBSTATION? No. Normally, the source for a distribution substation , like the 138KV Star substation, would have a confirmed 138KV source before the decision to build the sub is finalized.In this case the decision to build the sub and construction both took place even though the 138KV source was not secure. Mr. Sikes' testimony clearly states the decision to build the sub was made in 1999. The Company applied for a CUP in CSB REPORTING Wilder , Idaho 273 TEINERT (Di) Ci ty of Eagle83676 December 2000 to upgrade the Eagle sub to Star 69KV to 138KV and in February 2001 CSB REPORTING Wilder , Idaho TEINERT (Di) lOa City of Eagle 274 83676 the Eagle Planning and Zoning Commission formally recommended that the City Council deny the application. AFTER THE CITY P&Z COMMISSION'S DENIAL RECOMMENDATION , OF IDAHO POWER'S FIRST CUP APPLICATION, DID THE COMPANY OFFER THE CITY ANY ALTERNATIVES OTHER THAN 138KV ALTERNATIVES? No. DID THE COMPANY SUBMIT ANOTHER APPLICATION FOR A CUP TO UPGRADE THE 69KV LINE FROM EAGLE TO STAR TO 138KV? Yes.In September 2002 the Company submitted another CUP application for a 138KV alternative route along Highway 44 through Eagle.In September 2003, the City of Eagle P&Z Commission recommended denial of Idaho Power's second application for a CUP to build a new 138KV line through Eagle. AFTER THE DENIAL RECOMMENDATION, OF ITS SECOND CUP APPLICATION , DID THE COMPANY, OFFER THE CITY ALTERNATIVES OTHER THAN 138KV ALTERNATIVES? No. GIVEN THI S HI STROY OF SLOWER LOAD GROWTH IN THE STAR AREA AND THE P&Z' S TWO DENIAL RECOMMENDATIONS, WHAT WAS DRIVING THE COMPANY'S RUSH TO BUILD THE STAR SUBSTATION AND THE 138KV EAGLE TO STAR UPGRADE? CSB REPORTING Wilder , Idaho 275 TEINERT (Di) City of Eagle83676 It is reasonable to conclude that the Company's 10 Year Transmission Plan for the Treasure Valley, Exhibi t No. 114 , page 17 documenting the timing of the Company's 138KV Transmission plan , rather than the load in Star , was driving force behind the Company's push to complete the Star substation and 138KV source from Eagle in summer 2004. Upon completion of the 138KV substation in Star , the Company asserts they would then need a 138KV source from Eagle to serve it.However , the Company offers no data or analysis concluding that the existing 69KV feed to the Star substation is not adequate or that it could be upgraded to provide a permanent 69KV feed. The Company's silence on any solution other than a 138KV solution provides further support that the Company's 10 Year Transmission Plan , rather than the load in Star and Eagle is driving the plan and timetable for this proj ect. MOVING TO ALTERNATIVES OTHER THAN THE COMPANY'S 138KV OPTIONS, DID OR HAS THE COMPANY EVER OFFERED THE CITY ALTERNATIVES OTHER THAN THE 138KV ALTERNATIVES OUTLINED IN MR. SIKES' TESTIMONY? There is no documentation in the testimony or exhibi ts in this case that indicates the Ci ty was ever offered any al ternati ves other that the 138KV al ternati ves in Mr. Sikes' testimony. CSB REPORTING Wilder , Idaho 276 TEINERT (Di) Ci ty of Eagle83676 states: Also , Mr. Said's testimony on page 2, line 21 CSB REPORTING Wilder , Idaho 277 TEINERT (Di) 12a Ci ty of Eagle83676 " . . the Company has attempted to identify a route and al ternati ve acceptable to all interested parties" There has clearly been no option other than 138KV alternatives identified by Idaho Power and the City has repeatedly found the 138KV alternative unacceptable. Therefore, the Company has failed completely to identify acceptable al ternati ves for the Ci ty. Mr. Sikes , in his testimony, states on page line 3 that: "Idaho power has been diligent and prudent in its effort to site new transmission facilities. Again , neither Mr. Said nor Mr. Sikes has identified any alternative other than new 138kV alternatives regardless of the City's strong objection to new 138KV transmission facilities.There fore, the diligence and prudence of the Company's search for a solution acceptable to the City is questionable and clearly inadequate. IS IT PRUDENT PLANNING AND DESIGN STRATEGY TO EXCLUDE ALL ALTERNATIVES OTHER THAN 138KV ALTERENATIVES IF THE CITY IS FIRMLY IN OPPOSITION TO THE 138KV ALTERNATIVES? CSB REPORTING Wilder , Idaho 278 TEINERT (Di) Ci ty of Eagle83676 No. The Company's rush to adhere to building the 138KV Star substation and 138KV line from Eagle to the Star substation as outlined in its 10 Year Transmission Plan is unreasonable given the Ci ty ' s concerns. It is reasonable to conclude that the Company was totally committed to its 10 Year Transmission Plan and did not seek alternatives other than 138KV options. MR TEINERT HAVE YOU REVIEWED THE BLACK AND VEATCH STUDY IDENTIFIED AS EXHIBIT NO.115? Yes. BASED ON YOUR REVIEW OF THE BLACK AND VEATCH STUDY WERE THERE ALTERNATIVES OTHER THAT THE 138KV OVERHEAD AND UNDERGROUND LINE ALTERNATIVES ANALYZED AND REPORTED TO THE CITY IN THE BLACK AND VEATCH STUDY? No. THEREFORE, BASED ON THE DOCUMENTATION IN THI S CASE DO YOU FIND THAT BOTH THE COMPANY AND BLACK AND VEATCH PRESENTED ONLY 138KV OVERHEAD AND UNDERGROUND ALTERNATIVES? Yes. The only alternatives analyzed in the B&V study were the 138KV overhead and underground solutions previously identified by Idaho Power. Certainly the City had hoped that the B&V study would explore other reasonable alternatives to 138KV CSB REPORTING Wilder , Idaho TEINERT (Di) City of Eagle 279 83676 given the City's objection to the height of 138KV overhead and the expense of 138KV underground. HASN'T RECENT RESEACH AND DEVELOPMENT PROVIDED THE ELECTRIC UTILITY INDUSTRY WITH SEVERAL TECHNOLOGY ADVANCEMENTS LIKE SUPERCONDUCTING CONDUCTOR CAPABLE OF SIGNIFICANTLY INCREASING THE CAPACITY OF TRANSMISSION SYSTEMS? Yes.My seven years experlence at EPRI through early 2003 provided an inside look at several advances in transmission technology that will significantly improve the capacity of the existing transmission grid. Transmission superconductors, FACTS (Flexible AC Transmission Systems) and Dynamic Line Rating technology are examples of technologies that have been developed , tested and introduced to the industry by EPRI in the 1 as t few years. ARE THESE TECHNOLOGIES THAT IDAHO POWER SHOULD HAVE REVIEWED AND CONSIDERED AS ALTERNATIVES TO THE 138KV SOLUTIONS THEY IDENTIFIED? Yes.Some of them are potential solutions. However, the latest developments in these technologies have been developed by EPRI and its members and Idaho Power has not been a member of EPRI since 2001 and therefore, may not be aware of them. CSB REPORTING Wilder , Idaho 280 TEINERT (Di) City of Eagle83676 MOVING TO THE I SSUE OF DELIVERY SYSTEM CAPACITY AND UPGRADES TO THE STAR SUBSTATION, DOES MR. SIKES EXPLAIN WHY SERVICE TO THE STAR SUBSTATION FROM THE CALDWELL-LANSING 69KV LINE IS ONLY TEMPORARY? Yes , Mr. Sikes explains in his direct testimony that the 69KV line from Caldwell cannot provide ampaci ty and vol tage support to the Star substation beyond the load levels expected at the Star substation in early 2005. DOES MR. SIKES OFFER ANY SOLUTIONS FOR THE VOLTAGE SUPPORT AND AMPACITY PROBLEM ON THE 69KV LINE SERVING THE STAR SUBSTATION FROM CALDWELL-LANSING OTHER THAN THE 138KV EAGLE TO STAR UPGRADE? No. Mr. Sikes simply says in his testimony beginning on page 16 , line 10 that: "This line is limited by both conditions and will require a capacity upgrade in the future. Q .ARE THERE TECHNOLOGIES AVAILABLE TO RESOLVE THE CALDWELL-LANSING 69KV LINE VOLTAGE SUPPORT AND AMPACITY PROBLEMS GIVEN THE CITY OF EAGLE'S CONCERNS ABOUT CONSTRUCTING A 138KV LINE THORUGH EAGLE? Yes. The Caldwell 69KV line could be reconductored to mitigate the voltage support problem. Many electric utilities have been faced with transmission capacity problems and have CSB REPORTING Wilder , Idaho TEINERT (Di) Ci ty of Eagle 281 83676 addressed them by using high temperature, low sag, al uminum conductor steel supported (ACSS) cable that is capable of operating at approximately twice the operating temperature of conventional conductors. As stated in Exhibit No. 116, title "ACSS/TW conductor operates at higher temperatures, delivers more power over existing transmission corridors" ACSS cable would reduce vol tage drop and significantly increase the capacity of the Caldwell- Lansing 69kv line to adequately serve the Star substation. This solution would not require the proposed upgrade of the existing 69KV line through Eagle to a 138KV line. IF THE ACSS 69KV ALTERNATIVE IS USED TO RESOLVE THE VOLTAGE SUPPORT AND AMPACITY PROBLEMS ON THE CALDWELL-LANSING LINE TO SERVE THE STAR SUBSTATION, WOULD IT BE NECESSARY TO BUILD THE 138KV LINE THROUGH EAGLE AS PROPOSED BY THE COMPANY? No. If ACSS were used to reconductor the Caldwell-Lansing line then the Star substation could be served from that source instead of the Eagle source. MR TE I NER T , WHAT OTHER AL TERNA T I VE , NOT OFFERED BY THE IDAHO POWER COMPANY , WOULD ELIMNATE THE NEED FOR UPGRADING THE 69KV LINE TO 138KV FROM EAGLE TO THE STAR SUBSTATION? CSB REPORTING Wilder , Idaho TEINERT (Di) 1 7 Ci ty of Eagle 282 83676 ACSS cable could also be used to reconductor the 69KV ine from Eagle to the new Star substation. Height requirements would not need to exceed the existing 69KV line through Eagle especially if the Company undergrounds the distribution currently existing on the 69KV line as they have expressed a willingness to do. Therefore , it would not be necessary to erect large steel poles through Eagle for 138KV service to the Star substation. Facilities in the Eagle substation to step down 138KV to 69KV would be required. CAN EITHER OF THESE TWO SOLUTIONS BE IMPLEMENTED WITHIN THE TIME FRAME PROPOSED FOR THIS PROJECT? Yes. ACSS cable has been "widely available for more than a decade" as stated in Exhibit No. 116 and is available imposed deadline of May, 2005. IS ACSS TECHNOLOGY RELIABLE? Yes.Examples of research , studies and case histories as provided in Exhibit Nos. 116 and 117 that include studies by EPRI , the Electric Power Research Institute on ACSS cable, have verified ACSS technology as a reliable and efficient technology that effectively manages capacity problems on existing delivery infrastructure. As stated in Exhibit No. 116, CSB REPORTING Wilder, Idaho 283 TEINERT (Di) Ci ty of Eagle83676 " . . ACSS cable . has been used successfully by several utilities to improve power flows in existing transmission corridors. ACSS adds delivery capacity as deregulation has burdened electric utilities' transmission systems with non-native generation from unregulated companies. I S THE COST OF ACSS CABLE MORE EXPENS IVE THAN ACSR , A MORE FREQUENTLY USED CONDUCTOR? Yes. ACSS normally costs 15%-25% more than ACSR conductor.However, as shown in figure 3 of Exhibi No. upgrading capacity with ACSS can save the total cost of new structures and reduce overall conductor cost by 20% .The increased capacity of ACSS can eliminate the need for extensive and expensive upgrading to higher vol tages and is a much more economical al ternati ve than building a new 138KV steel pole line through Eagle. DOES THE INSTALLATION OF ACSS REQUIRE NON - STANDARD EQUI PMENT OR REQUIRE NON-STANDARD INSTALLATION TECHNIQUES OR TRAINING? As stated in Exhibit No. 116, ACSSNo. can be installed using "good stringing practices". Some additional care needs to be taken to protect the soft aluminum conductor during installation such as using lined stringing blocks. CSB REPORTING Wilder, Idaho 284 TEINERT (Di) Ci ty of Eagle83676 IN SUMMARY DOES YOUR TESTIMONY SUPPORT USING ACSS AT 69KV AS THE BASIS FOR SERVING THE STAR CSB REPORTING Wilder , Idaho SUBSTATION FROM EITHER OR BOTH THE CALDWELL-LANSING LINE OR THE EAGLE SOURCE? Yes. DOES THIS CONCLUDE YOUR DIRECT TESTIMONY? Yes. 285 TEINERT (Di) Ci ty of Eagle83676 ADDRESS. addre s s 834 PLEASE STATE YOUR NAME AND BUS INESS My name is Pike Teinert and my business Harcourt Road Boise, Idaho 83702. ARE YOU THE SAME PIKE TEINERT WHO FILED DIRECT TESTIMONY AND EXHIBITS IN THIS MATTER? I am. WHAT IS SUPPLEMENTAL TESTIMONY? CSB REPORTING Wilder, Idaho THE SCOPE OF YOUR REBUTTAL AND I will address the proposed overhead transmission line from Eagle substation to the new Star Substation along the route just North of and adjacent to State Street through the City of Eagle to the new Star HAVE YOU REVIEWED THE DIRECT TESTIMONY OF THE COMMISSION STAFF, IN THIS MATTER? Yes. DO YOU HAVE ANY OVERALL OBSERVATIONS REGARDING THAT TESTIMONY? Yes.Staff addressed many issues in its testimony, but it does not recommend an acceptable solution that can both satisfy the City's objections and meet the Company s goal of serving the new Star Substation. Substation. 286 TEINERT (Di-Reb) City of Eagle83676 ... WHAT WOULD BE AN ACCEPTABLE SOLUTION FOR BOTH PARTIES IN THIS CASE? The Company has stated that it wants to provide service to the new Star Substation from the existing Eagle Substation and the City's position is to minimize the impact of sub-transmission service to the new Star Substation on its residential and commercial property owners at no cost to the City or its citizens. If both the City and Company's positions could be realized with the same sub-transmission line and route, an acceptable solution could be reached. BEGINNING WITH THE PURPOSE AND ROUTE OF THE PROPOSED LINE DOESN'T THE STAFF IN SEVERAL PLACES IN ITS TESTIMONY STATE THAT THE PURPOSE OF THE PROPOSED LINE IS TO SERVE THE NEW STAR SUBSTATION? Yes.On page 2, line 7-11, the Staff states that: "Simply stated, Idaho Power Company needs to extend its sub transmission facilities from the existing substation through the City of Eagle to the new Star Substation. Additionally, on page 4, line 2-6, the Staff states: CSB REPORTING Wilder, Idaho 287 TEINERT (Di-Reb) City of Eagle83676 "The City of Eagle has denied Idaho Power's request to extend its overhead transmission facilities from the Eagle substation westward through the City to the Star substation. Based on these statements in the Staff's Testimony and the Ci ty' s response to the Company's complaint in this case, it is clear that both the Ci ty and the Staff understand the Company's request to build a sub-transmission line to serve the new Star Substation. WHY IS IT IMPORTANT TO EMPHASIZE THE STAFF'S AND THE CITY'S UNDERSTANDINHG OF THE COMPANY'S REQUEST FOR AN OVERHEAD TRANSMISSION LINE THROUGH THE CITY OF EAGLE? Because the Company in its CUP applications, its subsequent meetings with City staff and ul timately in this complaint did not reveal the real reason for the proposed 138kV line to the City or the Commission Staff. WHAT I S THE COMPANY'S REAL REASON FOR THE PROPOSED HIGH CAPACITY 138KV TRANSMISSION LINE? The City's Exhibit No. 114, Idaho Power Company'10 Year Transmission Plan for the Treasure Valley, Buildout proj ection Distribution Planning 2002-2012 , Page 11 under "Locust Loop No.2 states: CSB REPORTING Wilder , Idaho 288 TEINERT (Di-Reb) Ci ty of Eagle83676 The Locust-Eagle 138 will be built when the reliability of service is at risk or when the Gary tap opened because of the State 138kV conversion. The Star tap is a tap in the Locust-Eagle line for temporary service to Star. The Locust No.2 is completed wi th the Locust -Eagle 138kV construction and will serve H. P. , Joplin , Eagle loads and loads north of the Beacon Light area. The Eagle-Ustick 138kV line serves as a tie to the Cloverdale source. A source in the north Star area will serve the Star Substation. Clearly the need to serve the Star Substation only temporary. "The Star tap is a tap in the Locust-Eagle line for temporary service to Star." "A source in the north Star area will serve the Star Substation." The Company did not disclose that the proposed Eagle Substation service to the new Star Substation was only temporary. Also and more importantly, the Company did not disclose the real reason for the high capacity 138kV line as stated in the third sentence of the quote. "The Locust Loop No.2 is completed with the Locust-Eagle 138kV construction and will serve H. P., Joplin , Eagle loads and loads north of the Beacon Light area." Clearly this high capacity 138kV line , which is the same line being contested in this case, must have the capaci ty to carry CSB REPORTING Wilder , Idaho 289 TEINERT (Di - Reb) City of Eagle83676 the load for the Joplin and Hewlett-Packard Substations as well as the Eagle Substation load and benefits customers served from the Joplin and Hewlett-Packard substations too. CSB REPORTING Wilder , Idaho 290 TEINERT (Di-Reb) City of Eagle83676 The Company did not disclose this information in its CCUP application to the City, in meetings with the City Staff or Council , or in its complaint in this case. And the City of Eagle has been unfairly compelled to use its limited time and financial resources to respond to Idaho Power's claim in this dispute although customers served by the Joplin and Hewlett-Packard Substation clearly benefit from the high capacity 138kV line. Pages 47 and 48 of Exhibit 114 confirm that in the Company's loop model , the first line sections from the source substation , such as the Locust-Eagle 138kV line, must have enough capacity to carry all of the substations on the loop. Therefore , the Locust-Eagle 138kV line must have the capaci ty to carry all of the load on the Eagle, Joplin and Hewlett-Packard Substations at the same time. Additionally, the Company's request for a high capacity 138kV line from the Eagle Substation to the new Star Substation is not the Star Substation's permanent source , but instead , the first phase of the Locust-Eagle 138kV line to complete the Locust Loop No. If the City and the Commission Staff had known that the new Star Substation feed from Eagle Substation was only temporary and that the real reason for the high capacity 138kV ine was to complete the Locust Loop No. , the search for acceptable solutions would have been CSB REPORTING Wilder , Idaho 291 TEINERT (Di-Reb) Ci ty of Eagle83676 much more focused, easier to analyze, less contentious and significantly less time consuming. CSB REPORTING Wilder , Idaho 292 TEINERT (Di-Reb) City of Eagle83676 WHY WOULD THE CITY AND THE STAFF HAVE BEEN ABLE TO PURSUE MORE ACCEPTABLE SOLUTIONS? The City and Staff both believed that the Company's request for a high capacity 138kV line was needed to serve the existing and future loads in the Star and Eagle area as stated by the Company in its Testimony. The real reason for the high capacity 138kV line is to serve Eagle, Joplin and H. P. Substations, is to complete the Locust Loop No., a much larger load than the capaci ty of the new Star Substation. Based on the Company's 10 Year Transmission Plan, City Exhibit No. 114 , page No. 48, first paragraph, the first line section , the Eagle-Locust 138kV line, in the 138kV Locust Loop No., is rated as a getaway section at 277 MVA. In contrast , the new Star Substation transformer is rated from 20-30 MVA , about one tenth of the capacity the Company plans for the high capacity Eagle-Locust 138kV line. Therefore, al though the City and Staf f have been led to believe that the proposed high capacity 138kV line was needed to serve the Star Substation , the Company's 10 Year Transmission Plan contradicts the Company' testimony and explains that it's real purpose is the completion of the Locust Loop No.Therefore, the Ci and Commission Staff have been developing alternatives without the benefit of valid data and information. CSB REPORTING Wilder , Idaho 293 TEINERT (Di -Reb) Ci ty of Eagle83676 The City and Commission Staff could have more thoroughly analyzed smaller capacity solutions, like 69kV transmission to serve the new Star Substation capacity, had the Company disclosed the size of the Star Substation load, and that the Eagle feed to new Star Substation was only temporary. The Company's failure to disclose the real reason for the high capacity 138kV line created an extremely complex and contentious environment in which a solution to this dispute has not been found after more than four years since the Company first approached the City in late 1999 with its request to serve the proposed Star Substation. HAS THE STAFF INDICATED IN ITS TESTIMONY THAT THEY MADE AN ANALYSIS OF THE 69KV OPTION YOU RECOMMENDED IN YOUR TESTIMONY? No. The Staff however, did state in its testimony on page 8 , line 20, in reference to the 69kV option using ACSS conductor, that they believed it had potential to provide additional transmission capacity at reasonable cost. The Staff further says, beginning on line 23 of page 8, that they would look to the Company to explain why ACSS would not be a viable alternative to expand the capacity of existing facilities. CSB REPORTING Wilder, Idaho 294 TEINERT (Di-Reb) Ci ty of Eagle83676 Q. HAS THE COMPANY PRODUCED ANY DOCUMENTS DETAILING ITS ANALYSIS AND DECISION NOT TO USE ACSS? CSB REPORTING Wilder , Idaho 295 TEINERT (Di-Reb) Ci ty of Eagle83676 , it has not. SINCE THE COMMISSION STAFF HAS NOT OFFERED A 69KV ALTERNATIVE TO SERVING THE NEW STAR SUBSTATION AND A 69KV SOLUTION WOULD REQUIRE CAPACITY THAT IS MUCH LESS THAT THE CAPACITY NEEDED FOR THE LOCUST LOOP NO., IS THERE A 69KV SOLUTION THAT WILL MEET THE CITY'S REQUIREMENTS AND PROVIDE CAPACITY TO SERVE THE NEW STAR SUBSTATION? Yes , the new Star Substation transformer capacity is about 20-30 MVA. A 69kV line using ACSR , all al uminum or ACSS conductor can provide the needed transmission capacity to serve the transformer load the new Star Substation. In addition to the 69kV transmission line , an autotransformer would be required at or near the Eagle substation. These step-down 138kV/69kV autotransformers are available on the after-market, are excellent equipment for temporary applications and can be ordered and delivered in time to meet the Company's proposed May 2005 completion date. ON PAGE 2 , BEGINNING AT LINE 24 THE STAFF LISTS ALTERNATIVES AVAILABLE TO THE COMMISSION IN ITS DECISION. DOES THIS 69KV LINE ALIGN WITH THE ALTERNATIVES? Yes , the 69kV line aligns with the recommended Commission al ternati ves Nos. 1 , 4) and 5) respectively, CSB REPORTING Wilder , Idaho 296 TEINERT (Di -Reb) Ci ty of Eagle83676 directs the Company to extend its overhead facilities through Eagle and directs the CSB REPORTING Wilder , Idaho 297 TEINERT (Di-Reb) City of Eagle83676 Company to pursue a lower cost overhead al ignment or a combination of these al ternati ves. THE STAFF'S DIRECT TESTIMONY FURTHER RECOMMENDS , BEGINNING ON PAGE 3, LINE 1 , THAT THE COMMISSION SHOULD DIRECT THE COMPANY TO INSTALL OVERHEAD FACILITIES. WOULD THE 69KV LINE ALIGN WITH THIS RECOMMENDATION BY THE STAFF? Yes , the 69kV overhead line would comply wi th this recommendation also. ON PAGE 5, BEGINNING ON LINE 19 THE STAFF SAYS THAT " IT IS UNLIKELY THAT A PREVIOUSLY PROPOSED OVERHEAD ALIGNMENT ADJACENT TO STATE STREET THROUGH THE CITY WOULD BE ANY MORE ACCEPTABLE." DO YOU AGREE THAT THIS ALIGNMENT IS UNACCEPTABLE TO THE CITY? , because the Staff was referring to the high capacity 138kV line previously proposed to the City and not the 69kV line that could provide the temporary feed to the new Star Substation and would be much less obtrusive. A 69kV line from the Eagle Substation , along the alignment referenced by the staff , west along State Street , has previously used this route on existing poles before the Company reconfigured the line as a distribution feeder from the Eagle Substation. The City would not obj ect to the re-conversion of the line to 69kV service to feed the new Star Substation. CSB REPORTING Wilder , Idaho 298 TEINERT (Di-Reb) City of Eagle83676 ON PAGE 9, BEGINNING ON LINE 13, THE STAFF SAYS THAT THE STATE STREET ALIGHNMENT MAKES THE MOST ECONOMICAL SENSE FOR THE GENERAL BODY OF IDAHO POWER CUS TOMERS. DO YOU AGREE? Yes , I believe that if the Company completes a detailed design and cost analysis of the 69kV alternative, it will illustrate that the 69kV alternative will cost less than the 138kV high capacity alternative to temporarily serve the new Star Substation. This solution will therefore have less impact on the general body of Idaho Power customers, as well as the Ci ty of Eagle. ARE THERE ADDITIONAL ISSUES RAISED BY THE STAFF IN ITS DIRECT TESTIMONY THAT ARE PROBLEMATIC FOR THE CITY? Yes the Staff says on page 3, beginning on line 5 and again on page 9, beginning on line 4 that the Company should be allowed to reasonably extend and upgrade its overhead transmission/distribution facilities as it deems appropriate. However , the Staff does not include in this part of its testimony any recommendation for tests or checks and balances that will ensure that the Company's planning and design for such facilities include both the customer's and the Company's best interests.Especially in contested extension of CSB REPORTING Wilder , Idaho 299 TEINERT (Di-Reb) City of Eagle83676 facilities , as in this case, such a system of checks and balances would have quickly identified the Company's real reason for the proposed high CSB REPORTING Wilder , Idaho 300 TEINERT (Di -Reb) 11a Ci ty of Eagle83676 capacity 138kV line. A mandatory system of planning and design test sand checks and balances would have identified the separate functions of the Company' proposed line, one, a high capacity 138kV line designed to complete the Locust loop No.2 and two , to provide temporary service to the new Star Substation.The City and the Company could have focused their discussions clearly on the temporary service of a low capaci sub-transmission line to serve the Star Substation. In this case , an excessive amount of time has been required to extract the details of the Company's plan for the high capacity 138kV line. Therefore, if the Commission establishes a policy that allows the Company to reasonably extend its overhead facilities , then the Commission at the same time must also establish a system of tests , checks and balances for the Commission Staff to analyze the Company's plans and designs for those extensions in disputed instances. As examples , in this dispute, the Ci ty and the Staff were not given essential design data including, but not limited to: the proposed sub-transmission line electrical loads, the temporary load requirements for the new Star Substation feed from Eagle , the electrical load requirements of the 138kV high capacity line to complete the Locust Loop No., the timing associated wi th the CSB REPORTING Wilder, Idaho 301 TEINERT (Di -Reb) City of Eagle83676 completion of the Locust Loop No., the routing of the proposed Locust Loop No.2 through the city of Eagle , and the Company's standard design specifications for 138kV CSB REPORTING Wilder , Idaho 302 TEINERT (Di -Reb) 12a Ci ty of Eagle83676 and 69kV sub-transmission lines. Al though the Staff may not be comfortable with analyzing data at this level of detail , it is essential information necessary to analyze plans and design for contested Company proj ects. If the Commission required and the Staff reviewed this type of essential information as part of its test for reasonableness , the Ci ty, the Company and the Commission Staff would have been able to quickly identify potential solutions in this dispute. IN CONCLUSION , WILL YOU PLEASE SUMMARIZE YOUR REBUTTAL AND SUPPLEMENTAL TESTIMONY? Yes , in summary the Staff has been unable to provide an acceptable solution for this dispute primarily because the Company did not disclose the real reason for the proposed high capacity 138kV line. An overhead 69kV line solution routed on the old 69kV line right-of-way going West from the Eagle Substation is acceptable to the City as temporary service to the new Star Substation and agrees wi th the alternatives the Staff recommends to the Commission in its testimony. Also, the Staff's recommendation to the Commission that it should allow the Company to reasonably extend its overhead delivery facilities must be accompanied by a requirement for detailed planning and design data to enable the Staff to ensure CSB REPORTING Wilder , Idaho 303 TEINERT (Di -Reb) Ci ty of Eagle83676 equitable solutions for all parties. Had the Company disclosed its real reason for the high capacity 38kv line and provided this detail in the initial request to the City, all parties could have agreed on a solution very early in the process. DOES THI S CONCLUDE YOUR TESTIMONY. Yes. CSB REPORTING Wilder , Idaho 304 TEINERT (Di-Reb) City of Eagle83676 open hearing. (The following proceedings were had MS. BUXTON:Mr. Chairman , we present Mr. Teinert for cross-examination. Mr. Howell. COMMISSIONER KJELLANDER:Let's start with BY MR. HOWELL: MR . HOWELL:Thank you, Mr. Cha i rman . CROS S - EXAMINA T I ON Mr. Teinert, on page 14 you indicate that you have read and reviewed the Black and Veatch study? CSB REPORTING Wilder , Idaho Tha t 's correct. Isn't it true that less than one percent of transmission line circuit miles in the United States are installed underground? That would be a reasonable assumption. don't know the exact number. And doesn't the Black and Veatch report also say that on page 2 subtransmission lines such as the Eagle/Star 138 kV line proposed by Idaho Power are most always constructed using air insulated overhead bare conductors such as proposed by Idaho Power? Without looking at that specific part of 305 TEINERT (X) City of Eagle83676 the study, I'd accept that. Okay.On page 18 you talk about one of the al ternati ves, technology al ternati ves, such as using ACSS , which is aluminum conductor steel supported cable. Do you know if ACSS is typically the type of conductor used by Idaho Power? Idaho Power has stated in its discussions, I think, with myself and others off the record that it is not their typical standard construction conductor. If Idaho Power were to install ACSS as you're suggesting on a reroute or a replacement of the well , what used to be the 69 kV line, wouldn't it need additional instruments and software to monitor these types of conductors? Not that I'm aware of.A conductor is a conductor.It wouldn't take any additional electronic equipment to monitor that particular type of cable more so than it would an ACSR or all aluminum conductor which is their standard. Under your suggestion to reconductor the existing State Street 69 kV line, isn't it true that a transformer that would be used for that 69 kV line would have to be placed in the substation in Eagle? In response to that question , let me start at the Star substation and work back to the Eagle CSB REPORTING Wilder , Idaho 306 TEINERT (X) Ci ty of Eagle83676 substation and I will address that particular issue.The Star substation currently has a 69 kV transformer installed.The ine between Star and the Eagle substation as you heard Mr. Sikes testify this morning a 69 kV line, conducted for 69, insulated for 69 , so if we work backward from Star , we arrive at the Eagle substation with 69 facilities in place and when we get to the Eagle substation , we then from that point have a mismatch , if you will , of transmission voltages or in this case subtransmission as is stated by the Company, and at that point you would require an auto transformer and an auto transformer is basically a device that would take the 138 kV subtransmission voltage and drop it down to a 69 kV subtransmission voltage and allow you to serve the Star substation , one auto transformer available on the after market. I think that's what your testimony does say, available on the after market.What would the price of that transformer be? On the after market they run between 6 to $8.00 per kVa and that would get you a price in the neighborhood of 4 to $500,000. But under your configuration that auto transformer would need to be placed in the substation wouldn't it? CSB REPORTING Wilder, Idaho 307 TEINERT (X) City of Eagle83676 In or near the substation, that's correct, and I've taken the liberty of looking at the availability of properties in or near the substation.There are properties contiguous to and adj acent to the substation footprint that would allow at least the investigation of purchasing that property for an auto transformer installation. Have you been present pretty much all morning? Yes, I have. Haven't several witnesses said that it' their belief that Exhibit 100 which is the conditional use permit granting the substation rezone that no more upgrades could occur in that location and that the substation would have to be moved? ve heard those discussions , that' correct. So doesn't that seem to rule out the availability of putting the auto transformer in the substation? I believe my testimony was in or near and near is not in and splitting hairs, but again, I'm not the individual who makes the judgment on what the conditional use permitting process is and the rules that go wi th that. CSB REPORTING Wilder , Idaho 308 TEINERT (X) Ci ty of Eagle83676 I f the Company were to reconductor the existing 69 kV line route on State Street, wouldn't they have to use taller poles? If you reconductor for 69, the answer no and I believe that my testimony indicates that reconductored wi th ACSS trap wire which is a configuration of ACSS could manage the required power to serve the Star substation, so no taller posts would be required if it were 69. MR . HOWELL:No further quest ions. COMMISSIONER KJELLANDER:Mr. Squyres. MR. SQUYRES:No questions. COMM IS S IONER KJELLANDER:Ms. Moen. MS. MOEN:Thank you, Mr. Cha i rman . CROSS - EXAMINATION BY MS. MOEN: Mr. Teinert, in your direct testimony on page 2 , lines 14 to 15, you acknowledge that you' testifying in this case as an expert wi tness; is that right? Yes, that's correct. Mr. Teinert, can you tell me what professional experience that you have conducting CSB REPORTING Wilder , Idaho 309 TEINERT (X) Ci ty of Eagle83676 transmission line studies? My experience , as indicated in the testimony beginning on page 2 , indicates that I have substation and/ or, if you will, swi tchyard, and they' equally the same , 138/345 kV experience.That experience requires that you understand transmission line design particularly the loading and weighting of dead-end structures and those would be basically large angle structures similar to those that we're talking about here in this particular case at 138 kV. Well , my question was what professional experience do you have actually conducting transmission line studies? Transmission line studies? Yes. To what degree?Studies can come as models or they can come as driving the line to observe what the right of way looks like. Planning for transmission lines on a systemwide basis. Planning for transmission lines on a systemwide basis in several capacities at Texas Utilities and Texas Power & Light Company, I was responsible for negotiating line extension agreements which included not just line extension agreements for distribution but also CSB REPORTING Wilder , Idaho 310 TEINERT (X) Ci ty of Eagle83676 transmission facilities.In the process of those negotiations, we performed transmission line studies for the clients who needed those facilities, whether they were 345, 138 kV or perhaps 69 kV, so there's an extensive amount of experience there in that particular field. If we to go Appendix A, would you identify in your vi tae here where it says you have experlence conducting transmission line studies? If you will go to - - unfortunately, these pages aren't numbered , but bear with me - - it would be the fourth page , Manager of Industrial Services and read with me or let me read to you, if you don't mind.Under Manager of Industrial Services, "Developed policies, practices and procedures for new service , marketing, sales strategy and tactics for 108 000 commercial and industrial customers with annual revenue" and so forth. The policies , practices and procedures for new service, new service entails in many cases for industrial and, in fact , commercial customers similar to Eagle River perhaps in this particular case that required transmission line studies to determine the contractual obligations of both the company and the customer , and embodied in that, although it does not specifically say, that exactly is what is entailed. CSB REPORTING Wilder , Idaho 311 TEINERT (X) City of Eagle83676 Okay, and during that time period, December 1980 to July 1985, you were not a registered professional engineer , were you? Let me take a look at this.That is correct. Okay; so any work you would have participated in in conducting any transmission line studies would have had to have been reviewed and approved and signed off by someone with those qualifications correct, before those could be implemented? I don't believe that's the case.Studies, it is not required that you have a professional engineer's 1 icense to conduct studies.It does require a professional engineer's license to design and, if you will , supervise the construction of those types of facilities , but the studies themselves don't require a PE license , at least in my experience in the State of Texas. What professional experience do you have developing long-range electrical infrastructure plans? Long-range electrical infrastructure plans, can you clarify for me a bit, production? Deli very?Global?Distribution? Tell me any experience that you might have. CSB REPORTING Wilder, Idaho 312 TEINERT (X) Ci ty of Eagle83676 Any experience?Okay, once again , if you look at my experience, it's rather vast both at Texas Utilities , Texas Power & Light as well as Orlando Utilities and in particular with respect to industrial and technical serVlces, those management posi tions at Texas Power & Light, we clearly had to si t down wi th our large industrial customers and discuss our long-range plans for transmission facilities and those facilities basically were the facilities that they would attach to, whether it was a cogen proj ect that required large transmission capability.I will give you a quick example.Mini mills , those are basically steel mills that use scrap to produce rebar or sheet metal, require several thousand vol ts of delivery, 138 in these cases and we negotiated two of those.It required an understanding of the long-range electrical and infrastructure to provide service to those facilities. I understand.I too in this business have to learn a lot about electrici ty and understand those long-range electrical infrastructure plans, but I don't develop them and that's why I was asking if you developed those plans. We didn't in the industrial services and technical services actually develop those plans, that' correct. CSB REPORTING Wilder, Idaho 313 TEINERT (X) Ci ty of Eagle83676 Are you a registered professional engineer in Idaho? , I am not. Because you aren't a registered professional engineer in Idaho, isn't it fair to characterize most of your testimony concerning engineering matters to be an opinion only, rather than an expert opinion? I wouldn't characterize it that way, no. In your testimony are you asking the Commission to substitute your opinions regarding a subj ect matter on which you don't have an extensive amount of professional expertise for the decisions of Idaho Power's registered engineers that work wi th the system on a regular basis? My testimony does not specifically address detailed engineering design simply because we were not given that kind of information in either the testimony or the exhibi ts that Idaho Power or because based on my knowledge any other party to this proceedings has provided.My testimony essentially addresses somewhat broad issues about transmission vol tages, about corridors, about the capability, if you will , of certain equipment to provide the capaci ty necessary based on long-range, broad, not engineering specific plans CSB REPORTING Wilder , Idaho 314 TEINERT (X) Ci ty of Eagle83676 provided by the Company in some of its long-range planning. But you're suggesting to the Commission there's a bet ter way; right? And that is the case, in fact, and when we talk about a better way, we're not necessarily talking about connectors and, if you will , the particular technology embodied in that equipment, we're talking simply about the capacity of those types of delivery designs, if you will , those delivery types of lines to provide the capacity required to serve Star. Okay, let's take the example that Mr. Howell spoke with you about where you've suggested that a solution could be to place a transformer to basically bring down the voltage from 138 to 69 at the Eagle substation and that then we would have service to the Star substation that way.In your estimation, would that be a long-range solution to the system issues facing Idaho Power? The issue in this particular case providing service to the Star substation on a temporary basis.It is not a long-range issue. Do you recall that Mr. Sikes said in testimony this morning that even if it's a temporary solution , that particular 138 line would never become CSB REPORTING Wilder, Idaho 315 TEINERT (X) Ci ty of Eagle83676 obsolete? I don't recall that, but I'll accept that. Are you also aware that the 69 kV solution that you recommend would not in the long range serve the voltage requirements of the Lansing-Star substations? Well , we're not talking about the Lansing substation here.We are talking about the Star substation. Mr. Teinert, I think that's the problem we've got here is we can't look at the substations in isolation.We have to look at the system , so you can't just look at what's happening between Eagle and Star. Mr. SMITH:We are going to obj ect this.If you just askShe is being argumentative. questions , that's fine , but don't testify. MS. MOEN:m sorry, and I'll retract that question. BY MS. MOEN:Are you aware that we' looking at a systemwide system here? Basically I'm responding to the testimony and exhibi ts of the Company and the testimony and the exhibits of the Company indicate that this case is about serving the Star substation which seems to be an urgent mat ter. CSB REPORTING Wilder , Idaho 316 TEINERT (X) Ci ty of Eagle83676 And would you also agree that serving the Star substation is a component of Idaho Power's overall electrical system? The Star substation is a distribution system - - excuse me , a distribution substation and in that regard it's a pretty localized , if you will application.If it were a source substation or , if you will , a transmission substation , then I think you could make that statement, but in this particular case , the Star substation is for a very localized, if you will what we refer to as a distribution substation.I think that's the way it's referred to by Idaho Power in its system plan.It's not essential to the system other than the , if you will , those customers served from that particular substation since it is a 60 megawatt substation, as I understand it.By definition , that's a distribution substation , not a source substation. m going to swi tch gears here.You make references to the benefits of demand side management or DSM programs; is that right? Yes , I do. Have you ever managed a DSM program? Yes.Once again , you can refer to Appendix A.If you look at my title at Orlando Utilities , I was vice president of conservation , and CSB REPORTING Wilder , Idaho 317 TEINERT (X) City of Eagle83676 customer service and conservation for a municipal utility the size of Orlando included not only energy savings but demand reduction programs and they were demand side programs as well as a 1 000 point AC , load control AC, program at Texas Utilities and Texas Power & Light Company. You were proj ect manager; lS that right? For Orlando Utilities? Yes. I was a vice president of customer service and conservation , 200 employees if you'll read it. But did you actually implement and manage a demand side management program personally? I was responsible for all of Orlando Utilities' conservation which included demand side programs.The buck stopped at my desk and I had employees, 200 employees , in the division that did in fact design and implement the programs. Okay, in your testimony you provide very general recommendations or observations regarding the Company's abili ty to maybe serve the loads wi thin the Star service area with demand side incorporated into the system; isn't that correct? I don't think I limi ted it to just Star. I think I maybe said Eagle and Star, but if I said Star, CSB REPORTING Wilder, Idaho 318 TEINERT (X) Ci ty of Eagle83676 even Star would be appropriate as an example. Okay, have you ever done an analysis as to the amount of demand side management programs that would be required in order to achieve a deferral or avoidance of building the Eagle to Star transmission line? ve not done an analysis that would give you a specific number.ve used the Company's materials and they're in the exhibi ts to provides examples of the kinds of demand reduct ions, and I think if those programs had been discussed with the City, as I mentioned in my testimony, back in '99 given the five years that the Company had based on its 10-year transmission plan to build a substation and serve it that there could have been significant impact. Your experience as a manager in overseeing demand side management programs, what do you suppose would have cost to design, implement and manage systems to either defer or avoid construction of a 138 kV line? In my testimony, I basically say that given the $2.5 million budget that we somewhat have to work wi th here, we could have made some significant reductions in the demand in the Star and Eagle area had those programs been focused on those particular customers, so I don't know the amount because we haven't established which programs we might use.I can give you CSB REPORTING Wilder , Idaho 319 TEINERT (X) Ci ty of Eagle83676 a quick example.There is a program in your most recent DSM report , if I'm not mistaken , that indicates in new construction , and there is a lot of new residential by the way, that the Energy Star new construction residential program can reduce energy consumption in residential properties as much as 30 percent, so we could make some calculations. And in the last five years that you said Idaho Power could have done something here , did the Ci of Eagle adopt any ordinances requiring new construction to utilize Energy Star appliances in order to achieve the reductions you're referring to? I really haven't looked at the City' activities over the last five years with respect to DSM. Okay, do you think DSM programs could relieve significantly the expected load of 140 megawatts at build-out for the Star and Lansing substations? Well once again, I wasn't aware that Lansing was part of these proceedings, but for Star , the 60 megawatts at Star , that's build-out and as Mr. Sikes testified earlier today,the temporary StarserVlce would last as much as years and may,he had an exhibi his rebuttal,Exhibi t No.that indicated that in the first six years of the life of the Star CSB REPORTING Wilder , Idaho 320 TEINERT (X) Ci ty of Eagle83676 substation , the load on that substation will not exceed 14 megawatts, so if we go back to the initial , if you will, 1999 date and go through the year 2010 and we have 10, 11 years to work wi th , then I think we could make a significant impact on the 14 megawatt load , 15, I think, maybe if we round up, we could have had a significant impact on that load , yes, I do. Let's talk about the ACSS conductor , the aluminum conductor steel supported conductor , that you referred to in comparison to the ACSR conductor conventionally used by the Company.You indicate on page 1 7 of your testimony that ACSS conductor can increase the line capacity and reduce voltage drop; am characterizing your testimony correctly? I believe that's what it says, yes. Couldn't standard ACSR conductor of a larger size do the very same thing? It could , but once again, what we were concerned about here was not only capacity and voltage support, but also the issue of , if you will, the requirement for larger, bigger structures to support the ACSR - - excuse me , well , in your case ACSR and proposed, if you will , technological solution , perhaps, ACSS.ACSS has much less sag.ACSS can carry qui te a bi t more current at higher temperatures and therefore, CSB REPORTING Wilder , Idaho 321 TEINERT (X) Ci ty of Eagle83676 require a much smaller conductor, smaller poles , shorter poles, whichever you choose , and also lower - - let me go back because I said smaller poles, but fewer poles as well , so that comparison was basically to draw your attention to the fact that ACSS could provide the same capacity, somewhat improved voltage support and require smaller and fewer of the structures which was an issue here in this particular case. There are a couple of terms I want to clarify.You said somewhat increased voltage support, but you also indicated that ACSS can basically run hotter , can carry more electrical current at a higher temperature. That's right. That's ampacity, isn't it? More current is ampacity, that' correct. It isn't voltage support , is it? Well, no, but those are two different lssues as you are aware, I think , but ACSS and ampacity were the central issues when we looked at serving the Star substation from the Eagle substation.I think you're particularly referring to the current, if you will , configuration to serve Star from the Caldwell-Lansing line and in that particular case, the CSB REPORTING Wilder , Idaho 322 TEINERT (X) City of Eagle83676 Company indicates that there is a voltage support problem and that is the reason that that particular line could not be used for permanent or service beyond much where we are today in fact. Okay; so you would agree that the limi ting factor facing Idaho Power today is not an ampacity issue that could be corrected by ACSS, but it's a vol tage support issue? No, I couldn't agree wi th that , because once again you're making a general statement about the entire issue at hand here.That is one particular portion of this issue and that was the Caldwell-Lansing service to the Star substation that we have today, so if we make that statement about the service from Eagle to Star where there is no vol tage support problem , at least that I'm aware of , certainly the Company has not indicated that's the case, then that's a statement that has no meaning to that particular application. But as an electrical engineer , wouldn' you say it would be very short-sighted of Idaho Power to restrict a solution to a small part of its system?Don' you think it needs to evaluate the solutions and the problems from a systemwide basis? Well , if we go back once more to the fact that these are distribution substations within a loop and CSB REPORTING Wilder , Idaho 323 TEINERT (X) Ci ty of Eagle83676 that loop would be essentially the loop that they' described in their long-range plan and that long-range plan, by the way, was not discussed with the CAC, was not discussed with the City, was not discussed with the Commission Staff, the only point made in its case, in its complaint that the Company made was the service to the Star substation and as we found out by looking at the 10-year plan , it is only a temporary service of a 10-year link, or at least that was Mr. Sikes' testimony this morning, so if we look at that, which is in fact the issue at case here , temporary service to the Star substation for that 10-year period would easily be accommodated by the 69 kV solution ACSS or even ACSR or perhaps all aluminum on existing structures and existing right of way with the application of the auto transformer. And then in 10 years from now Idaho Power would need to come forward requesting a conditional use permit to perhaps increase the voltage or ampacity or change conductors on that ine? , 10 years from now you would have the substation , whatever it is unnamed today, up north of Star and you could serve Star as you were saying in your 10 -year plan from that substation, so in this particular case, there would be no need for the 69 kV service to CSB REPORTING Wilder , Idaho 324 TEINERT (X) City of Eagle83676 Star once you get the permanent , if you will , and those are my words, not yours , but the source substation for the 10-year Star substation after temporary service which would be, as Mr. Sikes says, approximately 10 years. You also heard Mr. Sikes say that the temporary line as it has been classified as would not become obsolete.Won't you agree wi th me it wi 11 become part of the entire system? MS. BUXTON:Obj ect , it's been asked and answered. BY MS. MOEN:The application of ACSS technology wouldn't preclude the eventual construction of another line through the City of Eagle , would it? Would the application of ACSS preclude the eventual construction of another line? Yes. That's a very general question.I suppose that eventually there's going to have to be some more ines in the Ci ty of Eagle somewhere , but ACSS would preclude the construction of this many lines because has more current carrying capacity with smaller conductors and that was the point of my testimony.Now again, we're making very general statements here , so it' very difficult to say without more specific information. CSB REPORTING Wilder , Idaho 325 TEINERT (X) Ci ty of Eagle83676 Okay, on page 17 of your testimony, lines 15 to 21 you say,If ACSS were used to reconductor the Caldwell-Lansing line , then the Star substation could be served from that source instead of the Eagle source" right? Yes, that's correct. And that assumes that there's sufficient transformer capacity at Caldwell , doesn't it? I would assume that you would have sufficient transformer capacity at Caldwell.That was not part of the Company's testimony or exhibits. , but it's a recommendation or suggestion that you've made as an alternative solution to the Eagle-Star line; correct? I think it's an assumption that the Company makes because the Company says the problem of servlng the Star substation beyond emergency, if you will , or very temporary nature that it currently serves it at was one of vol tage support and capaci ty, not one of transformer size at the Caldwell substation. Well , would it surprise you if I told you that Idaho Power had considered expanding the Caldwell-Lansing line? I don't think it would surprise me , but don't know that that's the case. CSB REPORTING Wilder , Idaho 326 TEINERT (X) Ci ty of Eagle83676 Would it surprise you that there' insufficient capacity at Caldwell or it's limited, so that's not a solution? MR. SMITH:Obj ection, Mr. Chairman. she wants to ask a question , that's fine, but she can't testify to things that aren't in the record.That information is not in their direct testimony and it' never shown up and she can't ask questions in that fashion. COMMISSIONER KJELLANDER:Ms. Moen. MS. MOEN:Yes, Mr. Chairman , Mr. Teinert makes the statement that a solution to the issue before the Commission is to have the Company look at an al ternati ve source.I think it's clear that Mr. Teinert is making that recommendation without sufficient substantiation or background. COMM IS S IONER KJELLANDER:I'll allow the question. THE WITNESS:Would you repeat the question for me, please? BY MS. MOEN:The question is are you aware that the 69 kV transformer capacity at Caldwell limited? I have no knowledge of that. And would you be surprised to know that CSB REPORTING Wilder , Idaho 327 TEINERT (X) Ci ty of Eagle83676 providing additional transformer capacity at Caldwell and reconductoring over 13 miles of kV line from Caldwell would be much more expensive to the Company's ratepayers than the Eagle alternative proposed by the Company? MR. SMITH:Before you answer , for the record , I obj ect to this. COMMI S S IONER KJELLANDER:Perhaps maybe we have gone pretty far out in relation to the testimony that has been submitted here today. MS. MOEN:Just one other question. BY MS. MOEN:Looking at the system as a whole, are you aware that your Caldwell-Lansing line solution wouldn't provide a source of electricity for the proposed substation at Beacon Light and Linder Road which are illustrated on the City's comprehensive plan maps? Once again , you're making pretty broad statements.The system as a whole , is that in reference to all of Idaho Power's loop system? No, I'm referring to the Caldwell, Lansing, Star , Eagle, eventually Beacon Light loop. m not aware that there is a pI an to serve Beacon Light/Linder from the Caldwell-Lansing sub and therefore, I haven't studied that particular application , if you will , so I can't answer that question. CSB REPORTING Wilder , Idaho 328 TEINERT (X) City of Eagle83676 MS. MOEN:I have no further questions. COMMI S S IONER KJELLANDER:I believe Mr. Squyres , we've given you an opportuni ty, haven't we? MR. SQUYRES:Yes. COMMI S S IONER KJELLANDER:So I think it' our turn if we have any questions from members of the Commission. No questions, we're ready for redirect. MS. BUXTON:Thank you, Mr. Cha i rman . REDIRECT EXAMINATION BY MS. BUXTON: Mr. Teinert , is it your testimony that Idaho Power doesn't have to do what it's proposing for the need that it says it's trying to meet right now; is that correct? Yes. So in other words , Idaho Power does not have to build a 138 kV line to provide reliable service to Eagle or Star , but can do it with a 69 kV line using modern technology; correct? Yes. Wouldn'that give Idaho Powe time place the line in a new transmission corridor that the CSB REPORTING Wilder , Idaho 329 TEINERT (Di) Ci ty of Eagle83676 Ci ty is trying to establish and as has been suggested by Mr. Lobb' s testimony? Yes. Mr.Teinert 114 front you? do you have a copy of Exhibit Yes. Could you describe briefly to the Commission the basis for your discussion of the fact that you believe that this is a temporary line and that the real purpose of this line is to close Locust Loop No. which is on page 11 , and then describe how the loop model with the two sources on page 47 and 48 would work? Based on this particular document which at this particular point in time approximately two to three years old , if we look under Locust Loop No., we discover that the Locust-Eagle 138 kV -- excuse me, 138 which I think is kV - - 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 , so simply what we I re saying here is down the road at some point based on those particular conditions there would be an additional t ransmi s s ion 1 ine in thi s case, once again , thi s subtransmission because it is part of a loop, it is not a transmission line in the sense that the transmission grid in Idaho Power's service area is significantly impacted CSB REPORTING Wilder , Idaho 330 TEINERT (Di) Ci ty of Eagle83676 by this, but if we go to the next sentence, then it states very clearly that the Star tap is a tap in the Locust-Eagle line for temporary service to Star. That particular statement really gets ahead of itself in terms of time, because really what we're talking about is the loop would be complete at that point and in fact , Mr. Sikes stated this morning that once the loop was complete and another source north of Star was available, we would in fact serve Star from that particular source , so the sequence of events here aren't necessarily clear , but we clearly know that the Locust-Eagle line only provides a temporary service to Star , so what we have is some triggers that would require the completion of the 138 kV loop from the source substation at Locust to Hewlett-Packard , and I'll read that part in just a moment, and to Joplin on around to Eagle and then back around to Locust, and if you'll look on page 47 of that document, you'll see that loop depicted in Figure No. 49b and so you see that the Star tap, the temporary serVlce is not included in that particular diagram, so what we really see here is that the, I think I refer to it in my rebuttal as the, real reason for the 138 kV line is not to serve Star on a temporary basis but to complete this loop a~d none of that was information was provided by the Company in its CSB REPORTING Wilder , Idaho 331 TEINERT (Di) Ci ty of Eagle83676 meetings with the CAC and its exhibits or the testimony to the Commission Staff or the City, so once again we're -- Let me interrupt you, then. Yes, ma' am. So in other words, what you're saying is that this 138 kV line that's being proposed in this matter will also benefit customers served from the Joplin and Hewlet t - Packard substations which are not wi thin the limits of the City of Eagle's jurisdiction; is that correct? Clearly that's the case. MS. BUXTON:I have no further questions. COMMISSIONER KJELLANDER:Thank you, and believe that Mr. Teinert, you're excused.We thank you for your test imony . (The wi tness left the stand. COMMI S S IONER KJELLANDER:And that then, I believe, takes us now to Mr. Squyres. MR. SQUYRES:Thank you, Mr. Cha i rman . would call Chuck Carlise to the stand, please. COMMISSIONER KJELLANDER:Mr. Squyre s , I' having just a little bit of difficulty hearing you. you mic on? CSB REPORTING Wilder , Idaho 332 TEINERT (Di) Ci ty of Eagle83676 MR. SQUYRES:I didn't get the mic on until I was about halfway through.Usually I don't need a microphone to be heard, but I think I was mumbling as well , Mr. Chairman , so I apologize. COMMISSIONER KJELLANDER:You're fine, thanks. CHARLES CARLISE produced as a wi tness at the instance of Eagle River LLC, having been first duly sworn , was examined and testified as follows: DIRECT EXAMINATION BY MR. SQUYRES: Mr. Carlise , would you please state your name and spell your last name for the record , please sir? Charles Carlise, spelled C-a-r-s-e. What is your business address? 485 East Riverside Drive in Eagle, Idaho. And you are the same Charles Carlise that provided written direct testimony on behalf of Eagle River that was filed in these proceedings on July the CSB REPORTING Wilder , Idaho 333 CARLISE (Di) Eagle River, LLC83676 8th , 2004? I am. I believe that testimony consisted of pages and two exhibits, Nos. 201 and 202; is that correct? Yes. Do you have any changes to that testimony? None. And if I asked you the questions that are set forth in that wri t ten test imony, would your answers be the same? Yes, they would. MR. SQUYRES:Mr. Chairman , I move for Mr. Carlise' s direct testimony to be spread on the record as if he had read it and for the exhibits , 201 and 202 to be marked for identification. COMMISSIONER KJELLANDER:Thank you , and without obj ection , we'll admit the direct testimony and also the associated exhibi ts. MR. SQUYRES:Thank you.I would al just state for the record that Exhibit 202 is the Development Agreement between Eagle River , LLC and the City that has also been marked as Exhibit 107 in Dr. Reading's testimony. CSB REPORTING Wilder , Idaho 334 CARLISE (Di) Eagle River , LLC83676 COMMISSIONER KJELLANDER:Mr. Squyres just as a point of clarification , I think you meant 301 and 302 and not 201 and 202. MR. SQUYRES:I don t think so, but that doesn't mean that I'm not wrong.If they should have been the 300 series , then I made a mi stake because don't think they are. COMMISSIONER KJELLANDER:The tabs that are in our books , it could well be that there's an error on our numbering system as well , but since we said the associated exhibits , I think we can find them and life good. MR . SQUYRES:Your Staff was probably making sure things were done right when I didn' (Eagle River , LLC Exhibit Nos. 201 & 202 were admi t ted into evidence. (The following prefiled testimony of Mr. Charles Carlise is spread upon the record. CSB REPORTING Wilder , Idaho 335 CARLISE (Di)Eagle River , LLC83676 Please state your name and address. My name is Charles Carlise.I am the Managing Partner for the Eagle River Development located in Eagle, Idaho.The address is 485 East Riverside Drive, Eagle, Idaho 83616. What is the purpose of your testimony in these proceedings? Eagle River is a premier mixed-use commercial development located at the intersection of Eagle Road and State Highway 44.If Idaho Power Company is permitted to construct the 138 kV transmission line along State Highway 44 (the Eagle Bypass), the transmission line will be directly adj acent to Eagle River's property and will cause substantial and irreparable economic injury to our Development. I am testifying to describe the impacts and detrimental effects that Idaho Power Company' proposed transmission line will cause to Eagle River , the Ci ty of Eagle, and the surrounding area.I am also testifying to explain how Eagle River was developed in strict accordance with the City of Eagle's Comprehensive Plan and the Development Agreement between the Ci ty and Eagle River , and how , if Idaho Power Company' transmission line is constructed as proposed, Eagle River's reliance upon the City of Eagle's development CSB REPORTING Wilder , Idaho 336 CARLISE (Di) Eagle River, LLC83676 plan and the considerable costs incurred to satisfy the City of Eagle's requirements will have been utterly wasted.Finally, I am testifying to explain how Idaho Power Company failed to notify Eagle River of its plan to construct the 138 kV transmission line and how Idaho Power Company acted in bad faith when it agreed to bury one of its power lines along Eagle Road to protect the aesthetic of our Development, while at the same time CSB REPORTING Wilder , Idaho 337 CARLISE (Di) Eagle River , LLC83676 was planning to construct a larger transmission line along the entire mile of our frontage along the Eagle Bypass.In sum, I am testifying to voice our obj ection to the construction of the transmission line as proposed by Idaho Power Company. Would you describe the Eagle River Deve 1 opmen t . The Eagle River Development is a unique high-end commercial development located on the southeast corner of Eagle Road and the Eagle Bypass.The Development, which is also known as Eagle River, consists of approximately 90 acres of land that is bounded on the south side by the North Channel of the Boise River and on the north by the Eagle Bypass. The Eagle River Development began wi th a vision of creating a premier mixed-use community that would take advantage of the natural environment of its river front set t ing and tie in wi th the Ci ty of Eagle' development plan for a distinctive rural town setting. The Eagle River site was specifically chosen for several reasons, including its river frontage and natural aesthetics and its prime location within the City of Eagle, which in and of itself is one of the most desirable locations within the Treasure Valley.The site was also chosen because the property is located at the CSB REPORTING Wilder , Idaho 338 CARLISE (Di) Eagle River , LLC83676 gateway to Meridian , Emmett, Star, Horseshoe Bend and McCall. In addition to the prime physical location of the property, we also favored locating our development wi thin the Ci ty of Eagle because of the Ci ty' s high standards for development.It has been our experience that communities with high standards for development are better able to attract quality businesses and a high-end demographic of customers and visi tors, CSB REPORTING Wilder , Idaho 339 CARLISE (Di) Eagle River , LLC83676 which in turn results in higher land values and a more profitable development.The City of Eagle recognizes the important connection between the enforcement of exacting development standards and resulting heightened quality development within a community, and it is one of the reasons why Eagle River and its parent company tend to purchase and develop in areas like Eagle. Once we decided on the location for the Development, we then began an extensive planning and design phase.That phase took years of planning and thousands of hours of work and coordination with the City of Eagle to ensure that the Eagle River Development would promote the development objectives of the City.In order to create the caliber of development that Eagle River has now become, more than $7.8 million dollars has been spent.By way of illustration, Eagle River has invested the following amounts in site improvements for the Deve 1 opmen Engineering / Archi tect ural / Permi t s 878 326. 388,631. 178,664. 844 402. 859,699. 438,178. Electric Water /Gas Systems Irrigation System/Canal Relocation Roads Storm Drainage/ Sani tary Sewer CSB REPORTING Wilder , Idaho 340 CARLISE (Di) Eagle River , LLC83676 Ponds /Fountains /Waterfall s 801 936. 506 685. 119,322. 211,176. Landscaping/Trees /Light ing Sidewalks/Bike Paths Traffic Signal Lighting CSB REPORTING Wilder, Idaho 83676 341 CARLISE (Di) Eagle River , LLC Taxes/Construction Management/Legal/Misc.622,617. TOTAL $ 7,847 651. At its full build out, the Development will consist of approximately 1 000 000 square feet of mixed-use commercial space , wi th the commercial uses being distributed between an Office Building Component of approximately 600 000 square feet , an Ambulatory Care Facility with Medical Offices of approximately 90,000 square feet, a 144-room Hotel with related meeting facilities totaling 135,000 square feet, and a Retail Component of approximately 200,000 square feet. The Retail Component is being developed along the western and northern part of the property to take advantage of its exposure to Eagle Road and the Eagle Bypass.This portion of the Development designed as a "Lifestyle Retail Center" that will focus on up-scale tenants in a pleasing setting in order to focus upon the high-end demographic market of Eagle. currently planned , the Retail Component will have at least ten restaurants with indoor and outdoor dining and at least twenty-five stores. The Office Building Component when completed will consist of approximately 600,000 square feet of a mix of one- and two-story, first class professional and medical offices.The offices will be CSB REPORTING Wilder , Idaho 342 CARLISE (Di) Eagle River , LLC83676 situated in a garden setting with exposure to the Boise River, pond frontage, walking paths, bike paths beautiful roads, all which are landscaped wi th planted medians , mature trees and flowers. The remaining building area consists of the river front Hilton Garden Inn.The Hilton currently has 99 rooms and is in the process of completing the final building plans that will expand its capacity to a total of CSB REPORTING Wilder, Idaho 343 CARLISE (Di) Eagle River , LLC83676 144 rooms.The expansion will also include a convention meeting area that will accommodate more than 600 people. The development as a whole has a variety of ameni ties such as over 2 , 500 feet of Boise River frontage, a river front greenbel t, integrated pathways and bike paths, six large ponds , three waterfall entry features, fountains and water features, mature landscaping, vintage street lighting along all roads, and approximately 25% of its property dedicated to open And significant to this case, all utilities havespace. been buried, including Eagle River's payment of more than $100,000 to Idaho Power Company to bury its power line along Eagle Road. All of this effort was made to make Eagle River an attractive, up-scale commercial center within the Ci ty of Eagle, and I believe our efforts have been a success.I have attached a copy of materials about Eagle River as Exhibi t 201. What are some of the businesses currently located at Eagle River? Eagle River is still in the early stages of its development, with the full build out to be completed within the next ten years.To date, several si tes have been sold and businesses constructed.Among the businesses that are currently located in Eagle River CSB REPORTING Wilder , Idaho 344 CARLISE (Di) Eagle River , LLC83676 include, Hilton Garden Inn , Land Group, Wendy's, Westmark Credi t Union , Eagle River I, Bardenay Restaurant , and the Riverside Office Building I. The Eagle River Development is continuing to grow.We completed five sales transactions in 2003 and have fifteen scheduled for 2004.Several businesses will begin building construction within the next CSB REPORTING Wilder , Idaho 345 CARLISE (Di) Eagle River , LLC83676 year , including St. Alphonsus Regional Medical Center Home Federal Savings, Eagle River I I , and Riverside Office Building II. In addi tion to the actual development of property wi thin the Ci ty of Eagle , does Eagle River bring any other benefits to the City and the surrounding area? Yes, in several regards.First , the Eagle River Development is designed to be an employment center that will bring several thousand jobs to the City of Eagle and the surrounding community.As noted above, at completion Eagle River will encompass approximately million square feet of commercial development space.The Development will employ one person for every 100 square feet of space , which translates to approximately 10,000 jobs.The creation of employment opportunities and a solid job-base is important for the City of Eagle and the surrounding areas , and it is one of the many goal s of the Eagle River Development. Additionally, the type of jobs that the Development will bring to the area are solid, quality jobs that will benefit the community.Because Eagle River is creating opportunities for office and retail businesses, it has been able to, and will continue to, attract medical personnel and staff , as well as other CSB REPORTING Wilder , Idaho 346 CARLISE (Di) Eagle River, LLC83676 professional jobs such as banking, mortgage business, and other office jobs.In addition , the Retai 1 Component of the Development will offer retail and restaurant jobs. Next, because of the qual i ty of the Eagle River Development, the property values wi thin the Development have increased.Presently the land values at Eagle River range between $9.50 to $17.00 per square foot.These high land values translate into a higher tax base for the Ci ty of Eagle, which CSB REPORTING Wilder, Idaho 347 CARLISE (Di) Eagle River, LLC83676 in turn resul ts in higher property tax revenues. Finally, the Eagle River Development will benefit the community by providing opportunities for additional tax revenues in the form of retail sales.The Retail Component of the Development is designed to accommodate at least twenty-five retail stores.At a standard rate of $300 of gross sales per square foot for the approximately 200,000 square feet of retail space the Retail Component of the Development will produce approximately $60,000 000 in retail sales, which at a sale tax rate of 6% totals approximately $3.6 million in additional sales tax revenue. The benefits that will result from a successful development at Eagle River will be felt beyond the borders of our Development.It will extend to the Ci ty, the surrounding areas and to the state as a whole. Did the Ci ty of Eagle impose any requirements on the Eagle River Development? Yes.The City of Eagle has very exacting development standards, and it was very strict in enforcing those standards for the Eagle River Development.Consistent with its Comprehensive Plan and its designation of the Eagle Bypass corridor as a scenlC area , the Ci ty required that Eagle River enter into a Development Agreement, which set forth the standards for CSB REPORTING Wilder , Idaho 348 CARLISE (Di) Eagle River , LLC83676 our development.I have attached a copy of the Development Agreement as Exhibit 202. Under that Agreement, the Eagle River Development was required to be constructed in harmony with the existing community.(Exhibit 202 , Development Agreement, p. 1) .The Agreement further required Eagle River to: CSB REPORTING Wilder, Idaho CARLISE (Di) Eagle River , LLC 349 83676 * Provide a public easement for a greenbel t pathway;(Exhibit 202, Development Agreement, p. 7) * Provide on-site, tree-lined landscaped strip along State Highway 44 and Riverside Driver (Id. * Provide a ten-foot wide bicycle/ pedestrian pathway within the landscaped strip (Id. * Provide a minimum 28,000 square foot on-site landscaped area at the corner of State Highway and Eagle Road (Id. * Provide public art, water features, or other features of interest (Id., p. 8) * Provide pedestrian amenities which encourage pedestrian use (i. e ., outdoor drinking fountains, benches, tables, etc.(Id. ) . And the list goes on and on.The purpose for these development requirements is perhaps best stated in the Development Agreement itself: "The Purpose of the Design Guidelines lS to provide an aesthetic roadmap for the development of the Eagle River proj ect wi thin the highly visible and scenic ci ty of Eagle/Boise River context.(Id., Design Guidelines, p. 1) The Development Agreement further provides that: CSB REPORTING Wilder , Idaho CARLISE (Di) Eagle River , LLC 350 83676 "The intent of the Design Guidelines is to provide a harmonious and integrated development of commercial and residential buildings sharing common streets, trails, wetlands, and open spaces.The general theme of the City of Eagle is to emphasize Northwest turn of the 19th Century, architectural styles and appropriate materials.(Id. ) . Eagle River is committed to meet, if not exceed these goal s, for the CSB REPORTING Wilder , Idaho 351 CARLISE (Di) Eagle River , LLC83676 purpose of creating a pleasing, premium quality development that enhances the Eagle community and for economic benefits that will result from such a deve 1 opmen Could the Eagle River Development have been constructed without meeting those requirements? No.The Development Agreement was a requirement for the Eagle River Development, as it is for other developments within the City of Eagle.One of the important considerations for Eagle River in creating its development was the fact that the City of Eagle was serious about its development requirements, its development ordinances and its Comprehensive Plan.What that meant to us was that not only would Eagle River be subj ect to the Ci ty' s high standards for development, but other developers would be as well.Eagle River relied upon the City of Eagle's strict enforcement of its development standards so that all developments would have the same themes, aesthetic and meet the same design goals as Eagle River. How did Eagle River learn about Idaho Power Company's proposal to construct a 138 kV transmission line along the Eagle Bypass corridor? We found out about the proposal almost by accident.One of our employees was at the Ci CSB REPORTING Wilder , Idaho 352 CARLISE (Di) Eagle River , LLC83676 of Eagle Sewer Office when he saw a copy of a notice of a Planning & Zoning Commission meeting where the Idaho Power Company's proposed line was to be discussed.The news was surprising to us, since Eagle River had been working closely wi th Idaho Power Company to have the company bury one of its power lines-at Eagle CSB REPORTING Wilder , Idaho 353 CARLISE (Di) Eagle River , LLC83676 River's expense - in order to protect our Development from these unsightly overhead lines.It seemed incredible that we had paid Idaho Power Company to bury these lines, when at the same time the company was planning and movlng forward wi th a proposal to construct a much larger transmission line along the entire length of Eagle River's property on the north.All of thi s occurred without any communication to us by Idaho Power. Upon discovering the information about the hearing, we contacted Layne Dodson at Idaho Power Company and met wi th him to discover why Eagle River was not informed about the transmission line.Through that meeting, we learned that we were not notified of the meetings-despite our prior interactions with Idaho Power Company and despi te our owning property right next to the proposed line-because Idaho Power Company only mailed notices to owners who had an Eagle zip code. How will the transmission line affect Eagle River? The construction of an overhead 138 kV transmission line along the entire mile-long northern boundary of the Eagle River property will have significant detrimental effects to our development. Because so much of our Development focuses on the aesthetic, natural environs, the transmission line will CSB REPORTING Wilder, Idaho CARLISE (Di) Eagle River , LLC 354 83676 severely impact that aspect of what we have created with Eagle River.In concrete terms, what this means is that with the 70-90 foot towers that are proposed for the transmission line, along with the tangle of overhead wires, the Eagle River Development will be degraded to the point that land values will fall and building standards will be forced down. Instead of a premium , high quality development, the Eagle River Development will be reduced to a more average qual i ty development, wi th CSB REPORTING Wilder, Idaho 355 CARLISE (Di) lOa Eagle River , LLC83676 much less desirability and appeal to the high-end businesses and customers Eagle River is seeking to attract.Eagle River would then have more industrial-type uses, rather than general office/medical office uses.Additionally, the Retail Component of the Development would be diminished because high-end retail will not locate in the proj ect as a resul t of its more industrial appearance. As a resul t, the Eagle River Development will suffer lower land values with a lesser quality of development.The Development build-out period will be delayed, there will be a loss of leverage for Eagle River to realize its plan for the development, and we will have lost the investment of the cost and expense of the high-end amenities which we incorporated into our Development.And Eagle River will have lost out on our reI iance upon the Ci ty of Eagle's development plan Comprehensive Plan, and Development Agreement, as well our future plans for the Eagle River Development. Will the impacts to the Eagle River Development that you described above have affects beyond your property? Yes.As a resul t of the lower land values that will be realized from a more industrial-type development, the City will loose a portion of its CSB REPORTING Wilder , Idaho 356 CARLISE (Di) Eagle River, LLC83676 property tax base.In addition, the Development will not attract the same type or quantity of employment opportunities, and therefore the City will lose out on these benefits as well.And finally, because the Development will be unable to support the Retail Component, the Ci ty and State will lose the sales tax revenues that it would have otherwise enj oyed. As noted above, the detrimental effects of Idaho Power Company's transmission line will not only be substantial , they will reach far beyond the CSB REPORTING Wilder, Idaho 357 CARLISE (Di) 11a Eagle River, LLC83676 borders of our Development. Are you aware that Idaho Power Company previously requested approval from the City of Eagle to construct the 138 kV transmission line? Yes.Before filing its complaint with the Idaho Public Utilities Commission, Idaho Power Company first sought permission from the City of Eagle to construct is transmission line through the City.Eagle River was involved in that process as a landowner affected by the proposed transmission line.Eagle River obj ected the proposed line at every stage the process and explained how it would be adversely impacted by the line.Ul timately,the City of Eagle rej ected Idaho Power Company's request. Is there anything else that you would like to add to your testimony? Just that, Eagle River is adamantly opposed to the proposed 138 kV transmission line. will drastically al ter the Eagle Bypass corridor and will have substantial adverse impacts on the Eagle River Development and other developments along its path. In addition , it is our understanding that there exists reliable technology that would not require Idaho Power Company to construct the massive 138 kV poles and lines and that would not cost any more than Idaho CSB REPORTING Wilder , Idaho 358 CARLISE (Di) Eagle River , LLC83676 Power Company's current proposal to construct the ines along the Eagle Bypass.It is also our understanding that this technology is currently in use in a number of other communities and that Idaho Power Company failed to consider any similar alternatives in its analysis of its current proposal.In fact, Eagle River in conj unct ion with the City of Eagle specifically asked CSB REPORTING Wilder, Idaho 359 CARLISE (Di) 12a Eagle River , LLC83676 Idaho Power Company whether there were any al ternati ves that would mitigate the injury that would be caused as a resul t of the construction of the 138 kV transmission line.And to my knowledge, Idaho Power Company did not consider al ternati ve technologies as a means of mitigating the impacts of its transmission line. Eagle River respectfully requests that the Commission deny Idaho Power Company's request to construct an overhead 138 kV transmission line within the right of way for the Eagle Bypass as proposed.Eagle River also requests that if al ternati ve technologies that were not considered by Idaho Power Company are available, those alternatives should be considered as a reasonable resolution and accommodation to all landowners who will be affected by the proposed transmission line, the City of Eagle and Idaho Power Company. Does this conclude your direct testimony? Yes, it does. CSB REPORTING Wilder , Idaho CARLISE (Di) Eagle River, LLC 360 83676 open hearing. (The following proceedings were had in MR. SQUYRES:I have nothing further and would tender Mr. Carlise for cross-examination. COMMI S S IONER KJELLANDER:Okay, and we' ready, then , and why don't we begin with Mr. Howell. CSB REPORTING Wilder , Idaho MR . HOWELL:No questions. COMMISSIONER KJELLANDER:And I'm not pretending to ignore you , I did hear what you said. We'll move to the Ci ty of Eagle. MS. BUXTON:Thank you, Mr. Cha i rman . BY MS. BUXTON: CROSS - EXAMINATION Mr. Carlise, you heard Ms. Moen' questions and discussion that power lines as proposed by Idaho Power do not negatively impact property values; do No. Why not? After 37 years of experience in the development business, I can assure you that this kind of an encumbrance, if you will , on the land will definitely be a detriment to selling it and leasing it.People you agree? 361 CARLISE (X) Eagle River , LLC83676 simply see it and judge it as something that is not desirable and therefore, it diminishes the value and diminishes the desirability. You were here in the room when there was earlier testimony and questions about exactly where you have buried your distribution lines on Exhibit 10.Could you describe that in more particularity for the record, please? Would you ike me to just walk over to that map or should I attempt to do it verbally?I have a copy of it. If you can just try and do it verbally, Mr. Carlise, that will be helpful , because it's hard to put pointing on the record. All right.We made contract wi th Idaho Power to bury the line that starts right at the intersection of Eagle Road and the Bypass goes all the way to the river which is our entire west boundary. left remaining one pole at the northwest corner of our property with a down guy and one in our southwest property or the corner of our southwest property with a down guy. Have you participated within all of the public testimony of opportunities with regard to these power ines in the Ci ty of Eagle, you or your CSB REPORTING Wilder, Idaho 362 CARLISE (X)Eagle River , LLC83676 representati ves? I believe so. As many as you have been aware of; is that correct? As many as I have been aware of, right. I sn 't it true you were not aware of some of those because you were not receiving proper notice; is that correct? Coincidentally during the period of time when we were negotiating with and paying Idaho Power to bury that line along our west line, Idaho Power was conducting studies with the Citizens Committee to determine where the location of this 138 kV line would Purely by accident one of our employees was at thego. Eagle Sewer Department and saw a P&Z memorandum about and came back and told us about it.We then contacted Layne Dodson and his group and had a meet ing with him and that time we were told about the fact that the study not only was underway but was about concluded. When we obj ected to the fact that we had not been notified given the fact that we had a mile of frontage on where this line was supposed to go or at least one of the options as to where it was going to go, we were told that they sent out a mailer to invi te the residents of the area and since we didn't have an Eagle CSB REPORTING Wilder , Idaho 363 CARLISE (X) Eagle River , LLC83676 zip code, we weren't included in the list. During your participation in the public meetings that you have attended with regard to this topic, were you aware of the temporary nature of the proposed line to serve Star , that it was really to close the Locust Loop No. No. Do you believe there was any testimony or any information like that given to the City by Idaho Power? Never heard that. Could you identify the development that you've been so fortunate to get in Eagle River since its inception , people that have already purchased property that you can disclose that has been developed and then things you can disclose that has not been developed yet that's coming on that they have relied upon, the documentation that's on the record, like the Development Agreement? I '11 try. Okay. We have starting from the northwest corner of our property, we have Westmark Credi t Union that is in and up and operating.There's a Wendy's operation due south of Westmark.Washington Trust Bank owns a parcel CSB REPORTING Wilder , Idaho 364 CARLISE (X)Eagle River , LLC83676 right at the intersection of our signalized entry and Eag 1 e Road.To the south of that we have the Hilton Garden Inn and just to the east of the Hil ton Garden Inn is a Bardenay Restaurant.In addition to that , we have sold approximately seven acres to Saint Alphonsus Regional Medical Center for the installation of one of their ambulatory care centers and medical office proj ect, as well as a second parcel to Saint Alphonsus for a 10,000 square foot future office building. In addition , we have built on our own Eagle River No. I.We are under construction with a 000 square foot Eagle River No. II.We built Riverside Office Building No. I and we're under construction with Riverside Office Building No. II. have sold at least five or six other parcels that will be developed over the course of the next year, year-and-a-half.All in all , there are, I believe it' 44 parcels and approximately 22 or 23 are either sold under development or spoken for ei ther in escrow or under contract. Every one of those purchasers have reI ied upon the Development Agreement, the standards that the City of Eagle has set out, the overall atmosphere that has been created by the Ci ty' s fathers and mothers in Eagle and it is a very important ingredient in our CSB REPORTING Wilder , Idaho 365 CARLISE (X)Eagle River , LLC83676 overall package. Are there other cities that you're working in in southern Idaho that also have development standards that are stringent besides Eagle? We are not working in any other city yet in Idaho. m sorry, I think I'm thinking of one of your representatives , so I apologize to you.You were in the Hearing Room today when we were talking about Wendy and can you describe the Wendy's as it looks in Eagle River versus as it looks at let's pick Meridian Crossroads? They re not in Meridian Crossroads.Oh, yes, they are, but there I s another one in Meridian, per se, which is a better comparison.The one in Meridian an absolute box with no embellishments whatsoever and it's really in my opinion hard to look at.The Wendy' that we've developed in Eagle River with our direction and the direction of the City and their Design Review Committee is something that I think is one of the best looking Wendy's that I've seen across the country, not just in Idaho but across the country, so I think there' a vast different interest.It certainly cost more to do it, but that's the kind of standards we've employed and the standards that have been employed by the City. CSB REPORTING Wilder, Idaho 366 CARLISE (X) Eagle River, LLC83676 Are you aware of whether that Wendy' franchise has been upset by the potential degradation of CSB REPORTING Wilder , Idaho their property by this potential line? I personally have not spoken to the individual that is the owner of Wendy's to find out whether or not he is upset specifically.I have spoken to others, of course, out there and wi thout fail , they' very, very worried about what can happen to their property and their property values.Bardenay, Saint Alphonsus, I mean, they're all very, very concerned. MS. BUXTON:I have no further questions, Thank you. COMMISSIONER KJELLANDER:Thank you. Mr. Carlise. Let's see , Ms. Moen, have we given you a MS. MOEN:No, you have not. chance yet? COMMISSIONER KJELLANDER:Let's do that then. MS. MOEN:Thank you. BY MS. MOEN: CROSS - EXAMINATION Mr. Carlise, as you state in your direct testimony, you're the managing partner for Eagle River 367 CARLISE (X) Eagle River , LLC83676 LLC; is that correct? That's correct. And I think on page 1 of your direct testimony, you indicate that your development was developed in strict accordance with the City of Eagle' comprehensive plan and the Development Agreement between the City of Eagle; is that right? I believe. On page 11 of your testimony at lines to 14 , you indicate that should Idaho Power's proposed transmission line be constructed on Eagle Road, your development will have lost out on its reliance upon the City of Eagle's comprehensive plan , among other documents; isn't that right? Yes. Have you had an opportunity to , I presume you have, but have you had an opportunity to review the City of Eagle's comprehensive plan? Not recently,. but, of course, I have. And you know that for sometime, then, as noted in my cross-examination of the Mayor that there are provisions in the comprehensive plan that permi placement of electric utility facilities on public rights of way; is that right? I heard you say that earlier. CSB REPORTING Wilder , Idaho 368 CARLISE (X) Eagle River , LLC83676 And that public streets and corridors can serve as avenues or routes for electric facilities; correct? I heard you say that as well. Okay, and also on the comprehensive plan it makes reference to the Eagle area Idaho Power facilities map that was provided by Idaho Power to the City of Eagle and which is referenced in the comprehensive plan.Are you aware of that? Not really, but I accept what you say. Okay, and are you aware that that particular map specifically identifies both the Eagle Bypass and the State Street routes as potential corridors for Idaho Power's facilities? I accept that, but I would like to make the qualification that power lines are one thing, 80-foot poles and multi-laced lines are certainly another.The comprehensive plan or , I should say, the Development Agreement of the City of Eagle required that we do everything underground and literally on our property, other than the entry points that I mentioned earlier, everything is underground.Not only is it underground in the new construction that we perform, but also we paid Idaho Power to underground that portion that was already in existence when we began to develop the property, so a CSB REPORTING Wilder , Idaho 369 CARLISE (X) Eagle River, LLC83676 power line is one thing, but it's certainly not what we're describing here. But again , that map that's identified in the comprehensive plan upon which you've testified you relied does illustrate the Bypass and State Street as corridors for Idaho Power's facilities? MR. SQUYRES:m going to obj ect to the question because it misconstrues his testimony.His testimony is that he relied on the comprehensive plan and the Development Agreement, not just the comprehensive plan standing alone.I think in both places that's used the phrase is used in the conj unct i ve and so I think you take them together. MS. MOEN:I'd 1 ike to rephrase the question -- COMMISSIONER KJELLANDER:Please do. MS. MOEN: - - or approach it a di f f erent way, i f I ma y I'll withdraw that particular question. BY MS. MOEN:Isn't it true, Mr. Carlise, that the development plan only addresses development within the boundaries of your 90- to 93-acre development? Yes. So it does not look to any improvements outside the boundaries of your property? I believe that's the case, yes. CSB REPORTING Wilder, Idaho 370 CARLISE (X) Eagle River , LLC83676 So you wouldn't look to your development plan to determine whether or not there are electric corridors designated on the Bypass; correct? What we would look at, however , is the ti tIe to the land that is adj acent to us.The corridor that you're referring to is owned by ITD.It's owned by the state from the standpoint of road purposes.It's not a public utility easement.It's a roadway and that' what we're looking at.We weren't looking at a public utility corridor, per see We were looking at a state road. But relying upon the comprehensive plan and your development plan in the conj uncti ve, you would have been aware that the Bypass was an al ternati ve route for Idaho Power's facilities; correct? Maybe you're suggesting I should have been aware, but I was not aware. MS. MOEN:All right, I have no further quest ions. COMMISSIONER KJELLANDER:Thank you. Mr.Howell , have we given you a chance We have.yet? Okay, I bel ieve we're ready now for the Commission.Commi s s i one rAre there any questions? Smi th. CSB REPORTING Wilder, Idaho 371 CARLISE (X) Eagle River , LLC83676 COMMISSIONER SMITH:Jus t one. EXAMINATION BY COMMISSIONER SMITH: I was looking on page 1 of your testimony where you give your address as 485 East Riverside Drive CSB REPORTING Wilder , Idaho Eagle, Idaho, 83616, is this a new address? Yes, it is.This building was just recently built and we recently occupied it as of the first of January of this year. So in 2002 your business had no presence in Eagle? We had a presence, but we didn't accept It came to my home office. Which is? 1002 Harrison Boulevard. mai 1 there. In Boise? In Boise , yes. COMMISSIONER SMITH:Thank you. COMMISSIONER KJELLANDER:Are there any further questions from members of the Commission? not, we are ready for redirect. 372 CARLI SE (Com) Eagle River, LLC83676 BY MR.SQUYRES: Eagle River to right? REDIRECT EXAMINATION The Development Agreement required you at landscape to the edge of the roadway; Tha t 's correct. I mean, you've landscaped, you ve put sod , there's a bike and walking path right in the right of CSB REPORTING Wilder , Idaho Tha t is correct.As a matter of fact, we way; right? were required to go to the state and get their consent to do in that a portion of the right of way or a portion of that area is, of course, still in the title of the state, so yes, we landscaped right up to the pavement. And that was pursuant to the Development Agreement with the City of Eagle and you were complying with their requirements? That is correct. MR. SQUYRES:No further questions. COMM IS S IONER KJELLANDER:Thank you , and believe that brings us to the end of your testimony. appreciate it and thank you for being here today. THE WITNESS:Thank you. (The wi tness left the stand. 373 CARLISE (Di) Eagle River , LLC83676 COMMI S S IONER KJELLANDER:Let's move now to Mr. Howell and your witness. RANDY LOBB produced as a wi tness at the instance of the Staff, having been first duly sworn, was examined and testified as follows: DIRECT EXAMINATION BY MR. HOWELL: Would you state your name and spell your last name for the record, please? My name is Randy Lobb, L-o- And Mr. Lobb, who are you employed by and in what capaci ty? m employed by the Idaho Public Utilities Commission as the administrator of the utilities division. And are you the same Mr. Lobb that has caused to be prepared prefiled direct testimony in this case? am. Do you have your prefiled testimony? any changes or corrections to CSB REPORTING Wilder , Idaho 374 LOBB (Di)Staff83676 No, I do not. If I were to ask you the questions set out on that prefiled testimony, would your answers be the CSB REPORTING Wilder , Idaho Yes, they would. MR . HOWELL:Mr. Lobb has no exhibits, but with that, I would move that his testimony be spread upon the record as if read and I would make Mr. Lobb available COMM IS S IONER KJELLANDER:Without same today? obj ection, we'll spread the testimony across the record and he wi 11 be subj ect now to cros s - examina t ion. (The following prefiled testimony of Mr. Randy Lobb is spread upon the record. for cross. 375 LOBB (Di)Staff83676 Please state your name and business address for the record. My name is Randy Lobb and my business address is 472 West Washington Street, Boise, Idaho. By whom are you employed? I am employed by the Idaho Public Utilities Commission as Utilities Division Administrator. What is your educational and professional background? I received a Bachelor of Science Degree in Agricultural Engineering from the University of Idaho in 1980 and worked for the Idaho Department of Water Resources from June of 1980 to November of 1987. received my Idaho license as a registered professional Civil Engineer in 1985 and began work at the Idaho Public Utilities Commission in December of 1987.My duties at the Commission currently include case management and oversight of all technical staff assigned to Commission filings.I have conducted analysis of utility rate applications, rate design , tariff analysis and customer petitions.I have testified in numerous proceedings before the Commission including cases dealing with rate structure , cost of service, power supply, line extensions, regulatory policy and facility acquisitions. What is the purpose of your testimony in this CSB REPORTING Wilder, Idaho 376 LOBB (Di) Staff83676 case? The purpose of my testimony is to provide a policy recommendation to the Commission regarding how Idaho Power's complaint should be resolved in this case and how similar situations should be addressed in the future. Please summarize your testimony. Simply stated, Idaho Power Company needs to extend its sub transmission facilities from the existing substation through the Ci ty of Eagle to the new Star substation.These new facilities will serve west Eagle and the Star serVlce areas.The City has twice denied the Company's application to construct overhead facilities through the City that exceed 35 feet in height.The al ternati ve would require underground facilities or alternative overhead alignments at significantly higher cost. The al ternati ves available to the Commission include: 1) directing the Company to extend its overhead facilities through Eagle; 2) directing the Company to install underground facilities provided the incremental additional cost is contributed by the City and/or its residents; 3) directing the Company to install underground facilities and spread all costs over the general body of ratepayers; 4) directing the Company to CSB REPORTING Wilder , Idaho 377 LOBB (Di) Staff83676 pursue a lower cost overhead alignment; 5) or a combination of the above. CSB REPORTING Wilder , Idaho 378 LOBB (Di) 83676 Staff I recommend that the Commission direct the Company to install overhead facilities unless or until the City of Eagle provides the incremental difference in cost required to place those facilities underground. addition , I recommend that the Commission establish a policy that allows the Company to reasonably extend its overhead facilities through existing utility corridors. While I do not necessary dispute the potential economic impact such overhead lines may have on adj acent property, I believe it is inappropriate to require the general body of Idaho Power customers to pay significantly higher rates to provide underground facilities for the aesthetic benefit of local communities and landowners. The Complaint Would you please briefly provide your understanding of the situation between Idaho Power Company and the City of Eagle that has lead to the Company's complaint in this case? Yes.My understanding of the situation based on discussions wi th the various parties to this case and a review of production requests and previously filed testimony.Both Company witness Sikes and City of Eagle wi tness Merrill have described the detailed history leading to Idaho Power's complaint so I will not repeat it here.Simply stated, Idaho Power has an existing CSB REPORTING Wilder, Idaho 379 LOBB (Di) Staff83676 substation within the City limits of Eagle served from the east along State Street by an overhead 138 - transmission line.The City of Eagle has denied Idaho Power's request to extend its overhead transmission facilities from the Eagle substation westward through the City to the Star substation.The first request made by Idaho Power for a conditional use permit (CUP) to exceed the 35 foot height limitation was opposed by the Eagle Planning and Zoning Commission and was wi thdrawn by the Company. The Ci ty Council unanimously rej ected the second request made by the Company stating: The proposed conditional use for the construction of overhead sub-transmissionline...is not in accordance with the general obj ecti ves of the Comprehensive Plan nor Eagle City Code Title 8. ...the design and construction of an overhead sub-transmission line conflicts with the City's goal "to protect important views, vistas, and panoramas of the community's natural setting and environment" ... The council went on to say "the overhead line also conflicts with the city's goal to 'Strive to create an aesthetically pleasing community and protect the unique natural beauty and small town character of the City. Exhibit No. 119 page 12 of 13 Section Eagle Findings of Fact and Conclusions of Law, Case No. CU-02. What do you believe the Commission must determine in order to resolve this complaint? I believe the Commission must determine whether CSB REPORTING Wilder , Idaho 380 LOBB (Di) Staff83676 facilities are needed , what facilities are necessary, the appropriate alignment and who should pay for any facilities constructed. Do any of the parties dispute that additional facilities are needed to meet load in the Eagle/Star Area? Not really.While City of Eagle witness Teinert questions the urgency for upgraded facilities and points to a lack of demand side management (DSM) implemented by the Company in prior years, he too seems to recognize that some new facilities are needed. Typically, DSM can dampen demand caused by load growth. However , it cannot el iminate construction necessary to promote system reliability. Al ternatives What are the al ternati ves available to Idaho Power to provide service to the Star substation given the City's opposition to the proposed overhead alignment? The overhead proposal rej ected by the Ci ty was to be located along the State Highway 44 bypass beginning at Edgewood Street.Al though not specifically rej ected by the City Council, it is unlikely that a previously proposed overhead alignment adj acent to State Street through the City would be any more acceptable. Consequently, the only 138 -kV al ternati ves from the Eagle CSB REPORTING Wilder , Idaho 381 LOBB (Di) Staff83676 substation to the Star substation would seem to be ei ther underground or consist of an overhead alignment that proceeds north from the CSB REPORTING Wilder , Idaho 382 LOBB (Di) 83676 Staff substation and then west around the City along either Floating Feather or Beacon Light. What is the estimated incremental increase in cost associated with these alternatives? Exhibit No.4 of Company witness Sike' s testimony shows that alternative overhead options 5 and would cost $1.42 million and $2.37 million more respectively than the proposed overhead option rejected by the Ci ty.The additional cost of underground options with alignments through the City and along the Highway bypass are estimated to range from $5.25 to $7 million. Are there other problems associated wi th these alternatives besides additional cost? Yes , there certainly could be.It is likely that any alternative overhead alignment chosen will encounter similar opposi tion from adj acent landowners. The Community Advisory Committee (CAC) established by the Company to assist in transmission siting recommended that overhead facilities not be placed" through residential The Company indicates that even wi thout landownerareas. opposition, it is unlikely that alternative overhead facilities could be completed by the time they are needed to serve the Star substation. Other problems with underground facilities are ci ted on pages 3 through 5 of the Black and Veatch study CSB REPORTING Wilder , Idaho 383 LOBB (Di) Staff83676 conducted for the Ci ty of Eagle and on pages 18 and 19 of an Idaho Power Routing Study attached as Appendix A to the Black and Veatch study (Exhibit No. 115)These problems include difficulty in identifying and repairing ine problems and the need to obtain highly trained technicians to maintain such facilities.It is my understanding that Idaho Power currently has no underground transmission facilities. Are there other al ternati ves described by the parties? Yes, City of Eagle witness Teinert maintains there are other methods and technologies such as demand side management (DSM) , mobile generators and Aluminum Conductor Steel Supported (ACSS) cable that the Company should have explored as alternatives to the 138- options. What is your opinion of the al ternati ves proposed by Mr. Teinert? I don't believe pointing out DSM activities that the Company could have undertaken in the past helpful in solving the transmission constraints experienced in the Eagle area today.Mr. Te inert speculates that a number of demand side management programs described by Idaho Power in 2002/2003 could have been put in place in the Eagle area as early as 1999. CSB REPORTING Wilder, Idaho 384 LOBB (Di) Staff83676 also speculates that these programs, many of which are untried or in the pilot stage, could have reliably CSB REPORTING Wilder , Idaho 385 LOBB (Di) 83676 Staff reduced transmission loadings and eliminated the need for transmission upgrades at issue in this case. He would seem to imply that Idaho Power was imprudent in its implementation of DSM and therefore , it is the shareholders and not the general body of customers or the citizens of Eagle that should pay for costly transmission upgrades.I do not believe that is an appropriate conclusion in this case nor do I believe that is the posi tion of Mr. Teinert. I also believe that placement of mobile generators in the Eagle/Star area as suggested by Mr. Teinert as an alternative to the transmission upgrade not a reasonable long-term solution.The Company' experience wi th the location or placement of mobile generators during the 2000/2001 energy crisis demonstrated significant customer opposition and a high cost of operation. What is your opinion of Mr. Teinert' s ACSS al terna t i ve? I am not an expert in ACSS.However , I believe this alternative has considerably more potential to provide additional transmission capacity at reasonable cost than the other al ternati ves described by Mr. Teinert. I would look to the Company to explain why ACSS would not be a viable al ternati ve to expand the capaci CSB REPORTING Wilder, Idaho 386 LOBB (Di) Staff83676 of existing facilities. What facilities do you believe should be installed to meet the growing load in the Eagle/Star area? In my opinion , the Company should be allowed in situations like these to reasonably extend and upgrade its transmission/distribution facilities, as it deems appropriate.In this case, an existing 138-kV overhead transmission line enters the City of Eagle from the east to serve the Eagle substation.The most logical and economical alternative is to upgrade existing overhead facilities to the west in established utility right of ways using structures that meet the lowest allowable clearances under the National Electric Safety Code. Consequently, the State Street alignment makes the most economic sense from the standpoint of the general body of Idaho Power customers. Is this alternative consistent with Idaho Code and the City's Comprehensive Plan? Yes. The Idaho Land Use Planning Act at section 67-6508 (h) requires local comprehensive plans to contain an analysis for "utility transmission corridors"The City's Comprehensive Plan Exhibit 106, section 4. page 10 of 54 states that: CSB REPORTING Wilder , Idaho 387 LOBB (Di) Staff83676 Appropriate placement of electric utility facilities on public right of ways is encouraged. Public streets and road rights- 388 LOBB (Di)CSB REPORTING Wilder , Idaho 83676 Staff of -ways typically serve as corridors for electric facilities. Transmission lines are usually located on easements that IPC acquires from private property owners. The joint use of utility corridors is alsoencouraged, provided that such j oint use is consistent with limitations as may be prescribed by applicable law and prudent utility practice for existing and proposed utility facilities. Both the State Street and bypass routes are along public roadways. Both Eagle River LLC witness Carlise and City of Eagle wi tness Reading point to the economic inj ury that adjacent land owners will experience if 138- transmission lines are placed overhead.Do you dispute their claim? Not necessarily.I believe it likely that large overhead power lines can negatively affect local property values wherever they are located.If the standard for constructing overhead transmission lines were that they couldn't negatively impact local property values then overhead lines would rarely be constructed. Even the alternative overhead alignments suggested by the City would not be viable on that basis. If overhead alternatives are eliminated due to property value impact, doesn't that leave just underground transmission as the only viable alternatives? A. wi th the possible exception of ACSS, it appears so based on the testimony of Mr. Teinert, Mr. Calise, CSB REPORTING Wilder , Idaho LOBB (Di)389 Staff83676 Dr. Reading and Ms. Merrill. Has the Ci ty offered to pay the higher incremental cost of underground transmission facilities in order to protect its vistas and property values? No, it has not. Who would pay the higher incremental cost of underground facilities if the City and its citizens did not? These costs would almost certainly be passed on and paid for by the general body of Idaho Power ra tepayers Is that reasonable? No, I don't believe it is.Ci ty of Eagle wi tness Reading in describing the Eagle Communi ty in testimony states: "The City of Eagle was the 3rd fastest growing city in Idaho between 1990 and 2000 increasing its population 233%.He also indicates that population has increased another 23% since 2000.He goes on to state "the City of Eagle has the highest property values in the state among residential communities.Finally, Dr. Reading states, "What is clear is that people want to move to Eagle and are willing to pay a premium to live there. The Ci ty of Eagle has experienced rapid growth that has required substantial electrical facilities CSB REPORTING Wilder , Idaho LOBB (Di)390 Staff83676 including 138-kV overhead transmission to provide cost effective reliable service.It is commendable that the CSB REPORTING Wilder , Idaho 83676 391 LOBB (Di)11aStaff City and its citizens have created a community that prosperous and desirable.However , I believe overhead transmission facilities are the standard of construction for Idaho Power Company.Underground transmission facilities exceed this standard and are more expensive to The residents of Eagle should be willing toconstruct. pay a premium that reflects the increased cost of meeting local concerns of the City.When the standard of construction is overhead, the incremental cost of these facilities should not be passed on to other Idaho Power customers that receive no aesthetic benefit of placing the facilities underground. Wouldn't you agree that the rate impact is very small when the incremental additional cost of placing transmission facilities underground through the City Eagle is spread over energy consumed by all Idaho Power customers? I would agree if this were the only such special request that could be expected.Howeve r , believe that other cities and counties would make similar requests if the Commission allows the additional costs described in this case to be spread among all Idaho Power customers. How would you recommend the City and its residents pay the increased incremental cost of underground transmission facilities? CSB REPORTING Wilder , Idaho LOBB (Di)Staff 392 83676 I bel ieve the Ci ty should provide a Contribution In Aid of Construction (CIAC) that reflects the additional incremental cost of underground facilities prior to commencing construction.The City rather than the utility should be responsible for assessing its citizens for the additional cost. Why do you recommend an up front CIAC paid for and collected from City residents by the City rather than an energy surcharge assessed and collected by Idaho Power Company? From a policy standpoint, I believe it is more efficient to require cities, counties or other governmental entities requesting special facilities to assume responsibility for CIAC payment and collection. Requiring an energy surcharge on local residents whenever special facilities are requested could lead to a hodgepodge of pancaked surcharges and rate structures across Idaho Power Company's entire service terri tory. The resul t would be administratively burdensome and confusing to electric customers. How might the City generate funds for the CIAC? Idaho Power Company wi tness Said describes in testimony ways in which the City could fund the additional costs associated with underground facilities. These options include creation of a Local Improvement CSB REPORTING Wilder , Idaho LOBB (Di)393 Staff83676 District (LID) and short-term financing through the Company paid for through franchise fees assessed by the Ci ty on local residents. Would the franchise fees assessed by the City be sufficient to cover the incremental additional cost of placing transmission facilities underground in this case? No.Even if franchise fees are set at the maximum rate of 3 % of electric revenues, the Ci ty could only generate $140,000 of the estimated $1.8 million needed each year. Then based on your recommendation , the City must either accept an overhead alignment or create an LID to pay the incremental addi tional cost of underground facilities? Yes, unless ACSS is shown to be a viable alternative to 138-kV facilities. Is it also your recommendation that the Commission establish a similar CIAC policy when underground or special utility facilities are requested by other municipal or county governments? Yes.First, ci ties and counties should recognize that electric transmission structures typically exceed 35 feet and local comprehensive plans should reflect that fact.Comprehensive plans should designate transmission corridors wi th the understanding that tall CSB REPORTING Wilder , Idaho LOBB (Di)394 Staff83676 electric transmission structures will be located there. Second, CSB REPORTING Wilder, Idaho LOBB (Di)395 14aStaff83676 these enti ties should be put on notice that the general body of ratepayers will not be responsible for incremental addi tional costs associated wi th special utility facilities requested for the benefit of local residents.Such notice will incent planning for overhead utility corridors or funding methods to provide CIAC to cover the higher cost of special facilities. Does this conclude your testimony? Yes it does. CSB REPORTING Wilder , Idaho LOBB (Di)396 Staff83676 open hearing. (The following proceedings were had in COMMISSIONER KJELLANDER:Let's begin wi the Ci ty of Eagle. BY MS. BUXTON: CROSS - EXAMINATION Good afternoon. Good afternoon. I can't hardly talk anymore, so I'll make Mr. Lobb, do you see any difference between an economic impact for a high vol tage line on property CSB REPORTING Wilder, Idaho values between a line along a potato field and a high-end I suppose that it could be perceived to have different economic impacts. Perceived or it would? I don't know. Do you think it's reasonable to think that a different economic impact or not? On a percentage basis or I mean , it depends on your perspective, I suppose.If you re the potato farmer , I suppose that a 10 percent reduction in your land value would be just as crucial as a 10 percent it quick. commerc ial area? it would have 397 LOBB (X)Staff83676 reduction in commercial value. impact.My testimony says that. So it would have an economic impact? I would say it would have an economic On page 9 of your testimony - - do you have that in front of you? CSB REPORTING Wilder, Idaho Yes , I do. Okay, looking at lines 4 through Page Page 9, sir. Okay, I'm there. You say that in situations like this, the Company should build facilities that it deems With a policy like that , what incentive does Idaho Power have to respect property values or city I think they certainly have to comply with appropriate. those land use plans as best they can.Hopefully, those land use plans accommodate transmission corridors. this particular instance, you have 138 kV line all the way down State Street from Gary Lane and perhaps even further to the east that goes into the City of Eagle to a It would seem to me that a reasonable extension of those facilities would be to continue down land use plans? substation. State Street. 398 LOBB (X)Staff83676 Okay, you were present when Dr. Reading testified that the City of Eagle since this proceeding has started in the process of amending its comprehensive plan , do you remember his testimony? I understand that he said that. And that he also said that the City of Eagle received a letter recently from Idaho Power telling them that they don't like where the City of Eagle trying to actually establish a utility transmission corridor and so again , even if the Ci ty is trying to establish it and Idaho Power doesn't like it , from your testimony, if they don't deem it appropriate , then why would anyone ever try? Well , I think that's one of the reasons that we're here is because the City has required an al ternati ve to what the Company deems appropriate and the Company deems it to be higher cost, so they've come to the Commission to determine if in fact the City ordinances and the alternatives that the City has proposed are reasonable al ternati ves. Is it the job of the Commission to take a look at whether the City has enacted unlawful ordinances or not or is that something that should come under the Administrative Procedure Act? I don't know what the Administrative CSB REPORTING Wilder , Idaho 399 LOBB (X)Staff83676 Procedure Act Perhaps that wasn't a fair question , but don't think that we're here to determine the validity of the City's ordinances. Well , I think we're here to determine the extension of the Company's facilities under the City ordinances makes sense in terms of the impact on ratepayers, the addi tional cost and that sort of thing. Is there a single dollar amount that can be deemed reasonable and prudent for costs for what' reasonable and deemed appropriate?What number that? I don't think it's a fixed number. think it's a range of reasonableness. How do we establ i sh the range of reasonableness if , like you say, the Company builds facili ties as they deem appropriate? Well , I think you need to give the Company the leeway to extend its facilities in a manner that within a reasonable range provides the reliability they're looking for and meets the growth and the loads that they expect. So is the reasonable and prudent standard or the appropriate standard, is it a solely a matter of the cheapest alternative? CSB REPORTING Wilder, Idaho 400 LOBB (X)Staff83676 I don't necessarily believe that it has to be the cheapest.Certainly my interest here is what does it cost, what are the al ternati ves, why would you pay more, what do you get if you pay more. You've heard testimony today that the City's frustration is that they can't get an actual cost number from Idaho Power and are they being unreasonable to try and get an actual cost amount? Well, I'm not sure there's a fixed alternative that has been acceptable to the City. seems to me in my participation that it's been somewhat of a moving target. I'll direct you to page 10 of your direct testimony, please.At lines 24 and 25 you say, "With the possible exception of ACSS, it appears so based on the testimony of Mr. Teinert, Mr. Carlise, Dr. Reading and Ms. Merrill.Wi th that, when you say "wi th the possible exception of ACSS, " you think underground is the only viable alternative to eliminate impact on property values? If the impact on property values determines whether or not you can put in overhead ines, then that is correct. Have you or the Staff investigated the viability of ACSS or other technology that would lessen CSB REPORTING Wilder , Idaho 401 LOBB (X)Staff83676 the impact on property value? No. Do you know if Idaho Power has ever investigated whether the viability of ACSS or other CSB REPORTING Wilder , Idaho technology could lessen the economic impact on property I don't know. They haven't provided it to you in this , they haven't provided the Staff wi any studies like that. Next to page 11 , 1 ines 2 through 4 , you indicate that overhead is a standard of construction for Who determines what is or what isn't the standard of construction?Is it the PUC or is it Idaho The standard of construction in my view what Idaho Power has traditionally used in terms of facilities when they extend those facilities. So when the Company establishes its values? standard of construction, do they take into account the impact on property values or is only the efficient method You'll need to ask Idaho Power that. As far as you know , there hasn't been case, have they? Idaho Power. Power? considered? 402 LOBB (X)Staff83676 anything that you've ever seen that would indicate that their standard construction would take into account impact on property values; correct? Tha t 's correct.I haven't seen any analysis like that. Mr. Lobb, did the Company clearly identify to you in its testimony that the proposed 138 kV line in this matter to the Star substation was only temporary service? Had they indicated that to me? Correct. I think in discussions that was indicated. Certainly in response to Production Request No.3 that the City had that it was clear to me -- it wasn't clear to me that it was temporary, but certainly there was additional future feeders planned. MS. BUXTON:I have no further questions. Thank you , Mr. Lobb. COMMISSIONER KJELLANDER:Thank you. Let's move to Mr. Squyres. Thank you.MR. SQUYRES:Mr. Lobb -- COMMI S S IONER KJELLANDER:Is your mic on? CSB REPORTING Wilder , Idaho 403 LOBB (X)Staff83676 CROSS - EXAMINATION BY MR. SQUYRES: Mr. Lobb, it's like marking exhibits and forgetting to get them admitted every time until somebody reminds you.As I understand - - well , whatExcuse me. is your job? My job is to set policy positions of the Commission Staff , review Commission Staff work products and generally oversight acti vi ties of the Staff. You're the top guy in your position? m the administrator of the Staff, that' correct. In other words, to go higher than you would ei ther have to go to Mr. Howell or go to - - I' looking at your testimony on page 9, beginning on line and I want to make sure that I understand your position. You said, "In my opinion, the Company should be allowed in si tuations like these to reasonably extend and upgrade its transmission/distribution facilities , as it deems appropriate. And then you go on to say, "In this case an existing 138 kV overhead transmission line enters the City of Eagle from the east to serve the Eagle substation"; so what you're - - the policy that you believe the Commission should adopt is if you have an CSB REPORTING Wilder , Idaho 404 LOBB (X)Staff83676 existing utility transmission corridor then in use and Idaho Power wants to upgrade or extend that route, if you will , then they should be able to do it as they deem appropriate; is that correct? Sure, I think the keyword there in that sentence is reasonably extend and it makes sense that the Company should be allowed to reasonably extend these facilities. But the qualifier there is because you talking about an existing, an expansion within an existing, corridor, because you go on to say, The most logical and economical al ternati ve is to upgrade existing overhead facilities to the west in established utility right of ways using structures that meet the lowest allowable clearances under the National Electric Safety Code? In this particular case, that's correct. Okay, and then you conclude, "Consequently, the State Street alignment makes the most economic sense from the standpoint of the general body of Idaho Power customers," that's your opinion? Tha t 's my opinion. MR. SQUYRES:Thank you, sir.No further questions. COMMISSIONER KJELLANDER:Thank you, CSB REPORTING Wilder , Idaho 405 LOBB (X)Staff83676 Mr. Squyres. Let's go to Ms. Moen. MS. MOEN:I have no questions. COMMI S S IONER KJELLANDER:Any questions from members of the Commission?Commissioner Smith. EXAMINATION BY COMMISSIONER SMITH: I guess, Mr. Lobb, were you present earlier today when it was suggested that perhaps utilities should come to the Commission first and get certificates or approval before doing these kinds of extensions? Yes, I was here. Is that the ordinary practice of utilities in our state? No.In fact, this is the first time, to my knowledge, that a company has actually come to the Commission in conjunction with a request for permit through a city. In fact, doesn't Idaho Code 61-526 say that if you have a certificate and you're providing service in a ci ty or county, you don't need to come to the Commission to extend that service in that city or CSB REPORTING Wilder , Idaho 406 LOBB ( Com)Staff83676 county? That's my understanding. And do you think that probably the other thing that's going on here and why Idaho Power came to the Commission is because it sees the potential of finding itself in the position of having spent money cannot recover if it expends monies perhaps to comply with rules that the Commission says we're not going to pay for that? Certainly, if the Company had just extended underground facilities at very high costs through the City of Eagle at the City of Eagle's request that would be something that I'm sure the Staff would look very closely at in terms of cost recovery. I don't know , I'm struggl ing wi th the word temporary in this case when it's testified that the facilities would be used 10 years in one way and then in perpetuity another way, so is 10 years in your mind temporary? Well, I don't think that it is.The question in my mind, is there a need , does the 138 kV line at least to Linder serve some purpose to the City Eagle and it seems to me that it does and if you look the Response to Production Request No.3, it seems to indicate that their grid is upgraded, is being upgraded CSB REPORTING Wilder , Idaho 407 LOBB (Com)Staff83676 to 138 kV , there's no new 69 kV ines proposed. provides looping into the Ci ty so you can have service from the east and service from the west. And does that increase the reliability to the customers in that area? Yes, it does. COMMISSIONER SMITH:That's all I have. Thanks. COMMISSIONER KJELLANDER:Ready for redirect? MR . HOWELL:None. COMMISSIONER KJELLANDER:Thank you. Before Mr. Lobb leaves , did you want to address the issue of the live rebuttal or would you like to wait until the end of the hearing? MR . HOWELL:We'll wai COMMISSIONER KJELLANDER:Okay, thank you. Mr. Lobb , you are temporarily excused. (The wi tness left the stand. MR . HOWELL:Mr. Chairman, if we could go off the record, I might confer with my witness. COMMISSIONER KJELLANDER:We'll go off the record. (Off the record discussion. COMMISSIONER KJELLANDER:We'll go back on CSB REPORTING Wilder , Idaho 408 LOBB (Com)Staff83676 the record and Mr. Howell , you asked for an opportunity to confer with your witness and what have you come to a conclusion on? MR . HOWELL:Thank you, Mr. Cha i rman . appreciate your indulgence.The Staff has determined that we do not see a need for live rebuttal. COMMISSIONER KJELLANDER:Okay.Well thank you , Mr. Howell.I think at this point it would be the Commission's pleasure to go ahead and adj ourn for the day and to head out to the public hearing in Eagle which will begin at 7: 00 and then tomorrow , at the crack of dawn , somewhere around noon , not knowing how late we' golng to go tonight, I think I'd like to get just a little later start since we only have one witness left how about if we shoot for 10: 30 or is that too late? 10:00 o'clock it is.10:00 o'clock will be our intended start date and I think that if we' fortunate, we may be able to run through that rather quickly, so we are adj ourned for the day. (The Hearing recessed at 4 :40 p. CSB REPORTING Wilder , Idaho 409 COLLOQUY83676