20080805ICIP to IPC 11-35.pdf

~r..~~'"E-ATTORNEYS AT LAW
Peter Richardson
Tel: [phone] Fax: [phone] H)p¡
petertirichardsonandoleary.com . _ '.\r- ,-, ¡.'-
P.O. Box 7218 Boise. ID 83707 - sis N. 27th St. BoiseUi;I~~kt,;
4 August 2008
Ms. Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, 10 83702
RE: IPC-E-08-10
Dear Ms. Jewell:
We are enclosing an three copies of the SECOND PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER, in the above case.
The original has been served on Idaho Power Company.
(j1(,Nina . Curtis
Richardson & O'Leary PLLC
,/
Peter J. Richardson ISB # 3195
RICHARDSON & O'LEARY PLLC
515 N. 27th Street
Boìse, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter~rìchardsonandolear . com
08
Attorneys for the Industrìal Customers of Idaho Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF IDAHO POWER
COMPANY FOR AUTHORITY TO
INCREASE ITS RATES AND CHARGES
FOR ELECTRIC SERVICE.
) CASE NO. IPC-E-08-10
)
) SECOND PRODUCTION REQUEST
) OF THE INDUSTIAL CUSTOMERS
) OF IDAHO POWER
)
Pursuat to Rule 225 of the Rules of Procedure of the Idaho Publìc Utìltìes Commssìon
(the "Commìssìon"), The Industrìal Customers of Idaho Power ("ICIP") by and through theìr
attorney of record, Peter J. Richardson, hereby requests that Idaho Power Company
("Company") provìde the followìng documents.
Ths productìon request ìs to be consìdered as contìnuìng, and the Company ìs requested
to provìde by way of supplementa responses addìtìonal documents that ìt or any person actìng
on ìts behalf may later obtaìn that wìIl augment the documents produced.
Please provìde one physìcal copy and one electronìc copy, ìf avaìlable, of your answer to
Mr. Rìchadson at the address noted above. Please provìde an addìtìonal electronìc copy, or ìf
unavaìlable a physìcal copy, to Dr. Don Readìng at: 6070 Hì1 Road, Boìse, Idaho 83703, Tel:
[phone]; Fax: [phone]; dreadìng~mìndspring.com
1 - SECOND PRODUCTION REQUEST OF INDUSTRlAL CUSTOMERS OF IDAHO POWER- IPC-E-08-10
For each ìtem, please ìndìcate the name of the person(s) preparg the answers, along
wìth the job tìtle of such person(s) and the WÌtness at hearìng who can sponsor the answer.
REQUEST FOR PRODUCTION NO. 11:
Ms. Mìler on page 12 of her dìrect testìmony states ìn reference to the Hells Canyon Re-
lìcensìng project "no new capìta expenditues were assumed, although addìtìonal costs wìl be
ìncured". Please provìde a detaled accountìng of these "addìtìonal costs".
REQUEST FOR PRODUCTION NO. 12:
Ms. Smìth on pages 12 through 13 of her dìrect testimony dìscusses the ìnclusìon of a
portìon of the plant held for futue use ìn the 2008 test year rate base based upon the amended
Idaho Code Sectìon 61-502A. Please provìde a detaled explanatìon of how the ìnclusìon ìn the
2008 test year of each specìfic facìlty ìdentified ìn Exhìbìt 29, lìnes: 5, 10, 11, 13, 16, 17,21,22,
24, 26, 27, and 28 ìs "explìcìtly" ìn the publìc ìnterest.
REQUEST FOR PRODUCTION NO. 13:
On page 10 of her dìrect testìmony Ms. Mìler states: "Tils proposal sìmply requests that
the Commìssion allow customers to pay financing costs on Hells Canyon re-licensìng
expenditues as they occur." Please explain how requìrig ratepayers to pay fiancing cost as
they occur wìll "explìcìty" serve the publìc ìnterest as the new law requìres.
REQUEST FOR PRODUCTION NO. 14:
Mr. Avera on page 14 of his dìrect testimony refers to a "detaled dìsclosure of demand
sìde management activìties" requìred as par of the FCA mechanism. Please provide tis
"detaled disclosure of demand sìde management activities" along with all documents, reports,
anysis, work papers, or any other materials used in preparng thìs dìsclosure.
2 - SECOND PRODUCTION REQUEST OF INDUSTRlAL CUSTOMERS OF IDAHO POWER - IPC-E-08- 1 0
REQUEST FOR PRODUCTION NO. 15:
Mr. Avera on page 19 of his dìrect testimony explains that volatìle gas prices are a major
source of rìsing costs and uncertainty for utilìties and are expected to remain highly volatìle.
Idaho Power's curent IRP plans for constrction of additional gas turbine plants. Please provide
an explanation for Idaho Power's belìefthat despìte hìgh volatìlity in the gas market, new gas
turbine generation is the most cost effective new resource.
REQUEST FOR PRODUCTION NO. 16:
Mr. Avera on page 19-20 of his direct testimony refers to rising coal prices for utilities
generally for the period 2004 though 2008. The coal report included in ms workpapers details
that Wyoming coal is rising far slower than overall coal costs. Please provide a detailed
comparson of Idaho Power's actua coal costs paid compared wìth the coal costs for utìlties
generally for the period of 2004 though 2008.
REQUEST FOR PRODUCTION NO. 17:
Mr. Avera on page 25-26 of his direct testimony discusses the possible implications of
futue carbon output regulations. Please provide a detailed comparson of Idaho Power's system
wìde carbon output compared wìth other utìlties of similar customer base.
REQUEST FOR PRODUCTION NO. 18:
Mr. Avera, on page 51, lìnes 5 through 8 states "( c Jonsidered along wìth S&P's corprate
credit ratings, a comparison of these Value Line indicators suggests that the investment risks
assocìated wìth the Non-Utìlty Proxy Group are below those of the group ofutìlties and Idaho
Power." Please reconcile this statement wìth the followìng: (a) Fitch Ratings' statement ''the
Utìlties, Power, and Gas sector is less sensitive to a downtu in the housing or the economy
than most other sectors" ("U.S. Utilties, Power and Gas 2008 Outlook" Page 1, Para 6
3 - SECOND PRODUCTION REQUEST OF INDUSTRlAL CUSTOMERS OF IDAHO POWER - IPC-E-08- 1 0
(December 11,2007)); (b)Moodys' statement ''te fudamental outlook for the US electric utìlty
setor remains stable, reflecting lower cash flow volatìlity in comparison to unegulated
industres and the resilience of financial performance in periods of weaker economic conditions"
("U.S. Electric Utility Sector" Pg 2, Para 1 (Januar 2008)); and (c) Stadad and Poor's analysis
that the strong liquidity position and relatively consistent cash flows of utilities "enabled the
companies to deal wìth the fallout of the auction rate securities and insured deals in a credit-
neutral maner" ("U.S. Electrc Utility Sector Continues to Benefit from Strong Liquidity Amid
Curent Credit Cruch" Page 2, Para 1 (March 27,2008)) all of which are referenced by Mr.
Avera and included in his work papers.
REQUEST FOR PRODUCTION NO. 19:
Mr. Avera states on page 52, lines 5 through 12, "required retus for
utìlties should be in line wìth those of non-utilty firms of comparable risk operating under the
constraints of free competition." Please explain why, in light of the above statement the non-
utilty proxy group is composed of credit ratings of "A+", safety ranngs of "1 ", and strength
ratings of "A+", whìle the utility proxy group is composed of "BBB", "3", and "B+" as shown in
Table 2 on page 51, lines 3 and 4 ofhìs dìrect testimony.
REQUEST FOR PRODUCTION NO. 20:
Mr. Avera states on page 73, lines 14 though 18 "(iJn evaluating the rate of retur for
Idaho Power, it is importt to consider investors' continued focus on the unsettled conditions in
restrctued wholesale energy markets, the Company's ongoing exposure to these markets to
meet a portion of its energy supply". Please provide a detaìled accounting of the "unsettled
conditions" ofIdaho Power's power purchases from "restructured wholesale energy markets".
REQUEST FOR PRODUCTION NO. 21:
4 - SECOND PRODUCTION REQUEST OF INDUSTRIAL CUSTOMERS OF IDAHO POWER ~ IPC-E-08- 1 0
Mr. Steven Keen on pages 10 though 14 of his direct testimony discusses the inadequacy
of the PCA mechanism. Please reconcìle tis discussion wìth Stadard and Poor's finding in
"Pacìfic Nortwest Hydrology and Its Impact on Investor-Owned Utìlties' Credit Quaity"
(Januar 28, 2008) that, of the five major nortwest investor owned utì1ties, Idaho Power has the
strongest PCA mechansm.
REQUEST FOR PRODUCTION NO. 22:
Mr. Steven Keen on page 25, lines 2 though 8 ofhìs dìrect testimony sumarzes the
Concerns in the financìal industr due to Hells Canyon Re- Licensing. Please identify and
provide the specìfic reports, documents, analysis, or anl other material including identifying the
specìfic analyst or company who produced these materials on whìch Mr. Keen relied upon to
arive at this conclusion.
REQUEST FOR PRODUCTION NO. 23:
Please provide any and all documents, reports, analysis data or an other item used to
arve at the $120 milion varation between high water and low water power supply costs
referenced by Mr. Keen on page 13, lìne 3 thròugh 5 ofhìs direct testimony.
REQUEST FOR PRODUCTION NO. 24:
Ms. Smith on page 5, lines 15 though 20 describes two methods used to adjust the 2007
actua data in creating the 2008 test year, "three- or five-year compounded anual growth rates"
applied to investments less than $2 milion and certin O&M expenses and "known and
measurable adjustments" applied to investments of greater than $2 milion. Please provide a
detailed explanation of why a $2 milion dollar theshold was chosen to differentiate these two
methods.
REQUEST FOR PRODUCTION NO. 25:
5 ~ SECOND PRODUCTION REQUEST OF INDUSTRlAL CUSTOMERS OF IDAHO POWER - IPC-E-08- 1 0
Ms. Smith on page 24, lines 5-11 explains why a five year compounded growt rate is
appropriate for test year operations and maintenance expenses. On page 23, lines 15-17 Ms
Smith states that operations and maitenance revenues were "updated using a three year
compounded anual growt rate". Please provide a detailed explanation of why different
compound anual growth rates were applied to O&M expenses and revenues.
REQUEST FOR PRODUCTION NO. 26:
Please explain, and provide a dollar amount for, the term "compensation at-risk
incentives" as used by Ms. Smith on page 23, line 21-22 for her direct testimony.
REQUEST FOR PRODUCTION NO. 27:
Ms. Smith on pages 24 though 25 of her direct testimony explains the calculation of the
five year compounded growth rate and offers arguments supporting its reasonableness. Please
provide the sae information for the three year compounded growth rate Ms. Smith mentions on
page 23, lines 16 through 17.
REQUEST FOR PRODUCTION NO. 28:
Ms. Smith on pages 12 through 13 of her direct testimony discusses the inclusion of a
portion of the plant held for future use in the 2008 test year rate base based upon the amended
Idaho Code Section 61-502A. Please provide a detailed explanation of how the inclusion in the
2008 test year of each specific facilty identified in Exhbit 29, page 21, lines: 5, 10, 11, 13, 16,
17,21,22,24,26,27, and 28 is "explìcitly" in the public interest.
REQUEST FOR PRODUCTION NO. 29:
Please provide a detaìled accounting for each dollar of the $132,506.69 of management
expenses (which is the Sl. of the total expenses minus the tota exclusion for each executive as
shown in Exhibit 30 pages 4-8) proposed to be included in the 2008 test year base rates.
6 ~ SECOND PRODUCTION REQUEST OF INDUSTRIAL CUSTOMERS OF IDAHO POWER ~ IPC-E-08-10
REQUEST FOR PRODUCTION NO. 30:
Please explain how the "normalized incentive" shown in Exhibit 31, page 2, line 19 is in
accord wìth Order No. 29505, section 5, pages 25 through 26.
REQUEST FOR PRODUCTION NO. 31:
On page 34 ofMr Said's workpapers is a document titled "Coal & Gas Prices". Please
provide, in the same format, for the Evander Andrews Power Plant both the Energy and Cost
values separately for Danskin CTl, Danskin CT2, and Danskin CT3. Please indicate the month
and year when Danskin CTI is assumed to be producing power.
REQUEST FOR PRODUCTION NO. 32:
Please provide the daily electrcity usage patterns for the top twenty five (25) by overal
electrcìty consumption of schedule 19 customers for each of the four years of introductory time
of use rates.
REQUEST FOR PRODUCTION NO. 33:
In 2004 Idaho Power installed Advanced Meter Reading ("AMR") technology in the
Emmett Valley and McCall operating areas. Please provide a detailed accounting of the cost per
customer for the instalation of the AMR infrastructue.
REQUEST FOR PRODUCTION NO. 34:
Please provide the daily usage patterns in 2004, 2005, 2006 and 2007 for the paricìpants
in the AMR program in the Emmett Valley and McCall operating areas separately.
REQUEST FOR PRODUCTION NO. 35:
Idaho Power states in the AMR Frequently Asked Questions that one of the primar
objectives of the AMR program is to evaluate "the abìlity to improve customer service through
pricing and demand-side management options". Please provide a detailed analysis ofIdaho
7 ~ SECOND PRODUCTION REQUEST OF INDUSTRlL CUSTOMERS OF IDAHO POWER ~ IPC-E-08- 1 0
Power's evaluation of the demand-side management options presented by the AMR program
including the impact to peak power demands addressed by the AMR program.
~DATED this 4- day of August, 2008.
RICHARSON & O'LEARY PLLC
By: €;: ./V
Peter J. Richardson, ISB #3195
Attorneys THE INDUSTRIL
CUStOMERS OF IDAHO POWER
8 - SECOND PRODUCTION REQUEST OF INDUSTRlAL CUSTOMERS OF IDAHO POWER - IPC-E-08- 1 0
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 4th day of August, 2008, a tre and correct copy of the
wìthin and foregoing SECOND PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS
OF IDAHO POWER, was served in the maner shown to:
Ms. Jean Jewell
Cotnssion Secreta
Idao Public Utilities Cotnssion
POBox83720
Boise il 83720-0074
~ Hand Delìvery
-A U.S. Mail, postage pre-paid
Facsimìle
Electronic Mail
JohnR. Gale
Vice President, Regulatory Affairs
Idaho Power Company
PO Box 70
Boise, Idaho 83707-0070
_ Hand Delivery
X U.S. Mail, postage pre-paid
Facsimile
Electronic Mail
Baron L. Kline
Senior Regulatory Attorney
Idaho Power Company
PO Box 70
Boise, Idaho 83707-0070
_ Hand Delivery
X U.S. Mail, postage pre-paid
Facsimile
Electronic Maìl
Randall C. Budge
Eric L. Olsen
Racine, Olson, Nye,Budge & Bailey, Chrd.
PO Box 1391
Pocatello, Idao 83204-1391
_ Hand Delìvery
X U.S. Mail, postage pre-paid
Facsimìle
Electronic Mail
Anthony Yanel
29814 Lake Road
Bay Vilage, Ohìo 44140
Hand Delivery
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Facsimile
Electronic Mail
O~~,Nina Cûrtis