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Home My WebLink About20080922IPC to ICIP 36-44.pdfBARTON L. KLINE Lead Counsel RECE\\fED Z.'SEP 22 PH 3: 34 H""i; iDArlO p. \ŠS\ON UTiUT\ESCO esIDA~POR(I An IDACORP Company September 22,2008 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilties Commission 472 West Washington Street P.O. Box 83720 Boise, Idaho. 83720-0074 Re: Case No. IPC-E-08-10 General Rate Case Dear Ms. Jewell: Enclosed for filing please find an original and three (3) copies each of Idaho Power Company's Response to the Third Production Request of The Industrial Customers of Idaho Power and Idaho Power Company's Response to the Idaho Irrigation Pumpers Association, Inc.'s Third Data Requests to Idaho Power Company. In addition, also enclosed are four copies of a CD. The CD contains the Company's responses to production/data requests in which electronic/excel files were requested. Finally, enclosed in a separate envelope are four copies of a document containing confidential information which is being prov~ded in response to a production request. As you know, the confidential information can only be viewed by those parties who have signed the Protective Agreement. Upon receiptofthis filing, I would appreciate it if you would return a stamped copy of this letter for my file in the enclosed stamped, self-addressed envelope.V71~ Barton L. Kline Lead Counsel for Idaho Power Company BLK:csb Enclosures P.O. Box 70 (83707) 1221 W. Idaho St. Boise, ID 83702 ."" BARTON L. KLINE, ISB #1526 LISA D. NORDSTROM, ISB #5733 DONOVAN E. WALKER, ISB #5921 Idaho Power Company P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-2682 Facsimile: (208) 388-6936 bkline(§idahopower.com Inordstrom(§idahopower.com dwalker(§idahopower.com RECEIVED 2008 SEP 22 PH 3: 35 IDAHO PUBLIÇ . UT1UTlES COMMiSSION Attorneys for Idaho Power Company Street Address for Express Mail: 1221 West Idaho Street Boise, Idaho 83702 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MAnER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AUTHORITY TO INCREASE ITS RATES AND CHARGES FOR ELECTRIC SERVICE. ) CASE NO. IPC-E-08-10 ) ) IDAHO POWER COMPANY'S ) RESPONSE TO THE THIRD ) PRODUCTION REQUEST OF THE ) INDUSTRIAL CUSTOMERS OF IDAHO ) POWER COMES NOW, Idaho Power Company ("Idaho Power" or "the Company"), and in response to the Third Production Request of the Industrial Customers of Idaho Power Company dated August 25,2008, herewith submits the following information: IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 1 REQUEST FOR PRODUCTION NO. 36: On pages 31 and 32 of Company witness Tim Tatum's workpapers is a table 'System Coincident Demand at Generation Level (kW), 2008 (5-year Median Factors), Idaho. Please provide, in electronic form, the data for each individual year for the 5 years that were used to find the" values found in the table. RESPONSE TO REQUEST FOR PRODUCTION NO. 36: The requested information is contained in the file named "MedianDemandFactors20032007.xls" that was provided in the Company's response to Idaho Irrigation Pumpers Association's Request for Production No. 1-5. This response to this Request was prepared by Timothy Tatum, Senior Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 2 REQUEST FOR PRODUCTION NO. 37: Please provide all input and supporting data, analysis, calculations, and any other materials used to produce the "Idaho Power Company Virtual Peaker Levelized Cost Analysis" submitted in response to ICIP's Production Request Number 10. RESPONSE TO REQUEST FOR PRODUCTION NO. 37: Attached is a Fuel Cost Calculation workbook used to calculate the 20-Year Levelized Dispatch Costs/MWh shown on the "Idaho Power Company Virtual Peaker Levelized Cost Analysis." In addition, the following financial assumptions were made when preparing this cost analysis and provide valuable support to the data inputted: · Virtual Peaker = Standby generation at customer site. . Analysis done on four sites with existing backup generation. . Costs of a traditional Simple Cycle CT plant being used as the comparison point. . Capital cost estimates and operating information for simple cycle CT resources based on 2006 IRP numbers. · Capital estimates associated with each of the potential virtual peaker sites represent the necessary costs to interconnect and become dispatchable. Idaho Power would make the investment to interconnect. . Modeling assumes customers would retain ownership of the generators and Idaho Power would pay for each customer's annual maintenance and variable operations costs, including fueL. . Diesel fuel priced at a fixed $3.70 per gallon. . Gas expense for the simple cycle CT based on the 2007 Northwest Power and Conservation Council's 2007 median case forecast. . Maintenance costs per generator estimated at approximately $4,000 annually and include two visits per year to inspect the machine, replace the lube oil and filters, and routinely test. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 3 . Fixed costs include one new Idaho Power employee to manage the program. · The levelized fixed costs represents Idaho Power's annual revenue requirement given the estimated capital investment and fixed operating costs (cost of capital and fixed O&M). This response to this Request was prepared by Courtney Waites, Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 4 REQUEST FOR PRODUCTION NO. 38: The Company's "Virtual Peaker Program Update" filed April 4, 2008 on page 2 states that the Company "talked with a total of fort-five customers about the potential for a virtual peaker program". Please identify each of these fort-five customers and provide a detailed account of the scope and content of these talks. RESPONSE TO REQUEST FOR PRODUCTION NO. 38: Attached is a confidential list of the customers the Company talked with regarding the Virtual Peaker Program. This information is being provided in accordance with the Protective Agreement. To gauge customer interest in the Virtual Peaker Program, in the spring of 2007, Idaho Power's Delivery Service Representative's ("DSRs") contacted those customers whom they knew had existing generation, those who had expressed an interest in adding generation, and those they thought might have generation. After soliciting customer interest utilzing the DSRs, the Company held numerous customer meetings and conference calls in May and June 2007 detailing the potential program. Additionally, in an effort to gain more awareness of the program, the Company asked the Industrial Customers of Idaho Power to forward the names of any customers who might be interested in participating. The Company also described the program during customer meetings held in June 2007 to explain the recently filed general rate case and energy effciency opportunities. This response to this Request was prepared by Courtney Waites, Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 5 REQUEST FOR PRODUCTION NO. 39: The "Virtual Peaker Program Update" filed April 4, 2008 on page 2 states that twelve of the forty-five customers whom the company initially discussed the potential for a virtual peaker program "expressed an interest in having more in-depth talks". Please identify these twelve customers and provide a detailed account of the scope and content of these "in-depth talks". RESPONSE TO REQUEST FOR PRODUCTION NO. 39: Please see the attachment to the Request for Production No. 38 for the twelve customers that expressed an interest in having more in-depth talks about the Virtual Peaker Program. These customers are identified under the section titled Held In-Depth Discussions With. The Company held either conference calls or customers meetings with these customers in May and June 2007 detailing the potential program and answering any questions customers had with regards to the potential program. This response to this Request was prepared by Courtney Waites, Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 6 REQUEST FOR PRODUCTION NO. 40: The "Virtual Peaker Program Update" filed April 4, 2008 on page 2 discloses that thirt three of the fort five customers initially approached by Idaho Power declined to have "more in-depth talks" about the potential for a virtual peaker program. Please provide a detailed account of the reasons given by these thirty three customers who were not interested in further discussing the potential for a virtual peaker program. RESPONSE TO REQUEST FOR PRODUCTION NO. 40: As described in the Request for Production No. 38, to gauge customer interest in the Virtual Peaker Program the Company contacted those customers they knew had existing generation, those customers who had expressed an interest in adding generation and those customers they thought might have generation. In addition, the Company described the program during meetings held with a number of its industrial customers in June 2007 to explain the recently filed general rate case and energy effciency opportunities. In total, fort-five customers were made aware of the potential program. Of those, twelve contacted the Company requesting more information about the program. Because the remaining thirt-three did not follow-up and contact the Company, the Company does not know the reason(s) why they are not interested in the program. This response to this Request was prepared by Courtney Waites, Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 7 REQUEST FOR PRODUCTION NO. 41: The "Virtual Peaker Program Update" filed April 4, 2008 on page 2 states "the Company began its investigation into air quality and permitting issues by holding discussions with the Department of Environmental Quality (DEQ)". Please provide a detailed account of these discussions including the DEQ personnel spoken with, the scope and content of the matters discussed, and the dates and length of time for each discussion. RESPONSE TO REQUEST FOR PRODUCTION NO. 41: On December 3, 2007, the Company held a conference call for approximately thirt minutes with Mike Simon from the Idaho Department of Environmental Quality ("DEQ") to discuss the permitting process of a customer with a diesel generator wanting to participate in a program similar to the Virtual Peaker Program if one were in place in Idaho. At the time, the Company explained the potential program design and received feedback on permitting requirements and processes. It was determined that customers with existing generation, participating in a program like this, would be required to modify their current permits because they would no longer be using the generators for emergency purposes only. The cost to permit is a minimum of $1,000 plus an additional amount based on the amount of the customers total emissions. In addition to explaining the applicability of a permit, Mr. Simon outlined the permitting process, explaining the steps the DEQ takes to issue a permit. These steps include: · The generator owner first determines whether future operations are exempt or require a Permit to Construct (Note: The DEQ suggested this step in the process for two reasons: the Company has not finalized the potential program design detailing operational guidelines and the Company did not have specific diesel generator emission data at the time of the conversation to fully assess the need of a permit). IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 8 · If necessary, submit a Permit to Construct application. With the application, the generator owner needs to submit an air quality analysis. . The DEQ wil review the application and air quality analysis and prepare a permit. · The DEQ wil publish the fact that an application has been filed with the Department on their website and in the local newspaper. . The DEQ wil solicit the public to determine if there is an interest in a comment period. If there is, the DEQ wil schedule a 30-day period once a draft permit is ready. . The permit is either granted or denied. This response to this Request was prepared by Courtney Waites, Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 9 REQUEST FOR PRODUCTION NO. 42: Please provide the research and documentation that supports the Company's conclusion on page 2 of the "Virtual Peaker Program Update" filed April 4, 2008: "that participation in the virtual peaker program would require customers with existing generators to modify their current permits because they would no longer be using the generators exclusively for emergency purposes. To modify their permits, the Company's research indicated customers would be required to submit an application along with an air quality analysis based on the total emissions on the customers' premises". RESPONSE TO REQUEST FOR PRODUCTION NO. 42: The conclusion expressed above was a result of the conversation the Company held with the Department of Environmental Quality on December 3, 2007, as described in the Response to Request for Production No. 41. This response to this Request was prepared by Courtney Waites, Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 10 REQUEST FOR PRODUCTION NO. 43: The "Virtual Peaker Program Update" filed April 4, 2008 states on page 2 "the Company solicited input form the environmental community". Please identify the specific members of the "environmental community" the Company discussed the virtual peaker program with, as well as, a detailed account of the scope and contents of these discussions. RESPONSE TO REQUEST FOR PRODUCTION NO. 43: In January 2008, the Company spoke with Ralph Cavanaugh from the Natural Resources Defense Council and Nancy Hirsch with the Northwest Energy Coalition and outlined the potential Virtual Peaker Program. Both Mr. Cavanaugh and Ms. Hirsch expressed concerns with the emissions of diesel generators. Ms. Hirsch indicated, with a potential program run time of up to 400 hours a year, she would not support a diesel generator program unless a conversion to biodiesel was possible. This response to this Request was prepared by Courtney Waites, Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 11 REQUEST FOR PRODUCTION NO. 44: The "Virtual Peaker Program Update" filed April 4, 2008 concludes on page 3 that: "Environmental ramifications may exist if the program is implemented. It is because of these impacts that Idaho Power believes the next logical step is to hold a workshop soliciting customer input regarding the implementation of a virtual peaker program." Please explain how soliciting customer input regarding a virtual peaker program wil address the environmental ramifications identified by the DEQ and environmental community. RESPONSE TO REQUEST FOR PRODUCTION NO. 44: The intent of holding a workshop was to gauge customer reactions of implementing a program like the Virtual Peaker Program as well as discuss and receive feedback on the potential design of the program. The thought was that at the conclusion of a workshop, the Company would better understand our customers' appetite for an investment in a Virtual Peaker Program and have the information needed to know how to proceed with the project. This response to this Request was prepared by Courtney Waites, Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.,.\ DATED at Boise, Idaho, this ~ '2 day of September 2008.~~ BARTON L. KLINE Attorney for Idaho Power Company LISA D. NORDSTROM Attorney for Idaho Power Company DONOVAN E. WALKER Attorney for Idaho Power Company IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 12 CERTIFICATE OF SERVICE ) I HEREBY CERTIFY that on this 22. "è day of September 2008 I served a true and correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER upon the following named parties" by the method indicated below, and addressed to the following: Commission Staff Weldon B. Stutzman Deputy Attorney General Idaho Public Utilities Commission 472 West Washington P.O. Box 83720 Boise, Idaho 83720-0074 Neil Price Deputy Attorney General Idaho Public Utilties Commission 472 West Washington P.O. Box 83720 Boise, Idaho 83720-0074 Industrial Customers of Idaho Power Peter J. Richardson, Esq. RICHARDSON & O'LEARY PLLC 515 North 2ih Street P.O. Box 7218 Boise, Idaho 83702 Dr. Don Reading Ben Johnson Associates 6070 Hil Road Boise, Idaho 83703 Idaho Irrigation Pumpers Association, Inc. Randall C. Budge Eric L. Olsen RACINE, OLSON, NYE, BUDGE & BAILEY, CHARTERED P.O. Box 1391 201 East Center Pocatello, Idaho 83204-1391 -2 Hand Delivered U.S. Mail _ Overnight Mail FAX -2 Email Weldon.stutzman((puc.idaho.gov -2 Hand Delivered U.S. Mail _ Overnight Mail FAX -2 Email Neil.priæcæpuc.idaho.gov Hand Delivered -2 U.S. Mail _ Overnight Mail FAX -2 Email petertãrichardsonandoleary.com Hand Delivered -2 U.S. Mail _ Overnight Mail FAX -2 Email dreadingcæmindspring.com Hand Delivered -2 U.S. Mail _ Overnight Mail FAX -2 Email rcbtãracinelaw.net elocæracinelaw.net IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER -13 Anthony Yankel Yankel & Associates, Inc. 29814 Lake Road Bay Vilage, Ohio 44140 Kroger Co. I Fred Meyer and Smiths Michael L. Kurt Kurt J. Boehm BOEHM, KURTZ & LOWRY 36 East Seventh Street, Suite 1510 Cincinnati, Ohio 45202 The Kroger Co. Attn: Corporate Energy Manager (G09) 1014 Vine Street Cincinnati, Ohio 45202 Kevin Higgins Energy Strategies, LLC Parkside Towers 215 South State Street, Suite 200 Salt Lake City, Utah 84111 Micron Technology Conley Ward Michael C. Creamer GIVENS PURSLEY, LLP 601 West Bannock Street P.O. Box 2720 Boise, Idaho 83701-2720 Dennis E. Peseau, Ph.D. Utility Resources, Inc. 1500 Liberty Street SE, Suite 250 Salem, Oregon 97302 Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email tony(§yankel.net Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email mkurt(§BKLlawfirm.com kboehmøiBKLlawfirm.com Hand Delivered -- U.S. Mail _ Overnight Mail FAX Email Hand Delivered -- U.S. Mail _ Overnight Mail F:AX -- Email khigginsøienergystrat.com Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email cewøigivenspursley.com mccøigivenspursley.com Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email dennytempøiyahoo.com IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 14 Department of Energy Lot R. Cooke Arthur Perry Bruder Offce of the General Counsel United States Department of Energy 1000 Independence Avenue SW Washington, DC 20585 Routing Symbol GC-76 Dwight D. Etheridge Exeter Associates, Inc. 5565 Sterrett Place, Suite 310 Columbia, MD 21044 Community Action Partnership Association Of Idaho Brad M. Purdy Attorney at Law 2019 North 1¡th Street Boise, Idaho 83702 Snake River Allance Ken Miller Snake River Allance P.O. Box 1731 Boise, Idaho 83701 Hand Delivered U.S. Mail -- Overnight Mail FAX -- Email Lot.CookeLâhq.doe.gov Arthur. BruderLâhq.doe.gov Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email detheridge(§exeterassociates.com Hand Delivered -- U.S. Mail _ Overnight Mail FAX -. Email bmpurdyLâhotmail.com Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email kmilercæsnakeriverallance.org jJ/~ Barton L. Kline IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER -15 BEFORE THE IDAHO PUBLIC UTiliTIES COMMISSION CASE NO. IPC-E-08-10 IDAHO POWER COMPANY RESPONSE TO ICIP'S REQUEST NO. 37 Fuel Oil #2 BTU per gallon heat rate with 500KW unit 130,000 12,000 KW per gallon (130k/12k) gallons per hour to run 500 KW unit (500/10.83) Max hours run per year 400 Max fuel use per year in gallons 500KW unit Forecast fuel price (WAG) 7.69 gallons per MMBTU $28.54 per MMBTU 10.83 $ 0.3425 $ fuel per KW 46.15 18,461.54 $3.71 $ 68,492.31 Total fuel Cost Fuel cost per KW Fuel cost per MWh $ $ 0.3425 342.46