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HomeMy WebLinkAbout20081014IPC to ICIP 45-51.pdfBARTON L. KLINE Lead Counsel ~IDA.~POR~ An IDACORP Company October 10, 2008 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilities 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 Second Supplemental Response to the Sixth Production Request of the Commission Staff, Idaho Power Company's Response to the Fourth Production RêqLJesföf the Industrial Customers, Idaho Power Company's Response to Community Action Partnership Association of Idaho's First Production Requests, and Idaho Power Company's Response to the Seventh Production Request of the Commission Staff. In addition, also enclosed are CDs containing the Company's responses to production requests in which electronic/excel files were requested and also for ease of production of the information. Upon receipt of this 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.velJ/&: Barton L. Kline Lead Counsel for Idaho Power Company BLK:csb Enclosures P.O. Box 70 (83107) 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 InordstromØlidahopower.com dwalkerØlidahopower.com RECEIVED 2008 OCT 10 PM 5: 04 IDAHO PUSLlC UTILITIES 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 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 ) ) ) ) ) ) IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER COMES NOW, Idaho Power Company ("Idaho Powet' or "the Company"), and in response to the Fourth Production Request of the Industrial Customers of Idaho Power Company dated September 26, 2008, herewith submits the following information: IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 1 REQUEST FOR PRODUCTION NO. 45: In Idaho Power Company's Response to the First Production Request to Commission Staff NO.9 the Company stated, "A wind integration cost cap of $6.50 was established in Case No. IPC-E-07-03. If this cap were used, it is estimated that Idaho Power would incur nearly $3.5 Millon in wind integration costs." Does Idaho Power believe it is in fact incurring $3.5 Millon in costs currently from both CSPP wind projects and its own Elkhorn Wind project that is not currently being passed on to ratepayers? Please explain fully. RESPONSE TO REQUEST FOR PRODUCTION NO. 45: Idaho Power is currently incurring the costs of integrating the CSPP and Elkhorn wind projects into the system. Those costs are not reflected in the power supply modeling contained in the Company's General Rate Case Application. The costs of integrating wind projects into the system include hourly operational impacts that are not easily captured in AURORA modeling, such as the need for standby generation from Company resources and increased purchased power expenses, while reducing surplus sales. Thes e costs should be included in base rates. If the costs are not reflected in base rates, they wil be recovered through the PCA on a shared basis. This response to this Request was prepared by Scott Wright, Pricing Analyst, and Gregory W. Said, Idaho Power Company, Manager of Revenue Requirement, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 2 REQUEST FOR PRODUCTION NO. 46: In Idaho Power Company's Response to the First Production Request to Commission Staff No.5, the Company provided a list of PURPA projects (CONFIDENTIAL) signed but not yet operating. Please, for this same list, provide the expected MW and MWh for each project. RESPONSE TO REQUEST FOR PRODUCTION NO. 46: This confidential response to this Request was prepared by Randy Allphin, Power Supply Planning Senior Administrator Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company, and is being provided pursuant to the Protective Agreement. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 3 REQUEST FOR PRODUCTION NO. 47: In Idaho Power Company's Response to the Third Production Request to ICIP No. 37 the Company states, "Attached in a Fuel Cost Calculation workbook used to calculate the 20-Year Levelized Dispatch Costs/MWh. Please provide the workbook and supporting workbooks in electronic form. RESPONSE TO REQUEST FOR PRODUCTION NO. 47: Please see the Fuel Cost Calculation workbook used to calculate the 20-Year Levelized Dispatch Costs/MWh, provided in electronic format on the enclosed CD. 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 FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 4 REQUEST FOR PRODUCTION NO. 48: In Idaho Power Company's Response to the Third Production Request to ICIP No. 37 the workbook provided uses "Max hours run per year" in the analysis of 400 hours. Please explain fully the answer to each of the following: a. Does the Company assume the 400 hours is for each generator or is it for some combination of generation sites? b. What is the number of sites, and total MWexpected by the Company should the program be implemented? c. Has the Company do any analysis as to the number of hours it would expect emergency generators would actually be run should the program be implemented? d. In the analysis did the Company consider using emergency generators as reserves that would be used to meet its reserve requirements? e. Please provide a copy of any analysis referred to in responding. RESPONSE TO REQUEST FOR PRODUCTION NO. 48: a. In the Fuel Cost Calculation provided by Idaho Power in response to Request No. 37 of the Third Production Request of the Industrial Customers, the Company assumes 400 hours of run time for a customets generator to come up with a cost per MWh. The cost per MWh is then compared to the cost per MWh of a simple cycle combustion turbine plant. b. Because the program is stil in the research and design phase, the Company did. not get commitment from customers as to whether or not they would be wiling to participate in the virtual peaker program. However, we are aware of at least IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 5 40 MW of existing generation that could potentially participate. In addition, a few customers expressed interest in adding generation in the future. c. The Company has not done any analyses as to the number of hours it would expect emergency generators would actually be run should a program be implemented. However, the Company did look at the number of hours the emergency generators would have been run had a program been in place during the last few years. Using a variable fuel expense of $342.46/MWh, it would theoretically have been economically feasible to dispatch emergency diesel generators on July 24,2006 from 12 PM to 8 PM and on July 25, 2006 from 11 AM to 8 PM. Wholesale power was purchased real time during these hours at $350/MWh and $350-$385/MWh respectively. d. The Company has considered using emergency generators to meet reserve requirements although the potential value of the reserves were not incorporated into the financial analysis. e. Other than the analyses already provided, no further analyses have been performed. 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 FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 6 REQUEST FOR PRODUCTION NO. 49: This Request is asking for reconciling various natural gas forecast used in the current case. a. In Idaho Power Company's Response to the Third Production Request to ICIP No. 37 the Company states it used the 2007 Northwest Power and Conservation Council's 2007 gas forecast in it Virtual Peaker Levelized Cost Analysis. b. In Idaho Power Company's Response to the First Production Request to Commission Staff No. 5 provided natural gas data used in Idaho Power's AURORA modeL. c. The 2008 Marginal Cost Analysis filed with witness Tatum's workpapers, page 47 states the Marginal Cost of Energy was found using power supply runs using Globallnsigtit 30-year Utility Natural Gas Index. d. The 2008 Marginal Cost Analysis filed with witness Tatum's workpapers, page 47 the loads and resources we from taken from the Company's 2006 IRP that was based on a different methodology. Please compare each of the natural gas forecasts described in a through d above and provide an explanation why a variety of natural gas forecasts were used in the analysis for a this single rate case. RESPONSE TO REQUEST FOR PRODUCTION NO. 49: Item (a) is not related to items (b)-(d) as it is not part of this current case. The gas expense used for the Virtual Peaker Levelized Cost Analysis was taken from the 2007 Northwest Power and Conservation Council's 2007 median case forecast because it is an independent data source that has been used for planning analyses and evaluations. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 7 Items (b)-(d) in the above requests are all related. Idaho Powets natural gas price forecast, item (b), was developed for the 2008 Test Year and then escalated using the Global Insight 30-year Utility Natural Gas Index for the Marginal Cost Analysis, item (c). According to Mr. Tatum's workpapers, the reference to the load and resources taken from the 2006 IRP is a separate sentence and is not related to the development of a natural gas price forecast. The next sentence in Mr. Tatum's workpapers states, "The 2008 test year gas prices were used, adjusted for each of the years using the Utility Natural Gas Index from the Global Insight 30-year US Economic Outlook, February 2008." Therefore, item (d), is related to the original gas price forecast developed as item (b). This response to this Request was prepared by Courtney Waites, Pricing Analyst, and Scott Wright, Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 8 REQUEST FOR PRODUCTION NO. 50: In Company witness Nemnich's direct testimony, page 35, she states, When time-of-use rates were implemented for Schedule 19 customers four years ago, the differentials between On- Peak, Mid-Peak, and Off-Peak Energy Charges were set at an "introductory" leveL. By increasing the rate differentials, a stronger price signal is sent that wil provide a stronger incentive to conserve or to shift the time of energy usage to a less costly time period. This stronger price signal provides higher benefits to those customers who modify operations or purchase equipment that uses less energy. a. Please provide any analysis and studies that the Company preformed that indicate the price response and elasticity for Schedule 19 customers to increasing the differentials in rates proposed for Schedule 19. b. Please provide any analysis and studies that the Company preformed that indicate the costs for Schedule 19 customers would incur in shifting their energy demand to take advantage of the differentials in rates proposed for Schedule 19. RESPONSE TO REQUEST FOR PRODUCTION NO. 50: a. Please see Idaho Power's response to Staffs production Request No. 45. b. While the Company, through its energy effciency programs, does have significant information about the costs and/or benefits to customers to conserve energy and demand, the Company does not collect information on the costs customers may incur when they shift energy in response to time-of-use rates. The response to this Request was prepared by Darlene Nemnich, Senior Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 9 REQUEST FOR PRODUCTION NO. 51: The Company is proposing an increase of 70.5% in the Summer On-Peak Demand Change for Schedule 19 customers going from the current $0.44 to $0.75 (Exhibit 74, page 5 of 10). Please provide any analysis or studies the Company has undertaken that would indicated (sic) the response it expects from this rate increase. RESPONSE TO REQUEST FOR PRODUCTION NO. 51: Idaho Power has not conducted any formal analysis or study to evaluate the response to this rate increase. This response to this Request was prepared by Darlene Nemnich, Senior Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power Company. DATED at Boise, Idaho, this 10th day of October 2008. " BART 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 FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 10 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 10th day of October 2008 I served a true and correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH 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 Industral 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 -l Hand Delivered U.S. Mail Overnight Mail FAX -l Email Weldon.stutzman~puc.idaho.gov -l Hand Delivered U.S. Mail Overnight Mail FAX -l Email Neil.price~puc.idaho.gov Hand Delivered -l U.S. Mail Overnight Mail FAX -l Email peter~richardsonandoleary.com Hand Delivered -l U.S. Mail Overnight Mail FAX -l Email dreadingØlmindspring.com Hand Delivered -l U.S. Mail Overnight Mail FAX -l Email rcb~racinelaw.net elo~racinelaw. net IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 11 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 Libert Street SE, Suite 250 Salem, Oregon 97302 Hand Delivered -l U.S. Mail Overnight Mail FAX -l Email tony~yankel.net Hand Delivered -l U.S. Mail Overnight Mail FAX -l Email mkurt~BKLlawfirm.com kboehm~BKLlawfrm.com Hand Delivered -l U.S. Mail Overnight Mail FAX Email Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email khiggins~energystrat.com Hand Delivered -l U.S. Mail Overnight Mail FAX -l Email cew~givenspursley.com mcc~givenspursley.com Hand Delivered -l U.S. Mail Overnight Mail FAX -l Email dennytemp~yahoo.com IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 12 Department of Energy Lot R. Cooke Arthur Perr 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 2104 Community Action Partnership Association Of Idaho Brad M. Purdy Attorney at Law 2019 North 1ih Street Boise, Idaho 83702 Snake River Allance Ken Miler Snake River Allance P.O. Box 1731 Boise, Idaho 83701 Hand Delivered U.S. Mail -l Overnight Mail FAX -l Email Lot.Cooke~hg.doe.gov Arthur.Bruder~hg.doe.gov Hand Delivered -l U.S. Mail Overnight Mail FAX -l Email detheridge~exeterassociates.com Hand Delivered -l U.S. Mail Overnight Mail FAX -l Email bmpurdy~hotmail.com Hand Delivered -l U.S. Mail Overnight Mail FAX -l Email kmiler~snakeriverallance.org t" IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER -13