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Home My WebLink About20081201IPC to Staff 49.pdfRECEIVE *SIDA~POR~ An IDACORP Company I: 18 DONOVAN E. WALKER Corporate Counsel December 1, 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-08-16 Advanced Metering Infrastructure (''AMI' Technology Dear Ms. Jewell: Enclosed for filing please find an original and three (3) copies of Idaho Power Company's Third Supplemental Response to the Production Requests of the Commission Staff. I would appreciate it if you would return a stamped copy of this letter for Idaho Power's file in the enclosed stamped, self-addressed envelope. r!lV- Donovan E. Walker DEW:csb Enclosures P.O. Box 70 (83707) 1221 W. Idaho St. Boise, ID 83702 DONOVAN E. WALKER, ISB No. 5921 BARTON L. KLINE, ISB No. 1526 Idaho Power Company P.O. Box 70 Boise, Idaho 83707 Telephone: 208-388-5317 Facsimile: 208-338-6936 dwalkert.idahopower.com bkline(Çidahopower.com RECEIVED 10D8 DEC - I PH I: 19 IDAHO PUBLlC 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 ) CASE NO. IPC-E-08-16 OF IDAHO POWER COMPANY FOR A ) CERTIFICATE OF PUBLIC CONVENIENCE ) IDAHO POWER COMPANY'S THIRD AND NECESSITY TO INSTALL ADVANCED ) SUPPLEMENTAL RESPONSE TO METERING INFRASTRUCTURE ("AMI") ) THE PRODUCTION REQUESTS OF TECHNOLOGY THROUGHOUT ITS ) THE COMMISSION STAFF TO IDAHO SERVICE TERRITORY ) POWER COMPANY ) COMES NOW, Idaho Power Company ("Idaho Power" or "the Company"), and in supplemental response to the Commission Staffs Production Requests to Idaho Power Company dated October 28, 2008, and October 31, 2008, herewith submits the following information: IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE PRODUCTION REQUESTS OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1 REQUEST NO. 49: Insofar as it has not been already provided in a response to a prior request, please provide an annual revenue requirement impact of the AMI implementation for each year of the project life. Please include the impact assuming existing meters are depreciated over 3 years, 5 years, 10 years and without accelerated depreciation. SUPPLEMENTAL RESPONSE TO REQUEST NO. 49: To evaluate the impact of the AMI implementation, the Company used a levelized life cycle cost analysis rather than a revenue requirement analysis that would be used in a rate case in order to reduce the complexity of the analysis. A levelized cost analysis is frequently used by the Company for multiple year analyses because it provides for reasonable conclusions based . upon limited assumptions. The levelized cost analysis as performed was provided to Staff in Idaho Power's Response to Staffs Request NO.4. In that analysis, a 3-year accelerated depreciation of the existing meters was assumed. Please see the attached worksheet that summarizes that scenario along with a 5-year acceleration scenario, á 10-year acceleration scenario, and a scenario without acæleration of depreciation. It should be noted that for each of the scenarios requested the benefits stream resulting from a 3-year deployment of AMI remain the same. The cost stream associated with the accelerated depreciation plan is the only change from scenario to scenario. The Company concluded that a 3-year recovery of accelerated depreciation provides adequate cash flow to improve cash flow coverage ratios to levels that are necessary to maintain Idaho Power's credit strength and its ability to access external markets for funding capjtal projects, thus allowing the Company the greatest opportunity IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE PRODUCTION REQUESTS OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2 to fund new AMI equipment with reduced reliance on borrowing. Given the extensive demands on Company capital and the current state of the financial markets, the Company would need to reevaluate deployment at this time if regulatory treatment created additional negative cash flow. This response to this Request was prepared by Courtney Waites, Pricing Analyst, and Greg Said, Director, State Regulation, Idaho Power Company, in consultation with Donovan E. Walker, Corporate Counsel, Idaho Power Company. DATED at Boise, Idaho, this 1 st day of December 2008. DONOVAN E. AL R Attorney for Idaho Power Company IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE PRODUCTION REQUESTS OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 1st day of December 2008 I served a true and correct copy of IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE PRODUCTION REQUESTS OF THE COMMISSION STAFF TO IDAHO POWER COMPANY upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Neil Price, Esq. Deputy Attorney General Idaho Public Utilities Commission 472 West Washington P.O. Box 83720 Boise, Idaho 83720-0074 --Hand Delivered U.S. Mail _ Overnight Mail FAX -- Email neil.priæt.puc.idaho.gov Kroger Co. Michael L. Kurt Kurt J. Boehm BOEHM, KURTZ & LOWRY 36 East Seventh Street, Suite 1510 Cincinnati, Ohio 45202 Hand Delivered -LU.S.Mail _ Overnight Mail FAX .L Email mkurtz(ÇBKLlawfirm.com kboehmt.BKLlawfirm.com Kevin Higgins Energy Strategies, LLC Parkside Towers 215 South State Street, Suite 200 Salt Lake City, Utah 84111 Hand Delivered -LU.S.Mail _ Overnight Mail FAX -- Email khiggins(Çenergystrat.com !J&J~ Donovan E. Walker IDAHO POWER COMPANY'S THIRD SUPPLEMENTAL RESPONSE TO THE PRODUCTION REQUESTS OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 4 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-08-16 IDAHO POWER COMPANY SUPPLEMENTAL RESPONSE TO STAFF'S PRODUCTION REQUEST NO. 49