20090413IPC to Staff 1, 4-15, 17-18, etc.pdf

1SIDA~PO~
An IDACORP Company
BARTON L. KLINE
Lead Counsel
April 10, 2009
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-09-03
LANGLEY GULCH POWER PLANT
Dear Ms. Jewell:
Enclosed for filing please find an original and three (3) copies of the first portion of
Idaho Power Company's responses to the Commission Staffs First Production Request to
Idaho Power Company. Idaho Power Company expects to file its responses to the
remaining requests on Monday, April 13. In addition, enclosed are four (4) copies of adisk
in which electronic files are being produced by Idaho Power in response to Staffs
production requests. Also, enclosed are four (4) copies ofa disk containing confidential
information in response to Staffs production requests. Please note this information should
be handled in accordance with the Protective Agreements in place between the parties.
In addition, 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.
Very truly yours,~I~
Barton L. Kline
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Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, 10 83702
BARTON L. KLINE, ISB #1526
LISA D. NORDSTROM, ISB #5733
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: 208-338-6936
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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 MA TIER OF IDAHO POWER
COMPANY'S APPLICATION FOR A
CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY FOR
THE LANGLEY GULCH POWER PLANT.
)
) CASE NO. IPC-E-09-03
)
) IDAHO POWER COMPANY'S
) RESPONSE TO THE COMMISSION
) STAFF'S FIRST PRODUCTION
) REQUEST TO IDAHO POWER
) COMPANY
COMES NOW, Idaho Power Company ("Idaho Powet' or "the Company"), and in
response to the First Production Request of the Commission Staff to Idaho Power
Company dated March 25, 2009, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 1
REQUEST NO.1: Please provide a copy of load-resource balance data by
month for each of the years 2009-2029 for the following conditions:
Energy analysis 50% water, 50% load
Energy analysis 70% water, 70% load
Energy analysis 90% water, 70% load
Peak hour analysis 50% water, 50% load
Peak hour analysis 70% water, 70% load
Peak hour analysis 90% water, 70% load
Please provide the data under two scenarios: a) without the addition of the
Langley Gulch plant or any other new resources, and b) with the addition of the Langley
Gulch plant. Please provide the data in an Excel format, both graphical and numericaL.
RESPONSE TO REQUEST NO.1: The requested information is provided in
Excel format on the enclosed CD.
The response to this Request was prepared by Phil DeVol, Planning Analyst, and
Karl Boke nkamp, General Manager Power Supply Operations and Planning, Idaho
Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power
Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 2
REQUEST NO.4: Please identify the possible "new large loads" locating within
the Company's service territory that prompted the Company to revise its resource
requirements. Bokenkamp Direct, p. 5, lines 3-4,7-11.
RESPONSE TO REQUEST NO.4: At the time the RFP was issued, there were
a number of new customers with large electrical loads considering locating within the
Company's service territory and, in at least one instance, an expected customer was
considering an expansion that would signifcantly increasing their electrical load.
Prior to issuing the RFP, advanced discussions were occurring between Idaho
Power and Southeast Idaho Energy LLC ("SIE") regarding providing electrical service to
their proposed facility. Phase i of SIE's proposed facility was expected to add
approximately 150 MW of load to Idaho Power's system by June 2012. Phase II of the
facility, if developed as anticipated, would add an additional 220 MW of load to Idaho
Power's system.
In addition to Idaho Power's discussions with SIE, Hoku Scientific inquired about
the possibility of increasing their loads to 100 aMW by 2011. Although the discussions
with Hoku were not at an advanced stage prior to issuance of the RFP, they were an
expected customer. Between just Hoku and SIE, Idaho Power had indications of over
400 MW of new load potentially being added to Idaho Power's system. These potential
new loads, coupled with the fact that Idaho Power had not finalized contracts for the
amount of geothermal generation anticipated in the 2006 Geothermal RFP, and the
anticipated shift in timing of the Bureau of Reclamation's releases of flow augmentation
water were significant factors in the Company's decision to increase the RFP quantity
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 3
from 250 MW (the resource size listed in the 2006 IRP) to approximately 300 MW, and
to accelerate the timing from 2013 to 2012.
The response to this Request was prepared by Karl Bokenkamp,General
Manager Power Supply Operations and Planning, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 4
REQUEST NO.5: Please indicate whether the "anticipated shift in flow
augmentation releases with water from the federal dams on the Snake River above
Brownlee" have been formalized. Bokenkamp Direct, p. 5, lines 4-6.
RESPONSE TO REQUEST NO.5: The anticipated shift in flow augmentation
releases with water from the federal dams on the Snake River above Brownlee has
been formalized, at least from NOAA's perspective as outlined in their Biological
Opinion dated May 5, 2008, which drives the Bureau of Reclamation's operations. A
copy of pertinent sections of NOAA's Biological Opinion is attached for reference and
can be found in its entirety at http://ww.nwr.noaa.gov/Salmon-Hydropower/Columbia-
Snake-Basin/final-BOs.cfm. Although NOAA's Biological Opinion may be challenged
and the Bureau of Reclamation's implementation of NOAA's Biological Opinion may be
subject to change, based on Idaho Power's discussions with the Bureau of Reclamation
and the attached memo from the Bureau of Reclamation to the Governor, the Bureau
intends to shift its flow augmentation releases from Milner and the Boise basin from July
and August to May and June. This shift in flow augmentation has been incorporated in
Idaho Power's streamflow forecasts, Operating Plans, and the 2009 Integrated
Resource Plan.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, and Jon Bowling, Engineering
Leader, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 5
REQUEST NO.6: Please indicate whether any changes in load projections
since the selection of Langley Gulch have accelerated or deferred the online date need
for the resource.
RESPONSE TO REQUEST NO.6: Since the selection of the Langley Gulch
project there have been no changes to the Company's load projections that have either
accelerated or deferred the on-line date need for this resource.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, and Barr Smith, Planning Analyst,
Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power
Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 6
REQUEST NO.7: Please provide a list of representatives of potential bidders
who attended the pre-bid meeting on May 8, 2008.
RESPONSE TO REQUEST NO.7: A copy of the pre-bid meeting sign-in sheet
is included on the enclosed CD.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 7
REQUEST NO.8: Please provide a copy of all "Notice of Intent to Bid" forms
completed and submitted to Idaho Power by interested bidders in the May 2008 RFP
process.
RESPONSE TO REQUEST NO.8: The requested information is confidentiaL.
Notwithstanding the foregoing, Idaho Power is willng to make the requested information
available for review by persons covered by the Protective Agreement in place for this
proceeding. Review wil take place at the offces of Idaho Power Company. Please
contact Doug Jones (388-2615) or Cathy Culp (388-2637) to make an appointment to
review this information.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 8
REQUEST NO.9: Please provide a copy of any evaluations, recommendations,
or other correspondence from the independent consultant related to the 2012 Baseload
RFP, the RFP evaluation criteria or the review and evaluation of bids.
RESPONSE TO REQUEST NO.9: The requested information is voluminous,
confidential, and may be subject to both attorney-client and accountant-client privilege.
Notwithstanding the foregoing, Idaho Power is willng to make the requested information
available for review by persons covered by the Protective Agreement in place for this
proceeding. Review wil take place at the offces of Idaho Power Company. Please
contact Doug Jones (388-2615) or Cathy Culp (388-2637) to make an appointment to
review this information.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 9
REQUEST NO. 10: Please provide copies of all bids received in response to the
2012 Baseload RFP.
RESPONSE TO REQUEST NO. 10: The requested information is voluminous,
confidential, and may be subject to both attorney-client and accountant-client privilege.
Notwithstanding the foregoing, Idaho Power is willng to make the requested information
available for review by persons covered by the Protective Agreement in place for this
proceeding. Review wil take place at the offces of Idaho Power Company. Please
contact Doug Jones (388-2615) or Cathy Culp (388-2637) to make an appointment to
review this information.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 10
REQUEST NO. 11: Please provide a copy or complete description of all criteria
used to evaluate bids received in the RFP, including the Evaluation ManuaL.
RESPONSE TO REQUEST NO. 11: The requested information is voluminous,
confidential, and may be subject to both attorney-client and accountant-client privilege.
Notwithstanding the foregoing, Idaho Power is willng to make the requested information
available for review by persons covered by the Protective Agreement in place for this
proceeding. Review wil take place at the offces of Idaho Power Company. Please
contact Doug Jones (388-2615) or Cathy Culp (388-2637) to make an appointment to
review this information.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 11
REQUEST NO. 12: Is the Evaluation Manual used to evaluate bids for this RFP,
including the breakdown between the number of points for price and non-price factors,
any different than was used to evaluate bids for the Bennett Mountain project or the
Danskin 1 project? If so, please explain the differences. Are the non-price factors
considered in the evaluation any different than those considered in the Bennett
Mountain or Danskin 1 RFPs? If so, please explain the differences.
RESPONSE TO REQUEST NO. 12: The Evaluation Manual used to evaluate
bids for this RFP is different in a number of respects from the Evaluation Manuals used
to evaluate bids for the Bennett Mountain Project or the Evander Andrews Unit #1
Project (a/kla Danskin). The principle differences between the Evaluation Manual used
to evaluate bids in this RFP as compared to the previously mentioned RFPs is the
degree of specificity relating the weighting of values; Le., points, to be assigned to both
price and non-price factors. At the conclusion of the Evander Andrews Unit #1 RFP,
Staff and others suggested in testimony that in the next RFP conducted by the
Company the criteria to be used in evaluating both price and non-price be more
transparent and provide additional guidance to the bidders as to how the Company
would evaluate and score the proposals as submitted. Both the RFP documents
distributed to bidders and the Evaluation Manual used to evaluate bids in this RFP
contained substantially more detail on how Idaho Power would assign points for price
and non-price factors. As a result, potential bidders in this RFP had better information
regarding what Idaho Power considered to be important in evaluating the bids and how
bids would be scored. Copies of the specific pages from the evaluation manual
addressing price and non-price factors and the bid evaluation manuals for the Bennett
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 12
Mountain Project, the Evander Andrews Unit # 1 Project and the Evaluation Manual
used in this RFP are available for review by persons covered by the Protective
Agreement in place in this proceeding. Review wil be at the offces of Idaho Power
Company. To make arrangements to review please contact Doug Jones (388-2615) or
Cathy Culp (388-2637) to make an appointment to review this information.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY -13
REQUEST NO. 13: Please provide copies of all analysis conducted by the
Company in evaluating RFP bids.
RESPONSE TO REQUEST NO. 13: The requested information is voluminous,
confidential, and may be subject to both attorney-client and accountant-client privilege.
Notwithstanding the foregoing, Idaho Power is wiling to make the requested information
available for review by persons covered by the Protective Agreement in place for this
proceeding. Review wil take place at the offces of Idaho Power Company. Please
contact Doug Jones (388-2615) or Cathy Culp (388-2637) to make an appointment to
review this information.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 14
REQUEST NO. 14: Please provide a summary of the price (including separately
the capital cost, transmission and interconnection costs, and plant operating costs) and
non-price scores awarded to each of the bids, both in the initial screening and in the
evaluation of short-listed bids.
RESPONSE TO REQUEST NO. 14: The requested information is confidential
and may be subject to both attorney-client and accountant-client privilege.
Notwithstanding the foregoing, Idaho Power is wiling to make the requested information
available for review by persons covered by the Protective Agreement in place for this
proceeding. Review wil take place at the offces of Idaho Power Company. Please
contact Doug Jones (388-2615) or Cathy Culp (388-2637) to make an appointment to
review this information.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 15
REQUEST NO. 15: Please provide analysis demonstrating that the Langley
Gulch project was the preferred alternative for meeting Idaho Power's needs.
RESPONSE TO REQUEST NO. 15: Mr. Bokenkamp describes on pages 9
through 14 of his testimony how the Company analyzed the various bids and based on
that analysis concluded that the Langley Gulch project was the preferred alternative.
The responses to Staffs Requests Nos. 13, 14,28, 30, 31, 35, 37 and 50 contain the
detailed bid and cost analyses the Company used to support its decision to select the
Langley Gulch project.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 16
REQUEST NO. 17: Please indicate those bids eliminated in the "short listing"
that occurred during November 2008. Please state the reasons why each bid was
eliminated.
RESPONSE TO REQUEST NO. 17: The Respondents to the Company's RFP
were labeled as A, B, C, D, and E. Some of the Respondents to the RFP provided
multiple proposals within their bid packages.
The eliminated proposals were A, all 3 of the C proposals, and 3 of the 6 E
proposals. Respondent A's proposal was eliminated for not meeting the requirement to
delivery energy and capacity to Idaho Power's system. The other proposals were
eliminated following the Stage 2 screening process. The Stage 2 screening process is
used to eliminate bids that are substantially more expensive than other bids and that do
not furnish suffcient information to allow further analysis and consideration in a limited
time period. The detail supporting the Company's Stage 2 screening decision is part of
the information that is available in the discovery room. See the Response to Staffs
Request No. 11.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 17
REQUEST NO. 18: Please provide, in a numerical format by year, a copy of any
firm wholesale electric and natural gas price forecasts used in any of the analysis of
bids received in the 2012 Baseload RFP.
RESPONSE TO REQUEST NO. 18: A copy of Addendum 2 to the 2012
Baseload Generation RFP, and subsequent update published on the Company's RFP
website, is included on the enclosed CD.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY -18
REQUEST NO. 22: Was Idaho Power or any of its employees contacted by any
entities desiring to submit turnkey or build-and-transfer bids? If so, how many entities
made such contacts? Please provide all related correspondence or memoranda.
RESPONSE TO REQUEST NO. 22: In the request for proposal documents
distributed by the Company in the spring of 2008 to initiate the RFP, the Company
advised all potential participants that the RFP did not include build and transfer
proposals. At the pre-bid meeting, one participant asked why the Company was not
accepting build and transfer proposals. The Company explained the need to expedite
the project precluded the Company's development of the detailed design specifications
that would allow build and transfer bids as an option in the RFP.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY -19
REQUEST NO. 24: Referring to page 8, lines 10-16 of Karl Bokenkamp's direct
testimony, how much time does Idaho Power believe it would have needed to prepare a
detailed design specification had it decided to consider build-and-transfer options in the
2012 Baseload RFP?
RESPONSE TO REQUEST NO. 24: Idaho Power estimates that it would have
taken somewhere between four and six months to prepare a detailed design
specification with suffcient detail to eliminate a number of the complications and
subjectivity discussed in the Response to Staffs Request No. 23.
Idaho Power anticipates it would have retained an experienced design engineer
to prepare the design specification. The four to six month estimate includes time for
Idaho Power to select the design engineer, time for the design engineer to produce the
initial draft of the specification, time for Idaho Power to review and comment on the draft
specification, and time for the design engineer to finalize the specification prior to
releasing it for use in the RFP.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 20
REQUEST NO. 27: Please describe the selection process for engaging an
independent third-part to review the Company's RFP and bid evaluation process.
RESPONSE TO REQUEST NO. 27: Prior to the issuance of the August 4, 2000,
RFP for the Company's first gas-fired large-scale generation project, the Company
contracted with R. W. Beck, a Seattle-based international consulting firm for assistance
developing the 2000 RFP process. Mr. Steven Stein, Principal and Executive
Consultant, R. W. Beck, was instrumental in the development of the bid solicitation and
evaluation process for the 2000 RFP. As a result, Mr. Stein was retained to provide
independent review of the 2005 RFP that resulted in the development of the Bennett
Mountain Power Plant, authorized through Commission Order No. 29410. Because of
the Company's experience with Mr. Steven Stein and R. W. Beck, and R. W. Beck's
knowledge, experience and familiarity with our Company's past RFP processes and
RFP processes in general, Mr. Stein was again retained to provide consultation and
independent review of the 2008 RFP process that resulted in the selection of the
Langley Gulch power project. Please see Exhibit 4 to Karl Bokenkamp's direct
testimony for additional detail about R. W. Beck and the resume of Mr. Steven Stein.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 21
REQUEST NO. 28: Please explain how Idaho Power compared power purchase
agreement (PPA) and tollng agreement (TA) proposals to the Company's self-build
proposal. Describe in detail any consideration that was given to advantages and
disadvantages of financing, project operational control, project ownership, risk,
ratemaking treatment, cash flow, actual vs. imputed debt, and other factors that
distinguish a utilty-owned asset from a PPA or TA.
RESPONSE TO REQUEST NO. 28: The Company employed the procedures as
defined in both the RFP and the Evaluation Manual to value price and non-price factors.
The non-price factors, which allow the Company to evaluate risk in the absence of cost
information, were published in the Company's RFP, and include:
NON-PRICE CRITERIA
a. Project Development
. b. Project Characteristics
c. Product Characteristics
d. Project Locations
e. Environmental
f. Credit Factors and Financial Strength
Additionally, price was scored from a ratemaking standpoint. The rate impact to
the Company's customers, from each of the projects, whether Company-owned and
built, Power Purchase Agreement ("PA") , or Tollng Agreement ('TA") , was evaluated
and scored.
The development of price scores involved an evaluation of the Company's total
revenue requirements among the various Proposals versus the Benchmark Resource
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 22
as identified in the RFP. The methodology used in the analysis was similar to that used
in the Idaho Power IRP. Total revenue requirements included total system costs and
the fixed and variable costs of the generation proposal(s), transmission upgrade costs,
and interconnection costs.
Alternatives were evaluated on the basis of the net present value of the total
revenue requirements over the study period (20 years). The proposals were ranked
according to total weighted scores.
The objective of the scoring and ranking system was not to provide a precise
indication of the potential value of the proposals, but rather to provide a good relative
comparison of the proposals to each other.
The advantages and disadvantages of financing and project operational control
were considered in the non-price criteria. Project ownership, to the extent it translated
into product flexibility, was considered in the non-price criteria. Risk was considered
qualitatively and was balanced against the 20-year net present value of the difference in
revenue requirements between the short-listed projects. Cash flow was not directly
considered in the evaluation; however, it did contribute to the calculation of AFUDC
costs which were included in the revenue requirement calculations for the Benchmark
Resource. Actual and imputed debt was not directly considered in this evaluation
process - it was not used in calculating the ATA's or PPA's revenue requirements.
However, the cost of imputed debt was discussed by the RFP team. The RFP team
concluded that imputed debt costs would not be considered in the evaluation unless it
was expected to be a differentiating factor between the proposals. At the conclusion of
the process, the cost differential was suffcient that imputed debt was not an issue.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 23
Idaho Power has retained the data and analysis as described in the above
response and is willng to make the requested information available for Commission
Staff review at the offces of Idaho Power Company. The requested information is
voluminous, confidential, and may be subject to both attorney-client and accountant-
client privilege. Notwithstanding the foregoing, Idaho Power is wiling to make the
requested information available for review by persons covered by the Protective
Agreement in place for this proceeding. Review wil take place at the offces of Idaho
Power Company. Please contact Doug Jones (388-2615) or Cathy Culp (388-2637) to
make an appointment to review this information.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, and Karl Bokenkamp, General Manager Power Supply
Operations and Planning, Idaho Power Company, in consultation with Barton L. Kline,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 24
REQUEST NO. 29: Please identify the members of Idaho Power's RFP
evaluation team.
RESPONSE TO REQUEST NO. 29: Please see the slide from the Pre-bid
Meeting Presentation which is included on the enclosed CD.
The response to this Request was prepared by Celeste Schwendiman, Senior
Pricing & Regulatory Analyst, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 25
REQUEST NO. 40: Has Idaho Power negotiated any agreements for the
purchase of natural gas fuel supplies for the Langley Gulch plant? If so, please provide
a copy of all such agreements.
RESPONSE TO REQUEST NO. 40: Idaho Power has not negotiated any
agreements for the purchase of natural gas fuel supplies for the Langley Gulch plant.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 26
REQUEST NO. 45: If the Langley Gulch project site can be expanded in the
future, please identify any costs of the Langley Gulch project that wil be incurred solely
to enable additional capacity should it eventually be built at the Langley Gulch site, e.g.,
permitting, land acquisition, pipelines, pipeline capacity, fuel handling or storage,
transmission, substations, interconnection, maintenance buildings or equipment, roads,
site improvements, etc.?
RESPONSE TO REQUEST NO. 45: The Langley Gulch project site could be
expanded in the future; however, no provisions are being made and no costs are being
incurred to the facility to accommodate a future expansion. Any expansion would likely
be built on the construction lay-down area for the plant which is approximately six acres
adjacent to the proposed plant.
The response to this Request was prepared by Vern Porter, General Manager,
Power Production, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 27
REQUEST NO. 48: Please describe and provide support for any assumptions
made with regard to air quality attainment issues and/or operating restrictions for any of
the project sites proposed by bidders. Please provide copies of any studies done to
evaluate air quality at any proposed project sites.
RESPONSE TO REQUEST NO. 48: All of the projects on the short list were
assumed to be capable of compliance with air quality requirements and air quality
attainment was not an issue in the final selection.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 28
REQUEST NO. 53: Please discuss any demand-side management (DSM)
alternatives considered as a means of minimizing or replacing the need for new
generation from the Langley Gulch plant. What actions has Idaho Power taken to
attempt to identify, quantify and price DSM alternatives?
RESPONSE TO REQUEST NO. 53: The need for a baseload resource was
identified in both the 2004 Integrated Resource Plan ("IRP") and the 2006 IRP. In both
of these IRPs, the analysis of cost-effective Demand-Side Management ("DSM")
alternative resources was incorporated in both the existing load forecast and the new
resource assessment. Please see response to Staffs Request No. 54 for details of
existing programs and the IRP process used to incorporate the effects of energy
effciency and demand response on existing and future resource requirements.
In order to identify and quantify DSM alternatives, the Company relies on third-
part consultants to provide potential studies to identify DSM potentiaL. In 2004, Idaho
Power contracted with Quantum Consulting to produce the Demand-Side Management
Potential Study. Idaho Power utilized the results of this study to help identify the DSM
resource potential for the 2004 and 2006 IRPs. In 2008 Idaho Power contracted with
Nexant Consulting to produce DSM Potential Study. Preliminary results and computer
models provided by Nexant are being used to identify new DSM potential for the 2009
IRP.
As part of the process of identifying price alternatives, Idaho Power follows the
cost-effectiveness methodology as described in the DSM Annual Report and the
Company's IRP. The most current description of this methodology can be found in the
2008 DSM Annual Report on page 11 and in the 2006 IRP Technical Appendix D on
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 29
pages 62-73. The Company is able to calculate the value of the energy savings
attributed to DSM program by using end-use load shapes in conjunction with the five
DSM alternative cost pricing periods described in the Technical Appendix of each IRP.
The DSM alternative energy costs are published in the Technical Appendix of each IRP.
For each pricing period, these costs are based on either projected fuel costs of a
peaking unit or forward market prices as determined by Idaho Power's power supply
model, AURORAm~ Electric Market ModeL. The avoided capital cost is based on a
gas-fired simple-cycle turbine.
The response to this Request was prepared by Peter Pengily, Customer
Research and Analysis Leader, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 30
REQUEST NO. 54: Please provide complete program descriptions of Idaho
Power's DSM programs. Discuss the status of these programs including participation
levels, funding commitments and future expansion plans. Describe how these
programs reduce any of the load that would otherwise have to be satisfied using the
proposed Langley Gulch plant.
RESPONSE TO REQUEST NO. 54: Annually, on or before March 15, Idaho
Power submits to the Idaho Public Utilities Commission ("I PUC") the Demand-Side
Management Report in conformance with IPUC Order No. 29419. The Demand-Side
Management 2008 Report was filed on March 13,2009. This report provides an annual
review of the financial and operation performance of Idaho Power's DSM activities and
initiatives. The DSM annual report is available for review on the Commissions website.
Additionally, in Appendix 4 the Company provides historical information on the
expenses and performance of all DSM programs and initiatives. Throughout the
document, the Company provides information on the plans for the upcoming year,
specifically this information is contained in each program description under a section
titled 2009 Strategies.
For long-term planning of Energy Effciency and Demand Response programs
the Company relies of the Integrated Resource Planning ("IRP") process. Idaho
Power's DSM programs are typically selected for implementation through the biennial
IRP.
Idaho Power's DSM programs, along with statutory building effciency code
changes, are captured in the in the IRP process through decrementing energy in the
final sales and load forecast. Effciency impacts on energy and peak are subtracted
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 31
from the initial load forecast (which initially excludes the impact of incremental DSM).
Peak demand impacts from demand response and coincident impacts from energy
effciency programs reduce the initial peak forecast. The final load forecast (adjusted
downward for DSM and code) is used in all studies and analysis associated with the
IRP. DSM energy and peak demand contributions are typically measured at the point of
delivery (customers' meters). In order to make the numbers comparable to supply-side
resources, which are typically measured at the point of generation, the DSM numbers,
prior to reducing the initial forecast, are increased by the amount of energy lost in
transmission from the generation source to the customers' points of use. Energy and
demand reduction from new DSM programs identified for an IRP process are treated as
new resources and are incorporated into the deficiency analysis.
In June 2008, as part of the requirements of IPUC Order No. 30317, Idaho Power
filed the 2008 Integrated Resource Plan Update. In Section 4, Demand-Side
Management, pages 17-2, of this report, the Company provided information on DSM
program performance, future performance, and energy and demand load forecasts.
Idaho Power plans to pursue all cost-effective demand-side resources. The
Company wil accomplish this by continuing to expand existing programs and implement
new programs as they are identified. This objective will be accomplished with input and
consultation with its Energy Effciency Advisory Group and participation in regional
energy effciency organizations.
Idaho Power has a strong financial commitment in achieving all cost-effective
energy effciency and demand response potentiaL. The Company primarily uses the
Energy Effciency Rider ("Rider") to fund DSM programs, and in April 2008 the Idaho
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 32
Rider liability account went contra, meaning that more funds had been expended on
activities than funded. On March 13, 2009, Idaho Power filed Case No. IPC-E-09-05
with the IPUC to increase the Idaho Rider from 2.5 percent of base rate revenues to
4.75 percent. The increase is intended to fund new and expanded energy effciency
and demand response programs as well as address the contra balance in the Rider
account.
As indicated in the 2008 update to the 2006 IRP, even with all of the DSM
programs operating satisfactorily, a resource like the Langley Gulch project is needed to
provide reliable service to customers.
The response to this Request was prepared by Peter Pengily, Customer
Research and Analysis Leader, and Karl Bokenkamp, General Manager Power Supply
Operations and Planning, Idaho Power Company, in consultation with Barton L. Kline,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 33
REQUEST NO. 55: Has Idaho Power considered any additional load
management programs, rate designs or other strategies that could reduce the
Company's peak load during those months and hours when the Langley Gulch plant is
expected to operate? If so, does the Company have any specific plans to introduce
such programs? Please provide copies of any reports, studies or analysis of any load
management programs considered.
RESPONSE TO REQUEST NO. 55: Idaho Power offers two distinct types of
load management programs. Energy Effciency Programs primarily target energy
savings and Demand Response programs which target peak savings. The goal of
demand response programs is to defer the need for peaking resources and
consequently that is how their value is determined. Since the need for a baseload
resource was identified in both the 2004 Integrated Resource Plan ("IRP") and the 2006
IRP, the energy effciency savings and the demand reduction attributable to DSM
programs was incorporated in the analysis associated with the 2004 and 2006 IRP
planning process.
Idaho Power is continually researching potential energy effciency and demand
response programs. The Company does this through participation in organizations
such as the Northwest Power and Conservation Council, the Regional Technical Forum
("RTF"), Northwest Energy Effciency Allance ("NEEA"), ESource, Bonnevile Power
Administration (liB PA") , Edison Electrical Institute, Energy Insights, and in consultation
with other utilities.
Idaho Power plans to continue to increase participation and energy savings from
existing programs and continue to implement new energy effciency and demand
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 34
response programs. In 2009, Idaho Power plans to expand its efforts in energy
effciency by continuing the Attic Insulation Pilot under the new name Home
Improvement Program, continuing the Home Weatherization Pilot under the new name
Weatherization Solutions for Eligible Customers program, and implementing a
refrigerator recycling program. Idaho Power wil expand the Irrigation Peak Rewards
program to add an option of a dispatchable demand response program, which wil
greatly increase the demand reduction potential from this program. Idaho Power
currently has a filing with the IPUC, Case No. I PC-E-09-02 , which, if approved, would
enable the Company to offer a demand response program to its commercial and
industrial customers through a third-part demand response aggregator.
Idaho Power has been transitioning from traditional flat rate designs towards
more time differentiated pricing for a number of years. Ultimately, with the deployment
of both capable meters and back offce systems, the company envisions widespread
use of dynamic pricing across the system. Since 2005, Idaho Power has operated a
successful Critical Peak Pricing program in the Emmett Valley with customers who
piloted our Advanced Metering Infrastructure ("AMI") system. In the 2008 General Rate
Case, Idaho Power stated as its primary goal in designing customer rates, liThe
Company is committed to providing customers cost-based price signals which
encourage the wise and effcient use of energy." To implement this goal, Idaho Power
proposed and the IPUC approved, inclining block rates for residential and small
commercial customers, mandatory time-of-use rates for large general and large power
customers and load-factor pricing for irrigation customers. All of these rate designs
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 35
send cost-based price signals to our customers and provide specific opportunities for
customers to benefit through energy effciency activities.
Idaho Power continues to work with Dr. Ahmad Faruqui, a nationally recognized
expert in the field of dynamic rate design. In 2008, Idaho Power commissioned Dr.
Faruqui to develop a white paper entitled Transitioning to Innovative Rates at Idaho
Power: Pathways to the Future, which is considered to be confidential and provided
pursuant to the terms of the Protective Agreement in place between the parties. With
the implementation of the Advanced Metering Infrastructure system, which is in its first
year of a three-year system wide roll out, and with the implementation billng systems to
manage the AMI data, Idaho Power's intent is to offer additional programs for customers
in all rate classes in the area of dynamic pricing.
The Company's March 13, 2009, Demand-Side Management 2008 Report
provides greater detail on the above-described programs. The report is available for
review on the Commissions website.
The response to this Request was prepared by Peter Pengily, Customer
Research and Analysis Leader, and Michael Youngblood, Manager Rate Design, Idaho
Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power
Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 36
REQUEST NO. 56: Has the Company implemented all of the DSM programs
that have been identified as cost-effective in previous IRPs or studies of DSM potential?
If not, please list and describe each of the programs that have not been implemented
and explain why they have yet to be implemented. What are the potential energy and
capacity savings estimates associated with each of these programs?
RESPONSE TO REQUEST NO. 56: Idaho Power currently offers fourteen
energy effciency programs and two demand response programs in Idaho. Of these
energy effciency programs, four were identified in the 2004 IRP: Building Effciency,
Industrial Effciency, Irrigation Effciency Rewards, and ENERGY STAR~ Homes
Northwest. The demand response programs were also identified in the 2004 IRP: AlC
Cool Credit and Irrigation Peak Rewards. Seven other energy effciency programs are a
result of the 2006 IRP: Easy Upgrades, Holiday Lighting Program, Energy Effcient
Lighting, Heating and Cooling Effciency, Home Products, Attic Insulation Pilot, Home
Weatherization Pilot, and expansion of the Industrial Effciency program, which was
renamed Custom Effciency. Three energy effciency programs predate the 2004 IRP:
Energy House Calls, Rebate Advantage, and Weatherization Assistance for Qualified
Customers. Additionally, Idaho Power offers Local Energy Effciency Funds, which
provide funding for cost-effective demonstration projects which cannot be incented
under programs.
In both the 2004 and 2006 IRP, potential savings were identified by sector,
whether they were from existing (retrofit) or new construction, and as either energy
effciency or demand response. In the 2004 IRP, six potential energy effciency
groupings were identified, of which four were implemented, as well as the two identified
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 37
demand response programs, were implemented. Between 2004 and 2006, the
"Commercial Effciency - Existing" and the "Residential Effciency - Existing" were not
implemented. The Company believed that these two programs could not be practically
implemented in the original time frame. Additionally, the Company believed that
programs, which achieved lost opportunity savings, had a higher priority than retrofit
programs. Although these programs were not implemented prior to 2006, for the 2006
IRP the energy potential was rebased and potential savings were identified for
Residential Retrofit, Commercial Retrofit, and Industrial Expansion. Programs to
address these potential savings have been implemented.
Overall, Idaho Power has exceeded the energy effciency potential identified in
the 2004 and 2006 IRPs. Estimated cumulative energy savings was 174 percent of
cumulative IRP targets from 2005 to 2008 (See table below).
2004/2006 IRP DSM Resources Penormance 2005-2008
MWh includin line losses
IRP Source 2004
Class
Irrigation
Industrial
Commercial
Residential
Total
Tar et
23,067
37,706
2,810
5,784
69,367
%of
Tar et
202%
197%
170%
105%
174%
Refer to Response to Staffs Request No. 53 for information on Idaho Power's
method of utilizing potential studies in IRP planning.
The response to this Request was prepared by Peter Pengily, Customer
Research and Analysis Leader, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 38
REQUEST NO. 59: Please provide a complete description of any actual or
proposed energy or capacity sales to any other parties from the Langley Gulch plant. If
no sales agreements have yet been made, does Idaho Power expect to make them in
the future?
RESPONSE TO REQUEST NO. 59: Idaho Power has not entered into any
energy or capacity sales to any other parties from the Langley Gulch plant. Although
Idaho Power has not entered into any energy or capacity sales agreements specifically
tied to the Langley Gulch project, the Company does expect there wil be times when
Langley Gulch output wil not be necessary to support Idaho Power's loads. During
these periods, if power prices are such that Langley Gulch can be profitable dispatched
and its output sold into the market, Idaho Power would operate Langley Gulch and
make surplus sales from an undesignated resource - which might not be Langley
Gulch. By keeping Langley Gulch on-line whenever it is economically justified, system
reliability and our ability to integrate wind generation wil be improved.
Any longer-term firm sales agreements would likely be limited to months in which
Idaho Power's system was suffciently surplus
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 39
REQUEST NO. 61: Please discuss any plans Idaho Power has to issue
additional RFPs in the next five years. What would be the timing of the RFPs and what
type and size of resource would the Company be seeking?
RESPONSE TO REQUEST NO. 61: At present, Idaho Power has two supply-
side resource RFPs that it intends to release in the near future. These RFPs are for
power purchase agreements ("PPAs") for the delivery of physical firm capacity and
energy to the east side of Idaho Power's system during heavy load hours of July and
August. The first RFP, as currently drafted, is for up to 83 MW/hr delivered to the
Jefferson substation during heavy load hours of July and August in 2012 and 2013. The
second RFP, as currently drafted, is for up to 75 MW/hr delivered to a number of Points
of Delivery east of Idaho Powets Brownlee 230 kV substation. The term for the second
RFP is July 1 - August 31 of 2009 through 2013. Terms and conditions of agreements
for the desired product wil be in accordance with the Western Systems Power Pool
Agreement, Service Schedule C, Firm Energy and/or Capacity.
The capacity and energy that Idaho Power anticipates acquiring via these RFPs
wil help to meet projected summer capacity and energy deficits until the Langley Gulch
and Boardman to Hemingway projects are completed.
In addition to the above RFPs, it is possible that Idaho Power wil issue an RFP
for additional wind generation to be on-line in 2012, as contemplated in the 2006 IRP.
Several of the portolios under consideration in the 2009 IRP add an additional 100 MW
of wind generation in 2012. Whether or not Idaho Power issues an RFP for additional
wind generation wil, at least in part, depend on the level of PURPA wind project
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 40
development. Idaho Power questions whether all of the PURPA wind projects currently
under contract to Idaho Power wil be built.
Regarding RFPs for geothermal powered generation, Idaho Power continues to
actively pursue PPAs from geothermal projects via on-going negotiations with individual
project developers. Unfortunately, Idaho Power was disappointed with the response to
its 2008 Geothermal RFP and the Company did not add any geothermal generation
resources as a result of this RFP. Idaho Power wil continue to look for opportunities to
add cost-effective geothermal powered generation resources to its resource portolio.
At present, Idaho Power does not have plans to issue any geothermal RFPs in the next
5 years; however, we do have resource portolios under consideration in the 2009 IRP
with 13 MW of geothermal coming on-line in 2013 and another 13 MW coming on-line in
2016. If Idaho Power is unable to secure additional geothermal generation as a result
of on-going negotiations, the Company may consider issuing another geothermal RFP.
Regarding RFPs for CHP generation resources, there are several resource
portolios under consideration in the 2009 IRP that include 10 MW of CHP to be on-line .
in 2010. Given the recent change in the published avoided cost rates, it is possible that
CHP projects wil be developed through PURPA. At present, Idaho Power is not
planning to issue an RFP for CHP generation resources; however, the Company may
consider issuing an RFP for CHP at a later date. The 13 MW of geothermal and 10 MW
of CHP being considered in the 2009 IRP are conservative estimates of the actual
amounts Idaho Power may acquire. Idaho Power recognizes the benefits of geothermal
and CHP resources and may acquire greater amounts if cost effective opportunities
become available.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 41
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 42
REQUEST NO. 62: Please provide an update on the status of the 2006
geothermal RFP.
RESPONSE TO REQUEST NO. 62: The successful bidder identified in the 2006
geothermal RFP, U.S. Geothermal, was announced on March 20, 2007. Idaho Power
intended to enter into Power Purchase Agreements ("PPAs") for 45.5 MW of geothermal
generation - roughly equivalent to the 50 MW of geothermal generation planned to be
on-line in 2009, listed in the 2006 IRP. The 45.5 MW of geothermal generation was to
be provided from Raft River Unit NO.1, Raft River Unit No.3, Neal Hot Springs Unit No.
1, and Neal Hot Springs Unit NO.2. The contract for Raft River Unit No. 1 was signed
on September 24, 2007. Due to a number of financial and development related issues,
Idaho Power and U.S. Geothermal have not entered into any subsequent contract. We
have terminated negotiations related to the 2006 Geothermal RFP - the 2006
Geothermal RFP has been concluded and the only PPA entered into as result of the
RFP is for the output of Raft River unit NO.1.
Idaho Power and U.S. Geothermal continue to discuss entering into a PPA for
the output of Neal Hot Springs.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, Idaho Power Company, in
consultation with Barton L. Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 43
REQUEST NO. 64: Please describe how construction of the Langley Gulch plant
wil be financed. Include a summary of the payment schedule Idaho Power wil follow.
Also include an estimate of AFUDC. Please provide copies of any financing
agreements.
RESPONSE TO REQUEST NO. 64: As Idaho Power witness Lori Smith stated
in her testimony, it is the Company's desire to utilize traditional utility debt-and-equity
financing to construct the Langley Gulch project. This is the financing model the
Company assumed when it developed its Commitment Estimate. It is the Company's
belief that if it can utilize traditional utility debt and equity financing, it can retain the
considerable savings Mr. Bokenkamp described in his testimony and Mr. Gale
described in his testimony presenting the Commitment Estimate. If financing other than
traditional utility financing is used, the Company believes it wil be more expensive and
the Company would be required to revise its Commitment Estimate to reflect that
greater cost.
As Ms. Smith noted in her testimony, there is substantial uncertainty underlying
today's credit and financial markets. Idaho Power has not undertaken any detailed
analysis to quantify the additional financing costs it would incur if it is forced to finance
Langley Gulch without being able to utilize traditional debt and equity financing. Idaho
Power has not entered into any alternative financing agreements and therefore has not
developed a financing payment schedule based on non-traditional financing schemes.
The AFUDC amounts that were used to develop the Commitment estimate are included
on the enclosed CD.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 44
Payment schedules for the construction of the gas turbine, steam turbine, and
overall construction of the Langley Gulch plant are not available at this time because
contract terms have not been finalized. Idaho Power estimated monthly cash
construction expenditures for the power plant portion of the project for purposes of
projecting AFUDC. A schedule that summarizes the monthly estimated cash flow and
AFUDC calculations for the plant is provided in the attached file.
Per the guidance received in IPUC order 29904, Idaho Power intends to record
the costs of the project in FERC account 183 - Preliminary Survey and Investigation
until a Certificate of Public Convenience and Necessity is received. Once a Certificate
is received (expected September 2009), the costs wil be reclassified into FERC
account 107 - construction work in progress and accrual of AFUDC wil begin.
Capitalization of AFUDC wil cease in the month the plant is placed in service (expected
December 2012).
The projected transmission cost of $31.5M includes a high level AFUDC estimate
of approximately $991,000. A projected cash flow and AFUDC schedule is not available
at this time for the transmission portion of the project due to the preliminary nature and
scope of the overall design and cost estimate.
The response to this Request was prepared by Lori Smith, Vice President
Corporate Planning and CRO, Idaho Power Company, in consultation with Barton L.
Kline, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 45
REQUEST NO. 66: Please provide copies of the minutes of all Idaho Power
Board of Directors meetings at which the Langley Gulch plant or any bids received in
the 2012 Baseload RFP were discussed.
RESPONSE TO REQUEST NO. 66: The requested information is confidential
and may be subject to both attorney-client and accountant-client privilege.
Notwithstanding the foregoing, Idaho Power is wiling to make the requested information
available for review by persons covered by the Protective Agreement in place in this
proceeding. The requested information wil be made available at the offces of Idaho
Power Company. Please contact Doug Jones (388-2615) or Cathy Culp (388-2637) to
make an appointment to review this information.
The response to this Request was prepared by Barton L. Kline, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 46
REQUEST NO. 67: Has the Idaho Power Board of Directors authorized
expenditure of funds for construction of the Langley Gulch plant?
RESPONSE TO REQUEST NO. 67: Yes. The Board authorized Idaho Power to
proceed with the filing of the CPCN Application for the Langley Gulch project and to
take actions, including making expenditures, consistent with the CPCN application
process.
The response to this Request was prepared by Barton L. Kline, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 47
REQUEST NO. 68: Please describe any additional costs Idaho Power expects it
wil incur as a result of delaying completion of the project from June 1, 2012 until
December 1, 2012.
RESPONSE TO REQUEST NO. 68: Idaho Power wil assume labor escalation
associated with the Engineering, Procurement and Construction ("EPC") Contract for
the period of time from March 1, 2009, to September 1, 2009. This EPC labor
escalation cost is capped at $550,686.
The response to this Request was prepared by Vern Porter, General Manger,
Power Production, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 48
REQUEST NO. 72: Please provide copies of all proposals or bids received in
response to all RFPs issued by the Benchmark Resource Team for key equipment
components.
RESPONSE TO REQUEST NO. 72: The information requested is voluminous
and confidential and, as a result, wil be made available for examination at the
Company's corporate offces. Please contact Doug Jones at 388-2615 or Cathy Culp at
388-2637 to arrange a time to review the requested.
The response to this Request was prepared by Vern Porter, General Manager
Power Production, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 49
REQUEST NO. 74: Please provide copies of all responses to the RFQ issued by
the Benchmark Resource Team.
RESPONSE TO REQUEST NO. 74: The information requested is voluminous
and, as a result, wil be made available for examination at the Company's corporate
offces. Please contact Doug Jones at 388-2615 or Cathy Culp at 388-2637 to arrange
a time to review the requested information.
The response to this Request was prepared by Vern Porter, General Manager
Power Production, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 50
REQUEST NO. 76: Please provide a copy of the EPC contract with TIC/Kiewit
once it is finalized.
RESPONSE TO REQUEST NO. 76: The EPC Contract wil be supplied to the
IPUC once it has been finalized.
The response to this Request was prepared by Vern Porter, General Manager,
Power Production, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 51
REQUEST NO. 77: Please provide copies of all contracts, leases, option
agreements and memorandums of understanding signed to date for engineering,
procurement, construction, major equipment, fuel supply, fuel transport, land, water
rights and any other thing needed to construct and operate the Langley Gulch project.
RESPONSE TO REQUEST NO. 77: The requested information is voluminous
and considered to be confidential. Notwithstanding the foregoing, Idaho Power is willng
to make the requested information available for Commission Staff review at the offces
of Idaho Power Company. Please contact Doug Jones (388-2615) or Cathy Culp (388-
2637) to make an appointment to review this information.
The response to this Request was prepared by Vern Porter, General Manager
Power Production, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
DATED at Boise, Idaho, this 10th day of April 2009.
ßi& 'BARTON L. KLINE
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 52
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 10th day of April 2009 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY upon the
following named parties by the method indicated below, and addressed to the following:
Commission Staff
Scott Woodbury
Deputy Attorney General
Idaho Public Utilities 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 27th Street
P.O. Box 7218
Boise, Idaho 83702
Dr. Don Reading
Ben Johnson Associates
6070 Hil Road
Boise, Idaho 83703
Invenergy Thermal Development
LLC
Dean J. Miler
McDEVITT & MILLER LLP
420 West Bannock Street
P.O. Box 2564
Boise, Idaho 83701
Wiliam Borders
Assistant General Counsel
Invenergy Thermal Development LLC
One South Wacker Drive, Suite 1900
Chicago, Illnois 60606
Snake River Allance
Ken Miler
Snake River Alliance
P.O. Box 1731
Boise, Idaho 83701
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IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
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Idaho Irrigation Pumpers
Association, Inc.
Eric L. Olsen
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
P.O. Box 1391
201 East Center
Pocatello, Idaho 83204-1391
Anthony Yankel
Yankel & Associates, Inc.
29814 Lake Road
Bay Vilage, Ohio 44140
Idaho Conservation League
Betsy Bridge
Idaho Conservation League
710 North Sixth Street
P.O. Box 844
Boise, Idaho 83701
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Barton L. Kline
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
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