20090415IPC to Staff 19-21, 23, etc.pdf

esIDA~POR~
An IDACORP Company
BARTON L. KLINE
Lead Counsel
April 14, 2009
VIA HAND DELIVERY
Idaho Public Utilties Commission
Office of the SecretaryRECEIVED
APR 14 2009
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Boise, Idaho
Re: Case No. IPC-E-09-03
LANGLEY GULCH POWER PLANT
Dear Ms. Jewell:
Enclosed for filing are an original and three (3) copies of the third portion of Idaho
Power Company's responses to the Commission Staffs First Production Request. Idaho
Power Company expects to file its responses to the remaining requests on Wednesday,
April 15. In addition, enclosed are four (4) copies of a disk in which electronic files are
being produced by Idaho Power in response to Staffs production requests.
Also, enclosed in a separate envelope are an original and three (3) copies of Idaho
Power Company's confidential responses to the Commission Staffs First Production
Request. 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 Powets file in the enclosed stamped, self-addressed envelope.
Very "~.n uffrs"O./~/~
saln L. Kline
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
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: 208-338-6936
bklineCãidahopower.com
InordstromCãidahopower.com
Idaho Public UtiltIes Commission
Office of the Secretary
RECEIVED
APR 14 2009
Boise, Idaho
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 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. 19: Please explain in detail why Idaho Power did not have
enough time to prepare a detailed design specification and release the RFP in time to
meet the 2012 online date. In your response, please explain why the Company's
Benchmark Resource development team had suffcient time to prepare a detailed bid,
yet the Company's RFP team did not have suffcient time to prepare a detailed design
specification for the RFP.
RESPONSE TO REQUEST NO. 19: The tenor of the question assumes that the
content of a bid for a self-build combined cycle plant is the same as the content of
design specifications necessary for a "build and transfer" proposaL. It is not. A bid
proposal need not require the degree of engineering detail that a design specification
would require. A bid proposal need only address criteria specified in the RFP, and in
the case of the baseload resource RFP, the criteria to be addressed did not require that
the Benchmark Resource team provide detailed design specifications. Detailed design
specifications include the detailed identification, layout and design of plant, and
equipment for optimal plant operation, maintenance, and operator safety. Indeed,
detailed design specifications for the Langley Gulch plant wil not be completed until well
after the IPUC issues a Certificate of Public Convenience and Necessity, should it elect
to do so. Detailed design criteria are, however, a necessary component of an RFP
inviting bids for build and transfer projects of the complexity of a combined cycle plant.
A typical build and transfer project, by definition, involves a third-part project
developer who contracts with other third parties to provide the plant design and
engineering services, construction services, and equipment. The eventual project
owner (Le., the utility) does not have direct contractual relationships with the project
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
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engineers, construction contractors, or equipment suppliers, and takes ownership or
control of the plant only upon its completion. The project owner then assumes
commercial operation of the plant and assumes operation and maintenance costs for
the balance of the plant's life. The only means by which the utility can assure that the
plant is designed and constructed in a manner that assures that the plant is capable of
being operated and maintained in a cost-effective and reasonable manner is by
including in the contract with the developer very detailed engineering and construction
specifications. This, in turn, requires that the RFP inviting build and transfer bids
contain these detailed specifications, or the RFP evaluation could become extremely
complicated and subjective as discussed in Response to Staffs Request No. 23.
With that background, the timeline for the project is as follows: In early
September 2007, the Company was stil exploring the possibility of satisfying its 2013
baseload generation resource need by developing a coal-fired generation facility. In
mid-September 2007, the decision to no longer pursue coal-fired generation and shift to
gas-fired resources was finalized. The Company then looked at gas generation
resource alternatives, visited CCCT projects, investigated potential sites, met with
potential EPC contractors, and considered developing a competitively bid self-build
resource, not unlike the process the Company followed when it was considering an
expansion of the Bridger project. The Company ultimately concluded that for a gas-fired
resource, an RFP would allow the Company to access multiple experienced gas-fired
resource developers. In March 2008, the Company assembled an RFP Team to issue
an RFP requesting that independent power producers submit bids for the 2012
base load resource, and that the Company submit a Benchmark Resource proposal.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 3
That RFP was issued April 1, 2008, requiring that bids be submitted no later than
October 17, 2008. The RFP called for the selected resource to be capable of
commercial operation with a high degree of operating availability by June 1, 2012.
Although the Benchmark Resource team had performed some preliminary work relative
to the development of a benchmark resource before the Company elected to issue the
RFP - identifying potential sites suitable for location of the resource, submission of
requests for transmission studies, review of existing generation facilities, and
preparation of a draft equipment RFP - the preparation of a bid by the Benchmark
Resource team did not begin until after the RFP was issued on April 1, 2009. Indeed,
the preparation of a bid could not begin until the RFP bid criteria were known. The
preparation of the Benchmark Resource team's bid was not completed until just prior to
the bid submission deadline of October 17, 2008.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, and Vern Porter, General Manager
Power Production, 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. 20: Does Idaho Power believe that by not allowing bids to be
submitted for turnkey or build-and-transfer proposals, but allowing a self-build proposal
to be submitted by its own Benchmark Resource development team, that it excluded
potential projects from being bid that could have been superior to the self-build
proposal? Please explain.
RESPONSE TO REQUEST NO. 20: No, and Idaho Power supports its belief
that a turn-key or build and transfer proposal would not have resulted in a superior
proposal on several grounds.
First, as noted in Response to Staffs Request No. 19, the only means by which
the project owner can be confident the plant is designed and constructed in a manner to
assure it is capable of being operated and maintained in a cost-effective and reasonable
manner is by including in the contract with the developer detailed engineering and
construction specifications. Prior to the issuance of the RFP, Company representatives
inspected several combined cycle plants and interviewed the operational personneL.
Among the plants visited was a combined cycle plant built in Utah pursuant to a build
and transfer arrangement. In the unanimous opinion of all team members who visited
this plant, it evidenced numerous design defects that undermined the effcient and
economical operation and maintenance of the plant, delayed the planned commercial
operation date, as well as caused significant project cost overruns. The lessons learned
from these plant visits was when dealing with a facility of the complexity and magnitude
of a combined cycle plant, a utility should not be required to operate the plant unless the
utility participates integrally in the design and construction of the plant. Absent the
opportunity to develop complete and thorough design and construction specifications,
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 5
this level of participation is not possible in the context of a build and transfer
arrangement.
Second, even if a utility is afforded the opportunity to develop detailed design and
construction specifications incident to a build and transfer arrangement, the absence of
a direct contractual relationship between the utility, the design engineer, and
construction contractor prevents the utility from exercising its contractual rights to
directly influence the design and construction of the facility while it is being designed
and constructed.
Third, the developer in a build and transfer arrangement has contractual warranty
responsibility for a finite term after commencement of commercial operation of the
facility, while the utility's operation and maintenance responsibilities extend through the
life of the plant. This creates a greater incentive on the part of the utility to assure
quality of engineering and construction than exists for the developer. In the case of
Idaho Power's Bennett Mountain Plant, the failure of the developer to fulfill its
contractual obligations during construction contributed to the creation of a latent defect
that manifested itself after commercial operation and leading to a prolonged outage and
direct repair expense in excess of $14 millon. Although Idaho Power considered the
developer's position to be commercially unreasonable and legally untenable, the
developer of the Bennett Mountain plant disavowed any contractual obligation to
reimburse Idaho Power for the repair expense.
Further, incident to a build and transfer arrangement, the developer charges a
substantial development fee. Such a fee is incremental to the underlying costs of
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 6
designing and constructing the plant and results ultimately in a more expensive project
for the utility's customers.
Finally, nothing precluded any project from being bid, the proposal just needed to
be structured as a PPA or a TA with the developer pricing the cost of owning, operating,
and maintaining the project in their proposal.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning, and Vern Porter, General Manager
Power Production, 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. 21: Does Idaho Power believe that a superior proposal to its
own self-build proposal could have possibly been submitted if the Company had
prepared detailed design specifications and allowed build-and-transfer proposals to be
submitted? Please explain.
RESPONSE TO REQUEST NO. 21: For the reasons specified in Response to
Staffs Request No. 20, Idaho Power believes a build and transfer proposal, even if
based on detailed design and construction specifications, would have been an inferior
proposal to the self-build proposal.
The response to this Request was prepared by Karl Bokenkamp, General
Manager Power Supply Operations and Planning 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. 23: Please explain why Idaho Power believes ". . . the
evaluation process could become extremely complicated and somewhat subjective"
(Bokenkamp Direct, p. 8, lines 3-4) if a build-and-transfer option was permitted, and
whether such complications and subjectivity is less in comparing a self-build proposal to
various PPA and TA proposals. Was this also the opinion of R. W. Beck? Please
provide all related correspondence or memoranda.
RESPONSE TO REQUEST NO. 23: There are several reasons why Idaho
Power believes that the evaluation process could become extremely complicated and
somewhat subjective if a build-and-transfer option was permitted in the 2012 Baseload
RFP process. First, the complications and the subjectivity are anticipated to occur if the
RFP documents fail to include a detailed design specifcation for the bidders to use in
designing their projects and preparing their proposals. Without a detailed design
specification, it is not unreasonable to expect that the proposals received wil be
different. Potential differences include: design criteria, equipment quality, level of
redundancy incorporated in the basic design, adaptability of the design and equipment
layout to accommodate future expansions, compatibility of control systems with Idaho
Power's existing systems, design features incorporated for ease of operations, design
features incorporated for ease of maintenance, shop and warehouse space and
features, and specific design features to address extreme temperature operation.
Idaho Power's concerns are in part based on its visits to other combined cycle
facilities - all projects are not created equally. Allowing build-and-transfer projects,
without detailed design criteria, could result in projects of different costs, quality, design
features, performance, and future maintenance costs being proposed and being
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 9
evaluated against each other. In Idaho Powets opinion, the above-mentioned
differences will complicate an evaluation process because of (1) the potential number of
differences that wil need to be considered and (2) the subjectivity associated with
quantifying those differences.
Idaho Power believes that by limiting the RFP to Power Purchase Agreement
("PPA") proposals, Tollng Agreement ("TA") proposals, and a self-build benchmark
proposal the above-mentioned complications and subjectivity of the evaluation process
are reduced. In this approach, each bidder is responsible for operating and maintaining
their proposed project for the duration of the agreement. Subsequently, each bidder wil
incorporate their estimate of the costs for operating and maintaining their project and
these costs are ultimately reflected in price they bid. However, if build-and-transfer
proposals were allowed, Idaho Power would need to quantify these differences and
likely reduce them to a cost - increasing the complication and subjectivity of Idaho
Power's evaluation process.
Idaho Power has experience with build-and-transfer proposals, as it has recently
conducted two RFPs that permitted build-and-transfer options. However, these RFPs
were for simple-cycle combustion turbines, which are less complicated than a combined
cycle combustion project. The Company wil give careful consideration to using build-
and-transfer proposals in the future.
R. W. Beck was consulted and asked if they agreed with Idaho Powets belief
that ". . . the evaluation process could become extremely complicated and somewhat
subjective" if build and transfer options were permitted without including a detailed
design specification in the RFP. Preparation of detailed design specifications for a build
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 10
and transfer RFP process option is consistent with R. W. Beck's normal
recommendations to clients for projects of this type.
The correspondence with R. W. Beck on this issue is enclosed.
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 - 11
REQUEST NO. 25: If Idaho Power believes it did not have time to prepare a
detailed design specification in order to consider build-and-transfer options in the 2012
Baseload RFP, please explain why it did not start the process sooner.
RESPONSE TO REQUEST NO. 25: Please see Response to Staffs Request
No. 19.
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 - 12
REQUEST NO. 30: Please perform the following computer simulation runs for
Idaho Powets system using the AURORA modeL. Before making any runs, however,
review all assumptions for the transmission interconnections to Idaho Powets system,
all assumptions for Idaho Power's existing generating plants, power purchase and sales
contracts, load shape and any other necessary input assumptions and make any
necessary adjustments so that the model corresponds as closely as possible to actual
conditions. Insure that the load and fuel price forecasts assumed in the modeling runs
are consistent with those of the 2008 IRP Update. It may be desirable to use the
AURORA "Portolio" feature to model Idaho Power for purposes of the following
analyses.
a. Perform an hourly simulation beginning December 1, 2012, and
extending through December 2037 (running five years beyond the conclusion of the
period of interest as recommended by EPIS) under an operating mode in which no new
capacity can be added within the Idaho Power system and supply deficiencies are met
through power imports from outside Idaho Power's system. Based on the results of this
run, identify the number and timing of any hours in which transmission constraints limit
the amount of power that can be imported. In addition, identify those transmission
interconnections on which constraints occur. Identify the timing and duration of any
load curtailment predicted by the modeL. Report the results in graphical format,
including any narrative necessary to interpret the results.
b. Perform a long-term optimization (capacity addition) study for the
period December 1, 2012 through December 2037. Use hourly dispatch to fully capture
peak load hours. Confirm that the new resource choices available match those
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY -13
identified in the Company's 2008 IRP Update and that the Langley Gulch project is also
available as a choice at the prices and terms assumed in the RFP analysis. Assume
also that market purchases are an available option. Based on the results of this run,
identify the type, timing and location of new resources added along with the amount of
capacity and energy associated with each new resource. Confirm whether the Langley
Gulch project is chosen as an alternative to meet load. Summarize the months and the
hours within each month when the Langley Gulch plant would be used to meet load.
Identify any other resources selected by the modeL.
c. Perform an hourly simulation beginning December 1, 2012, and
extending through December 2037 assuming that capacity and energy is available in
accordance with the Langley Gulch project but at zero cost. Compare the net power
supply cost over the duration of the simulation to the net power supply cost for the
model run conducted in part "b" above. Compare the difference in net power supply
cost to the cost of the Langley Gulch project.
RESPONSE TO REQUEST NO. 30:
a. As this question explores future transmission utilization to serve Idaho
Power's projected loads as predicted within the Aurora model, I have included a brief
description of how Aurora depicts transmission and some of its limitations. The
fundamental transmission architecture and setup are provided by EPIS and updated
periodically by them. The database used in this analysis is North_American_DB_2008-
02.zip. The version of Aurora is AURORAmp version 9.2.1023 x86 and running on
PC operating system Microsoft Windows XP Professional version 5.1.2600.196608,
.Net version 2.0.50727.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
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The transmission modeling links between geographic bubbles in Aurora are
defined at an aggregated level, and at yearly or seasonal maximum flow limits in MW.
TRM allowances are defined in the MW link limits. Wheeling costs and losses are
considered and included on the aggregated paths to approximate the historic weighted
average cost and losses for the paths in question. In general, the energy flow within the
Aurora model is determined on marginal unit economic dispatch optimized for the
lowest cost to serve load in each bubble subject to the modeling constraints and costs.
The Aurora transmission modeling is limited in scope and does not consider Bus
level flow constraints within a bubble. Additionally, other transmission operations
complexities like impedance and loop flow, transient stability, and contract transmission
rights are ignored in Aurora and this may significantly alter the projected future energy
flows within the WECC.
The assumptions made in this Aurora analysis reflect the assumptions
established for the 2009 IRP. The significant Idaho South bubble assumptions made in
the modeling analysis are a 50th percentile future hydro condition and 70th percentile
future load growth. The 50th percentile hydro equates to approx 8.5 millon MWh
annually from the Idaho Power Hydro projects. The 70th percentile load growth equates
to 1.5 percent annual growth rate over the time period 2009 to 2028 (1,888 MW to
2,484MW) (2,830MW by 2037). The link limits associated with the Idaho South bubble
are updated to reflect Power Supply Planning's estimates of flow limits if different from
EPIS. No future resources are added including committed DSM and Transmission
projects.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY -15
The significant global assumptions include a $0 dollar C02 adder, with RPS
resource additions in bubbles in states with current RPS standards timed to signifcantly
satisfy their states requirements. The requirements are based on future load growth
assumptions in Aurora. The other bubbles future resources were determined via an L T
optimization run and coordinated with the RPS resource additions as determined by
Power Supply Planning.
The total curtailment hours over the study period 2009 - 9/2035 are 29,767
distributed across 153 months. A graph of the frequency and distribution is shown
below.
Maithly Frequerc of Hourly Curtilment
80
100
700
600
500
40
30
200
o
.,' ,,'J 0," ~~ rl ~" .." "i'b ,,OJ ~'P ~ .." ",'" "';\ ri'" 'õ' ;-~' 'J'" ~" ':'" ':" .... .tl'\ ~.. .,',,", '" ~ 0' (\ (\ ". :\ X (\ ~ (\ ~' ";, ~ :; -y"i (l (l (l :' :' ~ ;,. ~ ~~ ~ ~# ~ ~ ~ ~ ~ ~# ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~
As noted earlier, this is analysis is based on a 50th percentile future hydro
condition and 70th percentile future load growth for the Idaho South bubble. If actual
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 16
hydro and load conditions differ from these assumptions, different results would be
expected.
b. Idaho Power continues to work on the response to this Request and it
should be complete in the near future.
c. The response depends on the results of the analysis requested in Staffs
Request No. 30(b). Idaho Power continues to work on the Response to Staffs Request
No. 30(b) - this response, and the response to 30(b) should be complete in the near
future.
The response to this Request was prepared by Rick Haener, 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 - 17
REQUEST NO. 31: Please provide an electronic copy of all input and output
files used to perform the AURORA analysis requested in Staff Request No. 30. Please
state the version of AURORA used.
RESPONSE TO REQUEST NO. 31: This Response is contingent upon
completion of Response to Staffs Request No. 30. Idaho Power wil supplement this
response.
The response to this Request was prepared by Rick Haener, 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 - 18
REQUEST NO. 32: Please describe any permits that wil be required for
transmission system additions or improvements and provide time estimates of when
such permits could be obtained. If any permits wil be required, what is their status?
RESPONSE TO REQUEST NO. 32: If the line crosses BLM land, a permit wil
need to be obtained from the BLM. Payette County has notified Idaho Power that a
conditional use permit wil be required for the transmission lines located in Payette
County. A conditional use permit may be required in Canyon County if the tower
heights are ninety feet or greater. Idaho Power has not applied for any of these permits
yet but, based on the location of the Langley Gulch project and the Company's prior
experience with similar requests, it does not anticipate that the permitting process wil
delay the on-line date of the project.
The Response to Staffs Request No. 47 contains additional detail on the status
of the permitting process.
The response to this Request was prepared by Dave Angell, Manager, Delivery
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. 38: Please provide estimates by month for the period December
2012 through December 2032 of the quantity of generation from the Langley Gulch
plant that Idaho Power expects it wil not need to meet its own load but wil be able to
sell off-system. Include estimates of the revenue associated with such sales.
RESPONSE TO REQUEST NO. 38: The response to this Request is
confidential and is being produced pursuant to the Protective Agreements executed in
this matter.
The response to this Request was prepared by Rick Haener, Planning Analyst,
Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power
Company.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
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REQUEST NO. 39: Please provide a copy of any contractslagreements signed
by Idaho Power to secure fuel storage and transportation rights (Le. transportation
contracts) for the Langley Gulch project. What is the term of the contract(s)? What are
the provisions for extending or renewing the agreements? For what period of time wil
fuel transportation and storage be guaranteed? Do the contracts include fuel
transportation and storage for either the Danskin or the Bennett Mountain plants as
well?
RESPONSE TO REQUEST NO. 39: The requested contract/agreements are
included on the enclosed CD. A summary of the contracts identifying contract number,
receipt/Delivery Points, Quantity, beginning and ending dates, renewal provisions, and
pertinent notes is provided below:
TF-1 (Firm) Service Agreement
Contract No: 126442
Receipt 1 Delivery: Sumas 1 Elmore
Quantity: 24,523 Dthlday
Begin Date: November 1, 2002
End Date: February 28, 2022
Evergreen Provision: Yes, grandfathered unilateral evergreen
TF-1 (Firm) Service Agreement temporarily released by Idaho Power Company from
contract 126442
Contract No: 135613
Receipt 1 Delivery: Sumas 1 Jackson Prairie
Quantity: 24,523 Dthlday
Begin Date: June 1, 2007
End Date: February 28, 2022
Evergreen Provision: No
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
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Contract No: 135612
Receipt 1 Delivery: Jackson Prairie 1 Elmore
Quantity: 24,523 Dthlday
Begin Date: June 1, 2007
End Date: February 28, 2022
Evergreen Provision: No
TF-1 (Firm) Service Agreement temporarily released by Idaho Power Company from
contract 135612
Contract No: 136078
Receipt 1 Delivery: Jackson Prairie 1 Kelso-Beaver
Quantity: 24,523 Dthlday
Begin Date: September 20, 2007
End Date: February 28, 2022
Evergreen Provision: No
Contract No: 136079
Receipt 1 Delivery: Molalla 1 Elmore
Quantity: 24,523 Dthlday
Begin Date: September 20, 2007
End Date: February 28,2022
Evergreen Provision: No
TF-1 (Firm) Precedent Agreement
Contract No: TBD
Receipt 1 Delivery: Stanfield 1 Elmore
Quantity: 22,000 Dth/day
Begin Date: November 1, 2012
End Date: November 30,2027
Evergreen Provision: TBD
The initial Primary Delivery Point wil be Elmore. Shipper retains the right to
change the Primary Delivery Point from Elmore to any new or existing delivery
point between Stanfield to OpaL. Shipper wil designate an Ultimate Primary
Delivery Point upon Shipper's receipt of approval from the Idaho Public Utility
commission of its 2012 Base-Load Generation RFP. Shipper wil reimburse
Transporter for all costs associated with a new or upgraded meter station
reasonably required to accommodate any Primary Delivery Point other than
Elmore.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
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A summary of the Jackson Prairie storage contract is shown below:
SGS - 2F (Firm) Service Agreement
Contract No: 135430
Contract Demand: 11,267 Dthlday
Begin Date: March 1, 2007
End Date: November 1, 2043
Evergreen Provision: Yes, standard bi-Iateral evergreen
Idaho Power's currently has 47,646 Dth of storage capacity available. Idaho
Power's storage capacity increases monthly, effective the first day of the month,
up to a total no greater than 131,453 Dth (January, 2011).
The firm contracts (transportation and storage) are essentially guaranteed,
subject to the terms and conditions of the agreements. In accordance with NWP's Gas
Tariff, Idaho Power segmented Contract No. 126442 and No. 135612. Per NWP's
FERC Gas Tariff, Fourth Revised Volume No.1, "Capacity between a shippets primary
receipt point and primary delivery point may be segmented into separate Service
Agreements for a Shipper's own use, provided that such a segmentation is operationally
feasible and provided that firm capacity is available at and between designated points."
Idaho Power has the right to use any available alternate receipt point and alternate
delivery point on a secondary firm basis. Secondary firm qualifies as the path outside of
the primary receipt point andlor primary delivery point and wil be curtailed based upon
NWP's scheduling priority.
Depending upon economics and reliability requirements, Idaho Power may
choose to utilize one or more of the above transportation and storage contracts to
supply one or more of its gas-fired generation units. Idaho Power used a portolio
approach to manage the fuel storage and transportation necessary to support its gas-
fired generation fleet, and does not specifically tie gas transportation or storage facility
contracts to a specific generating unit.
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 23
The response to this Request was prepared by John Anderson, Energy
Transaction Specialist, 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. 60: Please discuss the status of Idaho Power's plans to upgrade
the Borah-West transmission path. Was an upgraded Borah-West transmission path
assumed to be available in the evaluation of RFP bids? Were transmission cost
estimates for projects east of the Treasure Valley area less in the 2012 Baseload RPF
than in previous thermal RFPs due to an assumed upgraded Borah-West transmission
path?
RESPONSE TO REQUEST NO. 60: Idaho Power placed the Borah West
transmission path upgrade in-service on July 24,2007. The upgraded path would have
been included in any transmission analysis of RFP projects located near Borah or
further east. No bids were received proposing projects near or east of Borah.
The response to this Request was prepared by Dave Angell, Manager, Delivery
Planning, Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel,
Idaho Power Company.
DATED at Boise, Idaho, this 14th day of April 2009.
(l~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 - 25
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 14th 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
McDEVln & 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 Allance
P.O. Box 1731
Boise, Idaho 83701
-l Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-l Email Scott.WoodburyCãpuc.idaho.gov
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
-l Email peterCãrichardsonandoleary.com
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
-l Email dreadingCãmindspring.com
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-l U.S. Mail
_ Overnight Mail
FAX
-l Email joeCãmcdevitt-miler.com
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FAX
-l Email wbordersCãinvenergyllc.com
Hand Delivered
-l U.S. Mail
_ Overnight Mail
FAX
-l Email kmilerCãsnakeriverallance.org
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 26
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
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email elot§racinelaw.net
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email tonyt§yankel.net
Hand Delivered
-2 U.S. Mail
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FAX
-2 Email bbridgeCãwildidaho.org_~f~
Barton L. Kline
IDAHO POWER COMPANY'S RESPONSE TO THE COMMISSION
STAFF'S FIRST PRODUCTION REQUEST TO IDAHO POWER COMPANY - 27
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-09-03
IDAHO POWER COMPANY
RESPONSE TO STAFF'S.
REQUEST NO. 23
Bokenkamp, Karl
From:
Sent:
To:
Cc:
Subject:
Agnello, Elaine (EAgnello~rwbeck.com)
Tuesday, April 14, 20092:12 PM
Bokenkamp, Karl
Stein, Steven
Draft language
Confidential, Attorney-Client Privileged and Work-Product: The Information In This E-Mail And In Any Attachment
May Contain Information Which Is Legally Privileged. It Is Intended Only For The Attention And Use Of The
Named Recipient. If You Are Not The Intended Recipient, You Are Not Authorized To Retain, Disclose, Copy Or
Distribute The Message And/Or Any Of Its Attachments. If You Received This E-Mail In Error, Please Notify Me
And Delete This Message. Thank-You.
Good afternoon Mr. Bokenkamp:
Steve Stein asked me to send you this language.
R. W Beck was consulted and asked if they agreed with Idaho Power's belief that ". . . the evaluation
process could become extremely complicated and somewhat subjective" if build and transfer options
were permited without including a detailed design specifcation in the RFP. Preparation of detailed
design specifications for a build and transfer RFP process option is consistent with R. W Beck's
normal recommendations to clients for projects of this type.
Elaine Agnello
Ofice Supervisor
Phone [phone] Cell 407-399-7516
Fax [phone]
1000 Legion Place, Suite 1100
Orlando, FL 32801..Mind Powered: Insight with Impact.
rweck.com
Please consider the environment before printing this email.
This communication and any related verbal communication are provided under the terms of R. W. Beck's contract with its client, and are not intended to be used or
relied upon by any third party other than advisors or consultants to the client. Any use of such communication by any other third party is the responsibiliy of such
third party, and R. W. Beck accepts no responsibility for any damages incurred by any third part as a result of decisions or actions based on such communication.
Any guidance or opinions provided herein should only be read and relied upon by client within the limitations and context of any prior guidance provided by R. W.
Beck in any prior work products relating to the subject matter of such communication.
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