20090511IPC to ICIP 1-36.pdf

1'
IDA~PO~
An IDACORP Company
BARTON L. KLINE
Lead Counsel
May 11, 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 are an original and three (3) copies of Idaho Power Company's
Response to the First Production Request of the Industrial Customers of Idaho Power in
the above matter.
ve?!~jJ~Ý~~
Barton 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
bkline(Çidahopower.com
Inordstrom(Çidahopower.com
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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 MATTER 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 FIRST
) PRODUCTION REQUEST OF THE
) INDUSTRIAL CUSTOMERS OF
) IDAHO POWER
COMES NOW, Idaho Power Company ("Idaho Power" or "the Company"), and in
response to the First Production Request of the Industrial Customers of Idaho Power
dated April 20, 2009, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 1
REQUEST FOR PRODUCTION NO.1: Please provide the results of the final
cost model run performed for the selected Langley Gulch project. Results should
include:
A. Load factor and/or the hours the unit is expected to be on line;
B. The times of the year when the unit is expected to be on line;
C. Variable costs associated with the unit's operation;
D. Full kwh cost of the unit;
E. Input assumptions used in the cost model runs (e.g. carrying costs,
fuel costs, depreciation rates, O&M costs etc..);
F. The impact on hours of operation and costs of other Idaho Power
generating units.
RESPONSE TO REQUEST FOR PRODUCTION NO.1: The final costs model is
a revenue requirement model which is an Excel spreadsheet which generates the basis
for the financial scoring of the proposals. The final costs model does not determine
specific Load Factors, Run Times, Input Assumptions, or Impacts of individual
resources. The revenue requirements model incorporates fixed cost inputs and the
Aurora portolio costs. The Aurora portolio costs are the results of simulating the
proposals' variable costs and operating characteristics within a WECC context. The
results include the yearly summation of all costs of the resources that are part of Idaho
Power's energy generation portolio. Market purchase and market sales summaries are
also output from Aurora and used in the final revenue requirement modeL. Individual
resources operations are not separately identified in the revenue requirements modeL.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 2
Access to the revenue requirements model was provided to ICIP on April 20, 2009, and
again in DVD form on April 23, 2009.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 3
REQUEST FOR PRODUCTION NO.2: Please explain in detail what plans the
Company has to meet its loads that are assumed to be met with Langley Gulch if either
the financing cannot be obtained or the Commission does not approve the Company's
proposed ratemaking treatment.
RESPONSE TO REQUEST FOR PRODUCTION NO.2: In its CPCN Application,
the Company requested that the Commission allow the Company to utilize newly
authorized ratemaking tools to enhance the likelihood that the financial markets wil
allow the Company to use traditional utility debt and equity financing to finance the
Langley Gulch project. If financing for the Langley Gulch project cannot be obtained
either with or without the Company's proposed ratemaking treatments, the Company
would have to assess how it would proceed to add a new baseload resource. In the
interim, until such a resource could be added, the Company would attempt to meet its
most critical summertime loads through a combination of the following: (1) short-term
demand management programs, (2) market purchases delivered to the east side of
Idaho Power's system, (3) market purchases delivered at Mona or Red Butte (both in
Utah) and delivered to Idaho Power's system via Idaho Power's firm transmission rights
from Red Butte to Borah/Brady, (4) reductions in deliveries to Hoku during the summer
of 2012, or (5) purchases delivered to Jim Bridger for loss repayment. Market
purchases from the Pacific Northwest are also a possibility when transmission is not
constrained; PPAs from generation resources are another possibilty.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 4
REQUEST FOR PRODUCTION NO.3: Please provide any documents or
research that the Company has evaluating or relating to the potential for industrial
combined heat and power projects in its service territory.
RESPONSE TO REQUEST FOR PRODUCTION NO.3: Several individual
projects have been investigated, but i am unaware of any recent documents or generic
research evaluating the total CHP potential within Idaho Power's service territory. Idaho
Power expects that the new PURPA rates may stimulate CHP project development.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 5
REQUEST FOR PRODUCTION NO.4: Please describe any efforts Idaho Power
has made to look into the use of virtual peakers (i.e. emergency back-up generation
installed throughout the region in commercial and industrial facilities) to meet or reduce
peak loads since it issued its RFP for the CCCT in this docket. Please provide any
analysis, documentation and/or correspondence.
RESPONSE TO REQUEST FOR PRODUCTION NO.4: The Company has
pursued the feasibility of virtual peakers for a number of years and has communicated
these efforts directly with the Commission Staff and the Industrial Customers of Idaho
Power ("ICIP"). The Company has done substantial research into a virtual peaker
program, presenting potential program designs, soliciting input from customers, making
on-site visits to customers' premises for interconnection cost studies, and performing
financial analyses to determine the feasibility of such a program. Unfortunately, the
Company has not found a program design that offers a material economic benefit to the
Company or its customers. The most recent meetings with the Staff and ICIP occurred
in October of 2008. At this time, ICIP requested an additional analysis to include a
valuation for spinning reserves. This updated analysis was provided to ICIP and
Commission Staff on November 13, 2008. The conclusion was that the additional
operating reserves from a virtual peaker program, whether spinning or non-spinning did
not offer material economic benefit today. The Company offered to further analyze a
virtual peaker/distributed generation option as part of the 2009 Integrated Resource
Plan, which is currently in progress.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 6
The response to this Request was prepared by Ric Gale, Vice President of
Regulatory Affairs, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER-7
REQUEST FOR PRODUCTION NO.5: Please provide a copy of the RFP the
Company issued to potential bidders that resulted in the selection of the Langley Gulch
project.
RESPONSE TO REQUEST FOR PRODUCTION NO.5: A copy of the RFP is
included on the enclosed CD.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 8
REQUEST FOR PRODUCTION NO.6: In response to Staff First Production
Request, #28, the Company stated:
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.
And,
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.
Was a dollar amount assigned to either cash flow or imputed debt that could
impact the Company's financial ratings as outlined in Lori Smith's direct testimony? If
so, please describe in detail how the amounts were calculated. If not, please describe
how the conclusion that it was not an issue was made without a dollar amount
comparison.
RESPONSE TO REQUEST FOR PRODUCTION NO.6: No, the RFP team did
not assign a dollar amount to either cash flow or imputed debt that would impact the
Company's financial ratings. The RFP team worked under the assumption that Idaho
Power was capable of financing the project and meeting the associated cash flow
requirements.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 9
REQUEST FOR PRODUCTION NO.7: On page 9 of his direct testimony, Karl
Bokenkamp states:
The Proposal Evaluation Manual was finalized before any of the proposals
were received
Does his statement mean the Proposal Evaluation Manual was not finalized
when the RFP was developed and sent to prospective bidders?
RESPONSE TO REQUEST FOR PRODUCTION NO.7: The Proposal
Evaluation Manual was not fully completed when the RFP was released; however,
certain aspects of the evaluation, specifically those referred to in the RFP, were set prior
to the release of the RFP. This includes the weighting of price and non-price criteria in
the evaluation and the non-price evaluation criteria listed in Table 1, Evaluation Criteria,
found on page 14 of 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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 10
REQUEST FOR PRODUCTION NO.8: Did prospective bidders know the
specific elements in the evaluation process and the point factors for each element?
Please explain fully.
RESPONSE TO REQUEST FOR PRODUCTION NO.8: Material aspects of the
evaluation criteria were clearly communicated to prospective bidders in the RFP
document - the evaluation included both price (60 percent) and non-price (40 percent)
factors. The non-price criteria included: Project Development, Project Characteristics,
Product Characteristics, Project Location, Environmental, and Credit Factors and
Financial Strength, and the distribution of points between these categories were
identified in the RFP. The RFP did not spell out the specific details of how price points
would be calculated or distributed and it did not indicate that a busbar analysis would be
used to screen proposals prior to evaluation of the price and non-price factors.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 11
REQUEST FOR PRODUCTION NO.9: On page 7 of his direct testimony Karl
Bokenkamp states, "Build-and-transfer proposals were not considered in this RFP
process." Please explain how the Company's Langley Gulch project differs
conceptually from a build-and-transfer proposal.
RESPONSE TO REQUEST FOR PRODUCTION NO.9: Below are a few of the
primary areas in which the Company's Langley Gulch project differs conceptually from a
build-and-transfer proposaL. Under a build-and-transfer approach, Idaho Power would
(1) most likely not have a direct contractual relationship with the project engineers,
construction contractors, or the equipment suppliers, (2) would have taken ownership of
the plant only upon completion, and (3) would not have been in a position to have direct
control of the initial project design, as the initial design would have been determined by
the bidder - Idaho Power may be able to request design changes at a later date, likely
at an additional cost.
See the Company's Response to Staffs Requests Nos. 19 and 20, which provide
additional explanation of the conceptual differences between build-and-transfer
proposals and a utility constructed, owned, and operated generating plant like 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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 12
REQUEST FOR PRODUCTION NO. 10: Why was Idaho Power the one entity
allowed to submit a build-and-transfer proposal for this RFP?
RESPONSE TO REQUEST FOR PRODUCTION NO. 10: Idaho Power did not
submit a build-and-transfer proposal. See Idaho Power's Response to ICIP's Request
for Production NO.9. Idaho Power had no guarantee that any proposals would be
submitted in response to the RFP, or that they would be competitively priced. With this
in mind, and Idaho Power's need for the additional resource, the Company prepared
and submitted the Benchmark Resource as an independent bid in the RFP process.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 13
REQUEST FOR PRODUCTION NO. 11: Please explain why including a
"detailed specification" in the RFP would not ensure that plants would meet Idaho
Powets requirements for a build-and-transfer.
RESPONSE TO REQUEST FOR PRODUCTION NO. 11: Including a detailed
specification in the RFP would have met Idaho Powets concerns regarding plant
design; however, there are other concerns associated with a build-and-transfer project.
See the Company's Response to Staffs Requests Nos. 19,20, and 21.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 14
REQUEST FOR PRODUCTION NO. 12: At page 8 of his direct testimony Karl
Bokenkamp states:
Given the decision to accelerate the on-line date to 2012, information obtained
regarding critical equipment manufacturing lead times, and the aforementioned
differences in project design, in the Company's opinion, it did not have enough
time to prepare a detailed design specifcation and release the RFP in time to
meet the 2012 on-line date.
Does this mean the Langley Gulch facility does not have a "detailed design
specification" at this time?
RESPONSE TO REQUEST FOR PRODUCTION NO. 12: Yes. See the
Company's 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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER -15
REQUEST FOR PRODUCTION NO. 13: Please explain how a neutral bidding
evaluation can occur if bidders other than Idaho Power were not allowed to offer
projects without a "detailed design specification."
RESPONSE TO REQUEST FOR PRODUCTION NO. 13: Bidders, including
Idaho Power, were allowed to offer projects without a "detailed design specification."
See the Company's Response to ICIP's Request for Production No. 12 and the
Company's Response to Staffs Requests Nos. 19,20, and 21.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER -16
REQUEST FOR PRODUCTION NO. 14: On page of his direct testimony Karl
Bokenkamp states:
The Benchmark Resource team's AFUDC estimate was calculated by applying a
7 percent annual capitalized interest charge to the funds spent on construction of
the project.
Please explain how the 7 percent capitalized interest charge was derived and what
assumptions were made in its calculation.
RESPONSE TO REQUEST FOR PRODUCTION NO. 14: The 7 percent annual
capitalized interest charge used for purposes of deriving the Commitment Estimate was
based on the approximate average annual AFUDC rate Idaho Power accrued on its
capital projects between 2005 and 2008.
The response to this Request was prepared by Randy Henderson, Leader,
Finance Team i, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 17
REQUEST FOR PRODUCTION NO. 15: On page 12 of his direct testimony Karl
Bokenkamp states that the AFUDC for the Benchmark Resource is expected to total
$49 millon. Was this value calculated under the assumption of traditional ratemaking
treatment by the IPUC?
RESPONSE TO REQUEST FOR PRODUCTION NO. 15: The $49 millon
AFUDC estimate for the Benchmark Resource was calculated under the assumption
that the project wil be able to receive traditional ratemaking treatment. If the financial
markets wil allow the Company to utilize traditional utility debt and equity financing, it
can experience 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 must be used, the Company believes it
will be more expensive and the Company would be required to revise its Commitment
Estimate to reflect that greater cost.
The response to this Request was prepared by Randy Henderson, Leader,
Finance Team I, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 18
REQUEST FOR PRODUCTION NO. 16: If the Commission were to accept the
Company's proposed treatment to include CWIP in rate base during construction, how
would this impact the calculation of AFUDC? Please explain.
RESPONSE TO REQUEST FOR PRODUCTION NO. 16: Any CWIP accepted
for inclusion in rate base during construction would eliminate continued calculation and
inclusion of AFUDC on the expenditures included in rate base. Including CWIP in rate
base, lowers the final cost of a project to ratepayers and reduces rate shock by reducing
the AFUDC carrying charge on CWIP. Alternatively, if the Commission were to accept
the recovery approach for AFUDC currently used for the Hells Canyon Relicensing
project, the calculation of AFUDC would continue during the construction of the project
and a regulatory liability would be established to offset the collection and amortization of
AFUDC over the life of the plant.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 19
REQUEST FOR PRODUCTION NO. 17: Please provide the workpapers,
assumptions, and calculations of net present value for each of the valid bids in
electronic format.
RESPONSE TO REQUEST FOR PRODUCTION NO. 17: With the exception of
certain confidential information contained in the Benchmark Resource bid, Idaho Power
made the above-requested documents available to ICIP during its visit to the
Company's offices on April 20, 2009. Additionally, as a result of its visit, ICIP requested
paper and electronic copies of the information made available on April 20, which were
provided on April 23,2009. The confidential material wil be made available when ICIP
executes confidentiality agreements covering the material in the Benchmark Resource
bid.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 20
REQUEST FOR PRODUCTION NO. 18: On page 15 of his direct testimony Karl
Bokenkamp states:
However, with the utility-owned resource, any savings resulting from the Project
realizing a better that expected heat rate wil be shared with customers through
the PCA.
Please explain the impact on customers for the utilty-owned resource if the heat rate for
Langley Gulch is less than expected.
RESPONSE TO REQUEST FOR PRODUCTION NO. 18: If the heat rate for
Langley Gulch is less than expected, the Company's customers wil receive the benefit
of that lower heat rate through the PCA.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 21
REQUEST FOR PRODUCTION NO. 19: How many new customers, by class,
did the Company add in 2008?
RESPONSE TO REQUEST FOR PRODUCTION NO. 19:
FOR DECEMBER
IDAHO POWER COMPANY
CUSTOMER REPORT
2007 -
2008
Number of Actual 2007.Percenta
Customers 2008 ge
Customer Class 2007 2008 Change Change
Residential 400,637 404,373 3,736 0.9
*Commercial 62,765 64,125 1,360 2.2
Industrial 120 122 2 1.7
**Irrigation (active service
agreements)16,504 17,035 531 3.2
Total Customers (active service
agreements)480,026 485,655 5,629 1.2
Off-Irrigation Customers 1,622 1,507 -115 -7.1
***Irrigation (active plus off-
irrigation)18,126 18,542 416 2.3
Total Customers (including off.
irrigation)481,648 487,162 5,514 1.1
*Street lighting customers are included in the commercial class customer counts.
**The irrigation customer count represents the active service agreement count and does not include the
off-irrigation customer count.
-*The irrigation customer count represents the active service agreement count plus the off-irrigation
customer count.
The response to this Request was prepared by 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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 22
REQUEST FOR PRODUCTION NO. 20: Given the current economic conditions,
has the Company made any adjustments to its load forecasts for the coming five years,
and if so, what are those adjustments?
RESPONSE TO REQUEST FOR PRODUCTION NO. 20: In December 2008,
based on then-current economic variables and assumptions for Federal Reserve and
Federal government policy implementation, the decision was made to adjust the
residential and commercial sectors to reflect a prolonged slowdown in housing and
consumer spending. Residential new customer growth rates (initially forecast to decline
until the first quarter of 2009) were extended to continue the decline into 2010 and later
rebound to the point of the original new customer forecast in 2011. On a total customer
(new plus existing) basis, the revised forecast returns to the same value as the original
forecast in 2016. Commercial customer growth counts were lowered based on
regression models driven by residential customer growth. Use-per-customer forecasts
were not modified from the original forecast.
Currently, the load forecasting area is working on developing a new load forecast
that will be available in late summer of 2009. The load forecast wil be reflective of the
most current economic forecast drivers, the most recent input from the Company's large
power representatives and their contacts, energy effciency impacts, and the latest
forecast of retail electricity prices.
The response to this Request was prepared by Brad Snow, Planning Analyst,
Idaho Power Company, in consultation with Barton L. Kline, Lead Counsel, Idaho Power
Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 23
REQUEST FOR PRODUCTION NO. 21: Has the Company considered delaying
Langley Gulch due to the current economic crises, or for any other reason, and if so
please explain and document?
RESPONSE TO REQUEST FOR PRODUCTION NO. 21: The Company has
considered the current economic conditions and their potential impacts on the
Company's loads and, ultimately, its resource needs. The Company is in the process of
preparing a new load forecast, which is expected to be completed this summer. Any
near-term reduction in loads wil help to reduce anticipated summertime deficits and
may provide an opportunity to delay future resource additions. Given the permitting and
siting issues associated with the Boardman to Hemingway transmission project, the
Company is anticipating a delay for that transmission project; however, the Company is
not considering a delay of 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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 24
REQUEST FOR PRODUCTION NO. 22: On pages 14 to 16 of Vernon Porter's
direct testimony he provides an outline of the governmental permits that the Company
must acquire for the Langley Gulch power plant. Please provide for each of the actions
listed by Mr. Porter the expenditures made to date and an estimate of the expenditures
the Company expects to incur between the current date and the date of expected IPUC
approval of the plant.
RESPONSE TO REQUEST FOR PRODUCTION NO. 22: The summaries of
expenses to date and future expenses through Commission approval are identified
below:
Expenses to Date Add. Future Exp.
Tier 1 - Title V Air Permit to Construct:
NEPA (Environmental)
$ 48,224
$ 29,639
$ 996
$125,000
$ 200,000
$ 5,000Payette County Permitting
Other Permits and Related Activities
Injection Well Permit
$ 0 $ 0
$ 0 $ 0
$ 0 $ 0
$ 0 $ 200,000
$ 0 $ 0
$ 0 $ 0
$ 22,704 $ 0
$ 13,975 $ 0
$ 87 $ 0
Section 404
Section 401 Water Quality
Stream Alteration
NPDES for Construction
Other Building Permits
Geotechnical Engineering Rpt
Water Distribution Study
Cultural Resource Survey
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 25
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 26
REQUEST FOR PRODUCTION NO. 23: Please provide all analysis,
assumptions, workpapers and spreadsheets (in electronic form) that were used to
develop Exhibit 7 attached to Lori Smith's testimony.
RESPONSE TO REQUEST FOR PRODUCTION NO. 23: Included on the
enclosed CD is the electronic spreadsheet developed under my direction to
demonstrate the potential to reduce rate shock by employing either AFUDC Pay
Currently or CWIP in Rate Base versus the third alternative to place in service at the
end of construction the entire CWIP balance, including AFUDC of the Langley Gulch
Power Plant. The analysis is for ilustrative purposes only and does not predict the
future impact of these alternatives.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 27
REQUEST FOR PRODUCTION NO. 24: On page 9 of Vernon Porter's
testimony he states that the Company has paid Siemens $8.7 millon to reserve
equipment. Please describe in detail what equipment has been reserved and the final
dollar cost for each piece of reserved equipment.
RESPONSE TO REQUEST FOR PRODUCTION NO. 24: The reserved
Siemens equipment includes a SGT6-5000F combustion turbine and generator, an
SST-700/SST-900 steam turbine and generator, associated control systems,
transportation costs, taxes, and technical field assistance required for construction. The
equipment scope of supply, summarizing the detailed components of the purchase
contract, and purchase price can be found in the appendices of the corresponding
contracts. The contracts and the accompanying cost data are confidentiaL.
Notwithstanding the foregoing, Idaho Power is willng to make the requested information
available for review at the offces of Idaho Power Company; review wil be limited to
persons signing the Protective Agreement, including Exhibit B to the Protective
Agreement. 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.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 28
REQUEST FOR PRODUCTION NO. 25: With respect to Siemens' business
relationship with Idaho Power in general, please provide copies of all correspondence
between Siemens and Idaho Power over the last five years.
RESPONSE TO REQUEST FOR PRODUCTION NO. 25: Idaho Power
previously objected to this Request.
The response to this Request was prepared by Barton L. Kline, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 29
REQUEST FOR PRODUCTION NO. 26: Please describe and document any
advantages Idaho Power has realized for the Langley Gulch project as a result of its
having done business with Siemens in the past.
RESPONSE TO REQUEST FOR PRODUCTION NO. 26: Idaho Power
Company did not realize any financial advantages in selecting Siemens as the
equipment supplier.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 30
REQUEST FOR PRODUCTION NO. 27: Please provide the Large Generator
Interconnection Study Reports for Langley Gulch.
RESPONSE TO REQUEST FOR PRODUCTION NO. 27: The report was the
subject of the Commission Staffs Request No. 36. See the Company's Response to
Staffs Request No. 36.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 31
REQUEST FOR PRODUCTION NO. 28: Please provide any generator
interconnection study reports for Evander Andrews and Bennett Mountain.
RESPONSE TO REQUEST FOR PRODUCTION NO. 28: Idaho Power
Company interprets this question to mean the requestor is looking at studies that
evaluated the ability to add capacity at the two identified sites. Three Large Generator
Interconnection Feasibility Study Reports were completed including 100 MW at the
Bennett Mountain site, 300 MW at the Evander Andrews site, and 650 MW at the
Evander Andrews site. The requested information contains CEil and is voluminous.
Notwithstanding the foregoing, Idaho Power is willng to make the requested information
available for review by persons covered by the Protective Agreement and
Nondisclosure 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 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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 32
REQUEST FOR PRODUCTION NO. 29: Did the Company evaluate expansion
of either the Evander Andrews or Bennett Mountain simple cycle units to combined-
cycle units? If so, provide those evaluations. If not, why not?
RESPONSE TO REQUEST FOR PRODUCTION NO. 29: Yes. This Request
was the subject of the Commission Staffs Request No. 57. See the Company's
Response to Staffs Request No. 57.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 33
REQUEST FOR PRODUCTION NO. 30: Did the company evaluate dry cooling
versus wet cooling at Langley Gulch? Please provide the results of that evaluation if it
did so.
RESPONSE TO REQUEST FOR PRODUCTION NO. 30: Yes. A preliminary
evaluation of dry cooling versus wet cooling was performed. This evaluation showed an
increase in project energy effciency output of 2.5 to 3 percent for the wet cooling option.
The preliminary capital costs associated with the two options were not appreciatively
different.
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 FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 34
REQUEST FOR PRODUCTION NO. 31: Please provide copies of all written and
electronic correspondence between the Company and the IPUC related to Senate Bil
1123 that was passed by the Idaho Legislature this year.
RESPONSE TO REQUEST FOR PRODUCTION NO. 31: None exist.
The response to this Request was prepared by Ric Gale, Vice President of
Regulatory Affairs, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 35
REQUEST FOR PRODUCTION NO. 32: Given that Langley Gulch is planned to
meet future load growth, please describe, in detail, how recovery of CWIP for that plant
would benefit existing ratepayers. See Ric Gale's direct testimony at p. 7.
RESPONSE TO REQUEST FOR PRODUCTION NO. 32: Recovery of CWIP in
the specific instance of the Langley Gulch project can ultimately have long-term benefits
to existing customers through making it possible for the project to be financed initially
and the potential avoidance of equity issuances at below book prices. Should the
Company not be able to finance the project, alternative resource selections are
expected to have a larger net present value revenue requirement and therefore higher
rates. CWIP generally benefits customers through rate smoothing and a smaller rate
base addition upon commencement of commercial operation.
The response to this Request was prepared by Ric Gale, Vice President of
Regulatory Affairs, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 36
REQUEST FOR PRODUCTION NO. 33: Has the Company conformed to the
Oregon competitive bidding requirements? If not, please explain why not.
RESPONSE TO REQUEST FOR PRODUCTION NO. 33: The state of Oregon
has promulgated competitive bidding guidelines, not requirements. Idaho Power
believes that it conducted its 2012 baseload resource RFP in a manner that
substantially complies with the Oregon Commission guidelines. At the time that the
Company requests the Oregon Commission to include Oregon's 4 percent allocated
share of the costs of the Langley Gulch project in Oregon rates, Idaho Power believes
that it wil be able to demonstrate that its RFP selection process was fair, effcient, and
that the selection of the Langley Gulch project was the appropriate outcome of the 2012
baseload resource RFP process.
The response to this Request was prepared by Barton L. Kline, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 37
REQUEST FOR PRODUCTION NO. 34: Does the Company anticipate that it
wil request ratemaking treatment for its Oregon share of the Langley Gulch project if
the Idaho Commission approves its application in Idaho?
RESPONSE TO REQUEST FOR PRODUCTION NO. 34: Yes.
The response to this Request was prepared by Ric Gale, Vice President of
Regulatory Affairs, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 38
REQUEST FOR PRODUCTION NO. 35: Does Idaho Power expect the Oregon
Commission to approve Langley Gulch for ratemaking purposes if the Company does
not follow Oregon's proscribed Competitive Bidding Guidelines?
RESPONSE TO REQUEST FOR PRODUCTION NO. 35: Yes. See the
Company's Response to Request No. 33.
The response to this Request was prepared by Ric Gale, Vice President of
Regulatory Affairs, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 39
REQUEST FOR PRODUCTION NO. 36: Please provide all correspondence
between Idaho Power and the Oregon Commission relative to the ratemaking treatment
of the Langley Gulch Plant in Oregon.
RESPONSE TO REQUEST FOR PRODUCTION NO. 36: None exist.
The response to this Request was prepared by Ric Gale, Vice President of
Regulatory Affairs, Idaho Power Company, in consultation with Barton L. Kline, Lead
Counsel, Idaho Power Company.
DATED at Boise, Idaho, this 11th day of May 2009.
~J~
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 40
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 11th day of May 2009 I served a true and correct
copy of IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER upon the
following named parties by the method indicated below, and addressed to the following:
Commission Staff
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
Willam Borders
Assistant General Counsel
Invenergy Thermal Development LLC
One South Wacker Drive, Suite 1900
Chicago, Illnois 60606
-. Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-. Email Scott.Woodburytãpuc.idaho.gov
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email petertãrichardsonandoleary.com
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email dreadingtãmindspring.com
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-. U.S. Mail
_ Overnight Mail
FAX
-. Email joe(Çmcdevitt-miler.com
Hand Delivered
-. U.S. Mail
_ Overnight Mail
FAX
-. Email wborderstãinvenergyllc.com
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 41
Snake River Allance
Ken Miler
Snake River Allance
P.O. Box 1731
Boise, Idaho 83701
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
Northwest and Intermountain Power
Producers Coalition
Susan K. Ackerman
9883 NW Nottage Drive
Portland, Oregon 97229
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email kmiler(âsnakeriverallance.org
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-- U.S. Mail
_ Overnight Mail
FAX
-- Email elo(âracinelaw.net
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-- U.S. Mail
_ Overnight Mail
FAX
-- Email tony(âyankel.net
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email bbridge(âwildidaho.org
Hand Delivered
-- U.S. Mail
_ Overnight Mail
FAX
-- Email Susan.k.ackermantãcomcast.net
(l/¿J2
Barton L. Kline
\::
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 42