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Home My WebLink About20090604IPC to Staff 80-83.pdf?5IDA~POR~ An IDACORP Company BARTON L. KLINE Lead Counsel June 3,2009 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 Second Production Request of the Commission Staff in the above matter. In addition, also enclosed are four (4) copies of a disk containing information responsive to Staff's requests. If you have any questions about the enclosed information, please let me know. Very truly yours, BLK:csb 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: 208-388-2682 Facsimile: 208-388-6936 bklineCâidahopower.com InordstromCâidahopower.com RE(~Ef 2009 JUH -3 PN~: 46 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 SECOND ) PRODUCTION REQUEST OF THE ) COMMISSION STAFF TO IDAHO ) POWER COMPANY COMES NOW, Idaho Power Company ("Idaho Powet' or "the Company"), and in response to the Second Production Request of the Commission Staff to Idaho Power Company dated May 20,2009, herewith submits the following information: IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1 REQUEST NO. 80: The Company provided a Langley Gulch power plant cash flow and AFUDC calculation in response to Staff Production Request No. 64; please identify how the cash flows per month were identified and/or forecasted and all documentation associated with those amounts. Please include within your response the accounting extracts for amounts incurred to date and all electronic files with formulas intact. RESPONSE TO REQUEST NO. 80: The monthly cash flow estimates for the Langley Gulch power plant were derived from preliminary payment schedules/estimates for the gas turbine, steam turbine, and EPC contract. The cash flow amounts for the remainder of the project were based on Idaho Powets projected timing of construction and planned work activities. Included on the enclosed CD is an Excel file that contains the power plant cash flow by major component and/or activity. Also included on the enclosed CD is an Excel file that contains the detailed charges incurred for the project through May 26, 2009. 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 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2 REQUEST NO. 81: The Company noted that a schedule showing the AFUDC calculation associated with transmission was not available at the time in response to Staff Production Request No. 64; please provide a copy of the AFUDC calculation associated with transmission that includes how the cash flows per month were identified and/or forecasted and all documentation associated with those amounts. Please include within your response the accounting extracts for amounts incurred to date and all electronic files with formulas intact. RESPONSE TO REQUEST NO. 81: As noted in the Idaho Powets Response to Staff's Production Request No. 64, the Benchmark Resource Bid contained $991,000 in estimated AFUDC for transmission facilities. This estimate was based on a Feasibility Study level estimate of transmission facilty costs. A Feasibilty Study is a +/- 20 percent estimate of costs. Recognizing the $991,000 is an estimate, Idaho Power has included additional dollars in the Commitment Estimate to cover the potential for additional transmission costs and greater AFUDC. As with all generation interconnection projects, the Company is following the FERC-required facility interconnection process for developing the interconnection transmission cost of the Langley Gulch project. Within that FERC process, engineers in Idaho Powets Delivery business unit have approximately 180 days to complete the environmental studies, public hearings, and fixed-line routing analysis. Once the line routes are determined, Idaho Power completes the design and submits a detailed cost estimate, which includes a monthly cash flow, to the project developer. IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3 Idaho Power is stil working on the environmental studies, public hearings, and line routing for the Langley Gulch project. Therefore the detailed monthly cash flow and the AFUDC calculations for Langley Gulch are not available at this time. The response to this Request was prepared by Shelby LeForgee, 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 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 4 REQUEST NO. 82: Please provide the components and calculation of the 7% AFUDC (in Excel format with formulas intact) rate estimate used by the Company in its response to Staff Production Request No. 64. Please include within your response the actual AFUDC calculations for 2009 to date. RESPONSE TO REQUEST NO. 82: The 7 percent rate used to estimate AFUDC on the power plant portion of the project was not based on an exact capital structure or exact financing cost(s) at a particular point in time. It was a high level estimate derived from the average annual AFUDC rates the Company applied to construction work in progress over the last four years. Per the guidance received in IPUC Order No. 29904, Idaho Power is currently recording the costs of the project in FERC account 183, Preliminary Survey and Investigation, until a Certificate of Public Convenience and Necessity is received. Therefore, no AFUDC has been applied to the work order( s) to date. On a monthly basis, the AFUDC rate is calculated consistent with the AFUDC formula established in the FERC Uniform System of Accounts/General Instructions (18 CFR 1.101). Idaho Power uses semi-annual compounding as allowed in FERC Order 561. The rates for 2009 through April are as follows: January February March April 5.24 percent 4.11 percent 3.27 percent 8.26 percent These monthly percentage amounts wil make up only a portion of the final annual average 2009 AFUDC rate. IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5 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 SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 6 REQUEST NO. 83: Please provide all studies, life cycle analyses and other information used to derive a depreciable life of 35 years for the production plant and 45 years for the transmission plant. Please include within your response the commitment estimate dollars as it relates to production and transmission plant by electric plant in service account number (3XX.xx) and the related depreciable life. Reference Gale Supplemental testimony, page 4, lines 7 - 9. RESPONSE TO REQUEST NO. 83: The Idaho Power Company Depreciation Study as of December 31 , 2006, prepared by Gannett Fleming is included on the enclosed CD. Please also refer to Idaho Powets depreciation filing, Case No. IPC-E- 08-06. While Idaho Power believes that its Commitment Estimate is reasonable, it cannot predict with precision the specific Commitment Estimate amounts that wil close to each FERC electric plant account upon placing the project in-service. The requested allocation of Commitment Estimate dollars will be made upon final unitization of the work order(s). However, there are portions of the power plant Commitment Estimate that wil likely close to specific accounts. The property and water rights acquired for the plant wil close to plant account 340. The amounts for the gas turbine, steam turbine, and heat recovery steam generator ("HRSG") will close to plant accounts 343 and 344. The remainder of the power plant investment wil close to plant accounts 341, 342, 345, and 346. Accounts 340-346 currently all have approximately the same overall depreciable life. The current Idaho Power investment in these accounts has a composite remaining life of approximately 30 years. The transmission lines portion of IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 7 the project wil close to plant accounts 354-356 and the transmission station portion wil close to accounts 350,352, and 353. 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. DATED at Boise, Idaho, this 3rd day of June 2009. Cs~ BARTON L. KLINE Attorney for Idaho Power Company IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 8 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 3rd day of June 2009 I served a true and correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Scott Woodbury Deputy Attomey General Idaho Public Utilties Commission 472 West Washington P.O. Box 83720 Boise, Idaho 83720-0074 Industrial Customers of Idaho Power and Northwest and Intermountain Power Producers Coalition 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 Snake River Allance Ken Miler Snake River Alliance 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 -- Hand Delivered U.S. Mail _ Overnight Mail FAX -- Email Scott.WoodburvCâpuc.idaho.gov Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email peterCârichardsonandolearv.com Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email dreadingCâmindspring.com Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email kmillerCâsnakeriveralliance.org Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email eloCâracinelaw.net IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 9 Anthony Yankel Yankel & Associates, Inc. 29814 Lake Road Bay Village, Ohio 44140 Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email tonyCâyankel.net Idaho Conservation League Betsy Bridge Idaho Conservation League 710 North Sixth Street P.O. Box 844 Boise, Idaho 83701 Hand Delivered -- U.S. Mail _ Overnight Mail FAX -- Email bbridgeCáwildidaho.org 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 Susan.k.ackermanCâcomcast.net -Q-Barton L. Kline -- IDAHO POWER COMPANY'S RESPONSE TO THE SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 10