The URL can be used to link to this page

Home My WebLink About20090612IPC to Staff 90-93.pdf'1S1DA~POR~ An IDACORP Company BARTON L. KLINE Lead Counsel June 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 Fourth Production Request of the Commission Staff in the above matter. Also, enclosed in a separate envelope are an original and three (3) copies of Idaho Power Company's Confidential Response to the Commission Staffs Fourth Production Request and four (4) copies of a disk containing confidential information responsive to Staff's Requests. Please handle this confidential information in accordance with the Protective Agreement and Nondisclosure Agreement in place between the parties. If you have any questions about the enclosed information, please let me know. Very truly yours,~&- Barton L. Kline BLK:csb Enclosures P.O. Box 70 (83707) 1221 W. Idaho St. Boise, ID 83702 CERTIFICATE OF ATTORNEY REceiVED ASSERTION THAT MATERIALS REQUESTED AND PROVIDdlbll~G f~tli 49 COURSE OF AN IDAHO PUBLIC UTILITIES COMMISSION PR~~fiUC ARE PROTECTED FROM PUBLIC INSPECTIO~nUTÍES"" èot.lMl5Sl0N Case No. IPC-E-09-03 The undersigned attorney, in accordance with RP 233, hereby certifies as follows: 1. The Response to Production Request No. 93 propounded by the Commission Staff during the course of the above-referenced case contains information that is a trade secret or privileged or confidential as described in Idaho Code § 9-340, et seq., and § 48-801, et seq., and as such is exempt from public inspection, examination, or copying. DATED this 11th day of June 2009. ß;~ BARTON L. KLINE Counsel for Idaho Power Company 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 bkline(gidahopower.com Inordstrom(gidahopower.com REC6\VED L8~ JUtl \ \ .PM tt:SO UT\~R~~~ idJ~\~S\ÙN 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 FOURTH ) 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 Fourth Production Request of the Commission Staff to Idaho Power Company dated May 28, 2009, herewith submits the following information: IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1 REQUEST NO. 90: For each of the short-listed proposals, please describe and discuss the results of the sensitivity analyses conducted as part of the Stage 3 evaluation process. RESPONSE TO REQUEST NO. 90: The sensitivity analyses conducted in the Stage 3 evaluation process are consistent with the types of analyses used in evaluating resource portolios in the IRPprocess. In the IRP, portolios are evaluated against various quantitative risks, including natural gas price, carbon tax, capital construction costs, hydrological variabilty, and market risk. The IRP portolios contain numerous resources, varying fuel types, and online dates. A diverse set of risk factors helps in the evaluation of these very different portolios. In the RPF analysis, because of the single unit change in the portolio and the common fuel type between the proposals, only the natural gas price sensitivity was evaluated. As discussed in the Company's Response to Staffs Request No. 86, the high and low gas prices impacted the dispatch hours and the value that differing proposals contributed to the AURORA portolio total costs. Sensitivity runs were completed on select finalists' proposals. Using the base case AURORA results, proposals were selected if it was thought additional insight might be gained from a high or low gas price evaluation. Proposals E-2 and 0 were analyzed in the gas price sensitivity analysis. Results of the gas price sensitivity analysis were evaluated and discussed, but they were not used to calculate the price scores. The total hours of dispatch, as predicted by AURORA in the sensitivity analysis, provided insight into how the resources might operate with different gas prices. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2 Selected AURORA output used in the selection of the proposals for a gas price sensitivity analysis and the results of the sensitivity runs are included on the enclosed CD and are identified as follows: . Aurora_shortlst_30_shutdown_ Yearly_portolio_ TotalsBDE23_Feb_1_2009.xls · Aurora_shortlst_30_Low_NG_ Yearly_portolio_ TotalsDE2_Feb_2_2009.xls · Aurora_shortlst_30_HLNG_ Yearly _portolio_ TotalsDE2_Feb_2_2009.xls The information contained on the disk is confidential and is only being supplied to those parties that have signed the Protective Agreement and Nondisclosure Agreement in place 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 FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3 REQUEST NO. 91: Please clarify the amount of AFUDC used in price scoring for the Benchmark proposal and explain why the AFUDC amounts included in early versions of the Benchmark proposal were less than half of the AFUDC amount included in the final Commitment Estimate. RESPONSE TO REQUEST NO. 91: The Company discovered two separate errors in the computation of AFUDC in the scoring analysis for the Benchmark Resource that was created for the Board presentation. Both errors were corrected prior to completion of the final price scoring and final decisions to recommend the Benchmark Resource. The AFUDC amount in the Commitment Estimate uses the converted methodology; however, the projected final cost of the project amount was increased to reflect potential for additional cost (such as the gas tap and meter, which were to be supplied by the Company for all projects and therefore left out of the price scoring) and contingencies. 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 FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 4 REQUEST NO. 92: Please identify, explain and provide justification for every cost item and amount included in the Commitment Estimate that was not included in the Benchmark proposal costs that were used in the final price scoring of the bids. RESPONSE TO REQUEST NO. 92: The Commitment Estimate was provided in the Company's Response to Staff's Request No. 50. Additionally, the workpaper comparing the Commitment Estimate to the proposal bid is being provided in the Company's Response to Staffs Request No. 94. The Commitment Estimate is identified as one of the data columns in the workpaper, while the final price scoring of the bid is identified as the "i PUC Presentation" column. For the gas turbine contract, the option pricing provided in the contract was matched up with the Commitment Estimate, including training and the current transformer upsizing option; a net increase of $24,067. For the steam turbine contract, the Commitment Estimate included the final negotiated contract price as the steam turbine contract was not finalized at time of final bid; a net decrease of $351,738. This related to firming up the technical field assistance between the EPC contractor and the equipment supplier. Additional costs were added for land and easement acquisitions along the Snake River for the water pipeline; a net increase of $750,000. The gas compressor station was removed from the estimate after determining line pressures were adequate for plant operation; a net decrease of $1 ,200,000. Capitalized property taxes were recomputed based on the revisions to the Commitment Estimate; a net increase of $632,686. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5 Based on the above-mentioned items associated with the power plant subtotal, the difference between the commitment price and the final price scoring of the Benchmark Proposal is a net decrease of $74,985. A Commitment Estimate contingency was added for possible labor escalation due to a possible delay of the project commercial operation date from June to December 2012. As described in the Company's Response to Staffs Request No. 68, this item is limited to a net increase not to exceed $550,686, depending on actual labor escalation, if any. A Commitment Estimate contingency was added for pricing components that Idaho Power retained price risk escalation. These components include material escalation, gas pipeline, water pipeline, and the injection well design and construction. The total commitment contingency added was $6,250,000, or a total percentage of less than 2 percent of the power plant estimate. RFP pricing components were shown in the Commitment Estimate, which would have been added to any of the successful proposals unless specifically excluded in contract negotiations. These components included the gas line tap and meter, RFP team expenses, and start-up test fuel; this amounted to a total cost of $3,250,000 for Langley Gulch. Transmission line upgrades were added to the Commitment Estimate. The original transmission pricing in the final price scoring included the original $22,108,000 minimum integration cost plus $1,800,000 for constructing the 138-kV line at 230-kV standards. Idaho Powets Delivery Group also recommended installng a loop-in/loop- IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 6 out interconnection on the existing Ontario-Caldwell line, thus increasing the transmission line costs by $1,516,250. Transmission contingencies were added to the commitment price as a result of the Feasibility Study and System Impact Study being accurate within 20 percent. Likewise, the System Impact Study recommended a SSR study and implementation. The SSR costs and communications added an increase of $1,000,000. These costs were incorporated into the final evaluation of bids. Plant AFUDC also was recomputed as a result of the modification to the Commitment Estimate. 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 FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 7 THE RESPONSE TO REQUEST NO. 93 IS CONFIDENTIAL AND IS ONLY BEING PROVIDED TO THOSE PARTIES THAT HAVE SIGNED THE PROTECTIVE AGREEMENT IN PLACE IN THIS MATTER IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 8 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 11th day of June 2009 I served a true and correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH 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 Attorney General Idaho Public Utilities 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 Hill Road Boise, Idaho 83703 Snake River Allance Ken Miller 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 -l Hand Delivered U.S. Mail _ Overnight Mail FAX -l Email Scott.Woodburv(gpuc.idaho.gov Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email peter(grichardsonandolearv.com Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email dreading(gmindspring.com Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email kmiler(gsnakeriveralliance.org Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email elo(gracinelaw.net IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 10 Anthony Yankel Yankel & Associates, Inc. 29814 Lake Road Bay Vilage, Ohio 44140 Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email tony(gyankel.net Idaho Conservation League Betsy Bridge Idaho Conservation League 710 North Sixth Street P.O. Box 844 Boise, Idaho 83701 Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email bbridge(gwildidaho.org Northwest and Intermountain Power Producers Coalition Susan K. Ackerman 9883 NW Nottage Drive Portland, Oregon 97229 Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email Susan.k.ackerman(gcomcast.net Community Action Partnership Association Of Idaho Brad M. Purdy Attorney at Law 2019 North 17th Street Boise, Idaho 83702 Hand Delivered -l U.S. Mail _ Overnight Mail FAX -l Email bmpurdy(ghotmail.com OÆ/~Barton L. Kline IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 11