20101108ICIP 1-15 to IPC.pdf

RECE!V~"QJlJ.B~PUATTORNEYS AT LAW zuin HOV -8 PM 2= 22
Peter Richardson
Tel: [phone] Fax: [phone]
pete r~ tichardsonandol eary. co m
P.O. Box 7218 Boise, 1083707 - 515 N. 27th St. Boise, 10 83702
November 8, 2010
Ms. Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
RE: IPC-E-10-25
Dear Ms. Jewell:
We are enclosing three copies of the FIRST PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER, in the above case.
The original has been served on Idaho Power Company.
Sincerely,~Ú0d\1
Nina Curtis
Administrative Assistant to Peter Richardson
Richardson & O'Leary PLLC
iT
,.,
..
Peter J. Richardson ISB # 3195
Gregory M. Adams ISB # 7454
RICHARDSON & O'LEARY PLLC
515 N. 27th Street
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
peter(ßchardsonandolear.com
greg(grichardsonadolear.com
f)
imo NOV -8 PM 2= 22
Attorneys for the Industrial Customers of Idaho Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S REQUEST FOR
ACCEPT ANCEOF ITS 2011
RETIREMENT BENEFITS PACKAGE
) CASE NO. IPC-E-IO-25
)
) FIRST PRODUCTION REQUEST OF
) THE INDUSTRIAL CUSTOMERS OF
) IDAHO POWER
)
Pursuat to Rule 225 of the Ru1es of Procedure of the Idaho Public Utilties Coinmission
(the "Commission"), the Industral Customers of Idaho Power ("ICIP") hereby requests that
Idaho Power Company ("Idaho Power") provide responses to the following with supporting
documents, where applicable, no later than November 29,2010.
Ths production request is to be considered as continuing, and the Idaho Power is
requested to provide by way of supplementar responses additional documents that it or any
person acting on its behalf may later obtan that will augment the responses or documents
produced.
Please provide one physical copy and one electronic copy, if available, of your answer to
Mr. Adams at the address noted above. Please provide an additional electronÌC copy, or if
Page 1 ~ FIRST PRODUCTION REQUEST OF THE INDUSTRIA
CUSTOMERS OF IDAHO POWER~ IPC-E-IO-25
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unavailable a physical copy, to Dr. Don Reading at: 6070 Hil Road, Boise, Idaho 83703, Tel:
[phone]; Fax: [phone]; dreading~mindspring.com.
For each item, please indicate the name of the person(s) preparing the answers, along
with the job title of such person(s) and the witness at hearng who can sponsor the answer.
Some of the following requests may include disclosures deemed by Idao Power to be
confidentiaL. Counsel for the Industrial Customers of Idao Power contacted counsel for Idaho
Power regarding a confidentiality agreement prior to sending these Requests for Production.
Counsel and the expert witness of the Industrial Customers of Idaho Power are prepared to sign
any such agreement to obtai the materials. relevant to ths proceeding, and expect that executing
such a confidentiality agreement will not delay Idaho Power's responses to these Requests for
Production.
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CUSTOMERS OF IDAHO POWER- IPC-E-IO-25
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REQUEST FOR PRODUCTION NO. i
Reference Direct Testimony of Sharon Gershultz, p. 5, lines 3-18.
a. Please provide all documents, studies, or other information provided by Towers Watson
to Idaho Power.
b. Please indicate the tie period of the Towers Watson contract and the time period over
which Towers Watson conducted its investigation.
c. Please provide a description of the retirement benefit program for each of the 700
companies included in the comparson group. Please specify for each company's program
whether it includes a defined benefit program, defined contrbution program, cash balance
progr, or some other type of program, and if it includes.more than one type of program please
specify which types ar included and the relative percentages of each to the total program. For
each company, please also provide the date that the program described was in effect.
d. Please identify which of the 700 companes have a retirement benefit programs which
includes a defined benefit program for new employees, similar to that proposed by Idaho Power.
Please provide all evidence establishing such programs are similar to Idaho Power's.
e. F or each company in the comparson group, please indicate the number of employees of
that company as of the date of the program described.
REQUEST FOR PRODUCTION NO.2
Reference Direct Testimony of Sharon Gershu1tz, p. 5, lines 13-18, referrg to the investigation
of peer companies.
a. Please provide list of the peer companes.
b. Please provide the time period over which the comparson was conducted,
c. Please provide a description ofthe retirement benefit program for each ofthe peer
companies included. Please specify for each company's program whether it includes a defined
benefit program, defined contrbution program, cash balance program, or some other tye of
progra, and if it includes more than one tye of program please specify which types are
included and the relative percentages of each to the total program. For each company, please
also provide the date that the program described was in effect.
d. Please identify all peer companes whose retirement benefit programs include a defined
benefit program for new employees, similar to that proposed by Idaho Power. Please provide all
evidence establishing such programs are similar to Idaho Power's.
Page 3 ~ FIRST PRODUCTION REQUEST OF THE INDUSTRIA
CUSTOMERS OF IDAHO POWER- IPC-E-IO-25
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e. For each of the companes included in the peer group, please indicate the number of
employees.
REQUEST FOR PRODUCTION NO.3
Reference Direct Testimony of Sharon Gershu1tz, p. 8, lines 4-10. Please provide data for each
year through 2020 indicating the total number of total employees and the number in each of the
groups categorized as "curent leaders," and "Critical Operations."
REQUEST FOR PRODUCTION NO.4
Reference Direct Testimony of Sharon Gershu1tz, p. 8-11, regarding the "a simple shift of the
Company's curent benefit weighting from the defined benefit plan to the 401(K) benefit plan."
a. Please provide, in electronic format where possible, all work papers, spreadsheets, and
data used in the analysis,
b. Please provide all assumptions used in the analysis, including the assumed retu for both
the curent Company retirement program and the invested funds in an average employee's
401 (K).
c. Please provide the timeframe over which the analysis was conducted and a definition of
what was considered the "long-ru."
d. Please provide the present value of the total Company contribution under the curent
Company retirement plan and the defined contrbution alternative.
REQUEST FOR PRODUCTION NO.5
Reference Direct Testimony of Sharon Gershu1tz, p. 12, lines 2-8~ stating "As I fuer evaluated
different scenarios, I concluded that while the defined benefit plan provided a very similar
benefit as the 401(K) benefit plan to an average worker, it provided a higher level of benefits to
an employee with more years of experience while the 401(K) benefit plan provided more benefit
to a less experienced employee."
Please provide, in electronic format where possible, all work papers, spreadsheets, and data used
to reach this conclusion.
REQUEST FOR PRODUCTION NO.6
Reference Direct Testimony of Sharon Gershultz, pp. 13-15, describing the study of a cash
balance plan.
Page 4 - FIRST PRODUCTION REQUEST OF THE INDUSTRIL
CUSTOMERS OF IDAHO POWER-IPC-E-IO-25
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a. Please provide, in electronic format where possible, all work papers, spreadsheets, and
data used in the anysis.
b. Please provide all assumptions used in the analysis, including the assumed retu for both
the curent Company retirement program and cash balance plan.
c. Please provide the tieframe over which the analysis was conducted.
d. Please provide the present value of the tota Company contribution under the curent
Company retirement plan and the cash balance plan alternative.
REQUEST FOR PRODUCTION NO.7
Reference Direct Testimony of Sharon Gershultz, pp. 16-19, describing the proposed modified
retirement plan.
a. Please provide, in electronic format where possible, all work papers, spreadsheets, and
data used in the analysis.
b. Please provide all assumptions used in the analysis, including the assumed retur for both
the curent Company retirement program and the proposed modified plan.
c. Please provide the tiieframe over which the analysis was conducted and the impact on
the Company's retiement benefit costs on a year by year basis over the study tiie period.
d. Please provide the present value of the total Company contribution under the curent
Company retirement plan and the proposed modified plan.
REQUEST FOR PRODUCTION NO.8
Reference Direct Testimony of Sharon Gershultz, p 19, lines 3-7, stating "as I have looked at
other utilties, it is clear that the Company's workforce strctue has allowed it to avoid many
additional employee-related costs that other utilties incur and must pass on to customers."
a. Please provide a list of the other utilties that were used to arve at ths conclusion.
b. Please provide a description of the retirement benefit program for each of these utilties
(i.e. defined benefit, defined contribution, cash balance, combination of types, etc.).
c. Please specify any factors that Idaho Power can avoid that led other utilities to incur
additional employee-related costs and the dollar amounts of those costs.
Page 5 - FIRST PRODUCTION REQUEST OF THE INDUSTRIL
CUSTOMERS OF IDAHO POWER - IPC-E-l 0-25
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REQUEST FOR PRODUCTION NO.9
Reference the following Commission directive in Order No. 31091, p. 3:
Many employers in recent years have replaced their defined benefit plans with
pension programs that place greater responsibility and investment risks on
employees. Idaho Power must similarly consider changes to its retirement plan
and address shareholder and employee liabilities in the assignment of pension
plan investment risk. The Commission will not approve recovery of additional
pension plan contributions from customers without evidence that Idaho Power has
carefuly reviewed alternatives to reduce the burden placed on customers.
a. Please identify where in the testimony Idaho Power has demonstrated that it considered
shareholder liabilties in assignent of pension plan investment risk.
b. Please identify where in the testimony Idaho Power has demonstrated that it considered
employee liabilties in assignment of pension plan investment risk.
c. Please identify where in the testimony Idaho Power has demonstrated that it carefully
reviewed alternatives to reduce the burden placed on customers.
d. Reference Direct Testimony of Darel Anderson, p.5, lines 9~10, stating that his
instrctions to Ms. Gershultz prior to the retirement benefit review this year "were similar to the
instrctions that I provide for each year's review." Please explain how such an instrction to Ms.
Gersulch could obtain a resu1t that complies with the Commission's directive in Order No.
31091.
e. How does the modified retirement plan presented by Idaho Power shift the risk for
pension fud underperformance from ratepayers to employees?
f. How does the modified retirement plan presented by Idaho Power shift the risk for
pension fud underperformance from ratepayers to shareholders?
REQUEST FOR PRODUCTION NO.1 0
Reference Direct Testimony of Darel Anderson, p. 5, lines 20-22, stating, "retirement benefit
portbility is not in alignment with the Company's employee retention goals and may not be in
the best interests of customers." Please explain why retirement benefit portabilty would not be
the best interests of customers. Please provide all evidence, documents, or studies supporting
this assumption.
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CUSTOMERS OF IDAHO POWER-IPC-E-IO-25
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REQUEST FOR PRODUCTION NO. 11
Reference Direct Testimony of Darel Anderson, p. 7, stating, "Employees who retire prior to
age 62 receive a reduced benefit based on their age at retirement."
a. Please indicate whether there any additional retirement benefits an employee may receive
if they worked beyond age 62? Please explain.
b. Please indicate whether the Company considered or analyzed the impact (financial,
retention of workforce, or other factors) of extending the age or retirement beyond age 62? If so,
please provide a copy of that analysis including all assumptions and data.
REQUEST FOR PRODUCTION NO. 12
Reference Direct Testimony of Darel Anderson, p. 10, describing the retiree medical benefits
portion of the retirement benefits package.
a. Please describe the Company's retirement health care plan and explain how retirees bear
all market and infationar risk.
b. Does the Company believe heath care benefits are importt to curent or potential
employees?
REQUEST FOR PRODUCTION NO. 13
Reference Application at ir 17, requesting "the Commission issue its Order accepting the
Company's 2011 Retirement Benefits Package" and stating the Company "would anticipate that
recovery of plan costs will reasonably follow in accordance with previous Commission orders."
a, If the Commission were to issue the requested order, please explain what circumstaces
would allow the Commission to disallow expenditues made in accordance with the 2011
Retirement Benefits Plan when requested in futue filings.
b. Please explain where in the testimony the Company has described a cost estimate for the
likely expenses the Company will incur under the 2011 Retirement Benefits Plan, amI an
estimate for which of those expenses the Company will seek rate recovery' from its customers.
Page 7 ~ FIRST PRODUCTION REQUEST OF THE INDUSTRIL
CUSTOMERS OF IDAHO POWER - IPC-E-I 0-25
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REQUEST FOR PRODUCTION NO. 14
Reference Staff Comments in IPC-E-I0-08, p. 4, estimating the Company will need to make
additional payments to its employee pension plan of approximately $68 millon in the next thee
years, and $157 milion in the years 2014-2018.
a. Are these estimates still accurate? If not, please provide updated estimates.
b. How will the Company satisfy these needs? Wil the Company rely on futue rate
increases entirely, or will shareholders contrbute?
REQUEST FOR PRODUCTION NO. 15
Reference Direct Testimony of Greg Said, p. 7, lines 6~9, stating, "The Company also believes
that it wou1d be uneasonable to view its retirement benefits package as unacceptable based upon
curent pension fuding obligations resulting from a downtu in the economy (short-term
view)."
a. If the Company's customers will be asked to pay for pension fuding obligations
resulting from downtus in the economy, why is it uneasonable to view the retirement benefits
package in the short term?
b. Wil shareholders pay for any of the pension fuding obligations resu1ting from the
curent, or any future, downtur in the economy? If so, please explain how and to what extent.
c. Please explain how it is reasonable to continue offering the defined benefit plan proposed
in this fiing for new employees in the face of the contributions needed for existing employees,
as referenced in Request for Production 14.
Than you for your prompt attention to this First Request for Production.
ams
ARDSON & O'LEARY, PLLC
Page 8 - FIRST PRODUCTION REQUEST OF THE INDUSTRI
CUSTOMERS OF IDAHO POWER -IPC-E~l 0-'25
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 8th day of November, 2010, I caused a tre and
correct copy of the foregoing FIRST PRODUCTION REQUEST OF THE INDUSTRIAL
CUSTOMERS OF IDAHO POWER to be served by the method indicated below, and
addressed to the following:
Jean Jewell
Idaho Public Utilities Commission
472 West Washington Street (83702)
Post Office Box 83720
Boise, Idaho 83720-0074
( ) U.S. Mail, Postage Prepaid
(x) Hand Delivered
( ) Overnght Mail
( ) Facsimile
( ) Electronic Mail
Lisa Nordstrom
Donovan Walker
Idaho Power Company
PO Box 70
Boise, Idaho 83707
(x) U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
( ) Electronic Mail
Gregory W. Said
Tim Tatu
Idaho Power Company
PO Box 70
Boise, ID 83707
(x) U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnght Mail
( ) Facsimile
( ) Electronic Mail
Signed~ÚVc1
Nina M. Curis
CERTIFICATE OF SERVICE - 1