20110812ICIP 37-44 to IPC.pdf

Idaho Public Utilities Commission
Office of the SecretaryRECEIVED
Petr!. Richin ISB # 3195
. ry M. Adas ISB # 7454
. . SON & O'LEARY PLLC
51S N. 27th Stieet
Boise, Idaho 83702
Telephone: [phone]
Fax: [phone]
JUl 27 2011
Boise, Idaho
Attorneys for the Industial Cutomers of Idah Power
BEFORE TH IDAHO PUBLIC UTILITIES COMMSSION
ROFTHE
N OF IDAHO POWER
AUTORITY TO
ITS RATES AN CHAGES
C SERVICE TO ITS
CUSTOMERS IN THE STATE OF IDAHO
) CASE NO.IPC-E-ll-08
)
) FOURTH REQUESTS FOR
) PRODUCTION OF THE
) INDUSTRAL CUSTOMERS OF
) IDAHO POWER
Pusut to Rule 225 of the Rules of Procedure of the Idaho Public Utîlîties Commssion
(the "Commission"), the Industal Customers of Idao Power ("IClP") hereby requests tht
Idao Power Compay ("Idao Power" or the "Compay") provide responses to the following
with supportng documents, wher applicable. The response to th productîon request is due
August 24, 2011.
Ths prouctîon request is to be considere as contîpuing, and Idao Power is request
to provide by way ofsuplementå responses additîona documents tht it or any peon sctîng
on its behaf may later obtan tht will augment the responses or documents prouce.
please provide electronic coies, or if unavailable a physical copy, to Mr. Richadson and. -. .. . ___ . ',. '..c
Mr. Adam at the addrss noted above, and to Dr. Don Reading at: 6070 Hil Road, Boise, idao
83703, Tel: [phone]; Fax: [phone] i; drea(qdspring.com.
For each item, pleae indicate the name of the person(s) preparing the .anwers~ along
with the job title of such person(s) and the witíess at heag who can sponsor the aner.
Some of the followig requests may include disclosurs deemed by Idao Power to be
èonfdentî. Counel and the exprt witness for the Industral Customers of Idao Power have
executed the protecve agreement to obtan and use such materials according the terms of that
ageement.
FOURTH REQUESTS FOR PRODUCTION OF TH ICIP
IPC~E-i 1 -08
PAGE 2
REQUEST FOR PRODUCTION NO. 37:
Refernce Dirt Tesony of Scott Sparks, p, 38, lines 12-13 (sttîng that the "Book
Depreciatîon" component of th facilties charge uses "a stght lie anual depreciation of
asset based o.n a Ievelized 31 year basis"). For Schedules 9, 19, 24 and Special Contrct
Customers, pleas sepately provide:
(a) the origi asset value of all facilties cuintly sulùect the faciltîes chage (Le. the
"CoDipany's investmnt" referened in the chárge's calculaton set fort in the tarffs);
(b) the average age ofthe individua pieces of equipment cury subject to thefacilties
chage;
(c) the averae dollar weighted ag of the individua pieces of equipment curently subjec to
the facilities chare; .and
(d) remaing book value:of the equipment subjec to the failties charge (Le. assumng
stght line 31-year depreciationfrom the amounts provided in response to item (a)).
REQUEst FOR PRODUCTION NO. 38:
Refernce the table se for in the Dirct Testîony of M~ttew Larki on p~ 2S.
(a)Pleae provide the: values for the Oter E:xpese ite labeled "Fuel," organzed by
generion facilty. Please inc1udidenticaon of each generation facilty as either a
"Peag Unit" or a "Generation and Stea Production Unit," as those terms are used in
the cost of servce stdy.
Please explai why the: cost of Fuel used for Peakin Plants is alocated 100% to Energy
and not 100% to Demad consistent with the allocoo of Peakg Unit costs.
(b)
(c)Pleae explai why the cost ofFiil us for Generaton and Ste Production Units is
not allocated 53.88% Enery and 46.12% Demad, consient with the allocation of
Geeraton and Steam Proùcon Unit costs.
(d)Does Idaho Power agree that it would be logica to allocate the costs of ful consistent
with the allocation of the genertîon facilty using the ful? Pleae explai the response.
,.
REQUEST FOR PRODUCTION NO. 39
Pleas prvide all work papers, documentation, and a complete explantîon of the development
of the normalze values found in Wright EXhbit 18 in spreheet led, "Test Yea 201 1,
Cogeneraton and Small Power .Poduction, Rate Deparent N . Inortion," and
explain how thse values flow from th FERC Account 55S.2 data $itlied;fe Compay's
FOURTH REQUESTS FOR PRODUCTION OF TH LCIP
IPC~E-l 1 -08
PAGE 3
Respons to DOE's Data Request No. 1-13. Pleae include explanaton why the values in
Wright Exhbit 18 are higher th those found in the Compay's Resnse to DOE's Data
Request No. 1-13.
REQUEST FOR PRODUCTION NO. 40:
The Company request a load chage adjustment rate (LCAR) of $19.28IMWh for al cusomers
(Larki DI, p.38 and Exhbit 39), and a flXed cost adjusent (FCA) of .1218 centsWh for
reidetial custoer and to 0.2273 centsWh for Small Commercal customers (Cavangh DI,
Exhbit 42). Pleas fully explai why this is not allowig the Compay to be over-compensated
for reuced powersales attbutable to a declie in the economy and/or the Compay's demand
side management effort. Plèase includ explantion ofthe stes taen by the Company to
ensur that effects of LCAR and the FCA will not ret in double recvery for declin loads.
REQJÆST FOR PRQDUCTON NO. 41
Reference Commission Orer No. 32206, p. 2 (sttî tht the proposed LCAR rate for Idao
Power would be $ 15.43/MWh on March 15,2011). Pleae explain the factors tht have
increaed theload change adjUStment tate to $19.28IMWh as set fort Exhbit 49 to the Direct
Tesny of Mattew Larki. Include explantîon of what ha cause the energy e1assified
pomon of embedded production revenue reuireent to increase over i5% since Marh 201 1.
Wil the LeAR result in a iíicreased or decreas rates ths yea?
REQUEST FOR PRODUCTION NO. 42
Reference Rebuttal Testony of the Consrvation Pares, Nancy Hirsh, IPC-E-IO-2S, pp. 3-4,stati:
The A-J effect argues tht utlîties have an incentîve to put lare capita projec
into their rate base if the allowable 'rate of return exceeds the cost of capital. I
emphasize this send clause becàuse ths is essential to undertadig if the A-J
effect applies to Ìdaho Power. The incentive occurs becaus given a fied rate of
retu tht exceeds the cost of capita; shareholders ea more on a $ I millon
investentthan a $1 t. But as èxplaied by Steve Kihm in When
Revenue Decou ling i rk. . .and When it Won't: "If a regulator keeps
allowed rates close to a utlity's .Cost of capita, i the eaed
rate ofret wil e the pri drver of the utilty's stok pricé. See Kihm at i,
Attchment 1. ICIPs "discussion" of the A-J effect neglects to provide ths ful
explanatîon and does not attempt to exa Idao Power's rate of retu relatîve
to their cost of çapitaL.
(a) Does Idaho Power agee with ths assessment otthe A-J effect and cost of capita?
(b) Does.Raph Cavangh agree with ths assessment of the A-J effect ànd cost otcaita?
FOURTH REQUESTS FOR PRODUCTION OF TH IClP
lPC-E-l l -08
PAGE 4
Please explai how Idaho Power's cost of capita is close to Idao Power's authori
rate of retu? IfIdaho Power's explanation is different frm Mr. Cavan's please
explain.
(d) If Idao Power's 'cost of capital is not close to its authorized rate of retu please explai
how continuation of the fixed cost adjustment wiU overcome the A-J efêPt for Idao
Power without a corresponding reducion in the Company's authorize tae of retlì.
REQUEST FOR PRODUCTION NO, 43
Refernce the Direct lestîony of Ralph Cavanaugh p. 8, Jines 10-13 and Exhibit 42. Plea
explain why the fixed cost adjustment has increased eah year since its inception. If made
peent, wiU the FCA continue to increase eah yea?
REQUET FOR PRODUCTION NO. 44
Référence the Direct Testîony of Ralph Cavaugh p. q, lies 3-9.
(a)
(b)
Pleae explai why the FCA has not reduced Idao Power's ficia risks.
Pleae explai how the LCAR authoring récover thugh the PCA for lost reenue for
th energy Qlassified portion of embedde production revenue reuiment ha not
reduced Ìdaho Power's fiancial risks.
(c)Please explai how the Company considered its reuce risk from these combined
mechaisms in its analysis of its necssar rate of re in ths cae. If the Company did
not consider these two risk reduction factors, pleae explai why.
Than you for yourpromptattentîon to ths Four Request for Productîon.
Adams
SON;& O'LEARY, PLLC
FOURTH REÙESTS FOR PRODUCTION OF TH ICIP
¡PC-E-II-Q8
PAGES
CERTICATE OF SERVICE
I HEBY CERTIFY thto:t the 27th day of July, 201 tre and correc copy of the
withn and foregoing FOURTH REQUEStS FOR PRODUC OF THE INUSTRAL
CUSTOMERS OF IDAHO POWER IN CAE NOJPC-E- i 1-08 was se in the ma shown to:
Ms. Jean Jewell
COssion t:
.Idaho PUblic. U . es Common
P "83720
Bo' ,ID 83720-0074
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Lisa D Nordstom
JaSn B Wilias
Idao PDweCompay
POBox 70
BoIse, Idao 83707..0070
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Donovan Waler
Grg Said
Idaho Powe Company
POBox 70
Boise, Idaho 83707-0070
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Eric L. Olse
Racine, Olson,Nye, Budge &
Bailey, Chered
P.O. Box 1391; 201 E. Center
.Pocatßo, Idao 33204..1391
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