20110823IPC to Micron (Third).pdf

i?IDA""POR~
An IDACORP Company
LISA D. NORDSTROM
Lead Counsel
Inordstrom(åidahopower.com
August 22, 2011
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83720
Re: Case No. IPC-E-11-08
General Rate Case
Dear Ms. Jewell:
Enclosed for filng are an original and one (1) copy of Idaho Power Company's
Response to the Third Production Request of Micron Technology, Inc., to Idaho Power
Company in the above matter.
Also enclosed are three (3) copies of a non-confidential disk and three (3) copies of
a confidential disk containing information being produced in response to Micron's Third
Production Request.
Please handle the enclosed confidential information in accordance with the
Protective Agreement executed in this matter.
Very truly yours,
~.2Yê~
Lisa D. Nordstrom
LDN:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, 10 83707
LISA D. NORDSTROM (ISB No. 5733)
DONOVAN E. WALKER (ISB No. 5921)
JASON B. WILLIAMS
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
Inordstromcæidahopower.com
dwalkercæidahopower.com
jwilliamscæidahopower.com
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Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MA TIER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR )
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC )SERVICE IN IDAHO. )
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CASE NO. IPC-E-11-08
IDAHO POWER COMPANY'S
RESPONSE TO THE THIRD
PRODUCTION REQUEST OF
MICRON TECHNOLOGY, INC. TO
IDAHO POWER COMPANY
COMES NOW, Idaho Power Company ("Idaho Powet' or "Company"), and in
response to the Third Production Request of Micron Technology, Inc. to Idaho Power
Company dated August 1, 2011, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 1
REQUEST NO. 3-1: Tatum Exhibit 20, page 4. What level of FERC Acct. 456.1
revenues are included in the Company filing?
RESPONSE TO REQUEST NO. 3-1: Please see Jones Exhibit No. 14, page 1
of 23, column 11, lines 13-16 and 19-20 totaling $18,017,501.
The response to this Request was prepared by Timothy E. Tatum, Senior
Manager of Cost of Service, Idaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 2
REQUEST NO. 3-2: Provide all workpapers showing the sources, development,
estimation, adjustments annualization and normalization of each Acct. 456 and sub-
accounts recorded, and test year.
RESPONSE TO REQUEST NO. 3-2: Please see the Company's response to
Staffs Production Request No. 84 for corresponding spreadsheets containing the
calculation for 2011 Network Transmission Customer and point-to-point wheeling
revenues. 2010 actuals were used for revenues related to Photovoltaic, Antelope, and
Stand-by-service. See the Company's response to Micron's Production Request No. 3-
14 for Sierra Pacific Power usage revenues.
The response to this Request was prepared under the direction of Timothy E.
Tatum, Senior Manager of Cost of Service, Idaho Power Company, in consultation with
Lisa D. Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 3
REQUEST NO. 3-3: How are Acct. 456 and each sub-account credited to retail
and any other customer group? Cite fiing references for such credits.
RESPONSE TO REQUEST NO. 3-3: The first step in crediting Account 456
revenues to customer groups is to classify and functionalize each sub-account. As
shown on lines 290-297 of Larkin Exhibit No. 31, each sub-account that comprises
Account 456 is classified as being either customer-related, demand-related, or energy-
related and is further identified with one or more of the Company's operating functions,
such' as production and/or transmission. Once each sub-account has been classified
and functionalized, as shown in Larkin Exhibit No. 31, the segmented revenues are
transferred to the "Other Revenues" summary table, provided as page 3 of Larkin
Exhibit No. 32. This table compiles revenues from Accounts 415, 451, 454, and 456 by
classification and functional category in order to align the various components of each
account with the appropriate allocation factors. After these revenues have been
compiled by classification and functional category, they are allocated to rate classes as
shown on pages 25 and 26 of Larkin Exhibit No. 33. Finally, class-allocated revenues
are summed on line 18 of Larkin Exhibit No. 35, serving as a credit to each class in the
development of final class-specific revenue requirements.
The response to this Request was prepared by Matthew T. Larkin, Regulatory
Analyst, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 4
REQUEST NO. 3-4: Please provide detailed explanation for the Exhibit 20 page
11 item by item projected increase in each non-labor expense, including details of all
Company efforts to curb or eliminate the $15.6 milion increase
RESPONSE TO REQUEST NO. 3-4: Please see explanations for the projected
increase in each non-labor expense on Larkin Exhibit 20, page 11 in the attached Excel
file (each item with separate tabs). Also, see the Company's response to Staffs
Production Request No. 89.
Idaho Power is committed to managing all expenditures for operations and
maintenance ("O&M"), working capital, and capital investments that are required to
meet customer growth, reliabilty, and the preservation of its base resources. Annual
budgets are prepared with executive oversight and economical guidelines developed
with significant known/probable changes taken into consideration. Regular monitoring
of spending levels compared to budget is completed five times per year with the Senior
Executive Team.
The Company continues to manage upward cost pressure to meet new
compliance requirements, which include Sarbanes Oxley, Federal Energy Regulatory
Commission ("FERC") Standards of Conduct, North American Electric Reliability
Corporation reliabilty standards, ongoing environmental requirements, costs required to
comply with the terms of new hydro licenses, and an aging thermal fleet. The Company
has also experienced cost pressures in managing the aging workforce issues relative to
a significant portion of the craft positions within the Company and the utilty industry as
a whole.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 5
Specific quantification of individual initiatives is difficult. The Company measures
its success in its O&M management in the level of increase year over year given the
upward pressure on large portions of the Company's businesslike maintenance of an
aging thermal fleet, distribution and transmission facilties, new compliance
requirements, and aging workforce issues.
The response to this Request was prepared by Jerry McCabe, Corporate Budget
Manager, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 6
REQUEST NO. 3-5: Tatum Direct pg. 13 I 1-6 and Exhibit 20. Provide
itemization of each 2010 Valmy Power Plant (VPP) Nonfuel O&M account or category,
and the specific escalation rate of each making up the total requested O&M expense
increase.
RESPONSE TO REQUEST NO. 3-5: An itemization of the Valmy Power Plant
non-fuel O&M expense is provided below. The table below compares the 2010 actual
costs to the Valmy O&M costs being requested for 2011. For purposes of developing
the 2011 requested amount, Idaho Power relied on projections of 2011 expenses
provided by its Valmy operating partner, NV Energy, rather than applying escalation
rates to specific categories of expenses or FERC accounts.
2010 2011 2011
Actual Forecast Variance
Plant Direct Operation and
Maintenance Expenses 14,789,395 15,718,426 929,031
Other NV Energy Expenses
Direct Charged to Valmy 766,933 1,513,250 746,317
NV Energy Administrative and
General Overhead Expense 1,424,067 1,861,876 437,809
Total Valmy O&M 16,980,395 19,093,552 2,113,157
The response to this Request was prepared by Randy Henderson, Finance
Team Lead, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 7
REQUEST NO. 3-6: What is the actual nonfuel O&M expense for VPP being
requested for the test year?
RESPONSE TO REQUEST NO. 3-6: The actual non-fuel O&M expense is
$19,093,552.
The response to this Request was prepared by Jerr McCabe, Corporate Budget
Manager, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 8
REQUEST NO. 3-7: Exhibit 20, page 7. Provide all documentation showing the
actual PacifiCorp wage escalation and enhanced 401 K benefits referred to, and actual
total Bridger Power Plant O&M labor cost being requested on page 7.
RESPONSE TO REQUEST NO. 3-7: An itemization of the Jim Bridger Power
Plant O&M labor expense is provided in the attached Excel file which compares the
2010 actual Jim Bridger O&M labor costs to the labor costs being requested for 2011,
including amounts for wage escalation and enhanced 401 (K) benefits. For purposes of
developing the 2011 requested amount, Idaho Power relied on projections of 2011 labor
expenses provided by its Jim Bridger operating partner, PacifiCorp.
The response to this Request was prepared by Randy Henderson, Finance
Team Lead, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 9
REQUEST NO. 3-8: Tatum page 8, line 18. Please provide a comparison of
"2010 actual revenue" with the 2010 adjusted and normalized revenue.
RESPONSE TO REQUEST NO. 3-8: Please see Jones Exhibit No. 14, page 1
of 23. Idaho Power does not normalize Other Operating Revenues (Accounts 451, 454,
and 456) in developing a revenue requirement and has not done so in this case.
The response to this Request was prepare~ by Timothy E. Tatum, Senior
Manager of Cost of Service, Idaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 10
REQUEST NO. 3-9: Tatum page 9 lines 5-15. Provide actual network services
revenue, other long term firm revenues and point-to-point transmission revenues for
2010.
RESPONSE TO REQUEST NO. 3-9: Please see Jones Exhibit No. 14, page 1
of 23, lines 13-21.
The response to this Request was prepared by Timothy E. Tatum, Senior
Manager of Cost of Service, Idaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 11
REQUEST NO. 3-10: Provide revenues of each customer by name for each of
the transmission services identified in 8) above.
RESPONSE TO REQUEST NO. 3-10: Please see the spreadsheet containing
the revenues from each customer by name for each of the transmission services
identified in 8) above on the confidential CD. The confidential CD will be provided to
those parties that have executed the Protective Agreement in this matter.
The response to this Request was prepared under the direction of Doug Jones,
Finance Team Leader, Idaho Power Company, in consultation with Lisa D. Nordstrom,
Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 12
REQUEST NO. 3-11: Please provide a detailed explanation of how each of
these categories of revenues was "projected base upon information more reflective of
current circumstances and an anticipated Open Access Transmission Tariff rate update
in October 2011. (sic)
RESPONSE TO REQUEST NO. 3-11: Please see Tatum Exhibit No. 20,
Forecast Methodology Manual, for explanation of calculation of Network Transmission
Customer revenues and point-to-point wheeling revenues. Please see the Company's
response to Staffs Production Request No. 84 for workpapers of the detailed
calculation of the Open Access Transmission Tariff rate.
The response to this Request was prepared under the direction of Timothy E.
Tatum, Senior Manager of Cost of Service, Idaho Power Company, in consultation with
Lisa D. Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 13
REQUEST NO. 3-12: What were 2010 Sierra Power usage revenues in 2010?
RESPONSE TO REQUEST NO. 3-12: Please see Jones Exhibit No. 14, page 1
of 23, line 17.
The response to this Request was prepared by Timothy E. Tatum, Senior
Manager of Cost of Service, Idaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 14
REQUEST NO. 3-13: Please explain the basis for a "usage revenues from
Sierra Pacific Power. Specifically what was used and what is the intercompany billng
arrangement. (sic)
RESPONSE TO REQUEST NO. 3-13: Please see the Company's response to
Staffs Production Request No. 86.
The response to this Request was prepared under the direction of Timothy E.
Tatum, Senior Manager of Cost of Service, Idaho Power Company, in consultation with
Lisa D. Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY ~ 15
REQUEST NO. 3-14: Why are usage revenues from Sierra Pacific Power
expected to be zero in 2011?
RESPONSE TO REQUEST NO. 3-14: Please see the Company's response to
Staffs Production Request No. 86.
The response to this Request was prepared under the direction of Timothy E.
Tatum, Senior Manager of Cost of Service, Idaho Power Company, in consultation with
Lisa D. Nordstrom, Lead Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 16
REQUEST NO. 3-15: Has an agreement or contract been reached prohibiting
Sierra Pacific from using Idaho Powets plant from which the usage revenues are
generated?
RESPONSE TO REQUEST NO. 3-15: No.
The response to this Request was prepared under the direction of Timothy E.
Tatum, Senior Manager of Cost of Service, Idaho Power Company, in consultation with
Lisa D. Nordstrom, Lead Counsel, Idaho Power Company.
DATED at Boise, Idaho, this 22nd day of August 2011.
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LISA D. NORDS ROM
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 17
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 22nd day of August 2011 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER
COMPANY upon the following named parties by the method indicated below, and
addressed to the following:
Commission Staff
Donald L. Howell, II
Karl T. Klein
Deputy Attorneys General
Idaho Public Utilties Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
X Email Don.Howelicæpuc.idaho.gov
Karl. Kleincæpuc. idaho.gov
Industrial Customers of Idaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON & O'LEARY, PLLC
515 North 2¡th Street (83702)
P.O. Box 7218
Boise, Idaho 83707
Hand Delivered
U.S. Mail
_ Overnight Mail.
FAX
-2 Email petercærichardsonandoleary.com
gregcærichardsonandoleary.com
Dr. Don Reading
Ben Johnson Associates, Inc.
6070 Hil Road
Boise, Idaho 83703
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-2 Email drcæbenjohnsonassociates.com
Idaho Irrigation Pumpers Association, Inc.
Eric L. Olsen
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
201 East Center
P.O. Box 1391
Pocatello, Idaho 83204-1391
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FAX
-2 Email elo((racinelaw.net
Anthony Yankel
29814 Lake Road
Bay Vilage, Ohio 44140
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-2 Email tony((yankel.net
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 18
The Kroger Co.
Kurt J. Boehm
BOEHM, KURTZ & LOWRY
36 East Seventh Street, Suite 1510
Cincinnati, Ohio 45202
Kevin Higgins
Energy Strategies, LLC
215 South State Street, Suite 200
Salt Lake City, Utah 84111
Micron Technology, Inc.
MaryV. York
HOLLAND & HART LLP
101 South Capital Boulevard, Suite 1400
Boise, Idaho 83702
Richard E. Malmgren
Senior Assistant General Counsel
Micron Technology, Inc.
800 South Federal Way
Boise, Idaho 83716
The United States Department of Energy
Arthur Perry Bruder, Attorney-Advisor
United States Department of Energy
1000 Independence Avenue SW
Washington, DC 20585
Dwight D. Etheridge
Exeter Associates, Inc.
10480 Little Patuxent Parkway, Suite 300
Columbia, Maryland 21044
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-2 Email kboehm(iBKLlawfirm.com
jrh(ibattfisher.com
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-2 Email khiggins(ienergystrat.com
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-2 Email myork(ihollandhart.com
tnelson(ihollandhart.com
madavidson(ihollandhart.com
fschmidt(ihollandhart.com
Inbuchanan(ihollandhart.com
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-2 Email remalmgren(imicron.com
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-2 Email Arthur.bruder(ihg.doe.gov
Steven .porter(ihg.doe.gov
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-2 Email detheridge(iexeterassociates.com
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 19
Community Action Partnership
Association of Idaho
Brad M. Purdy
Attorney at Law
2019 North 1 ¡th Street
Boise, Idaho 83702
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FAX
-2 Email bmpurdy((hotmail.com
Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North Sixth Street (83702)
P.O. Box 844
Boise, Idaho 83701
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-2 Email botto((idahoconservation.org
Snake River Allance
Ken Miler
Snake River Allance
P.O. Box 1731
Boise, Idaho 83701
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-2 Email kmiler((snakeriverallance.org
NW Energy Coalition
Nancy Hirsh, Policy Director
NW Energy Coalition
811 First Avenue, Suite 305
Seattle, Washington 98104
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-2 Email nancy((nwenergy.org
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Lisa D. Nordstro .
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 20