20120419IPC(partial first) to Micron.pdf

R."A'A"64 Q IHO OPOMRO RECEIVED An IDACORP Company
JASON B. WILLIAMS
Corporate Counsel jDAHC
iwilliamsidahoower.com JT!
April 19, 2012
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-12-08
IN THE MATTER OF IDAHO POWER COMPANY'S APPLICATION TO
INCREASE ITS RATES DUE TO REVISED DEPRECIATION RATES FOR
ELECTRIC PLANT-IN-SERVICE
Dear Ms. Jewell:
Enclosed for filing are an original and three (3) copies of Idaho Power Company's
Response to the First Production Request of Micron Technology, Inc. ("Micron") to Idaho
Power Company in the above matter. Please note that responses to Production Request
Nos. 22, 25, 27, 38, 57, 58, 67, and 68 are not provided in this response. Idaho Power will
provide the aforementioned responses once they become available.
Also enclosed are four (4) copies of a non-confidential disk containing information
being produced in response to Micron's First Production Request.
If you have any questions about the enclosed documents, please do not hesitate to
contact me.
Very truly
"Jason B. Williams
JBW:csb
Enclosures
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
re'fl
JASON B. WILLIAMS (ISB No. 8718)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
IwiIIiamscidahopower.com
Inordstromcidahopower.com
Attorneys for Idaho Power Company
22 ! 2 APR 19 PH 4:47
UTL
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION TO
INCREASE ITS RATES DUE TO
REVISED DEPRECIATION RATES
FOR ELECTRIC PLANT-IN-SERVICE
CASE NO. IPC-E-12-08
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
MICRON TECHNOLOGY, INC.,
TO IDAHO POWER COMPANY
COMES NOW, Idaho Power Company ("Idaho Power" or "Company"), and in
response to the First Production Request of Micron Technology, Inc. ("Micron"), to Idaho
Power Company dated April 9, 2012, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -1
PRODUCTION REQUEST NO. 1: [Production Life] - Please provide the most
recent copy of the Company's integrated resource plan and generation expansion plan,
as well as any other studies that address future projections of life spans for the
Company.
RESPONSE TO PRODUCTION REQUEST NO. 1: Idaho Power's most recent
planning document is the 2011 Integrated Resource Plan ("IRP"), which was completed
and filed with the Idaho Public Utilities Commission ("Commission") in June 2011. The
main document and appendices are available on the Company's website via the
following link:
hftp://www.idahopower.com/AboutUs/PlanningForFuture/irp/201 I /default.cfm.
The response to this Request was prepared by M. Mark Stokes, Power Supply
Planning Manager, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -2
PRODUCTION REQUEST NO. 2: [Production Life] - Please provide all
support and justification for why the Valmy Units I and 2 can not last as long as the 60-
year life span for Jim Bridger.
RESPONSE TO PRODUCTION REQUEST NO. 2: The determination of a life
span for each unit is not solely based on how long the unit could last. Life spans are
determined based on many factors; physical condition, regulations, efficiency, cost-
benefit analysis, and generation demand are among some of the factors. Also, in the
case of Idaho Power's steam facilities, the decisions of its partners have an effect.
Based on the current business plans of both partners as well as the other factors
discussed above, the 50-year life span for Valmy I and Valmy 2 is the best
representation for these units. These units are independent of the life span of Jim
Bridger.
In addition, please also see the Company's responses to Micron's Production
Request Nos. 6 and 24, which contain relevant, supporting, underlying analysis and
workpapers.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -3
I
PRODUCTION REQUEST NO. 3: [Production Life] - Please identify prior
instances where Gannett Fleming has recommended different life spans for jointly
owned units in different jurisdictions.
RESPONSE TO PRODUCTION REQUEST NO. 3: The determination of a life
span for each individual utility is based on a combination of criteria such as condition of
the facility, future plans of the facility within the utility generation fleet, regulations, and
efficiency of the facility, to name a few possible factors. Additionally, each utility
conducts depreciation studies at different times; therefore, revised life spans could be in
effect for one owner but not another.
The Excel file provided on the non-confidential CD sets forth the most up-to-date
life spans of jointly owned units where Gannett Fleming has recommended either the
same or different life spans.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -4
PRODUCTION REQUEST NO. 4: [Production Life] - Please provide all
support and justification for any claim that the Company will not undertake capital
expenditures to keep Valmy Units I and 2 in operation as long as such future expected
capital expenditures are economical. To the extent the Company claims that future
capital expenditures necessary to keep the units operational will not be economical,
provide all support and justification for such a position.
RESPONSE TO PRODUCTION REQUEST NO. 4: The Company does not
make any claim that it will not undertake capital expenditures that are economically
sound to keep Valmy Units I and 2 operational.
The Company does not presently make any claim specifying future capital
expenditures that would render uneconomic options for keeping Valmy Units I and 2
operational.
The response to this Request was prepared by Dave Bean, Business Unit
Controller, Idaho Power Company, in consultation with Jason B. Williams, Corporate
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -5
PRODUCTION REQUEST NO. 5: [Production Life] - Please provide the
following as it pertains to each of the Company's steam production plant generating
units:
a.Megawatt size
b.Annual heat rate for the past 10 years
c The number of cold starts for the past 10 years
d.The availability factor for the past 10 years
e.The scheduled outage rate for the past 10 years
f.The fixed outage rate for the past 10 years
g.The capacity factor for the past 10 years
h.The operating temperature and pressure
i.The capital expenditures for the past 10 years
j.The projected capital expenditures
RESPONSE TO PRODUCTION REQUEST NO. 5:
a-i. Please see the Excel spreadsheet provided on the non-confidential CD
which contains the requested information, with the exception of cold starts for the past
10 years for Boardman and North Valmy. Boardman and North Valmy do not have
summarized annual information available. For the megawatt size, annual heat rate, and
capacity factor, net generation was used. The North American Electric Reliability
Corporation Generating Availability Data System does not have a definition for
scheduled outage rate or fixed outage rate; therefore, a scheduled outage factor and
forced outage rate are provided.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -6
j. Because this Request does not specify a forecasted time period, the
Company is unable to provide the projected capital expenditures.
The response to this Request was prepared by John Carstensen, Engineering
Project Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -7
PRODUCTION REQUEST NO. 6: [Production Life] - Please provide the
detailed analysis that supports the proposed life spans for each of the Company's
steam generating units. The response should include all workpapers, assumptions,
considerations, and material reviewed and or relied upon, in sufficient detail to permit
verification of each proposed life span.
RESPONSE TO PRODUCTION REQUEST NO. 6: The life spans of each facility
and unit were based primarily on the following factors: (1) the current life span utilized,
(2) the life span utilized by the partners, (3) the range of life spans of other steam
facilities in the industry, (4) the specific plans of Idaho Power learned through
discussions during the last three studies, and (5) my professional judgment, which
included any regulations and regulatory orders.
The current life span for Boardman is 50 years. The current life spans for the
Valmy units are 50 years. And, the current life span for Jim Bridger is 52 years. The
life span of the operating partner for Boardman is currently 50 years, but due to the
operating partner's decision to cease coal-fired operations at the plant, it is being
changed to 40 years. The life span currently for the partner of the Valmy units is 50
years; the life span for the partner of Jim Bridger was changed since the last Idaho
Power study and is currently 60 years. The Excel spreadsheet provided on the non-
confidential CD sets forth the industry range for steam facilities of which Gannett
Fleming is aware, which is generally 50-65 years. There are units that have shorter life
spans than 50 years and others that have longer life spans than 65 years in the
industry. However, my understanding of the background of the determined life spans is
the reason they are excluded from the general industry range.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -8
The specific plans learned from discussions with Idaho Power during the three
depreciation studies conducted are described below.
First, in this case, the Company informed me that Boardman would be retired by
2020 due to the majority owner and operator's decision to cease coal-fired operations
as of 2020. Therefore, the life span was changed to 40 years, consistent with the
partner's decision.
Second, the Valmy units have experienced some moderate capital expenditures
since the last study; however, current Company plans are to maintain the life span at 50
years, consistent with the operating partner's decision.
Third, the Jim Bridger facility experienced major capital upgrades, which have an
anticipated life expectancy of 25-30 years. Given that these assets have a 25-30 year
life from the 2007-2010 addition years and the partner is currently at a 60-year life span,
it was determined an extension from 2026 to 2034 is appropriate, which also represents
60 years from initial construction
The factors listed above were the primary basis for the life spans for steam
generating units in this depreciation study.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -9
PRODUCTION REQUEST NO. 7: [Production Life] - Please provide all
documents that support the proposed early termination of the Boardman generating
station.
RESPONSE TO PRODUCTION REQUEST NO. 7: While the documents
provided on the non-confidential CD are not all of the documents that support the
proposed early termination of the Boardman generating station, the Company believes
the documents provided are the most relevant, supporting documents. These
documents were also provided as attachments to Idaho Power Company's Request for
Acceptance of its Regulatory Plan Regarding the Early Shutdown of the Boardman
Power Plant (Case No. IPC-E-11-18), which was approved in Order No. 32457. The
following is a summary of the attachments provided on the non-confidential CD:
1.A copy of the Boardman Analysis (Chapter 12) included in Portland
General Electric Company's ("PGE") 2009 IRP.
2.A copy of the Boardman Analysis (Chapter 12) of PGE's 2009 IRP
Addendum.
3.The Environmental Protection Agency's approval of the revision to
Oregon's Clean Air Act State Implementation Plan.
4.Order No. 10-457; the Public Utility Commission of Oregon's
acknowledgement of PGE's 2009 IRP, including the Addendum.
The response to this Request was prepared by Courtney Waites, Regulatory
Analyst, Idaho Power Company, in consultation with Jason B. Williams, Corporate
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -10
PRODUCTION REQUEST NO. 8: [Production Life] - Please provide the life
span reflected in all Gannett Fleming depreciation studies for coal fired generating units
during the past 5 years. For each study, identify the utility, the year of the study, the
specific unit, and whether the life spans reflected in the study were ultimately adopted
by the utility's regulator and if so, the relevant jurisdiction as well as the corresponding
docket number.
RESPONSE TO PRODUCTION REQUEST NO. 8: The Excel spreadsheet
provided on the non-confidential CD sets forth the life spans reflected in Gannett
Fleming depreciation studies for coal-fired generating units during the past five years.
The schedule sets forth the study year, utility, unit, and life span. These life spans were
adopted or agreed upon in each case.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -11
PRODUCTION REQUEST NO. 9: [Production Life] - Regarding the statement
on page 11-27 of Exhibit No. 11, that the life span estimates for the thermal, base load
units is 40-60 years, please provide a listing of each coal fired unit that Gannett Fleming
believes currently has a 40-year life span. For each such instance, identify the utility,
and generating unit, when the 40-year life span was established, and the jurisdiction
and corresponding docket number where such life span was adopted by the utility's
regulator. The response should include copies of any documents necessary to verify
any claim regarding a 40-year life span for coal fired generating units.
RESPONSE TO PRODUCTION REQUEST NO. 9: For clarification of page II-
27, the reference to thermal, baseload unit range of 40-60 years relates to all steam
facilities.
For example, as shown in the Excel file provided on the non-confidential CD, the
Colstrip Units 3 and 4 have a 40-year life span. The units are jointly owned and
Gannett Fleming has conducted studies for Puget Sound Energy and Avista
Corporation. The studies were conducted in 2006 and both were filed in the state of
Washington. Each of the other studies was performed since 2006 and was adopted in
Virginia, Kentucky, Nevada, South Carolina, Kansas, and Wisconsin.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
1 All references to Exhibit No. I herein refer to Exhibit No. 1 to the Direct Testimony of John J.
Spanos filed by the Company in this proceeding.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -12
PRODUCTION REQUEST NO. 10: [Hydro] - Regarding the statement on page
11-27 of Exhibit No. 1, that the 75-114-year life spans for the hydraulic production
facilities are within the typical range, please identify and fully justify the specific typical
range referenced. Further, provide the life spans for all hydro generating units reflected
in Gannett Fleming depreciation studies during the past 5 years, specifically identifying
the utility, the jurisdiction, and name of the facility, the size of the facility, and the
location of the facility and whether such life spans have been specifically adopted by the
referenced utility's regulator and if so, identify the jurisdiction and the docket number.
RESPONSE TO PRODUCTION REQUEST NO. 10: The typical range of life
spans for hydro facilities is 50-120 years, which is primarily based on the Federal
Energy Regulatory Commission ("FERC") license, if applicable. The Excel spreadsheet
provided on the non-confidential CD sets forth the life spans for the hydro generating
units reflected in Gannett Fleming depreciation studies during the past five years.
These life spans have been adopted in all cases.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -13
PRODUCTION REQUEST NO. 11: [Hydro] - Regarding the statement on page
11-27 of Exhibit No. 1, that life spans for hydro facilities are determined by condition and
license dates, please provide the following:
a.Any specific issue associated with condition of any of the
Company's hydro generating units which limits the life expectancy of each unit to less
than 100 years.
b.Each license application for renewal of a hydro facility that Gannett
Fleming and/or the Company are aware of that was denied for a hydro facility
associated with any utility, specifically identifying the utility, hydro facility, date of denial,
reason for denial, and Docket number.
C. Each instance that the Company and/or Gannett Fleming are aware
of where a hydro license was renewed or extended for Idaho Power Company.
d.A listing of each instance that the Company and/or Gannett
Fleming are aware of that a hydro license was renewed or extended for other utilities
during the past 20 years, specifically identifying the utility and hydro generating facility,
as well as the date of the renewal or extension.
e.All specific studies, analysis, reports, etc. that specifically address
the probable retirement year for each of the Company's hydro generating facilities.
For each subpart above, please provide all workpapers, assumptions,
considerations, and material reviewed and/or relied upon in sufficient detail to permit
verification of the response.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -14
RESPONSE TO PRODUCTION REQUEST NO. 11:
a.The life span of a hydro facility must be associated with the license date or
a scheduled renewal date. It is not appropriate to assume a renewal many years into
the future when it is unknown as to rulings of FERC, etc. Additionally, water regulations
cannot always be predicted. Thus, condition is only one factor in determining whether a
hydro facility could last 100 years. There are examples across the United States where
hydro facilities have not reached 100 years before needing to be reconstructed. The
majority of utilities across the nation use this approach; anything different would be
counter to industry standards. This methodology is also consistent with the
methodology approved in the Company's two previous depreciation cases.
b.The Company does not have specific, detailed knowledge of denials of
other companies' hydro license renewals or extensions.
C. The Company has received hydro license renewals as follows:
Swan Falls 1989
Twin Falls 1991
Bliss 2004
C J Strike 2004
Lower Salmon 2004
Shoshone Falls 2004
Upper Salmon 2004
Malad 2005
d.The Company does not have specific, detailed knowledge of renewals or
extensions of other companies' hydro licenses. However, Gannett Fleming is aware of
hydro license renewals for other utilities. Generally speaking, the FERC grants 30-year
renewals, but there have been instances of a few that were longer.
e.The probable retirement year for each hydro facility is tied to the FERC
license date or, if a renewal is in progress, then the retirement date reflects the potential
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -15
renewal. If the hydro facility does not have a FERC license, then the probable
retirement date reflects my professional judgment based on the Company's current
plans.
In addition, please also see the Company's response to Micron's Production
Request No. 24, which includes workpapers that support this conclusion.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -16
PRODUCTION REQUEST NO. 12: [Hydro] - Please explain and fully justify
why the Company believes it can obtain 100-year or longer life spans for certain of its
hydro generating facilities yet proposes life spans short of 100 years for many of its
hydro generating facilities. The response should specifically address all factors that
prohibit those hydro generating facilities with life spans of less than 100 years of being
able to obtain 100 years of service or longer. The response should provide all
workpapers, assumptions, considerations, and material reviewed and/or relied upon in
sufficient detail to permit verification of the reasonableness of the response of
information.
RESPONSE TO PRODUCTION REQUEST NO. 12: The basis of this Request
does not properly represent the process for developing a retirement date in a
depreciation study. The hydro facilities that currently have life spans 100 years or
longer are a result of a license that allows those facilities to stay in operation that long
and capital expenditures have been spent in order for those facilities to operate that
long.
Hydro facilities that currently have life spans less than 100 years are due to the
fact that they only have the right to continue operating while the current license is in
effect. It is possible for these facilities to get a renewal; however, at this time, the
current assets need to be recovered during the known recovery period, which is the
license date. Attempting to recover investment over a longer period of time would be an
unnecessary risk without reasonable justification. The majority of utilities across the
nation use this approach; anything different would be counter to industry standards.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -17
This methodology is also consistent with the methodology approved in the Company's
two previous depreciation cases.
In addition, please also see the Company's response to Micron's Production
Request No. 24, which includes workpapers and material reviewed and relied upon to
reach this conclusion.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -18
PRODUCTION REQUEST NO. 13: [Other Production] - Please provide the
following for each of the Company's Other Production generating units:
a.The Megawatt size
b.Type of unit, including manufacturer and model number
C. The number of annual hours of operations since 2000
d.The number of annual starts since 2000
e.The heat rate by year
f.The forced outage rate by year since 2000
g.The availability factor by year since 2000
h.The manufacturer's recommended maintenance schedule
L All information from the manufacturer regarding the number of
hours of operation that can be obtained from each type of unit
RESPONSE TO PRODUCTION REQUEST NO. 13: Please see the Excel
spreadsheets provided on the non-confidential CD.
The response to this Request was prepared by Dale Koger, Power Production
Manager, Idaho Power Company, in consultation with Jason B. Williams, Corporate
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -19
PRODUCTION REQUEST NO. 14: [Other Production] - Please identify the life
spans utilized by Gannett Fleming in each of its depreciation studies during the past 5
years as it relates to Other Production generating units, identifying the type of unit, the
megawatt size, the utility, the name of the unit, and the location of the unit. Further,
provide the operating characteristics of the unit (i.e., base load, intermediate, peaking,
reserve, etc.).
RESPONSE TO PRODUCTION REQUEST NO. 14: The schedule provided on
the non-confidential CD sets forth the readily available information of life spans Gannett
Fleming has recommended and currently are approved for Other Production generating
units.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -20
PRODUCTION REQUEST NO. 15: [Other Production] - Please identify all
operating or maintenance characteristics of the Company that would result in a situation
where the life expectancy for its generating units would be shorter than the life
expectations of similar units operated by other utilities. For each item, policy, practice,
etc. identified, provide all support and justification for the Company's decision to operate
in such a manner and the resulting expected life shortening impact that each such
situation produces. Further, provide all underlying support and justification for the
Company's response.
RESPONSE TO PRODUCTION REQUEST NO. 15: The life expectations of the
generating units for Idaho Power are within the range of other utilities. There are
currently no operating or maintenance characteristics of the Company that would result
in a situation where life expectations would be shorter than those of other utilities. It
should be noted that, in this proceeding, the life span of the Boardman facility has been
shortened because the majority owner and operator of the Boardman facility, PGE, has
chosen to cease coal-fired operation in 2020.
Please also see the Company's responses to Micron's Production Request Nos.
6 and 24, which contain relevant, supporting, underlying analysis and workpapers.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -21
PRODUCTION REQUEST NO. 16: [Combined Cycle] - Please identify the life
span utilized by other utilities for combined cycle generating units that the Company
and/or Gannett Fleming are aware of. For each other combined cycle unit, provide the
name of the unit, the owner of the unit, the location of the unit, and the type of unit,
including manufacturer and model number, as well as all documentation and support of
the Company's response.
RESPONSE TO PRODUCTION REQUEST NO. 16: Please see the Excel
spreadsheet provided on the non-Confidential CD setting forth the life spans utilized by
other utilities for combined-cycle generating units of which the Company and/or Gannett
Fleming are aware. The information supplied by unit is what is readily available.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -22
PRODUCTION REQUEST NO. 17: [Combined Cycle] - Please provide any life
expectation information provided by the manufacturer of the Langley Gulch combined
cycle unit.
RESPONSE TO PRODUCTION REQUEST NO. 17: The Langley Gulch
combined-cycle combustion turbine ("CCCT") project was developed using a design
criteria of a minimum working life of 30 years, with scheduled maintenance.
The response to this Request was prepared by Scott Larrondo, Manager, Power
Production Engineering and Construction, Idaho Power Company, in consultation with
Jason B. Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -23
PRODUCTION REQUEST NO. 18: [Combined Cycle] - Please provide the
underlying economic analyses utilized by the Company to support the decision to
construct the Langley Gulch combined cycle facility.
RESPONSE TO PRODUCTION REQUEST NO. 18: The identification of the
need for the Langley Gulch CCCT was outlined in Idaho Power's 2006 IRP and was
confirmed in the 2008 update to that plan. The Company's 2006 IRP, its appendices,
and the 2008 IRP Update are provided on the non-confidential CD.
Specifics regarding the analysis, justification, and competitive procurement
process to acquire the resource were presented in the testimony of Company witness
Karl Bokenkamp in Case No. IPC-E-09-03, wherein Idaho Power filed a request for a
Certificate of Public Convenience and Necessity ("CPCN") with the Commission. All
filings associated with the Langley Gulch CPCN case can be found via the following
link: hftp://www.puc.idaho.aov/intemet/cases/summarv/IPCE0903.htmi.
The response to this Request was prepared by M. Mark Stokes, Power Supply
Planning Manager, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -24
PRODUCTION REQUEST NO. 19: [Other Production] - Please provide all
studies, reports, analyses, etc. developed by or on behalf of the Company that supports
the proposed life spans for the Company's Other Production generating facilities. The
response should include all analyses of current practices and expected practices as well
as current utilization and expected demands on each of the generating facilities.
RESPONSE TO PRODUCTION REQUEST NO. 19: The proposed life spans of
the Other Production generating facilities are based on the currently approved life
spans, which are supported by discussions with Company personnel as well as the
range of life spans of other facilities within the industry.
Most of the Idaho Power facilities are 10 years or less; therefore, practices,
demands, and utilization are not fully established or vary each year.
Please also see the Company's response to Micron's Production Request No. 24
for the supporting workpapers relied upon for this life span determination.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -25
PRODUCTION REQUEST NO. 20: [Production Life] - Please identify the type
of major environmental systems at each of the Company's coal fired generating facilities
(e.g., scrubbers, bag houses, etc.). Further, indicate if such systems were placed in
service when the units initially became operational or have been retrofitted, and if
retrofitted, state when the retrofit occurred. Finally, identify all current plans to place
any new major environmental systems into operation for each of the Company's
generating facilities.
RESPONSE TO PRODUCTION REQUEST NO. 20: Please see the Excel
spreadsheet provided on the non-confidential CD for the on-line date for each of Idaho
Power's coal-fired generation facilities and the installation dates for all major
environmental systems.
The response to this Request was prepared by John Carstensen, Engineering
Project Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -26
PRODUCTION REQUEST NO. 21: [Hydro] - For each of the Company's hydro
generating facilities, identify the location, the body of water associated with each hydro
facility, the megawatt size, and any identifiable major problems associated with any
major component of each hydro facility.
RESPONSE TO PRODUCTION REQUEST NO. 21: The requested information
is presented in the document provided on the non-confidential CD. The Company is not
aware of any major problems associated with any major component of its hydro
facilities.
The response to this Request was prepared by Scott Larrondo, Manager, Power
Production Engineering and Construction, Idaho Power Company, in consultation with
Jason B. Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -27
PRODUCTION REQUEST NO. 23: [Data] - Please provide a complete copy of
any internal or external surveys of depreciation parameters in possession of both the
Company and Gannett Fleming as it relates to service life and salvage estimates used
by other electric utilities.
RESPONSE TO PRODUCTION REQUEST NO. 23: Please see the Excel
spreadsheet provided on the non-confidential CD setting forth the service life and
salvage parameters used by other electric utilities which Gannett Fleming is aware for
production and transmission accounts. The Company has no additional information
responsive to this Request.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -28
PRODUCTION REQUEST NO. 24: [Data] - Please provide all interview notes
and site visit notes associated with the development of the current depreciation study
including notes from prior studies that were relied upon for purposes of the current
depreciation study.
RESPONSE TO PRODUCTION REQUEST NO. 24: The documents provided
on the non-confidential CD set forth the readily available interview and site visit notes,
which were relied upon for this depreciation study, associated with the development of
the current depreciation study.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -29
PRODUCTION REQUEST NO. 26: [Net Salvage] - Please identify the specific
trend observed and relied upon by Gannett Fleming as referenced at the bottom of page
1-3 of Exhibit No. I as it relates to the development of net salvage estimates for each
account. Further, specifically identify, by account, those accounts where no trend was
identified.
RESPONSE TO PRODUCTION REQUEST NO. 26: In general, the observed
trends from the historical data are that the cost to remove assets has increased as a
percentage of plant retired and the scrap value for assets will be less, with the exception
of steel. The other general trend observed in the net salvage analysis is that the new
fixed asset system requires some entries to be recorded differently than in the past, so
the last five to seven years are the most indicative of the future.
Gannett Fleming relied on the last five years of historical indications for net
salvage for steam accounts. The nature of the retirements is indicative of the future
and the associated cost of removal and gross salvage is expected to continue at that
level.
The type of assets being retired in Accounts 353 and 362, Station Equipment,
over the last six or seven years is expected to continue and the level of associated cost
of removal and gross salvage will continue as well. The majority of the future
retirements will be to control/relay equipment and circuit breakers. Another trend that
Gannett Fleming relied upon was that the salvage value for distribution poles and
conductor will go down. This trend has been clear for the last seven years or so. The
reduction for poles is the lack of a market for small poles and for the conductor it relates
to less copper conductor to be retired so future salvage value for aluminum is less.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -30
Most of the other accounts did not have an observed trend that was a primary
indicator for a net salvage selection. However, for all accounts, the overall net salvage
percent, three-year moving averages, and most recent five-year average is considered
in the determination of a net salvage percent. The historical net salvage data by
account is set forth on pages 111-175 through 111-250 of Exhibit No. 1.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -31
PRODUCTION REQUEST NO. 28: [Net Salvage] - Please state whether the
historical data, as reflected in the net salvage analysis, are time synchronized. To the
extent the information is not time synchronized, please identify the minimum and
maximum time periods between when a retirement is recorded and when the
corresponding gross salvage and cost of removal are reported by account. Further,
identify the annual level of cost of removal and gross salvage, by account, during the
past 5 years which was not recorded the same year as the corresponding retirement.
RESPONSE TO PRODUCTION REQUEST NO. 28: The historical data, as
reflected in the net salvage analysis, are generally time synchronized. There are some
instances when cost of removal and gross salvage from the operating partner are not
reported in the same year as the retirement. In addition, there are instances where
retirements, cost of removal, and gross salvage were not recorded at the same time due
to fixed asset system conversion delays and some instances where the gross salvage
was recorded in bulk, which may not be time synchronized.
Quantifying the annual level of cost of removal and gross salvage by account
during the last five years which was not recorded in the same year as the associated
retirement cannot be completed in the time available.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -32
PRODUCTION REQUEST NO. 29: [Account 311] - Please explain how a
negative gross salvage for 1996 was recorded for Account 311 as set forth on page III-
175 of Exhibit No. 1. Further, provide all justification for negative gross salvage values.
RESPONSE TO PRODUCTION REQUEST NO. 29: A negative gross salvage
amount in 1996 for Account 311 relates to an offset of gross salvage from a prior year.
In many cases, gross salvage is initially allocated and then reversed and unitized to the
specific accounts once the retirement order is closed. The 1996 amount offsets an
allocated amount in a prior year.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -33
PRODUCTION REQUEST NO. 30: [Account 311] -Please identify what retired
and at what unit in 2010 for Account 311 in the amount of $1.8 million.
RESPONSE TO PRODUCTION REQUEST NO. 30: Please see the Excel file
provided on the non-confidential CD for 2010 retirements by location for Account 311.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -34
PRODUCTION REQUEST NO. 31: [Data] - Please provide a detailed
categorization of plant investment by account, on electronic medium in Excel readable
format.
RESPONSE TO PRODUCTION REQUEST NO. 31: Please see the Excel file
provided on the non-confidential CD for plant investment by group asset as of June 30,
2011.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -35
PRODUCTION REQUEST NO. 32: [Data] - Please provide a detailed
categorization of what retired by account per year for the past 10 years for all
production, transmission, and general plant accounts. The information should be
provided on electronic medium in Excel readable format.
RESPONSE TO PRODUCTION REQUEST NO. 32: Please see the Excel file
provided on the non-confidential CD for retirements by year for the specified accounts
and time period.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -36
PRODUCTION REQUEST NO. 33: [Account 312] - Please identify what retired
in 2009 and 2010, separately, for Account 312 as set forth on page 111-1 76 of Exhibit No.
1. Further, identify which plant the retirements are associated with as well as what
caused the retirements, and why such type of retirements are considered typical and
predictive of the overall level of net salvage for this account.
RESPONSE TO PRODUCTION REQUEST NO. 33: Please see the Excel file
provided on the non-confidential CD for retirements by project identification, plant
Account 312, for 2009 and 2010. The "Project Description" column of the Excel file
describes the work being done. Salvage is booked to Thermal Plant Projects based on
information received from the Operating Partner of each plant. Detailed salvage and
removal cost records are maintained by the Operating Partner; therefore, the Company
does not have this information.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -37
PRODUCTION REQUEST NO. 34: [Account 314] - Please explain and justify
the negative cost of removal and negative gross salvage in 1999 for Account 314 as set
forth on page 111-178 of Exhibit No. 1.
RESPONSE TO PRODUCTION REQUEST NO. 34: Please see the Excel file
provided on the non-confidential CD for negative cost of removal and negative gross
salvage in 1999 for Account 314.
The negative cost of removal and negative gross salvage resulted from charges
on project identification number 21921070 JBRGOI6I49 - Retube Condenser. This
project was converted to PeopleSoft from the legacy system. Removal cost and
salvage were originally recorded in 1997 to Account 314 when the project was originally
pre-closed based on estimates. However, during unitization in 1999 the original entries
were reversed and unitized to Account 31220 based on actuals. Therefore, the
negative cost of removal and negative gross salvage in 1999 for Account 314 set forth
on page 111-178 of Exhibit No. I is reversing a portion of the amounts shown in 1997.
The reclassification entries are shown in Account 31220.
The response to this Request was prepared by Debra Bammel, Property
Accountant, Idaho Power Company, and John J. Spanos, Vice President of the
Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -38
PRODUCTION REQUEST NO. 35: [Account 314] - Please identify, by
generating unit, what retired annually for the years 2006-2010 in Account 316 as set
forth on page 111-178 of Exhibit No. 1. Further, state and justify why each separate type
of retirement activity is considered predictive of future expectations for the Company's
current investment in the account.
RESPONSE TO PRODUCTION REQUEST NO. 35: Please see the Excel file
provided on the non-confidential CD setting forth the retirements for 2006 through 2010
by generating facility for Account 314 as summarized on page 111-1 78 of Exhibit No. 1.
The document identifies the asset or assets being retired; however, some Valmy
retirements are not specifically identified by asset due to the documents sent by the
operating partner.
Each of the retirements listed are for retirement units and determined to be
ordinary and occur as part of the normal course of business.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -39
PRODUCTION REQUEST NO. 36: [Account 331] - Please provide a detailed
narrative of what retired in 2009 for Account 331 as set forth on page 111-1 82 of Exhibit
No. 1. Further, identify why the 218% cost of removal for the retirement in that year is
considered representative of the future expectations for such account. Finally, provide
all workpapers, assumptions, considerations, and material reviewed and/or relied upon
in sufficient detail to permit verification of the accuracy of the response.
RESPONSE TO PRODUCTION REQUEST NO. 36: Please see the Excel file
provided on the non-confidential CD for retirements by project identification for 2009,
Account 331, which includes a description of the assets retired during that period.
Asset retirements are recorded after projects are reconciled and may not be recorded in
the same year as removal costs due to timing. Removal costs for 2009 retirements
were not recorded in the same calendar year. In addition, retirements to projects with
the removal cost booked in Account 331 for 2009 were booked in subsequent years.
Therefore, a large portion of the $199,171 in cost of removal relates to retirements that
were recorded subsequent to 2009; thus, the cost of removal in 2009 when related to
retirements in later years is representative of amounts that would be incurred to remove
assets.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, and John J. Spanos, Vice President of
the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -40
PRODUCTION REQUEST NO. 37: [Account 332] - Please provide a detailed
narrative of what retired by amount in what year for Account 332 that resulted in the
$495,652 cost of removal reported in 1997 as set forth on page 111-185 of Exhibit No. 1.
The response should further fully support and justify why such level of cost of removal is
considered indicative of retirement activity in the future for the remaining investment in
this account. Finally, provide all workpapers, assumptions, considerations, and material
reviewed and/or relied upon in sufficient detail to permit verification of the
reasonableness of the response.
RESPONSE TO PRODUCTION REQUEST NO. 37: Detailed cost of removal
information by work order is not available prior to 1998 due to the conversion of data
and processes from the legacy system to Idaho Power's current work management and
financial software systems. Detailed transactions for work orders that were closed as of
the conversion date, January 1, 1998, were summarized at a level suitable for financial
analysis and reporting. The net salvage percent recommended for this account takes
into consideration that the $495,652 cost of removal amount for 1997 is high compared
to the retirements recorded in 1997. However, the cost of removal amount relates to
retirements in prior years. Therefore, the amount is not considered a strong indicator of
future net salvage percentages.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, and John J. Spanos, Vice President of
the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -41
PRODUCTION REQUEST NO. 39: [Net Salvage] - Please identify each
generating unit the Company has retired in the past. For each such generating unit,
identify and provide the name, the megawatt size, the fuel type, the year installed, the
year retired, the reason for retirement, the disposition of the facility, and the specific
gain or loss associated with the retirement, specifically identifying the dollar level of
retirement and the corresponding gross salvage and cost of removal.
RESPONSE TO PRODUCTION REQUEST NO. 39: No date range was
provided in the above Request. Because no date range was specified, it is assumed
that the information provided would be subsequent to the last depreciation study
conducted (December 31, 2006). No generating units have been retired or disposed of
since the last depreciation study was conducted. However, over the last 22 years, the
Company has retired only two generating units: (1) the Wood River Turbine and (2) the
old Swan Falls power plant.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -42
PRODUCTION REQUEST NO. 40: [Net Salvage] - Please identify any plant
retired that was sold where the proceeds associated with the sale were not booked into
the accumulated provision for depreciation since the Company's last fully litigated rate
proceeding. The response should identify the amount of retirement and net proceeds
obtained from each such sale, the account to which the plant was set forth prior to
retirement, and whether customers received the benefit of the proceeds of any such
sale and if not, why not.
RESPONSE TO PRODUCTION REQUEST NO. 40: Proceeds from the sale of
the Goshen Cap Bank to PacifiCorp were accounted for per guidance of the Code of
Federal Regulations. The cost of the asset and accumulated depreciation were
transferred to Account 102, Electric Plant Purchased or Sold. Proceeds were also
applied to Account 102, resulting in no gain or loss to the Company. Accounting entries
were submitted to FERC and the Commission and approved by Commission Order No.
31007.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -43
PRODUCTION REQUEST NO. 41: [Fully Accrued] - Please identify any
account or sub-account in which the Company ceased the booking of depreciation to
the accumulative provision for depreciation while the corresponding plant dollars were
still in service since the Company's last fully litigated rate proceeding. For each such
instance, identify the depreciation rate in effect immediately prior to the cessation of
booking of depreciation, the plant balance on a monthly basis from that time period
through the present, and any changes in account depreciation rates approved by the
Commission and when such changes in depreciation rates became effective. The
information should be provided on electronic medium in Excel readable format. Further,
provide all support and justification for any decision to cease booking depreciation
expense to the accumulated provision for depreciation without authority from the
Company's regulator.
RESPONSE TO PRODUCTION REQUEST NO. 41: There are no accounts or
subaccounts that have become fully depreciated as of the Company's last fully litigated
rate proceeding.
The response to this Request was prepared by Debra Bammel, Property
Accountant, Idaho Power Company, in consultation with Jason B. Williams, Corporate
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -44
PRODUCTION REQUEST NO. 42: [Account 353] - Please fully explain and
justify the negative gross salvage for Account 353, reported in 2009 on page 111-201 of
Exhibit No. 1.
RESPONSE TO PRODUCTION REQUEST NO. 42: Please see the Excel file
provided on the non-confidential CD for gross salvage in 2009 for Account 353.
Salvage is recorded to the salvage project identification (27012388) as incurred.
Those charges are allocated to individual project identifications based on Account 108
labor charges recorded to the individual project identification and allocated to individual
plant accounts based on project type. When the project identification is unitized, the
original plant account allocation is reversed and the final plant account allocation is
done based on actual removals.
The negative was a result of the reversal of the original salvage recorded to
Account 353 in 2007-2009. Salvage was unitized to Accounts 352, 353, 361, and 362
in 2009. Specifically, for Account 353, 58,216.87 of negative gross salvage in 2009 is
offsetting the positive gross salvage amount in 2007.
The response to this Request was prepared by Debra Bammel, Property
Accountant, Idaho Power Company, and John J. Spanos, Vice President of the
Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -45
PRODUCTION REQUEST NO. 43: [Account 353] - Please identify the number
and size of transformers reflected in Account 353. Further, identify the number and size
of transformer retired by year during the past 10 years.
RESPONSE TO PRODUCTION REQUEST NO. 43: Please see the Excel file
provided on the non-confidential CD for Account 353, Transformer Investment and
Retirements.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -46
PRODUCTION REQUEST NO. 44: [Account 353] - Please identify specifically
what retired in Account 353 during 2005 in the amount of $3 million, and the reason for
the retirement.
RESPONSE TO PRODUCTION REQUEST NO. 44: Please see the Excel file
provided on the non-confidential CD for retirements for Account 353 during 2005.
However, the Company is not sure what retirement is being referenced in this Request.
Exhibit No. I page 111-201 shows Account 353 retirements for 2005 totaling $5,258,014.
The provided Excel file details the retirements totaling $5,258,014.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -47
PRODUCTION REQUEST NO. 45: [Net Salvage] - Please identify by account,
by year, those retirements that occurred due to emergency situations for production and
transmission accounts.
RESPONSE TO PRODUCTION REQUEST NO. 45: The Company's work
management system does not distinguish the difference in work orders of emergency
and regular operations.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -48
PRODUCTION REQUEST NO. 46: [Account 355] - Please identify the
number, by type and height, of the various poles in Account 355, along with the
corresponding level of investment by type and height.
RESPONSE TO PRODUCTION REQUEST NO. 46: Please see the Excel file
provided on the non-confidential CD. Transmission poles are not recorded by height in
Idaho Power's asset records. However, information has been provided at the level of
detail available.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -49
PRODUCTION REQUEST NO. 47: [Account 355] - Please provide a detailed
narrative of what retired by year and the corresponding dollar amounts that correspond
to the $1.1 million cost of removal reported in 2007 for Account 355 on page 111-206 of
Exhibit No. 1.
RESPONSE TO PRODUCTION REQUEST NO. 47: Please see the Excel file
provided on the non-confidential CD. The "Removal" tab in the Excel file shows
removal cost by project totaling $1,146,257.93. Due to the volume of projects,
retirements are shown for those projects with removal costs greater than $10,000 on tab
"Rem W Ret" of the Excel file.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -50
PRODUCTION REQUEST NO. 48: [Account 355] - Please identify the number
of poles by height and type retired by year during the past 10 years in Account 355.
RESPONSE TO PRODUCTION REQUEST NO. 48: Please see the Excel file
provided on the non-confidential CD. Transmission poles are not recorded by height in
Idaho Powers asset records. However, information has been provided at the level of
detail available.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -51
PRODUCTION REQUEST NO. 49: [Account 356] - Please identify the linear
feet and corresponding dollar level of investment in copper overhead conductors in
Account 356.
RESPONSE TO PRODUCTION REQUEST NO. 49: Transmission overhead
conductor (Account 356) when closed to plant is not recorded at a level that allows the
determination of what material it is made of. Primary conductor is tracked by size,
whether it is less than or equal to 4/0 or greater than 4/0.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -52
PRODUCTION REQUEST NO. 50: [Account 356] - Please identify the linear
feet of conductor retired by type of conductor in Account 356 by year for the past 10
years.
RESPONSE TO PRODUCTION REQUEST NO. 50: Please see the Excel file
provided on the non-confidential CD.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -53
PRODUCTION REQUEST NO. 51: [Account 356] - Please identify what retired
and the corresponding dollars of retirement by year that relate to the $1.3 million of cost
of removal reported for Account 356 in 2007 on page 111-209 of Exhibit No. 1.
RESPONSE TO PRODUCTION REQUEST NO. 51: Please see the Excel file
provided on the non-confidential CD. The "Removal_2007_QRY" tab in the Excel file
shows removal cost by project totaling $1,335,946.09, as referenced on page 111-209 of
Exhibit No. I for 2007. Due to the volume of projects, retirements for projects with total
removal costs greater than $10,000 are shown on the "RET_QRY" tab of the Excel file.
The "REM_RET" tab of the Excel file shows those projects identified as having met the
$10,000 materiality threshold for removals costs in Account 356 in 2007 and the detail
of what was retired and the dollar amount of the retirement. As evidenced in the data,
the retirement of assets on these projects that received 2007 removal costs were
processed in subsequent years. The Company's project process allows projects to
cross years due to the scope of work and the time from work completion to
reconciliation and close of the project.
As removal costs are charged to a project, the charges are allocated to plant
accounts based on the estimate of work to be done. When the project is reconciled and
completed, the retirement of assets removed is done. Because projects cross years, it
is possible to see removal cost charged in one year and the associated retirements
done in a subsequent year.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -54
PRODUCTION REQUEST NO. 52: [Account 356] - Please provide a detailed
narrative explanation along with all support and justification why similar dollar levels of
retirement activity in Account 356 for 2009 and 2010 produced negative net salvage
values in 2010 more than double the value in 2009. Further, provide all workpapers,
assumptions, considerations, and material reviewed and/or relied upon in sufficient
detail to permit verification of the reasonableness of the response.
RESPONSE TO PRODUCTION REQUEST NO. 52: Please see the Excel file
provided on the non-confidential CD for negative net salvage for 2009 and 2010 for
Account 356.
Asset retirements are recorded after projects are reconciled and may not be
recorded in the same year as net salvage charges due to timing. Retirements for 2009
and 2010 negative net salvage amounts were not recorded in the same calendar years.
Moreover, retirements to projects with negative net salvage amounts booked in Account
356 for 2009 and 2010 were booked in subsequent years. Please see the portion of the
Company's response to Micron's Production Request No. 42 related to the salvage
allocation process.
The response to this Request was prepared by Debra Bammel, Property
Accountant, Idaho Power Company, in consultation with Jason B. Williams, Corporate
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -55
PRODUCTION REQUEST NO. 53: [Account 311] - Please provide a detailed
narrative supporting and justifying reliance on historical life indications for Account 311
when the observed life table declines to only 94% surviving as set forth on page 111-15 of
Exhibit No. 1. Further, explain and justify why a value of 125 years would not also be
representative based on the historical data.
RESPONSE TO PRODUCTION REQUEST NO. 53: The interim survivor curve
for Account 311, Structures and Improvements, is a 100-SI. Therefore, after 37-age
intervals, having 94 percent still surviving is representative of interim retirement
patterns. As shown by the graph on page 111-14 of Exhibit No. 1, the 100-SI survivor
curve is a good match for the historical data. Consequently, a 125-year average life
would not match the historical indications, and is not reasonable for structures based on
the assets included in this account.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -56
PRODUCTION REQUEST NO. 54: [Data] - Please provide the input to each life
and salvage analysis for production and transmission plant accounts on electronic
medium in Excel readable format.
RESPONSE TO PRODUCTION REQUEST NO. 54: Please see the Excel
spreadsheets provided on the non-confidential CD setting forth the input data for life
and salvage analysis for production and transmission plant accounts in Excel readable
format.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -57
PRODUCTION REQUEST NO. 55: [Data] - Please provide the output of each
life analysis (i.e., the observed life table) by account for production and transmission
accounts on electronic medium in Excel readable format.
RESPONSE TO PRODUCTION REQUEST NO. 55: Please see the Excel
spreadsheet provided on the non-confidential CD setting forth the output of each life
analysis by account for production and transmission accounts in Excel readable format.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -58
PRODUCTION REQUEST NO. 56: [Data] - Please provide the annual plant
balance and corresponding dollars of retirement by generating unit by account on
electronic medium in Excel readable format.
RESPONSE TO PRODUCTION REQUEST NO. 56: Please see the Excel
spreadsheets provided on the non-confidential CD showing plant balances, additions,
and retiremenfs by plant account for each production facility for 2009, 2010, and 2011.
The response to this Request was prepared by Larry Tuckness, Business Unit
Finance Team Leader, Idaho Power Company, in consultation with Jason B. Williams,
Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -59
PRODUCTION REQUEST NO. 59: [Account 332] - Please state whether other
longer life-curve combinations would also be reasonably representative of the observed
life table for Account 332.20 as reflected on page 111-47 of Exhibit No. 1. To the extent
the proposed 95S4 life curve combination is the best representative predictor of interim
retirements for this account, and that other values that are longer are not also
reasonably representative, provide all support and justification for such claim.
RESPONSE TO PRODUCTION REQUEST NO. 59: The selection of an interim
survivor curve is not only a statistical exercise. As stated on page 11-24 of the
depreciation study, the service life estimates were based on judgment which considered
a number of factors. The primary factors were the statistical analyses of data, current
Company policies and outlook as determined during conversations with management,
and the survivor curve estimates from previous studies of the Company and other
electric utility companies. The previous current estimate for this account is an 85-S4.
Therefore, the recommended estimate is 10 years longer in this case.
Please also see the Company's response to Micron's Production Request No.
24, which contains relevant, supporting, underlying analysis and workpapers.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -60
PRODUCTION REQUEST NO. 60: [Account 333] - Regarding the graphical
presentation set forth on page 111-54 of Exhibit No. 1, and the corresponding observed
life table numerical data on the following pages, please provide a detailed narrative
explaining and justifying the selection of an 80R3 life-curve combination for Account
333. The response should specifically address why the values beginning at
approximately 40 years of age and continuing through 60 years of age, were allowed to
deviate to the extent shown in comparison with an apparent attempt to match the
decline in the observed life table in the mid-60 year age range and older. Further,
provide all support and justification for the response provided.
RESPONSE TO PRODUCTION REQUEST NO. 60: The basis, support, and
justification of the factors in determining the life parameters are set forth on page 11-24
of the depreciation study. The current estimate for Account 333 is the 80-R3, which is
also recommended in this case. The historical indications from age 0 through age 80
are considered in the life analyses, and it can be seen the rates of retirement for age 40
through 60 are quite different than the rates of retirement for age 60 through 80.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -61
PRODUCTION REQUEST NO. 61: [Account 333] - Please state whether the
Company agrees that a longer life-curve combination would also be reasonable if not
superior to the 80R3 life curve combination proposed for Account 333 as set forth on
page 111-54 of Exhibit No. 1. To the extent the Company believes that the 80R3 is the
best curve fit or other longer curve fits are not equivalent or superior, please provide all
support and justification for such position.
RESPONSE TO PRODUCTION REQUEST NO. 61: Gannett Fleming does not
agree that a longer life-curve combination would be more reasonable than the 80-R3 life
curve combination proposed for Account 333. A determination of the most appropriate
life-curve combination is not solely a statistical exercise.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -62
PRODUCTION REQUEST NO. 62: [Account 343] - Please provide a detailed
narrative explaining and justifying the selection of a 40S1.5 life-curve combination for
Account 343 as set forth on page 111-82 of Exhibit No. 1. Further, state and justify
whether a longer life-curve combination would also be appropriate for this account and if
not, why other longer life-curve combinations would not be reasonable and appropriate.
RESPONSE TO PRODUCTION REQUEST NO. 62: Account 343 has only 8.5
ages of exposure as of December 31, 2010. Therefore, informed judgment is a major
factor in determining the interim survivor curve. The 40-S1.5 survivor curve is
comparable to the interim survivor curves utilized by other utilities for similar assets.
There have been over $1.0 million retired during the first 8.5 age intervals, and the
expectations in future years are levels of retirements that are representative of the 40-
S1.5 survivor curve. At this time, when using the experience of many other studies, a
longer life-curve combination would not be appropriate.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -63
PRODUCTION REQUEST NO. 63: [Account 353] - Please provide a detailed
narrative explaining the curve fitting selection for Account 353 as set forth on page Ill-
101 of Exhibit No. 1. The response should specifically address the criteria relied upon
as well as all support for such criteria, and specifically why it was acceptable to present
a life-curve combination which begins to deviate from the observed life table at
approximately 45 years of age.
RESPONSE TO PRODUCTION REQUEST NO. 63: The determination of the
life and curve combination for Account 353 was based on the factors described on page
11-24 of the depreciation study. For Idaho Power's station equipment, the current
average service life estimate is 45 years. The industry range is generally 38-53 years.
Through discussions and understanding of the assets in this account, it is known that
more technology driven assets exist so low-moded curves are reasonable. The
proposed 48-R1.5 survivor curve is a very good fit of a significant portion of the original
survivor curve. There is no smooth curve for this account which will match every point
of the life table and the 48-R1.5 survivor curve represents the anticipated life cycle of all
the assets.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -64
PRODUCTION REQUEST NO. 64: [Account 354] - Please provide a detailed
narrative setting forth the specific criteria relied upon to establish a 65S3 life-curve
combination for Account 354 including the curve fit relationship set forth on page 111-1 05
of Exhibit No. 1. The response should specifically address why a longer life-curve
combination is not more appropriate than the 65S3 as proposed.
RESPONSE TO PRODUCTION REQUEST NO. 64: The historical data for this
account is inconclusive. The current estimate is a 60-S4 survivor curve. The industry
range for towers and fixtures is 55-75 years with a higher moded curve. The 65-S3
curve reasonably represents the anticipated life characteristics of towers. Also, the 65-
S3 curve represents no retirements for the first 25 years and has a maximum life of 130
years. Therefore, a longer life-curve combination would not be more appropriate for
towers given all the forces of retirement.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -65
PRODUCTION REQUEST NO. 65: [Account 355] - Please provide a detailed
narrative identifying the process and all criteria employed to establish a 60R2 life-curve
combination for Account 355 as set forth on page 111-1 08 of Exhibit No. 1. The response
should specifically address why the deviation beginning in the early 40-year age bracket
was considered reasonable and acceptable. The response should include all criteria
and support for criteria relied upon in the curve fitting process.
RESPONSE TO PRODUCTION REQUEST NO. 65: The estimate for this
account is based on a combination of historical indications as well as informed
judgment, which includes industry ranges, current estimates of the Company, and
management outlook. The 60-R2 curve is a good fit for the historical data. The current
estimate for this account is a 55-R2 and the industry range is generally 40-55 years.
The expectation for transmission poles is retirements will be caused primarily by wear
and tear, capacity upgrades, changes due to conductor upgrades, and age. Given this
information and historical indications, the 60-R2 curve best represents the life
characteristics of transmission poles.
There are deviations in the curve in early ages and later on in older ages;
however, it is unrealistic to anticipate the original curve would be identical to any smooth
curve.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -66
PRODUCTION REQUEST NO. 66: [Account 356] - Please provide a detailed
narrative explaining the curve fitting process and all underlying criteria and support for
such criteria associated with the selection of 65R2 life-curve combination for Account
356 as set forth on page 111-112 of Exhibit No. 1.
RESPONSE TO PRODUCTION REQUEST NO. 66: The estimate for this
account is based on a combination of historical indications as well as informed
judgment, which includes industry ranges, current estimate of the Company, and
management outlook. The 65-R2 curve is a reasonable interpretation of the historical
data and life characteristics of transmission conductor. The current estimate for this
account is a 60-R2 and the industry range is generally 40-55 years. There is not a lot of
major capacity upgrades in the near future so other forces of retirement are more
dominant. The historical indications show moderate levels of retirements in the first 50
ages, then high levels of retirement as a percent of exposures after age 50. Therefore,
the 65-R2 is above the industry range, but representative of life characteristics for
transmission conductor for Idaho Power.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -67
PRODUCTION REQUEST NO. 69: [Account 397.2] - Please provide a detailed
narrative identifying and fully supporting the selection of a I 5SQ life-curve combination
for Account 397.2. The response should fully address and justify the selection and
relationship of the proposal to the surviving original cost set forth on page 111-439 of
Exhibit No. I that exceeds the 15 year service life assumption.
RESPONSE TO PRODUCTION REQUEST NO. 69: Account 397.2,
Communication Equipment - Microwaves, is an amortized account. The 15-year
amortization period is the most commonly used amortization period for these assets and
has been approved by this Commission since the 2001 depreciation study. The SQ
type curve represents the dispersion pattern of amortized accounts.
The surviving plant balance on page 111-439 of Exhibit No. I shows 95 percent of
the investment within the amortization period; therefore, the 15-year life is quite
representative of the life. The remaining vintages, 1992 through 1995, have been
properly reclassified as a result of the PeopleSoft conversion and exist within the
amortization period vintages. The 1996 vintage amount has been retired during 2011.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -68
PRODUCTION REQUEST NO. 70: [Data] - Please identify any retirements,
gross salvage, cost of removal or other data considered atypical or unusual in
development of the depreciation study. For each such instance, identify the account,
the amount, the type of transaction, why it was determined or assumed to be atypical or
unreasonable and the action taken in association with such a determination (e.g.,
removed retirements for Account 353 in 2006 because it reflected a situation deemed to
be unusual because xxx). Further, provide all support and justification for any such
justification.
RESPONSE TO PRODUCTION REQUEST NO. 70: There are no retirements,
gross salvage, cost of removal, or other data considered atypical or unusual in
development of the depreciation study. As explained in many other responses to
production requests, cost of removal and gross salvage are originally allocated and then
specifically unitized so an individual year may look unusual but the overall data is
ordinary. There are instances, such as the $495,652 cost of removal amount for
Account 332 in 1997, which are ordinary but less weight is put on those amounts in
determining the net salvage percent because the entry is considered to be non-
recurring at that level.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -69
PRODUCTION REQUEST NO. 71: [Combined cycle] - Please provide all input
and corresponding calculations corresponding to the depreciation rates for Langley
Gulch utility as set forth on page 111-10 of Exhibit No. 1.
RESPONSE TO PRODUCTION REQUEST NO. 71: The development of the
proposed rates for Langley Gulch set forth on page 111-10 of Exhibit No. I are based on
knowledge obtained during the site visit and discussions with Company personnel. For
each account, the proposed rates were based on the same interim survivor curve as the
existing other facilities in the account as well as a 30-year life span. The calculation by
account is based on the estimated investment by account as of June 30, 2012.
The document provided on the non-confidential CD sets forth the detailed
calculation by account as of June 30, 2012. Please also see the workpapers related to
site visits and discussions with Company personnel provided in the Company's
response to Micron's Production Request No. 24.
The response to this Request was prepared by John J. Spanos, Vice President
of the Valuation and Rate Division, Gannett Fleming, Inc., in consultation with Jason B.
Williams, Corporate Counsel, Idaho Power Company.
DATED at Boise, Idaho, this 19th day of April 2012.
4tto
WILLIAM
rney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -70
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 1 9t day of April 2012 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
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 Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
Micron Technology, Inc.
Thorvald A. Nelson
Frederick J. Schmidt
Sara K. Rundell
HOLLAND & HART, LLP
6380 South Fiddlers Green Circle, Suite 500
Greenwood Village, Colorado 80111
Richard E. Malmgren
Senior Assistant General Counsel
Micron Technology, Inc.
800 South Federal Way
Boise, Idaho 83716
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email don.howell(puc.idaho.qov
karI.kIein(Duc. idaho.qov
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Overnight Mail
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X Email tnelson(ähoI land hart. com
fschmidthollandhart.com
sakrundelkhol land hart. com
lnbuchananchollandhart.com
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X Email remalmqren(micron.com
J.
Christa Bearry, Legal Assistant
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IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF MICRON TECHNOLOGY, INC., TO IDAHO POWER COMPANY -71