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Home My WebLink About20120524IPC to Staff 34-43.pdfHO PIVER® R F C F \I T An IDACORP Company 20I211&Y2 1 PM t tO JULIA A. HILTON Corporate Counsel 1 r! r - ihiIton(idahopower.com UT Lfl1ES COMM.IS 30N May 24, 2012 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilities Commission 472 West Washington Street Boise, Idaho 83702 Re: Case No. IPC-E-12-14 Langley Gulch Recovery - Response to the Fourth Production Request of the Idaho Public Utilities Commission Staff Dear Ms. Jewell: Enclosed for filing please find an original and three (3) copies of Idaho Power Company's Response to the Fourth Production Request of the Commission Staff ("Staff') to Idaho Power Company in the above matter. Also, enclosed in a separate envelope are an original and four (4) copies of Idaho Power Company's Confidential Response to the Fourth Production Request of the Commission Staff to Idaho Power Company in the above matter. Lastly, enclosed are four (4) copies each of non-confidential and confidential disks containing information being produced in response to Staffs Fourth Production Request. Please handle the enclosed confidential information in accordance with the Protective Agreement executed in this matter. Very truly yours, Julia A. Hilton JAH :csb Enclosures 1221 W. Idaho St. (83702) P.O. Box 70 Boise, ID 83707 LISA D. NORDSTROM (ISB No. 5733) JULIA A. HILTON (ISB No. 7740) Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-5825 Facsimile: (208) 388-6936 Inordstrom(idahoower.com ihiItonidahopower.com 2U!2 MAY 2 PM 4# 40 IDAH( FU;UC UTtLITIES COMMISSION Attorneys for Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AUTHORITY TO INCREASE ITS RATES AND ITS RATE BASE TO RECOVER ITS INVESTMENT IN THE LANGLEY GULCH POWER PLANT. CASE NO. IPC-E-12-14 IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY COMES NOW, Idaho Power Company ("Idaho Power' or "Company"), and in response to the Fourth Production Request of the Commission Staff to Idaho Power Company dated May 21, 2012, herewith submits the following information: IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -1 REQUEST NO. 34: Staff Production Request No. 32, requests all the documentation supporting the calculation of O&M expenses contained within Exhibit No. 3. Please provide the following to supplement the response: a.Please provide copies of the actual source documentation for the insurance expenses, as shown to Staff at Idaho Power's offices on Friday, May 18, 2012. b.Please provide the job descriptions, including pay ranges, for the 17 new positions for Langley Gulch described in the Labor O&M section of Response to Production Request 32, as discussed with Staff at Idaho Powers offices on Friday, May 18, 2012. C. Please provide a narrative describing how, and in what manner, the estimates were arrived at for the Non-Labor O&M, as described to Staff at Idaho Powers offices on Friday, May 18, 2012. RESPONSE TO REQUEST NO. 34: a.Please see the confidential PDF file provided on the confidential CD that provides the source documentation of the insurance expense included in the calculation of operations and maintenance ("O&M") expenses as contained within Exhibit No. 3 and shown to the Idaho Public Utilities Commission Staff ("Staff') at Idaho Power's offices on Friday, May 18, 2012. The confidential CD will be provided to those parties that have executed the Protective Agreement in this matter. b.Please see the confidential Excel file provided on the confidential CD that provides the job descriptions, including pay ranges, for the 17 new positions for the Langley Gulch power plant ("Langley Gulch") as included in the O&M expense IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -2 calculation contained within Exhibit No. 3 and discussed with Staff at Idaho Power's offices on Friday, May 18, 2012. The confidential CD will be provided to those parties that have executed the Protective Agreement in this matter. The chart at the top of the page details the payroll expense, including payroll loadings. The detail of the pay by job description is listed below the chart. C. Non-labor O&M expenses were estimated by the plant manager using his prior experience of operating a combined-cycle combustion turbine plant. The detail of the non-labor O&M expenses by cost category was provided in Idaho Power's Response to Staff's Production Request No. 17. The response to this Request was prepared by Courtney Waites, Regulatory Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -3 REQUEST NO. 35: Please provide an updated JSS to include changes in depreciation for Langley Gulch filed in the settlement stipulation for Case No. IPC-E-12- KJ RESPONSE TO REQUEST NO. 35: Please see the attached Excel file containing the jurisdictional separation study used to determine the Idaho jurisdictional revenue requirement using the depreciation rates related to Langley Gulch as filed in the settlement stipulation for Case No. IPC-E-1 2-08. The response to this Request was prepared by Courtney Waites, Regulatory Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -4 REQUEST NO. 36: Please identify all aspects of each early completion bonus contained within the Company's rate filing. Please include within your response: a.the recipient of the bonus, b.the terms that must be met by the recipient to receive the bonus, C. photocopies of all relevant excerpts from the legal documents outlining each bonus, d.if a bonus exists that does not stem from a legal document, provide all documents that outline the bonus terms, e.whether the terms that must be met to receive the bonus have been met, f.the amount of each early completion bonus by account, g.how the amount of each early completion bonus is included within the filing, and h.the net financial cost of each early completion bonus. RESPONSE TO REQUEST NO. 36: a.If achieved, the Early Completion Bonus will be paid to Boise Power Partners ("Contractor"). b.As defined in Articles 7.1 and 7.2 of the First Amendment to the Contract for Engineering, Procurement and Construction Services, the Early Completion Bonus will be paid in the event the Contractor achieves Substantial Completion by July 1, 2012. C. Please see the confidential copy of the First Amendment to the Contract for Engineering, Procurement and Construction Services provided on the confidential CD, which is the legal document that outlines the only bonus associated with Langley IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -5 Gulch. The confidential CD will be provided to those parties that have executed the Protective Agreement in this proceeding. d.There are no bonuses that exist from a document other than the legal document provided in the Company's response to Staffs Production Request No. 36.c above. e.The terms have not yet been met in order for the Contractor to receive the Early Completion Bonus. f.When closed to plant, the Early Completion Bonus, if achieved, will be spread to all generation plants with Langley Gulch investments, Federal Energy Regulatory Commission Accounts 341-346. g.If achieved, the Early Completion Bonus is anticipated to be paid to the Contractor in July 2012. The Company's request in this case includes costs expected to be incurred through June 2012. Therefore, no costs associated with the Early Completion Bonus have been included in the revenue requirement requested in this filing. h.The response to this Request is confidential and will be provided separately to those parties that have executed the Protective Agreement in this proceeding. The response to this Request was prepared by Courtney Waites, Regulatory Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -6 REQUEST NO. 37: Please provide the Early Completion Bonus cost contained in the filing's revenue requirement for Boise Power Partners Joint Venture ($750,000 lump sum and $10,000 per day) by account. Please include within your response how the early completion bonus is included within the filing. RESPONSE TO REQUEST NO. 37: No costs associated with the Early Completion Bonus have been included in the revenue requirement requested in this filing. If achieved, the Early Completion Bonus is anticipated to be paid to Boise Power Partners in July 2012. The Company's request in this case includes costs expected to be incurred through June 2012. The response to this Request was prepared by Courtney Waites, Regulatory Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -7 REQUEST NO. 38: Please individually identify the net benefit to customers of each early completion bonus contained within the Company's filing. RESPONSE TO REQUEST NO. 38: The response to this Request is confidential and will be provided separately to those parties that have executed the Protective Agreement in this proceeding. The response to this Request was prepared by Chris Baerlocher, Financial Analyst II, Idaho Power Company, and Tessia Parks, Director of Load Servicing Operations, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -8 REQUEST NO. 39: Please prepare excel spreadsheets that remove early completion bonuses from the revenue requirement filed in this case. Please include within your response the removal of the bonuses and any other related costs (investment tax credits, deferred taxes, income taxes, and depreciation) from the JSS and all exhibits in the filing. Please provide the spreadsheets in excel format with formulas activated. RESPONSE TO REQUEST NO. 39: No costs associated with the Early Completion Bonus have been included in the revenue requirement requested in this filing. The response to this Request was prepared by Courtney Waites, Regulatory Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -9 REQUEST NO. 40: Please provide photocopies of the contract excerpts identified and requested during the Langley Gulch on-site visits. RESPONSE TO REQUEST NO. 40: Please see the confidential excerpts from the Siemens and engineering, procurement, and construction ("EPC") contracts provided on the confidential CD which were identified and requested by Staff during the Langley Gulch on-site visits. The confidential CD will be provided to those parties that have executed the Protective Agreement in this proceeding. At the request of Siemens Energy, Inc., the Company has redacted those portions of the contract excerpts that are not related to taxes. The response to this Request was prepared by Courtney Waites, Regulatory Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -10 REQUEST NO. 41: Please provide the detailed reconciliation for the EPC contract, current change orders, and anticipated change orders (not currently included in the current scope of work) relative to the expected amount to be spent on the total project shown to Staff during the on-site visit 5/17/12. In addition to the reconciliation detail, please provide a short description of the scope of work and dollar amounts related to each anticipated change order. RESPONSE TO REQUEST NO. 41: Please see the attached PDF file, EPC Contract - Boise Power Partners, (Attachment 1) for the detailed reconciliation of the EPC contract as shown to Staff during the on-site visit on May 17, 2012. The "EPC Contract Change Orders" section of the attached PDF file, Change Order Summary, (Attachment 2) provides a brief description of the scope of work and dollar amounts related to each anticipated change order. In addition to the 11 change orders listed in the "EPC Contract Change Orders" section, the Company has signed two additional change orders since Staffs on-site visit on May 17, 2012. Those additional change orders are listed below: 1. CO-01 2: UAT Foundation, Blast Wall, and Containment $101,102.64 (Concrete work for the additional transformer discussed in Owner Furnished Equipment) 2 CO-013: Owner Furnished Equipment Management True-Up $ 58,804.49 (Please see Section 2.6 of the EPC contract.) Due to the quick response turnaround time requested, the Company was not able to put together a more detailed description of the change orders. However, if IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -11 Staffs preference is for a more detailed write-up of the change orders, the Company is willing to provide that information at a later date upon request. The response to this Request was prepared by Courtney Waites, Regulatory Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -12 REQUEST NO. 42: Please provide the basis used to calculate the net fuel cost for the test year (up to June 30th) and for contingency net fuel cost for the period after June 30th Specifically, provide the actual and estimated fuel/energy prices and amounts of fuel/energy to determine the basis distinguishing actual from estimated. RESPONSE TO REQUEST NO. 42: Please see the confidential PDF file, Langley Gulch Power Plant MW/Fuel Gas Summary, provided on the confidential CD that details the forecasted start-up fuel costs by month, which is the basis for the Company's estimate of remaining dollars to spend through June 30, 2012, or $4,674,996. The Company estimated an additional $500,000 of start-up fuel costs in July 2012 in the event Langley Gulch is not on-line in June. The confidential CD will be provided to those parties that have executed the Protective Agreement in this proceeding. The response to this Request was prepared by Courtney Waites, Regulatory Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -13 REQUEST NO. 43: Please provide a copy of the DEQ air permit application. RESPONSE TO REQUEST NO. 43: Please see the attached air permit application, Prevention of Significant Deterioration Permit-To-Construct Application, for Langley Gulch. The response to this Request was prepared by Courtney Waites, Regulatory Analyst II, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. DATED at Boise, Idaho, this 24th day of May 2012. dUAA. HiLTON Attorney for Idaho Power Company IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -14 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 24th day of May 2012 I served a true and correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY upon the following named parties by the method indicated below, and addressed to the following: Commission Staff 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 Industrial Customers of Idaho Power Peter J. Richardson Gregory M. Adams RICHARDSON & O'LEARY, PLLC 515 North 27th Street (83702) P.O. Box 7218 Boise, Idaho 83707 Hand Delivered U.S. Mail Overnight Mail FAX X Email don. howellcpuc.idaho.ciov Karl. kIeincDuc. idaho.ciov Hand Delivered U.S. Mail Overnight Mail FAX X Email peterrichardsonandolearv.com qreqcrichardsonandoleary.com Dr. Don Reading Ben Johnson Associates, 6070 Hill Road Boise, Idaho 83703 Hand Delivered Inc. U.S. Mail Overnight Mail FAX X Email dread incicmindsprinc.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 Anthony Yankel 29814 Lake Road Bay Village, Ohio 44140 Hand Delivered U.S. Mail Overnight Mail FAX X Email eloracinelaw.net Hand Delivered U.S. Mail Overnight Mail FAX X Email tonyvankel.net IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -15 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 tnelson(hollandhart.com fschmidtchoIIandhart.com sakrundelkholland hart.com lnbuchanan(hoIland hart.com Hand Delivered U.S. Mail Overnight Mail FAX X Email remaImqrenmicron.com Christa Bearry, Legal IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY -16