20130806IPC to Staff 1-10.pdf

SIffi*.
An IDACORP Company
?t!l:l A[J{} -t Pi'l ti: trS
ri., !r',1i t-r-,, r : i .t i
LISA D. NORDSTROM
Lead Counsel
[e-mail]
August 6,2013
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-13-16
Bridger CPCN - ldaho Power Company's Response to the First Production
Request of the Commission Staff
Dear Ms. Jewell:
Enclosed for filing in the above matter are an original and three (3) copies of ldaho
Power Company's Response to the First Production Request of the Commission Staff to
ldaho Power Company. ln addition enclosed are an original and three (3) copies of ldaho
Power Company's Confidential Response to the First Production Request of the
Commission Staff.
Also, enclosed are four (4) copies of the confidential disk containing information
responsive to the Commission Staff's Request for Production Nos. 1,3,4, and g. Please
handle the confidential information in accordance with the ProtectiveAgreement executed
in this matter.
Sincerely,
o{r-C fr*o"*
Lisa D. Nordstrom
LDN:evp
Enclosures
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
LISA D. NORDSTROM (lSB No. 5733)
JENNIFER M. REINHARDT-TESSMER (lSB No. 7432)
Idaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
I nordstrom@ ida hopower. com
i rei n hardt@ id a hopower. co m
Attorneys for ldaho Power Company
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR A
CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY FOR INVESTMENT IN
SELECTIVE CATALYTIC REDUCTION
CONTROLS ON JIM BRIDGER UNITS 3
AND 4.
'i,i i:: !'5
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-13-16
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE
COMMISSION STAFF TO !DAHO
POWER COMPANY
COMES NOW, ldaho Power Company ("ldaho Powed' or "Compo[y"), and in
response to the First Production Request of the Commission Staff ("Staff') to ldaho
Power Company dated July 15,2013, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REOUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1
REQUEST NO. 1: Please provide a cost breakdown of the entire Jim Bridger
Units 3 and 4 Environmental Compliance upgrade project that makes up the
Commitment Estimate. Please include a narrative or description for each element of
cost. Also, please provide a copy of the Engineering, Procurement and Construction
(EPC) contract including all cost estimates, timelines for completion, etc.
RESPONSE TO REQUEST NO. 1: Please see the confidential attachment
provided on the confidential CD for the cost breakdown of the Jim Bridger Units 3 and 4
Selective Catalytic Reduction ("SCR') project and description for each element of cost.
This attachment contains information that is confidential, proprietary, and/or has
commercial value. The confidentia! CD will be provided to those parties that have
executed the Protective Agreement in this proceeding.
ldaho Power will make the confidentia! EPC contract available for viewing at its
corporate office in Boise, Idaho pursuant to the signing of a confidentiality agreement.
Please contact Doug Jones at 388-2615 or Camilla Victoria at 388-5821 to view the
materials.
The response to this Request was prepared by John Carstensen, Engineering
Project Leader, ldaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2
REQUEST NO. 2: Please provide an itemized estimate of additional costs if the
Company delays the start of the project until November 21, 2013, but is still required to
meet the Wyoming State lmplementation Plan (SlP) deadlines for compliance.
RESPONSE TO REQUEST NO. 2: ldaho Power and PacifiCorp cannot meet
the Wyoming State lmplementation Plan deadlines for compliance if the project start
date is delayed to November 21, 2013. Consequently, no estimate of additional costs
due to project delay exists.
ln January and February of 2013, PacifiCorp requested certain short-listed
contractors to advise PacifiCorp of the potential consequences of delaying the Full
Notice to Proceed ('FNTP") beyond May 15, 2013. Prior to the request, short-listed
bidders had indicated that they would require a "day-for-day" schedule extension in the
event the FNTP was issued after the May 15,2013, date. PacifiCorp was advised that
an extension would, in turn, prevent Units 3 and 4 at Bridger from meeting SIP
compliance dates.
In response to PacifiCorp's request, the short-listed contractors provided updated
competitive bids that would provide for Limited Notice to Proceed ("LNTP") contract
approach that would permit contractors to perform certain limited tasks in order to meet
the Wyoming State lmplementation Plan compliance deadlines, but extend the FNTP
date beyond May 15, 2013, to December 1, 2013. PacifiCorp recommended this
approach to Idaho Power as the least cost alternative to ensure compliance with the
legally enforceable compliance obligations. On May 31, 2013, PacifiCorp executed the
contract with LNTP provisions included with the selected bidder. ldaho Power reviewed
PacifiCorp's recommended course of action. The EPC contractor is currently on track
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3
to timely complete the limited tasks identified in the LNTP.
The response to this Request was prepared by Tom Harvey, Joint Projects
Manager, ldaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 4
REQUEST NO. 3: Please provide a three-year history by month of unit
availability and amount of generation for Jim Bridger Units 3 and 4.
RESPONSE TO REQUEST NO. 3: Please see the confidential table provided
on the confidential CD which shows the past 36 months of equivalent availability and
tota! net generation in megawatt-hours (MWh) for Jim Bridger Units 3 and 4. The
generation is the total production of the units and not Idaho Powe/s share of the
generation of the units, because ldaho Power takes a share of the plant total generation
and is not allocated generation by unit. This attachment contains information that is
confidential, proprietary, and/or has commercial value. 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 John Carstensen, Engineering
Project Leader, ldaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5
REQUEST NO. 4: Please provide an itemized estimate of costs and benefits for
each alternative (r.e., emission control upgrade, gas conversion, CCCT replacement), a
short description of each element of cosUbenefit, the timing of each element of
cosUbenefit (e.9., gas conversion capital cost, mine remediation cost, CCCT capital
investment, etc.), and whether each is a one-time cosUbenefit or is re-occurring.
RESPONSE TO REQUEST NO. 4: An itemized list of costs and the annual
timing for each investment alternative of emissions contro! upgrade, gas conversion and
CCCT replacement is shown in confidential Exhibit No. 5 to the testimony of Tom
Harvey. Specifically, it is included in the confidential SAIC Report Appendix A, Coal
Environmental Compliance Upgrade lnvestment Evaluation Table A-17 Upgrade, Table
A-18 Fuel Switch, and Table A19 Retire and Replace on page 48 (Attachment 1 ) for Jim
Bridger 3 and Table A-20 Upgrade, Table A-21 Fuel Switch and Table A22 Retire and
Replace on Page 49 (Attachment 2) for Jim Bridger 4. The confidential attachments will
be provided on the confidentia! CD. These attachments contain information that is
confidential, proprietary, and/or has commercia! value. The confidential CD will be
provided to those parties that have executed the Protective Agreement in this
proceeding.
As shown in the CPCN application Exhibit No 6, Page 16, Figure 4-Tota! Portfolio
Costs gives the benefit of each alternative as the lower expected cost (highlighted in
green) of the alternatives under the 9 future scenarios. The described page is attached
as Exhibit No 6, Page 16 (Attachment 3).
ln general, a cost or benefit related to a fixed investment is one-time in nature
and those related to variable costs are recurring.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 6
The response to this Request was prepared by Richard Haener, Senior Fuels
Management Coordinator, ldaho Power Company, in consultation with Lisa D.
Nordstrom, Lead Counsel, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 7
REQUEST NO. 5: Please provide the cost of transmission investment that could
be realistically avoided or delayed if Jim Bridger Units 3 or 4 (or both) were shut down
on the Wyoming SIP compliance dates and alternative generation sources were
installed close to major load centers.
RESPONSE TO REQUEST NO. 5: Removing approximately 550-1 ,100
Megawatts (MW) of resources in Wyoming would undoubtedly change the power flow
characteristics of the transmission system in ldaho. Today, ldaho Power's resource
fleet is balanced geographically which balances the transmission capacity needs and
power flows across the system. Adding generation close to major load centers would
certainly require transmission investment to integrate the new resources (aka "Local
lnterconnection Costs"). Additionally, large resource additions near the load centers
combined with a reduction in Wyoming generation may also require additional
transmission investment beyond what is planned today due to the changes in the power
system operations and power flows. For example, more power may flow west-to-east
across ldaho Powe/s system requiring transmission reinforcements that are not
necessary today because of the present geographically balanced resource portfolio.
Thus, the addition of generating capacity close to major load centers would result in
added costs.
There are no large future transmission investments between Jim Bridger and the
Treasure Valley that can be avoided if Jim Bridger Units 3 and 4 were to be shut down.
Series capacitors at Borah and Kinport substations will need to be replaced in the future
due to the age of the equipment, likely in the next 5-10 years. lf no generation is
substituted in Wyoming then it is possible that series capacitor replacements may not
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 8
be required, although studies would be required to verify if the system could operate
adequately without the series capacitors. The cost estimate for replacement of these
series capacitors is roughly $16 million in today's dollars.
The response to this Request was prepared by Mitch Colburn, Senior Engineer,
ldaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, ldaho
Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 9
REQUEST NO. 6: Please provide the reduction in capacity for Jim Bridger Units
3 and 4 if the Environmental Protection Agency (EPA) places a 0.05 lbs/MMBTU
compliance standard for nitrogen oxide at some future date. What are the incremental
costs (r.e. capital, maintenance, and operation) associated with the more stringent
standard on each unit?
RESPONSE TO REQUEST NO. 6: The current proposed Federal
lmplementation Plan by the Federal EPA, posted on June 4,2013, approves the state of
Wyoming's State lmplementation Plan of 0.07 lbs/MMBtu NOx emissions for Units 3
and 4 at the Jim Bridger Power Plant.
A definitive estimate of the SCR run-rate cost implications associated with a
requirement to achieve a 0.05 lb/MMBtu permit limit has not been determined.
However, it is anticipated that scheduled catalyst fill and replacement events could cost
up to approximately ten percent more and ammonia consumption costs could increase
by approximately four percent over the respective costs for the 0.07 lb/MMBtu permit
limit scenario.
At this time, the best estimate of SCR project initial capital cost implications for
scope modifications required to achieve a 0.05 lbs/MMBtu permit limit is less than $1.7
million per unit (ldaho Powe/s share).
lncremental unit capacity reductions are not anticipated if the NOx emissions limit
was established at 0.05 lb/MMBtu.
The response to this Request was prepared by John Carstensen, Engineering
Project Leader, ldaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counse!, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1O
REQUEST NO. 7: Please provide a copy of the Request for Proposal (RFP) and
RFP evaluation results for the EPC contractor.
RESPONSE TO REQUEST NO. 7: ldaho Power will make the confidentia! RFP
and RFP evaluation results available for viewing at its corporate office in Boise, ldaho,
pursuant to the signing of a confidentiality agreement. Please contact Doug Jones at
388-2615 or Camilla Victoria at 388-5821 to view the materials.
The response to this Request was prepared by John Carstensen, Engineering
Project Leader, ldaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counsel, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 11
REQUEST NO. 8: Please discuss Idaho Power's course of action and the
ramifications of those actions if the EPA doesn't finalize its rules by the Final Notice to
Proceed deadline (see the direct testimony of Michael Youngblood, pg 18).
RESPONSE TO REQUEST NO. 8: Even if the EPA rules are not finalized by the
final notice to proceed deadline, ldaho Power and PacifiCorp will still have to comply
with the Wyoming Regional Haze SIP and the BART Settlement Agreement which
requires the installation of SCRs on Jim Bridger Units 3 and 4,by the years 2015 and
2016 respectively.
As Lisa Grow's testimony on page 11, lines 7 through 11, states: "lf the
environmental upgrades are not installed within the time frame given by the EPA, ldaho
Power would be forced to stop generating from these units. Unlawfully operating the
units in violation of federal and state regulations is not an option for ldaho Power."
The response to this Request was prepared by John Carstensen, Engineering
Project Leader, ldaho Power Company, in consultation with Lisa D. Nordstrom, Lead
Counse!, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 12
REQUEST NO. 9: Please provide an explanation of the contractual obligations
and costs between ldaho Power and PacifiCorp if ldaho Power were to decide to
abandon generation at Jim Bridger on the Wyoming SIP compliance dates for each unit.
PIease provide documentation that supports these obligations and costs.
RESPONSE TO REQUEST NO. 9:
The response and attachments provided in response to this request contain
confidential contract terms and will be provided to those parties that have executed the
Protective Agreement in this proceeding.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 13
REQUEST NO. 10: Please provide the dates when the useful life of Jim Bridger
Units3and4ends.
RESPONSE TO REQUEST NO. 10: Currently, in the ldaho Jurisdiction, the
depreciable life of Jim Bridger Units 3 and 4 ends in 2034.
The response to this Request was prepared by Mitch McClellan, Joint Venture
Analyst, ldaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
ldaho Power Company.
DATED at Boise, ldaho, this 6h day of August 2019.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 14
Attorney for ldaho Power Company
CERTIFICATE OF SERVICE
! HEREBY CERTIFY that on this 6th day of August 2013 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
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
Kristine A. Sasser
Deputy Attomey General
ldaho Public Utilities Commission
47 2 W est Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-007 4
lndustrial Gustomers of Idaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North Sixth Street
Boise, ldaho 83702
Snake River Alliance
Ken Miller, Clean Energy Program Director
Snake River Alliance
P.O. Box 1731
Boise, ldaho 83701
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FAX
Email [e-mail]
qreg@ richa rdsonadams. com
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IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 15
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-13-16
IDAHO POWER COMPANY
RESPONSE TO STAFF'S REQUEST NO.4
the twenty-year Aurora generated total portfolio cost to form the basis for the quantitative evaluation of the
investment alternatives.
Figure 4, below, summarizes the combined NPV results of ldaho Power's Aurora analysis and SAICs fixed
costs analysis for each investment option under varying carbon and natural gas futures. The planning case
(planning case carbon/planning case natural gas) is denoted in bold.
The left column groups each unit with the investment atternatives. The columns to the right show the NPV of
the total portfolio costs over the twenty-year period (2013-2032) in 2013 dollars. The green highlighted cell
indicates the least cost option for the unit under that scenario. The preponderance of least cost outcomes
and the relative cost difference between alternatives helps determine the investment recommendation.
Flgure 4. Total Portfolio Costs
ldaho Power Company
Coal Environmental lnvestment Modelin8 Results
Total Portfolio Costs (Aurora Portfolio cost + SAlc Fired Costs l
For the 20 year forecast period 2013-2032
NPV ln 2013 SMilliont
NPV ofthe Total Portfolio Cost for the 3 natural l.3 and 3 carbon adder futures
lnv!stm !nt Alt!rnatives
NG High
:O, S0
NG High
:o2 s14
NG High
:or 535
NG low
:o, So
NG Low
:o2 514
NG Low
:oz $35
NG
Planning
3o, S0
NG
)lannihB
:o2 514
NG
,lanninB
:or 935
/almy 1 (v1) DSI
/l 2015 retlre/rcdace wlti CCCI
,1 2015 natural tas conv€rsion
6,Ut5 3,96s
3.922
i.s a,a 5.t7!l
d079
3,t69
4,800
0.581
1,012
1,927
+r.,
+rin6,7t1 t,Tzz 6,?aa c79'
/1 v2 Enhanc"d Upgrrdc (SCR & wfGD) 2018
/1 V2 r€tlre/rcplace with CCCT 2018
/1 V2 natural tas convcrsbn 2018
5,157
5,124
z38r
6,961
r.580
4,283
5,372
+983
7,la rA'rt
4,379
5,ltt
r,0x
7,1A
4,r03
4,33s 5,9t0 6,979
:TA - v1 V2 Eoftrm.d Upt..de (SCR & WFGDI 2023
fA - Vl v2 retlrc/r€plac! with cccf 2023
ITA - vl v2 natur.l !.! convusion 2023
5.06!7,316 /t 512 5,315 7.t70 1,aB 5"rtE ,,,7L
4,256
4.:Il1 5,8,:l t,u7 1,275 5.(m 7,A75 ..:ll5 tt13 7.1(n
im sridter 1 (i81) lnstall scR
81 rctireteplace with CCCI 2023
B1 natural Bas convlrslor 2023
4,054
4,08r
4479
/f,911
6,962
7.005
4,155
r,155
1,t,,?
4,955 69at
4,149
1,L67
a,964
a,ttt
0,943
7.O12
im &id8s 2 (J82)tnstall scfi
82 r?tirG/replrc! with CCCr 2022
82 natural gir convsrion 2022
a,tt?
I tnt
/t,935
a,928
7,009
7,008
a,198
4,16:t
4981
4,X9 6.3:U
/t,201
4,L79
5,65
argit
6,980
z(xrlt
im Bridter 3 (J83) lnstall SCR
83 rltir./ref{ace widr CCCT 2016
83 n.tural 8.s converlon 2016
4,231
1.207
5 016
4,989
7,O22
7-O70
4,201
4.154
1,917
L a77 4.853
4,253
La10
5,030lu 6,931
6 q6C
im Bridg.r 4 (.,84) lnstall sCR
84 retirelreplace with CCCT 2017
84 naiural !15 converrion 2O17
1,20,3
4.rto
4,985
4961
6,984
6,9E3
4,189
1,LlL
4,935
4.915 5,82s
4,235
4,195
5,0o'
a's7t
5,903
6.g:ta
rA - JB3 JBr tnst.U SCR
ItA - JB3 rB4 retirc/rcpld€ w CCCI 2020-21
lfA -J83 JB4 n.tural 8as ctrvcrllil 2020-21
4,E95
I OtO
5,576
( (at 7,151
7.54S
4,539
u \47
5,209
( 1nn
4,712
L An?
5,/ti!6
I lt27.(t86 ,.354
Coal Unit Environmental Analysis Page 16
Exhibit No. 6
Case No. IPC-E-13-16
T. Harvey, IPC
Page 16 of 30