20130910IPC to Staff 45-48.pdf

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LISA D. NORDSTROM i: . :-Leadcounsel ii'i'ii'ii:',, t,'' i'. .:,
! [e-mail]
September 10,2013
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
Certificate for Public Convenience and Necessity for Jim Bridger Units 3 and
4 - ldaho Power Company's Response to the Fourth Production Request of
the Commission Staff
Dear Ms. Jewel!:
Enclosed for filing in the above matter are an original and three (3) copies of ldaho
PowerCompany's Response to the Fourth Production Request of the Commission Staff to
ldaho Power Company.
Sincerely,
K-- A(^rr-*,*,
Lisa D. Nordstrom
LDN:evp
Enclosures
1221 W. ldaho 5t. (83702)
P.O. 8ox 70
Boise, lD 83707
LISA D. NORDSTROM (lSB No. 5733)
JENNIFER M. REINHARDT-TESSMER (lSB No. 7432)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I nord strom@ id a hopower. co m
i rei n hardt@ idaho power. com
Attorneys for ldaho Power Company
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR A
CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY FOR THE INVESTMENT
IN SELECTIVE CATALYTIC REDUCTION
CONTROLS ON JIM BRIDGER UNITS 3
AND 4.
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anI^ arnii i ,: )Lr
:t.' I i lr i. ' t ' ''-
!3 F;i L: L3
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. |PC-E-13-16
IDAHO POWER COMPANY'S
RESPONSE TO THE FOURTH
PRODUCTION REQUEST OF
THE COMMISSION STAFF TO
IDAHO POWER COMPANY
COMES NOW, ldaho Power Company ("ldaho Powe/' or "Compohy"), and in
response to the Fourth Production Request of the Commission Staff ("Staff') to ldaho
Power Company dated August 27,2013, 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.45: Please explain why Sulfur Dioxide (SO2) emission levels for
Jim Bridger Unit 4 are almost 300 times lower than the levels for Jim Bridger Unit 3 as
shown in Table A-1 in Tom Harvey's Exhibit No. 5.
RESPONSE TO REQUEST NO. 45: The SAIC Table A-1 SO2 emission leve! for
Jim Bridger Unit 4 is in error. lt should read 0.1458 lbs/MMBtu. The correct SO2
emission level of 0.1458 lbs/MMBtu was used in the actual calculations of sulfur dioxide
emissions in Exhibit No. 5.
The response to this Request is sponsored by Tom Harvey, Joint Projects
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2
REQUEST NO.46: ln Tom Harvey's Exhibit No. 5 (page 3-8), it says "the study
approach examined costs and benefits of each unit's upgrade or retirement decision
separately," and that "...the effects of the given unit's scenario was isolated and
considered no interaction with any other units on the IPC system." Because each
analysis was isolated from the system, it would seem that if a generation unit does not
require natural gas as fuel for a given scenario, that the price of natural gas would have
no effect on the analysis results. Please explain why the Total Cost results for the
Emission Upgrade Scenario for Jim Bridger Unit 3 (page 4-6) and Unit 4 (page 4-8)
show increasing Total Net Present Value (NPV) costs with increasing natural gas prices
for a given carbon price (i.e. carbon prices are held constant).
RESPONSE TO REQUEST NO. 46: The SAIC analysis evaluated the NPV cost
to provide 20 years of varying annual megawatt-hours ("MWh") using the three different
technologies. The basis for the 20-year MWh forecast was the generation of the coal
units (without the upgrades) as determined by Aurora under the three natural gas and
carbon scenarios. The price of natural gas is a driver in how the Company's generation
resources are economically dispatched. That is, a lower natural gas price results in
lower utilization of the Jim Bridger units and a higher natural gas price results in more
utilization of Jim Bridger. For example the Jim Bridger Unit 3 total generation over the
study period for under median carbon is:
Low Natural Gas 21.5 million MWhs
Median Natural Gas 24.8 million MWhs
High Natural Gas 26.1 million MWhs
Although the carbon adder is fixed, total cost increases with higher MWhs of production.
Similar results occurred with Jim Bridger Unit 4 under the SAIC analysis methodology.
IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY.3
The response to this Request is sponsored by Tom Harvey, Joint Projects
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY.4
REQUEST NO.47: ln Tom Harvey's Exhibit No. 5 (page 3-9), the Company and
SAIC assumed that a price of carbon from burning natural gas would be 50 percent of
the $/MWh price for coal. ln the Natural Gas Conversion scenarios for Jim Bridger
Units 3 and 4 in the low and planning gas cases, the Total NPV cost results for the high
carbon cases are lower than the no carbon and planning carbon cases for a given
natural gas price. Please explain why the high carbon cases reflect a higher total cost
than the no carbon or planning carbon cases.
RESPONSE TO REQUEST NO. 47: The high carbon/high gas NPV results
being relatively higher than the high carbon/low gas and high carbon/planning gas is the
result of the differing generation forecasts used. The below table sums the total MWhs
used in the SAIC analysis for the Jim Bridger 3 Fuel Switch analysis:
Scenerio
LoGas_0C
LoGas_PlanC
LoGas_HiC
PlanGas_OC
PlanGas_PlanC
PlanGas-HiC
HiGas_OC
HiGas_PlanC
HiGas HiC
MWhs
22,89L,578
2L,24L,L75
10,tz0,623
24,803,937
24,358,54L
19,832,655
25,708,569
25,553,803
23,836,533
As identified within each gas scenario, the relative difference in total generation varies
greatly between carbon cases. The low gas/zero carbon forecast has 22.9 million
MWhs and low gas/high carbon has 10.1 million MWhs, which is less than half of the
zero carbon MWhs. As the gas price increases the variance in generation level
between carbon cases decreases. ln the high gas scenario the lower MWhs is not
sufficient to negate the higher carbon costs, whereas in the zero and planning gas
IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5
scenarios the relatively fewer MWhs total costs overcome the higher per MWh carlcon
cost on fewer MWhs.
The response to this Request is sponsored by Tom Harvey, Joint Projects
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION
REOUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 6
REQUEST NO. 48: ln response to Staffs Production Request No. 5, the
Company states "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." Per the original request, Staff requests whether or not transmission
investments can possibly be avoided or "delayed." Please answer the question as it
pertains to "delaying" potential investment and specifically whether or not investment in
the Gateway West transmission line could be avoided or delayed.
RESPONSE TO REQUEST NO. 48: Removing approximately 550-1 ,100
megawatts of resources in Wyoming would undoubtedly change the power flow
characteristics of the transmission system in ldaho. Today, Idaho Power's resource
fleet is balanced geographically, balancing the transmission capacity needs and power
flows across the system. Without knowing where replacement generation would be
located, Idaho Power cannot ascertain if particular transmission investments can be
delayed.
For instance, if a large generation resource was sited near or west of the
Treasure Valley load center combined with a reduction in Wyoming generation,
additional transmission capacity would likely be necessary in the west-to-east direction
(today the transmission capacity constraint is in the opposite direction, east-to-west). lt
is difficult to say if Gateway West can ultimately be avoided in this scenario, but if it can
be avoided, alternate capacity upgrades would likely be needed in addition to the local
generation i nterconnection costs.
Alternatively, if Jim Bridger Units 3 and 4 were shut down and new generation
was built in or near the Magic Valley area, ldaho Power's interest in and need for
IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 7
Gateway West would remain unchanged. The same amount of power would likely be
crossing ldaho Power's transmission system between the Magic Valley and the
Treasure Valley. ln fact, the need for portions of the Gateway West project, specifically
the segment between the proposed Cedar Hill substation and Midpoint substation, may
be accelerated to integrate any new resource if the resource is sited south of the Magic
Valley.
As indicated in ldaho Power's previous response to the ldaho Public Utilities
Commission Staffs Production Request No. 5, if substitute generation is located west of
Wyoming then end-of-life equipment replacements estimated at $16 million may
potentially be avoided. However, studies would be needed to confirm that the system
could operate without the equipment.
Finally, if Jim Bridger Units 3 and 4 were shut down and new generation was built
in Wyoming, then the Jim Bridger shut down would have no impact on transmission
investment plans because there would be no change in the amount of capacity needed
across ldaho Power's transmission system.
ln summary, without a definitive geographic location for a substitute resource
location if Jim Bridger Units 3 and 4 were shut down, ldaho Power cannot confidently
determine if transmission investments, including Gateway West, can be delayed or
avoided.
The response to this Request is sponsored by Lisa Grow, Senior Vice President
of Power Supply, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY. S
DATED at Boise, tdaho, this lOth day of September 2013.
IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 9
Attorney for ldaho Power Company
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this lOth day of September 2013 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
Kristine A. Sasser
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-0074
lndustrial Customers of ldaho 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
Idaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North Sixth Street
Boise, ldaho 83702
Snake River Alliance
Dean J. Miller
McDEVITT & MILLER LLP
420 West Bannock Street
P.O. Box 2564
Boise, Idaho 83701
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IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1O
Ken Miller, Clean Energy Program Director
Snake River Alliance
P.O. Box 1731
Boise, ldaho 83701
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IDAHO POWER COMPANY'S RESPONSE TO THE FOURTH PRODUCTION
REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 11