20170124IPC to Micron 4-22.pdf

LISA D. NORDSTROM
Lead Counsel
[e-mail]
January 24, 2017
VIA HAND DELIVERY
Diane Hanian, Secretary
~017 Jrir{ 24 PH 3: 2
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-16-23
Revised Depreciation Rates for Electric Plant-In-Service
An IDACORP company
Responses to Micron Technology, lnc.'s ("Micron") Data Request Nos. 1-4
through 1-22
Dear Ms. Hanian:
Enclosed for filing are an original and three (3) copies of Idaho Power Company's
Response to Request Nos. 1-4 through 1-22 of Micron's First Data Request to Idaho Power
Company in the above matter. Responses to Nos. 1-1 through 1-3 were previously filed on
January 10, 2017.
Also enclosed are four (4) copies each of a non-confidential disk and the
confidential attachments containing information responsive to Micron's production
requests.
Lastly, enclosed is the original Protective Agreement which was previously
distributed to the parties for their signature via email.
If you have any questions about the enclosed documents, please do not hesitate to
contact me.
LDN/kkt
Enclosures
Very truly yours,
x~£2.~~
Lisa D. Nordstrom
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]
[e-mail]
Attorney for Idaho Power Company
:
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
)
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR )
AUTHORITY TO INCREASE ITS RA TES )
DUE TO REVISED DEPRECIATION RA TES )
FOR ELECTRIC PLANT-IN-SERVICE. )
)
) ___________ )
CASE NO. IPC-E-16-23
IDAHO POWER COMPANY'S
RESPONSE TO THE FIRST DATA
REQUEST OF MICRON
TECHNOLOGY, INC. TO IDAHO
POWER COMPANY
COMES NOW, Idaho Power Company ("Idaho Power" or "Company"), and in
response to the First Data Request of Micron Technology, Inc. to Idaho Power
Company dated January 3, 2017, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 1
REQUEST NO. 1-4: Please provide all final observed life tables generated for
each account in Excel format.
RESPONSE TO REQUEST NO. 1-4: The final observed life tables are set forth
in the Company's response to Micron's Request No. 1-3, "Attachment 2 -Response to
Micron's Request No. 3_Rpt-lPC-2015-Curves and Life Tables (J Spanos).docx."
These are only available in Word format.
The response to this Request is sponsored by John J Spanos, Senior Vice
President, Gannett Fleming Valuation and Rate Consultants, LLC.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 2
REQUEST NO. 1-5: Please provide all remaining life calculations in Excel
format.
RESPONSE TO REQUEST NO. 1-5: Please see the Excel file provided on the
CD that includes the final report table from the depreciation study with cell references
and formulae intact for the calculations of composite remaining life.
The response to this Request is sponsored by John J Spanos, Senior Vice
President, Gannett Fleming Valuation and Rate Consultants, LLC.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 3
REQUEST NO. 1-6: Please provide the average age of survivors as of the study
date for each production plant by account.
RESPONSE TO REQUEST NO. 1-6: Please see the schedule provided on the
CD which sets forth the weighted average age of survivors as of the study date for each
production plant by account.
The response to this Request is sponsored by John J Spanos, Senior Vice
President, Gannett Fleming Valuation and Rate Consultants, LLC.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 4
REQUEST NO. 1-7: Please identify and describe any changes in the
depreciation system / methodology between the previous depreciation study and the
depreciation study filed in this case.
RESPONSE TO REQUEST NO. 1-7: There were no changes to the
depreciation system / methodology between the previous depreciation study and the
depreciation study filed in this case. There are changes to probable retirement dates for
generating units such as the license date for Hells Canyon, as well as survivor curve
and net salvage percentages for some accounts.
The response to this Request is sponsored by John J Spanos, Senior Vice
President, Gannett Fleming Valuation and Rate Consultants, LLC.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 5
REQUEST NO. 1-8: Please provide a copy of the most recent, previously-filed
depreciation study.
RESPONSE TO REQUEST NO. 1-8: Please see the attachment provided on
the CD for the most recent, previously-filed depreciation study.
The response to this Request is sponsored by Courtney Waites, Senior
Regulatory Analyst, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 6
REQUEST NO. 1-9: Please provide a copy of the most recent Commission
order(s) regarding currently-approved depreciation rates and probable retirement dates
of any production units.
RESPONSE TO REQUEST NO. 1-9: Please see Order No. 32559 provided on
the CD for a copy of the most recent Idaho Public Utilities Commission order regarding
currently-approved depreciation rates. The depreciation rates approved in this order
are based on the following probable production unit retirement dates:
Depreciable Group
Steam Production Plant
Boardman
Bridger
Valmy 1
Valmy 2
Hydraulic Production Plant
Milner Dam
American Falls
Brownlee
Bliss
Cascade
Clear Lake
Hells Canyon
Lower Malad
Lower Salmon
Milner
Oxbow
Shoshone
Strike
Swan Falls
Twin Falls (Old)
Twin Falls (New)
Thousand Springs
Upper Malad
Upper Salmon A
Upper Salmon B
Probable Retirement
Year
2020
2034
2031
2035
2067
2055
2060
2033
2061
2017
2060
2033
2033
2068
2060
2031
2032
2042
2040
2040
2019
2033
2033
2033
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 7
Other Production Plant
Evander Andrews (Danskin 1)
Salmon Diesel
Bennett Mountain
Evander Andrews (Danskin 2)
Langley
2036
2012
2041
2043
N/A*
*Order No. 32559 specified the Company should use a 35-
year life for Langley but did not identify a probable
retirement year.
The response to this Request is sponsored by Courtney Waites, Senior
Regulatory Analyst, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 8
REQUEST NO. 1-10: Please provide a copy of the Company's most recently­
filed integrated resource plan; please also provide a copy of the most recently prepared
integrated resource plan.
RESPONSE TO REQUEST NO. 1-10: A copy of Idaho Power's most recently­
filed, and most recently prepared, integrated resource plan ("IRP") and appendices can
be found here:
• IRP:
http://www.puc.idaho.gov/fileroom/cases/elec/lPC/IPCE1519/201506301NTEGRA TED%
20RESOURCE%20PLAN%202015.PDF
• IRP Appendix A -Sales and Load Forecast:
http://www. puc. idaho.gov/fileroom/cases/elec/1 PC/I PCE 1519/201506301RP%20APPEN
DIX%20A%20SALES%20AND%20LOAD%20FORECAST%20. PDF
• IRP Appendix B -DSM Annual Report:
http://www. puc. idaho.gov/fileroom/cases/elec/1 PC/IPCE 1519/201506301RP%20APPEN
DIX%20B%20DSM%20ANNUAL %20REPORT.PDF
• IRP Appendix C-Technical Report:
http://www. puc. idaho.gov/fileroom/cases/elec/1 PC/IPCE 1519/20150630 IRP%20APPEN
DIX%20C%20TECHNICAL %20REPORT.PDF
The response to this Request is sponsored by Courtney Waites, Senior
Regulatory Analyst, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY - 9
REQUEST NO. 1-11: Please provide all notes taken during any meetings with
Company personnel regarding the depreciation study. Identify by name and title, all
Company personnel who provided the information, and explain the extent of their
participation and the information they provided. Please explain how this information
affected the depreciation study.
RESPONSE TO REQUEST NO. 1-11: Idaho Power Company interpreted this as
a request for the notes of John Spanos. Please see the attachment provided on the CD
to the Company's response to Micron's Request No. 1-12.
As described by the National Association of Regulatory Utility Commissioners
(NARUC) manual, the determination of life and salvage estimates should include
informed judgment. Informed judgment includes a lot of aspects of each estimate;
however, discussions with utility personnel and visits to facilities allow for an
understanding of how assets are utilized and the condition of the assets. In many
cases, the condition of the assets require replacement which may be at a level quite
different than what has occurred in the past or the load of an asset changes which
requires upgrades to a newer technology to meet demands. These factors were
obtained during meetings and visits with Idaho Power personnel as well as industry
information obtained from conducting these activities with other utilities.
The response to this Request is sponsored by John J Spanos, Senior Vice
President, Gannett Fleming Valuation and Rate Consultants, LLC.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY-10
REQUEST NO. 1-12: Please identify all plant tours taken in relation to the
depreciation study. For each such tour:
a. Identify those in attendance and their titles and job descriptions.
b. Provide all conversation notes taken during the tour.
c. Provide all photographs and images taken during the tour.
d. Provide all written materials obtained during the tour.
RESPONSE TO REQUEST NO. 1-12: Please see the file provided on the CD
which sets forth notes, photos, and materials from the site tours taken during the
depreciation study. Please also see pages 111-2 and 111-3 of the Depreciation Study filed
as Exhibit No. 2 of John Spanos' testimony for other locations visited during past
studies.
The response to this Request is sponsored by John J Spanos, Senior Vice
President, Gannett Fleming Valuation and Rate Consultants, LLC.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY -11
REQUEST NO. 1-13: Please provide all external sources relied upon in
conducting the depreciation study, including industry surveys, statistics, and reports.
RESPONSE TO REQUEST NO. 1-13: Please see the industry statistics
provided in the Company's response to Micron's Request No. 1-3 (Attachment 5) which
were considered during the conduct of the Depreciation Study.
The response to this Request is sponsored by John J Spanos, Senior Vice
President, Gannett Fleming Valuation and Rate Consultants, LLC.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY-12
REQUEST NO. 1-14: Please provide a copy of the most recent industry surveys
associated with depreciation statistics in the Company's possession.
RESPONSE TO REQUEST NO. 1-14: No industry surveys associated with
depreciation statistics are maintained by the Company outside of the attachments
provided as part of the Company's response to Micron's Request No. 1-3.
The response to this Request is sponsored by Donna Wheeler, Finance T earn
Leader, Idaho Power Company, and John J Spanos, Senior Vice President, Gannett
Fleming Valuation and Rate Consultants, LLC.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY -13
REQUEST NO. 1-15: Please identify and provide a copy of the Company's
accounting policies and procedures for plant retirements and cost of removal.
RESPONSE TO REQUEST NO. 1-15: The attachment provided on the CD
includes the Company's written accounting practices related to plant retirements,
including cost of removal.
The response to this Request is sponsored by Donna Wheeler, Finance Team
Leader, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY-14
REQUEST NO. 1-16: Please identify and provide copies of Company programs
and plans that might substantially affect the remaining lives of any plant assets.
RESPONSE TO REQUEST NO. 1-16: Aside from plans regarding the
Boardman and North Valmy plants to accelerate original useful lives and adjust
depreciation expense accordingly that are or have been addressed in separate
proceedings, Idaho Power has no programs or plans in place that would substantially
affect the remaining lives of any plant assets.
The response to this Request is sponsored by Randy Henderson, Finance Team
Leader, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY -15
REQUEST NO. 1-17: Regarding the placement and experience bands chosen
for the analysis of each account, please explain why such bands were chosen and if
any other bands were considered for conducting depreciation analysis.
RESPONSE TO REQUEST NO. 1-17: The placement and experience bands
utilized in the depreciation study represented the overall available period of actuarial
transactional data. In plant accounts 311, 314, 315, 316, 331, 332.1/332.2, 333, 334,
and 335, there was an additional experience band presented in the study which was a
strong indicator of life characteristics. As part of the study, the Company's consultant
looked at various bands in order to determine trends or patterns in the data if Idaho
Power knew there had been changes. The report then presents the most indicative
bands for each account that lead to the estimate. Any band reviewed but not included
was left out, either because the information was inconclusive for shaping a curve, the
information produced the same result as the band presented in the study, or the
indications were not indicative of future life characteristics of the account.
The response to this Request is sponsored by John J Spanos, Senior Vice
President, Gannett Fleming Valuation and Rate Consultants, LLC.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY-16
REQUEST NO. 1-18: Please provide copies of any internal memos, policies,
studies, etc., identifying the appropriate allocation or treatment of costs between cost of
removal and the installation of new investment when a retirement occurs and a
replacement investment is installed at the same location. Further, provide all support,
justification and related documents associated with establishing the allocation levels.
RESPONSE TO REQUEST NO. 1-18: Idaho Power does not maintain or utilize
any internal memos, policies, or studies for the purpose of allocating costs between the
cost of removal and the installation of a new investment when a retirement occurs.
In practice, Idaho Power captures removal costs through the work order system
typically via one of two methods.
(1) A work order is set up with a separate task designated for removal costs,
with accounting to FERC Account 108, accumulated provision for depreciation of
electric utility plant. Idaho Power employees charge their labor hours associated with
disassembly and removal activities directly to that task. If removals are being done by
an outside contractor, the contractor is asked to provide the estimated amount for these
activities allowing for the appropriate amount related to the removals task to be
recorded at the time the invoice is processed.
(2) A work order may be set up with a task that includes an accounting split
between the estimated install (FERC Account 107, construction work in progress) and
removal (FERC Account 108, accumulated provision for depreciation of electric utility
plant) activities. The accounting split estimate is based upon the planned design set up
by the designer/engineer via estimated costs and plans for needed resources to
complete the project.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY -17
Under both methods, the project manager reviews the actual removal and
installation costs recorded to the work order at the time the work order is reconciled.
Any adjustments that are required during the project manager's reconciliation are
communicated and coordinated with the accounting department before the work order
reconciliation is completed.
The response to this Request is sponsored by Donna Wheeler, Finance Team
Leader, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY -18
REQUEST NO. 1-19: Please identify and provide copies of all Board of
Director's minutes and internal management meeting minutes in which the subject of
the Company's depreciation rates or the probable retirement dates of the Company's
production units were discussed during the last three calendar years.
RESPONSE TO REQUEST NO. 1-19: Without waiving IDACORP's or Idaho
Power's ability to object to demands for access to its books and records under the Idaho
Business Corporation Act, responsive excerpts from the Idaho Power Board of Directors
meetings are produced in the attached confidential document. The confidential
attachment will be provided to those parties that have executed the Protective
Agreement in this matter.
Idaho Power's response does not take into account any minutes from the
November 16-17, 2016, Board of Directors meetings, because those minutes have not
yet been finalized and approved by the Board.
The response to this Request is sponsored by Patrick Harrington, Corporate
Secretary, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY-19
REQUEST NO. 1-20: Please provide the following information regarding each of
the Company's generating units:
a. Date of installation;
b. MW capacity;
c. Primary fuel source;
d. Detailed narrative identifying all significant improvements performed
during the past 10 years;
e. Detailed narrative identifying all anticipated significant improvements over
the next 10 years.
f. The estimated / proposed probable retirement dates throughout the history
of the units, from the units' inception to present day.
RESPONSE TO REQUEST N0.1-20:
a-c. Please see Attachment 1 provided on the CD.
d. Please see Attachment 2 provided on the CD.
e. Please see confidential Attachment 3. This attachment is confidential
given the forward-looking nature of the response. The confidential attachment will be
provided to those parties that have executed the Protective Agreement in this matter.
f. Please refer to Attachment 1 which sets forth the probable retirement
dates utilized in the past depreciation studies since 2001. This is the only available
history of probable retirement dates.
The response to this Request is sponsored by Donna Wheeler, Finance Team
Leader, Randy Henderson, Finance Team Leader, Idaho Power Company and John J
Spanos, Senior Vice President, Gannett Fleming Valuation and Rate Consultants, LLC.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY -20
REQUEST NO. 1-21: Please identify any proposed changes in the probable
retirement dates of any production units and provide justification and support for such
proposed changes.
RESPONSE TO REQUEST NO. 1-21: Please see the explanation for proposed
changes in probable retirement dates on the Excel file provided on the CD.
The response to this Request is sponsored by John J Spanos, Senior Vice
President, Gannett Fleming Valuation and Rate Consultants, LLC and Donna Wheeler,
Finance Team Leader, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY -21
REQUEST NO. 1-22: Please provide all decommissioning studies relied upon
for support of any terminal net salvage requested in this case.
RESPONSE TO REQUEST NO. 1-22: There is no terminal net salvage
requested in the Depreciation Study.
The response to this Request is sponsored by John J Spanos, Senior Vice
President, Gannett Fleming Valuation and Rate Consultants, LLC.
DATED at Boise, Idaho, this 24th day of January 2017.
'-// ~ 12. ~IW2he» ~
at<D.NORDROM
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY -22
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 24th day of January, 2017, I served a true and
correct copy to IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA
REQUEST OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY the
following named parties by the method indicated below, and addressed to the following:
Commission Staff
Daphne Huang
Deputy Attorney 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
Emanuel T. Cocian
Brian T. Hansen
HOLLAND & HART, LLP
6380 South Fiddlers Green Circle, Suite 500
Greenwood Village, Colorado 80111
Pete Bennett
Micron Technology, Inc.
8000 South Federal Way
Boise, Idaho 83707
Idaho Irrigation Pumpers Association, Inc.
Eric L. Olsen
ECHO HAWK & OLSEN, PLLC
505 Pershing Avenue, Suite 100
P.O. Box 6119
Pocatello, Idaho 83205
Anthony Yankel
12700 Blake Avenue, Unit 2505
Lakewood, Ohio 44107
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IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY -23
Industrial Customers of Idaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, Idaho 83707
Dr. Don Reading
6070 Hill Road
Boise, Idaho 83703
United States Department of Energy and
Federal Executive Agencies
Steven Porter
Office of the General Counsel (GC-76)
The United States Department of Energy
1000 Independence Avenue, SW (Room 6D-033)
Washington, D.C. 20585
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IDAHO POWER COMPANY'S RESPONSE TO THE FIRST DATA REQUEST
OF MICRON TECHNOLOGY, INC. TO IDAHO POWER COMPANY -24