20161222IPC to IIPA 1-15 Redacted.pdf

:=>E C IVE.D An IDACORP Company
201'.' O'::C 21 PM ~: 8
LISA D. NORDSTROM
Lead Counsel
[e-mail]
December 21, 2016
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-16-24
Recovery of Costs Associated with North Valmy Power Plant -Idaho Power
Company's Redacted and Confidential Responses to the Idaho Irrigation
Pumpers Association, lnc.'s First Data Requests
Dear Ms. Jewell:
Enclosed for filing in the above matter please find an original and three (3) copies
each of Idaho Power Company's Redacted Responses to the Idaho Irrigation Pumpers
Association, lnc.'s First Data Requests and Idaho Power Company's Confidential
Response to the Idaho Irrigation Pumpers Association, lnc.'s Data Request No. 3.
Also enclosed are four (4) copies each of non-confidential and confidential disks
containing information responsive to the Idaho Irrigation Pumpers Association lnc.'s data
requests. Please handle the confidential information in accordance with the Protective
Agreement executed in this matter.
LDN:csb
Enclosures
Very truly yours,
~J)_-7c_~~
Lisa D. Nordstrom
1221 W. Idaho St. (83702)
P.O. Box 70
Boise, ID 83707
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
,., -· I 'ED 1·( t: C, CI
'l I I,-, ,,
, . ,·. ·\ :· 1·:::" 'CV~ '·· • . cl '"',.) I I
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO INCREASE ITS RATES
FOR ELECTRIC SERVICE TO RECOVER
COSTS ASSOCIATED WITH THE NORTH
VALMY POWER PLANT
)
) CASE NO. IPC-E-16-24
)
) IDAHO POWER COMPANY'S
) REDACTED RESPONSES TO
) THE IDAHO IRRIGATION
) PUMPERS ASSOCIATION ,
) INC.'S FIRST DATA REQUESTS _______________ )
COMES NOW, Idaho Power Company ("Idaho Power" or "Company"), and in
response to the Idaho Irrigation Pumpers Association, lnc.'s ("IIPA") First Data
Requests to Idaho Power Company dated November 30, 2016, herewith submits the
following information:
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -1
REQUEST NO. 1: On page 10 of Mr. Harvey's testimony, it is stated: "The
preferred portfolio selected for the 2015-2034 planning horizon contained both actions
in the year 2025, with completion of the 82H transmission line preceding the end-of­
year coal plant retirement." Please answer the following:
a. When was the B2H transmission line first publically proposed and when
was its anticipated completion date at the time?
b. What was the B2H transmission line's anticipated completion date at the
time in the 2009 IRP?
c. What was the B2H transmission line's anticipated completion date at the
time in the 2011 IRP?
d. What was the 82H transmission line's anticipated completion date at the
time in the 2013 IRP?
e. What was the B2H transmission line's anticipated completion date at the
time in the 2015 IRP?
f. Given the 82H transmission line's anticipated completion date in the 2015
IRP, what milestones were planned/expected to be met by year-end 2015 and year-end
2016?
g. Given the 82H transmission line's anticipated completion date in the 2015
IRP, what expected milestones were not met by year-end 2015 and year-end 2016?
h. Please provide a copy of all communications during 2016 that address the
possibility of delay of the anticipated completion date of 82H past the summer of 2025.
RESPONSE TO REQUEST NO. 1:
a. A Northwest-based purchase requiring an increase in transmission line
import capability in year 2012 was first identified as a preferred resource alternative in
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS - 2
Idaho Power's 2006 Integrated Resource Plan ("IRP"). The identified need for
transmission line import capability in the 2006 IRP is what eventually became the
Boardman to Hemingway ("B2H") project.
b. The 2009 IRP identified B2H in the preferred resource portfolio with an in-
service date of 2015.
c. The 2011 IRP identified B2H in the preferred resource portfolio with an in-
service date of 2016.
d. The 2013 IRP identified B2H in the preferred resource portfolio with an in-
service date of 2018.
e. The anticipated B2H completion date at the time of the 2015 IRP submittal
was 2021 or beyond. Resource portfolios were modeled with B2H in-service dates in
2021 , 2023, and 2025.
68:
f. The 2015 IRP discussed the following permitting milestones on pages 67-
On December 19, 2014, BLM published the Draft
Environmental Impact Statement (Draft EIS). Idaho Power
expects the BLM to issue a Final EIS in 2016. In late
February 2013, Idaho Power submitted the preliminary
Application for Site Certificate (pASC) to the ODOE as part
of the state siting process. Idaho Power intends to submit
an amended pASC in late 2015 or 2016.
BLM published the final EIS on November 25, 2016, and Idaho Power submitted
a final draft amended pASC to the Oregon Department of Energy ("ODOE") in June
2016. Both of these milestones are consistent with what was expected at the time the
2015 IRP was completed .
g. Please refer to the Company's response to IIPA's Request No. 1.f, above.
All expected milestones were met by year-end 2015 and 2016.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-3
h. Idaho Power has no communication from 2016 relating to scheduling
delays extending the in-service date beyond 2025. Idaho Power, in conjunction with the
82H Permit Funding Partners, PacifiCorp and the Bonneville Power Administration,
analyzed different scheduling scenarios looking at different in-service dates. However,
none of the scheduling scenarios were delay driven.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS - 4
REQUEST NO. 2: On page 11 of Mr. Harvey's testimony, it is stated: "The
2015-2018 action plan recognized in the 2015 IRP included ongoing permitting,
planning studies, and regulatory filings associated with the 82H transmission line during
all four years ... ". Please answer the following:
a. Where in the 2015 IRP are these action plans addressed?
b. Please supply more specifics regarding the ongoing permitting, planning
studies, and regulatory filings that were in the action plan and what were the dates of
each item.
c. What specific ongoing permitting, planning studies and regulatory filings in
the action plan are presently behind schedule and by how much?
RESPONSE TO REQUEST NO. 2:
a. The 2015 IRP action plan is addressed on pages 141-143 of the 2015
IRP.
b. The permitting phase of the 82H project is subject to federal review and
approval by the U.S. Bureau of Land Management ("BLM"), the U.S. Forest Service, the
Department of the Navy, the Army Corps of Engineers, and certain other federal
agencies. The BLM, as the lead federal agency on the National Environmental Policy
Act review, issued a draft EIS for the project in December 2014 and a final EIS on
November 25, 2016. The BLM also plans to issue a record of decision in the first
quarter of 2017.
In the separate Oregon state permitting process, Idaho Power submitted a final
draft amended preliminary application for a site certificate to the ODOE in June 2016.
Due to uncertainty in the permitting process, Idaho Power is unable to determine a
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -5
specific in-service date for the line but, given the status of ongoing permitting activities,
expects the in-service date would be in 2023 or beyond .
c. None of the permitting, planning studies, or regulatory filings in the action
plan are currently considered to be behind schedule. Please see the Company's
response to IIPA's Request No. 2.b, above, for a discussion of current activities.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-6
REQUEST NO. 3: On page 11 of Mr. Harvey's testimony, it states with respect
to Valmy that "the dispatch cost is now typically higher than the market price." What is
the dispatch cost or range of dispatch costs of Valmy?
RESPONSE TO REQUEST NO. 3: As of November 30, 2016, the current
dispatch rate for North Valmy is $-megawatt-hour.
The confidential response will be provided to those parties that have executed
the Protective Agreement in this matter.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-7
REQUEST NO. 4: In support of the table on page 12 of Mr. Harvey's testimony
please provide in electronic format, on an hourly basis, for the period January 1, 2008
through the most recent month available the following data:
a. Total system input;
b. System input from Company owned generation (stating hydro, coal,
natural gas, and other generation separately);
c. System input from firm purchases, grouped by type of purchase (LF, IF,
SF, etc.)
d. The cost of each group of firm purchase listed in "c" above;
e. Total system input from non-firm and/or economy purchases;
f. The cost of non-firm and/or economy purchase listed in "e" above;
g. System input from exchanges into the system;
h. System input from Unit purchases;
i. Other system inputs than those listed above;
j . Jurisdictional (Idaho and Oregon) sales;
k. System losses;
I. Requirements Wholesale sales (RQ);
m. Long-term firm Wholesale sales (LF);
n. Intermediate-term firm Wholesale sales (IF);
o. Short-term Wholesale sales (SF);
p. The revenue collected Short-term Wholesale sales (SF) listed in "o" above
q. Unit sales, Wholesale (LU) or otherwise;
r. Non-firm and/or economy sales (OS);
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -8
s. The revenue collected each hour from non-firm and/or economy sales
listed in "r" above.
t. Exchanges out of the system;
u. Other system outputs;
v. Inadvertent power flows into or out of the system ;
w. The power available (at input level) to supply retail load once Wholesale,
Exchange, Wheeling, and Inadvertent has been subtracted;
x. Losses assigned to each retail jurisdiction ;
y. Losses assigned to Wholesale sales; and
z. Idaho Power's share of the Valmy output.
RESPONSE TO REQUEST NO. 4: Please see the following responses for the
location of where the requested information can be found in confidential Attachments
1-9 provided on the confidential CD, with the exception of the responses to x and y.
The following responses to x and y can be found in confidential Attachment 10 provided
on the confidential CD. The confidential CD will be provided to those parties that have
executed the Protective Agreement in this matter.
a. Please see column Q.
b. Please see column P.
c. Please see column 0 .
d. Please see column O for purchase type and the associated cost located in
column V.
e. Please see column N.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -9
f. Please see column N for purchase type and the associated cost located in
column V.
g. Please see column M.
h. Please see column L.
i. Please see column K.
j. This information is not available on an hourly basis.
k. Please see column J.
I. This information is not available.
m. Please see column I.
n. Please see column H.
o. Please see column G.
p. Please see column G for the requested sales type and the associated cost
located in column V.
q. Please see column F.
r. Please see column E.
s. Please see column E for the requested sales type and the associated cost
located in column V.
t. Please see column D.
u. Please see column C.
v. Please see column B.
w. Please see column A.
x. Hourly losses assigned to each retail jurisdiction are not available. The
annual system loss factors for peak demand and energy by voltage for each jurisdiction
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-10
for the periods 2008-2015 are included in confidential Attachment 10, Loss Factors
2008-15, provided on the confidential CD. These are system loss factors by voltage
level and are not calculated on an hourly basis.
y. Hourly losses assigned to Wholesale sales are not available. The annual
system loss factors for peak demand and energy by voltage for each jurisdiction for the
periods 2008-2015 are included in confidential Attachment 10, Loss Factors 2008-15,
provided on the confidential CD. These are system loss factors by voltage level and are
not calculated on an hourly basis.
z. Please see column P for Company-owned generation described as Valmy.
The responses to Requests a through z, except x and y, are sponsored by
Aubrae Sloan, Accounting Manager, Idaho Power Company. The responses to
Requests x and y are sponsored by Jordan Prassinos, Load Research and Forecasting
Leader, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -11
REQUEST NO. 5: Regarding all of the scenarios listed in Table 7.5 of Exhibit
No. 5, is the completion of the 82H transmission assumed for the summer of 2025?
RESPONSE TO REQUEST NO. 5: Table 7.5 of Exhibit No. 5 does not include
82H transmission.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -12
REQUEST NO. 6: On page 14 of Mr. Harvey's testimony, it states: "However,
Idaho Power and NV Energy continue discussions working towards a mutually agreed
upon closure date." If at some time in the future, Idaho Power and NV Energy agree
upon a closure date, will this preclude the changing of that date for non-forecasted
events (82H being delayed, wholesale prices returning to historic levels, etc.)?
RESPONSE TO REQUEST NO. 6: No.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-13
REQUEST NO. 7: On page 14 of Mr. Harvey's testimony, it states: "However,
Idaho Power and NV Energy continue discussions working towards a mutually agreed
upon closure date. Synchronized depreciation dates for rate making purposes will help
in establishing a date to cease coal-fired operations." Can this statement be taken to
mean that having a "synchronized depreciation dates for rate making purposes" is not a
prerequisite for "establishing a date to cease coal-fired operations"? If not, why not?
RESPONSE TO REQUEST NO. 7: Yes. "Synchronized depreciation dates for
rate making purposes" is not a prerequisite to "establishing a date to cease coal-fired
operations."
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -14
REQUEST NO. 8: Please explain the following with respect to the Appendix A
found on page 2 of Exhibit 6:
a. With respect to the annual fixed costs listed for each scenario, please
indicate what specific components (Return, fixed O&M, taxes, etc.) of "fixed costs" are
involved.
b. With respect to the specific components of "fixed costs" for each scenario
listed in "a" above, please list the dollar amounts that make up the figures for 2016
through 2025.
c. With respect to the categories of "fixed costs" for each scenario listed in
"b" above, and the dollar amounts that make up the figures for 2016 through 2025, what
would the figures for the 2025 retirement scenario be if the retirement date was moved
to 2026?
Please provide an explanation of how/why these values changed.
d. With respect to the categories of "fixed costs" for each scenario listed in
"b" above, and the dollar amounts that make up the figures for 2016 through 2025, what
would the figures for the 2025 retirement scenario be if the retirement date was moved
to 2027?
Please provide an explanation of how/why these values changed.
e. Mr. Larkin states that the Company is requesting an additional revenue of
$28.5 million per year. How is this amount reflected on page 2 of Exhibit 6?
f. What causes the fixed costs in 2016 under the early retirement scenario to
be $8,365,000 higher than under the present retirement schedule?
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-15
g. What causes the fixed costs in 2018 under the early retirement scenario to
be $7,462,000 higher than under the present retirement schedule?
h. With respect to the Aurora costs for each scenario, please supply a copy
in electronic format of the outputs for years 2025 through 2034.
i. In 2026 the Aurora Model predicts that the 2025 retirement scenario will
result in $7,732,000 more than the model run for the present retirement scenario. In
2027 the Aurora Model predicts a reduction in this difference to $6,733,000. For the
next several years the difference between the two model runs show an increasing cost
differential. What input mechanisms are at work to cause this variation in the difference
between the two scenarios to change in this manner from year to year?
j. For the year 2026, is the entire cost to the customers $477,970,000
($51 ,461 ,000 plus $426 ,509,000) under the present retirement schedule and
$434,241 ,000 under the 2025 retirement scenario for an overall savings of $43,729,000
in 2026? If not, what other costs/differentials are involved?
k. If the answer to "j" above is positive, does this mean that by present
customers paying $28,500,000 extra annually, effective June 1, 2017, then in 2026 the
customers will begin to save $43,729,000 annually and by 2034 the annual savings will
drop to $32,309,000?
RESPONSE TO REQUEST NO. 8:
a. The workbook analysis calculates and groups the fixed costs in three
categories: (1) Book Depreciation, Tax, and Finance, (2) Operations and Maintenance,
and (3) Property tax and Insurance.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -16
b. The dollar amounts that make up the Fixed Costs figures of Appendix A of
Exhibit No. 6 are shown in the spreadsheet (Attachment 1) provided on the non­
confidential CD.
c. The requested analysis does not exist and therefore cannot be provided.
Please see Idaho Public Utilities Commission ("Commission") Rule of Procedure
221.05, Idaho Civil Rule of Civil Procedure 16(b)(1), and Order No. 32910 at 12.
d. The requested analysis does not exist and therefore cannot be provided.
Please see Commission Rule of Procedure 221.05, Idaho Civil Rule of Civil Procedure
16(b)(1), and Order No. 32910 at 12.
e. The $28.5 million referred to in Mr. Larkin's testimony is not reflected on
page 2 of Exhibit No. 6 of Mr. Harvey's testimony. The $28.5 million referred to in Mr.
Larkin's testimony represents the levelized Idaho jurisdictional revenue requirement
reflected in Mr. Larkin's Exhibit No. 2, assuming a recovery period beginning June 1,
2017.
f. The Exhibit No. 6 analysis includes the year 2016 in the accelerated
recovery period. Accelerating some of the Valmy cost recovery in 2016 increases the
fixed costs for 2016 compared to the present retirement schedule.
g. The fixed costs in 2018 under the accelerated recovery scenario are
$7,462,000 higher than under the present retirement schedule due to the accelerated
recovery of the existing investment of the plant.
h. To accommodate this request, the Company has provided the summary
Aurora output files listed below on the non-confidential CD :
1. Attachment 2, Scenario 1.
2. Attachment 3, Scenario 2.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -17
i. The differences between the annual Aurora variable costs for years after
2025 are the result of the removal of the Valmy units. The higher variable Aurora cost
in the early retirement Valmy case is the result of Valmy not being available to serve
load or make market sales when it would have been economic. With Valmy absent,
higher cost options are used during the periods when in the present retirement schedule
Valmy is available for serving load or making off system sales. The early retirement
option is a lower total cost when both fixed and variable costs are included in the net
present value ("NPV") calculation over the time period examined. When comparing the
two alternative retirement dates, both the fixed and variable costs need to be
considered to give a valid comparison.
j. Yes. The only cost differential/savings for the year 2026 is the
$43,729,000 represented in Exhibit No. 6.
k. The differences in the forecasted costs for the specific Valmy investments
under the two schedules of costs indicates paying off the Valmy investment and retiring
the units early results in higher costs in the earlier years and lower costs in the later
years compared to continuing to invest and operate Valmy through 2034.
The response to this Request is sponsored by Tom Harvey, Planning Resource
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -18
REQUEST NO. 9: What specific forecast changes or other parameter changes
occurred between the 2013 Coal Study and the 2015 IRP that resulted in the 2025
retirement date being economical compared to 2031 and 2035 retirement dates?
RESPONSE TO REQUEST NO. 9: The Company did not evaluate a 2025
shutdown date in the 2013 Coal Study. The 2013 Coal Study was based on the
assumptions used in the 2011 IRP. The 2011 assumptions were updated based on the
2013 IRP, which included carbon adders of $0, $14, and $35 per ton. The 2013 Coal
Study and the 2015 IRP use a 20-year NPV of Aurora Total Portfolio Costs and include
changes to the fixed costs associated with the resource changes in the respective
analyses as the basis for the evaluation. The 2015 IRP preferred portfolio was used to
satisfy future resource requirements in the Aurora Total Portfolio cost forecasts.
The 2013 Coal Study specifically focused on the replacement of the two Valmy
units on a megawatt ("MW") for MW basis with dispatchable resources. Two
alternatives which were evaluated included a (1) Combined Cycle Combustion Turbine
("CCCT") and (2) a conversion of the Valmy coal units to burn natural gas. The
following were various dates and investments evaluated:
• April 1, 2015, Unit 1: Dry Sorbent Injection ("OSI") Upgrade,
Natural Gas ("NG") Conversion, Replace with CCCT.
• January 1, 2018, Unit 1 and Unit 2: Selective Catalytic Reduction
("SCR"), NG Conversion, Replace with CCCT.
• January 1, 2023: SCR, NG Conversion, Replace with CCCT.
The action item from the 2013 Coal Study was the installation of OSI for
compliance with the Mercury Air Toxic Standards (MATS) on Valmy Unit 1 in 2015.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-19
The 2015 IRP used a portfolio approach to evaluate various coal retirement
dates with various resource alternatives. The 2015 IRP is a more comprehensive
analysis than the 2013 Coal Study because it considers a wider array of alternatives
with updated assumptions.
The primary difference between the 2013 Coal Study and the 2015 IRP were
different shutdown dates. The Valmy shutdown was April 1, 2015, in the 2013 Coal
Study and December 31, 2025, in the 2015 IRP. The primary replacement resource
was 82H in the 2015 IRP compared to a CCCT In the 2013 Coal Study.
Additionally, the 2013 Coal Study had an alternative compliance date of January
1, 2023, which evaluated a hypothetical requirement to invest in SCRs for Valmy Units 1
and 2. The result was the CCCT was the preferred investment.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -20
REQUEST NO. 10: Were any economic evaluations (similar to that in Exhibit 6
in this case) conducted in the 2013 Coal Study or the 2013 IRP? If so, please provide.
RESPONSE TO REQUEST NO. 10: The 2013 IRP and the 2013 Coal Study are
themselves economic evaluations similar to Exhibit No. 6. An IRP balances the costs,
risks, and environmental attributes of resource alternatives to reliably serving
customer's electrical needs. As stated in the Company's response to IIPA's Request
No. 9, the 2013 Coal Study focused on the replacement of the two Valmy units on a MW
for MW basis with dispatchable resources. The two alternatives evaluated included a
(1) CCCT and (2) a conversion of the Valmy coal units to burn natural gas. Please see
the 2013 Coal Study and the 2013 IRP, which are publicly available via the following
links:
https://www.idahopower.com/pdfs/AboutUs/PlanningForFuture/irp/2013/2013CoalUnitEn
vironmentalAnalysis Final Report. PDF
https://www.idahopower.com/pdfs/AboutUs/PlanningForFuture/irp/2013/20131RP.pdf
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-21
REQUEST NO. 11: For each of the tariff rates listed in Attachment 2 to the
Application, please provide the following:
a. Billing demands where applicable;
b. Revenue associated with customer charges;
c. Revenue associated with demand charges;
d. Revenue associated with energy charges;
e. Revenue associated with Schedule 55 (Power Cost Adjustment);
f. Other "Current Billed Revenue" that may be included in Attachment 2;
g. Indicate which of the above revenues was included in "all base rate
components except the service charge" as used to spread the increase among tariff
rates in Attachment 2; and
h. If Schedule 55 revenues were not considered a part of "all base rate
components except the service charge", explain why not.
RESPONSE TO REQUEST NO. 11:
a-f. Please see the Excel file provided on the non-confidential CD for the
billing demands, where applicable, and revenues associated with customer charges,
demand charges, energy charges, and other billed revenue components by customer
class.
g. As can be seen in the Excel file provided on the non-confidential CD, "all
base rate components except the service charge" include energy and demand charges,
where applicable.
h. Schedule 55, the Power Cost Adjustment mechanism, is not considered a
base rate component. Costs recovered through this schedule are based on a
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -22
prescribed methodology approved by the Commission that tracks the difference
between net power supply expenses included in base rates and those actually incurred
by the Company. Idaho Power's request in this case is associated with accelerated
depreciation, incremental capital investments, and decommissioning costs of the Valmy
plant and is therefore not included in the current Schedule 55 methodology.
The response to this Request is sponsored by Courtney Waites, Senior
Regulatory Analyst, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-23
REQUEST NO. 12: On page 6 of Mr. Larkin's testimony, it states: " ... Idaho
Power's preferred portfolio from the 2015 Integrated Resource Plan ("IRP") included the
shutdown of Valmy Unit 1 and 2 in 2025 to coincide with the completion of the
Boardman to Hemingway ("B2H") transmission line. In addition to the 2015 IRP
analysis, in 2016, Idaho Power completed an assessment of the operating future of
Valmy with respect to economics of production and system reliability." Explain how the
2015 IRP could have been based upon the shutdown of Valmy in 2025 when, it was not
until 2016 that "Idaho Power completed an assessment of the operating future of Valmy
with respect to economics of production and system reliability."
RESPONSE TO REQUEST NO. 12: The 2015 IRP was not based on a 2025
shutdown of Valmy; the analysis performed in the 2015 IRP identified the 2025 Valmy
shutdown date as part of the 2015 preferred portfolio. The 2016 analysis was
performed to further analyze the implications and circumstances of a Valmy shutdown.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -24
REQUEST NO. 13: On page 9 of Mr. Larkin's testimony, it states: "Without
accelerating the depreciation schedule to reflect the 2025 shutdown date, cost recovery
from customers could extend beyond the plant's operating life, resulting in cost recovery
from future customers for a plant that will no longer be providing service at that time."
Please answer the following:
a. Would it be accurate to say that "the plant's operation life" is actually 50
years and that the Company is proposing to close the plant early because it is no longer
economical and/or needed?
b. Would it be accurate to say that the Company's proposal is to charge
existing customers approximately $28.5 million more annually between June 1, 2017
and December 31, 2025. And further that, because of the increase in costs to the
customers between 2017 and 2025, the customers between 2026 and 2035 get a much
larger decrease?
RESPONSE TO REQUEST NO. 13:
a. No. When Valmy was placed in service in 1981 (Unit 1) and 1985 (Unit 2),
a 50-year depreciable life was established for each unit, resulting in a depreciable life
for Unit 1 ending in 2031 and a depreciable life for Unit 2 ending in 2035. The "plant's
operation life" can be impacted by a number of factors over time, such as continued
investments and plant maintenance. However, it is accurate to state that the Company
is proposing to change the depreciable life of Valmy from 2031 /2035 to 2025 because
the Company does not believe Valmy will be run beyond 2025 for economic or reliability
purposes, as detailed in Mr. Harvey's direct testimony.
b. It is accurate to state that the Company's proposal is to increase annual
revenue requirement by $28.5 million effective June 1, 2017 , subject to the balancing of
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -25
cost recovery with actual costs incurred over time as detailed in Mr. Larkin's direct
testimony. However, the Company does not agree with the characterization that
"customers between 2026 and 2035 get a much larger decrease." The Company's
current filing solely addresses cost recovery associated with reducing the depreciable
life of the North Valmy plant from 2031/2035 to 2025. This request is intended to match
the recovery of resource costs from customers served by those resources. Based on
this principle, the Company does not believe potential rate impacts between 2026 and
2035 should be characterized as a rate "decrease," as rates at that time should reflect
the cost of resources in place to serve customers, and are therefore not a "decrease"
relative to the cost of providing service.
The response to Request No. 13.a is sponsored by Tom Harvey, Resource
Planning and Operations Director, Idaho Power Company, and the response to Request
No. 13.b is sponsored by Matt Larkin, Revenue Requirement Manager, Idaho Power
Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-26
REQUEST NO. 14: According to Mr. Larkin's testimony at page 5: "The
Company's current base rates do not include any recovery of ARO (Asset Retirement
Obligation) related to Valmy." If the present base rates do not include any recovery of
ARO, why should this cost be added to the increase in costs that the Company is
presently proposing for the June 1, 2017 through December 31, 2025 timeframe?
RESPONSE TO REQUEST NO. 14: AROs identified at Valmy are legal
obligations associated with the removal and retirement of evaporative ponds, landfills,
and fuel tanks. Recovery of these costs is not currently in rates because Idaho Power
has followed the accounting treatment outlined in Commission Order No. 29414, which
calls for the Company to record a regulatory asset for (1) the cumulative financial
statement impact resulting from the Company's implementation of Accounting
Standards Codification ("ASC") 410 (formerly Statement of Financial Accounting
Standards 143) and (2) the ongoing annual differences between the ASC 410
depreciation and accretion expenses and the annual depreciation expenses that are
currently authorized by the Commission in depreciation rates and accruals.
As discussed on page 9 of Mr. Larkin's testimony, the ratemaking treatment
proposed by the Company in this filing is intended to recover the costs to demolish and
decommission the Valmy plant from customers currently being served by the plant.
Additionally, as stated in the direct testimony of Mr. Harvey, Idaho Power does not
expect to run the Valmy plant beyond 2025 for economic or reliability purposes. Given
this expectation, and because a decommissioning study has been performed, it is now
appropriate to include these costs in rates to ensure that all Valmy-related costs are
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -27
appropriately recovered from customers who are served by the plant while also
mitigating future rate impacts to customers.
The response to this Request is sponsored by Matt Larkin, Revenue
Requirement Manager, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION , INC.'S FIRST DATA REQUESTS-28
REQUEST NO. 15: With respect to Attachment A of Exhibit 6, what would the
"Fixed Costs" values be for 2016-2034 if Valmy was shut down in 2025, but there was
no change in the Valmy depreciation schedule i.e., there was no accelerated
depreciation and the present depreciation rates were maintained through 2031 and
2035?
RESPONSE TO REQUEST NO. 15: The requested analysis does not exist and
therefore cannot be provided. Please see Commission Rule of Procedure 221.05,
Idaho Civil Rule of Civil Procedure 16(b)(1), and Order No. 32910 at 12.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
DATED at Boise, Idaho, this 21st day of December 2016.
~[)~~ isAo. NORDSROM
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS-29
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 21st day of December 2016 I served a true and
correct copy of IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE
IDAHO IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS
upon the following named parties by the method indicated below, and addressed to the
following:
Commission Staff
Camille Christen
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-007 4
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
_x_ Hand Delivered
__ U.S.Mail
__ Overnight Mail
FAX
X Email [e-mail]
__ Hand Delivered
_x_ U.S. Mail
__ Overnight Mail
FAX
_x_ Email [e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
[e-mail]
Hand Delivered
_x_ U.S. Mail
__ Overnight Mail
FAX
_x_ Email [e-mail]
tawolf@micron .com
__ Hand Delivered
_x_ U.S. Mail
__ Overnight Mail
FAX
X Email [e-mail]
Hand Delivered
X U.S. Mail
__ Overnight Mail
FAX
_x_ Email [e-mail]
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -30
Idaho Conservation League
Benjamin J. Otto
Idaho Conservation League
710 North Sixth Street
P.O. Box 844
Boise, Idaho 83701
Sierra Club
Travis Ritchie
Sierra Club
2101 Webster Street, Suite 1300
Oakland, California 94612
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
__ Hand Delivered
__x_ U.S. Mail
__ Overnight Mail
FAX
__x_ Email [e-mail]
__ Hand Delivered
__x_ U.S. Mail
__ Overnight Mail
__ FAX
__x_ Email [e-mail]
__ Hand Delivered
__x_ U.S. Mail
__ Overnight Mail
FAX
__x_ Email steven.porter@hq .doe.gov
IDAHO POWER COMPANY'S REDACTED RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCIATION, INC.'S FIRST DATA REQUESTS -31