20170214Staff 1-23 to IPC redacted.pdf

CAMILLE CHRISTEN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. IOI77
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702.5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AUTHORITY
TO INCREASE RATES FOR ELECTRIC
SERVICE TO RE,COVER COSTS ASSOCIATED
WITH THE NORTH VALMY PLANT.
CASE NO. IPC.E-I6.24
FIRST PRODUCTION
REQUEST OF THE
COMMISSION STAFF TO
IDAHO POWER
The Staff of the Idaho Public Utilities Commission, by and through its attorney of record,
Camille Christen, Deputy Attorney General, request that Idaho Power Company (Idaho Power or
Company) provide the following documents and information as soon as possible, or by
THURSDAY, MARCH 2, 2017.
This Production Request is continuing, and Idaho Power is requested to provide, by way
of supplementary responses, additional documents that it or any person acting on its behalf may
later obtain that will augment the documents produced.
Please provide answers to each question and supporting workpapers that provide detail or
are the source of information used in calculations. Idaho Power is reminded that responses
pursuant to Commission Rules of Procedure must include the name and phone number of the
person preparing the document, and the name, location and phone number of the record holder
and if different the witness who can sponsor the answer at hearing if need be. IDAPA
31.0t.0r.228.
FIRST PRODUCTION REQUEST
TO IDAHO POWER COMPANY
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1 FEBRUARY 9,2017
In addition to the written copies provided as response to the questions, please provide all
Excel and electronic files on CD with formulas activated.
REQUEST NO. 1: Please provide all attachments and exhibits included in the filing, as
well as any attachment or workpapers as a result of data requests, in executable format. This is
an ongoing request.
REQUEST NO. 2: The Company's 2015 IRP stated that the P9 portfolio with
retirement of North Valmy Unit #1 in2019 and retirement of Unit #2 in2025 was the lowest cost
and least risk on a quantitative basis. The Company chose the P6(b) portfolio with Valmy
retirement of both units in 2025 with an NPV that was some $75 million greater than P9. The
Company justified its selection of P6(b) based on the following subjective risk criteria:
a) The near term impact to customer rates of Unit #l retirement in 2019.
b) 320 MW of PURPA solar online uncertainty as described on page 6 in the Company's
reply comments filed in Case No. IPC-E-I5-19.
c) Uncertainty of cooperation by Valmy operating partner.
i. Does the Company believe that the NPV differential identified in the 2015 IRP
between P6(b) and P9 portfolios would be at least as large using updated cost
assumptions? If not, why not? If the Company does not believe this to be a
reasonable approximation, please provide an approximate revenue requirement
differential that is reasonable.
ii. Has the uncertainty associated with the subjective risk criteria listed above
changed since the 2015 IRP was issued? Please explain.
iii. Has the Company tried to identi$ the cost of mitigating the subjective risk
associated with criteria b and c described above if it pursued the P9 portfolio? If
so, please provide the analysis. [f not, why not?
iv. Given subjective risk criteria b described above, please estimate the probability of
contract cancellations for each project that make up the 320 MW of PURPA
capacity. Please describe the factors (e.g. milestone achievement, source of
financing, etc.) that affect the likelihood that a PURPA project will be cancelled
FIRST PRODUCTION REQUEST
TO IDAHO POWER COMPANY 2 FEBRUARY 9,2017
and for each project, provide the status ofeach project relative to each ofthose
factors.
v. Given subjective risk criteria b described above, if the Company was to close
Valmy Unit #1 in20l9, what alternative resource could the Company implement
to mitigate capacity deficits due to the cancellation of one or more of these
PURPA projects to alleviate this risk? What is the NPV revenue requirement
impact of potentially replacing cancelled PURPA project capacity with least-cost
alternative resource(s)?
vi. The Company has chosen to forgo $75 million in NPV benefits associated with
the lower cost, lower risk P9 portfolio identified in the 2015 IRP in favor of a
higher cost, higher risk P6(b) portfolio based on the subjective uncertainty and
associated risks described above. Please describe the level of NPV savings that
would need to occur before the Company would pursue the lower cost, lower risk
portfolio. Please provide the rational for establishing such a savings level.
REQUEST NO.3: Are the Loss of Load Probabilities (LOLP) for Portfolio P6(b) and
P9 as reflected in the 2015 IRP results reasonable LOLP approximations for the Company's
present filing and for a comparable North Valmy Unit #1 2019 closure scenario with updated
assumptions as discussed in Production Request No. 2, respectively? If the Company does not
believe these to be reasonable approximations, please explain why, and provide LOLP
approximations that are reasonable.
FIRST PRODUCTION REQUEST
TO IDAHO POWER COMPANY 3 FEBRUARY 9,2017
THE FOLLOWING REQUEST CONTAINS CONFIDENTIAL INF'ORMATION
SUBJECT TO PROTECTIVE AGREEMENT
REQUEST NO. 4: In emails between Tom Harvey from Idaho Power and Kevin
Geraghty from NV Energy from April l9 through May 2,2016 supplied in Response to Sierra
Club Production Request No. 1-5, the two companies discussed
Please describe the nature of this inquiry and the
result. AIso, please provide any documents, agendas and/or meeting minutes, descriptions of
phone conversations, and any other evidence of communications that the Company has had with
NV Energy to investigate, negotiate and/or alter the contract with NV Energy to allow for
different Valmy closure dates.
FIRST PRODUCTION REQUEST
TO IDAHO POWER COMPANY 4 FEBRUARY 9,2017
REQUEST NO. 5: Please provide approximate settlement costs that Idaho Power would
have to pay to NV Energy to facilitate North Valmy Unit #1 early closure dates of 2019,2020,
2021,2022,2023, or 2024. Please provide a basis and calculation for each estimate (including
workpapers with formulae intact).
REQUEST NO. 6: Please provide a detailed explanation of any contractual limitations
the Company has in either extending the life of the plant beyond2025 or retiring the plant earlier
than2025. Harvey Direct at 17.
REQUEST NO. 7: Please provide detailed descriptions and dollar amounts for any
maintenance and incremental capital costs that could be avoided if North Valmy Unit #1 was
closed in 2018, 2019,2020,2021,2022,2023, or 2024. Please include an explanation of the
drivers for each expenditure and why the costs could be avoided. Additionally, were any of
these avoided costs included in the 2019 North Valmy Unit #l closure in the P9 portfolio of the
IRP?
REQUEST NO. 8: The Company states that, without any Valmy generation capacity,
peak-hour deficits grow from 24ildW in2020 to 236 MW in 2024. Harvey Direct at 13. Please
provide altemative load-serving resources that the Company considered andlor evaluated in
preparation for this case to offset lost needed generation capacity for North Valmy Unit #1
closure dates from 2019 to 2024.
REQUEST NO. 9: Relative to the Company's proposal with both Valmy units closing
in2025, please explain how decommissioning costs would change if North Valmy Unit #1 was
closed in20l9.
REQUEST NO. 10: Please provide historical evidence of North Valmy plant dispatches
due to transmission constraints that limited the purchase of market electricity over the past 5
years.
FIRST PRODUCTION REQUEST
TO IDAHO POWER COMPANY 5 FEBRUARY 9,2017
REQUEST NO. 11: Exhibit No. 6, Appendix A to Harvey's testimony compares the
revenue requirement of Valmy retirement dates of 2025 and203112034. Please add a row to the
analysis in Figure I reflecting a201912025 retirement date. If a Unit #I 2019 retirement date
would require the Company to acquire alternate resources to meet capacity deficits (as identified
as the P9 portfolio from the 2015 IRP), please include that revenue requirement as well.
REQUEST NO. 12: Exhibit No. 6, Appendix A to Harvey's testimony shows a
comparison of Forecasted Fixed Costs and Total Power Supply Costs through 2025 and2034,
respectively. For the2034 shutdown scenario, for each year, please provide a breakdown of the
number of megawatts of generation that were dispatched due to economic reasons versus the
number of megawatts of generation that were dispatched to meet peak load due to system
transmission constraints.
REQUEST NO. 13: In Response to Idaho Conservation League's (ICL) Production
Request No. l-10, Idaho Power states that, "Based on the final CPP and historical generation, it
appeared that the state of Nevada would be able to meet both the mass and rate goals with Valmy
running until the end of 2025." Meeting compliance goals aside, did the Company evaluate the
cost impact due to the required number and projected value of allowances necessary to run
Valmy to meet Idaho jurisdictional load? Does the Company believe this to have a potentially
large impact to the Company's proposed analysis in this case if the CPP is implemented in its
current form? Why or why not?
REQUEST NO. 14: Please provide the load forecast, natural gas forecast, and Valmy
coal price forecast, as well as the water condition assumptions used to develop the NPV potential
revenue requirement impact analysis as discussed on Page 16 of Tom Harvey's direct testimony.
Please describe the sources of information and how they were used to develop these input
assumptions. Please provide in worksheet format and provide any worksheets used to develop
these inputs with all formulae intact.
REQUEST NO. 15: According to the Company, it works jointly with NV Energy to
make decisions regarding any environmental investment, plant retirement, or conversion. Given
FTRST PRODUCTION REQUEST
TO IDAHO POWER COMPANY 6 FEBRUARY 9,2017
NV Energy has 50 percent ownership and is the owner/operator of the Valmy facility, please
explain the process for resolving disputes when Idaho Power and NV Energy have disagreements
about investing in the plant, retiring the plant, or converting the plant. Furthermore, please
explain any past disagreements and how they were resolved.
REQUEST NO. 16: According to the Company, the specific timing and exact amounts
of future investments at Valmy are not yet known. Please explain how the Company plans to
utilize a least cost approach for incremental capital additions and overall maintenance given the
proposed early retirement. Furthermore, please explain when the Company believes the
Commission should determine the prudency of incremental capital additions and maintenance
costs.
REQUEST NO. 17: What is the probability and risk of B2H being delayed past2025?
Please provide all analysis evaluating the probability and risk of B2H being delayed, including
any key milestones that must be met in order to achieve the2025 target. What resource options
has the Company evaluated to meet system peak if B2H is delayed?
REQUEST NO. 18: Please provide the forecasted yearly capacity factor for the Valmy
plant from 2016 through2025 based on the Company's updated analysis of the P6(b) portfolio
reflected in this filing.
REQUEST NO. 19: In the Public Utilities Commission of Nevada (PUCN) final order,
Docket Nos 16-07001, l6-07007, 16-08027,the Nevada Commission ordered NV Energy to
complete an updated Life Span Analysis Process (LSAP) for the North Valmy power plant.
What kind of review will Idaho Power perform relative to this analysis? Please describe how the
results of this analysis and any analysis IPC has done or will complete in the future, will be used
in the process of determining an agreed upon North Valmy closure date between the two
utilities?
REQUEST NO.20: Please describe the process, including an approximate timeline and
activity descriptions, the Company will implement to continually ensure that the Valmy closure
FIRST PRODUCTION REQUEST
TO IDAHO POWER COMPANY 7 FEBRUARY 9,2017
scenario the Company has adopted optimizes least-cost/least-risk to Idaho ratepayers and to
ensure ratepayers will not be exposed to incremental capital expenditures on a plant that is no
longer required for optimal system operation. Furthermore, please include in this process
description, but not limited to: (1) the activities the Company will perform to engage NV Energy
to synchronize Valmy closure dates which look out for the best interests of Idaho ratepayers; (2)
reports the Company will file with the Idaho Public Utilities Commission that provides evidence
of continued prudent Company decision-making; and (2) checkpoints to determine potential
cases the Company would file if there is a change in circumstances and an adjustment in rates is
warranted.
REQUEST NO.21: Please provide all authorized Environmental Protection Agency
and Nevada Division of Environmental Protection documents (e.g. State Implementation Plans,
Federal Implementation P1ans, etc.) that mandate environmental upgrades made to the Valmy
plant since the 201I General Rate Case.
REQUEST NO. 22: Given the Valmy plant partnership with NV Energy, please explain
how the Company has ensured that its managing partner has completed the capital projects
included in Exhibit No. 4 of Harvey's direct testimony, in a least cost manner (e.9. competitive
bidding). In addition, please provide a copy of the documentation the Company reviewed (i.e.
request for proposals, list of potential bidders, submitted proposals, bid evaluations, and bidder
pricing) for the capital projects that are listed in Exhibit No. 4 of Harvey's direct testimony in
performing its due diligence.
REQUEST NO.23: Please provide a copy of final EPC contract, construction
organization charts, construction schedules (baseline vs. actual), project status reports, action
item lists, and change orders for plant investment projects listed in Exhibit No. 4 of Harvey's
direct testimony that are greater than $3,000,000 in value.
FIRST PRODUCTION REQUEST
TO IDAHO POWER COMPANY 8 FEBRUARY 9,2017
oA
Dated at Boise, Idaho, this ttt' day of Feb ruary 2017.
lr,r;,JJ" Clunr*
Camille Christen
Deputy Attorney General
Technical Staff: Mike Louis (1-10, 12-14)
Stacey Donohue (11)
Matt Elam (15-17)
Rick Keller (18-23)
i:umisc:prodreq/ipcel6.24ccmlmerksd prod reql
FIRST PRODUCTION REQUEST
TO IDAHO POWER COMPANY 9 FEBRUARY 9,2017
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 14th DAY OF FEBRUARY 2017,
SERVED THE FOREGOING FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER, N CASE NO. IPC-E-16-24, BY
MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE FOLLOWING:
LISA D NORDSTROM
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOrSE ID 83707-0070
E-mail : [e-mail]
[e-mail]
ERIC L OLSEN
ECHO HAWK & OLSEN PLLC
PO BOX 6119
POCATELLO ID 83205
E-mail: [e-mail]
BEN OTTO
ENERGY ASSOCIATE
ID CONSERVATION LEAGUE
710 N 6TH ST
BOISE ID 83702
E-mail: [e-mail]
THORVALD A NELSON
ET AL
HOLLAND & HART LLP
6380 S FIDDLERS GREEN CIR
STE 5OO
GREENWOOD VILLIAGE CO 8OI1I
E-mail : tnel [e-mail]
fschmidt@ ho I I andhart. com
etcocian@hol landhart. com
bthansen@hollandhart. com
MATTHEW T. LARKIN
IDAHO POWER COMPANY
PO BOX 70
BOrSE rD 83707-0070
E-mail: [e-mail]
ANTHONY YANKEL
12700 LAKE AVE
UNIT 2505
LAKEWOOD OH 44107
E-mail: [e-mail]
PETE BENNETT
MICRON TECHNOLOGY INC
8OOO S FEDERAL WAY
BOISE ID 83707
E-mail: [e-mail]
E.MAIL ONLY
[e-mail]
klhall@hollandhart. com
kmtrease@hollandhart. com
CERTIFICATE OF SERVICE
TRAVIS RITCHIE
ASSOCIATE ATTORNEY
SIERRA CLUB
2IOI WEBSTER ST STE 13OO
OAKLAND CA946I2
E-mail: [e-mail]
STEVEN PORTER
US DEPT OF ENERGY
IOOO INDEPENDENCE AVE SW
ROOM 6D-033
WASHINGTON DC 20585
E-mail: [e-mail]
ARY
CERTIFICATE OF SERVICE