20170328IPC to Micron Redacted 7-10.pdf

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An IDACORP Company
LISA D. NORDSTROM
Lead Counsel
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March 28,2017
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Gase No. IPC-E-16-24
Recovery of Costs Associated with North Valmy Power Plant - ldaho Power
Company's Response to Micron Technology, lnc.'s Second Set of Data
Requests
Dear Ms. Hanian
Enclosed forfiling in the above matter please find an originaland three (3) copies of
ldaho Power Company's Response to Micron Technology, lnc.'s Second Set of Data
Requests.
Also enclosed are four (4) copies of a confidential disk containing information
responsive to Micron Technology, lnc.'s data requests. Please handle the confidential
information in accordance with the Protective Agreement executed in this matter.
Very truly yours,
X*!/1*a*
Lisa D. Nordstrom
LDN:csb
Enclosures
1221 W. rdaho St. (83702)
PO. Box 70
Boise, lD 83707
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I no rd strom @ ida h opowe r. com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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!N THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORIW TO INCREASE ITS RATES
FOR ELECTRIC SERVICE TO RECOVER
COSTS ASSOCIATED WITH THE NORTH
VALMY PLANT
CASE NO. IPC-E-16-24
IDAHO POWER COMPANY'S
RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND
SET OF DATA REQUESTS
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COMES NOW, ldaho Power Company ("ldaho Powe/' or "Comp?ry"), and in
response to Micron Technology, lnc.'s Second Set of Data Requests to ldaho Power
Company dated March 7 ,2017, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND SET OF DATA REQUESTS - 1
REQUEST NO. 7: Referrin g to IPC's response to the Excel Attachment to
Corrected Supplemental Response to Micron's Request No. 1-4, at the worksheet
called "Valmy Forecast," please provide a detailed explanation of the $5,000,000
forecasted expense in 2024 for Valmy Capital Plan - 2024 (see cell J59), including all
justification and support for the prudence of this forecasted investment.
RESPONSE TO REQUEST NO. 7: As an engaged partner, ldaho Power fully
vets and evaluates capital budgets on an annual basis with the owner-operator, NV
Energy, and intends to only invest in projects that are prudent between now and the
plant's end-of-life. The $2,500,000 capital expense (ldaho share) in 2024 represents
spend that may be required to keep the plant operating reliably and safely through
2025. This point estimate was provided by the owner-operator, NV Energy. This
amount is not allocated to, approved, or committed to specific capita! projects but
serves as a high-level planning estimate. ldaho Power believes this figure represents a
reasonable level of spend for 2024 to include as a starting point for purposes of
calculating an initial levelized revenue requirement given the operating history, age of
the plant, and experienced gained through the operation of the Boardman plant leading
up to its scheduled end-of-life in 2020.
To assess the reasonableness of the capital spend estimate near the end of the
plant's life, ldaho Power studied the projected capital spend trend at the Boardman
plant provided by Portland General Electric Company for 2017-2020. Capital spend
anticipated at Boardman does not deviate significantly in the 2-3 years leading up to the
final year of operation. Based on this pattern observed in the last 2-3 years of operation
IDAHO POWER COMPANY'S RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND SET OF DATA REQUESTS.2
at Boardman, keeping Valmy's projected spend for 2024 near the same levels as spend
projected in 2022 and 2023 was reasonable.
It is important to note that ldaho Power is proposing to track any difference
between actual revenues and expenses in a balancing account and true-up collections
to match actual expenses incurred. lncluding a forecasted amount of spend in future
years for purposes of determining an initial revenue requirement helps to smooth
revenue requirement impacts over the remaining 8.5 years of the plant's life and allows
for full recovery of Valmy-related costs by its end-of-life.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND SET OF DATA REQUESTS - 3
REQUEST NO. 8: Please confirm whether any investment in the Valmy V2 Low
Nox Burner replacement project is included in the proposed net change in levelized
revenue requirement, and if there is, please quantify such investment and provide all
justification and support for the prudence of such investment.
RESPONSE TO REQUEST NO. 8: The Valmy Low Nitrogen Oxides ("NOx")
Burner replacement project was added to electric plant-in-service in 2015 at a cost of
$2,426,039, and is included within the existing Valmy plant balance used for purposes
of determining the net change in levelized revenue requirement.
This investment replaced burner components, including coal conduit transitions,
the inner barrel, diffusers, deflectors, and nozzle tips with hardened materia! that will
extend the reliable service life of Unit 2 through 2025. The burners that were replaced
in 2015 were I to 9 years old, were in poor condition, and had a high failure rate due to
excessive wear and overheating. The burners were also required to maintain emissions
standards for NOx in compliance with the FederalAcid Rain Program and as required in
the North Valmy Title V Permit issued by the state of Nevada.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND SET OF DATA REQUESTS - 4
REQUEST NO. 9: Please confirm whether any investment in Valmy Wells 21,
23, and 27 are included in the proposed net change in levelized revenue requirement,
and if there is, please quantify such investment and provide all justification and support
for the prudence of such investment.
RESPONSE TO REQUEST NO. 9: Yes The table below quantifies the net
change to Plant for investments in Valmy Wells 21,23, and 27
Project
Gross
Additions Retirements
Net Change to
Plant
VALMY VC PRODUCTION WELL#27
VALMY VC PRODUCTION WELL #23
VALMY VC PRODUCTION WELL #21
765,339.42
589,238.38
575,550.70
(315,962.15)
(183,225.50)
(18s,803.37)
449,377.27
406,012.88
389,747.33
1,930,128.50 (684,991.02)1,245,137.48
These are the original wells from when the Valmy plant went into operation. Well
21 was drilled in 1977, and Wells 23 and 27 were drilled in 1981. Since that time, water
levels have changed and the well casings are falling apart. These wells have reached
the end of their useful lives. Well casing issues are causing an influx of sand from the
well bore into the plant, which has led to additional water treatment due to the poor
water quality. These wells were becoming unusable and unable to provide enough
water for the plant's operations.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND SET OF DATA REQUESTS - 5
REQUEST NO. 10: Regarding the proposed decommissioning costs stated in
Exhibit No. 2 of Mr. Larkin's testimony:
a. Please provide all justification and support for such proposed costs,
including, but not limited to the most recently-conducted, site-specific decommissioning
study for the Valmy Plant.
b. Please tie any cost estimates stated in the decommissioning study to the
proposed decommissioning costs in Exhibit No. 2 of Mr. Larkin's testimony.
c. Please confirm whether any contingency cost factors were included in the
decommissioning study.
d. PIease verify the escalation rate used to escalate the present value of the
proposed decommissioning costs to the "2025 Costs" stated in Exhibit No. 2.
e. Please provide a detailed explanation any plans that Company
management has considered as an alternative to complete dismantlement of the Valmy
plant, including, but not limited to the sale of the plant, the repowering or conversion of
the plant, or the use of the site for future generating assets. Please include all
documentation and any cost estimates associated with such alternative plans.
RESPONSE TO REQUEST NO. 10:
a. The Valmy site-specific decommissioning study is included as part of the
confidential NV Energy North Fleet Demolition and Pond Decommissioning Study,
which is provided on the confidential disk. The confidential disk will be provided to
those parties that have executed the Protective Agreement in this matter.
b. Please see page 5 of the confidential attachment provided with the
Company's response to subpart a above for the decommissioning cost estimates of
IDAHO POWER COMPANY'S RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND SET OF DATA REQUESTS - 6
Valmy Units 1 and 2. Please note, the total provided on page 5 is the total cost and in
2012 dollars. To tie the estimate to Exhibit No. 2 of the Company's filing, ldaho Power's
50 percent ownership share was first applied then the amount was escalated by 3
percent each year.
c. Please see column E of Table 1 on page 5 of the confidentia! attachment
provided with the Company's response to subpart a above for contingency cost factors
included in the decommissioning study.
d. Please see the Company's response to subpart b above.
e. Please see the Company's confidential response to Staffs Request No. 4
and the confidential response to the Sierra Club and the ldaho Conservation League's
Request No. 2-7 for discussion regarding the sale of the plant. ln addition, please see
the Company's response to the ldaho lrrigation Pumpers Association, lnc.'s Request
Nos. 9 and 10 for discussion regarding the repowering or conversion of the plant. ldaho
Power has not studied other alternatives for future generating assets on the Valmy site
other than the studies discussed above.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, ldaho Power Company, and Matt Larkin, Revenue
Requirement Manager, ldaho Power Company.
DATED at Boise, tdaho, this 28th day of March 2017.
LISA D
Attorney for ldaho
IDAHO POWER COMPANY'S RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND SET OF DATA REQUESTS - 7
Company
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 28th day of March 2017 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND SET OF DATA REQUESTS upon the following
named parties by the method indicated below, and addressed to the following:
Commission Staff
Camille Christen
Deputy Attorney General
ldaho Public Utilities Commission
47 2 W est Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-007 4
Micron Technology, lnc.
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, lnc.
8000 South FederalWay
Boise, ldaho 83707
ldaho lrrigation Pumpers Association, Inc.
Eric L. Olsen
ECHO HAWK & OLSEN, PLLC
505 Pershing Avenue, Suite 100
P.O. Box 6119
Pocatello, Idaho 83205
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fschmidt@holland hart. com
etcocian@hol land hart. com
bhansen@hollandhart. com
klhall@hollandhart. com
kmtrease@ hol land hart. com
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Anthony Yankel
12700 Blake Avenue, Unit 2505
Lakewood, Ohio 44107
IDAHO POWER COMPANY'S RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND SET OF DATA REQUESTS - 8
ldaho Conseryation League
Benjamin J. Otto
ldaho Conservation League
710 North Sixth Street
P.O. Box 844
Boise, ldaho 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.G.20585
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rista Bearry, Legal
]DAHO POWER COMPANY'S RESPONSE TO MICRON
TECHNOLOGY, INC.'S SECOND SET OF DATA REQUESTS - 9