20170410IPC to ICL & Sierra Club 4-1 to 4-7.pdf

3Iffi*.
An IDACORP Company
LISA D. NORDSTROM
Lead Counsel
I [e-mail]
April 10,2017
VIA HAND DELIVERY
Diane Hanian, Secretary
!daho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-16-24
Recovery of Costs Associated with North Valmy Power Plant- ldaho Power
Company's Response to the Fourth Set of Data Requests of the Sierra Club
and the ldaho Conservation League
Dear Ms. Hanian:
Enclosed forfiling in the above matter please find an originaland three (3) copies of
ldaho Power Company's Redacted Response to the Fourth Set of Data Requests of the
Sierra Club and the ldaho Conservation League. Also enclosed for filing are an original
and three (3) copies of ldaho Power Company's Confidential Response to the Sierra Club
and the ldaho Conservation League's Data Request No. 4-5.
ln addition, enclosed are four (4) copies each of non-confidential and confidential
disks containing information responsive to the Sierra Club and the ldaho Conservation
League's data requests. Please handle the confidential information in accordanee with the
Protective Agreement executed in this matter.
Very truly yours,
X"-P@
LDN:csb
Enclosures
122 1 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
Lisa D. Nordstrom
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
lnordstrom@id ahooower.com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORIry TO INCREASE RATES FOR
ELECTRIC SERVICE TO RECOVER
COSTS ASSOCIATED WITH THE NORTH
VALMY PLANT
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CASE NO. IPC-E-16-24
IDAHO POWER COMPANY'S
REDACTED RESPONSE TO
THE FOURTH SET OF DATA
REQUESTS OF THE SIERRA
CLUB AND THE IDAHO
CONSERVATION LEAGUE
COMES NOW, ldaho Power Company ("ldaho Power" or "Company"), and in
response to the Fourth Set of Data Requests of the Sierra Club and the ldaho
Conservation League to ldaho Power Company dated March 21, 2017, herewith
submits the following information:
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 1
REQUEST NO. 4-1: Please refer to the Application at paragraph 1 1 (page 6).
Please verify that ldaho Power Company is proposing, in this docket, to include within
rates "all the investments made between the 2011 test year and July 31 ,2016."
RESPONSE TO REQUEST NO. 4-1: The statement contained in the
Company's Application is correct; the levelized revenue requirement amount requested
in this case includes actua! investments made at Valmy through July 31 ,2016.
The response to this Request is sponsored by Matt Larkin, Revenue
Requirement Manager, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 2
REQUEST NO. 4-2: Refer to Response to Staff Request No. 1, file "Attachment
8 - Response to Staffs Request No. 1_Exhibit 6 Workpapers_Fixed Costs
(00207922xBCD5C)" tab "Valmy 10 Year budget." ("2015 to 2024 North Valmy Capita!
Plan")
a. Does this table represent Valmy total costs (irrespective of ownership), or
IPC-share?
b. lf this table represents IPC-share, does it represent whole Company, or
ldaho share only?
c. Provide a table of annual actual capital expenditures at Valmy Unit 1,
Valmy Unit 2, and at any shared Valmy facilities from 2010 to the present day, broken
down into Budget lD, Unit, and Project Title, as per the referenced worksheet (to be
labeled "2010 to 2017 North Valmy Capital Spend")
d. Refer to IPC Response to Staff DR 22 (Attachments 1 through 30).
Provide a crosswalk between projects listed in Staff DR22 and (c) above ("2010 to
2017 North Valmy CapitatSpend").
RESPONSE TO REQUEST NO. 4.2:
a. Attachment I - Response to Staffs Request No 1_Exhibit 6
Workpapers*Fixed Costs.xlsx, tab "Valmy 10 Year budget," rows 1 through and
including 273 are Valmy total project costs. Rows 275 through and including 339 are
ldaho Power's share of the Valmy total costs.
b. The ldaho Power-specific information contained in rows 275 through and
including 339 reflects ldaho Power's total Company share, not the ldaho-allocated
share.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 3
c. Please see the "Request No 4-2 c." tab in the Excel file, "2010 lo 2017
North Valmy Capital Spend," provided on the non-confidential CD. Please note that the
cost information included in this Excel file is classified by ldaho Power work order
number and not "Budget lD." Please see the "Request No 4-2 d." tab for the NV Energy
Budget lD that corresponds to each ldaho Power work order number.
d. PIease see the "Request No 4-2 d." tab on the Excel file, "2010 to 2017
North Valmy Capital Spend."
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 4
REQUEST NO. 4-3: Refer to IPC Response to Staff 22, attachment 28 ("Valmy
1 Utility MACT")
a. Identify the date upon which this document was provided to IPC from NV
Energy.
b. ldentify the individuals (name, department) charged with the review of this
document at lPC.
c. Provide any written internal correspondence at IPC with respect to the
review of this document.
d. Provide any written correspondence with NV Energy with respect to the
review of this document.
e. ldentify the date upon which IPC provided approval to NV Energy to
proceed with with the Valmy 1 Utility MACT project as scoped in this document.
t. ldentify the date upon which final notice to proceed was provided to the
buiber by NV Energy.
g. What was the final cost of this project on a plant-wide basis?
RESPONSE TO REQUEST NO. a-3:
a. The information from the Generation Business Case was presented to
ldaho Power during the 2010 capita! budget meeting in summer 2010.
b. The individuals that reviewed this information from ldaho Power were
John Carstensen (Joint Projects Department) and the Joint Projects financia! analyst,
who was in transition at the time and it is unclear who represented finance during that
time.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 5
c. There was no written internal correspondence at ldaho Power with respect
to review of this document.
d. This project was part of the capital approval process that was approved by
ldaho Power on February 4, 2011, via a budget approval letter to NV Energy, which is
provided on the non-confidential CD.
e. Please see the Company's response to the Sierra Club and the ldaho
Conservation League's ("Sierra Club-lCL") Request No.4-3.d, above.
f. The award date for the installation of the Valmy 1 Utility Maximum
Achievable Control Technology ("MACT") was September 26,2013.
g. The final plant-wide project cost was $14,300,344.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 6
REQUEST NO. 44: Refer to IPC Response to Staff 22, attachment 28 ("Valmy
1 Utility MACT"); refer specifically to page 5 of 6 ("Cost Benefits Calculations").
a. Verify that this document was provided to IPC by NV Energy.
b. Please provide any workpapers or calculations or spreadsheet versions of
this document that were either generated by IPC or provided by NV Energy.
c. Describe what is represented by the line labeled "Duration of Derate \ hr"
in this specific circumstance. Specifically, page 3 of 6 ("Assumptions") states that
"derated [sic] is based on loss of the unit's ability to operate beyond the compliance
date," so why does the analysis draw on a duration of derate at72OO hours for 2016-
2019?
d. Describe what is represented by the line labeled "facility capacity factor."
e. Provide the annual capacity factor of Valmy 1 from 2003-2013, inclusive.
f. Describe what is represented by the line "probability of occurrence."
g. State if IPC believes that the values of "probability of occurrence" as
documented in this analysis were true and correct at the time it was developed.
h. Describe what is represented by the line "Replacement Power Margin \
$/MWh."
i. Produce any economic analysis of the Valmy 1 Utility MACT project
conducted by lPC.
RESPONSE TO REQUEST NO. 44:
a. The Generation Business Case was provided to ldaho Power in summer
2010 by NV Energy.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 7
b. No workpapers, calculations, or spreadsheets associated with the
Generation Business Case were generated by ldaho Power or provided by NV Energy.
c. The line labeled "Duration of Derate \ hr" is referencing the fact that the
unit would not be able to operate past April 15, 2015, if the Dry Sorbent lnjection
System (DSl) was not installed as per the Federal Utility MACT Rule.
d. The "facility capacity factor" is the assumed capacity factor of the
uniUplant in future years. Because this project was required by the implementation of a
federa! rule, the plant operational assumption was set to 100 percent.
e. Please see the table below.
North Valmy Unit 1 Net Capacity Factor
2003 83.73o/o
2004 83.230/o
2005 80.58%
2006 66.85%
2OO7 76.210/o
2008 72.37%
2009 65.99%
2010 68.96%
2011 34.78o/o
2012 36.760/o
2013 55.70%
f. The "probability of occurrence" is the probability the derate would occur.
Because the unit would not be able to operate beyond April 15,2015, the probability of
a derate was 100 percent.
g. Yes. ldaho Power believes the values of the "probability of occurrence"
documented in the analysis were true and correct at the time it was developed.
h. The "Replacement Power Margin \ $/MWh" is the difference between the
market price and the dispatch price of North Valmy.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 8
i. There was no other economic analysis conducted by ldaho
Power with respect to the Valmy 1 Utility MACT project.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVAT]ON LEAGUE - 9
REQUEST NO. 4.5:Refer to the ldaho Power Company's 2013 lntegrated
Resource Plan ("lRP")
a. ldentify the date upon which the final model runs in the 2013 IRP were
conducted.
b. For each of the nine portfolios examined in the 2013 lRP, provide the
annual projected capacity factor for Valmy 1 through the full analysis period.
c. For each of the nine portfolios examined in the 2013 lRP, provide the
annual production cost (in $/MWh) for Valmy 1 through the full analysis period.
d. For portfolios 3 through 9 in the 2013lRP, provide the annua! production
cost (in $/MWh) for the combined-cycle combustion turbine (CCCT) through the full
analysis period.
RESPONSE TO REQUEST NO. 4-5: Please see the confidential Excel file
provided on the confidential CD for the detail behind the responses to subparts a-d
provided below. The confidential CD will only be provided to those parties that have
executed the Protective Agreement in this matter.
a. The date upon which the final model runs in the 2013 IRP were conducted
was March 2013.
b. The capacity factors for Valmy 1 from the 2013 IRP portfolios were:
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 1O
Year
2013
2014
201s
2016
20t7
2018
2019
2020
2021
2022
2023
2024
202s
2026
2027
2028
2029
2030
2031
2042
SCCI
1 So.rdman to
Hemintway plus
Demand Re$pnse and
2 Boadman to
Hemingway plus
Demaad Response
Demand
CCCr and 4 Demand Respons dus
rwo CCCT5
5 oemand Respon*
dusTwo Con*otive
CCCfs tct--Bsu
7 Coal to
Natural Gas
Conve6ion
plus
Boardman to
Hemingway
and Demand
Response
I North valmy Oosurc,
,eplaced with Demand
Response, Boardman to
HeminflaL and a CCCT
9 North
valmy
clo$re,
Boardman
to
Hemingway
Altemative
c. The confidential annual nominal variable cost dollars per megawatt-hours
(.MWh") for Valmy 1 from the 2013 lRP portfolios using a planning case carbon adder of
$14.64 per ton starting in 2018 escalating at 3 percent annually were:
d. The annual nominal variable cost dollars per MWH for the CCCT 1 from
the 2013 IRP portfolios using a planning case carbon adder of $14.64 per ton starting in
2018 escalating at 3 percent annually were:
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, Idaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 11
Year
2013
2014
2015
2016
20t7
2018
2019
2020
2027
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
s
s
s
s
s
s
s
s
s
s
s
s
s
s
s
5
s
s
s
60.34
64.93
68.53
72.42
76.33
80.78
84.51
44.77
93.42
98.15
103.49
80.32
44.67
88.89
93.57
98.32
103.54
37.10
38.89
46.48
49.L4
52.00
55.85
60.68
54.81
68.37
72.25
76.25
80.54
84.39
88.55
93.30
97.94
LO4.42
46.48
49.10
51.98
55.96
60.67
54.4O
64.47
72-45
76.34
80.79
84.46
88.59
93.50
98.18
105.20
46.44
49.10
51.98
55.98
60.77
64.92
58.49
72.49
76.39
80.54
84.50
88.75
93.46
98.08
105.12
50.34
64.88
68.51
72.47
76.45
80.87
84.50
88.80
93.49
98.19
105.28
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ttlt
I Demand n"rponr"l l5 oemand Response
plusaccCTandan l4OemandResponseplus lplusTwoConsecutive
sccr ltwo cccrs lcccrt ICL_BSU
7 Coal to Natural
Gas Conversion
plus Boardman to
Hemingway and
Demand Response
8 Nonh Valmy Closure,
replaced with Demand
Response, Boardman to
Hemincwav, and a CCCT
I
lg uorilr vatmv
lclosure, Boardman
Ito Hemingway
lAlternative
REQUEST NO. 4-6: Refer to IPC Response to Staff 22, attachment 4 ("Valmy 2
Cooling Tower, Replace").
a. ldentify the date upon which this document was provided to IPC from NV
Energy.
b. ldentify the individuals (name, department) charged with the review of this
document at lPC.
c. Provide any written internal correspondence at IPC with respect to the
review of this document.
d. Provide any written correspondence with NV Energy with respect to the
review of this document.
e. ldentify the date upon which IPC provided approval to NV Energy to
proceed with the Valmy 2 Cooling Tower project as scoped in this document.
f. ldentify the date upon which final notice to proceed was provided to the
builder by NV Energy.
RESPONSE TO REQUEST NO. 4-6:
a. The information from the Generation Business Case was presented to
ldaho Power during the 2010 capital budget meeting in summer 2010.
b. The individuals that reviewed this information from Idaho Power are John
Carstensen (Joint Projects Department) and the Joint Projects financia! analyst, who
was in transition at the time and it is unclear who represented finance during that time.
c. There was no other written internal correspondence at ldaho Power with
respect to Attachment 4 provided in the Company's response to the ldaho Public
Utilities Commission Staffs ("Staff') Request No. 22.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 12
d. There was no other written correspondence with NV Energy with respect
to Attachment 4 provided in the Company's response to Staff's Request No. 22.
e. This project was part of the capital approval process that was approved by
ldaho Power on February 4, 2011, via a budget approva! letter that is provided as an
attachment to the Company's response to Sierra Club-lCL's Request No. 4-3.
f. NV Energy provided a notice to proceed on the Valmy 2 Cooling Tower
Project on December 13, 2013.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 13
REQUEST NO. 4-7: Refer to IPC Response to Staff 22, atlachment 4 ("Yalmy 2
Cooling Tower, Replace"); refer specifically to page 5 of 6 ("Cost Benefits
Calculations").
a. Verify that this document was provided to IPC by NV Energy.
b. Please provide any workpapers or calculations or spreadsheet versions of
this document that were either generated by IPC or provided by NV Energy.
c. Confirm or deny: the section entitled "heat rate improvements" assumes a
100o/o capacity factor from Valmy for 2016 through 2021. lf not, please state the
capacity factor assumed in the values of "heat rate savings."
d. Produce any economic analysis of the Valmy 2 Cooling Tower
Replacement project conducted by lPC.
RESPONSE TO REQUEST NO. 4.7:
a. Yes. NV Energy provided ldaho Power with this document.
b. There were no other workpapers, calculations, or spreadsheets
associated with this document generated by ldaho Power or provided by NV Energy.
c. Please see the line labeled "Total Available Hours/yea/'on page 5 of 6 of
the Generation Business Case to confirm Attachment 4 uses 8,760 hours/year for the
heat rate improvement, or a 100 percent capacity factor. Although the capacity factor
was overstated, as stated on page 2 ol 6 of the Generation Business Case, "Even
without the heat rate improvement, this project is still viable with a 1.20 lProtitability
lndexl Pl. This business case has been calculated very conservatively, and if the
probability risk of failure increases, the Pl will only increase." Further justifying the
project, on page 3 of 6, under the section "Avoided Derates/Outages," the business
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE- 14
case concludes that the project "Avoids a 1Oo/o chance lor a 50o/o tower failure, with an
escalating failure probability ol 5o/o year over year over year, requiring (5) months to
repair at a current cost of $15,000,000, plus the equivalent chance of structural failure of
the basin resulting in 100% loss of tower capacity." Therefore, in addition to the Valmy
2 Cooling Tower Replacement being economical, the cooling tower was aging, raising
safety and reliability concerns. !f the tower was to collapse during the summer season,
the unit would be forced offline for approximately five months to construct a new tower.
The Valmy 2 Cooling Tower Replacement was based on economics, safety, and
reliability.
d. ldaho Power did not conduct any other economic analysis with respect to
the Valmy 2 Cooling Tower Replacement.
The response to this Request is sponsored by Tom Harvey, Resource Planning
and Operations Director, ldaho Power Company.
DATED at Boise, ldaho, this l Oth day of April 2017 .
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVAT]ON LEAGUE - 15
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this l0th day of April 2017 I served a true and
correct copy of IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FOURTH SET OF DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO
CONSERVATION LEAGUE 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
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 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 FederalWay
Boise, ldaho 83707
ldaho lrrigation Pumpers Association, lnc.
Eric L. Olsen
ECHO HAWK & OLSEN, PLLC
505 Pershing Avenue, Suite 100
P.O. Box 6119
Pocatello, ldaho 83205
Anthony Yankel
12700 Lake Avenue, Unit 2505
Lakewood, Ohio 44107
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fschmidt@hollandhart. com
etcocian@ hol land hart. com
[e-mail]
[e-mail]
kmtrease@ hol land ha rt. com
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IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 16
ldaho Conservation 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 lndependence Avenue, SW (Room 6D-033)
Washington, D.C.20585
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fry,al
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE FOURTH SET OF
DATA REQUESTS OF THE SIERRA CLUB AND THE IDAHO CONSERVATION LEAGUE - 17