20170428IPC to Staff 18-27.pdf

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An IDACORP Company
DONOVAN E. WALKER
Lead Counse!
dwal ker@i dahopower. com
Apnl 27 ,2017
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
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Re Case No. IPC-E-16-28
Certificate of Public Convenience and Necessity for Wood River Valley
ldaho Power Company's Response to the Third Production Request of the
Commission Staff
Dear Ms. Hanian:
Enclosed forfiling in the above matter please find an originaland three (3) copies of
ldaho Power Company's Response to the Third Production Request of the Commission
Statf.
Also enclosed are four (4) copies of a non-confidential disk containing information
responsive to Staffs production requests.
very yours,
E. Walker
DEW:csb
Enclosures
1221 W. ldaho St. (83702)
PO. Box 70
Boise, lD 83707
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwal ker@ id ahopower. com
Attorney for ldaho Power Company
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BEFORE THE IDAHO PUBLIC UTILIT!ES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A
CERTIFICATE OF PUBLIC CONVENlENCE
AND NECESSIry FOR THE WOOD RIVER
VALLEY
CASE NO. IPC-E-16-28
IDAHO POWER COMPANY'S
RESPONSE TO THE THIRD
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, Idaho Power Company ("ldaho Power" or "Company"), and in
response to the Third Production Request of the Commission Staff to ldaho Power
dated April 6, 2017, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF. 1
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REQUEST NO. 18: ln Staffs Production Request No. 17, Staff asked
ln its Application, the Company indicated that
repairing the existing system could require as many as 40
eight hour power interruptions. To avoid these interruptions,
the Company indicated the need for a second transmission
Iine to provide power while these repairs are made. Did the
Company consider any routes that would permit repair of the
existing line without necessarily providing full redundancy?lf so, please describe these routes and provide cost
estimates. Please include electronic workpapers with all
formulas and links intact.
With respect to the routes the Company considered, please include in your
response any permanent or temporary routes.
RESPONSE TO REQUEST NO. 18: Please see the Company's response to
ldaho Public Utilities Commission ("Commission") Staffs ("Staff') Production Request
No. 17.
The response to this Request is sponsored by David Angell, Transmission and
Distribution Planning Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
REQUEST NO. 19: On page 4 of its application, the Company states that peak
demand reached 63 megawatts during the winter of 2007. On page 22 of its
application, the Company states that the Overhead Distribution option provides only 60
MW of back-up service for the existing customers. Please clarify whether the Overhead
Distribution option would be able to meet the Company's 63 megawatt peak demand,
and if so, explain how.
RESPONSE TO REQUEST NO. 19:The Overhead Distribution option will be
able to serve up to 65 megawatts ("MW"). Each distribution circuit will be able to serve
up to 13 MW. This was communicated to the Community Advisory Committee on
October 2, 2014. For meeting minutes, please see Attachment 8 provided with the
Company's response to Staffs Production Request No. 1.
The response to this Request is sponsored by David Angell, Transmission and
Distribution Planning Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 3
REQUEST NO. 20: On page 20 of its application, the Company states that the
Underground Transmission option would support a build-out demand of 120 MW. ls this
the capacity of the Underground Transmission line alone, or is it the aggregate capacity
of both the existing overhead Iine and the proposed Underground Transmission line?
Please explain.
RESPONSE TO REQUEST NO. 20: The proposed Underground Transmission
option would support a build-out demand of 120 MW independent of the existing
transmission line.
The response to this Request is sponsored by David Angell, Transmission and
Distribution Planning Manager, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
REQUEST NO. 21: lf the Commission were to accept, as base case, either the
Overhead Transmission-Dollar Mountain option or the Overhead Transmission-
Downtown District Transmission option, would the Company proceed with its plans to
provide a redundant transmission line to the Ketchum/Sun Valley area? Please explain.
RESPONSE TO REQUEST NO. 21: Unless the Commission relieves the
Company of its obligation to provide reliable electric service to the North Valley, and
assuming the Commission concurs with the need for a redundant transmission line and
grants Idaho Power a Certificate of Public Convenience and Necessity ("CPCN") for
either the Overhead Transmission-Dollar Mountain option or the Overhead
Transmission-Downtown District Transmission option as the base case, the Company
has no other option then to proceed with the necessary steps to permit, site, and
construct the CPCN specified route for the redundant transmission line to the North
Wood River Valley. The Company would once again be faced with seeking to permit
and route a line within and through the local jurisdictions and allocate any incremental
cost difference to those local jurisdictions between the approved base case and a
mutually agreed upon alternative route.
The response to this Request is sponsored by David Angell, Transmission and
Distribution Planning Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 5
REQUEST NO. 22: For the Overhead Transmission-Downtown option please
provide the total cost, including right-of-way, broken down by planUexpenditure type.
Please provide depreciable lives (amortization periods, if applicable) for the various
planUexpenditure types. Please indicate the amount of capitalized labor included in the
costs. The Company's Response to the First Production Request of the Commission
Staff, question 1(f), indicates the cost of the option will be $18.5 million, plus the right-of-
way costs. Would this entire cost be capitalized? Are there any separate O&M costs?
lf so, please provide estimates of the O&M costs. Please provide the effective property
tax rate for the applicable area. ls the Company aware of any tax incentives that would
apply to this project? Please provide the Company's estimate of the revenue
requirement impact of this project along with assumptions and a supporting work paper
in Excel with formulae intact. Please indicate if the Company's estimated revenue
requirement is a levelized revenue requirement (level annual revenue over the project
life).
RESPONSE TO REQUEST NO. 22: The downtown Ketchum overhead line
route is preliminary. The route selection process relied on the use of aerial maps and
two field visits to Ketchum to determine the route that was constructible, from an
engineering standpoint, avoided the downtown core to the extent possible, and
minimized impacts on the City of Ketchum. The route was selected and has been
evaluated from an engineering perspective only. No survey or design work has been
performed on the downtown overhead route to confirm that it is feasible to build.
After the proposed overhead route was selected, Idaho Power determined that it
was not practical or feasible to permit or build the downtown overhead route because of
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 6
issues such as land use constraints (i.e., tall building and zero lot-line building
setbacks), clearance restrictions, vegetation issues, right-of-way constraints,
condemnation issues, and the use of non-standard support structure configurations,
among others. Because the route was determined to not be feasible, additional work
toward estimating its cost was not pursued.
Attachment 1 provided on the enclosed CD shows the estimate for the total cost
($18.5 million) of the Overhead Transmission-Downtown option. Idaho Power's
estimating software does not provide component breakdowns for the individual
planUexpenditure types. ldaho Power has provided information on the most prevalent
accounting category for the cost estimate breakdown.
Attachment 2 provided on the enclosed CD is an Excel spreadsheet showing the
depreciable life for the various planUexpenditure types expected on this project.
All costs on this project will be capita! expenditures except for approximately half
of the distribution underbuild costs, which will be operations and maintenance ("O&M')
costs for transferring the existing distribution facilities onto the new transmission poles.
ldaho Power does not have a breakdown of labor costs for this project. Most labor will
be engineering consultants supporting project design and construction labor for the
installation.
Blaine County has estimated property tax rates of 0.32 percent for transmission,
0.35 percent for distribution, and 0.35 percent for general plant. The Company is not
aware of any tax incentives that would apply to this project.
Attachment 3 provided on the enclosed CD is an Excel workbook with formulae
intact which provides a high-level estimate of the revenue requirement for the Overhead
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
Transmission-Downtown option that excludes additional costs for right-of-ways. The
revenue requirement is provided annually and on a levelized basis. This is only an
estimate and may be different than the revenue requirement determined at the time the
Company requests recovery through rates.
The response to this Request is sponsored by Ryan Adelman, Transmission and
Distribution Projects Manager, and Michae! Youngblood, Manager of Regulatory
Projects, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 8
REQUEST NO. 23: For Underground Transmission-Options TP-1, TP-2, and
TP-3, please separately provide the tota! cost, including right-of-way, broken down by
planUexpenditure type. Please provide depreciable lives (amortization periods, if
applicable) for the various planUexpenditure types. Please indicate the amount of
capitalized labor included in the costs. What is the cost of the project, including the
right-of-way costs? Would this entire cost be capitalized? Are there any separate O&M
costs? lf so, please provide estimates of the O&M costs. Please provide the effective
property tax rate for the applicable area. ls the Company aware of any tax incentives
that would apply to this pQect? Please provide the Company's estimate of the revenue
requirement impact of this project along with assumptions and a supporting work paper
in Excel with formulae intact. Please indicate if the Company's estimated revenue
requirement is a levelized revenue requirement (level annual revenue over the project
life).
RESPONSE TO REQUEST NO. 23: The Excel spreadsheets provided on the
enclosed CD show estimates for the total cost of the Underground Transmission-
Options TP-1, TP-2, and TP-3. ldaho Power's estimating software does not provide
component breakdowns for the individual planUexpenditure types. ldaho Power has
provided information on the most prevalent accounting category for the cost estimate
breakdown in Attachment 1.
Attachment 2 provided on the enclosed CD is an Excel spreadsheet that shows
the depreciable life for the various planUexpenditure types expected on this project.
All costs on this project will be capital expenditures except for approximately half
of the distribution underbuild costs, which will be O&M costs for transferring the existing
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 9
distribution facilities onto the new transmission poles. ldaho Power does not have a
breakdown of labor costs for this project. Most labor will be engineering consultants
supporting project design and construction labor for the installation.
Blaine County has estimated property tax rates of 0.32 percent for transmission,
0.35 percent for distribution, and 0.35 percent for general plant. The Company is not
aware of any tax incentives that would apply to this project.
Attachment 3 provided on the enclosed CD is an Excel workbook with formulae
intact which provides a high-level estimate of the revenue requirement for each of the
three Underground Transmission-Options TP-1, TP-2, and TP-3. The revenue
requirement is provided annually and on a levelized basis. This is only an estimate and
may be different than the revenue requirement determined at the time the Company
requests recovery through rates.
The response to this Request is sponsored by Ryan Adelman, Transmission and
Distribution Projects Manager, and Michael Youngblood, Manager of Regulatory
Projects, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REOUEST OF THE COMMISSION STAFF - 1O
REQUEST NO. 24: For Underground Transmission-Option TP-1, please provide
the following for all rate classes:
a) Number of local customers benefiting from the TP-1 Option (as opposed
to the Overhead Transmission-Downtown option), by rate class and town.
b) Weather normalized annual energy (kwh) usage of these benefitting loca!
customers, by rate class and town.
c) A map showing boundary lines for benefitting customers.
RESPONSE TO REQUEST NO. 24: All the customers served by either the
Ketchum or Elkhorn substations benefit from the proposed redundant transmission !ine,
regardless of where the overhead to underground transition point is determined. The
below table responds to subparts a and b of Staffs Production Request No. 24 above
and is based upon 2015 annual data. The data is grouped by city (Ketchum, Sun
Valley, and the remaining customers in north Blaine County) and rate class (Residential,
Small Commercial, and All Other, which includes Large Commercial, lndustrial,
lrrigation, and Other).
Customer
Count
Annual
Energy
(kwh)
North Blaine County
RESIDENTIAL
SMALL COMMERCIAL
ALL OTHER
Ketchum
RESIDENTIAL
SMALL COMMERCIAL
ALL OTHER
Sun Valley
RESIDENTIAL
SMALL COMMERCIAL
ALL OTHER
Grand Tota!
1,,49O
L,3L6
169
5
4,885
3,725
L,757
4
2,835
2,567
266
2
9,211
40,129,BLL
24,88L,245
5,27L,397
9,977,L69
95,799,155
48,228,886
35,O47,979
72,522,290
60,949,587
36,385,809
9,169,156
75,394,622
196,878,553
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REOUEST OF THE COMMISSION STAFF - 11
Please see the attachment provided with the Company's response to ldaho
Sierra Club's Request for Production No. 6 for a map showing boundary lines for
benefitti ng customers.
The response to this Request is sponsored by David Angell, Transmission and
Distribution Planning Manager, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 12
REQUEST NO. 25: For Underground Transmission-Option TP-2, please provide
the following for all rate classes:
a) Number of local customers benefiting from the TP-2 Option (as opposed
to the Overhead Transmission-Downtown option), by rate class and town.
b) Weather normalized annual energy (kwh) usage of these benefitting local
customers, by rate class and town.
c) A map showing boundary lines for benefitting customers.
RESPONSE TO REQUEST NO. 25: Please see the Company's response to
Staffs Production Request No. 24.
The response to this Request is sponsored by David Angell, Transmission and
Distribution Planning Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 13
REQUEST NO.26: For Underground Transmission-Option TP-3, please provide
the following for all rate classes:
a) Number of local customers benefiting from the TP-3 Option (as opposed
to the Overhead Transmission-Downtown option), by rate class and town.
b) Weather normalized annual energy (kwh) usage of these benefitting local
customers, by rate class and town.
c) A map showing boundary lines for benefitting customers.
RESPONSE TO REQUEST NO. 26: Please see the Company's response to
Staffs Production Request No. 24.
The response to this Request is sponsored by David Angell, Transmission and
Distribution Planning Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 14
REQUEST NO. 27: ln the event that a surcharge applies to local customers,
does the Company have a preferred recovery period (duration of recovery)? Please
explain the justification for the Company's preferred recovery period.
RESPONSE TO REQUEST NO. 27: The Com pany has only considered the
application of a surcharge as one of the possible funding arrangements proposed by the
local jurisdictions (City of Sun Valley, City of Ketchum, and Blaine County) to recover
any incremental cost differential between the least-cost standard practice option and
alternate designs that customers or the local jurisdictions may request and/or require.
For the three transition point options for the Underground Transmission construction
configurations described in the Company's Application and testimony, TP1, TP2, and
TP3, the incremental cost ranges from $0.0 to $5.7 million. TP1 has no incremental
cost difference. ln response to the localjurisdictions' requests to consider a surcharge,
the Company responded that if the third option (TP3) was chosen/required, that the
incremental cost of approximately $5.7 million was too large for a surcharge option on
customers' electric bills and each jurisdiction could implement a local improvement
district (LlD) to collect that amount. However, if the local jurisdictions wanted routing
option TP2, with the underground transition point at Hospital Drive, the incremental
costs would be approximately $2.7 million above the economically equivalent base
case. The Company agreed that if the local jurisdictions chose this option for the
transition point of the Underground Transmission !ine, the Company would agree to
support implementation of a 3 percent surcharge for the City of Ketchum and Blaine
County and a 3 percent franchise fee for the City of Sun Valley in order to pay for the
incremental cost difference of TP2. Based on 2015 energy sales data, the duration of
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 15
recovery for the incremental costs of $2.7 million with a 3 percent surcharge would be
less than 10 years. Please see Youngblood Dl, Exhibit No. 1, pp. 8-10.
The response to this Request is sponsored by Michael Youngblood, Manager
Regulatory Projects, ldaho Power Company.
DATED at Boise, tdaho, this 27th day of April2017.
OVAN E. WALKER
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 16
CERTIFICATE OF SERVICE
! HEREBY CERTIFY that on the 27th day of April 2017 I served a true and correct
copy of IDAHO POWER COMPANY'S RESPONSE TO THE THIRD PRODUCTION
REQUEST OF THE COMMISSION STAFF upon the following named parties by the
method indicated below, and addressed to the following:
Commission Staff
Daphne Huang
Camille Christen
Deputy Attorneys General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North 6th Street
Boise, ldaho 83702
Sierra Club
Kelsey Jae Nunez
KELSEY JAE NUNEZLLC
920 North Clover Drive
Boise, ldaho 83703
Zach Waterman
Director, ldaho Sierra Club
503 West Franklin Street
Boise, ldaho 83702
Michael Heckler
3606 North Prospect Way
Garden City, ldaho 83714
Kiki Leslie A. Tidwell
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Streer,f3702)
P.O. Box 7218
Boise, ldaho 83707
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cam i I le. ch risten@puc. idaho. sov
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IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 17
Kiki Leslie A. Tidwell
300 Let'er Buck Road
Hailey, ldaho 83333
Rolling Rock Properties, LLG, and
Rolling Rock Properties #2, LLC
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Rolling Rock Properties, LLG
Rock Rolling Properties, LLC
c/o Kris Dondero
P.O. Box 739
Sun Valley, ldaho 83353
Rolling Rock Properties #2, LLC
Rock Rolling Properties #2,LLC
c/o John Dondero
P.O. Box 739
Sun Valley, ldaho 83353
Gity of Ketchum
Matthew A. Johnson
Wm. F. Gigray, lll
WHITE PETERSON GIGRAY
& NICHOLS, P.A.
5700 East Franklin Road, Suite 200
Nampa, ldaho 83687
lndividual
Laura Midgley
231 Valley Club Drive
Hailey, ldaho 83333
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IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 18
GomCox, LLG
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite 900
P.O. Box 2900
Boise, ldaho 83701
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c rista Bearry, Legal Assistant
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 19