20170825IPC to Staff 25-35.pdf

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An IDACORP CompanY
LISA D. NORDSTROM
Lead Counsel
I [e-mail]
August 25,2017
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho Public Utilitles Commission
47 2 W est Washington Street
Boise, ldaho 83702
Re Case No. IPC-E-16-32
Hells Canyon Complex Relicensing Costs through 2015 - 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 original and three (3) copies of
ldaho Power Company's Response to the Third Production Request of the Commission
Staff.
Also enclosed are four (4) copies each of non-confidential and confidential disks
containing information responsive to Staffs production requests. Please handle the
confidential information in accordance with the Protective Agreement executed in this
matter.
Very truly yours,
Xu-0.flyrt t"rr.,-:
Lisa D. Nordstrom
LDN:kkt
Enclosures
LISA D. NORDSTROM (lSB No. 5733)
Idaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83701
Telephone: [phone]
Facsimile: [phone]
I no rd stro m @ ida hopowe r. co m
!N THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A
DETERMINATION OF HELLS CANYON
RELICENSING COSTS THROUGH 2015
AS PRUDENTLY INCURRED
' r i - f 1 l- r tJ , t-',r j:1 1i/E i)
; i-5 P,'i lr: 22
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILIT!ES COMMISSION
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CASE NO. !PC-E-16-32
IDAHO POWER COMPANY'S
RESPONSE TO THE THIRD
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Powe/' or "Company"), and in
response to the Third Production Request of the Commission Staff to Idaho Power
dated August 4,2017, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
REQUEST NO. 25: Has a contingency plan been formed in the event that the
re-licensing impasse between stakeholders, states, and agencies cannot be resolved?
lf so, please describe. lf not, please explain why not.
RESPONSE TO REQUEST NO. 25: No. The Federal Energy Regulatory
Commission ("FERC") cannot move ahead with issuance of a new Hells Canyon
Complex ("HCC") license without receiving Clean Water Act S 401 water certification ("$
401 certification") from ldaho and Oregon that the project meets water quality
standards. There are no readily available, altemative provisions for addressing this
impasse. The impasse is largely related to Oregon and ldaho's differing positions on
fish passage and whether it belongs in a $ 401 certification. ldaho Govemor Otter has
engaged with Oregon Govemor Brown and the two states are actively attempting to
work out a solution. ln the absence of a state-sponsored solution, ldaho Power wil!
evaluate what legal and other govemmental solutions may be available to facilitate
resolution and eventual issuance of a new license.
The response to this Request is sponsored by Brett Dumas, Environmental
Affairs Director, and Sarah Higer, Legal Counse!, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
REQUEST NO. 26: Please provide the projected timeline and milestones for the
completion of Hells Canyon Complex re-licensingby 2021. Tatum Direct at 10.
RESPONSE TO REQUEST NO. 26: As it has done consistently since 2003,
ldaho Power withdrew and resubmitted its $ 401 certification application with the
Oregon and ldaho Departments of Environmental Quality in April 2017. This action
results in the estimate for receiving a new license for the HCC from FERC in 2021 at the
earliest. Key milestones in this process include the following with the estimated
completion date:
. Receipt of $ 401 certifications from both states - April 2018
o The potential for a supplemental environmental analysis from FERC under the
National Environmental Policy Act ('NEPA") - May 2018 through July 2020
o lssuance of a Biological Opinion for endangered species under the authorization
of the United States Fish and Wildlife Service -February 2021
. lssuance of a Biological Opinion for endangered species under the authorization
of the Department of Commerce National Oceanic and Atmospheric
Administration's Nationa! Marine Fisheries Service -February 2021
o FERC develops the new HCC license and conditions - March 2021 through
December 2021, and issues new license
The response to this Request is sponsored by Brett Dumas, Environmental
Affairs Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 3
REQUEST NO. 27: Please provide an update on the status of the CWA 5401
certification applications filed with ldaho and Oregon in July of 2016. Randolph Direct at
31.
RESPONSE TO REQUEST NO. 27: In the 2016 S 401 certification application
process, Oregon required ldaho Power to comply with fish passage and reintroduction
conditions. ldaho law, however, specifically forbids ldaho Power from reintroducing any
fish into ldaho's waters without consultation with and express approval of the State of
ldaho. ln April 2017, the governors of Oregon and ldaho jointly requested that ldaho
Power withdraw and resubmit its S 401 certification applications in both states to allow
the states additional time to negotiate a potentia! resolution of the disputed issues. As it
does each year, ldaho Power subsequently withdrew its $ 401 certification applications
in both states. ln the joint request, the governors of Oregon and ldaho stated that they
expect the states to conclude discussions by September 2017. ldaho Power
resubmitted the applications in April 2017, and if approved, ldaho Power expects the
states to issue their $ 401 certifications in 2018.
The response to this Request is sponsored by Brett Dumas, Environmental
Affairs Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
REQUEST NO. 28: Please provide a detailed account of costs and activities,
referencing work order numbers, associated with the Reservoir Temperature control
structures. Randolph Direct at 33. Please explain why these expenses were necessary
and what the project accomplished.
RESPONSE TO REQUEST NO. 28: ldaho Power has not incuned costs
associated with a reservoir temperature control structure itself. Costs associated with
reservoir temperature control structure studies were not charged to unique work orders
and therefore cannot be consolidated and detailed. As explained on page 23 of Mr.
Randolph's direct testimony, costs incurred between 1997 and July 2003, can be
summarized ln the following categories: Aesthetic, Aquatic, Archaeological/Cultural,
Recreation, Admin and Legal, Terrestrial/Botanical, Wildlife, and Allowance for Funds
Used During Construction ("AFUDC"). The majority of costs associated with reservoir
temperature control structure studies would fall in the Aquatic or Admin and Legal
categories. Costs incurred between August 2OO3 and December 31, 2015, can be
found on page 61 of Mr. Randolph's testimony. Because several issues were being
addressed simultaneously and projects undertaken during this period have broad
application to the overall relicensing effort, the costs are summarized by year and
detailed cost element. Following is an explanation of activities and temperature
structures evaluated along with the main uses of the information in the relicensing
process.
Activities associated with reservoir control structure evaluations on Brownlee
Reservoir included engineering evaluations of cost, feasibility, effectiveness, and
environmental effects of a range of structures including a selective withdraw tower,
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 5
intake channel weirs and gates, reservoir curtain, bubble upwelling system, and a
reservoir pump system. Activities included developing conceptual designs, feasibility
level construction and operational costs, numeric modeling of temperature, and other
environmental effects within the reservoir and downstream.
Evaluations were conducted and were ongoing at varying levels of effort over the
past 15 years through the licensing process. lnitial evaluations were required by FERC
in an Additional lnformation Request (WQ-2), issued by FERC in May 2004, to support
the Company's license application. Further evaluations were necessary as resource
agency consultation continued in support of the Oregon and ldaho S 401 certifications
and FERC's NEPA process. ln addition, the activities supported ldaho Powe/s
September 24,2010, S 401 certification applications to Oregon and ldaho, in which the
Company proposed a pump and pipe system as a temperature mitigation measure.
The information also supported ldaho Powe/s proposal to develop and implement a
temperature management plan that was adopted by FERC staff in the Environmental
lmpact Statement ('EIS") process. Specifically, in its Fina! ElS, FERC discusses issues
and conclusions relative to temperature control options (pages 647 - 649).
The response to this Request is sponsored by Ralph Myers, Environmenta!
Supervisor, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF.6
REQUEST NO. 29: Please provide the Company's policy regarding
determination of Hells Canyon Complex settlement conditions and monetary
expenditures.
RESPONSE TO REQUEST NO. 29: ldaho Power does not have a policy
regarding settlement negotiations. However, the Company's strategy in regards to HCC
relicensing settlement activities is to attain a Iicense in a least-cost, least-risk manner.
During the course of the relicensing process, the Company has engaged in numerous
settlement discussions related to various relicensing issues with federal and state
resource agencies, lndian Tribes, and relicensing stakeholderc. When evaluating HCC
relicensing settlement opportunities, the Company considers, among other things, the
risks associated with resolving the issue(s) through the relicensing process in the
absence of a settlement, the relative costs of settling versus not settling, and the
potential for expediting the relicensing process and achieving a level of certainty as to
the Company's obligations under the new license. These considerations are inter-
dependent and the weight given to any one consideration largely depends on the
specific issues to be resolved through the settlement.
With regard to monetary expenditures, the relicensing of a hydroelectric project
under the Federal Power Act ('FPA") is a data driven process. Under the FPA, FERC is
to determine the impact or effect of the project on environmental, fish and wildlife,
cultural, recreational, and related resources and require that the applicant (the
Company) implement protection, mitigation, and enhancement ("PM&E") measures to
address those impacts. As part of the process, federal and state resource agencies,
lndian Tribes, and relicensing stakeholders submit comments and recommendations to
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
FERC on purported impacts of the project and the nature and level of PM&Es that they
consider necessary to address those impacts. ln developing responses to those
comments/recommendations, and to ensure that the Company is not required to
address impacts not associated with the project, or implement measures in excess of
what is required to address an impact, the Company must conduct studies, data
gathering, and analysis and file that information with FERC. Monetary expenditures
associated with relicensing are largely associated with this process. ln the absence of
this information, there is significant potential for the Company being required to
implement PM&Es to address impacts not caused by or associated with the project.
The response to this Request is sponsored by James Tucker, Lead Counsel,
ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 8
REQUEST NO. 30: Please provide the term sheets for the 2003 County of
Baker, Oregon Settlement Agreement, the 2OO4 lnterim Settlement Agreement, and
proposed 2013 comprehensive seftlement agreement. Randolph Direct a|44.
RESPONSE TO REQUEST NO. 30: Please see the 2003 Baker County
Settlement Agreement, the 2004lnterim Settlement Agreement, and the proposed 2013
comprehensive settlement agreement provided as Attachments 1, 2, and confidential
Attachment 3, respectively, on the enclosed non-confidential and confidential CDs.
The confidentia! CD will be provided to those parties that have executed the
Protective Agreement in this matter.
The response to this Request is sponsored by Brett Dumas, Environmental
Affairs Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 9
REQUEST NO. 31: Please provide a list of expenses and description of each
expense, referencing work order numbers, associated with settlement activities
performed with the County of Baker, Oregon. Randolph Direct at 45. Please explain
why these expenses were necessary and what the project accomplished.
RESPONSE TO REQUEST NO. 31: Please see the list of expenditures
referencing work order numbers associated with the Baker County Settlement
Agreement provided on the enclosed non-confidentia! CD.
The expenses summarized in Attachment 1 were necessary to meet the
provision of the 2003 Baker County Settlement Agreement. Specifically, these
expenses have gone towards completing the following projects:
. lmplementation of the lifter and sanitation program, including: placement and
maintenance of dumpsters and portable toilets along the Snake River and
Homestead county roads, road signage to direct the public to these facilities,
public relations campaign called "Lend a Hand - Care for the Land" to curb
littering, and coordination of bi-annual trash pickup days along the Snake River
and Homestead County roads, which include use of State of Oregon correctional
inmates.
o Annual payments to the Baker County Weed Department to support weed
abatement projects in the HCC.
o Funding of several road improvement projects completed by Baker County on the
Snake River Road, including augmentation of crushed gravel every 5 years.
o Idaho Power maintenance of a 6.4 mile portion of Homestead Road.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1O
. Annual funding of maintenance for the Hewitt County and Holcomb Gounty parks
along the Powder River pool of Brownlee Reservoir.
. Siting and permitting costs associated with a low elevation boat ramp on
Brownlee Reservoir in Baker County in the vicinity of Swedes Landing.
Construction of this project was completed in 2017 with non-relicensing funds.
. Annual reimbursement to Baker County for enhanced law enforcement, through
one additional deputy sheriff, to patrol within the vicinity of the HCC, including
labor, vehicle, and supply costs.
The response to this Request is sponsored by Brett Dumas, Environmental
Affairs Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 11
REQUEST NO. 32: Please provide a detailed account of costs and activities,
referencing work order numbers, associated with the Surface Collector project.
Randolph Direct at 52. Please explain why these expenses were necessary and what
the project accomplished.
RESPONSE TO REQUEST NO. 32: Expenditures related to the Surface
Collector project were charged to work order 27368563. Please see the detailed
account of costs and activities provided on the enclosed confidential CD. The Surface
Collector evaluation was necessary to explore the cost and feasibility of a combined
temperature withdrawal structure and fish passage structure on the Hells Canyon Dam
as a means of meeting S 401 certification and meeting fish passage requirements
associated with a bull trout Section 18 Fishway Prescription and potential passage of
anadromous fish. The evaluation of the feasibility of the Surface Collector pQect had
four major components: (1) engineering design/feasibility, (2) collection of reservoir
temperature information, (3) monitoring movements of fish using acoustic telemetry
techniques, and (4) modelling reservoir hydrodynamics relative to fish movements and
water temperature and the function of a collector. The Company gained an
understanding of the structure from an engineering feasibility perspective, as wel! as
from the perspective of passing fish and achieving temperature targets. However, the
project was not pursued further after methylmercury concerns were identified relative to
meeting the water temperature goals.
The confidential CD will be provided to those parties that have executed the
Protective Agreement in this matter.
The response to this Request is sponsored by Brett Dumas, Environmental
Affairs Director, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 12
REQUEST NO. 33: Please provide a list of expenses and description for each
expense associated with protection, mitigation, and enhancement (PM&E) measures.
Please reference applicable work order numbers. Please explain why these expenses
were necessary and what the project accomplished.
RESPONSE TO REQUEST NO. 33: lt is important to note that only costs
associated with the development of the proposed PM&E measures have been included
as relicensing costs. Costs associated with implementing the proposed PM&E
measures will be incuned after the issuance of the FERC license, and therefore, are not
part of this prudence request. PM&E measures, and expected implementation costs,
were proposed by ldaho Power in the draft and final license applications and, if adopted
by FERC, wil! become part of the license articles included within the new license issued
by FERC. After license issuance, these costs become associated with license
compliance rather than relicensing. No compliance costs, including early
implementation of anticipated Iicense compliance measures, have been charged to
relicensing work orders and included as part of the Company's prudence request.
Development of PM&E measures during the relicensing process was embedded
throughout the process, including in the collaborative team discussions and each
individual resource work group. Once resource impact studies were completed, the
results and ldaho Powe/s proposed mitigation and enhancement measures were
reviewed within the resource work groups. The Company took the information leamed
through those consultations and developed the PM&Es that were included in the draft
and final license applications. The estimated costs for implementing each PM&E is
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 13
summarized in the final license application, but the cost of developing the PM&E
measures is embedded throughout the relicensing work orders.
The response to this Request is sponsored by Brett Dumas, Environmental
Affairs Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 14
REQUEST NO. 34: Please provide the Agency Comments listed in Randolph
Exhibit No. 3.
RESPONSE TO REQUEST NO. 34: The Agency Comments listed in Randolph
Exhibit 3 can be found in the Forma! Consultation Package, Section lll, First Stage
Consultation. An index of the comments can be found at
https://www.idahopower.com/pdfs/Relicensinq/hellscanvon/hellspdfs/TechAppendices/Consultat
ion/lll FirstStaqe/04a AoencvFCPCmnts/lndex.pdf. Click on the correspondence to view
the individual comments.
The response to this Request is sponsored by Brett Dumas, Environmenta!
Affairs Director, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCT]ON REQUEST OF THE COMMISSION STAFF - 15
REQUEST NO. 35: For each of the following topics and sub-topics
section a, please provide the information requested in b, c, d, and e:
a. Topics
i. Aquatics:
1. Bull Trout
2. Salmon/Steelhead
3. Resident Fish
4. Mollusks
5. Sturgeon
6. Hatcheries
7. Passage/Reintroduction
ii. Cultural Resources
iii. Project Operations
iv. Recreation
v. Sediment Depletion
vi. Terrestrial-Botanical Resources
vii. Water Quality
1. Dissolved Oxygen
2. Total Dissolved Gas
3. Water Temperature (CWA 5-401)
b. Please describe the issue raised by stakeholders.
c. ldentify the study or studies used to investigate the issue.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 16
listed in
d. Provide and summanze the agreement reached between the Company
and stakeholderc that resolved the issue.
e. Provide the total expense incuned on each topic, including the costs of all
studies and mitigation measures. PIease provide the work order number, vendor, date,
amount, and brief description.
RESPONSE TO REQUEST NO. 35:
b. Please see Section Vlll of the Formal Consultation Package for a list of
the issues raised by stakeholders which can be found at
https://www.idahopower.com/pdfs/AboutUs/RatesRegulatory/Formal-Consultation-
Package.pdf. Section Vlll is segmented into the following categories: Aquatic
(fisheries, water quality, and sediment depletion), Wildlife, Botanical, Historica! and
Archeological (Cultural Resources), Other Tenestrial, Recreation, Land Management,
and Aesthetics. Project Operations issues are spread throughout all categories. Each
section under Section Vlll categorizes stakeholder issues and identifies the problem
statement and the study necessary to resolve the stakeholder issue. The studies were
provided in the Company's Response to the Idaho Public Utilities Commission Staffs
("Staff') Request No. 14.
c. Please see the response to b. above.
d. Please see Exhibit E of the final license application for a summary of the
agreement reached between the Company and stakeholders to resolve the issues,
including details of the analyses conducted, measures recommended by the agencies,
and ldaho Poweds existing and proposed measures, all of which represent the
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 17
culmination of the resource advisory group meetings, relicensing studies, and analyses.
(https://www.idahopower.com/pdfs/Relicensinq/hellscanyon/hellspdfs/hc licenseapp.pdf).
e. Please see page 23 of Mr. Randolph's direct testimony for a summary of
the costs incurred between 1997 and July 2003, by the following categories: Aesthetic,
Aquatic, Archaeological/Cultural, Recreation, Admin and Legal, Tenestria!/Botanical,
Wildlife, and AFUDC. Costs incurred between August 2003, and December 31,2015,
can be found on page 61 of Mr. Randolph's testimony. However, as noted, because
several issues were being addressed simultaneously and projects undertaken during
this period have broad application to the overall relicensing effort, the costs are
summarized by year and detailed cost element. As described in the Company's
Response to Staffs Request No. 33, there are no costs associated with the
implementation of mitigation measures included in the Company's request at this time
as implementation of mitigation measures is not considered a relicensing cost, but
rather a compliance cost. The confidential transaction detail file, provided in the
Company's Response to Staff's Request No. 1, includes a column titled Relicensing
Category, allowing alltransactions to be sorted into desired categories.
The response to this Request is sponsored by Brett Dumas, Environmental
Affairs Director and Randy Henderson, Finance Team Leader ll, ldaho Power
Company.
DATED at Boise, ldaho, this 25h day of August 2017.
LISA
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 18
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 25h day of August 2017 I served a true and
conect 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
Camille Christen
Brandon Karpen
Deputy Attomeys General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
lndustrial Customers of ldaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27h Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
ldaho lrrigation Pumpers Association, lnc.
Eric L. Olsen
ECHO HAWK & OLSEN, PLLC
505 Pershing Avenue, Suite 100
P.O. Box 6119
Pocatello, ldaho 83205
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brando n. karpen@puc. idaho. qov
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_FAXX Email peter@richardsonadams,colll
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Anthony Yankel
12700 Lake Avenue, Unit 2505
Lakewood, Ohio 44107
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IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 19
T
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Assistant
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