20180606IPC to REC 1-12.pdf

DONOVAN E. WALKER
Lead Counsel
dwa! [e-mail]
June 6, 2018
VIA HAND DELIVERY
Diane Hanian, Secretary
!daho Public Utilities Commission
472 W est Washington Street
Boise, ldaho 83702
Re Case No. IPC-E-18-07
Petition for Modification of 901110 Performance Band and Calculation of
O&M Charges for PURPA QFs - ldaho Power Company's Response to
Renewable Energy Coalition's First Request for Production
Dear Ms. Hanian
Enclosed for filing in the above matter are an original and three (3) copies of ldaho
Power Company's Response to Renewable Energy Coalition's First Request for
Production.
Also, enclosed are four (4) copies of non-confidential disks containing information
responsive to these production requests.
Very yours,
38ffi*@
An IDACORP Company
1221 W. ldaho St. (83702)
PO. Box 70
Boise, lD 83707
RECE IVED
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Donovan E
DEW:csb
Enclosures
DONOVAN E. WALKER (lSB No. 5921)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalker@ idahopower. com
IN THE MATTER OF THE PETITION OF
IDAHYDRO, SHOROCK HYDRO, INC.,
J.R. SIMPLOT COMPANY, AND
RENEWABLE ENERGY COALITION FOR
MODIFICATION OF THE 9O/1 1O
PERFORMANCE BAND AND
CALCULATION OF OPERATION AND
MAINTENANCE CHARGES FOR PURPA
QUALIFYING FACILITIES
CASE NO. rPC-E-18-07
IDAHO POWER COMPANY'S
RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST
REQUEST FOR PRODUCTION
RECEIVED
i0l8,lui{ -6 PFI L: l+ I
'-t t^-.LIUiil,{lssl0N
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UT!LITIES COMMISSION
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COMES NOW, ldaho Power Company ("ldaho Power" or "Comp?ny"), and in
response to Renewable Energy Coalition's First Request for Production to ldaho Power
dated May 16,2018, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 1
REQUEST FOR PRODUCTION NO. 1.1: Please provide copies of Idaho
Power's responses to all other parties requests for production of documents. This is an
ongoing request.
RESPONSE TO REQUEST FOR PRODUCTION NO. 1.1 : Copies of Idaho
Power Company's Answers and Responses to J.R. Simplot's First lnterrogatories,
Requests for Admission, and Requests for Production to ldaho Power Company and
ldaho Power Company's Response to J.R. Simplot Company's Second Set of Requests
for Production to ldaho Power Company were provided to Renewable Energy Coalition
('REC') and the other parties on May 16, 2018. As a matter of course, copies of ldaho
Power's responses to discovery requests in this case will be provided to the parties of
record.
The response to this Request is sponsored by Christa Bearry, Legal
Administrative Assistant, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 2
REQUEST FOR PRODUCTION NO. 1.2: Please provide the formula and all
inputs that ldaho Power used to arrive at the percentages listed in Tables 1 and 2 ol
ldaho Power's Third Revised Sheet No.72-17.
RESPONSE TO REQUEST FOR PRODUCTION NO. 1.2: The followi ng
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION .3
describes the inputs and formula used to develop the percentages listed in Tables 1 and
2 of ldaho Power's Third Revised Sheet No.72-17.
The Schedule 72 percentages were developed in two steps. First, the Company
used 1989 actual operations and maintenance ("O&M") and capital amounts to calculate
two rates,0.4 percent for interconnections 138 kilovolts ("kV") and above and 0.7
percent for interconnections below 138 kV. ln Order No. 24025, the ldaho Public
Utilities Commission ("Commission") approved the calculation and reasonableness of
the O&M service charge calculation. The original calculation for the below 138 kV O&M
rate (0.7 percent) is shown in Attachment 1 provided on the enclosed CD. The
workpapers supporting the calculation of the 0.4 percent rate for interconnections 138
kV and above are not available.
Second, Order No. 24025 directed the Company to submit a revised Schedule 72
tariff that included escalating O&M rates determined by a methodology proposed by
Commission Staff ("Staffl'). On February 18, 1992, ldaho Power filed the revised
Schedule 72 with the 3S-year escalating rates that are in effect on the current Schedule
72. Please see Attachment 2 provided on the enclosed CD for a copy of this filing and a
copy of Staffs methodology for escalating O&M rates as included in T. Faull's Exhibit
No. 105 in Case No. IPC-E-90-20. The workpapers applying this methodology to arrive
at the escalating rates on Tables 1 and 2 on ScheduleT2 are not available.
Also, in 2016, the Company filed Tariff Advice No. 16-04, which added a rate for
O&M charges for interconnection facilities that have been in place beyond 35 years.
The response to this Request is sponsored by Mark Annis, Senior Regulatory
Analyst, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION .4
REQUEST FOR PRODUCTION NO. 1.3: Please provide current updated values
for all inputs that ldaho Power provided in response to request no. 1.
RESPONSE TO REQUEST FOR PRODUCTION NO. 1.3:The Company
assumes that this Request relates to REC's Request for Production No. 1.2. Please
see the Excel spreadsheet provided on the enclosed CD, which includes values of all
inputs used in the Company's response to REC's Request for Production No. 1.2, using
actual financial data from 2017, or other sources as noted in the attachment.
The response to this Request is sponsored by Mark Annis, Senior Regulatory
Analyst, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 5
REQUEST FOR PRODUCTION NO. 1.4: Please refer to ldaho Power's Third
Revised Sheet No. 72-17 where ldaho Power states:
Where a Seller's interconnection will utilize lnterconnection
Facilities provided under a prior agreement(s) and the
combined term(s) of the prior agreement(s) is less than 35
years, the operation and maintenance charge related to
those existing lnterconnection Facilities for the Seller's
interconnection will be computed to include the expired term
of the prior agreement(s).
Explain what it means to "include the expired term of the prior agreement(s)" in
computing the operations and maintenance charge. Please provide the formula and all
inputs used in this computation.
RESPONSE TO REQUEST FOR PRODUCTION NO. 1.4: To "include the
expired term of the prior agreement(s)" means that the number of years under the prior
agreement are contiguous as they relate to the computation of the O&M charge under
the replacement contract. For example, if a project had an initial agreement with a 20-
year term and the project obtained a replacement contract at the expiration of the first
agreement, the O&M charge under the new contract will begin at the year-21 rate,
rather than start over at year one. This is true for any existing facilities that are
continuing in service under the replacement contract. lf additional facilities are required
to accommodate the Seller's requirements or a change in interconnection standards,
only the additiona! facilities would start at the year-one rate.
The response to this Request is sponsored by Aubrae Sloan, Accounting
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 6
REQUEST FOR PRODUCTION NO. 1.5: Please refer to ldaho Power's Third
Revised Sheet No. 72-17 where ldaho Power states
Where a Seller's interconnection will utilize Interconnection
Facilities provided under a prior agreement(s) and the
combined term(s) of the prior agreement(s) is greater than
35 years, the operation and maintenance charge related to
those existing lnterconnection Facilities for the Seller's
interconnection will be computed at the applicable levelized
rate designated at 36+ years.
Explain what it means to compute the operations and maintenance charge at the
"applicable levelized rate designated at 36+ years." Please provide the formula and all
inputs used in this computation.
RESPONSE TO REQUEST FOR PRODUCTION NO. 1.5: The "applicable
levelized rate designated at 36+ years" is 0.4 percent for 138 kV and 161 kV and 0.7
percent for below 138 kV, as identified in Tables 1 and 2 of ScheduleT2, Section 3.
These rates will be used to compute the O&M charge for all interconnections that have
been in-service for over 35 years. Please refer to the Company's response to REC's
Request for Production No. 1.2 for a discussion of the formula and inputs used in this
computation.
The response to this Request is sponsored by Aubrae Sloan, Accounting
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 7
REQUEST FOR PRODUCTION NO. 1.6: Please refer to ldaho Power's Third
Revised Sheet No. 72-17 where ldaho Power states:
The cost upon which an individual Seller's operation and
maintenance charge is based will be reduced by subsequent
Vested lnterest refunds.
a. ls the operation and maintenance charge reduced only on a going-forward
basis by subsequent Vested lnterest refunds, or does the Seller also receive a refund
for past operations and maintenance charges? lf the operation and maintenance
charge is only adjusted on a going-forward basis, please explain why.
b. Explain how the operation and maintenance charge is reduced by
subsequent Vested lnterest refunds. Please provide the formula and all inputs used in
this computation.
RESPONSE TO REQUEST FOR PRODUCTION NO. 1.6:
a. Pursuant to Schedule 72, any potential reduction in O&M charges based
upon Vested lnterest payments would be on a going-forward basis. Page 72-17 of
Schedule 72 provides the formula for determining the refund payment. These
calculated refunds are only provided at the time "when an Additional Application shares
use of those lnterconnection Facilities." When those Vested lnterest refund amounts
are determined, they would reduce the Original lnterconnection Cost of the Seller
holding the Vested lnterest by the same amount. The Seller holding the Vested lnterest
would have its O&M charge calculated based upon this new, reduced lnterconnection
Cost on a going-forward basis, and the Additional Applicant would pay the O&M charge
on the amount it paid as an Additional Applicant. See Schedule 72, p. 72-18,
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION .8
"Additional Applicants who are Sellers will pay the monthly operation and maintenance
charge on the amount they paid as an Additional Applicant."
Pursuant to Schedule 72, "The Company will provide a refund payment to each
Seller holding a Vested lnterest in Company-owned lnterconnection Facilities when an
Additional Applicant shares use of those lnterconnection Facilities." Schedule 72,
p. 72-17. O&M fees are assessed on those items identified in the Generator
lnterconnection Agreement ("GIA') as lnterconnection Facilities and not to those items
identified in the GIA as Network Upgrades, which are required for the Seller's
generation facility to be designated as a Network Resource on ldaho Power's system.
Because the Seller does not pay an O&M charge on facilities identified as Network
Upgrades, Vested lnterest refunds for Network Upgrade facilities have no impact on the
calculation of the O&M charge. The Seller only pays the O&M charge on its
I nterconnection Facilities.
b. Please see the Company's response to REC's Request for Production No.
1.6.a, above.
The response to this Request is sponsored by Aubrae Sloan, Accounting
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 9
REQUEST FOR PRODUCTION NO. 1.7: When a qualifying facility or other
electricity generator that historically operated under an interconnection agreement with
ldaho Power seeks to enter a new interconnection agreement, how does ldaho power
account for prior operations and maintenance payments under the new agreement?
RESPONSE TO REQUEST FOR PRODUCTION NO. 1.7: Please refer to the
Company's response to REC's Request for Production No. 1.4.
The response to this Request is sponsored by Aubrae Sloan, Accounting
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 1O
REQUEST FOR PRODUCTION NO. 1.8:ln IPUC Order No. 24025, Case No
IPC-E-90-20 the ldaho Commission stated
The monthly operation and maintenance (O&M) service
charges for QF interconnection facilities under ldaho
Power's proposed Schedule 72 as a percentage of actual
interconnection investment are 0.7o/o for distribution facilities
and O.4o/o for transmission facilities. The Schedule 72 O&M
percentages are based on the current average O&M costs
for ldaho Power's distribution and transmission facilities.
Fr.p.157.
a. Please explain how ldaho Power determined that 0.7o/o and 0.4o/o
represented the appropriate percentages for operations and maintenance charges for
distribution and transmission facilities respectively. Please provide the formula and all
inputs used in this computation.
b. Please explain what it means for the 0.7o/o and 0.4o/o charges to be "based
on" the current average O&M costs.
c. Please provide ldaho Power's workpapers used to calculate the O&M
charges developed in this IPUC Case No. IPC-E-90-20.
d. At the time that ldaho Power developed the 0.7o/o and 0.4% O&M service
charges, what was ldaho Power's average O&M costs for its distribution and
transmission facilities? Please also provide the total O&M costs and total capital costs
upon which that average is based and/or any other inputs ldaho Power used to arrive at
the average O&M costs.
e. What costs are covered by ldaho Power's O&M charge?
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 11
RESPONSE TO REQUEST FOR PRODUCTION NO. 1.8:
a. Please see the Company's response to REC's Request for Production No.
1.2 for the formula and inputs used to calculate the 0.7 percent used for facilities below
138 kV.
b. Actual system-wide 1998 financial data-O&M costs and plant balances-
were used to calculate the O&M rates. Please also see the Company's response to
REC's Request for Production No. 1.2.
c. Please see the Company's response and attachments to REC's Request
for Production No. 1.2.
d. ldaho Power's average O&M costs were 0.7 percent and 0.4 percent,
based on the methodology presented in Attachment 1 provided with the Company's
response to REC's Request for Production No. 1.2.
e. The costs covered by ldaho Power's O&M charge are shown in
Attachment 1 provided with the Company's response to REC's Request for Production
No. 1.2.
The response to this Request is sponsored by Mark Annis, Senior Regulatory
Analyst, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 12
REQUEST FOR PRODUCTION NO. 1.9: Please:
a. ldentify the O&M charges calculated using the total O&M costs and total
capital costs over ldaho Power's whole system, including ldaho Power-owned
distribution facilities.
b. Confirm that this includes amounts that are before and that are beyond the
point of delivery.
c. Provide a breakdown of the O&M costs and total capital costs over ldaho
Power's whole system, including ldaho Power-owned distribution facilities amounts,
between those amounts that are before and are beyond the point of delivery. If exact
amounts are not known, then please identify the exact or percentage breakdown for the
amounts before and after the point of delivery.
RESPONSE TO REQUEST FOR PRODUCTION NO. 1.9:
a. ldaho Power does not track O&M charges in such a manner. Please see
the Company's response to REC's Request for Production No. 1.2 lor a discussion of
the methodology of determining O&M charges.
b. O&M costs included amounts for facilities owned by the Company.
Facilities beyond the interconnection point are owned by the projects.
c. Please see the Company's responses to REC's Request for Production
Nos. 1.9.a and 1.9.b, above. Neither an amount nor a percentage breakdown are
available.
The response to this Request is sponsored by Mark Annis, Senior Regulatory
Analyst, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 13
REQUEST FOR PRODUCTION NO. 1.10: At present, what is ldaho Power's
current average O&M costs for its distribution and transmission facilities? Please also
provide the total O&M costs and total capital costs upon which that average is based
and/or any other inputs ldaho Power used to arrive at the average O&M costs.
RESPONSE TO REQUEST FOR PRODUCTION NO. 1.10: The Company has
not calculated the current average O&M costs for its distribution and transmission
facilities. ln an effort to provide responsive information, the Company has prepared a
calculation of current average distribution O&M costs based on the original methodology
described in the Company's response to REC's Request for Production No. 1.2 and the
2017 actual financial information provided in the Company's response to REC's
Request for Production No. 1.3. The current average O&M cost for distribution facilities
remained at 0.7 percent. Please see the Excel spreadsheet provided on the enclosed
CD for this calculation.
The response to this Request is sponsored by Mark Annis, Senior Regulatory
Analyst, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 14
REQUES@ NO. 1.11: Please provide a list of all facilities
that have a Uniform lnterconnection Agreement with ldaho Power and to which
Schedule 72 applies. For each facility please provide an accounting of the amount
collected by ldaho Power for ScheduleT2 O&M charges and the actual interconnection
O&M expenses incurred by ldaho Power over the course of the interconnection
agreement.
RESPONSE TO REQUEST PRODUCTION NO. 1.11:Please see the
Company's response to J.R. Simplot Company's Request for Production No. 16.
Please note that these collections also include O&M charges collected from contracts
that were signed prior to the implementation of ScheduleT2.
ldaho Power does not separately track actual costs incurred for O&M expenses
on Qualifying Facility ("QF') interconnections. Once these projects are placed into
service, they are deemed a part of ldaho Power's plant, the same as any other plant
that is non-customer funded, and the cost of maintaining (or replacing) this equipment is
paid for by all ldaho Power customers, with an offsetting revenue credit for the amounts
collected through the O&M charge assessed to QF interconnections.
The response to this Request is sponsored by Aubrae Sloan, Accounting
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 15
REQUEST FOR PRODUCTION NO. 1.12: For each electric utility in the Pacific
Northwest, please identify whether interconnection O&M costs are recovered through a
formula rate, actual costs incurred by the utility, or some other methodology.
RESPONSE TO REQUEST FOR PRODUGTION NO. 1.12: ldaho Power does
not know whether other electric utilities in the Pacific Northwest recover O&M costs
through a formula rate, actual costs, or some other methodology.
The response to this Request is sponsored by Mark Annis, Senior Regulatory
Analyst, ldaho Power Company.
DATED at Boise, ldaho, this 6th day of June 2018.
E.R
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 16
CERTIFICATE OF SERVICE
! HEREBY CERTIFY that on this 6th day of June 2018 ! served a true and correct
copy of IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE ENERGY
COALITION'S FIRST REQUEST FOR PRODUCTION upon the following named parties
by the method indicated below, and addressed to the following:
Commission Staff
Edith L. Pacillo
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
J. R. Simplot Company
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
ldahydro and Shorock Hydro, lnc.
C. Tom Arkoosh
ARKOOSH LAW OFFICES
802 West Bannock Street, Suite 900
P.O. Box 2900
Boise, ldaho 83701
David H. Arkoosh
Law Office of David Arkoosh
P.O. Box 2817
Boise, ldaho 83701
Renewable Energy Coalition
J. Kahle Becker
Attorney at Law
223 North 6th Street, Suite 325
Boise, ldaho 83702
X Hand Delivered
_U.S. Mail
_Overnight Mail
FAX
x Email edith. pacillo@puc. idaho.qov
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
q req@ richard sonadams. com
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXxEmail tom.arkoosh arkoosh.com
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand DeliveredX U.S. Mail
_Overnight Mail_FAXX Email [e-mail]
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 17
lrion Sanger
SANGER LAW, P.C.
1117 SW 53'd Avenue
Portland, Oregon 97215
Tamarack Energy Partnership
Michael C. Creamer
Preston N. Carter
GIVENS PURSLEY LLP
601 West Bannock Street
Boise, ldaho 83702
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
_Hand DeliveredX U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
pnc@o ivensp u rsley. com
n
Christa Bearry, Legal nt
IDAHO POWER COMPANY'S RESPONSE TO RENEWABLE
ENERGY COALITION'S FIRST REQUEST FOR PRODUCTION - 18