20190506IPC to Staff 13-18.pdf

RECEIVEE
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An IDACORP Company
JULIA A. HILTON
Senior Counsel
[e-mail]
l*ii}'t0 f,)UBLIC
'Tlt-lTlIS COMMI$Sl0N
May 6, 2019
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-19-08
Recovery of Costs Associated with North Valmy Power Plant - ldaho Power
Company's Response to the Third Production Request of the Commission
Staff
Enclosed for filing in the above matter are an original and three (3) copies of ldaho
Power Company's Response to the Third Production Request of the Commission Staff.
Very truly yours,
(
Julia A.Iton
JAH:csb
Enclosures
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
Dear Ms. Hanian:
JULIA A. HILTON (lSB No. 7740)
LISA D. NORDSTROM (!SB No. 5733)
ldaho Power Company
1221West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
ih ilton@idahopower. com
I nordstrom@ idahopower. com
RECEIVEO
:CI19 HfiY -6 Pl{ 3: lr I
Til'3ffln&'rflhl8u,o*
Attorneys for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
!N THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORIry TO INCREASE ITS RATES
FOR ELECTRIC SERVICE TO RECOVER
COSTS ASSOCIATED WITH THE NORTH
VALMY POWER PLANT
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CASE NO. IPC-E-19-08
IDAHO POWER COMPANY'S
RESPONSE TO THE THIRD
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Power" or "Comp?[y"), and in
response to the Third Production Request of the Commission Staff to ldaho Power
Company dated May 1 ,2019, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
REQUEST NO. 13: Please explain why in Exhibit No. 3, capita! expenditures
made from August 1, 2016 through December 31, 2018 for Unit 1 are 125o/o greater or
$2,034,457 above the capital expenditures made for Unit 2 during this same period?
RESPONSE TO REQUEST NO. 13: Prior to the North Va lmy power plant
("Valmy") transitioning to primarily summer operations in 2016, work performed during
annual outages to address needed repairs and capital projects was more extensive.
The last major unit outage under this operating condition occurred in 2015 for Unit 2 and
in 2016 for Unit 1. Summer operations and additional certainty around earlier unit end-
of-life have reduced the scope of annual outage work. Because the Company's request
in this case is for a prudence review of all investments made from August 1, 2016,
through December 31, 2018, it includes some capital additions for projects included in
the scope of the last major outage for Unit 1. These projects added to plant in late 2016
included replacing the generator step-up (GSU) high voltage bushings and upgrades to
the high energy piping system.
Certain capital projects specific to Unit 1 were identified as necessary through
ongoing inspection and condition assessment activities conducted during 2017 and
2018, which caused Unit 1 additions to be higher when compared to Unit 2 for this same
period. These projects were undertaken to allow for continued safe, compliant, and
reliable operation of the unit. The most significant projects on Unit 1 included upgrades
to the low NOx burners to address maintaining compliance with Mercury Air Toxics
Standards, refurbishment of the pulverizers, replacement of the failing induced fan
motor, replacement of the failed air preheater box, and upgrades to the emergency
lighting system.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
ln addition, the different ages of the units and different turbine and generator
manufacturers and systems can cause the scope of capital work necessary to support
continued safe and reliable operations to be different between the two units.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 3
REQUEST NO. 14: Please explain why the 2017 budgeted amount of $24,185
for the Valmy Unit 1 "TWIP lnsta!!" (Project No.27467689) is significantly less than the
actual cost of $274,822 shown in Exhibit No. 3.
RESPONSE TO REQUEST NO. 14: The 2017 budgetary estimate for the
Turbine Water lnduction Protection ("TWIP") system installation on Unit 1 was for the
initial engineering for inspection and review as well as minor repairs as plant personnel
believed the system was working adequately. However, the actual cost of the TWIP
system installation was higher due to the procurement and installation of a new
feedwater heater level control valve that was malfunctioning. Additionally, after an audit
of the TWIP system on Unit 1, it was determined the motor-operated extraction steam
block valves were not closing properly to ensure turbine protection, requiring installation
of moisture telltale valves (a valve in a drain area to give a visual indication if the control
valve is leaking moisture) and instrumentation per ASME TDP-1-2013 (Prevention of
Water Damage to Steam Turbines Used for Electric Power Generation: Fossil-Fueled
Plants). Finally, the Distributed Control System was upgraded to incorporate the TWIP
system to prevent water induction.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
REQUEST NO. 15: Please explain why the 2015116 budgeted amount of
$287,575 for the Valmy Unit 1 "Clarifier Recirculation Drives" (Project No. 27430166) is
significantly less than the actual cost of $541,177 shown in Exhibit No. 3.
RESPONSE TO REQUEST NO. 15: ln December 2015, four months following
receipt of the budgetary estimate from NV Energy for the project, bids received for the
recirculation drive equipment came in higher than initially budgeted. ln addition, when
work began, it was determined that the bridge structure supporting the recirculation
drive equipment was structurally compromised due to corrosion and failed welds and
had been painted with lead-based paint. The complete replacement of the bridge
structure was more cost-effective than abating the lead paint and performing repairs to
the existing bridge structure.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REOUEST OF THE COMMISSION STAFF - 5
REQUEST NO. 16: Please explain why the 2018 budgeted amount of $225,054
for the Valmy Unit 1 "Pulverizer Rebuild" (Project No. 27501 1 16) is less than the actual
cost of $319,565 shown in Exhibit No. 3.
RESPONSE TO REQUEST NO. 16: The initial budgetary scope and estimate
for the pulverizer rebuild on Unit 1 included replacement of the trunnion wheels, table
segments, pyrite plows labyrinth seals, pressure/spring frame wear plate, and
miscellaneous sea! air piping, coal shields, and vane repairs. Upon further inspection of
the condition of the overall pulverizer system in mid-2018, it became evident that
replacement and refurbishment of certain additional components were necessary to
continue safe and reliable operations. The additional items that were addressed
included refurbishment of the motor, pressure/spring frame assembly, and grinding
table yoke.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF.6
REQUEST NO. 17: Please identify all capital projects over $200,000 where
generally similar work was completed on Units 1 and 2. Where the differences in actual
costs between the two units exceed 25o/o please explain the basis for the difference.
RESPONSE TO REQUEST NO. 17: The only capital projects over $200,000
where similar work was completed on both Units 1 and 2 and the difference between
actua! costs exceeded 25 percent were the TWIP system installations. While work
performed on the units may be similar, as explained in the Company's response to the
ldaho Public Utilities Commission Staff's ("Staff') Production Request No. 13, the two
units have different turbine and boiler manufacturers and were built at different times,
resulting in cost variances for similar work performed on each unit. With respect to the
TWIP system installations, the differing equipment provided by the original
manufacturers and the best practices for preventing turbine water induction events in
place when each unit was designed resulted in differences in the equipment installed to
better comply with the more modern standard practices of the ASME TDP-1-2013
standard.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 7
REQUEST NO. 18: For each item identified above in Responses to Production
Request Nos. 14 through 17, please provide an itemized breakdown for each project
and detailed invoices showing the actual costs by component.
RESPONSE TO REQUEST NO. 18: lnvoices, and the associated support
received from NV Energy for the projects referenced in Staffs Production Request Nos.
14 through 17 are available for on-site review. This third-party information from the
Company's operating partner is the source for the monthly recording of ldaho Power's
share of Valmy construction charges. Because ldaho Power is not the operating
partner at Valmy, it does not possess the detailed charge breakdown showing the actual
cost of these projects by component. ldaho Power gains comfort regarding the validity
and accuracy of the Valmy capital and operating charges it is billed by performing
monitoring and control activities and conducting annual billing reviews/audits. The
Valmy Billing Review Audit reports and workpapers for the years 2016 and 2017 are
available for review at the Company's corporate headquarters. Please contact Tami
White at [phone] or Camilla McClusky at [phone] to schedule a time to
review the requested information.
The response to this Request is sponsored by Randy Henderson, Finance Team
Leader ll, ldaho Power Company.
DATED at Boise, Idaho, this 6th day of May 2019.
J A.H N
Attorney
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF. S
ldaho Power Company
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 6th day of May 2019 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:
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD
PRODUCTION REQUEST OF THE COMMISSION STAFF - 9
Commission Staff
Edward Jewell
Deputy Attorney General
ldaho Public Utilities Commission
472 West Washington Street (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
X Hand Delivered
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_FAXX Email edward ewel idaho.qov
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Christa Bearry, Legal Ass
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North 6th Street
Boise, ldaho 83702
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