20200721IPC to Staff 1-11.pdf

LISA D. NORDSTROM
Lead Counsel
[e-mail]
July 21, 2020
VIA ELECTRONIC FILING
Diane Hanian, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-20-25 - Transfer of Certain Assets Associated with the Hemingway
Substation - Idaho Power Company’s Response to the First Production Request of
the Commission Staff to Idaho Power Company
Dear Ms. Hanian:
Attached for electronic filing in the above matter is Idaho Power Company’s
Response to the First Production Request of the Commission Staff to Idaho Power
Company.
If you have any questions about the enclosed documents, please do not hesitate to
contact me.
Very truly yours,
Lisa D. Nordstrom
LDN:sdh
Attachment
RECEIVED
2020 July 21, PM 3:24
IDAHO PUBLIC
UTILITIES COMMISSION
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 1
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR AN
ORDER APPROVING THE TRANSFER
OF CERTAIN ASSETS ASSOCIATED
WITH THE HEMINGWAY SUBSTATION.
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CASE NO. IPC-E-20-25
IDAHO POWER COMPANY’S
RESPOSNE TO THE FIRST
PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO
POWER COMPANY
COMES NOW, Idaho Power Company (“Idaho Power” or “Company”), and in
response to the First Production Request of the Commission Staff to Idaho Power
Company dated June 30, 2020, herewith submits the following information:
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 2
REQUEST NO. 1: Please provide an explanation and any supporting evidence
for the following (Idaho Code § 61-328 (3)):
a. That the transaction is consistent with the public interest;
b. That the cost and rates for supplying service will not be increased by reason
of such transaction.
RESPONSE TO REQUEST NO. 1:
a. As explained in the Company’s Application, following installation of Idaho
Power’s Hemingway Substation access road, residential property owners
began using the road to access their properties rather than the existing Wilson
Cemetery Road. Eventually the Wilson Cemetery Road became overgrown
from non-use and impassable for vehicles. In July 2019, Owyhee County
(“County”) denied a building permit for one of the residents along the south of
Wilson Cemetery Road because the resident was not able to show public
access to the property. To re-establish legal access for the land owners, the
Company conveyed 1.91 acres of land to the County. This gave the County
ownership of the access road and also the roadway to reach the residents
south of Wilson Cemetery Road.
The conveyance of the land provided several benefits to Idaho Power and
its customers, consistent with public interest: (1) the Company would continue
to have the right to use the access road without having the obligation to
maintain the road, (2) Idaho Power reduced the liability that accompanied
ownership of the portion of the access road conveyed to the County, and (3)
the 1.91 acres conveyed was encumbered by the Wilson Cemetery Road and
therefore limited for any other uses by the Company. In addition, the
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 3
transaction resolved potential litigation and did not impact Idaho Power’s ability
to continue to provide safe, efficient, and reliable electric service to customers.
b. The conveyance of the land was a reasonable solution to avoid incurring further
costs to mitigate access issues, ultimately resulting in little to no financial
impact to Idaho Power and its customers. As can be seen in the journal entries
provided as Attachment No. 3 to the Application, the $26,488 loss associated
with the land was recorded to FERC Account 421.2, Loss on the Disposition of
Property, in February 2020, and the $41,394 in site improvements were
removed from FERC Account 101, Electric Plant-in-Service with a
corresponding offset to FERC Account 108, Accumulated Reserve.
The response to this Request is sponsored by Matt Larkin, Revenue Requirement
Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 4
REQUEST NO. 2: Please provide a list of all assets, including land and
improvements, included in the transfer by ID, year in service, installed valuation, and
current book value.
RESPONSE TO REQUEST NO. 2: Please see the attachment to DR 2.
The response to this Request is sponsored by Donna Wheeler, Finance Team
Leader, Idaho Power Company.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 5
REQUEST NO. 3: Are additional transfers planned in the general vicinity of this
proposed transfer? If so, please provide an explanation of potential transfers, location,
and when they may occur.
RESPONSE TO REQUEST NO. 3: No. There are no disposals or transfers
anticipated or planned for the remaining Hemingway Substation lands.
The response to this Request is sponsored by Ivan Sim, Corporate Services
Director, Idaho Power Company.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 6
REQUEST NO. 4: Please explain why the Company chose to grant the 1.91 Acre
Parcel to the County and did not seek financial compensation for this transfer.
RESPONSE TO REQUEST NO. 4: At the time of construction of the Hemingway
Substation, the Company did not proceed through a formal County process to vacate and
relocate the old Wilson Cemetery Road as the new Idaho Power access road. When
contacted by the residents along the south of Wilson Cemetery Road, the County took
the position that the residents had no legal access, making the determination that the
road bed had been relocated. Idaho Power did not seek financial compensation for the
conveyance because, in addition to the transaction being consistent with the public
interest and resolving potential litigation as explained in the Company’s Response to
Request Nos. 1 and 6, the conveyance was the only available resolution to re-establish
legal access for the land owners.
The response to this Request is sponsored by Ivan Sim, Corporate Services
Director, Idaho Power Company.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 7
REQUEST NO. 5: Please provide any projected or budgeted maintenance or tax
expense for the access road and roadway.
RESPONSE TO REQUEST NO. 5: Idaho Power historically budgeted
approximately $2,700 for grading and dust abatement as maintenance on the entire
length of the access road, up to the Hemingway substation fence. Maintenance on the is
driven by weather and traffic therefore the number of trips varies year to year. Upon
conveyance of the 1.91 acre parcel to the County, the Company only has the
responsibility of maintaining the access road beyond the cattle guard, the point at which
Wilson Cemetery Road veers northwest and continues to the cemetery, into the
Hemingway Substation, or approximately half the distance Idaho Power previously
maintained. In 2019, the Company had budgeted $2,705 for maintenance of the access
road in 2020 and estimates a reduction in property tax expense of approximately $292 as
a result of the 1.91 acre conveyance.
The response to this Request is sponsored by Ivan Sim, Corporate Services
Director, Idaho Power Company.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 8
REQUEST NO. 6: Please provide any financial projection, analysis, or similar
documentation or narrative that quantifies the “liability that accompanies ownership of
access roads used by the public” that is stated in p. 3 of the Application.
RESPONSE TO REQUEST NO. 6: The Company recognized the liability
exposure of owning the access road used by members of the public and private land
owners living adjacent to the Idaho Power land. As the owner and maintainer of the road,
Idaho Power could be sued, with increased liability along the portion of the road used
most by the public, or that portion conveyed to the County. In addition, the County would
no longer issue building permits to the private property owners south of the Idaho Power
property until a formal use was granted to those individuals who had been land locked by
the construction of the subject road. Idaho Power concluded that, from a cost and liability
standpoint, it would be preferable for the County to take ownership of and maintenance
responsibility for the access road and as good will to the private property owners who
were negatively impacted by Idaho Power’s ownership of the access road north of Night
Hawk Lane.
The response to this Request is sponsored by Ivan Sim, Corporate Services
Director, Idaho Power Company.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 9
REQUEST NO. 7: Please provide a legible copy of the Record of Survey
included in Attachment No. 2.
RESPONSE TO REQUEST NO. 7: Please see the attached Record of Survey.
The response to this Request is sponsored by Ivan Sim, Corporate Services
Director, Idaho Power Company.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 10
REQUEST NO. 8: Will the public still be using the Company’s access road that is
outside of the transferred property area to access the Wilson Cemetery or other adjacent
parcels? If so, how does the Company plan to limit liability from the public’s use of the
access road and who will maintain the portion used by the public? Please describe
barriers or signage that will be installed to indicate the Company’s boundaries.
RESPONSE TO REQUEST NO. 8: Yes, the public still uses a portion of the
Company’s access road outside the transferred property area to access Wilson
Cemetery. As shown in the site layout included as Attachment 1 to the Application, the
Company’s access road crosses through the transferred property and then continues
approximately 500 feet over Idaho Power property to a point where a “spur road” branches
off from the access road to extend north to the Wilson Cemetery property. Idaho Power
allows the public to use this 500-foot segment of the access road to reach Wilson
Cemetery because the old Wilson Cemetery Road was located in the same general
location and the Company did not want to block access to the cemetery.
The Owyhee County Road & Bridge Department maintains the 500-foot segment
of the access road. Idaho Power has placed a cattle guard across the access road just
beyond the spur road turn off to discourage further public use of the access road from this
point on to the Hemingway Substation. Idaho Power did not convey this portion of the
access road to Owyhee County because there was no issue of public access over this
road. By contrast, there was a serious issue of public access over the Idaho Power
access road crossing the transferred property area; specifically, the County determined
that adjacent homeowners did not have public access over this road and thus could not
obtain building permits from the County for their homes.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 11
Idaho Power will install signage for the 500-foot segment of the access road
heading to Wilson Cemetery identifying drivers are now entering Company property. The
signs will indicate the public is using the road at their own risk, must stay on the main
road, and that no off-road use of any kind is allowed.
The response to this Request is sponsored by Ivan Sim, Corporate Services
Director, Idaho Power Company.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 12
REQUEST NO. 9: Please respond to the following related to Wilson Cemetery
Road:
a. Who was responsible for the maintenance of Wilson Cemetery Road prior to
the transfer?
b. Why was Wilson Cemetery Road not maintained prior to the transfer?
c. Who will be responsible for the maintenance of the access road identified as
Wilson Cemetery Road after the transfer, including sections of the road not
included in the transfer? Please provide all applicable documents or
agreements between the Company and Owyhee County regarding future
maintenance of the road.
RESPONSE TO REQUEST NO. 9:
a. The County was responsible for maintenance of Wilson Cemetery Road prior
to the transfer.
b. Idaho Power does not know why the County did not maintain Wilson Cemetery
Road prior to the transfer.
c. Please see the Company’s Response to Request Nos. 5 and 8 for detailed
maintenance responsibilities of the access road. There is no formal
documentation describing the access road maintenance agreement between
the County and Idaho Power.
The response to this Request is sponsored by Ivan Sim, Corporate Services
Director, Idaho Power Company.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 13
REQUEST NO. 10: Please explain why the Company did not submit an approval
application for the transfer of property prior to completing the transfer.
RESPONSE TO REQUEST NO. 10: Idaho Power acknowledges the Application
in this case is not timely and will endeavor to improve the timelines of future filings. In
this circumstance, there was confusion internally over whether or not the 1.91-acre parcel
was considered property used in the generation, transmission or distribution of electric
power and energy to the public, requiring pre-approval from the Commission. Based on
the Company’s experience with this transaction, it is developing and implementing control
measures to ensure future property transactions are reviewed for filing requirements in
advance of any such transactions occurring to ensure that all regulatory requirements are
met.
The response to this Request is sponsored by Matt Larkin, Revenue Requirement
Senior Manager, Idaho Power Company.
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 14
REQUEST NO. 11: Please explain the Company’s plan if the road segment on
the transferred property is not maintained to a high enough standard for the Company to
use for access to the Hemingway Substation site.
RESPONSE TO REQUEST NO. 11: Idaho Power has maintained positive
relationships with the County Commissioners throughout the conveyance process, with
both parties working together to find a solution for the landlocked landowners. In the
unlikely event the portion of the access road conveyed to the County is not maintained to
the Company’s standard, the County will be contacted, and a solution found.
The response to this Request is sponsored by Ivan Sim, Corporate Services
Director, Idaho Power Company.
DATED at Boise, Idaho, this 21st day of July 2020.
LISA D. NORDSTROM
Attorney for Idaho Power Company
IDAHO POWER COMPANY’S RESPOSNE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 15
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 21st day of July 2020 I served a true and correct
copy of foregoing IDAHO POWER CMPANY’S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF THE COMMISION STAFF TO IDAHO POWER
CMOPANY upon the following named parties by the method indicated below, and
addressed to the following:
Commission Staff
Dayn Hardie
Deputy Attorney General
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email [e-mail]
Sandra Holmes,
Legal Administrative Assistant
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-20-25
IDAHO POWER COMPANY
ATTACHMENT TO DR2
Idaho Power Company
IPC-E-20-25
Staff's DR 2
Asset ID
Year In
Service
Plant
Account
Property
Unit No. Asset / Property Unit Description Installed Cost Retired Cost
Remaining
Cost
000001535041 2008 35011 50010101 LAND OWNED IN FEE TS 1,543,953.49 (26,488.38)1,517,465.11 Note 1
000001697553 2010 35200 52100100 SITE PREPARATION & IMPROVEMENT 3,841,559.22 (41,394.00)3,800,165.22
Note 1: The land asset (ID 000001535041) had an original quantity of 111.33 acres. Following the transfer of 1.91 acres of land to Owyhee
County, there are 109.42 acres remaining associated with the land asset.
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-20-25
IDAHO POWER COMPANY
ATTACHMENT TO DR7