20211013IPC to Sierra Club 28-32.pdf

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LISA D. NORDSTROTI
Leed Counsel
[e-mail]
October 13,2021
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, ldaho 83720-007 4
Re: Case No. IPC-E-21-17
ln the Matter of ldaho Power Company's Application for Authority to
lncrease lts Rates for Electric Service to Recover Costs Associated with the
Jim Bridger Power Plant
Dear Ms. Noriyuki:
Enclosed for electronic filing, pursuant to Order No. 35058, please find ldaho
Power Company's Response to the Third Production Request of Sierra Club to ldaho
Power Company. Due to the voluminous nature of confidential and non-confidential
information provided in response to data requests in this case, the Company is posting
the attachments to these requests to the secure FTP site to allow parties to view the
requested information remotely. Because certain aftachments contain confidential
information, the FTP site is divided between confidentialand non-confidentialinformation.
The login information for the non-confidential portion of the FTP site was provided to all
parties on July 21, 2021, and the login information for the confidential portion was
provided to those parties that executed the Protective Agreement in this matter on July
21,2021.
lf you have any questions about the attached filing, please do not hesitate to
contact me.
Very truly yours,
X; l.Y/"*t..*,
Lisa D. Nordstrom
LDN:sg
Enclosures
LISA D. NORDSTROM (!SB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Aftorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MAfiER OF THE IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORITY TO INCREASE ITS RATES
FOR ELECTRIC SERVICE TO RECOVER
COSTS ASSOCIATED WITH THE JIM
BRIDGER PLANT
GASE NO. !PC-E-21-17
IDAHO POWER COMPANY'S
RESPONSE TO THE THIRD SET
OF PRODUCTION REQUESTS
OF THE SIERRA CLUB
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COMES NOW, ldaho Power Company ('ldaho Powef or "Company"), and in
response to the Third Set of Production Requests of Sierra Club to Idaho Power dated
September 22,2021, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB . 1
REQUEST NO. 28: Refer to ConfidentialAttachment 2, "Coal Environmental
Compliance Upgrade lnvestment Evaluation,'provided in response to Sierra Club 2-18.
a. Provide the workpapers that support the calculation of the cumulative
present value power costs shown in the report, in machine readable
format with cells unlocked and formulas intact.
b. Provide the source of forecasts of coal prices, natural gas prices, and
carbon compliance costs used in the analysis (if something other than
!PC) and the date each forecast was created.
c. Confirm that the analysis of the Jim Bridger units was done only for IPC's
share of the plant, and that costs and generation are for the 33 percent
share only.
d. Provide the capacity factors that correspond to the generation amounts
shown in Table A-26.
RESPONSE TO REQUEST NO. 28:
a. Please see Confidential Attachment 1 for the Excel model workbook that was
used in the preparation of the Coal Environmental Compliance Upgrade
lnvestment Evaluation (SAIC IPC Coal Upgrade lnvestment Eva Model.xlsx).
The calculation of the cumulative present value power costs for each scenario
analyzed is included on each specific tab.
b. Source forecast files detailing the coal prices, natural gas prices and carbon
compliance costs used in the analysis are provided as Confidential
Aftachments 2, 3 and 4, respectively. AII of these forecasts were developed
in late 2012.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB .2
c. The analysis of the Bridger units was done only for ldaho Power's share of
the plant, and the costs and generation are for the 33 percent share only.
d. Annual coa! plant capacity factors for the corresponding generation levels
included in Table A-26 of the Coal Environmental Upgrade lnvestment
Evaluation are provided in ConfidentialAttachment 5.
Due to the voluminous nature of confidential and non-confidential information
provided in response to previous data requests in this case, ldaho Power provided parties
access to an FTP site where copies of allconfidentialand non-confidential responses can
be found. Al! the attachments can be found in the confidential portion of that site.
The response to this Request is sponsored by Randy Henderson, PrincipalJoint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB - 3
REQUEST NO. 29: Describe how PacifiCorp and !PC, as co-owners of the Jim
Bridger plant, make decisions about investments and future operations of the plant.
RESPONSE TO REQUEST NO. 29: As described in Mr. Adelman's direct
testimony, as the operator of the plant, PacifiCorp manages the budget for Bridger, vetting
and analyzing the need for specific replacements that arise to continue reliable and safe
operation of the plant. As a Co-Owner, Idaho Power regularly participates in discussions
of the investment forecast prepared by PacifiCorp, influencing the investments ultimately
made and receives from PacifiCorp a monthly billing invoice, invoice support
documentation, and monthly invoice reconciliation. On a monthly basis, forecasts for
capital and operations and maintenance expenses ("O&M") are provided for review by
the Company. In addition, Appropriation Requests are available for projects, which
include a project description, investment reason, project number, and projected
expenditures for the project, by year. During quarterly Ownership Meetings, Idaho Power
reviews the current year O&M and capital budgets and forecasts, routinely providing the
Company the opportunity to raise any questions necessary about upcoming projects.
Under Section 5.4 of the Agreement for the Operation of the Jim Bridger Project
between ldaho Power Company and Pacific Power & Light Company dated September
22, 1969, each October PacifiCorp submits a forecast of its estimate of operating
expenses for the following calendar year, including capital projects, to ldaho Power. The
budget includes items of expenditures for replacement and repair of facilities and wil!
include a contingency for emergency repairs and replacements. The forecast is subject
to approval by the Company. Under the agreement, if the forecast for projects changes
by 10 percent or more during the calendar year, PacifiCorp will notify ldaho Power. ln
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB - 4
addition, in compliance with the Sarbanes-Oxley Act, forecasts for projects over $1 million
that change by 10 percent or more during the calendar year must be approved by both
Co-Owners.
Mid-year, the Co-Owners hold a capitalbudget reviewwhere the forecasted capital
projects expected to occur over the next three calendar years over $50,000 are discussed
in detail. ln addition, Iarge capital projects expected over the next decade are reviewed,
including unit overhauls, and the scope and need of projects are discussed. Foltowing
the meeting, plant personnel consolidates and finalizes the list of all projects, including
the scope, need and consequence foreach.
Following the quarterly Ownership Meeting that occurs in September, the plant
personnel present a formal capital and O&M expense budget for the following year as
well as a high level 1O-year forecast. The intent of the meeting is for the Co-Owners to
ask questions of the plant personnel, most often the subject matter experts, about any
details surrounding the forecasted capital investments and O&M expense.
\Mtile the Company is cognizant of the approaching end-of-life of Bridger, there
are investments necessary to ensure the plant remains operational in a safe, efficient,
and reliable mafter. ldaho Power will continue to be an active participant in discussions
regarding the capital and O&M investment forecast.
The response to this Request is sponsored by Ryan Adelman, Vice President of
Power Supply, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB - 5
REQUEST NO.30: Describe how PacifiCorp and lPC, as co-owners of the Jim
Bridger plant, made the decision to installthe SCRs at units 3 and 4.
a. Provide the dates of any meetings that were held to discuss whether or not
to proceed with the SCR investments.
i. Provide any presentations, meeting minutes, or other documents
that were referred to during any such meetings.
b. Provide the date at which a decision was made by PacifiCorp and IPC to
proceed with the SCR investments at units 3 and 4.
i. After this date, did IPC do any additional analysis of the economics
of the SCR investments at Jim Bridger units 3 and 4?
1. lf yes, provide any analysis done, the date(s) at which this
analysis was done, and a!! supporting workpapers in
machine-readable formats with ce!!s unlocked and formulas
intact.
2. lf no, why not?
RESPONSE TO REQUEST NO. 30:
a. Please see ConfidentialAttachment 1 for documentation supporting
discussions between ldaho Power and PacifiCorp about whether or not to
proceed with the Selective Catalytic Reduction ('SCR') investments on
Bridger Units 3 and 4. ldaho Power would like to point out that the date on
the letters from ldaho Power to PacifiCorp provided on PDF pages 32-36
were inadvertently dated with the year "2014" when the letters were written
and sent in"2013." !t is also important to note that ldaho Power performed
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB - 6
its own analyses to support the Company's decision to proceed with the
SCR investments on Units 3 and 4 parallelto any analyses and decisions
made by PacifiCorp. The analyses, the Coal Unit Environmental
lnvestmentAnalysis filed with the Commission on February 14,2013, as
part of the 2011 lntegrated Resource Plan ('lRP") Update in Case No. IPC-
E-11-11 and the Bridger Units 3 and 4 SCR Analysis included as part of the
Appendix C - Technical Report to the 2015 IRP filed in Case No. IPC-E-
15-19, were provided in the Company's Response to Sierra Club's Request
Nos. 18 and 19, respectively.
ldaho Power notified PacifiCorp to proceed with the SCR investments on
Units 3 and 4 after the Commission approved issuance of a Certificate of
Public Convenience and Necessity on December 2,2013, in Case No IPC-
E-13-16.
i. Yes.
1. The Company performed an additional analysis of the
Bridger SCR investments for Units 3 and 4 in the 2015
Coal Study which was part of the Appendix C - Technical
Report to the 2015 IRP filed in Case No. IPC-E-15-19,
and provided in the Company's Response to Sierra
Club's Request No. 19. Please see Confidential
Attachment2for the workpapers that support the 2015
Coal Study.
2. See (1) above.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB - 7
b
Due to the voluminous nature of confidential and non-confidential information
provided in response to previous data requests in this case, ldaho Power provided parties
access to an FTP site where copies of allconfidential and non-confidential responses can
be found. Al! the attachments can be found in the confidential portion of that site.
The response to this Request is sponsored by Ryan Adelman, Vice President of
Power Supply, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB .8
REQUEST NO. 31: Between 201 1 and 2016, was IPC aware of any analysis
done by PacifiCorp on the economics of the SCR investments at Jim Bridger units 3
and 4?
c. lf yes, how was IPC made aware of such analysis?
i. Did PacifiCorp inform IPC of its intent to perform such analysis?
ii. Did PacifiCorp share the results of any such analysis with IPC?
1. lf yes, provide the results of any such analysis done by
PacifiCorp and shared with !PC.
a. Provide both the date of any analysis and the date
that it was shared with lPC.
2. lf yes, provide any correspondence between IPC and
PacifiCorp that discusses the analysis of the SCR
investments at Jim Bridger units 3 and 4.
d. lf no, why not?
RESPONSE TO REQUEST NO. 31: Yes. ldaho Power was aware of the
analysis done by PacifiCorp as it was a part of PacifiCorp's 2011 IRP Update, filed
with the Commission on March 31,2012. Appendix A contains the coal replacement
study update which has PacifiCorp's analysis of the SCRs for Bridger Unit 3 and 4.
As discussed in the Response to Request No. 30, ldaho Power independently
analyzed installing SCRs on Units 3 and 4 in its Coal Unit Environmental lnvestment
Analysis study and the Bridger Units 3 and 4 SCR Analysis included as part of the
Appendix C - Technical Report to the 2015 lRP. ldaho Power concluded from these
analyses that the installation of SCRs on Units 3 and 4 was the least-cost least risk
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB .9
option to comply with the Environmental Protection Agency Regional Haze Rules and
the resulting \Afroming State lmplementation Plan. As co-owners, ldaho Power and
PacifiCorp were in communication and may have been aware of each other's plans to
independently evaluate SCR investments, but ldaho Power is unable to confirm the
exact date any intent was communicated or provide any associated correspondence.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB - 1O
REQUEST NO. 32: ln its evaluation of the SCR investments at Jim Bridger
units 3 and 4, did IPC calculate a "break even" price for natura! gas, meaning the
price for natural gas at which it becomes more economic to convert the units to gas
rather than install the SCRs?
a. !f yes, what was that price?
i. Provide any supporting workpapers (in machine readable format
with cells unlocked and formulas intact) that calculate a price for
natural gas at which point it becomes more economic to forego the
SCR investments.
b. lf no, why did IPC not do such a calculation?
c. ls IPC aware if PacifiCorp did such a calculation?
i. lf yes, when did IPC become aware of this calculation?
1. What was the break even price of gas calculated by PacifiCorp?
RESPONSE TO REQUEST NO. 32: ldaho Power did not determine a "break
even" price of natural gas where it becomes more economic to convert Bridger Units
3 and 4 to naturalgas. Alternatively, the Coal EnvironmentalCompliance Upgrade
lnvestment Evaluation (the 2015 Coal Study, provided as ConfidentialAttachment 2
to Sierra Club's Request No. 18) analyzed the cost of installing SCRs compared to
the cost of converting the units to natural gas or retiring the units and replacing with
Combined-Cycle Combustion Turbine ("CCCT') resources. Nine d ifferent
combinations of cost sensitivities were analyzed considering a low, planning and high
case natural gas forecast, and a no carbon, planning carbon and high carbon case
future. ln eight out of the nine cost sensitivities analyzed, the present value power
IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB - 11
costs were lowest under the SCR upgrade option for units 3 and 4. The naturalgas
conversion option resulted in the lowest present value power cost only under the low
gas, high carbon sensitivity. Retiring and replacing Bridger Units 3 and 4 with new
CCCT resources was the highest cost option under all nine sensitivities.
ldaho Power believes this analysis performed across a broad range of potential
naturalgas price forecasts and carbon futures more strongly demonstrates that
installing SCRs on Units 3 and 4 was the lowest cost option for customers rather than
simply identiffing a "break even" naturalgas price forecast.
The Company is unaware of whether or not PacifiCorp calculated a 'break even"
naturalgas price forecast in their SCR investment analysis.
The response to this Request is sponsored by Randy Henderson, PrincipalJoint
Projects Coordinator, ldaho Power Company.
IDAHO POVVER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB - 12
Respectfully submitted this 13th day of October 2021.
&,fr-ff.1,t..*,
LISA D. NORDSTROM
Attomeys for ldaho Power Company
IDAHO POVVER COMPANYS RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRACLUB.l3
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 13th day of October 2021,1 served a true and
correct copy IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF
PRODUCTION REQUESTS OF THE SIERRA CLUB upon the following named parties
by the method indicated below, and addressed to the following:
Gommission Staff
Erick Shaner
Deputy Attorney General
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg No. 8,
Suite 201-A(83714)
PO Box 83720
Boise, lD 83720-0074
lndustrial Customer of ldaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 N.6h Street
Boise, ldaho 83701
City of Boise
Ed Jewell
Boise City Attorney's Office
150 N. Capitol Blvd.
Boise, ldaho 83701
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IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB .14
Clean Energy Opportunities for ldaho, lnc.
Kelsey Jae
Law for Conscious Leadership
920 N. Clover Dr.,
Boise, ldaho 83703
Michael Heckler
Courtney \Mite
3778 Plantation River Drive, Suite 102
Boise, ID 83703
Sierra Club
Rose Monahan
Ana Boyd
2101 Webster Street, Suite 1300
Oakland, C494612
Micron Technology, lnc.
Austin Rueschhoff
Thorvald A. Nelson
Austin W. Jensen
Holland & Hart LLP
555 17th Street, Suite 3200
Denver, CO 80202
Jim Swier
8000 S. FederalWay
Boise, lD 83707
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IDAHO POWER COMPANY'S RESPONSE TO THE THIRD SET OF PRODUCTION REQUESTS OF
THE SIERRA CLUB .15