HomeMy WebLinkAbout20211203IPC to Staff Supplemental 3.pdfDONOVAN WALKER
Lead Counsel
dwalker@idahopower.com
December 3, 2021
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-21-25
In the Matter of the Application of Idaho Power Company’s Petition for
Approval of a Customer Surcharge and Modified Line Route Configuration
for Construction of a New 138 KV Transmission Line in the Wood River
Valley
Dear Ms. Noriyuki:
Enclosed for electronic filing, please find Idaho Power Company’s Supplemental
Response to the First Production Request of the Commission Staff in the above matter.
Please feel free to contact me directly with any questions you might have about this filing.
Very truly yours,
Donovan E. Walker
DEW:cld
Enclosures
RECEIVED
2021 DEC -3 PM 12:01
IDAHO PUBLIC
UTILITIES COMMISSION
IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF – 1
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: (208) 388-5317
Facsimile: (208) 388-6936
dwalker@idahopower.com
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY’S PETITION
FOR APPROVAL OF A CUSTOMER
SURCHARGE AND MODIFIED LINE
ROUTE CONFIGURATION FOR
CONSTRUCTION OF THE NEW 138 KV
TRANSMISSION LINE IN THE WOOD
RIVER VALEY
)
)
)
)
)
)
)
)
)
CASE NO. IPC-E-21-25
IDAHO POWER COMPANY’S
SUPPLEMENTAL RESPONSE
TO THE FIRST PRODUCTION
REQUEST OF THE
COMMISSION STAFF
COMES NOW, Idaho Power Company (“Idaho Power” or “Company”),
suppements its response to the First Production Request of the Commission Staff to
Idaho Power Company dated September 30, 2021, herewith submits the following
information:
IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF – 2
REQUEST NO. 3: Please provide the expected useful lives and the annualized
revenue requirement for the following:
a. The incremental 1.4 miles of transmission line that will be undergrounded.
b. The 8 miles of distribution line from the Wood River Substation to Owl Rock Road
that will be undergrounded.
c. The overhead transmission line included in the CPCN that is being replaced by the
undergrounded transmission line
d. The overhead distribution line included in the CPCN that is being replaced by the
undergrounded distribution line.
SUPPLEMENTAL RESPONSE TO REQUEST NO. 3: This response
supplements the Company’s original response to this Request, based on follow-up
comments received from Staff.
The requested revenue requirement information for a-d is provided in Excel
Attachment 1. In this spreadsheet, the Company provides a high-level revenue
requirement model based on a model format developed by Staff. The model combines
the information previously provided in the Company’s original response to this request
and provides: 1) a calculation of the 20-year levelized revenue requirement based on the
surcharge financing model for both underground transmission and underground
distribution, and 2) a high-level 20-year “loan amortization” model showing the recovery
of the incremental costs over the 20-year surcharge period. The model also incorporates
estimated annual transmission operations and maintenance (“O&M”) expense, and
property taxes and insurance (“PT&I”) for both overhead and underground transmission
to determine incremental annual costs associated with the Owl Rock Road Route.
IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF – 3
For underground distribution, the model calculates additional PT&I but does not
include an estimate of incremental O&M. The age of current overhead distribution lines
ranges from approximately 8 to 30 years old and, thus, are expected to require more
maintenance than new equipment in the underground configuration. Considering that the
current distribution facilities will be replaced, the Company does not expect distribution
O&M costs for underground distribution to differ substantially relative to the O&M costs of
the existing, above-ground configuration.
Regarding the request for expected useful lives of the items in a-d:
a. The expected useful lives of the components of the incremental 1.4 miles of
underground transmission will vary depending on the nature of each
component. Underground transmission costs include the costs of infrastructure
(e.g., conduit, trenching, concrete vaults, etc.) and underground equipment
(e.g., primarily conductor, splices, terminations, and accessories). Industry-
standard calculations for underground equipment indicate a minimum
estimated life of 35-40 years. However, the Company expects the infrastructure
components to have longer estimated lives based on its experience with
underground distribution cable and conduit and based on ongoing maintenance
of individual components that extend the life of the entire system. It is important
to note that underground conductor technology is relatively new—and the
actual life cycle of the conductor could be considerably longer than industry
estimates.
While the Company’s proposed surcharge does not include incremental costs
that may be incurred in the distant future to replace any of the components of
IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF – 4
the underground transmission line, the estimated cost of replacing the
conductor and devices for the Owl Rock Road Route’s 1.4 miles of incremental
underground transmission is approximately $2.2 million, based on the 2019
incremental cost estimate. This estimate, shown in the table below, includes a
contingency factor (30 percent), overhead (15 percent), and allowance for
funds used during construction (8 percent) to arrive at the final estimate:
The estimated useful lives of the Company’s fixed assets are based on
depreciation studies prepared by industry experts and is subject to approval by the
Commission. The Company’s filed its 2021 depreciation study with the Commission in
Case IPC-E-21-18 for which an order is pending. In the Company’s pending depreciation
case, Transmission Plant Account 357-Underground Conduit the depreciation rate is
based on a 55-S3 survivor curve and Account 358-Transmission Underground Conductor
and Devices, is based on a 50-S2 survivor curve.
b. In the Company’s pending depreciation case, Plant Account 366-Distribution
Underground Conduit, the depreciation rate is based on a 58-R2 survivor curve and
Account 367-Distribution Underground Conductor and Devices, is based on a 50-R1.5
survivor curve.
Distance in miles 1.32
Underground Estimate Owl Rock Road to Ketchum Substation 4,474,000$
Add 30% contingency, 15% overheads, 8% AFUDC 6,845,220$
Underground Estimate Elkhorn Rd to Ketchum Substation 3,008,000$
Add 30% contingency, 15% overheads, 8% AFUDC 4,602,240$
Total Cost (Owl Rock Rd estimate minus Elkhorn Road estimate):2,242,980$
Segment 5 - Owl Rock Road to Elkhorn Road / Hwy 75 Intersection underground transmission cable replacement cost
IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF – 5
c. The expected useful lives of overhead transmission varies widely depending on
the nature of the component. In the Company’s pending depreciation case, the majority
of the assets in Transmission Plant Accounts 352-356 use survivor curves ranging from
50-85 years.
d. The expected useful lives of overhead distribution varies widely depending on
the nature of the component. In the Company’s pending depreciation case, the majority
of the assets in Distribution Plant Accounts 361-373 use survivor curves ranging from 50-
70 years.
The response to this Request is sponsored by Mark Annis, Regulatory Consultant,
Idaho Power Company.
Respectfully submitted this 3rd day of December 2021.
DONOVAN E. WALKER
Attorney for Idaho Power Company
IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF – 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 3rd day of December 2021, I served a true and
correct copy of the within and foregoing IDAHO POWER COMPANY’S SUPPLEMENTAL
RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF
upon the following named parties by the method indicated below, and addressed to the
following:
Blaine County Board of County
Commissioners
2016 1st Avenue South, Ste. 300
Hailey, ID 83333
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email
bcc@co.blaine.id.us
Tim Graves, Chief Deputy Blaine
County Prosecuting Attorney's Office
2191st Avenue South, Suite 201
Hailey, lD 83333
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email
tgraves@co.blaine.id.us
Blaine County Land Use Department
c/o Tom Bergin
219 1st Avenue South, Suite 208
Hailey, ID 83333
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email
tbergin@co.blaine.id.us
Ronald Williams
HAWLEY TROXELL ENNIS & HAWLEY
877 West Main Street, Suite 1000
Boise, Idaho 83702
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email
rwilliams@hawleytroxell.com
Kiki Leslie A. Tidwell
704 N. River St. #1
Hailey, ID 83333
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email
ktinsv@cox.net
IDAHO POWER COMPANY’S SUPPLEMENTAL RESPONSE TO THE FIRST PRODUCTION
REQUEST OF THE COMMISSION STAFF – 7
John R. Hammond, Jr.
Dayne Hardie
Idaho Public Utilities Commission
11331 W. Chinden Blvd.
Bldg. 8, Ste. 201-A
Boise, ID 83714
Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email
john.hammond@puc.idaho.gov
dayn.hardie@puc.idaho.gov
________________________________
Christy Davenport, Legal Assistant