ROS12161.txt

1 BOISE, IDAHO, THURSDAY, DECEMBER 16, 1993, 9:00 A. M.

2

3

4 COMMISSIONER MILLER: Good morning. Let's

5 resume our hearing. I think we're ready to take the Staff

6 case. Before we do, are there any preliminary matters that

7 arose over the evening that we need to address? If not, I

8 guess, Mr. Woodbury, we can go to you.

9 MR. WOODBURY: Thank you, Mr. Chairman. The

10 Staff would call Tom Faull.

11

12 THOMAS FAULL,

13 produced as a witness at the instance of the Staff, having

14 been first duly sworn, was examined and testified as

15 follows:

16

17 DIRECT EXAMINATION

18

19 BY MR. WOODBURY:

20 Q Mr. Faull, will you please state your full

21 name and spell your last name for the record?

22 A My name is Thomas Faull, F-a-u-l-l.

23 Q And whom do you work for and in what capacity?

24 A I work for the Idaho Public Utilities

25 Commission as a staff engineer.

415

CSB REPORTING FAULL (Di)
Wilder, Idaho 83676 Staff

1 Q In that capacity, did you have occasion to

2 prefile testimony in Case No. IPC-E-92-31 consisting of 22

3 pages and eight exhibits?

4 A Yes, I did.

5 Q Have you had the opportunity to review the

6 prefiled testimony and exhibits?

7 A Yes, I have.

8 MR. WOODBURY: And yesterday Staff circulated

9 three replacement pages, Pages 19, 20, and 21, and I guess

10 I'll detail the changes made to the testimony. On Page 19,

11 Lines 19 to 24 were deleted. Page 20, Lines 1 to 3 were

12 deleted. Substitute language was added, replacement

13 Pages 19 and 20. On Page 21, a sentence was added to the

14 answer at Line 11. Answer in the second and third

15 paragraphs, Lines 17 to 24, was deleted. Substitute

16 language was added as reflected in replacement Page 21. We

17 indicated yesterday that the reason for the and you indicate

18 in your testimony that the reason for that change is your

19 review of correspondence from Rosebud to Idaho Power

20 Company.

21 I have previously circulated to all the

22 parties and to the court reporter a new Staff exhibit, Staff

23 Exhibit 109. If I could approach the Bench, I'll give

24 copies to the Commissioners.

25 (Mr. Woodbury approached the bench.)

416

CSB REPORTING FAULL (Di)
Wilder, Idaho 83676 Staff

1 Q BY MR. WOODBURY: Mr. Faull, could you please

2 identify what Staff Exhibit No. 109 is?

3 A Staff Exhibit 109 is a letter from Orndorff,

4 Peterson, Hawley, Wight & Gilman on behalf of Rosebud

5 offering to sell energy to Idaho Power at rates and under

6 terms and conditions essentially the same as under a

7 previous contract known as the Meridian Energy contract.

8 Q The first page of that exhibit is the May 25th

9 letter which you reference in your testimony?

10 A That's correct.

11 Q The next two pages are a May 28th letter from

12 Rosebud to Idaho Power where he includes the rates related

13 to the Meridian contract that he requests?

14 A Correct.

15 Q And the following two pages are a response

16 directed to myself and copied to Owen Orndorff with respect

17 to the May 25th letter and this was a letter from Bart

18 Kline.

19 A That's correct.

20 Q Okay. If I were to ask you the questions

21 which are set forth in your testimony, including the

22 replacement pages, would your answers be the same?

23 A Yes, they would.

24 MR. WOODBURY: Mr. Chairman, I'd ask that the

25 testimony, including the replacement pages, be spread on the

417

CSB REPORTING FAULL (Di)
Wilder, Idaho 83676 Staff

1 record, that Exhibits 101 through 109 be identified and I'd

2 present Mr. Faull for cross-examination.

3 MR. KLINE: Mr. Chairman.

4 COMMISSIONER MILLER: Mr. Kline.

5 MR. KLINE: I'd like to talk about how the

6 changed testimony is going to be reflected in the record in

7 this case. Obviously, the Staff has the right to change its

8 testimony and we're not arguing at this stage that they

9 can't. My concern with this particular procedure for

10 substituting revisions to the prior testimony of Mr. Faull

11 is we're not just talking about a clerical change or a

12 change in an exhibit number. We're talking about a major

13 shift in the position of the Commission Staff, and if

14 someone reads this record with the revised testimony just

15 placed in there and then they look at Idaho Power's

16 testimony in this case, they're not going to be able to tell

17 from the record that Idaho Power rebutted or had any

18 objection to Mr. Faull's testimony in Idaho Power's direct

19 case.

20 So what I'm requesting that the Commission do

21 in order to make sure the record is clear as to why Idaho

22 Power's testimony was as it is, is that the revised

23 testimony and the original testimony both go in the record

24 so that anybody can read it, they can see there was original

25 testimony, there was revised testimony and combined with the

418

CSB REPORTING FAULL (Di)
Wilder, Idaho 83676 Staff

1 discussions that we're having here about why that was done,

2 they can understand why Idaho Power's direct case was not

3 able to respond to the testimony of Mr. Faull.

4 COMMISSIONER MILLER: Mr. Woodbury, do you

5 have any objection to including within the transcript both

6 the original and the substituted pages?

7 MR. WOODBURY: I really don't. We could take

8 the three pages that Staff is removing and attach them to

9 the Company's testimony as an exhibit.

10 MR. KLINE: No, I don't think that's really --

11 it isn't our exhibit. I think the record has to show what

12 happened in the Staff's case. Someone reading it needs to

13 see what happened. That will then explain why Idaho Power

14 in its case didn't rebut the testimony of Mr. Faull, the

15 revised testimony.

16 MR. WOODBURY: I believe that the record that

17 we established yesterday when Staff submitted the

18 replacement pages and the continuance, we adjourned early so

19 that the Company could prepare some rebuttal testimony or

20 prepare a line of cross for Mr. Faull based upon the

21 replacement pages, I think the Company is going to have all

22 the opportunity that it needs.

23 MR. KLINE: And we are going to present

24 cross-examination based on the revised testimony, but that

25 doesn't cure the problem of the fact that the record won't

419

CSB REPORTING FAULL (Di)
Wilder, Idaho 83676 Staff

1 reflect we did not have an opportunity to present a rebuttal

2 to Mr. Faull's testimony in our case.

3 MR. WOODBURY: Mr. Chairman, I really have --

4 I don't care.

5 COMMISSIONER MILLER: Mr. Orndorff.

6 MR. ORNDORFF: Thank you. I don't know what

7 Bart is suggesting, but I would think it would be even a

8 worse record to have two sets of Pages 19, 20 and 21 in the

9 transcript for the witness. It would be better and clearer

10 under cross-examination if the old pages were introduced as

11 an exhibit by Idaho Power and appended to Idaho Power's

12 exhibits with the cross-examination explanation, and I'm

13 sure that Idaho Power can find a witness that can explain

14 why they didn't address the issue. I can't believe that

15 somebody isn't going to get the ultimate confusion seeing

16 two sets of 19, 20, 21 in the transcript if that is what

17 Bart is suggesting.

18 COMMISSIONER MILLER: Let's be at ease for a

19 second.

20 (Off the record discussion.)

21 COMMISSIONER MILLER: We'll go back on the

22 record. There are obviously a number of ways that this

23 could be handled and I think that we have decided the

24 easiest way to do it would be to spread the testimony in its

25 revised form. Is everybody clear on what we've done? All

420

CSB REPORTING FAULL (Di)
Wilder, Idaho 83676 Staff

1 right; so with that, in the absence of objection,

2 Exhibits 101 through 109 will be marked. The prefiled

3 testimony of Mr. Faull as revised will be spread on the

4 record and the original pages will be included in the

5 transcript as we've just directed.

6 (The following prefiled testimony of

7 Mr. Thomas Faull is spread upon the record.)

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421

CSB REPORTING FAULL (Di)
Wilder, Idaho 83676 Staff

1 Q Please state your name and business

2 address for the record.

3 A My name is Thomas Faull and my business

4 address is 472 West Washington Street, Boise, Idaho.

5 Q By whom are you employed and in what capacity?

6 A I am employed by the Idaho Public

7 Utilities Commission as a Public Utilities Engineer.

8 Q Have you included a statement of your

9 qualifications in this testimony?

10 A Yes. Exhibit No. 101 is a statement of

11 my qualifications.

12 Q What is the purpose of your testimony?

13 A There are three goals to my testimony:

14 1) To demonstrate that the Idaho Public Utilities

15 Commission (IPUC, Commission) currently has a succinct

16 policy regarding avoided cost rates available to

17 Qualifying Facilities (QFs) larger than 10 MW

18 capacity, 2) to demonstrate that the current policy remains

19 in the public interest today, and 3) to

20 demonstrate that the proposed Mountain Home Plant

21 (Plant) of Rosebud Enterprises, Inc. (Rosebud) is

22 eligible to receive firm guaranteed avoided cost

23 rates.

24

25

422

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 1) CURRENT COMMISSION POLICIES:

2 Q Does the Commission currently have a

3 policy regarding avoided cost rates available to QFs

4 over 10 MW (large QFs)?

5 A Yes. The current Commission policy is

6 that, at the time large QFs are "ready, willing, and

7 able" to obligate themselves to deliver capacity and

8 energy to the utility, they are entitled to receive

9 the published avoided cost rates, adjusted for the

10 specific effects that the QF has on the utility's

11 distribution system and on the load resource balance

12 used to determine the published avoided cost rates.

13 Q Can you support that statement?

14 A Yes. The Commission has spoken to this

15 issue in several past orders. For example, beginning

16 on page 11, line 27, of Dr. Slaughter's testimony, is

17 a quote from Order No. 15746, which came out of the

18 P-300-12 case.

19
...Such facilities [larger that 10,000
20 kW]...represent a significant generating
resource on the system and may require
21 special operating and scheduling
procedures unlike those for smaller
22 units. The published rates would still
form the starting point for
23 negotiations, but individualized
consideration would be given to issues
24 such as losses, reliability, ability to
schedule and so forth. [emphasis added]
25

423

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 From this it is clear that on August

2 5, 1980 the Commission considered the only variables

3 applicable for adjustment of the published rates were

4 "...losses, reliability, ability to schedule and so

5 forth."

6 Dr. Slaughter also quotes from Order No.

7 22636 (July 27, 1989) language that reaffirms that

8 position, or perhaps narrows it even more, to wit:

9
Large projects shall be subject to
10 adjustments to the published rates to
reflect their effect on the utility's
11 load-resource balance.

12 (Slaughter, Di., pg. 12, 11. 30-32)

13 Q Has the Commission affirmed and/or

14 further defined this policy in other orders?

15 A Yes. This subject was at issue in Case

16 No. U-1006-244. The Commission addressed both the

17 definition of "...and so forth." from the above quote

18 and the eligibility of large QFs for published avoided

19 cost rates in Order No. 20859 (Nov. 14, 1986). In

20 that order the Commission said:

21
..."and so forth" cannot equate with
22 "perceived changes" in avoided costs.
If Water Power perceived its avoided
23 costs to be changing significantly,
then it was incumbent upon it to file
24 an Application requesting that they be
changed by the Commission....
25
(O.N. 20859, pp. 2-3)
424

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 and

2 As we indicated above it is the
responsibility of the utility and the
3 CSPP [Cogenerator or Small Power
Producer] through individual negotiation
4 to determine the appropriateness of
adjustments for "losses, reliability,
5 ability to schedule and so forth". If
there is no required balancing or
6 adjustment for those or related factors
then the CSPP is entitled to the
7 scheduled or filed avoided cost rates.
(emphasis added)
8
[O.N. 20859, pg. 4]
9

10

11 Thus it appears that Rosebud is entitled

12 to the published avoided cost rates unless Idaho Power

13 Company (IPCo, Company) can demonstrate that the

14 Project causes an increase in transmission/distribution

15 losses, is unreliable, changes the load resource

16 balance date used to determine the published avoided

17 cost rates, or inflicts some other physical adversity

18 on IPCo's system (e.g., poor power factor, poor

19 voltage control). Conversely, if Rosebud offers (and

20 IPCo accepts) benefits such as dispatchability or

21 system power factor enhancement, or if Rosebud can

22 demonstrate that its project creates a significant

23 reduction in IPCo's transmission/distribution losses,

24 Rosebud may be entitled to a rate that is higher than the

25 published avoided cost rates.

425

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 Q Is it the Commission's policy, then, to

2 consider dispatchability to be an added value

3 available from a QF?

4 A I believe that is generally the case,

5 though not always. To this issue the Commission has

6 said:

7
This Commission has consistently chosen
8 to publish rates for non-dispatchable
resources. For that reason we have
9 based the rates on the non-hydro
resource with the lowest variable
10 (fuel) costs....Within the constraint
of the Commission determined avoided
11 cost, Idaho's utilities have been given
broad freedom to design rates that
12 encourage CSPPs to generate during the
utility's peak load period. We
13 consider this practice to have been
very successful. Therefore, published
14 rates will continue to be based on an
efficient base-load plant, will continue
15 to be applied on an energy only basis,
and will continue to apply to all energy
16 generated by the contracting QF,
regardless of the QFs plant factor.
17
Hence, the rates...will be...applicable
18 to non-dispatchable QFs. We encourage,
(but do not require) utilities to
19 develop alternative rates to be
applicable to dispatchable
20 QFs....Whether the...dispatchable rate
is more or less than the
21 non-dispatchable rate...will depend on
the value of dispatchability to the
22 utility, the sharing of future variable
cost risks, etc. We encourage the
23 utilities to use their imagination in
designing alternative avoided cost
24 rates that will attract those projects
most beneficial to their systems.
25
(O.N. 22636, pg. 56)
426

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 Q Does the Commission have a policy

2 regarding the time at which a QF becomes eligible for

3 the (adjusted) published avoided cost rates?

4 A Yes. A QF becomes eligible for the

5 published avoided cost rates when it is ready, willing

6 and able to obligate itself to deliver capacity and

7 energy to the utility.

8 Q Has the Commission spoken to the

9 parameters of this standard in its orders?

10 A Yes. In Case No. U-1008-241 the

11 Commission said:

12
The negotiation process takes place in
13 a continuum along which certain
milestones must be passed before both
14 parties are ready, willing and able to
perform.
15
...Empire...had neither conveyed to
16 Water Power with sufficient degree of
certitude its project site location,
17 nor had it committed itself with any
reasonable specificity to project size
18 and design characteristics.

19 (O.N. 20693, pg. 2)

20 and

21 ...As we stated in Afton Energy, Inc.
v. Idaho Power Company, U-1006-199,
22 Order No. 17609:

23 "There is a recognized progression in
the development of a project, ranging
24 from preliminary feasibility studies,
to serious permit acquisition, site
25

427

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 design and interconnect work. No one
deserves a contract who has not done a
2 professional job at each stage."

3 (O.N. 20693, pg. 3)

4
and
5
...This Commission will no longer
6 countenance a utility position that
asserts that...it would not contract on
7 the basis of an obsolete albeit filed
avoided cost as opposed to its
8 self-determined but unfiled actual
avoided costs...
9
Notwithstanding its transgression,
10 Water Power is correct in requiring
specificity in site, design and output
11 as a precondition to contract.

12 (O.N. 20693, pg. 5)

13 and

14 ...The laundry list of unnegotiated
issues in this case [Insurance
15 provisions, security, terms of
operation, terms of delivery, site
16 location, interconnection arrangements,
specifications of the site, capacity
17 and engineering characteristics of the
facility] clearly dictates that the
18 parties were far from being ready,
willing and able to sign a contract.
19 Empire has never indicated or expressed
a willingness to bind itself to a
20 complete contract.... This Commission
approves rates for known projects,
21 specific in size and location. These
are fundamental issues that must be
22 resolved before serious negotiation can
be viewed as having take place.
23 (emphasis added)

24 (O.N. 20693, pg. 8)

25

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IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 Thus, the Commission has defined "ready,

2 willing and able" to include specificity of plant

3 size, design characteristics, and interconnection

4 characteristics. It appears that the Commission also

5 requires that the parties have discussed all of the

6 clauses typically included in a contract to the extent

7 that they either agree on each clause or are clear on

8 which clauses they disagree and the reasons

9 therefore. Until these criteria are met, a QF is not

10 eligible for a contract unless the utility has refused

11 to negotiate. Furthermore, even if the failure to negotiate

12 is the fault of the utility, the QF is not

13 entitled to a contract unless it expresses a

14 willingness to sign a firm contract with specific

15 language in each clause generally required in a QF

16 contract. (Recently approved contracts with

17 appropriate language are always available at the IPUC

18 offices.) Guaranteed rates are available only in a

19 power purchase contract.

20 However, the Commission has also said:

21
This Commission has repeatedly declined
22 to adopt a bright line rule or yardstick
in determining at what point in
23 development a project is entitled to a
legally enforceable obligation. Each
24 case, as we have stated, presents a
myriad of facts that distinguish it and
25 give it a uniqueness all its own.
(O.N. 22636, pg. 63)
429

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 Q Have the policies developed by the

2 Commission in Case No. U-1008-241 withstood judicial

3 review?

4 A Yes. Case No. U-1008-241 was appealed

5 to both the Idaho State Supreme Court and the U.S.

6 Supreme Court. The Commission's decision was affirmed

7 in both those proceedings.

8 Q Is a firm fuel supply also prerequisite

9 to eligibility for a contract?

10 A No. In Case No. IPC-E-92-4 the

11 Commission approved a 20-year contract (Meridian

12 Contract) with non-levelized rates for a 54 MW

13 cogeneration plant. The order approving the contract

14 in that case included the following language.

15
3. (c) Paragraphs 4.1.9 and 4.1.10
16 require that as a condition of
interconnection, MGC will
17 demonstrate to Idaho Power's
reasonable satisfaction that MGC
18 has entered into fuel supply and
fuel transportation contracts that
19 will provide a firm supply of fuel
and firm fuel transportation in an
20 amount sufficient to allow the
project to generate the annual net
21 firm energy amount each contract
year for the full term of the
22 Agreement.

23 (O.N. 24805, pg.5)

24 and

25

430

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 We further find that sufficient measures
have been included in the Agreement to
2 assure project completion and resource
reliability.
3
(O.N. 24805, pg. 14)
4

5 Thus, it is clear that in one case the

6 Commission found the contractual obligation to secure

7 a firm fuel supply to be adequate to provide

8 eligibility for a power sales contract.

9 However, Case No. IPC-E-92-4 was brought

10 to the Commission as a signed contract including

11 substantial reliability enhancing clauses that the

12 parties agreed to. To my knowledge, the Commission

13 has not considered the appropriateness of requiring a

14 secure fuel supply for plants larger than 10 MW

15 requesting non-levelized rates. However, because

16 Rosebud has indicated a desire to have a firm fuel

17 supply to minimize its own risks, it appears that the

18 issue of whether or not to require a firm fuel supply

19 is beyond the scope of this proceeding.

20 Q Will you please repeat your

21 understanding of the Commission's current policy of

22 pricing for QFs larger than 10 MW?

23 A The current Commission policy is that,

24 at the time it is "ready, willing, and able" to

25 obligate itself to deliver capacity and energy to the

431

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 utility, a large QF is entitled to receive the

2 published avoided cost rates, adjusted for the

3 specific effects that the QF has on the utility's

4 distribution system and on the load resource balance

5 used to determine the published avoided cost rates.

6 I believe this policy has been and

7 continues to be in the public interest.

8 2) CURRENT COMMISSION POLICIES ARE IN THE PUBLIC
INTEREST:
9
Q Is the issue of whether or not the
10

11 current policy is in the public interest outside the

12 scope of this proceeding?

13 A Absolutely not. The Commission may

14 reconsider the appropriateness of current policy

15 during any case. Furthermore, it is my duty as a

16 public servant to consider the "public interest"

17 effects of any potential decision the Commission may

18 make in a case for which I am responsible as a Staff

19 witness.

20 In addition, on September 17, 1993 the Company

21 submitted to the Commissioners and Staff a 29

22 page document entitled "1993 Acquisition of

23 Supply-Side Resources" (Resource Paper). That

24 document challenges the public interest effects of the

25 Commission's entire QF acquisition policy, including

432

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 both the general avoided cost methodology and the

2 policies (or lack thereof, as the Company would have

3 us believe) pertaining to large QFs. On page 4,

4 fourth paragraph, the Resource Paper specifically

5 refers to "...the current Rosebud complaint..." as an

6 example of the alleged confusion relating to pricing

7 for QFs larger than 10 MW. Therefore, even if the

8 "public interest issue" were not otherwise a

9 legitimate subject for this case (which it is), IPCo

10 has thrust it in.

11 Q Why are the Commission's current

12 policies towards QFs in the public interest?

13 A Because, when properly implemented, they

14 result in optimal cost resources being acquired for

15 each electric utility's system. Note that I use the

16 term "optimal cost" rather than "least cost". There

17 are a multitude of potential resource types available

18 to fulfill a utility's resource needs. The worst of

19 all types are the high risk, high cost resources such

20 as nuclear power plants. However, there are also

21 available high cost, low risk resources; low cost,

22 high risk resources; and low cost, low risk

23 resources. An example of a low cost, low risk

24 resource is IPCo's Twin Falls Hydroelectric Plant

25 upgrade. In a perfect world utilities would acquire

433

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 only such resources. Unfortunately, however, they are

2 few and far between. Therefore, an optimal resource

3 portfolio will include resources that exhibit a

4 mixture of cost and risk levels.

5 Q What is a typical high cost, low risk

6 resource?

7 A A system purchase from an all thermal

8 utility owning well built, well maintained power

9 plants and transmission plant.

10 Q What is a typical low cost, high risk

11 resource?

12 A Spot purchases from the secondary power

13 market of the Western System.

14 Q What are some typical medium cost,

15 medium risk resources?

16 A For base load power, a coal fired power

17 plant. For peaking power, a combustion turbine (CT).

18 For intermediate to base load power, a combined cycle

19 CT (CCCT).

20 Q Where do QFs fit in this scale of cost

21 and risk?

22 A Under the Commission's current policies,

23 QFs provide medium cost, medium risk power. Even

24 though the operating risks of QFs may be somewhat

25 higher than those of a utility owned resource, the

434

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 construction risks to the utility are nearly

2 non-existent. Considering the Commission's strong "QF

3 security" policy (O.N. 21690), I believe that QFs are

4 slightly less risky than Company owned resources of

5 approximately the same cost.

6 Q Is this a universally held opinion?

7 A Apparently not. The majority of IPCo's

8 Resource Paper is dedicated to attempting to

9 demonstrate that QF resources acquired under the

10 current policy are unreasonably expensive. In my

11 opinion, the Resource Paper is filled with erroneous

12 information, inappropriate comparisons, and flawed

13 conclusions. Nonetheless, I believe the Company

14 honestly believes QF resources are too expensive.

15 Q Is it appropriate to rebut the Company's

16 Resource Paper in the context of this case?

17 A No. To do so would unduly broaden the

18 issues in this case. Nonetheless, there are six

19 allegations in the Resource Paper that must be

20 discussed to adequately analyze the public interest

21 effects of the Commission's current policies towards

22 large QFs. They are: (1) That the Commission has no

23 policy toward large QFs (discussed above), (2) that

24 base load QFs displace less expensive resources, (3)

25 that avoided costs should not be derived from the

435

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 costs of a base load resource, (4) that acquisition of

2 QF resources should be delayed until the Company is in

3 load resource balance, (5) that QF resources are more

4 expensive than spot resources, and (6) that current

5 avoided costs exceed actual avoided costs.

6 Q Do base load QFs displace lower cost

7 Company owned resources?

8 A No. In Case No. U-1500-170 the issue of

9 the type of avoidable resource that IPCo would require

10 was thoroughly discussed. IPCo demonstrated that its

11 future need would be for relatively high capital cost,

12 low operating cost base load plant. Therefore, that

13 is the type of avoidable resource the Commission

14 selected to determine avoided costs. The Company's

15 argument that QF power cannot be economically

16 dispatched is based on the fact that the capital costs

17 of the avoidable resource are included in the energy

18 rate paid to the QF. This methodology was developed

19 for base load QFs for all Idaho electric utilities

20 after IPCo experienced difficulty in actually

21 receiving the capacity that it contracted for under

22 take or pay capacity and energy contracts. The irony

23 of IPCo's argument is that, although it dispatches its

24 resources on the basis of operating costs only, it

25 bills all its retail customers for both capacity and

436

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 energy primarily on an energy only basis. Thus,

2 ratepayers pay for the Company's capacity in almost

3 exactly the same way that IPCo pays for QFs'

4 capacity. These payment methodologies have evolved

5 over several years -- they are appropriate.

6 The fact is that, over the long run, QF

7 base load resources are the least expensive base load

8 resources on the Company's system, not the most

9 expensive.

10 Q Should avoided costs be derived from the

11 costs of base load resources?

12 A The answer to that question is partially

13 included in the answer to the prior question: Avoided

14 costs are derived from base load resources because

15 that is the type of resource the Company indicated in

16 the U-1500-170 case that it would first need in the

17 future. The rest of the answer is that avoided costs

18 are based on the time that the Company's resource plan

19 (as appropriately adjusted in Case No. IPC-E-89-11)

20 indicated it would need a new base load resource. The

21 differences between the timing of base load resources

22 included in the resource plan supporting the

23 IPC-E-89-11 case (including interim "trigger"

24 adjustments) and the Company's current resource plan

25 are not significant.

437

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 The fact that the Company's current

2 resource plan shows a need for peaking resources prior

3 to a need for base load resources does not justify

4 eliminating legitimate base load avoided cost rates.

5 Rather, it makes it incumbent upon the Company to file

6 accurate peaking (dispatchable) avoided cost rates.

7 Q Should acquisition of QF resources be

8 deferred until IPCo is in load resource balance?

9 A No. Federal law does not permit the

10 Commission to defer acquisition of QF resources.

11 However, it may be time for the Commission to consider

12 eliminating levelized rates for QFs under 10 MW that

13 consume non-renewable fuels. However, that is not an

14 appropriate issue for consideration in this case.

15 Q Are QF resources more expensive than

16 spot resources?

17 A That is a "trick question" similar to

18 the question of whether non-dispatchable base load QFs

19 receiving their capacity payments through energy rates

20 are more expensive than dispatchable Company owned

21 resources. Certainly the long term contractual rates

22 paid for QF power are higher than spot prices.

23 However, avoided cost rates included only spot energy

24 prices prior to the time that the Company's resource

25

438

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 plan (as appropriately adjusted) shows a need for new

2 base load resources.

3 No, QF resources are not more expensive

4 than spot resources. To the extent that future spot

5 prices can be estimated, QF resources are exactly the

6 same cost as spot resources.

7 Q Are current avoided cost rates excessive

8 in comparison to the Company's actual avoidable costs?

9 A The only appropriate discussion relative

10 to this issue is to point out that it has no bearing

11 on this case. As the Commission has stated (previously

12 cited on page 3 of my testimony)

13

14 ..."and so forth" cannot equate with
"perceived changes" in avoided costs.
15 If Water Power perceived its avoided
costs to be changing significantly,
16 then it was incumbent upon it to file
an Application requesting that they be
17 changed by the Commission...

18 (O.N. 20859, pp. 2-3)

19

20 and as Dr. Slaughter has pointed out on page 5 of his

21 testimony,

22 The utility is in a unique position
when negotiating with CSPPs. It
23 controls the resources and data by
which a determination can be made as to
24 whether its scheduled avoided costs are
in synch with its perceived "true"
25 avoided costs. If it perceives a

439

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 significant change then, (sic) it is
incumbent upon the utility to initiate
2 an appropriate filing with the
Commission....[emphasis added]
3
(U-1008-244, O.N. 20859, pg. 5)
4

5 Q Is it your position, then, that the

6 Commission's current policies toward large QFs are in

7 the public interest because they result in lower cost

8 resources than acquisition of new Company owned

9 resources with the same level of risk?

10 A Yes. Even when the utility has a

11 resource surplus, ratepayers are better off in the

12 long run when the utility purchases QF resources under

13 the Commission's current policies -- provided, of

14 course, that the utility fulfills its obligation to

15 keep avoided cost rates current.

16 3)ELIGIBILITY OF ROSEBUD'S MOUNTAIN HOME PLANT:

17 Q Is the Mountain Home plant eligible for

18 current avoided cost rates?

19 A I believe it is. In its letter dated

20 May 25, 1993 Rosebud indicated a willingness to be

21 bound by all terms and conditions contained in the

22 Meridian contract, adjusted only for project specific

23 characteristics, at rates less than current published

24 avoided costs. I believe that letter perfected

25

440

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 Rosebud's right to a power sales contract.

2 Q Is Rosebud currently in a position to

3 obligate itself?

4 A That depends on the level of risk that

5 Rosebud is willing to expose itself to. For example,

6 although Rosebud has selected a specific site for its

7 plant, I am not aware that it has specified plant

8 layout to an extent adequate for IPCo to estimate

9 interconnection costs. To obligate itself at this

10 time, Rosebud would have to be willing to commit to

11 paying reasonable interconnect costs without knowing

12 precisely how much those costs would turn out to be.

13 Rosebud also appears to be deficient in

14 other areas. For example, it appears that Rosebud has

15 not yet acquired the permits necessary to build its

16 plant. Nonetheless, if Rosebud were to submit a

17 contract to IPCo that was essentially identical to the

18 Meridian Contract discussed on pages 9 and 10, above,

19 adjusted to fit the physical and operating features of

20 the Mountain Home plant, then I believe Rosebud could

21 be ready, willing and able to obligate itself.

22 However, the proposed Mountain Home contract would

23 have to include additional contingent clauses similar

24

25

441

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 to the Meridian Contract's contingent fuel supply

2 clause (discussed above). Those additional clauses

3 would have to provide reasonable assurance that all

4 current deficiencies in the administrative and

5 operating licenses, contracts, etc. would be met prior

6 to energizing the Mountain Home plant. The contract

7 should probably also include reasonable liquidated

8 damages clauses to compensate IPCo for its

9 administrative costs relative to the Mountain Home

10 plant if Rosebud fails to deliver capacity and energy

11 as required by the proposed contract. It appears that

12 Rosebud is willing to accept these risks.

13 Q What is your recommendation to the

14 Commission regarding this case?

15 A That the Commission affirm its policies

16 regarding pricing and eligibility for rates to large

17 QFs.

18 I also recommend that, based on current

19 policy, the Commission affirm Rosebud's eligibility to a

20 power purchase contract.

21

22

23

24

25

442

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 Q Have you included any exhibits with your

2 testimony?

3 A Yes. In addition to my qualifications,

4 Exhibit 101, I have included as exhibits copies of

5 each of the Commission orders I have cited in my

6 testimony and a copy of IPCo's Resource Paper. They

7 are numbered as follows.

8
CASE NUMBER ORDER NO. EXHIBIT NO.
9 P-300-12 Order No. 15746 Exhibit No. 102
U-1008-241 Order No. 20693 Exhibit No. 103
10 U-1006-244 Order No. 20859 Exhibit No. 104
U-1006-292 Order No. 21690 Exhibit No. 105
11 U-1500-170 Order No. 22636 Exhibit No. 106
IPC-E-92-4 Order No. 24805 Exhibit No. 107
12 None Resource Paper Exhibit No. 108

13

14 Q Does this conclude your testimony in

15 this proceeding?

16 A Yes, it does.

17

18

19

20

21

22

23

24

25

443

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 (The following three pages in the transcript

2 reflect the original testimony of Mr. Faull. His revised

3 testimony is on the pages preceding the page on which this

4 occurs.)

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

444

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 significant change then, (sic) it is
incumbent upon the utility to initiate
2 an appropriate filing with the
Commission....[emphasis added]
3
(U-1008-244, O.N. 20859, pg. 5)
4

5 Q Is it your position, then, that the

6 Commission's current policies toward large QFs are in

7 the public interest because they result in lower cost

8 resources than acquisition of new Company owned

9 resources with the same level of risk?

10 A Yes. Even when the utility has a

11 resource surplus, ratepayers are better off in the

12 long run when the utility purchases QF resources under

13 the Commission's current policies -- provided, of

14 course, that the utility fulfills its obligation to

15 keep avoided cost rates current.

16 3) ELIGIBILITY OF ROSEBUD'S MOUNTAIN HOME PLANT:

17 Q Is the Mountain Home plant eligible for

18 current avoided cost rates?

19 A I don't believe so. My review of the

20 record leads me to believe that Rosebud has not yet

21 indicated a willingness to be contractually bound by

22 all the typical clauses of a power sales agreement.

23 The essence of Rosebud's complaint in this case is

24 that IPCo is interpreting the Commission's policies as

25

445

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 not entitling Rosebud to published avoided cost rates

2 once Rosebud is ready, willing and able to obligate

3 itself.

4 Q Is Rosebud currently in a position to

5 obligate itself?

6 A That depends on the level of risk that

7 Rosebud is willing to expose itself to. For example,

8 although Rosebud has selected a specific site for its

9 plant, I am not aware that it has specified plant

10 layout to an extent adequate for IPCo to estimate

11 interconnection costs. To obligate itself at this

12 time, Rosebud would have to be willing to commit to

13 paying reasonable interconnect costs without knowing

14 precisely how much those costs would turn out to be.

15 Rosebud also appears to be deficient in

16 other areas. For example, it appears that Rosebud has

17 not yet acquired the permits necessary to build its

18 plant. Nonetheless, if Rosebud were to submit a

19 contract to IPCo that was essentially identical to the

20 Meridian Contract discussed on pages 9 and 10, above,

21 adjusted to fit the physical and operating features of

22 the Mountain Home plant, then I believe Rosebud could

23 be ready, willing and able to obligate itself.

24 However, the proposed Mountain Home contract would

25 have to include additional contingent clauses similar

446

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 to the Meridian Contract's contingent fuel supply

2 clause (discussed above). Those additional clauses

3 would have to provide reasonable assurance that all

4 current deficiencies in the administrative and

5 operating licenses, contracts, etc. would be met prior

6 to energizing the Mountain Home plant. The contract

7 should probably also include reasonable liquidated

8 damages clauses to compensate IPCo for its

9 administrative costs relative to the Mountain Home

10 plant if Rosebud fails to deliver capacity and energy

11 as required by the proposed contract.

12 Q What is your recommendation to the

13 Commission regarding this case?

14 A That the Commission affirm its policies

15 regarding pricing and eligibility for rates to large

16 QFs.

17 I also recommend that, based on current

18 policy, the Commission deny Rosebud eligibility to

19 current avoided cost rates until it has perfected its

20 entitlement thereto.

21 I also recommend that the Commission

22 order IPCo to update its avoided cost rates and to

23 submit proposed avoided cost rates for dispatchable

24 QFs.

25

447

IPC-E-92-31 FAULL (Di)
9/30/93 Staff

1 (The following proceedings were had in open

2 hearing.)

3 COMMISSIONER MILLER: All right, and he's

4 ready for cross-examination?

5 MR. WOODBURY: Yes.

6 COMMISSIONER MILLER: Mr. Burleigh, do you

7 have questions?

8 MR. BURLEIGH: No, sir.

9 COMMISSIONER MILLER: Mr. Fell.

10 MR. FELL: Yes, sir.

11

12 CROSS-EXAMINATION

13

14 BY MR. FELL:

15 Q Mr. Faull, when a utility enters into a

16 contract with a qualifying facility, I'm interested in your

17 opinion about what that contract represents from the utility

18 perspective. Does that contract represent a firm resource

19 contract for the utility?

20 A Yes, it does.

21 Q And would you please explain what a firm

22 resource is for a utility?

23 A A firm resource is a source of energy and/or

24 capacity that is guaranteed to the utility for a period of

25 time.

448

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 Q And how would you describe a non-firm

2 resource?

3 A A non-firm resource is a resource that may or

4 may not be available at any given point in time at an

5 unknown price.

6 Q Is it customary for the price of the resource

7 to reflect the level of firmness of the contract?

8 A Yes, it is.

9 Q When a utility signs a firm resource contract,

10 does that resource then take a place on the utility's

11 resource stack for meeting its future requirements?

12 A Yes, it does.

13 Q And in determining whether to enter into a

14 contract or to build another resource, the company's needs

15 are evaluated on the assumption that that resource will be

16 there; correct?

17 A That is correct.

18 Q In looking at a contract for a resource, is it

19 fair to say that the contract price represents the value of

20 all the terms and conditions that are contained in that

21 agreement?

22 A That should be the ideal situation, yes.

23 Q In your testimony, you refer to the right of a

24 QF to present a Meridian style contract to the utility to

25 represent its willingness and ability to enter into or

449

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 rather to commit to a certain resource and obtain a certain

2 price for that resource; is that fair?

3 A Yes, that's reasonably fair.

4 Q Is it fair to say that by --

5 MR. WOODBURY: Mr. Chairman, if there's a

6 reference cite to his testimony, can Mr. Fell give that?

7 COMMISSIONER MILLER: The witness seemed to be

8 able to answer the questions; so if that's an objection,

9 it's overruled.

10 MR. WOODBURY: It's not an objection. It's

11 just for the record.

12 COMMISSIONER MILLER: With respect to this

13 question, the witness was clearly able to answer the

14 question without a reference. Mr. Fell, it appears that

15 Mr. Woodbury would prefer for record purposes references to

16 specific parts of the testimony if that's possible in future

17 questions.

18 MR. FELL: I shall do my best.

19 COMMISSIONER MILLER: Thank you, sir.

20 Q BY MR. FELL: Would you describe generally

21 what it is that the Meridian contract represented in terms

22 of the QFs meeting the responsibilities to be ready, willing

23 and able to enter into that contract? To put it in context,

24 it's my understanding that that contract included certain

25 contingencies before the utility was obliged to

450

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 interconnect; is that correct?

2 A That is correct.

3 Q Would you describe the types of contingencies

4 that were included in that contract?

5 A It's my recollection that they included

6 milestone dates for meeting certain conditions, such as

7 permitting, firm fuel supply, and I believe construction

8 startup as well as on-line date, but it's been some time

9 since I reviewed it in detail. I may be a little bit

10 mistaken on that, but things of that nature at any rate.

11 Q If I understand your testimony, in particular

12 the revised pages that were substituted, you're concluding

13 that Rosebud's willingness to enter into a contract such as

14 the Meridian contract demonstrated their readiness,

15 willingness and ability to enter into a contract; is that

16 correct?

17 A That along with their previous submittals

18 throughout the negotiations showing that they had the

19 technology and capability and history of being able to

20 provide a plant with specific characteristics at the site

21 that they'd specified.

22 Q And the way the Commission rules work, in your

23 opinion, that then entitled them to the prices in effect at

24 that time; is that your point?

25 A With modifications for the effects of the

451

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 project on the Company's system, which could be operational

2 or perhaps effects on the transmission system.

3 Q In effect, though, not though, in effect, at

4 that point they staked a claim to those prices; is that

5 fair?

6 A I guess that's not exactly how I'd

7 characterize it, but in essence, yes.

8 Q They also, in effect, staked a claim to a

9 position on the utility's resource stack?

10 A Yes.

11 Q What was the nature of the Meridian resource?

12 Was it a gas-fired resource?

13 A It's a gas-fired cogeneration plant.

14 Q So it had a steam host as well?

15 A Yes.

16 Q Now, what Rosebud has proposed in this case is

17 a fluidized bed project; correct?

18 A Correct.

19 Q And this project would be fueled by, as I

20 understand it from yesterday's testimony, either waste coal

21 or waste petroleum coke; is that correct?

22 A That's how I understand it.

23 Q There's no steam host, is there?

24 A No.

25 Q So if I understand you correctly, you're

452

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 taking a contract that was designed for a natural gas-fired

2 steam host-type facility and saying their willingness to

3 enter into a contract on those terms stakes their claim in

4 this case?

5 A I see no difference between a natural

6 gas-fired and a coke-fired plant as far as the source of

7 capacity and energy. Rosebud is willing to provide

8 reasonable assurances that it can perform and whether or not

9 they perform with natural gas or with petroleum coke or

10 waste coal is of no consequence.

11 Q What if this were a geothermal resource?

12 A Given reasonable assurances and security

13 deposits, I would see no difference.

14 Q And the same answer would apply if this were a

15 hydro facility?

16 A That's correct.

17 Q And, again, if I understand what your opinion

18 is on this case, they would be -- a qualifying facility

19 would have the right, then, to stake a claim to both price

20 and position on the resource stack leaving fuel as a

21 contingency to be resolved later?

22 A Yes.

23 Q And they could leave the control and

24 identification of the site to be resolved later?

25 A I'm not sure what you mean by that question.

453

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 The site has been identified in this case.

2 Q As I understand the testimony yesterday, there

3 is no, the control of the site has not been established,

4 that is to say, ownership and the right to develop the

5 project on that site; so that those would be left to be

6 resolved later?

7 A Yes, that's reasonable.

8 Q And the environmental permitting could be left

9 to be resolved later?

10 A Yes.

11 Q And that would include air, water, waste

12 disposal, all those subjects?

13 A Yes.

14 Q And any conditions on the permits for those

15 particular activities could be resolved later?

16 A Yes. Given these reasonable security

17 deposits, I think that's reasonable.

18 Q And the matter of whether the contract --

19 strike that. The matter of whether the project would

20 perform to the same level as the project that was

21 represented in the Meridian contract, that could be resolved

22 later as well?

23 A I don't believe that's an issue with QF

24 contracts. QF contracts are paid on delivery of energy only

25 and the level of performance is really outside the purview

454

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 of the utility.

2 Q Does the price reflect energy values only?

3 A No, it doesn't.

4 Q It reflects a capacity value as well?

5 A It does.

6 Q And, again, this QF resource occupies a

7 position in the utility's resource stack so the utility is

8 relying on that capacity in some respect; is that correct?

9 A That's correct.

10 Q And that's the nature of a firm resource,

11 isn't it, that it delivers capacity?

12 A Yes.

13 Q And the matter of the interconnection

14 requirements and costs would be resolved later as well?

15 A That's reasonable, yes.

16 Q What happens if one of these contingencies is

17 not resolved prior to the milestone for that?

18 A The developer forfeits his security deposit.

19 Q And does the utility have a right to terminate

20 the contract then?

21 A I believe it does, yes.

22 Q Would it be fair, then, to call these

23 contingencies or to compare them to on-off switches? If it

24 gets done, the switch is on? If it doesn't get done, the

25 switch is off?

455

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 A I think often they're referred to as off

2 ramps, but an on-off switch is not an unreasonable analogy.

3 Q What sort of security are you talking about

4 now if, for example, after two years of operation in trying

5 to implement the contract the utility has to flip a switch

6 off, what is the utility's right then in security?

7 A I believe it's $5.00 per kilowatt, I don't

8 have the contract in front of me, but it was $5.00 a

9 kilowatt to meet, I believe, the permitting requirements and

10 the fuel requirements, and it's a greater amount, I don't

11 remember the number, for the additional contingencies.

12 Q What is the $5.00 per kilowatt security

13 intended to recover?

14 A Well, not having been involved in the

15 negotiation, I can't tell you what Idaho Power expected it

16 to cover. I would expect that it covers the administrative

17 costs of the negotiation and the administrative costs of

18 replacing the resource.

19 Q The administrative costs you're saying?

20 A Yes.

21 Q Okay; so it does not reflect any of the costs

22 of actually replacing the power that will not be delivered?

23 A That depends on how you define the actual

24 costs. The cost of replacing power is really just the

25 administrative costs.

456

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 Q Excuse me, I'll clarify. I'm talking about

2 the replacement power cost. I'll let you explain this,

3 because if I understand what you're saying, the utility does

4 not have to pay that QF and so replacement power just

5 substitutes for that; is that your point?

6 A That is correct, yes.

7 Q So your point does not take into account any

8 changes in the cost of power between when the first contract

9 was entered into and when the second one is entered into?

10 A Either up or down, that's correct.

11 Q Nor does it take into account the ability of

12 the utility to enter into a long-term contract for an

13 equivalent resource at that later time?

14 A I don't understand the question. What

15 ability?

16 Q Well, at that point when the utility switches

17 this project off because of the failure of a contingency,

18 the utility has lost, presumably, a 20-year resource at a

19 certain size that has been firm in its resource planning.

20 Presumably, they would have to replace it with an equivalent

21 resource; do you agree with that?

22 A Not necessarily would have to, but it could be

23 desirable. They might at that point wish to replace it with

24 some other type of resource or be required to depending on

25 the regulatory situation at the time. In other words, if

457

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 some PURPA, if that were to raise avoided costs to where

2 another QF were to replace it, then it would be less

3 voluntary.

4 Q But in the meantime, the utility is subjected

5 to the risk of the cost and availability in terms of

6 replacement firm power resources while these contingencies

7 are being worked out; isn't that correct?

8 A To the extent that there is risk, that's

9 true. With long lead time resources contracted well in

10 advance of need, that risk is substantially mitigated.

11 Q Would it also be fair to describe a contract

12 as an instrument that allocates risk between two parties?

13 A That could be the case, yes.

14 Q Isn't it very often or almost universally the

15 case?

16 A I suspect that it is, yes.

17 Q And these contingencies allocate risk between

18 the parties, too, don't they?

19 A Yes, they do.

20 Q Is it your point of view that the risk of

21 these contingencies is on the qualifying facility?

22 A The risk of performing is on the qualifying

23 facility, yes.

24 Q Are you familiar with the adage that if I owe

25 you $10,000, I have a problem, and if you owe me -- pardon

458

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 me -- if I owe you $10 million, you have a problem?

2 A No, I'm not.

3 Q Have you heard that expression?

4 A No, I haven't.

5 Q It was a popular expression when South

6 American governments owed the United States' banks enormous

7 amounts of money and it was no longer their problem, it was

8 our banks' problems, but the point of the adage is that a

9 party who has an obligation from another party that is

10 beyond that party's ability to perform shifts the risk. Is

11 that a concept that you would accept?

12 A That's a reasonable concept, yes.

13 Q Now, in terms of the contingencies we were

14 talking about, one of them was fuel and there is, would you

15 accept, a fuel risk with respect to a facility that doesn't

16 yet have a fuel contract?

17 A I'll accept that.

18 Q In the case of the type of fuel discussed in

19 this case, the fuel risk, presumably, would be the ability

20 to purchase petroleum coke on terms and conditions that

21 would be acceptable to whom?

22 A To the qualifying facility.

23 Q Correct. In this case with petroleum coke --

24 I'm sorry, were you changing your answer?

25 A No, I wasn't.

459

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 Q Okay. In the case of petroleum coke, what

2 does the QF rely on for the production of that petroleum

3 coke?

4 A Petroleum coke is a by-product of oil

5 refinery.

6 Q It is a waste product from the refining of --

7 A Crude oil.

8 Q -- crude oil. And who controls the operation

9 of the refinery?

10 A The owner of the refinery does.

11 Q In terms of the risk presented here, there's

12 another concept that I'd like to present to you which is

13 called plant risk which we encounter in dealing with

14 resources from a utility perspective. The concept of plant

15 risk is who bears the risk of the plant continuing to be in

16 operation through the term of the contract. Would you agree

17 that there is a plant risk over a 20-year period with

18 respect to any waste product from a manufacturing plant?

19 A I think there's a plant risk with any -- yes,

20 I would agree with that, just as with a plant that's

21 required to have a steam host in order to remain a

22 qualifying facility. There's a certain risk that's inherent

23 with the qualifying facility.

24 Q And in that context, then, what you're saying

25 is that the risk of the terms and conditions of the contract

460

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 with that host or, in this case, with that plant are the

2 risks of the qualifying facility; is that correct?

3 A Could you ask the question again?

4 Q The risk of the continued performance and

5 delivery of petroleum coke here is on the qualifying

6 facility, that's your intention with the Meridian style?

7 A The responsibility of maintaining the

8 qualifying facility status is on the qualifying facility.

9 The risk inheres to both the facility and the company and

10 the ratepayers.

11 Q And, presumably, the level of risk being faced

12 depends on the terms and conditions that the refinery is

13 willing to enter into in supplying the fuel; is that fair?

14 A I'm going to have to ask you to repeat the

15 question again.

16 Q Wouldn't the level of fuel risk depend on the

17 terms and conditions that the refinery is willing to enter

18 into?

19 A Yes.

20 Q For example, if the refinery is willing or not

21 willing to provide a substitute fuel if they don't operate

22 is a factor.

23 A To a certain extent, that's true. Those are

24 certainly terms and conditions that have to be dealt with in

25 contracting for long-term fuel contracts.

461

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 Q I'm not suggesting that what I've described is

2 an absolute requirement, but that it affects the risk and

3 who's bearing what risk. Is the refinery bearing the risk

4 or is the QF bearing the risk, because there's allocation

5 between them as well, isn't there?

6 A Yes, and, again, the risk would probably be

7 shared between the two. That depends on the contract

8 itself.

9 Q And you've already testified that these same

10 circumstances exist with a steam host --

11 A Yes.

12 Q -- that the operation of that plant is

13 relevant. It could exist with a geothermal facility as

14 well, couldn't it, with regard to the steam from the

15 geothermal resource?

16 A That's true.

17 Q Permitting risk, are permits all or

18 nothing-type permits generally or do you find that permits

19 often get issued with conditions?

20 A I think typically they're issued with

21 conditions.

22 Q So the ability to get a permit is perhaps one

23 point and the terms and conditions of the permit and whether

24 they allow the project to go forward is another matter;

25 right?

462

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 A Yes.

2 Q Who decides whether the permit conditions are

3 acceptable, the QF or the utility?

4 A The QF.

5 Q We previously established that the price of a

6 contract represents the value of the terms and conditions in

7 that contract and we have established that a QF that agrees

8 to sign a Meridian style contract locks in or stakes a claim

9 to the price. Are you also saying that the level of

10 development of these various contingencies need not have any

11 effect on the price?

12 A I guess what I'm saying is that in the event

13 that there is a failure to have any meeting of the minds

14 between the utility and a QF and in the event that the rates

15 offered to the QF are not reflective of the current avoided

16 cost rates, the only alternative the QF has is to offer to

17 enter into -- to offer to be bound to terms and conditions

18 that have been found reasonable in the past, and they really

19 have no other option by which they can establish the ready,

20 willing and able standard, and so, in my opinion, Rosebud

21 did all that it could to perfect its right to a contract.

22 Q Let me understand that. The right to permit

23 or rather to offer a Meridian style contract would not

24 mature until the utility had demonstrated an unwillingness

25 to negotiate with the project over these issues?

463

CSB REPORTING FAULL (X)
Wilder, Idaho 83676 Staff

1 A To negotiate in good faith, yes.

2 Q And I gather the point of all that is that if

3 the utility actually had been willing to negotiate these

4 issues with the QF, you could have actually marched down

5 these paths simultaneously, the progress could be made, in

6 terms of process, that the progress could be made on several

7 fronts at the same time if the utility had been negotiating

8 in good faith on the power side?

9 A That's a possibility.

10 Q Excuse me, what I can compare you to is the QF

11 contract that was submitted as Exhibit 214 and represented

12 the Montana facility --

13 A Correct.

14 Q -- where those milestones were actually being

15 accomplished at the same time; is that what you're talking

16 about?

17 A That's a possibility. It's not a necessity.

18 Q Do you consider it useful to the utility in

19 terms of the utility's identification of who's bearing what

20 risk in what resource it's getting?

21 A I suspect it would be, yes.

22 Q And in terms of the overall value of the

23 contract, it would be useful for both parties, wouldn't it?

24 A Perhaps. I'm not certain of that.

25 Q Isn't it also true that if this resource, if a

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1 qualifying facility resource occupies a place on a resource

2 stack, that is, as I've described, it stakes a claim, that

3 they also stake a claim against anybody else who would come

4 in to displace them, a more mature resource, for example,

5 that hadn't yet staked a claim?

6 A Yes.

7 Q Would it be fair to characterize your position

8 as you've described it in this exchange that the QF, the

9 QF's entitlement to stake that claim against other resources

10 that might be more mature is really, I think you've said

11 this, dependent on the QF having negotiated in good faith

12 against a utility's unwillingness to negotiate and,

13 therefore, to break that dance of death or whatever, the

14 Commission will step in and say the claim has been staked;

15 is that it?

16 MR. WOODBURY: Mr. Chairman.

17 COMMISSIONER MILLER: Mr. Woodbury.

18 MR. WOODBURY: Could I ask for some

19 clarification in the question? He talks about more mature.

20 If he's speaking about this particular case, Rosebud and

21 Idaho Power, could Mr. Fell please indicate what he means by

22 "more mature"?

23 COMMISSIONER MILLER: Mr. Faull, were you

24 capable of answering that question? Was it clear enough to

25 you?

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1 THE WITNESS: No, it really wasn't. I was

2 going to ask for some clarification myself.

3 COMMISSIONER MILLER: Mr. Fell, apparently,

4 the question is incapable of being answered as posed. Would

5 you rephrase it, please?

6 MR. FELL: Certainly.

7 Q BY MR. FELL: First of all, I read your

8 testimony as having policy implications, not just

9 implications for this particular project, and, therefore,

10 I'm talking more in a generic sense, that a qualifying

11 facility may be able to stake a claim through this process

12 of signing a Meridian style contract, and that in staking

13 that claim, it stakes a claim against other resource

14 developers, that another resource developer may actually

15 have the site under control, may actually have a firm fuel

16 resource, may have applied for permits but not have

17 concluded that process, but may not have at that point an

18 executed contract with the utility. As I understand your

19 testimony, the QF that proposes, that signs and submits the

20 Meridian style contract stakes a claim against that other

21 resource; is that true?

22 A I wouldn't characterize it that way. The QF

23 who has reached an impasse in negotiations and makes a firm

24 offer that binds the QF to terms and conditions that have

25 been found reasonable in the past establishes a right to a

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1 QF contract. Whether some other QF is in negotiations at

2 the same time and either has not reached an impasse or is

3 not as far through in the negotiation process or whatever

4 that condition may be is a totally separate issue. It may

5 be that the establishment of the right by the first QF

6 reduces the rates to the second, but that's one of the risks

7 of doing business.

8 Q That's one of the risks of not staking your

9 claim quickly enough, isn't it? I think that's a fair

10 question.

11 COMMISSIONER MILLER: Mr. Woodbury, do you

12 have an objection?

13 MR. WOODBURY: Yes, I do. The way Mr. Fell is

14 characterizing "staking your claim," I think that the

15 Commission's methodology has been quite clear throughout the

16 years that in order to lock-in rates, you either have to

17 have a signed contract presented to the Commission or a

18 complaint on file showing that but for the actions of the

19 utility, the project is otherwise entitled to a contract,

20 and staking a claim, as Mr. Fell seems to be talking about,

21 is outside of the -- you know, basically, the Commission is

22 not a party to this and somebody just by correspondence or

23 whatever is locking this in and that hasn't been the

24 procedure that we've followed here. We've always required

25 that a complaint be filed.

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1 COMMISSIONER MILLER: I think that Mr. Fell's

2 use of the phrase staking a claim is intended as a shorthand

3 expression for a process and I don't think that its use of

4 the phrase in this context is seriously misleading. I think

5 Mr. Faull has been able to answer the questions based on it;

6 so I'll allow the question.

7 Q BY MR. FELL: Let's take an example that might

8 illustrate the problem that I'm trying to describe. You

9 have described a process that entitles Rosebud to a price

10 and a place on the resource stack by virtue of the process

11 they have gone through, and that process, I understand from

12 your testimony, would apply to a resource larger than

13 10 megawatts in particular, perhaps it applies below, but

14 here the resource is larger than 10 megawatts; is that

15 correct?

16 A Yes.

17 Q And there is no ceiling once you get beyond

18 that 10 megawatt level, according to the Commission's rules

19 in terms of the procedures that apply and the rules that

20 apply; is that correct?

21 A Only those ceilings required by PURPA.

22 Q And PURPA either imposes ceilings or imposes

23 cogeneration-type requirements?

24 A Correct.

25 Q And the Commission's rules according to the

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1 Commission's orders apply to facilities out of state that

2 deliver in Idaho, also; is that correct?

3 A That is correct.

4 Q So if I use an example that's a facility

5 that's not exactly in Idaho but could deliver in Idaho,

6 that's an example as well; so what I would propose is that

7 you consider the effect on the resource stack of, for

8 example, a 470 megawatt project located in Hermiston,

9 Oregon, which is a project that's on that list that

10 Mr. Weaver sponsored. That resource if it had staked a

11 claim quickly here could have occupied that place in the

12 resource stack, could it not?

13 A With modifications for its effect on the

14 system, yes.

15 Q And so if there were another project that were

16 farther along in its permitting, had a firm fuel supply

17 contract and were otherwise ready but had not filed a

18 complaint, that resource would then be evaluated in terms of

19 price after the 470 megawatt project that slipped in first;

20 correct?

21 A Yes.

22 Q The only point I guess I have to make in

23 closing on that is, do you observe, I'm interested in

24 whether you observed, that this claim-staking encourages

25 qualifying facilities to reach impasse and file complaints

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1 quickly, has that observation come to you that there could

2 be that effect?

3 A It encourages QFs to file complaints quickly

4 if they are unable to, if they reach impasse. I'm not sure

5 that it encourages them to make an effort to reach impasse.

6 Q Does it encourage them to provide information

7 and negotiate terms and conditions regarding these various

8 contingencies?

9 A I believe to a certain extent it does because

10 a complaint filing is an expensive procedure with

11 substantial risk involved.

12 Q But according to your testimony, they need not

13 really make any progress in terms of securing fuel, site and

14 environmental permitting; is that fair?

15 A They need to demonstrate a real project. I

16 don't believe it's necessary that they demonstrate any given

17 specific level of progress on any given item, but they need

18 to demonstrate a real project and a reasonable probability

19 that they can perform.

20 Q What do you mean by "can perform"? Does can

21 perform take into account the economics of whether they

22 desire to perform; that is to say, if the conditions of all

23 of these other activities become uneconomic to them that

24 they will back out?

25 A Certainly if the cost of performing exceeds

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1 the value of the security deposit, they're likely to back

2 out.

3 Q Let's talk about what kind of security the

4 utility has. The utility has this financial security. What

5 happens if the financial security really doesn't compensate

6 them for the loss they incur? That's their risk, isn't it?

7 A Certainly.

8 Q And if they relied on that firm resource for

9 meeting their loads, assume that it is a large resource and

10 it is reasonable to rely on it to meet their loads, if they

11 have relied on that, that's their problem, then, isn't it?

12 A That's correct.

13 Q Do you contemplate or let me phrase this

14 differently: Does the Meridian style contract contemplate

15 that someone else would take over that project and perform

16 in place of Meridian or is it just financial resolution?

17 A I believe that the Meridian contract includes

18 lien rights for the utility; so if the project were

19 partially or completely constructed, the utility could take

20 over and perform.

21 Q And what would the utility in this case, for

22 example, perform with regard to the fuel supply?

23 A The utility would have a number of options.

24 It would no longer be required to operate as a qualified

25 facility; so they could use run-of-mine coal. They could

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1 use wood waste. They could use petroleum coke. They have a

2 number of options.

3 Q But there would be no fuel supply that they

4 could turn to in order to operate that facility at the cost

5 that they had previously expected?

6 A There are too many contingencies to make a

7 statement about that one way or another. It's an unknown.

8 There would be some fuel supply at some cost and they would

9 have some capital invested in the plant. Whether or not

10 those costs were more or less than anticipated is an

11 unknown.

12 Q And the same applies to the site, to acquiring

13 the site?

14 A Certainly.

15 Q They would get whatever rights the QF might

16 have had in that area?

17 A I'm not sure that the lien rights come into

18 play until after the, until later in the process; so I'm not

19 sure on that.

20 Q So they might not have a site?

21 A They may not have a site.

22 Q And they don't have permits either, do they?

23 A Obviously, if there are no permits, they don't

24 have them.

25 Q And none of these risks that the utility faces

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1 in that circumstance have been taken into account in price,

2 have they?

3 A Yes, they have. Those risks are all part of

4 the costs of the surrogate resource in the avoided cost

5 rate; so to that extent they have, not in this specific

6 case, but in a generic form they're considered.

7 Q I'm trying to understand that. Excuse me for

8 a minute. Is the implication of what you said that the

9 utility really wouldn't have that resource, they would go

10 someplace else, they could build something else?

11 A Build or more likely buy.

12 Q So, really, it's a total abandonment and

13 restart?

14 A That, again, depends on specific

15 circumstances, where along the continuum of development that

16 the project were to end is the answer to that question.

17 Q They get what's left?

18 A As in any development contract, that's

19 correct.

20 MR. FELL: No further questions.

21 COMMISSIONER MILLER: Thank you, Mr. Fell.

22 Mr. Richardson, did you have questions?

23 MR. RICHARDSON: Just one, Mr. Chairman.

24

25

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1 CROSS-EXAMINATION

2

3 BY MR. RICHARDSON:

4 Q Mr. Faull, I apologize in advance if I

5 misheard you, but when you revised your testimony, did you

6 also revise your prefiled testimony at Page 1, Line 22?

7 A No, I didn't. Did I myself something? No, I

8 didn't. Thank you for pointing that out.

9 Q To be consistent with the revisions of the

10 last few pages of your testimony, did you want to make a

11 change there?

12 A Yes.

13 MR. WOODBURY: Just delete "not yet."

14 THE WITNESS: Yeah, I would delete everything

15 after the comma on Line 20 and starting with the word

16 "and."

17 MR. FELL: Excuse me, I got the impression

18 from Mr. Woodbury that that's not what he was proposing.

19 COMMISSIONER MILLER: Pardon me, I'm sorry,

20 we've been distracted up here for which I genuinely

21 apologize. Let's go off the record for just a second.

22 (Off the record discussion.)

23 MR. RICHARDSON: Mr. Chairman, would you like

24 me to repeat the question?

25 COMMISSIONER MILLER: Please do.

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1 Q BY MR. RICHARDSON: Mr. Faull, I asked you

2 earlier if to be consistent with your revisions to your

3 prefiled testimony that you made at the beginning of your

4 remarks this morning if you don't have any changes to make

5 on Page 1, Line 22, of your prefiled testimony.

6 A Yes, I do, and having conferred with my

7 attorney, the change that I'd like to make is to strike the

8 word "not" from the end of Line 22 and strike the word "yet"

9 at the beginning of Line 23; so that the third section of

10 that sentence reads: "to demonstrate that the proposed

11 Mountain Home plant of Rosebud Enterprises, Inc. is eligible

12 to receive firm guaranteed avoided cost rates."

13 MR. RICHARDSON: Thank you, Mr. Chairman.

14 That's my only question for Mr. Faull.

15 COMMISSIONER MILLER: Mr. Orndorff.

16

17 CROSS-EXAMINATION

18

19 BY MR. ORNDORFF:

20 Q Mr. Faull, Mr. Fell was discussing staking a

21 claim. Would you accept, subject to check, that the

22 Meridian contract has in it $48.00 a kilowatt as a total

23 security deposit?

24 A That sounds like something close to what I

25 remember.

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1 Q Would you further accept that on a 40,000

2 kilowatt project that's nearly $2 million of security?

3 A Subject to check, yes.

4 Q Do you know any rate based plant in Idaho in

5 recent history that's given ratepayers a security deposit

6 for performing?

7 A No, I don't.

8 Q Did Idaho Power offer a security deposit in

9 the Twin Falls rate basing hearing?

10 A The simple answer to that question is no.

11 They did offer a cap to the costs which is something akin to

12 a security.

13 Q Was there a cash security offered in the

14 Milner rate basing?

15 A No. Again, there was a price cap.

16 Q Does a QF contract have a price cap with a

17 fixed rate?

18 A Yes, it does.

19 Q Let me ask you, Mr. Faull, if a utility signs

20 a contract with a QF and subsequently project loads do not

21 materialize during the development phase and then the QF

22 fails, is it likely the ratepayer is better off not having

23 the resource come on line?

24 A You said project loads, do you mean loads that

25 were intended to be met by the project?

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1 Q Correct.

2 A Yes, I would say ratepayers would be better

3 off under that circumstance.

4 Q Mr. Fell referred to some contingencies, such

5 as fuel and site and permits and whatnot, those

6 contingencies not being fulfilled as of the date of the

7 signing of a contract with a QF, is that normal and

8 customary in your experience?

9 A Yes, and I'm referring to contracting in

10 general, not just utility contracting.

11 Q The Meridian contract or the Meridian project,

12 did it have a fuel agreement when it signed this contract?

13 A No, it didn't, not that I'm aware of.

14 Q Did it have all the permits?

15 A Not that I'm aware of.

16 Q Do you know if the Auger Falls project had all

17 its permits?

18 A No, I don't. I know it had its FERC license,

19 but I don't know whether it had any permits beyond that or

20 not.

21 MR. ORNDORFF: Mr. Chairman, could I approach

22 the witness with a couple of exhibits with your permission?

23 COMMISSIONER MILLER: Yes.

24 (Mr. Orndorff approached the witness.)

25 MR. ORNDORFF: I believe I've previously given

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1 all the parties these. I'd like to mark these as

2 Exhibits 13 and 14 to be consistent, I think, with my other

3 exhibit numbering.

4 COMMISSIONER MILLER: Exhibits 13 and 14 will

5 be marked.

6 (Rosebud Enterprises, Inc. Exhibit Nos. 13 &

7 14 were marked for identification.)

8 Q BY MR. ORNDORFF: Mr. Faull, have you seen

9 Exhibit 13 before?

10 A Yes, I have.

11 Q And how about Exhibit 14?

12 A I don't remember it as specifically, but I

13 believe I have seen it.

14 Q Now, I'd like to refer you to starting on

15 Page 20 --

16 MR. KLINE: At this stage, I'm sorry,

17 Mr. Orndorff, but we really need to have the exhibits

18 identified other than just that he's seen them.

19 MR. FELL: Also, Mr. Chairman, I'd like to

20 have a copy of what the exhibit is.

21 COMMISSIONER MILLER: That was Mr. Fell,

22 Mr. Orndorff.

23 MR. ORNDORFF: I believe I left them on your

24 table, Mr. Fell.

25 MR. FELL: Oh, earlier, that's these. Thank

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1 you.

2 COMMISSIONER MILLER: Would you mind

3 identifying the exhibits for the record, Mr. Orndorff?

4 MR. ORNDORFF: That would be fine.

5 Q BY MR. ORNDORFF: Turning to Exhibit 13,

6 Mr. Faull, could you identify that exhibit for us starting

7 with the cover letter?

8 A The cover letter is a letter to Mr. Kline from

9 yourself identifying the attachment which is a one-line

10 diagram of the electrical interconnect proposed for the

11 Rosebud project, as I understand it.

12 Q Did you review the electrical interconnect

13 diagram and form any opinion?

14 A I scanned it and it looked similar to typical

15 one-line diagrams. I didn't analyze it in any detail.

16 Q Now, turning to Exhibit 14, would you identify

17 that for the record, please?

18 A This is a letter, again, to Mr. Kline from

19 yourself. I'm less familiar with it. It's a

20 page-and-a-half letter. It discusses petroleum coke

21 availability. It talks about rates, avoided cost rates, and

22 a win-win-type contract. It's essentially, I would say, a

23 negotiating letter proposing a step in the negotiation.

24 Q And attached to the letter that's marked

25 Exhibit 14, what is attached?

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1 A Request for interconnection for Rosebud. It

2 identifies a location by section, township, and Page 2 is a

3 continuation that identifies the energy output, the fuel

4 type, heat rate, source of the fuel, alternate fuel,

5 storage. Page 3 identifies the type of generation,

6 indicates that the type of or the make of the generator has

7 not yet been established, but it will be a Y wound, 13.8 kV,

8 3 phase, 45 megawatt generator, power factor plus or

9 minus .9. It's generally the electrical data typically

10 required of a generating plant.

11 Q Are you generally familiar with the form

12 that's attached to Exhibit 14?

13 A Actually, I've not been directly involved with

14 requests for interconnection so that I'm not terribly

15 familiar. This isn't the first time I've seen it, but I

16 haven't studied it in any case for quite some time.

17 Q Is your understanding that such a form is

18 typically required by Idaho Power in the early stages of

19 negotiation?

20 A Yes.

21 Q I'd like you to now turn to Page 20 of your

22 revised testimony. Having reviewed the Exhibit 14 and

23 Exhibit 13, could you tell me if you still believe that your

24 comments about the interconnect on Lines 9 through 12 are

25 appropriate?

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1 MR. FELL: Excuse me, objection, and point of

2 clarification.

3 COMMISSIONER MILLER: Mr. Fell.

4 MR. FELL: Exhibit 13 that has been

5 identified, would Mr. Orndorff please tell me what he

6 believes that diagram is? He tried to identify it through

7 the witness and I'm not sure that that was the correct

8 answer.

9 COMMISSIONER MILLER: Mr. Orndorff, you were

10 directing Mr. Faull to what part of his testimony?

11 MR. ORNDORFF: I believe we're talking about

12 Page 20, Lines 9 through 12, and the objection, I think, is

13 a desire for me to identify an engineering diagram. I

14 thought it would be more helpful to the Commission to have

15 an engineer identify it, but it is an on-line electrical

16 diagram of an interconnect and the electrical system in a

17 plant that was provided Idaho Power in 1992. It's done by

18 an independent engineer who Rosebud hired.

19 MR. RIPLEY: Is this identification or

20 testimony?

21 MR. ORNDORFF: Well, Mr. Fell just asked and

22 I'm fulfilling that --

23 MR. FELL: Let me explain my point,

24 Mr. Chairman.

25 COMMISSIONER MILLER: Thank you.

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1 MR. FELL: I'm not sure from the

2 identification on that one-line diagram whether it is a

3 one-line diagram of the electrical system of the plant or of

4 the interconnection and that's what I'd like to have

5 answered.

6 COMMISSIONER MILLER: Can that be answered?

7 MR. ORNDORFF: Well, if the Commission wants

8 me to try to explain it; otherwise, I think Mr. Fell [sic]

9 is an engineer and is qualified to offer testimony, and if

10 Mr. Fell doesn't agree with him, I'm sure he will let us

11 know.

12 MR. FELL: I was asking if Mr. Orndorff would

13 answer whether he has presented this to the witness as a

14 representation of the on-line diagram of the plant or of the

15 interconnection.

16 COMMISSIONER MILLER: Could you make an oral

17 representation with respect to what you think this is,

18 Mr. Orndorff?

19 MR. ORNDORFF: My understanding is,

20 Mr. Chairman, that this is an electrical diagram. Now, I am

21 not an engineer and the Exhibit 13 speaks for itself and

22 should be considered just as that.

23 MR. FELL: I object to the introduction of the

24 exhibit and it doesn't speak for itself to me.

25 COMMISSIONER MILLER: I think we'll take a

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1 recess for a few minutes.

2 (Recess.)

3 COMMISSIONER SMITH: We'll go back on the

4 record. There has been a distraction here at the Commission

5 and we will need to adjourn this hearing subject to further

6 call of the Commission, and so we are now recessed until

7 further notice.

8 (The Hearing recessed at 10:50 a.m.)

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1 AUTHENTICATION

2

3

4 This is to certify that the foregoing proceedings

5 held in the matter of Rosebud Enterprises, Inc.,

6 Complainant, versus Idaho Power Company, Respondent,

7 commencing at 9:30 a.m., on Tuesday, December 15, and

8 continuing through December 16, 1993, at the Commission

9 Hearing Room, 472 West Washington, Boise, Idaho, is a true

10 and correct transcript of said proceedings and the original

11 thereof for the file of the Commission.

12 Accuracy of all prefiled testimony as

13 originally submitted to the Reporter and incorporated herein

14 at the direction of the Commission is the sole

15 responsibility of the submitting parties.

16

17

18

19 CONSTANCE S. BUCY
Certified Shorthand Reporter
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