20200128_dh1.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:DAYN HARDIE
DEPUTY ATTORNEY GENERAL
DATE:JANUARY 17,2020
SUBJECT:IN THE MATTER OF IDAHO POWER COMPANY'S APPLICATION TO
UPDATE THE SUBSTATION ALLOWANCE UNDER SCHEDULE 19-
LARGE POWER SERVICE;CASE NO.IPC-E-19-40.
On December 27,2019,Idaho Power Company ("Company")applied for approval to
update the substation allowance outlined in Schedule 19-Large Power Service ("Substation
Allowance").Application at 1.The Company's Substation Allowance typically is filed as a tariff
advice.Id.at 2.However,Commission Staff requested the Company file this update as a case.Id.
The Company requests March 15,2020 effective date and that its Application be reviewed under
Modified Procedure.Id.at 1,4-5.
THE APPLICATION
The Company seeks to decrease its Substation Allowance by 29%,from $69,397 per
megawatt ("MW")to $49,253 per MW'.Id.at 3;Attachment 2.The proposed change results from
updated material and labor costs.Id.Material costs increased by about 5%,and labor costs
increased by about 16%.Id.at 3-4.
Materials costs increased because the Company has installed larger transformers when
upgrading substations.The Company changed the default transformer it uses to estimate costs from
the 30 mega volt amp ("MVA")transformer it historically has used to the 44.8 MVA transformer
it has typically installed in recent years.2 Id.at 3.The 44.8 MVA transformer increased material
i The maximum possible allowance wi[I be determined by multiplying the customer's actual increase in load by $49,253 per MW
but will not exceed the actual cost of the substation facilities.
2 [n Order No.34277,the Commission found it was "reasonable and just to base estimated transformer costs on other,actual
similar transformer costs..."
DECISION MEMORANDUM l
costs by 20%.Id.This increase was offset somewhat by a 6%reduction to the cost of the 4-unit
metalclad and a 9.81%to 9.57%decrease in the general overhead rate.Id.
Labor costs increased because the construction labor rate increased by about 2.75%,and
because the Company added 80 hours of System Protection Engineering labor.3
STAFF RECOMMENDATION
Staff recommends the Commission issue a Notice of Application and Notice of Modified
Procedure with a twenty-one (21)day comment period for Staff and other interested persons and
a seven (7)day reply comment period for the Company.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and Notice of Modified
Procedure that establishes a twenty-one (21)day comment period for Staff and any other interested
persons and a seven (7)day reply comment period for the Company?
Dayn S.Hardie
Deputy Attorney General
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3 System Protection Engineering includes time for project scoping,fault studies,setting and logic development,panel shop
testing,and commission relaying.On average.System Protection Engineering requires between 80 and 120 hours.
DECISION MEMORANDUM 2