20031015Teinert Direct.pdf

Peter J. Richardson ISB 3195
Molly O'Leary ISB 4996
Richardson & O'Leary PLLC
99 East State Street
PO Box 1849
Eagle, Idaho 83616
[phone]
(208) 938- 7904 fax
peter(fYri chardsonando I eary. com
REC~E:lvtD FILED
21931C1 15 PH 12: 33
iDi\ilU FUBUC
UTILITIES COMMISSION
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
Kimball Properties Limited Partnership, and
Idaho Power Company, an Idaho Corporation
, )
Hewlett Packard Company,
Complainants
vs.
Respondent.
Case No.: CASE NO. IPC-00-
NOTICE OF SUBSTITUTION OF DIRECT
TESTIMONY OF KIMBALL PROPERTIES
LIMITED PARTNERSHIP AND THE
HEWLETT PACKARD COMPANY
COMES NOW, Kimball Properties Limited Partnership and the Hewlett Packard
Company (herein collectively "complainants ) by and through their attorneys of record and
hereby provides notice of its withdrawal ofthe direct testimony and Exhibit No.1 of Mr. Stuart
Trippel in the above captioned matter. Enclosed for filing is the direct testimony of Mr. Pike
Teinert and Replacement Exhibit No.1 with additional Exhibits Nos. 12 and 13. The direct
testimony of Mr. Trippel and Exhibit No.1 should be discarded and replaced with the direct
testimony of Mr. Teinert and Replacement Exhibit No.1. Mr. Teinert intends to adopt Exhibit
Nos. 2 through 11 that are currently in Mr. Trippel's direct testimony. Therefore please strike
the name "Trippel" on Exhibits Nos. 2 through 11 and replace it with the name "Teinert.
In addition please correct your service list in this matter by deleting Mr. Trippel and
adding Mr. Teinert at the following address:
Notice - 1
Pike Teinert
834 Harcourt Road
Boise, Idaho 83702
[phone]
[phone] (fax)
pteinert(fYcab leone. net
Dmed tlris 15
Peter .chardson ISB 3195
Richardson & O'Leary PLLC
99 East State Street
PO Boc 1849
Eagle, Idaho 83616
Notice - 2
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on October 16th, 2003 , I served a true and correct copy ofthe within
and foregoing NOTICE OF SUBSTITUTION OF DIRECT TESTIMONY OF KIMBALL
PROPERTIES LIMITED PARTNERSHIP AND THE HEWLETT PACKARD COMPANY and
the DIRECT TESTIMONY OF MR. PIKE TEINERT WITH REPLACEMENT EXHIBIT NO.
AND EXHIBITS NOS. 12 AND upon the following named individuals in the manner shown:
Barton L. Kline
Monica Moen
Idaho Power Company
POBox 70
Boise, 10 83707
Hand Delivered
Scott Woodbury, Esq.
Deputy Attorney General
Idaho Public Utilities Commission
POBox 83720
Boise, ID 83720-0074
Hand Delivered
Brian Graham
Hewlett Packard Company LIS
11311 Chinden Blvd., MS 782
Boise, Idaho 83714-1021
First Class Mail, Postage Prepaid
~~
L4\~(
Administrative Assistant
Certificate of Service
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
KIMBALL PROPERTIES LIMITED
PARTNERSHIP AND HEWLETT
PACKARD COMPANY
COMPLAINANT S
CASE NO. IPC-E-OO-12
VS.
IDAHO POWER COMPANY , AN IDAHO
CORPORATION.
DIRECT TESTIMONY AND EXHIBITS OF
PIKE TEINERT
ON BEHALF OF
KIMBALL PROPERTIES LIMITED PARTNERSHIP
AND HEWLETT PACKARD COMPANY
TABLE OF CONTENTS
QUALIFICATIONS ....................................... 2
INTRODUCTION AND OVERVIEW OF TESTIMONY. . . . . . . . . . . . . . . 3
FACTUAL BACKGROUND.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
COST ALLOCATION ISSUES..............................
Teinert, Di
Hewlett Packard andKimball Properties
PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.
My name is Pike Teinert and my business address
is 834 Harcourt Road Boise, Idaho 83702.
WHAT IS YOUR OCCUPATION?
I am a principal in Energy Strategies Group LLC,
consul ting engineering firm that provides services
clients in the public utility industry..
ARE YOU SPONSORING ANY EXHIBITS WITH THIS
TESTIMONY?
Yes.I am sponsoring Exhibit Nos. 1 through 13.
Exhibi t No.labeled Replacement Exhibi t No.1. "
Exhibit Nos. 2 - 11 indicate that they are being sponsored
by "Trippel.They are now sponsored by me and therefore
the name "Trippel" should be replaced on those Exhibits with
my name, "Teinert.
QUALIFICATIONS
PLEASE DESCRIBE YOUR QUALIFICATIONS TO TESTIFY
AS AN EXPERT IN THIS PROCEEDING.
electrical engineer with thirty-four
years experience in the energy industry in positions ranging
from design engineer to Vice President. A complete resume,
including my educational background and employment history,
is presented as Replacement Exhibit No.
Teinert, Di
Hewlett Packard andKimball Properties
ARE YOU FAMILIAR WITH THE IDAHO PUBLIC UTILITIES
COMMISSION AND ELECTRICITY ISSUES IN THE STATE OF IDAHO?
Yes.Al though I am relatively new to the State
of Idaho and this Commission,I have read extensively from
the Commission andrecent not orders.recent
addi tion,I am very familiar with the regulatory framework
in which Idaho Power operates.
HAVE YOU PREVIOUSLY APPEARED EXPERT
WITNESS BEFORE THIS COMMISSION?
No.
INTRODUCTION AND OVERVIEW OF TESTIMONY
WHOSE BEHALF ARE YOU TESTIFYING THIS
. PROCEEDING?
testifying behalf the Kimba 11
Properties Limited Partnership Kimball" and the Hewlett
Packard Company ("HP"
WHAT IS THE PURPOSE OF YOUR TESTIMONY?
The purpose of my testimony is to present the
factual circumstances under which HP was required to pay a
contribution in aid of construction for a new substation
located just the Boisewest Towne Square shopping
complex. I also offer an opinion on the inappropriateness of
the payment.
Teinert, Di
Hewlett Packard andKimball Properties
WHY SHOULD THE CIRCUMSTANCES UNDER WHICH HP WAS
CHARGED A CONTRIBUTION IN AID OF CONSTRUCTION BE OF INTEREST
TO THIS COMMISSION?
HP was,in my opinion, unfairly singled out to
partially pay for the construction of a new substation known
as the Bethel Court Substation.
WHY DO YOU SAY THAT HP WAS UNFAIRLY SINGLED OUT
FOR PAYMENT OF ITS CONTRIBUTION IN AID OF CONSTRUCTION?
will show,Idaho Power Company (" Idaho
Power " or the "Company has an arbitrary and irrational
policy regarding payments from industrial customers for the
construction of substation and transmission lines.
ARE THERE OTHER REASONS THAT CAUSE YOU TO STATE
THAT HP WAS UNFAIRLY SINGLED OUT?
Yes.In addition to having an arbitrary and
irrational policy, Idaho Power does not apply that policy on
consistent basis,which that not onlymeans
arbi trary and irrational,but also capricious and
discriminatory.
FACTUAL BACKGROUND
WHAT HAS LEAD TO HP' COMPLAINT AGAINST IDAHO
POWER FOR RE FUND ITS CONTRIBUTION AID
CONSTRUCTION?
Teinert, Di
Hewlett Packard and
Kimball Properties
Beginning in 1999, Kimball began construction of
four buildings located on North Sailfish Place , West Golden
Trout Street , and North Kimball Place in the city of Boise.
These four buildings are commonly referred to as the Kimball
Business Park.
WHAT IS THE RELATIONSHIP BETWEEN KIMBALL AND HP?
directly reimbursed Kimball for the
construction of the Kimball Business Park , and HP currently
occupies all four buildings.These buildings are served
wi th electric power from Idaho Power under the Company
Schedule 9.Idaho Power determined that it was necessary to
construct a new substation to provide electric service to HP
in the Kimball Business Park , to serve future loads in the
area, and to readjust some existing loads.At the time of
the in t e rconne ct i on request was anticipated that these
buildings would served under Schedule 19,the large
industrial customer rate schedule.
WHERE IS THE KIMBALL BUSINESS PARK?
located between Emerald Street the
south and Franklin Road to the north.It is a little over
one mile west of the Boise Towne Square shopping center.
occupies what it refers to as buildings 26,, 28 and 29
located at 303 N. Kimball Place, 333 N. Sailfish Place, 9390
Golden Dr.Trout Dr.and 9415 Golden Trout
respectively.
Teinert, Di
Hewlett Packard and
Kimball Properties
DOES HP DISPUTE THE NECESSITY OF CONSTRUCTING A
NEW SUBSTATION TO SERVE FACILITIES IN THE KIMBALL BUSINESS
PARK AREA?
Not exactly.
PLEASE EXPLAIN.
There appears to have been adequate capacity at the
Cloverdale substation all Hewlettservesome
Packard Buildings that are at issue in this case.Those
buildings are referred to internally by HP as Building Nos.
26, 27 , 28 and 29.
ON WHAT DO YOU BASE YOUR ASSERTION THAT IDAHO
POWER HAD ADEQUATE CAPACITY AT THE CLOVERDALE SUBSTATION TO
SERVE HP'NEW BUILDINGS?
The Record of Decision, Sequence No. 2113, Rev.
dated 6/20/00 prepared by Mr.Num.KA Georgeson that
states "A new distribution feeder could be built from the
existing Cloverdale substation to serve the load but this
would only be a temporary fix. Cost for this line would run
about $100,000 per year in Railroad RW fees. Wi thin a year
or so an additional feeder would also be required to serve
the increasing loads 12 )in this area. "(See exhibit No.
There also other substations,addi tionwere the
Cloverdale Substation, that could have served HP.
WHAT OTHER SUBSTATIONS?
Teinert , Di
Hewlett Packard andKimball Properties
The Ustick,Victory and Wye substations,which
are all located in the Bethel Court high density load area,
all could have been used to serve some or all of the new HP
load.
IF THERE WERE FOUR SUBSTATIONS IN THE BETHEL
COURT HIGH DENSITY LOAD AREA THEN WHY DID IDAHO POWER
CHOOSE TO CONSTRUCT A NEW SUBSTATION AT THAT LOCATION?
Well, of course, Idaho Power is free to design
its system as it sees fit.But it appears that due to poor
planning decisions found itself wi thout adequate
distribution corridors to the heart of this high density
load thereby making actually less expensi vearea
construct a new substation rather than connecting to any of
four proximate substations in the area that had existing
capacity to serve the new HP load.
Q. YOU SAY IDAHO POWER DID NOT ADEQUATELY PLAN FOR
DISTRIBUTION LINES IN THE BETHEL COURT AREA. ISN'T THAT AREA
HEAVILY NETWORKED WITH DISTRIBUTION LINES?
Yes,Based Idaho Power Substation Feeder
Maps,there are in close proximity to theseveral lines
Bethel Court area. But Idaho Power claims that they were too
heavily loaded for the addition of HP'loads. One of the
Al ternati ves " discussed in Idaho Power s Record of Decision
for Bethel Court Substation was to build a feeder from the
Teinert , Di
Hewlett Packard and
Kimball Properties
Cloverdale Substation along the railroad right-of-way to the
HP loads.
IS THAT THE ONLY WAY THAT EXISTING SUBSTATION
CAPACITY FROM THE FOUR SURROUNDING SUBSTATIONS COULD SERVE
THE HP LOADS?
ExistingNo,feeders from thesome
substations could have been used to serve the HP loads.
HOW THAT POSSIBLE GIVEN THE LOADING THAT
EXISTED ON THE DISTRIBUTION FEEDERS IN THE BETHEL COURT AREA
AT THE TIME AND THEIR DISTANCE FROM THEIR SUBSTATIONS?
A. Based on the Idaho Power s Substation Feeder Maps,
the four substations surrounding the Bethel Court area
through their distribution feeders provide dense
distribution network and offer switching capability to move
existing load from one feeder to another.
Q. HAVE YOU REVIEWED THESE MAPS TO DETERMINE WHAT
FEEDERS MAY HAVE BEEN CAPABLE OF SERVING THE HP LOADS?
A. Yes, Although there may have been others capable
of serving the HP loads, three feeders that existed before
requested service,Cloverdale-012,Cloverdale-014 and
Ustick-015 bordered the area near HP buildings 26, 27, 28
and 29 and could have been used to provide service to the
buildings.
Q. HOW COULD THOSE THREE FEEDERS HAVE SERVED THE HP
LOADS IF THEY WERE ALREADY LOADED?
Teinert, Di
Hewlett Packard and
Kimball Properties
Since the feeders from all four substations are
closely networked, load can be moved from one distribution
feeder to another using existing switches and possibly some
new switches. The close proximity of several circuits to the
Cloverdale-012 and -014 and the Ustick-015 circuits offers
the opportunity to relieve them of enough load to pick up
the HP loads without overloading these three circuits.
DID IDAHO POWER ANALYZE THE CAPABILITY OF THE
NETWORK IN THE BETHEL COURT AREA TO DETERMINE WHETHER OR NOT
EXISTING FEEDERS COULD BE UNLOADED AND THEN USED TO SERVE
THE HP LOADS?
I cannot say that they did nor did not perform
that analysis. However, there is no indication that it was
performed based on the information in the "Alternatives
section of the Record of Decision for the Bethel Court
Substation proj ect.
HAS IDAHO POWER COMPLETED PLANNING STUDIES THAT
PROJECT THE NEED FOR ADDITIONAL TRANSMISSION AND SUBSTATION
FACILITIES IN THE TREASURE VALLEY?
Yes.Idaho Power 10 Year Transmission Plan
for Treasure Valley completed in 2002 uses the loop model of
the electrical system first identified and used in Idaho
Power study that completed 2000.year was
identifies the Bethel Court Substation service area as a
critical high density,12 MW plus per square mile load
Teinert, Di
Hewlett Packard and
Kimball Properties
area.Al though not specifically identified as Bethel Court,
the year Tranmission Plan calls for consideration of
substations of the Bethel Court size, or loop substations
for high density areas as found in the Bethel Court area.
Thus Idaho Power did have plans to build substations in the
high density Bethel Court area and had to implement them
earlier than expected compensate for Cloverdale
distribution delivery corridor deficiencies.Also,Idaho
Power was aware of additional future load growth in this
area. (See exhibit No. 12)
DOES IDAHO POWER'S TEN YEAR TRANSMISSION PLAN
PROVIDE SUBSTATION CRITERIA FOR HIGH DENSITY LOAD AREAS LIKE
THE BETHEL COURT SUBSTATION AREA?
Yes.It specifies that source substations, like
the Cloverdale substation that high-densi ty loadserve
areas above 12 MW per square mile,serve about 120 MW of
12.kv load.Loop substations,like Bethel Court that
serve loadless,supplement the high densi ty
demand. A copy of the 10 year Transmission Plan is attached
at Exhibit 13.
ARE THERE OTHER CRITERIA THAT APPLY THE
BETHEL COURT SITE SUBSTATION?
Yes.The Ten Year Transmission Plan states that
when selecting substation sites,select sites near
railroads further indicating a substation near the railroad,
Teinert, Di
Hewlett Packard andKimball Properties
like the Bethel Court substation, was the result of prior
planning.
WHAT DO THESE CRITERIA INDICATE IN THE INSTANCE
OF THE BETHEL COURT SUBSTATION?
The Bethel substationCourt fits both the
above cri teria loop substation si tingand near
railroad for a substation planned to serve loads in a high
densi ty load areas like the Bethel Court area. It also fits
the substation criteria for high density load areas - that
is a 40 MW or less substation that supports high density
load.Although a specific site was not yet selected, Idaho
Power was aware of the need for an additional substation in
the high areadensi ty load between Cloverdale,Ustick,
Victory and substationsWye but had not appropriately
planned for it and had not planned for adequate distribution
deli very corridors the high densi ty areas.For
example, Cloverdale substation has not yet fully utilized
it's capability due to lack of planning for distribution
feeder deli very corridors for service to high densi ty
loads like those in the Bethel Court area.
Q. SHOULD IDAHO POWER HAVE RECOGNIZED THE INADEQUACY
OF THEIR DISTRIBUTION DELIVERY CAPACITY IN THE BETHEL COURT
AREA BEFORE HP REQUESTD SERVICE TO BUILDINGS 26 , 27 , 28 AND
29?
Teinert, Di
Hewlett Packard and
Kimball Properties
Yes.Idaho Power s long range planning studies
of the area where Bethel Court now resides, indicated that
it was a high density load area prior to the request for
service in the Kimballfrom HP for its new buildings
Business Park. Therefore, Idaho Power should have known that
it did not have adequate distribution delivery corridors to
serve the potential remaining undeveloped high-density load
area at more than 12 MW per square mile and also should have
known that it would have to build a loop sub, like Bethel
Court substation , in the area before HP requested service.
DID IDAHO POWER'S STUDIES THE YEAR
TRANSMISSION PLAN INDICATE THAT THE BETHEL COURT AREA WAS A
HIGH DENSITY LOAD AREA AND THAT IDAHO POWER FACILITIES IN
THAT AREA WERE INADEQUATE TO SERVE THE HIGH DENSITY LOAD IN
THAT AREA?
Yes,the plan provides a base case analysis at
1265 MW Treasure Valley load that shows the Cloverdale-
Bethel Court 69 KV line as overloaded as early as 2002. Thus
the need for the 69 KV to 138 KV conversion of the line.
(See Exhibit 12)
WAS IDAHO POWER'S PLANNING GROUP AWARE OF THE
INADEQUACY OF IDAHO POWER FACILITIES IN THE BETHEL COURT
HIGH DENSITY LOAD AREA?
A. Yes, Keith Georgeson, planning engineer, and David
Kip " Sikes,werehissupervisor,aware of the 10 Year
Teinert, Di
Hewlett Packard and
Kimball Properties
Transmission Plan and 75 study since Georgeson was
contributing author of the 10 year plan. Thus both
aware that substations like Bethel Courtwere Substation
were part of a plan for high density load areas like the
Bethel Court Substation area.
WHERE IS THE BETHEL COURT SUBSTATION LOCATED?
The Bethel Court Substation located just
south Franklin Road adj acent the Union Pacific
railroad tracks.Attached as Exhibit No.2 is a map showing
all of Idaho Power s substations in a seven-mile radius of
Bethel Court.Exhibi t No.shows,Bethel Court
located almost exactly in the center of the Boise-Meridian
metropoli tan area.There are a total of 15 substations in
this area.Indeed, if we take a close look, the fact that
the Bethel Court Substation is in the heart of Idaho Power
high density load,East Treasure Valley service territory
becomes even more dramatic.
Q . PLEASE EXPLAIN.
Exhibit showing the Bethel Courtmap
Substation in relation to the closest substations in each
direction.The Bethel Court Substation is almost exactly in
the center densely developed thepartvery
Boise/Meridian Wye,urban bounded the Ustick,area
Cloverdale and Victory Substations.It is hard to imagine
Teinert, Di
Hewlett Packard and
Kimball Properties
that responsible for the need for new substation
capaci ty in this area.
ARE THERE OTHER INDUSTRIAL CUSTOMERS THE
SEVEN-MILE RADIUS SHOWN ON EXHIBIT 2?
accordingYes,confidential Idaho Power
response to discovery, I have learned that there are thirty
Schedule customers that those thirtyarea.
Schedule 19 customers,I am aware that only HP has been
required to pay for a portion of a new substation.
It is interesting to note that this is the first new
substation buil t that seven-mile radius,not
counting the Hewlett Packard Substation,over twenty
years.That seems remarkable.
WHY I S THAT REMARKABLE ?
Looking mapsthe and considering the
unprecedented growth that has taken place in Boise over the
last twenty remarkable that otheryears,new
substations were not built earlier.Exhibi t No.4 is a list
of the substations in this area by year of construction.
The Hewlett Packard Substation for its Chinden Blvd. complex
is left off the list because it was constructed to serve a
single customer and was paid for by that customer.In that
respect it is different from the rest of the substations on
Exhibi t No.
Teinert, Di
Hewlett Packard and
Kimball Properties
ARE YOU SUGGESTING THAT IDAHO POWER HAS NOT
UPGRADED ITS SUBSTATION CAPACITY IN THIS AREA WITHIN THE
PAST TWENTY YEARS?
No.Upgrades must have been made to keep up
wi th the rapid growth in the Boise area.Referring again to
Exhibi t No.4, however, there seems to be a lumpy pattern of
substation construction.There flurry new
construction followed by a period of acti vi ty.The
company was actively building substations in this area in
the 1960s and then activity occurred for almost
decade.Then the late 1970s saw several new substations,
followed by two decades of no acti vi ty.Now, there are two
new substations constructed in the early 2000s - Joplin and
Bethel Court.The time-clustered pattern appears to be
repeating.
DID IDAHO POWER REQUIRE HP TO PAY FOR THE BETHEL
COURT SUBSTATION?
Yes,Exhibitpart.No.copy
correspondence from Gregory Hall of Idaho Power,in which
Idaho Power informed HP that before it would proceed with
the new substation, a contribution in the amount of $561,824
would have paid.that $490,824amount,was
directly related to the substation, and $71,000 was for new
distribution facilitates to serve the HP properties.HP has
Teinert , Di
Hewlett Packard and
Kimball Properties
no dispute with Idaho Power over payment of the $71,000 for
distribution facilities.
HOW DID IDAHO THE $490 824POWER ARRIVE
FIGURE?
The second Exhibi t (whichNo.page
actually labeled "Page 1") contains a breakdown of the cost
of the Bethel Court substation.Idaho Power determined that
it would pro-rate the Substation s total cost by the ratio
of HP's load to the total substation capacity.Since HP was
estimated to have a total connected load of 4 megawatts, and
the capacity of the substation is 20 megawatts, Idaho Power
charged HP for one-fifth,or 20 percent,of the cost of
construction.
DID HP PAY THE REQUESTED AMOUNT?
Yes,but did under protest,while
reserving the right to challenge that payment later. Exhibit
No.6 is a copy of the letter of transmittal from Winston
Moore, the general manager of Kimball Properties, to Larry
Ripley, attorney for Idaho Power, indicating that a check in
the $561,824amount delivered to Idaho Power onwas
October 29,1999.copy of the check attached as
Exhibit
IF HP DISPUTED THE CHARGE , WHY DID IT PAY THE
BILL , EVEN IF IT DID SO "UNDER PROTEST"?
Teinert, Di
Hewlett Packard andKimball Properties
It would have been extremely disruptive to HP'
business operations to delay occupancy of the facilities for
which the electric power was needed.so,Had it done
would have been left even more financially disadvantaged
than it is now.HP made an appropriate business decision
overall, while realizing that it would need to approach the
Commission to resolve this specific dispute at a later time.
COST ALLOCATION ISSUES
WHY YOU CALL IDAHO POWER'SYSTEM
APPORTIONING THE COSTS OF NEW FACILITIES ARBITRARY AND
IRRATIONAL?
Idaho Power policy charging industrial
customers for new transmission and substation facilities is
arbitrary and irrational because it allocates an excessive
cost to the load that comes on-line nearest the time of
construction , regardless of the size of the load.In other
words, costs are allocated based on when one connects to the
system and not on a uniform system based upon objective cost
allocation criteria.
WHAT DO YOU MEAN?
had constructed its facili ties
location where there was sufficient capacity to serve its
load, then under Idaho Power s system of cost apportionment,
Teinert , Di
Hewlett Packard andKimball Properties
the anyCompanywouldhavenotassessed charge for
substation or transmission upgrades.
WHAT IS ARBITRARY ABOUT SUCH A SYSTEM?
If a new industrial customer were now to locate
in the Kimball Business Park, then that new customer would
chargednot anything for the Bethel Courtuse
Substation (beyond, naturally, what is already embedded in
Schedule 19 rates for general substation service).It was
nothing other than a matter of timing that caused HP to be
assessed almost half a million dollars for a substation that
others may now use without also making contributions in aid
construction for substation capacity.This
inherently arbitrary policy.
Q. DO YOU HAVE ANY OBSERVATIONS RELATIVE TO HOW
IDAHO POWER IMPLEMENTED ITS POLICY THIS PARTICULAR
INSTANCE?
Yes.noted earlier the fournone
buildings are served under Schedule 19.They are all served
under Schedule 9.
WHY IS THAT RELEVANT?
Schedule 9, unlike Schedule 19, does not contemplate
new customers contributing to substation construction.But
nevertheless, at the time the request for service was made
Idaho Power was operating under the assumption that these
buildings would, in fact, be served under Schedule 19.Even
Teinert, Di
Hewlett Packard andKimball Properties
wi th that assumption,have serious concerns about how
their policy of allocation of the substation costs to these
three customers was implemented.
WHY YOU REFER THE PLURAL
"CUSTOMERS? "ISN'T IT JUST A SINGLE ENTITY?
Indeed.HP is a single corporate entity as far
know.But the utili ty each indi vidualarena
delivery point or meter actually considered to
separate customer, which receives a separate invoice or bill
from Idaho Power.So, the fact that HP has four buildings
Kimball Business Park that served through threeare
separate meters actually means ~hat HP is considered to be
three separate customers.
IS THAT JUST A CUSTOM IN THE UTILITY INDUSTRY
TO CONSIDER A SINGLE COMPANY WITH MULTIPLE FACILITIES ON
DIFFERENT METERS TO ACTUALLY BE MULTIPLE CUSTOMERS?
No.If entities such as HP , or chains of small
commercial businesses were considered to be single customers
the utili ty would lose significant Also,revenues.
believe the Commission has rules prohibiting what is called
master metering.I am sure that HP would like to have had
these three meters amalgamated for billing purposes, as it
would lower its rate to the more favorable Schedule 19 rate.
Just as a chain of small restaurants or gas stations that
Teinert, Di
Hewlett Packard andKimball Properties
are owned by the same corporate parent would like to be
considered a single customer.
, WHAT IS THE SIGNIFICANCE TO THE FACT THAT HP
IS REALLY THREE SEPARATE CUSTOMERS?
It is quite significant in the application of
Idaho Power own policy.shows that its policy was
arbi trarily detriment.administered HP'considerable
Assume for a moment that none of our other arguments in this
matter convince the Commission that HP should not be charged
for any portion of the Bethel Court Substation.Also assume
that Idaho Power s policy is endorsed by the Commission.
WHAT WOULD ONE CONCLUDE USING THOSE ASSUMPTIONS?
Consistently applying Idaho Power s own policy,
the first building that was separately metered would be the
entity Bethel" responsible for the construction the
Court Substation.Subsequent buildings that were separately
metered, regardless of who owns the building, would then be
served from the new substation because Idaho Power would
have sufficient capacity those subsequentserve
buildings.is,under Idaho Power policy,the first
customer that the forcustomer which inadequatenew
capacity caused the construction of the new substation.
other words Idaho Power amalgamated loads for purposes of
charging for substation construction but doesn t amalgamate
Teinert, Di
Hewlett Packard andKimball Properties
the loads for other billingverysame purposes.This
appears to be both discriminatory and arbitrary.
WREN'T ALL OF THE BUILDINGS BUILT AT THE SAME
TIME?
No.The proj ect was phased-in over a period of
several months.Building No.2 6 (the first new customer)
was completed in approximately October of 1999.Building
No. 27 was not constructed until the next year in January of
2000.Building No. 26 then , using Idaho Power logic, is the
only customer that was responsible for the new substation.
That building was constructed with a 1500 KVA transformer
which is equally to roughly 1.5 MW.
WHAT SHOULD HP HAVE BEEN CHARGED USING IDAHO
POWER'S OWN POLICY?
Assuming reasonable,Idaho Power policy
which we do not do, HP's share of the cost of this new 20 MW
substation should have been 1.5/20 which is equal to 7.
percent rather than 4/20 or 20 percent.Under this scenario
enti tIed refund the difference between
$490,824 and $184 058.
IS IT YOUR POSITION THAT HP ACTUALLY OWES IDAHO
POWER FOR PERCENT OF THE COST OF THE BETHEL COURT
SUBSTATION?
Teinert, Di
Hewlett Packard and
Kimball Properties
No.This illustrates a strong argument to the
contrary.It is a stark illustration of the discriminatory
and arbitrary treatment afforded HP by Idaho Power.
ARE THERE OTHER ISSUES IMPLICATED IDAHO
POWER'CHARGING HP FOR ITS PROPORTIONATE SHARE OF THE
BETHEL COURT SUBSTATION?
Assuming HPYes.(and not poor planning on Idaho
Power s part) caused the need for this substation, then it
should pay no more than an appropriate share of the net
present value of the difference between the cost of building
the Bethel Court substation at the time of HP's request for
service to their new facilities in the Kimball Business Park
and the time that a new substation would have been needed to
serve this high density load.
WHEN WOULD THAT HAVE BEEN?
From reading Idaho Power s ten year transmission
plan,it appears that a new substation in this area would
have been required to serve this high density load area in
approximately 2002.Based on Appendix the Year
Transmission Plan the Cloverdale to Bethel Court 69 KV line
would be overloaded in 2002 by 8% due to area high density
loads.
ARE THERE OTHER PAYMENT CALCULATIONS
ALTERNATIVES APPROPRIATE IN THIS CASE?
Teinert, Di
Hewlett Packard andKimball Properties
A. Yes, HP should pay no more than an amount equal
to the portion of the cost of new distribution facilities to
serve their new load based on Rule including a vested
interest provision any railroad right ofand excluding
way cost since inadequate distribution delivery corridor
planning necessitated the proposed railroad right of way
feeder route.
Q. ARE THERE SIMILAR CASES WHERE THIS ALTERNATIVE HAS
BEEN USED BY IDAHO POWER?
Yes,WestFarms requirednotwas pay any
transmission or substation cost associated with construction
of a new substation from which they received service. They
were only required to pay a portion of the new distribution
cost to serve their facility.
WHY IS WESTFARMS FOODS RELEVANT TO THIS CASE?
From looking at documents made available to us
the WestFarm Foods (now known Cheese)Jerome
appears that Idaho Power charged them over $1,000,000 for
transmission and substation upgrades they said were needed
to be made to serve a planned WestFarm expansion.WestFarm
obj ected and Idaho Power apparently just backed down and
only charged them a relatively modest fee for connections.
Teinert, Di
Hewlett Packard andKimball Properties
Q . ARE THERE OTHER CASES WHERE IDAHO POWER DEVIATED
FROM THE PAYMENT CALCULATIONS ANALYSIS THAT THEY USED FOR HP
TO SERVE BUILDING NOS. 26 , 27 , 28 AND 29?
Yes,Idaho Power in the Meridian Gold Company
(MGC) was required by the IPUC in IPC-E-90-14 to provide MGC
a credit for any substation and transmission capacity that
was available although inadequate to serve the entire load
to be served at MGC. In that case, the pro rata share of the
transmission and associated upgrades to serve MGC mining
load was reduced by an amount equal to the unused system
capacity available, but inadequate to serve the MGC load.
Based on the logic in the MGC case, HP would be allowed a
credit for the capacity in any or all of the subs in the
area that could have served all or part of the new HP load.
That available capacity is well in excess of HP'4 MW
connected load for buildings 26, 27, 28 and 29 (actually the
excess substation capacity was in excess of approximately 70
MW. Therefore , under the MGC model , HP should pay nothing.
ARE THERE OTHER REASONS THAT HP SHOULD NOT BE
SINGLED OUT TO PAY FOR A PORTION OF BETHEL COURT SUBSTATION?
This is a relatively dense area that contains a
mix large commercial and industrial facilities.The
Bethel Court substation deli vers power many more
customers than just HP.The key point is that it is only by
Teinert, Di
Hewlett Packard andKimball Properties
accident timing that charged for thiswas
substation facility.
HOW DO YOU KNOW THAT THE BETHEL COURT SUBSTATION
DELIVERS POWER TO MANY MORE CUSTOMERS THAN JUST HP?
The Idaho Power system is an integrated electric
grid on which power flows over the path of least resistance.
Generically as new transmission and substation facilities
are added those facilities support the entire area.
CAN YOU POINT TO ANYTHING THAT SUGGESTS THE
BETHEL COURT SUBSTATION IS BENEFITING THE IDAHO POWER SYSTEM
AS A WHOLE?
Yes.Attached,Exhibi t two-page
feeder map of the Bethel Court Substation and its immediate
environs.during ourThisdocument was provided to
meetings with Idaho Power personnel at their headquarters in
Boise.It was prepared by Idaho Power and shows how the
Bethel Court Substation integrates into the Kimball Business
Park and surrounding areas.The first page of Exhibit 8 is
labeled in the lower right hand corner as "Feeder Map BCRT -
011" and the second page of Exhibit 8 is similarly labeled
Feeder Map BCRT-012"
WHAT IS THE DIFFERENCE IN THE TWO MAPS?
First,pointshould that BCRT"out the
abbreviation Idaho has assignedPower reference the
Bethel Court Substation.The first page of Exhibit (BCRT-
Teinert, Di
Hewlett Packard and
Kimball Properties
011)is a close up diagram of the Bethel Court Substation
feeder line as it extends into the Kimball Business Park.
The second page of Exhibit (BCRT-012)shows the larger
area with the Kimball Business Park detail omitted.The
Blue box, labeled "BCRT", at the bottom of these maps j list
North of Bethel Court and just South of the railroad tracks
the Bethel Substation whichCourt taps
transmission line running parallel to the railroad tracks
which is indicated on BCRT-012 by the red box and adjacent
circle.That the substation serves the Kimball Business
Park and surrounding area can be seen on BCRT-Oll by the
broken blue line, which represents a distribution feed from
the substation , running North to connect to the distribution
system at the South end of N. Sailfish Pl.
HOW CAN ONE TELL WHICH CUSTOMERS ARE SERVED BY
THE DISTRIBUTION SYSTEM CONNECTED THE BETHEL COURT
SUBSTATION?
Again,I would refer you to Exhibit On the
first page of that Exhibit (BCRT-Oll) you can see where the
broken blue lines lead from the street to red boxes and red
hourglass shapes.Those are the points at which Idaho Power
delivers electricity to an individual customer s premises.
Beyond those red icons are the customer-owned facilities.
The maps contain a wealth of other information that
is not relevant for our purposes.
Teinert, Di
Hewlett Packard andKimball Properties
WHAT DO YOU CONCLUDE FROM YOUR REVIEW OF AND
UNDERSTANDING OF EXHIBIT 8?
have reviewed these maps and reading these
one line diagrams as an engineer , it is apparent that this
substation is, indeed in the heart of a large high density
commercial/industrial complex.It is also clear that this
substation is interconnected to many more customers than
just the HP facilities. Because it is so interconnected in
such a densely developed area that continues to develop,
this substation supports Idaho Power s general distribution
system in the high density load Bethel Court area which has
been identified in Idaho Power s 10 Year Transmission Plan
as a "giant (load) sink"See Exhibit 13 at page 10.
HOW DENSELY DEVELOPED IS THE AREA IN WHICH THE
HP FACILITIES ARE LOCATED?
businessThe park has approximately
commercial buildings some of which are very large.When I
refer to the business park I am just including the streets
of the 9000Sailfish,Golden Trout,Kimball Place,
block of Emerald, the circle at the end of Mitchell St.(300
block) and Bethel Court.This is very compact area and all
of the buildings in it are within approximately 1,000 feet
of at least one of the four HP buildings.
HAVE YOU REVIEWED AN INVENTORY OF THE BUILDINGS
IN THIS AREA?
Teinert, Di
Hewlett Packard andKimball Properties
My ExhibitYes.list of all of the
buildings in the area.The list identifies the building,
the date of construction and the number of square feet in
each building.Exhibi t shows that,al though
occupies the largest single building in the area,it only
occupies a small minority of the space.There is almost
600,000 square feet of office and industrial space occupied
in the immediate vicinity of the HP buildings.Of that HP'
largest single building,building 27,occupiesNo.only
approximately 90,000 square feet.
CAN YOU IDENTIFY THE LOCATION THE
BUILDINGS ON EXHIBIT 8?
Yes.We have created Exhibit 10 by enlarging
that portion of the first page of Exhibit (BETHEL COURT
SUBSTATION-Oll) showing just the Kimball Business Park.
have inserted the key number from Exhibit 9 on Exhibit 10
(the enlarged map the business park)indicating the
approximate location of each building in the area.
WHERE ARE THE BUILD INGS LOCATED YOUR
EXHIBIT 10?
One can easily identify the four HP buildings on
Exhibi t 10.16, and 20.They are key numbered as 13,15,
All four of the HP buildings are located toward the bottom
of the map.
Teinert, Di
Hewlett Packard andKimball Properties
In order to obtain the information used to develop
Exhibi t 9 we physically inspected the area and identified
the address building.each then submitted the
addresses City of Boiseto the Planning Department
order to obtain copies of building permits showing date of
construction and/or occupancy along with the total square
feet in each building.the CityIn a couple of cases,
records were incomplete - as a result there is no square
footage or occupancy date for three buildings.
WHAT ARE YOU ABLE TO CONCLUDE LOOKING AT YOUR
EXHIBITS AND AND ESPECIALLY THE DATE
CONSTRUCTION OF THE VARIOUS BUILDINGS?
Assuming Idaho Power is correct, that additional
electrical capacity was needed in this area,then it
clear that HP is minor player in creating that need. As can
seen Exhibit there close 600,000 square feet
office space this area.that 600,000 square feet
office space HP'largest single building,(No.27)
responsible for only approximately 90,000 square feet.
It is also important for the Commission to consider
the fact that a majority of the office space in this area
has been constructed either contemporaneously with or after
the HP facilities were constructed.
HOW DO YOU KNOW THAT?
Teinert, Di
Hewlett Packard and
Kimball Properties
We prepared Exhibit 11 from the data collected
and reported Exhibit showing just the buildings
constructed beginning in 1999, which is the year HP began
occupying its first building in the business park.
WHAT DOES EXHIBIT 11 SHOW?
shows that buildingsten containingnew
approximately 226,000 feet has beensquarespace
constructed in the business park area since 1999
WHY IS THE TIMING OF NEW GROWTH IN THE AREA
IMPORTANT?
This is important because it shows that the Bethel
Court Substation is being used to serve a broad base of new
customers.In effect HP is subsidizing other ratepayers by
paying for a portion of a substation being used to support
Idaho Power s overall system.This assertion is supported
by the fact that the majority of the new square feet of
construction in the immediate vicinity of the HP facilities
has come on line either contemporaneous with or after the
construction of the Bethel Court Substation.
HOW DO THESE NEW BUILDINGS RELATE TO THE BETHEL
COURT SUBSTATION?
All thoseten buildings are electrically
connected with the grid that is directly supported by the
Bethel Court substation.Looking back to Exhibit 8 and
Teinert, Di
Hewlett Packard andKimball Properties
following the dotted blue lines leading from the Bethel
Court Substation confirms this assertion.
WILL OTHER INDUSTRIAL CUSTOMERS WHO TAKE SERVICE
IN THE AREA OF THE BETHEL COURT SUBSTATION IN THE FUTURE
ALSO BE CHARGED FOR THEIR PRO RATA SHARE OF THE SUBSTATION
CAPACITY?
No.According to Idaho Power s policy,if the
capacity is available,then no substation or transmission
contribution is asked from new industrial customers.
YOU STATED EARLIER THAT IDAHO POWER'S POLICY IS
NOT ONLY ARBITRARY BUT IS ALSO IRRATIONAL.HOW IS THE
POLICY BOTH ARBITRARY AND IRRATIONAL?
It is arbitrary because two identical industrial
customers will be treated very differently, depending solely
on the timing of each request for service.It is irrational
because the decision to assess the first customer and not
subsequent hascustomer relationshipany cost
causation.
HOW MANY INDUSTRIAL CUSTOMERS HAVE PAID FOR
SUBSTATIONS?
Three that I am aware of.Micron Technology has
substation dedicated to its facility.What used to be
known as Micron Electronics in Nampa also has a substation
dedicated its facility.Hewlett Packard Chinden
Boulevard also has a substation dedicated to that facility.
Teinert, Di
Hewlett Packard and
Kimball Properties
There may be others, but surprisingly, Idaho Power informed
that does keep records specificallynot tracking
instances which customers charged for substationare
construction.however,We can conclude that between the
years of 1970 and 2000 no new industrial customer that came
on-line in the seven-mile radius shown on Exhibit No.2 was
required to pay for substation construction, because no new
substation was constructed in that time period.It was
inherently arbitrary and irrational to force HP to pay for a
substation in the heart of a rapidly developing high density
load area when no other new industrial customer in the same
area has been similarly charged.
ARE THERE MANY INDUSTRIAL CUSTOMERS THAT
SEVEN-MILE RADIUS OF THE BETHEL COURT SUBSTATION?
One would expect there to be a number of large
customers Boise.the heart an urban sucharea
Indeed,in response to our discovery Idaho Power revealed
that there are thirty industrial Schedulecustomers 19)
wi thin that seven-mile radius.Of those thirty industrial
customers with the seven-mile radius,I am only aware HP
having been required to pay for a portion of a substation.
YOU REFER TO IDAHO POWER'S "POLICY.WHAT IS
YOUR UNDERSTANDING OF THE ORIGIN OF THAT POLICY?
Idaho Power has no written policy on how to and
when to assess industrial customers a fee for construction
Teinert, Di
Hewlett Packard andKimball Properties
of transmission or substation facilities.My understanding
is that the Company chooses to charge industrial customers
for such facili ties hoc basis and that any
consistency such unwri tten policy depends
indi vidual newpersonnelinformingCompanyverbally
personnel of the policy and how it is implemented.This
subj ects the policy - such as it is - to the vicissitudes of
communication and personal memory.
ARE THERE OTHER PROBLEMS WITH THE COMPANY'S
UNWRITTEN POLICY?
It seems obvious that it has not been approved
by this Commission - if it were approved by the Commission
then we would have the benefit of a written policy.
addi tion, since it is administered on an ad hoc basis based
solely on individual personnel's memories, it is likely to
be subj ect to inconsistent administration.Finally, without
the benefit of a written policy,new industrial customers
are disadvantaged because they simply don t know in advance
when whether will requiredthey forpay new
substation capacity.
CAN YOU SUGGEST HOW IDAHO POWER SHOULD HANDLE
TRANSMISSION AND SUBSTATION CONSTRUCTION COSTS?
Yes.The current approach to cost recovery is
not tenable and is not a fair method to apportion costs.
Idaho shouldPower develop and use policy that
Teinert, Di
Hewlett Packard and
Kimball Properties
uniform that allocatessystem unbiasedcost and
nondiscriminatory manner where all inputs and outputs are
equi table and consistent.system would be one inSuch a
which customers would be required to pay for utilization on
a consistent and equitable basis. The system would not only
consider costs but also revenue contribution.
WOULD EVER APPROPRIATE ASK NEW
INDUSTRIAL CUSTOMER CONTRIBUTE THE COST NEW
TRANSMISSION AND SUBSTATION FACILITIES?
Yes.would generally appropriate
circumstances in which a customer takes service and does not
provide adequate for the addi tionrevenuepay
facili ties required to serve that customer.
ARE THERE ALTERNATIVES YOUR SUGGESTED
APPROACH?
Possibly.One could devise a system whereby all
users of new facilities pay for those facilities in a manner
similar to the Company current Rule That approach,
however, might be cumbersome to administer, given the many
different customers who would benefit from new transmission
and substation construction.
DOES THIS CONCLUDE YOUR TESTIMONY?
Yes.
Teinert, Di
Hewlett Packard and
Kimball Properties