20040122Teinert Rebuttal Testimony for Kimball.pdf

;r~'EI\'r-!\i::.L -it.
,,-
r'"!LED
LOOI, Jr\\ " ':( I. 'J'.., - I ' v I
. ,,-. .' '
" - ; L 1\...
BEFORE THE IDAHO PUBLIC UTILITI~~ji~b~I~~~6~SSION
KIMBALL PROPERTIES LIMITED
PARTNERSHIP AND HEWLETT
PACKARD COMPANY CASE NO. IPC-E-OO-12
COMPLAINANTS
VS.
IDAHO POWER COMPANY AN IDAHO
CORPORATION.
REBUTTAL TESTIMONY
PIKE TEINERT
ON BEHALF OF
KIMBALL PROPERTIES LIMITED PARTNERSHIP
AND HEWLETT PACKARD COMPANY
Teinert, Reb
Hewlett Packard and
Kimball Properties
PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.
My name is Pike Teinert and my business address is
834 Harcourt Road Boise, Idaho 83702.
ARE YOU SAME FILED DIRECTTHEPIKETEINERTWHO
TESTIMONY AND EXHIBITS IN THIS MATTER?
I am.
WHAT IS THE SCOPE OF YOUR REBUTTAL TESTIMONY?
I plan to only address surrounding thetheissues
discriminatory nature of TheIdaho Power treatment of HP.
Commission should not see the lack of attention to any particular
issue in this rebuttal testimony as a concession on my part as to
that issue.
WHY ARE YOU LIMITING YOUR REBUTTAL TESTIMONY TO JUST
THE DISCRIMINATION ISSUE?
Because I believe that issue is so compelling to the
resolution of this case.
DID STAFF'S DIRECT TESTIMONY ADDRESS THE ISSUES YOU
RAISED WITH RESPECT TO THE OTHER ISSUES , SUCH AS YOUR CONCLUSION
THAT THE NEED FOR BETHEL COURT WAS THE RESULT OF POOR PLANNING ON
IDAHO POWER'S PART?
No.While I can somewhat understand that they might
not want to explore the detailed engineering issues associated
wi th my conclusion that the Bethel Court Substation was made
Teinert, Reb
Hewlett Packard and
Kimball Properties
necessary because of poor planning,I had hoped that they would
del ve into that portion of this case.
WHY?
I do believe that Staff has an obligation to insure
that the power company is,indeed,engaged in proper planning
that will result in a low cost,efficient,safe and reliable
electrical system.
HAVE YOU REVIEWED THE DIRECT TESTIMONY THE
COMMISSION STAFF IN THIS MATTER?
Yes.
YOU
TESTIMONY?
Yes.
HAVE ANY OVERALL OBSERVATIONS REGARDING THAT
Frankly,perplexed Staff'
recommendation in this matter
IN WHAT WAY DO YOU FIND STAFF'S TESTIMONY PERPLEXING?
The bottom line in Staff'testimony is that they
agree with our contention that HP was treated in a discriminatory
and capricious manner when Idaho Power charged for twenty
percent of the Bethel Court Substation.Staff also quotes the
Idaho law to make the point that discriminatory treatment by a
regulated utility is illegal.
WHY DOES THAT PERPLEX YOU? AFTER ALL ISN'T ONE OF
YOUR MAIN CONTENTIONS THAT THE SUBSTATION CHARGES WERE
DISCRIMINATORY?
Teinert, Reb
Hewlett Packard and
Kimball Properties
However, the result that naturally flows from aYes.
finding that the substation charges were discriminatory should be
charges are void returned thethatthoseandshould
Staff,al though agreeing that the chargesratepayer.were
illegal,keep two thirds ofwould still allow Idaho Power to
those illegal charges.
According to the Staff at page 6, lines 8 through 12:
I firmly believe, however, that there is an
expectation that those special arrangements (the HP
substation charges) will be fair and non-discriminatory.
Special arrangements " does not mean that any arrangementsare acceptable. Idaho Code ~61-315 prohibits discrimination
and preference among customers. (Emphasis in original.
lines 23,the StaffThen,throughpage
unequivocally makes the finding that the substation charges were
discriminatory and capricious:
Q. HP /Kimball witness Teinert suggests that Idaho
Power policy of requiring a contribution in aid construction for substations is capricious anddiscriminatory. Idaho Power witness Said disagrees. What
is your opinion?
A. I agree with Mr. Teinert. It is discriminatory
whenever one customer has to pay for substation facilitiesand another customer , who may require the same or evenlarger substation capacity, does not have to pay just
because extra substation capacity is already availableWhile Idaho Power may attempt to honestly and fairly apply
its policy, the results are inconsistent and discriminatory.
(Emphasis provided.
the reason I am perplexed is because,So,you can see,
while agreeing with us that we were treated in a capricious and
Teinert, Reb
Hewlett Packard and
Kimball Properties
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
discriminatory manner , the Staff chose not to provide a complete
remedy for the identified illegal treatment.
WHAT RATIONALE DID STAFF RELY ON IN CONCLUDING THAT
HP IS RESPONSIBLE FOR TWO THIRDS OF ITS SUBSTATION CONTRIBUTION
DESPITE THE COSTS WEREFACTTHATSTAFFCONCLUDEDTHOSE
DISCRIMINATORY?
The Staff reasoned that HP should not be required to
pay for the portion of the substation that it is currently using
(approximately
megawatts) .
one third the original requested four
However, it reasoned that HP should be required to
pay for the portion of the 4 MW not currently being used by HP.
DO YOU SEE ANY PROBLEMS WITH STAFF'S APPROACH?
Yes,do.Obviously the first concern is that no
other customer is being required to pay for any portion of this
substation.
ARE OTHER CUSTOMERS , IN FACT , USING THE SUBSTATION?
Absolutely.Eighty two percent of the(16.MW)
capacity of this brand new 20 MW substation is currently being
used.
substation.
substation
HOW MUCH DOES HP USE?
has capaci ty thisused1. 5 the
There benefi ting from thisothercustomersare
who consuming capacity.currently 14.are
There are only 3.6 MW of rated capacity left in this substation.
Teinert, Reb
Hewlett Packard and
Kimball Properties
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
won take long for those remainlng three and one half
megawatts to be consumed in this rapidly growing area.
THE FACT THAT THE BETHEL COURT SUBSTATION
CURRENTLY AT 82% OF IT POTENTIAL CAPACITY SIGNIFICANT?
As stated in the ten year transmission plan forYes.
the Treasure not normally load itsValley,Idaho Power does
substation feeders to 100% of their rated capacity.They choose
to allow 2.5 MW of capacity per feeder of "available margin " for
operating flexibility instead.Thus indicating that the Bethel
Court Substation may optimum operatingalreadyloaded
capacity.This point further strengthens the position that a
substation in the Bethel Court area was needed with or without
the Hewlett Packard load.
HOW DO YOU KNOW THAT IDAHO POWER ALLOWS 2. 5 PER
FEEDER FOR "AVAILABLE MARGINS"?
Exhibi t Yearwhich13,theOn page Ten
Transmission Plan of the Treasure Valley Build Out proj ection
Distribution Planning 2002 Through 2012 which was prepared by
Idaho Power.
WHAT HAPPENS WHEN THE REMAINING "AVAILABLE MARGIN" IS
USED UP BY OTHER CUSTOMERS AND HP (OR ANY OTHER NEW CUSTOMER)
SEEKS TO EXPAND OR BEGIN OPERATIONS IN THE KIMBALL PARK AREA?
If HP, or a new customer, were planning to consume an
addi tional one-megawatt or more, then under Staff's proposal, the
problem would did currentpresumablyplaytheout
Teinert, Reb
Hewlett Packard and
Kimball Properties
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
situation.Then, at its discretion Idaho Power could require HP
or the new customer to pay for their portion of the expansion,
while all other customers who come on line after the expansion
would get a free (and discriminatory) ride.
WHAT DO YOU SUGGEST?
For the current situation,I strongly recommend that
the Commission heed the advice of its Staff and find that HP has
been illegally charged for the Bethel Court Substation.Then,
having made that finding, craft the only possible rational remedy
- which is to order a complete refund of these charges.
DO YOU HAVE ANY COMMENTS ON STAFF'S OBSERVATION THAT
IF THE COMMISSION DOES NOT ORDER A REFUND HP WILL BE PAYING
TWICE FOR SUBSTATION CAPACITY?
willabsentrefund,Yes.true,
uniquely singled out as the only Schedule customer that is
required to pay for substation capacity both in its rates and
again as an up front contribution.That is reason enough to
order a refund.just as importantly,it appears thatHowever,
Staff is actually imposing a penalty on HP for not using the
entire four megawatts.is discriminatory and shouldThat too,
not be used as a rationale for denying HP its rightful refund.
PLEASE EXPLAIN.
There provision ei ther Schedule
Schedule providing against customer forpenal tyfor
erroneous load estimates.did suggest severalStaffgrowth
Teinert, Reb
Hewlett Packard and
Kimball Properties
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
concepts that may be discussed as new policy choices in a new
generic case. Included among those concepts is a requirement that
all Schedule 19 customers pay up front for all their requested
capacity.That may be a good idea,but it is not currently
before the Commission for resolution.It is certainly a bad idea
to impose this suggested policy on only one customer and to do so
retroacti vely and before the concept has been fully examined by
the Commission in a proceeding called for that purpose.
DOES STAFF REACH OTHER CONCLUSIONS IN ITS TESTIMONY
THAT YOU FIND PERPLEXING?
find make theperplexingthatStaffcould
following statement and still conclude that HP should pay for a
significant portion of the Bethel Court Substation:
Idaho power s application of the rule causes unfair
resul ts. Idaho Power charges Schedule 19 customers whorequest new service when substation and transmission
capacity is not adequate, but imposes no up-front charges
when adequate capacity already exists. By applying the rule
in this way, whether a customer is asked to make an up-front
payment truly is a matter of timing.
Sterling, R. Di p. 12, lines 9 - 15.
HP experienced the exact scenario described above by
Mr.Sterling as "unfair yet it seems the Staff is content to
permi t this inj ustice go without a remedy.
ALTHOUGH STAFF DID NOT ADDRESS YOUR ASSERTION THAT
IDAHO POWER AMALGAMATEDUNFAIRLY THE LOAD FOR THESE FOUR
BUILDINGS FOR PURPOSES OF CALCULATING THE AMOUNT OF CONTRIBUTION
Teinert, Reb
Hewlett Packard and
Kimball Properties
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
IDAHO POWER CHARGED HP MR. SIKES DID.DO YOU HAVE ANY RESPONSE
TO MR. SIKES' CRITICISM OF YOUR TESTIMONY ON THIS POINT?
Sikes states at page 17 of his testimonyYes.Mr.
that when Idaho Power receives multiple requests for new capacity
wi thin the lead time required for construction of the facilities
needed to serve the request" that it treats all of those requests
as equally contributing to the need to upgrade the facilities.
He concluded that Idaho Power requires all of those new customers
to pay for the increased capacity on the " same prorated capacity
basis. "
IS THAT WHAT IDAHO POWER , IN FACT , DID IN THIS CASE?
This is another example of the problems inherentNo.
in implementing a "policy" that is neither written nor approved
by the Commission.
WHAT PROBLEMS CONCERN YOU?
First, What is the definition of "lead time required
for construction of the facilities needed to serve the request?"
Does " lead thetimeincludejusttheconstructionphase,
planning phase or general pre-planning for the area?Second,
what geographic upgraded facilities?served thearea
Bethel Court is now loaded to 82 percent of its maximum capacity.
Presumably serving just the immediatebeyondarea
Kimball business park.if we just Kimballlook atHowever
business Park area, it is apparent, that this 11ili hour "policy
Teinert, Reb
Hewlett Packard and
Kimball Properties
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
justification for amalgamating just the HP buildings is not only
discriminately applied, it is not a true policy at all.
PLEASE EXPLAIN?
Using Idaho Power s logic, all new load in this area
wi thin timethe frame buildingswhenHP'same were
constructed should have been amalgamated for purposes
contributing to the cost of Bethel Court.After all, according
to Mr. Sikes, "If Idaho Power receives multiple requests within a
similar time frame,whether by the same customer or multiple
customers,the viewsCompan y all those requests
contributing equally the need upgrade the faculties. "
Sikes, Di , page 17 lines 5 -
WERE THERE OTHER BUILDINGS CONSTRUCTED AT KIMBALL
PARK WITHIN THE SAME TIMEFRAME HP'BUILDINGS WERE
CONSTRUCTED?
Many new buildings were constructed in Kimball Park
during that time frame,but only HP'were amalgamated under
Idaho policyPower which ostensibly requires all new
customers in the same time frame to contribute to cost of the new
capacity.
WHAT TIME FRAME SHOULD BE USED TO CHARGE ALL NEW
CONSTRUCTION IN THE AREA FOR BETHEL COURT CONSTRUCTION COSTS - AT
LEAST ACCORDING TO IDAHO POWER'S AMALGAMATION "POLICY?"
A. The same time frame should be used for all of the new
buildings in the area as was used for HP.The relevant time
Teinert, Reb
Hewlett Packard and
Kimball Properties
251
252
253
254
255
256
257
258
259
260
261
262
263
264
265
266
267
268
269
270
271
272
273
274
275
frame would be from the date of the ROD (probably earlier but
that is a conservative date) to the date of construction of the
last HP building.
WHAT ARE THOSE DATES?
The Record of Decision for Bethel Court, Sequence No.
2113, Rev. Num. 1 has an "origin " date of May 1999.That would
be the starting date.Of course, the ending date would be the
date the last HP building that was assessed a CIAC for Bethel
Court was constructed.That date is May 2000.
HOW MUCH NEW CONSTRUCTION ACTIVITY TOOK PLACE IN THE
KIMBALL BUSINESS PARK DURING THAT TIME PERIOD?
Qui te new buildingslot.fifteenTherewere
constructed in the immediate vicinity of the four HP buildings
during the time frame Idaho Power s "policy " of amalgamation was
in effect.However, only the four HP buildings were amalgamated
despi te policy amalgamating allthecompanypower new
customers.My Exhibit No. 14 is a list of the fifteen buildings
indicating their construction dates.It is keyed to the map in
Exhibi t 10.
WHAT DO YOU CONCLUDE FROM THE FACT THAT IDAHO POWER
ONLY AMALGAMATED HP'S LOAD AND NONE OF THE OTHER NEW CUSTOMERS
WHO APPEAR TO FALL WITHIN THEIR POLICY OF AMALGAMATION?
discriminatoryanother andexample
capricious treatment of just HP.I do not doubt that Idaho Power
had intentions,inherent applyinggoodbuttheflaws
Teinert, Reb
Hewlett Packard and
Kimball Properties
276
277
278
279
280
281
282
unwritten
inconsistent
customers.
customers,
and undefined policy are apparent.resul ts
implementation and harms the power company
also someuncertaintyandcreatescauses
such this instance,unfairly
discriminatorily treated.
DOES THIS CONCLUDE YOUR REBUTTAL TESTIMONY?
Yes, it does.
Teinert, Reb
Hewlett Packard and
Kimball Properties
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
COMPLAINANT S
EXHIBIT NO. 14
KIMBALL PROPERTIES LIMITED
PARTNERSHIP AND HEWLETT
PACKARD COMPANY
CUSTOMERS THAT SHOULD HA VE BEEN AMALGAMATED
FOR CONTRIBUTIONS FOR BETHE COURT CONSTRUCTION
Customers That Should Have Been Amalgamated
For Contributions for Bethel Court Construction
Map Address
Key #
Square
Feet
Approx. Date of Name of
Construction! BusinessOccupancy or Bldg
9576 W. Emerald (#1)160 8/99
9576 W. Emerald (#2)160 8/99
9543 W. Emerald 100 11/99 Sailfish Place
9357 W Emerald 306 3/99 Westpark Medical
9196 W. Emerald 200 1 % Pinnacle Square
10.9140 W. Emerald 380 1/01 Westpark Market
11.351 Mitchell St. Ste 102 500 5/00 Business Interiors
12.350 N. Mitchell St.426 10/00 Cottonwood Plaza
13.333 N. Sailfish PI 276 9/00 HP #27
15.9415 W. Golden Trout St Dr.600 6/00 HP #29
16.9390 N.. Golden Trout St.400 9/00 HP #28
18.456 N. Kimball PI.124 1/01 Kimball Plaza
19.303 N. Kimball PI 124 10/99 HP # 26
Exhibit No. 14
Teinert, Reb
Source: Records
City of Boise
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on January 22 2004, I served a true and correct copy of the within
and foregoing REBUTTAL TESTIMONY OF PIKE TEINERT ON BEHALF OF KIMBALL
PROPERTIES LIMITED PARTNERSHIP AND HEWLETT PACKARD COMPANY upon the
following named individuals in the manner shown:
Barton L. Kline
Monica Moen
Idaho Power Company
POBox 70
Boise, ID 83707
Hand Delivered
Gregory W. Said
Idaho Power Company
POBox 70
Boise, ID 83707
Hand Delivered
Scott Woodbury, Esq.
Deputy Attorney General
Idaho Public Utilities Commission
POBox 83720
Boise, ID 83720-0074
Hand Delivered
JY\Uu\~\
Nina M. Curtis
Administrative Assistant
Certificate of Service