20090309Porter Direct.pdf

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UTILITIES COMf,A
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR A
CERTIFICATE OF PUBLIC CONVENIENCE
AN NECESSITY FOR THE LAGLEY
GULCH POWER PLAT.
CASE NO. IPC-E-09-03
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
VERNON PORTER
1 Q.Would you please state your name, emploYment
2 status, and educational background?
3 A.My name is Vernon Porter. I have been
4 employed by Idaho Power Company (" Idaho Power" or
5 "Company") for 19 years. I currently hold, and at all
6 times relevant to this Application have held, the position
7 of General Manager of Power Production. I work at the
8 Company's Corporate Headquarters, located at 1221 West
9 Idaho Street in Boise. I attended Brigham Young University
10 from which I obtained a Bachelor of Science degree in 1985
11 in Electrical Engineering and a Master of Science degree in
12 1986.
13 Q.What are your responsibilities as General
14 Manager of Power Production?
15 A.I manage the operation, maintenance, and
16 construction. of Idaho Power's generation facilities. I
17 also manage Idaho Power's interest in certain jointly owned
18 coal - f ired plants and a coal mine.
19 Q.Would you please provide a summary of your
20 testimony in this proceeding?
21 A.I offer testimony regarding: the
22 development of the proposed combined cycle combustion
23 turbine ("CCCT") baseload resource that is the subject of
24 this proceeding ("Langley Gulch Power Plant" or "Plant") i
PORTER, DI 1
Idaho Power Company
1 the contracts for acquisition of the equipment and the
2 engineering, procurement, and construction ("EPC") services
3 relating to the Plant i the status of the Company's efforts
4 to obtain governmental permits necessary to construct and
5 operate the Plant i the Plant's environmental and emission
6 controls i the allocation of price risk associated with the
7 construction of the Plant i interconnection of the Plant to
8 Idaho Power's systemi plant operation, and benefits
9 associated with the Company's operation of the Planti and
10 economic benefits to the local economy of construction and
11 operation of the plant.
12 Q.What role have you had in the development of
13 the Langley Gulch Power Plant?
14 A.I was the senior member of the Idaho Power
15 team that submitted the Company's benchmark resource
16 proposal in response to the Company's base load resource
17 Request for Proposal ("RFP"). That team is commonly
18 referred to as the "Benchmark Resource Team" or "Team," and
19 the benchmark resource is now referred to as the Langley
20 Gulch Power Plant.
21 Q.What were the responsibilities of the
22 Benchmark Resource Team?
23 A.The Benchmark Resource Team was responsible
24 for developing a proposal for a technologically and
PORTER, DI 2
Idaho Power Company
1 economically sound baseload generating resource that would
2 be capable of commercial operation by June of 2012.
3 Q.You stated that the Langley Gulch Power
4 Plant was originally scheduled to be in service in June
5 2012.What
6 operation?
7 A.
8 Q.
9 change?
10 A.
is its currently scheduled date of commercial
December 1, 2012.
Why did its commercial operation date
In order to meet a June 1, 2012, commercial
11 operation date, Idaho Power would have to authorize the EPC
12 contractor to proceed with engineering and other proj ect
13 related activities before the Idaho Public Utilities
14 Commission ("IPUC") had considered and ruled upon Idaho
15 Power's Application for a Certificate of Public Convenience
16 and Necessity. Given the current economic crisis and the
17 challenges it creates in financing the project, Idaho Power
18 has negotiated with the EPC contractor to delay
19 commencement of its work until September 1, 2009. This
20 will permit the IPUC to consider the Application and, if it
21 so decides, issue a Certificate that will facilitate
22 proj ect financing.
PORTER, DI 3
Idaho Power Company
1 LAGLEY GULCH POWER PLAT DEVELOPMENT
2 Q.Will you please describe, in general, the
3 Langley Gulch Power Plant?
4 A.The proposed Langley Gulch Power Plant is a
5 CCCT power plant that utilizes a Siemens SGT6-5000F
6 combustion gas turbine matched with a Siemens steam turbine
7 (a combination referred to as a "1X1" configuration) for a
8 flexible, energy efficient, low-emission, highly reliable
9 power plant located approximately four miles south of New
10 PlYmouth, Idaho, in Payette County. The Benchmark Resource
11 Team performed an extensive evaluation of numerous sites
12 across Southwest Idaho. The selected site, in combination
13 with high efficiency equipment and superior design and
14 construction, will result in a state of the art facility
15 that will provide long-term, low cost, fully integratable,
16 and operationally flexible generation to meet Idaho Power
17 customer needs for an estimated 35 years.
18 Q.Will you please describe, in general, the
19 Benchmark Resource Team's process that led to the
20 development of the Langley Gulch Power Plant proposal?
21 A.The Benchmark Resource Team was led by Idaho
22 Power's Power Production group, with technical assistance
23 of many others wi thin, and external to, Idaho Power. The
24 Team has been assisted by Idaho Power personnel from the
PORTER, DI 4
Idaho Power Company
1 Company's Land Management, Legal, Environmental, and Water
2 Management Departments.
3 The Team also retained the services of an
4 independent engineering firm, Power Engineers, to act as an
5 Owner's Engineer to assist with technical matters and
6 provide independent advice on pricing and current trends
7 and developments in the combined cycle industry.
8 The Team conducted a thorough site selection process
9 that led to the Company acquiring the right to purchase
10 land for the facility.
11 The Team issued an RFP and conducted a competi ti ve
12 bidding process for key equipment components - the gas and
13 steam turbines. The Team selected an equipment supplier,
14 Siemens, after receiving the competing proposals.
15 The Benchmark Resource Team also issued a Request
16 for Statement of Qualifications ("RFQ") to identify
17 potential contractors to perform EPC services. After
18 evaluating the qualifications of potential contractors,
19 interviewing representatives of the contractors, and
20 inspecting projects built by them, the Team selected what
21 it considers to be the best EPC contractor for this
22 project.
23 The Team has begun the process of securing
24 environmental, land use, and other permits necessary to
PORTER, DI 5
Idaho Power Company
1 complete construction and commence commercial operation of
2 the Plant by December 1, 2012.
3 Q.Where is the Langley Gulch Power Plant to be
4 located?
5 A.The site consists of 137 acres of
6 undeveloped range land located in rural Payette County,
7 adjacent to Interstate 84 and immediately southwest of Exit
8 9. This interchange provides access to US Highway 30 and
9 the City of New PlYmouth approximately four miles to the
10 north. To the south, the interchange leads directly into
11 this specific property. The site is bounded by Interstate
12 84 to the north, Bureau of Land Management ("BLM") land to
13 the south and west, and private range ground to the east.
14 Q.What has the Company done to secure land on
15 which the Langley Gulch Power Plant will be located?
16 A.The Company has acquired an option to
17 purchase the land. The option will expire in March 2010.
18 Q.Will you please describe how the Benchmark
19 Resource Team selected this site for the Langley Gulch
20 Power Plant?
21 A.The Benchmark Resource Team conducted a
22 detailed review of 13 potential sites in Southwest Idaho in
23 order to identify and secure a site that provides the
24 optimal combination of project performance, reliability,
PORTER, DI 6
Idaho Power Company
1 economy, minimal environmental impact, and
2 constructability. The Team considered 18 factors relative
3 to each site. The proposed project site will permit the
4 construction of a highly efficient combined cycle plant
5 (low elevation, water cooled) at a location away from any
6 population center and outside the potential air quality
7 "non-attainment" area consisting of Ada and Canyon
8 counties. At the same time, the site is near available
9 transmission, gas, and transportation facilities. The site
10 will also accommodate the possible future construction of
11 additional generating resources at the same location.
12 Specifically:
13 (1) The site is at low elevation, and can
14 access water from the Snake River. These factors optimize
15 the generating efficiency of the Plant and reduce overall
16 generation costs i
17 (2) Gas supply from the Williams Northwest
18 Pipeline is located approximately three-quarters of a mile
19 from the sitei
20 (3) The site is near existing transmission
21 facilities i
22 (4) The site has no nearby neighbors. The
23 nearest residence is approximately three quarters of a mile
24 from the site, across the Interstatei
PORTER, DI 7
Idaho Power Company
1 (5) The site is located adjacent to the
2 Interstate and nearby rail sidings, permitting optimal
3 access ¡and
4 (6) The site could accommodate possible
5 future construction of a similar capacity plant or simple
6 cycle gas generation facility at the same location.
7 Q.You indicated that the Langley Gulch Power
S Plant will be water cooled.What has the Company done to
9 secure water for this Plant?
10 A.The Company purchased a water right from the
11 Cottonwood Irrigation District for Snake River surface
12 water rights. The Company will construct a pumping station
13 and pipeline. The pipeline will be approximately eight
14 miles in length, the majority of which will be across BLM
15 land.
16 SIEMNS EQUIPMNT
17 Q.You stated that the Langley Gulch Power
1S Plant will utilize a Siemens gas turbine and Siemens steam
19 turbine. What has the Company done to assure that this
20 equipment will be available for the Plant?
21 A.Due to global high demand and long
22 manufacturing lead times for gas and steam turbines, in
23 200S Idaho Power entered into reservation agreements with
24 Siemens for combustion and steam turbines to assure their
PORTER, DI S
Idaho Power Company
1 delivery in time to permit completion of construction and
2 commercial operation of the Plant in 2012. Idaho Power and
3 Siemens have since executed final contracts relating to the
4 purchase of the equipment. Idaho Power has paid Siemens a
5 total of $8,721,701 to reserve the equipment. This sum is
6 creditable against the final purchase price of the
7 equipment. No further paYments on the equipment are
8 required before September 1, 2009. If Idaho Power
9 terminates the contracts, the paYments made to date will be
10 largely non-refundable. The contracts are, however,
11 potentially assignable subject to certain conditions.
12 Q.How did the Benchmark Resource Team come to
13 select Siemens equipment?
14 A.Siemens Energy was selected as the
15 combustion turbine and steam turbine supplier after Idaho
16 Power received bids in response to a RFP. Idaho Power
1 7 received bids from two of the three maj or suppliers of such
18 equipment (Siemens, General Electric, and Mitsubishi) .
19 Q.What are the key terms of the Siemens
20 contracts?
21 A.The two contracts for the purchase of the
22 gas turbine and steam turbine, respectively, have similar
23 terms. Each contract requires: the Company to pay a fixed
24 price for the equipment i Siemens to guarantee delivery of
PORTER, DI 9
Idaho Power Company
1 the equipment to the site by specific dates that will
2 accommodate the proj ect schedule, or incur liquidated
3 damages i Siemens to guarantee that the equipment will meet
4 specified performance and emission standards, or incur
5 liquidated damages i and Siemens to warrant for a period of
6 time that the equipment is free from defects. The
7 contracts are also assignable by Idaho Power with the
8 consent of Siemens (which may not be unreasonably withheld
9 by Siemens) .
10 Q.Will you please describe the technical
11 characteristics of the Siemens' gas and steam turbines?
12 A.The proposed Langley Gulch Power Plant will
13 utilize a Siemens gas fired combustion turbine matched with
14 a Siemens steam turbine for an energy efficient, low heat
15 rate, low emission combined cycle power plant.
16 The gas turbine is classified as an SGT6-s000F ("F-
17 class") machine, capable of producing 180 MW at the design
18 condition. The design condition is 90 degrees Fahrenheit,
19 at 20 percent relative humidity. The machine class is the
20 same as Idaho Power's Bennett Mountain and Danskin Unit No.
21 1 machines. The F-class machine has demonstrated an
22 exceptional world-wide operating and reliability record
23 with nearly five million operating hours and 205 machines
24 in the fleet.
PORTER, DI 10
Idaho Power Company
1 The steam turbine is a SST-700 high pressure steam
2 turbine directly coupled with a SST-900 intermediate
3 pressure turbine, capable of producing 96 MW at the design
4 condition. The SST-900 turbine is equipped with a multi-
5 valve inlet to accommodate the low pressure steam system.
6 These turbines have high reliability and efficiency. They
7 have a compact design and are nearly completely assembled
8 at the factory for easy integration during construction.
9 The turbine equipment will be controlled by a
10 Siemens T-3000 control system. This is the same control
11 system in use at Idaho Power's other gas-fired plants.
12 EPC SERVICES
13 Q.Who will provide EPC services for the
14 Langley Gulch Power Plant?
15 A.Idaho Power has executed a memorandum of
16 understanding ("MOU") with a joint venture consisting of
17 The Industrial Company ("TIC") and Kiewit Power Engineers
18 Co. ("Kiewit") to provide EPC services for the Langley
19 Gulch Power Plant.
20 Q.How was the EPC contractor selected by Idaho
21 Power?
22 A.Following issuance of a RFQ, the Benchmark
23 Resource Team conducted an evaluation of the most qualified
24 engineering and construction firms with experience relating
PORTER, DI 11
Idaho Power Company
1 to combined cycle gas fired power plants. Eight firms
2 participated in a pre-qualification process. Various firms
3 were interviewed and representatives of the Benchmark
4 Resource Team examined reference plants constructed by
5 several of the firms. Through this process it became
6 apparent that Kiewit as an engineering firm, and TIC as a
7 construction firm, were superior to other potential firms.
8 Q.What are the EPC Contractor's
9 qualifications?
10 A.Kiewi t and TIC have a long history of
11 successfully engineering and constructing combined cycle
12 gas projects. They have built plants both individually and
13 as members of j oint ventures.
14 Q.Has Idaho Power entered into a contract with
15 the EPC Contractor?
16 A.While an executed MOU is currently in place
17 between Idaho Power and the EPC contractor, the parties are
18 in the process of completing a final EPC contract. The
19 Parties expect to execute the final agreement by mid-March
20 2009. In addition, the EPC contractor has been performing
21 certain preliminary engineering services in order to
22 maintain proj ect schedule. These services have been
23 performed pursuant to separate engineering services
24 agreements.
PORTER, DI 12
Idaho Power Company
1 Q.What are the key terms of the EPC contract?
2 A.The EPC contract with TIC/Kiewit will
3 require TIC/Kiewit to perform all engineering services,
4 equipment procurement, and construction for the power plant
5 (other than the Siemens supplied gas and steam turbines) .
6 TIC/Kiewit must guarantee completion of construction by
7 December 1, 2012, or pay liquidated damages. TIC/Kiewit
8 must also guarantee that the overall Plant will meet
9 specified performance standards, or pay liquidated damages.
10 TIC/Kiewit will warrant that they will perform the services
11 in accordance with the reasonable industry standards of
12 care, or remedy defective work.
13 As discussed in greater detail in my testimony
14 below, TIC/Kiewit have assumed primary price risk in
15 relation to labor and materials relative to the EPC
16 contract.
17 Q.What are the maj or construction schedule
18 dates?
19 A.Subj ect to IPUC approval, engineering will
20 begin on September 1, 2009, and construction will begin on
21 August 1, 2010. The gas turbine is scheduled to be
22 delivered on February 1, 2011, while the steam turbine is
23 scheduled to be delivered on July 29, 2011. The Plant will
24 be available for commercial operation by December 1, 2012.
PORTER, DI 13
Idaho Power Company
1 PERMITS REQUIRED
2 Q.What governmental permits are required for
3 the Langley Gulch Power Plant and what has the Company done
4 to assure that those permits will be secured in time to
5 maintain the construction schedule?
6 A.This is a summary of the required permits
7 and actions taken by the Company to obtain those permits:
S (1) Tier 1 - Title V Air Permit to
9 Construct. Preliminary air-shed modeling has been
10 completed by a consul tant retained by the Company, Tetra
11 Tech, for 13 preliminary sites, including the proposed
12 site. Based on the results of the model, the Company
13 anticipates obtaining an air permit without complication.
14 The Team has coordinated with the Idaho Department of
15 Environmental Quality ("IDEQ") regarding the Meteorological
16 Monitoring Plan and location of a meteorological tower to
17 collect data required for the permit. The tower was
lS installed in November 200S and is currently collecting
19 data.
20 (2) NEPA (Environmental). The Company has
21 entered into a contract with a consultant, EDAW, to perform
22 National Environmental Protection Act ("NEPA") compliance
23 services relating to the project. An Application for
24 Transportation and Utility Systems and Facilities on
PORTER, DI 14
Idaho Power Company
1 Federal Lands required by the Department of the Interior
2 has been submi t ted to the BLM.
3 (3) Payette County Coordination.
4 Representatives of the Company have discussed this proj ect
5 with Payette County Planning and Zoning Department
6 personnel on several occasions. Idaho Power has drafted a
7 comprehensive plan change application and is prepared to
8 submit the application.
9 (4) Other Permits and Related Acti vi ties.
10 Other permit applications will be prepared and submitted to
11 the appropriate regulatory authorities as the proj ect
12 proceeds. These, and related activities, include:
13 (a) Section 404 Permit - US Army Corps
14 of Engineers i
15 (b) Section 401 Water Quality -
16 through Idaho DEQ and EPAi
17 (c) Stream Alteration Permit - through
18 Idaho Department of Water Resources (IDWR) i
19 (d) Inj ection Well Permit to Construct
20 - through IDWR i
21 (e) A National Pollutant Discharge
22 Elimination System Permit for Large Construction Activities
23 - through EPAi
PORTER, DI 15
Idaho Power Company
1 (f) Other building and installation
2 permits will be obtained by the building contractor i
3 (g) A geotechnical engineering report
4 and supporting addenda were prepared for the site by a
5 consultant retained by the Company, Materials Testing and
6 Inspectioni
7 (h) A water distribution study has
8 been completed for the construction of the pump station and
9 associated water line to the plant. The trench will
10 predominately be open-cut with a couple of borings to cross
11 canals and State/Federal roadways ¡and
12 (i) A Cui tural Resource Survey has
13 also been completed for the site.
14 PLAT ENVIRONMNTAL AN EMISSION CONTROLS
15 Q.What environmental and emission controls are
16 incorporated into the Langley Gulch Power Plant's design?
17 A.The Plant is designed to accommodate current
18 and reasonably anticipated environmental restrictions, and
19 to enhance community acceptance of the proj ect .
20 Specifically:
21 (1) A preliminary air modeling study was
22 completed that determined that the Langley Gulch location
23 was suitable for obtaining an air permit to construct. The
24 si te is located outside the potential Ada and Canyon County
PORTER, DI 16
Idaho Power Company
1 "non-attainment" area. The Plant will have selective
2 catalytic reduction for nitrogen oxide ("NOx") control, low
3 NOx burners, and a catalyst for carbon monoxide
4 ("CO") reduction. The emission controls will qualify for
5 Best Available Control Technology. NOx emissions will be 2
6 parts per million ("ppm") and CO emissions will be 1 ppmi
7 (2) The plant is designed for zero surface
8 wastewater discharge to reduce environmental effects. The
9 plant is designed to utilize a cooling water inj ection well
10 systemi and
11 (3) The equipment will include sound
12 attenuation in the design. Plant noise will be less than
13 the adjacent interstate freeway bordering the site.
14 PRICE AN OUTPUT RISK
15 Q.What has the Company done to limit its price
16 risk associated with the Langley Gulch Power Plant?
17 A.In general, the Company has at tempted to
18 manage price risk by securing, to the extent possible,
19 contractual terms with the equipment and EPC contractors
20 that result in those contractors assuming price risk. To
21 this end, the contracts with Siemens for the purchase of
22 the gas and steam turbines are fixed price contracts
23 pursuant to which Siemens assumes all price risk for labor
PORTER, DI 17
Idaho Power Company
1 and material costs associated with the design, manufacture,
2 and delivery of the equipment.
3 The EPC contractor initially proposed two pricing
4 options: (1) a fixed price option pursuant to which the
5 contractor assumed all price risk for labor and material
6 costs associated with the construction of the Plant (other
7 than relating to the gas and steam turbine) and (2) a
8 "target" price option pursuant to which price risk
9 associated with engineered equipment would be shared by the
10 contractor and Idaho Power. Under the target price option:
11 (1) the EPC contractor's base bid is reduced by
12 approximately $5.3 million as compared to the fixed price
13 optioni (2) a target price for engineered equipment is
14 established.(Engineered equipment does not include
15 commodities such as steel, rebar, concrete, and other
16 materials used to construct those portions of the Plant not
17 consisting of engineered equipment. The EPC contractor
18 assumes price risk associated with these commodities.) ¡and
19 (3) the contractor and Idaho Power share equally the risks
20 and rewards of actual engineered equipment costs in a range
21 approximately $8 million above and below the target price.
22 Price risk and reward outside this aggregate approximately
23 $16 million range is assumed exclusively by Idaho Power.
PORTER, DI 18
Idaho Power Company
1 Q.Mr. Gale describes the Company's commitment
2 estimate in his testimony. Have you read his testimony?
3 A.Yes.
4 Q.Based on your knowledge of the cost of the
5 Langley Gulch proj ect, what price risk does the Company
6 retain relative to the commitment estimate?
7 A.The Company's proposed commitment estimate
8 includes contingencies for those components of the overall
9 price of the proj ect where the Company continues to assume
10 price risk. Those primary components are:
11 (1) EPC Contract. As a condition of
12 delaying six months the commencement of construction and
13 procurement of materials and supplies (other than the
14 turbines), the EPC contractor requires Idaho Power to
15 accept price risk associated with two items: (1) Idaho
16 Power must accept the target price option relating to
17 engineered equipment ¡and (2) Idaho Power must assume labor
18 price escalation risk during the period of time that the
19 IPUC is considering the present petition, not to exceed two
20 percent of the total labor component of the EPC contract.
21 (2) Other Components. The proposed
22 commitment estimate also assumes project related expenses,
23 and contingencies, other than those related to the EPC and
24 Siemens contracts, including:(a) transmission costs, and
PORTER, DI 19
Idaho Power Company
1 contingencies relating thereto i (b) the estimated cost of
2 constructing the gas line tap, and contingencies relating
3 theretoi (c) estimated costs associated with the gas line,
4 water line, and discharge water injection wells, and
5 contingencies relating theretoi (d) net start-up fuel
6 cos ts ¡and (e) RFP team expenses.
7 In the aggregate, that portion of the commitment
8 estimate that is comprised of contingencies is
9 approximately 2. 8 percent.
10 Q.Did the Benchmark Resource Team's proposal
11 include reasonably anticipated maintenance and operation
12 expenses and future capital expenditures associated with
13 the Plant?
14 A.Yes. The proposal included costs for major
15 maintenance items such as hot gas path work, spare parts,
16 labor, and other reasonably anticipated maintenance and
17 operation expense. In addition, the proposal included
18 $500,000 per year for capital and maintenance improvements.
19 Q.What has the Company done to assure the
20 Plant's generation output will be met?
21 A.The equipment contracts with Siemens contain
22 terms requiring that the gas and steam turbines meet
23 specific output performance standards, and if these
24 standards are not met, then Siemens must pay Idaho Power
PORTER, DI 20
Idaho Power Company
1 specified liquidated damages. Similarly, the EPC contract
2 contains terms requiring that the overall Plant meet
3 specific output performance standards, and if these
4 standards are not met, the EPC contractor must pay Idaho
5 Power liquidated damages.
6 TRASMISSION AN INTERCONNCTION
7 Q.How will the Langley Gulch Power Plant be
8 interconnected to the Company's transmission facilities?
9 A.A System Impact Study has been prepared by
10 the Company's Transmission Department. In addition, an
11 Application for Network Transmission Service for the
12 project has been submitted and is queued on OASIS as
13 Request No. 72568424.
14 The selected site provides for robust integration
15 into Idaho Power's transmission grid. The transmission
16 integration plan loops the existing Ontario-Caldwell 230kV
17 line (located 2.5 miles from the Plant) into the Plant, and
18 calls for construction of a new 18 mile, 138kV line from
19 the Plant to Wagner Tap, on the existing Caldwell-Willis
20 138kV line. Wagner Tap is approximately three miles from
21 Caldwell Substation. This 18 mile line will be built using
22 230kV construction, but will be operated at 138kV, so that
23 when future load growth drives the need for additional
PORTER, DI 21
Idaho Power Company
1 capacity, this line can be inexpensively converted to
2 a230kV line.
3 In addition, locating generation on the west side of
4 the Treasure Valley improves reliability in the Ontario-
5 Caldwell area. The new Plant helps alleviate problems (low
6 voltage and heavily loaded lines) associated with the loss
7 of the Brownlee-Ontario 230kV line.
s Q.What is the cost of the interconnection?
9 A.Based on the System Impact Study, the
10 estimated cost of the transmission interconnection is
11 $22, ios, 000. That figure does not include: (1) certain
12 upgrades recommended in the study to improve the
13 transmission system but not specifically required to
14 integrate the Langley Gulch Power Plant (bringing the total
15 estimated cost to $25,424,250, exclusive of contingencies)
16 or (2) a 20 percent contingency added in recognition that
17 final transmission cost estimates have not been completed.
lS Final estimates will be completed during the Facility
19 Study, which is expected to be completed in September 2009.
20 During the Facility Study, a sub-synchronous
21 resonance ("SSR") analysis will be performed to determine
22 whether a potentially harmful torsional interaction exists
23 between the combined cycle units and the Ontario C231
24 series capacitor bank. If SSR interactions exist, they may
PORTER, DI 22
Idaho Power Company
1 be mitigated by modifying the capacitor bank, using SSR
2 relays, or adapting operating procedures at the Plant. If
3 these options do not work, then a filter scheme can be used
4 to mitigate SSR interactions, costing an estimated $4-$S
5 million. Initial indications are that a filter scheme will
6 not be required, but that some other lower cost mitigation
7 measure may be required. The commitment estimate also
S includes an expense ($1 million) associated with this
9 component, and substation communication costs.
10 Q.Is the interconnection dependent upon the
11 Company's completion of the proposed Hemmingway to Boardman
12 or Sand Hollow facilities?
13 A.No. The Plant will be interconnected with
14 the existing Ontario-Caldwell 230kV line and the Caldwell-
15 Willis 13SkV line.
16 PLAT OPERATION AN BENEFITS
17 Q.Will Idaho Power have personnel capable of
lS operating a base load resource of this type?
19 A.Yes. Idaho Power will be able to operate
20 and maintain this combined cycle power plant. Idaho Power
21 has been operating natural gas combustion turbines since
22 Evander Andrews Unit Nos. 2 and 3 were constructed in
23 2001. The Company added Bennett Mountain in 2005, and
24 Evander Andrews Unit No. 1 in 200S. Idaho Power's
PORTER, DI 23
Idaho Power Company
1 operations and maintenance staff is familiar with gas
2 operations and has developed extensive expertise with
3 Siemens F-Class gas turbines. In addition, the combined
4 cycle power plant will be controlled by the Siemen's T-3000
5 system, which is the control system currently used to
6 operate the Company's existing gas turbines.
7 The combined cycle plant staff will consist of 18
8 personnel, including 10 operators to provide 24 by 7
9 coverage, two maintenance mechanics, two technicians, an
10 engineer, a chemist, a clerk/materials coordinator, and an
11 operations and maintenance supervisor. These individuals
12 will be hired at various stages in the construction process
13 so that they will be familiar, as needed, with the design
14 and construction of the Plant and will receive training
15 prior to commercial operation.
16 The existing combustion turbine staff and the new
17 combined cycle staff will be combined to form a gas group,
18 reporting to one manager. This will facilitate the sharing
19 of knowledge and expertise among the plants as well
20 as allow the Company to shift manpower as needed for
21 maintenance.
22 Prior to commencing with Plant operations, personnel
23 will receive operating and maintenance training as part of
24 the contracts with Siemens and Kiewit/TIC.
PORTER, DI 24
Idaho Power Company
1 Operating and maintenance procedures will be
2 developed and implemented with Siemens and Kiewit/TIC prior
3 to commercial operation of the Plant.
4 Q.What advantages does the Company's operation
5 of a baseload resource of this type provide relative to the
6 operability of the Company's generation and transmission
7 systems?
8 A.This power plant is a baseload facility with
9 inherent operational flexibility. It can be dispatched to
10 optimize the Plant's output and capabilities with Idaho
11 Power's existing generation fleet. The Plant can change
12 generation quickly to maintain system balance as load
13 varies or as intermittent resources such as wind and solar
14 vary their output. In light of the limited capacity of the
15 Company's existing hydro generation resources to integrate
16 intermittent generation resources such as wind and solar
17 generation, the flexibility this Plant would provide is
18 necessary to permit integration of future intermittent
19 generation resources.
20 In addition, the Plant will also provide additional
21 operating reserves necessary to reliably operate Idaho
22 Power's transmission and generation system.
PORTER, DI 25
Idaho Power Company
1 ECONOMIC BENEFITS TO LOCA ECONOMY
2 Q.How will the Langley Gulch Power Plant
3 impact the local economy?
4 A.Construction of the Plant will offer a
5 stimulus to the Treasure Valley economy. The construction
6 will require a labor force of up to 120 workers for as long
7 as two years. These will include qualified local
8 electricians, pipefitters, steelworkers, excavators,
9 carpenters, concrete workers, and laborers. In addition,
10 the construction will require the purchase of commodities
11 such as concrete, rebar, and steel, and the rental of
12 equipment.
13 As noted above, when construction of the Plant is
14 complete, the Company is expected to employ 18 people to
15 operate the Plant.
16 Finally, the Plant will be placed in the tax base
17 and the Company will pay property taxes during the life of
18 the Plant.
19 Q.Does this conclude your testimony?
20 A.Yes, it does.
PORTER, DI 26
Idaho Power Company