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Home My WebLink About20071210Goins direct.pdf. .iUn? DEC 10 10=23 .STATE OF IDAHO BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION . CASE NO. IPC-E-07-08 . . IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPAN FOR AUTHORITY TO INCREASE ITS RATES AND CHAGES FOR ELECTRIC SERVICE TO ELECTRIC CUSTOMERS IN THE STATE OF IDAHO .DIRECT TESTIMONY OF DR. DENNIS W. GOINS ON BEHAF OF THE' U.S. DEPARTMENT OF ENERGY . . December 10, 2007. . . .TABLE OF CONTENTS Page .INTRODUCTION AN QUALIFICATIONS .............................................................................. 1. CONCLUSIONS...................................................................................................................... 3 RECOMMENDATIONS .......................................................................................................... 7 COST. OF SERVICE ................................................................................................................9.REVENUE SPREAD ............................................................................................................ 20 EXIDBITS ApPENDIX A . . . . . .Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Pagei ." . . . 1 2 Q. 3 4 A. 5 6 7 Q. 8 9 A. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . . . . . . . INTRODUCTION AN QUALIFCATIONS PLEASE STATE YOUR NAME, OCCUPATION, AN BUSINESS ADDRESS. My name is Dennis W. Goins. I operate Potomac Management Group, an èconomic and management consultig firm. My business address is 5801 Westchester Street, Alexandra, Virginia 22310. PLEASE DESCRIBE YOUR EDUCATIONAL AN PROFESSIONAL BACKGROUND. I received a Ph.D. degree in economics and a Master of Economics degree from Nort Carolina State University. I also eared a B.A. degree with honors in economics from Wake Forest University. From 1974 though 1977 I worked as a staff economist at the Nort Carolina Utilities Commission. Durg my tenure at the Commission, I testified in numerous cases involving electrc, gas, and telephone utilities on such issues as cost of service, rate design, intercorporate transactions, and"load forecasting. I also served as a member of the Ratemakg Task Force in the national Electrc Utility Rate Design Study sponsored by the Electrc Power Research Institute (EPRI and the National Association of Regulatory Utilio/ Commssioners (NARUC). Since 19781 have worked as an economic and management consultat to :fs and organizations in the private and public sectors. My assignents focus priarly on market strctue, policy, planing, and pricing issues involving:fs that operate in energy markets. For example, I have conducted detaled analyses of product pricing, cost of servce, rate design, and interutility plang, operations, and pricing; prepared analyses related to utility mergers, trsmission access and pricing, and the emergence of competitive markets; evaluated and Case No. IPC-E-07-08 Dennis W. Goins - DOE -Di Page i . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Q. 22 A. 23 24 25 . . . . . . . . . developed regulatory incentive mechanisms applicable to utilty operations; and assisted clients in analyzing and negotiating interchange agreements and power and fuel supply contracts. I have also assisted clients on electrc power market restrctug issues in Arkasas, New Jersey, New Yorl" South Carolina, Texas, and Virginia. I have submitted testimony and affidavits and provided techncal assistace in more than 100 proceedigs before state and federal agencies as an expert in competitive market issues, regulatory policy, utility planing and operatig practices, cost of service, and rate design. These agencies include the Federal Energy Regulatory Commission (FERC), the Governent Accountability Offce, the First Judicial Distrct Cour of Montaa, the Circuit Cour of Kanawha County, West Virginia, and regulatory agencies in Alabama, Arzona, Arkansas, Colorado, Florida, Georgia, Idaho, Illiois, Kentucky, Louisiana, Maie, Marland, Massachusetts, Minesota, Mississippi, New Jersey, New York, Nort Carolina, Ohio, Oklahoma, South Carolina, Texas, Utah, Vermont, Virginia, and the Distrct of Columbia. A listig of these regulatory, administrative, and cour proceedings is presented in Appendix A. I have also parcipated in several cases before this Commssion involvig Idaho Power Company (!C). These cases include Docket Nos. E-03-13, E-04- 23, and E-05-28. ON WHOSE BEHALF AR YOU APPEARNG IN TIDS PROCEEDING? I am appearng on behalf of the U.S. Deparent of Energy (DOE) representing the Federal Executive Agencies (FEA), which is comprised of all Federal facilities served by Idaho Power Company (IPC). Two of the larger FEA facilities are the Deparent of Ènergy's Idao National Laboratory (DOEII) and Mounta Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 2 ' . . 1 2 3 Q. 4 5 A. 6 7 8 9 10 Q. 11 12 A. 13 14 15 16 17 Q. 18 A. 19 20 21 22 23 . . . . . . . . . Home Air Force Base. IPC serves DOEII under a special contract, and serves the bulk of Mountai Home AFB's load under Schedule 19 Large Power Service. WHT ASSIGNMENT WERE YOU GIVN WHN YOU WERE RETAINED? I was asked to undertake two priar taks: 1. Review IPC's proposed cost-of-service analyses (includig pro forma adjustments) and related rates. 2. Identify any major deficiencies in the cost analyses and proposed rates and suggest recommended changes. WHAT SPECIFIC INORMTION DID YOU REVIEW IN CONDUCTING YOUR EVALUATION? I reviewed IPC's app'lcation, testiony, exhbits, and responses to requests for information related to cost of service, revenue spread, and rate design issues. I also reviewed documents found on web sites operated by the Commission and by IPC. CONCLUSIONS WHT CONCLUSIONS HAVE YOU REACHED? On the basis of my review and evaluation, I have concluded the followig: 1. Cost of Service. IPC has proposed increasing base revenues by approximately $63.95 million (10.35 percent). In developing proposed rates for its retai1 electrc services, IPC fist conducted four (4) cost-of- service studies for the test year endig December 31, 2007. In these cost analyses, IPC allocated and/or directly assigned its costs to fuctional Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 3 . . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 segments of its retail electrc business. The retu component of IPC's costs reflects a requested 8.561 percent retu on its retal jursdictional rate base (using an 11.5 percent retu on conion equity). In its cost studies, IPC classified steam and hydro production costs as demand- and energy-related costs. IPC set the energy-related component of these costs equal to the Idaho jursdictional load factor (58.53 percent), with the residual (1 -load factor) classified as demand-related costs. IPC has used ths classification scheme in prior rate cases. IPC classified transmission costs as demand-related costs and distrbution costs as demand- or customer-related costs. IPC classified the cost of all power purchases assigned toFERC Account 555.1 as energy-related costs. With respect to purchases from cogeneration and small power producers assigned to FERC Account 555.2, IPC classified alost 97 percent of these costs as energy-related costs. IPC's energy-based classification scheme reflects the domiance of I-par pricing (that is, prices stated on a $/M basis) for Account 555 transactions in power markets-parcularly Account 555.1 transactions. IPC's four cost studies include a Base Case analysis that generally follows fuctionalization, classification, and allocation steps reflected in cost studies that IPC submitted in its last two rate cases. In allocating demand-related production costs to major customer classes, IPC used a weighted l2-month coincident peak (W12CP) methodology. Tils methodology develops class allocation factors using the simple average of seasonal allocators derived from two different costig approaches-a traditional L2CP methodology and a methodology that weights class . . . . . . .Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 4 . . . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 monthly coincident peak demands by IPC's estimated generation-related marginal cost. IPC assumes that its marginal generation cost is positive (non-zero) only in the six months in which its projects capacity deficits (May though September and December). IPC's estiated margial generation cost in all other months is zero. IPC also used a W12CP methodology to allocate demand-related transmission costs. In its Base Case study, IPC allocated energy-related costs using ElO allocation factors reflectig monthly energy use by class weighted by ¡PC's estimated monthy marginal energy cost. Finally, IPC allocated distrbution plant demand-related costs on the basis of coincident group peak demands, and customer-related distrbution plant costs using average number of customers. IPC's conducted a second cost-of-servce study (Base Case - Non- weighted) that differs in one major respect from its Base Case study. Specifically, the second study is the Base Case without marginal cost weightings of demand-related production and trsmission plant costs and energy-related production costs. In its thrd and four cost studies, ¡PC allocated its steam, hydro, and combustion tubine (CT) plant costs differently. ¡PC first designated generation plant assigned to FERC accounts 310-316 (steam production) and 330-336 (hydro production) as Baseload/termediate Load capacity (hereinafter referred to as Baseload capacity). IPC then designated its CT capacity reflected in FERC accounts 340-346 as Peakg capacity. In its thd cost study, IPC allocated Baseload capacity using an unweighted 12 CP allocation method, and its Peakg capacity using an unweighted 3CP . . . . . . .Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di PageS . . . 1 2 3 4 5 6 7 8 9 10 11 method (the 3CP/12CP method). IPC's four cost study replicated its 3CP/12CP study with one exception. In this four study, IPC allocated demand-related Baseload costs on the basis of unweighted anual energy use. IPC called ths study its 3CP/Average Energy cost study. In both the 3CP/12CP and 3CP/Average Energy cost studies, IPC allocated energy- related production and demand-related transmission and distrbution costs the same way these costs were allocated in IPC's Base Case study. IPC's preferred cost-of-service methodology is the 3CP/12CP method. According to IPC, the 3CP/12CP method best reflects factors drvig IPC's need for capacity to meet growig summer demands as well as year- round demands. . . . .14 15 16 17 2. Revenue Spread. IPC spread its proposed revenue increase among rate classes using the following 4-step sequential approach: . Identify sales revenue increases (or decreases) necessar to match total revenue from each class with IPC's estimated cost of serving the class as determined in IPC's 3CP/12CP class cost-of-servce study 12 13 (COSS). 22 23 24 . Set a 20-percent liit on rate increases to Schedule 24 Irgation Service and Special Contracts customers and a 15-percent limit on the Small General Service, Large Power Service, and Traffc Control Lightig classes. . Hold revenues from the Dusk-to-Dawn Lightig class at test-year levels under present rates instead of decreasing revenues as indicated by the COSS results-that is, give no initial increase to this class. .18 19 20 21. . .Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 6 . . . . 1 2 3 4 Q. 5 6 A. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 . . . . . . . . . Spread the revenue shortfall caused by the 20- and IS-percent caps on class increases across all other schedules. RECOMMNDATIONS WHAT DO YOU RECOMMEND ON THE BASIS OF THESE CONCLUSIONS? I recommend the following: 1. Reject IPC's classification of steam and hydro production plant costs as demand- and energy-related costs. Instead, all steam and hydro production plant costs should be classified as demand-related costs. IPC's proposed classification scheme suffers from at least two defects. First, the scheme arbitrarly . assumes that higher load factor customers receive a disproportionate share of .the cheap energy benefits of baseload and intermediate capacity without payig a proportionate share of the higher capital costs of such capacity-paricularly if demand-related capacity costs are allocated on the basis of peak demands. Second, the classification scheme arbitrarly assumes that IPC's system load factor somehow identifies the porton of generation plant costs that are supposedly energy-related costs. Neither assumption is intuitively obvious or empircally supportble. 2. If the Commission requires IPC to classify hydro plant costs into demand and energy cost components, then system load factor should not be used to determe the energy cost component. Instead, as an alternative, I recomiend classifyg approximately 60 percent of hydro plant costs as demand and 40 percent as energy. As IPC notes, it uses hydro plant not only to meet baseload demands, but also to serve peak loads. Ths Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 7 . . 1 2 3 4 5 6 operating flexibility is not reflected in a classification scheme based on system load factor. My recommended alternative 60/40 classification scheme is reasonable because it falls between the 100-percent demand classification scheme IPC uses for peakg CTs and the approxiately 40 percent demand/60 percent energy scheme it uses to classify baseload steam generatig costs. . . 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 3. Reject IPC's classification of Account 555 purchased power costs. Classifyg these costs on the basis of how they are priced ignores the capacity component of the underlyig products, and is inconsistent with how IPC classifies production plant (built or acquired) that could substitute for off-system purchases. My review of IPC's 2006 purchased,. i ' power costs indicates that nearly 68 percent of its purchases were short- term firm trsactions, while nearly 19 percent were long-term purchaes from a des,ignated generatig unt. By not imputing a meaningful demand. related capacity component to the cost of these transactions (that is, by classifyg more than 98 percent of Account 555 expenses as energy costs), IPC ensured that a disproportionate share of Account 555 costs would be allocated to high load factor customer classes. Because purchased 'power cost represent a significant test-year cost (nearly $144 millon), iPC's energy-only classification scheme distorts the results of its cost-of-service studies. As a step to correct ths error, I recommend classifyng Account 555 purchased power expense on a 50/50 basis-that is, 50 percent classified as demand-related costs and 50 percent classified as energy-related costs. . . . . .25 26 4 Approve IPC's 3CP/12CP allocation methodology, but modify the approach to reflect my recommended classification of hydro plant and .Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 8 . . .1 2 3 4 5 6 7 8 9 10 11 12 13 14 Q. 15 16 A. 17 18 19 20 21 22 Q. 23 24 A. 25 . . . . . . . . . Account 555 costs. As I show later in my testiony, these changes dramatically alter the resultsofIPC's 3CP/12CP cost study. 5. Reject IPC's proposed revenue spread, which is based on its 3CP/12CP cost study results. As I just nòted, correcting ths study to reflect a balanced classification of hydro plant and Account 555 costs signficantly alters the class cost responsibilities on which IPC based its proposed revenue spread. I recommend spreadig IPC' s revenue increase to reflect results from a 3CP/12CP cost study, modified as I have suggested. In addition, I recommend limitig the increase to any class to 2.5 ties the system average increase, and not reducing rates for any class below present levels. Details of how to implement ths revenue spread approach are presented later in my testiony. COST OF SERVICE DID IPC ESTIMATE ITS COST OF SERVING DIFFERENT CUSTOMER CLASSES? Yes. IPC conducted four detailed cost-:of-service studies using data (adjusted in many cases) for the test year ending December 31, 2007. In these cost analysis, IPC classified and then allocated and/or diectly assigned its costs to fuctional segments of its re~ail electrc business. The retu component of IPC's costs reflects a requested 8.561 percent retu on its Idaho retail jursdictional rate base (using an 11.5 percent retu on common equity). HOW DID IPC ALLOCATE ITS DEMA-RELATED PRODUCTION COSTS? In its Base Case cost study, IPC used a weighted l2-month coincident peak (W12CP) methodology to allocate demand-related production costs to major Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 9 . . 1 2 3 4 5 . .6 Q. 7 . 8 A. 9 10 11 12 Q. 13. 14 A. 15 16. 17 Q. . 18 A. 19 20 21 . . . customer classes. Under ths methodology, class allocation (actors are set equal to the simple average of seasonal allocators derived from two different costig approaches-a traditional 12CP methodology and a methodology that weights class monthly coincident peak demands by IPC's estimated generation-related margial capacity cost. DOES IPC WEIGHT ALL MONTHLY PEAK DEMANS BY MARGINAL GENERATION CAPACITY COSTS? Na. IPC weights class monthly coincident peak demands by margial generation costs only in the six months in which it projects capacity deficits (May though September and December). IPC's estimated marginal generation cost in all other months is zero. DID IPC USE A SIMLAR METHODOLOGY TO ALLOCATE DEMA- RELATED TRASMISSION COSTS? Yes. IPC also used a W12CP methodology to allocate these costs in its Base Case study. However, in developing these class allocators, IPC weighted class monthly coincident peak demands by each month's estiated tranmission marginal cost. IS IPC'S WEIGHTED 12CP METHODOLOGY REASONABLE? Yes. Although the methodology is not widely used, it appears to be reasonable. I prefer allocation methods that are more straightforward than IPC' s method. Neverteless, the W12CP methodology has some intutive costing logic underlyig its application. Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 10 . .1 Q. . 2 A. 3 4 . 5 Q. 6 7 . 8 A. 9 10 11 12 Q..13 A. 14 15 16 17 18 19 . .20 Q. 21 .22 A. 23 . . HOW DID IPC ALLOCATE ITS ENERGY-RELATED COSTS? In its Base Case study, IPC used allocation factors (E 1 0 factors) based on class monthy energy use weighted by estimated monthy marginal energy cost to allocate its energy-related production costs.l IS TilS ALLOCATION APPROACH CONSISTENT WITH THE W12CP METHODOLOGY IPC USED TO ALLOCATE DEMAD-RELATED PRODUCTION AND TRASMISSION COSTS? Yes. Both approaches weight selected customer usage measures (peak demands and energy consumption) by relevant margial costs. Ths marginal cost weightig reflects a reasonable attempt to introduce a dynamic costig element to IPC's analysis of historical embedded costs. HOW DID IPC CLASSIFY PRODUCTION PLANT COSTS? In its Base Case cost study, IPC classified steam (FERC Accounts 310-316) and hydro (pERC Accounts 330-336) production costs as demand- and energy-related costs. IPC set the energy-related component of these costs equal to the Idao " jursdictional load factor (58.53 percent), with the residual-41.47 percent or (1 - load factorr-lassified as demand-related costs. IPC classified 100 percent of its investment in combustion tubines (pERC Accounts 340-346) as demand related costs. DO YOU AGREE WITH, IPC'S CLASSIFICATION OF PRODUCTION PLANT COSTS? I agree with the classification of CT costs, but disagree with IPC' classification of steam and hydro production plant costs. IPC's classification of these latter costs Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 11 . . . . . . . . . . . 1 2 3 rests on questionable assumptions, the validity of which is neither intutively obvious nor empircally demonstrable. More specifically, IPC's steam and hydro classification scheme rests on the followig arbitrar assumptions: 4 5 6 7 8 1. Higher load factor customers receive a disproportionate share of the cheaper energy benefits of baseload and intermediate capacity without payig a proportionate shae of the higher capital costs of such capacity- paricularly if demand-related capacity costs are allocated on the basis ôf peak demands. 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 2. System load factor somehow identifies the porton of generation plant costs that are supposedly energy-related costs. Regardig the first assumption, base load and intermediate plants are planed and designed to -operate durg more than peak demand periods, and higher load factor customers use energy from such plants in non-peak periods. However, whether higher load factor customers benefit disproportionately from cheaper base load and intermediate plant energy is an empircal question that IPC has not addressed in this case. Moreover, in addressing this question, the method used to allocate energy-related costs must be considered. For example, if production plant costs are classified ~s energy-related costs and energy costs are . allocated on the basis of average energy use, then low load factor customers willlikely receive the benefits of cheap~~ baseload and intermediate energy without payig a fair share of the capital costs for these plants. Regarding the second assumption, using IPC's system load factor to identify the porton of production plant costs to classify as energy-related costs is totally arbitrar. System load factor is an indicator of the relative use of supply resources i IPC developed seasonal EIOfactors (EIOS and ElONS) to facilitate identifyng seasonal cost responsibilty. Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 12 . . 1 2 .3 Q. 4 5 6 A..7 8 9 10 11 12 13 . .14 Q. . 15 A. 16 17 . 18 19 20 21 22 23. . . (production plant) over time, and provides neither an economic nor engineerig rationale for classifying production plant costs. IF THE COMMISSION REQUIRES THAT SOME PART OF STEAM AN HYRO PLANT COSTS BE CLASSIFIED AS ENERGY COSTS, HOW SHOULD THE ENERGY-RELATED COMPONENT BE IDENTIFIED? Let me reiterate-in my opinion, all production plant costs should be classified as demand-related costs. Nonetheless, if par of IPC's production plant costs is classified as energy-related costs, I recommend settg the percentage of such plant costs classified as energy-related costs equal to the ratio of IPC's weighted energy allocators in non-capacity deficit months-that is, all months other than May - Septemb~r and December-to the weighted 12-month allocator. Ths approach provides at least some intuitive linage between the energy cost of production plant,a.d hi~ load factor energy use. WHAT IS THE RÉSULT OF USING THIS APPROACH? . In IPC's Exhbit No. 47, page 5, sum the weighted retail jursdiction energy factors for the six non-capacity deficit months-that is, all months other than May - September and December. Ths value is 443,673,889. . Divide 443,673,889 by 1,158,007,47Q-the sum of weighted retal jursdiction energy use for all 12 months. The resulting value is 38.31 Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 13 . . 1 2 3 Q. 4 5 6 A. 7 8 9 10 11 12 13 14 15 16 17 Q. 18 A. 19 20 21 22 . . . . . . . . . percent. The remaining 61.69 percent of costs should be classified as demand.2 DOES TIDS ALTERNATIVE CLASSIFICATION SCHEME BETTER REFLECT DRIVERS UNDERLYING IPC'S NEED FOR STEAM AND HYRO PRODUCTION PLANT? Yes. As ¡ noted earlier, steam and hydro generation plant investments are priarly undertaken to meet. demand, and a classification scheme that results in allocatig nearly 60 percent of these costs on the basis of energy simply makes no economic or engineerig sense. Ths problem is paricularly acute for hydro plant. ¡PC admits that it often manages its hydro plant to serve peak hours-not simply to meet baseload demand.3 This operating flexibilty is not reflected in a classification scheme based on system load factor. My recommended alternative 60/40 demand-energy.classification scheme is reasonable because it falls between the 1 OO-percent ,d~ipand classification scheme IPC uses for peakg CTs and the approximately 40 percent demand/60 percent energy scheme it uses to classify base load steam generating costs. HOW DID IPC CLASSIFY ITS PURCHASED POWER COSTS? IPC's separted its test-year purchased power costs into FERC Account 555.1- all transactions except those involvig cogeneration and small power production (CSPP)-and FERC Account 555.2-all CSPP purchases. ¡PC classified about 98 percent of its total Account 555 costs as energy costs-l00 percent of Account 555.1 purchasesând 97 percent of Account 555.2 purchases. (See Table 1 below.) 2 As I describe later in my testiony, I prepared cost studies using classification schemes for hydro plant and purchased power costs that differ from the classification schemes that IPC used in its cost studies. The 60/40 demand-energy split I used to classify hydro plant costs approximates the 61.49/38.31 demand- energy split derived in my alternative classification approach.3 See the direct testimony ofIPC's witness Timothy Tatu at 12:24-25. Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 14 . .Table 1. IPC 2007 Test-Year Account 555 Expense Accunt555 Total Demand Energy 555.1 Purcased Power $55,420,025 $$55,420,025 555.2 Cogeneration & Sm Power Capacity 2,673,562 2,673,562 0 Energy 85,79,748 0 85,479,748 Total 5551CSPP $143,573,335 $ 2,673,562 $140,899,773 Percent 100%2%98% 1 Source: IPC Exhibit No. 41 at 51. . . . 2 Q. 3 4 A. 5 6 7 8 9 Q. 10 11 A. 12 13 14 15 16 . . . . . . WHY is IPC'S CLASSIFICATION OF THESE COSTS SO HEAVILY SKEWED TOWAR ENERGY? IPC's classification scheme reflects how these transactions are priced. For example, the classification of Account 555.1 costs reflects the dominance of 1~ . . ~; par pricing (that is, prices stated on a $/M basis) for such purchases in power markets. In classifying Account 555.2 costs, IPC relied on prior Commssion rulings requirg energy~only prices for more recent CSPP transactions. SHOULD THE PRICING OF PURCHASED POWER DICTATE ITS CLASSIFICATION? No. Classifying these costs on the basis of how transactions are priced ignores the underlying products. I reviewed IPC's 2006 Account 555 purchased power costs as recorded in FERC Form 1. My review indicates that nearly 68 percent ofIPC's purchases were short~term fir4 trsactions, while nearly 19 percent were long- term purchases from designated generating unts.s Settlement prices for almost all of these transactions were energy~only prices-implyig that the purchases had no 4 Such purchases are classified in FERC Form 1 as SF - short-term service, including all fi servces with commitments of one year or less. All nonfirm servces, regardless of lengt, are put in a category called OS - other service.S Such purchases are classified in FERC Form 1 as LV -long-term servce (5 years or longer) from a designated generating unit, with availabilty and reliabilty that matches the availabilty and reliability of the Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 15 . . 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Q. 16 17 A. 18 19 20 21 22 . . . . . . . . . capacity component. Yet the underlyig products either hedged IPC's short-term pricing risk or provided access to energy on a basis that matched a designated unit's availability and reliability. In both cases, IPC was buying more than nonfirm energy to reduce real-time generating costs. IPC's classification of Account 555 costs is also inconsistent with how it classifies production plant (built or acquired) that could substitute for off-system purchases~ IPC's customers should be indifferent to IPC's decision to purchase electrcity instead of buildig or buyig generatig capacity. If IPC had built or bought generatig capacity instead of purchasing electrcity, IPC would have classified the cost of that capacity as either demandor as both demand and energy. For this reason, the cost of IPC's short-term firm and long-term unit power purchases should not be classified only as energy-related. Using an energy..only classification scheiie UÌfaily shifts purchased power costs to high load factor customers-thereby forcing them to subsidize low load factor classes. WHAT HAPENS IF THE CAPACITY COMPONENT OF PURCHASED POWER COSTS IS IGNORED? By not imputing a meangful demand-related capacity cost component to these transactions (for example, by classifyg more than 98 percent of Account 555 costs as energy costs), IPC ensured that a disproportonate share of these costs were allocated to high load factor customer classes. Moreover, because Account 555 represents a signficant test-year cost (nearly $144 millon), IPC's energy-only classification scheme distort the results of its cost-of-service studies. designted unit. Case No. IPC-K.07-08 Dennis W. Goins - DOE - Di Page 16 . . . . . . . . . . . 1 Q. 2 A. 3 4 5 6 7 Q. 8 9 A. 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 SHOULD TmS CLASSIFICATION ERROR BE CORRCTED? Yes. As a step to correct this error, I recommend classifyg Account 555 purchased power expense on, a 50/50 basis-that is, 50 percent classified as' demand-related costs and 50 percent classified as energy-related costs. Ths is a reasonable approach to address a serious cost-of-service issu~parcularly with IPC's increàsed reliance on purchased power to serve load. DID IPC CONDUCT SEVERA DIFFERENT COST-OF-SERVICE STUDIES? Yes. As I noted earlier, IPC conducted four cost studies.6 IPC's Base Case study is essentially the same tye of cost study that IPC has submitted in recent rate .,. - ~ .\ ~ cases. It includes a weighted 12CP allocation of all production plant costs and marginal-cost-weighted energy costs allocators. IPC's second cost study differs from the Base Case study in one major respect. Specifically, ths second study (the Base Case - Non-weighted study) is the Base Case without marginal cost weightings of deinand-related production and transmission plant costs and energy- related production costs. The thd and four studies reflect a significant depare from IPC'sprevious cost studies. In these studies, IPC first designated steam and hydro production plant as Baseload capacity. IPC then designated its CT capacity as Peakg capacity. In its thd cost study, IPC allocated Baseload capacity using an unweighted 12 Cll .,allocation method, and its Peakig capacity using an unweighted 3CP method (the 3CP/12CP method). IPC's four cost study replicated its 3CP/l2CP study with one exception. In ths four study, IPC allocated demand-related Baseload costs. on the basis of unweighted anual energy 6 For a succinct description of these different studies, see the direct testimony ofipe witness Timothy Tatu at 16. Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 17 . . . 1 2 3 4 5 6 7. 8 9 10. 11 Q. . 12 A. 13 14 15 .16 Q. . 17 A. 18 19 20 . 21 Q. 22 23 . . use. IPC called ths study its 3CP/Average Energy cost study. In both the 3CP/12CP and 3CP/Average Energy cost studies, IPC allocated energy-related production and demand-related transmission and distrbution costs the same way these costs were allocated in IPC's Base Case study. To simplify discussion of these studies and my modifications to them, I wil refer to IPC's four cost studies as follows: . Case 1 = Base Case study. . Case 2 = Base Case - Non-weighted study. . Case 3 = 3CP/12CP study. . Case 4 = 3CP/Average Energy cost study. DOES IPC HAVE A PREFERRD COST-OF-SERVICE STUDY? Yes. IPC's preferrtd. cost-of-service methodology is Case 3-the 3CP/l2CP method. Accordig tQ ,IPC, the 3CP/12CP method best reflects factors drving IPC's need for capacity to meet growing summer demands as well as year-round demands. DO YOU AGREE WITH IPC REGARING THE 3CP/12CP STUDY? I agree that the 3CP/12CP methodology is reasonable, but only if modified to classify hydro plant and purchased power costs properly. As I discuss later, I used results from my Case. 3 cost study that reflects the 3CPIl2CP methodology with corrected cost classifications to develop my recommended revenue spread. DID YOU CONDUCT COST STUDIES THAT REFLECT YOUR RECOMMENDED CLASSIFICATION OF HYDRO PLANT AN PURCHASED POWER COSTS? Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 18 . .1 A. 2 3 4 5 6 7 8 . . . 9 Q. 10 11 12 .13 A. 14 15 16 17 18 19 . .20 Q. 21 22 A. . . . Yes. I conducted cost studies that replicate Cases 1-4 except that I classified hydro plant and purchased power costs to reflect my earlier testiony. Exhbit No. 607 shows how my recommended classification of production costs differs from IPC's classification for each of the four cost study cases. In general, my classification scheme results in more costs classified as demand (all cases) and more costs assigned to the Peakng category of production plant (Cases 3 and 4). Results from my cost analyses for Cases 1-4 are shown in Exhbit Nos. 608 (Case 1),609 (Case 2),610 (Case 3), and 611 (Case 4). DO THE RESULTS OF YOUR COST STUDIES INDICATE SIGNIFICANTLY DIFFERENT CLASS COST RESPONSmILITIES RELATIVE TO ,CLASS COST ALLOCATIONS IN IPC'S COST STUDIES? Yes. In general, results from my studies indicate signficantly lower cost responsibilities for Large Power Service. and Special Contracts customers. For example, in Case 3, my analysis indicates that a 9.71 percent revenue increase (about $523,000) is required to brig DOEII to cost of servce. In contrast, IPC's Case 3 analysis (Exhibit No. 53) indicates that a 24.48 percent increase ($1.32 milion) is requied. This huge disparty shows why properly classifyg IPC's hydro plant costs and purchased power costs is critical. WHCH COST STUDY DO YOU RECOMMEND USING AS THE BASIS FOR SPREADING IPC'S REVENUE INCREASE? I recommend using results from my Case 3 analysis shown in Exhbit No. 610. Case No. IPC-E-07-08 Dennis W. Goins - DOE- Di Page 19 . .1 2 Q. 3.4 A. 5 6 7. 8 Q. .9 Á. 10 11 12 13 14 15 . .16 Q. 17 18 A. . . . . REVENUE SPREAD HOW DID IPC SPREAD ITS PROPOSED REVENUE INCREASE AMONG CUSTOMER CLASSES? As I described earlier, IPC used a 4-step sequential approach to spread its proposed revenue increase among rate classes. Ths approach-which is lined to results from IPC's 3CP/12CP cost study-is discussed in detail by IPC witness Maggie Brilz7 and presented in Exhbit No. 58. DO YOU AGREE WITH IPC'S PROPOSED REVENUE SPREAD? No. As I just noted, correcting IPC's 3CP/12CP cost study to reflect a balanced classification of hydro plant and Account 555 costs signficantly alters the class cost responsibilities on which IPC based its proposed revenue spread. I recommend spreading IPC's revenue increase to reflect results from a 3CPI12CP cost study, modified as I have suggested. (See Exhbit No. 610.) In addition, I recommend limitig the increase to any class to 2.5 times the system average increase, and not reducing rates for any class below present levels. HAVE YOU DEVELOPED A REVENUE SPREAD THAT REFLECTS THESE MODIFICATIONS? Yes. Ths alternative revenue spread is shown in.Exhbit No. 612. 7 See IPC witness Maggie Brilz, direct testimony at 3:4 - 4:22. Case No. IPC-E-07-08 Dennis W. Goins - DOE - Di Page 20 . .1 Q. 2 3 .4 A. 5 6 .7 Q. IF THE COMMISSION ALLOWS LESS THA IPC'S REQUESTED SALES REVENUE INCREASE, HOW SHOULD THE APPROVED INCREASE BE SPREAD? IfIPC's retail base revenue increase is below 10.35 percent, I recommend using the same 4-step sequential approach that I used to develop the DOE revenue spread shown in Exhbit No. 612. DOES THIS COMPLETE YOUR DIRECT TESTIMONY? 8 A. Yes. . . . . . . . Case No. IPC-E-07-08 Dennis W. Goins - DOE. Di Page 21 . . .STATE OF IDAHO BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION . CASE NO. IPC-E-07-08 . . IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMæAN FOR AUTHORITY TO INCREASE ITS RATES AND CHARGES FOR ELECTRIC SERVICE TO ELECTRIC CUSTOMERS IN THE STATE OF IDAHO .EXHBITS TO THE DIRECT TESTIMONY OF DR. DENNIS W. GOINS ON BEHAF OF THE U.S. DEPARTMENT OF ENERGY. . December 10, 2007. . . . .STATE OF IDAHO BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION . CASE NO. IPC-E-07-08 . . IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPAN FOR AUTHORITY TO INCREASE ITS RATES AN CHARGES FOR ELECTRIC SERVICE TO ELECTRIC CUSTOMERS IN THE STATE OF IDAHO .EXHBIT NO. 607 OF DR. DENNIS W. GOINS ON BEHAF OF THE U.S. DEPARTMENT OF ENERGY US DOE . . December 10, 2007 . . . . . . . . . . Al t e r n a t i v e C l a s s i f i c a t i o n o f P r o d u c t i o n F u n c t i o n C o s t s : C O S C a s e s 1 an d 2 De m a n d ( % ) En e r g y ( % ) Co s t Ite m IP C DO E IP C DO E Hy d r o P l a n t ( 3 3 0 - 3 3 6 ) 1 41 . 4 7 60 . 0 0 58 . 5 3 40 . 0 0 Pu r c h a s e d P o w e r ( 5 5 5 . 1 ) 0. 0 0 50 . 0 0 10 0 . 0 0 50 . 0 0 CS P P ( 5 5 5 . 2 ) 2 3. 0 3 50 . 0 0 96 . 9 7 50 . 0 0 CT s / O t h e r ( 3 4 0 - 3 4 6 ) 10 0 . 0 0 10 0 . 0 0 0. 0 0 0. 0 0 St e a m P l a n t ( 3 1 0 - 3 1 6 ) 1 41 . 4 7 41 . 4 7 58 . 5 3 58 . 5 3 1 I P C e n e r g y c l a s s i f i c a t i o n r e f l e c t s s y s t e m l o a d f a c t o r ; d e m a n d c l a s s i f i c a t i o n r e f l e c t s th e v a l u e ( 1 - s y s t e m l o a d f a c t o r ) . T a t u m d i r e c t a t 1 9 . 2 C S P P = c o g e n e r a t i o n a n d s m a l l p o w e r p r o d u c t i o n . F o r I P C d e m a n d v a l u e , s e e Sc h w e n d i m a n w o r k p a p e r s a t 7 2 a n d E x h i b i t N o . 4 1 a t 5 1 . . . . Ex h i b i t N o . 6 0 7 IP C C a s e N o . E - 0 7 - 0 8 D. G o i n s , D O E Pa g e 1 0 # 2 . . . . . . . . . Al t e r n a t i v e C l a s s i f i c a t i o n o f P r o d u c t i o n F u n c t i o n C o s t s : C O S C a s e s 3 a n d 4 De m a n d ( % ) Ba s e J l n t e r m e d Pe a k i n g En e r g y ( % ) Co s t Ite m IP C DO E IP C DO E IP C DO E Hy d r o P l a n t ( 3 3 0 - 3 3 6 ) 1 41 . 4 7 24 . 0 0 0. 0 0 36 . 0 0 58 . 5 3 40 . 0 0 Pu r c h a s e d P o w e r ( 5 5 5 . 1 ) 0. 0 0 25 . 0 0 0. 0 0 25 . 0 0 10 0 . 0 0 50 . 0 0 CS P P ( 5 5 5 . 2 ) 2 3. 0 3 25 . 0 0 3. 0 3 25 . 0 0 96 . 9 7 50 . 0 0 CT s J O t h e r ( 3 4 0 - 3 4 6 ) 0. 0 0 0. 0 0 10 0 . 0 0 10 0 . 0 0 0. 0 0 0. 0 0 St e a m P l a n t ( 3 1 0 - 3 1 6 ) 1 41 . 4 7 - 41 . 4 7 0. 0 0 0. 0 0 58 . 5 3 58 . 5 3 1 I P C e n e r g y c l a s s i f i c a t i o n r e f l e c t s s y s t e m l o a d f a c t o r ; d e m a n d c l a s s i f i c a t i o n re f l e c t s t h e v a l u e ( 1 - s y s t e m l o a d f a c t o r ) . T a t u m d i r e c t a t 1 9 . 2 C S P P = c o g e n e r a t i o n a n d s m a l l p o w e r p r o d u c t i o n . F o r I P C d e m a n d v a l u e , s e e Sc h w e n d i m a n w o r k p a p e r s a t 7 2 a n d E x h i b i t N o . 4 9 a t 5 1 . . . Ex h i b i t N o . 6 0 7 IP C C a s e N o . E - 0 7 - 0 B D. G o i n s , D O E Pa g e 2 o f 2 . . .STATE OF IDAHO BEFORE THE IDAHO PUBLIC UTILITIES COMMI~SION . CASE NO. IPC-E-07-08 . . IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPAN FOR AUTHORITY TO INCREASE ITS RATES AND CHARGES FOR ELECTRIC SERVICE TO ELECTRIC CUSTOMERS IN THE STATE OF IDAHO .EXHIBIT NO. 608 OF DR. DENNIS W. GOINS ON BEHAF OF THE U.S. DEPARTMENT OF ENERGY US DOE . . December 10, 2007 . . . . . . . . . . . . . 1 ID A H O P O W E R C O M P A N Y 2 CL A S C O S T O F S E R V I C E S T U D Y 3 .. . R E V E N U E R E Q U I R E M E N T S U M M A R Y ' " TW E L V E M O N T H S E N D I N G D E C E M B E R 3 1 , 2 0 0 7 4 5 (A ) (8 ) (C ) (0 ) (E ) (F ) (G ) (H ) 6 SO U R C E S GE N S R V GE N 5 R V AR E A LG P O W E R IR R I G A T I O N 7 & NO T E S TO T A L RE S I D E N T I A L GE N S R V PR I M A Y SE C O N D A R Y LIG H T I N G .P R I M A R Y SE C O N D A R Y 8 (1 ) (7 ) (9 - ) (9 - S ) (1 5 ) (l 9 - P ) (2 4 - 5 ) 9 10 T O T A L R A T E B A S E 1, 8 8 2 , 6 7 0 , 9 2 0 82 9 , 6 4 4 , 5 9 3 44 , 0 7 8 , 2 2 8 42 , 0 6 5 , 1 7 2 38 6 , 7 9 7 , 0 9 4 89 0 , 8 8 3 20 9 , 8 5 2 , 3 7 1 27 8 , 0 4 5 , 6 3 1 11 12 R E V E N U E S F R O M R A T E S 13 RE T A I L 61 7 , 8 2 0 , 2 6 8 29 4 , 0 8 7 , 6 1 0 15 , 3 8 1 , 3 2 8 12 , 7 1 2 , 6 9 7 12 6 , 2 2 1 , 2 1 0 93 1 , 1 4 7 65 , 8 6 9 , 4 7 4 70 , 7 5 0 , 6 5 9 14 15 T O T A L S A S R E V E U E S 61 7 , 8 2 0 , 2 6 8 29 4 , 0 8 7 , 6 1 0 15 , 3 8 1 , 3 2 8 12 , 7 7 2 , 6 9 7 12 6 , 2 2 1 , 2 1 0 93 1 , 1 4 7 65 , 8 6 9 , 4 7 4 70 , 7 5 0 , 6 5 9 16 17 T O T A L O T H E R O P E R A T I N G R E V E N U E S 17 8 , 3 9 1 , 0 7 8 67 , 7 1 7 , 4 4 0 2,8 8 5 , 4 8 6 5, 4 1 9 , 3 3 1 38 , 3 0 0 , 0 8 2 17 5 , 4 0 2 28 , 9 5 0 , 7 1 9 21 , 1 6 1 , & 4 4 18 19 T O T A L R E V E N U E S 79 6 , 2 1 1 , 3 4 6 36 1 , 8 0 5 , 0 5 0 18 , 2 6 6 , 8 1 4 18 , 2 5 2 , 0 2 8 16 4 , 5 2 1 , 2 7 2 1,1 0 6 , 5 4 9 94 , 8 2 0 , 1 9 3 91 , 9 1 2 , 5 0 3 20 21 O P E R A T I N G E X E N S E S 22 IM T H O U T I N C T A X 62 9 , 3 4 6 , 4 9 0 27 3 , 6 9 1 , 9 0 6 14 , 9 4 6 , 1 2 1 14 , 5 1 4 , 7 3 12 8 , 6 4 5 , 0 3 9 86 9 , 5 3 3 76 , 8 0 0 , 0 3 5 81 , 9 8 5 , 9 3 4 23 24 O P E R A T I N G I N C O M E 25 BE F O R E I N C O M E T A X S 16 6 , 8 6 , 8 5 6 88 , 1 1 3 , 1 4 3 3,3 1 8 , 6 9 4 3, 7 3 7 , 0 5 5 35 , 8 7 6 , 2 3 3 23 7 , 0 1 6 18 , 0 2 0 , 1 5 9 9, 9 2 6 , 5 6 9 26 27 T O T A L F E D E R A I N C O M E T A X 46 , 7 5 3 , 6 1 1 20 , 6 0 3 , 1 1 2 1,0 9 4 , 6 2 4 1, 0 4 , 6 3 2 9,6 0 5 , 5 8 8 22 , 1 2 4 5,2 1 1 , 4 0 3 6, 9 0 4 , 8 9 1 28 T O T A L S T A T E I N C O M E T A X 2,9 4 9 , 2 6 8 1,2 5 5 , 5 9 9 66 , 7 0 9 63 , 6 6 2 58 5 , 3 8 6 1, 3 4 8 31 7 , 5 9 4 42 0 , 7 9 9 29 30 T O T A L O P E R A T I N G E X E N S E S 67 8 , 9 4 9 , 3 6 9 29 5 , 5 5 0 , 6 1 8 16 , 1 0 9 , 4 5 3 15 , 6 2 3 , 2 6 8 13 8 , 8 3 6 , 0 1 2 89 3 , 0 0 5 82 , 3 2 9 , 0 3 2 89 , 3 1 1 , 6 2 4 31 32 T O T A L O P E R A T I N G I N C O M E 11 7 , 2 6 1 , 9 7 7 66 , 2 5 4 , 4 3 2 2,1 5 7 , 3 6 1 2, 6 2 8 , 7 6 1 25 , 6 8 5 , 2 5 9 21 3 , 5 4 12 , 4 9 1 , 1 6 2 2, 6 0 0 , 8 7 9 33 34 AD : I E R C O O P E R A T I N G I N C O M E El0 4, 9 6 9 , 9 6 1, 8 3 5 , 5 1 5 71 , 0 5 9 12 8 , 8 4 0 1,1 4 3 , 5 6 9 2,1 6 5 76 6 , 7 8 2 61 6 , 5 8 1 35 C O N S O L I D A T E D O P E R I N C O M E 12 2 , 2 3 1 , 9 3 8 68 , 0 8 9 , 9 4 7 2,2 3 4 , 4 2 0 2, 7 5 7 , 6 0 1 26 , 8 2 8 , 8 2 8 21 5 , 7 0 9 13 . 2 5 7 , 9 4 3,2 1 7 , 4 6 0 36 37 R A T E S O F R E T U R N 6. 4 9 8.2 0 7 5.0 6 9 6.5 5 6 6,9 3 6 24 . 2 1 3 6. 3 1 8 1.1 5 7 38 R A T E S O F R E U R N - I N D E X 1.0 0 0 1.2 6 4 0.7 8 1 1.0 1 0 1.0 6 8 3.7 2 9 0. 9 7 3 0. 1 7 8 39 A V E R A G E M l L L S I K I 50 . 2 0 59 . 2 4 73 . 9 3 35 . 4 1 40 . 8 6 15 7 . 7 5 30 . 7 0 45 . 9 6 40 41 R E V E N U E R E Q U I R E M E N T C A L C U L A T I O N 42 R A T E O F R E T U R N R E Q U I R E D 8.5 6 1 8.5 6 1 8.5 6 1 8.6 1 8.5 6 1 8.5 6 1 8. 5 6 1 8. 5 6 1 43 44 R E Q U I R E D R E U E 68 1 , 7 6 5 , 5 2 6 29 8 , 9 0 8 , 4 0 2 17 , 9 0 8 , 5 5 9 14 , 1 5 7 , 8 8 6 13 6 , 5 4 0 , 9 6 7 70 2 , 1 8 5 73 , 5 9 9 , 2 1 9 10 4 , 5 5 2 , 9 1 5 45 R E V U E D E F I C I E N C Y 63 , 9 4 5 , 2 5 8 4, 8 2 0 , 7 9 2 2,5 2 7 , 2 3 1 1, 3 8 5 , 1 8 9 10 , 3 1 9 , 7 5 7 (2 2 8 . 9 6 2 ) 7,7 2 9 , 7 4 5 33 , 8 0 2 , 2 5 6 46 P E R C E N T C H A G E R E Q U I R E D 10 . 3 5 % 1.6 4 % 16 . 4 3 % 10 . 9 4 % 8.1 8 % -2 4 . 9 % 11 . 3 % 47 . 7 8 % 47 R E T U R A T C L A M E D R O R 16 1 , 1 7 5 , 4 5 7 71 , 0 2 5 , 8 7 4 3, 7 1 3 , 5 3 7 3,6 0 1 , 1 9 9 33 , 1 1 3 , 6 9 8 76 , 2 6 8 17 , 9 6 5 , 4 6 2 23 , 8 0 3 , 4 8 6 48 E A N I N G S D E F I C I E N C Y 38 , 9 4 3 , 5 1 9 2, 9 3 5 , 9 2 7 1,5 3 9 , 1 1 7 84 3 , 5 9 9 6,2 9 4 , 8 7 0 (1 3 9 , 4 4 1 ) 4,7 0 7 , 5 1 8 20 , 5 8 6 , 0 2 7 49 50 R E V E N U E R E Q U I R E M E N T F O R R A T E D E S I G N 51 T O T A L I D A H O S A E S R E V N U E S 61 7 , 8 2 0 , 2 6 8 29 4 , 0 6 7 , 6 1 0 15 , 3 8 1 , 3 2 6 12 , 7 1 2 , 6 9 7 12 6 , 2 2 1 , 2 1 0 93 1 , 1 4 7 65 , 8 6 9 , 4 7 4 70 , 7 5 0 , 6 5 9 52 53 R E Q U E S T E D C H A G E I N R E V N U E ( % ) 10 . 3 5 % 1. 6 4 % 16 . 4 3 % 10 . 9 4 % 8.1 8 % -2 4 . 9 % 11 . 7 3 % 47 . 7 8 % 54 55 S A E S R E V N U E R E Q U I R E D 66 1 , 7 6 5 , 5 2 6 29 8 , 9 0 8 , 4 0 2 17 , 9 0 8 , 5 5 9 14 , 1 5 7 , 8 8 6 13 6 , 5 4 0 , 9 6 7 70 2 , 1 8 5 73 , 5 9 9 , 2 1 9 10 4 , 5 5 2 , 9 1 5 56 R A T E O F R E T U R N A T R E Q U I R E D R E V N U E 8.5 6 1 8.5 6 1 8.5 6 1 8. 5 8 1 6:5 6 1 8.5 6 1 8. 5 6 1 8. 5 6 1 57 R E Q U E S T E D A V E R A G E M I L L S I 55 . 0 60 . 2 1 86 . 0 8 39 . 2 5 44 . 2 0 11 8 . 9 6 34 . 3 1 67 . 9 2 56 59 A C T U A L R A T E O F R E T U R N ( S A S R E N U E O N L V ) -3 . 2 5 -0 . 1 8 -1 . 6 5 -6 . 7 8 -3 . 2 6 4.2 8 -7 . 8 4 -6 . 6 8 60 R E Q U E S T E D R A T E O F R E T U R N ( S A E S R E V E N U E O N L V ) 0.1 5 0, 4 0 4. 8 -3 . 4 8 -0 . 5 9 -2 1 . 4 2 -4 . 1 6 5.4 8 Ex h i b i t N o . 6 0 S Ca s e N O . I P C . E . 0 7 - D S Ca s e 1 D. G o i n s , D O E Pa g e 1 o f 2 . . . . . . . . . . . 1 ID A H O P O W E R C O M P A N Y 2 CL A S C O S T O F S E R V C E S T U D Y 3 . . . R E V N U E R E Q U I R E M E N T S U M M A R Y - TW L V E M O N T H S E N D I N G D E C E M B E R 3 1 , 2 0 0 7 4 5 (I ) (J ) (K ) (L ) (M ) (N ) 6 SO U R C E S UN M E T E R E D MU N I C I P A L TR A F I C SC SC SC 7 & NO T E S TO T A L GE N S E R V I C E ST L I G H T CO N T O L DO E J N L JR S I M P L O T MIC R O N 8 (4 0 ) (4 1 ) (4 2 ) 9 10 T O T A L R A T E B A E 1,8 8 2 , 8 7 0 , 9 2 0 2, 4 1 0 , 2 4 8 2,8 3 0 , 9 3 9 56 1 , 6 0 5 15 , 7 7 2 , 2 1 2 18 , 3 7 2 , 0 1 7 53 , 3 4 9 , 9 3 0 11 12 R E V E N U E S F R O M R A T E S 0 13 RE T A I L 61 7 , 8 2 0 , 2 6 8 88 0 , 6 1 0 2,0 5 6 , 1 4 6 18 8 , 5 4 3 5,3 8 4 , 8 4 9 4,6 5 7 , 8 8 1 18 , 6 3 8 , 1 1 4 14 15 T O T A L S A E S R E V E N U E S 61 7 , 8 2 0 , 2 6 8 88 0 , 6 1 0 2,0 5 6 , 1 4 6 18 8 , 5 4 3 5,3 8 4 , 8 4 9 4,6 5 7 , 8 8 1 18 , 6 3 8 , 1 1 4 16 17 T O T A L O T H E R O P E R A T I N G R E E N U E S 17 8 , 3 9 1 , 0 7 8 20 2 , 9 9 1 43 1 , 5 2 8 67 , 9 6 4 2,3 9 6 , 0 3 3 2,6 5 8 , 9 3 5 7, 9 6 3 , 3 4 2 18 19 T O T A L R E V E N U E S 79 6 , 2 1 1 , 3 4 6 1, 0 8 3 , 6 0 1 2,4 8 7 , 6 7 4 25 6 , 5 0 7 7,7 8 0 , 8 8 2 7,3 1 6 , 8 1 6 26 , 6 0 1 , 4 5 8 20 21 O P E R T I N G E X E N S E S 0 22 WIT H O U T I N C T A X 62 9 , 3 4 6 , 4 9 0 79 0 , 7 1 3 2,1 2 8 , 8 9 8 20 4 , 2 0 1 8,4 9 7 , 5 1 0 5,9 0 5 , 3 6 0 22 , 3 6 4 , 2 6 7 23 0 24 O P E R A T I N G I N C O M E 0 25 BE F O R E I N C O M E T A X S 18 6 , 8 6 4 , 8 5 8 29 2 , 8 8 8 35 8 , 7 7 6 52 , 3 0 6 1,2 8 3 , 3 7 2 1,4 1 1 , 4 5 8 4, 2 3 7 , 1 8 8 28 27 T O T A L F E D E R A I N C O M E T A X 46 , 7 5 3 , 6 1 1 59 , 8 5 5 70 , 3 0 3 13 , 9 4 7 39 1 , 6 8 2 40 6 , 5 7 7 1,3 2 4 , 8 7 4 28 T O T A L ST A T E IN C O M E TA X 2, 8 4 9 , 2 6 8 3,6 4 8 4, 2 8 4 85 0 23 , 8 7 0 24 , 7 7 8 80 , 7 4 1 29 30 T O T A L O P E R A T I N G E X E N S E S 67 8 , 9 4 9 , 3 6 9 85 4 , 2 1 6 2,2 0 3 , 4 8 5 21 8 , 9 9 7 6,9 1 3 , 0 6 2 6,3 3 6 , 7 1 5 23 , 7 6 9 , 8 8 2 31 32 T O T A L O P E R A T I N G I N C O M E 11 7 , 2 6 1 , 9 7 7 22 9 , 3 8 5 28 4 , 1 8 9 37 , 5 0 9 86 7 , 8 2 1 98 0 , 1 0 1 2, 8 3 1 , 5 7 3 33 0 34 AD D : I E R C O O P E R T I N G I N C O M E El 0 4, 9 6 9 , 9 6 2 5,9 & 4 7,5 9 1 2,0 0 8 73 , 4 9 5 65 , 7 1 9 24 4 , 8 4 5 35 C O N S O L I D A T E D O P E R I N C O M E 12 2 , 2 3 1 , 9 3 8 23 5 , 3 7 9 29 1 , 7 8 0 39 , 5 1 8 &4 1 , 3 1 5 1, 0 4 5 , 8 2 0 3,0 7 6 , 2 1 8 36 37 R A T E S O F R E T U R N 6.4 9 2 9.7 6 6 10 . 3 0 7 7.0 3 7 5. Y i j i j 6. 3 8 8 5.7 6 6 38 R A T E S O F R E T U R N - I N D E X 1. 0 0 0 1. 0 4 1.5 8 8 1.0 8 4 0.9 1 9 0.9 8 4 0.8 8 8 39 A V E R A G E M I L L S I 50 , 2 0 1 53 . 0 10 9 , 3 34 . 4 4 24 . 9 9 24 . 3 26 . 5 4 40 41 R E I l N U E R E Q U I R E M E N T C A L C U L A T I O N 42 R A T E O F R E R N R E Q U I R E D 8.5 6 1 8.5 6 1 8.5 6 1 8.5 6 1 8, 6 1 8. 5 6 1 8.5 6 1 43 44 R E Q U I R E D R E V N U E 68 1 , 7 6 5 , 5 2 6 83 2 , 9 3 0 1,9 7 4 , 9 9 3 20 2 , 6 0 0 6,0 5 6 , 3 3 5 5,2 4 2 , 0 8 5 21 , 0 8 6 , 4 5 0 45 R E V E N U E D E F I C I E N C Y 63 , & 4 5 , 2 5 8 (4 7 , 6 8 0 ) (8 1 , 1 5 3 ) 14 , 0 5 7 67 1 , 4 8 6 58 4 , 2 0 4 2,4 4 8 , 3 3 6 46 P E R C E N T C H A G E R E Q U I R E D 10 . 3 5 -5 . 4 1 % -3 , 9 5 % 7. 6 % 12 . 4 7 % 12 . 5 4 % 13 . 1 4 % 47 R E T U R N A T C L A M E D R O R 16 1 , 1 7 5 , 4 5 7 20 6 , 3 4 1 24 2 , 3 5 7 48 , 0 7 9 1. 3 5 0 , 2 5 9 1, 4 0 1 , 6 0 8 4,5 6 7 , 2 8 8 48 E A I N G S D E F I C I E N C Y 38 , 9 4 3 , 5 1 9 (2 9 , 0 3 8 ) (4 9 , 4 2 3 ) 8,5 6 1 40 8 , 9 4 35 5 , 7 8 8 1,4 9 1 , 0 7 0 49 50 R E E N U E R E Q U I R E M E N T F O R R A T E D E S I G N 51 T O T A L I D A H O S A E S R E V E N U E S 61 7 , 8 2 0 , 2 6 8 88 0 , 6 1 0 2, 0 5 6 , 1 4 6 18 8 , 5 4 3 5, 3 8 4 , 8 4 9 4,6 5 7 , 8 8 1 18 , 6 3 8 , 1 1 4 52 53 R E Q U E S T E D C H A G E I N R E V N U E ( % ) 10 . 3 5 % .5 . 4 1 % -3 . 9 5 % 7.4 6 % 12 . 4 7 % 12 . 5 4 % 13 . 1 4 % 54 55 S A S R E V U E R E Q U I R E D 68 1 , 7 6 5 , 5 2 6 83 2 , 9 3 0 1,9 7 4 , 9 9 3 20 2 , 6 0 0 6,0 5 6 , 3 3 5 5,2 4 2 , 0 8 5 21 , 0 8 6 , 4 5 0 56 R A T E O F R E T U R N A T R E Q U I R E D R E N U E 8. 5 6 1 8,5 6 1 8.5 6 1 8.5 6 1 8.5 6 1 8. 5 6 1 8.5 6 1 57 R E Q U E S T E D A V E R A G E M I L L S I K 55 . 4 0 5Ð . 8 10 5 , 9 37 . 0 1 28 . 1 0 27 . 8 4 30 . 0 3 58 59 A C T U A L R A T E O F R E T U R N ( S A S R E V E N U E O N L Y ) (3 . 2 5 ) 1. 0 -5 . 2 0 -5 . 4 2 .9 . 8 9 .1 0 . 2 5 -9 . 6 2 60 R E Q U E S T E D R A T E O F R E T U R N ( S A E S R E V E N U E O N L Y ) 0.1 5 -0 . 8 8 -8 . 0 7 ' -2 . 9 2 -5 . 4 3 -6 . 6 9 -5 , 0 3 Ex h i b i t N o . 6 0 8 Ca s e N O . I P C . E . 0 7 . 0 8 D. G o i n s , D O E Ca s e 1 Pa g e 2 o f 2 . . .STATE OF IDAHO BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION . CASE NO. IPC-E-07-08 . . IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPAN FOR AUTHORITY TO INCREASE ITS RATES AN CHAGES FOR ELECTRIC SERVICE TO ELECTRIC CUSTOMERS IN THE STATE OF IDAHO .EXHBIT NO. 609 OF DR. DENNIS W. GOINS ON BEHAF OF THE U.S. DEPARTMENT OF ENERGY US DOE . . December 10, 2007 . . . . . . . . . . . . . 1 ID A H O P O W E R C O M P A N Y 2 CL A S C O S T O F S E R V I C E S T U D Y 3 ." R E V E N U E R E Q U I R E M E N T S U M M A R Y ' " TW L V E M O N T H S E N D I N G D E C E M B E R 3 1 , 2 0 0 7 4 5 (A ) (B ) (C ) (D ) (E ) (F ) (G ) (H ) 6 SO U R C E S GE N S R V GE N S R V AR E A LG P O W E R IR R I G A T I O N 7 & NO T E S TO T A L RE S I D E N T I A L GE N S R V PR I M A Y SE C O N D A R Y UG H T I N G PR I M A R Y SE C O N D A R Y 6 (1 ) (7 ) (9 - ) (9 - S ) (1 5 ) (1 9 - ) (2 4 - S ) 9 10 T O T A L R A T E B A S E 1, 8 8 2 , 6 7 0 , 9 2 0 85 4 , 4 4 3 , 9 0 0 43 , 9 4 1 , 0 2 9 42 , 5 3 3 , 8 0 3 38 9 , 8 9 7 , 2 0 7 87 7 , 7 3 4 21 3 , 8 0 9 , 0 8 1 24 2 , 3 0 3 , 7 5 9 11 12 R E V E N U E S F R O M R A T E S 13 RE T A I L 81 7 , 8 2 0 , 2 6 8 29 4 , 0 8 7 , 6 1 0 15 , 3 8 1 , 3 2 8 12 , 7 7 2 , 6 9 7 12 6 , 2 2 1 , 2 1 0 93 1 , 1 4 7 65 , 8 8 9 , 4 7 4 70 , 7 5 0 , 6 5 9 14 15 T O T A L S A S R E V E U E S 61 7 , 8 2 0 , 2 6 8 29 4 , 0 8 7 , 6 1 0 15 , 3 8 1 , 3 2 8 12 , 7 7 2 , 6 9 7 12 6 , 2 2 1 , 2 1 0 93 1 , 1 4 7 65 , 8 6 9 , 4 7 4 70 , 7 5 0 , 6 5 9 16 17 T O T A L O T H R O P E R A T I N G R E V E N U E S 17 6 , 3 9 1 , 0 7 6 68 , 9 2 , 1 2 4 2, 9 1 3 , 4 4 8 5, 5 1 0 , 9 8 8 38 , 6 1 9 , 0 3 1 16 9 , 9 4 8 29 , 2 5 1 , 8 6 6 19 , 5 0 5 , 5 1 6 18 19 T O T A L R E V E N U E S 79 6 , 2 1 1 , 3 4 6 36 2 , 5 7 9 , 7 3 4 18 , 2 9 4 , 7 7 6 18 , 2 8 3 , 6 8 5 16 4 , 8 4 0 , 2 4 1 1,1 0 1 , 0 9 5 95 , 1 2 1 , 3 4 0 90 , 2 5 6 , 1 7 5 20 21 O P E R A T I N G E X E N S E S 22 IM T H O U T I N C T A X 82 9 , 3 4 6 , 4 9 0 28 0 , 4 7 5 , 6 8 5 14 , 9 4 8 , 0 0 7 14 , 6 6 0 , 9 0 5 12 9 , 7 5 3 , 3 7 0 85 9 , 5 9 8 78 , 0 8 3 , 9 4 8 71 , 5 8 3 , 8 7 4 23 24 O P E R A T I N G I N C O M E 25 BE F O R E I N C O M E T A X S 16 6 , 8 6 4 , 8 5 6 82 , 1 0 4 , 0 4 9 3, 3 4 6 , 7 6 9 3, 6 2 2 , 7 8 0 35 , 0 8 6 , 8 7 1 24 1 , 4 9 7 17 , 0 3 7 , 3 9 2 18 , 6 7 2 , 3 0 0 26 27 T O T A L F E D E R I N C O M E T A X 46 , 7 5 3 , 6 1 1 21 , 2 1 8 , 9 7 0 1,0 9 1 , 2 1 7 1,0 5 6 , 2 7 0 9, 6 8 2 , 5 7 5 21 , 7 9 7 5,3 0 9 , 6 6 2 6, 0 1 7 , 2 8 9 28 T O T A L S T A T E I N C O M E T A X 2,8 4 9 , 2 6 8 1,2 9 3 , 1 3 1 66 , 5 0 1 84 , 3 7 1 59 0 , 0 7 8 1,3 2 8 32 3 , 5 8 3 36 6 , 7 0 7 29 30 T O T A L O P E R A T I N G E X E N S E S 67 8 , 9 4 9 , 3 6 9 30 2 , 9 8 7 , 7 8 6 16 , 1 0 5 , 7 2 5 15 , 7 8 1 , 5 4 7 14 0 , 0 2 6 , 0 2 2 88 2 , 7 2 4 83 , 7 1 7 , 1 9 3 77 , 9 6 7 , 8 7 0 31 32 T O T A L O P E R A T I N G I N C O M E 11 7 , 2 6 1 , 9 7 7 59 , 5 9 1 , 9 4 9 2,1 8 9 , 0 5 1 2,5 0 2 , 1 3 9 24 , 8 1 4 , 2 1 9 21 8 , 3 7 1 11 , 4 0 4 , 1 4 7 12 , 2 8 8 , 3 0 4 33 34 AD : I E R C O O P E R T I N G I N C O M E El 0 4,9 6 9 , 9 6 2 1, 8 5 2 , 8 0 2 78 , 0 2 8 12 9 , 7 1 6 1,1 5 3 , 0 3 1 1,8 8 77 5 , 3 1 4 57 4 , 0 3 1 35 C O N S O U D A T E D O P E R I N C O M E 12 2 , 2 3 1 , 9 3 8 61 , 4 4 , 7 5 0 2, 2 7 , 0 8 0 2,6 3 1 , 8 5 5 25 , 9 6 7 , 2 5 0 22 0 , 3 5 9 12 , 1 7 9 , 4 6 1 12 , 8 6 2 , 3 3 5 36 37 R A T E S OF R E R N 6.4 9 7.1 9 1 5.1 5 9 6. 1 8 8 6. 6 6 0 25 . 1 0 5 5,6 9 6 5.3 0 8 38 R A T E S O F R E T U R N - I N D E X 1. 0 0 0 1.1 0 8 0.7 9 5 0.9 5 3 1.0 2 6 3.8 6 7 0.8 7 7 0.8 1 8 39 A V E R A G E M I L L S / K W 50 , 2 0 59 . 2 4 73 . 9 3 35 , 4 1 40 , 8 6 15 7 . 7 5 30 , 7 0 45 . 9 6 40 41 R E V E N U E R E Q U I R E M E N T C A L C U L A T I O N 42 R A T E O F R E T U R N R E Q U I R E D 8, 5 6 1 8.5 6 1 8.5 6 1 8.5 6 1 8.5 6 1 8.5 6 1 8.5 6 1 8.5 6 1 43 44 R E Q U I R E D R E N U E 68 1 , 7 6 5 , 5 2 6 31 3 , 3 0 5 , 8 9 3 17 , 8 3 5 , 6 4 5 14 , 4 3 0 , 2 3 7 13 8 , 3 9 1 , 4 6 7 69 2 , 7 0 2 75 , 9 2 6 , 2 8 8 83 , 6 9 1 , 7 3 7 45 R E V N U E D E F I C I E N C Y 63 , 9 4 5 , 2 5 8 19 , 2 1 8 , 2 8 3 2, 4 5 4 , 3 1 7 1, 6 5 7 , 5 4 0 12 , 1 7 0 , 2 5 7 (2 3 8 , 4 4 5 ) 10 , 0 5 6 , 8 1 4 12 , 9 4 1 , 0 7 8 46 P E R C E N T C H A G E R E Q U I R E 10 . 3 5 % 6.5 3 % 15 . 9 6 % 12 . 9 8 % 9, 4 % -2 5 . 6 1 % 15 . 2 7 % 18 . 2 9 % 47 R E T U R A T C L A M E D R O R 16 1 , 1 7 5 , 4 5 7 73 , 1 4 8 , 9 4 2 3,7 6 1 , 7 9 1 3, 6 4 1 , 3 1 9 33 , 3 7 9 , 1 0 0 75 , 1 4 3 18 , 3 0 4 , 1 9 5 20 , 7 4 3 , 8 2 5 48 E A N I N G S D E F I C I E N C Y 38 , 9 4 3 , 5 1 9 11 , 7 0 4 , 1 9 2 1,4 9 4 , 7 1 2 1, 0 0 9 , 4 6 4 7, 4 1 1 , 8 5 0 (1 4 5 , 2 1 6 ) 6,1 2 4 , 7 3 4 7, 8 8 1 , 2 9 0 49 50 R E V E N U E R E Q U I R E M E N T F O R R A T E D E S I G N 51 T O T A L I D O S A E S R E N U E S 61 7 , 6 2 0 , 2 6 8 29 4 , 0 8 7 , 6 1 0 15 , 3 8 1 , 3 2 8 12 , 7 7 2 , 6 9 7 12 6 , 2 2 1 , 2 1 0 93 1 , 1 4 7 65 , 8 6 9 , 4 7 4 70 , 7 5 0 , 6 5 9 52 53 R E Q U E S T E D C H A I N R E N U E ( ' I ) 10 . 3 5 % 6. 5 3 % 15 . 9 6 % 12 . 9 8 % 9.6 4 % -2 5 . 1 % 15 . 2 % 18 . 2 9 % 54 55 S A S R E U E R E Q U I R E D 68 1 , 7 6 5 , 5 2 6 31 3 , 3 0 5 , 8 9 3 17 , 8 3 5 , 6 4 5 14 , 4 3 0 , 2 3 7 13 6 , 3 9 1 , 4 6 7 69 2 , 7 0 2 75 , 9 2 6 , 2 8 8 83 , 6 9 1 , 7 3 7 56 R A T E O F R E T U R N A T R E Q U I R E D R E U E 8.5 6 1 8. 5 6 1 8. 5 6 1 8.5 6 1 8.5 6 1 8. 6 1 8.5 6 1 8.5 6 1 57 R E Q U E S T E D A V E R A E M 1 L S i 55 , 4 0 63 . 1 1 85 , 7 3 40 . 0 0 44 . 0 11 7 . 3 5 35 . 3 9 54 . 3 7 58 59 A C T U A L R A T E O F R E U R N ( S A S R E V E N U E O N L Y ) -3 . 2 5 -1 . 0 4 -1 . 5 -7 . m -3 . 5 4 5.5 2 -8 , 5 -2 . 9 8 60 R E Q U E S T E D R A T E O F R E U R N ( S A E S R E V E N U E O N L Y ) 0. 1 5 1. 2 1 3.9 4 -3 , 1 8 -0 , 4 2 -2 1 . 6 5 -3 . 6 4 2. 3 6 Ex h i b i t N o . 6 0 9 Ca s a N O . I P C . E - G 7 - G a Ca s e 2 D. G o i n s , D O E Pa g a 1 o f 2 . . . . . . . . . . . 1 ID A H O P O W R C O M P A N Y 2 CL A S C O S T O F S E R V I C E S T U D Y 3 _ . R E V E N U E R E Q U I R E M E N T S U M M A R Y ' " TW L V E M O N T H S E N D I N G D E C E M B E R 3 1 , 2 0 0 7 4 5 (I) (J ) (K ) (L ) (M ) (N ) 8 SO U R C E S UN M E T E R E D MU N I C I P A L TR A F I C SC SC SC 7 & NO T E S TO T A L GE N S E R V I C E ST L I G H T CO N T R O L DO E A N L JR S 1 M P L O T MI C R O N 8 (4 0 ) (4 1 ) (4 2 ) 9 10 T O T A L R A T E B A E 1,8 8 2 , 6 7 0 , 9 2 0 2,4 6 0 , 4 2 9 2,9 2 9 , 5 7 1 56 1 , 7 8 9 17 , 1 1 0 , 2 3 7 17 , 0 0 3 , 2 2 9 54 , 7 9 9 , 1 5 2 11 12 R E V E N U E S F R O M R A T E S 0 13 RE T A I L 81 7 , 8 2 0 , 2 6 8 88 0 , 6 1 0 2,0 5 6 , 1 4 6 18 8 , 5 4 3 5,3 8 4 , 8 4 9 4,6 5 7 , 8 8 1 18 , 8 3 8 , 1 1 4 14 15 T O T A L S A E S R E V E N U E S 81 7 , 8 2 0 , 2 6 8 88 0 , 6 1 0 2,0 5 6 , 1 4 6 18 8 , 5 4 3 5.3 8 4 , 8 4 9 4,6 5 7 , 8 8 1 18 , 6 3 8 , 1 1 4 18 17 T O T A L O T H E R O P E R A T I N G R E V E N U E S 17 8 , 3 9 1 , 0 7 8 20 2 . 3 1 8 44 3 , 4 5 1 67 , 3 8 0 2,4 5 6 , 8 4 5 2,6 7 7 , 1 2 5 8,0 8 1 , 0 3 7 18 19 T O T A L R E V E N U E S 79 6 , 2 1 1 , 3 4 6 1, 0 8 2 , 9 2 8 2,4 9 9 , 5 9 7 25 5 , 9 2 3 7,8 4 1 , 6 9 4 7,3 3 5 , 0 0 6 26 , 7 1 9 , 1 5 1 20 21 O P E R A T I N G E X P E N S E S 0 22 WIT H O U T I N C T A X 82 9 , 3 4 6 , 4 9 0 80 5 , 2 2 8 2,1 6 7 , 4 9 3 20 3 , 2 4 5 8,8 8 6 , 6 4 8 8,0 7 8 , 8 7 6 22 , 8 4 1 , 6 1 2 23 0 24 O P E R A T I N G I N C O M E 0 25 BE F O R E I N C O M E T A X S 16 6 , 8 5 4 , 8 5 8 27 7 , 7 0 0 33 2 , 1 0 4 52 , 6 7 7 95 5 , 0 4 6 1,2 5 8 , 1 3 0 3,8 7 7 , 5 3 9 26 27 T O T A L F E D E R A I N C O M E T A X 46 , 7 5 3 , 6 1 1 61 , 1 0 1 72 , 7 5 2 13 , 9 5 1 42 4 , 9 1 0 42 2 , 2 5 2 1,3 6 0 , 8 6 4 28 T O T A L S T A T E I N C O M E T A X 2, 8 4 8 , 2 8 8 3,7 2 4 4,4 3 4 85 0 25 , 8 9 5 25 , 7 3 3 82 , 9 3 4 29 30 T O T A L O P E R A T I N G E X E N S E S 87 8 , 9 4 9 , 3 6 9 87 0 , 0 5 3 2, 2 0 1 , 6 7 9 21 8 , 0 4 7 7,3 3 7 , 4 5 2 6,5 2 4 , 8 6 2 24 , 2 8 5 , 4 1 0 31 32 T O T A L O P E R A T I N G I N C O M E 11 7 , 2 6 1 , 9 7 7 21 2 , 8 7 5 25 4 , 9 1 8 37 , 8 7 6 50 4 , 2 4 2 81 0 , 1 4 4 2,4 3 3 , 7 4 2 33 0 :u AD D : I E R C O O P E T I N G I N C O M E El 0 4,9 6 9 , 9 6 2 5, 9 5 4 7,9 5 2 1, 8 8 75 . 0 4 6 66 , 1 0 0 24 8 , 0 0 1 35 C O N S O L I D A T E D O P E R I N C O M E 12 2 , 2 3 1 . 9 3 8 21 8 , 8 3 9 26 2 , 8 7 0 39 , 8 6 4 57 9 , 2 8 8 87 6 . 2 4 5 2,6 8 1 , 7 4 3 36 37 R A T E S O F R E T U R N 6, 9 2 8.8 5 4 8.9 7 3 7.0 9 6 3.8 6 5.1 5 3 4, 9 4 38 R A T E S O F R E T U R N - I N D E X 1.0 0 0 1. 7 0 1. 3 8 2 1. 9 3 0.5 2 1 0.7 9 4 0. 7 5 4 39 A V E R A G E M I L L S / K V 50 . 2 0 1 53 . 0 10 9 . 9 3 34 . 0 1 24 . 9 9 24 . 3 26 . 5 4 40 41 R E V E N U E R E Q U I R E M E N T C A L C U L A T I O N 42 R A T E O F R E T R N R E Q U I R E D 8.5 6 1 8.5 6 1 8.5 6 1 8.5 6 1 8.5 6 1 8.5 8 1 8.5 6 1 43 01 R E Q U I R E D R E V U E 68 1 , 7 6 5 , 5 2 8 86 7 , 1 4 3 2.0 3 6 , 3 2 7 20 2 , 0 5 8 6,8 3 8 , 8 7 2 5,6 0 9 , 2 5 9 21 , 9 3 7 , 8 9 8 45 R E N U E D E F I C I E N C Y 63 , 9 4 5 , 2 5 8 (1 3 , 4 6 7 ) (1 9 , 8 1 9 ) 13 , 5 1 5 1.4 5 4 , 0 2 3 95 1 , 3 7 8 3, 2 9 9 , 7 8 4 46 P E R C E N T C H G E R E Q U I R E D 10 . 3 5 -1 . 5 3 % -0 , 6 % 7. 1 7 % 27 , 0 0 % 20 . 4 3 % 17 . 0 % 47 R E T U R N A T C L A M E D R O R 16 1 , 1 7 5 , 4 5 7 21 0 , 6 3 7 25 0 , 8 0 1 48 , 0 9 5 1,4 5 4 , 8 0 7 1,4 5 5 , 5 4 6 4, 6 9 1 , 3 5 5 48 E A I N G S D E F I C I E N C Y 38 , 9 4 3 , 5 1 9 (8 , 2 0 2 ) (1 2 , 0 7 0 ) 8, 2 3 1 ' 8 8 5 , 5 1 9 57 9 , 4 0 2 2, 0 0 9 , 6 1 3 49 50 R E E N U E R E Q U I R E M E N T F O R R A T E D E S I N 51 T O T A L I D A H O S A S R E V N U E S 61 7 , 8 2 0 , 2 6 8 88 0 , 6 1 0 2,0 5 6 , 1 4 6 18 8 , 5 4 3 5,3 8 4 , 8 4 9 4, 6 5 7 , 8 8 1 18 , 6 3 8 , 1 1 4 52 53 R E Q U E S T E D C H A G E I N R E V N U E ( % ) 10 . 3 5 % -1 , 5 3 % .0 . 9 6 % 7. 1 7 % 27 . 0 0 % 20 . 4 3 % 17 . 7 0 % 54 55 S A E S R E V N U E R E Q U I R E D 68 1 . 7 6 5 , 5 2 6 86 7 , 1 4 3 2,0 3 6 , 3 2 7 20 2 , 0 5 8 6,8 3 8 , 8 7 2 5,6 0 9 , 2 5 9 21 , 9 3 7 , 8 9 8 56 R A T E O F R E T U R N A T R E Q U R E D R E V N U E 8.5 6 1 8.5 6 1 8. 5 8 1 8. 5 6 1 8. 5 8 1 8.5 8 1 8.5 6 1 57 R E Q U E S T E D A V E R A G E M 1 L L S / K 55 . 4 0 53 . 8 10 8 . 8 7 38 . 9 1 31 . 7 3 29 . 7 8 31 . 2 4 58 59 A C T U A R A T E O F R E T U R N ( S A E S R E V E U E O N L Y ) (3 . 5 ) 0. 4 3 -6 . 0 1 -5 . 2 5 -1 1 . 1 -1 0 . 9 8 -1 0 . 3 1 60 R E Q U E S T E D R A T E O F R E T U R N ( S A E S R E V E N U E O N L Y ) 0.1 5 .0 . 1 2 .7 . 1 1 -2 . 8 5 -2 , 9 1 -5 . 3 8 ..4 , 8 Ex h i b i t N o . 6 0 9 Ca s e N o . I P C . E . 0 7 - G Ø D. G o i n s , D O E Ca s e 2 Pa g e 2 o f 2 . . .STATE OF IDAHO BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION . CASE NO. IPC-E-07..08 . . IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPAN FOR AUTHORITY TO INCREASE ITS RATES AND CHAGES FOR ELECTRIC SERVICE TO ELECTRIC CUSTOMERS IN THE STATE OF IDAHO .EXHIBIT NO. 610 OF DR. DENNIS W. GOINS ON BEHAF OF THE U.S. DEPARTMENT OF ENERGY US DOE . . December 10, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . .STATE OF IDAHO BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION . CASE NO. IPC-E-07-08 . . IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPAN FOR AUTHORITY TO INCREASE ITS RATES AN CHAGES FOR ELECTRIC SERVICE TO ELECTRIC CUSTOMERS IN THE STATE OF IDAHO .EXHIBIT NO. 611 OF DR. DENNS W. GOINS ON BEHAF OF THE U.S. DEPARTMENT OF ENERGY US DOE . . December 10, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . .STATE OF IDAHO BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION . CASE NO. IPC-E-07-08 . . 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C\ C' 'V"l "l"" T" CD CDciIt oC'It,¿Itco..co CD (A coItC\,¿C'o~ CD (A '# CDC'ci.. II cuñien l/ñi'õcu0-en'~ i- ~0:o.sco~ ~i- It.. N CD W "l.. N 0..COibQO ö'i . "lZ W ~ &-ù - II:i ii 0 ii_ _Co.c . .lC 0 QW Z CDIIIIU . . . APPENDIX A . .QUALIFICATIONS OF DENNS W. GOINS . . . . . . . .DENNis W. GOINS PRESENT POSITION .Economic Consultant, Potomac Management Group, Alexandra, Virginia. ARAS OF QUALIFICATION . ~ . Competitive Market Analysis . Costig and Pricing Energy-Related Goods and Services . Utilty Planing and Operations . Litigation Analysis, Strategy Development, Expert Testimony .PREVIOUS POSITIONS . Vice President, Hagler, Baily & Company, Washigton, DC. . Pricipal, Resource Consultig Group, Inc., Cambridge, Massachusetts. . Senior Associate, Resource Planng Associates, Inc., Cambridge, Massachusetts. . Economist, Nort Carolina Utilities Commission, Raleigh, Nort Carolina. . Dr. Goins specializes in pricing, planng, and market strctue issues affectig firms that buy and sell products in electrcity and natual gas markets. He has extensive experience in evaluating competitive market conditions, analyzing power and fuel requirements, prices, market operations, and transactions, developing product pricing strategies, setting rates for energy- related products and services, and negotiating power supply and natual gas contrcts for private and public entities. He has parcipated in more than 100 cases as an expert on competitive market issues, utility restrctug, power market planning and operations, utility mergers, rate design, cost of servce, and management prudence before the Federal Energy Regulatory Commssion, the General Accounting Offce, the First Judicial District Cour of Montaa, the Circuit Cour of Kanawha County, West Virgiia, and regulatory commissions in Alabama, Arzona, Arkansas, Colorado, Florida, Georgia, Idaho, Ilinois, Kentucky, Louisiana, Maie, Marland, Massachusetts, Minesota, Mississippi, New Jersey, New York, Nort Carolina, Ohio, . . . DENNIS W. GOINS 2.Oklahoma, South Carolina, Texas, Uta, Vermont, Virgina, and the Distrct of Columbia. He has also prepared an expert report on behalf of the United States regarding pricing and contract issues in a case before the United States Cour of Federal Claims. . PARTICIPATION IN REGULATORY, ADMIISTRATIVE, AN COURT PROCEEDINGS 1. Oncor Electrc Delivery Company and Texas Energy Futue Holdings Limted Parership, before the Public Utilities Commission of Texas, PUC Docket No. 34077 (2007), on behalf of Nucor Steel - Texas, re acquisition of TXU Corp. by Texas Energy Futue Holdigs Limited Parership. 2. Arkansas Oklahoma Gas Company, before the Arkansas Public Service Commssion, Docket No. 07-026-U (2007), on behalf of West Centrl Arkansas Gas Consumers, re gas cost-of-service and rate design issues. 3. Idaho Power Company, before the Idaho Public Utilities Commssion, Case No. IPC-E-07- 08 (2007), on behalf of the U.S. Deparent of Energy (Federal Executive Agencies), re cost-of-service and rate design issues. 4. Potomac Electrc Power Company, before the Distrct of Columbia Public Service Commission, Formal Case No. 1056 (2007), on behalf of the General Servces Administration, re demand-side management and advanced meterig programs. " 5. South Carolina Electrc & Gas Company, before the South Carolina Public Service Commission, Docket No. 2007-229-E (2007), on behalf of CMC Steel-SC, re cost-of- service and rate design issues. 6. Potomac Electrc Power Company, before the Marland Public Service Commission, Case No. 9092 (2007), on behalf of the General Services Admistration, re retail cost allocation and standby rate design issues for distrbuted generation resources. 7. Potomac Electrc Power Company, before the Distrct of Columbia Public Service Commission, Formal Case No. 1053 (2007), on behalf of the General Services Administration, re retail cost allocation and stadby rate design issues for distrbuted generation resources. 8. Entergy Gulf States Inc., before the Public Utilties Commission of Texas, PUC Docket No. 32907 (2006), on behalf of Texas Cities, re hurcane cost recovery. 9. Entergy Gulf States Inc., before the Public Utilities Commission of Texas, PUC Docket No. 32710/ SOAR Docket No. 473-06-2307 (2006), on behalf of Texas Cities, re reconciliation of fuel and purchased power costs. 10. Florida Power & Light Company, before the Florida Public Servce Commission, Docket No. 060001-EI (2006), on behalf of the U.S. Ai Force (Federal Executive Agencies), re fuel and purchased power cost recovery. . . . . . . . . . DENNIS W. GoINS 3. . 11. Arzona Public Service Company, before the Arzona Corporation Commssion, Docket No. E-01345A-05-08l6 (2006), on behalf of the U.S. Ai Force (Federal Executive Agencies), re retail cost allocation and rate design issues. 12. PacifiCorp (dba Rocky Mountain Power), before the Uta Public Service Commssion, Docket No. 06-035-21 (2006), on behalf of the U.S. Air Force (Federal Executive Agencies), re rate design issues. 13. South Carolina Electrc & Gas Company, before the South Carolina Public Service Commssion, Docket No. 2006-2-E (2006), on behalf of CMC Steel-SC, re fuel and purchased power cost recovery. 14. Entergy Gulf States Inc., before the Public Utilties Commission of Texas, PUC Docket No. 31544/ SOAR Docket No. 473-06-0092 (2006), on behalf of Texas Cities, re transition to competition rider. 15. Idaho Power Company, before the Idaho Public Utilities Commission, Case No. IPC-E-05- 28 (2006), on behalf of the U.S. Deparent of Energy (Federal Executive Agencies), re cost-of-service and rate design issues. 16. Alabama Power Company, before the Alabama Public Service Commission, Docket No. 18148 (2005), on behalf ofSMI Steel-Alabama, re energy cost recovery. 17. Florida Power & Light Company, before the Florida Public Service Commission, Docket No. 050001-EI (2005), on behalf of the U.S. Ai Force (Federal Executive Agencies), re fuel and capacity cost recovery. 18. Entergy Gulf States Inc., before the Public Utilities Commssion of Texas, PUC Docket No. 31315/ SOAR Docket No. 473-05-8446 (2005), on behalf of Texas Cities, re incremental purchased capacity cost rider. 19. Florida Power & Light Company, before the Florida Public Service Commission, Docket No. 050045-EI (2005), on behalf of the U.S. Ai Force (Federal Executive Agencies), re cost-of-service and interrptible rate issues. 20. Arkansas Electrc Cooperative Corporation, before the Arkansas Public Service Commission, Docket No. 05-042-U (2005), on behalf of Nucor Steel and Nucor- Y amato Steel, re power plant purchase. 21. Arkansas Electrc Cooperative Corporation, before the Arkansas Public Service Commission, Docket No. 04-L4L-U (2005), on behalf of Nucor Steel and Nucor-Yamato Steel, re cost-of-servce and rate design issues. 22. Dominion Nort Carolina Power, before the Nort Carolina Utilities Commission, Docket No. E-22, Sub 412 (2005), on behalf of Nucor Steel-Hertord, re cost-of-service and interrptible rate issues. 23. Public Service Company of Colorado, before the Colorado Public Utilities Commssion, Docket No. 04S-l64E (2004), on behalf of the U.S. Air Force (Federal Executive Agencies), re cost-of-service and interrptible rate issues. . . . . . . . . . DENNIS W. GOINS 4.24. CenterPoint Energy Houston Electrc, LLC, et al., before the Public Utility Commssion of Texas, PUC Docket No. 29526 (2004), on behalf of the Coalition of Commercial Ratepayers, re stranded cost tre-up balances. 25. PacifiCorp, before the Utah Public Service Commssion, Docket No. 04-035-11 (2004), on behalf of the U.S. Ai Force (United States Executive Agencies), re time-of-day rate design issues.. . 26. Arzona Public Service Company, before the Arzona Corporation Commssion, Docket No. E-01345A-03-0347 (2004), on behalf of the U.S. Ai Force (Federal Executive Agencies), re retail cost allocation and rate design issues. 27. Idaho Power Company, before the Idaho Public Utilities Commssion, Case No. IPC-E-03- 13 (2004), on behalf of the U.S. Deparent of Energy (Federal Executive Agencies), re retal cost allocation and rate design issues. 28. PacifiCorp, before the Utah Public Service Commssion, Docket No. 03-2035-02 (2004), on behalf of the U.S. Ai Force (United States Executive Agencies), re retail cost allocation and rate design issues. 29. Dominion Virginia Power, before the Virginia State Corporation Commission, Case No. PUE-2000-00285 (2003), on behalf of Chaparal (Virginia) Inc., re recovery of fuel costs. 30. Jersey Central Power & Light Company, before the New Jersey Board of Public Utilities, BPU Docket No. ER02080506, OAL Docket No. PUC-7894-02 (2002-2003), on behalf of New Jersey Commercial Users, re retail cost allocation and rate design issues. 31. Public Service Electrc and Gas Company, before the New Jersey Board of Public Utilities, BPU Docket No. ER02050303, OAL Docket No. PUC-5744-02 (2002-2003), on behalf of New Jersey Commercial Users, re retail cost allocation and rate design issues. ,32. South Carolina Electrc & Gas Company, before the South Carolina Public Service Commission, Docket No. 2002-223-E (2002), on behalf of SM! Steel-SC, re retail cost allocation and rate design issues. 33. Montana Power Company, before the First Judicial Distrct Cour of Montana, Great Falls Tribune et al. v. the Montana Public Service Commission, Cause No. CDV2001-208 (2002), on behalf of a media consortium (Great Falls Tribune, Billngs Gazette, Montana Standard, Helena Independent Record, Missoulian, Big Sky Publishig, Inc. dba Bozeman Daily Chronicle, the Montaa Newspaper Association, Miles City Star, Livingston Enterprise, Yellowstone Public Radio, the Associated Press, Inc., and the Montana Broadcasters Association), re public disclosure of allegedly proprietar contract information. 34. Louisvile Gas & Electrc et al., before the Kentucky Public Servce Commission, Administrative Case No. 387 (2001), on behalf of Gallati Steel Company, re adequacy of generation and transmission capacity in Kentucky. 35. PacifiCorp, before the Utah Public Servce Commission, Docket No. 01-035-01 (2001), on behalf of Nucor Steel, re retail cost allocation and rate design issues. . . . . . . . . DENNIS W. GoINS 5. . 36. TXU Electrc Company, before the Public Utilities Commssion of Texas, PUC Docket No. 23640/ SOAR Docket No. 473-01-1922 (2001), on behalf of Nucor Steel, re fuel cost recovery. 37. FPL Group et al., before the Federal Energy Regulatory Commission, Docket No. EC01- 33-000 (2001), on behalf of Arkansas Electrc Cooperative Corporation, Inc., re merger- related market power issues. 38. Entergy Mississippi, Inc., et al., before the Mississippi Public Service Commission, Docket No. 2000-UA-925 (2001), on behalf of Birgham Steel-Mississippi, re appropriate regulatory conditions for merger approvaL. 39. TX Electrc Company, before the Public Utilties Commssion of Texas, PUC Docket No. 22350/ SOAR Docket No. 473-00-1015 (2000), on behalf of Nucor Steel, re unbundled cost of service and rates. 40. PacifiCorp, before the Utah Public Service Commission, Docket No. 99-035-10 (2000), on behalf of Nucor Steel, re using system benefit charges to fud demand-side resource investments. 41. Entergy Arkasas, Inc. et al., before the Arkansas Public Service Commission, Docket No. 00-190-U (2000), on behalf of Nucor-Yamato Steel and Nucor Steel-Arkasas, re the development of competitive electrc power markets in Arkasas. 42. Entergy Arkasas, Inc. et al., before the Arkasas Public Service Commssion, Docket No. 00-048-R (2000), on behalf of Nucor- Y amato Steel and Nucor Steel-Arkansas, re generic filing requirements and gudelines for market power analyses. 43. ScottshPower and PacifiCorp, before the Utah Public Servce Commission, Docket No. 98-2035-04 (1999), on behalf of Nucor Steel, re merger conditions to protect the public interest. 44. Dominion Resources, Inc. and Consolidated Natual Gas Company, before the Virginia State Corporation Commission, Case No. PUA990020 (1999), on behalf of the City of Richmònd, re market power and merger conditions to protect the public interest. 45. Houston Lightig & Power Company, before the Public Utility Commssion of Texas, Docket No. 18465 (1998) on behalf of the Texas Commercial Customers, re excess earings and stranded-cost recovery and mitigation. 46. PJM Interconnection, LLC, before the Federal Energy Regulatory Commission, Docket No. . ER98-1384 (1998) on behalf of Wellsboro Electrc Company, re pricing low-voltage distrbution services. 47. DQE, Inc. and Allegheny Power System, Inc., before the Federal Energy Regulatory Commssion, Docket Nos. ER97-4050-000, ER97-4051-000, and EC97-46-000 (1997) on behalf of the Borough of Chambersburg, re market power in relevant markets. 48. GPU Energy, before the New Jersey Board of Public' Utilties, Docket No. E097070458 (1997) on behalf of the New Jersey Commercial Users Group, re unbundled retail rates. . . . . . . . . . DENNS W. GOINS 6. . 49. GPU Energy, before the New Jersey Board of Public Utilties, Docket No. E097070459 (1997) on behalf of the New Jersey Commercial Users Group, re stranded costs. 50. Public Service Electrc and Gas Company, before the New Jersey Board of Public Utilities, Docket No. E097070461 (1997) on behalf of the New Jersey Commercial Users Group, re unbundled retail rates. 51. Public Service Electrc and Gas Company, before the New Jersey Board of Public Utilities, Docket No. E097070462 (1997) on behalf of the New Jersey Commercial Users Group, re stranded costs. 52. DQE, Inc. and Allegheny Power System, Inc., before the Federal Energy Regulatory Commission, Docket Nos. ER97-4050-000, ER97-4051-000, and EC97-46-000 (1997) on behalf of the Borough of Chabersburg, Allegheny Electrc Cooperative, Inc., and Selected Municipalities, re market power in relevant markets. 53. CSW Power Marketig, Inc., before the Federal Energy Regulatory Commission, Docket NO.ER97-1238-000 (1997) on behalf of the Trasmission Dependent Utility Systems, re market power in relevant markets. 54. Central Hudson Gas & Electrc Corporation et al., before the New York Public Service Commission, Case Nos. 96-E-0891, 96-E-0897, 96-E-0898, 96-E-0900, 96-E-0909 (1997), on behalf of the Retail Council of New York, re stranded-cost recovery. 55. Central Hudson Gas & Electrc Corporation, supplemental testiony, before the New York Public Service Commission, Case No. 96-E-0909 (1997) on behalf of the Retail Council of New York, re stranded-cost recovery. 56. Consolidated Edison Company of New York, Inc., supplemental testiony, before the New York Public Service Commssion, Case No. 96-E-0897 (1997) on behalf of the Retal Council of New York, re stranded-cost recovery. 57. New York State Electrc & Gas Corporation, supplementa testiony, before the New York Public Service Commission, Case No. 96-E-0891 (1997) on behalf of the Retail Council of New York, re stranded-cost recovery. 58. Rochester Gas and Electrc Corporation, supplemental testiony, before the New York Public Service Commssion, Case No. 96-E-0898 (1997) on behalf of the Retail Council of New York, re stranded-cost recovery. 59. Texas Utilties Electric Company, before the Public Utility Commission of Texas, Docket No. 15015 (1996), on behalf of Nucor Steel-Texas, re real-time electrcity pricing. 60. Central Power and Light Company, before the Public Utility Commission of Texas, Docket No. 14965 (1996), on behalf of the Texas Retailers Association, re cost of service and rate design. 61. Carolina Power & Light Company, before the South Carolina Public Servce Commission, Docket No. 95-1076-E (1996), on behalf of Nucor Steel-Darlington, re integrated resource plang. . . . . . . . . . DENNIS W. GOINS 7. . 62. Texas Utilities Electrc Company, before the Public Utility Commission of Texas, Docket No. 13575 (1995), on behalf of Nucor Steel-Texas, re integrated resource planing, DSM options, and real-tie pricing. 63. Arkansas Power & Light Company, et al., Notice of Inquir to Consider Section ILL of the Energy Policy Act of 1992, before the Arkansas Public Service Commission, Docket No. 94-342-4 (1995), Initial Comments on behalf of Nucor-Yamato Steel Company, re integrated resource planng stadads. 64. Arkansas Power & Light Company, et al., Notice of Inqui to Consider Section 111 of the Energy Policy Act of 1992, before the Arkansas Public Service Commssion, Docket No. 94-342-4 (1995), Reply Comments on behalf of Nucor-Yamato Steel Company, re integrated resource planning stadads. 65. Arkasas Power & Light Company, et al., Notice of Inquir to Consider Section 111 of the Energy Policy Act of 1992, before the Arkansas Public Service Commission, Docket No. 94-342-4 (1995), Final Comments on behalf of Nucor-Yamato Steel Company, re integrated resource planing standads. 66. South Carolina Pipeline Corporation, before the South Carolina Public Service Commission, Docket No. 94-202-G (1995), on behalf of Nucor Steel, re integrated resource planing and rate caps. 67. Gulf States Utilties Company, before the United States Cour of Federal Claims, Gulf States Utilties Company v. the United States, Docket No. 91-11 18C (1994, 1995), on behalf of the United States, re electrcity rate and contract dispute litigation. 68. American Electrc Power Corporation, before the Federal Energy Regulatory Commssion, Docket No. ER93-540-000 (1994), on behalf of DC Tie, Inc., re costig and pricing electrcity trsmission services. 69. Texas Utilities Electrc Company, before the Public Utility Commission of Texas, Docket No. 13100 (1994), on behalf of Nucor Steel-Texas, re real-tie electrcity pricing. 70. Carolina Power & Light Company, et al., Proposed Regulation Governing the Recovery of Fuel Costs by Electrc Utilities, before the South Carolina Public Service Commission, Docket No. 93-238-E (1994), on behalf of Nucor Steel-Darlington, re fuel-cost recovery. 71. Southern Natual Gas Company, before the Federal Energy Regulatory Commission, Docket No. RP93-15-000 (1993-1995), on behalf of Nucor Steel-Darlington, re costing and pricing natual gas transporttion services. 72. West Penn Power Company, et al., v. State Tax Deparent of West Virgina, et al., Civil Action No. 89-C-3056 (1993), before the Circuit Cour of Kanawha County, West Virginia, on behalf of the West Virginia Deparent of Tax and Revenue, re electrcity generation ta. 73. Carolin Power & Light Company,et al., Proceedig Regardig Consideration of Certain Standards Pertning to Wholesale Power Puchases Pursuant to Section 712 of the 1992 Energy Policy Act, before the South Carolina Public Service Commission, Docket No. 92- 231-E (1993), on behalf of Nucor Steel-Darlington, re Section 712 regulations. . . . . . . . . . DENNIS:W. GoINS 8. . 74. Mountain Fuel Supply Company, before the Public Service Commission of Utah, Docket No. 93-057-01 (1993), on behalf of Nucor Steel-Utah, re costing and pricing retail natual gas firm, interrptible, and transporttion services. 75. Texas Utilities Electrc Company, before the Public Utilty Commission of Texas, Docket No. 11735 (1993), on behalf of the Texas Retailers Association, re retail cost-of-service and rate design. 76. Virginia Electric and Power Company, before the Virgina State Corporation Commssion, Case No. PUE920041 (1993), on behalf of Philip Morrs USA, re cost of service and retail rate design. 77. Carolina Power & Light Company, before the South Carolina Public Service Commssion, Docket No. 92-209-E (1992), on behalf of Nucor Steel-Darlington. 78. Guif States Utilities Company, before the Louisiana Public Service Commssion, Docket No. U-17282, Rate Design (1992), on behalf of the Deparent of Energy, Strategic Petroleum Reserve. 79. Georgia Power Company, before the Georgia Public Service Commssion, Docket Nos. 4091-U and 4146-U (1992), on behalf of Amicalola Electrc Membership Corporation. 80. PacifiCorp, Inc., before the Federal Energy Regulatory Commission, Docket No. EC88-2- 007 (1992), on behalf of Nucor Steei-Uta. 81. South Carolina Pipeline Corporation, before the South Carolina Public Service Commission, Docket No. 90-452-G (1991), on behalf of Nucor Steel-Darlington. 82. Carolina Power & Light Company, before the South Carolina Public Servce Commssion, Docket No. 91-4-E, 1991 Fall Hearg, on behalf of Nucor Steel-Darlington. 83. Sonat, Inc., and Nort Carolina Natual Gas Corporation, before the Nort Carolina Utilities Commission, Docket No. G-21, Sub 291 (1991), on behalf of Nucor Corporation, Inc. 84. Nortern States Power Company, before the Miesota Public Utilties Commission, Docket No. E002/GR-91-001 (1991), on behalf of Nort Star Steel-Minnesota. 85. Gulf States Utilities Company, before the Louisiana Public Service Commission, Docket. No. U-17282, Phase N-Rate Design (1991), on behalf of the Departent of Energy, Strategic Petroleum Reserve. 86. Houston Lighting & Power Company, before the Public Utilty Commission of Texas, Docket No. 9850 (1990), on behalf of the Deparent of Energy, Strategic Petroleum Reserve. 87. General Servces Administration, before the United States General Accounting Office, Contract Award Protest (1990), Solicitation No. GS-00P-AC87-91, Contract No. GS-OOD- 89-B5D-0032, on behalf of Satila Rural Electrc Membership Corporation, re cost of service and rate design. . . . . . . . . . DENNS W. GoINS 9.88. Carolina Power & Light Company, before the South Carolina Public Service Commission, Docket No. 90-4-E (1990 Fall Hearg), on behalf of Nucor Steel-Darlington, re fuel-cost recovery. 89. Gulf States Utilities Company, before the Louisiana Public Service Commission, Docket No. U-17282, Phase il-Rate Design (1990), on behalf of the Deparent of Energy, Strategic Petroleum Reserve, re cost of service and rate design. 90. Atlanta Gas Light Company, before the Georgia Public Service Commission, Docket No. 3923-U (1990), on behalf of Herbert G. Burs and Oglethorpe Power Corporation, re anticompetitive pricing schemes. 91. Ohio Edison Company, before the Ohio Public Utilities Commission, Case No. 89-1001- EL-AIR (1990), on behalf of Nort Sta Steel-Ohio, re cost of service and rate design. 92. Gulf States Utilities Company, before the Louisiana Public Service Commission, Docket No. U-17282, Phase il-Cost of Service!Revenue Spread (1989), on behalf of the Deparent of Energy, Strategic Petroleum Reserve. Nortern States Power Company, before the Miesota Public Utilities Commission, Docket No. E002/GR-89-865 (1989), on behalf of Nort Star Steel-Minesota. Gulf States Utilities Company, before the Louisiana Public Service Commssion, Docket No. U-17282, Phase il-Rate Design (1989), on behalf of the Deparent of Energy, Strategic Petroleum Reserve. Uta Power & Light Company, before the Uta Public Service Commssion, Case No. 89- 039-10 (1989), on behalf of Nucor Steel-Utah and Vulcraft, a division ofNucor Steel. Soyland Power Cooperative, Inc. v. Central Ilinois Public Service Company, Docket No. EL89-30-000 (1989), before the Federal Energy Regulatory Commssion, on behalf of Soyland Power Cooperative, Inc., re wholesale contrct pricing provisions Gulf States Utilities Company, before the Public Utility Commssion of Texas, Docket No. 8702 (1989), on behalf of the Deparent of Energy, Strategic Petroleum Reserve. Houston Lightig and Power Company, before the Public Utility Commission of Texas, Docket No. 8425 (1989), on behalf of the Deparent of Energy, Strategic Petroleum Reserve. 99. Nortern Ilinois Gas Company, before the Ilinois Commerce Commission, Docket No. 88-0277 (1989), on behalf of the Coalition for Fair- and Equitable Transportation, re retail gas transporttion rates. 100. Carolina Power & Light Company, before the South Carolina Public Service Commission, Docket No. 79-7-E, 1988 Fall Hearg, on behalf of Nucor Steel-Darlington, re fuel-cost recovery. 101. Potomac Electrc Power Company, before the Distrct of Columbia Public Service Commission, Formal Case No. 869 (1988), on behalf of Peoples Drg Stores, Inc., re cost of service and rate design. . . . . . . DENNIS W. GoiNS 10.102. Carolina Power & Light Company, before the South Carolina Public Service Commission, Docket No. 88-11-E (1988), on behalf of Nucor Steel-Darlington. 103. Nortern States Power Company, before the Minesota Public Utilties Commission, Docket No. E-002/GR-87-670 (1988), on behalf of the Metalcasters of Minesota. 104. Ohio Edison Company, before the Ohio Public Utilities Commission, Case No. 87-689- EL-AIR (1987), on behalf of Nort Sta Steel-Ohio. 105. Carolina Power & Light Company, before the South Carolina Public Service Commssion, Docket No. 87~ 7-E (1987), on behalf of Nucor Steel-Darlington. 106. Gulf States Utilities Company, before the Louisiana Public Service Commission, Docket No. U-17282, Phase I (1987), on behalf of the Strategic Petroleum Reserve. 107. Gulf States Utilities Company, before the Public Utility Commssion of Texas, Docket No. 7195 (1987), on behalf of the Strategic Petroleum Reserve. 108. Gulf States Utilities Company, before the Federal Energy Regulatory Commission, Docket No. ER86-558-006 (1987), on behalf of Sam Raybur G&T Cooperative. 109. Uta Power & Light Company, before the Utah Public Service Commission, Case No. 85- 035-06 (1986), on behalf of the U.S. Ai Force. 110. Houston Lightig & Power Company, before the Public Utility Commission of Texas, Docket No. 6765 (1986), on behalf of the Strategic Petroleum Reserve. 111. Central Maine Power Company, before the Maine Public Utilties 'Commssion, Docket No. 85-212 (1986), on behalf of the U.S. Ai Force. 112. Gulf States Utilities Company, before the Public Utility Commssion of Texas, Docket Nos. 6477 and 6525 (1985), on behalf of Nort Star Steel-Texas. 113. Ohio Edison Company, before the Ohio Public Utilities Commssion, Docket No. 84-1359- EL-AI (1985), on behalf of Nort Star Steel-Ohio. 114. Utah Power & Light Company, before the Utah Public Servce Commssion, Case No. 84- 035-01 (1985), on behalf of the U.S. Ai Force. 115. Central Vermont Public Service Corporation, before the Vermont Public Service Board, Docket No. 4782 (1984), on behalf of Central Vermont Public Service Corporation. 116. Gulf States Utilities Company, before the Louisiana Public Servce Commssion, Docket No. U-15641 (1983), on behalf of the Strategic Petroleum Reserve. 117. Southwestern Power Admstrtion, before the Federal Energy Regulatory Commission, Rate Order SWP A -9 (1982), on behalf of the Deparent of Defense. 118. Public Servce Company of Oklahoma, before the Federal Energy Regulatory Commission, Docket Nos. ER82-80-000 and ER82-389-000 (1982), on behalf of the Deparent of Defense. 119. Centrl Maine Power Company, before the Maine Public Utilties Commission, Docket No. 80-66 (1981), on behalf of the Commssion Staff. . . . . . . . . . .. DENNIS W. GoINS 11.120.Bangor Hydro-Electrc Company, before the Maine Public Utilities Commission, Docket . No. 80- 1 08 (1981), on behalf of the Commission Staff. 121.Oklahoma Gas & Electrc, before the Oklahoma Corporation Commission, Docket No. 27275 (1981), on behalf of the Commission Staff..122.Green Mountain Power, before the Vermont Public Service Board, Docket No. 4418 . (1980), on behalf of the PSB Staff. 123.Wiliams Pipe Line, before the Federal Energy Regulatory Commssion, Docket No. OR79-1 (1979), on behalf of Mapco, Inc. 124.Boston Edison Company, before the Massachusetts Deparent of Public Utilities, Docket.No. 19494 (1978), on behalf of Boston Edison Company.. 125.Duke Power Company, before the Nort Carolina Utilities Commission, Docket No. E-7, Sub 173, on behalf of the Commission Staff. 126.Due Power Company, before the Nort Carolina Utilities Commssion, Docket No. E-.100, Sub 32, on behalf of the Commssion Staff.'. 127.Virginia Electrc & Power Company, hefore the Nort Carolina Utilties Commission, Docket No. E-22, Sub 203, on behalf of the Commission Staff. 128.Virginia Electrc & Power Company, before the Nort Carolina Utilities Commssion,.Docket No. E-22, Sub 170, on be~alf of the Commission Staff..129.Southern Bell Telephone Company, before the Nort Carolina Utilities Commission, Docket No. P-5, Sub 48, on behalf of the Commission Staff. 130.Western Carolina Telephone Company, before the Nort Carolina Utilities Comms.sion, Docket No. P-58, Sub 93, on behalf of the Commission Staff..131.Natul Gas Ratemakg, before the Nort Carolina Utilities Commssion, Docket No. G-. 100, Sub 29, on behalf of the Commission Staff. 132.General Telephone Company of the Southeast, before the Nort Carolina Utilities Commission, Docket No. P-19, Sub 163, on behalf of the Commission Staff..133.Carolina Power and Light Company, before the Nort Carolina Utilties Commssion,. Docket No. E-2, Sub 264, on behalf of the Commssion Staff. 134.Carolina Power and Light Company, before the Nort Carolina Utilities Commssion, Docket No. E-2, Sub 297, on behalf of the Commission Staf. 135.Duke Power Company, et ai., Investigation of Peak-Load Pricing, before the Nort.Carolina Utilities Commission, Docket No. E-I00, Sub 21, on behalf ofthe Commssion . Staff. 136.Investigation of Intrastate Long Distace Rates, before fue North Carolina Utilities Commission, Docket No. P-LOO, Sub 45, on behalf of the Commssion Staff... .. . CERTIFICATE OF SERVICE - CASE NO. IPC-E-07-8 .I hereby certify that I have ths ioth day of December, 2007, served or caused to be served a tre and correct copy of the attached DIRCT TESTIMONY OF DENNIS W. GOINS ON BEHALF OF THE UNTED STATES DEPARTMNT OF ENERGY upon each of the pares listed below, by placing the same in the U.S. Mail, postage prepaid. .Baron L. Kline Lisa D. Nordstrom Idaho Power Company 1221 W. Idaho St. (83702) P.O. Box 70 Boise, il 83707-0070. John R. Gale Vice President, Reguatory Affairs Idaho Power Company 1221 W. Idaho St. (83702) P.O. Box 70 Boise, il 83707-0070. . Weldon Stutzan Donovan Walker Deputy Attorney Generals Idaho Public Servce. Commission 472 W. Washington (83702) PO Box 83720 Boise, il 83720-0074.Peter J. Richardson Richardson & 0 'Lear 515 N. 27th St. P.O. Box 7218 Boise, il 83702. Dr. Don Reading Ben Johnson Associates 6070 Hil Road Boise, il 83703. . Eric L. Olsen Racine, Olson, Nye, Budge & Bailey, Charered P.O. Box 1390; 201 E. Center Pocatello, il 83204-1391 . .Anthony Yanel 29814 Lake Road Bay Vilage, OH 44140 Michael Kur, Esq..Kur J. Boehm, Esq. Boehm, Kurz & Lowr 36 E. Seventh Street, Suite 1510 Cincinnati, OH 45202 .Conley E. Ward Michael c. Creamer Givens Pursley LLP 601 W. Banock Street PO Box 2720 .Bois, il 83701-2720 Dennis E. Peseau, Ph.D. Utility Resources, Inc. 1500 Libert Street, Suite 250.Salem, OR 97302 LotH. Cooke Actig Assistant General Coùnsel United'States Deparent of Energy .1000 Independence Ave., SW Washington, DC 20585 Dale Swan Exeter Associates 5565 Sterrtt Place, Suite 310.Columbia, MD 21044 . . . . ~.a._J Arur Perr Bruderr Attorney-Advisor Office of the General Counsel United States Deparent of Energy Washington, DC -2-