20220624Compliance Filing 2021.pdf

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MATTHEWT. LARKIN
Revenue Requirement Senior Manager
m [e-mail]
June24,2022
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, ldaho 83720-0074
Re: Case No. IPC-E-12-09
Compliance Filing - Boardman Power Plant Annual Review (2021)
Dear Ms. Noriyuki:
Pursuant to ldaho Public Utilities Commission ("Commission") Order Nos. 32457
(Case No. IPC-E-11-18) and 32549 (Case No. IPC-E-12-09), attached for electronic filing
is ldaho Power Company's Boardman Power Plant Annual Review report for the year
ending 2021.
lf you have any questions regarding this filing, please contact Regulatory
Consultant Courtney Waites at [phone] or [e-mail].
Sincerely,
Matthew T. Larkin
MTL:sg
cc: Dayn Hardie
AnID COiPCompdry
SIHilh.
An DloonPoonrpmy
BOARDMAN POWER PLANT ANNUAL REVIEW
FOR THE YEAR ENDING 2021
June 24,2022
Pursuant to ldaho Public Utilities Commission ("Commission") Order Nos. 32457 (Case
No. IPC-E-11-18) and 32549 (Case No. !PC-E-12-09), ldaho Power Company ("ldaho Powe/'
or "Company'') has completed its review of the Boardman power plant ("Boardman") balancing
account for 2021. The purpose of this report is to provide the Commission with (1) an update of
the Boardman balancing account levelized revenue requirement and (2) a summary of activities
that occurred at Boardman in 2021. The Company is not recommending a rate change as part
of this report.
I. BACKGROUND
ln February 2012, the Commission issued Order No. 32457 in Case No. IPC-E-11-18: (1)
accepting the Company's accounting and cost recovery plan forthe early shutdown of Boardman
and (2) allowing the Company to establish a balancing account to track shutdown-related costs
and benefits. Following the Commission's order, on February 15,2012, ldaho Power requested
authority to increase rates to begin recovery of the levelized revenue requirement associated
with Boardman beginning June 1,20'12 (Case No. IPC-E-12-09). The Company proposed to
replace the then current non-levelized base rate revenue recovery associated with ldaho
Powefs existing investment in Boardman with a levelized revenue requirement that was tracked
in the Boardman balancing account, smoothing the revenue requirement impacts of the early
Boardman retirement over the remaining years of the plant's life and providing for full recovery
of Boardman-related costs by Boardman life end.
The le velized revenue requirement calculation included three components: (1) the
revenue requirement on existing investments as of May 31, 2012, prior to when the Boardman
balancing account was established; (2) the revenue requirement on incremental investments
after May 31 ,2012, after the Boardman balancing account was established; and (3) the revenue
requirement associated with future decommissioning and offsetting salvage costs. The
Commission issued Order No.32549 on May 17,2012, authorizing implementation of the cost
recovery approach approved in Order No. 32457 and increasing the Company's annual revenue
requirement by $t,525,501 effective June 1 ,2012, to reflect in customer rates the new levelized
Boardman revenue requirement of $5,174,794.
ln accordance with Order Nos. 32457 and 32549, ldaho Power filed its Boardman Power
Plant Annual Review each year from2012 through year-end 2018 without requesting to adjust
rates. Then, on October 17,2019, ldaho Power filed an application in Case No. IPC-E-19-32
1
requesting to decrease customer rates $1,058,225 effective January 1,2020, to reflect the
updated Boardman levelized revenue requirement amount of $5,135,872. On December 26,
2019, the Commission issued Order No. 34519 in Case No. IPC-E-20-32 approving the
requested rate change. Because full depreciation of all Boardman investments was to occur
December 31,2020,|daho Powerfiled a requestwith the Commission to remove the $5,135,872
in Boardman levelized revenue requirement amounts, less an adjustment of $213,918 to reflect
benefits of the U.S. Tax Cuts and Jobs Act of 2017 associated with Boardman thatwill no longer
exist, effective January 1,2021. The Commission approved the Company's request with Order
No.34885.
II. SUMMARY OF ACTIVITIES IN 2021
Boardman produced its last megawatt of energy on October 15,2020, at 12:56 PM. !n the
Company's Boardman Power Plant Annua! Review for the Year Ending 2020, ldaho Power
provided the updated quantification of the levelized revenue requirement based on actuals
through the plant's end-of-life. Therefore, no update to the levelized revenue requirement is
required. The following summarizes the activities related to cessation of coal-fired operations at
Boardman that occurred in the year 2021:
Decommissioninq and Salvaqe Costs
ldaho Powe/s initial estimate of the decommissioning and salvage costs was determined
by applying the Company's 10 percent ownership percentage to the decommissioning study
performed by Black & Veatch for Portland General Electric ('PGE') and completed in 2011. !n
2018, PGE issued a request for proposal seeking an Owne/s Engineer to complete design and
permitting work in preparation for decommissioning activities, including capping the ash disposal
area, demolishing structures at Boardman (i.e., coal handling systems), remediating the coal
yard, and other selective demolition work across the site (i.e., support buildings, features
supporting coal, coal handling, and coal ash handling). The cost study prepared by AECOM
Technical Services, the Updated Boardman Coal Plant Decommissioning and Demolition Plan
dated October 16,2019, indicates a slightly higher decommissioning cost forecast than the
estimate prepared in 2011, however no changes were made to the $5.4 million of
decommissioning and salvage costs included in the levelized revenue requirementand collected
from customers.
Decommissionino and Demolition Activities
As the end-of-life approached, a Boardman coal management plan was implemented
and a coal reclamation contractor, RPM Solutions, began reclaiming the base layer of coalfrom
the remaining coal pile at Boardman, allowing the otherwise unburnable coalto be used at the
plant during the final months of Boardman's operation.
Decommissioning of the Boardman plant and separating of the facilities shared with
PGE's Carty generating station began on October 16,2020. At this time the plant was taken to
a cold, dark and dry state in preparation of demolition. Decommissioning activities began and
in the first quarter of 2021, waste was removed and disposed ol utilities were disconnected, oils
Boardman Power Planl 2021 Annual Review
Case No. IPC-E-12-09 2
were removed from machanery, assets disposed ol and general clean-up around the site was
performed. ln addition, the reclaimed coal yard, which previously held the coal pile, was
revegetated (see Appendix Pictures 1 and 2) and the petroleum contaminated sediment from a
wash pad containment area and fuel underground storage tanks were removed (see Appendix
Picture 3). During this time, continued designed of the plant demolition and closure of the ash
disposal area was occurring. A request for proposal ("RFP') for plant demolition was issued and
a contractor mobilized for closure of the ash disposa! area in accordance with the Environmental
Protection Agency requirements.
Decommissioning activities continued during the year, including continued asset
disposition, closure of the ash disposal area with the installation of a ClosureTurf Cover System
as approved by the Environmental Protection Agency to cap coal combustion residuals (see
Appendix Picture 4), and removal of information technology equipment. The plant demolition
RFP's responses were reviewed, a contractor selected, and contract negotiations began.
Decommissioning was completed and the plant work force was reduced to four individuals who
will support demolition. Next, pre-mobilization planning for demolition, including work plans,
training development, etc. commenced. Finally, during the fourth quarter o12021, the demolition
contract was executed, and the contractor mobilized on-site. Universalwaste remova! occurred,
asbestos abatement performed, ash removal and tank cleaning took place, and lead paint was
eliminated.
The materials and supplies inventory that could not be scrapped or salvaged was higher
than expected, $942,704 while estimated to be $729,000, resulting in an adjustment of $213,704
in the Boardman balancing account to reflect the actual write-off of the materials and supplies
inventory that occurred in 2020. The following summarizes ldaho Power's share of the
decommissioning expenditures recorded to the balancing account on a system basis as of
December 31,2021:
Decommissioning Costs $1,824,247
Materials and Supplies Write-off $ 942.704
Actua! Decommissioning Expenditures $2,766,951
Remainino Forecast $2.853.313
Current Decommissioning Estimate $5,620,2&1
Decommissioninq Costs Collected ($5.381.547)
Estimated Under (Over) Collection $ 238,717
Collection of estimated levelized revenue requirement amounts ceased and decommissioning
activities are in progress. However, interest will continue to accrue on the balance of the
Boardman balancing account at the customer deposit rate, which is 1 percent for the 2022
calendar year, as authorized by the Commission with Order No. 35246.
ilt. coNclustoN
The levelized revenue requirement following the 2020 annual review, when ful! collection
of Boardman levelized revenue requirement amounts occurred, demonstrated that there was a
difference in the annual revenue requirement which, along with the sum of the associated true
Boardman Power Plant 2021 Annual Review
Case No. IPC-E-12-09 3
ups, is negative $40,669, or a benefit to customers. Because decommissioning activities have
commenced and decommissioning expenses are being incurred, the revenue requirement true-
up has remained in the balancing account, which is also tracking variations between actual and
forecasted decommissioning expenses, to offset future positive differences or for future refund
to customers. The Company will continue to monitor any over- or under-collection of costs,
reporting the balancing account activities to the Commission, and will adjust customer rates in a
future proceeding, if necessary, ensuring customers pay no more or no less than actual
Boardman-related costs.
IV. APPENDIX
Pictures 1 and 2. CoalYard Veqetation.
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Boardman Power Plant 2021 Annual Review
Case No. IPC-E-12-09 4
Picture 3. Former Fue! Underqround Storaqe Tank.
Picture 4. Ash DisposalArea.
Boardman Power Plant 2021 Annual Review
Case No. IPC-E-12-09 5