20131105Harvey Rebuttal.pdf

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An IDACORP Company
!: !JLISA D. NORDSTROM
Lead Counsel
November 4,2013
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-13-16
Certificate for Public Convenience and NecessityforJim Bridger Units 3 and
4 - Replacement Pages 19 and 20 to the RebuttalTestimonyof Tom Harvey
Dear Ms. Jewell:
It has come to the attention of ldaho Power Company ("Company") that pages 19
and 20 of the Rebuttal Testimony of Tom Harvey contain confidential information that
should have been redacted. Therefore, nine (9) copies of Mr. Harvey's redacted rebuttal
testimony are enclosed for filing. Other than the redactions, no other changes have been
made to the testimony.
ln addition, enclosed in a separate envelope are nine (9) copies of confidential
pages 19 and 20 to Mr. Harvey's testimony.
!f you have any questions regarding the enclosed documents orthis matter, please
do not hesitate to contact me.
Very truly yours,
?filIl.jil'r.r -f. D::r-u,,r.irj. -, I li
2 /^t 4/)
firl^, A.//uJ-/*
Lisa D. Nordstrom-
LDN:evp
Enclosures
cc: Service List (w/encls.)
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
ntDlltNPO1TER=
An IDACORP Companv
iill: ilfiT ?! p'i tr: firr
i: j, ! r .,
i,i-:::'_LISA D. NORDSTROM
Lead Counsel
I [e-mail]
October 29,2013
VIA HAND DELIVERY
Jean D. Jewell, Secretary
!daho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. !PC-E-13-16
lnvestment in Selective Catalytic Reduction Controls for Jim Bridger Units 3
and 4 - ldaho Power Company's RebuttalTestimony
Dear Ms. Jewell:
Enclosed for filing in the above matter are an original and nine (9) copies each of
the Rebuttal Testimony of Tom Harvey and Michae! J. Youngblood. One copy of each
witness's rebuttaltestimony has been designated as the "Reporte/s Copy." ln addition, a
disk containing a Word version of the aforementioned rebuttaltestimony is enclosed forthe
Reporter.
Sincerely,
&-e/(^*+r,*'
Lisa D. Nordstrom
LDN:evp
Enclosures
1221 W. ldaho St. (83702)
P.O. Box 70
8oise, lD 83707
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY' S APPLICATION EOR A
CERTIFICATE OE PUBLIC CONVENIENCE
AND NECESSITY EOR THE INVESTMENT
IN SELECTIVE CATALYTIC REDUCTION
CONTROLS ON JIM BRIDGER UNITS 3
AND 4.
CASE NO. IPC-E-13-16
IDAHO POWER COMPANY
REBUTTAL TESTIMONY
OF
TOM HARVEY
O. Pl-ease state your name.
A. My name j-s Tom Harvey.
O. Are you the same Tom Harvey that previously
4 presented direct testimony?
A. Yes.
O. What is the scope of your rebuttal testimony?
A. My rebuttal testimony will begin by
8 addressing the criticisms of Idaho Power Company's
9 ("Idaho Power" or "Company") Coal Unit Environmental-
10 Investment Analysi-s ("Coal Study"), Exhibit Nos. 5 and 6
11 of my direct testimony, raised by the Industrial- Customers
12 of fdaho Power ('ICfP") witness Dr. Reading, Snake River
13 Al-l-iance ("SRj\") witness Mr. Miller, and the Idaho
14 Conservation League ("ICL") witness Ms. White. I will then
15 explain how the Company's Integrated Resource Pl-an
76 ("IRP") is aligned with, and served as the foundation for
77 assumptions in, the Coal Study. Lastly, I wil-I address
18 certain investments that I believe the Idaho Publ-ic
L9 Util-ities Commiss j-on ("Commission" ) Staf f ("Staf f " )
20 witness Mr. Louis inappropriately excluded from his
27 recommendation for pre-approved ratemaking treatment.
22
z3
I. COAL STI'DY CRITICISMS
O. How would you characterize each party's
24 conclusions with regard to the Company's Coal Study?
25
HARVEY, REB 1
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A.After a thorough review of the Company's
Coal Study and all- of its inputs through severa.l- rounds
of discovery and a number of on-sj-te visits, the Staff
concluded that the Company's Coal- Study methodofogy is
reasonable and the conclusions reached by the study
support investment in the Selective Catalytic Reduction
("SCRs") controls at issue in this case. Dr. Readi-ng,
Mr. Miller, and Ms. White were critical- of Idaho Power's
analysis and cited perceived deficiencies related to the
modeling of uncertainty in carbon regulation. However,
Dr. ReadJ-ng, Mr. Mil1er, and Ms. White fai1ed to provide
any substantive analyses or alternative inputs that could
correct the perceived deficiencies. In other words, they
critiqued isol-ated parts of the Company's Coal- Study
methodology, but, practically speaking, they were unabl-e
to propose a better model for evaluating the Company's
opt j-ons.
O. Does the Company belj-eve there is
uncertainty related to coal- regulatj-on?
A.Yes, the Company agrees that coal- regulation
uncertainty exists, but its recommendatj-on to j-nstal-1 the
SCRs was made based upon what is known today and what can
be reasonably foreseen or model-ed. Waiting for perfect
knowledge before taking action is not an option that will
ensure rel-iable service to customers.
HARVEY, REB 2
Idaho Power Company
1 Q. How did Ms. White support ICL's view that
2 the Company's Coal- Study analysis fail-ed to model the
3 uncertai-nty?
4 A. On pages 4 and 5 of Ms. White's testimony,
5 she provi-ded excerpts from a report published by the
6 Edison El-ectrj-c Institute and the McKinsey Global
7 Institute ("McKinsey"), which describe the uncertaj-nties
8 facing util-j-ti-es related to "disruptive forces"; however,
9 she provided no analysis or reconrmendations regarding how
10 she bel-ieves these uncertainties should or could have
11 been addressed in the Company's analysis.
t2 O. Do you agree with Ms. White's contention on
13 pages 4 and 5 of her testimony that energy storage
L4 technology should or could have been considered as part
15 of the Company's Coal Study?
1,6 A. No, I do not. At this point in tj-me, it i-s
L7 neither appropriate nor prudent to develop a resource
18 procurement strategy that relies upon an energy storage
19 technology that is not currently technically nor
20 economically viable at a utility sca1e. There is no
2L question that advancement of storage technol-ogy would be
22 a major breakthrough in the energy worl-d. In particular,
23 T agree with the McKinsey report, referenced by Ms.
24 White, in that advanced battery storage systems woul-d
25 help with integration of solar and wind power. The
HARVEY, REB 3
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McKinsey report clearly describes the transformative
potenti-al of energy storage. With continued
technological advancement, energy storage is likely to
decrease j-n cost over time. However, there is simply too
much uncertainty around when and to what extent cost
decreases will occur for the variety of storage
technologies described in the McKinsey report to be
modeled and included j-n Idaho Power's CoaI Study.
On page 7 of her testj-mony, Ms. White
maintains that the Company focused its Coal- Study
analysis on how to maj-ntain nameplate capacity rather
than how to best serve future customer energy needs. Is
this a correct characterization of the Company's
analysis ?
A.No. The Company's analysis was focused on
determini-ng the least-cost and l-owest-risk option for
compliance with environmental regulations that woul-d
stil-l- provide the Company with a basel-oad resource that
would continue to rel-j-ably and economically meet
customers' e.l-ectric j-ty needs .
O.Do you agree with Mr. Mi.l-Ier's contention,
on page 24 of hi-s testimony, that the Company's annual
qenerati-on by fuel type is the correct presentation of
Idaho Power's portfol-io di-versity?
HARVEY, REB 4
Idaho Power Company
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A.No. Mr. Mil-l-er's testimony responds to Ms
Grow's descrj-ption of Idaho Power's resource
being among the most diverse, and therefore
nation. Namepl-ate capacity is the industry
describing the maxj-mum output capability of
portfolio as
secure in the
standard for
a resource
fn its Coal Study, the Company considered resource
nameplate capacity as wel-I as capacity factor, a measure
of the annual- production capability of a resource. This
provi-des for a fair comparison between available basel-oad
generation resource opti-ons. Basel-oad resources like the
Jim Bridger plant must operate at relatively high
capacity factors to successfully meet energy demands
throughout the year. Because the Coal- Study analysi-s was
intended to identify cost-effective ways to meet the
loads currently served by the Jim Bri-dger plant, only
di-spatchabl-e resources with similar nameplate capacities
were appropriately considered. Thus, while Idaho Power
agrees with Mr. Mil-l-er that supplied energy mi-x i-s an
approprj-ate reflection of pollution emissions, the focus
of Ms. Grow's testimony and Idaho Power's Coal Study was
on capacity.
O. On pages B and 9 of Dr. Reading's testimony,
he points to the si-ngle scenario in the CoaI Study in
which the SCR is not the lowest cost. Please describe
the other scenarios included in the Coal- Study.
HARVEY, REB 5
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A.Eight of the nine sensj-tivities in the Coal
Study identified the SCR investments as being the l-owest
present val-ue cost al-ternative It is only under the
unl-ike1y event that a Iow gas price future is coupled
with a high carbon adder future that the SCR investments
woul-d resul-t in a higher present val-ue cost than
replacing Jj-m Bridger Units 3 and 4 with a Combined Cycle
Combustion Turbine ('CCCT")The other eight analyzed
combinations of natural gas and carbon futures support
the install-ation of SCR controls.
O. Did the Company analyze a reasonabl-e range
of future environmental- control costs in its Coal- Study?
A.Yes. The Company util-ized availabl-e
information related to future environmentaf control costs
when it performed the Coal Study analyses and
subsequently fil-ed this request for a Certificate of
Publ-ic Convenience and Necessity ('CPCN") What the
Company knew at the tj-me it fil-ed the Applicatj-on was
that the Environmental- Protection Agency ("EPA") proposed
approving sections of the Wyoming State fmplementation
Plan (*SfP"), including the parts pertaining to the SCRs
at Jim Bridger Units 3 and 4, which will- make compliance
with the Wyoming SIP by the stated deadlines federally
enforceabl-e. As the future of carbon regulation is not
known, the Company included a "carbon adder" in its CoaI
HARVEY, REB 6
Idaho Power Company
1 Study that represents those future costs of regulation
2 that are not currently known but assumed to occur in some
3 fashion in the fr.,trr.". This is the same carbon adder
4 that was used in the Company's 201-3 IRP which is intended
5 t.o capture future unknown costs associated with carbon
6 regul-ation.
1 Q. Mr. Mj-lJ-er stated on page 72 to 13 of his
8 testimony that Idaho Power omitted anal-ysis of other
9 pollution control regulations in its CoaI Study. Is Mr.
10 Miller's statement accurate?
11 A. No. The CoaI Study conducted by the Company
72 incl-uded the anticipated impacts of other existing,
13 proposed, or expected regulations. These include the
14 Cl-ean Water Act requirements for existing coal--fired
15 power plants; Coal- Combustion Residuals ("CCRs"),
16 National Ambient Air Quality Standards (*NAAQS"), and
1,7 Mercury and Aj-r Toxic Standards (*MATS") The
18 Application for the CPCN simply focuses on the
!9 environmental- regulations that directed the Company to
20 instal-l SCRs on Jim Bridger Units 3 and 4.
21 O. Why did the Company not incl-ude the
22 compliance costs for the MATS rule in its CPCN request as
23 Mr. Mil-l-er suggests on page L9 of his testimony?
24 A. Because the Company is required to comply
25 with the MATS rule, Idaho Power included the cost of
HARVEY, REB 7
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compliance with MATS in the Coal- Study. The Coal- Study
results indicated that it is cost-effective to install
SCRs at the Jim Bridger plant even with the additional
costs associated with MATS compliance. However, the
costs of compliance with MATS regulations are not nearly
of the same magnj-tude as the SCR j-nvestments. The
Company vj-ews the anticipated investments rel-ated to MATS
compliance to be more routi-ne in nature and not of the
magnitude or type of investment justifying the regulatory
treatment associated wi-th a CPCN.
O.On page 8 of Ms. White's testj-mony she
states that the Company's minority interest in its Jim
Bridger plant exposes customers to risk. Do you agree?
A.I think there are risks unique to being both
a minority sharehol-der and a majorj-ty shareholder of a
plant like Jim Brj-dger. Idaho Power' s counsel- works to
mi-nimize that risk through the terms of the Company's
operating agreements. Additionally, the Company actually
benefits from partnering wi-th another utility that is
similarly aligned in a fiscal and regulatory sense as
wel-I as having significant operational experience.
Partnering in a plant also reduces the scal-e of
investment required by each company and subsequently
recovered in rates.
HARVEY, REB 8
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Do you aqree with Mr.
characterization of the Coal Study
preliminary planning document, not
investment decisions"?
Il-er's
a "high-level-
conclusi-ve basis for
Mi
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A.No. The quotations on pages 10 through 72
of Mr. Mi-l-Ier's direct testimony that attempt to
establish that the Company's CoaI Study is simply a
"hi-gh-1eve1" planning document are actually statements
incl-uded in the analysis performed by the Company's
outside consul-tant SAIC. The statements made in the SAfC
analysis are primariJ-y "safe-harbor" statements, much
Iike the Company's identi-fication of risks that it
incl-udes in its U.S. Securiti-es and Exchange Commission
("SEC") filings, which is discussed next in my testimony.
The results of the SAIC analysis served as independent
third-party planni-ng recommendations regarding the three
investment alternati-ves to be used in the Company's
comprehensj-ve total portfol-io resource cost analysis (the
Coal- Study) . The Company util-ized the results from the
dynamic CoaI Study to inform its decision on the SCR
i-nvestments.
O. Did the statements in the Company's 2OLL
Annual Report on Form 10-K fifed with the SEC indicate
that the Company lacked sufficient information needed to
invest in coal plants with the intent of extending their
HARVEY, REB 9
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l-ives, dS Mr. Miller suggests on page 16 of his
testimony?
A.It is my understanding that risk factor
discl-osures are a required part of the SEC report and serve
to inform the investors of potential risks a company may
face j-n 1ts operating environment. Risk factor disclosures
also serve as an important protection for the Company
against claj-ms of material omj-ssion or non-disclosure by
purchasers and sellers of its publicly-traded securities.
The form of disclosure that satisfies both of these goals
incl-udes a discussion of not only those risks that are
known to exist and/or have measureable outcomes, but al-so
those that are speculative in nature, both in the
probability of occurrence and in the ultimate impact on the
Company's operations and financial condj-tion. The rj-sks
SRA quotes from the Company's 2011 Annual Report on Form
10-K did not say the Company l-acks the information needed;
rather, it provides caveats that the Company does not have
perfect knowledge on the future of coal regulation and, in
fact, Do one knows the outcome of future coal regulati-on.
O. Would it have been reasonable, as Mr. Mil 1er
tosuggests on page 2L of his testj-mony, for the Company
attempt to negotiate an early shutdown of Jim Bridger
with the EPA as model-ed as an option in its Coal Study
scenarj-o assumptions ?
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A. No. Lisa Grow testified on page 8 of her
direct testimony, "The Jim Bri-dger Plant not only
provides highly valuable capacity during periods of peak
demand, but al-so l-ow cost and dependable baseload
energy." Ms. Grow goes on to state, "The Jim Bridger
Plant has the l-owest dispatch cost of Idaho Power's
entire thermal generation fl-eet." At the time the state
of Wyoming decided to require the SCRs at Jim Bridger
Units 3 and 4, it would not have been reasonabl-e for the
Company to consj-der the shutdown of the Jim Bridger
p1ant, its lowest variabl-e cost thermal resource, as an
economically viabl-e alternative.
II. IRP ASSI'MPTIONS AI{D AI{ALYSIS IN TEE COAL STI'DY
O.Are the four risks covered by the IRP
White on page 11"cursory" in nature, dS suggested by Ms
of her testimony?
A.No. For Idaho Power, the conditions
encountered which significantly affect operating costs
and system reliabj-lity rel-ate to water supply, operating
costs for thermal- (gas and coal) resources, carbon
regulation, and customer demand. The TRP ri-sk factors
were selected to capture the effects of these conditions,
recogniz:-rrq that extreme level-s for any one of these
conditj-ons can cause operating costs for a resource
portfolio to markedly deviate f rom normal- cost l-evels.
HARVEY, REB 11
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The selected risk factors allow the Companyr ds a
resource planner, to ask meanj-ngfuI "what ifs." For
example, what if the cost to operate fossil fuel
resources increases greatly as a resul-t of carbon
regulations? Or, what if natural gas costs soar? What
if water supply reaches cri-tj-ca1 levels? And, fi-na11y,
what if customer demand is much greater than expected?
What if all these occur at the same tj-me? The Company's
objective is to predict how the IRP resource portfolios
perform under a spectrum of possible futures. Through
sampling of the four risk factors considered-natural gas
price, customer l-oad, hydroelectric variability, and the
carbon adder-the IRP stochastic risk analysis considered
702 possible futures.
The risk analysis included in the IRP, notably the
sel-ection of cost-of-carbon scenarios, was thoroughly
discussed with the IRP Advisory Council (*IRPAC")
(including ICL), and was not devised by Idaho Power
uni-Iateral1y. The Company views risk analysi-s as a vital
component of informed and prudent decision making.
O.Ms. White cl-aims on pages 8 and 9 of her
testimony that the Application did not characterize
current and future demand needs nor did it identify an
adequate range of compliance al-ternat j-ves.
HARVEY, REB L2
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Did Idaho Power consi-der demand needs and
compliance alternatives as part of its consideration of
the SCR investments?
A.Yes. Thj-s analysis was done as part of the
IRP process and memorialized in the 20L3 IRP, Attachment
4 to the Applicati-on. The selection of the IRP preferred
portfolio j-s the culminatj-on of a lengthy and transparent
process involving input from the IRPAC and public
participants at monthly IRPAC meetings. Notably, this
process has included portfol-io design workshops as a
forum for the IRPAC and the public to offer resource
suggestions. For the 2Ot3 IRP, IRPAC members
representing ICL and Boise State Uni-versity ("BSU")
requested a special meeti-ng with the Company to propose a
coal alternative resource portfolio. The product of this
collaboration wj-th fCL and BSU IRPAC representati-ves is
Resource Portf olio 6, which provides for complete coal-
retirement by year-end 2020.
The studied resource portfolios are then evaluated
through a rigorous stochastj-c risk analysis, which I
descri-bed earlier i-n my testimony. With respect to a
coal-fi-red plant such as Jj-m Bridqer, a critical risk
f actor incl-uded j-n the analysis i-s the carbon adder. The
carbon adder for the study took on three leve1s-a low
case of $0 per ton COz, a planni-ng case of $1-4.64 per ton
HARVEY, REB 13
Idaho Power Company
t COz, and an upper case of $35.00 per ton COz. The three
2 carbon adder cases were developed coll-aboratively with
3 the IRPAC. While there is currently no regulation
4 imposing costs for carbon emissi-ons from exJ-sting fossil
5 fuel- plants, the Company recognizes the importance of
6 understanding the effects of potential carbon-emission
7 costs on operating costs for the IRP resource portfol-ios.
I Q. What affect did the carbon adder, whi-ch is
9 j-ntended to be a surrogate for a future carbon tax, have
10 on portfolio operating costs?
11 A. The resul-ts of the stochastic risk analysis
72 definitively show the carbon adder has the effect of
13 increasing portfolio operati-ng costs. Of the 102 total-
L4 stochastic futures studi-ed, the highest portfolio
15 operating costs predomi-nantly correspond with the 34
1,6 futures for whj-ch the upper case carbon adder is
7't sel-ected. Conversely, the 34 futures havj-ng a l-ow case
18 carbon adder largely comprise the set of futures for
L9 whj-ch portfolio operating costs are lowest.
20 The total portfolio costs, which incl-ude both
2L fixed and variable costs, for the IRP preferred resource
22 portfolio are the lowest for all 1.02 futures, including
23 the 34 futures having upper case carbon adder costs
24 imposed.
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How does the preferred resource portfolio
from the IRP perform in this analysis?
A. The preferred resource portfolio, consisting
of a blend of the Boardman to Hemingway transmission l-ine
("B2H") and demand response, outperforms the other
resource portfolios for all tO2 futures. This means that
even for the worst set of conditions, the preferred
portfolio's costs are the lowest This outcome is a
testament to the bal-anced nature of the existing
portfolio coupled with B2H. Whil-e it is hard to
a resource decision as having zero ri-sk, the 2Ol3
stochastic analysis results described on page 104
(Attachment 4 to the Application) suggest a very
likelihood of encountering a future for which the
preferred resource portfoli-o would be regrettable
resource
consider
IRP'S
sl-im
compared to the alternative portfol-ios.
O. Do you agree with Mr. Mil-ler (page l-5) and
Ms. White (pages 1-9) that the Company omj-tted
replacement resources such as energy effj-cj-ency and
renewable resources as an al-ternative for replacing coal-
fired generation?
A.No, f do not. To put this recommendation
into context, it is important to review the deficit
positions that fesult when the coal- fl-eet is assumed
retiredr ds occurred in the 2013 fRP's Resource
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Portfolios 6 and 7 . Charts with the deficit posj-tj-ons
for these portfolios are provided as Figure 8.6 and
Figure 8.1 on pages 93 and 94, respectively, of the 2013
IRP (Attachment 4 to the Application). Without coa1,
summertime deficits, reaching nearly L,900 megawatts
("MW") by the end of the planning peri-od, tend to produce
the greatest alarm and receive the most attention.
However, not to be overlooked, are wintertime deficj-ts
which reach nearly 700 MW. While the benefits of energy
efficiency are not to be ignored, deficits of this
magnitude cannot cost-effectively be met with energy
efficiency or renewable generation. The Company resists
the characteri-zation of a resource decision as a bet as
Ms. White does in her testimony. However, solely for the
sake of il-lustrating a principle, the Company bel-j-eves a
safer bet to meet wintertj-me deficits is to rely on
dispatchable thermal- resources rather than renewables.
Betting on renewable resources such as wind and
sol-ar to meet summertime deficits is not much safer than
it is betting on them duri-ng wintertime. Whil-e the sun
is at least shining during peak suflrmer power demand, peak
demand j-s often hours past sol-ar' s peak energy output.
In fact, the Commission Staff in Case No. GNR-E-11-03
performed an analysis that found peak summer customer
demand for power has occurred as late as hour ending 8:00
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Idaho Power Company
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p.m. (MDT) (Staff Comments, p. 5). C1early, the amount
of installed sol-ar capacj-ty necessary to meet peak power
demand extending to 8:00 p.m. is staggering, and, of
course, solar capacity install-ed to meet peak surnmer
demand contributes very Iittle to meeting peak winter
customer demand.
Relying on wi-nd is al-so risky. Gj-ven that peak
customer demand for power, during winter and summer
a1ike, ordinarily occurs during periods where the weather
is dominated by large stable bl-ocking patterns (i.e.,
high-pressure ridges), the likelihood of high wind
production coinciding with peak power demand is low. fn
short, wind i-s quite clearly an energy resource and not a
capacity resource.
Eor this reason, I bel,ieve the generating
resources to be considered in replacing coal--fired
generation are those which realistically al-low the
Company to maintain reliable service.
o.Did Idaho Power consider energy efficiency
its coal-as an al-ternative to continued operation of
fi-red plants?
A.Yes. Energy efficiency
low-cost resource since 2002 and the
average system l-oads by more than 100
("aMW") between 2002 and 2072 through
has been a primary
Company has reduced
average megawatts
energy efficiency.
HARVEY, REB L7
Idaho Power Company
,-' ii ''
'1 To help maintain these savings levels and prepare for the
. . ?!: a lri.],,, _il irtl l,: t,!i2 2073 IRP, the Company contracted with a third-parly
3 consultant to provide a credibl-e and transparent' ia'bsessment
4 of energy efficiency potential in Idaho Power's service
5 area. The ldaho Power Energy Efficiency Potential Study
6 ("Potential Study") performed by EnerNOC Utility Solutj-ons
7 Consulting was included in the Demand-Side Management 20L2
8 Annual- Report, Supplement 2z Evaluation, filed in Case No.
9 IPC-E-13-08. The Potential Study resulted j-n a forecast of
10 achievable potential that included all cost-effective
11 enerqy efficiency taking into consideration current and
72 future market conditions, customer preferences for
13 efficient technologies, and expected program participation.
1,4 The Company included the forecast achievable potential from
15 the Potential Study into the IRP planning process as the
16 first and lowest cost resource to meet future loads. Idaho
11 Power added additional amounts of forecast energy
18 efficiency outsi-de of the Potential Study to account for
\9 future savings from several large load customers and to
20 account for program changes occurring after the study was
2L completed. A total reductj-on of 261, aMW of system energy
22 reduction was accounted for over the 20L3 fRP 2)-year
23 planning horizon.
24
25
HARVEY, REB 18
Idaho Power Company
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Idaho Power does not conslder the energy efficiency
potential identified in the Potential Study as a ceiling to
energy efficiency and the Company wil-I contj-nue to pursue
al-l cost-effective energy efficiency.
o.Can the Company's coal-fired generation be
replaced solely by alternative resources?
A.Although Mr. Mil-l-er and Ms. White suggest that
the Company's 351 MW of coal-fired generation from Jim
Bridger Unj-ts 3 and 4 can be replaced by alternative
resources like energy efficiency, it would not be
reasonable to add unsubstantiated amounts of incremental
energy efficiency beyond the 26L aMWs already identified
and included in the 2Ot3 IRP 2)-year planning horizon.
Irr. REQUTRED IN\ZESTT4ENTS SEOrrLp BE TNCLUDEp IN PRE-
APPRO\TED RATE!,IAKING
O.On pages 26 to 28 of his testimony, Staff
witness Mr. Louis recommended that certain cost estimates
be excluded from the pre-approved ratemaking treatment
because the costs are not known and measureabl-e at this
polnt in time. Are these i-nvestments Staff has excluded
necessary to complete the SCR upgrade?
Staff excluded the following investments from
the Company's cost estimate: the boiler and air pre-heater
reinforcement , the economizer upgrade
-,
the flue gas reinforcement proj""t I
HARVEY, REB 19
Idaho Power Company
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79
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I, the spare parts allowance , and
other cost expense
The economizer upgrade is needed to control the
temperature of the flue gas exiting the boj-l-er and entering
the SCR catalyst. If the temperature is not controlled,
early deterioration of the catalyst will be inevitabl-e.
The boiler and air pre-heater reinforcement project
and the fl-ue gas reinforcement project are necessary to
comply with the National Fire Protection Association
(*NEPA") 85 Boiler and Combustion Systems Hazards Code
("Code") requirements. The boiler and air pre-heater
casings and exj-sting flue gas equipment and ductwork from
the air pre-heater outlet through the chimney wiIl be
structurally reinforced to meet Code.
The spare parts allowance will be used to minimize
the durati-on and magnitude of outage and derate events.
Certain capitalized "critical" spare parts wil-l- be
purchased and stored on-site. These capitalized critical
spare parts are recommended and priced by the original
equipment manufacturers and represent components that have
lonq or extended delivery durations and will extend outage
or derate events if replacement spares are not immediately
avail-able.
HARVEY, REB 20
Idaho Power Company
1 Other cost expense includes project engineering and
2 consultant support; initial fil1s of lubricants and ammonia
3 reagent; contracted site construction management and
4 inspection services; cost of PacifiCorp internal labor
5 charged to the project; PacifiCorp travel expenses related
6 to the SCR project as plant operator and project managex;
7 cost for removal and disposal of existing hazardous waste
I materials encountered; cost of supplementary plant security
9 and communication features; additional plant perimeter
10 security costs expensed to the project for extended
11 security resource during on-si-te construction; plant
L2 operating data historian integration; and any additional-
13 special tools determined to be essential to maj-ntain and
L4 operate the incremental- equipment. Whil-e the l-eve1 of
15 expense is uncertain, it is certain that expenses will be
76 j-ncurred in those categories.
Ll O. Does that conclude your testimony?
18 A. Yes, it does.
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HARVEY, REB 2L
Idaho Power Company
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SUBSCRIBED AND
October 2073.
ATTESTATION OF TESTIMONY
SWORN to before me this 29th day of
STATE OF IDAHO
County of Ada
l{xe;
ss.
T, Tom Harvey, having been duly sworn to testify
truthfully, and based upon my personal knowledge, state the
following:
I am employed by Idaho Power Company as the Joint
Projects Manager in the Power Supply Department and am
competent to be a witness in this proceeding.
I declare under penalty of perjury of the laws of
the state of Idaho that the foregoing pre-fil-ed testimony
j-s true and correct to the best of my information and
bel-ief .
DATED this 29th day of October 20L3.
h
'S-,!*
)
.to.
HARVEY, REB 22
Idaho Power Company
oO! ef p
lDO1'l
Pggr,tg
Notary Publit
Residing at:
My commissj-on
(J
;fr*
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 29th day of October 2013 t served a true and
correct copy of the within and foregoing Rebuttal Testimony of Tom Harvey, upon the
following named parties by the method indicated below, and addressed to the following:
Commission Staff
Kristine A. Sasser
Deputy Attomey Genera!
ldaho Public Utilities Commission
47 2 W est Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
lndustrial Customers of ldaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
ldaho Conservation League
Benjamin J. Otto
ldaho Conservation League
710 North Sixth Street
Boise, ldaho 83702
Snake River Alliance
Dean J. Miller
McDEVITT & MILLER LLP
420 West Bannock Street (83702)
P.O. Box 2564
Boise, ldaho 83701
Hand Delivered
U.S. Mail
Overnight Mail
FAXX Email [e-mail]
Hand Delivered
U.S. Mail
Overnight Mail
FAXX Email [e-mail]
q reg@ richard so nadams. com
_Hand Delivered
U.S. Mail
Overnight Mail
FAXX Email [e-mail]
_Hand Delivered
U.S. Mai!
Overnight Mail
FAXX Email [e-mail]
Hand Delivered
U.S. Mail
Overnight Mail
FAXX Email [e-mail]
CERTIFICATE OF SERVICE
t
Ken Miller, Clean Energy Program Director
Snake RiverAlliance
P.O. Box 1731
Boise, ldaho 83701
_Hand Delivered
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Ovemight Mail
FAx
Emai! [e-mail]
CERTIFICATE OF SERVICE