20130822Additional Comments.pdf

Peter J. Richardson ISB # 3195
Greg Adams tSB # 7454
RICHARDSON & O'LEARY PLLC
515 N.27th Street
Boise,Idaho 83702
Telephone: [phone]
Fax: [phone]
peter@richardsonandoleary. com
Attorneys for Glanbia Foods, In.
IN THE MATTER IDAHO POWER
GLANBTA FOODS, INC. FOR
APPROVAL OF AN ALLOWANCE
PURSUANT TO IDAHO POWER'S RULE
H
) CASE NO. TPC-E-13-09
)) GLANBIA FOODS, INC.',S
) ADDITIONAL COMMENTS FOR
) APPROVAL OF AN ALLOWANCE
) PURSUANT TO IDAHO POWER',S
RULE H
r-t.)i
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
Pursuant to that OrderNo. 32862 issued in this docket on July 31,2013, by the Idaho
Public Utilities Commission (the "Commission"), Glanbia Foods, Inc. ("Glanbia") by and
through its attorney of record, Peter Richardson, hereby responds to the Commission's directive,
to wit:
Because Case No. IPC-E-08-22 focused on residential customer facilities and allowances,
the Orders issued in that case do not address how to calculate an allowance for a
Schedule l9 customer when an allowance is appropriate. The Commission will extend
the comment period in this case and ask the parties to address this issue.l
In addition to addressing how to calculate an allowance for Glanbia, the Commission also
stated:
In that discussion the parties should consider how to structure an allowance for Glanbia's
project so that it does not create a cost risk to Idaho Power's other customers. If an
allowance were given and Glanbia thereafter did not continue as a customer, the portion
' Order No. 32862 at p. 6.
I -GLANBIA ADDITIONAL COMMENTS - IPC-E-I3.09
of facilities costs recovered through Glanbia's rates would be lost, and the cost of the
allowance would be paid by all customers. There is nothing to indicate Glanbia's
proposed project is speculative; nonetheless, the parties should consider how an equitable
allowance can be structured to eliminate any potential cost to the Company's general
body of customers.2
Glanbia's comments will address both issues as well as the issue of the creation of a Reserved
Capacity interest on Glanbia's part in the future use of the facilities being installed as well as a
couple of contracting issues.
PROPER ALLOWANCE CALCULATION
The Commission noted that the Staff and Glanbia proposed an allowance based on
identified costs embedded in rates, but also that the Commission had abandoned that approach in
Case No. IPC-E-08-22. In its stead, the Commission adopted an allowance calculation based on
the actual costs of terminal facilities that will be used to serve the customer who is charged:
Distribution facilities, in contrast, are easily identified to specific customers, and those
costs historically have been collected partially through rates and partially in up-front
contributions from new customers. The portion of facilities costs collected through
electric rates represents the investment in new facilities made by Idaho Power, and "is
often referred to as an installation or construction 'allowance."' Order No. 30853, p. 10.
The Commission approved new allowances for residential customers based on the costs
to provide standard terminal facilities for each of those customers, and clarified on
reconsideration that the approach was different from the previous method that attempted
to determine what portion of distribution plant was embedded in customer rates. Order
No. 30955 , pp.20 - 23.3
The Commission concluded by explicitly identifying the type of facilities that will be used to
measure the proper allowance:
The Commission approved specific allowance for single-phase and three-phase service,
and the key factor was that the allowances were "based on the costs of standard terminal
facilities that will be used to serve only the customer who is charged." Order No. 30955,
p.22.4
2 Id.
3 Id.
a 1d. Emphasis provided.
2 _GLANBIA ADDITIONAL COMMENTS - IPC-E-I3-09
The "terminal facilities" that will be used to serve only Glanbia is the transformer (and related
equipment) that will be placed on Glanbia property that will be deeded over to Idaho Power. The
exact cost of the transformer installation will not be known until the work order is issued and the
work complete. That said, the attached Facilities Study Report issued by ldaho Power estimates
the cost for the terminal facilities to serve Glanbia to be approximately $3,784, 127.s This is the
amount, according to the Commission's current policy on allowances, of the allowance due to
Glanbia.
Glanbia's electric bill, once the upgrade is complete will be approximately twice the size
of this allowance on an annual basis. To put that into perspective, the standard allowance for a
residential customer is over two times a typical residential customer's annual bill. So, on a
comparative basis, the proposed allowance for Glanbia is a mere fraction of the standard
residential allowance on a proportionate basis.
PROTECTION OF OTHER CUSTOMERS
While recognizing that the Glanbia proposed expansion is not "speculative," the
Commission asked the parties how to eliminate any potential cost to the Company's (Idaho
Power) general body of ratepayers should the Glanbia load be lost. Because Glanbia is owned
by an international corporation with a balance sheet much larger than Idaho Power'so this should
not be a concern. That said, Glanbia would be willing to execute a note or other guarantee, in a
form satisfactory to the Commission, that would be due in the event the Glanbia facility closes or
significantly reduces it consumption of power. The magnitude of the note or guarantee could
t See page 4,138134.5 kV 30 MVA Substation.
3 _CLANBIA ADDITIONAL COMMENTS - [PC-E-I3-09
slowly depreciate or it could expire at a date certain, again as the Commission deems
appropriate.
RESERVED CAPACITY IN TRANSMISSION LINE
It is admittedly unlikely that additional customers will move into the area and utilize the
new transmission line and substation transformer that Glanbia is paying for. Glanbia
nevertheless, would like to have this Commission recognize its right to that line (or equivalent
amount of capacity) for a time certain. The Commission has, in the past made such recognitions6
and because it is unlikely to become an issue, should be able to do so in this case without
reservation. A likely retort to this request might be, if it is unlikely to become an issue then why
ask for the vested interest in the first place. Glanbia's management is concemed about
uncertainty and understandably would not like to have to go through the tiresome process of
negotiating line extensions again in the future, if it can be avoided. Glanbia recommends that its
reserved capacity in the total capacity of the new line be preserved for at least a twenty year
period.
NEWLY CREATED CAPACITY BONUS
Ganbia's expansion will cause the existing Gooding Substation, from which the plant is
currently served, to have an additional nine MW of freed-up capacity. While Glanbia is not
making a claim to any vested interest in that additional capacity, it is important for the
Commission to recognize, as it considers Glanbia's requests herein, that its expansion will have
6 See Joint Application of Idaho Power Company and Tamarack Resort LLC for Approval of an Agreement to
Provide Electric Distribution Facilities, Case No. IPC-E-O4- 12, Order No. 29589.
4 -GLANBIA ADDITIONAL COMMENTS - IPC-E.I3-09
beneficial effects on the company and its ratepayers over and above the additional revenue the
Company will realize as a result of Glanbia's expansion.
CONTRACT ISSUES
Glanbia management has a strict policy of not contracting with vendors, such as ldaho
Power on an open ended basis. That is, the agreement for this line extension will have to have a
not to exceed number that can be relied upon by Glanbia for its financial planning purposes.
Therefore, Glanbia urges the Commission to instruct Idaho Power to provide in its notice to
proceed a not to exceed cost estimate that can be relied upon without contingency. In addition, it
is Glanbia's management policy that vendors commit to complete work within a specified time
frame. Therefore Glanbia urges the Commission to instruct Idaho Power to provide in its notice
to proceed a commitment to complete the upgrade by a date certain that can be relied upon by
Glanbia without contingency. Such commitments are common, reasonable business practices
that Idaho Power should be held to account for.
Respectfully submitted this 22nd day of August 2013.
5 _CLANBIA ADDITIONAL COMMENTS - IPC-E.I3-09
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 25m day of March,2}l3,a true and correct copy of the
within and foregoing GLANBIA FOODS's ADDITIONAL COMMENTS FOR APPROVAL
OF AN ALLOWANCE was served in the manner shown to:
Ms. Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington (83702)
PO Box 83720
Boise, lD 83720-0074
Lisa Nordstrom
Donovan Walker
Idaho Power Company
PO Box 70
Boise, Idalro 83707 -007 0
lnordstrom@ idahopower. com
dwalker@ idahopower. som
Q., &^o',,
Nina Curtis
Administrative Assi stant
X Hand Delivery
_U.S. Mail, postage pre-paid
_ Facsimile
_ Electronic Mail
X Hand Delivery
_U.S. Mail, postage pre-paid
_ FacsimileX Electronic Mail
6 -CLANBIA ADDITIONAL COMMENTS _ IPC-E-I3.09
FACILITY STUDY
REPORT
Attachment - Glanbia Additional Comments - IPC-E-13-09
F'acility Study
For
GLAIT{BIA trIOODS
GooDrNG,IDAIIO
IDAEO FOWER COMPAI\IY
Revired
November 27th,2012
In
Page 1
1.0 Introduction
Glanbia Foods (Glanbia) has contracted with Idaho Power Company (IPC) to prepare this Facilify Study
Report (FSR) for the integration of an additional seven MW of power to their facility in Gooding, Idaho.
This will bring Glanbia's total load to 19 MW. This FSR documents the upgrades to the IPC electrical
system required to meet this load request and is based upon the requirements outlined in a Large Load
Feasibility Study (dated August 9,2012) produced by IPC.
2,0 Required Upgrades to the IPC Electrical System
In order to provide a total of 19 MW (nine MW existing three MW planned, seven MW requested) to
the Glanbia facility, a trew substation will need to be constuoted at that location. A new te,lr mile long
i38 kV transmission line will need to be constucted to bring power to this new zubstation. See the
attactred line route map, zubstation single line diagram, and zubstation general location drawing. These
new upgrades to the IPC eleshical system will be owned, operated and maintained by IPC and as such
are available to serve other custorners.
3.0 Engineering Overviews
Substations: Design and consfiuction of substation work will be carried out to IPC specification. The
substation will consist of a standard grounded, graveled, fenced yard. Equipment will rest on concrete
foundations with either ahmrinum or galvanized steel support stuctures, Standard IPC substation
equipment and apparatus will be used in ordor to have the ability to backup and quickly replace
equipment as well as for maintenance efficiency. Geotechnical and land surveys will be perforrred as
necessary to support design and construction. A threoleg dead-end structure will be installed for the
tlansmission line. Other equipment installed include air break switches 041B and 0428 for line
switching; lOlXand 042Kforanemergencymobiletansformerconnection; and 131X, l3|Z,and 13lL
for hansformer protection and switching. The distribution feeder lines and breakers were requested
utilizing an open bus arrangement. This arrangernent requires a control building to house the control
oquipmont, consisting of relay and communication panels, DC batteries, SCADA equipment load
centers, and cabling.
Lines: Standard tPC design and construction will be utilized. Tran$nission structures will be wood
single pole structures with a single shield wire.
Line Bjeht-of-Way (ROW): In order to avoid the high costs associated with relocating a transmission
line, IPC requires pdvate ROW easernents for those facilities. IPC will hire a licensed land zurveyor to
create the legal descriptions and confirm ownership and title for the eassment properties. IPC will
create the appropriate easement documents for the line route, and will negotiate with and secure these
easements from the property owners. The costs and time required to secure these easements oan vary
widely depending upon the disposition of the property owners.
Page 2
Communication: A dedicated phone line will be the communication path for SCADA, system
protection and control.
Protection: For feeder protection, a standard two-feeder contol and relaying panel will be equipped for
the Glanbia feeder (041A) and a future feeder. The panel will be installed in the building. The relaying
will consist of dual SEL-351A's and a shared SEL-501X. A oomplete control module will be installed
even thoug[r half of the equipme,nt will not be used until another feeder is required.
Bus differential protection consists of a standard hansformer/bus protection control and relaying panel
equipped to protect the 138/34.5kV transformer and the 34.5kV bus. The panel will be installed in the
building. The relaying will consist of dual SEL-587 relays with associated lockouts. One relay will
wrap the transfomer. The ottrer relay will wrap the transforrner, both feeders, and the 34.5kV capacitor
bank's bus.
A standard shunt oapacitor control and relaying panel will be equipped to protect ttre 138kV capacitor
bank. The panet will be installed in the building. The relaying will consist of dual SEL-421 relays. The
protection requires current inputs from two curent transformers (preferably those from a substation
class breakor), a voltage input &om a three-phase 138kV instrument transformer, and a voltage input
from the capacitor bank.
4.0 Regulations, Permittingn and Other Requirements
City Permittine: A Special Use Permit or Variance is required by the City of Gooding where the
proposed hansmission line transitions through the city boundaries. IPC will be responsible for securing
this permit.
County Pemitting: A Conditional Use Permit is required from Gooding County for the substation
portion of this project. IPC will be responsible for securing this permit,
5.0 Customer Requirements
Substation Property: Glanbia will provide right-of-way easements for access to the transmission and
distribution lines actoss their property, to and from the tPC substation. Glanbia will donate and hansfer
ownership of the property necessary for the substation to IPC. IPC will be supplying 34.5 kV power to
Glanbia out of the substation. The oost for all upgrades or modifications to IPC owned distribution
faoilities beyond the point of delivery (metering point) will be added to Glanbia's Distribution Facilities
Investment (DFD and will be zubject to amonthly facility charge.
System Requirements: The proposed factory will need to stay within the power factor requirements set
by IPC. Glanbia will be responsible for this power factor correction. The dishibution of flris reactive
compensation and single points of failure, that rnight disconnect large reactive compensation amounts or
large load values, concern IPC due to potential problems liko nuisance ftpping.
Page 3
Coordination: Glanbia shall coordinate with IPC personnel in all aspects associated with IPC facility
upgrades,
6.0 Estimated Costs
The following tables list cost estimates for the upgrades needed to accommodate the proposed project
based on the infonnation available today. Note that this estimate does not include the cost of the
custorner's equiprnent and facilities or costs associated with cornpensating for power factor. If the
power factor at the substation tansformer requires compensation for power factor or hannonics, these
facilities will also be installed in the zubstafion at the expense of Glanbia. This is discussed further in
the Power Factor Correction Options section below.
Glanbia's payrnents will not give Glanbia any ownership rights in the new substation and kansmission
facilities. All ownership of these facilities will remain with IPC.
Glanbia New 138kV Line and Substation Estimated Costs
138/34.5 kV 30 MVA Substation s2.407.205
Tax Gross Uo s746.234
Contineencv (o0%\$630,688
Estimated Costs $3.784,127
138 kV Transmission Line $2.891.699
Ta"lr Gross Uo s896.427
Contingency O0%\$7s7.62s
Estirrated Costs s4.545.7s1
Combined Substation and Trnnsmission Tap Estimated Cost $8.32e977
These cost estimates include scoping and design labor, materials, and installation labor costs, overheads,
contingency and ta:r-gross up. Please note that the ROW easement costs can vary widely depending
upon the property owners. The ROW costs in this estimate axe based upon paying50% of the estimated
value of the land. Allowance for Funds Used During Construction (AFUDC) are not included since this
project will be funded by Glanbia as it moves forward. These are estirnated costs only and final charges
to the customer will be based on the actual constructlon costs incurred, including overheads and
tax-gross up. Please note ttrat the overhead rate and tax gross-up percentages may vary during the year.
Reliability Options
As a result of the increased demand requested by Glanbiq the 138kV transmission system cannot
support their entire load in addition to existing customers' load dur{ng oertain outages at peak loading
times dr,rring winter. There are two low-probability outage scenru'ios for which this can occur:
Page4
Outage #/: Bus or breaker short circuit at the King substation (avg repair time: 10 hrs*) during high
loading levels. Frequency of outage is less than I in 10 years. This is an upper bound for impact to
Glanbia because there is a probability that the combined load will be within the still available line
cqacity, not requiring load to be shed. High loading that would require load shedding if such an outage
occurs, exists for about 1.37% of the year. An optimistic lower bound for the occurence of an outage
during this time (assuming indepe,nde'nce of the two events) would be 1 in 730 years. We would expect
the actual experience to be more like the lower bound than the upper bound.
Outage #2: Increased outage duration due to a sustained short circuit on the 6.9 mile section of the
138kV ffansmission line between the I(ng substation and the Toponis tap during higlr loading on the
138kV system, In this scenario, Glanbia would experience an outage until this section of transmission
line is sectionalized for repairs (average seotionalizing time: 30-60 mins*). After the sectionalizing
occlus, the present Glanbia load level oould be restored. However, with the additional load level,
restoration of Glanbia will create low voltage at Glanbia and for other customers fbd from the 138 kV
tansmission line during peak loading in winter. Glanbia could be partially restored, up to nine MW in
this soenario, until repairs are made (average repair time : 6.9 hrs*) or until other affected customer
loading drops to a level for whic,h Glanbia could be completely restored. Frequency of outage is less
than 2 in 1 1 .7 years. As in the case for outage 1 , this is an upper bound for the rate of events that affect
Glanbia- The optimistic lower bound is once per 427 yeam. Again, we expect the actual experience to
be closer to the lower bound.
One of the following options must be chosen in order to ensure reliability to customers is not adversely
impacted due to the requested load increase,
Option Descriotion Cosl**
I IPC automatically sheds entire Glanbia load
at proposed substation. This prevents the
shedding of residential customers on other
oarts of the IPC 138kV ffansmission system.
$0
2 Glanbia sets up intelligence to receive signal
to trip non-critical load such that no more
than gMW of critical load remains online
aftel receiot of this sisnal.
Equipme,nt firnded, owned,
and rnaintained by Glanbia
3 Install 20 MVAr capacitor bank on the
138kV side ofproposed substation. This will
onable sorvice to be maintained during
Outage #1 and will allow total load
restoration after the 138kV systern is
sectionalized duine Outaee #2.
$831,400
*All outage data is derived from electrical systern equipment historical outage data. This data may or
may not reflect future perfornance.
**Cost estimates listed include20% contingency, overheads and tax gross-up
Page 5
Power Factor Correction Options
Idaho Powff has a design standard that requires all distribution substations to operate at unity pow€r
factor at peak substation loading. With Glanbia's curent power factor of 92% and the unknown power
factor of the new equipment, IPC will require powe,r factor correction. With the assumption that
Glanbia's peak demand will be l9MW at a9V/o power faotor after the increase in load, the following
are options for correoting the power factor to unity.
One of the following options rnust be chose,n:
Option Description Cost**
1 Install a single 9.0 MVAr 138kV capacitorbank on
the hish side of the transformff at Glanbia.
$714,400
2 Install 9.0 MVAr 34.5kV capacitorbank in two
4.5MVAr separately switchable sections at the
proposed substation. Based on simulations,
harmonic de-tuning reactors or other mitigation
measures are required to provide IEEE-519
oornpliant senvice. This option will provide
increased substation transformer capacity for fufure
growth due to reactive power correction on the
hansformer low side.
$991,700 (includes the cost of
harmonic de-tuning reactors)
3 Glanbia corrects their power factor to unity within
the plant.
Equipment funded, owned,
and maintained bv Glanbia
**Cost estimates listed include}O% contingency, overheads and tan gross-up
7,0 Estimated Timeline
The schedule for IPC facility upgrades depends on the completion of a signed agreement, funding, and
authorization to proceed.
The following table outlines the sequence of work as we envision the scoping design, and construction
to take piace for the constuction of the initial zubstation and related lines without any of the available
options prese,nted:
Gla Substation Schedule Estimanbia te:
Siened Aeresment with IPC for Construction of Substation 12/14/2012
Receive Construction Fundine t2lzv20t2
Proiect Scooe Comoleted 0u1.81201,3
Desien Ifick Off U22120t3
Desisn Comolete 712112013
Pre-Construction Moetins 8tU20t3
Construction Start 911712013
Test & Commission 3n3t2014
Proiect In-Service 312312014
Final Construction Cost True-Up sl30l20t4
Page 6
Tlris schedule is based on a signed agreement being cornpleted by December L4,2Ol2 and receiving
funding by Decemba 2t, 2A12. [f the,se dates slip, the overall schedule will be changed to
acc,omrnodate additional time and these cost estimates may need to be updated, If any of the available
options me chosen, this schedule will need to be modified to take into account the additional work and
time required. Schedule dates are estimated milestones and aro not guarartees. Weather, material
availability, ROW easement acquisition, and permitting restriction could adversely impact the schedule.
8.0 General Assumptions
System: The new IPC 138 kV line that will serve the proposed substation will have adequate capacity to
serrre the project.
Lines: A new 138 kV line will extend the existing Toponis Tap of the King to Wood River 138 kV line
to provide the energy source for the new substation. The length of this extension will be approximately
10 miles. The new 34.5 kV overhead distribution line(s) will come from the substation. The length of
these distribution lin{s) and financing will depend on the location of the substation and the metering
points. It is assumed that ROW easements for the hansmission and distribution lines can be obtained in
a timeframe that does not impact the schedule. A Special Use Perrnit or Variance may be required for
the portion of transmission line extension that passes through the city limits of Gooding enroute to the
substation.
Substations: It is assumed that the new substation will be on property owned by Glanbia and the
required substation property will be given to IPC and ownership transferred to IPC at no cost. It is
assurned that the needed properties can be obtained in close proximity to the locations identified. A
Minor Land Division application must be approved prior to tansfeming ownership of the property to
Idaho Power and a Conditional Use Permit must be approved prior to construction of the substation.
9.0 Outside of IPC Control
There are numerous iterns outside the conhol of IPC whioh could irnpact the execution of the planned
work in this Facility Study, Any of these items could necessitate changes that could impact both cost
and schedule.
o Obtaining Permits, lmposed Restrictions/Requirernentso ObtainingRight-of-wayo MaterialAvailabilityo Weather
10.0 Conclusions / Next Step
The requestod large load interconnection to IPC's system was investigated and the results of this work
inclicate that the existing IPC system can bo upgraded to zupport the 19 MW required. The next step in
the process to connect this large load would be to ueate a contract with tPC for the execution of the
work. Mike Pohanka can get this process started.
Page 7