20160928Reply Comments.pdf

RECEIVED
2013 SEP 28 PM 4: I 7
LISA D. NORDSTROM 11 , : i · , \jDLIC
·; -; 1~0\{MISSION Lead Counsel
[e-mail]
September 28, 2016
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
An IDACORP Company
Re: Case No. IPC-E-16-18 -Application for Approval of an Agreement for Electric
Service Between Idaho Power Company and the United States Department
of Energy -Idaho Power Company's Reply Comments
Dear Ms. Jewell:
Enclosed for filing in the above matter please find an original and seven (7) copies
of Idaho Power Company's Reply Comments.
LDN:kkt
Enclosures
Very truly yours,
/i,;,__,12_.1[ ~
Lisa D. Nordstrom
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
RE CE IVED
201c SEP 28 PH 4: 17
. JLI C -;J'.·.i\MISSI ON
COMPANY'S APPLICATION TO APPROVE ) CASE NO. IPC-E-16-18
AN AGREEMENT FOR ELECTRIC )
SERVICE WITH THE UNITED STATES ) IDAHO POWER COMPANY'S
DEPARTMENT OF ENERGY ) REPLY COMMENTS
________________ )
Idaho Power Company ("Idaho Power" or "Company") respectfully submits the
following Reply Comments in response to comments filed by the Idaho Public Utilities
Commission ("Commission") Staff ("Staff") on September 21, 2016. Idaho Power
appreciates the comments provided in this case and Staff's recommendation that the
Commission approve the Application for a new electric service agreement ("2016
Agreement") with the United States Department of Energy ("DOE").1 In these Reply
Comments, the Company responds to and clarifies an issue raised in Staff's Comments.
1 Staff's Comments, p. 2.
IDAHO POWER COMPANY'S REPLY COMMENTS -1
I. BACKGROUND
On page 2 of its Comments, Staff notes that the terms set forth in the 2016
Agreement remain consistent with the current Agreement approved by the Commission
in Order No. 32354 ("2011 Agreement"). Staff observes that previous agreements and
the proposed 2016 Agreement require the Company to maintain equipment owned by
another entity, in this case the DOE with facilities at the Idaho National Laboratory
("INL"). "Staff believes that any liability that comes as a result of the Company
maintaining and operating equipment that the Company does not own should be at the
Company's risk .... "2 In Staff's recommendation to the Commission, Staff states that it
"has no concerns with the proposed agreement, provided that any liability that comes
from maintaining and operating non-Company owned equipment is not borne by other
ratepayers. "3
II. IDAHO POWER'S RESPONSE
The Company is concerned that Staff's position overstates the Company's
responsibilities for the DOE-owned equipment. The identified equipment is located in
the Antelope Substation which is jointly-owned by Idaho Power and PacifiCorp and
operated by PacifiCorp. In the Agreement, the DOE acknowledges that PacifiCorp is
the operator of the Antelope Substation, and that Idaho Power has no operational
control over any of the DOE-owned equipment and shall not be liable to DOE for any
damage to such equipment, or injury to person or property that may result from DOE's
or PacifiCorp's failure to properly operate such equipment in accordance with Prudent
2 Id.
3 Staff's Comments, p. 3.
IDAHO POWER COMPANY'S REPLY COMMENTS -2
Utility Practice.4 Any liability that may arise due to operation of the equipment is
governed by contractual arrangements between PacifiCorp and DOE, and will not fall to
Idaho Power's other customers.
In the 2016 Agreement, as well as earlier iterations of this special contract, Idaho
Power is responsible for maintaining the facilities set forth in Attachment 1 of the 2016
Agreement. The Company's concern is that Staff's additional recommended provision
restricts this special contract more than any of the previous Commission-approved
special contracts between the Company and the DOE, which contained the same
maintenance provisions. Maintenance of the facilities set forth in Attachment 1 of the
2016 Agreement (which are identical to the facilities listed in the 2011 Agreement) is
necessary for the Company to safely provide reliable service to the INL site.5 As was
the case in prior agreements, the parties agree that the actual costs incurred by the
Company to maintain the DOE-owned equipment, including repair, removal,
replacement, or relocation, will be billed directly to the DOE; therefore, customers are
not at risk for costs of maintaining the DOE-owned equipment.
To provide further clarification, the maintenance section of the 2011 Agreement
was moved out of the 2016 Agreement into a separate Attachment 1 in order to facilitate
Commission approval of the 2016 Agreement now, and allow future anticipated changes
in the ownership and maintenance arrangement to occur without the need to file a
revised special contract with the Commission within a matter of a few months. Idaho
Power, the DOE, and PacifiCorp have negotiated but not executed an agreement to
4 Attachment 1 to Other Terms and Conditions -Continuation Page to Exhibit "A" Authorization
No. DE-DT0011152 Under GSA Areawide Contract No. GS-OOP-09-BSD-0651 for Electric Service Idaho
Power Company and U.S. DOE -Idaho Operations Office, p. 3.
5 Attachment 1 to Other Terms and Conditions -Continuation Page to Exhibit "A" Authorization
No. DE-DT0011152 Under GSA Areawide Contract No. GS-OOP-09-BSD-0651 for Electric Service Idaho
Power Company and U.S. DOE -Idaho Operations Office, pp.1-2.
IDAHO POWER COMPANY'S REPLY COMMENTS - 3
transfer title of the DOE-owned Antelope substation equipment to Idaho Power and
PacifiCorp. This transfer of title agreement was to become effective upon the execution
and approval by the Commission of the 2016 Agreement; however, Idaho Power
requested additional time to determine whether or not it will execute the agreement and
take title to the DOE-owned equipment. No later than March 31, 2017, Idaho Power will
notify the DOE in writing if it will take title to the DOE-owned equipment. If PacifiCorp or
Idaho Power agrees to take title, either separately or jointly, such title will pass no later
than July 31, 2017. Upon such a transfer of title, the DOE understands that Idaho
Power will charge the DOE for the maintenance of the then formerly DOE-owned
equipment through a facility service charge or similar mechanism.
In addition, it should be noted that this 2016 Agreement actually provides Idaho
Power and its customers with more protection from potential liability exposure than past
agreements. Section 7, Limitation of Liability, was not included in previous
Commission-approved agreements between the Company and DOE, but was
incorporated into the 2016 Agreement to reflect the specific limitation of liability
language approved by Order No. 33071 in Case No. IPC-E-13-23. In that docket, the
Company argued that Idaho Power and its other customers should not be exposed to
undue risk of unlimited direct damages and consequential damages related to a special
contract customer's business operations. Incorporating the Commission's guidance
offered In Order No. 33038, Idaho Power proposed revised limitation of liability
language consistent with prudent energy contract procedures and market standards that
was subsequently approved by the Commission in Order No. 33071. This language
was not included in previous special contracts, and its inclusion in the 2016 Agreement
IDAHO POWER COMPANY'S REPLY COMMENTS - 4
provides Idaho Power and its other customers with more protection than the current
2011 Agreement.
Ill. CONCLUSION
Idaho Power appreciates the opportunity to respond to comments filed in this
case and respectfully requests that the Commission issue an order approving the
agreement for electric service between Idaho Power and DOE, without any caveats
regarding liability.
DATED at Boise, Idaho, this 281h day of September 2016.
~/Q ~ AD.NoRDST
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S REPLY COMMENTS - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 28th day of September 2016 I served a true and
correct copy of IDAHO POWER COMPANY'S REPLY COMMENTS upon the following
named parties by the method indicated below, and addressed to the following:
Commission Staff
Daphne Huang
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-007 4
IDAHO POWER COMPANY'S REPLY COMMENTS -6
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