20170915final_order_no_33872.pdf

Office ofthe Secretary
Service Date
September 15,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF TIlE APPLICATION )
OF IDAHO POWER COMPANY FOR A )CASE NO.IPC-E-16-28
CERTIFICATE OF PUBLIC CONVENIENCE )
AND NECESSITY TO CONSTRUCT )
SYSTEM IMPROVEMENTS FOR WOOD )ORDER NO.33872
RIVER VALLEY CUSTOMERS )
On November 8,2016,Idaho Power Company filed an Application for a Certificate
of Public Convenience and Necessity (CPCN)to make system improvements and to secure
adequate and reliable service to customers in the Wood River Valley.Specifically,the Company
requested a CPCN to construct a new (second)138 kilovolt (kV)transmission line and related
facilities “to provide redundant service from the Wood River substation near Hailey into the
Ketchum substation.”Application at 1-2.The Company asked that the CPCN permit the
particular line route and facilities identified in testimony accompanying the Application.Id.at 2.
The Commission received testimony and comments from numerous intervenors and
members of the public,both in writing and in technical and public hearings.We are grateful for
the effort by parties and members of the public to provide a full and complete record for this
proceeding.Having considered the record,we issue this Order granting Idaho Power the
requested CPCN for a second 138 kV transmission line as requested in the Company’s
Application.This Order does not constitute approval of costs incurred for ratemaking purposes.
BACKGROUND
The Commission issued a Notice of Application and granted Petitions to Intervene
from Kiki Tidwell;Laura Midgley;the Sierra Club;Idaho Conservation League;the City of
Ketchum;CoxCorn,LLC;Rock Rolling Properties,LLC;and Rock Rolling Properties #2,LLC.
Order Nos.33657,33675,33683,33711 and 33760.The Commission conducted a public
hearing in Ketchum,Idaho on July 26,2017,and a technical hearing in Boise,Idaho on August
8,2017.In addition to the testimony filed by parties and taken at the technical and public
hearings,the Commission received and the record includes over 30 written comments from
members of the public,including local governments,other entities and associations,and
individuals.
ORDER NO.33872 1
IDAHO POWER’S APPLICATION AND SUPPORTING TESTIMONY
Idaho Power applied for a CPCN to construct a second transmission line from the
Wood River substation near Hailey into the Ketchum substation,asserting the line is necessary to
secure reliable and adequate service to its customers.Application at 1 -2.In support of its
Application and in response to other parties’positions,the Company presented testimony from
four witnesses:Manager of Regulatory Projects in the Regulatory Affairs Department,Michael
Youngblood;Planning Manager in the Customer Operations Engineering and Construction
Department,David Angell;Customer Operations Project Manager in the Customer Operations
Engineering and Construction Department,Ryan Adelman;and Vice President of Transmission
and Distribution Engineering and Construction and Chief Safety Officer,Vern Porter.
1.Redundant Line needed to ensure Reliable Service
The Company asserted that the existing transmission line serves over 9,000 customers
in the North Valley,including the resort communities of Ketchum and Sun Valley,and the Sun
Valley ski resort.Id.at 4.According to the Company,although its sole existing radial
transmission line has a good record of reliability it has experienced sustained outage line events,
is aging,and requires reconstruction.Id.at 2,16;Tr.at 432.The Company estimates the
existing transmission line “will result in average sustained outages of more than 209 minutes per
year.”Application at 5;Tr.at 225.Outages can be caused by,“among other things,vandalism,
inclement weather,wood decay,woodpecker damage,avalanche,fire,and micro-burst wind
events.”Application at 4;Tr.at 203.The risk of power outages and economic impacts
therefrom is heightened when tourism activity,and thus electrical demand,are at their peak.
Application at 4-5;Tr.at 20 1-03,224.Peak demand swells in the North Valley at the height of
tourist seasons in summer and winter,but especially winter.Tr.at 201.
The Company stated that,under reliability standards established by the North
American Electric Reliability Corporation (NERC)and approved by the Federal Energy
Regulatory Commission (FERC)in October 2013,the maximum non-consequential load loss for
a single transmission line is 75 MW.Id.at 250-52.Because the simultaneous loss of two
transmission lines “has a much lower probability than the loss of one transmission line,the
NERC reliability standards allow for unlimited non-consequential load loss for the loss of two
transmission lines.”Id.at 252;see also id.at 255 (stating “NERC reliability standards embody
the concept of redundant service and elimination of radial service as required reliability
ORDER NO,33872
improvements,”).Idaho Power states it typically initiates and constructs a second transmission
source and transformer in an area when peak load for the area’s substations is projected to
surpass 40 megawatts (MW),thus exceeding NERC’s reliability standard.Application at 4-5;Tr,
at 223,244-45.The winter 2007 peak load for the Ketchum and Elkhorn substations serving the
North Valley was 63 MW.Application at 4.
2.History and Community Outreach
Idaho Power obtained a Certificate (No.272)to construct a second transmission line
to the North Valley,and related facilities,in 1974.Application at 6;Order No.11315.In 1995,
the Company participated in public meetings about the proposed construction of a second
transmission line,including an open house for which it sent invitations to more than 8,000 Idaho
Power customers.Application at 6.There was considerable public opposition to the proposal,
based on the route that the transmission line would take,aesthetic impacts,perceived health and
safety issues,and the requirement that the incremental cost of placing the line (in part or all)
underground be funded locally.Id.at 7.The Company concluded that the line was no longer
needed nor feasible.Ex.103 at 4,7.At the Company’s request,the Commission cancelled
Certificate No.272,finding that “the present public convenience and necessity no longer
require[dj construction of a second 138 kV transmission line to provide adequate,efficient,just
and reasonable service to the Ketchum/Sun Valley area.”Order No.26107.
In 2007,the Company initiated a Community Advisory Committee (CAC)to develop
the Wood River Valley Electrical Plan,a comprehensive plan for future transmission facilities in
the Wood River Valley,including the North Valley area.Application at 8-9.In 2011,the CAC
recommended that Idaho Power construct the second 138 kV transmission line.Id.at 9.From
2012-2014,the CAC took additional input from the community,including the City of Ketchum
and the Ketchum Energy Advisory Committee,and reaffirmed the need for a second energy path
into the North Valley.Id.;Tr.at 205-14.
3.A Temporary Line in Lieu of a Redundant Line would be Inadequate
The Company stated that the existing transmission line must be rebuilt,and that its
reconstruction would be best facilitated by building a redundant line.Application at 16.
According to the Company,the existing line cannot be rebuilt while energized,and
reconstruction “would require as many as 40 eight-hour line outages ...[as well as]a six to 12
week continuous outage.”Id.at 17;Tr.at 226-27.However,a temporary overhead line would
ORDER NO.33872 3
face insurmountable obstacles (siting,excessive costs,opposition to visual impacts).Tr.at 434-
35.“Idaho Power views routing any overhead transmission line through the city of Ketchum,
whether new or temporary,as not viable for many of the same reasons a permanent overhead
transmission line is not a viable option.”Id.at 434.Also,if a temporary rather than a redundant
line were built,the Company would be able to salvage some,but not all of the materials.
Application at 17.The Company thus asserted,not only would a temporary line (absent a
redundant line)fail to secure reliable and adequate service,it would also involve wasted
investment,preliminarily estimated at roughly $4 million.Id.;Tr.at 359-60.
4.Redundant Service Options
Idaho Power stated it investigated four configurations that would provide the needed
redundancy.Application at 17.Each configuration utilizes a “Common Route”that would
extend overhead from the Wood River substation near Hailey,north along Highway 75 for about
7.5 miles,to the area near Owl Rock Road and south of the St.Luke’s Medical Center.Id.at 18.
From there,north to the Ketchum substation,they would differ.Id.Idaho Power characterized
the four configurations using the following descriptions:(1)overhead transmission;(2)
underground transmission;(3)overhead distribution;and (4)underground distribution.Id.at 18-
23.
Overhead Transmission.Idaho Power asserted that “the Company’s traditional
practice to reduce the likelihood of sustained outages would be to construct multiple overhead
transmission lines ...or to implement distribution circuits with tie switches.”Tr.at 112,230.
The Company determined the overhead transmission route was not viable due to siting obstacles
such as geographical constraints (Id.at 230)and local ordinances (id.at 230-31);excessive costs
such as condemnation of private property (Id.at 236,417)and installation of engineered steel
structures (Id.at 361,416);legal obstacles such as need to secure easements and likely litigation
(Id.at 445,491);and strong community opposition to visual impacts (Id.at 236).Application at
18-20;Tr.at 237.The Company asserted that,while theoretically possible from an engineering
perspective,an overhead transmission line through downtown Ketchum would be infeasible from
a practical perspective.Tr.at 444-48.The Company posited that there may be no cost at which
it could obtain the rights-of-way required to construct an overhead transmission line through
downtown Ketchum.Id.
ORDER NO.33872 4
Underground Transmission.Idaho Power stated that the CAC recommended this
option.Application at 20.The Company asserted the underground transmission option “would
support a build-out demand in the North Valley area of 120 MW”—twice the area’s approximate
peak of 60 MW.Id.;Tr.at 381-82.The Company estimated this option would cost between $30
million and $35.7 million,depending on the location where the transmission line would be
underground.Application at 20-21.The Company examined three potential points where the
line would transition from overhead to underground transmission:Elkhom Road,Hospital
Drive,and Owl Rock Road.Id.at 20.The Company’s preferred transition point was Elkhorn
Road (also referred to as transition point 1),the lowest-cost option at $30 million.Id.at 21;Tr.
at 387.
Although Idaho Power acknowledged it “currently does not have any underground
transmission line anywhere on its system,”the Company noted that underground transmission is
not a new technology,and is used by utilities elsewhere in the country.Tr.at 382.
Overhead Distribution.Idaho Power stated this option would include a new
substation,five overhead distribution circuits,and acceleration of a 2018 planned Ketchum
substation distribution circuit.Application at 21.The Company noted that the overhead
distribution option would provide “only 60 MW of backup service for the existing customers.”
Id.at 22;see Tr.at 382.The Company estimated the option would cost between $29.1 and $31.1
million,and described it as a “base case...consistent with the Company’s standard practice of
providing redundant electrical service to an area.”Application at 22;see Tr.at 112.
Underground Distribution.The Company described this option as substantially
similar to the overhead distribution option,but with greatly reduced visual impacts,and an
estimated cost between $43.4 and $45.9 million.Application at 22-23.The Company
determined that the underground distribution option’s cost was excessive and ruled it out as not
viable.Id.at 23;Tr.at 3 84-85.
5.Idaho Power’s Proposal:Underground Transmission
The Company selected the underground transmission option with undergrounding at
Elkhorn Road as the proposed configuration for its requested CPCN.Application at 23-24.The
Company described the route as an “economic equivalent to the standard overhead distribution
base option.”Id.at 21;Tr.at 389,396.In the event that local governmental entities require
undergrounding at a point other than Elkhorn Road to accommodate aesthetic preferences,the
ORDER NO.33872 5
Company asked “that the incremental cost difference between the overhead distribution and
such]underground transmission configurations be assessed to the cities of Ketchum and Sun
Valley and to Blame County.”Application at 24;Tr.at 319,398.Idaho Power asserted it was
not seeking any specific rate recovery in its Application,but would “do so in a proper rate
recovery proceeding in the future.”Application at 23.As to alternative sources (such as diesel
engine,gas turbines,and photovoltaic plus battery energy storage systems),Idaho Power
asserted they would be less reliable,and the costs significantly higher,than the Company’s
proposed line.Id.at 9;Tr.at 215-23.
6.Rebuttal to Other Parties’Concerns
Sierra Club raised concerns about the proximity of the proposed and existing
transmission lines.In response,Idaho Power clarified that the proposed and existing lines do not
cross nor do they share common towers.Tr.at 256-57,3 15-16;Exhibit 9.The Company
asserted that “proximity’is not prohibited nor addressed by NERC reliability standards beyond
a common tower configuration.”Tr.at 257.According to the Company,although one would
expect “two circuits on a single tower ...to go out of service at some point in time,”two
independent tower-built transmission lines,even if they are “right next to each other[,1 ...will
not be subjected to the same outage.”Id.at 309.Also,reliability gains from adding a second
line are not lost because the two lines originate in the (same)Wood River substation.Id.at 257.
This is because the Wood River substation itself is “sourced by two redundant transmission
sources of energy,”and because substations,by virtue of their construction,“have much less
exposure to line events”and fail much less frequently than transmission lines.Id.at 257-58.
The Company emphasized that its proposal to build a redundant line is “to meet [the
Company’s]reliability and service quality standards that are consistent with other utilities as
well as national standards.”Id.at 253.According to the Company,no matter how reliable the
existing line has been,a second transmission line is necessary to address the North Valley’s
growth,difficult-to-access terrain,substantial seasonal resort economy,and “the risk of harm
from potential long-term outage and the potential catastrophic effects of a long-term outage
during extreme winter conditions when electric load peaks.”Id.at 253.
7.Idaho Power’s Requested Relief
The Company thus asked that the Commission grant its requested CPCN authorizing
it to construct a redundant transmission line to ensure reliable and adequate service to the North
ORDER NO.33872 6
Valley.As requested,the line would extend overhead from the Wood River substation,then
transition underground near Elkhom Road,and continue underground to the Ketchum substation.
STAFF AND INTERVENOR TESTIMONY
A.Commission Staff
Commission Staff argued that the Company failed to demonstrate the need for a
redundant line at this time,but if the Commission were to approve a redundant line,Staff
recommended that the base case be the overhead transmission option rejected by the Company.
1.Redundant Line not justified
Staff asserted the Company failed to show that the benefits of a second line justified
the $30 million cost of the Company’s proposed route.Id.Staff examined the Company’s
rationale for cancelling its CPCN in 1995 for a project that included a second Wood River
Ketchum line.Id.Part of that rationale was an assessment that the risk of avalanches,fires,and
other unplanned events were low,and that the Company’s maintenance and emergency plans
could quickly repair any damage caused by such events.Id.at 631.Staff testified that,in light
of the risk assessment,the Company found a second redundant line was not needed.Id.Staff
asserted the Company provided no evidence that its assessment of risks has changed,or that
response time to repair damage has increased,since 1995.Id.at 652.Accordingly,Staff argued
the Company did not show that a redundant line is needed nor that ratepayers should bear the
cost.Id.at 63 1-32,652.Although Staff agreed with the Company that the existing line is aging
and needs to be replaced,Staff believed that could be accomplished with a temporary line at a
lower cost,rather than with a $30 million permanent redundant line.Id.at 632-3 5.
2.The Base Case,if any,should be Overhead Transmission
If a second line were approved,Staff recommended that the base case should be
overhead transmission (through downtown Ketchum)rather than the Company’s proposals
(overhead distribution,or underground transmission as its economic equivalent).Id.at 638,640,
643.Staff acknowledged that the Company determined overhead transmission was not viable,
but asserted that —per the Company’s own analysis —there are options for the route that are
technically feasible and may not require easements (such as the Davit Arm design described in
Exhibit 110).Id.at 63 9-40.Staff indicated that the Company rejected these options because of
local aesthetic concerns.Id.at 640.Staff noted that the Idaho Legislature enacted a funding
ORDER NO.33872 7
mechanism for communities that prefer undergrounding of utilities to pay for doing so via local
improvement districts under Idaho Code §50-2503.Id.
Staff testified it was difficult to see how the Company’s base case,overhead
distribution,would provide the North Valley any noticeable reliability improvement.Id.at 642.
Staff asserted that with a capability of 60 MW,overhead distribution may not be capable of
serving the North Valley’s peak load (63 MW).Id.at 641.Further,overhead distribution would
not decrease the frequency of outage events,but might decrease their duration.Id.Finally,
overhead distribution would rely upon remotely-controlled automated distribution ties,which
Staff testified may not be a standard practice for the Company.Id.at 641-42.Considering that
overhead distribution was estimated to cost $30 million,and that the existing line could be
rebuilt using a temporary line at a much lower cost,Staff asserted the overhead distribution
option appeared to be an “inadequate,non-standard alternative used to justify the high cost of
[the Company’s]preferred alternative.”Id.
As to the underground transmission option (with undergrounding at Elkhorn Road),
Staff argued that the Company’s analysis did not fully address the costs and logistics of
underground transmission.Id.at 643-45.Staff stated it was $1 1.5 million more expensive than
the “far more standard practice of using Overhead Transmission.”Id.at 643.Further,Staff
observed that the Company has no experience repairing underground transmission lines (the
Company said it would use qualified contractors,but does not currently have a list of such
contractors).Id.Finally,Staff noted that the Company estimated the cost of annual operations
and maintenance for the underground transmission option to be twice that of the overhead
transmission option.Id.at 644.
As to local generation and distribution options,Staff agreed with the Company’s
analysis which concluded that the costs of each of these options exceeded the costs of the
proposed redundant line.Id.at 645.
In sum,Staff testified that the Company did not demonstrate that a redundant line
would provide a significant reliability benefit to justify its cost.Id.at 646-47.Staff concluded
that the existing line should be rebuilt using a temporary line to provide power to the North
Valley during the reconstruction.Id.Staff recommended that overhead transmission be
considered the base case if the Commission approved a redundant line,and that any additional
costs of undergrounding be funded locally.Id.at 647.
ORDER NO.33872 8
B.Sierra Club
Sierra Club testified that while the existing line is aging and needs to be rebuilt,the
Company has “failed to show that building an additional transmission line is the most cost-
effective solution available.”Tr.at 516.According to Sierra Club,the Company’s proposal
“does not contain enough relevant information about alternative solutions to reliability problems
in this relatively remote and mountainous portion of the company’s service territory”and as
such,an “informed decision on how to best ensure reliable and adequate service”cannot be
made.Id.at 518.
Sierra Club expressed concern that the proposed redundant line may not achieve the
reliability goal,particularly because the existing and proposed new lines would run near each
other at certain points and would source out of the same substation,which would continue to be a
single point of failure.Id.at 524-26.Further,Sierra Club argued that the existing line has had
excellent reliability,and that rebuilding that line,particularly with steel poles,would allow that
excellent reliability to continue.Id.at 531.Given the existing line’s excellent reliability,Sierra
Club asserted that a redundant line would do little to improve reliability and would not justify its
costs.Id.at 534.Finally,Sierra Club argued that a redundant line is not needed to serve load
growth,and even if additional capacity were needed,over and above what the existing line
provides,the existing line could be rebuilt with larger conductor.Id.at 534-4 1.
Sierra Club also asserted the Company’s analysis of alternative resources (including
distributed generation and batteries)was deficient and that it was undertaken with a
predetermined outcome—its preferred alternative.Id.at 541-43.According to Sierra Club,the
Company used its redundant line proposal as the baseline against which alternatives were
compared,rather than comparing alternatives against a need for reliable service.Id.at 542-45.
Sierra Club also argued the Company’s analysis overestimated costs and failed to evaluate all
benefits,among other deficiencies.Id.
Sierra Club disagreed with Staffs opinion that the Company’s distributed generation
analysis was sufficient,and suggested the analysis failed to explore the “reasonable cost for
general ratepayers to ensure reliable service to the [North Wood River Valley].”Id.at 567-68.
To remedy these deficiencies and supplement the record,Sierra Club recommended that a
technical advisory council or other mechanism be established to collect the necessary data or
complete additional studies.Id.at 553-54,588.
ORDER NO,33872 9
C.CoxCorn,LLC
CoxCom (Cox)testified that it provides advanced digital video,Internet,telephone
and home and business security and automation services in Blame County,and its subscribers
include residential,business and government entities,schools,hospitals,and health care
providers,Tr.at 497.Cox explained that it is a significant customer of Idaho Power,which
powers Cox’s entire network and facilities.Id.at 503.Cox stated it has a pole attachment
agreement with the Company under which Cox attaches its equipment to the Company’s poles
along Highway 75 and the route of the proposed redundant line,in exchange for compensation.
Id.at 503-4.If the Application is granted,Cox asked that the Commission ensure that the
physical facilities authorized can continue to accommodate attachment of Cox’s equipment.Id.
at 507-9.
D.Ciz)ofKetch urn
The City of Ketchum advocated for a “true consideration of alternatives”and
questioned whether the Company has “truly evaluated and considered alternatives and feasibility
costs that can achieve goals of resiliency and redundancy without simply reverting to building
more lines.”Tr.at 5 99-600.The City provided a proposal (as part of public comments in this
docket)for an independent analysis of “[b]etter grid integration,accommodation for growing
local generation trends,and...storage.”Id.at 599-602.
The City stated it shares the Company’s reliability goals,but believes the Company
has overlooked the benefits of rebuilding the existing line with a temporary line and considering
other alternatives.Id.at 603.The City agreed with Sierra Club’s suggestion for the
establishment of a technical review committee,and it and its Ketchum Energy Advisory
Committee would be interested in participating in such a committee.Id.at 605.
The City argued it is premature to consider assigning costs of undergrounding a
redundant line to certain communities.Id.The City indicated that undergrounding may be
appropriate for reasons other than aesthetics—for example,for healthy,safety,and economic
reasons.Id.at 605-6.While the City “accepts that some level of local responsibility for
incremental costs to address purely local concerns may be necessary,”first there should be
“better analysis of such cost alternatives and actual needed construction.”Id.at 609.At the
technical hearing,the City’s witness Mayor Nina Jonas testified that if local funding were
ORDER NO.33872 10
required,a franchise fee or payments based on use,rather than property values,might be more
palatable to North Valley constituents,Id.at 611.
In response to Cox’s testimony,the City indicated that “[h]eightening of poles should
be restricted to a minimum to preserve the character of these communities”and that “issues
pertaining to co-location should be of lower priority until the multitude of technical review
concerns are addressed.”Id.at 607.The City asserted that the high-priority issues in this case
should be resiliency and the source of power.Id.at 594.When outages have occurred or have
been at risk of occurring,the outage sources have been south of the Wood River substation,so a
redundant line as proposed in this case would not resolve the true reliability issue.Id.at 613.
The City conveyed its citizens’desire for resiliency and the ability to tap into an available source
of energy when the primary source is unavailable.Id.at 615.The City acknowledged that there
are unanswered questions about siting alternative generation sources,but nonetheless asked for
further discussion about options and reliability as an alternative to a redundant transmission line.
Id.at 617-18.
In sum,the City “supports more sophisticated analysis of technological advancement
and a reluctance to rush into overbuilding traditional infrastructure just because that is the way it
has been done before.”Id.at 608.
E.Public Testimony and Comments
The Commission held a public hearing in Ketchum,Idaho on July 26,2017,to take
testimony from members of the public.Twenty-seven members of the public testified at the
hearing.In addition,the public had the opportunity to submit written comments for the record at
any point during this case.We received written comments over the course of the case from more
than 30 individuals or organizations (some of whom also provided testimony at the public
hearing).
Testimony or comments from 12 individuals or organizations expressed support for
the proposed redundant line.These individuals and organizations,including the City of Sun
Valley,the St.Luke’s Wood River Medical Center,the Sun Valley Resort,homeowners’groups,
and an association of emergency responders,agreed that a redundant line is needed to support
public safety and welfare and to mitigate the economic and other risks of an outage of the
existing line.For example,testimony described that the St.Luke’s Wood River Medical Center
currently does not have enough backup generation available,in the event of an outage of the
ORDERNO.33872 11
existing line,to power certain diagnostic machines.Tr.at 29.The redundant line would
increase the likelihood that the Medical Center could continue to provide all its services even if
the existing line suffered an outage.Id.Other comments and testimony described other health
and safety and economic risks from a sustained outage of the existing line in winter,including
concerns about the impact of an outage on emergency responders and concerns about frozen
pipes and property damage and other economic impacts.Some of the commenters in support of
the line also supported further exploration of distribution generation and alternative energy
sources in addition to construction of a redundant line.
Testimony or comments from a few individuals or organizations did not explicitly
support or oppose the proposed redundant line,but instead asked questions or requested more
analysis.One acknowledged the complexity of the issues in this case and expressed sympathy
for and understanding of opinions on all sides.
Testimony or comments from 19 individuals and organizations,including the City of
Ketchum,opposed the proposed line or questioned the need for it.Many of these individuals and
organizations expressed that a redundant line is not needed,due to the excellent reliability of the
existing line and the ability to reconstruct it using a temporary line,or that a redundant line
would not solve outages that occur south of the Wood River substation.Many called for
additional analysis of other options,including both rebuilding the existing line using a temporary
line and alternative energy options.Many expressed a desire for additional resiliency in the
Wood River Valley in the form of micro-grids and local generation such as roofiop solar and
energy storage.Commenters also expressed concern about the cost of the proposed redundant
line and its aesthetic (impact on the view shed along Highway 75),economic (including negative
impact on property values and tourism),and health and safety impacts.Some commenters also
objected to the Company’s proposal to underground just a portion of the proposed line at all
ratepayers’expense,and suggested that the entire line should be underground.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction in this case under its express statutory authority to
investigate rates,charges,rules,regulations,practices,and contracts of public utilities and to
determine whether they are just,reasonable,preferential discriminatory,or in any way in
violation of any provision of law,and may fix the same by Order.Idaho Code §6 1-502 and
61-503.By law,public utilities shall “furnish,provide and maintain such service,
ORDER NO.33872 12
instrumentalities,equipment and facilities as shall promote the health,safety,comfort and
convenience of its patrons,employees and the public,and as shall be in all respects adequate,
efficient,just and reasonable.”Id.§61-302.The Commission has authority to order a utility to
build new structures or upgrade and improve existing plant and structures to secure adequate
services or facilities.Id.§61-508.
Before constructing “a line,plant,or system,”a public utility providing electrical
service must obtain a CPCN from the Commission (establishing that the “public convenience
and necessity”requires it).However,a CPCN is not required to extend lines,plant or system in
an area already served by the utility.Id.§61-526.Under Idaho Code §61-526,whether the
“public convenience and necessity does not require or will require”the construction or extension
of lines,plant or system,the Commission “may,after hearing,make such order and prescribe
such terms and conditions for the locating or type of the line,plant or system affected”as the
Commission finds just and reasonable.Id.§61-526.
The Commission appreciates the considerable time and expense that parties and
participants,including local governments,organizations,and citizens,dedicated to providing
testimony and comments.The submissions were very well informed and thoughtful and have
greatly aided our understanding of the issues in this case.Likewise,we appreciate the
Company’s efforts to involve the communities in its decision-making processes and to keep the
communities informed through the CAC processes.We believe those processes were successful,
as demonstrated by the high-level of public involvement in this case.We encourage all
interested parties to continue to work together on these issues,as there may still be opportunities
to find areas of common interest and common ground,notwithstanding the outcome of this
proceeding.
At its root,this case presents the question of what facilities are required in the North
Wood River Valley for Idaho Power Company to meet its obligation to provide service that
promotes the “health,safety and convenience”of the public and that is “adequate,efficient,just
and reasonable.”See Id.§61-302.Having reviewed the record,we find that the Company has
demonstrated the need for a redundant line from the Wood River substation to the Ketchum
substation.The redundant line is justified by the Company’s own planning standard (Tr.at 244-
248),supports national reliability standards (Id.at 250-52,308-10),and will increase resiliency
in the North Valley.The existing line has had minimal reliability concerns,and we commend
ORDER NO.33872 13
the Company for its efforts in maintaining the line,However,we must take into consideration
whether the proposed redundant line provides resiliency after a major outage that could avoid
catastrophic consequences.
The Company provided evidence that a major outage could take days or weeks to
repair,particularly given the line’s mountainous terrain and access limitations.Id.at 201-03,
253,426.An outage of days or weeks could have devastating impacts,particularly if it occurred
in the middle of winter.The hospital may be unable to provide full services,emergency
responders may be hampered in their ability to do their jobs,and the public may be without
power to heat their homes.See,e.g.,id.at 426.We believe this possibility poses an
unacceptable risk to public health and safety.
A redundant line would meaningfully reduce the likelihood that the communities
would lose power if the existing line experienced an outage.The Company provided evidence
that,although an event such as an avalanche or wind or ice storm might take out one
transmission line,it is extremely unlikely to impact a second transmission line configured on
separate towers,as the redundant line is proposed by the Company.Id.at 309,326-30.
Moreover,in the event both lines are impacted by an outage,a redundant line provides resiliency
that would enable Idaho Power to restore power faster.We find that a second transmission line
would enhance the reliability and resiliency of Company’s service to the North Valley.
We recognize that the redundant line does not eliminate the risk of outages to North
Valley customers.However,the Company has undertaken improvements to its system south of
the Wood River substation to reduce the risk of outages there.Id.at 429-3 0.
Nearly all the parties and participants agreed that the existing line needs to be rebuilt.
Idaho Power explained that the redundant line would allow the existing line to be rebuilt without
interruption to customers.Application at 16.Other parties and participants argued that the
existing line could be rebuilt using a temporary line to avoid interruption to customers.Tr.at
531,603,632-3 5.Regardless,rebuilding the existing line using a temporary line instead of a
second permanent line does not create redundancy and thus does not improve resiliency to the
North Valley in a permanent way going forward.
Many parties and participants called for additional analysis of alternative solutions,
such as distributed local generation and energy storage systems.We do not believe these options
are effective stand-alone alternatives to a redundant line today.For example,parties and
ORDER NO.33872 14
participants suggested these options could be used (and need only be used)to meet just a portion
of the North Valley’s load.That is,there would be some process to determine which loads get
served in an outage,and which do not.We do not believe an option that only meets a small part
of the load is an effective solution for providing adequate and reliable service,when the
redundant line option would be capable of serving all of the load.That being said,we agree that
these options should continue to be explored,particularly as the North Valley’s load increases
and as the alternatives become more cost-effective.
Given the record before us,we find that redundancy is needed to provide adequate
and reliable service to the North Valley and promote public health,safety and convenience,and
thus grant the Company’s requested CPCN authorizing construction of a second transmission
line.Further,we approve the Company’s requested route of overhead transmission from the
Wood River substation to the transition point near Elkhom Road,then underground transmission
to the Ketchum substation.
Parties and participants questioned the need for that route and its cost.In response,
the Company further explained why an overhead transmission configuration along the whole
route is not feasible,including geographical and other constraints.Tr.at 230-31,236,361,416-
17,445-51.As an example,siting an overhead transmission line through the downtown
Ketchum area could require placing large steel poles in the sidewalks or the edge of the road (id.
at 237,417),which could impair drivers’and pedestrians’sight lines in intersections and would
be a detriment to public safety.In addition,the Company might need to obtain a significant
number of easements or condemnations,which could be extremely costly.Id.at 236,417,445,
491.We find that the Company has demonstrated that the overhead transmission option through
downtown Ketchum is not feasible,and that the preferred route is overhead transmission to the
Elkhorn Road transition point,then underground transmission to the Ketchum substation.That
is the route for which we grant the CPCN.
As to Cox’s request to continue to attach equipment to Idaho Power’s poles,we
understand that Idaho Power’s proposed design for the overhead portion of the line will allow for
attachment of Cox’s equipment while keeping pole heights to a minimum.We appreciate the
willingness of Cox and Idaho Power to work together to find a solution.
In summary,having considered the record before us,we issue this Order granting
Idaho Power the requested CPCN for a second 138 kV transmission line as requested in the
ORDERNO,33872 15
Company’s Application.This Order does not constitute approval of any cost of the line for
ratemaking purposes.The Company will be required to apply to the Commission for inclusion
of the costs of the line in its rates at a later date.
INTERVENOR FUNDING
Intervenor funding is available under Idaho Code §61-61 7A and Commission Rules
161 through 165.Section 61-617A(l)declares it is “the policy of [Idahol to encourage
participation at all stages of all proceedings before this commission so that all affected customers
receive full and fair representation in those proceedings.”Idaho Code §6l-617A(2).The
statute authorizes the Commission to order any regulated utility with intrastate annual revenues
exceeding $3.5 million to pay all or a portion of the costs of one or more parties.Intervenor
funding costs include legal fees,witness fees,transportation and other expenses,so long as the
total funding for all intervening parties does not exceed $40,000 in any proceeding.Idaho Code
§61-617A(2).
The Commission must consider the following factors when deciding whether to
award intervenor funding:
(1)That the participation of the intervenor has materially contributed to the
Commission’s decision;
(2)That the costs of intervention are reasonable in amount and would be a
significant financial hardship for the intervenor;
(3)The recommendation made by the intervenor differs materially from the
testimony and exhibits of the Commission Staff;and
(4)The testimony and participation of the intervenor addressed issues of
concern to the general body of customers.
Idaho Code §61-617A(2).An intervenor’s petition must contain:an itemized list of expenses
broken down into categories;a statement explaining why the costs constitute a significant
financial hardship;and a statement showing the class of customer on whose behalf the intervenor
participated.IDAPA 31.01.01 .162.Expenses awarded shall be chargeable to the class of
customers represented by the qualifying intervenors.Idaho Code §61-6l7A(3).
A.Sierra Club’s Request
Sierra Club filed the sole Petition for Intervenor Funding in this case,requesting
$14,850 for attorney fees.Sierra Club submitted,and it is undisputed,that Idaho Power is a
ORDER NO.33872 16
regulated public utility with gross intrastate annual revenues exceeding $3.5 million.Petition at
1.Sierra Club stated its “members and supporters are residential and small commercial
customers of Idaho Power.”Id.at 4.Sierra Club asserted its position and requested relief were
materially different from and disagreed with those of Commission Staff with respect to local
generation and storage options.Id.at 3.Also,Sierra Club stated it pursued ‘issues of concern
for general ratepayers who will be subject to rate increases Idaho Power seeks to recover
the costs of the proposed redundant line,as well as local ratepayers who may be assessed
additional charges for local undergrounding.”Id.at 4.
Sierra Club asserted it is a non-profit organization supported through charitable
donations that are “inherently unstable and sometimes insufficient,”such that intervenor funding
is essential for Sierra club to participate in these proceedings.”Id.at 3.With its request,Sierra
Club provided an itemized list of legal expenses (hours billed by legal counsel at an hourly rate
of $150).Exhibit A to Petition.
B.Commission Findings and Decision
The Commission finds that Sierra Club’s request for intervenor funding satisfies the
statutory requirements.Sierra Club participated in the case and materially contributed to our
analysis and decision.We find that Sierra Club’s position regarding local generation and storage
options contrasted with that of Staff,thus helping to create a record with broader perspectives of
the issues before us.Also,Sierra Club supported the establishment of a technical advisory
committee to complete additional studies of local generation and storage options.We find that
lack of intervenor funding would be a significant financial hardship to Sierra Club,as it is a
nonprofit organization dependent upon such funding for its ability to participate and represent its
members,who include customers of Idaho Power.Finally,we find that the hourly attorney fee
rate of $150 and the itemized hours for which Sierra Club requests funding,and to which no one
objected,are fair,just and reasonable.Accordingly,we grant Sierra Club’s Petition for
Intervenor Funding in the requested amount of $14,850.Because Sierra Club states that its
members are residential and small commercial customers of Idaho Power,we find that this
amount shall be chargeable to the Company’s residential and small commercial customers.
ORDERNO.33872 17
ORDER
IT IS HEREBY ORDERED that the Application of the Idaho Power Company in
Case No.IPC-E-16-28 is granted.The Commission issues the Company a CPCN for a second
138 kV transmission line as requested in the Application.
IT IS FURTHER ORDERED that Sierra Club’s Petition for Intervenor Funding is
granted as requested in the amount of $14,850.This amount will be chargeable to the
Company’s residential and small commercial customers.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order with regard to any
matter decided in this Order.Within seven (7)days after any person has petitioned for
reconsideration,any other person may cross-petition for reconsideration.See Idaho Code §61-
626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of September 2017.
PAUL KJLLAN,PRESIDENT
ATTEST:
,‘-7N •m,3447
Diane M.Hanian
Commission Secretary
O:IPC-E.i 6-28 djh4 Final
ERIC ANDERSON,COMMISSIONER
ORDER NO.33872 18