20161214Randolph Direct & Exhibits 1-4.pdf

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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A
DETERMINATION OF HELLS CANYON
COMPLEX RELICENSING COSTS THROUGH
2015 AS PRUDENTLY INCURRED.
CASE NO. IPC-E-16-32
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
CHRIS RANDOLPH
1 Q. Please state your name, business address, and
2 present position with Idaho Power Company ("Idaho Power" or
3 "Company")
A. My name is Chris Randolph and my business 4
5 address is 1221 West Idaho Street , Boise, Idaho 83702.
6 am employed by Idaho Power as the Environmental Affairs
7 Director in the Power Supply Department .
I
8
9
Q.
A .
Please describe your educational background.
I obtained a Bachelor of Science degree in
10 Fisheries Resources from the University of Idaho in 1980
11 and a Master of Science degree in Fish and Wildlife
12 Management from Montana State University in 1984 . I am a
13 Certified Fisheries Professional and a Certified Project
14 Management Professional .
15 Q. Please describe your work experience with
16 Idaho Power.
17 A. I was hired by Idaho Power in 1987 as a Fish
18 Biologist and have worked as the Fisheries Program
19 Supervisor, Manager of Environmental Affairs, and currently
20 serve as the Director of the Environmental Affairs
21 Department.
22 Q. What is the purpose of your testimony in this
23 case?
24 A. The purpose of my testimony is to provide a
25 detailed history of the Company 's Hells Canyon Complex
RANDOLPH, DI 1
Idaho Power Company
1 ("HCC") relicensing efforts, and to provide support for the
2 $220.91 million in relicensing costs incurred through year-
3 end 2015, demonstrating that they were necessary and
4 prudent to ensure future operations of this key component
5 of Idaho Power's generation resource portfolio.
6
7
Q.
A.
How is your testimony organized?
I will begin with a discussion on the HCC
8 relicensing process, describing activities and costs
9 associated with Idaho Power's pre-filing efforts that
10 occurred between 1991 and July 21, 2003. Next, I will
11 discuss the relicensing process since the license
12 application was filed on July 21, 2003, the associated
13 activities, and the costs incurred from August 2003 through
14 December 31, 2015.
15
16
17
Q.
A.
I. HCC RELICENSING OVERVIEW
Is a license required to operate the HCC?
Yes. Idaho Power obtains licenses for its
18 hydroelectric projects from the Federal Energy Regulatory
19 Commission ("FERC"), similar to other utilities that
20 operate nonfederal hydroelectric projects on qualified
21 waterways. The licensing process includes an extensive
22 public review process and involves numerous natural
23 resource and environmental agencies. The licenses last
24 from 30 to 50 years depending on the size, complexity, and
2 5 cost of the project.
RANDOLPH, DI 2
Idaho Power Company
1 Q. Does Idaho Power currently have a license to
2 operate the HCC?
3 A. Yes. Idaho Power was initially granted a 50-
4 year license to operate the HCC effective July 31 , 1955,
5 with an expiration date of July 31, 2005 . As required by
6 the Federal Power Act ("FPA"), in July 2003 , Idaho Power
7 filed an application with FERC for a new license in
8 anticipation of this expiration date. However, the
9 Company's July 2003 application is still pending;
10 therefore, Idaho Power has been operating under annual
11 licenses issued by FERC since the expiration of i ts
12 previous long-term license on July 31, 2005 .
13 Q. Why is the Company's July 2003 application not
14 yet resolved?
15 A. The HCC is one of the largest privately owned
16 hydroelectric projects licensed under the FPA. Because it
17 forms the border between Idaho and Oregon, the HCC is
18 subject to the jurisdiction of both states. Portions of
19 the project are either within or adjacent to national
20 forest lands, wilderness areas, the Hells Canyon National
21 Recreation Area, and other federal reservations. Also, the
22 Snake River below Hells Canyon Dam is designated as a wild
23 and scenic river under the Wild and Scenic Rivers Act.
24 Over one hundred species with an endangered, threatened, or
25 other special status designation by federal or state
RANDOLPH, DI 3
Idaho Power Company
1 agencies inhabit the general area of the HCC. In addition
2 to the numerous federal and state resource agencies,
3 environmental organizations and private interests, six
4 federally recognized Native American Indian tribes have
5 claimed that the HCC affects lands and cultural and natural
6 resources in which they have an interest. In all, the
7 relicensing of the HCC must comply with various provisions
8 of the Wilderness and Wild and Scenic Rivers Acts, the
9 National Historic Preservation Act, the National
10 Environmental Policy Act ("NEPAn), regulations of the
11 Environmental Protection Agency ("EPAn), the Clean Water
12 Act ("CWAn), the Endangered Species Act ("ESAn), the
13 Electric Consumers Protection Act, and various Idaho and
14 Oregon laws and regulations.
15 Q. Please provide a summary of the relicensing
16 process.
17 A. Generally speaking, there are two major
18 components of the licensing process: ( 1) pre-filing and ( 2)
19 post-filing. Pre-filing activities include first and
20 second stage consultation which develop a study package,
21 results from those studies, and reporting of the study
22 results. The draft license application is developed as a
23 pre-filing activity. Post-filing includes the filing of
24 the final license application, obtaining the§ 401 water
25 quality certification ("§ 401 certificationn), ESA
RANDOLPH, DI 4
Idaho Power Company
1 consultation, and the final license issuance by FERC. The
2 § 401 certification and ESA consultation are the remaining
3 pieces of the information FERC needs in order to complete
4 the NEPA process and issue a new license for the HCC. To
5 obtain a§ 401 certification first, the states in which a
6 facility operates (in this case, Idaho and Oregon) must
7 render a decision on what is known as§ 401 certification.
8 This certification is related to water quality, and a
9 positive decision indicates that any discharges from the
10 project comply with applicable state water quality
11 standards. Once§ 401 certification is achieved, FERC will
12 initiate the ESA consultation process, which is described
13 in more detail later in my testimony. Once§ 401
14 certification is achieved and the ESA consultation process
15 is complete, FERC may then issue the final long-term
16 license.
17 Q. Please provide a general timeline of Idaho
18 Power's relicensing efforts, as well as total costs
19 associated with each step.
20 A. The table below provides a high-level timeline
21 associated with the Company's relicensing efforts,
22 including the corresponding timeline and related costs.
23
24
25
RANDOLPH, DI 5
Idaho Power Company
1
2
3
4
Table 1: HCC Relicensing Timeline and Costs
(including AFUDC)
Description Timing Cost (millions)
Pre-Filing Costs 1997 -7/2003 $51 .08
Post-Filing Costs I 8/2003 2015 $169 .65 -§ 401 Certification
Total 1 $220 .73
Q. Idaho Power is still working on a number of
5 outstanding issues prior to the issuance of a final license
6 by FERC. Why has the Company presented only costs through
7 2015?
8 A . The Company 's efforts towards relicens ing HCC
9 have spanned nearly three decades yet there are three
10 issues that must be resolved in advance of a license
11 issuance: (1) the CWA § 401 certification , (2) ESA
12 consultation, and (3) the potential for a revised or
13 supplemental NEPA analysis. Idah o Power does not
14 anticipate the issuance of a license until at least 2021 .
15 Because the issuance of the license is unknown and
16 significant costs have been incurred, Idaho Power is
17 requesting a prudence determination on the HCC relicensing
18 costs through December 31, 2015, at this time . The
19 testimony of Company witness Timothy E. Tatum explains the
1 The sum of the costs presented in my testimony is $220 .73
million which is approx i mately $170 ,000 less than the Company's
December 31 , 20 15 , Construction Work in Progress balance associated
with HCC relicensing cos ts . The difference is the result of certain
credit amounts within the transaction data that are described in
further detail in the testimony o f Company witness Ken W. Petersen .
RANDOLPH, DI 6
Idaho Power Company
1 importance of determining prudence of the costs at this
2 time.
3 Q. Why is it necessary and prudent for the
4 Company to incur costs associated with HCC relicensing?
5 A. As mentioned previously, a federal license is
6 required for Idaho Power to legally operate the HCC. As
7 discussed in the Company's 2015 Integrated Resource Plan,
8 the HCC provides approximately two-thirds of Idaho Power's
9 hydroelectric generating capacity and 34 percent of the
10 Company's total generating capacity, provid i ng a resource
11 of significant value. Investments in relicensing are made
12 to ensure that the Company can continue to utilize this
13 resource to provide customers with clean, low cost,
14 hydroelectric energy. In addition, activities performed
15 and costs incurred to date addressed, resolved, and
16 provided baseline information on issues that may have come
17 with a higher cost upon FERC's issuance of a license.
18 Q. What is the total 2015 year-end balance of HCC
19 related expenditures?
20 A. As of year-end 2015, total costs associated
21 with relicensing of the HCC were $220.91 million.
22 Q. How will your testimony present the total 2015
23 year-end balance of $220.91 million in HCC relicensing
24 costs?
25
RANDOLPH, DI 7
Idaho Power Company
1 A. My testimony will present the HCC relicensing
2 costs in two segments: $51.08 million associated with pre-
3 filing efforts between 1997 and July 2003, and $169.65
4 million associated with post-filing efforts from August
5 2003 through 2015.
6 Q. Why is the Company presenting the HCC
7 relicensing costs in these two segments?
8 A. As mentioned previously, the Company filed its
9 application for a new long-term license in July of 2003.
10 Therefore, I will discuss the expenditures in two segments
11 to more easily explain expenditures made before and after
12 the filing of the license application.
13 II. PRE-FILING EXPENDITURES: 1997-2003
14 Pre-Fi1ing Process Overview
15 Q. Please summarize the components of the
16 traditional FERC licensing process.
17 A. The traditional licensing process generally
18 consists of three stages, referred to as "consultation
19 stages." The first and second stages typically involve
20 pre-filing consultation, completion of studies, and
21 preparation of a draft license application. The third
22 stage of the consultation process is the filing of the
23 final license application with FERC. Exhibit No. 1
24 provides an overview of FERC's traditional relicensing
25 process including the three stages of consultation and a
RANDOLPH, DI 8
Idaho Power Company
1 timeline of Idaho Power's traditional relicensing
2 consultation process.
3 Q. Please summarize the timeline of the
4 relicensing activities performed prior to the filing of the
5 final license application.
6 A. Idaho Power's relicensing efforts began in
7 1991 prior to entering the formal consultation stages of
8 FERC's traditional licensing process. Following completion
9 of this preliminary work, in 1996, the Company began the
10 first stage of formal consultation, followed by the
11 commencement of the second stage in mid-1997. The second
12 stage of the consultation process was completed in July
13 2003, when the Company filed its official license
14 application with FERC.
15 Pre-Forma1 Consu1tation Activities (1991-1996)
16 Q. When did Idaho Power begin the process to file
17 the license application?
18 A. Idaho Power began the relicensing process in
19 1991 and followed the traditional consultation set forth by
20 FERC.
21 Q. What work did Idaho Power perform from 1991
22 until entering the first formal consultation stage in 1996?
23 A. Idaho Power's efforts between 1991 and 1996
24 were comprised primarily of informal stakeholder outreach
25 and baseline study development. Recognizing the importance
RANDOLPH, DI 9
Idaho Power Company
1 of stakeholder interaction in the licensing process, Idaho
2 Power began developing an informal consultation memorandum
3 of understanding ("MOU") with external stakeholders in
4 December 1991. The Company held several meetings with
5 interested parties in 1992 to work toward the MOU, but
6 there was no consensus on how to proceed with consultation
7 and studies. Consequently, Idaho Power decided not to
8 continue to pursue the informal consultation MOU before
9 entering the first stage of the traditional FERC process.
10 Instead, Idaho Power concentrated its pre-
11 consultation efforts on gathering baseline data and
12 formulating study initiatives. The Company reviewed
13 existing environmental literature from the Hells Canyon
14 region, including environmental impact statements,
15 environmental assessments, land use plans, and resource
16 management plans, to identify known natural resource issues
17
18
associated with the HCC. Resource specialists for
appropriate management agencies were also consulted.
19 addition, Idaho Power extensively reviewed available
20 technical literature and critically evaluated work
21 performed previously.
What was the result of these efforts?
In
22
23
Q.
A. This review resulted in a series of resource
24 inventories and descriptive studies that were ·used to
25
RANDOLPH, DI 10
Idaho Power Company
1 develop a baseline understanding of the environment
2 surrounding the HCC.
3 Q. How did Idaho Power choose the studies that
4 were used to form the baseline understanding of the
5 environment surrounding the HCC?
6 A. The studies conducted were targeted based on
7 criteria used by FERC for appraising resource values to the
8 public and by recognizing the value of a proposed study
9 with respect to the general requirements for preparing a
10 license application. These studies ultimately were
11 incorporated into the Formal Consultation Package that was
12 submitted for stakeholder review in the first stage of
13 formal consultation, as described later in my test i mony.
14 The First Stage 0£ Forma1 Consu1tation (1996-1997)
15 Q. Please describe Idaho Power's work during the
16 first stage of formal consultation.
17 A. Work began on the first stage of formal
18 consultation in January 1996. At this time, Idaho Power
19 developed a collaborative relicensing process that was
20 designed to allow Idaho Power to meet all FERC requirements
21 while providing additional opportunities for stakeholders
22 to communicate and cooperate. The intent of the
23 collaborative process was to improve the level of
24 understanding of resource issues and the potential for
25 agencies, tribes, and interested parties to resolve these
RANDOLPH, DI 11
Idaho Power Company
1 issues. In addition, the process augmented the traditional
2 FERC relicensing process by including earlier and more open
3 discussion of studies and resource issues.
4 Q. Did the collaborative process extend beyond
5 the first stage of formal consultation?
6 A. Yes. The collaborative process spanned both
7 the first and second stages of formal consultation.
8 Although it was created in 1996, the process was designed
9 to provide a way to involve stakeholders early in the
10 relicensing process, during the entire pre-filing period,
11 so that issues could be evaluated and addressed
12 effectively. It was intended to increase the likelihood o f
13 consensus o n relicensing issues and to help strike an
14 appropriate balance between project operations and the
15 protection of the resource.
16 Q. Please describe the collaborative proc ess
17 undertaken by the Company.
18 A. At a February 6, 1996, meeting, participants
19 focused on ways to improve communication and cooperation
20 during the relicensing process. Subsequently, a sub-
21 process team with representatives from the U.S. Fish and
22 Wildlife Service ("USFWS"), Office of the Idaho Attorney
23 General, Idaho Rivers United, and Idaho Power drafted a
24 collaborative process document that the larger group of 31
25
RANDOLPH, DI 12
Idaho Power Company
1 agencies, tribes, and nongovernmental organizations
2 ultimately endorsed.
3 Q. What was the design of the collaborative
4 process agreed upon in this document?
5 A. The collaborative process involved the
6 development of several groups, including a policy-level
7 collaborative team ("Collaborative Team") and various
8 technical resource work groups ("Resource Work Groups").
9 The Collaborative Team acted as a forum to engage all
10 participants in the process. The Collaborative Team
11 consisted of Idaho Power as well as representatives from
12 federal, state, and local government, tribes,
13 nongovernmental organizations, the public, and the
14 Company's customers. The process also established the
15 smaller Resource Work Groups with similar representation
16 that were charged with providing technical input to be
17 considered for the license application. These Resource
18 Work Groups provided early and ongoing input on technical
19 studies, analyses, and mitigation measures for the draft
20 license application. As a result of the collaborative
21 process, in July 1996, the aquatic, cultural, terrestrial,
22 and recreation and aesthetics Resource Work Groups were
23 formed.
24 Q.
25 Work Groups?
What was the focus of each of the Resource
RANDOLPH, DI 13
Idaho Power Company
1 A. The focus of the aquatic Resource Work Group
2 was around water quality, quantity, and use, and fish and
3 mollusc resources. The work of the cultural resource work
4 group centered around the Native American and Euro-Asian
5 American cultural resources including archaeological sites,
6 traditional cultural properties, and oral history studies.
7 Wildlife, soils and geology, botanical, and cultural
8 resources were the focal point of the terrestrial resource
9 work group. Finally, the recreation and aesthetics
10 resource work group dealt with recreational use and
11 aesthetic qualities.
12 Q. Were there other groups formed as part of the
13 collaborative process?
14
15
A. Yes. In December 1996, the economic work
group was established. Functioning in a less technical
16 manner, the economic work group was established to consider
17 broader economic values associated with relicensing. These
18 values were related to aquatic, fish and wildlife,
19 recreation, cultural, and aesthetic resources, as well as
20 developmental values of power generation, irrigation, and
21 flood control. In addition, several subgroups were formed
22 to address certain aspects of these resources in greater
23 detail, such as white sturgeon, invertebrates, and
24 aesthetics.
25
RANDOLPH, DI 14
Idaho Power Company
1 Q. What was the goal of the Collaborative Team
2 and the economic and Resource Work Groups?
3 A. The charge of the Collaborative Team was to
4 evaluate information generated by the Resource Work Groups
5 from a big picture perspective. The team was to consider
6 overall goals and objectives and resource trade-offs and
7 provide input on the final package of protection,
8 mitigation and enhancement ("PM&E") measures that Idaho
9 Power would ultimately propose in the draft license
10 application. Discussions and agreements made at the work
11 group level would also be considered in the development of
12 Idaho Power's draft license application. The HCC-specific
13 resource information was invaluable, identifying resource
14 impacts and developing meaningful cost-effective mitigation
15 to off-set those impacts.
16 Q. After the Collaborative Team and Resource Work
17 Groups were formed, what activities were performed?
18 A. Once the Collaborative Team and Resource Work
19 Groups were formed, a series of scoping meetings were
20 conducted from January 1996 to January 1997. The purpose
21 of these scoping meetings was to develop a list of issues
22 and concerns surrounding the HCC. These issues were then
23 combined into problem statements in each resource area to
24 help define the appropriate focus and scope of the resource
25 studies needed. Appendix B to the Company's license
RANDOLPH, DI 15
Idaho Power Company
1 application provides additional details on the public
2 meetings held in 1996.2 The Resource Work Groups then
3 developed study proposals aimed at investigating problem
4 statements and presented these study proposals to FERC,
5 state and local agencies, tribes , and other interested
6 parties.
7 Q. How were the study proposals presented to the
8 stakeholders?
9 A. In January 1997, Idaho Power distributed to
10 stakeholders the Formal Consultation Package3 as prescribed
11 in 18 CFR § 16.8. The Formal Consultation Package included
12 the following sections addressing information required by
13 FERC:
14
15
16
17
18
19
20
2 1
22
23
I .
II.
III.
IV.
V.
VI.
VII.
VIII.
Introduction
Maps
Engineering Design
Operation
Affected Environment and Significant Resources
Streamflow and Water Regime
Existing Protection, Mitigation and
Enhancement Measures
Proposed Resource Studies
24 The proposed study plans in section VIII of the
25 Formal Consultation Package reflected the Company's
26 response to preliminary recommendations for studies and
2 Idaho Power 's Hells Canyon Complex Li cense Applicati on c an be
found at :
https ://www .idahoower .com/ dfs/Relicensing/hellscanyon/hellspdfs/hc li
censeapp .pdf
3 Idaho Power 's Formal Consultation Package can be found at :
htts ://www .idahoower .com/ dfs/AboutUs/RatesRe ulator /Formal -
RANDOLPH, DI 16
Idaho Power Company
1 necessary information. The Formal Consul tat ion Package
2 included over 80 proposed studies . Exhibit No . 2 to my
3 testimony provides a list of the study titles categorized
4
5
6
7
8
9
according to the resource in which they apply . Following
distribution of t h e Formal Consultation Package , Idaho
Power was officially in the second stage of formal
consultation pursuant to 18 CFR § 16.8 .
The Second Stage or Forma1 Consu1tation (1997-2003)
Q. What took place after the Formal Consultation
10 Package was distributed?
11 A. Once the Formal Consultation Package was
12 delivered, joint agency public consultation meetings were
13 held so that Idaho Power could present , discuss , and
14 receive feedback on the study proposals outlined in the
15 document . In March 1997, the Company held meetings in
16 Lewiston, Boise, and Weiser , Idaho , and in Halfway , Oregon .
17 In addition to providing extensive input into study design
18 and scope, stakeholders were given the opportunity to
19 provide written comment on the Formal Consultation Package.
20 Q. How did Idaho Power use the comments received
21 from stakeholders?
22
23
A. The deadline for comments on the Formal
Consultation Package was May 13, 1997. In total , Idaho
24 Power received comments from 34 different stakeholders . A
25 list of the stakeholders that commented and the date of the
RANDOLPH, DI 17
I daho Power Company
1 comments is provided as Exhibit No . 3 to my testimony . A
2 tracking matrix was developed to capture stakeholder
3 comments , which were then assigned to the appropriate
4 Resource Work Group for further consideration . After
5 discussing the individual issues and comparing them against
6 issues originally outlined in the Formal Consultation
7 Package , the Resource Work Groups forwarded recommendations
8 for additional or revised studies to Idaho Power .
9 Q. What did Idaho Power do with the study
10 recommendations?
11
12
A. After the recommendations were evaluated,
study plans were revised . Beginning in the latter half of
13 1999, the revised detailed study plans , including
14 additional studies , were distributed to Resource Work Group
15 participants . Idaho Power continued conducting necessary
16 environmental studies , provided the results to resource
17 agencies and tribes , and allowed the chance for interested
18 parties to comment.
19 Through 2000 and 2001 , the Resource Work Groups and
20 the Collaborative Team continued to meet to review studies
21 that were complete and provide input on developing
22 appropriate PM&E proposals for the draft license
23 application . Near the end of 2001 , the Company announced
24 that it was targeting February 2002 as the release date for
25 all technical reports prepared for relicensing , including
RANDOLPH, DI 18
Idaho Power Company
1 those for the aquatic studies of concern. Resource Work
2 Group meetings were scheduled for the spring o f 2002 to
3 allow all remaining technical reports to be considered at
4 the work group level. Participants were given the
5 opportunit y to provide input on the development of PM&E
6 measures appropriate to the study findings. On May 8 and
7 9 , 2002, a final meeting of the Collaborative Team was held
8 and participants discussed the study results and their
9 nexus and appropriateness to potential PM&E measures.
10 Q. Following the final meeting in May 2002, what
11 was the next step in the second stage of formal
12 consultation?
13 A. On September 18, 2002 , Idaho Power mailed the
14 draft license application for review and comment to
15 interested stakeholders. Idaho Power requested comments in
16 90 days but extended the deadline to January 10, 2003, at
17 the request of stakeholders. All comment letters and Idaho
1 8 Power's responses can be found in Section VII of the
1 9 Consultation Appendices to the final license application.
20 After several joint agency meetings to discuss the draft
21 license application, on July 31, 2003 , Idaho Power filed
22 the final license application with FERC, entering the third
23 stage of the formal consultation process.
24
25
RANDOLPH, DI 19
Idaho Power Company
1 Q. Does Idaho Power believe the collaborative
2 process was beneficial in preparing the draft license
3 application?
4 A. Yes. While the collaborative process did not
5 lead to agreement on all resource issues, it was successful
6 in providing direct and frequent communication between the
7 Company and stakeholders. Issues were identified,
8 appropriate studies were scoped and conducted, and results
9 were discussed by the various groups. Participants gained
10 a better understanding of how each agency and person viewed
11 potential relicensing impacts and the appropriateness and
12 desirability of various mitigation measures. The
13 collaborative process provided a basis for agreement on
14 many recreation measures, minimizing future opposition and
15 potential costs.
16 By the end of the first two stages of the
17 consultation process, Idaho Power had established a
18 Collaborative Team that consisted of over 100
19 organizational affiliations with 50 to 75 individuals
20 participating at regular meetings. The collaborative team
21 formed Resource Work Groups that undertook over 90 studies
22 to evaluate project-related impacts of operations of the
23 HCC. The final license application, and the technical and
24 environmental studies that support it, was in excess of
25 35,000 pages and provided a comprehensive analysis of
RANDOLPH, DI 20
Idaho Power Company
1 potential project impacts on the environment and natura l
2 resources affected by the project .
3
4
Costs Associated with Pre-Fi1ing Activities: 1991-2003
Q. Idaho Power has been incurring costs
5 associated with relicensing efforts since 1991. Please
6 describe how the Company has tracked costs related to the
7 HCC relicensing .
8 A. Idaho Power has tracked the cost of the HCC
9 relicensing efforts on capital work orders since 1997 .
10 Generally , detail -level work orders are used through the
11 life of a study or task and costs are ultimately
12 transferred to a plant -specific location consolidated work
13 order once the unique project o r task is completed.
14 Work orders for general administrative efforts to
15 support hydro relicensing were identified as "split" work
16 orders. The allocation of split work order charges to
17 specific hydro plants was based upon a weighting derived by
18 summing charges made to pro j ect specific work orders during
19 the same time period and computing each project 's sum as a
20 percentage of the whole. These percentages were applied to
2 1 the split totals to determine how much to transfer to each
22 consolidated work order.
2 3 Q.
24 prior to 1997?
25
How were the HCC relicensing costs tracked
RANDOLPH , DI 21
Idaho Power Company
1 A. Prior to 1997, relicensing activity was
2 recognized for accounting purposes as operations and
3 maintenance expenses or "expensedu in the year incurred.
4 In 1997, the Company determined that costs specific and
5 incremental to relicensing efforts should be capitalized.
6 At that time, the 1997 HCC relicensing charges were
7 reclassified to capital and transferred to a specific work
8 order on a going forward basis.
9 Q. Because HCC relicensing costs prior to 1997
10 were expensed, does the Company's request for prudence
11 contain costs associated with pre-1997 activities?
12 A. No. Because these costs were expensed in the
13 years in which they were incurred, the Company's prudence
14 request does not include costs associated with pre-1997
15 activities. The prior discussion of these activities was
16 provided solely for informational purposes.
17 Q. Does Idaho Power have a summary of the costs
18 incurred on relicensing efforts from 1997 through the
19 license application date in 2003?
20 A. Yes. In addition to separating the costs
21 incurred on relicensing efforts by year, Idaho Power has
22 separated the costs into resource categories similar to
23 those associated with the Resource Work Groups explained
24 previously in my testimony: Aesthetic, Aquatic,
25 Archaeological/Cultural, Recreation, Admin and Legal,
RANDOLPH, DI 22
Idaho Power Company
1 Terrestrial/Botanical, and Wildlife. The following chart
2 surrunarizes relicensing costs by year and by category,
3 including Allowance for Funds Used During Construction
4 ("AFUDC") amounts accrued:
5
6
7
8
Table 2. HCC Relicensing Costs, 1997 -July 2003
(000s)
Resource
Aesthetic
Aquatic
Archaeological/Cultural
Recreation
Admin and Legal
Terrestrial/Botanical
Wildlife
Subtotal
AFUDC
Total Charges
Q.
1997
$2
$816
$287
$408
$859
$237
$289
$2,898
$0
$2,898
1998
$3
$2,457
$419
$512
$1,140
$335
$394
1999
$2
$3,904
$452
$585
$1,502
$1,089
$125
2000
$283
$4,626
$754
$741
$1,298
$1,244
$0
2001
$182
$4,299
$494
$513
$1,059
$1,003
$0
$5,260 $7,659 $8,946 $7,550
$0 $948 $1,584 $1,038
$5,259 $8,607 $10,530 $8,589
2002
$12
$3,461
$214
$43
$2,044
$1,288
$0
$7,062
$1,695
$8,756
Jan-Jul
2003
$0
$2,049
$10
$135
$1,379
$812
$0
Total
$484
$21,612
$2,630
$2,937
$9,281
$6,008
$808
$4,385 $43,760
$2,059 $7,324
$6,444 $51,083
Based on your review of relicensing activities
9 and associated expenditures between 1997 and July 2003, do
10 you believe the $51 million detailed in the table above
11 reflects prudently incurred costs to support relicensing?
12 A. Yes. Because it forms the border between
13 Idaho and Oregon, the HCC is subject to the jurisdiction of
14 both states. In addition to the numerous federal and state
15 resource agencies, environmental organizations, and private
16 interests, six federally recognized Native American Indian
17 tribes have claimed that the HCC affects lands and cultural
18 and natural resources in which they have an interest. In
19 all, the relicensing of the HCC must comply with various
20 provisions of the Wilderness and Wild and Scenic Rivers
RANDOLPH, DI 23
Idaho Power Company
1 Acts, the National Historic Preservation Act, NEPA,
2 regulations of the EPA, the CWA, the ESA, the Electric
3 Consumers Protection Act, and various Idaho and Oregon laws
4 and regulations. As such, Idaho Power began relicensing
5 efforts in 1991, prior to entering the formal consultation
6 stages of FERC's traditional licensing process. The
7 Company began the first stage of formal consultation in
8 1996, followed by the second stage in mid-1997, and on July
9 21, 2003, Idaho Power filed the final license application,
10 entering the Third State of formal consultation. The
11 activities undertaken by the Company during this time
12 period were necessary and prudent to satisfy all of these
13 relicensing requirements, and to ensure that this resource
14 is available to continue to provide clean, low cost,
15 hydroelectric energy to customers.
III. THE RELICENSING PROCESS: 2003-2015 16
17 Q. Please generally describe FERC's process once
18 a license application is filed.
19 A. As discussed previously, FERC is expected to
20 issue a 40 to 50 year-term license order for the HCC after
21 completion of three remaining regulatory processes: ( 1)
22 the yet to be issued § 401 certification, (2) ESA
23 consultation, and (3) NEPA. Once§ 401 certification has
24 been achieved, FERC will initiate the ESA consultation
25 process. After both§ 401 certification and the ESA
RANDOLPH, DI 24
Idaho Power Company
1 consultation process are complete, FERC is expected to
2 complete its NEPA requirements culminating in the issuance
3 of the final long-term license.
4 Q. Idaho Power must receive§ 401 certification
5 before FERC will initiate ESA consultation. What is the
6 process for achieving§ 401 certification?
7 A. When I daho Power submits the§ 401
8 certification applications to the states of Idaho and
9 Oregon for consideration and approval, both Idaho and
10 Oregon give notice to the public of the opportunity to
11 comment on the proposals. The states then render a
12 decision on the§ 401 certification within one year of
13 submittal of the applications , including any measures to be
14 included in the project license to address water quality
15 impacts .
16 Q. What is the next step in relicensing after the
17 Company achieves§ 401 certification?
18 A. After§ 401 certificat i on is achieved, FERC
19 initiates ESA consultation on the project license with the
20 Department of Commerce National Oceanic and Atmospheric
21 Administration's ("NOAA") National Marine Fisheries Service
22 ("NMFS") and the USFWS. FERC cannot issue a license for
23 the HCC until both states have issued water quality
24 certifications under§ 401 and ESA consultation on the
25 licensing of the project is completed .
RANDOLPH, DI 25
Idaho Power Company
1 Q. You indicated Idaho Power is still awaiting§
2 401 certification. Has there been any progress in
3 obtaining§ 401 certification since Idaho Power filed its
4 license application in July 2003?
5 A. The f il ing in July 2003 initiated the thi rd
6 stage of formal consultation under FERC 's traditional
7 licensing process . On December 3, 2003 , FERC issued a
8 notice accepting Idaho Power 's final application and
9 soliciting motions to intervene and protests . Twenty -seven
10 parties filed formal motions to intervene in the
11 relicensing proceeding , including four Native America n
12 tribes , as well as numerous federal and state resource
13 agencies and non-governmental organizations such as
14 American Rivers , Columbia River Inter -Tribal Fish
15 Commission , American Whitewater , the Northwest Resource
16 Information Center , and Idaho Rivers United . Various
17 parties also filed protests and comments to the licen s e
18 application with FERC . As can be seen in Exhibit No . 4 to
19 my testimony , a timeline of post -license submittal events ,
20 a significant number of activities have occurred since that
21 time. Because the events span the course o f several years
22 and often overlap each other , I have categorized them and
23 wi l l discuss each activity separately .
24
25
Q. In what categories do the activities fal l ?
RANDOLPH , DI 26
Idaho Power Company
1 A. The activities that have occurred since filing
2 of the license application can be summarized in the
3 following categories : Environmental I mpact Statements ,
4 Additional Information Requests , Hells Canyon Water Quality
5 Certification , Site Specific Water Temperature Standard,
6 Mandatory Conditions under Section 4(e) of the FPA ,
7 Settlement Activities, USFWS Section 18 Fishway
8 Prescription , and Biological Opinions for Listed Species .
9 Each of these categories represent a key component of the
10 relicensing process to be considered by FERC , and will be
11 described in more detail in their respective sections that
12 follow .
13 Environmenta1 Impact Statements
14 Q. What is an Environmental Impact Statement
15 ("EIS ")?
16 A . An EIS, which is prepared by FERC staff and
17 required under NEPA , reviews and analyzes Idaho Power's
18 proposed operations and mitigation measures together with
19 the comments , terms , prescriptions , and recommendations
20 previously received from stakeholders.
21 Q. Did FERC issue an EIS with regard to Idaho
22 Power's HCC license application?
23 A. Yes . On July 28 , 2006 , FERC staff issued a
24 draft EIS for the licensing of the HCC, which reviewed and
25 analyzed Idaho Power's proposed operations and mitigation
RANDOLPH , DI 27
Idaho Power Company
1 measures together with the comments, terms, prescriptions,
2 and recommendations previously received. Various parties,
3 including Idaho Power, filed comments on the draft EIS and
4 on August 31, 2007, FERC staff issued a final EIS for the
5 licensing of the HCC. This final EIS contains FERC staff's
6 recommended terms and conditions for the licensing of the
7 project.
8 Q. How does the final EIS impact Idaho Power's
9 license application?
10 A. FERC will consider these recommendations in
11 the development of final license conditions. However,
12 certain portions of the final EIS may be affected by the§
13 401 certification for the project under the CWA and the
14 formal consultations under the ESA. If FERC determines
15 that these effects are material, it may require that a
16 supplement to the final EIS be prepared in accordance with
17 NEPA guidelines. Idaho Power has reviewed the final EIS
18 but does not anticipate filing comments until the§ 401
19 certification and ESA processes progress to a point where
20 their influence upon provisions of the final EIS can be
21 determined.
22 Additiona1 In£ormation Requests
23 Q.
24 ("AIR")?
25
What are Additional Information Requests
RANDOLPH, DI 28
Idaho Power Company
1
2
A.
information.
AIRs are requests made by FERC for additional
In May 2004, Idaho Power received
3 n otification that FERC would need additional information to
4 complete its evaluation of the Company's license
5 application and submitted AIRs. The AIRs covered the
6 f o llowing categories : general operations, geology and
7 soils, water quantity and quality, aquatic resources,
8 terrestrial resources, land use, developmental resources
9 and transmission lines. Under FERC's regulations, the
10 Company had three to nine months t o provide the information
11 requested in the AIRs. The table below is a summary of the
12 requested AIRs:
13
14
Table 3.
Resource/AIR Number
General Operations
OP-1
OP-2
Geology and Soils
S-1
Water Quantity and
Quality
WQ-1
WQ-2
Aquatic Resources
AR-1
AR-2
Terrestrial Resources
TR-1
Land Use
LU-1
Developmental
Resources
DR-1
DR-2
DR-3
DR-4
Transmission Lines
TL-1
Additional Information Requests
AIR Description
Operational Scenarios
Current Operations Scenario
Sediment Transport
Dissolved Oxygen Augmentation
Temperature Control
Hells Canyon Fish Trap
Modifications
Listed Molluscs
Habitat Resource Management
Project Boundary Change
Thermal Alternative Cost of
Capital
Flood Control
Power Economics
Estimated Cost of PM&E Measures
Transmission Line Jurisdiction
Filing Due
9 months
3 months
9 months
9 months
9 months
6 months
9 months
9 months
6 months
3 months
6 months
6 months
9 months
3 months
RANDOLPH, DI 29
Idaho Power Company
1 In some cases, FERC requested some follow-up AIRs to
2 further clarify the results of what had been completed
3 earlier. The final AIR responses were filed in 2007.
4
5
He11s Canyon Water Qua1ity Certi£ication
Q. As discussed previously, the CWA requires
6 Idaho Power file an application with both Idaho and Oregon
7 for a§ 401 certification for the HCC, and FERC cannot
8 issue a new license for HCC without§ 401 certification.
9 Did Idaho Power file a§ 401 certification application?
10 A. Yes. Because the HCC is a border river
11 between Oregon and Idaho, Idaho Power applied for§ 401
12 certification from both the Oregon and Idaho Departments of
13 Environmental Quality ("DEQ") to certify that any
14 discharges originating in their respective states that may
15 result from the continued operation of the HCC will comply
16 with applicable water-quality standards. In an attempt to
17 avoid conflicts or inconsistencies in the issued
18 certifications and encourage the DEQs to coordinate their
19 respective certification proceedings, the Company filed a
20 joint application for Idaho and Oregon. Consistent with
21 applicable law, each state's§ 401 certification should
22 only include conditions relating to discharges within that
23 state.
24 Q. How does FERC use the§ 401 certifications in
25 their evaluation of the license application?
RANDOLPH, DI 30
Idaho Power Company
1 A. Once the§ 401 certifications are issued by
2 the states and filed with FERC , FERC will review the
3 measures required by the certifications in its l icensing
4 order and may comment on whether, in its view, there is a
5 need for such measures based on its NEPA analys i s. But,
6 regardless of FERC's views, in accordance with judicial
7 precedent , it will incorporate all§ 401 certification
8 conditions in the license without modification.
9 Q. Has Idaho Power received the§ 401
10 certifications?
11 A. No. Under applicable provisions of the CWA,
12 the states have one year to issue a decision on a§ 401
13 certification application.
Q. When was the application filed?
A. Idaho Power first filed a§ 401 certification
14
15
16 application with both DEQs in July 2003. However, because
17 of the complexities involved and the need for additional
18 technical analysis, the Company , with concurrence of the
19 states, has annually withdrawn and filed amended§ 401
20 certification applications as new information comes
21 available .
22 2016.
23 Q.
The latest applications were filed in July
What has caused the delay in obtaining a water
24 quality certification from the state DEQs?
25
RANDOLPH, DI 31
Idaho Power Company
1 A. Over the past several years , water temperature
2 has proven to be the complicating issue. Temperature
3 loading calculations performed by both DEQs in 2004
4 demonstrated the dominant causes of elevated temperatures
5 in the Snake River are natural heating and heat sources
6 that cannot be precisely quantified. This analysis
7 determined that natural and non-quantifiable human
8 influences preclude the attainment of the salmonid rearing
9 and cold-water criteria upstream of the HCC during summer
10 months. Although the analysis did not assign the HCC a
11 temperatur e l oad allocation for exceedances of the aquatic
12 life and salmonid rearing criteria below the HCC, it did
13 assign a temperature load allocation for exceedances of the
14 salmonid spawning criteria in the fall.
15 Q. What was the ultimate conclusion of the
16 analysis performed in 2004?
17 A. While the analysis determined that the outflow
18 from the HCC would exceed the salmonid spawning criteria by
19 only a "small margin," it concluded the HCC is responsible
20 for the approximately two-week exceedance of the salmonid
21 spawning criter ia.
22 Q. What measures has Idaho Power taken to resolve
23 the water temperature issue?
24 A. Since 2004, Idaho Power has explored various
25 measures to address this temperature exceedance, including
RANDOLPH, DI 32
Idaho Power Company
1 the installation of some type of temperature control
2 structure in the Brownlee or Hells Canyon Reservoirs that
3 would access cool water from the bottom of the reservoir
4 and release that cool water downstream, attempting to cool
5 Hells Canyon Dam outflows to a level consistent with the
6 applicable criteria.
7 Q. Would a temperature control structure resolve
8 the water temperature issues?
9 A. Yes. However, installation of a temperature
10 control structure in the HCC could potentially create other
11 water quality and resource issues, including potential
12 adverse consequences to in-reservoir fisheries by changing
13 the temperature and water quality conditions within the
14 HCC. Also, and of principle concern, a temperature control
15 structure may adversely affect downstream ESA-listed
16 species and their habitat by the releasing of low dissolved
17 oxygen and toxin-laden water downstream. For these
18 reasons, in recent applications for§ 401 certification,
19 Idaho Power proposed to address the HCC temperature
20 obligation through a comprehensive Temperature Management
21 and Compliance Plan.
22 Q. Please describe Idaho Power's proposed
23 Temperature Management and Compliance Plan.
24 A. Idaho Power's proposed Temperature Management
25 and Compliance Plan includes as its centerpiece the
RANDOLPH, DI 33
Idaho Power Company
1 development and implementation of a suite of robust
2 upstream Snake River in-river and tributary measures that
3 provide temperature, water-quality, and habitat benefits to
4 the Snake River above, within, and below the HCC (referred
5 to herein as the Snake River Stewardship Program) The
6 Snake River Stewardship Program was developed in
7 consultation with The Freshwater Trust, a 501 (c) (3)
8 non-profit organization with more than 30 years' experience
9 in preserving and restoring freshwater ecosystems. Idaho
10 Power has worked closely with The Freshwater Trust since
11 2012 to develop and study the details of the Snake River
12 Stewardship Program. The Snake River Stewardship Program
13 will include consideration of alternative or supplemental
14 measures and, as appropriate, inclusion of those measures
15 as a component of the Temperature Management and Compliance
16 Plan.
17 Q. Has Idaho Power included its proposed Snake
18 River Stewardship Program as part of the Company's annual§
19 401 certification application?
20 A. Yes. In the 2014 § 401 certificati on
21 application, Idaho Power presented its Snake River
22 Stewardship Program to the Idaho and Oregon DEQs. Since
23 then, Idaho Power continues to meet with the DEQs and
24 refine the proposed plan in an effort to resolve the
25 temperature issue.
RANDOLPH, DI 34
Idaho Power Company
1 Q. Has Idaho Power taken any action with FERC to
2 attempt to resolve§ 401 certification-related issues since
3 Idaho Power filed the latest annual applications with both
4 states in July 2016?
5 A. Yes . On November 23 , 2016, Idaho Power filed
6 a petition with FERC for a declaratory order that the
7 Oregon statute upon which the Oregon DEQ relies for
8 authority to compel anadrornous fish passage, is preempted
9 by the FPA.
10 Q. Please explain what led to the filing of Idaho
11 Power's petition.
12 A. Complicating the§ 401 certification
13 discussions has been the assertion by Oregon that the
14 Company is obligated , pursuant to Oregon state law, to pass
15 anadrornous fish upstream of the Hells Canyon Darn, and
16 potentially Oxbow and Brownlee, and reintroduce those fish
17 into Oregon tributaries to the Snake River. Because the
18 Snake River constitutes the border between Oregon and
19 Idaho, Idaho has opposed Oregon's efforts. Oregon and
20 Idaho have reached an impasse and it appears Oregon intends
21 to include a passage and reintroduction condition in the
22 Oregon draft§ 401 certification. Idaho Power has
23 consistently advised Oregon that it does not believe that
24 such a condition is appropriate, or allowed, under either
25 the CWA or the FPA.
RANDOLPH, DI 35
Idaho Power Company
1 Q. What is the intent of Idaho Power's petition
2 at FERC?
3 A. Idaho Power's petition is intended to clarify
4 that the FPA takes primacy over the Oregon statute, thereby
5 removing the primary state authority under which Oregon
6 contends that passage is an appropriate condition of state
7 law for inclusion in the HCC§ 401 certification. It does
8 not, however, answer the broader federal question of
9 whether or not such a condition is allowed under the CWA.
10 Q. Is FERC required to respond to Idaho Power's
11 petition within a certain time period?
12 A. No. FERC rules and procedures are not
13 specific to the process required to respond to the petition
14
15
16
17
within a specific time frame. However, Idaho Power
requested expedited treatment from FERC.
Site Speci£ic Water TeDperature Standard
Q. What is a site specific water temperature
18 standard?
19 A. The site specific water temperature standard
20 is the water temperature requirements specific to a unique
21 area within the state, where general statewide standards
22 can be modified to be protective of conditions or resources
23 within the unique area. A site specific temperature
24 standard must be adopted by each state through its
25 rulemaking process and then approved by the EPA.
RANDOLPH, DI 36
Idaho Power Company
1 Q. Has Idaho Power initiated the process for
2 changes to the site specific water temperature standard in
3 an attempt to mitigate water temperature issues?
4 A. Yes. Although a change to the site specific
5 temperature standard is not required, a successful change
6 would significantly reduce required mitigation. Therefore,
7 on December 8 , 2005, Idaho Power submitted a preliminary
8 draft proposal to the Idaho and Oregon DEQs to initiate a
9 process for site specific criteria of the fall Chinook
10 salmon spawning temperature criteria of the Snake River
11 below the HCC. In January 2006, the Company met with the
12 staffs of both DEQs to discuss the preliminary proposal.
13 Idaho Power thereafter submitted a written response to some
14 of the questions raised at this meeting and held a follow-
15 up technical meeting in February 2006 , resulting in a May
16 2006 revised proposal that addressed concerns associated
17 with the salmon-spawning water temperature criteria .
18
19
Q.
A.
Please explain the revised proposal.
The revised proposal included salmon-spawning
20 criteria not greater than 16.5 °c as a daily maximum
21 temperature on October 23 and subsequent daily maximum
22 temperatures not to exceed levels equal to a 0.2 °C daily
23 rate of decline through November 10. From November 11
24 through April 15, the daily maximum temperature was not to
25 exceed 13° C. These site specific criteria were to be
RANDOLPH, DI 37
Idaho Power Company
1 applied to the Hells Canyon Reach, the segment of the Snake
2 River from Hells Canyon Dam to the Oregon/Washington
3 border.
4 Q. What events followed Idaho Power's proposed
5 revisions?
6 A. Subsequently in 2006, the Idaho DEQ held a
7 meeting to discuss the technical merits of the Company's
8 proposed site specific criteria petition. Attendees
9 included the Idaho DEQ, Oregon DEQ, EPA, NOAA, USFWS, Idaho
10 Fish and Game, Columbia River Inter-Tribal Fish Commission,
11 Nez Perce tribe, Idaho Rivers United, and American Rivers.
12 Over the next several months parties submitted comments to
13 the petition, raising various issues with the proposal
14 including a concern that the proposed site specific
15 criteria was at the "edge of the envelope" for fall Chinook
16 spawning and suggested that a margin of safety be included
17 in the revised criteria to ensure protection of the
18 resource.
19 Over the course of the next several years, Idaho
20 Power considered these comments and initiated a series of
21 studies to address the issues raised by the comments.
22 July 2010, Idaho Power filed a Proposal to Initiate
23 Negotiated Rule Making for Site Specific Temperature
24 Criteria for Snake River fall Chinook salmon below the
25 Hells Canyon Dam with both the Idaho DEQ and the Oregon
In
RANDOLPH, DI 38
Idaho Power Company
1 Environmental Quality Commission. The proposed revised
2 criteria utilized a step-down temperature approach to the
3 salmonid spawning standard, not to exceed 14.5 °C from
4 October 29 through November 6 and not to exceed 13 °C from
5 November 7 through April 15.
6 Q. What was the result of Idaho Power's Proposal
7 to Initiate Negotiated Rule Making for Site Specific
8 Temperature Criteria?
9 A. The Idaho DEQ published a notice of negotiated
10 rulemaking and thereafter held a negotiated rulemaking
11 meeting in June 201 1. Based upon comments, the Idaho DEQ
12 revised the proposed rule and thereafter republished the
13 rule with notice of a 30-day comment period. Written
14 comments were received from six parties, but the Idaho DEQ
15 made no revisions to the proposed rule.
16 The proposed rule was considered, and approved
17 without revision, by the Idaho Board of Environmental
18 Quality on November 10, 2011 . On March 29, 2012, the Idaho
19 Legislature approved the rule. Consistent with the CWA,
20 Idaho submitted the rule for the site specific temperature
21 criteria to EPA for approval on June 8, 2012. Although
22 Section 303(c) of the CWA provides that EPA is to take
23 action on such submissions within 60-90 days, EPA to date
24 has failed to act on the Idaho submission.
25
RANDOLPH, DI 39
Idaho Power Company
1 Q. Has Idaho Power filed a similar petition with
2 the Oregon DEQ?
3 A. Yes. In 2010, the Company filed a similar
4 petition for rulemaking with Oregon and a hearing on the
5 petition was held before the Oregon Environmental Quality
6 Commission. The Oregon Environmental Quality Commission
7 issued an order on the petition, dated March 4, 2011,
8 directing Oregon DEQ staff to consider the proposed site
9 specific criteria change during the next water quality
10 standards review and rulemaking process, which happens
11 triennially. To date, Oregon has taken no further action
12 on the proposed site specific criteria change.
13 Mandatory Conditions under Section 4(e) 0£ the FPA
14 Q. Please describe Section 4(e) of the FPA
15 ("Section 4(e)").
16 A. Section 4(e) provides that FERC must include
17 in a license such conditions as the applicable agency
18 considers "necessary for the adequate protection and
19 utilization of that reservation" for pro jects within a
20 federal reservation, such as a national forest or Bureau of
21 Land Management ("BLM") lands. In terms of relicensing,
22 Section 4(e) provides applicable agencies with a
23 conditioning authority as compared to a veto authority. In
24 other words, the applicable resource agency (i.e., the
25 United States Forest Service ("USFS") or the BLM) may not
RANDOLPH, DI 40
Idaho Power Company
1 prevent FERC from issuing the license, but if FERC issues a
2 license, the resource agency's conditions must be included
3 in the license.
4 Q. Was Idaho Power subject to mandatory
5 conditions under Section 4(e)?
6 A. Yes. In October 2005, FERC issued a notice
7 that the project was ready for environmental review and set
8 a 90-day period for the filing of comments, terms,
9 prescriptions, and recommendations. Fifteen parties filed
10 comments, terms, prescriptions, and recommendations in
11 response to the notice. Some of the federal agency
12 filings, particularly the USFS and the BLM, contained
13 mandatory conditions under Section 4(e).
14 Q. Does Idaho Power have the opportunity to
15 respond to the mandatory conditions under Section 4(e)?
16 A. Yes. In Section 241 of the Energy Policy Act
17 of 2005 ("EPAct"), Congress provided license applicants
18 with a right to an evidentiary hearing on contested
19 mandatory conditions before an administrative law judge
20 ("ALJ").
21 Q. Did Idaho Power request an evidentiary hearing
22 associated with the mandatory conditions contained in
23 Section 4(e)?
24 A. Yes. In February 2006, Idaho Power filed
25 hearing requests under Section 241 of EPAct with regard to
RANDOLPH, DI 41
Idaho Power Company
1 six BLM and ten USFS mandatory conditions. An ALJ was
2 assigned by the Departments of Interior ("DOI") and
3 Agriculture, respectively, to each set of hearings and over
4 the next several months, various motions and discovery
5 proceedings were initiated before the ALJs.
6
7
Q.
A.
Were the hearings held?
No. Hearings were scheduled for June 2006 on
8 both the BLM and USFS conditions. As the Company prepared
9 for litigation, Idaho Power explored settlement
10 opportunities with both agencies. Prior to the scheduled
11
12
13
14
15
hearings, in May 2006, Idaho Power resolved its contests to
the mandatory conditions through favorable settlements with
both the USFS and BLM.
Legai Matters and Settiement Activities
Q. Did any legal matters arise through the
16 preparation and filing of the HCC license application?
17 A. Yes. While preparing the relicensing
18 application, Idaho Power was involved in various legal
19 proceedings that had the potential to affect the
20 relicensing process. Some posed risks to the relicensing
21 by seeking determinations by FERC, or other federal
22 resource agencies, of the effect or impact of the HCC on
23 cultural, terrestrial, or aquatic resources above, within,
24 and below the project. Idaho Power worked to resolve the
25
RANDOLPH, DI 42
Idaho Power Company
1 issues resulting from the relicensing studies, the
2 collaborative process, and the license application.
3 Q. Did these legal matters have the potential to
4 impact the relicensing process?
5 A. Yes. Idaho Power was concerned that premature
6 legal or factual determinations of these issues would not
7 only be based on an inadequate record, but also that they
8 would outstrip, and therefore prejudice, the relicensing
9 process. Moreover, there were serious questions relating
10 to the authority of FERC to reopen the current license for
11 the HCC, consider the issues, and impose conditions in
12 advance of relicensing.
13 Q. Please provide an example of a legal matter
14 that had the potential to impact the relicensing process.
15 A. An example of a legal matter that presented a
16 risk began in 1997 with a letter by American Rivers, the
17 Sierra Club Legal Defense Fund, and various environmental
18 interests to FERC and NOAA. The letter gave Notice of
19 Intent ("NOI") to sue for violations of the ESA, alleging
20 that the operation of the HCC adversely affected ESA-listed
21 salmon below the HCC. The effect of the HCC on ESA-listed
22 species, particularly salmon, was a central issue in the
23 relicensing of the HCC.
24
25
Q. What was Idaho Power's response to the NOI?
RANDOLPH, DI 43
Idaho Power Company
1
2
A. Idaho Power filed detailed comments with FERC
opposing the 1997 allegations. Issues raised by the NOI
3 were the subject of numerous filings and meetings with FERC
4 and NOAA and eventually proceeded through litigation in
5 federal court. In 2004, Idaho Power , NOAA, the
6 environmental interests, and various other relicensing
7 parties resolved the issues raised by the NOI on an interim
8 basis with an interim settlement agreement ("2004 Interim
9 Settlement Agreement"). Final resolution of the issues
10 remained subject to the completed relicensing process.
11 Q. Did Idaho Power participate in any other
12 settlement activities with regard to the HCC relicensing
13 efforts?
14 A. Yes. As Idaho Power was working through the§
15 401 certification process with the respective DEQs in both
16 jurisdictions, the interrelationship of the§ 401
17 certification issues with the unresolved aquatic ESA issues
18 offered the potential for reaching a broad-based settlement
19 of all remaining relicensing issues. Therefore, in 2013,
20 Idaho Power prepared a settlement term sheet with the
21 objective of developing a comprehensive settlement
22 agreement.
Q. What did the term sheet address?
A. The term sheet addressed the water quality,
23
24
25 ESA, and other issues that remained unresolved. It was
RANDOLPH, DI 44
Idaho Power Company
1 presented to the states of Oregon and Idaho, NMFS, USFWS,
2 EPA, the Bureau of Indian Affairs, and the various Indian
3 Tribes participating in the relicensing process and
4 discussed at various meetings in June and July 2013.
5 Q. Were the parties able to reach settlement on
6 the unresolved issues?
7 A. No, the parties were unable to reach consensus
8 on all remaining issues. As a result, Idaho Power again
9 turned its attention to resolving the remaining§ 401
10 certification and ESA issues with the DEQs in both
11 jurisdictions, the NMFS, and USFWS.
12 Q. Aside from the work on the NOI, § 401
13 certification , and ESA issues, did Idaho Power perform any
14 other settlement activities?
15 A. Yes. In October 2003, the Company worked
16 towards a signed agreement between Idaho Power and the
17 County of Baker, Oregon. The intent was to get Baker
18 County's support for Idaho Power's relicensing of the HCC
19 to include the§ 401 certification with the state of
20 Oregon. As part of settlement, Idaho Power agreed to
21 provide funding for: (1) a deep draft boat launch facility
22 near the town of Richland along the Snake River road, (2)
23 improvements to the Hewett/Holcomb Park on the Powder River
24 arm of Brownlee Reservoir near Richland, Oregon, (3) a
25 litter and sanitation plan, (4) initial improvements to and
RANDOLPH, DI 45
Idaho Power Company
1 sourcing of gravel to use on the Snake River road for
2 maintenance, ( 5) maintenance on the Homestead road, ( 6)
3 annual weed control efforts, and (7) enhanced law
4 enforcement services in the HCC corridor. Idaho Power has
5 met with Baker County approximately every three years to
6 discuss the terms of the agreement and any issues that have
7 arisen and the Company continues to fulfill obligations
8 under the agreement.
9 Q. Were there any legal matters that were
10 resolved during this time?
11 A. Yes. There were other legal processes
12 initiated during this first stage of the relicensing
1 3 process that offered Idaho Power the opportunity to
14 possibly bring closure to complex, and potentially
15 contested, issues related to the relicensing of the HCC.
16 For example, in 1993, a series of federal reserved water
17 right c laims were filed in the Snake River Basin
18 Adjudication by the United States, in its trustee capacity,
19 for the Nez Perce tribe.
20 Q. What was the claim filed by the Nez Perce
21 tribe?
22 A. The claim was that ins tream flows on the
23 Clearwater, Salmon, and Snake Rivers were to provide
24 habitat and passage flows for ESA-listed salmon and
25 anadromous fish. Idaho Power and many of the stakeholders
RANDOLPH, DI 46
Idaho Power Company
1 in the relicensing of the HCC filed responses to these
2 claims . Litigation of the claims proceeded in the Snake
3 River Basin Adjudication for several years and various
4 issues in the litigation had the potential to impact HCC
relicensing issues. In 1998, the Snake River Basin 5
6 Adjudication court ordered mediation of the claims. Idaho
7 Power participated in the litigation and in the mediation
8 to not only ensure that HCC relicensing issues were not
9 prejudiced by the proceeding but also in an effort to
10 resolve many of those relicensing issues in a manner that
would benefit the relicensing of the HCC. In 2004, the 11
12
13
14
15
claims were resolved through the mediation resulting in no
effect on the HCC relicensing.
USFWS Section 18 Fishway Prescription
Q. Please describe the requirements under Section
16 18 of the FPA.
17 A. Section 18 of the FPA, 16 U.S.C. § 1341,
18 states that FERC must require the construction,
19 maintenance, and operation by a licensee of such fishways
20 as the Secretaries of Corrunerce and Interior may prescribe.
21 In its January 26 , 2006, filing, the DOI provided
22 preliminary prescriptions for fishways for bull trout.
23 EPAct provides parties to the licensing proceeding the
24 opportunity to propose alternatives to preliminary
25 prescriptions.
The
RANDOLPH, DI 47
Idaho Power Company
1 Q. Did any parties to the proceeding propose
2 alternatives to the preliminary prescriptions?
3 A. Yes. In a February 28 , 2006 , filing in
4 accordance with Section 241 of EPAct, Idaho Power presented
5 an alternative prescription. Under the alternative, the
6 Company would prepare a Bull Trout Passage Plan that would
7 inc lude: (1) final design plans for the Hells Canyon trap
8 modifications, (2) final engineering design plans for the
9 Pine Creek monitoring weir and trap fishway, (3) specific
10 protocols for the period of operation, location of release
11 point, and handling of all life-stages of bull trout and
12 other fish captured at the two facilities, (4) provisions
13 for transport of bull trout between Pine Creek and Hells
14 Canyon Dam, (5) an assessment of monitoring necessary to
15 evaluate the potential and risk of introducing deleterious
16 pathogens, and (6) a post-construction monitoring plan.
17 Under this alternative condition , the plan would include a
18 description of specific triggers related to the timeline of
19 construction and implementation of the Oxbow upstream trap
20 fishway, the Indian Creek permanent weir and trap fishway,
21 and the Wildhorse River weir and trap fishway. The plan
22 would also include the specific monitoring necessary to
23 determine when established triggers have been satisfied.
24 Q. What was the result of Idaho Power's
25 alternative prescription?
RANDOLPH, DI 48
Idaho Power Company
1 A. On January 3, 2007, DOI filed its modified
2 fishway prescription, which incorporated the trigger
3 criteria proposed by Idaho Power 's alternative fishway
4 prescription, with slight modifications . The primary
5 difference between DOI's modified fishway prescription and
6 Idaho Power's alternative fishway prescription were: ( 1)
7 the modified prescription maintains language from the
8 preliminary prescription regarding the need for appropriate
9 attraction flows when the Oxbow Dam fish trap is
10 constructed, which Idaho Power omitted, ( 2) the modified
11 prescription specifies that the Pine Creek weir is to be
12 constructed within two years from license issuance, and (3)
13 the modified prescripti o n includes language to reflect the
14 need for further information and discussion to define the
15 operational period for downstream passage facilities, while
16 Idaho Power's alternative prescription limited the period
17 of operation to October through November.
18 Q. Did FERC comment on Idaho Power 's modified
19 fishway prescription in the fina l EIS?
20 A. Yes. In the final EIS issued in 2007, FERC
21 staff noted that the modified fishway prescription did not
22 specify the flow range within which the Pine Creek weir
23 would be operable and recommended that the Pine Creek weir
24 be designed to provide effective downstream passage over a
25 wide range of flows which they defined as "encompassing the
RANDOLPH, DI 49
Idaho Power Company
1 range of flows that occur at least ninety percent of the
2 time in an average water year" (FERC final EIS page 666).
3 FERC identified that the value of the larger weir would be
4 to help evaluate the reintroduction potential of anadromous
5 fish into Pine Creek.
6 Q. How did the potential for a large Pine Creek
7 weir impact Idaho Power?
8 A. The inclusion of the potential for a large
9 weir in Pine Creek prompted additional engineering and
10 feasibility evaluation of such a structure. The drafting
11 of a detailed conceptual design was initiated and an
12 analysis to understand the hydrology of the Pine Creek
13 basin relative to the potential of flows that could be
14 destructive to such a facility was performed. It was
15 determined through this analysis that a large weir
16 structure in Pine Creek for collecting anadromous fish
17 outmigrants during the spring high fl ow period is not
18 feasible. Specifically, the weir could be subjected to
19 bedload and debris loads that could significantly damage
20 the structure and render the facility inoperable. Further,
21 the facility would likely have to be operated in a manner
22 to reduce the potential damage that would preclude the
23 facility's primary intent of capturing downstream migrating
24 fish.
25
RANDOLPH, DI 50
Idaho Power Company
1 Q. Did Idaho Power perform any other evaluations
2 related to Idaho Power's alternative prescription since the
3 final EIS was released?
4 A. Yes. First, Idaho Power performed an
5 engineering evaluation built upon the conceptual design of
6 the Hells Canyon Trap modification. Evaluation of the
7 potential period of operation of the Hells Canyon Trap
8 relative to passing bull trout as part of a Section 18
9 requirement determined that the number of fish handled in
10 the trap could be very large, especially during high return
11 periods of adult Chino o k salmon or steelhead. These fish
12 would need to be processed effectively to return them to
13 the river, while sorting out any potential bull trout to
14 pass.
15 Q. Would the processing of the fish more
16 effectively require additional design work?
17 A. Yes. The additional conceptual design work
18 included holding raceways such that fish could be held at
19 least on a daily schedule and released back into the river,
20 rather than releasing fish as encountered only to have them
21 immediately reenter the trap. Such holding facilities will
I
22 reduce the number of times individual fish may be handled
23 while operating the trap facility.
24
25
RANDOLPH, DI 51
Idaho Power Company
1 Q. Please explain any additional evaluations
2 related to the alternative prescription Idaho Power has
3 performed .
4 A. Although not directly related to the Section
5 18 evaluations , another engineering evaluation relat i ve to
6 fish passage was the analysis of an anadrornous surface
7 collector on the Hells Canyon Darn. The surface collector
8 was evaluated as part of a Relicensing Settlement Term
9 Sheet prepared in June 2013. The evaluation was a
10 conceptual engineering design of a surface collector and
11 included the development of a computational flow dynamics
12 model for the Hells Canyon Reservoir . The evaluation also
13 included the purchase of receivers and tags to implant in
14 hatchery released Chinook salmon and steelhead to allow for
15 their evaluation in the reservoir passage.
16 The surface collector was a component of a larger
17 structure targeted at meeting specific temperature
18 standards for the purposes of the§ 401 certification by
19 pumping cool water from the Hells Canyon Reservoir into
20 pump chambers that would mix with water being drawn into
21 the penstocks . Subsequent water quality evaluations
22 relative to rnethylrnercury in the cooler waters of Hells
23 Canyon Reservoir rendered this concept not viable.
24 However, the fish passage components of the design continue
25
RANDOLPH , DI 52
Idaho Power Company
1 to have some potent i al if fish pa s sage options are
2 considered under the new license term .
3 Bio1ogica1 Opinions £or Listed Species
4
5
Q.
A.
Please describe a Biological Opinion .
A Biological Opinion is prepared when FERC , as
6 part of an EIS , requires formal consultation associated
7 with listed species .
8 Q. When FERC issued the final EIS in 2007 , was
9 Idaho Power required to do any formal consultation
10 associated with listed species?
11 A . Yes . In conjunction with the issuance of the
12 final EIS , on September 13 , 2007 , FERC requested forma l
13 consultation under Section 7 of the ESA with the NMFS and
14 the USFWS regarding the effect of the HCC relicensing on
15 several aquatic and terrestrial species listed as
16 threatened under the ESA. However , because the "propo s ed
17 action " that FERC will consider in connection with the
18 issuance of a final license is not adequately defined until
19 the water qua lity measures to be implemented under the§
20 401 certification are identified , NOAA 's NMFS and USFWS
21 have been unable to proceed with formal consultations as
22 required by the ESA .
23 Q. Is FERC able to issue a new license absent
24 formal consultation under t he ESA?
25
RANDOLPH , DI 53
Idaho Power Company
1 A. No. As with§ 401 certification, FERC will
2 not issue a new license for the HCC until formal
3 consultation under the ESA is complete. These§ 401
4 certifications, together with the information in the final
5 EIS as supplemented if required by FERC, should provide
6 NMFS and USFWS with sufficient information to complete ESA
7 consultation, develop Biological Opinions, and make
8 appropriate recommendations to FERC for measures, if any,
9 to be included in the project license to address ESA
10 issues.
11 Q. Can any work be done regarding the effect of
12 the HCC relicensing on the aquatic and terrestrial species
13 listed as threatened under the ESA until the§ 401
14 certification is received?
15 A. Yes. NMFS and USFWS continue to gather and
16 consider information relative to the effect of relicensing
17 on the ESA listed species under their respective
18 jurisdiction. Idaho Power, as FERC's designated non-
19 federal representative, continues to cooperate with NMFS
20 and USFWS in the development of this information in an
21 effort to ensure that any ESA concerns are adequately
22 addressed.
23 In this regard, in early 2009, representatives from
24 the USFWS contacted Idaho Power about initiating informal
25 consultation regarding the preparation of a biological
RANDOLPH, DI 54
Idaho Power Company
1 assessment that would facilitate the issuance of a
2 Biological Opinion. The USFWS identified several issues
3 relative to bull trout in their recommendations and,
4 through this informal consultation process, began working
5 with Idaho Power on how the issues would be addressed.
6 Q. What were some of the issues raised by the
7 USFWS?
8 A. Some of the more significant issues identified
9 were related to the operational effects of the HCC, i.e.,
10 ramping rates associated with load following. In addition,
11 the status of bull trout in many of the HCC tributaries had
12 not been updated since the mid-1990s. However, the USFWS
13 identified information needs that would help facilitate a
14 Biological Opinion.
15 Q. What has Idaho Power done to date to address
16 issues raised by the USFWS?
17 A. A research and monitoring program has
18 continued since issuance of the final EIS. This research
19 need centered on developing long-term trends in the
20 population status of bull trout in these tributaries and
21 the migratory component of these tributaries that use the
22 mainstem Snake River. The long-term trends will be used
23 for adaptive management purposes when programs associated
24 with implementation of the HCC license begins.
25 Additionally, significant effort has been invested in
RANDOLPH, DI 55
Idaho Power Company
1 understanding the habitat limitations relative to bull
2 trout in these tributaries and the mainstem Snake River.
3 Predictive basin-wide temperature models were developed for
4 Pine Creek and Eagle Creek, which will be instrumental in
5 future monitoring plans relative to the distribution of
6 bull trout.
7 Q. Does Idaho Power believe the research and
8 monitoring program will have a positive impact on bull
9 trout?
10 A. Yes. Significant improvement is anticipated
11 in bull trout habitats associated with the implementation
12 of the license including water quality (total dissolved
13 gas, dissolved oxygen, temperature), habitat (instream
14 flows, screened water diversions, forage/prey base),
15 suppression of brook trout, and passage. In addition, one
16 of the components of the Proposed Action in the final EIS
17 is to develop a Tributary Habitat Enhancement Plan relative
18 to bull trout. Idaho Power initiated a pilot project in
19 2013 to begin to understand the dynamics and processes of
20 working with landowners in the Pine Creek basin relative to
21 water efficiency programs. Participation in the
22 development of recovery plans for bull trout and the
23 habitat has been beneficial to Idaho Power by identifying
24 realistic primary threats to bull trout in these basins.
25
RANDOLPH, DI 56
Idaho Power Company
1 Q. Has any other work been done regarding the
2 effect of the HCC relicensing on the aquatic and
3 terrestrial species listed as threatened under the ESA
4 while waiting for the§ 401 certification?
5 A. Yes . During this same time period, Idaho
6 Power engaged in informal consultation with NOAA's NMFS
7 relative to preparation of a Biological Opinion for
8 anadromous fish. The primary species of concern in this
9 consultation is Snake River fall Chinook salmon and, to a
10 lesser extent, Snake River steelhead and Snake River
11 spring/summer Chinook salmon. Other ESA Columbia River
12 stocks of salmon and steelhead and some ESA species
13 associated with estuary habitat may also be included in
14 this consultation. Because Snake River fall Chinook salmon
15 are a mainstem spawner, they are directly associated with
16 water quality within and below the HCC.
17 Since issuance of the final EIS, Idaho Power has
18 continued monitoring the timing and distribution of fall
19 Chinook salmon redds. In addition, the Company continued
20 temperature monitoring throughout the mainstem Snake River
21 relative to timing of spawning, incubation, and emergence
22 to guide operational plans and protocols specific to the
23 Snake River fall Chinook salmon.
24 Another component of the Snake River fall Chinook
25 salmon status evaluation included working with Oak Ridge
RANDOLPH , DI 57
Idaho Power Company
1 National Lab in the development of a Population Viability
2 Model. The model will be used to evaluate the status of
3 the extant population downstream of the Hells Canyon Dam
4 and will also be used to evaluate the potential benefit of
5 establishing a second population upstream of the HCC.
6 Consideration of a second population above the HCC is
7 currently a component of the NOAA Snake River fall Chinook
8 Recovery Planning. This monitoring and modeling information
9 will be incorporated into the development of the Biological
10 Opinion.
11 Q. When did Idaho Power begin working on the
12 issues regarding the effect of the HCC relicensing on the
13 fall Chinook salmon and bull trout?
14 A. Consideration of issues associated with the
15 potential stranding and entrapment of juvenile fall Chinook
16 salmon and adult bull trout developed during discussions
17 related to the 2004 Interim Settlement Agreement that
18 addressed measures to protect ESA-listed species until a
19 li cense issuance. Stranding and entrapment surveys were
20 initiated in the spring of 2005. These surveys included
21 identifying and surveying potential stranding and
22 entrapment bars and pools.
23
24
Q.
A.
What did Idaho Power learn from the surveys?
Through these surveys, it was determined that
25 the stranding of bull trout was not an issue of significant
RANDOLPH, DI 58
Idaho Power Company
1 concern, but that there was potential for entrapment of
2 juvenile fall Chinook salmon under some conditions. A plan
3 to reduce the potential harmful effects from entrapment
4 including water temperature monitoring and implementing
5 operational protocols to ensure reconnection of pools on a
6 daily basis to the main river have been implemented.
7 Annual monitoring to estimate total entrapment has occurred
8 since 2005.
9 Q. Please summarize the issues affecting the
10 issuance of a Biological Opinion.
11 A. Many of the primary issues associated with the
12 HCC§ 401 certification are directly relevant to
13 preparation of a Biological Opinion for fall Chinook salmon
14 and bull trout. Specifically, the§ 401 certification
15 measures that improve total dissolved gas, dissolved
16 oxygen, and water temperature will improve habitat
17 conditions for these fish and lessen the potential of
18 adverse effects or modifications to these fish and their
19 critical habitats. A relatively new issue that emerged
20 during§ 401 certification development was the potential
21 for harmful effects associated with methylmercury as
22 relatively high levels of methylmercury were identified in
23 smallmouth bass associated with the HCC. Collections of
24 various fish species for analysis of methylmercury have
25 been completed since 2013 and will be incorporated into the
RANDOLPH, DI 59
Idaho Power Company
1 Biological Opinion relative to baseline descriptions and
2 potential effects to the species from the proposed actions
3 associated with the§ 401 certification.
4
5
Costs Associated with Re1icensing Activities: 2003-2015
Q. Idaho Power has been involved in a number of
6 activities since the final license application was filed in
7 July 2003. Has Idaho Power subsequently tracked costs
8 related to the HCC relicensing activities in a manner
9 similar to the process used prior to the filing of the
10 license application?
11 A. Yes. Similar to the tracking of costs prior
12 to filing the license application, Idaho Power tracks the
13 cost of the HCC relicensing efforts on work orders. The
14 detail-level work orders are used through the life of a
15 study or task and costs are ultimately transferred to a
16 plant-specific location consolidated work order once the
17 unique project or task is completed. However, since 2003,
18 the splitting of certain administrative and general costs
19 across multiple locations ceased and all of the costs of
20 relicensing were direct charged to unique HCC relicensing
21 work orders.
22 Q. Does Idaho Power have a summary of the costs
23 incurred on relicensing efforts from August 2003 through
24 December 31, 2015?
25
RANDOLPH, DI 60
Idaho Power Company
1 A. Yes. However, unlike the summary of 1997-2003
2 costs included earlier in my testimony, the August 2003
3 through December 31, 2015, costs are summarized by year and
4 detailed cost element. During this period, several issues
5 were being addressed simultaneously and projects undertaken
6 have broad application to the overall relicensing effort.
7 Because of this, relicensing work orders contain charges
8 that overlap categories and periods. This makes it
9 difficult to discretely compartmentalize charges into the
10 broader categories exactly as discussed in my testimony.
11 The table below summarizes the HCC relicensing costs
12 recorded from August 2003 through 2015 including AFUDC
13 amounts accrued:
14
15
Year
lPCo Labor
Materials
Purch Services
Acct Entries
Overheads
Other Expenses
Subtotal
Aug-
Dec
2003
$1,262
$63
$1,150
$57
$0
$155
$2,688
Table 4 .
2004 2005
$2,351 $1,867
$163 $232
$3,151 $3,036
$137 $137
$0 $1
$533 $260
$6,335 $5,534
HCC Re licensing Costs, August 2003 -2015
(000s)
2006 2007 2008 2009 2010 2011 2012 2013 2014
$1,947 $1 ,559 $1 ,510 $1 ,727 $1 ,723 $1 ,636 $1,682 $1,792 $1,846
$165 $147 $132 $60 $119 $35 $43 $80 $45
$3,541 $2,549 $1,878 $1 ,825 $1 ,523 $1 ,890 $2,537 $3,087 $2,729
$137 $137 $137 $137 $137 $137 $137 $137 $137
$2 $1 $0 $0 $0 $0 $0 $0 $0
$(79) $247 $214 $216 $159 $148 $191 $228 $204
$5,713 $4,639 $3,872 $3,966 $3,662 $3,847 $4,592 $5,324 $4,962
2015
$2,071
$76
$3,037
$137
$0
$718
$6,040
AFUDC $1,636 $3,686 4,365 $4,758 $5,497 $5,376 $7,785 $9,437 $!0,804 $11,764 $12,976 $14,535 $15,854
Total Charges $4,324 $10,022
16
17 Q.
18 issues.
9,898 $10,472 $10,137 $9,248 $11,751 $13,099 $14,651 $16,356 $18,300 $19,496 $21,893
IV. OUTSTANDING RELICENSING ISSUES
Please summarize the outstanding relicensing
RANDOLPH , DI 61
Idaho Power Company
Total
$22,974
$1,362
$31,933
$1,706
$4
$3,194
$61,173
$108,472
$169,646
1 A. Generally, the outstanding issues that must be
2 addressed in advance of a license issuance fall into three
3 broad categories: (1) the CWA § 401 certification , (2) ESA
4 consultation, and (3) the potential for a revised or
5 supplemental NEPA analysis.
6 Q. When does Idaho Power estimate receiving a new
7 license from FERC?
8 A. Although Idaho Power is unable to predict with
9 certainty the timing of the issuance of a new license for
10 the HCC, the Company estimates issuance of the license will
11 be delayed until at least 2021.
12 Q. Has Idaho Power prepared an estimate of total
13 costs the Company anticipates incurring as it resolves the
14 outstanding issues and awaits a l onger -term operating
15 license from FERC?
16 A. Yes. As described in more detail in the
17 testimony of Mr. Tatum, Idaho Power estimates total HCC
18 relicensing costs to be between $350 million to $400
19 million on a system basis at 2021.
20
21
22
Q.
A.
V. CONCLUSION
Please summarize your testimony.
During 1991 to 2003, the first and second
23 stages of consultation on the relicensing of the HCC were
24 completed and resulted in the filing of the final licensing
25 application to the FERC on July 21, 2003 , initiating the
RANDOLPH, DI 62
Idaho Power Company
1 third stage of formal consultation. To involve
2 stakeholders, Idaho Power established a Collaborative Team
3 that consisted of over 100 organizational affiliations with
4 50 to 75 individuals participating at regular meetings.
5 The collaborative team formed Resource Work Groups that
6 undertook over 90 studies to evaluate project-related
7 impacts of operations of the HCC. The results of these
8 studies were documented in a draft license application.
9 Subsequent comments from the Collaborative Team and public
10 entities on this draft resulted in a final license
11 application that was filed with FERC. In total, Idaho
12 Power spent $51.08 million on relicensing activities from
13 1991 through July 2003 in the following resource
14 categories: Aesthetic, Aquatic, Archaeological/Cultural,
15 Recreation, Admin and Legal, Terrestrial/Botanical, and
16 Wildlife.
17 FERC is expected to issue a 40 to 50 year-term
18 license order for the HCC after completion of the§ 401
19 certification and the ESA consultation processes. When the
20 final§ 401 certification applications are presented to the
21 states of Idaho and Oregon for consideration and approval,
22 the states will give notice to the public of the
23 opportunity to comment on the proposals. The states will
24 then render a decision on the§ 401 certification
25
RANDOLPH, DI 63
Idaho Power Company
1 applications, including any measures to be included in the
2 project license to address water quality impacts.
3 Thereafter, FERC will initiate ESA consultation on
4 the project license with NOAA's NMFS and USFWS. FERC
5 cannot issue a license for the HCC until both states have
6 issued water quality certifications under§ 401 of the CWA
7 and ESA consultation on the licensing of the project is
8 completed. FERC may require that a supplement to the final
9 EIS be prepared if, through the completion of these tasks,
10 provisions of the final EIS issued by FERC in 2007 are
11 materially influenced by the§ 401 certifications issued
12 for the project under§ 401 of the CWA, or the Biological
13 Opinions issued after formal consultations under the ESA,
14 or if the certifications or consultations result in
15 modifications or additions to project structures or
16 operations not previously evaluated in the final EIS.
17 Idaho Power has continued to incur costs associated
18 with relicensing HCC after the final li c ense application
19 was filed, with the complexities since the submittal
20 described earlier in my testimony. Several issues were
21 being addressed simultaneously and projects undertaken have
22 broad application to the overall relicensing effort. From
23 August 2003 through December 2 015, Idaho Power has spent an
24 additional $169.65 million including AFUDC on relicensing
25 efforts bringing the total cost to $220.73 million. Idaho
RANDOLPH, DI 64
Idaho Power Company
1 Power considers the HCC relicensing project to be a viable ,
2 cost-effective effort that will ultimately serve the best
3 interests of customers.
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Q.
A.
Does this complete your testimony?
Yes , it does .
RANDOLPH , DI 65
Idaho Power Company
1 ATTESTATION OF TESTIMONY
2
3 STATE OF IDAHO
4 ss.
5
6
7
8
9
10
11
12
13
14
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County of Ada
I, Chris Randolph, 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
Environmental Affairs Director 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-filed testimony
and exhibits are true and correct to the best of my
information and belief.
DATED this 14th day of December 2016.
SUBSCRIBED AND SWORN to before me this 14th day of
December 2016.
-ti~~::r;wdl_
Residing at: Boise, Idaho
My commission expires: 12/20/20
RANDOLPH, DI
Idaho Power Company
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-16-32
IDAHO POWER COMPANY
RANDOLPH, DI
TESTIMONY
EXHIBIT NO. 1
Outline of the Federal Energy Regulatory Commission's
Traditional Relicensing Stages for Hydroelectric Facilities.
First Stage
o Applicant issues notice of intent, preliminary application document, request to use
Traditional Licensing Process ("TLP"), and newspaper notice;
o Commission approves use ofTLP;
o Formal Consultation Package ("FCP") sent out to Consulting entities;
o Applicant conducts joint agency/public meeting and site visit to discuss FCP;
o Resource agencies and tribes provide written comments; and
o Agencies, tribes, or applicant request dispute resolution on studies with the
Commission.
Second Stage
o Applicant completes reasonable and necessary studies;
o Applicant provides draft application and study results to resource agencies and
tribes;
o Resource agencies and tribes comment on draft application; and
o Applicant conducts meeting if substantive disagreements exist.
Third Stage
o Applicant files final application with Commission and sends copies to agencies
and tribes.
Exhibit No. 1
Case No. IPC-E-16-32
C. Randolph, IPC
Page 1 of 2
Hels Canyon Complex (FERC No_ 1971)
Consullafion Appendix
AN OVERV1IEW OF IDAHO POWEiR'S RELICENSING CONSULTATION
PROCESS
Fir.st Stage Formal Co.1m1ltation
(Fanml rommtatiOl'I ~ m tJw JrORSS dlscril»d by FEZC ~)
(II Cii §JU ad 4..51)
FIil. 1:r.lC-Jln. 1951
lJe'l,'l!IIJp SIUll)'Plill'I& 111111. ----t RWG&C,:~CT
FIIJ,_ u. 1"7
FCPSentlO~
~ & IID!ll!&lecl Parlle6
11:Jroommenl
J\JL 31, 2003
File~ FERC
2_Dd Stage Fonnal Consultation
(1.fl CFR Secnan.s 16.8 .no 4_S1}
Tbh,d Snge Formal Coasultation
(18 en. 116..8 and 4-11)
* Some smdiies haw bel!D ill ~p-ess siDcle 1991 (i-e.. f'aU Cllilloc*}.
Exhibit No. 1
Case No. IPC-E-16-32
C. Randolph, IPC
Page 2 of2
I
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-16-32
IDAHO POWER COMPANY
RANDOLPH, DI
TESTIMONY
EXHIBIT NO. 2
Proposed Study Plans included in Idaho Power's Formal Consultation Package
The proposed study plans in section VIII of the Formal Consultation Package reflected Idaho Power's
response to preliminary recommendations for studies and necessary information. Study titles are
categorized according to resource and listed below.
Aquatic Resources
• Pollutant Sources to Hells Canyon Complex
• Pollutant Transport and Processing Study
• Turbine Oil Losses from Hells Canyon Complex
• Oxbow Bypass Study
• Total Dissolved Gas Study
• Sediment Transport Study
• Evaluation of Anadromous Fish Potential with the Mainstem Snake River (RM 149-RM 458) and
Tributaries within the Hells Canyon Complex of Reservoirs
• Future Direction of !PC Anadromous Hatchery Program
• Status and Habitat Use of White Sturgeon in the Hells Canyon Complex
• Status, Distribution and Limiting Factors of Redband Trout and Bull Trout Associated with the
Hells Canyon Complex
• Hells Canyon Resident Fish Study Plan
• A Survey and Study of Benthic Macroinvertebrates in the Hells Canyon Complex, including
Upriver and Downriver Adjacent Reaches
Wildlife Resources
• A Description of the Small Mammal Community in Hells Canyon
• A Description of the Nongame Bird Community in Hells Canyon
• A Description of the Raptor Community Nesting in Hells Canyon
• A Description of the Amphibian and Reptile Community in Hells Canyon
• A Description of the Bat Community in Hells Canyon
• Distribution and Abundance of Wintering Bald Eagles in Hells Canyon
• Distribution of Nest Sites and Productivity of Nesting Peregrine Falcons in the Hells Canyon Study
Area
• A Description of State and Federal Sensitive Species in Hells Canyon
• Mule Deer Population Survey in Hells Canyon
• Distribution and Abundance of Mountain Goats in Hells Canyon
• Literature and Status Review of Big Game Species in Hells Canyon
• Spring Distribution, Habitat Use, and Relative Abundance of Upland Game Birds in Hells Canyon
• Distribution and Abundance of Sage and Sharp-tailed Grouse in Hells Canyon
• Summer Survey of Waterfowl Broods in Hells Canyon
• Use of Hells Canyon by Wintering Waterfowl
• Distribution and Relative Abundance of Mammalian Carnivores and Furbearers in Hells Canyon
• Survey of Wolverine Dens in the Seven Devils Mountains of Hells Canyon
• Nongame Wildlife Habitat Measurements
• Review of Wildlife Information and Data Collected in Hells Canyon by the Oregon Department of
Fish and Wildlife Department Exhibit No. 2
Case No. IPC-E-16-32
C. Randolph, IPC
Page 1 of 3
• Habits of Bald Eagles Wintering in Northeastern Oregon and Adjacent Areas of Washington and
Idaho (From Isaacs et al. 1992)
• Validation of a Mountain Quail Survey Technique (From Heekin and Reese 1995)
• Movements, Habitat Use, and Population Characteristics of Mountain Quail in West-central
Idaho; Big Canyon Creek (from Reese and Smasne 1996)
• Effects of Water Level Fluctuations on Wildlife Habitat
• Effects of Water Level Fluctuations and Road and Transmission Line Corridors on Riparian
Habitat Fragmentation
• Effects of Water Level Fluctuations on Threatened and Endangered Species: Bald Eagle
• Effects of Water Level Fluctuations on Species of Special Concern
• Effects of Water Level Fluctuations on Amphibians and Reptiles
• Effects of Reservoir Icing on Big Game Populations
• Effects of Road and Transmission Line Corridors on Wildlife Habitat
• Effects of Roads and Transmission Line Corridors on Wildlife Habitat: Threatened and
Endangered Species and Species of Special Concern
• Effects of Human Recreational Activities on Nesting Peregrine Falcons in the Hells Canyon Study
Area
• Effects of Human Recreational Activities on Wintering Bald Eagles in the Reservoir Reaches of the
Hells Canyon Study Area
• Effects of Human Recreation Activities on the Distribution and Relative Abundance of Townsend's
Big-Eared Bats and Spotted Bats in the Unimpounded Reach of the Hells Canyon Study Area
• An Evaluation of Raptor Electrocution at Transmission Lines Associated with the Hells Canyon
Project
• An Evaluation of Avian Collision with Transmission Lines Associated with the Hells Canyon
Project
Terrestrial/Botanical Resources
• Vegetation Description of Hells Canyon-Weiser, Idaho to the Salmon River
• Inventory of Threatened, Endangered and Sensitive Plant Species along the Snake River, Weiser,
Idaho to Salmon River
• Effects of Water Level Fluctuations on Noxious Weeds
• Effects of Road and Transmission Line Rights-of-Ways on Noxious Weeds
• Effects of Water Level Fluctuations on Botanical Resources
• Effects of Road and Transmission Line Rights-of-Ways on Botanical Resources
• Effects of Water Level Fluctuations Resulting from Operation of the Hells Canyon Complex upon
Threatened, Endangered and Sensitive Species
• Effects of Road and Transmission Line Rights-of-Ways on Threatened, Endangered and Sensitive
Plant Species
• Land Management Plan (LMP)
Archaeological/Cultural Resources
• Archaeological Inventories-Hells Canyon Complex Transmission Lines
• Archaeological Inventories-Brownlee, Oxbow, and Hells Canyon Reservoirs
• Archaeological Inventories-Below Hells Canyon Dam
• Euro-Asian Oral History Study-Hells Canyon, Oxbow, and Brownlee Area
• Native American Oral History Study-Hells Canyon, Oxbow, and Brownlee Area Exhibit No. 2
Case No. IPC-E-16-32
C. Randolph, IPC
Page 2 of 3
• Reconnaissance Inventory of Existing Project Structures: Brownlee, Oxbow, and Hells Canyon
Dam
• Effects of Reservoir Water Level Fluctuations on Cultural Resources
• Effects of River Water Level Fluctuations on Cultural Resources
• Other Terrestrial Resources Effects of Water Level Fluctuations on Soil Resources
• Effects of Road and Transmission Line Rights-of Ways on Soil Resources
• Influences of Land Management Practices on Terrestrial Resources on !PC Non-Project Lands
• Influences of Recreation Activities on Terrestrial Resources
Recreation Resources
• A Review of Past Recreation Issues and Uses in the Hells Canyon Recreation Complex (HCRC)
• A Description of Current and Potential Recreational Use and Users Associated with Reservoirs
within the Hells Canyon Recreation Complex (HCRC)
• A Description of Current and Potential Recreation Use and Users Associated with the Snake River
within the Hells Canyon National Recreation Area (HCNRA)
• An Investigation into the Current and Potential Physical and Social Conflicts Associated with
Recreational Use and Recreational Carrying Capacity of the HCRC
• A Description of the Impacts of Reservoir Water Level Fluctuations Within the HCRC on
Navigation, Recreational Opportunities, Amount of Recreational Use and Quality of Recreational
Experience
• A Description of the Impacts of Project-Induced River Water Level Fluctuations Within the
HCNRA on Navigation, Recreational Opportunities, Amount of Recreational Use and Quality of
Recreational Experience
• An Inventory of Existing Dispersed Recreational Access Sites Associated with the Reservoirs within
the Hells Canyon Recreation Complex, Recreational Use at those Sites, and Attitudes about
Dispersed Access
• An Inventory of Existing River-Related Dispersed Recreational Access Sites Within the HCNRA,
Recreational Use at those Sites, and Attitudes about Dispersed Access
• An Evaluation of Current (1997-2000) and Potential Recreational Use at Major Developed Sites
on Reservoirs within the Hells Canyon Recreation Complex
• An Evaluation of Users' Attitudes about and Expectations of Major Developed Sites and Facilities
Associated with Reservoirs within the Hells Canyon Recreation Complex
• Description of Current Angling Use, Users and Angling Results at Reservoirs within the Hells
Canyon Recreation Complex
• A Description of Angling Use Associated with the Snake River within the HCNRA
• A Description of Hunting Pressure within the Hells Canyon Recreation Complex
Aesthetic Resources
• An Evaluation of the Aesthetic Resources of Hells Canyon
Exhibit No. 2
Case No. IPC-E-16-32
C. Randolph, IPC
Page 3 of 3
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-16-32
IDAHO POWER COMPANY
RANDOLPH, DI
TESTIMONY
EXHIBIT NO. 3
Agency Comments Received on the Formal Consultation Package for Relicensing
Comments on the Formal Consultation Package were received from numerous entities. The
entities, as well as the date on the comment letters, are provided by category (to review comment
letters, see section III, First Stage Consultation, Agency Comments on Formal Consultation
Package).
Tribes
Columbia River Inter-Tribal Fish Commission-dated 5/12/97
Nez Perce Tribe-dated 5/12/97
Shoshone-Bannock Tribes-dated 5/12/97
Federal Agencies
Environmental Protection Agency-dated 5/12/97
National Marine Fisheries Service-dated 5/12/97
U.S. Fish and Wildlife Service-dated 5/13/97
U.S. Forest Service, Wallowa-Whitman National Forest-dated 5/15/97
U.S. Army Corps of Engineers-dated 6/10/97 and 11/22/99
National Park Service-dated 6/20/97
Bureau df Indian Affairs-dated 7 /2/97
State Agencies of Idaho
Division of Environmental Quality-dated 5/9/95
Department of Fish and Game-dated 5/12/97
Department of Parks and Recreation-dated 5/12/97
Department of Water Resources-dated 5/12/97
State Agencies of Oregon
State Historic Preservation Office-dated 2/5/97
Department of Agriculture-dated 5/1/97
Department of Geology and Mineral Industries-dated 5/5/97
Department of Environmental Quality-dated 5/8/97
Northwest Electric Power and Conservation Planning Council-dated 5/12/97
Department of Fish and Wildlife-dated 5/12/97
Department of Parks and Recreation-dated 5/12/97
Division of State Lands-dated 5/15/97
Exhibit No. 3
Case No. IPC-E-16-32
C. Randolph, IPC
Page 1 of 2
Local Government
Wallowa County Court-dated 5/12/97
Nongovernmental Organizations
Friends of the Weiser River Trail, Inc.-dated 4/23/97
Lost Valley Reservoir Company-dated 5/5/97
Idaho Wildlife Federation-dated 5/12/97
Hells Canyon Preservation Council-dated 5/13/97
Weiser Irrigation District-5/14/97
American Rivers-dated 5/15/97
Public
Arthur Seamans-dated 3/3/97
Buck Wheeler-dated 3/4/97
Howard and Sandra Britton-dated 3/12/97
Tracy Vallier-dated 3/24/97
John Batownis-dated 4/12/97
Exhibit No. 3
Case No. IPC-E-16-32
C. Randolph, IPC
Page 2 of2
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-16-32
IDAHO POWER COMPANY
RANDOLPH, DI
TESTIMONY
EXHIBIT NO. 4
Post License Submittal Timeline
(2003 through 2021)
Final HCC License Application
Submitted to the FERC
Mon 7/21/03
FERC Issues Notice of
Ac:ceptance of HCC Final
License Application
Wed 12/3/03
Federal Agencies File Mandatory
Conditions with the FERC
Thu 1/26/06
IPC Submits Revised Site
Specific Standard Change
Mon 5/1/06
IPC and USFWS Initiate
Informal Development of
Biological Assessment
Mon 2/2/09 Oregon Environmental Quality
Commission Orders ODEQ to
Review Temperature Change
Fri 3/4/11
Settlement of 1997
Environmental Group
vs FERC ESA Suit Agreement
Wed 12/1/04
USFWS Modifies
Fishway Prescription
Wed 1/3/07
Idaho Legislature Approved
Site Specific Standard Change
Thu 3/29/12
I •••••• . I I .
2003 2004 2005
FERC Notices HCC
License Rudy for
Environmental Review
Mon 10/3/05
• •
2006
Idaho State Submits Site
Specific Temperature Chan1e
to EPA
Wed 6/6/12
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Estimated Date of
Second Hells Canyon
License Issuance
Thu 1/2/21
2021
Site Specific Temperature
Standard Change Submitted
to DEQs
Thu 12/8/05
Original HCC
License Expired
Fn 7/1/05
FERC Staff Issues
Final Environmental
Impact Statement
Fri 8/31/07
Idaho Board of
Environmental Quality
Approved Temperature
Criteria Change
IPC Files Current
HCC 401 Application
Fri 7/29/16
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FERC Requests Additional
Information Requests
Wed 5/5/04
Baker County
Settlement Signed
Wed 10/1/03
FERC Staff Issues
Draft Environmental
Impact Statement
Fri 7/28/06
IPC Files Alternative
Prescription Under
Section 241 EPAct
Tue 2/28/06
Thu 11/10/11
Comprehensive Settlement
Discussions Discontinued
Mon 6/3/13