20190308Larkin Direct.pdf

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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSTON
IN THE MATTER OF ]DAHO POWER
COMPANY' S APPLICAT]ON EOR
AUTHORITY TO ]NCREASE ]TS RATES
FOR ELECTRIC SERVICE TO RECOVER
COSTS ASSOCIATED WITH THE NORTH
VALMY POWER PLANT.
IDAHO POWER COMPANY
D]RECT TESTIMONY
OF
MATTHEW T. LARKIN
CASE NO. IPC-E-19-08
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O. Pl-ease state your name, business address, and
present position with Idaho Power
"Company").
Company ("Idaho Power" or
A. My name is Matthew T. Larkin. My business
address is 7221 West Idaho Street, Boise, Idaho 83102. I
am employed by Idaho Power as the Revenue Requirement
Department.Senior Manager
O.
A.
in the Regulatory Affairs
Pl-ease describe your educatlonal background
I received a Bachelor of Business
10 Administration degree in Finance from the Universi-ty of
Oregon in 2001. In 2008, I earned a Master of Business
Administration degree from the University of Oregon. I
have also attended e1ectric utility ratemaking courses,
including the ELectric Rates Advanced Course, offered by
the Edison Electric Instj-tute, and Estimation of
El-ectricity Marginal Costs and AppTication to Pricinq,
presented by Natlonal Economic Research Associates, Inc.
O. Pl-ease describe your work experience with
Idaho Power.
A. I began my employment with Idaho Power as a
Regulatory Analyst in January 2009. As a Regulatory
Analyst I, I provj-ded support for the Company's regulatory
activities, including compliance reporting, financial-
analysis, and the development of revenue forecasts for
regulatory filings.
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LARKIN, DI 1
Idaho Power Company
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1 In January 20L4, I was promoted to Senior Regulatory
2 Analyst where my responsibilities expanded to incl-ude the
3 development of complex cost-related studies and the
4 anal-ysis of strategic regulatory issues.
5 Since becoming the Revenue Requirement Senior
6 Manager in March 2016, T have overseen the Company's
7 regulatory activities rel-ated to revenue requirement, such
8 as power supply expense modeling, jurisdictional- separation
9 studies, and Idaho Power's Open Access Transmission Tariff
10 formula rate.
11 I. OVERVIETT
72 O. What is the purpose of this case?
13 A. The purpose of this case is to present to the
L4 Idaho Public Utilj-ties Commission ("Commission") the
15 results of successful negotiatj-ons between Idaho Power and
16 Sierra Pacific Power Company d/b/a NV Energy (*NV Enerqy")
Ll regarding the terms and conditions under which either
18 partner may elect exit of participation in the North Valmy
79 power plant ("Valmy"). The resul-ts of these negotiations,
20 whj-ch began in 2071, have been memorial-ized in the North
27 Valmy Project Framework Agreement between NV Energy and
22 Idaho Power dated as of Eebruary 22, 2019 ("Agreement").
23 As required by the settlement agreement approved by Order
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LARKIN, Df 2
Idaho Power Company
1 No. 33117,1 in Case No. IPC-E-16-24, Idaho Power has pursued
2 prudent and commercially reasonabl-e efforts to end its
3 particj-pation in the operation of Valmy Unit 1 by December
4 3L, 2079, and Valmy Unit 2 by December 31, 2025. The terms
5 and conditions contained in the Agreement are consistent
6 with the commitments detail-ed in the settl-ement agreement
7 approved by Order No. 33711 and will al-l-ow Idaho Power to
8 achieve cost savings benefits for customers of
9 approximately $L2.2 mifl-ion when compared to operating both
10 units through 2025 under current agreements. In this case,
11 the Company seeks the Commission approval required by the
12 Agreement and to adjust customer rates to align with the
13 remaining life-cyc1e costs provided for by the Agreement.
L4 0. What specific actlon
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is the Company requesting
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A. The Company is requesting the Commission: (1)
approve the Agreement; (2) f ind that al-l- actual- Valmy
investments through December 31, 2018, were prudently
incurred; (3) al-l-ow investments forecasted through December
31, 2025, dt Valmy to be incl-uded in the level-j-zed revenue
requirement mechanism established by Order No. 33117; and
(4) adjust customer rates to recover the associated
1 In the Matter of the Application of Idaho Power Company forAuthority to Increase fts Ra tes for El-ectric Service to Recover Costs
Associated with the North VaTny PLant, Case No. IPC-E-16-24, Order No.
33117 (May 31 , 201,'7) .
LARKIN, DI 3
Idaho Power Company
1 incremental annual- Ievelized revenue requirement of $L.2L
2 mil-Iion with an effective date of June 7, 2079, which
3 equates to an overall increase of 0.11 percent.
4 Q. How is the Company's case organized?
5 A. My testj-mony begins with a discussion of the
6 Company's efforts to reach an agreement with NV Energy to
7 amend the current contracts associated with the ownership
8 and operation of Va1my, as required by Order No. 3311L. I
9 provide an overview of the Agreement and how it resul-ts in
10 l-ower costs than what exist under the current agreements,
11 benefiting Idaho Power's customers. My testimony then
12 summarj-zes the requested changes to the Valmy l-evel-j-zed
13 revenue requj-rement, including: (1) modifications
74 ref l-ecti-ng the provisions of the Agreement; (2) necessary
15 actual- investments made through December 31, 20L8, and
76 forecasted through December 31, 2025, for both Units 1 and
!7 2; and (3) savings resulting from operations and
18 maintenance ("O&M") reductions already experienced between
19 June 7, 20L7, and December 31, 2018, and those expected to
20 occur through 2025. My testimony concludes with a
2L quantification of the proposed $L.21 million increase to
22 rates with a requested effective date of June 7, 20L9.
23 The direct testimony of Company witness Tom Harvey
24 descri-bes in detaif the provisions of the Agreement. Mr.
25 Harvey's testimony presents the evaluation of the economics
LARKTN, Dr 4
Idaho Power Company
1 of a Unit 2 closure supporting the cessation of operations
2 aL December 31, 2025. Mr. Harvey discusses the necessary
3 actual- investments made at the Valmy plant that have added
4 to the assocj-ated plant bal-ances since July 31, 2016, that
5 are requested to replace the previously forecasted plant
5 bal-ances through December 31, 2078, and that are currently
7 ref1ected in customer rates.2 Fina1Iy, Mr. Harvey informs
8 the Commission of necessary future investments at the plant
9 to ensure Unit 1 and Unit 2 continue to be available for
10 rel-iabl-e l-oad service through the end of 2079 and 2025,
11 respectively.
72 O. Do you have any exhibits?
13 A. Yes. Exhibit No. 1 to my testimony provides a
74 summary of the updated l-evel-ized revenue requirement
to the l-evel-1zed15 calculations by cost category as compared
76 revenue requirement amounts incfuded in customer rates
approved with Order Nos. 33111 and 34071.3
O. Please summarize the Company's l-ast update to
base rates assoclated with Va1my.
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2 Order No. 33117, in Case No. IPC-E-16-24, al-l-owed customer rates
to be set based upon actual Valmy plant bafances through July 31, 2016,
and a forecast of Unit 1 plant bafances through December 31, 2019.
Order No. 33111, further required Idaho Power to seek a prudence review
of actual- plant bafances incurred after July 31, 2076, and a review of
forecasted bafances beyond 2019 before incfusion in rates as part of a
subsequent case. This case requests such a review.
3 In the lulatter of the Investigation into the Impact of Federaf
Tax Code Rerzisions on Utility Costs and Ratenaking, Case No.
GNR-U-18-01, Order No. 34071 (Idaho Power Company) (May 31,2018).
LARKIN, DI 5
Idaho Power Company
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1 A. Order No. 33117, in Case No. IPC-E-16-24,
2 approved a settlement stipulation entered into between
3 Idaho Power, Commission Staff, the Idaho lrrigation Pumpers
4 Association, Inc., Micron TechnoJ-ogy, Inc., the U.S.
5 Department of Energy and Federal Executive Agencies, the
6 Idaho Conservation League and Sierra C1ub, and the
7 Industrial Customers of Idaho Power re1ated to Valmy
8 ("settlement Stipulation") The Settl-ement Stipulation
9 contained the foll-owing provisions: (1) a level-ized annuaf
10 Idaho jurisdlctional- revenue increase of $13.29 mil-l-ion
11 effective June L, 2071, to recover Valmy-related revenue
1,2 requirements through 2028; (2 ) a balancing account to track
13 the incremental- costs and benefits associated with the
1,4 accel-erated Val-my end-of-life date; (3) regulatory
15 accounts, including regulatory assets, to facil-itate
16 compliance with Genera1ly Accepted Accounting Principles;
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18 each generation unit; and (5) the settl-ement of all- issues
79 in Case No. IPC-E-76-23.4
20 O. Please describe the components for which the
27 $73.29 million was based.
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a In the Matter of the AppTication of ldaho Power Company for
Authority to Increase Rates Due to Revised Depreciation Rates for
Efectric PLant-in-Service, Case No. IPC-E-16-23, Order No. 33770 (May
31, 2011 ) .
LARKIN, DI 6
Idaho Power Company
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revenue requirement
(1) existing Valmy
based on actual- plant balances
The levellzed annual Idaho jurlsdictional-
incl-udes the revenue requirement on:
investments
forecasted plant
31, 2011; (2) the
from August
requirement
Unit 1 from
31, 2071, which were
July 31, 20L6, and
t, 2016, through May
on incremental-
June 7, 2077,
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in the
at May
through
balances
revenue
investments forecasted for
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through December 37, 20L9; and (3) the revenue requi-rement
associated with expected decommissioning costs, the sum of
whlch is offset by the expected annual- non-fuel O&M
savJ-ngs.
O. Were there any further adjustments to customer
13 rates re1ated to the recovery of Valmy-specific revenue
l4 requirements after
A. Yes.
June 7, 2071?
15 , 2078, customer rates were
of the federa] Tax Cuts and16 reduced to reflect the impact
71 Jobs Act of 2011 ("TCJA"), as directed in Order No. 34071.
This adjustment included a specific reduction related to
Valmy of approximately $2.78 miIIion, or $2.07 mil-l-ion on
an Idaho jurisdictional basis. The computatj-on of the
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2L incremental change in the l-evelized revenue requirement
this case are22 amounts included in the Company's request
tax rates in effect23 based on the corporate
24 respective years.
LARKIN, DT 7
Idaho Power Company
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On June 1
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II. IDAIIO POIVER'S CESSATION OF PARTICIPATION
IN VALM:T OPERATIONS
O. Under what agreements do NV Energy and ldaho
Power own and operate Valmy?
A. Currently, the ownership and operation of
Valmy is dictated by three agreements: the Agreement for
the Ownership of the North Valmy Power Pl-ant Project
("Ownership Agreement"), the Agreement for the Operation of
the North Valmy Power Pfant Project ("Operation
Agreement"), both of which are dated December 12, L918, and
the North Valmy Station Operating Procedures Criteria,
dated as of February 77, 1993, between Idaho Power Company
and Sierra Pacific Power Company, as amended by Amendment
No. 1 to the Operating Procedure Criteria for Valmy Coal
Diversion Procedures and Usage, dated as of January 7, 2072
(coIlectively, the "Existj-ng North Valmy Agreements"). The
Ownership Agreement sets forth Idaho Power's ownership
rights and interests in the Valmy plant whil-e the Operation
Agreement assigns NV Energy as the operator of the Valmy
plant whil-e al-so setting forth operating decj-sion
procedures, operating expense payments, and the annual
budgeting process, among other terms and conditions. The
Exi-sting North Valmy Agreements have provided Idaho Power
and NV Energy ("Party" or col-l-ectively, the "Parties")
LARKTN, DI B
Idaho Power Company
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the basis for owning and operating the Valmy plant for over
40 years.
O. What
used by the Parties
are the current end-of-life assumptions
for each Valmy unit?
the SettlementAIdaho Power, in
Commission with Order No
StipuJ-ation
. 33117, agreed to
efforts to end its
Update
and 2,
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I participation in
commercially reasonabl-e
the operation of Unit December 31,1bv
In9 20L9, and Unit 2 by December 31, 2025.i-ts 2078
10 to the Llfe Span Analysis Process of Valmy Units 1
11 NV Energy recoflrmended retirement dates of both units at
72 year-end 2025.5 However, oh December 21, 2018,. in Docket
13 No. 1B-06003, the Nevada Public Utilities Commission
L4 ("Nevada PUC" ) issued an order adopting NV Energy's 2079-
15 2038 Triennial Integrated Resource PIan, 20L9-2021 Action
76 Pl-an, and 201,9-2021 Energy Supply Pl-an, all of which
L1 incfuded an early retirement of Unit 1 on December 31,
5 Application of Sierra Pacific Power Company d/b/a NV Energy and
Nevada Power Company d/b/a NV Energy for approvaL of 1ts 2077-2036
TrienniaJ- Integrated Resource Pfan and 2077-2019 Enerqy Supply P1an,
2016 AnnuaL Demand Side lulanaqement Update Report as it refates to theAction Pfan of its 2076'2035 Integrated Resource Pl-an, and the second
amendment to its 2076-2035 Integrated Resource Pfan and 2016-201-8Action PLan to incfude the acquisition of the South Point Energy
Center, Docket No. 16-07001. Updated Life Span Analysis Process in
compliance with Order dated February 16, 207'7, filed on February 1,6,
20L8.
LARKIN, DI 9
Idaho Power Company
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202L, under NV Energy's stated conditions.6 The end-of-life
date for Unit 2 remained at year-end 2025.1
O. Do the Existing North Valmy Agreements offer
NV Energy or Idaho
in a Valmy unit?
A. No.
Power the ability to end participation
Ownership Agreement provides
under a variety of scenarios,
in which one party chooses to
units during the time the other party
wishes to cont j-nue operations.
O. With a year-end 2079 cessation of
participation in Unit 1 operations, Idaho Power would be
the first party to exit a Valmy unit while NV Energy
continues operations of the unit through at least 202L, dfl
exit scenario not provided for under the Existing North
Valmy Agreements. Has the Company attempted to amend the
6 Joint AppTication of lilevada Power Company d/b/a NV Energy and
Sierra Pacific Power Company d/b/a NV Energy for approvaL of their
2019-2038 Trienniaf Inteqrated Resource Pfan and 2079-2021 Energy
SuppTy P7an, Docket No. 18-06003 (December 21, 2018). NV Energy's
stated conditions include: ( 1 ) demonstrative evidence that the three
new northern PV projects and associated storage projects will achieve
commercial operati-on by June 2022, (2) NV Energy must have adequate
capacity to serve customer 1oad, (3) there must be sufflcient access to
capacj-ty and energy in western markets to mitigate cost pressure and
afl-evi-ate a reduction in ffexibilj-ty associated wj-th not having power
avail-abfe from Va]my 1, (4) a transmj-ssion area foad of 2,800 MW wil-]
trigger a reevaluation of retirement of Va1my 1, (5) accounting
treatment regarding decommissioning Valmy 1 must be consistent wlth
other retirement NV Energy generatj-on assets, and (6) the accounting
treatment regarding undepreciated book value must be consistent with
the tracking accounting treatment authorized in prior dockets.
LARKIN, DI 10
Idaho Power Company
While the
for cessation of
none contemplate
exit one or both
operations
a scenari-o
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7 Nevada PUC Order dated December 21, 2078.
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Existing North Valmy Agreements and end participation in
operations of Unit 1 in accordance with Order No. 3311L?
A. Yes. Following Commission approval of the
Settlement Stipulation in Case No. IPC-E-1,6-24, Idaho Power
and NV Energy began discussions around Idaho Power's exit
from ownershi-p and/or operations of Va1my. While the
Parties do not align on retirement dates of the units, both
companies committed to pursuing a path forward that wou1d
allow Idaho Power to exit one or more Valmy units on the
Company's proposed schedul-e. On December 27, 2011, the
Parties signed a term sheet ("Term Sheet") that established
a non-binding agreement that would set in motion the path
for Idaho Power to achieve its preferred exit dates for
both Valmy units. The Term Sheet, which was included as
part of the Val-my Status Report8 filed with the Commission
on December 29, 2011, also identified Idaho Power's intent
to cease its participation in operatj-ons of Unit l- on
December 3!, 20L9.
O. Please summarize the provisions of the Term
Sheet.
A. The Term Sheet included both binding and non-
binding provisions. The binding provisions speci-fied that
the Parties were bound to maintain the confidentiality of
8 Idaho Power Company's Confidentiaf North Valmy Power Pl-ant
Status Report, Case No. IPC-E-76-24.
LARKIN, DI 11
Idaho Power Company
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1 discussions rel-ated to the retirement and shutdown of Valmy
2 and that the Parties would consult with each other prior to
3 issuing any press rel-ease or publi-c statement or making any
4 public filing. The non-binding provj-sions indicated the
5 Parties agreed to enter into a retirement, monitoring, and
6 decommissioning (or si-milar) agreement that would set
7 forth, among other things, the means for Idaho Power's exit
8 from one or more Valmy units, and clarify certain issues
9 under the existing ownership and operating agreements
10 between the Parties with respect to retirement,
11 environmental assessment and monitoring, and
72 decommissioning. Through the Term Sheet, the Parties
13 commi-tted to working through all the binding and non-
14 binding provisions and memorialize resolutions in an
15 agreement.
76 O. Pl-ease describe the activities the Parties
77 have undertaken fol-lowing execution of the Term Sheet.
18 A. Immediately foll-owing the signing of the Term
19 Sheet, the Parties commenced preparation and negotiation of
20 the Agreement. Paraflel- to drafting provisions of the
27 Agreement, the Partj-es worked to identify indivlduaf O&M
22 expense items, separating
and variable O&M expenses.
were reviewed to determine
O&M cost components between fixed
activi-ty would be
for budgeting purposes,
LARKIN, Df L2
Idaho Power Company
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Over 300 different activities
if the
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what time period it applied to, whether it is associated
with a speciflc unit, coflrmon facilitles, or both, and what
the budget amount would be if only one unit were in
operation. The
currently used
review resulted in approximately 170
activitles receiving a designation of fixed
or variabl-e O&M. These fixed and variable O&M charges
became the foundatj-on for ca1culating payment obligations
contained in the Agreement.
O. Have the Parties finalized the Agreement?
10 A. Yes. The Agreement was executed by Idaho
l-1 Power on February 22, 20!9, and by NV Energy on February
L2 28, 2079, and is effective upon both Party's determination
13 of sati-sfactory regulatory approval-s from the Commission,
14 the Nevada PUC, and the Publ-ic Utility Commissi-on of
15 Oregon. The Agreement will remain in effect until- the date
76 in which all Valmy decommissioning activities have been
l1 performed
costs have
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or completed and all related decommissioning
1B been paid.
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20 Idaho Power's
Why is the Agreement in the best interest of
customers ?
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A. In addition to meetlng the obligations
committed to in the Sett1ement Stipulation approved with
Order No. 33117, the Agreement creates a structure whereby
fdaho Power may cease its participation in the Valmy plant
or the units thereof, resulting in a reduction in overa1l
LARKTN, Dr 13
Idaho Power Company
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1 costs for ldaho Power customers of approximately $12.2
2 million, as compared to prior plans to operate both Valmy
3 units through 2025. The option to cease participation in
4 one or more Valmy units does not exist under the current
5 Existing North Valmy Agreements. The Agreement clarifies
5 the respective rights and obligatlons of each Party with
7 respect to the continued operation, exit or retirement, and
8 decommi-ssioning of the Va1my plant or the units thereof .
9 The newly-structured payment obligations set forth in the
10 framework of the Agreement provide a financial- benefit to
11 customers because incremental- capital improvements
12 associated wlth an exited unit cease, comrnon facility costs
13 are reduced as a resul-t of Idaho Power's new capacity
L4 share, and variable operating cost savings are experienced.
15 The Agreement provides a l-evel- of certainty
16 regarding the amount of fixed non-fuel O&M costs in the
71 future and generates an annual levelized revenue
1B requirement savings to customers of nearly $189,000.
19 Approval of the Agreement is in the best j-nterest of Idaho
20 Power and its customers.
27 a. Pl-ease provide a general overview of the
22 purpose of the Agreement.
23 A. The Parties entered into the Agreement because
24 the Existing North Valmy Agreements
mechanj-sm by which either Party can
do not provide for a
cease participation in
LARKIN, DI 74
Idaho Power Company
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1 Valmy operations in a manner that woul-d al-l-ow either Party
2 to avoid any of the associated cost obligations, nor do
3 they set forth the terms by which decommissioning of the
4 plant is to occur. The Agreement was executed to: (1)
5 provide for a contractual mechanism by which Idaho Power
6 may meet its obligations pursuant to Order No. 33777; (2)
1 clarlfy the respective rights and obligations of the
8 Parties with respect to the continued operation,
9 retirement, and decommissioning of the Valmy plant or the
10 units thereof; and (3) affow an exiti-ng participant to
11 cease participation in the Valmy plant or the units
12 thereof. Company witness Tom Harvey will describe the
13 provisions of the Agreement in more detail-.
L4 O. Are there any costs associated with the
15 Agreement?
16 A. Yes. The Agreement sets forth payment
tl obligations associated with a Party's exit from
18 participatj-on 1n operation of a Valmy unlt. Mr. Harvey
19 will explai-n the exit fee structure establ-ished as part of
20 the Agreement i-n more detail- in his testimony, but,
2l generally, Idaho Power would be responsible for exit fees,
22 a fixed dol-l-ar amount that represents ongoing Valmy-related
23 costs that exist under the current agreement, and shared
24 costs, which are known, ongoing Valmy-rel-ated costs that
25 exist regardless of a decision to exit a unit. The Company
LARKIN, DI 15
fdaho Power Company
1 would be l-iable for these costs until- the earl-ier of the
2 reLtrement date of each unit or December 31, 2025.
3 In addition, Idaho Power would be responsible for
4 its share of the applicable decommissioning costs arising
5 from activities that occurred prior to exlt of the unit.
6 The Company would not, however, be responsible for the
7 fol-lowing costs after exiting from the unit: operating
8 expenses, fuel-related costs, costs of capital additions,
9 administrative and general expensesr or any new fixed or
10 variable costs associated with such unit.
11 O. Please explain how the cost provisions of the
12 Agreement benefit customers.
13 A. The Existing North Valmy Agreements do not
74 provi-de relief from contractual- payment obligations should
15 Idaho Power exit a unit prior to NV Energy, meaning the
76 Company would be responsible for 50 percent of the fixed
l1 and variabl-e costse associated with Val-my for as long as NV
18 Energy operated the plant regardless of Idaho Power's
19 decision to exit from one or both uni-ts. With execution of
20 the Agreement, when Idaho Power exits operations of Unit 1
2t at year-end 2079, total variab1e operating costs will
22 decrease, a percentage of common facility costs will be
23 reduced, and incremental capital improvements specific to
24 Unit 1 will- cease. When NV Energy ceases operatlons of
LARKIN, DI 16
Idaho Power Company
e Excfudj-ng fuel expenses
1 Unit l, Idaho Power will no longer be responsible for fees
2 associated with exiting the unit.
Has Idaho Power quantified the cost savings it
achieving assuming execution of the Agreement?
Yes. When compared to costs assocj-ated with
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anticipates
A.
the Exlstlng
contractual-
North Valmy Agreements and Idaho Power's
payment obligations associated with both units
B through December 3L, 2025, the Company estimates savings of
9 over $L2.2 million by entering into the Agreement. These
10 costs are detalled in Mr. Harvey's testi-mony. Because the
11 balancing account mechanism approved by the Commission with
t2 Order No. 3311 1 ensures customers pay no more or no less
13 than actual Valmy-refated costs, these cost savings will-
14 serve as a direct benefit to customers.
15 rrr. THE VAI;}fY LEVELIZED REVENT E REQUIRET,IENT MECHANISM
L6 O. Pl-ease provide an overview of the Company's
L1 bal-ancing account mechanism assoclated with the Valmy plant
18 and approved with Order No. 3311I.
L9 A. The balancing account mechanism approved j-n
20 Case No. IPC-E-16-24 is designed to smooth revenue
2l requirement lmpacts associated with the shutdown of Valmy
22 and all-ow for full- recovery of Valmy-related costs near the
23 plant's end-of-l-ife. In addition, LL more closely aligns
24 the cost recovery period with the remaining operating life
25 of the pJ-ant, resuJ-ting 1n a better matching of cost
LARKIN, DI 11
Idaho Power Company
1 recovery from customers who
2 operations while mitigating
3 bearing the costs of a plant
benefit from the plant's
the risk of future customers
that
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providing service. With Order No.
the rate impact to customers, the
Valmy-rel-ated revenue requirement
three years longer
fife of the plant.
O. What
balancing account?
A. There
wil-l- no longer be
33171, to help mltigat.e
Commission approved a
collection through 2028,
than Idaho Power's planned operatlonal-
types of costs are recorded in the Valmy
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11 are four types of costs the Company
12 records to the balancing account: (1) the accelerated
13 depreciation associated with existing Valmy plant
!4 investments,' (2) the return on the undepreciated capital
15 investments at Valmy; (3) non-fuel O&M reductlons; and (4)
L6 decommissioning costs refated to the Va1my shutdown. Under
71 the balancing account approach, the Company replaces the
18 base rate revenue recovery associated with Idaho Power's
1,9 existing investment in Valmy with a levelized revenue
20 requirement and tracks it in the Valmy balancing account.
27 O. How is the level-ized revenue requirement
22 determi-ned?
23 A. The l-evelized revenue requirement is
24 determined by calcul-ating the present va1ue of the revenue
25 requj-rement of each of the individual- balancing account
LARKIN, Df 18
Idaho Power Company
1 items and converting the values into a level payment stream
2 from customers over the remainlng recovery period. Order
3 No. 33777 approved an incremental revenue requirement
4 increase of $13.3 million, lncl-uding all Valmy-related
5 plant investments as of May 3L, 20L1, based on actual plant
6 bal-ances through July 31, 2016, and forecasted plant
7 balances from August l, 2016, through May 31, 2071,
8 projected additions to the Valmy plant for Unit 1 from 2077
9 through 20!9, current and future non-fuel O&M savings
10 beginning June 1-, 20L7, through December 31, 2025, and
11 projected decommissioning costs, excluding contingency
72 estimates.
13 O. You indicated Idaho Power is proposing to
L4 update the l-evel-1zed revenue requirement as part of this
15 request. What is the updated levelized revenue requirement
16 based on cost changes updated by the Agreement and the
L1 Settl-ement Stipulation that the Company is proposing to be
18 recovered from customers and tracked in the Valmy balancing
79 account?
20 A. Incorporating the changes in costs associated
2L with execution of the Agreement and updating Valmy-related
22 plant investment balances results in an annual l-evel-ized
23 revenue requirement of $29.90 milllon on an Idaho
24 jurisdictional basis, ot an incremental- increase to the
25 Idaho jurisdictional- levelized revenue requirement of $7.27
LARKTN, Dr 19
Idaho Power Company
3
4
5
6
1
B
9
1 million. Exhibit No. 1 summarizes
2 level-ized revenue requlrement. The
the changes to the
updated Valmy-rel-ated
inclusion of al-1 actual-
2078; (2) an updated
1 through December 3!,
the l-evelized revenue
January 1,
Unit 2 and
Based upon
the Settl-ement Stipulation,
estimate of an updated
that incorporated planned
forecast of investments for Units
2019, ds weff as the inclusion of
requirement for Unit 1 investments beginning
2020,' and (3) a forecast of investments for
common facil-ities through December 31, 2025.
plant balances consist of: (1) the
investments through December 37,
the Company also quantified an
levelized revenue requirement
10 the terms of the Settlement Stipulati-on, forecasted
11 j-nvestments at Unit 2 between June l, 2077, and December
L2 31, 2025, were excluded from customer rates until- the
13 Company filed this case, or a case with a similar intent.
74 O. How does the updated levelized revenue
15 requirement compare to prj-or estimates performed at the
L6 time of settlement discussions in Case No. IPC-E-16-24?
71 A. When Idaho Power computed the Idaho
1B j urisdictlonaf
with the terms
fevelized revenue requirement associated
19 agreed upon in
22 investments associated with Unit 2 from June l, 2071, with
20
27
23
24
25
a recovery
2025. The
forecast of
beginn j-ng
level-i zed
January l, 2020, through December 31,
revenue requirement incl-uded a
Unit 2 investments of approximately $9.1 4
LARKIN, DI 20
Idaho Power Company
1
2
3
4
5
6
1
I
mil-l-ion. Through negotiations of the Agreement, Idaho
Power was able to significantly reduce forecasted Unit 2
investments to $5. 17 mil-l-ion, resulting in a lower
the updates to the level-ized
9 revenue requirement amount.
10 A. The levelized revenue requirement can be
11 separated into four components:
72 o Component A. The revenue requirement on
13 actuaf existing investments at May
Ievel-ized revenue requirement
by eliminating certain costs
continued operation of Valmy
the p1ant.
O. Please describe
74 a Componen! B. The
15 incremental investments after May
76
20
than that estimated in 2077
associated with NV Energy's
after Idaho Power's exit from
31, 20L7;
revenue requirement on
3L, 2017;to
revenue requirement
non-fuel- O&M
a Qprnppnelt C. The
11 associated with future decommissioning costs; and
1B o Component D. The revenue requirement
79 associated wlth O&M savj-ngs, including
reductions and those costs updated by the Agreement.
10 As presented 1n Exhibit No. l, Component B conslsts of two
subcomponents: (1) the revenue requirement of j-ncremental investments
at Unit 1 from June 1, 201-7, through 2019 and (2) the revenue
requirement on Unit 2 Valmy j-ncremental investments after May 31, 201J,
including the revenue requirement of Unit 1 beyond 2079.
LARKTN, Df 2I
Idaho Power Company
1
2
3
4
5
6
"7
8
Y
O.
changes to
inc]uded in
A.
investments
the revenue
January 7,
requirement
in Unit 2 during
requirement for
2020. Whil-e the
Pl-ease provide a summary of the drivers of the
the level-ized revenue requirement amount to be
customer rates.
The main driver of the increase relates to the
inclusion of the actual- and estimated incremental
the remainder of 1ts l1fe and
Unit 1 investments beyond
Company calcul-ated the revenue
of these cost categories in Case No.
lncfuded in the Ievellzed10 IPC-E-L6-24, they were not
11 revenue requirement computation approved with Order No.
72 33771 but rather deferred for review and inclusion in rates
13 at a later date. For comparative purposes, the annual
74 l-evel-ized revenue requirement related to the same cost
15 categories in that case was $1.15 million. To a l-esser
16 degree, the update of the existing plant to actual-s at May
77 31, 20L1, afso contributed to the increase in the levelized
18 revenue requi-rement. Fina11y, forecast O&M expenses for
79 the remainder of Valmy's life are lower than the levels
20 approved in Case No. IPC-E-16-24, partj-a1Iy offsettlng the
21 other incremental cost categories.
22 O. Were there any changes to Component A, the
23 revenue requirement on existing investments as of May 31,
24 201,7 ?
25
LARKIN, DI 22
Idaho Power Company
1 A. Yes. The revenue requirement component
2 related to existing investments is based on the Valmy-
3 related plant bal-ances in effect prior to the establ-ishment
4 of the Valmy balancing account or existing investments as
5 of May 31, 2071. In Case No. IPC-E-L6-24, the approved
6 accelerated depreciation expense was based on a net plant
7 balance that included actual- plant balances as of July 31,
8 20L6, and forecasted balances through May 31, 2077. Idaho
9 Power has updated the Valmy-related plant balances so that
10 the revenue requirement on existing investments incl-udes
11 actual- plant bafances on May 31, 2017. As of May 31, 20L1,
L2 the Val-my net plant investment was approximately $271.55
13 mil-f ion.
74 How does this too
15 plant investments approved
76 A In Case No. IPC-E-16-24,
77
1B
t9
20
27
22
23
24
the Val-my-related net
rPC-E-1 6-24?
the Commission
compare
in Case No.
25 associated with existing Valmy investments incl-uded in the
approved Valmy-related net plant investments of
approximately $276.77 million, or approximately $780,000
l-ess than actual- Valmy-related plant investments at May 37,
20L1 .
O. What is the updated l-evelized revenue
requirement on existing lnvestments as of May 31, 2071,
included in the level-ized revenue requirement calculation?
A. The total- revenue requirement amount
LARKTN, Dr 23
Idaho Power Company
1 l-evelized revenue requirement calculatj-on is approximately
2 $34.44 million on an Idaho jurisdictional- basis.
3 Q. How does this compare to the l-evel-lzed revenue
4 requj-rement on existing investments currently included in
5 customer rates?
5 A. The updated level-ized revenue requJ-rement on
7 existing investments is an increase of approximately
I $144,000 due to higher than forecasted plant investments
9 through May 31, 2071.
10 O. Please describe the changes made to Component
11 B, the l-evelized revenue requj-rement on j-ncremental
72 i-nvestments.
13 A. The changes made to Component B, the levelized
1,4 revenue requirement on incremental- investments can be
15 summarized in two subcomponents: (1) the revenue
!6 requirement on incremental- investments at Unit I from June
L7 !, 2071, through December 31, 2019, and (2) the revenue
18 requirement on Unit 2 Valmy i-ncremental- investments after
19 May 37, 2077, lncJ-uding the revenue requirement of Unit 1
20 beyond 20L9.
2! O. What changes were made to the revenue
22 requi-rement on incremental- investments associated with the
23 first subcomponent Unit 1 investments from June L, 2011,
24 through December 37, 2019?
25
LARKTN, Dr 24
Idaho Power Company
1
2
3
4
5
6
7
B
9
A.
i-ncremental-
Stipulation
al-l- Unit 1
through 20L9.
13 (a) (1) of the
investments approved in
in Case No. IPC-E-L6-24
plant j-nvestments made at
the Settl-ement
included a forecast of
after May 31,
requj-rement only
with Sectlon
The revenue requirement component related to
Valmy
20L7, and included the associated revenue
Idaho Power,
Settl-ement
in accordance
Stipulation, adjusted
3L, 20L8, balances toL, 2071, through December
actual- Unit 1 i-ncremental-
p1ant.
the June
reflect
10
investments made at the Valmy
Actual Unit 1 plant investments made during the June
L, 20!1, through December 31, 2078, time period were
approximately $2.26 mil-l-ion compared to the forecast of
$1.53 million, on a system basj-s. In addition, Idaho Power
has updated the forecast of lncremental investments
associated with Unit 1 to include the $400,000 in expected
investments tn 20L9 for the remaining life of the unit.
0. What is the driver behind the $730,000
difference between the forecasted Unit 1 Valmy plant
investments and the actual- Unit 1 Valmy plant investments?
A. The primary dri-ver of the differences in Unit
1 investments was due to unexpected significant degradation
of burner and combustion contro1 parts discovered during a
required i-nspection of Unit 1 in December 20L1. The
Mercury and Air Toxj-cs Standard ("MATS") requires burner
LARKIN, DI 25
Idaho Power Company
11
L2
13
74
15
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25
1 and combustion control inspection and combustion tuning
2 every 36 months and, as a resuft of the degradation, burner
3 and combustj-on control parts were required to be repaired
4 in order to comply with MATS regulations.ll Exhibit No. 3
5 to Company witness Mr. Harvey's testj-mony details all
5 Val-my-related incremental plant investments made since
7 August 7, 2016, and the purpose of the incremental
8 investment, including a cl-assification as to whether the
9 investment was for environmental compliance, the safe and
10 economic operation of the p1ant, or for reliability
11 purposes. Mr. Harvey wil-l- also discuss all- incremental-
72 investments made at Valmy in more detail.
13 0. What was the j-mpact to the l-evel-i-zed revenue
74 requirement for subcomponent 1 as a resul-t of the update to
15 actua.l-s of the Unlt 1 plant bal-ances and forecasted 2019
16 plant investments?
L7 A. The update to actuals of the Unit 1
18 investments and the inclusion of forecasted plant
79 investments in 20L9 resul-ted in an increase to the
20 levelized revenue requirement of approximately $38r000.
2L O. What were the changes made to subcomponent 2,
22 the l-evel-ized annuaf revenue requirement on all Valmy
23 incremental investments after December 37, 20L9, including
24 the revenue requirement of Unit 1 beyond December 3!, 2019?
11 Mercury and Air Toxics Standards Rule 40 CFR 63.10021.
LARKTN, Dr 26
Idaho Power Company
1 A. Now that an Agreement is in place and a plan
2 for Idaho Power to cease all Valmy operations by 2025 has
3 been established, Idaho Power is proposing to j-nclude in
4 the l-evel-ized revenue requirement computation all
5 forecasted Valmy-related incremental j-nvestments for both
6 units beyond 20L9. First, in accordance with Section
1 L3 (a) (2) of the Settlement Stipulation approved with Order
8 No. 337'77, Idaho Power has included the June L, 2071 ,
9 through December 3!, 2078, actual investment"s associated
10 with Valmy Unit 2 and common facilities and is requesting
11 the Commission approve these incremental- lnvestments as
1-2 part of the updated l-evel-ized revenue requj-rement
13 computation. The total plant bal-ance as of December 3!,
L4 20!8, associated with Unit 2 included in the l-evel-ized
15 revenue requirement on incremental investments is $1.38
16 mil-l-ion. Mr. Harvey wil-l- discuss in detail the investments
L7 but, primarily, they were for rel-iabil-ity purposes.
18 O. What is the forecast of Valmy-related
19 incremental- investments associated with both units beyond
20 2079?
27 A. The Company anticipates $5.57 mil-l-ion12 in
22 forecasted investments expected over Valmy's remaining l-ife
23 for those necessary investments expected for environmental-
12 The forecast incl-udes $400,000 in Unit 1 investments in 2019
and $5.17 mil-l-ion in Unit 2 and common facil-ity j-nvestments made in
2019 throuqh 2025.
LARKTN, Df 21
Idaho Power Company
1
2
3
A
5
6
1
9
compliance, the safe and economic
or for rel-iabillty purposes. The
$5.57 m1l1ion is down from the $9
operation
forecast
7 million
addition
of the p1ant,
of approximately
forecasted
of the
in an increase
duri-ng Case
incrementaf
No. IPC-E-76-24. The
10
investments beyond 20L9 results
to the level-ized revenue requirement on incremental
j.nvestments associated with subcomponent 2 of $7.27
mj-l-Ilon. Mr. Harvey will explain in more detail these
anticipated capital expenditures.
O. What is the total revenue requirement
assoclated with the incremental investments of both
subcomponents with al-l- Val-my-related plant including actual
investments from June 7, 2077, through December 31, 2078,
and forecasted investments from January l, 2079, through
11
t2
13
74
15 December 31, 2025?
16 A. The Idaho jurisdictional- revenue requirement
11 associated with incremental- investments at Valmy sj-nce the
18 balancj-nq account mechanism was establ-ished on June 7,
19 2071, is $1.31 mil-l-ion. As can be seen in Exhibit No. 1,
20 the increase was prj-mariJ-y attributable to the addition of
27 the revenue requirement associated with both Unit 1 and
22 Unlt 2 investments beginning January \, 2020.
23 O. Have any changes been made to Component C, the
24 revenue requirement associated with future decommissioning
25 costs?
LARKIN, DI 28
Idaho Power Company
1 A. No. Idaho Power conti-nues to monitor and
2 review cost estimates for decommissioning activities
3 associated with the cessation of operations at Valmy and
4 will- seek to update the decommlssioning cost estimate
5 included in the levelized revenue requirement computation
6 as part of a future case. At this time, the Company is not
7 proposing a change j-n the levelized revenue requirement
8 computation associated with the decommissioning cost
9 category.
10 O. Does Idaho Power propose changes be made to
11 update Component D, the revenue requirement associated with
1,2 O&M savings, including non-fue1 O&M reductions and those
13 costs updated by the Agreement?
L4 A. In Case No. IPC-E-16-24, the Commissj-on
15 approved a l-evelized revenue requi-rement that included
76 expected non-fuel O&M savings when compared to Valmy-
L7 re1ated non-fuel O&M amounts approved in the Company's l-ast
18 general rate case. Idaho Power committed to, ds part of
79 the Settlement Stipulation approved with Order No. 33711,
20 making a forecast-to-actual adjustment of the non-fue1 O&M
2L savings in the next Valmy-related adjustment to base rates.
22 The Company has incl-uded the O&M costs updated by the
23 Agreement in its updated forecast of non-fuel- O&M savings.
24
25
LARKIN, DI 29
Idaho Power Company
1
2
3
4
5
6
1
B
9
O. What were the non-fuel- O&M savj-ngs that were
included in the level-ized revenue requirement approved in
Case No. IPC-E-16-24?
A. The Idaho jurisdictional levelized revenue
requirement included an offset of $4.64 million per year
associated with forecasted Valmy non-fuel O&M savings.
O. How do actual and forecasted non-fuel O&M
savings compare to amounts included in the Idaho
jurisdictional- l-evelized revenue requirement?
A. The total- actual- and forecasted non-fuel O&M10
11
t2
13
L4
15
76
71
1B
19
20
27
22
/<
24
savings associated with Valmy through
approximately $52.36 mi11ion, which is
the $52.32 m1l-1ion approved with Order
December
stightly
No. 33117
31, 2025, is
higher than
O. You indicated Idaho Power has inc1uded in
Component D the costs updated by the Agreement. How does
Idaho Power propose to update these O&M expenses?
A. As I explained earl-ier in my testimony, the
Agreement sets forth Idaho Power's payment obligations
associated with the exit from participation in operatJ-ons
of a Valmy unit, including an annual exit fee and shared
costs. Company witness Mr. Harvey will explain in detail
the specific payment obligations Idaho Power woul-d be
responsible for upon approval of the Agreement, but, in
general, the Company would be obligated to make an annual
fixed dollar amount payment in the form of an exj-t fee as
LARKTN, Df 30
Idaho Power Company
25
1 well as certain shared costs if Idaho Power exited
2
3
4
5
6
7
I
9
operations of a unit prior
Idaho Power's current plan
to NV Energy.
to exit Unit 1
an
through
Therefore, under
in 2079 and if NV
December 31
sources suggest, i3 the
annual exit fee payment
Energy continued
2027, ds current
Company would be
in 2019 and 2020.
O&M expenses are
to operate Unit l-
publicly available
responsible for
The exit fees incl-uded in the forecasted
and $
U(JJ LJ
respectively,
the forecast ofon a total- system basis and are included in
10 O&M expenses.
in 2021, Idaho
until 2025.
costs through 2025. Shared
that exist regardless of a
However, if NV Energy does not exit Unit 1
Power would be responsible for the exit fee
Idaho Power woufd al-so be obligated to pay shared
are the ongoing costs
11
72
13
74
15 decision to exlt a unit. These
16 expenses incfude costs such as Iabor,
TheL1 maintenance, and fuel- handling forecasted O&M
1B expected beginning
Power's exit from
2020 are directly correlated with
t9
fixed and variable
savj-ngs
Idaho
20 reduction i-n variable
1 operations and the corresponding
operating costs specific to the
Unit
27 exited unit.
22 O. Dld the Company make any other adjustments to
23 the non-fuel- O&M savings?
13 Docket No. 18-06003, Order dated December 21, 2078
REDACTED LARKIN, DI 31
Idaho Power Company
1 A. Yes. Idaho Power has al-so incl-uded
2 amortization of materials and suppli-es inventory at the
3 Valmy p1ant. Materials and supplies are those parts
4 necessary to have on hand at the Valmy plant to keep the
5 plant operating at a safe and reliable level shoul-d repairs
6 be required. The Company has included approximately
7 $830,000 in estimated amortization associated with the
8 material-s and supplies beginning in 2020 to ensure the
9 costs are recovered when operations of the plant cease.
10 O. What are the total non-fuel O&M savings
11 included in the levelized revenue requirement computation?
12 A. Idaho Power is proposing a non-fuel O&M
13 incremental- savings adjustment of approxj-mately $189,000
14 for a total- $4.83 million levelized revenue requirement
15 Idaho jurisdlctional- basls.
76
t1
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ZU
27
22
24
savings on an
o.
requirement?
What is the resulting total Ievelized revenue
A. The Company's proposed update to the levelized
revenue requirement associated with VaImy includes $34.44
million associated with existing j-nvestments, $1.31 million
related to j-ncremental investments, $1.04 million in
decommissi-onj-ng costs, and $4.83 million in non-fuel- O&M
savings, for a total- l-evel-ized revenue requirement of
$29.89 mil-l-ion on an Idaho jurisdictional basis.
LARKIN, DI 32
Idaho Power Company
25
1
2
3
4
5
6
1
R
9
u
as soclated
o.
requirement
requirement
15 Idaho
76
71
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79
20
2t
22
What is the existing revenue requirement
1s currently included in the
Company's
A.
with Valmy that
base rates?
resuft of the TCJA with Order No. 34011 is
The Idaho jurisdictional- Ievelized revenue
requj-rement approved with Order No. 33117
the total levelized
and updated as a
$28.68 million.
revenueHow does
compare to
currently
the existing level-ized revenue
in customer rates?
10 A. The total Idaho jurisdictional levelized
revenue requirement of $29.89 million less the Idaho
jurisdictional share of the existing revenue requirement
$28.68 mil-l-ion resul-ts in an j-ncremental annual levelized
L4 revenue requirement
11
72
13
of
j urisdictional
O. Did the
of approximately
basls.
$7.20 million on an
Company make any additional
request that have not already been
The Company also adjusted the l-evelized
to true-up the difference in level-ized
collected from June 7, 2011, through
that was a result of actual- Idaho
adjustments to its
discus sed?
A. Yes.
revenue requirement
revenue requirement
December 3L, 20L8,
23 jurisdj-ctional sal-es volumes that
24 forecasted volumes over the same
25 20L8, the total under collection,
were l-ower than
period. At December 37,
j-ncl-uding applicabl-e
LARKIN, DI 33
Idaho Power Company
1 carrylng charges, was $83,844. This under col-Iection has
2 been added to the updated levelized revenue requirement, to
3 be collected over the remaining recovery period, through
4 2028. The annual j-mpact of this adjustment over the
5 remaining recovery period is $9,183.
6 Q. What is the true-up associated with the under
7 col-l-ection of Valmy-related revenue requirement amounts
8 during the June 1-, 2071, through May 31, 2019, time period?
9 A. Spreading the under collection over the
10 remaining recovery period, or through December 37, 2028,
11 resul-ts in a true-up of approximately $9,000. Adding this
t2 to the Idaho jurisdictional levelized revenue requirement
13 of $29.89 mill-ion resul-ts in an Idaho jurisdictj-onal
1,4 levelized revenue requirement of $29.90 miIIion, or an
15 incremental- increase of approximately $1.21 million.
16 IV. RECOMMEIIDED RATE!{AI(ING TREAT!,IENT
71 O. Why does the Company believe the proposed June
7, 20L9, effective date for the requested rate adjustments
is reasonabfe and appropriate?
A. Idaho Power acknowl-edges the Company is
requesting a relatively expedited review of its request j-n
this case, especially i-n light of the complexities of the
Agreement and associated update to the Idaho jurisdictlonal-
Valmy levelized revenue requirement. However, because the
Valmy balancing account mechanism approved by the
18
19
20
27
22
)?
25
LARKIN, DI 34
Idaho Power Company
24
1
2
3
4
6
6
1
I
9
Commission with Order No. 33711 converts revenue
requirement amounts into a level payment stream over the
recovery period, it ensures customers pay no more or no
less than actual- Valmy-rel-ated costs. Therefore, this
mechanism would allow for the interi-m approval of an
incremental level-ized revenue requirement increase of $7.2L
million if the Commission needed more time for review of
the Company's broader
any
request in
di-f f erences
this case. Under this
10
approach, should
al-l-owed l-evefs of
ultimately
recovery, a true-up coul-d
the next update to Valmy-related base
O. If the bal-ancing account
customers pay no more or no fess than
costs, hrhy does the Company bel-ieve a
rates on June l, 2019, is necessary?
impact the
be made during
rates.
mechanism ensures
actual Valmy-related
change in customer
and
LARKIN, DI 35
Idaho Power Company
11
t2
13
74
15
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20
21
))
23
A. Idaho Power's request for a June l, 2019,
effective date wil-1 coincide with the annual flxed cost
power cost rate adjustments.la Therefore, the Company's
requested effective date for the incremental Valmy
levelized revenue requirement update woul-d minimize rate
changes for
consolidate
customers while allowing Idaho Power to
several- rate updates.
14 fdaho Power afso fil-ed an applicati-on i-n Case No. IPC-E-19-06
on Eebruary 72, 2079, to reduce the Energy Efficiency Rider, Tariff
Schedule 91, effective June 1, 2079.
1
2
3
4
5
6
1
B
9
o.How does the Company propose to al-l-ocate the
incremental- annual- l-evelized revenue requirement amount of
approxj-mately $1.21 mill-ion to each cl-ass of customers?
A The Company requests that the Idaho
jurisdictional incremental- revenue requirement of
approximately $7.21 million be recovered from all customer
classes through a uniform percentage j-ncrease to al-l- base
rate components except the service charge.
O. Has the Company prepared a schedul-e that
presents the revenue spread resul-ts for each customer cl-ass
under the Company's proposed allocation methodology?
A. Yes. Attachment 2 Lo the Application presents
a summary of the proposed revenue lmpact for each customer
class. When the Company requests rate changes associated
with the annual rate mechanisms l-ater this spring, Idaho
Power will attach to its application a summary of the
proposed combined revenue impact for each customer cl-ass.
V. CONCLUSION
O. Please summarize your testimony.
A. As required by the Settlement Stipulation
approved by Order No. 33171 in Case No. IPC-E-16-24, Idaho
Power has pursued prudent and commercially reasonable
efforts to end its participation in the operation of Valmy
Unit 1 by December 3L, 2079, and Valmy Unit 2 by December
31, 2025, which have been memorialized i-n the Agreement.
LARKIN, DI 36
Idaho Power Company
10
11
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13
t4
15
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27
22
Z3
24
25
1
2
3
4
5
6
1
9
The terms and conditions contained in the Agreement are
in the Settlementconsistent
Stipulation
Idaho Power
with the commitments detail-ed
approved by Order No. 33771 and wil-l- allow
to achieve the cost savings benefits for
10
customers of approximately $72.2 million.
The Company seeks the Commission approval required
by the Agreement and to adjust customer rates to align with
the remaining life-cyc1e costs provided for by the
Agreement. The update to the Valmy l-evel-ized revenue
requirement includes only those Valmy-rel-ated investments
11 necessary for environmental compliance, and the continued
L2 safe, reIiabIe, and economic operation of the plant and the
13 costs updated by the Agreement. fdaho Power seeks approval
L4 of an adjustment of $7.21 million to the Company's Idaho
15 jurisdictional- revenue requirement to take place on June \,
L6 2079, which equates to an overal-l- increase of 0.11 percent.
l7 O. Does this complete your testimony?
18 A. Yes, it does.
79
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27
22
23
24
25
LARKIN, DI 31
Idaho Power Company
)
)
)
1
2
3
4
5
6
7
8
9
ATTESTATION OF TESTIMONY
STATE OF IDAHO
SS.
County of Ada
I, Matthew T. Larkj-n, having been duly sworn to
testify truthfully, and based upon my personal knowledge,
state the followi-ng:
I am employed by Idaho Power Company as the Revenue
Requirement Manager in the Regulatory Affairs Department
and am competent to be a wj-tness j-n this proceeding.
I declare under penalty of perjury of the laws of
the state of Idaho that the foregoing pre-filed testimony
and exhibit are true and correct to the best of my
information and belief.
DATED this Btn day of March 20L9.
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Matthew T. Larkin
SUBSCRIBED AND SWORN to before me this 8th day of
March 2079.
S
Not ary Iic for I
Res j-ding at:Meri-dian Idaho
My commission expires:02/04/2
LARKIN, DI 38
Idaho Power Company
s.
or
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
cAsE NO. IPC-E-I9-08
IDAHO POWER GOMPANY
LARKIN, DI
TESTIMONY
EXHIBIT NO. 1
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Exhibit No. 1
Case No. IPC-E-19-08
M. Larkin, IPC
Page 1 of 1
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