20191212Reply Comments.pdf

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Enclosures
December 12,2019
VIA HAND DELIVERY
Diane Hanian, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Dear Ms. Hanian:
Enclosed for filing in the above matter are an original and seven (7) copies of ldaho
Power Company's Reply Comments.
Very truly yours,
Lzr-
isa D. Nordstrom
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Re: Case No. IPC-E-19-32
Rate Decrease for Costs Associated with the Boardman Power Plant
ldaho Power Company's Reply Comments
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORITY TO DECREASE ITS RATES
FOR ELECTRIC SERVICE FOR COSTS
ASSOCIATED WITH THE BOARDMAN
POWER PLANT
RECEIVED
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Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. tPC-E-19-32
IDAHO POWER COMPANY'S
REPLY COMMENTS
ldaho Power Company ("ldaho Power" or "Company") respectfully submits the
following Reply Comments in response to Comments filed by the ldaho Public Utilities
Commission ("Commission") Staff on December 5, 2019. ldaho Power welcomes Staff s
Comments supporting approval of the Company's proposed decrease in customer rates
effective January 1,2020. However, as discussed fu(her in these Reply Comments, the
Company disagrees with several of Staffs assertions regarding the Company's role in
decision-making at the plant and its ability to gain access to plant documentation.
Based on its audit and review, Staff recommends the Commission approve the
Company's request to (1) decrease customer rates of $1 .06 million effective January 1 ,
IDAHO POWER COMPANY'S REPLY COMMENTS - 1
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2020, and (2) include the updated forecast investments made through 2020 in the
levelized revenue requirement mechanism per Order No. 32457. Staff recommended the
Commission defer the determination of prudency of investments through December 31,
2018, until a later filing after the Company provides documentation when it becomes
available. ln these Reply Comments, ldaho Power acknowledges Staffs extensive
review of the Company's expedited request in this case and asserts that (1 ) the Company
is actively involved in the Boardman power plant ("Boardman") capital investment
decisions, (2) the Sulfur Dioxide ('SO2) controls project costs are accurately reflected in
the Boardman Balancing Account, and (3) sufficient evidence exists supporting a
prudence determination for Boardman-related expenditures.
I. REPLY COMMENTS
ln its Application filed on October 17, 2019, ldaho Power requested an order (1)
finding that all actual Boardman investments through December 31 , 2018, were prudently
incurred, (2) approving an update to forecasted investments through 2020 al Boardman
to be included in the levelized revenue requirement mechanism established by Order No.
32457, and (3) decreasing customer rates $1.06 million to reflect the decrease in
collections associated with the Boardman levelized revenue requirement, effective
January 1 , 2020. The Company acknowledges the relatively expedited review requested
in this case and appreciates Staffs evaluation in the compressed time frame. As Staff
noted in their Comments,l the Company's prudence request includes over 215 different
projects totaling $4.98 million during the June 1,2012, through December 31, 2018, time
period. Given the shortened timeframe, ldaho Power believes Staff's request for
1 Staffs Comments, pp. 6-7. Staff noted 216 budgeted items, with '15 items in 2017; however,
there were only 't4 budgeted items in 2017 for a total of 215 items.
IDAHO POWER COIVIPANY'S REPLY COMI\4ENTS - 2
additional time for a prudence determination until the Company files its next request to
true-up the Boardman balancing account is understandable, but for the following reasons,
ldaho Power believes its submission and documentation is sufflcient to support a
determination of prudence. However, the Company will address a number of incorrect
interpretations expressed in Staff's Comments.
A. ldaho Power is Actively lnvolved in Boardman Gapital lnvestment Decisions.
First, as the Company described in Production Request No. 4,, and as Staff
pointed out in their Comments,3 as only a 10 percent owner in the Boardman plant, ldaho
Power has contractual limitations on its influence over the capital replacements if the
Company has disagreements as to capital spend. But these contractual limitations do
not preclude the Company's from actively participating in and influencing the decision-
making process at the plant. As ldaho Power explained in the same response, the
Company is actively involved in the decision-making process in all matters associated
with capital investments at Boardman and provides input that influences these decisions.
ldaho Power agrees with Staff's statement that "the Company is obligated to its customers
to assure that capital investments made at Boardman are prudent and reasonable,"o but
disagrees with the assertion that the Company lacks the review and availability of capital
investment source information.
2 ldaho Power is including as an Attachment to these comments, the responses to all of
Commission Staffs Production Requests for reference. The Company has not, however, included the
attachments to the Production Requests as some are voluminous or confidential in nature. ln addition, the
results from the model referenced in Production Request No. 2 can be found in Exhibit No. 1 to the Direct
Testimony of Matthew T. Larkin in this matter.
3 Staff's Comments, p. 7
4 ld.
IDAHO POWER COMPANY'S REPLY COMMENTS . 3
Further, Staff erroneously characterized a portion of ldaho Power's response to
Production Request No.4, stating that "[a]ccording to the Company, coordination of
documentation is constrained given that the Company defers the management, vetting,
and need for capital projects to the operator PGE."5 ln response to Production Request
No. 4, ldaho Power affirmed that "PGE, as the operator of Boardman, manages the capital
budget in total for a year, vetting and analyzing the need for capital replacements
specifically as they arise and for those required to continue to provide reliable and safe
operation of the plant."6 The Company did not, however, indicate that this hindered ldaho
Power's ability to coordinate documentation of the capital investments or take part in the
review of capital expenditures prior to them occurring.
ln fact, ldaho Power explained its involvement in the decision-making process in
all matters associated with capital investments and described in detail the two types of
meetings in which capital investments at Boardman are discussed: Asset Management
Plan ("AMP") and Ownership Meetings. The Company provided Staff the opportunity to
review meeting materials for a total of 15 AMP or Ownership meetings that have occurred
over the past seven years.T ln addition, the Company explained to Staff during thetr on-
site audit on November 19, 2019, the detailed review of proposed capital investments
upon receipt of budget information from Portland General Electric ('PGE'). And finally,
during the same on-site audit, ldaho Power described the process by which the Company
creates a Project lD within the Company's accounting system for each project identified
5ld.
5 ldaho Power's Response to Commission Staffs Production Request No. 4
7 ldaho Povrer's Response to Commission Staffs Production Request No. 3
IDAHO POWER COIUPANY'S REPLY COMIVENTS - 4
by PGE for which capital investments are budgeted, with supporting project
documentation from PGE. These source documents from PGE are the foundation of
ldaho Power's work order packet information, as demonstrated by the Company in the
response to Production Request No. 15. ldaho Power actively participates in Boardman
capital investment decisions.
B. SO2 Controls Project Costs are Accurately Reflected in the Boardman
Balancing Account
The next misunderstanding presented in Staffs Comments is with respect to the
SO2 Controls project discussed in Production Request No. 6. This project resulted in the
addition of a dry sorbent injection system to control sulfur emissions from Boardman, as
required by the Best Available Retrofit Technology rulemaking and the Oregon Regional
Haze State lmplementation Plan. ln their Comments, Staff accurately identified an error
in the Company's response to Production Request No. 6. ldaho Power's share of the
SO2 Controls project cost was $2,777,774, as identified in the levelized revenue
requirement computation provided in response to Production Request No.2, not
approximately $500,000 as indicated in the Company's response to Production Request
No. 6. However, Staff inaccurately indicated this error "leads to a discrepancy of $2.92
million to the balancing account."8
ln the work order packet documentation for the SO2 Controls project provided in
the response to Production Request No. 15 and discussed with Staff during their on-site
documentation review on November 18, 2019, ldaho Power provided supporl for the
$2.78 million project cost. This $2.78 million project cost, referenced accurately by Staff
as Cell F84 of the "2018 Adds" tab provided in the Excel file included in the response to
I Staff's Comments, p. I
IDAHO POWER COMPANY'S REPLY COMIVIENTS - 5
Production Request No. 2,9 is the primary component of the $2.81 million of total 2014
incremental investments and is appropriately included in the levelized revenue
requirement tracked in the Boardman balancing account. There is no discrepancy or
error in the Boardman balancing account levelized revenue requirement computation; the
error only occurred in the presentment of information in the Company's Response to
Staff's Request for Production No. 6.
C. Sufficient Evidence Exists Supporting a Prudence Determination for
Boardman-Related Expenditures.
Finally, ldaho Power disagrees with Staffs assertion that there was "insufficient
evidence that projects were needed or completed efficiently and in a least-cost way."to
The Company understands Staffs request to delay a prudence determination in light of
Staff's limited "ability to fully complete the prudence review as requested" for a rate
effective date of January 1 , 2020." However, ldaho Power provided nearly all
documentation that supported the project costs for the sample of work orders selected by
Staff aspartof theirreviewof the response to Production Request No. 15. Documentation
included project reconciliations of original estimated project costs with final project costs,
internal bid reviews and/or vendor selection support, vendor quotations, purchase orders,
change logs, preliminary engineering reports, funding requests, and ldaho Power's work
order packet documentation.
There was just one project, the installation of a sewage lagoon liner, totaling
$78,534, that ldaho Power is awaiting additional source documents from PGE. However,
IDAHO POWER COMPANY'S REPLY COMIVIENTS - 6
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for this project, the Company provided the work order packet documentation, a
reconciliation of the original estimated project cost with the final project cost, and a
detailed description of the requirement by the Oregon Department of Environmental
Quality, in accordance with the Water Pollution Control Facilities permit issued for the
Boardman facility, that dictated on-site clayJined sewage lagoons be evaluated and
reconditioned. The Company believes it has provided adequate documentation to allow
Staff to perform its due diligence for all projects requested.
il. coNcLustoN
ldaho Power appreciates the opportunity to respond to Comments filed in this case
and would like to reiterate appreciation for Staff's expedited review of the extensive
documentation of Boardman-related costs and support for approval of the Company's
proposed decrease in customer rates effective January 1, 2020. The Company
respectfully requests that the Commission issue an order approving its request for an
order (1) finding that all actual Boardman investments through December 31, 2018, were
prudently incurred, or, in the alternative, deferring the determination of prudency of the
investments, (2) approving an update to forecasted investments through 2020 al
Boardman to be included in the levelized revenue requirement mechanism established
by Order No. 32457, and (3) decreasing customer rates $1.06 million to reflect the
decrease in collections associated with the Boardman levelized revenue requirement,
effective January 1,2020, which equates to an overall decrease of 0.09 percent.
DATED at Boise, ldaho, this 12th day of December, 2019.
a
LI D. NORD M
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S REPLY COMMENTS . 7
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 12th day of December 2019 I served a true and
correct copy of IDAHO POWER COMPANY'S REPLY COMMENTS upon the following
named parties by the method indicated below, and addressed to the following:
Commission Staff
Edward Jewell
Deputy Attorney General
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
X Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email edward.iewell@puc idaho.qov
Ki rly Towel cutive Assistant
IDAHO POWER COMPANY'S REPLY COMMENTS - 8
BEFORE THE
IDAHO PUBLIC UTILITIES GOMMISSION
CASE NO. !PC-E-19-32
IDAHO POWER COMPANY
REPLY COMMENTS
ATTACHMENT
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Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORITY TO DECREASE ITS RATES
FOR ELECTRIC SERVICE FOR COSTS
ASSOCIATED WITH THE BOARDMAN
POWER PLANT
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CASE NO. tPC-E-19-32
COMES NOW, ldaho Power Company ("ldaho Power" or "Company"), and in
response to the First Production Request of the Commission Staff to ldaho Power
Company dated November 7 ,2Q19, herewith submits the following information:
IDAHO POWER COMPANY'S REOACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
LISA D NORDSTRoM (lSB No 5733)
ldaho Power Company
'1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
lnordstrom@ idahopower. com
IDAHO POWER COMPANY'S
REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST
OF THE COMMISSION STAFF
REQUEST NO. 1: Please provide all workpapers and Excel digital files, with
formulas intact, used to support Attachment 1 of the Application.
RESPONSE TO REQUEST NOJ: Please see the Excel file attachment which
includes the associated workpapers in digital format, with formulas intact, provided on
the nonconfidential CD.
The response to this Request is sponsored by Matthew T. Larkin, Revenue
Requirement Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMIVIISSION STAFF - 2
REQUEST NO. 2: Please provide all workpapers and Excel digital files, with
formulas intact, used to support Exhibit No. 1 and 2 of Larkin, Dl Testimony
RE PONSE TO RE UEST NO.2: Please see the Excel file attachment for
Exhibit Nos. 1 and 2, with the assoctated workpapers, in digital format, with formulas
intact, provided on the nonconfidential CD.
The response to this Request is sponsored by Matthew T. Larkin, Revenue
Requirement Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PROOUCTION REOUEST OF THE COIVII\4ISSION STAFF - 3
REQUEST NO.3: Pease provide all documentation since 2012 between the
Company and its partner, Portland General Electric (PGE), showing how the Company
actively engaged with PGE to minimize costs attributed to plant investments in relation
to the forecasted amounts flled in 2012. These documents would likely question the
need for an upgrade and/or likewise explore potential alternatives for minimizing cost,
especially given the plant's sho( remaining life.
RESPONSE TO REQUEST NO. 3: Please see the response to Stalfs Request
No. 4 below for a description of ldaho Power's engagement in Boardman plant meetings
where discussions regarding capital investments were had. A copy of the meeting
notes from these meetings are available for review at the Company's headquarters.
Please contact Tami White at [phone] to schedule a time to review the
requested information.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 4
REQUEST NO. 4: Please provide guidelines and procedures used by the
Boardman plant (ldaho Power Company/Portland General Electric) to develop and
complete pro1ect capital investments at the plant.
RESPONSE TO REQUEST NO. 4:ln general, PGE, as the operator of
Boardman, manages the capital budget in total for a year, vetting and analyzing the
need for capital replacements specifically as they arise and for those required to
continue to provide reliable and safe operation of the plant. As only a 10 percent owner
in the plant, ldaho Power has contractual limitations on its influence over the capital
replacements if the Company has disagreements as to capital spend. However, it
should be noted that ldaho Power is actively involved in the decision-making process in
all matters associated with capital investments and provides input that influences
decision-making at the time. ln addition, since a Boardman cessation of coal-fired
operations date was established, the actual capital spend at the plant has consistently
come in under planned capital amounts, suggesting prudent capital investment
decision-making.
There are two types of meetings in which potential capital investments at
Boardman are discussed: Asset Management Plan ('AMP") meetings and Ownership
Meetings. AMP meetings are held with PGE corporate personnel and the Boardman
plant personnel to discuss upcoming capital projects identified by corporate and plant
engineering personnel. The AMP meetings, which generally occur on an annual basis,
are attended by PGE corporate personnel, Boardman plant management and staff, and
ldaho Power representatives. The AMP meetings include a discussion of future capital
and operations and maintenance ("O&M") expense pro.iects for the plant. Anyone in
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF . 5
attendance can ask questions regarding any aspect of the projects, including
iustification, timing, and costs. Similarly, mpital and O&M projects, both actual and
forecasted, may be discussed during each Ownership Meeting, which occurs annually
at a minimum.
For the last few years, considering the limited remaining operating life, the
Boardman capital plan has been a series of blankets and/or contingency pro.iects rather
than specifically identified "planned" projects. lf and when a capital issue arises,
typically to address equipment failures, the plant will write a new budget lD and work
order for the capital investment.
Finally, the contractual dispute process defined in the Agreement for
Construction, Ownership and Operation of the Number One Boardman Station on Carty
Reservoir dated October 15, 1S76, as amended ("Boardman Agreement"), allows for
use by ldaho Power of a Project Consultant to determine Prudent Utility Practice of
capital inveslments.
The response to this Request is sponsored by John Carstensen, Joint Prolects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REOUEST OF THE COMIVIISSION STAFF .6
REQUEST NO.5: For project'27300604 BOARDMAN 24806 EXPAND
SHOP & WAREHOUSE" identified in accounting year 2013, please provide the
following:
a. Analysis used to support the capital investment.
b. Request developed for bidder proposals.
c. Projectconstructiondocumentationincluding:
i. Construction contract
ii. Scope document
iii. Organizationalchart
iv. Schedule (baseline versus actual)
v. Monthly project status reports
vi. Action items list(s)
vii. Contractor change order requests
NOTE: Where requested information has not been provided, please explain why
it was not provided and further how the Company assured the construction of the
project at a least cost.
RESPONSE TO REQUEST NO.5:ldaho Power's share of the Boardman shop
expansion and warehouse project cost was approximately $200,000. The shop
provides needed work space for equipment repair and overhaul, and allows plant
personnel to perform the necessary maintenance activities to ensure that the plant
remains operational through the remaining life of the plant. The shop expansion allows
for overhaul of large equipment to occur in the shop rather than in the turbine deck and
crane bay as previously performed. When the turbine deck and crane bay was utilized
IDAHO POWER COMPANY'S REOACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COI\4IVlISSION STAFF - 7
for such work, it created communication issues, impeded emergency egress, and the
welding activities set off the smoke and fire alarms. ln addition, prior to the expansion,
the weld shop was undersized and had inadequate ventilation and separation from the
rest of the maintenance shop. The expansion provided a safer working environment, as
well as more efficient working space for the Boardman maintenance crews.
ldaho Power has contacted PGE for the requested information and was informed
it will be compiled and available to the Company the week of November 18, 2019. Due
to the confidential nature of the documents, ldaho Power respectfully requests
Commission Staff come on-site to review the closure planning guidance, Please
contact Tami White at [phone] to arrange a time to review the requested
material.
The response to this Request is sponsored by John Carstensen, Joint Pro.iects
Leader, ldaho Power Company.
IDAHO POWER COIVIPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF IHE COMI\4ISSION STAFF .8
REQUEST NO. 6:For project 27363452 BOARDMAN 1-1760 SO2
CONTROLS MODIFICATION BART identified in accounting year 2014, please
provide the following:
d- Analysis used to support the capital investment.
e. Request developed for bidder proposals.
f. Projectconstructiondocumentationincluding:
i. Construction contract
ii. Scope document
iii. Organizationalchart
iv. Schedule (baseline versus actual)
v. Monthly proiect status reporls
vi. Action items list(s)
vii. Contractor change order requests
NOTE: Where requested information has not been provided, please explain why
it was not provided and further how the Company assured the construction of the
proiect at a least cost.
RESPO NSE TO REQUEST NO. 6: ldaho Power's share of the Boardman Sulfur
Dioxide ("SO2") Controls project cost was approximately $500,000. Through the Best
Available Retrofit Technology ("BART'') rulemaking process, the Oregon Regional Haze
State lmplementation Plan ("RHSIP'), and per the Oregon Department of Environmental
Quality Title V Operating permit and Acid Rain permit, SO2 emissions must be
controlled and monitored, This project resulted in the addition of a dry sorbent injection
system to control sulfur emissions from Boardman, as required by BART and the
IDAHO POWER COIVIPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF.9
Oregon RHSIP. ldaho Power has contacted PGE for the requested information and
was informed it will be compiled and available to the Company the week of November
18, 2019. Due to the confrdential nature of the documents, ldaho Power respectfully
requests Commission Staff come on-site to review the closure planning guidance.
Please contact Tami White at [phone] to arrange a time to review the requested
material.
The response to this Request is sponsored by John Carstensen, Joint Proiects
Leader, ldaho Power Company.
IDAHO POWER COIMPANY'S REOACTEO RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COIV]IV]ISSION STAFF - ,10
REQUEST NO. 7: Please provide the Company's analysis and explain the
reasoning for the sale of assets under the APA in year 2014 to Portland General Electric
(PGE). Further, please identify all assets sold under this agreement
RESPONSE TO REQUEST NO.7: As explained in the conveyance notification
provided to the Commission on August 19,2014, and provided as an attachment on the
nonconfidential CD, ldaho Power and PGE are owners and parties to the Boardman
Agreement. The Boardman Agreement provides that one or more of the owners may
construct additional generation projects at the Boardman site. ln such case, the owners
are required to grant to the constructing owner, among other things. a partial ownership
interest in certain facilities at Boardman that may be used in common for the operations
of Boardman and the new generating project ("Shared Facilities"). Under the Boardman
Agreement, the Shared Facilities may include such items as the project reservoir,
pumping facilities, pipelines, roads, railroad spurs, docks, parking lots, fencing, and
transmission facilities.
ln 2014, the owners entered into an Asset Purchase Agreement ("APA") dated
April 14, 2014,1or conveyance of interest in Shared Facilities to PGE for use at their
new natural-gas fired generation pro.ject on the Carty Reservoir ("Carty"). Under the
APA, PGE purchased a 50 percent ownership interest in the Shared Facilities and
payment was based upon the Carty project's expected usage percentage and the
agreed upon asset value as summarized below:
IDAHO POWER COMPANY S REDACTEO RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMIVIISSION STAFF. 11
Asset Description Allocable Share
Payable to ldaho Power
Shared Facilities:
Carty Reservoir $ 489,365
$ 40,580
Existing Water lntake Structure $ 745
Potable Water System $ 12,295
Tower Road Rights $ 22,245
Wastewater Ponds $ 12,325
Communications Equipment & Housing $ 42,580
Plant Real Property Easement s 70$ 620,205Total
ldaho Power's conveyance of the Shared Facilities to PGE did not adversely
affect the continued use of the Shared Facilities at Boardman or ldaho Power's existing
rights to the output and capacity at Boardman, including use of the connecting
transmission lines. The Company received fair compensation of $620,205 for a
conveyance that reduced ldaho Power's depreciation expense and decommissioning
costs because (1) the Company's ownership interest in the Shared Facilities was
reduced, and (2) the Shared Facilities would not need to be fully depreciated and
decommissioned as otheMise planned for the 2020 shutdown of the Boardman plant,
due to their continued use at Carty. The purchase price associated with the Shared
Facilities at Boardman resulted in a gain of $264,060 on a total system basis, or
$251,077 on an ldaho lurisdictional basis. The customer benefit associated with the
gain is reflected in the levelized revenue requirement computation on the Conveyance
of Shared Facilities Gain ilne of Exhibit No. 1 while the reduction of $356,145 to the
plant balances is reflected as a reduction to the 2014 incremental investments.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
Columbia River lntake
IDAHO POWER COIV1PANY'S REOACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 12
REQUEST NO. 8: Please explain the current requrrements for renovation of the
ash field. Please explain any differences rn costs or requirements relative to the
requirements expected in 2012.
RESPONSE TO REQUEST NO. 8:ln compliance with the existing Coal
Combustion Residuals rule, PGE plans lo cap the ash landfill in place and not dispose
of any ash elsewhere. ln the Confidential Updated Boardman Coal Plant
Decommissioning and Demolition Plan dated October 16, 2019, that the Company rs
providing in Response to Staff s Request No. 17, the estimated cost of the disposal area
closure is $7.'18 million as compared to the $7.05 million previously estimated. The
2019 study assumes closure of the disposal area with no ash reclamation and 30 years
of groundwater monitoring and O&M. Please note, ldaho Power's request in this case
does not include an update to the decommissionrng costs as the 20"19 study was not
available at the time of filing
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S REOACTED RESPONSE TO THE
FIRST PROOUCTION REOUEST OF THE COIVIN4ISSION STAFF - 13
REQUEST NO. 9: Please explain the current Boardman plant approach for
disposing of any remaining coal on site at the end of 2020. When the plant is closed,
will any remaining coal on site be required to be landfilled? lf so, please explain why
and quantify the cost.
RESPONSE TO REQUEST NO. 9: ldaho Power and PGE are carefully
coordinating coal deliveries and managing inventories to minimize the risk of any coal
remaining unburned at the end ol 2020. There is coal at the base of the existing coal
pile that will need to be recovered (separated from the dirt). The partners are currently
planning on bringing a contractor on-site in 2020 lo start the recovery process of the
coal, which, in turn, will be burned in the boiler. Any coal that cannot be recovered will
be transported and disposed of at a landfill. Considering data from PGE's on-site
biomass disposal efforts, ldaho Power estimates that the disposal of any unrecoverable
coal would cost approximately
The response to this Request is sponsored by John Carstensen, Joint Proiects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COIV1N1ISSION STAFF - 14
REQUEST NO. '10: ln reference to the Boardman Balancing Account, please
provide an Excel spreadsheet with work orders andior project numbers for the
Boardman additions that have closed to plant in service from January 1,2017 through
December 31, 2018 or have been included in the balancing account during that same
time period. Please provide copies of all work orders and all supporting documentation
for the actual capital investments for 201 7 and 2018.
RESPONSE TO REQUEST NO. 10: Please see the "20'18 Adds" tab in the
attachment provided in response to Staff's Request No. 2 for a list of all Boardman
additions that have closed to electric plant in service from January 1, 2017, through
December 31 , 2018. The work order numbers are identified in the column titled
"Project". Please see the Company's Response to Staff's Request No. 15 for the
supporting documentatron for the actual capital investments for 2017 and 2018.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COIVIMISSION STAFF - 15
REQUEST NO. 11: Please provide the Audit Reports from the external auditor
for the Boardman Trust for the years 2016 through 201 9
RESPONSE TO REQUEST NO. 11: The annual external auditor report on the
Boardman Trust was suspended after the 2014 calendar year because it was
determined it was nol a cosleffective approach. Prior year reports found no material
errors or misstatements, and no findings were made regarding the reasonableness and
validity of ldaho Power's share of the costs at the Boardman plant. Although the
contractual requirement that a third-party audit of the Boardman Trust be commissioned
annually has been suspended, ldaho Power retains the right to request that PGE
commission a third-party audit by providing a 90-day written notice prior to the end of
the calendar year.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 16
REQUEST NO. 12: ln reference to the Boardman Balancing Account, please
provide the forecast and budget documents prepared by Portland General Electric for
the Boardman plant for the years 2012 through 2020. ln addition, please provide the
calculation and supporting documentation for the "adder" that ldaho Power includes in
the calculation of the actual and forecast for the Boardman Balancing account.
RESPONSE TO REQUEQT NO. 12: Please see the confidential Excel file
attachment for the Boardman forecast and budget documents prepared by PGE in the
years 2013 through 2019, including the capital loadings or "adders" where appropriate.
ldaho Power has not retained budget documentation pertaining to the 2012 budget year
in the ordinary course of business.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COIVIPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COIVIMISSION STAFF.17
REQUEST NO. 13: ln reference to the Boardman Balancing Account, please
provide the underlying supporting information (actual kwhs sold or other similar
documentation used) for the actual revenue true up collections for 2017 and 2018.
RESPONSE TO REQUEST NO. 13: Please see Exhibit No. 2 to the direct
testimony of Mr. Larkin for the actual kilowatt-hours sold by month and used to calculate
the actual revenue true up collections for 2017 and 2018.
The response to this Request is sponsored by Matthew T. Larkin, Revenue
Requirement Senior Manager, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF . 18
REQUEST NO. 14: Please provide any internal audit reports and supporting
workpapers for the Boardman facility. ln addition, please provide any Sarbanes-Oxley
results that pertain to the Boardman facility.
RESPONSE TO REQUEST NO, 14:Due to the nature of the documents, ldaho
Power respectfully requests Commission Staff come on-site to review the internal audit
reports and SOX results specific to the Boardman plant. Please contact Tami White at
[phone] to arrange a time to review the requested material.
The response to this Request is sponsored by Sonse Sutezzo, Operatrons Audit
Manager, ldaho Power Company.
IDAHO POWER COMPANY'S REOACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF. 19
REQUEST NO. 15: Please provide copies of Boardman Capital lnvestment
Source Documents for the period from June 2012 through December 2018 for onsite
revtew
RESPONSE TO REQUEST NO. 15: Please see the'20'18 Adds" tab in the
workpapers provided in response to Staff's Request No.2 for a list of all Boardman
additions that have closed to electric plant in service from June 1, 2012, through
December 31 , 2018. ldaho Power's work order jackets include invoices from PGE that
support the plant additions. Due to the voluminous nature of the material, ldaho Power
respectfully requests that Staff review the work order jackets of the work orders
referenced in the attachment and identify the specific invoices for which they would like
documentatlon.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Pro.jects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REOUEST OF THE COMI\4ISSION STAFF.20
REQUEST NO. 16: Please provide project description, costs, and dates for
unplanned investments or those investments that weren't included in the last "projected
additions" to the Boardman plant through December 31,2018.
RESPONSE T RE UEST NO. ,I6: Attached is a summary report prepared by
PGE that shows the projects that were included as part of a forecasUbudget as
compared to actual capital spend, by project, that ldaho Power was billed. Amounts are
reflected at the plant level cost, or '100 percent share.
Because this report is directly from the operating partner, actual capital spend
amounts will not tie in total to the actuals included in a specific year's closing amount
used to model the incremental revenue requirement as provided in the response to
Staff's Request No. 2. This is due to the fact that each Company's Allowance for Funds
Used During Construction accrual rates are different, and capital amounts recorded by
ldaho Power incur a one-month lag, which therefore results in different in-service dates
for the two partners.
This report highlights the capital projects that arose since 2012 for which a
specific budget line item was not created. Please note, 2012 amounts represent budget
and project spend amounts for the entire calendar year 2012, rather than the June 1
through December 31 ,2012, time period used in the incremental revenue requirement
calculation in this case.
The response to thls Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 21
REQUEST NO. 17: Please provide a copy of the report prepared by CH2M Hill
in 2015 for the decommissioning, demolition, and final closure plan for Boardman. ln
addition, Matt Larkin's testimony on page 16 refers to a request for proposal by Portland
General Electric "seeking an owner's engineer to complete design and permitting work
in preparation for decommissioning activities in 2019..." Please provide a copy of this
updated decommissioning cost study when it becomes available.
RESPONSE TO REQUEST NO. 17: Please see Confidential Attachment 1,
Updated Boardman Coal Plant Decommissioning and Demolition Plan dated October
16, 2019, prepared by AECOM for the updated decommissioning cost study, and
Confidential Attachment 2, Decommissioning and Demolition Plan for the Boardman
Power Plant prepared by CH2M Hill. Please note, ldaho Power's request in this case
does not include an update to the decommissioning costs as the 2019 study was not
available at the time of filing.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
DATED at Boise, ldaho, this 1Sth day of November 2019.
fl;P.'v7*r4,--,@
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S REOACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COIVIIVIISSION STAFF .22
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 1Sth day of November 2019 I served a true and
correct copy of IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF upon the following
named parties by the method indicated below, and addressed to the following.
Commission Staff
Edward Jewell
Deputy Attorney General
ldaho Public Utilities Commission
1 1331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise. ldaho 83714
X Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
K Towell utive Assistant
IDAHO POWER COMPANY'S REDACTED RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF - 23
*At,,^l^^il-/u*il
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
Inordstrom@idahopower. com
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORITY TO DECREASE ITS RATES
FOR ELECTRIC SERVICE FOR COSTS
ASSOCIATED WITH THE BOARDMAN
POWER PLANT
RECEIVED
rr;9l{CY 27 Ptl 2:0\
;f P(riLl: I ^nt{tIt stor,l
Attorney for ldaho Power Company
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CASE NO. tPC-E-19-32
IDAHO POWER COMPANY'S
RESPONSE TO THE SECOND
PRODUCTION REQUEST OF
THE COMMISSION STAFF
COMES NOW, ldaho Power Company ("ldaho Power" or "Company"), and in
response to the Second Production Request of the Commission Staff to ldaho Power
Company dated November 20,2019, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 1
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
REQUEST NO. 18: ln reference to Work Order 27300604 "Boardman 24806
Expand Shop & Warehouse," please reconcile the original estimate of $107,000 (ldaho
Power share) with the final amount of $210,448.32, which includes ldaho Power's
AFUDC. Please include with your response all original detailed source documents
showing the individual costs, such as any Boardman labor, contractor expenses, PGE
overhead charged to the project, and any other line item charges. Please also include
an explanation of why the total project costs escalated from $1,070,000 to over $2.1
million. Please provide any written documentation such as letters, invoices, billing
documents, emarls and all other documentation necessary to justify the total cost for the
project, including change orders, and what steps ldaho Power undertook to ensure that
this project was necessary and that the costs were prudently incurred. ln addition,
please provide a copy of the information provided to Staff onsite from the Work Order
packet for this project. Furthermore, please provide copies of the information provided
onsite in response to Production Request No. 5.
RESPONSE TO REQUEST NO. 18: Please see Confidential Attachments 1-7
provided on the confidential CD which contains files supporting the expansion of the
Boardman shop and warehouse, including a reconciliation of the original project cost
with the final amount, the work order packet documentation, the Purchase Order
Executive Summary, the Final Bid Review, the Shop Expansion Purchase Order, and
the Change Log. The confidential CD will be provided to those parties that have
executed the Protective Agreement in this matter.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 2
REQUEST NO. l9: ln reference to Work Order 27300599 'Boardman 24796 lns
New Fire Detection System," please reconcile the original estimate of $107,'120 (ldaho
Power share) with the final amount of $178,339.17, which includes ldaho Power's
AFUDC. Please include with your response all original detailed source documents
showing the individual costs, such as any Boardman labor, contractor expenses, PGE
overheads charged to the pro.iect, and any other line item charges. Please also include
an explanation of why the total project costs escalated from about $1 million to over
$1.6 million. Please provide any written documentation such as letters, invoices, billing
documents, emails and all other documentation necessary to justify the total cost for the
project, including Change Orders, and what steps ldaho Power undertook to ensure that
this project was necessary and that the costs were prudently incurred. ln addition,
please provide a copy of the information provided to Staff onsite from the Work Order
packet for this proiect.
RESPONSE TO REQUEST NO. 19: Please see Confidential Attachments 1-13
provided on the confidential CD which contains files supporting the installation of the
new fire detection system, including the technical requirements and specifrcation
documents, the internal bid scoring sheet, vendor quotations, Purchase Requisition
Request, Phase ll Schedule of Values, the work order packet documentation, and a
reconciliation of the original pro1ect cost with the final amount. The confidential CD will
be provided to those parties that have executed the Protective Agreement in this matter.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PROOUCTION REOUEST OF THE COIVMISSION STAFF .3
REQUEST NO. 20: ln reference to Work Order 27385087 "BDMN 1-2702 lnstall
Sewage Lagoon Liner," please reconcile the original estimate of $46,800 (ldaho Power
share) with the final amount of $78,534. Please include with your response all original
detailed source documents showing the individual costs, such as any Boardman labor,
contractor expenses, PGE overheads charged to the project, and any other line rtem
charges. Please also include an explanation of why the total project costs escalated
from about $468,000 to $785,342. Please provide any written documentation such as
letters, invoices, billing documents, emails and all other documentation necessary to
justify the total cost for the project, including Change Orders, and what steps ldaho
Power undertook to ensure that this project was necessary and that the costs were
prudently incurred. ln addition, please provide a copy of the information provided to
Staff onsite from the Work Order packet for this project.
RESP9NSE TO REQUEST NO. 20: Please see Confidential Attachments 1-2
provided on the confidential CD which contains work order packet documentation and a
reconciliation of the original project cost with the final amount. The confidential CD will
be provided to those parties that have executed the Protective Agreement in this matter.
ldaho Power is awaiting additional source documents from Portland General Electric
("PGE") and the Boardman plant and will provide the information as soon as it becomes
available.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company,
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REOUEST OF THE COMMISSION STAFF - 4
REQUEST NO. 2l : ln reference to Work Order 27385087 'BDMN 1-2702 lnstall
Sewage Lagoon Liner," please explain why ldaho Power customers should pay for any
work done for this project since PGE intends to continue utilizing the lagoon for the
"future Carty generation facilities'' as shown in the justification section, the lmpacts and
issues section, and the Risks, Dependencies & Constraints section of the Project
Justification Form,
RESPONSE TO REQUEST NO. 21: The Water Pollution Control Facilities
('WPCF) permit issued by the Oregon Department of Environmental Quality ('DEO)
for the Boardman facility in 2012 dictated that the onsite clay-lined sewage lagoons be
evaluated and reconditioned. ln 2014, it was determined that the two clay-lined sewage
lagoons northeast of the power block building needed relining with a new synthetic liner
system per the WPCF and DEQ regulations. Upon further evaluation, flow estimates
from both the Boardman and Carty generation facilities showed that one pond, in its
current size, would be adequate for normal service conditions. As a result, the
remaining clay-lined pond was taken out of service, The installalion of the sewage
lagoon liner was required as it is now the only sewage lagoon available for service to
Boardman. As described in more detail in the Company's Response to Request No. 22,
under the Asset Purchase Agreement ("APA") with PGE, the Company conveyed 5
percent of its ownership interest in the Wastewater Ponds, including the sewage lagoon,
as they are assets identified as those that would be shared between the Boardman and
Carty generating facilities.
The response to this Request is sponsored by John Carstensen, Joint Projects
Leader, ldaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REOUEST OF THE COMMISSION STAFF - 5
REQUEST NO. 22: ln reference to Work Order 27385087 "BDMN 1-2702 lnstall
Sewage Lagoon Liner," the Thermal Plant Work Order Closings' document shows that
ldaho Power paid '10% of the costs to PGE for this project, According to the response
to Production Request No. 7, a 500/o ownership interest in the Wastewater Ponds was
transferred to PGE. Please describe and provide documentation justifying why ldaho
Power is still responsible tor 10% of the costs for this project, instead of 5olo as with all
the other shared facllities where 50% of ldaho Power's ownership interest was
transferred to PGE in 2014.
RESPONSE TO REQUEST NO. 22: ldaho Power has confirmed that the
Company was charged by PGE for 10 percent of the costs associated with the
installatron of a sewage lagoon liner, an investment associated with the Wastewater
Ponds. The Wastewater Ponds are one of a few investments that were identified as
Shared Facilities under the APA between ldaho Power and PGE. Therefore, ldaho
Power conveyed 5 percent of the Company's ownership in the Wastewater Ponds to
PGE in 2014. Under Section 6 of the APA, from and after the effective date, capital
additions to the Shared Facilities should be allocated to ldaho Power at 5 percent. The
Company has notified PGE of the error. ln addition, ldaho Power reviewed the work
order delail descriptions and has not identified any additional investments made to the
Shared Facilities assets since execution of the APA.
The response to this Request is sponsored by Randy Henderson, Principal Joint
Projects Coordinator, ldaho Power Company-
DATED at Boise, ldaho, this 27th day of November 2019.
D. NORD M
Attorney for ldaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REQUEST OF THE COMMISSION STAFF - 6
V,
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 27th day of November 2019 I served a true and
correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REOUEST OF THE COMMISSION STAFF upon the following named
parties by the method indicated below, and addressed to the following:
Commission Staff
Edward Jewell
Deputy Attorney General
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Kim
IDAHO POWER COMPANY'S RESPONSE TO THE SECOND
PRODUCTION REOUEST OF THE COMMISSION STAFF . 7
X Hand Delivered
_U.S. Mail
_Overnight Mail
_FAXX Email [e-mail]
l"
, Executive Assistant