20191227Application.pdf

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LISA D. NORDSTROM
Lead Counsel
[e-mail]
RECEIVED
0i9 DEC 27 Pll lr: b2
IU
ISSION
December 27,2019
Diane Hanian, Secretary
ldaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, ldaho 83714
Re: Case No. IPC-E-19-40
Annual Compliance Filing to Update the Substation Allowance under
Schedule 19, Large Power Service - ldaho Power Company's Application
Dear Ms. Hanian:
Enclosed for filing in the above matter please find an original and seven (7) copies
of ldaho Power Company's Application Additionally, the Company is providing the
workpapers used to calculate the per megawatt Substation Allowance and the stations
overhead rate on a CD as Confidential Attachment 1. Please handle the confidential
information in accordance with the Protective Agreement to be executed in this matter.
lf you have any questions about the enclosed documents, please do not hesitate to
contact me.
Very truly yours,
Ua-,a-Ksl-'+".--
Lisa D. Nordstrom
Enclosures
VIA HAND DELIVERY
LDN:kkt
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Faqsimile: [phone]
[e-mail]
iIECEIVED
:iiiIC2? Pl'l lr:lr2
tb5 ON
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY TO
UPDATE THE SUBSTATION ALLOWANCE
UNDER SCHEDULE 19, LARGE POWER
SERVICE
CASE NO. TPC-E-19-40
APPLICATION
ldaho Power Company ("ldaho Power" or "Company"), in accordance with /daho
Code $ 61-503 and RP 052, hereby respectfully makes application to the ldaho Public
Utilities Commission ("Commission") for an order approving the proposed update to the
Substation Allowance amount outlined in Schedule 19, Large Power Service ("Schedule
19") from $69,397 to $49,253 effective March 15, 2020.
ln support of this Application, ldaho Power represents as follows:
APPLICATION - 1
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I. BACKGROUND
1. This is the annual compliance filing to update the Substation Allowance
amount contained within Schedule 19 as required by Commission Order Nos.328931
and 32914.2
2. Per Staffs request, the Company is filing this update to the Substation
Allowance as a case rather than an advice filing as has been done in previous years.
3. ln Case No. IPC-E-13-09, the Commission found the determination of a
standard terminal facilities equivalent for Schedule 19 customers, applied on a per
megawatt ("MW") basis, is a just, reasonable, and equitable determination of
allowances for Schedule 19 customers.s The cost estimation methodology the
Company used in this filing is the same methodology the Company presented and
approved by this Commission in Case Nos. IPC-E-13-09 and IPC-E-14-01.4
4. ln Order No.34277 issued in Case No, IPC-E-19-02, the Commission
found that it was, ''reasonable and just to base estimated transformer costs on other
actual, similar transformer costs rather than a budgetary prory"s as proposed by the
Company. However, the Commission acknowledged the Company's willingness to
I ln the Matter of the Petition of Glanbia Foods, lnc. tor Approval of a Line Extension Allowance
Pursuant to ldaho Power Company's Rule H, Case No. IPC-E-13-09, Order No. 32893 (September 19,
2013\.
2 d., Order No. 32914 (October 29, 2013).
3 /d., Order No. 32893.
1 ln the Matter of the Application of ldaho Power Company to lmplement a Schedule 19
Substation Allowance and Transmission Vested lnterest (Tariff Advice No. 13-08), Case No. IPC-E-14-01,
Order No. 32982 (February 25,20141.
5 h the Matter of the Application of ldaho Power Company to lncrease the Subslalion Allowance
in Schedule 19, Large Power Service, Case No. IPC-E-19-02, Order No. 34277 (Marcl, 19, 2019).
APPLICATION .2
work with Staff before the next year's substation allowance update to discuss potential
changes to the materials used to calculate the allowance.6
5. Because the Company has most commonly purchased 44.8 mega volt
amp ("MVA") transformers in recent years, both the Company and Staff agreed that it
was appropriate to utilize the transformer costs for a 44.8 MVA transformer rather than
continuing to use a budgetary estimate for a 30 MVA transformer as used in prior year's
compliance filings to update the Substation Allowance amount.
II. PROPOSAL FOR UPDATE
6. As reflected on Confidential Attachment 1, the updated Substation
Allowance reflects updated material costs (including a 44.8 MVA transformer), labor
rates, and stations overhead rate.
7. The Substation Allowance amount decreased from $69,397 to $49,253, or
29 percent. The prlmary driver for the decrease of the Substation Allowance is
attributed to the reduction in the denominator (44.8 MVA instead of 30 MVA). More
details on the other primary drivers of the changes are provided below:
a. Material Costs. Total material costs increased by approximately 5
percent. The cost of the 44.8 MVA transformer increased by 20 percent,
primarily offset by a 6 percent reduction to the cost of the 4-unit metalclad. The
cost used for both the 44.8 MVA transformer and the 4-unit metalclad were
based on recent actual purchases. Other material cost changes constitute less
than 0.5 percent of the total material costs. Total changes in material costs were
partially offset by a slight decrease in the general overhead rate from 9.81
percent to 9.57 percent.
6/d.at3
APPLICATION - 3
b. Labor Costs. Total labor costs increased by approximately 16
percent. The construction labor rate increased by 2.75 percent, which
contributed to the increase in the labor costs. Additionally, the Company has
included 80 hours for System Protection Engineering. These are labor costs that
the Company incurs for substation projects but upon review of this year's
proposed update it was discovered the costs associated with this activity had
been inadvertently omitted in prior year's calculations. System Protection
Engineering includes time for project scoping, fault studies, settings and logic
development, panel shop testing, and commission relaying. On average, System
Protection Engineering is between 80 and 120 hours for a System Protection
Engineer.
8. Workpapers The Company is providing the workpapers used to calculate
the per megawatt Substation Allowance and the stations overhead rate on a CD as a
Confidential Attachment 1 to this filing.
9. Proposed Tariffs. The proposed tariff change for Schedule 19 is reflected
in Attachment 2 to this Application (in both legislative and clean formats).
III. MODIFIED PROCEDURE
10. ldaho Power believes that a hearing is not necessary to consider the
issues presented herein and respectfully requests that this Application be processed
under Modified Procedure; i.e., by written submissions rather than by hearing. RP 201,
el seq.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
11. Communications and service of pleadings with reference to this
Application should be sent to the following:
APPLICATION - 4
Lisa D. Nordstrom
ldaho Power Company
122'l West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
lnordstrom@idahopower. com
dockets@ idahopower.com
v. coNcLustoN
12. For the reasons set forth above, ldaho Power respectfully requests that
the Commission issue an order authorizing an update to the Substation Allowance
under Schedule 19, from $69,397 to $49,253 effective March 15,2020; however, the
Company would not oppose a later effective date if the Commission or Commission
Staff does not believe the Company's proposed timeline is sufficient to process the
issues presented by the Company in this matter.
Respectfully submitted this 27th day of December 2019.
LI D. NORDS OM
Attorney for ldaho Power Company
APPLICATION - 5
Connie Aschenbrenner
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
[e-mail]
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-19-40
IDAHO POWER COMPANY
CONFIDENTIAL
ATTACHMENT 1
PROVIDED ON CD
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. |PC-E-19-40
IDAHO POWER COMPANY
ATTACHMENT 2
SCHEDULE 19
CLEAN FORMAT
SCHEDULE 19
LARGE POWER SERVICE
(Continued)
PECIAL ARRANGEMENTS FOR SU BSTATION ALLOWANCES AND/OR TRANSMISSION VESTED
INTE EST (Continued)
Definitions (Continued)
Transmission Vested lnterest Portion is that part of the Company's transmission system in
which a Transmission Vested lnterest is held
Substation Allowance
lf a Schedule 19 Customer's request for service requires the installation of new or upgraded
transformer capacity in Substation Facilities, the following considerations will be included in the
separate agreement between the Customer and the Company:
The Customer will initially pay for the cost of new or upgraded Substation Facilities
required because of the Customer's request. The Customer will be eligible to receive a one-
time Substation Allowance based upon subsequent sustained usage of capacity by the
Customer.
a Substation Allowance: The maximum possible allowance will be
determined by multiplying the Customer's actual increase in load by $49,253 per MW,
but will not exceed the actual cost of the Substation Facilities.
b. Substation Allowance Refunds: The Substation Allowance will be
refunded to the Customer over a five-year period, with annual payments based on the
Customer's Basic Load Capacity at the time of refund. The first refund will be paid one
year following the first month energy is delivered through the new Substation Facilities.
The refunds will occur based on the following adjustment, which will be
added to the Substation Allowance received in the previous year. lf there is no
change in load from the previous year, the Substation Allowance for that year is
equal to the Substation Allowance from the previous year.
((Change in load from the previous year as measured in MW) x (Substation Allowance per MVv))
Number of Substation Allowance Retunds remaining in five-year period
The Customer's annual refunds will be made in accordance with the
Substation Allowance amount stated in the separate construction agreement
between the Customer and the Company.
Transmission Vested lnterest
lf a Schedule 19 Customer's request for service requires the installation of new or upgraded
capacity in Transmission Facilities, and those Transmission Facilities are serving the Customer by a
radial feed, the following considerations will be included in the separate agreement between the
Customer and the Company.
IDAHO
lssued per Order No.
Effective - March 15, 2020
lssued by IDAHO POWER COMPANY
Timothy E. Tatum, Vice President, Regulatory Affairs
'1221 West ldaho Street, Boise, ldaho
ldaho Power Company Sixth Revised Sheet No. 19-6
Cancels
l P.U.C. No. 29, Tariff No. 101 Fifth Revised Sheet No. 19-6
SGHEDULE 19
LEGISLATIVE FORMAT
ldaho Power Company FfthSlEI Revised Sheet No. 19-6
Cancels
FeurthFifth Revised Sheet No. 19-6t.P.u.c.No.29 Tariff No. '101
SPECIAL A
SCHEDULE 19
LARGE POWER SERVICE
(Continued)
RRANGE MENTS FOR SU BS oN ALLOWANCES AND/OR TRANSMISSION VESTED
Defi nitions (Continued)
Transmission Vested lnterest Portion is that part of the Company's lransmission system in
which a Transmission Vested lnterest is held.
Substation Allowance
lf a Schedule 19 Customer's request for service requires the installation of new or upgraded
transformer capacity in Substation Facilities, the following considerations will be included in the
separate agreement between the Customer and the Company:
The Customer will initially pay for the cost of new or upgraded Substation Facilities
required because of the Customer's request. The Customer will be eligible to receive a one-
time Substation Allowance based upon subsequent sustained usage of capacity by the
Customer,
a. Substation Allowance:The maximum possible allowance will be
determined by multiplying the Customer's actual increase in load by $693€749. ?! 3 per
MW, but will not exceed the actual cost of the Substation Facilities.
b Substation Al nce Refunds: The Substation Allowance will be
refunded to the Customer over a five-year period, with annual payments based on the
Customer's Basic Load Capacity at the time of refund. The first refund will be paid one
year following the first month energy is delivered through the new Substation Facilities.
Number of Substation Allowance Refunds remaining in five-year period
The Customer's annual refunds will be made in accordance with the
Substation Allowance amount stated in the separate construction agreement
between the Customer and the Company.
IDAHO
lssued per Ordet No. 2+77
Effective - Ap+il-+March 15,201920
AdYi€e-Ne {€-04
lssued by IDAHO POWER COMPANY
Timothy E. Tatum, Vice President, Regulatory Affairs
1221 West ldaho Street, Boise, ldaho
INTEREST (Continued)
The refunds will occur based on the following adjustment, which will be
added to the Substation Allowance received in the previous year, lf there is no
change in load from the previous year, the Substation Allowance for that year is
equal to the Substation Allowance from the previous year:
((Change in load from the previous year as measured in MW) x (Substation Allowance per MVV))
Transmission Vested lnterest
lf a Schedule 19 Customer's request for service requires the installation of new or upgraded
capacity in Transmission Facilities, and those Transmission Facilities are serving the Customer by a
radial feed, the following considerations will be included in the separate agreement between the
Customer and the Company.