20220222Comments.pdf

DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9917
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Street Address for Express Mail:
1I33I W CHINDEN BLVD, BLDG 8, SUITE 2OI.A
BOISE, ID 83714
Attonrey for the Commission Staff
BET'ORE TIIE IDAHO PUBLIC UTILITIES COMNIISSION
IN THE MATTER OF IDAHO POWER'S
APPLICATION TO UPDATE THE
SI'BSTATION ALLOWAIYCE I]I\[DER
SCImDULE 19, LARGE POWER SERVICE
CASE NO. IPC-E,-Z}-OI
COMMENTS OF THE
COMMISSION STAFF'
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Dayn Hardie, Deputy Attorney General, submits the following comments.
BACKGROT]ND
On December28,202l,Idaho Power Company ("Company") filed TariffAdvice No.
2l-03 (*TariffAdvice") proposing to update the Substation Allowance ('Allowance") outlined
in Schedule 19, Large Power Service, as required by Idaho Public Utilities Commission Order
Nos. 32893 and329l4. The Company requested the update to the allowance become effective
February 1,2022. The Commission suspended the proposed effective date until March 15,2022,
pursuant to ldaho Code $ 6l-622(4), unless the Commission issues an earlier order accepting,
rejecting, or modifring the Application. Order No. 35309
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ISTAFF COMMENTS FEBRUARY 22,2022
The updated Allowance reflects updated material costs, labor rates, and the stations'
overhead rate. The Allowance amount increased from $49,016 per Megavolt Amperes ("MVA.)
to $57,640 per MVA' an increase of 17.6 percent.
STAFF REYIEW
Staffs review focused on three areas to determine the reasonableness of the Company's
Allowance proposal: (1) the calculation method; (2) changes to direct Allowance costs; and (3)
an audit of the overhead rate. Based on its review, Staffbelieves the Allowance costs are
reasonable, the overhead rate is accurate, and the calculation method complies with prior
Commission Orders. After a review of the Application and relevant documents and workpapers
submitted through Audit Requests, Staffrecommends that the Commission approve the
Company' s proposed Allowance.
Allowance Method
Staffconfirmed the Company's calculations follow the method approved by past
Commission Orders.l Under the current method, the Company deterrnines the per Megawatt
('MW') substation allowance by dividing the estimated fully loaded costs for constructing a
transfonner substation by M.8 MVA, which is the rating of the transformer commonly used by
the Company for this type of service.2
Allowance Costs and Overhead
Staffbelieves the costs included in the Company's proposed Allowance are reasonable.
Staffreviewed the direct costs that make up the Allowance including labor, material, and vehicle
costs. Staffalso reviewed the overhead rate that deterrnines indirect costs in the Allowance.
The primary driver for the increase of the Allowance is attributed to the increased costs
of the l38kV/13.09kV,44.8 MVA hansfonner, and the 4-unit metalclad switchgear, which
increased approximately 17 percent and 25 percent respectively. Staffreviewed actual invoices
verifuing the increases in material costs for the transformer and the metalclad switchgear. All
I Order Nos. 32893, 32914, from Case No. IPC-E-13-09 (Glanbia Foods Petition for Allowance to Rule H), Order
No. 32982 from Case No. IPC-E-14-01 (Schedule 19 Update), and Order No. 34576 from Case No. IPC-E-19-40
(Update to Substation Allowance Under Schedule 19)
2 MVA and MW are equivalent for purposes of determining the cost per MW of the Substation Allowance.
2STAFF COMMENTS FEBRUARY 22,2022
material costs g€nerally increased, but were partialty offset by a decrease in the general overhead
rate.
General overheads are capital costs that cannot be directly assigned to a specific asset or
individual project The Schedule 19 general overhead rate is applied to all vehicle, labor, and
dfuect material costs. The proposed general overhead rate for the 12 months ending October 31,
2021, is 8.63 percent which is a decrease from the current authorized rate of 8.97 percent Staff
verified the Company's inputs and calculation of general overheads for Substations.
STAXT' RECOMMENDATIONS
Staffrecommends the Commission approve the Company's proposed update to Schedule
19 as filed with an effective date as of the date of the Final Order.
LL"JRespectfully submitted this day ofFebruary 2022.
Deputy Attorney General
Technical Staff: Kathy Stockton
Travis Culbertson
Yao Yin
i:umisc/commentVipce22. I dhklsilnoyy comments
3STAFF COMMENTS FEBRUARY 22,2022
CERTINCAIE OF SERYICE
I IIEREBY CERTIFY THAT I HAVE THIS 22ND DAY OF FEBRUARY 2022,
SERVED TIIE FOREGOING COMMENTS OF Tm COMI TSSION STAtr'F, IN
CASE NO. IPC.E.224I, BY E.MAILING A COPY TIIEREOF, TO TIIE
FOLLOWING:
LISANORDSTROM
IDAHO POWERCOMPAI.IY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
dockets@ idahopower. com
CONNIE ASCHENBRENNER
RATE DESIGN SEMORMGR
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
ilnr, /,nn rt,*
SECRETARY
CERTIFICATE OF SERVICE