19901109Baggs Direct.pdf

SNAKE RIVER ..J7~Gi';
HYDRO POWER
IDA~C~VErilVVER COMPANY
FILED 0 BOX 70 · BOISE, IDAHO 83707
90 NGU 9 Pll 3 18 November 7, 1990
IDAHO PUBLIC
UTiLITIES COMMISSION)2~
Mrs. Myrna J. Walters
Secretary
Idaho Public Utilities Commission
Statehouse
Boi se, Idaho 83720
Re: Swan Falls Testimony
Case No. IPC-E-90-2
Dear Mrs. Walters:
Please find enclosed for fil ing an original and seven (7) copies of
the Direct Testimony of James L. Baggs and Direct Testimony and exhibits of
Jan B. Packwood.
I f you have any quest ions, please feel free to call me.
Sincerely,~~ ~ AJ
iar~;pie~
Attorney
LDR:mmb
Enclosures
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,'::1 .REelED 0
FILED 0
90 NUU 9 Prl 3 18
ID;.l-O PUBUC
¡Jr\Lì1~ES COMM\$s\ON
EVANS, KEANE, KOONTZ, BOYD, SIMKO & RIPLEY
c/o Idaho Power Company
1220 W. Idaho Street
P. O. Box 70
Bo i se, Idaho 83707
[phone]
STEVEN L. HERNDON
IDAHO POWER COMPANY
1220 W. Idaho Street
P. O. Box 70
Boise, ID 83707
[phone]
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AUTHORITY
TO RATE BASE THE INVESTMENT REQUIRED
FOR THE REBUILD OF THE SWAN FALLS
HYDROELECTRIC FACILITY
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CASE NO. IPC-E-90-2
CERTIFICATE OF MAILING
I HEREBY CERT I FY that on th is 9th day of November, 1990, I ma i 1 ed a
true and correct copy of the within and foregoing DIRECT TESTIMONY OF JAMES L.
BAGGS and DIRECT TESTIMONY AND EXHIBITS OF JAN B. PACKWOOD, postage prepaid and
addressed as follows:
James N. Roethe
Pi 11 sbury Madi son & Sutro
P.O. Box 7880
San Francisco, CA 94120
Grant E. Tanner
DAVIS WRIGHT TREMAINE
2300 Fi rst Interstate Bank Tower
1300 S. W. Fifth Avenue
Portl and, OR 97201
Harold C. Miles
Energy & Natural Resources
Committee
316 Fi fteenth Ave. South
Nampa, ID 83651
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and servi ce by hand deli very was made upon the fo 11 owi ng on th is 9th day of
November, 1990:
Peter J. Richardson
DAVIS WRIGHT TREMAINE
Jefferson PL ace, Su i te 400
350 N. Ninth
Boise, ID 83702
Michael S. Gi lmore
Assistant Attorney General
Statehouse Mail
Boi se, ID 83720-0001
Afton Energy, Inc.
c/o Owen H. Orndorff
Orndorff & Peterson
1087 W. River Street, Suite 230
Boi se, ID 83702
R. Michael Southcombe
Cl emons, Cosho & Humphrey
815 W. Washington
Boi se, ID 83702-5590
Is~4d
2
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REeEIVED 0
FILED 0
9DNOU 9 Plì 3 18
IDAHO PUBLIC
;j LIlIES COMMiSSiOH
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR )
AUTHORITY TO RATE BASE THE )
INVESTMENT REQUIRED FOR THE )
REBUILD OF THE SWAN FALLS )HYDROELECTRIC FACILITY )
)
CASE NO. IPC-E-90-2
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
JAMES L. BAGGS
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Please state your name and business address.
My names is James L. Baggs, and my business
address is 1220 Idaho street, Boise, Idaho.
By whom are you employed and in what capacity?
I am employed by Idaho Power Company as Manager of
Rates.
Please describe your educational background and
professional experience.
In May of 1975, I received a Bachelor of Arts
Degree in Economics from the University of
Colorado at Boulder, Colorado. In May, 1977, I
graduated from the University of Arizona at
Tucson, Arizona with a Master of Science Degree in
Agricultural Economics. While studying at
Arizona, I held the positions of Teaching
Assistant and Research Assistant.
After completion of my Masters Degree, I
assumed the position of Research Associate in the
Department of Agricultural Economics at the
University of Arizona. In that capacity, I served
as an Economic Consultant to the Institute of
Government Research and the Pima Association of
Governments in Tucson, Arizona.
From September, 1978, to August, 1979, I
worked toward the Doctor of Philosophy Degree in
Baggs, Di 1
Idaho Power Company
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1 Agricultural Economics at the University of
2 California, Davis. At the same time I was
3.employed as a Teaching Assistant. In August,
1979, I accepted emploYment as Senior Water4
5 Resource Analyst for the Idaho Department of Water
6 Resources. My duties included economic analysis
7 and planning related to complex multi-objective
8 water and related resource issues.
9 In August of 1982, I accepted the position of
Rate Analyst with Idaho Power Company. My duties10
11 as Rate Analyst included the preparation of cost
12 of service information for use in the development
13 of jurisdictional separation models, class cost-
14 of-service studies and average system cost
15 studies. More specifically, I was responsible for
gathering and analyzing data from various sources16
17 and utilizing computer modeling and other
18 techniques to carry out cost-of-service related
19 analyses.
20 In September, 1986, I was promoted to the
21 position of Supervisor of Rates, and in August,
22 1989, I was promoted to the position of Manager of
23 Rates. As a result, I am now responsible for the
24 overall coordination and direction of the Rate
25 Department, including the development of
Baggs, Di 2
Idaho Power Company
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jurisdictional revenue requirements, the
preparation of rate design analyses and
recommendations, and the coordination and
preparation of the Company' s rate related
regulatory filings in the four regulatory
jurisdictions in which Idaho Power provides
service.
What is the purpose of your testimony in this
proceeding?
The purpose of my testimony is to explain the
ramifications of rate basing the investment
required for the rebuild of the Swan Falls
hydroelectric facility.
will the Company' s rates be affected while the
Swan Falls project is being constructed?
No, The Company's rates will not be affected. The
investment in the Swan Falls project will be
treated as construction work in progress until the
proj ect is completed, and construction work in
progress is not included in the Company' s rate
base when Idaho jurisdictional revenue
requirements are determined.
Q.Once the project is completed will the rates the
Company charges for electric service change?
No. Until the Company' s revenue requirement is
Baggs, Di 3
Idaho Power Company
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reviewed by the Commission and the rates of the
Company are changed in a general rate proceeding,
or a "tracker" type rate proceeding, the rates the
Company is authorized to charge will not change.
Is it customary to include investment in the
Company' s rate base without the Commission
reviewing the Company' s revenue requirement and/ or
rates?
Literally every day the Company makes additions to
or reductions in its electric plant in service.
Every time there is an addition or removal of any
electric plant investment (i.e., a line extension,
replacement of an old transformer with a new
transformer, etc.), the Company includes that
investment in the appropriate electric plant
account without specific Commission review. This
accounting procedure is permissible because it is
assumed that the Commission will allow the
recovery of these costs by the inclusion of the
Company' s electric plant in service in rate base
when determining the Company' s revenue
requirements.
Q.As Manager of Rates of Idaho Power Company, what
is the effect of the Commission' s determination
that it will rate base the investment required for
Baggs, Di 4
Idaho Power Company
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the rebuild of the Swan Falls hydroelectric
facility?
If the Company utilizes reasonable and prudent
construction practices, the Commission' s
authorization is recognition that the investment
is in the public interest and that it will be
included in the Company' s rate base when the
Company' s rates are next adjusted after completion
of construction.
Does this complete your testimony?
Yes, it does
Baggs, Di 5
Idaho Power Company