19900525notice_of_application.pdf

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MAY 25 1990
BEFORE TH IDAHO PUBUC UTIL COMMON
IN TH MAlTER OF TH APPUCATION )
OF IDAHO POWER COMPAN FOR A )CERTICATE OF PUBUC CONVCE )
AN NECESITY FOR TH RATE BASG OF)
TH MINER HYROELECTRIC PROJECT )
OR, IN THE ALTERNATI, A DETERMA- )
TION OF EXE STATUS FOR THE )
MINER HYDROELECTRIC PROJECT. )
)
CASE NO. IPC-B-90
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that on April 25, 1990, Idaho Power Company
applied to the Idaho Public Utilties Commission for a certificate of public convenience
and necessity for the rate basing of the Milner hydroelectric project or, in the
alternative, for a determination of exempt status for the Milner hydroelectric project.
YOU ARE FURTHER NOTIFIED that the Applicant Idaho Power describes the
Milner hydroelectric project as a project that wil be undertaken in connection with the
rebuild of the existing Milner Dam in conjunction with the Twin Falls Canal Company and
the Northside Canal Company, Ltd. (the Canal Companies). The Application describes
the Milner rebuild project and Idaho Power's arrangements with the Canal Companies in
more detail than this Notice. This Notice provides the following sketch of the project:
(1) The hydroelectric project facilties wil extend approximately 1.3 miles
from Milner Dam along the existing Twin Falls main canal headworks on Milner Reservoir
on the Snake River. From these headworks on the south side of the da , water wil be
conveyed in an enlarged Twin Falls canal and diverted into a for bay and intake
structure, penstock and powerhouses. Two powerhouses, located approx.mately 1.6 miles
downstream from Milner Dam, wil take advantage of the drop in el vation from the
Canal to the Snake River, which is by then entering a deep canyon. The turbines in the
main powerhouse wil be vertical-shaft, Kaplan-type turbines directly coupled to
NOTICE OF APPLICATION -1-
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generators. The larger unit wil have a rated output of 46,000 kilowatts (kw) at a net
head of 150 feet, a discharge of 4,000 cubic feet/second and a speed of 200 revolutions
per minute. The smaller unit wil have a rated output of 11,500 kw at a net head of
157 feet, a discharge of 1,000 cubic feet/second, and a speed of 400 revolutions per
minute.
(2) In addition, a powerhouse wil be constructed near the north abutment .of
Milner Dam consisting of a single-propeller turine that wil discharge a constant 200
cubic feet/second when in operation with a net head of 50 feet. Its maximum output wil
be 770 kw.
(3) Idaho Power's construction of its hydroelectric project wil be in con-
junction with repairs to Milner Dam to ensure its structural integrity. Those repairs wil
cost approximately $11,700,000. Idaho Power has agreed to provide interim financing for
the rehabiltation of the Canal Companies' dam, and the Canal Companies have agreed to
repay this initial loan with interest from funds obtained elsewhere at or near the time the
project and dam are completed. Idaho Power has agreed to guarantee the payment of
complete debt service on the permanent loan for the dam through a base royalty equal to
the original present value of $5,638,000 plus one-half of the total cost of repairing the
dam over the term of the FERC license. Additionally, the Canal Companies wil receive
an incentive royalty whenever the annual project generation exceeds a base of
142,000 megawatt-hours. If Idaho Power's investment in the project is not recognized for
revenue requirement purposes by the Commission, the Canal Companies may exchange
the fixed royalty option for 50 percent of the net benefits derived from off-system sale
of the power after deduction of Idaho Power's costs including a return on equity.
(4) The Milner project's costs are currently projected to be $60,334,000 at
completion in 1992, with dam reconstruction costing an additional $11,700,000.
NOTICE OF APPLICATION -2-
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With an additional five percent, Idaho Power's commitment estimate for the powerhouse
is $63,350,600 for an installed turine capacity of 58,300 kw. According to the
Application, the commitment estimate is the estimate that places a ceilng upon the
costs that Idaho Power wil include in its rate base if the project is rate-based, subject to
documented changes in escalation rates or scope.
(5).According to Idaho Power's calculations, the cost per kilowatt-hour would
range from a maximum of 52.93 mils/kwh based upon a cost for the powerhouse of
$63,350,600, 60 years of water data and a 50-year levelized cost to 37.80 mils/kwh based
upon a powerhouse cost of $60,334,000, 20 years of water data and a 50-year levelized
cost.
YOU ARE FURTHER NOTIFIED that the Application contains the following
attachments:
(1) The Federal Energy Regulatory Commission's Order Approving Transfer of
the License to include Idaho Power as a licensee, 47 FERC ,r62,124 (June 13, 1989), and
the Order Issuing License (Major Project) for Project No. 2899-003, issued December 15,
1988.
(2) The Agreement Regarding the Ownership, Construction, Operation and
Maintenance of the Milner Hydroelectric Project (FERC No. 2899) by and between the
Twin Falls Canal Company, Northside Canal Company, Ltd. and Idaho Power Company.
(3) Idaho Power's cost estimate for the Milner hydroelectric project
powerhouses.
YOU ARE FURTHER NOTIFIED that the Application recites the history of the
Canal Companies' licensing of the Milner project and Idaho Power's participation in it in
greater detail than this Notice.
NOTICE OF APPLICATION -3-
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YOU ARE FURTHER NOTIFIED that Idaho Power wil be represented by the
following persons in this proceeding and that copies of all documents required by the
Commission's Rules of Practice and Procedure (IDAPA 31.A) to be served upon the
Applicant Idaho Power should be served upon its following two representatives:
Larry D. Ripley
c/o Legal Department
Idaho Power Company
P.O. Box 70
Boise, ID 83707
Steven L. Herndon
Legal Department
Idaho Power Company
P.O. Box 70
Boise,ID 83707
YOU ARE FURTHER NOTIFIED that Idaho Power requests the following action
by the Commission in this Application: A certificate of public convenience and necessity
should be issued for the rate-basing of Idaho Power's participation in the Milner
hydroelectric project, or, in the alternative, the project should be exempted from the
Commission's regulation for a period of 20 years from the date of commercial operation
to allow Idaho Power to enter into a long-term sale of energy to another utilty. The
details of the alternative option and the procedures under which the plant would be put in
rate base after 20 years are set forth in more detail in the Application.
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this
matter for the purpose of becoming a party must file a Petition to Intervene with the
Commission Secretary and upon all parties to the proceeding on or before Wednesday,
June 27, 1990. Persons not desiring the right of party, i.e., the right to cross-examine
witnesses and to make and argue motions, need not petition to intervene.
YOU ARE FURTHER NOTIFIED that the Commission wil consider this
Application under the Public Utilties Law, Chapters 1-7, Title 61, Idaho Code. In
considering this Application, the Commission may issue any order addressing the future
ratemaking treatment of the Company's investment in the Milner hydroelectric project
and/or the proposed exemption of the project from the Commission's regulation
consistent with its authority under the Public Utilties Law.
NOTICE OF APPLICATION -4-
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YOU ARE FURTHER NOTIFIED that all proceedings in this matter wil be
conducted pursuant to the Commission's Rules of Practice and Procedure, IDAPA 31.A.
DATED at Boise, Idaho, this -'~¿, day of May 1990.
~~f2,ÛD_/MYR A J. WALTERS - COMMSSION SECRETARY
MG:dc/N-153
NOTICE OF APPLICATION -5-