19901205Postion Statement.pdf

. .
~Ø'ORE THE IDAH PUBC tTILITIES COMMSSION
/7738
IN THE MATTER OJ THE APPLICATION Of IDAH POER CO.)
fOR AUlHORITY TO RATE BASE THE INVESTME REQUIED )
fOR THE REBUI Of THE SWAN f.A HYOELECTRIC )fACILITY )
HECEiVED m
FILED n
CAE'iill-riolf 2 '05
HO PUBLIC
¡L1T1ES COMMISSIO~/2,
CASI'- NO. IPC-¡'~O-8
IN THIMATER OJ THE APPLICATION OJ IDAH POER CO.)
fOR A CERTIfICAE OJ PUBiC CONVENIENCE AN NECESS..)
ITY fOR THE. RATE BASING OJ THE MINER. PROJECT OR IN)
THI ALTERNATIVE A DETERMINITION OF EXEM" STATUS )
fOR THE MINER HYOELECTRIC PROJ ECT )
COMMS OF IDAH, CONSUM., AfF AI, INCORPORA ED. (ICA)
COME NOW, Idaho Consumer Affairs, Ino. (ICA) through its Intervenor rep-
resentative, Mr. Harold C. Miles, )16 fifteenth Avenue South, Nampa, Idaho 8)6;1,
and offers the following statements of position in acoordance with the Commssion's
requirement that they be submitted on or before" Deoember 7, 1990, for the' Comms-
sion's,consideration.
1. .CONSERVATION" is lCA's preferred source of additional generating capacity
and can, in part, be-attained by the nine recommendations for Conservation measures
ICA' submitted to this Commssion at pages 10 & 11 filed in the "aonservation Stan-
dards & Praotice"Càse No. U-L;00-16; on November 14, 1987, which by reference we
ask be incorporated into the official reoord of this hearing.
2. We feel the Idaho Public Utilities Commssion (IPUC) and the Idaho Power
co. (IPC) have not been an are not now fully oommtted to GOnservation, e.g. the
lights are left on in the employee's rooms, when not in use. at both the IPUC's
and IPC's office building rooms, thereby' needlessly consumng electrioity. In
addition, IPC at their most reoent Teohnical Advisory Panel meeting, of which ICi
is a member" acknowledged that IPC had not oommtted itself adequately to viable
Conservation Programs in the past to the extent they should have,but now they are
increasing their COnservation efforts for not only their residential olass of ous-
tomeI's, but oommeroial, industrial and irrigation oustomers as well. Ths faot
was also addressed by 1PUC staff member, Thomas raull's"unoontested statement at
page 1) of his direct testimony. aase No. 1PC.I;.. Qute, ,1t1!lieuCommssion has been
(1)
..e~couraging Idaho Utilities to acquire cost effective conservation reiources for
years, but with little avail. Now, when it appears that flew resouroes are needed,
the utilities have little oonservation Hon lineN, and are essentially unprepared
to agressively bring suoh resources on line. Therefore, it appears ineq.úitableto
aacribe a benefit to IPC in evaluating its supply side resouroes by ignring the
utility's appal' ant negligence in acquiring demand side resourcesN, endquote.
Dr. Rean~t page 9 of his direot testimony in the Swan ralls case states:
Quote, "The compan has not presented evidenoe showing that reconstruction of the
Sw falls project is less costly than installation of demand side maagement
measures~; endquote.
3. Although "ConservationN is our preferred source of new generatin capacity,
there is a strong feeling by ma of ICA:'s members and supporters that Idaho, at
this time, is not convinoed that Conservation should be totally relied on as the
sole NEW source of 1PC' s projected need for additional generating capacity by the
mid to late 1990' s under a medium or high medium growth scenao.
4. It is lCA's belief that hydroeleotric generation as well as fish & wild-
lie protection an enhancement are Nbeneficial uses"" of water. A1so theNIdaho
Eñergy Resource Policy Bòard/l adopted the following policy in its Februar1 1982
publi.ation~We quote from page ;, "It is the policy of the State of Idaho
that the private and public utility companies place a high priority on conservation,
renewable resources, generating resources of high fuel conversion efficiency, and
tthen on all other resources in meeting the future'electrical needs of the state.
Further, in the development of renewable resources, the state shoul give a high
priority to hyoelectric projects, (emphasis added) in particular, the upgradi
of current facilities withi the statel ~ endquote. The Swan 'alls an Milner proj-
eots quay under this State of Idaho Policy.
;. lCA feels that hyoelectric projects can be constructed or upgraded that
are reasonably environmentally acceptable and should be built at an early date for
the following reasons:
lCA Comments (2)
..
a. Projects such as Mier and Swan lalls should not become lflost opportu-
nities" for Idaho's and the Pacific Northwest's future needs for additional gen-
eratin capacity.
b. Over the life of the projeot their 0 & M costs will be far less tha
for thermal projects.
c. They do not contribute to the acid rain, air pollution, fly ash, an
rado active waste disposal problems that coal or nuclear plants do.
d. Their fuel costs (water) are considerably less than coal or uranWl.
e.. Their plant life is oonsiderable longer, probably over double, that of
therma plants.
f. They are not great consumptive users of water, particularly run of
the river plants..
6. Idaho, including IPC, needs to plan.:where possibilities exist, for ad-
ditional hydroelectric generation, particularly in view of the fact the "Pacific
Northwest Cbordination Agreementtland the five NEntitlement AgreementsN with C'iinada
start ending in 1998. The Caadian share of the poer, probably in the neighbor-
hood of 900 average megawatts, will revert to British ColWlbia for their use. in-
stead of BPAi who has distributed an sold this Caadian power to its customers,
principall in the Pacific Northwest. Even if British Columia decided to sell
this reclaied power,in total or in part,to U.S. based utilities after these
agreements expire the. cost of this poer most assuredly will be greater than no.
Therefore, since ¡PC is a Northwest utility and a member of the Northwest Power
Pool an additional electrical generation produced in the Northwest region con-
tributes to this region's reliability.
7. The classification of some or all of Idaho's anadromous fish as threat-
ened or endanered also will have a bearing on the future cost of electricity in
the Pacific Northwest. and even though Milner's and Swan fals' power ma not be
Illeast cost" compared to COnservation, the:" cost of this power on a levelized basis
over the life of the plants will not be excessive. (see lCA"s append A of two
pages) . furhermore. the estimated inorease of this power percentage wise willICA: Comments ())
be ,from 1.J~ to 2.4~1. Milner power, depending on t~cenario adopted according
to stephane Miller of the IPUC staff, see page 4 of her direct testimny, an in
all probability not more than j~ moreefor Swan 'alls power, in our judment, due
to the extra costs of the historical preservation requiements requied by the
fmC's relicensing requirements. In this connection, we believe these plants
should be constructed now and in support of this position we would like to say
that ~we _pay now or we pay even more laterll' as Idaho i s Northwest Power Coun,Cil's
member quite often has said. Ah we reiterate again, "we don't want these plants
to become "lost opportuntiesll for the future addition of poer to IPC's system.
8. In spite of the fact lCA: believes the construction of these plants should
proceed now an very likely some Cl all of the power they produce ma have to be
sold, short term off system at a reduced rate, we still matai our position
they should not be ratebased until they become lIused and uselulll for IPC's, rate-
payers. To do otherwse3would requiecIPC's ratepayers assume most of the risks.
Dr. Readi lists 9 of them òn pages 19 & 20 of his diect testimony in the Swan
ralls case and reiterates them again on pages 18 & 19 in his direct testimony in
the Milner case, which we incorporate by reference in th~uiecc)l..ents to the ¡PUC.
In addition, we support the addtional oomments of Dr. Reading on page 19 of his
. direct testimony in the Milner case. quote. tlIdabo Power's stockholders, on the
other han, would face only the risk that the Compan would not use' reasonable
and prudent oonstruction praotices and the risk that some costs of the plant might
not be allowed in rate base if the Compan exceeded its cap. The latter risk is
practically eliminated by the broadly defined escalation and scope reservations
that accompan the Compan' s proposal.,1l
IlClearly, whie ratepayers would bear a great deal of risk, the stockholders
would incur very little," endquote. Thus, it can be seen IPC's ratepayers will
become liable for too man risks before the plants are completed, their costs
audited by the IPUC staff, an alowed in rate base.
9. We point out that Dr. John Wilmorth of IPC in his exhibit NO.7, case
No. IPC-E-9-l on page 2 shows that under median hydro condtions, with IPC's
expected load forecast, the cross over time between IPC's surplus and need willICl COmments (4)
..
be the ias~of 1998 or the first part of 1999 (see ICA's appendi :8). Therefore,
plenty of time exists for the IPC to justify its expendtures for constructing
the Mier and Swan falls power plants and for the IPUC staff to ascertain the:
expendtures for same were prudently incurred.
10. AI regards the rebuilding of the Milner dam itseU, not the construction
of it. powerhouse, we:feel all the costs of rebuildig the dam should be born by
the stockhlders ot the oanal oompanes ownng the dam, since the prima purpose"
of this dam is to irrigate farmland in the Magic Valley, an the revenue received
from the sale of power generated at the dam will go to retire the debt incured.
by the rebuilding of the dam. We strongly object to the proposed plan to rate base
in the form of higher than necessary royalty payents,
thes~ dam rebuildng costs, since most of IPC's ratepayers will not receive anl"
revenue from the dam's irrigated farmland. Thestockhold.ers of this dam should
provide their own financing separate from Idaho Power. Compan. as was ddnewhen
the Mier Dam was originally construoted.
11. We reque:it the IPUC to order at least a 200 cfs mimum flow at the
Milner Da, not a target flow as stated..by Mr. Moss during oross examnation of
his testimony at the Milner hearing, for the protection and enhancement of the
fish & wildlife downstream from the dam, as stipulated in the lIRe envionmental
assessment, ifa'rmi flow for fish & wildlife protection is not a rmc license
ref uirement.
12. With furher referenoe to ratebasing the Milner dam's electrical gen-
erating plant l in the event the plant is determined not to be need.ed upon com-
pletion and the poer is sold off-system for an interm period of time, thee amunt
allowed in rate base when the poer generated by the plant is aotually needed,
should be the Milner plant's actual depreciated costs at that time. In support
of ourpølit10n we quote from Staff witness, Stephane Miler's direct testimony
at line 6, page 12, HI think the most sensible thing to do would be to replace the
reproduction cost lanuage with a -general statement that the oommssion would de-
termine the value of the plant at that time for rate mag purposes"'. endquote.
lCA Comments (5)
..13. lCA has no great problems with the J'ERC's order for IPC to rebuild their
Swan ralls Dam, or IPC's desire to increase its generating capaoity to 2; IW, since
our preliminary investigation has determined there will be suffioient water during
several months of the year to justify this additional generating capacity, also
IlC:oould use"this additional electrical power at a later date, if not when the
reèu1ld is completed.
This rebuild will be more expensive than it would be under ordinar cir-
cumtances, due to the fERCrequirements that it be rebuilt in complianoe with
certain historioal preservation requirements. However, this aspect is imprtant
to man people so ¡PC's ratepayers will have to fund these requirements by having
their future rates slightly increased.
14. Regarding the rERe- requirements that the picnic and boating facilities
at Swan J'alls be upgraded at the time of the rebuild" IC.l respeotfully requests
the Commssion to require the building of a boat launohing dock dowstream from
the dam and the installation of picnic tables, a drinkng water fountain and rest
rooms in the wooded area downstream from the dam. The pre1Jent picnic and other
mentioned facilities near the present lawn, as well as the present boat launching
area are not adequate for the increased use age of the recreation facilities by
the general public.
1;. We feel IPC's deoision to add additional generating capacity when the
Swan falls Da is rebuilt, as ordered by FERC, is in the best interests of IlC's
ratepayers, long term at least. However, we request any oontracts for off -system
power sales mae by IPC be short term, five to ten years, and recallable.
Respectfully submitted.
Dated at
esources ee
This is to oertify that on Deoember ;, 1990, I have han delivered two copies
of this document to the IPC at their corporate headqua~ers in Boise, Idaho, eight
copies to the IPUC at 472W. Washington Street, BOis. Idaho, and a copy maled,
postage prepaid, first olass to all the other par of od in h ec 0 ses.LlCA Comments (6)
lCA'S COIMSi,Qf', CEMER 5, 1990, CASES NOS. IPC~, " -8 APPEND,IX A of 2 pages, FlNM :.HOUT38 . ,Page 110/15/90 D':, R' C\, It, T"~rir
SWAN FALLS REBUILD
PLANT SIZE (MW)
GENERATION
(MWH)
(AVERAGE MW)
SEASONALITY
CAPACITY FACTOR
DISPATCHABILITY
INVESTMENT COST (1990$000)
PRIMARY FUEL
HEAT RATE (BTU/KWH)
FUEL COST (1990 $'S)
O&M COST (1990 $'S)
FIXED ($/KW)
VARIABLE (MILLS/KWH)
ESTIMATED ECONOMIC LIFE (YEARS)
CONSTRUCTION TIME OR
FIRST YEAR AVAILABLE
STATUS OF TECHNOLOGY
LEVELIZED COST (MILLS/KWH)
13
25
167,338
19
SEE PAGE 37
76%
NO
$64.228.0
HYDRO
o
2.00 MILLS
50
1994
MATURE
57.0--
FLNM:H0i7TC:'S' COMMS Of DrER 5. 1990. CABS NOS. ¡PC-. AIEN~,:; ~ pag... 10/10/90 DRAFT
MILNER-- -- - ----- - - -- - -- - --- --- - - ----- - - - - - - ---
SOURCE
PLANT SIZE (MW)
GENERATION
IDAHO POWER COMPANY
58
(MWH)
(AVERAGE MW)
SEASONAL I TY
CAPACITY FACTOR
DISPATCHABILITY
INVESTMENT COST (1990 $000)
PRIMARY FUEL
HEAT RATE (BTU/KWH)
FUEL COST (1990 $'S)
O&M COST (1990 $'S)
FIXED ($/KW)
VARIABLE (MILLS/KWH)
ESTIMATED ECONOMIC LIFE (YEARS)
CONSTRUCTION TIME OR
FIRST YEAR AVAILABLE
STATUS OF TECHNOLOGY
LEVELIZED COST (MILLS/KWH)
194.719
22
SEE PAGE 37
40%
NO
$59.967.8
. HYDRO
a
1.66
50
1992
MATURE
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