19901205Position Statement.pdf

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:BEFORE THE IDAHO PUBLIC UlILITIES COMMSSION r.'C't'r:~....V_I r....1EJ tLJ
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IN THE MATTER OF THE APPLICATION OF IDAHO POWER CO.)
FOR AUlHORITY TO RATE BASE THE INVESTME REQUIED )
FOR THE REBUID OF THE SWAN FALS HYDROELECTRIC )FACILITY )CASE Nd ll_sSo.l1 2 '05
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0' ~. 1'" .- C" ~..I ~ !~: J 1(: i:: ~ r: ~¡,~I,:, ,Lil le0 l;')I,¡¡" "'.... ~I'
/2, ~_é'hA"'IN THE MATTER OF THE APPLICATION OF IDAHO POWER CO.)
FOR .A CERTIFICATE OF PUBIC CONVENIENCE AND NECESS-)
IT! FOR THE RATE BASING OF THE MINER PROJECT OR IN)
THE ALTmiNATIVE A DETERNITION OF EXEl STATUS )
rOR THE MINER HYOELECTRIC PROJECT )
CASE NO. IPC-i-90-8
COMMNTS OF IDAHO CONSUM AFFAIRS. INCORPORATED, (ICA)
COME NOW. Idaho Consumer Affairs, Ino. (ICA) through its Intervenor rep-
resentative, Mr. Harold C. Miles, ;16 Fifteenth Avenue South, Nampa. Idaho 8)651,
and offers the following statements of position in acoordanoe with the Commssion's
requirement that they be submitted on or before- Deoember 7, 1990. for the- Comms-
sion's oonsideration.
1. "CONSERVATION'l is ICA's preferred souroe of additional generating oapaoity
and oan, in part. be attained by the nine reoommendations for Conservation measures
ICA submitted to this Commssion at pages 10 & 11 filed in the "Conservation Stan-
dards & Practioe"Case No. U-1500-i65 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 Commission (IPUC) and the Idaho Power
co. (IPC) have not been and are not now fully oommtted to Conservation, 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 electricity. In
addition, IPC at their most recent Technioal Advisory Panel meeting, of which ICA
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 class of cus-
tomers, but commercial, industrial and irrigation customers as well. This fact
was also addressed by IPUC staff member. Thomas Faull's, uncontested statement at
page 1; of his direct testimony Case No. IPC-E-2. Quote, "The ,Commssion has been
(1)
..e~couraging Idaho Utilities to acquire oost effective oonservation reoources for
years, but with little avail. Now, when it appears that new resources are needed.
the utilities have little conservation "on line", and are essentially unprepared
to agressively bring such resouroes on line. Therefore, it appears ineq,uitable to
ascribe a benefit to IPC in evaluating its supply side resources by ignoring the
utility's apparant negligence in acquiring demand side resouroes", endquote.
Dr. Readin~t page 9 of his direct testimony in the Swan Falls case states_~
Quote, "The oompany has not presented evidence showing that reconstruction or the
Swan Falls project is less oostly than installation of demand side management
measures~, endquote.
3. Although 11 Conservation" is our preferred source of new generating oapacity,
there is a strong feeling by many of ICA's members and supporters that Idaho. at
this time. is not oonvinced that Conservation should be totally relied on as the
sole N~Ñ source of IPC's projeoted need for additional generating capaoity by the
mid to late 1990' s under a medium or high medium growth scenario.
4. It is ICA's belief that hydroelectrio generation as well as fish & wild-
life protection and enhancement are i1beneficial uses"" of water. Also the"Idaho
Energy Resource Policy Boardil adepted the following polioy in .its February 1982
publi cation.We quote from page 5, tIlt is the policy of the State of Ida.ho
that t he private and public utility oompanies place a high priority on conservation,
renewable resources, generating resources of high fuel conversion efficienoy, and
then on all other resources in meeting the future electrical needs of the state.
Further, in the development of renewable resources, the state should give a high
priority to hydroeleotric projects, (emphasis added) in particular, the upgrading
of ourrent facilities within the state", endquoteo The Swan Falls and Milner proj-
eots qualify under this State of Idaho Policy.
5. ICA feels that hydroelectric projects can be constructed or upgraded that
are reasonably environmentally aoceptable and should be built at an early date for
the following reasons:
ICA Comments (2)
..
a. Projects suoh as Milner and Swan Falls should not become "lost opportu-
nities" for Idaho's and the Paoific Northwest's future needs for additional gen-
erating capacity.
b. Over the life of the project their 0 & M oosts will be far less than
for thermal projeots.
c. They do not contribute to the acid rain. air pollution, fly ash, an
radio active waste disposal problems that coal or nuclear plants do.
d. Their fuel costs (water) are considerably less than coal or uranium.
e. Their plant life is oonsiderable longer, probably over double, that of
therma plants.
f. They are not great oonsumpti ve users of water, particularly run of
the river plants.
6. Idaho, including IPC, needs to plan.where possibilities exist, for ad-
ditional hydroeleotric generation, partioularly in view of the faot the "Pacific
Northwest Coordination Agreementlland the five "Entitlement Agreements" with Canada
start ending in 1998. The Canadian share of the power, probably in the neighbor-
hood of 900 average megawatts, will revert to British Columbia for their use, in-
stead of BPA who has distributed end sold this Canadian power to its oustomers,
principally in the Pacific Northwest. Even if British Columia deoided to sell
this reolaimed power,in total or in part, to U.S. based utilities after these
agreements expire the cost of this power most assuredly will be greater than now.
Therefore, sinoe IPC is a Northwest utility and a member of the Northwest Power
Pool any additional eleotrical generation produoed in the Northwest region con-
tributes to this region' s reliability.
7. The classifioation of some or all of Idaho i s anadromous fish as threat-
ened or endangered also will have a bearing on the future cost of electricity in
the Pacific Northwest; and even though Milner's and Swan Falls' power may not be
"least oost" oompared to Conservation, the oost of this power on a levelized basis
over the life of the plants will not be excessive. (see ICA's appendix A of two
pages). Furthermore, the estimated increase of this power percentage wise willT~A ~~mM_"~~ (~)
~e from 1.J~ to 2.4~ ~ Milner power, depending on thJlenario adopted acoording
to Stephanie Miller of the IPUC staff, see page 4 of her direot testimony, and in
all probability not more than 3~ more for Swan Falls power, in our judgment, due
to the extra costs of the historical preservation requirements required by the
FERC'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 pq now or we pay even more later" as Idaho's Northwest Power Counc:l' s
member quite often has said. An we reiterate again, 'we don't want these plants
to become "lost opportunties" for the future addition of power to IPC's system.
8. In spite of the faot leA" believes the oonstruction of these plants should
prooeed now and very likely some or all of the power they produce may have to be
sold, short term off system at a reduoed rate, we still maintai our position
they should not be ratebased until they become "used and useful" for IPC's rate-
payers. To do otherwse would require IPC l S ratepayers assume most of the risks.
Dr. Reading lists 9 of them on pages 19 & 20 of his direct testimony in the Swan
Falls oase and reiterates them again on pages 18 & 19 in his direct testimony in
the Milner case, which we incorporate by reference in th~se comments to the !PUC.
In addition, we support the additional oo~~ents of Dr. Reading on page 19 of his
direct testimony in the Milner case, quote, "Idaho Power' a stookholders, on the
other hand, would face only the risk that the Company would not use reasonable
and prudent construotion practices and the risk that some oosts of the plant might
not be allowed in rate base if the Company exceeded its cap. The latter risk is
practioally eliminated by the broadly defined escalation and scope reservations
that accompany the Compan's proposal. it
"Clearly, while ratepayers would bear a great deal of risk, the stookholders
would incur very little." endquote. Thus, it can be seen IPC's ratepayers will
become liable for too man risks before the plants are oompleted, their oosts
audited by the IPUC staff. and allowed in rate base.
9. We point out that Dr. John Wilmorth of IPC in his exhibit No.7, Case
No. IPC-E-89-l on page 2 shows that under median hydro oonditions, with IPC's
expeoted load forecast, the cross over time between IPC's surplus and need will
,.,.. f"",_.......". ,
..
be the ias~of 1998 or the first part of 1999 (see ICA's appendi B). Therefore,
plenty of time exists for the IPC to justify its expenditures for oonstructing
the Milner and Swan Falls power plants and for the IPUC staff to asoertain the,
expendtures for same were prudently inourred.
10. As regards the rebuilding of the Milner dam itself, not the construction
of its powerhouse, we feel all the costs of rebuilding the dam should be born by
the stockholders of the canal companes ownng the dam, since the prima purpos~
of this dam is to irrigate farmland in the Magic Valley, and the revenue reoeived
from the sale of power generated at the dam will go to retire the debt incurred
by the rebuilding of the dam. We strongly object to the proposed plan to rate base
in the form of higher than neoessary royalty payments,
these~ dam rebuilding oosts, since most of IPC's ratepayers will not receive any'"
revenue from the dam's irrigated farmland. The stockholders of this dam should
provide their own financing separate from Idaho Power Compan, as was done when
the Milner Dam was originally constructed.
11. We request the IPUC to order at least a 200 ofs minimum flow at the
Milner Dam, not a target flow as stated ~y Mr. MOss during oross examination of
his testimony at the ~tllner hearing, for the proteotion and enhanoement of the
fish & wildlife downstream from the dam. as stipulated in the FERC environmental
assessment. if a minium flow for fish & wildlife protection is not a FERC license
requirement 0
12. With further reference to ratebasing the ¥dlner dam's electrical gen-
erating plant, in the event the plant is determined not to be needed upon oom-
pletion and the power is sold off-system for an interm period of time, the amount
allowed in rate base when the power generated by the plant is aotually needed,
should be the Milner plant's actual depreciated costs at that time 0 In support
of our position we quote from Staff witness, Stephanie Miller's direot testimony
at line 6, page 12, "I think the most sensible thing to do would be to replaoe the
reproduotion cost language with a general statement that the oommssion would de-
termine the value of the plant at that time for rate making purposesd~ endquote.
ICÂ Comments (5)
..¡ ...13. ICA has no great problems with the FERC's order for IPC to rebuild their
Swan falls Dam, or IPC's desire to inorease its generating capacity to 25 MN, since
our preliminary investigation has determined there will be sufficient water during
several months of the year to justify this additional generating capacity, also
IPC could use this additional eleotrioal power at a later date, if not when the
rebuild is oompleted.
This rebuild will be more expensive than it would be under ordinary cir-
cumstanoes. due to the FERC requirements that it be rebuilt in oomplianoe with
certain historical preservation requirements. However, this aspect is important
to man people so IPC's ratepayers will have to fund these requirements by having
their future rates slightly increased.
14. Regarding the FERC requirements that the pionic and boating faoilities
at Swan Falls be upgraded at the time of the rebuild, rCA respeotfully requests
the Co~~ssion to require the building of a boat launching dock downstream from
the dam and the installation of pionic tables t a drinking water fountain and rest
rooms in the wooded area downstream from the dam. The present picnic and other
mentioned facilities near the present lawn, as well as the present boat launohing
area are not adequate for the increased useage of the reoreation facilities by
the general public.
15. We feel IPC' s decision to add additional generating oapacity when the
Swan Falls Dam is rebuilt, as ordered by FERC, is in the best interests of IPC's
ratepayers, long term at least. However, we request any contracts for off-system
power sales made by IPC be short term, five to ten years, and recallable.
Respectfully submit ted,
Dated at
=-1 /.(,¿~
man~Energy & Natura
1990
ee
CCNSUNER AFFAIS, INC.
This is to oertify that on December 5, 1990, I have hand delivered two copies
of this document to the IPC at their corporate headquarters in Boise, Idaho, eight
oopies to the IPUC at 472 W. Washington Street t Bois , Idaho, and a copy mailed,postage prepaid, first class to all the other par of ~ o~d in h~e o~ses.. i ¿--:JIC''' Comments (t. \
¡CAtS COHHS of DECE~æER 5, 1990, CASES NOS. IPC-E-2-8 APPENDIX A of 2 pages. FlNM:.H,OUT38. . Paße 110/15/90 ~ ~ .C' ~1
(i i. '~.v ir .
SWAN FALLS REBUILD-- ------ - - -- -- -- - - - --- - --- -- - - --- - -- ----
PLANT SIZE (MW)25
GENERATION
(MWH)167,338
(AVERAGE MW)19
SEASONALITY SEE PAGE 37
CAPACITY FACTOR 76';
DISPATCHABILITY NO
INVESTMENT COST (1990 $000)$64,228. a
PRIMARY FUEL HYDRO
HEAT RATE (BTU/KWH)
FUEL COST (1990 $'S)0
O&M COST (1990 $ is)2.00 MILLS
FIXED ($/KW)
VARIABLE (MILLS/KWH)
ESTIMA TED ECONOMIC LIFE (YEARS)50
CONSTRUCTION TIME OR
FIRST YEAR AVAILABLE 1994
STATUS OF TECHNOLOGY MATURE
LEVELIZED COST (MILLS/KWH)57.0--
13
ICA' S CO~:ENTS OF' DEr.E11IER 5, 1990, CASES NOS. IPC-E-2-8 APPENDIX A of 2 pagesFLNM:~OUT8. . ~age 2. 10/15/90 DRAfT
MILNER
SOURCE
PLANT SIZE (MW)
GENERATION
(MWH)
(AVERAGE MW)
SEASONALITY
CAPACITY FACTOR
DISPATCHABILITY
INVESTMENT COST (1990 $000)
PRIMARY FUEL
HEAT RATE (BTU/KWH)
FUEL COST (1990 $'S)
O&M COST (1990 SIS)
FIXED ($/KW)
VARIABLE (MILLS/KWH)
ESTIMATED ECONOMIC LIFE (YEARS)
CONSTRUCTION TIME OR
FIRST YEAR AVAILABLE
STATUS OF TECHNOLOGY
LEVELIZED COST (MILLS/KWH)
IDAHO POWER COMPANY
58
194,719
22
SEE PAGE 37
40i
NO
$59.967.8
HYDRO
o
1.66
50
1992
MATURE
50.3
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