19920402Application.pdf

IrIILITIES
APR Z.
COMIUISSIONBET'ORD IEE IDAEO PIIBLIC
INIEE MATTEB OF TIIE APPTJCATION
OF IDAIIO POWEB GOMPAI{IY FOB
ATITEORf,TY 1lO SEI,I.. TTS HAII,UT
TT RBINE r:r.r:gltsIc GENERA1I1OR
CASE NO.IPGF,.92.9
NCIrICE OFAPPIJCATION
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YOU ARE HEREBY NOTIFIED that on March 9, L992, the Idaho
Power Company (Idaho Power; Qernpan/) filed an Application for authority to
sell its turbine electric generator (Hailey Turbine) located approximately two
miles north of Hailey, Idaho at the Wood River Substation.
According to the Application, the Hailey Turbine is a General Electric
Frame 7, model MS 7001 B (C), dual fuel turbine electric generator with a rating
of 49,580 kW. The equipment proposed for sale includes the fuel handling
equipment, two auxiliary transformers, the carbon dioxide fire control unit, the
waste sump, the 4.16 kV auto transfer unit for starting, all special tools, spare
parts and manuals as well as the turbine generator unit itself.
The Company notes that on February 6, 1974, in Case No. U-1006-89,
by Order No. 11315, Idaho Power was granted a Certificate of Public
Convenience and Necessity for the construction and installation of the Hailey
Turbine. The original purpose for the turbine $,as to provide increased reliability
to the Hailey-Ketchum-Sun Valley area. According to the Company: sldaho
Power has now completed constr-uction of a second 138 kV transrnission line, and
that line has been in operation for over a year.s
Idaho Power contends that problems involving availability of fuel and
the local environmental impact at the present site have forced the Company to
omit the Hailey T\rrbine as a resource for planning purposes from Idaho Power's
current studies for new resource planning or avoided cost determination.
Because of this, the Co-pany contends, the sale of the Hailey T\rrbine will not
affect Idaho Power's sAppendix A' loads and resources assessment established
by the Idaho Public Utilities Commission in Case No. IPC-E-89-11, Order
No. 23357, setting avoided cost rates for power purchases from PURPA
qualifying facilities.
NOTICE OF APPLICATION -1-
Idaho Power asserts that it would have no need for the Hailey Turbine
until the year 2002 at which time it would be nearly 30 years old. By that time,
the Company contends, the turbine will be outdated and would require additional
improvements in order to be useful. Furthermore, Idaho Power states that an
economical supply of natural gas for delivery at the present location is not
available. In order to obtain lower natural gas prices, Idaho Power contends, the
Company would have to guarantee the rninimum operation of the turbine at a
20Vo annrual plant factor. This would force the operation of the turbine when less
costly alternatives are available such as Idaho Power's share of the Bridger,
Boardman and Valmy generation units.
The Company states that it is also hesitant to utilize the turbine
because of complaints received from local residents regarding excessive noise and
vibration when the turbine was utilized in the past. In addition, if the machine
were to operate ZOVo of the year or more, the Company states that it would have
to add equipment to reduce the amount of air pollutants exhausted into the Wood
River Valley atmosphere.
Finally, the Company states that, if left in place, the Hailey Turbine
would require ongoing maintenance in order to keep it in operating condition.
Idaho Power estimates that a capital expenditure of $10 million would
be needed to relocate the turbine to a site near the main gas pipeline, to
refurbish the unit as required for increased operation, to install air pollution
control equipment required at a new site and to provide all the electrical
equipment to connect to Idaho Power's transrnission system.
The Cornpany states, as of December 31, 1991, the net book value of the
Hailey Turbine for revenue requirement purposes was $1,926,391. Thus, Idaho
Power contends, the turbine has been essentially depreciated for income tax
purposes.
Idaho Power proposes selling the Hailey Turbine for not less than
$8 million. The sale may be accomplished by competitive bidding, a modified
form of competitive bidding or a negotiated sale.
The Qernpan/ concedes that the Cornrnission has jurisdiction to
determine how the proceeds of the sale will be booked for revenue requirement
purposes once the turbine is sold. Upon the sale of the turbine, the Company
asserts, it will file with the Cornrnission notifrcation of the sale of
NOTICE OF APPLICATION -2-
the turbine, the sale price, the income tax consequences of the sale and a request
for an accounting order The Company has requested modifred procedure of the
handling of its Application pursuant to IDAPA 31.A.23.
YOU ARE FURTHER NOTIFIED that any persons desiring to
intervene in this case for the purpose of becoming a party, i.e., to acquire the
right to cross-exarnine witnesses and to make and argue motions, must file a
Petition to fntervene with the Cornrnission Secretary on or before Monday,
April27, 1992. The Petition to Intervene must comply with Rule 5 of the
Commission's Rules of Practice and Procedure (RP&P), IDAPA 31.A.5. the
Petition to Intervene shall be accompanied by a written Statement of Position
stating, in general terms, the Petitioner's position concerning Idaho Power's
Application.
YOU ARE FURTHER NOTIFIED that all persons who do not wish to
become parties to this action may file written comments or protests to the
Application with the Cornrnission on or before Monday, April 27, L992.
YOU ARE F URTIIER NOTIFIED that all proceedings conducted in
this case will be done so pursuant to the Cornmission's Rules of Practice and
Procedure, IDAPA 31.A.
YOU ARE FURTHER NOTIFIED that the Company's Application
has been filed with the Cornrnission and is available for public inspection during
regular business hours of the Cornmission office.
YOU ARE FURTHER NOTIFIED that proceedings in this case will
be held pursuant to the Commission's jurisdiction under Title 61 of thre ld.aho
Code.
DATED at Boise, Idaho, this /s/ day of April 1992.
BP:vldA.I-475
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- COMMISSION SECRETARY
NOTICE OF APPLICATION