20031204Comments.pdf

VERNON RAVENSCROFT
1328-B Shoestring Road
Bliss, Idaho 83314
[phone]
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Scott Woodbury
Idaho Public Utilities Commission (I.P.
O. Box 83720
Boise, Idaho 83720
Nov. 29, 2003
Dear Mr. Woodbury,
I am advised that Idaho Power Company (I.P.) has filed for changes in the
insurance coverage that is required for the independent hydro projects who sell power to
I.P.
I.C.P. should be complemented for recognizing and initiating corrective action in
regard to the current insurance problems. During the last three (3) years there has been
significant changes both in the coverage offered and the charges made for the limited
coverage, which is being offered. Some coverage is no longer available and others are
priced beyond the point of practicality.
I have obtained the exhibit #3 from the I.C. application now pending before
your Commission. This exhibit provides a summary of the changes petitioned by the
Power Company. Please consider the following items, which I believe will clarify and/or
strengthen the pending petition:
Item # 1- Commercial liability- no comment
# 2- All Risk Property- Your fmal order should more specifically derIDe "80% of
cost." Does this category include the "soft costs" such as Engineering, Federal
Licensing, legal expense, contract negotiations, financing expense, Finders fees
etc? Also does it include land purchases, long term land rental contracts and
water rights?
# 3- Catastrophic Perils (Earthquake and Flood) limits- "80% of Equipment Cost" is
this intended to be original cost, current replacement cost or current depreciated
value?
# 4- Boiler machinery - Same questions as outlined in #3.
# 5- Loss ofIncome from Business Interruption.
a. "75% of estimated daily income" seems to me to be meaningless when it is
combined with "20% of estimated annual income . For the Ravenscroft
project 75% ofthe estimated daily income would be $482.00 and 20% of the
estimated average annual income would be $46 955. I do not understand the
need for the daily figure.
b. There is an extreme difference when you compare the "business interruption
risk between the various independent projects now operating in our state.
There are some who have only one generation unit served by only one
penstock and one control valve. Any major break down can cause a total loss
of income for several weeks or even months. In comparison The Ravenscroft
Project will soon have four (4) generation units all under computer control and
each with its own penstock and control valve. Our interruption loss risk is
confined to the 20% of the time (Idaho Department of Water Resources flow
duration data) when we have a flow that exceeds our plant capacity.
In the final order there should be some procedures and/or defined basis
where by this requirement can be adjusted to reflect the differing degrees of
risk from one project to the other.
Secondly on this same subject we have induction generators which can be
quickly repaired in at least two shops in Twin Falls and vertical shaft turbines
which can be quickly repaired at Yanke Machine shop in Boise. We do not
have a significant Business Interruption risk.
# 6- Other than the identification of low risk projects explained above, I agree with the
generalized deductible language which reads "Consistent with current insurance
industry utility practice for a similar property.
Sincerely,