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HomeMy WebLinkAbout20070815PAC to Staff 18-23, 25-31, 33-35.pdf~ ~\~ro ~OUNTAIN 201 South Main, Suite 2300 Salt lake City. Utah 84111 August 14 2007 " F1"'.IVEOI ,.- znOl AUG 1 5 '1: I 5 Scott Woodbury Deputy Attorney General Idaho Public Utilities Commission 472 W Washington Boise, ID 83702-5983 UT! ~l~H~~:id~J( iil\~S iON Neil Price Deputy Attorney General Idaho Public Utilities Commission 472 W Washington Boise, ID 83702-5983 RE:PAC-07- IPUC Production Data Request 18- Please find enclosed Rocky Mountain Power s Response to IPUC Production Requests 18 - 35 excluding 24 and 32. Provided on the enclosed CD are Attachments IPUC Production 27 -(1-2), 29 and 31. Provided on the enclosed Confidential CD is Attachment IPUC Production 20 -1. A hard copy of Confidential Attachment IPUC Production 18 is being provided to IPUC Staff only. The responses to IPUC Production Requests 24 and 32 are in process and will be provided when available. If you have any questions, please feel free to call me at (801) 220-4975. Sincerely, ~~/ f;P Brian Dickman, Manager Regulation Enclosures " 0 P AC- E-07 -05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 18 IPUC Production Data Request 18 Please provide the full 2006 Long-Term Outlook for Coal and Competing Fuels Report from Energy Ventures Analysis referenced on page 5 of Company witness Widmer s testimony. Response to IPUC Production Data Request 18 Please see Confidential Attachment IPUC Production 18. To avoid unauthorized copying or dissemination of a copyrighted document, Energy Ventures Analysis has given the company permission to send a hard copy ofthis publication to IPUC Staff only under the following conditions: (1) a PDF version should not be made from the hard copy, (2) the publication should be returned to PacifiCorp once the review has been completed, and (3) IPUC Staff should conduct their review in such a manner as to avoid making additional copies and should avoid quoting verbatim from the document. Please contact Brian Dickman at (801) 220-4975 to make arrangements to return the publication to the company once the review is complete. (Brian T. Durning prepared this response and is the recordholder. Mark T. Widmer is expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. IDAHO P AC-O7- ROCKY MOUNTAIN POWER IPUC PRODUCTION DATA REQUESTS 18- CONFIDENTIAL A TT ACHMENT IPUC PRODUCTION PROVIDED IN HARD COpy TO STAFF ONLY PAC-07-05/Rocky Mountain Power August 14 2007 IPUC Production Data Request 19 IPUC Production Data Request 19 Please provide the Company s Official Price Forecasts used as the market price inputs for the net power cost calculation. Please explain why two price forecasts were used? Response to IPUC Production Data Request 19 Please see the Company s response to Monsanto data request 1.8. The requested information was provided as Attachment Monsanto 1.8L. The Company s March 31 , 2007 Official Forward Price Forecast commences from April 2007. As stated in Mr. Widmer s testimony, the Company December 31 , 2006 Official Forward Price Forecast was used to provide data for January 2007, February 2007 and March 2007. (Mark T. Widmer prepared this response, is the recordholder, and is expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. PAC-07-05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 20 IPUC Production Data Request 20 Please provide further explanation into the development ofthe market price hourly scalars. Please include the scalars in the response to this request. Response to IPUC Production Data Request 20 The development of the hourly scalars is described in Confidential Attachment IPUC _Production 20 -1. The scalars themselves are extremely confidential, price and transaction sensitive, and commercially proprietary. Disclosure of this information may give an undue advantage to competitors and therefore requires the highest level of confidential treatment. Monthly and hourly scalars developed for the quarter ended June 30, 2007 will be made available for review at the company s offices. Please contact Mark Widmer at 503-813-5541 to make arrangements to review. (Mark T. Widmer prepared this response, is the recordholder, and is expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. IDAHO P AC-07- ROCKY MOUNTAIN POWER IPUC PRODUCTION DATA REQUESTS 18- CONFIDENTIAL A TT ACHMENT IPUC PRODUCTION 20 - ON THE ENCLOSED CONFIDENTIAL CD PAC-07-05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 21 IPUC Production Data Request 21 (a) Why does the Company use historical data since 1996 to develop the market price hourly scalars? (b) Please recalculate the scalars using historical data from 2002 to December 31 2006 and apply to the Official Price Forecasts used by the Company in this filing. Response to IPUC Production Data Request 21 (a) To calculate scalars, the company uses all data available in order to have the largest possible sample size. The use of a larger sample size improves the accuracy of the scalars for periods with fewer periods from which to sample specifically Saturdays and Sundays. (b) Scalars are updated on a regular basis; the next update is not scheduled to be available until early October. Due to the time and human resources required to reprogram code to re-create customer scalars, recalculation of scalars cannot be completed in time to respond to this data request. (Mark T. Widmer prepared this response, is the recordholder, and is expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. PAC-07-05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 22 IPUC Production Data Request 22 On page 21 of Company witness Widmer s testimony, it is stated that the VISTA model uses the same market price input as the GRID model. Do both models use the December 31 , 2006 forecast and the March 31 , 2007 forecast, or only the former? Response to IPUC Production Data Request 22 The VISTA model used only the December 31 , 2006 forecast. (Mark T. Widmer prepared this response, is the recordholder, and is expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. P AC- E-07 -05/Rocky Mountain Power August 14 2007 IPUC Production Data Request 23 IPUC Production Data Request 23 The GRID model uses normalized retail load by jurisdiction as an input. How is this information collected, i., at the substation level? Are there any instances in which the Company has to use its judgment in assigning partial load to multiple states due to how the load data is collected? Please explain. Response to IPUC Production Data Request 23 PacifiCorp s jurisdictional loads are calculated by summing control area generation within a particular state (owned and owned by others) with metered interchange at the control area boundary and interstate boundary. The company then subtracts borderline customer load in its control area that is not served by PacifiCorp. Additionally, the company adds borderline customers (PacifiCorp load in other control areas) that lie within a specific jurisdiction. Applicable contractual losses are applied to each jurisdiction on a pro rata load basis (with the losses for Oregon, Washington, and California spread separately from the losses for Utah, Idaho, and Wyoming). The load calculation is based on system input rather that customer usage. The only partial load assignment to individual states occurs with the contractual losses allocated to the different states on a pro rata load basis as described above. The weather impacts on the actual load are then added to or subtracted from the actual load giving the normalized loads. The weather impacts are estimated using actual and normal weather for the current year and regression coefficients estimated using three years of historical information. (Mark T. Widmer prepared this response, is the recordholder, and is expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. PAC-07-05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 25 IPUC Production Data Request 25 It is Staff's understanding that the load profile meters used to collect sampling data for residential Schedules 1 and 36 were installed in 2001 and in 1999 for irrigation Schedule 10. (a) Have there been additional load profile meters installed for these classes since then? (b) Have the meters installed in 1999 and 2001 remained at one location, or does the Company rotate meters within the respective customer class after a period of time? (c) Has the Company done any studies to determine if its sampling size is adequate? Please explain your answers. Response to IPUC Production Data Request 25 (a) To date, no additional load recorders have been installed on the samples identified, above that which was called for in the sample design. (b) Load recorders installed at a particular location remain at that location for the duration of the sample. These sample points will eventually be replaced by an entirely new sample. (c) Load samples are designed to meet PURP A mandated requirements of :I: 10% precision at the 90% confidence level. As the data from these samples is summarized, the sample energy is compared to the measured population energy to determine if significant variance between sample and population has occurred. For the samples identified, and for the test year employed by this filing, the total variance was as follows: Schedule 01 Schedule 36 Schedule 10 +0.223% 046% 001 % Looking at just the summer months for the irrigation schedule, the variance is - 623%. Based on the above information, the company concludes that all samples are still meeting PURP A requirements. The information also indicates that the company would be prudent to determine if it is time to replace or adjust the irrigation sample. (Douglas Marx prepared this response and is the recordholder. It has not been determined who will sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. P AC- E-07 -05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 26 IPUC Production Data Request 26 (a) Please describe the metering equipment in place for residential Schedule 36 customers. (b) What information is collected to facilitate time-of-use billing? (c) What information is available to the customer; is it available in real-time or only at billing? Response to IPUC Production Data Request 26 ( a) Rocky Mountain Power installs programmable, solid-state meters that measure kWh consumption during on-peak and off-peak periods as prescribed in Schedule 36. The energy consumption for the respective periods is stored and displayed as cumulative totals. (b) Total energy quantities for on-peak and off-peak are collected via a manual read on the prescribed meter reading day each month. Current month usage for on-peak and off-peak is derived by subtracting the previous monthly read from the current read. There is no further granularity of data available. (c). On-peak and off-peak energy usage is reported to the customer in their monthly bill summary. No real-time data or summary is available. (Douglas Marx prepared this response and is the recordholder. It has not been determined who will sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. P AC- E-07 -05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 27 IPUC Production Data Request 27 On page 10 of Company witness Griffith's testimony, it is stated that the on- peak/off-peak rate differentials for Schedule 36 customers is consistent with the differential in wholesale cost differences, yet the rate differential is nearly twice as high in percentage terms as the wholesale differential. Please provide further support of the prices and differentials proposed by the Company. Also, provide any analysis the Company has done with respect to the impact Schedule 36 has had on participating customers' bills, total usage, use pattern, peak load and Company revenues. Response to IPUC Production Data Request 27 The on- and off-peak rates in Schedule 36 are not meant to precisely mirror wholesale prices, but rather to reflect "the direction of wholesale cost differences " as Mr. Griffith states in his testimony. This means that Schedule 36 rates are lower during off-peak periods than during on-peak periods, and that customers are provided a clear incentive to shift usage from on-peak to off-peak periods when possible. The Company prepared an analysis of Schedule 36 usage compared to Schedule in September 2006 , using a test period of 12 months ended September 2005. This study is provided as Attachment IPUC _Production 27 -1. The data and conclusions contained in this report were previously presented to the Commission at the PURP A standards conference and the quarterly Commission meeting both in late 2006. The presentation given at the quarterly Commission meeting in December 2006 is provided as Attachment IPUC _Production 27 -2. The study demonstrates that Schedule 36 customers use more energy overall and use a higher percentage of off-peak energy than Schedule 1 customers. Load research data used in this analysis indicates that Schedule 36 load often reaches its peak during off-peak hours, while Schedule 1 peaks during on-peak hours. Data from the current test period shows that Schedule 36 customers have higher average bills due to their higher energy use, but pay a lower average cents-per- kWh rate. This data can be found in Mr. Griffith's Exhibit Nos. 31 and 35. (William R. Griffith prepared this response, is the recordholder, and is expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. IDAHO P AC-07- ROCKY MOUNTAIN POWER IPUC PRODUCTION DATA REQUESTS 18- ATTACHMENT IPUC PRODUCTION 27 -(1- ON THE ENCLOSED CD P AC- E-07 -05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 28 IPUC Production Data Request 28 (a) Please compare the cost of meter reading for Schedule 1 customers with that of Schedule 36 customers. (b) Please provide a business case analysis of the costs/benefits of installing automatic or advanced meter reading capability for Schedule 36 customers. Response to IPUC Production Data Request 28 ( a). Rocky Mountain Power does not differentiate the cost of meter reading between Schedule 1 and Schedule 36 customers. The added costs to read a Schedule 36 customer versus a Schedule 1 customer is marginal. (b). A comprehensive business analysis of the costs/benefits for automatic or advanced meter reading systems for Schedule 36 customers has not been completed. It is impractical to analyze these systems for individual customer classes. (Douglas Marx prepared this response and is the recordholder. It has not been determined who will sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. PAC-07-05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 29 IPUC Production Data Request 29 Please describe the Company s efforts to promote the Schedule 36 time-of-use billing to residential customers. Response to IPUC Production Data Request 29 All new Rocky Mountain Power residential customers in Idaho receive a Welcome Aboard" booklet that informs them of their two billing options; Schedule 1 - Standard Service and Schedule 36 - Optional Time-of-Day Service. Schedule 36 time-of-use billing is also featured on the Company s website under the "Save Energy and Money" section. Both the webpage and the "Welcome Aboard" booklet inform the customer of the difference in prices and provide the timeframes which are considered on and off peak. The "Welcome Aboard" booklet is provided as Attachment IPUC Production 29. In past years, a bill insert was sent out to customers each year that informed them of consumer rights/ responsibilities and their pricing options. The bill insert that was sent out last year in December 2006 did not include pricing information, because of a pending rate change. (Douglas Marx prepared this response and is the recordholder. It has not been determined who will sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. IDAHO P AC-07- ROCKY MOUNTAIN POWER IPUC PRODUCTION DATA REQUESTS 18- ATTACHMENT IPUC PRODUCTION ON THE ENCLOSED CD PAC-07-05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 30 IPUC Production Data Request 30 In the class cost of service models, are residential customers partitioned by Schedules 1 and 36, or does that occur when the Company does its rate spread and rate design? Please explain your answer. Response to IPUC Production Data Request 30 Residential Schedules 1 and 36 are separate in the cost of service study, as are all individual service schedules. Cost of service results are calculated for the two schedules separately and can then be aggregated to achieve results for the entire residential class. Cost of service information is shown separately for Schedules and 36 in Mr. Tucker s cost of service exhibits 28 - 30. (Mark Tucker prepared this response, is the recordholder, and is expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. P AC-07-05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 31 IPUC Production Data Request 31 On page 5, lines 7 through 9 of Company witness Bennion s testimony, it is stated that "(t)he Company must also build transmission facilities to move power generated by others (i.e. qualifying facilities) to substations and load centers. Consistent with Revised Protocol, Section C3 , please provide the following:(a) a list of all QF contracts included in the case;(b) the location of each QF;(c) the embedded cost differential calculation for each existing QF under the Revised Protocol; the Comparable Resource calculation for each new QF; the dollar amount allocated as a system cost for each project, and the dollar amount allocated as a situs cost for each project. (d) (e) (f) Response to IPUC Production Data Request 31 (a) (b) (c) The requested information is provided as Attachment IPUC Production 31. See the company s response to (a) above. Consistent with Revised Protocol, Section C3 the existing QF contract differential is not calculated on an individual contract by contract basis. The Existing QF Contract costs in each State are compared against normalized costs of the remaining generation portfolio on a $/MWh basis and an adjustment which reflects the cost difference is applied. This adjustment is referred to as "Existing QF Contracts Cost Differential Adjustment." The Existing QF Contracts Cost Differential Adjustment is calculated as the Annual Existing QF Contracts Costs for a specific State less the Annual Embedded Costs - All Other, multiplied by the normalized MWh's of output from that State s Existing QF Contracts. See Steven R. McDougal direct testimony exhibit 11 page 10.23 for the calculation of the existing QF contract differential. (d)The intent of the comparable resources standard in the Revised Protocol is to provide a remedy when a state commission directs the Company to enter into a qualifying facility contract with pricing terms beyond the state approved avoided costs. The pricing terms of all qualifying facility contracts entered into since the effective date of the Revised Protocol have fallen within the parameters of avoided costs. It is the expectation of the Company that the pricing provision of all new qualifying contracts will fall in the parameters of approved avoided costs and that the provision for situs assignment of cost beyond those of a comparable resource will not come into play. P AC-07-05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 31 (e)The QF projects listed below are not included in the existing QF contract differential calculation and these are system allocated. Douglas County Forest Products R. Johnson Evergreen BioPower ExxonMobil Kennecott Pioneer Ridge Simplot Phosphates Tesoro US Magnesium Weyerhaeuser The remaining QF projects are part of the existing QF contract differential. The costs of Existing QF Contracts are first allocated on a system-wide basis. Then the Existing QF cost difference is calculated separately for each State. This adjustment is situs assigned to that State. The sum of this adjustment for all States is calculated and an adjustment for the reciprocal amounts is allocated to all States using the SG factor. This adjustment assigns $604 429 of situs expense to Idaho and reduces SG system allocated expense to Idaho by $2 746 762. The dollar amounts for these QF projects are included as Attachment IPUC Prodcution 31. (1)There are no individual QF projects that are assigned situs. (Mark Widmer prepared the responses to parts a, b, and d of this request, is the recordholder for these parts, and is expected to sponsor the above-mentioned responses at hearing. Steven R. McDougal prepared the responses to parts c, e and f of this request, is the recordholder for these parts, and is expected to sponsor the above-mentioned responses at hearing. Please contact Brian Dickman at 801- 220-4975 to discuss this response. IDAHO P AC-07- ROCKY MOUNTAIN POWER IPUC PRODUCTION DATA REQUESTS 18- ATTACHMENT IPUC PRODUCTION ON THE ENCLOSED CD P AC- E-07 -05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 33 IPUC Production Data Request 33 Please describe in greater detail the gas procurement strategies for the Currant Creek and Lakeside projects. Has the Company negotiated a contract to supply the Lakeside project with natural gas, and if so, please provide it with your response. Also, if the plant is not online when anticipated, please provide the Company s plan for marketing/utilizing otherwise unused natural gas? Response to IPUC Production Data Request 33 There are no specific natural gas supply contracts dedicated solely to Lake Side requirements. Lake Side and Currant Creek requirements are part of a portfolio of risks and requirements for which hedging and procurement on a forward basis are done in aggregate. PacifiCorp currently has the monthly natural gas price risk associated with its natural gas fired generation assets, including Currant Creek and Lake Side, fully or partially hedged through 2011. PacifiCorp procures physical natural gas by employing a strategy that balances the security of higher cost long-term firm contractual commitments with the expected availability of lower cost short term firm purchases. These long-term firm commitments extend through 2011 and the short-term firm purchases are done on a season ahead or month ahead basis. PacifiCorp continually manages its expectations of fuel requirements at Lake Side and transacts natural gas in the day-ahead and forward markets in order to efficiently and economically manage the price and delivery risk associated with the uncertain requirements during the testing and commissioning of the plant. expectations and the reality of requirements change, excess natural gas diverted to other generating plants or sold to third parties, whichever is more economic. (Bruce Evans prepared this response and is the recordholder. Mark T. Widmer is expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. P AC- E-07 -05/Rocky Mountain Power August 14 2007 IPUC Production Data Request 34 IPUC Production Data Request 34 (a) Please describe how the Renewable Energy Tax credit for wind generation additions was calculated in Company witness McDougal's Exhibit No. 13. (b) Is the Blundell bottoming cycle project eligible for the Renewable Energy Tax credit, and if so, how has the Company incorporated it into this rate filing? Response to IPUC Production Data Request 34 (a) The Renewable Energy Tax credit for the wind generation additions was calculated using the 2 cents multiplied by the kilowatt hours of electricity production by plant as shown in the power cost study in Mark Widmer s Exhibit No. 14 pg. 10 of 15 for the Other Generation. (b) Yes, the Blundell Bottoming Cycle project is eligible for the Renewable Energy Tax Credit. This credit was inadvertently excluded from the company case, and would properly be included as a reduction to FERC Account 409. The Renewable Energy Tax credit is calculated the same as for the wind generation. The test year in the company s case includes 15 620 598 kWh from the Blundell Bottoming Cycle. The Federal Renewable Energy credit (2 cents per kWh) would equal of$312 412; allocated on an SE factor (6.5817%) to Idaho would produce a federal credit of $20 562. The Bottoming Cycle project would also qualify for a Utah State Renewable Energy credit of .35 cents per kWh, or $54 672, as a reduction to the calculation of the Utah state income tax expense. The IBT factor would be used to allocate this state credit to Idaho for an amount of $1 ,205 ($54 672 multiplied by .022044), resulting in a net credit to Idaho total current tax expense of$783. (L. Susan Morton and Steven R. McDougal prepared this response, are the recordholders, and are expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response. PAC-07-05/Rocky Mountain Power August 14, 2007 IPUC Production Data Request 35 IPUC Production Data Request 35 Please provide an explanation and any supporting materials, including any contract information regarding the Company s share ofthe Jim Bridger mine that would support and quantify the projected increase in costs for 2007. Response to IPUC Production Data Request 35 The Jim Bridger plant is supplied by both Bridger Coal Company and Black Butte Coal Company. The 2007 calendar year Idaho filing reflects a slight decrease in Bridger Coal Company operating cost from $1.180/mmBtu in calendar year 2006 to $1. 177/mmBtu in calendar year 2007. This decrease is offset by an increase in the Tier 1 contract price from Black Butte Coal Company from $0.989/mmBtu in calendar year 2006 to $1.005/mmBtu in calendar year 2007. The Tier 1 price is escalated based on changes in a basket of producer price indices such as labor and benefits, materials and supplies, steel, explosives, diesel fuel, and petroleum products. In addition, the transportation rate increased due to rising fuel costs reflected in the rail fuel surcharge. The net result is an overall price increase of $0.003/mmBtu from calendar year 2006 to calendar year 2007. PacifiCorp share ofthe Jim Bridger plant is 66.7%. The following table summarizes the changes in fuel cost from calendar year 2006 to calendar year 2007. Calendar Year 2006 Calendar Year 2007 Idaho Filing 2/8/2006 Idaho Filing 3/8/2007 Increase/Decrease (thousands)thousands (thousands) Bridger Mine Tons 014.3 004. MMBtu 660.4 825.164. $/MMBtu $1.180 $1.177 ($0.003) Black Butte Mine Tons 725.4 737.12. MMBtu 875.016.141.0 $/MMBtu $0.989 $1.005 $0.016 Total Tons 739.742. MMBtu 107 536.107 842.1 305. $ /MMB tu $1.122 $1.125 $0.003 (Brian T. Durning prepared this response and is the recordholder. Mark T. Widmer is expected to sponsor this response at hearing. Please contact Brian Dickman at 801-220-4975 to discuss this response.