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Home My WebLink About20070924PAC to Monsanto 9-1 to 9-5, 9-8 to 9-13.pdf~ ~~~" ~OUNTAIN , C,. " -.), ::: tJ 20 I South Main. Suite 2300 Salt lake City. Utah 84111 2007 SEP 2 L ). I u, i- UTi L ~f!d1~~~~ J ~ S I 0 i. September 21 , 2007 Randall C. Budge RACINE, OLSON, NYE, BUDGE & BAILEY, CHARTERED O. Box 1391; 201 E. Center Pocatello , Idaho 83204-1391 RE:PAC-07- Monsanto Data Request Set 9 (1-13) Please find enclosed Rocky Mountain Power s Response to Monsanto Data Requests 9. - 9., excluding the previously provided responses for 9.6 and 9.7. Provided on the enclosed CD are Attachments Monsanto 9.1 , 9.5-(1-2) and 9.12. If you have any questions, please feel free to call me at (801) 220-4975. Sincerely, . \ i~"-- i v wInM ""/ 111 Brian Dickman, Manager Regulation Enclosures Cc:James R. Smith/Monsanto Maurice BrubakerlMonsanto Richard Anderson/Energy Strategies Jean JewelllIPUC Eric Olsen/liP A Tony YankellllPA Conley Ward/Agrium Dennis Peseaul Agrium Brad Purdy/CAP AI Timothy Shurtz PAC-07-05/Rocky Mountain Power September 21 , 2007 Monsanto 9th Set Data Request 9. Monsanto Data Request 9. Referring to the direct testimony of RMP witness, Erich Wilson at 19, please identify the amount of pension cash contributions and FAS 87 pension expense on a total company and Idaho basis recorded over the last five years, and projected over the next five years. Response to Monsanto Data Request 9. Please refer to Attachment Monsanto 9. (This response was prepared under the direction of Bruce N. Williams and Steven R. McDougal, who are also the recordholders. Erich D. Wilson 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 MONSANTO DATA REQUESTS SET 9 (1-13) ATTACHMENT MONSANTO 9. ON THE ENCLOSED CD PAC-07-05/Rocky Mountain Power September 21 , 2007 Monsanto 9th Set Data Request 9. Monsanto Data Request 9. Please provide all support for Mr. Wilson s contention at page 20 of his testimony that "over the long run, the accrued pension expense will equal the total pension cash contributions; however, in a given year, the cash contribution maybe significantly different than the accrued expense Response to Monsanto Data Request 9. A company tracks on its balance sheet the difference between the cumulative employer contributions and the cumulative accrued pension expense. If the cumulative contributions are in excess of cumulative expense, it is a prepaid asset with the expectation that future expense will exceed future contributions by that amount. If the cumulative expense exceeds the cumulative contributions, it is an unfunded accrued pension cost with the expectation that future contributions will exceed future expense by that amount. (This response was prepared under the direction of Erich D. Wilson, who is also the recordholder. Erich D. Wilson 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 September 21 , 2007 Monsanto 9th Set Data Request 9. Monsanto Data Request 9. At page 16 ofMr. Wilson s Testimony, please state the impact on the company on-going annual pension expense caused by its decision to freezing its defined benefit pension plan and switch to a cash basis pension plan as of May 31 , 2007. Also, please identify the amount of pension trust assets and the plan benefit obligation as of May 31 , 2007. Finally, state whether the current pension trust balance is adequate to fund the new benefit plan obligation. Response to Monsanto Data Request 9. The impact of switching to the cash balance formula for the non-union workforce for the test year is addressed at page 18 of Mr. Wilson s testimony. The pension trust assets and benefit obligations used for the measurement at the time of the change were $886 million and $1.159 billion, respectively. It is obvious that the assets are not yet adequate to fund the benefit obligation. (This response was prepared under the direction of Erich D. Wilson, who is also the recordholder. Erich D. Wilson 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 September 21 , 2007 Monsanto 9th Set Data Request 9.4 Monsanto Data Request 9. Please estimate the amount oftotal company and Idaho allocated retirement plan cost using the cash basis formula set forth in Mr. Wilson s testimony, pages 16 and 17 , and the change to the company s 401k expense created by this proposed change. Please compare these on-going retirement costs to the amount of retirement plan and 401k expenses included in the company s filing in this case. Response to Monsanto Data Request 9.4 Page 18 ofMr. Wilson s testimony provides the retirement plan cost information for the cash balance formula. The company s 401(k) expense decreases by $0. million in the test year with the proposed change. (This response was prepared under the direction of Erich D. Wilson, who is also the recordholder. Erich D. Wilson 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 September 21 , 2007 Monsanto 9th Set Data Request 9.5 Monsanto Data Request 9. Please provide a history of all curtailments and/or interruptions made to Monsanto for the years 2001 through 2005 , inclusive. Please detail the time and date of the curtailment or interruption, the amount and reason (economic curtailment operating reserves, system integrity, etc. Response to Monsanto Data Request 9. Please refer to Attachments Monsanto 9.and 9.5 - (Robert T. McCarthy prepared this response and is also 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-O7- ROCKY MOUNTAIN POWER MONSANTO DATA REQUESTS SET 9 (1-13) ATTACHMENT MONSANTO 9.5-(1- ON THE ENCLOSED CD PAC-07-05/Rocky Mountain Power September 21 , 2007 Monsanto 9th Set Data Request 9. Monsanto Data Request 9. (a) Does the March 2007 market price forecast utilized in the GRID models used to value the Monsanto contract for 2008 and 2009 include a price component for capacity? (b) If yes, please quantify the capacity component. Describe in detail how any adjustment to the market price forecast was made to account for the value of capacity. Response to Monsanto Data Request 9. (a) The market prices used in the company s filing are based on price quotes from independent third party brokers and other market intelligence. The company believes there is an implied capacity component in the market price, but has not attempted to measure the amount. (b) Please refer to the company s response to (a) above. (Mark T. Widmer prepared this response and is also 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. PAC-07-05/Rocky Mountain Power September 21 , 2007 Monsanto 9th Set Data Request 9. Monsanto Data Request 9. In the recently released final copy ofPacifiCorp s 2007 Integrated Resource Plan Chapter 4 (Resource Needs Assessment), page 81 , a statement is made regarding an increase in interruptible resources for the Company. The statement, in referring to an increase in annual capacity positions reads in part; "The slight increase in 2009 is due to . . . and an increase in the curtailment portion of the Monsanto contract." The table following the statement, Table 4.12, indicates an increase in interruptible capacity in 2009 of 65 MWs. Please explain the basis of the expected change in the Monsanto contract to transpire in 2009. Response to Monsanto Data Request 9. The expected change in the Monsanto contract was included in the IRP because it reflected the Company s best estimate of the Monsanto curtailment product based on the status of negotiations at that time. Ultimately, negotiations continued and a different package of curtailment products was agreed to by the parties. (This response was prepared under the direction of Greg N. Duvall who is also 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 September 21 , 2007 Monsanto 9th Set Data Request 9.10 Monsanto Data Request 9. With regard to Mr. McDougal's Exhibit page 5., under the heading of Adjustment to Expense , please provide an explanation of what constitutes the difference between Existing Firm Energy and Post-Merger Firm Energy. Response to Monsanto Data Request 9. Existing Firm Energy refers to contracts executed before the Utah Power / Pacific Power merger. Post-Merger Firm Energy refers to contracts executed after the merger. (Mark T. Widmer prepared this response and is also 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 September 21 , 2007 Monsanto 9th Set Data Request 9. Monsanto Data Request 9. With regard to Mr. McDougal's Exhibit 11 , page 5.1.1 , please explain the difference between the entries "Fuel Consumed - Gas" and "Natural Gas Consumed" Response to Monsanto Data Request 9. Fuel Consumed -Gas" is comprised primarily of natural gas expense from the Gadsby steam generating units plus a small amount of natural gas expense for the Naughton plant. Natural gas consumed is comprised of natural gas expense for Lakeside, Currant Creek, Hermiston and Little Mountain gas generation plants. (Mark T. Widmer prepared this response and is also 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. PAC-07-05/Rocky Mountain Power September 21 2007 Monsanto 9th Set Data Request 9. Monsanto Data Request 9. With respect to Mr. McDougal's Exhibit 11 , page 5.1.1 , under the heading Purchase Power" (Account 555), line entitled "Post Merger Firm , please provide a detail analysis and description of how normalizing the booked cost of this entry resulted in an approximate 165% increase in value. Response to Monsanto Data Request 9. Normalization of net power costs is described in Mr. Widmer s direct filed testimony. The analysis prepared by the company for this case is the net power cost study loaded on the GRID computer provided to Monsanto. The higher costs are comprised of existing short-term firm purchases, existing post merger long-term firm purchases and system balancing transactions calculated by the GRID model for the 2007 calendar year proforma period as compared to the 2006 actual results. Provided as Attachment Monsanto 9., is a summary of the purchase power contracts and amounts that equal the $1 669 090 842 total post-merger firm purchase power expense shown on Mr. McDougal's Exhibit 11 , page 5.1.1.1. (Mark T. Widmer prepared this response and is also 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 MONSANTO DATA REQUESTS SET 9 (1-13) ATTACHMENT MONSANTO 9. ON THE ENCLOSED CD PAC-07-05/Rocky Mountain Power September 21 , 2007 Monsanto 9th Set Data Request 9. Monsanto Data Request 9. With respect to Mr. McDougal's Exhibit 11 , page 5., please provide a detailed analysis and explanation of how normalizing "Natural Gas Consumed" (Account 547.1) resulted in an approximate 115% increase in value over booked cost. Response to Monsanto Data Request 9. Natural Gas Consumed" is comprised of the GRID calculated natural gas expense for Currant Creek, Lakeside, Hermiston and Little Mountain. The natural gas expense for each of these plants calculated by the GRID model is shown on Mr. Mcdougal's Exhibit 11 , page 5.1.3. Normalization of net power costs is described in Mr. Widmer s direct filed testimony. The analysis prepared by the company for this case is the net power cost study loaded on the GRID computer provided to Monsanto. The higher natural gas costs for the 2007 proforma period compared to the 2006 historical period are the result of several factors including: the addition of Lakeside combined cycle combustion turbine during the 2007 proforma period, the reflection of a full year of combined cycle operation for the Currant Creek combined cycle combustion turbine during the 2007 proforma period compared to the 10 months it was in- service during 2006, contract escalation of the Hermiston gas costs and higher natural gas prices for the 2007 proforma period compared to the 2006 actual period due to more favorable hedging during 2006. (Mark T. Widmer prepared this response and is also 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.