20101126PAC to Monsanto Reb 3 (1-7).pdf

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~~~OUNTAIN RECE i"
Loin HOV 26 t\~1 9: 52 201 South Main, Suite 2300
Salt Lake City, Utah 84111
November 24,2010
if D j~~J.'I c~
UTIUTn=:s
Randall C. Budge
RACINE, OLSON, NYE, BUDGE &
BAlLEY, C~TERED
P.O. Box 1391; 201 E. Center
Pocatello, Idao 83204-1391
RE: ID P AC-E-1O-07
Monsanto Rebutt3rd Set Data Request (1-7)
Please fid enclosed Rocky Mounta Power's responses to Monsanto Rebutt3rd Set Data
Requests 3.1-3.7. Provided on the enclosed CD are Attchments Monsanto Rebutt 3.1, 3.2 -(1-
2), and 3.7.
If you have any questions, please feel free to call me at [phone].
Sincerely,
J(Tdtv~/~
J.Ted Weston
Maner, Reguation
Enclosure:
cc: Jea JewelllUC (C)/ 3 copies
Enc Olsen/IPA (C)
Ben Oto/ICL (C)
James R. Smithonsato (C)
Richard Anderson/onsanto (C)
George C. Carer, IIIIonsanto (C)
Denns Peseau/onsanto (C)
Gareth R. Kajander/Monsanto (C)
Maurce Brubaker/Monsanto (C)
Bnan Collinonsto (C)
Michal Gormanonsanto (C)
Ka Iverson/onsanto (C)
Mark WidmerlMonsanto (C)
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P AC-E-1 0-07/Rocky Mountain Power
November 24,2010
Monsanto Rebutt Data Request 3.1
Monsanto Rebuttal Data Request 3.1
At page 5 of Mr. Willams' testiony, he states that PacifiCorp is investing more
in doing business th is generated from operations. He states that in the fist six
month of2010, the Company invested $876 milion into capita expenditues
while generating only $779 milion of net cash flow from operations. Please
provide the sources of cash the Company relied on to supplement the amount of
internal cash flow generation to meet its capital expenditues in 2010.
Response to Monsanto Rebuttal Data Request 3.1
Please refer to Attachment Monsanto 3.1, in paricular the sections titled "Cash
flows frm fiancing activities" and ''Net change in cash and cash equivalents"
Recordholder:
Sponsor:
Bruce N. Wiliams
Bruce N. Wiliams
,
P AC-E-l 0-07/Rocky Mountain Power
November 24,2010
Monsanto Rebutt Data Request 3.2
Monsanto Rebuttal Data Request 3.2
At pages 5 and 6 of Mr. Wiliams' testimony, he is cntical of Mr. Gorman for
relying on data only up through June 30, 2010. Pleas provide complete copies of
the most recent FERC filings, and Securties and Exchage Commssion filings,
which show more recent fincIal data for PacifiCorp and Rocky Mounta Power
th that relied on by Mr. Gorman.
Response to Monsanto Rebuttal Data Request 3.2
Please refer to Atthments Monsanto 3.2 -1 and 3.2 -2.
Recordholder:
Sponsor:
Bruce N. Wiliams
Bruce N. Wiliams
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P AC-E-l 0-07/Rocky Mountain Power
November 24, 2010
Monsanto Rebutt Data Request 3.3
Monsanto Rebuttal Data Request 3.3
With respect to pages 6 and 7 of Mr. Willam' testimony, he states some
concern with Mr. Gorman's use of off-balance sheet debt adjustments to his
credit metrc calculation. With respect to ths testimony, please answer the
following:
a Pleae identify the differences in off-balance sheet debt used by Mr. Gorman
and that estimated by Stadard and Poor's.
b. To the extent any amount of this is related to post-retirement benefits or
pension expense, please anwer the followig:
i. Does the Company have discretion on how to mae cash contnbutions
it makes to the trt fuds for post-retirement benefits, and pension
expense?
11. Does the amount of off-balance sheet debt reflect the difference
between the Company's obligation and the value of the trt fud
assets?
iii. Can the Company reduce the off-balance sheet debt for post-retiment
benefits and pension expense by increasing its cas contrbutions to
the trst fud assets?
Response to Monsanto Rebuttl Data Request 3.3
a.Gormanxhbit No. 218 S&P October 7, 2010/
Rang Direct Report
Operating Leases
Interm. Hybnds
Post Retirement Oblig.
Accred interest
Power purchase agmts
Asset retirement oblig
Tota
$36.5 milion
o
o
o
395.7 millon
o
$432.2 millon
$36.5 millon
20.5 millon
369.9 milion
111.0 milion
395.7 millon
66.3 milion
$999.8 millon
Difference $567.6 millon
b.
i. Yes, however there are mium fuding requirements and limits from a
maimum tax deductible stadpoint and other considerations.
11. S&P states tht the adjusent to the balance sheet, if the net pension and
postetirement fuded statu is a deficit, is multiplied by (1- ta rate).
ii. The fuded statu of post-reent benefit plans depends upon a numbe
of factors, includi the rates of retu on plan assets, the level and na
of benefits provided, discount raes, the interest rates us to measure
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P AC-E-1 0-07/Rocky Mountain Power
November 24,2010
Monsanto Rebuttl Data Request 3.3
required minium fundig levels, chages in benefit design changes in
laws and governent reguation and requid or volunta contrbutions
made to the plan.
Recordholder:
Sponsor:
Bruce N. Wiliams
Bruce N. Wiliams
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PAC-E-I0-07/Rocky Mountain Power
November 24,2010
Monsanto Rebutt Data Request 3.4
Monsanto Rebuttl Data Request 3.4
Referrng to page 3 of Dr. Hadaway's rebutt testiony, he refers to the most
recently alowed retu on equity in Idaho for Avista Corp. as 10.5%. Pleae stte
whether or not that retu on equity was a settlement or a litigated position.
Please identify the date the paries agreed to that retu on equity findig.
Response to Monsanto Rebutt Data Request 3.4
As stated in Dr. Hadaway's Rebutt Testiony, the Avista case was setted and
the Commssion approved a 10.5% ROE on July 17,2009. Dr. Hadaway does not
know when the pares agreed to tht retu on equity fidig.
Recordholder:
Sponsor:
Dr. Samuel C. Hadway
Dr. Samuel C. Hadaway
P AC-E-1 0-07/Rocky Mountan Power
November 24,2010
Monsanto Rebutt Data Request 3.5
Monsanto Rebuttal Data Request 3.5
At page 10 of Dr. Hadaway's testimony, he cites certin deficiencies of the
CAPM. Please identify any proceeding in which Dr._Hadaway has filed in the last
five year where he has relied on the results of a CAPM study to support his
recommended retu on equity. For each such proceeding, identify the name of
the utilty, the state jurisdiction, the docket and the order date.
Response to Monsanto Rebuttal Data Request 3.5
Dr. Hadaway has used the CAPM in some cases, such as Illinois, where that
model is accepted. He has not researched his testiony for the last five years to
determine which cases.
Recordholder:
Sponsor:
Dr. Samuel C. Hadaway
Dr. Samuel C. Hadway
P AC-E-l 0-07/Rocky Mounta Power
November 24,2010
Monsanto Rebuttal Data Request 3.6
Monsanto Rebuttl Data Request 3.6
Concernng pages 21 and 22 of Dr. Hadaway's testimony, please identi the
number of proceedings where Dr. Hadaway has recommended his methodology
for supporting a GDP growt forecast for use in a DCF study. For all these
proceedings, please identif any reguatory commssion tht ha accepted hi
GDP growt forecast methodology.
Response to Monsanto Rebuttal Data Request 3.6
Dr. Hadaway has not researched his past testimony to determine the number of
cases in which he ha used the GDP grwt rate in his DCF calculations. To the
best of his recollection, he has done so in each case for about the last seven years
or so. In many cases, Commssions don't specify exactly how they arve at their
ROE conclusions. Dr. Hadway's base ROE recommendation was accepted as
fied by the Missour Public Service Commssion in December 2006 (Missour
Public Servce Commission, Cae No. ER -2006-0314, filed Janua 27, 2006) and
tht recommendation was in par based on the GDPgrowth rate methodology. He
does not know the effect tht his GDP growt rate recmmendations may have
ha in other cases.
Recordholder:
Sponsor:
Dr. Samuel C. Hadaway
Dr. Samuel C. Hadaway
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P AC-E-l 0-07/Rocky Mountan Power
November 24,2010
Monsanto Rebutt Data Request 3.7
Monsanto Rebuttal Data Request 3.7
Please provide complete copies of all Dr. Hadaway's workpapers supportg his
updated retu on equity estimates on an electronic spreadsheet with all formulas
intat.
Response to Monsanto Rebuttal Data Request 3.7
Provided as Attachment Monsanto 3.7 are the Excel spreadsheets supportng Dr.
Hadaway's Exhibits 58, 59, and 60.
Recordholder:
Sponsor:
Dr. Samuel C. Hadaway
Dr. Samuel C. Hadway