20101129Monsanto to PAC 5 (1-18).pdf

Mrs. Jean Jewell, Secretar
Idaho Public Utilties Commission
P.O. Box 83720
Boise, Idaho 83720-0074
W. MARCUS W. NYE
RANDALL C. BUDGE
JOHN A. BAILEY, JR.
JOHN R. GOODELL
JOHN B. INGELSTROM
DANIEL C. GREEN
BRENT O. ROCHE
KIRK B. HADLEY
FRED J. LEWIS
ERIC L. OLSEN
CONRAD J. AIKEN
RICHARD A. HEARN, M.D.
LANE V. ERICKSON
FREDERICK J. HAHN, III
DAVID E. ALEXANDER
PATRICK N. GEORGE
SCOTT J. SMITH
JOSHUA D. JOHNSON
STEPHEN J. MUHONEN
CANDICE M. MCHUGH
CAROL TIPPI VOLYN
BRENT L. WHITING
JONATHON S. BYINGTON
DAVE BAGLEY
THOMAS J. BUDGE
JONATHAN M. VOLYN
MARK A. SHAFFER
JASON E. FLAIG
FERRELL S. RYAN, III
Dear Jean:
LAW OFFICES OF
RACINE OLSON NYE BUDGE Be BAILEY
CHARTERED
201 EAST CENTER STREET
POST OFFICE BOX 1391
POCATELLO, IDAHO 83204-1391
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LOUIS F. RACINE (1917-2005)WILLIAM D. OLSON. OF COUNSEL
November 29,2010
Re: PAC-E-IO-07
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Enclosed for fiing in the captioned matter please find the original and thee copies of
Monsanto Company's Response to Rocky Mountain Power's Fourth antfets olData Requests.
Than you for your assistace.
c.t1
RCB:rr
Enclosures
cc: Service List (via email)
Randall C. Budge, ISB No. 1949
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
P.O. Box 1391; 201 E. Center
Pocatello, Idaho 83204-1391
Telephone: [phone]
Fax: [phone]
rcbCfracinelaw.net
l.:
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Attorneys for Intervenor Monsanto Company
BEFORE THE IDAHO PUBLIC UTLITIES COMMSSION
IN THE MATTER OF THE APPLICATION OF )
ROCKY MOUNTAIN POWER FOR APPROVAL)
OF CHANGES TO ITS ELECTRIC SERVICE )
SCHEDULES AND A PRICE INCREASE OF )
$27.7 MILLION, OR APPROXIMATELY )13.7 PERCENT )
)
Case No. PAC-E-IO-07
MONSANO COMPAN'S RESPONSE TO ROCKY MOUNAI POWER'S
FIFTH SET OF DATA REQUESTS
COMES NOW Monsanto Company ("Monsanto"), though counsel, and hereby responds
to Rocky Mountain Power's Fifth Set of Discovery Requests dated November 19,2010, pursuat
to Rule 225 of the Idaho Public Utilities Commission's Rules of Procedure, IDAPA 31.01.01, as
follows:
MONSANTO COMPAN'S RESPONSE TO ROCKY MOUNTAIN POWER'S FIF DISCOVERY REQUESTS-l
RESPONSES TO DATA REQUESTS
Mr. Lawrence
RM Data Request 5.1:
In Mr. Lawrence's Direct Testimony page 3 line 15, Mr. Lawrence states ''the new plants in
China have low costs." On page 4 line 8 he further states that the Chinese have "current electricity, labor
and environmental cost advantages." Please provide any data Monsanto used in support of the claim as it
pertains to the cost of electricity.
Response to RM Data Request 5.1:
There are approximately 200 Chinese glyphosate producers in 10 provinces with multiple
electrical suppliers relying upon hydro, coal and/or self-produced electricity. Monsanto does not attempt
to determine each production cost separately, instead focusing on the average overall production costs for
Chinese glyphosate which is substantially less than the production cost at the Soda Springs plant. See
attached confidential data.
RM Data Request 5.2:
Mr. Lawrence states in his Direct Testimony page 5 lines 17-18 that "electricity is the only input
under which we have no control.
a. In the last 10 years, has Monsanto evaluated installng its own generation onsite, similar
to other industrial customers with large electric demand? If the answer is no, please
provide an explanation as to why such evaluations have not been made. If yes, please
provide a summar of the evaluations.
b. In the last 10 years has Monsanto evaluated forming a municipal electric utility with the
City of Soda Springs or evaluated buying power from the Bonnevile Power
Administration? If no, please provide an explanation as to why such evaluations have
not been made. If yes, please provide a summar of the evaluations.
Response to RM Data Request 5.2:
a. No analysis has been performed within the last ten years, except to confirm in a general
maner the conclusion from previous analysis that Monsanto could not likely generate its
own electricity at a cost less than the rates provided by PacifiCorp.
b. Not in the last ten years. Buying power from BPA through the City of Soda Springs was
previously investigated but not pursued due to legal constraints which included
annexation to the City of Soda Springs and federal law which precluded BPA from
sellti electricity to the eastern Idaho phosphate industr.
MONSANTO COMPAN'S RESPONSE TO ROCKY MOUNAIN POWER'S FIH DISCOVERY REQUESTS - 2
RM Data Request 5.3:
Mr. Lawrence states in his Direct Testimony page 6 lines 18-20 that "our Roundup herbicide
gross profit, which peaked in 2008, declined by seven percent in 2009 and an additional 92% in 2010."
Please provide the gross profit of the Roundup business segment for years 2003 through 2010, and any
forecasted results for 2011 through 2013.
Response to RM Data Request 5.3:
See attached Confidential Response providing gross profit of Roundup business segment for the
years 2008 to date and forecasts for future years. Such information for years prior to 2008 is objected to
on grounds of relevance.
Mr. Smith
RM Data Request 5.4:
In Mr. Smith's Direct Testimony page 1 lines 24-25 he states: "Monsanto's rates have already
increased by 65% since 2003. IfPacifiCorp's proposed $22.3 milion increase is approved, then
Monsanto's net rates wil have increased an incredible 153% since 2003." Please provide the detailed
calculations supporting the 65% and 153% increase claims.
Response to RM Data Request 5.4:
In 2003, Monsanto was paying $18.50 per MWH. In 2010, Monsanto is paying $30.64 per
MWH. This is an increase of65.6%. Also, see the Direct Testimony of Mr. Richard Walje at page 19,
line 5 where he states: "Since 2003, Monsanto's rateshave increased 59 percent nominally and 73
percent on a compounded basis." PacifiCorp's proposal to increase Monsanto's rates by $22.3 milion
would result in an increase of$16.10 per MWH ($22.3 milion -: 1,385,173 MWH) above the current
rate. This results in a proposed rate of $46.74 per MWH, or an increase of 153% above the 2003 rate of
$18.50 per MWH.
RM Data Request 5.5:
In Mr. Smith's Direct Testimony page 6line 30 and page 7line 1 he states that Monsanto's
curtailment/load can be taken in a matter of seconds, quicker than Nucor and U.S. Magnesium. Please
provide the analysis and information to support this claim.
Response to RM Data Request 5.5:
The records ofPacifiCorp reflect that Monsanto's load can be curtailed in a matter of seconds
while longer notice periods are required to interrpt Nucor and U.S. Magnesium. PacifiCorp has
respective contracts of each which were confidentially produced in this proceeding and has the records to
substantiate the speed of the curtailment of Monsanto. This was further recognized by the Commission
in Order No. 30482 approving the 2008 Contract where the Commission stated:
"Monsanto is an interruptible customer that can provide PacifiCorp with up to 162 MW
of curtailments. Its three furnaces can be interrpted separately as well as collectively in
MONSANTO COMPAN'S RESPONSE TO ROCKY MOUNAI POWER'S FITH DISCOVERY REQUESTS - 3
any combination. Interrptions can occur within seconds to meet system emergencies
and provide operating reserves. Two hours notice is required to interrpt for economic
reasons. The interrptible products we find, provide operational benefits to PacifiCorp.
We find the products to be priced at a level commensurate with the value they represent
today."
RM Data Request 5.6:
In Mr. Smith's Direct Testimony page 7 line 20 through page 8 line 2 he states: ''the curtailment
value for the current contract is much higher than originally proposed by the Company, based on its
internal models. This clearly demonstrates that the Company's models do not reflect a realistic value for
the curtailment." Please provide the analysis and information to support this claim.
Response to RM Data Request 5.6:
In Order 30482 approving Monsanto's 2008 Contract, the Commission approved the settlement
stipulation stating on page 8:
"The curtailment valuation for Monsanto is based on a "black box" determination with
no part accepting a specific methodology for setting this valuation.
Thereupon the Commission approved the interrptible credit as set forth in Schedule 400 and stated on
page 12:
"We find the products to be priced at a level commensurate with the value they represent
today."
In Supplemental Testimony fied July 5,2007 in Docket No. PAC-E-07-05, the Company testified that
"The Company performed an analysis to determine the forecasted interrptible value for 2008 and 2009.
The analysis indicated an average value of $1 0.0 milion for the curtailment product credit for calendar
year 2008 and an average value of $9.6 milion for calendar year 2009." Those Company-derived values
are roughly 36 to 40% less than the approved settlement values.
RM Data Request 5.7:
Is it Monsanto's position that Monsanto should not be subject to rate increases at the same time
as other Idaho customers? If yes, please provide evidence supporting the justification for this position.
Response to RM Data Request 5.7:
Monsanto's rates are specified in the Electric Service Agreement between PacifiCorp and
Monsanto Company dated November 5, 2007 ("2008 Agreement") effective Januar 2008 through the
initial term expiring December 31, 2010. Thereafter the rate is governed by paragraph 2.1 of the 2008
Agreement which states:
"After the termination date PacifiCorp shall continue to provide any electric service to
Monsanto as specified in Idaho Electric Service Schedule No. 400 or its successor then
MONSANTO COMPAN'S RESPONSE TO ROCKY MOUNTAIN POWER'S FIm DISCOVERY REQUESTS - 4
in effect until such time as the Commission establishes or approves other terms or
conditions and prices."
Accordingly, PacifiCorp's rate increase filings as approved by the Commission determine when the rates
of Monsanto and other Idaho customers wil increase.
RM Data Request 5.8:
In Mr. Smith's Direct Testimony page 10 lines 18-20 he states "Monsanto has always taken non-
firm power and been subject to curtailment. We plan to continue to take non-firm power and provide up
to 1,050 hours of curtailment.. ."
a. Please clearly define non firm power as used in this context.
b. Is it Mr. Smith's position that Monsanto's interrptions are limited to 1,050 hours in any
given year? If yes, please explain the level of service (firm or non firm) that is required
to be provided to Monsanto once the 1,050 hours of curtailment are used.
Response to RM Data Request 5.8:
a. Monsanto has always been a non-firm customer because its electric service is subject to
curtailment by PacifiCorp and previously its predecessors in interest. Monsanto also
receives a 9 MW firm load that is not subject to curtailment.
b. The terms ofPacifiCorp's right to curtail Monsanto for operating reserves, system
integrity and economic purposes are set forth in the 2008 Electric Service Agreement and
Exhibits A and B attached thereto. PacifiCorp should manage its interrption rights
under the Agreement so that the limit is not exceeded. If reliability needs in excess of
the specified curtailment hours arise, Monsanto has been, and remains, wiling to help
support system integrity. The records ofPacifiCorp reflect the hours of curtailment used
each year and when they are taken.
Ms. Iverson
RM Data Request 5.9
In Ms. Iverson's Direct Testimony page 3 lines 14-15 she states that ''the Company has not
planed for, or acquired resources, on the basis of Monsanto's non-firm loads..."
a. Please clearly define "non-firm" as used in this context.
b. Is it Ms. Iverson's position that a "non-firm load" can be curtailed at any time for any
reason without limits? If no, please describe the level of service that is to be provided to
a non-firm load.
c. Is it Ms. Iverson's position that ifPacifiCorp has not acquired resources for a load,
PacifiCorp is not obligated to serve that load? If no, please describe what resources are
to be used to provide service to Monsanto.
MONSANO COMPAN'S RESPONSE TO ROCKY MOUNTAIN POWER'S FI DISCOVERY REQUESTS - S
Response to RMP Data Request 5.9:
a. "Non-firm" loads reflect power available under an arrangement that does not have the
guaranteed continuous availability feature of firm power.
b. See Response to RMP Data Request 5.8 b.
c. The basic premise is that no plant is built by the Company to serve interruptible
customers; rather, such customers are served out of resources acquired to support firm
customers, when the firm customers do not require the use of those resources.
RM Data Request 5.10:
In Ms. Iverson's Direct Testimony page 4 line 14 she states that 95% of Monsanto's load is non-
firm. Please clearly define non-firm as used in this context.
Response to RM Data Request 5.10:
Ms. Iverson is referring to Monsanto's interrptible demand.
RM Data Request 5.11:
In Ms. Iverson's Direct Testimony page 10 line 10 she states that Monsanto's "quality of service
has gone down." Please explain what is meant by "quality of service" and please provide any analysis
demonstrating that it has gone down.
Response to Data Request 5.11:
In this context "quality of service" refers to the additional hours of interrption. In general, an
interrptible customer limited to 100 hours of interrptions per year can be said to have a "higher quality
of service" than an interrptible customer experiencing 1,000 hours of interrptions per year.
RM Data Request 5.12:
In Ms. Iverson's Direct Testimony page 7 line 15 through page 8 line 2 she implies that
Monsanto is not "being served as firm customer" during the other hours of the year even though
curtailment is limited to 1,050 hours per year.
a. Once all 1,050 hours of curtailment are used, is PacifiCorp obligated to provide
continuous uninterrpted service to Monsanto? If yes, please describe how this service
differs from the service PacifiCorp provides to other firm customers. If no, please
describe PacifiCorp's obligation for service.
b. Please clearly define "lower quality service."
Response to RM Data Request 5.12:
a. Under the current agreement, Monsanto is available for interrption in all twelve months.
How PacifiCorp chooses to optimize the available interrptions according to the terms
and conditions of the agreement over the course of the year is strictly PacifiCorp's
MONSANTO COMPAN'S RESPONSE TO ROCKY MOUNAIN POWER'S FIm DISCOVERY REQUESTS - 6
responsibilty. Therefore, the best use of the 1,050 hours of curtailment is entirely up to
PacifiCorp operators. However, should PacifiCorp exhaust all these hours and find itself
in need of additional demand-side resources, Monsanto and the Company have reached
agreement for additional interruptions in the past through mutual consent.
b. See Response to RMP Data Request 5.11.
RM Data Request 5.13:
In Ms. Iverson's Direct Testimony page 9 lines 10-11 she states: "A proper allocation method
would allocate costs only to those loads designated as firm."
a. Is it Ms. Iverson's position that PacifiCorp incurs no costs to serve the portion of
Monsanto's load that exceeds the 9 MW she defines as "firm"? If the answer is no,
please describe what costs PacifiCorp incurs to serve this load and how those costs
should be allocated to Monsanto.
b. IfPacifiCorp does not plan for or acquire resources to meet Monsanto's peak demands,
please describe PacifiCorp's obligation to provide service to Monsanto during peak
demand periods?
c. Is PacifiCorp obligated to provide service to Monsanto if:
1. Company owned resources are not available?
ii. PacifiCorp can sell the excess output of Company owned resources to market at
a profit to reduce net power costs, thus benefiting firm customers to whom the costs of
such a resource were allocated?
Il. PacifiCorp has utilized all of the allotted curtailment hours in the contract?
Response to RM Data Request 5.13:
a. The referenced testimony is referring to fixed costs. The costs associated with serving
interrptible energy are included in the JAM study and allocated to the state ofIdaho.
See the Direct Testimony of Ms. Iverson, page 10, lines 15 - 21.
b. RMP has the abilty to curtail Monsanto's loads any time throughout the year, including
peak periods in accordance with the Agreement that PacifiCorp and Monsanto developed
to govern this relationship. Also see Response to RMP Data Request 5.8 b.
c. See Response to RMP Data Request 5.8 b and 5.12 a.
RM Data Request 5.14:
In Ms. Iverson's Direct Testimony page 11 line 3 she states that Monsanto assumes all the risks
associated with taking interrptible service. Please identify and define these risks.
Response to RM Data Request 5.14:
Risks include, but are not limited to, lost production opportnity, potential damage to Monsanto
equipment, e.g., icing during periods of excessive cold, and incurring additional energy costs in order to
buy-through a curtailment.
MONSANO COMPAN'S RESPONSE TO ROCKY MOUNAIN POWER'S FITH DISCOVERY REQUESTS-7
RM Data Request 5.15:
In Ms. Iverson's Direct Testimony page 22 line 20 she references ''the latest interrptible
contract signed by the Company."
a. Is Monsanto wiling to accept curtailment terms and conditions similar to those in the
referenced contract?
b. Is Monsanto willng to have costs allocated to them in a manner similar to that which
was used to determine the rate for the referenced contract?
c. Is Monsanto wiling to have their rate change over time in a maner similar to that which
is included in the referenced contract?
Response to RM Data Request 5.15:
Monsanto remains flexible as to consideration of possible terms and conditions necessar to
achieve a competitive energy price.
Mr. Collns
RM Data Request 5.16:
Is it Mr. Collns' position that PacifiCorp has no obligation to serve Monsanto's load since
PacifiCorp, in his opinion as described in his Direct Testimony, has not acquired long term firm
resources to meet Monsanto's load? Ifno, please describe PacifiCorp's obligation and please describe
what resources are to be used to meet that obligation. Please clearly define "long term firm resources"
Response to RM Data Request 5.16:
No. PacifiCorp has an obligation to serve 9 MW of Monsanto load as firm load and an
obligation to serve 162 MW of Monsanto load as interrptible load. PacifiCorp's portfolio of resources
constrcted or purchased to serve firm customers would be used to serve Monsanto's 9 MW of firm load.
No resource is constrcted or purchased by the Company to serve interruptible customers; rather, such
customers are served from resources built or contracted to serve firm customers when the available
resources exceed what is required to reliably serve firm customers. Long-term firm resources are power
or power producing capacity intended to be available at all times during the period covered by a
commitment, even under adverse conditions. Long-term firm resources are resources constrcted or
purchased for a term greater than one-year.
Mr. Peseau
RM Data Request 5.17:
Is it Monsanto's position that much of the Populus to Terminal transmission line capacity is used
to supply wind power from Wyoming to California? If yes, please provide analysis and evidence that
supports this position.
MONSANO COMPAN'S RESPONSE TO ROCK MOUNTAIN POWER'S FIH DISCOVERY REQUESTS - 8
Response to RM Data Request 5.17:
The term "much" in this request is vague and not quantifiable. Response is yes, in par. See
Peseau Direct Testimony and Exhibits in this case. See also Direct Testimony of Staff witness Lobb in
this case, as well as Exhibit No. 36. See PacifiCorp Energy Gateway Transmission Project, Frequently
asked questions available on PacifiCorp's website.
See also PacifiCorp's website Energy Gateway, Segment B Populus to Terminal, Ben Lomond to
Terminal, Gateway South and Gateway West. See also SPG Coordiantion Group, Foundational
Transmission Project List, August 11,2010. See also Energy Gateway Transmission Expansion Plan
Segment H - 500 kV Line - Hemingway - Captain Jack, DRAFT, Februar 12,2010 published by
PacifiCorp.
RM Data Request 5.18:
Is it Monsanto's position that Idaho customers are being asked to pay for California's renewable
electricity needs? If yes, please provide analysis and evidence that supports this position.
Response to RM Data Request 5.18:
Yes, in part. See Response to RMP Data Request 5.18.
.J
DATED this z.q day of November, 2010.
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
BYJi~.~
RANDALL C. BU
CERTIFCATE OF MAING
I HEREBY CERTIFY that on this Æ rf/day of November, 2010, I served a true,
correct and complete copy of the foregoing document, to each of the following, via the method so
indicated:
Jean D. Jewell, Secretar (original and 3)
Idaho Public Utilties Commission
P.O. Box 83720
MONSANTO COMPAN'S RESPONSE TO ROCKY MOUNAIN POWER'S FlH DISCOVERY REQUESTS - 9
Boise,ID 83720-0074
E-mail: jjewell(ipuc.state.id.us U.S. Mail
Ted Weston
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, Utah 84111
E-mail: ted.weston(fpacificorp.com E-Mail
Paul J. Hickey
Hickey & Evans, LLP
1800 Carey Ave., Ste 700
PO Box 467
Cheyenne, WY 82003
E-mail: phickey(fhickeyvans.com E-Mail
Mark C. Moench
Daniel Solander
Rocky Mountain Power
201 S. Main Street, Suite 2300
Salt Lake City, Utah 84111
E-mail: mark.moench(fpacificorp.com
daniel.so lander(fpacificorp.com
E-Mail
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, Oregon 97232
E-mail: datarequest(fpacificorp.com
E-Mail
Scott Woodbury
Deputy Attorney General
Idaho Public Utilities Commission
P. O. Box 83720
Boise, Idaho 83720-0074
E-mail: scott. woodbury(fpuc.daho. gov
E-Mail
Katie Iverson
Brubaker & Associates
17244 W. Cordova Court
Surprise, Arizona 85387
E-mail: kiverson(fconsultbai.com
E-Mail
James R. Smith
Monsanto Company
P. O. Box 816
Soda Springs, Idaho 83276
E-mail: jim.r.smith(fmonsanto.com
E-Mail
MONSANTO COMPAN'S RESPONSE TO ROCKY MOUNTAIN POWER'S FITH DISCOVERY REQUESTS -10
Eric L. Olsen
Racine, Olson, Nye, Budge & Bailey
P.O. Box 1391
Pocatello, Idaho 83204-1391
E-mail: elocmracinelaw.net
E-Mail
Anthony Yankel
29814 Lake Road
Bay Vilage, Ohio 44140
E-mail: tonycmyankel.net
E-Mail
Tim Buller
Jason Haris
Agrium, Inc.
3010 Conda Road
Soda Springs, Idaho 83276
E-mail: tbullercmagrium.com
jaharriscmagrium.com
E-mail
Benjamin J. Otto
Idaho Conservation League
P. O. Box 844
Boise, Idaho 83702
E-mail: bottocmidahoconservation.org
E-Mail
Dr. Don Reading
6070 Hil Road
Boise, Idaho 83703
U.S. Mail
Melinda J. Davison
Davison Van Cleve, P.C.
333 SW Taylor, Suite 400
Portland, Oregon 97204
E-mail: mjdcmdvclaw.com
E-Mail
Ronald L. Wiliams
Wiliams Bradbury, P.C.
1015 W. Hays Street
Boise, Idaho 83702
E-mail: roncmwiliamsbradbury.com
E-Mail
Brad M. Purdy
Attorney at Law
2019 N. 17th Street
Boise, Idaho 83702
E-mail: bmpurdycmhotmail.com
E-Mail
MONSANO COMPAN'S RESPONSE TO ROCKY MOUNTAI POWER'S FI DISOVERY REQUESTS-11
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RANDALL C. BUDGE ~
.
MONSANO COMPAN'S RESPONSE TO ROCKY MOUNTAIN POWER'S FITH DISCOVERY REQUESTS - 12