20121130PAC to Staff 20-24.pdf

ROCKY MOUNTAIN
POWER
AOMSIONOFPACIRCORP iiI2NOV30 ?M 3:140
201 South Main, Suite 2300
Salt Lake City, Utah 84111
November 30, 2012
VIA EMAIL
AND OVERNIGHTDELIVERY
Kristine A. Sasser
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702-5918
Kris.Sasser(puc.idaho.gov
RE: ID PAC-E-12-07
IPUC Data Request (20-24)
Please find enclosed Rocky Mountain Power's responses to 1PUC Data Requests 20-24. Also
provided are Confidential Attachments 1PUC 22 and 24.
If you have any questions, please feel free to call me at [phone].
Sincerely,
J. Ted Weston
Manager, Regulation
Enclosure
C.c.: Jean Jewell/IPUC Jean.jewe11cirnc.idaho.gov (3 CDs)
Terri Carlock/IPUC Teni.Car1ock),puc.idaho.gov (W)
PAC-E-12-O7lRocky Mountain Power
November 30, 2012
IPUC Production Data Request 20
IPUC Production Data Request 20
Please explain how costs were adjusted in the CPCN PVRR analysis (Wyoming
Docket No. 20000-400-EA- 11) for shared facilities in scenarios where they are no
longer needed by Naughton Unit 3 (see IPUC Production Request No. 18).
Response to IPUC Production Data Request 20
Costs were adjusted for Unit 3 by removing costs associated with coal mills, ash
handling equipment, ash disposal and the precipitator. Also removed were costs
for start-up fuel and mine water. Other chemical costs were reduced by 30%.
The outage cycle remained at four years and costs were reduced by 50%. Labor
allocated to unit 3 was reduced by 60%.
Recordholder: Aric Hunter
Sponsor: To Be Determined
PAC-E-12-07/Rocky Mountain Power
November 30, 2012
IPUC Production Data Request 21
IPUC Production Data Request 21
Please indicate and provide an explanation regarding which of the following were
reasonably available at the time of the initial Wyoming CPCN application
(Wyoming Docket No. 20000-400-EA-1 1):
(a)Operating cost and run-rate capital cost assumptions included in the 2012
business plan with correctly applied tax depreciation life assumptions for
certain environmental capital investments (see Rick Link Rebuttal Testimony,
page 14, lines 12-16, Wyoming Docket No. 20000-400-BA-1 1);
(b)Power requirements of the SCR and baghouse investments in the event that
Naughton unit 3 continues operation as a coal-fueled facility (see Rick Link
Rebuttal Testimony, page 14, lines 17-19, Wyoming Docket No. 20000-400-
EA-1l);
(c)Potential costs that might arise from provisions in the coal supply agreement
that is in place for the Naughton plant facility (see Rick Link Rebuttal
Testimony, page 16, lines 4-17, Wyoming Docket No. 20000-400-BA-1 1);
(d)Forecasted average coal costs for Naughton #1 and #2 that might be affected
by a change in volumetric deliveries in case Naughton #3 is retired early or
converted to a natural gas facility (see Rick Link Rebuttal Testimony, page
16, lines 16-23 and page 17, lines 1-3, Wyoming Docket No. 20000-400-EA-
11).
Response to IPUC Production Data Request 21
(a)At the time of the initial Wyoming certificate of public convenience and
necessity (CPCN) application for the Naughton Unit 3 selective catalytic
reduction (SCR) and baghouse projects (September 2011), operating cost and
run-rate capital cost assumptions included in the Company's 2011-2020
business plan were available. Operating cost and run-rate capital cost
assumptions for the Company's 2012-2021 business plan would have been in
development in mid-2011, but were not reviewed and approved to the level
required to reasonably support the economic analysis schedule that formed the
basis of the Company's initial application.
(b)In September 2011, the approximate incremental auxiliary power
requirements for the SCR and baghouse projects were reasonably available to
be calculated via competitive market bids that were received in April 2011.
The information, however, was not incorporated into the Company's
economic analysis that supported the initial application.
(c)& (d) In August 2011, the assessment of these potential costs and forecasted
coal costs reflected contract terms of the Kemmerer Mine Coal Supply
Agreements as effective as of July 1, 2010 and executed September 1, 2010.
Recordholder: Chad Teply / Rick Link
PAC-E-12-07/Rocky Mountain Power
November 30, 2012
IPUC Production Data Request 21
Sponsor: To Be Determined
PAC-E-12-O7fRocky Mountain Power
November 30, 2012
IPUC Production Data Request 22
IPUC Production Data Request 22
Please provide the base, low, and high case (as described in the original
application) PVRR System Optimizer results comparing the optimized simulation
(operation of Naughton #3 as a coal plant with emission control investments) with
the change case simulation (natural gas conversion) as described on page 11 of
Rick Link's rebuttal testimony (Wyoming Docket No. 20000-400-EA-1 1). In
both simulations, please use June 2011 forward price curves and any assumptions
that were reasonably available when the CPCN application was initially submitted
(Wyoming Docket No. 20000-400-EA- 11), including assumptions that the
Company indicated as "reasonably available" in Production Request No. 21,
above. The intent of this request is to quantify the PVRR difference that the
Company would have calculated at the time of the initial application comparing
the continued operation of Naughton #3 as a coal plant (with necessary emission
controls) with the natural gas conversion alternative capturing both energy and
capacity costs and benefits.
Response to IPUC Production Data Request 22
The Company has not performed the analysis requested. However, the Company
did include with its rebuttal filing the PVRR(d) results that incorporated all
updates summarized in the testimony of Company witness Mr. Rick T. Link and
that applied the June 2011 official forward price curve (OFPC). Please refer to
Confidential Exhibit RMP (RTL-3R) of Mr. Link's testimony, which was
provided with the Company's response to IPUC Production Data Request 2. This
exhibit graphically shows the PVRR(d) results using the June 2011 OFPC. The
numerical PVRR(d) on that figure is provided herein Confidential Attachment
IPUC Production 22.
Recordholder: Rick Link
Sponsor: To Be Determined
PAC-E- 1 2-07/Rocky Mountain Power
November 30, 2012
IPUC Production Data Request 23
IPUC Production Data Request 23
Please provide an update on the Wyoming regional haze SIP. Has final EPA
action occurred and, if so, what was the result?
Response to IPUC Production Data Request 23
EPA's pre-publication draft of their final ruling on Wyoming's 309 SIP (focused
on SO2 emissions controls) was issued November 13, 2012. The EPA's final
ruling on this portion of Wyoming's regional haze SIP is consistent with their
originally proposed action to approve the state of Wyoming's participation, along
with Utah and New Mexico, in the SO2 Regional Milestones and Backstop
Trading Program as a mechanism to ensure Wyoming is achieving appropriate
emission reductions. The EPA ruling is not considered to be final and appealable
until it is published in the Federal Register.
The pre-publication draft of the final ruling on Wyoming's 309(g) SIP (focused
on NOx and PM emissions controls) is expected to be issued by December 14,
2012, consistent with a stipulation filed October 3, 2012, in the U.S. District
Court for the District of Colorado to extend the previously established consent
decree deadline entered into between Wild Earth Guardians and EPA
Recordholder: Chad Teply
Sponsor: To Be Determined
PAC-E-12-07/Rocky Mountain Power
November 30, 2012
IPUC Production Data Request 24
IPUC Production Data Request 24
Please provide the status of the Company's efforts to extend the Wyoming
regional haze compliance timeframe.
Response to IPUC Production Data Request 24
Please refer to Confidential Attachment IPUC Production Request 24.
Recordholder: Chad Teply
Sponsor: To Be Determined