20130417PAC to Staff 1-6.pdf

ROCKY MOUNTAIN
POWER
A DMSION OF PACIICORP ZDI3APR 17 ppj f: 13
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201 South Main, Suite 2300
Salt Lake City, Utah 84111
April 17, 2013
Jean Jewell
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702-5918
jean.jewellDuc. state. gov (C)
RE: ID PAC-E-13-02
IPUC Data Request (1-6)
Please find enclosed Rocky Mountain Power's responses to IPUC Data Requests 1-6. Also
provided are Attachments IPUC 1, 3 —(1-4), and 5 —(1-2).
If you have any questions, please feel free to call me at [phone].
Sincerely,
z, p'
J. Ted Weston
Manager, Regulation
Enclosure
C.c.: Randall C. Budge/Monsanto [e-mail]
James R. Smith/Monsanto Company iim.r.smitl-@,monsanto,com
Brubaker & Associates/Monsanto [e-mail]
PAC-E-13-02/Rocky Mountain Power
April 17, 2013
IPUC Data Request 1
IPUC Data Request 1
Please provide documentation and any additional source information showing
how existing rates for Exhibit No. 1 Depreciation Rates were developed or
calculated for the Production Plant, Distribution Plant, and Mining Plant. Some
rates differ from Order No. 30499.
Response to IPUC Data Request 1
Please see Attachment IPUC 1 for the documentation that shows the calculation
of the composite rates for Exhibit No. 1, which are based on the deprecation rates
approved in Order No 30499.
Recordholder: Henry Lay
Sponsor: Henry Lay
PAC-E-13-02/Rocky Mountain Power
April 17,2013
IPUC Data Request 2
IPUC Data Request 2
Please provide source documentation and any additional information showing
development of the calculation of Total Production Plant-Depreciable for the
Proposed Depreciation rate shown on Exhibit No. 1. (Rate shown is 4.07 %.)
Response to IPUC Data Request 2
The rate shown for the Proposed Depreciation rate for the Total Production Plant-
Depreciable on Exhibit No. 1, should have been shown as 4.16%. Please see
Attachment IPUC 1 for the corrected calculation of this composite rate. Note: the
proposed depreciation amount on the exhibit was correct; only the calculation of
the composite rate was in error.
Recordholder: Henry Lay
Sponsor: Henry Lay
PAC-E-13-02fRocky Mountain Power
April 17, 2013
IPUC Data Request 3
IPUC Data Request 3
Please provide a listing of proposed asset additions between the study year 2011
and the 2013 filing. Include asset description, asset class, asset location, date of
proposed purchase, and asset life.
Response to IPUC Data Request 3
Attachment IPUC 3-1 provides the calculation of the plant in service amounts at
12/31/2013. The plant in service amounts at 12/31/2013 were calculated as the
2011 plant balances plus the estimated 2012 and 2013 additions less the estimated
2012 and 2013 retirements. The estimated plant additions were based on the
Company's capital budget. Please refer to Attachments IPUC 3-2, 3-3, and 3-4
for the estimated additions. The estimated retirements were calculated based on
the ending 2011 plant balances and the retirement ratios from the estimated
survivor curve for each account.
Recordholder: Henry Lay
Sponsor: Henry Lay
PAC-E-13-02/Rocky Mountain Power
April 17, 2013
IPUC Data Request 4
IPUC Data Request 4
Please provide additional information regarding the calculations for the life of the
mine (Utah). Include new life calculations, including reserves, safety
requirements, any reclamation costs and bonds.
Response to IPUC Data Request 4
The current mine plan extends through 2019 and was developed on the basis of
recovery of the known economic reserves of the Deer Creek Mine. As a result of
an ongoing drilling program, Energy West personnel identified reserve areas in
the mine that are not economically recoverable due to extremely high ash content
or contain minimal inner burden between the Hiawatha and Blind Canyon seams.
The drilling program identified ash content levels as high as 20 percent; Deer
Creek's ash content typically ranges from 12 percent to 14 percent. The areas of
minimal inner burden present roof control concerns. Having already mined the
upper Blind Canyon seam, the thin level of inner burden could result in collapse
of the roof during mining of the Hiawatha seam. Obtaining approval of roof
control and ventilation plans from the Mining Safety Health and Administration
in thinning inner burden mining areas is unlikely.
Recordholder: Brian Durning
Sponsor: Henry Lay
PAC-E-13-02/Rocky Mountain Power
April 17, 2013
IPUC Data Request 5
IPUC Data Request 5
Please provide additional supporting information for the calculation of Terminal
Retirements and Interim Retirements shown in Exhibit No. 3 pages 111-582 thru
111-587. Include supporting workpapers as well as any additional calculations
used to develop and link the schedule with the Appendix showing Weighted Net
Salvage Percentage for Generation Plant as of December 2013.
Response to IPUC Data Request 5
The response to IPUC 6 provides an explanation of the calculation of each value
shown in Exhibit No. 3 on pages 111-582 through 111-587. The weighted net
salvage percentages as of December 31, 2013 are calculated in the same manner
using December 31, 2013 balances.
Excel files for each of these calculations have been provided as Attachment IPUC
5-1 and Attachment IPUC 5-2 to this response. The calculations of the interim
and terminal retirements were determined based on Gannett Fleming's
depreciation software, and as such there are no additional work papers for these
calculations. Work papers supporting the interim net salvage percentages have
been provided on pages 111-588 through 111-618 of the Depreciation Study. The
estimated dismantlement costs shown as $/kW are based on the estimates
stipulated in the settlement agreement for the prior Depreciation Study, and the
PacifiCorp Share of MW output for each generating unit were provided by the
Company in the filing. All other calculations are included in the Excel files
attached.
Recordholder: Henry Lay
Sponsor: Henry Lay
PAC-E-13-02/Rocky Mountain Power
April 17,2013
IPUC Data Request 6
IPUC Data Request 6
Please provide further explanation and documentation to support the Interim
Retirements Net Salvage percentage values. Please show how Net Salvage
Statistics included in Exhibit No. 3 lead to the final rate included in the Appendix
Calculation of Weighted Net Salvage Percent for Generation Plant As of
December 2013.
Response to IPUC Data Request 6
The calculation of the Weighted Net Salvage Percent for Generation Plant based
on December 31, 2011 balances is presented in the Depreciation Study on pages
111-582 through 111-587. The same calculation based on December 31, 2013
balances is presented in the Appendix of the Depreciation Study. These
calculations have been provided in Excel format as Attachment IPUC 1.5-1 and
Attachment IPUC 1.5-2.
A description of these calculations is set forth below.
Column 2— Terminal Retirements - The terminal and interim retirement amounts
shown in Columns 2 and 7 were calculated based on the surviving plant balances
for each plant account for each generating plant, the interim survivor curve
estimate for each account, and the final retirement date estimated for each
generating plant. The process for this calculation based on December 31, 2011
balances is as follows. The process was the same for December 31, 2013
balances.
1.Survivor ratios for the estimated survivor curve were applied to the
12/31/2011 plant balances to determine the age distribution projected to be
surviving at 12/31/2012.
2.The retirements for 2012 were calculated as the difference between the
12/31/2012 vintage balances and the 12/31/2011 vintage balances.
3.This process was repeated for each successive year through the estimated final
retirement year, resulting in projected retirements for each year from 2012
through the retirement of each of the Company's generating plants.
4.The retirements calculated to occur in years prior to the final retirement year
provided the amounts shown as interim retirements in Column 7.
5.The retirements calculated to occur in the final retirement year resulted in the
terminal retirements shown in Column 2.
Column 3 - MW (Pacific= Share) - This column indicates the MW output for
each generating location
PAC-E-13-02IRocky Mountain Power
April 17, 2013
IPUC Data Request 6
Column 4— Dismantlement Cost per kW - This column indicates the estimated
cost of dismantling each type of generating plant, expressed as the cost per kW of
output.
Column 5 - Allocated Net Salvage ($) - the total terminal net salvage for each
generating plant is calculated as the MW in Column 3 multiplied by the $/kW in
Column 4 multiplied by 1,000. The total cost for terminal net salvage is allocated
to each plant account in proportion to the estimated terminal retirements in
Column 2.
Column 6— Terminal Net Salvage (%) - The terminal net salvage percent is equal
to Column 5 divided by Column 2.
Column 7— Interim Retirements - Please refer to the description for Column 2
above for an explanation of the calculation of the interim retirements for each
plant account for each generating plant.
Column 8 - Interim Net Salvage (%) - the interim net salvage percent estimates
are based on judgment incorporating a number of factors, including the statistical
analyses of historical data. A description of the process for estimating net salvage
can be found on pages 11-31 through 11-36 of the Depreciation Study. The
statistical support for these estimates can be found on pages 111-588 through III-
618 of the Depreciation Study.
Column 9— Interim Net Salvage ($ - the interim net salvage is equal to the
product of Column 7 and Column 8.
Column 10 - Total Net Salvage - the total net salvage is equal to the sum of the
terminal net salvage in Column 5 and the interim net salvage in column 9.
Column 11 - Total Retirements - the total retirements are equal to the sum of the
terminal retirements in Column 2 and the interim retirements in Column 7.
Column 12— Estimated Net Salvage (%) - the estimated weighted net salvage
percent for each account for each generating plant is equal to the total net salvage
in Column 10 divided by the total retirements in Column 11.
Recordholder: Henry Lay
Sponsor: Henry Lay