20170925Utah_DPU Set 7 (1-35)3.pdf

1407 W.NorthTemple
ROCKY MOUNTAIN Salt Lake City,UT 84116
POWER
A DIVISION OF PAC1FICORP
August 28,2017
Erika Tedder
Division of Public Utilities
160 E 300 S,4th Floor
Salt Lake City,UT 84114
etedÀer@_utah.gov(C)
RE:UT Docket No.17-035-39
DPU 7th Set Data Request (1-35)
Please find enclosed Rocky Mountain Power's Responses to DPU 7th Set Data Requests 7.2,7.5-
7.9,7.11-7.17,7.19-7.21,7.24,and 7.30-7.31.The remaining responses will be provided
separately.Also provided is Attachment DPU 7.13.Provided on the enclosed Confidential CD
is Confidential Attachment DPU 7.20 and Confidential Responses to DPU 7.24,7.30,and 7.31.
Confidential information is provided subject to Public Service Commission of Utah (UPSC)
Rules 746-1-602 and 746-1-603.
If you have any questions,please call Tarie Hansen at [phone].
Sincerely,
Bob Lively
Manager,Regulation
Enclosures
C.c.:Dan Kohler/DPU [e-mail](C)
Dan Peac/DPU (C)(W)
Aliea Afnan/DPU [e-mail]_m (W)
jbowe_ggaymagea.c_o_m (W)
Béla Vastag/OCS [e-mail](C)
Philip Hayet/OCS p_hayet@j_kenn.co_m (C)
Gary A.Dodge/UAE [e-mail]_m(C)
Kevin Higgins/UAE (C)
Neal Townsend/UAE (C)(W)
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.2
DPU Data Request 7.2
Link Testimony.In reference to Mr.Link's Testimony,lines 335-343:
(a)Please identify the "price-policy assumptions"as referenced in this section.
(b)Please provide a comparison of all assumptions used in the 2017 IRP and those used
in the updated analysis,including(but not limited to)those listed in this section:
price-policy assumptions,up-frontcapital costs,run-rate operating costs,and energy
output from existing and repowered facilities.This response should include 2017 IRP
assumptions,new assumptions,and the delta between the two.
Response to DPU Data Request 7.2
(a)The price-policy assumptions referenced in the Direct Testimony of Company
witness,Rick T.Link,lines 335-343,are the same price-policy assumptions described
in lines 264-275.
(b)Please refer to the Company's response to OCS Data Request 1.28.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.5
DPU Data Request 7.5
Link Testimony.In reference to Mr.Link's Testimony,Table 1:Please explain why the
Company used a different "Medium Gas"forecast for the Zero CO2 CSSe than for the
other CO2 CRSOS.
Response to DPU Data Request 7.5
The medium-natural-gas-price assumptions paired with the zero-carbon-dioxide (CO2)
prices reflect natural-gas prices from PacifiCorp's official forward price curve (OFPC)
dated April 26,2017.The medium,low,and high natural-gas price assumptions used for
all other scenarios were chosen after reviewing a range of credible third-partyforecasts as
described further in the Direct Testimony of Company witness,Rick T.Link;lines 534-
564.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.6
DPU Data Request 7.6
Link Testimony.In reference to Mr.Link's Testimony,lines 599-605:
(a)Please provide work papers supporting the $4 million benefit value.Work papers
should be provided in electronic spreadsheet format with formulas intact.
(b)Please explain the difference between this $4 million benefit and the $11 million
discussed in the Link Testimony,lines 58-63.
Response to DPU Data Request 7.6
(a)Please refer to the confidential work papers that accompanied the Direct Testimony of
Company witness,Rick T.Link,specifically the folder titled "Exhibits Figures
Tables,"the file titled "Repower Results Direct Testimony,"bottom of "Price-Policy
Annual -PaR"worksheet (row 903),which reports the renewable energy credit
(REC)benefit estimate of $4 million.
(b)Both the $4 million and the $11 million represent the amount under all price-policy
scenarios that benefits would improve for every dollar assigned to the incremental
RECs that will be generated from the repowered wind facilities.The $4 million is the
present value revenue requirement (PVRR)benefit calculated through 2036 and the
$11 million is the PVRR benefit calculated through 2050.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.7
DPU Data Request 7.7
Link Testimony.In reference to Mr.Link's Testimony,lines 703-731:Please provide a
reference to specific work papers where the values in Figure 5 are calculated.If these
values are not calculated in work papers already provided,please provide all analysis
supporting these values.
Response to DPU Data Request 7.7
Figure 5 (appearingafter line 713 in the Direct Testimony of Company witness,Rick T.
Link)was created from the data provided in Exhibit RMP_(RTL-5).The data in this
exhibit are derived from Mr.Link's confidential work papers,specifically the
confidential work paper titled "Repower Results Direct Testimony"and the worksheet
titled "Exhibit 5"(row 99).
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.8
DPU Data Request 7.8
Larsen Testimony.For ratemaking purposes,please explain how the company proposes
to treat any costs incurred associated with development of any portion of the wind
repowering projects that are not built for any reason?
Response to DPU Data Request 7.8
The Company objects to this request as speculative.Without waivingthis objection,the
Company responds as follows:
The Company has not completed a regulatory assessment for incurred costs on the
development of the wind repowering projects that are not built.Accounting Standards
Codification (ASC)980-360-35 would be applied for abandonment accounting.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.9
DPU Data Request 7.9
Larsen Testimony.Is the company aware of any other potential costs or benefits
associated with development or operation of the wind repowering project that have not
been factored into the company's revenue requirement and/or rate treatment described in
Larsen's testimony?
Response to DPU Data Request 7.9
The Company is not aware of any other potential costs or benefits associated with the
development of the wind repowering project that have not been reflected into the revenue
requirement presented in Mr.Larsen's testimony.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.11
DPU Data Request 7.11
Larsen Testimony.Under the Company's proposed rate treatment,are there any potential
costs or benefits associated with the wind repowering project that are not allocated to
Utah and/or do not go through the Company's proposed Resource Tracking Mechanism
(RTM)or Energy Balancing Account (EBA)with the exception of costs moved to base
rates in subsequent Company general base rate filings?
Response to DPU Data Request 7.11
No.Under the Company's proposed rate treatment,all costs and benefits associated with
the wind repowering project will be captured in the Resource Tracking Mechanism
(RTM)or Energy Balancing Account (EBA).
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.12
DPU Data Request 7.12
Larsen Testimony.In reference to Mr.Larsen's Testimony,lines 95-97,stating that "This
[RTM]mechanism will align the costs and benefits so that customers receive the full net
benefits from the repowering project while shareholders receive appropriate cost recovery
of the prudent investment":
(a)Has the Company used a RTM as proposed for the Combined Project to recover costs
in the past for similar projects?If so,when and for which projects?
(b)Please provide a monthly comparison of the rate making treatment and projected rate
impacts associated with and without approval of the proposed RTM.
Response to DPU Data Request 7.12
(a)Althoughthis Data Request refers to the "Combined Projects,"the Company is
responding under the assumption that "wind repowering project"was intended.The
Company,through the RTM,proposes to align benefits and costs by passing both
through to customers.Similarly,the company has tried to align costs and benefits in
the past through the implementation of a variety of rate-making mechanisms such as
the EBA and RBA.
(b)Please refer to Exhibit RMP_(JKL-3),line 23,for the calculation of the estimated
monthlyrevenue requirement after EBA pass-through for the wind repowering
project.Before includingthe wind repowering project in base rates and without an
RTM,the Company would be responsible for the costs and receive the benefits shown
on line 23.With the RTM,the Utah-allocated share of costs and benefits shown on
line 24 would be deferred and passed-though to Utah customers as shown on line 28.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.13
DPU Data Request 7.13
Larsen Testimony.In reference to Mr.Larsen's Testimony,lines 211-214:Please provide
a comparison of the O&M expense by wind resource included as part of the revenue
requirement approvedin the most recent rate case to the 2014-2017 historical four-year
average of O&M expense by wind resource proposed for purposes of tracking
incremental O&M expense in the RTM for the repowered wind.
Response to DPU Data Request 7.13
Please refer to Attachment DPU 7.13,which provides the actual operations and
maintenance (O&M)expense by wind resource for calendar years 2014 through 2016.
Calendar year 2017 actual data is not available.The Company's last general rate case,
Docket 13-035-184,was resolved in a negotiated settlement and all adjustments to
revenue requirement were not identified.Therefore there is no way to positivelyidentify
the amount approved in current rates.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.14
DPU Data Request 7.14
Larsen Testimony.In reference to Mr.Larsen's Testimony,lines 226-227:How will the
company calculate the incremental generationassociated with wind repowering for
purposes of calculating the Wyomingwind taxes?
Response to DPU Data Request 7.14
As stated in Mr.Larsen's Exhibit JKL-5,the incremental generationwill be calculated as
the estimated increase in generation at the wind plant due to repowering,meaning the
new wind plant generationMWh less the Base Wind Plant Generation MWh.The Base
Wind Plant Generationis calculated as:
Base Wind Plant Generation =Wind Plant GenerationMWh /(1 +Project Generation
Increase %)
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.15
DPU Data Request 7.15
Larsen Testimony.In reference to Mr.Larsen's Testimony,lines 250-257:Are the
monthlymarket prices assigned to wind resources by physical location and the wind
integration costs that the Company proposes to use to calculate the incremental NPC
benefits in the RTM consistent with the calculation of NPC in the EBA?If not,please
explain how and why they are different.
Response to DPU Data Request 7.15
Yes,this methodology is consistent with the methodology used in the energy balancing
account (EBA)to value certain energy such as the generation from the Black Cap Solar
facility.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.16
DPU Data Request 7.16
Larsen Testimony.In reference to Mr.Larsen's Testimony,lines 230-240 and lines 250-
257:Are the monthlymarket prices assigned to wind resources by physical location and
the wind integration costs that the Company proposes to use to calculate the incremental
NPC benefits in the RTM consistent with the calculation of NPC in the EBA?If not,
please explain how and why they are different.
Response to DPU Data Request 7.16
Please see the Company's response to DPU Data Request 7.15.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.17
DPU Data Request 7.17
Larsen Testimony.In reference to Mr.Larsen's Testimony,lines 230-240 and lines 250-
257:Are the monthlymarket prices assigned to wind resources by physical location and
the wind integration costs that the Company proposes to use to calculate the incremental
NPC benefits in the RTM consistent with the calculation of NPC in the EBA?If not,
please explain how and why they are different.
Response to DPU Data Request 7.17
Please refer to the Company's response to DPU Data Request 7.15.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.19
DPU Data Request 7.19
Larsen Testimony.In reference to Mr.Larsen's Testimony,lines 264-266):The
Company is proposing to use the tax gross-up rate from most recent general rate case to
calculate the revenue requirement value of the PTC tax credits.The company also
proposes to continue to track and true-up PTC s from the wind repowering projects
through the RTM on an ongoing basis (lines 271-273).Does the Company plan to adjust
the tax gross-up rate used to calculate the revenue requirement value of the PTC tax
credits to reflect any adjustments in the tax gross-up rate approved in future base rate
cases?
Response to DPU Data Request 7.19
The Company plans to adjust the tax gross-up rate using the most recentlyapprovedrate
case as of the time the calculation for the deferral is being performed.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.20
DPU Data Request 7.20
Hemstreet Testimony.In reference to Mr.Hemstreet's Testimony,lines 402-424:Is the
capital cost associated with the WindFREE,WindCONTROL,and/or WindINERTIA
equipment necessary for the repowering project to be eligible for the PTC under the
80/20 rule?Please provide all analysis and calculations supporting this response.
Response to DPU Data Request 7.20
No,capital costs associated with the WindFREE,WindCONTROL and WindINERTIA
equipment is not necessary for the repowering project to be eligible for production tax
credits under the 80/20 rule.
For reference,please refer to the Company's response to OCS Data Request 1.55,and
specifically refer to Confidential Attachment OCS 1.55.For an updated analysis showing
80/20 calculations without costs associated with these options,please refer to
Confidential Attachment DPU 7.20.
Confidential information is provided subject to Public Service Commission of Utah
(UPSC)Rule 746-1-602 and 746-1-603.
17-035-39 /Rocky Mountain Power
August 28,2017
DPU Data Request 7.21
DPU Data Request 7.21
Crane Testimony.In reference to Ms.Crane's Testimony,line 137-141:Does the
Company anticipate being able to recover damages (includingbut not limited to
insurance claims)for "lost"PTC value associated with the wind repowering projects
achieving commercial operation for PTC purposes after December 31,2020?If so,
please provide the terms includingany limitations of such recovery.Please also explain
how the Company proposes to pass such recovery on to customers.
Response to DPU Data Request 7.21
The Company objects to this data request asspeculative.Without waivingthis objection,
the Company responds as follows:
The Company considers it highly unlikelythat the wind repowering projects will not
achieve commercial operation by December 31,2020.The wind repowering projects
involve very limited on-site construction effort.The major work involved is removal of
the existing blades and nacelles and replacement with the new longer blade sets and
nacelles.No foundation,tower erection or collector system/substation work is required.
Wind projects are comprised of multiplewind turbines "daisy chained"together in
strings,tied to individual circuits.The repowering project will replace the equipment on
these strings,which will then be placed in service sequentially.So the scenario of not
being able to achieve commercial operation would be limited to a few wind turbines and
not the entirety of the wind repowering projects.The Company recognizes the
requirement to place these projects in commercial operation by December 31,2020,and
will manage these projects accordingly.The construction schedule (see Exhibit
RMP (TJH-5)from the testimony of Company witness Mr.Timothy J.Hemstreet).for
the reyweringproject has 11 of the 12 repowering projects being placed into
commercial operation in 2019,which also mitigates the risks related to potential delays in
project execution.
If a project or a portion of a project is delayeddue to force majeure events,or some other
form of excusable delay,the Company would seek to demonstrate to the Internal
Revenue Service (IRS)that the work had been conducted in a manner to demonstrate
"continuous construction activity."
Any recovery of damages would be given back to customers,either as a reduction to
plant or expense,consistent with generally accepted accounting principles and Federal
Energy Regulatory Commission accounting procedures.
17-035-39 /Rocky Mountain Power
August 28,2017
Confidential DPU Data Request 7.24
DPU Data Request 7.24
CONFIDENTIAL REQUEST-Link Testimony Workpapers:SO and PaR analysis.
Response to DPU Data Request 7.24
The fixed operations and maintenance (O&M)and variable O&M information for each
wind project repowered are included in the confidential work papers supporting the
Direct Testimony of Company witness,Rick T.Link,specifically the following
folder/file path:
Other Summary Reports\RePower Data 20170516 LGIA Limit vl3
For historical O&M over the past five years (2012 through 2016)for each wind project,
please refer to the Company's response to OCS Data Request 1.40,specifically
Attachment OCS 1.40.
17-035-39 /Rocky Mountain Power
August 28,2017
Confidential DPU Data Request 7.30
DPU Data Request 7.30
CONFIDENTIAL REQUEST-Link Testimony Workpapers:RePower2017051
LGIALimit vl 3.xlsx.
Confidential Response to DPU Data Request 7.30
The Wind RePower capital costs represent the estimated plant in service capital costs to
repower each wind project.These capital costs include the followingcost elements for
each project:
For the work papers from which the capital costs were derived,please refer to the
Company's response to OCS Data Request 1.26
17-035-39 /Rocky Mountain Power
August 28,2017
Confidential DPU Data Request 7.30
Please refer to the Company's response to DPU Data Request 1.9 for the work papers
associated with the development of the capital costs described above for the Wind Status
Quo and Wind Repower Run,specifically Confidential Attachment DPU 1.9,which
includes the spreadsheet "Wind Repower CAPEX (May 10 2017)CONF."
Confidential information is provided subject to Public Service Commission of Utah
(UPSC)Rule 746-1-602 and 746-1-603.
17-035-39 /Rocky Mountain Power
August 28,2017
Confidential DPU Data Request 7.31
DPU Data Request 7.31
CONFIDENTIAL REQUEST-Link Testimony Workpapers:RePower2017051
LGIALimit vl3.xlsx.In reference to the "O&M"worksheet:
Confidential Response to DPU Data Request 7.31
(a)Please refer to the Company's response to DPU Data Request 1.9 for the work papers
associated with the development of the operations and maintenance (O&M)costs for
the Wind Status Quo and RePower cases,specifically Confidential Attachment DPU
1.9,which includes the spreadsheet "Wind Repower OMAG (May 16 2017)CONF."
17-035-39 /Rocky Mountain Power
August 28,2017
Confidential DPU Data Request 7.31
Please refer to the Company's response to DPU Data Request 1.5,specifically
Confidential Attachment DPU 1.5,for the report describing these estimated energy
mcreases.
(b)Please refer to the Company's response to Data Request OCS 1.40,subpart (a),
specifically Attachment OCS 1.40.
Confidential information is provided subject to Public Service Commission of Utah
(UPSC)Rule 746-1-602 and 746-1-603.