20170925Utah_OCS Set 2 (1-19).pdf

1407 W.North Temple
ROCKY MOUNTAIN Salt Lake City,UT 84116
POWER
A DIVISION OF PACIFICORP
August 14,2017
Béla Vastag
Office of Consumer Services
160 East 300 South
Salt Lake City,Utah 84111
bvastag@utahgov (C)
Donna Ramas
Ramas Regulatory Consulting,LLC
4654 Driftwood Drive
Commerce Twp.,MI 48382
dynmaramas@aol._co_m_(C)
RE:UT Docket No.17-035-39
OCS 2nd Set Data Request (1-19)
Please find enclosed Rocky Mountain Power's Responses to OCS 2nd Set Data Requests 2.1-
2.19.Also provided are Attachments OCS 2.2 -(1-3),2.3 -(1-5),2.9,and 2.13.Provided on the
enclosed Confidential CD are Confidential Attachments OCS 2.8 and 2.17.Confidential
information is provided subject to Public Service Commission of Utah (UPSC)Rules 746-1-602
and 603.
If you have any questions,please call Tarie Hansen at [phone].
Sincerely,
Bob Lively
Manager,Regulation
Enclosures
C.c.Erika Tedder/DPU etedder@utaahgov (C)
Dan Kohler/DPU (C)
Dan Peac/DPU dgea daymarkeago_m (C)(W)
Aliea Afnan/DPU aafnan@daymarkea.c_om (W)
Philip Hayet/OCS phayet@j_k_ennn.com (C)
Gary A.Dodge/UAE gdodge@h dlaw.com (C)
Kevin Higgins/UAE (C)
Neal Townsend/UAE (C)(W)
17-035-39 /Rocky Mountain Power
August 10,2017
OCS Data Request 2.1
OCS Data Request 2.1
Refer to the Direct Testimony of Jeffrey K.Larsen,lines 165 -172,which indicates,in
part,that the Company will "...defer the full amount of the capital investment,ADR and
ADIT related to repowering to the RTM and will calculate a return on the net plant
balance.
(a)Does the Company agree that the net book value of the existing wind projects it is
proposing to repower is currentlylower than the amounts incorporated in the current
base rates for those same projects?If no,explain why not.
(b)Since the current net book value (PIS less ADR less ADIT)of the existing wind
project assets that are being repowered are lower than the amounts considered in
current base rates,please explain why the reduction in the net book value for the
existing assets is not being used to offset the net book value associated with the
repowering in the proposed RTM calculations.
Response to OCS Data Request 2.1
The Company is proposing to include the incremental costs and savings only as described
in the application and not perform a true-up of current balances versus what was included
in the last rate case,which was a settled case that lacked specific findings on line item
details.Therefore,the current level in base rates is not factored in,which is similar to the
treatment that the Company is proposing for the level of production tax credits (PTC)in
base rates.Virtuallyall of the PTCs in base rates will expire before repowering,resulting
in a significant change relative to the amount included in the last general rate case filing.
The RTM addresses the incremental new costs until all items are reflected in bases rates
through a future rate case.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.2
OCS Data Request 2.2
For each of the wind resources the Company proposes to repower (i.e.,Glenrock I,
Glenrock II,RollingHills,etc.),please provide in schedule form the following
information:
(a)Amount included in rate base in the Company's adjusted test year in the most recent
rate case.This should be broken down by plant in service,accumulated depreciation
and ADIT as well as the net resulting balance included in rate base.This should also
include the impacts of the adjustments to the wind facilities for plant additions shown
on Exhibit RMP_(SRM-3),page 8.6.23,submitted with the Company's filing in the
rate case.
(b)The amount of plant in service,accumulated depreciation,ADIT and resulting net
book value amount (PIS -ADR -ADIT)as of the most recent date available;
(c)The projected amount of plant in service,accumulated depreciation,ADIT and
resulting net book value amount (PIS -ADR -ADIT)anticipated immediately prior
retiring the existing assets being replaced.Identify the date being used in the
projection.
Response to OCS Data Request 2.2
(a)Please refer to Attachment OCS 2.2 -1 for the wind resources included in the
Company's original and rebuttal filings in Docket 13-035-184.The case was resolved
via black box settlement.Not all specific adjustments to revenue requirement were
determined.Therefore,there is not a specific level that can be identified as "in rates."
For the UT June 2015 GRC,ADIT was calculated through the Company's PowerTax
fixed asset software system which computes wind resources in total and not by
individual wind farm.The total amount is included in Attachment OCS 2.2 -1.
(b)Please refer to Attachment OCS 2.2 -2 for the July 31,2017 balances for the wind
resources that the Company proposes to repower.
The ADIT will be provided as soon as available.
(c)Please refer to Attachment OCS 2.2 -3 for the balances as of the repower date for the
wind resources that the Company proposes to repower.
The ADIT will be provided as soon as available.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.3
OCS Data Request 2.3
With regards to wind plant in its entirety (i.e.,not limited to the wind facilities being
repowered in this case),please provide in a schedule in excel format:i)plant in service;
ii)accumulated depreciation;iii)accumulated deferred income taxes;and net wind plant
in service (PIS -ADR -ADIT)on a total Company and on a Utah jurisdictional basis for
each of the followingperiods:
(a)As included in the adjusted test year in the Company's most recent rate case filing -
Docket No.13-035-184;
(b)As of December 31,2016;
(c)As of the most recent date available;
(d)As projected for December 31,2019;and
(e)As projected for December 31,2020.
Response to OCS Data Request 2.3
(a)Please refer to Attachment OCS 2.3 -1 for the total wind resources included in the
Company's rebuttal filing in Docket 13-035-184.The case was resolved via black
box settlement.Not all specific adjustments to revenue requirement were determined.
Therefore,there is not a specific level that can be identified as "in rates."
(b)Please refer to Attachment OCS 2.3 -2.
The ADIT will be provided as soon as available.
(c)Please refer to Attachment OCS 2.3 -3.
The ADIT will be provided as soon as available.
(d)Please refer to Attachment OCS 2.3 -4.
The ADIT will be provided as soon as available.
(e)Please refer to Attachment OCS 2.3 -5.
The ADIT will be provided as soon as available.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.4
OCS Data Request 2.4
Refer to the Direct Testimony of Jeffrey K.Larsen,lines 170 -172,which states:"The
Company will use the net plant balance described above to calculate a return on
investment using the most recent Commission-approved cost of capital and income tax
rate".
(a)If Federal legislation is passed and signed into law that lowers the federal corporate
income tax rate,resulting in RMP's effective federal income tax rate being lower than
the most recent Commission-approved income tax rate,does RMP intend to base the
deferral on the lower actual federal income tax rate applicable to it or the most recent
Commission approved rate?Please explain.
(b)In the event new legislation is signed into law that results in the Federal income tax
rate applicable to RMP being reduced to an amount that is lower than the amount
considered in the current Commission-approved rates,explain why the amounts
deferredby RMP should be calculated based on an income tax rate that is higher than
the actual rate applicable to RMP.
Response to OCS Data Request 2.4
(a)If Federal legislation is passed and signed into law that lowers the federal corporate
income tax rate,resulting in the Company's effective federal income tax rate being
lower than the most recent Commission-approved income tax rate,the Company
would propose using the lower actual federal income tax rate in the deferral
calculation.
(b)Please refer to the Company's response to subpart (a)above.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.5
OCS Data Request 2.5
Refer to the Direct Testimony of Jeffrey K.Larsen,lines 170 -172,which states:"The
Company will use the net plant balance described above to calculate a return on
investment using the most recent Commission-approved cost of capital and income tax
rate".
(a)Please provide the actual capital structure ratios for the Company (i.e.,percentages of
long term debt,preferred stock,and equity)as of December 31,2016,the most recent
date available,and as projected for December 31,2017 and December 31,2018.
(b)Please provide the actual current average long term debt rate for the Company.This
should be comparable to the 5.20%long term debt rate identified in the
Commission's August 29,2014 Report and Order in Docket No.13-035-184,at
page 8.
(c)For the Company's three most recent long term debt issuances,please provide the
following:
i.Amount of debt issued;
ii.Maturity Date;
iii.Date of issuance;and
iv.Cost rate (%).
Response to OCS Data Request 2.5
(a)Provided below are actual and projected 12-month average capital structure
percentages as of the requested dates.In determining each of the capital structures,
the Company averaged the five quarter-end capital structures spanning the 12-month
periods ended.This capital structure determination is consistent with the
methodology used by the Company in Docket 13-035-184.
PacifiCorp
Capital Structure Percentages
Actual Actual Forecast Forecast
12/31/2016 6/30/2017 12/31/2017 12/31/2018
Long-Term Debt 48.61%48.52%48.50%48.56%
Preferred Stock 0.02%0.02%0.02%0.02%
Common Equity 51.37%51.46%51.48%51.42%
(b)The actual weighted average cost of long-term debt for the Company as of June 30,
2017,was 5.261 percent.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.5
(c)Below are the requested details for the Company's three most recent long-term debt
issuances:
(i)(ii)(lii)(iv)
Principal All-in
Amount Maturity Issuance Cost of
Long-term Debt Series issued Date Date Debt
(1)3.35%FMB Series due 2025 $250,000,000 07/01/25 06/09/15 3.466%
(2)3.60%FMB Series due 2024 $425,000,000 04/01/24 03/13/14 3.757%
(3)2.95%FMB Series due 2023 $300,000,000 06/01/23 06/06/13 3.058%
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.6
OCS Data Request 2.6
Does the Company have any specific fundingplans for raising the capital to be invested
in the wind repowering projects at issue in this docket?If yes,please provide any written
financing and/or fundingplans specific to the wind repowering projects at issue in this
case.
Response to OCS Data Request 2.6
The Company intends to finance the wind repowering projects through its normal sources
of capital,both internal and external,includingnet cash flow from operating activities,
the issuance of new long-term and short-term debt and,if necessary,capital
contributions.Althoughthe repowering projects proposed in this docket are a significant
investment,the Company expects to use a reasonable mix of capital designed to provide a
competitive cost of capital and predictable capital market access to allow the Company to
remain financiallystable.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.7
OCS Data Request 2.7
Please provide a copy of all cost/benefit analysis and studies conducted by or for the
Company associated with the capital projects at issue in this proceeding.
Response to OCS Data Request 2.7
Please refer to the Direct Testimony,Exhibits,and accompanyingwork papers of
Company witness,Rick T.Link.
Please also refer to PacifiCorp's 2017 Integrated Resource Plan (IRP):
Volume I,Chapter 8,pages 205-206 and 209-233.
Volume II,Appendix K,pages 179-180,193,194,and 221-224.
Volume II,Appendix L,pages 226-227,229-232,and 236-237.
Please also refer to the Company's response to DPU Data Request 1.4.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.8
OCS Data Request 2.8
For each of the capital projects at issue in this proceeding please provide the following:
(a)Project work orders;
(b)Information submitted to management seeking approval of the project;
(c)Capital project authorization requests in the most detailed format available (if not
already being provided in response to (b),above;and
(d)Project authorizations.
Response to OCS Data Request 2.8
For each of the capital projects at issue in this proceeding please provide the following:
(a)Please refer to the Company's response to DPU Data Request 1.4,specifically subpart
(b).
(b)Please refer to the Company's response to DPU Data Request 1.4,specifically subpart
(b).
(c)The Company's governance approval memorandums and the third party repowering
presentations are considered highly confidential and commercially sensitive.The
Company requests special handling.Please contact Bob Lively at [phone] to
make arrangements for review.Please refer to Confidential Attachment OCS 2.8,
which provides confidential redacted versions of these documents.In addition,please
refer to the Company's response to DPU Data Request 1.4,specifically subpart (b).
(d)Please refer to the Company's responses to subpart (b)and (c)above.
Confidential information is provided subject to Public Service Commission of Utah
(UPSC)Rules 746-1-602 and 603.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.9
OCS Data Request 2.9
Refer to the Direct Testimony of Jeffrey K.Larsen,page 10,lines 211-214,which states:
"As repowered wind resources are placed into service,the Company will compare the
actual O&M expense for each wind resource to the 2014-2017 historical four-year
average of O&M expense by wind resource.The difference will be included in the RTM
deferral".
(a)Please explain why the historical four-year average of O&M expense by wind
resource is proposed to be used instead of the amount included in current base rates
by wind resource.
(b)Please explain why the 2013 -2016 years,all of which are now known,are not
proposed to be used in the calculation as opposed to including2017,which is not yet
know.
(c)Please refer to Exhibit RMP_(SRM-3),page 4.9.1 in the last rate case filing,Docket
No.13-035-184.Does the Company agree that the amounts included in current base
rates for non-labor O&M expense for the wind resources is the $23,897,854 shown in
column (B)of page 4.9.1 under "Wind Generation"?If no,explain in detail,why not.
(d)Please provide the non-labor O&M expense by wind resource included in current
base rates.If the Company plans to include labor O&M expenses in the deferral,then
separately provide the labor O&M expenses by wind resource included in base rates.
(e)Please provide the actual non-labor O&M expense by wind resource for each year,
2013 through 2017 year to date.If the Company intends to include labor-related
costs in the O&M expenses to be deferred,then separately provide the actual labor
O&M expense by wind resource for each year 2013 through 2017 year to date.
(f)Please provide the projected O&M expense by wind resource for 2017,separated
between labor and non-labor amounts.
Response to OCS Data Request 2.9
(a)The Company proposed a four-year average in order to smooth out year-over-year
changes that occur in actual expenses.The last rate case was settled so specific
findings on detailed cost categories may not exist.
(b)The year 2017 was proposed to reflect the most recent data that would be available on
an actual basis prior to potential impacts resulting from decisions to repower any of
the existing wind facilities.The 2017 data will be known and available at the time
that the RTM calculations are prepared beginning in mid-2019.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.9
(c)The Company confirms that the amount listed is the amount that was included in the
direct filing in Docket 13-035-184.The case was resolved by settlement for less than
the filed request,and the stipulation was silent as to how these adjustment were
determined.Therefore,there is no way to conclude that the level of operations and
maintenance (O&M)referenced is the amount included in base rates.
(d)Please refer to the Company's response to subpart (c)above.
(e)The Company intends to include labor-related costs in the O&M expenses to be
deferred.Please refer to Attachment OCS 2.9 for O&M expenses with labor separated
out.
(f)Please refer to Attachment OCS 2.9.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.10
OCS Data Request 2.10
Refer to the Direct Testimony of Jeffrey K.Larsen,lines 211 -214,which states:"As
repowered wind resources are placed into service,the Company will compare the actual
O&M expense for each wind resource to the 2014-2017 historical four-year average of
O&M expense by wind resource.The difference will be included in the RTM deferral".
Does the Company propose to include internal labor costs in the O&M expenses to be
deferred?If yes,does the Company currentlyanticipate that its overall employee
compliment on a full time equivalent basis will increase during the period the projects are
placed into service as compared to the amounts incorporated in current base rates?
Response to OCS Data Request 2.10
The Company is proposing to include incremental operations and maintenance (O&M)
expense in the Resource Tracking Mechanism deferral as described in the testimony
referenced above.The incremental O&M expense may include internal labor,external
labor or a combination of both.It is currentlynot known what the impact would be on the
employee compliment on a full-time-equivalentbasis as it is not known what the source
of incremental labor will be.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.11
OCS Data Request 2.11
Please provide the actual employee compliment on a full time equivalent basis for each
month of the base period in the Company's most recent rate case and as of the most
recent date available.
Response to OCS Data Request 2.11
Please refer to the table provided below:
Number of Employees
Full-Time
Month Equivalent
Base Period Jul-12 5,558.5
Base Period Aug-12 5,543.5
Base Period Sep-12 5,523.0
Base Period Oct-12 5,496.5
Base Period Nov-12 5,491.0
Base Period Dec-12 5,481.0
Base Period Jan-13 5,451.0
Base Period Feb-13 5,448.5
Base Period Mar-13 5,420.5
Base Period Apr-13 5,411.5
Base Period May-13 5,383.5
Base Period Jun-13 5,364.5
Most Recent Jul-17 4,996.0
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.12
OCS Data Request 2.12
Refer to the Direct Testimony of Jeffrey K.Larsen,lines 221-224,which states:"The
Company will calculate property taxes associated with the repowered wind resources by
taking the monthlyaverage of the capital investment less ADR included in the RTM
deferral multipliedby the average property tax rate from the Company's last general rate
case".
(a)Please provide the amount included in the Company's adjusted test year in the last
rate case for property tax expense for each of the wind resources that are at issue in
this case.
(b)Does the Company agree that the amount of property tax expense associated with the
existing wind assets that are being proposed for repowering in this case would decline
each year as accumulated depreciation on the assets grows?If no,explain,in detail,
why not.
(c)Please explain why the Company is proposing to use the "average property tax rate
from the Company's last general rate case"in calculating the deferral instead of using
tax rates specific to the taxing jurisdiction in which the wind resources are located.
(d)Please provide the estimated property tax rate that was used in the Company's
property tax expense adjustment calculation in the last rate case for each of the wind
resources that are at issue in this case.
(e)Please provide the "average property tax rate from the Company's last general rate
case"that it proposes to use in its calculation.
(f)Please provide the current actual property tax rates that are applicable to each of the
wind resources at issue in this proceeding.
(g)Is it currentlyanticipated that each of the applicable taxing authorities will begin
charging property taxes on each of the repowering projects the date the projects are
placed into service?If no,then identify when it is anticipated that the Company will
begin to actuallyincur property tax expense for each of the projects.
(h)For each of the wind resources that are being proposed for repowering in this case,
please provide the followinginformation:
i.Property tax base (i.e.,amount the property tax rate is applied to)that was used in
the Company's last general rate case filing;
ii.Most recent actual property tax base (identify the tax year);
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.12
iii.Projected property tax base for each year,2018 through 2020 excluding the
capital additions at issue in this case;and
iv.Projected property tax base for each year,2018 through 2020 inclusive of the
capital additions at issue in this case.
Response to OCS Data Request 2.12
(a)The property tax expense included in the Company's filing in Docket 13-035-184 was
$132,913,000 total company,or $56,453,673 Utah allocated.This amount is not
available by resource,since the property taxes in the rate case are shown on a total
company basis.As shown in Exhibit RMP_(JKL-4),lines 7-14,the Utah average
composite property tax rate in the last Utah rate case was 0.769%,which is the rate
the Company is proposing to use for the incremental investments.This amount could
be used to calculate the approximate property taxes by unit assuming each was equal
to the tax rate above.
(b)As a general premise,when existing wind assets age and the accumulated amount of
depreciation grows,the value and associated amount of property tax expense can
generally be expected to decline.Nevertheless,values assigned to the Company's
operating property for property tax assessment purposes are influenced by numerous
factors beyond the net book value (NBV)of the property.These additional factors
include the level of rate base,the amount of income expected to be derived from the
investment in the property and the rate employed by state assessment staff when
converting the expected income amount into an estimate of value.A one-to-one
relationship between the NBV of wind project assets and the assessed value of these
assets does not necessarily exist.
(c)In proposing to use the "average property tax rate from the Company's last general
rate case,"the Company is establishing a reasonable methodology that is quantifiable,
verifiable and traceable to prior Company filings and provides a basis for estimating
the incremental property tax impact of additional investment in wind repowering that
will take place in multiplestates across the Company's system.
(d)A specific property tax rate for each wind resource was not calculated in the last
general rate case.Please refer to Exhibit RMP_(JKL-4),lines 7-14,which shows
the estimated property tax rate from the Company's last general rate case to be 0.769
percent.
(e)Please refer to Exhibit RMP_(JKL-4),lines 7-14,which shows the estimated
property tax rate from the Company's last general rate case to be 0.769 percent.
(f)Property tax rates generally applicable to each wind project for 2016 are listed in the
followingtable:
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.12
Wind Facility State 2016 Tax Rate %
Leaning Juniper Oregon 1.03%
Goodnoe Hills Washington 1.01%
MarengoI Washington 1.15%
MarengoII Washington 1.15%
Dunlap Wyoming 0.72%
Glenrock I Wyoming 0.76%
Glenrock III Wyoming 0.76%
High Plains Wyoming 0.75%
McFaddenRidge Wyoming 0.77%
Seven Mile Hill I Wyoming 0.74%
Seven Mile Hill II Wyoming 0.74%
Rolling Hills Wyoming 0.76%
(g)No.Valuation of the Company's operating property for Washington,Wyomingand
Oregon property taxation purposes is based on property owned as of January lst of
each year.As a consequence,capital invested in repowering Washington and
Wyomingwind projects will impact each state's assessed values and correspondingly
Washington and Wyomingproperty tax expense beginning on January lst of the year
followingthe year in which capital investment occurs.Capital invested in repowering
the Leaning Juniper wind project will impact Oregon assessed values and
correspondingly Oregon property tax expense beginning on July lst of the year
followingthe year in which capital investment occurs.
(h)The Company's operating property is annuallyvalued on a centralized basis by each
state's Department of Revenue or Tax Commission using methodologies which
produce a value pertaining to all company owned operating property in all states.
From that total or system wide property value,an allocation process is employed by
each state to arrive at the state and then tax code specific values upon which the
property taxes are paid each year.Separate project specific values do not generally
exist either in the context of past general rate case filings,recent year assessments or
future year projections.Tax code specific values reflect the combined value of all
distribution,transmission,generationor other operating property employed by the
Company within each unique geographic area.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.13
OCS Data Request 2.13
Refer to the Direct Testimony of Jeffrey K.Larsen,lines 221-224,which states:"The
Company will calculate the Wyomingwind tax by taking the incremental generation
associated with the wind repowering multipliedby the Wyomingwind tax rate".
Additionally,please refer to the Company's filing in the last general rate case,Exhibit
RMP_(SRM-3),page 7.9.1,which shows the projected "Jun-15 NPC MWH Production"
to which the WyomingWind Generation tax rate was applied,totaling 2,009,507 MWH.
(a)Does the Company plan to calculate the "incremental generation associated with the
wind repowering"as the difference between the actual annual production post-
repowering less the amount assumed in the prior general rate case shown on page
7.9.1 of the referenced exhibit?If no,explain why not and describe,in detail,how
the "incremental generationassociated with the wind repowering"will be determined
for purposes of calculating the incremental Wyomingwind tax expense.
(b)Please provide the actual NPC MWH production,by wind plant,in a similar format to
page 7.9.1 for each year,2014 through 2017 year to date.
(c)Please provide the actual WyomingWind Generation Tax paid by the Company,for
each year,2014 through 2017 year to date,by wind plant.
(d)Please provide the actual WyomingWind Generation Tax rate for each year,2014
through the present date.If future rates are known,please also provide the future tax
rates through 2020.
Response to OCS Data Request 2.13
(a)No.The Direct Testimony of Tim Hemstreet,beginning on page 12,lines 265-272
and his referenced Confidential Exhibit RMP (TJH-3)explain and demonstrate how
the incremental percentage increase in generain will be measured.This generation
increase percentage will be used to determine the amount of incremental generation
on an actual basis going forward to be used in the RTM calculation until the
repowered wind resources are included in base rates.
(b)Please refer to Attachment OCS 2.13,which provides actual generation (megawatt-
hours (MWh)for the wind plants listed in Exhibit RMP_(SRM-3),page 7.9.1 from
Docket 13-035-184.The information provided covers calendar years 2014 through
20 16,and 20 17 year-to-date (May 20 17).
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.13
(c)Please see the followingschedule.
Taxable MWH's of Generation
Calendar Year Calendar Year Calendar Year 2017 to date-
Facility 2014 2015 2016 May
Foote Creek 101,592 81,453 108,681 44,822
Glenrock I 299,004 289,386 311,607 136,016
Glenrock III 112,823 108,844 118,738 51,240
Rolling Hills 271,147 261,284 284,156 121,418
Seven Mile 335,038 296,563 348,841 160,955
Seven Mile Il 73,601 64,063 69,847 29,836
High Plains 324,244 250,864 316,175 143,346
McFadden Ridge 98,411 78,271 95,925 42,635
Dunlap I 382,995 339,706 388,498 175,429
Total Taxable MWH's 1,998,855 1,770,434 2,042,468 905,697
Total Wyoming Generation Tax $1,998,855 $1,770,434 $2,042,468 $905,697
(d)The Wyomingwind generation tax rate has consistently been $1/MWhsince its
inception.The Company does not know what,if any,rate changes will occur in the
future.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.14
OCS Data Request 2.14
Refer to the Direct Testimony of Jeffrey K.Larsen,lines 258 through 267,which
describes the calculation of the Production Tax Credits that will be included in the RTM
and lines 279 -280,which states:"The RTM is intended to track the PTCs associated
with repowered wind resources only".
(a)Please explain with specificity how the amount of "PTCs associated with repowered
wind resources"will be calculated for determining the impact on the RTM.
(b)Please provide an example calculation of the amount to be included in the RTM
associated with the PTCs on the repowered wind resources that will be received by
the Company between the date the repowering projects are placed into service and the
next base rate case (i.e.,before the capital projects proposed in this case are
considered in base rates).
(c)Will 100%of the PTC received by the Company on the wind resources that are
repowered be included in the RTM calculation,or only some incremental amount?If
an incremental amount,explain how that "incremental amount"will be calculated.
Response to OCS Data Request 2.14
(a)For repowered wind resources,the Company will identify and track the kilowatt-hour
(kWh)generation associated with the repoweredwind resources and multiplythe
applicable production tax credit (PTC)rate on a cents per kWh (¢/kWh)basis,
grossed up for taxes,to the kWh generation.The Utah-allocated amount of this
grossed-up PTC value will be included in the Resource Tracking Mechanism (RTM)
deferral.
(b)Please refer to Exhibit RMP_(JKL-2),lines 14-18.The amounts on line 14
represents the estimated kWh generation multipliedby the estimated PTC rate
applicable for each year.The remaining lines,15-18,with the accompanying
references,demonstrate and explain the calculation of the grossed-up PTC value to be
included in the RTM deferral.
(c)The Company proposes that 100 percent of the PTC received by the Company on the
wind resources that are repowered be included in the RTM calculation.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.15
OCS Data Request 2.15
Refer to the Direct Testimony of Jeffrey K.Larsen,lines 286 through 288,which states:
"Most of the costs are due to reduced generationfrom the facilities before and during
repowering,and the associated loss of PTCs.These costs will be included in the EBA."
Is the Company proposing to include the "loss of PTCs"due to reduced generation from
the wind facilities before and during repowering to be include in the EBA?If no,then
explain why "the associated loss of PTCs"was included in this referenced testimony as
being included in the EBA.If yes,then explain,in detail,how the "loss of PTCs"due to
the reduced generationfrom the wind facilities before and during repowering will be
calculated by the Company for inclusion in the EBA.Include all assumptions that will be
used in the calculation (i.e.,PTC amount per MWH,calculation of "loss of PTCs",etc.).
Response to OCS Data Request 2.15
Please refer to the Company's response to OCS Data Request 1.41.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.16
OCS Data Request 2.16
Refer to the Direct Testimony of Jeffrey K.Larsen,lines 373 through 376,addresses the
salvage value of the replaced equipment.The Company proposes that "To the extent that
any salvage value is obtained from the equipment,then the value would be credited to the
ADR,reducing the net plant balance".
(a)If additional salvage value is received by the Company after depreciation rates are
next set,would the Company be willingto include that additional salvage value as an
offset in the subsequent RTM calculation?If no,explain why not.
(b)If the salvage on the existing equipment being replaced is received by the Company
after the next base rate case such that the offset is not included in base rates but the
capital costs associated with the repowering project is included in rate base in that
case,does the Company agree that ratepayers would not receive the benefit of the
offset caused by the additional salvage received until a subsequent rate case?If no,
please explain.
(c)If additional salvage value is received by the Company after the next rate case and the
associated repowering project is included in rate base in that case,would the
Company be willing to include that additional salvage value as an offset in the
subsequent RTM calculation?If no,explain why not.
(d)Would the Company be willing to agree to reflect any salvage amounts received on
the equipment being replaced as a credit in the RTM instead of as a credit to the
accumulated depreciation reserve?If no,explain why not.
Response to OCS Data Request 2.16
(a)The Company would follow the accounting guidelines on salvage value in the Federal
Energy Regulatory Commission (FERC)Code of Federal Regulations (CFR).
Referring to 18 CFR,Part 101,Electric Plant Instructions,10 Additions and
Retirements ofElectric Plant,paragraph F.,which states:"The book cost less net
salvage of depreciable electric plant retired shall be charged in its entirety to account
108.Accumulated Provision for Depreciation of Electric Plant in Service."The
triggering event is not the setting of depreciation rates in the next study,but when the
depreciation rates are included in base rates and reflect the impact of salvage.Prior to
the next rate case,the impact would be reflected through the RTM.The Company
would be willing to discuss the impact of salvage that would not be reflected through
the RTM or in rates after the next rate case.
(b)Yes.
(c)The Company's proposal is that only production tax credits (PTC)continue to be
included in the Resource Tracking Mechanism (RTM)once repowered wind facilities
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.16
investment has been included in base rates.Any subsequent salvage value would be
treated similarly to subsequent capital additions in that it would be considered for
inclusion in base rates in the followingrate case.
(d)Please refer to the Company's response to subpart (a)above.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.17
OCS Data Request 2.17
Please provide the work papers,in the most detailed format available,includingthe
assumptions,used to determine each of the amounts presented in Exhibit RMP_(JKL-3).
For any of the work papers calculated using excel,please provide in excel format with all
formulas and calculations intact.If not clear from the electronic work papers,the
assumptions used in determining the amounts input into the work papers should also be
provided.This should include,but not be limited to,the determination of the estimated
amounts shown in the exhibit on lines 1,2,3,8,9,10,l1,13 and 14.
Response to OCS Data Request 2.17
Please refer to Confidential Attachment OCS 2.17.
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 14,2017
OCS Data Request 2.18
OCS Data Request 2.18
Please refer to Exhibit RMP (JKL-3).Since the repowered facilities will be replacing
older assets,please explain,idetail,why the O&M expenses on line 8 are shown as an
increase in the revenue requirement subject to the RTM instead of a reduction in O&M
expenses for the projects being repowered as compared to the current cost incorporated in
base rates for the facilities.
Response to OCS Data Request 2.18
The actual incremental operations and maintenance (O&M)impact to be included in the
Resource Tracking Mechanism (RTM)will be determinedbased on the methodology as
outlined in the Direct Testimony of Company witness,Jeffrey K.Larsen,page 10,lines
211-214.The values in Exhibit RMP_(JKL-3),line 8,are estimates which will be
updated to actual O&M by wind resource compared against the 2014 through 2017
historical four-year average of O&M expense by wind resource.This incremental O&M
calculation may increase or decrease the RTM deferral.
17-035-39 /Rocky Mountain Power
August 14,2017
OCS Data Request 2.19
OCS Data Request 2.19
Please refer to Exhibits RMP_(JKL-2)and (JKL-3).Are each of these exhibits based on
the Company's current best estimates of the RTM monthlyand annual deferrals that will
result if it is granted the treatment requested in this case?If not,then please provided
updated versions of these two exhibits,in electronic format with all calculations and
formulas intact,based on the Company's current best estimates.Also,please provide all
work papers and assumptions used in deriving the updated estimates.Include a
description and explanation of all modifications to the amounts presented in the exhibits
provided with the Company's filing.
Response to OCS Data Request 2.19
Yes.