20170925Utah_OCS Set 5 (1-11).pdf

1407 W.NorthTemple
ROCKY MOUNTAIN Salt Lake City,UT 84116
POWER
A DIVISION OF PACIFICORP
September 5,2017
Gavin Mangelson
Office of Consumer Services
160 East 300 South
Salt Lake City,Utah 84111
[e-mail](C)
RE:UT Docket No.17-035-39
OCS 5*Set Data Request (1-11)
Please find enclosed Rocky MountainPower's Responses to OCS 5*Set Data Requests 5.1-5.3,
and 5.8-5.11.The remaining Responses will be provided separately.Also provided are
Attachments OCS 5.10 -(1-2).
If you have any questions,please call Tarie Hansen at [phone].
Sincerely,
Bob Lively
Manager,Regulation
Enclosures
C.c.Erika Tedder/DPU [e-mail]@utah.gov(C)
Dan Kohler/DPU [e-mail](C)
Dan Peac/DPU [e-mail] (C)(W)
Aliea Afnan/DPU aafnan@daymm:kea.com (W)
Philip Hayet/OCS [e-mail](C)
Gary A.Dodge/UAE (C)
Kevin Higgins/UAE (C)
Neal Townsend/UAE (C)(W)
17-035-39 /Rocky Mountain Power
September 5,2017
OCS Data Request 5.1
OCS Data Request 5.1
Please provide the inflation rate used in the development of the wind-integrationcosts
used in the repowering economic evaluation.Please reconcile this with the Company's
response to OCS 1.36.
Response to OCS Data Request 5.1
Please refer to the Company's response to OCS Data Request 5.2.
17-035-39 /Rocky Mountain Power
September 5,2017
OCS Data Request 5.2
OCS Data Request 5.2
Refer to "IRP Repower LGIA Limit vl3 WIC Dunlap.xlsm,""Existing"tab,cell E135.
(a)Please reconcile this 2.51%to the Company's response to OCS 1.36.
(b)Is this difference in inflation rate assumed across all the "WIC"revenue requirement
models?
(c)Does the Company usuallyassume inflation on the integration costs?
(d)What would the impact be to the analysis and the benefit of repowering if the
integrations costs were not inflated?
(e)What would the impact be to the analysis and benefit of repowering if the inflation
rate used to determine integration costs was consistent with the value found in cell
J25 in the excel file supplied in response to OCS 1.36.
Response to OCS Data Request 5.2
Referencing the confidential work papers that accompanied the Direct Testimony of
Company witness,Rick T.Link,specifically in the confidential folder "Wind
Projects/Linked Power":
(a)The 2.51 percent inflation rate was inadvertentlyused to calculate wind integration
costs found in the respective resource specific "WIC"workbooks.
(b)Yes,each of the "WIC"resource-specific models uses the 2.5 l percent inflation rate
assumption to calculate the wind integration component of the "Wind Integration,
Wyoming Prod.Tax"values.
(c)Yes.
(d)PacifiCorp has not performed any sensitivity analysis assuming wind integration
charges are held flat.However,if the wind integration costs specific to the
incremental energy from repoweredwind facilities were not escalated,the present-
value revenue requirement differential (PVRR(d))benefits of wind repowering would
improve by $0.8 million when calculated off of forecasted results through 2036,and
improve by $3.1 million when calculated off of forecasted results through 2050.This
findings are applicable to all price-policy scenarios.
(e)If the inflation rate for resource-specific wind integration costs are changed from 2.51
percent to 2.22 percent,wind repowering benefits would improve by approximately
$0.1 million when calculated off of forecasted results through 2036,and improve by
17-035-39 /Rocky Mountain Power
September 5,2017
OCS Data Request 5.2
approximately $0.4 million when calculated off of forecasted results through2050.
These findings are applicable to all price-policy scenarios.
17-035-39 /Rocky Mountain Power
September 5,2017
OCS Data Request 5.3
OCS Data Request 5.3
Refer to "IRP Repower LGIA Limit vl3 WIC Dunlap.xlsm,""Existing"tab,rows 110 to
122.Please provide the work papers supporting these values and explain what these are
used for.Please explain why these forward prices are different between states and
projects within the same state,and if these are derived from a specific fuel forecast.
Response to OCS Data Request 5.3
Please reference the confidential work papers that accompanied the direct testimony of
Company witness,Rick T.Link,specifically in the confidential folder "Wind
Projects/Linked Power",the file "IRP Repower LGIA Limit vl3 WIC Dunlap.xlsm":
The referenced rows l10 through 122 (and the calculations in rows 27 through 39)are
not used in this filing,and have been "turned off"by setting the "%of FPC"figures in
cells D27 through D39 to zero.
17-035-39 /Rocky Mountain Power
September 5,2017
OCS Data Request 5.8
OCS Data Request 5.8
Refer to "IRP Repower LGIA Limit vl3 WIC LJ.xlsm"tab:"LJ"rows 13,14,and 22.
(a)Please explain why PTC are included in the total revenue requirement that is then
levelized.
(b)Please explain why Wind Integration Costs and Wind Production Tax Costs are not
included in the levelized cost calculations.
(c)Please explain why PTC and Wind Production Tax Costs are treated differently.
Response to OCS Data Request 5.8
(a)Income taxes are a component of revenue requirement,which spreads the initial up-
front cost of assets over the life of those assets,accounting for return on investment,
return of investment,and taxes.Production tax credits (PTC)represent a credit that
offset income taxes,and therefore,a reduction to revenue requirement.Considering
that PTCs are a component of income taxes that are included in revenue requirement,
they are levelized over the life of the project in the same way that other components
of revenue requirement are levelized (i.e.,return on and return of investment).
(b)These costs are variable.The treatment of these costs aligns with how they are
captured in rates,where the cost for integration and wind taxes incurred for any given
time period are not amortized over the life of the asset.
(c)Please refer to the Company's responses to subparts (a)and (b)above.
17-035-39 /Rocky Mountain Power
September 5,2017
OCS Data Request 5.9
OCS Data Request 5.9
Refer to "Repower Results Direct Testimony.xlsm"tab:"Price-Policy Annual -PaR"
line 89,cells E89 and F89.Please explain why the net capital recovery is negative.
Response to OCS Data Request 5.9
The net capital recovery is negative as certain capitalized operations and maintenance
(O&M)expenses are no longer necessary upon repowering.The elimination of these
otherwise capitalized O&M expenses results in negative Capital Recovery as a
component of Project Net Costs in 2017 and 2018.
17-035-39 /Rocky MountainPower
September 5,2017
OCS Data Request 5.10
OCS Data Request 5.10
Refer to OCS 1.11.
(a)Please provide the Aurora wholesale market price forecasts for the longest time
period available in each of the 9 fuel price scenarios that the Company considered.
(b)Please provide a narrative explanation and accompanying work papers detailing the
process to aggregate/convertthese market price forecasts derived from Aurora
(hourly,monthly,on-peak,off-peak etc)to the inputs that were used in SO and PaR.
(c)Please provide standard Aurora output reports for the longest run performed for the
Mod/Mod case.
(d)Please provide a summary of the generic options available in the Aurora modeling of
the WECC region and how they compare to the generic types of available in System
Optimizer.
Response to OCS Data Request 5.10
(a)The Aurora wholesale market price forecasts,for the longest time period available in
each of the eight gas carbon dioxide (CO2)priCC Scenarios,were provided with the
non-confidential work papers that accompanied the Direct Testimony of Company
witness,Rick T.Link,specifically the folder "Market Prices".The market prices for
the ninth gas CO2 price scenario (Base Gas Zero CO2 (MN)),the April 26,2017
official forward price curve (OFPC),was inadvertently omitted from the original
non-confidential work papers folder.Please refer to Attachment OCS 5.10-1,which
provides the ninth price scenario.
(b)The non-confidential monthlyon-peakand off-peak price files provided are used to
develop hourlyprices which are used as inputs to the SO model and PaR model.For
Aurora's eight gas-CO2 scenarios,each monthlyhub price is multipliedby hub-
specific hourly scalars as calculated from historical hourly price shapes.This post-
processing step is carried out by a macro-driven model that produces no work
papers.
(c)Please refer to Attachment OCS 5.10-2,which provides the longest run Aurora
output report through 2042 for the medium gas-medium CO2 price scenario.This is
Aurora's only output used by the SO model and/or the PaR model either directly or
indirectly.
(d)Please refer to the table provided below,which provides a summary of generic
resource options available in Aurora when adding new generic resource capacity:
17-035-39 /Rocky Mountain Power
September 5,2017
OCS Data Request 5.10
Technology Type Selection
Combined Cycle CT gasloil Advanced Endogenous
Combined Cycle CT gasloil Advanced 1 x1 Endogenous
Single Cycle CT Conventional Endogenous
Single Cycle CTAdvanced Endogenous
Wind Endogenous/Exogenous
Solar Photvoltaic Endogenous/Exogenous
*Biomass Exogenous
*Geothermal Exogenous
*Small Hydroelectric Exogenous
Fuel or location constrained resources,as denoted by an asterisk (*),are not available
for endogenous selection,but must be user determinedto prevent infeasible
selections.Similarly,generic resources needed to fulfill renewable portfolio standards
(RPS)requirements are also user selected to insure compliance.These resources are
selected in an offline spreadsheet model and are an input to Aurora.
The SO model offers similar generic options at a more granular level and also
includes solar thermal,pumped storage,and nuclear options.It does not include an
option for small hydroelectric;however,small hydroelectric facilities are considered
as part of PacifiCorp's private generationforecast.The generic resource options
available in the SO model are detailed in the Company's 2017 Integrated Resource
Plan (IRP),specifically Chapter 6 (Resource Options),Table 6.2 (Total Resource
Cost for Supply-Side Resource Options).The Company's 2017 IRP is publicly
available and can be accessed by utilizing the followingwebsite link:
http://www.pacificorp.com/es/iro.html
17-035-39 /Rocky Mountain Power
September 5,2017
OCS Data Request 5.11
OCS Data Request 5.11
Please provide a sensitivity economic evaluation in which you assume the expansion plan
is the same in both the Status Quo and Repower cases.Then the only different in the
analysis should be the modeling of the repowered wind resources.Please provide the
same work papers /spreadsheets /results as were provided for the Company's analysis.
Response to OCS Data Request 5.11
PacifiCorp has not performed the requested analysis.