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Home My WebLink About20170925Utah_OCS Set 6 (1-10).pdf1407 W.NorthTemple ROCKY MOUNTAIN Salt Lake City,UT 84116 POWER A DIVISION OF PACIFICORP September 6,2017 Gavin Mangelson Office of Consumer Services 160 East 300 South Salt Lake City,Utah 84111 Donna Ramas donnararnas@aol.com (C) RE:UT Docket No.17-035-39 OCS 6th Set Data Request (1-10) Please find enclosed Rocky Mountain Power's Responses to OCS 6th Set Data Requests 6.1- 6.10.Provided on the enclosed Confidential CD are Confidential Attachments OCS 6.5 and 6.6 and Confidential Response OCS 6.3.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 (801)220-2053. Sincerely, Bob Lively Manager,Regulation Enclosures C.c.Erika Tedder/DPU e_ttedder@utah.gov(C) Dan Kohler/DPU (C) Dan Peac/DPU M (C)(W) Aliea Afnan/DPU (W) Philip Hayet/OCS phayet@ikenn.com (C) Gary A.Dodge/UAE gdo_dge@hidlaw.co_m(C) Kevin Higgins/UAE (C) Neal Townsend/UAE (C)(W) 17-035-39 /Rocky Mountain Power September 6,2017 OCS Data Request 6.1 OCS Data Request 6.1 Refer to the Direct Testimony of Rick T.Link,page 29,lines 603 -605,which states: "Customer benefits for all price-policy scenarios would improve by approximately $4 million for every dollar assigned to the incremental RECs that will be generated from the repowered wind facilities through 2036". (a)Please explain and show,in detail,how the $4 million was determined.Includeall assumptions in deriving the amount. (b)Please identify the quantityof RECs considered in deriving the $4 million and identify the percentage of total incremental RECs generated that the quantityused in determining the $4 million entails (i.e.,50%,75%,100%,etc.). Response to OCS Data Request 6.1 (a)The $4 million is the total renewable energy credit (REC)net present value (NPV) through the study period 2017 through 2036 and includes each year's incremental RECs generated by repowering when the per-REC value is assumed to be $1. Please refer to the confidential work papers that accompanied the Direct Testimony of Company witness,Rick T.Link,specifically the folder "Exhibits Figures Tables",the file "Repower Results Direct Testimony".The calculation can be seen in detail in the tab "Price-Policy Annual"-PaR",rows 900-903. (b)Please refer to the Company's response to subpart (a)above.With the assumption of $1 per REC ($1/REC),the total quantity of RECs for the 2017 through 2036 study period would equate to 4 million.This represents 100 percent of total incremental RECs assumed to be generated during the study period. 17-035-39 /Rocky Mountain Power September 6,2017 OCS Data Request 6.2 OCS Data Request 6.2 Refer to the Direct Testimony of Rick T.Link,page 3,lines 60 -63,which states:"Over the remaining life of the repowered wind facilities,present-value benefits would improve for all scenarios by an additional $11 million for every dollar assigned to the incremental RECs that will be generated after repowering". (a)Please explain and show,in detail,how the $11 million was determined.Include all assumptions used in deriving the amount. (b)Please identify the quantityof RECs considered in deriving the $11 million and identify the percentage of total incremental RECs generated that the quantityused in determining the $11 million entails (i.e.,50%,75%,100%,etc.). Response to OCS Data Request 6.2 (a)The $11 million is the total renewable energy credit (REC)net present value (NPV) through the study period 2017 through 2050 and includes each year's incremental RECs generated by the repowering when the per-REC value is assumed to be $1. Please refer to the confidential work papers that accompanied the Direct Testimony of ,Company witness,Rick T.Link,specifically the folder "Exhibits Figures Tables",the file "Repower Results Direct Testimony".The calculation can be seen in detail in the tab "Price-Policy Annual -PaR",rows 900-903. (b)Please refer to the Company's response to subpart (a)above.With the assumption of $1 per REC ($1/REC),the total quantityof RECs for the 2017 through2050 study period would equate to 11 million.This represents 100 percent of total incremental RECs assumed to be generated during the study period. 17-035-39 /Rocky MountainPower September 6,2017 OCS Data Request 6.3 OCS Data Request 6.3 Please provide the a copy of any internal forecasts or projections the Company has regarding the marketability of RECs going forward and the sales prices of RECs going forward.Additionally,if the Company has projected any future sales prices on a per REC basis,please provide such information for all future years the Company has projected and explain how the projected sales price per REC was determined. Confidential Response to OCS Data Request 6.3 Due to lack of transparency and liquidity in the renewable energy credit (REC)markets, the Company maintains only a one-year forecast for REC sales. 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 September 6,2017 OCS Data Request 6.4 OCS Data Request 6.4 Please provide a detailed description of the Company's current policy regarding the retention of RECs.Additionally,please explain if $4 million and $11 million referenced on pages 3 and 29 of Mr.Link's testimony factor in the impacts of the Company's current REC retention policy.If no,explain why not.If yes,explain how the retention policy was factored into the calculations. Response to OCS Data Request 6.4 For Utah-allocated renewableenergy credits (REC),the Company's policy is to maximize benefits for customers through REC sales.This is not a factor in the development of the $4 million and $11 million REC benefit figures.The calculation assesses the potential benefit of incremental RECs based on their value assuming $1 per REC ($1/REC).Please also refer to the Company's response to OCS Data Request 6.9. 17-035-39 /Rocky Mountain Power September 6,2017 OCS Data Request 6.5 OCS Data Request 6.5 Please provide in table format the followinginformation for each year,2012 through 2017 year to date: (a)Total RECs PacifiCorp generated; (b)Total RECs from contracts where PacifiCorp obtains ownership of the RECs; (c)Total RECs generated and acquired (combination of (a)and (b)); (d)Amount of RECs retained for renewable portfolio standards compliance requirements; (e)Amount of RECs sold; (f)Amount of RECs remaining at year-end;and (g)Percentage of RECs generated and acquired that were sold during the year. Response to OCS Data Request 6.5 For the Company's responses to subparts (a)through (e)and (g),please refer to Confidential Attachment OCS 6.5. (f)The Company tracks the amount of renewable energy credits (RECs)available for sale by vintage and it is updated monthly.In a certain year,older,current or future vintage RECs might be sold.Please refer to Confidential Attachment OCS 6.5 for marketable RECs available by vintage as of August 31,2017. 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 September 6,2017 OCS Data Request 6.6 OCS Data Request 6.6 Please provide in table format the followinginformation for each year,2012 through 2017 year to date: (a)Total RECs sold by vintage year; (b)Total revenues from RECs sold during the year;and (c)Average revenue received per REC sold (i.e.,subpart (b)divided by subpart (a)). Response to OCS Data Request 6.6 Please refer to Confidential Attachment OCS 6.6. 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 September 6,2017 OCS Data Request 6.7 OCS Data Request 6.7 Please provide for each year,2012 through 2016,the number of RECs remaining available for sale at year end (i.e.,excluding RECs retained for renewable portfolio standards compliance requirements)by vintage year of the RECs. Response to OCS Data Request 6.7 Please refer to Company's response to OCS Data Request 6.5 subpart (f). 17-035-39 /Rocky Mountain Power September 6,2017 OCS Data Request 6.8 OCS Data Request 6.8 Please provide the number of RECs currentlyavailable for sale as of the most recent date available (i.e.,excluding RECs retained for renewable portfolio standards compliance requirements)by vintage year of the RECs. Response to OCS Data Request 6.8 Please refer to Company's response to OCS Data Request 6.5 subpart (f). 17-035-39 /Rocky Mountain Power September 6,2017 OCS Data Request 6.9 OCS Data Request 6.9 If the Company historicallyhas not sold all of the RECs it has had available for sale, please explain,in detail,how the incremental RECs generated as a result of the Wind Projects will result in increased REC sales revenues. Response to OCS Data Request 6.9 The renewable energy credit (REC)market is not consistently active and is illiquid.There is little price transparency in REC markets.Most transactions are conducted as bilateral contracts between parties,and prices are not reported.The current vintage unbundled REC prices have been ranging between $0.75 per REC ($/REC)and $2.25/REC based on transactions the Company has executed and based on quotes from market participants. The price of RECs depends on the volume of RECs available in the market at any given point in time,the vintage of the REC,applicable program for which the RECs are eligible,and location of the facility that is generatingthe RECs.With these considerations,the Company's economic analysis conservatively does not rely on a revenue stream to support the all-in economic benefits for customers.Rather,the Company quantified how REC revenues could potentiallyimprove the economic benefits from the new wind projects. 17-035-39 /Rocky Mountain Power September 6,2017 OCS Data Request 6.10 OCS Data Request 6.10 Does the Company project or anticipate that the additional wind resources that will come on-line in the United States between now and when the opportunity for projects to qualify for the production tax credits under the current phase-out of the credits expiring will put downward pressure on the amount paid for RECs and on the percentage of REC available for sale that are actually sold?If no,please explain why not.If yes,please describe the projected impacts based on the Company's current estimates. Response to OCS Data Request 6.10 The Company objects to this request as speculative,vague,and as requiring development of a special study or informationnot maintained in the ordinary course of business. Without waiving these objections,the Company responds as follows: The Company has not performed a supply/demandanalysis of United States renewable energy credit (REC)markets and pricing.Please also refer to the Company's response to OCS Data Request 6.9.The analysis does not consider potential recursive price impacts of new renewables driven by the production tax credit (PTC),but the Company notes that PTC incentives coexist with significant increasing renewable portfolio standards.