20170815Utah_OCS Set 2 (1-14).docx

BEFORE THE PUBLIC SERVICE COMMISSION OF UTAHIn the Matter of the Application of Rocky:Docket No. 17-035-40Mountain Power for Approval of a:Office of Consumer ServicesSignificant Energy Resource Decision:Second Data Request toAnd Voluntary Request for Approval of:Rocky Mountain PowerResource Decision:August 4, 2017Please provide responses to:Béla VastagDonna RamasOffice of Consumer ServicesRamas Regulatory Consulting, LLC160 East 300 South 4654 Driftwood DriveSalt Lake City, Utah 84111Commerce Twp., MI 48382(801) 530-6374(248) [e-mail]@aol.comReferto the Direct Testimony of Jeffrey K. Larsen, lines 186 – 192, which states, in part, that the exhibits assume that “…12 percent of the transmission revenue requirement will be paid by third-party transmission customers…” Please explain, in detail, why the 12 percent was assumed and explain and show how the 12 percent factor was determined. Provide any workpapers used to calculate the 12 percent, if applicable.Refer to the Direct Testimony of Jeffrey K. Larsen, lines 172 – 174, 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.”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.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 deferred by RMP should be calculated based on an income tax rate that is higher than the actual rate applicable to RMP.Refer to the Direct Testimony of Jeffrey K. Larsen, lines 172 – 174, 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.”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 as of December 31st of the years 2017 through 2021.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.For the Company’s three most recent long term debt issuances, please provide the following:Amount of debt issued;Maturity Date;Date of issuance; andCost rate (%).Does the Company have any specific funding plans for raising the capital to be invested in the new wind projects at issue in this docket? If yes, please provide any written financing and/or funding plans specific to the wind projects at issue in this case.Does the Company have any specific funding plans for raising the capital to be invested in the transmission facilities at issue in this docket? If yes, please provide any written financing and/or funding plans specific to the transmission facilities at issue in this case.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.For each of the capital projects at issue in this proceeding please provide the following:Project workorders;Information submitted to management seeking approval of the project;Capital project authorization requests in the most detailed format available (if not already being provided in response to (b), above; and Project authorizations.Refer to the Direct Testimony of Jeffrey K. Larsen, lines 197-198, which states: “Asfacilities are part of the Combined Projects are placed into service, the Company will include the actual O&M expense associated with the facilities 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 currently anticipate 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?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.Refer to the Direct Testimony of Jeffrey K. Larsen, lines 200-203, which states: “The Company will calculate property taxes associated with the Combined Projects by taking the monthly average of the capital investment less ADR included in the RTM deferral multiplied by the average property tax rate from the Company’s last general rate case.”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 proposed new assets are located.Please provide the “average property tax rate from the Company’s last general rate case” that it proposes to use in its calculation.Please provide the current actual property tax rates that are applicable to each of taxing jurisdictions in which the projects that are at issue in this proceeding are located.Please explain, in detail, why the Company does not propose to include the actual property tax expenses associated with the projects at issue in this proceeding in the RTM deferral instead of estimated amounts based on the average property tax rate from the last rate case.Will the Company have the ability to know the actual property taxes it pays associated with each of the projects at issue in this case? If no, explain in detail, why not.Is it currently anticipated that each of the applicable taxing authorities will begin charging property taxes on each of the projects the date the projects are placed into service? If no, then identify when it is anticipated that the Company will begin to actually incur property tax expense for each of the projects.Please provide the workpapers, in the most detailed format available, including the assumptions, used to determine each of the amounts presented in Exhibit RMP__(JKL-3). For any of the workpapers calculated using excel, please provide in excel format with all formulas and calculations intact. If not clear from the electronic workpapers, the assumptions used in determining the amounts input into the workpapers 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, 7, 8, 9, 10, 11 and 14.Please provide revised versions of Exhibits RMP__(JKL-2) and (JKL-3) separated between the Wind Projects and the transmission projects. This should be provided in such a format as to be able to separately determine the net rate base, O&M expense, depreciation expense and property tax amounts separately for the Wind Projects and the Transmission projects. As an alternative, the Company can provide a single revised version of the 2 exhibits with additional lines separately showing the amounts entered for the Wind Projects and the Transmission Projects.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 monthly and 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 workpapers 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.With regards to transmission plant (inclusive of all FERC transmission plant accounts), please provide in a schedule in excel format: i) plant in service; ii) accumulated depreciation; iii) accumulated deferred income taxes; and net transmission plant in service (PIS – ADR – ADIT) on a total Company and on a Utah jurisdictional basis for each of the following periods:As included in the adjusted test year in the Company’s most recent rate case filing – Docket No. 13-035-184;As of December 31, 2016;As of the most recent date available;As projected for December 31, 2019;As projected for the month prior to the month the new transmission facilities at issue in this case are anticipated to be placed in service; andAs projected for the end of the month in which the new transmission facilities at issue in this case are anticipated to be placed in service.