20171102PAC to PIIC 4-15.pdf

RECEIVED
ROCKY MOUNTAINPOWER 2Oll NOV -2 PM 4:37
A DIVISION OF PACIFICORP
ID AHO PUBLIC 1407 W North Temple,Suite 330
UT ILITIES COMMISSION Salt Lake City,Utah 84116
November 2,2017
Ronald L.Williams,ISB No.3034
802 W.Bannock Street,Suite 900
Boise,ID 83702
[e-mail](C)
RE:ID PAC-E-17-07
PIIC 2nd Set Data Request (4-15)
Please find enclosed Rocky Mountain Power's Responsesto PIIC 2nd Set Data Requests 4-15.
Provided on the enclosed CD are Confidential Response PIIC 15 and Confidential Attachments
PIIC 6-1,6-3,7 and 13.
Confidential information is provided subject to the terms and conditions of the protective
agreement in this proceeding.
If you have any questions,please feel free to call me at [phone].
Sincerely,
J.Ted Weston
Manager,Regulation
Enclosures
C.c.:Brad Mullins/PIIC [e-mail] (C)
Jim Duke/PIIC jduke idahoan.com (W)
Kyle Williams/PIIC [e-mail] (W)
Val Steiner/[e-mail] (W)
Brian C.Collins/Brubaker&Associates [e-mail] (C)(W)
James R.Smith/Monsanto [e-mail] (C)(W)
Maurice Brubaker/Monsanto mbrubaker consultbai.com (C)(W)
Katie Iverson/[e-mail] (C)
Eric Olsen/IIPA [e-mail] (C)
AnthonyYankel/IIPA [e-mail](C)
Randall C.Budge/Monsanto [e-mail] (C)
Thomas J.Budge/Monsanto [e-mail] (C)(W)
Diane Hanian/[e-mail] (C)
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2nd Set Data Request 4
PIlC Data Request 4
Please provide permission for Mr.Mullins to use confidential information that the
Company has provided in Oregon Docket No.LC 67,or in the alternative,please
provide copies of all data requests and work papers provided to Mr.Mullins in
Oregon Docket No.LC 67.
Response to PIIC Data Request 4
The Company objects to this request on the basis that it is not reasonably
calculated to lead to the discovery of admissible evidence.Without waiving this
objection,the Company responds as follows:
Please refer to the Company s response to IPUC Data Request 2.
Recordholder:Kaley McNay
Sponsor:Not applicable
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PllC 2nd Set Data Request 5
PIIC Data Request 5
Please provide copies of each official forward price curve that the Company has
issued since December 31,2016,including the official forward price curve issued
on,or around,September 30,2017.
Response to PIIC Data Request 5
Please refer to Attachment PllC 5,which provides the Company's official
forward price curves (OFPC)issued:
March 31,2017
April 26,2017
June 23,2017 (an abbreviated OFPC produced for the Oregon 2017 July
Update Transition Adjustment Mechanism (TAM))
June 30,2017
September 29,2017
Recordholder:Connie Clonch
Sponsor:Rick Link
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2nd Set Data Request 6
PIIC Data Request 6
Reference the Company's October 2,2017 Q2 Avoided Cost Compliance filing in
Docket No.17-035-37 before the Utah Public Service Commission:
(a)Please provide copies of the GRID model studies used to develop the
reference filing.
(b)Please provide fully functional net power cost templates,with all macros and
links intact,that were used to calculate avoided costs in the referenced filing.
(c)Please provide the Demand,Energy Charge,Fuel Price,Delivery Point,and
Market Capacity GRID work papers files,in Excel format,with all formulas
and links retained.
(d)Please provide the Partial Displacement,Wind,and Wind Shaping work
papers relied upon in the referenced filing.
Response to PIIC Data Request 6
The Company objects to this request on the basis that it is not reasonably
calculated to lead to the discovery of admissible evidence.Without waiving this
objection,the Company responds as follows:
In Docket No.17-035-37,the Company's 2017.Q2 Avoided Cost Input Changes
Quarterly Compliance Filing for Schedule 38,submitted to the Public Service
Commission of Utah on October 2,2017:
(a)The Company is in the process of providing Bradley Mullins of MW
Analytics,(consultant to the PacifiCorp Idaho Industrial Customers (PIIC))
access to the Generation and Regulation Initiative Decision Tool (GRID)via
the internet and access to the GRID project(s)/scenario(s)supporting the
above-referenced studies.
Access to GRID and its inputs are provided subject to the terms and
conditions of the protective agreement in this proceeding and may only be
disclosed to qualified persons as defined in that agreement.
(b)Please refer to Confidential Attachment PIIC 6-1 and Attachment PIIC 6-2.
(c)Please refer to Confidential Attachment PIIC 6-3.
(d)Please refer to Confidential Attachment PIIC 6-3.
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2""Set Data Request 6
Confidential information is provided subject to the nondisclosure agreements in
place in this docket.
Recordholder:Dan MacNeil
Sponsor:Rick Link
PAC-E-17-07/Rocky Mountain Power
November 2,2017
PIIC 2nd Set Data Request 7
PIIC Data Request 7
With respect to the official forward price curve issued on,or around,
September 30,2017,please provide the following:
(a)The hourly market price file input into the GRID model,including 30 years of
prices.
(b)Updated Fuel Price GRID work paper,including 30 years of prices.
(c)Updated Energy Charge work paper,as used in the partial displacement
deferred revenue requirement model,with Front Office Transactions and other
contracts based on the reference price curve.
(d)The GRID Market Price work paper based on the referenced curve.
(e)Any other GRID work papers relied upon for calculating avoided costs that
are sensitive to the forward price curve.
Response to PIIC Data Request 7
The Company objects to this request on the basis that it is not reasonably
calculated to lead to the discovery of admissible evidence and requiring
development of a special study or information not maintained in the ordinary
course of business.Without waiving these objections,the Company responds as
follows:
Referring to Docket No.17-035-37,the Company's 2017.Q2 Avoided Cost Input
Changes Quarterly Compliance Filing for Schedule 38,submitted to the Public
Service Commission of Utah (UPSC)on October 2,2017,then updated to reflect
the September 29,2017 official forward price curve (1709 OFPC):
(a)The Company is in the process of providing Bradley Mullins of MW
Analytics,(consultant to the PacifiCorp Idaho Industrial Customers (PIIC))
access to the Generation and Regulation Initiative Decision Tool (GRID)via
the internet and access to the GRID project(s)/scenario(s)supporting the
above-referenced studies.
Access to GRID and its inputs are provided subject to the terms and
conditions of the protective agreement in this proceeding and may only be
disclosed to qualified persons as defined in that agreement.
(b)Please refer to the Company's response to PIIC Data Request 6,specifically
Confidential Attachment PIIC 6-3.
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2nd Set Data Request 7
(c)Other than the GRID project for which access has been provided as noted in
subpart (a)above,the Company has not prepared the requested supporting
work papers.
(d)Please refer to the Company's response to subpart (c)above.
(e)Please refer to Confidential Attachment PIIC 7.
(f)The Company has not prepared any subsequent analysis.
(g)Please refer to the Company's 2017.Q2 Avoided Cost Input Changes
Quarterly Compliance Filing for Schedule 38,submitted to the UPSC on
October 2,2017 (Docket No.17-035-37).The filing can be accessed by
utilizingthe following website link:
https://psc.utah.gov/2017/06/22/docket-no-l7-035-37/
The only change between the October 2,2017 submittal to UPSC (and the
subject of PIIC Data Request 6)and to the scenario provided in this response
(PIIC Data Request 7)is the update to the 1709 OFPC.
Confidential information is provided subject to the nondisclosure agreement in
place in this docket.
Recordholder:Dan MacNeil
Sponsor:Rick Link
PAC-E-17-07/Rocky Mountain Power
November 2.2017
PIIC 2""Set Data Request 8
PHC Data Request 8
If not reflected in the Company's Q2 Avoided Cost Compliance filing,please
provide the GRID Retail Load file,in .csv format,corresponding to the most
recent load forecast that Company has completed,including 30 years of load data.
Response to PUC Data Request 8
The Company objects to this request on the basis that it is not reasonably
calculated to lead to the discovery of admissible evidence.Without waiving this
objection,the Company responds as follows:
The Company's 2017.Q2 Avoided Cost Input Changes Quarterly Compliance
Filing for Schedule 38 (Docket No.17-035-37),filed with the Public Service
Commission of Utah on October 2,2017,included the Company's most recent
load forecast.
Recordholder:Dan MacNeil
Sponsor:Rick Link
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2nd Set Data Request 9
PIIC Data Request 9
Please provide the Company's best estimate of the impact of updating its analysis
regarding the economics of its propose projects to be based on the September 30,
2017 official forward price curve,and provide work papers supporting the
Company's estimate.
Response to PIIC Data Request 9
The Company objects to this request on the basis that it is vague,speculative,
requiring development of a special study or information not maintained in the
ordinary course of business,and not reasonably calculated to lead to the discovery
of admissible evidence.
PacifiCorp assumes the PacifiCorp Idaho Industrial Customers'(PIIC)reference
to "proposed projects"is to Energy Vision 2020 as defined in the Company's
2017 Integrated Resource Plan (IRP)-Energy Vision 2020 Update,filed with the
Idaho Public Utilities Commission (IPUC)on July 28,2017.Based on this
assumption,the Company responds as follows:
The Company has not produced an updated economic analysis of Energy Vision
2020 isolating the impact of updating to the September 2017 official forward
price curve (OFPC).The Company refreshed its economic analysis of its
proposed wind repowering project,one element of Energy Vision 2020,with
several modeling updates,including updated market price assumptions that are
based on the September 2017 OFPC.This analysis was prepared in support of the
Company's rebuttal testimony filed with the Public Service Commission of Utah
(UPSC)on October 19,2017,in Docket No.17-035-39.In this filing,the
updated economic analysis,which includes updated assumptions beyond the
OFPC (i.e.,cost-and-performance updates for repowered wind facilities)shows
that the present-value revenue requirement (PVRR)benefits of the wind
repowering project have increased from $359 million as reported in the July 28,
2017 Update (Table 3.2)to $471 million assuming medium natural gas prices and
medium carbon dioxide (CO2)prices through 2050.
The Company has not completed a similar update for its proposed new wind and
transmission projects,which are also elements of Energy Vision 2020.
Based on the relatively minor changes between the September 2017 OFPC and
the April 2017 OFPC,as shown in the figure below,the updated OFPC
assumptions would not materially alter the present value of revenue requirements
differential benefits of Energy Vision 2020.
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PllC 2nd Set Data Request 9
Nominal Henry Hub Natural Gas Prices ($/MMBtu)
58
$7
S6
$5
S4 a
$3
$2
---Med Gas (September OFPC)-41-Med Gas (April 2017 OFPC)
Recordholder:Dan Swan
Sponsor:Rick Link
PAC-E-17-07/Rocky Mountain Power
November2,2017
PIIC 2nd Set Data Request 10
PIIC Data Request 10
Reference the GRID studies provided to Mr.Mullins in response to ICNU Data
Request 10 in Oregon Docket No.LC 67:Please identify how the results of those
studies are incorporated into the economics of the Company's proposal as
developed using the IRP work papers.
Response to PIIC Data Request 10
The line loss,transmission system derate,and energy imbalance market (EIM)
transfer benefit adjustments identified in the Company's response to ICNU Data
Request 0010 (inserted below for other parties'reference)are incorporated into
the 2017 Integrated Resource Plan (IRP)results.These adjustments are made out
of the model and input into the "SO Model Summary Report"on tab "New FOM
Adjustments".Please refer to pages 220 and 221 of Volume I of the 2017 IRP,
Chapter 8 (Modeling Results).
The Company's 2017 IRP is publicly available and can be accessed by utilizing
the followingwebsite link:http://www.pacificorp.com/es/irp.html
For the economic analysis supporting the new wind and transmission projects
proposed in this proceeding,the line loss,transmission derate,and EIM transfer
benefits were incorporated into the System Optimizer model and the Planning and
Risk model.Please refer to the Direct Testimony of Company witness Mr.Rick T.
Link (pg.24 line 19 through pg.26 line 12).
ICNU Data Request 0010
Please provide ICNU consultant,Brad Mullins,with access to all Generation
and Regulation Initiative Decision Tools (GRID)model studies and analysis
that the Company has performed with respect to new wind resources in the
Company's 2017 Integrated Resource Plan,including:
(a)The GRID project files;
(b)The GRID model conversion wizard;
(c)Any GRID input files in Excel format;
(d)Any GRID model work papers,with the same level of detail as provided
in Transition Adjustment Mechanism filing;
(e)Any GRID model scenario files,fully intact,with all functioning macros;
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2"Set Data Request 10
(f)Any subsequent analysis performed using the GRID model scenarios;and
A narrative description of all the major GRID molding assumptions,using a
format similar to the quarterlyreport that the Company files in Utah,
documenting its avoided cost pricing methodology.
I
Recordholder:Dan MacNeil
Sponsor:Rick Link
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
RIIC 2""Set Data Request l 1
PIIC Data Request 11
Reference the incremental wholesale transmission volumes and revenues that the
Company has assumed in connection with completing the Aeolus to Bridger
transmission segment:
(a)Please identify the amount of the referenced incremental transmission
revenues assumed in the Company's analysis.
(b)Please provide work papers supporting the referenced incremental wholesale
transmission volumes and revenues.
(c)Please explain how the referenced transmission segment will allow the
Company to make more wholesale wheeling transactions.
(d)Does the Company have any existing requests for wholesale transmission
service that it is unable to fulüll in the absence of the referenced transmission
segment.If yes,please identify all such requests.
Response to PIIC Data Request 11
The Company objects to this data request on the basis that it is unduly vague to
the extent it fails to mention which document PacifiCorp Idaho Industrial
Customers (PIIC)is referencing in its statement in its first sentence,starting with
"the Company has assumed ...".The Company does not know whether Pf lC is
referencing the testimony in the current case or some other document.Without
waiving the objection,based on the assumption that Mr.Mullins copied this set of
data requests from those data requests he issued in the Oregon docket as a
representative of the Industrial Customers of Northwest Utilities (ICNU),
PacifiCorp assumes the PIIC reference to "wholesale transmission volumes and
revenues"is to the Company's discussion of transmission-revenue credits related
to the proposed Aeolus-to-Bridger/Anticline transmission line as discussed in the
Company's 2017 Integrated Resource Plan (IRP)--Energy Vision 2020 Update
filed with the Idaho Public Utilities Commission (IPUC)on July 28,2017 (pages
12-13).Based on this assumption,the Company responds as follows:
(a)Please refer to Attachment E to the 2017 IRP -Energy Vision 2020 Update,
specifically the rows "Incremental Transmission Revenue,"which are the
same for each price-policy scenario.
(b)Please refer to Attachment PIIC 0011,which provides the derivation of the
range of percentages that served as the basis for the Company assuming
transmission revenue credits tied to 12 percent of transmission revenue
requirement.The calculation of revenue credits based the 12 percent
assumption is provided in the confidential work papers supporting the 2017
PAC-E-17-07/Rocky Mountain Power
November 2,2017
PIIC 2nd Set Data Request 11
IRP -Energy Vision 2020 Update,specifically folder "Transmission
Projects",file "Energy Gateway GM 2017 03 13 w Bonus.xlsm",tab
"Gateway".
(c)The Company has not assumed the Aeolus-to-Bridger/Anticline line will
allow the Company to make more wholesale wheeling transactions nor does
the Company anticipate that the proposed line will increase wheeling
transactions.
(d)No.the Company does not have any pending third-party requests for
wholesale transmission service that rely on the new transmission segment.
There are,however,third-party requests for interconnection service that
cannot be accommodated without significant investments in the transmission
system,including the proposed Aeolus-to-Bridger/Anticline transmission line.
Recordholder:Shay LaBray /Randy Baker
Sponsor:Rick Vail
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2""Set Data Request 12
PHC Data Request 12
Reference the integrationcosts assumed with respect to the Company's new wind
proposal:
(a)Please identify the integration costs that the Company assumed in its analysis
on a $/MWh basis.
(b)Please provide work papers supporting the integrationcost assumptions used
in the Company's analysis.
(c)Please identify the $/MWh cost of inter-hour wind integration included in the
Company's July update in Docket UE 323,the 2018 Transition Adjustment
Mechanism Filing,before the Oregon Public UtilityCommission.
(d)Please identify the $/MWh cost of intra-hour wind integration included in the
Company's July update in Docket UE 323,the 2018 Transition Adjustment
Mechanism Filing,before the Oregon Public UtilityCommission.
Response to PHC Data Request 12
The Company objects to this request on the basis that it is vague to the extent it
fails to identify which document it references when it says "reference the
integrationcosts assumed with respect to the Company's new wind proposal."
Without waiving the objection and assuming Mr.Mullins copied this set of data
requests from the set that he issued on behalfof the Industrial Customers of
Northwest Utilities (ICNU)in the Oregon Integrated Resource Plan (IRP)docket
which are nearly identical to this set,the Company assumes Mr.Mullins is
referring to the integration costs assumed in the 2017 IRP and states as follows:
(a)The wind integration cost is $0.57 per megawatt-hour ($/MWh),as reported in
Volume II of PacifiCorp's 2017 IRP,Chapter F (Flexible Resource Study),
page 133,Table F.22 (2017 FRS Flexible Resource Costs as Compared to
2014 WIS Costs,$/MWh).
(b)Please refer to the public data disks that accompanied the 2017 JRP,
specifically:Data Disk l_PUBLIC\Chapters Appendix -Public.zip\Chapters
Appendix\Appendix F -Flexible Reserve Study\,file "2017 Flexible Reserve
Study Results.xlsx",which provide the supporting work papers.
(c)In Oregon Docket UE 323 (2018 Transition Adjustment Mechanism (TAM)),
the inter-hourwind integrationcost is $0.75/MWh,based on Volume II of
PacifiCorp's 2015 IRP,Chapter H (Wind Integration Study),page 100,Table
H.3 (Wind IntegrationCost,$/MWh),then adjusted for inflation rate.
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2""Set Data Request 12
(d)The Company is not able to explicitlycalculate intra-hour wind integration
cost.The Generation and Regulation Initiative Decision Tool (GRID)reflects
perfectly optimized costs for an hourly period assuming load net of wind and
solar generation remains unchanged at a single level for the whole hour.The
GRID result does not include these additional within-hour costs because it
does not include the within-hour variation in requirements or the constrained
set of resources available to accommodate those changes.
Recordholder:Dan Swan /Teresa Tang
Sponsor:Rick Link
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2nd Set Data Request 13
PIIC Data Request 13
Has the Company performed any analysis to quantify the potential impacts of tax
reform on the economics of its resource proposal?If yes,please provide all work
papers supporting its analysis.If no,please explain why the Company believes that it
is not necessary to consider such impacts.
Response to PIIC Data Request 13
The Company performed a tax-policy sensitivity that is summarized in the rebuttal
testimony of Company witness,Rick T.Link,in Utah Docket No.17-035-39.The
sensitivity study assumes the current federal tax corporate income tax rate is reduced
from 35 percent to 25 percent.Assuming a marginal state income tax rate of
4.54 percent less a federal deductibility benefit of 1.135 percent,the assumed net state
tax rate is 3.405 percent.Based on these inputs,the effective combined federal and
state income tax rate assumed for this sensitivity is 28.405 percent.
The table below summarizes the results of the sensitivity relative to an updated
benchmark case,which reflects updated transmission,load forecast,price curve,and
cost-and-performance assumptions.To assess the potential impact of a change in the
federal corporate tax rate,the present-value revenue requirement differential
(PVRR(d))results were calculated through 2036 based on the System Optimizer
model (SO model)and the Planning and Risk (PaR)model results.The sensitivity
results reflect updated medium natural gas and medium carbon dioxide (CO2)price-
policy assumptions.
Tax Policy Sensitivity
(Benefit)/Cost of Wind Repowering ($million)
BenchmarkModelSensitivityPVRR(d)PVRR(d)Change in PVRR(d)
SO Model (545)($138)$93
PaR Stochastic Mean ($23)($1 15)$93
PaR Risk Adjusted ($24)($121)$97
Although the overall benefit of the wind repowering project is reduced by between
$93 million to $97 million.the wind repowering project still produces net economic
benefits for customers.
Please refer to Confidential Attachment PIIC 13,which provides the SO and PaR
study results related to this sensitivity.
Confidential information is provided subject to the protective agreement in this
proceeding.
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2""Set Data Request 13
Recordholder:Dan Swan
Sponsor:Rick Link
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2nd Set Data Request 14
PIIC Data Request 14
Please identify the amount of incremental operations and maintenance expense
that the Company has assumed with respect to the new transmission segment,and
provide work papers supporting the assumed amounts.
Response to PIIC Data Request 14
The Company assumes incremental operations and maintenance (O&M)expense
for the Aeolus-to-Bridger/Anticline transmission line of $1 million per year in
2017 dollars.The Company does not have supporting work papers as this estimate
is based on management judgment.Maintenance activities include:
Line safety inspections
Line detail inspections
Corrective line maintenance
Tower inspections
Substation inspections
Substation equipment maintenance:relay testing,breaker inspections
Corrective substation maintenance
Recordholder:Mark Paul
Sponsor:Rick Link
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
PIIC 2nd Set Data Request 15
PIIC Data Request 15
Reference the capital cost of the proposed Aeolus to Bridger transmission segment:
(a)Please identify the total amount of capital cost that the Company has assumed
with respect to the referenced transmission segment.
(b)Please provide an explanation of how the Company derived its capital cost
estimate.
(c)Please provide work papers supporting its capital cost estimate,including
itemization of each identified component of the estimated capital costs.
(d)Please identify any contingency that the Company has included in its estimate.
(e)Please identify any risks that the Company has considered which might cause the
actual capital costs associated with building the referenced transmission segment
to exceed the estimates the Company used in its analysis.
Confidential Response to PIIC Data Request 15
(a)ofr
500/345 kilovolt (kV)transmission line.
(b)The Company developed the estimate using quantity models from the preliminary
transmission-line design with historical unit pricing from previous projects
(adjusted for inflation as necessary).Substation estimates were derived from
models of substation components and equipment based on conceptual one-line
diagrams.Construction costs were estimated using historical unit prices and
major equipment prices were evaluated by requesting budgetary quotes from
manufacturers.
(c)The cost studies for the project contain commercially sensitive information and
are considered highly conndential.The Company requests special handling.
Public disclosure of this information before completion of the competitive bidding
process in 2018 could negatively impact the responses from bidders with potential
for the company to not secure the most cost-efficient proposal.Please contact Ted
Weston at [phone] to make arrangements for review.
(d)The Company has presented the transmission cost estimate with a plus or minus
15 percent accuracy given the early nature of the estimate and pending
fmalization of the scope and approach.The estimate values used historical pricing
from previous projects (adjusted for inflation as necessary),and the historical
pricing units were from engineer,procure and construct (EPC)contracts and
PAC-E-17-07/Rocky Mountain Power
November 2,2017
PIIC 2nd Set Data Request 15
contained contractor contingencies representing such risks as soils,production
rates,weather,environmental constraints.In addition,the Company prepared a
risk evaluation to determine potential cost and schedule risks;the values
determined from this process identified that the risk profile was within the overall
accuracy of the project cost estimate.
(e)The risk/uncertainty assessments correlate closely to the cost study data and
therefore could also impact the competitive bidding process if made public at this
time.The Company considers this information commercially sensitive and highly
confidential.The Company requests special handling.Please contact Ted
Weston at [phone] to make arrangements for review.
Confidential information is provided subject to the terms of the protective agreement
in this proceeding.
Recordholder:Todd Jensen
Sponsor:Rick Vail