20171102PAC to Staff 57-58.pdf

RECEIVED
ROCKY MOUNTAINPOWER 2011NOV -2 PM12:I5
A DIVISION OF PAC1FICORP 1407 W North Temple,Suite 330
IDAHO PUBLIC Salt Lake City,Utah 84116
UTILITtES COMMISSION
November 2,20 17
Diane Hanian
Idaho Public Utilities Commission
472 W.Washington
Boise,ID 83702-5918
[e-mail](C)
RE:ID PAC-E-17-07
IPUC 46 Set Data Request (57-58)
Please find enclosed Rocky Mountain Power's Responsesto IPUC 4th Set Data Requests 57-58.
If you have any questions,please feel free to call me at [phone].
Sincerely,
J.Ted Weston
Manager,Regulation
Enclosures
C.c.:Ronald L.Williams/PIIC [e-mail](C)
Brad Mullins/PIIC [e-mail] (C)
Jim Duke/PIIC [e-mail] (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 [e-mail] (C)(W)
Katie Iverson/[e-mail] (C)
Eric Olsen/IIPA [e-mail] (C)
Anthony Yankel/IIPA [e-mail](C)
Randall C.Budge/Monsanto [e-mail] (C)
Thomas J.Budge/Monsanto [e-mail] (C)(W)
PAC-E-17-07 /Rocky Mountain Power
November2,2017
lPUC 4"'Set Data Request 57
IPUC Data Request 57
Please explainwhy the Company's models (System Optimizer and PaR)included
the 300 MW of Wyoming wind in year 2021 in the Company's baseline scenario
used for comparison of the Company's proposal to calculate the NPVRR(d).
Please provide the specific driver(s)for including it into the baseline.For
example,was it included to meet capacity deficits,RPS requirements in other
states,etc.Please provide documentation,work papers,and/or model outputs that
illustrates the Company's explanation.
Response to IPUC Data Request 57
The System Optimizer model (SO model)includes a broad range of expansion
resources,including proxy wind resources,that can be used to meet capacity
requirements including a 13-percent planning reserve margin (PRM)and energy
requirements serving all customer loads.that minimize the present value of
revenue requirements (PVRR).The SO model produces a portfolio that
simultaneously optimizes all of these factors over the entire study period,in this
case from 2017 through 2036.The 300 megawatts (MW)of Wyoming wind in
2021 was selected as a least-cost option by the SO model,recognizing it is
eligible for 100 percent of production tax credits (PTC)by being placed in service
by December 31,2020.Each Planning and Risk (PaR)study inherits its portfolio
from the corresponding SO portfolio.
The Wyoming proxy wind resource was not selected to meet state-specific policy
objectives,such as requirements to meet renewable portfolio standards (RPS).No
state-specific RPS constraints were included in the study.The 300 MW wind
resource in 2021 provides capacity through the end of the study term.The
selection of the resource indicates that it was a lower-cost option for meeting both
peak load requirements and energy requirements over that entire time frame
relative to other alternatives.For instance,had the resource been added in 2022,
the effective cost would be higher as it would not have been eligible for 100
percent PTCs.Since the model chose to add wind at the last possible time that
maintained 100 percent PTC eligibility,it indicates that the value of the PTCs,
along with the capacity and energy benefits the resource provided,outweighed the
additional cost of acquiring it earlier than resources that would have been needed
solely from a capacity standpoint.Because available front-office transactions
(FOT)are sufficient to meet the Company's capacity requirements in the early
years of the study,the capacity benefits of this resource are small during the first
several years after being placed in service.
The above explanation applies to all studies,including the baseline study (SENS-
RPN-EEN-MM).
PAC-E-l7-07 /Rocky Mountain Power
November 2,2017
IPUC 40'Set Data Request 57
Recordholder:Dan Swan /Randy Baker
Sponsor:Rick Link
PAC-E-17-07/Rocky Mountain Power
November 2,2017
IPUC 4*Set Data Request 58
IPUC Data Request 58
Please explain why the Company did NOT use the 320 MW of PURPA wind
referenced in Rick Links direct testimony (page 21)instead of the 300 MW of
Wyoming wind in year 2021 in the Company's baseline scenario used for
comparison of the Company's proposal to calculate the NPVRR(d).Between the
320 MW of PURPA wind,and the 300 MW of Wyoming wind discussed above,
which would have priority?If the 320 MW of PURPA wind has priority and was
used in the baseline instead of the 300 MW of Wyoming wind,please estimate the
change to the NPVRR(d)for the medium natural gas,medium CO2 case.Please
provide documentation,work papers,and/or model outputs that illustrates the
Company's explanation.
Response to IPUC Data Request 58
In cases without any Energy Gateway transmission,Wyoming wind resources
behind the TOT 4A cut-plane were limited to 300 megawatts (MW).This limit
was based on a review of interconnection studies for wind projects in the
interconnection queue,which indicated that approximately240 MW of new wind
could be interconnected.These studies indicate that once approximately240 MW
of generation is interconnected behind the TOT 4A cutplane,no further
interconnections are possible.Any additionalprojects would be lower in the
interconnection queue and require incremental transmission investment.For
planningpurposes,the Company used 300 MW as a simplifying assumption.
This distinction is also made in the 2017 Integrated Resource Plan (IRP).Please
refer to Volume I of PacifiCorp's 2017 IRP,Chapter 4 (Transmission Planning),
page 62.
The 300 MW of Wyoming proxy wind resource in the 2017 IRP is a proxy in that
it can ultimately represent any combination of power purchase agreements,new
resources or resource purchases not to exceed 300 MW.As the 300 MW
simplifying assumption already assumes the maximum possible interconnection
(even above the assessed 240 MW approximate interconnection limit),the
320 MW capacity ascribed to the Boswell Springs qualifying facility (QF)
projects would be considered outside the realm of possibility,and is therefore
only included in the cases that also include the Transmission Projects.This QF
resource is included as a proxy,just like the proxy benchmark resources,
representing the potential cost and performance assumptions for wind resources
that could come out of the 2017 Renewable Request for Proposals (2017R RFP).
The project cannot be interconnected without additional investment in the
transmission system,and therefore cannot be included in the simulation without
new transmission.Ultimately,the winning bids from the 2017R RFP will be used
in the Company's updated economic analysis,which will be filed in mid-January
2018.
PAC-E-17-07 /Rocky Mountain Power
November 2,2017
IPUC 4"'Set Data Request 58
Recordholder:Dan Swan /Randy Baker
Sponsor:Rick Link