20171109PAC to Staff 3rd Suppl UT-40 OCS 8 1-17.pdf

1407 W.North Temple
ROCKY MOUNTAIN Salt Lake City,UT 84116POWER
ADIVISION OFPACFFICORP
October 20,2017
Béla Vastag
Office of Consumer Services
160 East 300 South
Salt Lake City,Utah 84111
bvashtg@utahgoy (C)
RE:UT Docket No.17-035-40
OCS 8th Set Data Request (1-17)
Please find enclosed Rocky Mountain Power's Responses to OCS 8th Set Data Requests 8.1-
8.17.Also provided are Attachment OCS 8.1-1 and 8.7.Provided on the enclosed Confidential
CD are Confidential Responses OCS 8.1,8.12,and 8.15 and Confidential Attachments OCS
8.1-2,8.2,and 8.5.Confidential information is provided subject to Public Service Commission
of Utah (UPSC)Rule 746-1-602 and 746-1-603.
If you have any questions,please call me at [phone].
Sincerely,
Jana Saba
Manager,Regulation
Enclosures
C.c.Erika Tedder/DPU [e-mail](C)
Dan Kohler/DPU (C)
Dan Peaco/DPU doeaco daymarkea.com (C)(W)
Aliea Afnan/DPU (W)
Philip Hayet/OCS [e-mail] (C)
Gary A.Dodge/UAE [e-mail] (C)
Kevin Higgins/UAE (C)
Neal Townsend/UAE ntownsend energystrat.com (C)(W)
Sophie Hays/UCE (C)
Kate Bowman/UCE gh¾(C)(W)
Emma Rieves/UCE [e-mail](C)(W)
Lisa Tormoen Hickey/[e-mail] (C)
Mitch Longson/Interwest [e-mail] (C)
Nancy Kelly/[e-mail](C)
Jennifer Gardner/WRA ces._org (C)
Penny Anderson/WRA penny.anderson@westernresources org (W)
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.1
OCS Data Request 8.1
The Company has stated that 1,270 MW is the amount of new wind resource capacity
enabled by the Aeolus to Bridger/Anticlineline.Please provide an explanation how
specifically the Company determined that exactly 1,270 MW was amount that could be
enabled by the new transmission line,and if any power flow studies or any other studies
were used to determine that,please provide such studies.
Response to OCS Data Request 8.1
A study was performed that added the Energy Gateway D.2 transmission projects to the
existing system,then evaluated the addition of new wind resources in various locations in
eastern/northeastern Wyoming.Under one of these scenarios,it was identified that up to
1,270 megawatts (MW)of new wind could be added to the system.
The power flow files are considered highly confidential and commercially sensitive.The
Company requests special handling.Please contact Jana Saba at [phone] to make
arrangements for review.
Please refer to Attachment OCS 8.1-1 and Confidential Attachment OCS 8.1-2,which
provide the requested study report and supporting documentation.
Confidential information is provided subject to Public Service Commission of Utah
(UPSC)Rule 746-1-602 and 746-1-603.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.2
OCS Data Request 8.2
In response to OCS 1-35,the Company provided an analysis of the historical outages on
the 230-kV system.As part of the analysis,the Company provided a set of assumptions.
Please provide the Study referred in Assumption 1 in the Reliability Benefits tab.Also,
please provide a detailed explanation why some rows in the Reliability Impacts Table had
System Impacts and GenerationImpacts and some rows only had System Impacts.
Response to OCS Data Request 8.2
Please refer to Confidential Attachment OCS 8.2.
The "System Impact Derate"column indicates the corresponding derate to the TOT 4A
transmission path,in megawatts (MW),related to a particular line outage.The
Generation Impact column indicates the amount of generationcurtailment,in MW,that
may be necessary as a result of each particular line outage.As indicated,some line
outages required both a path derate and generationcurtailment,whereas other outages
result only in a path derate.If no generationcurtailment is required as a result of the line
outage,the cell under the Generation Impact column was left blank.
Confidential information is provided subject to Public Service Commission of Utah
(UPSC)Rule 746-1-602 and 746-1-603.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.3
OCS Data Request 8.3
In response to DPU 6.5,the Company provided the Boswell Springs wind project signed
interconnection agreements (non-confidential).Appendix B states there is "the
requirement that the Transmission Provider's Energy Gateway South and Aeolus to
Populus portion of Gateway West projects come into service as currentlyplanned in
2024.Interconnecting the Project before the Energy Gateway projects are in service
would create system emergency conditions.Thus,the Project will require the Energy
Gateway projects to be in-service in order to maintain system reliability."
(a)Why was this QF told in 2012 that it could not interconnect without both the Aeolus
to Populus portion of Gateway West,and Gateway South being in-service,given that
the Company's position now is that only the Aeolus to Bridger/Anticline segment is
necessary in order to interconnect Boswell Springs?If any studies were performed
that led to this change in position,please provide such studies.
(b)Has Boswell Springs signed any other agreements beside those provided in response
to DPU 6.5?If not,what is the basis for the Company's assumption that Boswell
Springs would be able to construct 320 MW of wind capacity by the end of 2020,as
the Company assumed in its economic evaluation?If any other documentation exists
from or to Boswell Springs,please supply all documents.
Response to OCS Data Request 8.3
The Company objects to this request as misstating the Company's position.Without
waiving this objection,the Company responds as follows:
Boswell Springs I,LLC (80 megawatts (MW)),Boswell Springs II,LLC (80 MW),
Boswell Springs III,LLC (80 MW),and Boswell Springs IV,LLC (80 MW)are
collectivelyreferred to in this response as "Boswell Springs I-IV."
(a)The Company has not changed its position on what is required to interconnect Boswell
Springs I-IV.No additional studies have been issued after the Boswell Springs
interconnection agreements were executed.The Company's economic analysis in this
docket used Boswell Springs I-IV as one of the proxies for the wind resources that will
ultimatelybe selected through the 2017Renewable Request for Proposals (2017R
RFP).
(b)Boswell Springs I-IV have not signed any other agreements besides those provided
with the Company's responses to DPU Data Request 6.5 and OCS Data Request 1.34.
Please refer to the Company's response to subpart (a)above.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.4
OCS Data Request 8.4
In response to DPU 6.5c,the Company states that it is aware that there are four 80 MW
wind sites in Carbon County,Wyoming.
(a)What is the name of these projects,and what are their Interconnection Queue
identification numbers?
(b)Does the Company have any information about the status of these projects at this
time?If so,please explain the status.
Response to OCS Data Request 8.4
(a)The four projects referred to in the Company's response to DPU Data Request 6.5
subpart (c)are Boswell Springs I,LLC (80 megawatts (MW)),Boswell Springs II,
LLC (80 MW),Boswell Springs III,LLC (80 MW),and Boswell Springs IV,LLC
(80 MW).The interconnection queue numbers are as follows:
Boswell Springs I,LLC -Q409-A
Boswell Springs II,LLC -Q409-B
Boswell Springs III,LLC -Q409-C
Boswell Springs IV,LLC -Q409-D
(b)The Company does not have any additional information about the status of the
described wind projects.The Company executed power purchase agreements (PPA)
with the four qualifyingfacilities (QF),which have been filed in WyomingPublic
Service Commission Docket 20000-515-EK-17.After acceptance of the PPAs by the
Wyoming commission,the QFs will provide monthlyupdates to the Company.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.5
OCS Data Request 8.5
Refer to the Company's responses to OCS 1.9 and 1.10:
(a)In those responses,the Company stated that updates to the Interconnection Facilities
Study Reports for Ekola Flats and TB Flats are anticipated to be available by mid-
September 2017.Please supply these updates if they are available,or supply them
when they become available,and state when they are expected to be available.
(b)What is the Company's basis for stating that it is confident that any schedule
inconsistencies could be resolved if the Ekola Flats project were to emerge as the best
choice for customers?Please supply any documentation between the Company and
Ekola Flats and TB Flat that addresses this issue.
Confidential Response to OCS Data Request 8.5
(a)In the response to OCS 1.9 and 1.10,the Company mistakenly stated that revised
interconnection facility study reports would be issued for
The system impacts of the proposed
projects needed to be re-studied before the revised interconnection facilities reports
could be developed.The revised system impact study reports were completed in
The
interconnection facilities study reports for the
Please refer to Confidential Attachment OCS 8.5,which provides copies of the
revised system impact reports.
(b)The statement regarding resolution of scheduling inconsistencies was based on the
Company's expectation that the completion of the planned Energy Gateway Segment
D.2 will enable the interconnection of the wind projects chosen in the Company's
2017R Request for Proposals.
Confidential information is provided subject to Public Service Commission of Utah
(UPSC)Rule 746-1-602 and 746-1-603.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.6
OCS Data Request 8.6
Why did the Company choose the TB Flats,Ekola Flats and McFadden Ridge II projects
as the benchmark projects,and not the Boswell Springs projects?
Response to OCS Data Request 8.6
The Boswell Springs projects are qualifying facilities (QF)projects under Public Utility
Regulatory Policies Act of 1978 (PURPA),and the project developer was not interested
in entertaining alternative commercial arrangements at the time the Company was
identifyingpotential benchmark projects.The Boswell Springs projects,however,are
eligible to submit competitive market proposals into the 2017 Renewable Request for
Proposals.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.7
OCS Data Request 8.7
Refer to the Company's response to OCS 1.22b:
(a)Please provide a copy of the Tot 4A transmission path rating study that was
completed April 17,2013.
(b)What is the difference between Phase 1,Phase 2 and Phase 3 Status?
Response to OCS Data Request 8.7
(a)Please refer to Attachment OCS 8.7,which provides all requested study reports and
communications with the Western Electricity Coordinating Council (WECC)relative
to the TOT 4 transmission path being granted Phase 3 on April 17,2013.
(b)The WECC path rating process is outlined in the Project Coordination,Path Rating
and Progress Report Processes document,dated October 15,2015,which is included
in Attachment OCS 8.7.Please refer to Section 4 -"Path Rating Process"of this
document for a summary of Phase 1,Phase 2 and Phase 3 of the process.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.8
OCS Data Request 8.8
Please explain the difference between the available transmission capacity of 888 MW for
TOT 4A (Path 37)identified in the Company's response to OCS 1.22,and the path rating
identified on page 7 of the Company's November 24,2010 WECC Phase 2 Path Rating
Report for Aeolus West of 2,672 MW (response to OCS 1-19).
Response to OCS Data Request 8.8
In the Company's response to OCS Data Request 1.22,the 888 megawatt (MW)value
identified in the "TOT 4A TTC-ATC 2012-2017"table for the TOT 4A (Path 37)path is
the Effective Total Transfer Capability (Effective TTC)for the path.For a given path,the
Effective TTC is equal to the Total Transfer Capability (TTC)minus the Transmission
Reliability Margin (TRM)value.In the November 24,2010,Western Electricity
Coordinating Council (WECC)Phase 2 Path Rating Report,the table on the top of page 7
indicates a value of 2,672 MW for the "Path Rating Achieved in this study."This path
rating value is the TTC for the Aeolus West path.Because the Aeolus West path is not
currentlyan active transmission path,no TRM value has been determined for the path.
The TTC for the Aeolus West path is significantlyhigher than the TTC for the TOT 4A
path due to the Energy Gateway facilities that have been added to the transmission
system.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.9
OCS Data Request 8.9
Refer to the response to OCS 1.24.It appears that voltage oscillations occur when a
contingency occurs (loss of Dave Johnston -Difficulty 230 kV line),and in order to
operate reliably,the Company curtails generationin Eastern Wyoming.
(a)Why couldn't the Company add additional wind in Eastern Wyoming,and simply
curtail more generationin Eastern Wyoming when contingencies occur?
(b)If the answer to part a above,is that 1,270 MW is simply too much capacity to add
and rely on a curtailment scheme in order to operate reliably,then precisely how
much incremental wind capacity could be added to what exists right now,and still be
able to rely on the curtailment scheme in order to operate reliably.
Response to OCS Data Request 8.9
(a)PacifiCorp,as a transmission planner,must meet the North American Electric
Reliability Corporation (NERC)and Western ElectricityCoordinating Council
(WECC)reliability criteria.Additionally,best engineering practices must be applied
when planning a complex transmission system.At this time,without addition of the
Energy Vision 2020 transmission facilities,system stiffness factor (short circuit ratio)
prevents interconnection of any additional wind resources (or any type of resources)
in southeastern Wyoming.
Generator tripping Remedial Action Schemes related to the Energy Vision 2020 plan
of service contemplate tripping up to 640 megawatts (MW)of generationfor various
N-1 contingencies to integrate up to 1,270 MW of additional wind resources in
Wyoming east of Bridger/Anticline.While well-studied Remedial Action Schemes
are one transmission planning tool,the safe,reliable operation of the Bulk Electric
System (BES)is paramount.Reliance on excessive generator tripping/curtailmentor
operator intervention is not viewed as prudent transmission planning for the BES.
(b)Zero (0)MW.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.10
OCS Data Request 8.10
Refer to Table 1 supplied as part of the Company's response to OCS 7.6.For each Case
identified going down the page,and for each renewable resource alternative going across
the page,provide a table by year indicating the annual restrictions for each renewable
resource type that were included as modeling inputs that were placed on allowing the
System Optimizer model to select those renewable resource alternatives to be added to
the Case expansionplans.Some optimization models refer to these constraints as tunnel
constraints.For example,a constraint could be no more than X number of a specific
renewable resource alternative type could be added to the expansion plan in a given year.
Or,no more than Y MWs of a specific renewable resource alternative type could be
added in a given year.If the same constraints applied to the different cases,then only
one table is necessary.However,if different constraints were modeled in different cases,
please provide separate tables for each case.Also,provide explanations of why the
constraints were modeled,and if the constraints changed on an annual basis please
explain why the Company chose to change the constraints from one year to the next.
Finally,if different constraints were modeled in different cases for the renewable
resource alternatives,then provide an explanation of why the Case warranted including
different constraints.
Response to OCS Data Request 8.10
Please refer to the table below,which provides the total renewable build limits or
constraints in the System Optimizer model (SO model)for 2017 through 2036.There are
no specific renewables annual limits by year.The table represents the base case
assumptions.For studies OP-GW4 and GW-4,the Wyoming renewable limit was
increased to 1,200 megawatts (MW)in 2021,and 1,100 MW for studies FS-GW4
(Preferred Portfolio)Battery and CAES to recognize the addition of Energy Gateway
transmission specific to those studies.
Renewable (MW)2019-2020 2020-2021 2022 and after
Wyoming Wind 0 300 300
Idaho Wind 0 150 805
Washington Wind 0 0 600
Oregon Wind 0 460 1,000
Utah Wind 0 0 500
Oregon Solar 405 405 405
Utah Solar 805 805 805
Washington Solar 655 655 655
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.11
OCS Data Request 8.11
Refer to the Confidential response to OCS 1.60 and to Section 4.02 of IRS Notice 2013-
29 that defines Physical Work of a Significant Nature.Related to the approximate 300+
MW of turbine equipment purchased by the Company from GE to meet the 5%safe
harbor requirements,please indicate whether the Company believes the equipment
purchased would qualify for the Physical Work test.In other words,was the equipment
purchased out of the vendor's inventoryor was it manufactured subsequent to a binding
written contract?Please explain why or why not.
Response to OCS Data Request 8.11
To clarify,the Company did not purchase "300+MW of turbine equipment"to meet the
five-percent safe-harbor requirement.As described in the Company's response to OCS
Data Request 1.60,the Company timely purchased and took possession of 32.2
megawatts (MW)of equipment to qualify new wind projects of up to approximately 300
MW to 320 MW under the five-percent safe-harbor method under Section 5.01 of the
Internal Revenue Service (IRS)Notice 2013-29.
The Company is not relying upon Section 4.02 of IRS Notice 2013-29,Physical Work of
a Significant Nature,to qualify the projects as beginning construction before January 1,
2017.Section 3 of the Notice provides that although a taxpayer may satisfy both the
safe-harbor and physical-work-of-a-significant-nature methods,a taxpayer need only
satisfy one method to establish that construction of the facility has begun.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.12
OCS Data Request 8.12
Confidential Request -Refer to the confidential response to OCS 1.60 and to Section
4.02 of IRS Notice 2013-29 that defines Physical Work of a Significant Nature.Related
to the approximate 500 MW of turbine equipmentreported to have been procured by the
outside developer,
to meet the 5%safe harbor requirements,please indicate whether the Company
believes the equipment procured would qualify for the Physical Work test.In other
words,was the equipment procured out of the vendor's inventoryor was it manufactured
subsequent to a binding written contract?Please explain why or why not.
Confidential Response to OCS Data Request 8.12
The Company objects to this request as not reasonably calculated to lead to the discovery
of admissible evidence and as requiring information outside of the Company's custody,
control or possession.Without waiving these objections,the Company responds as
follows:
Confidential information is provided subject to Public Service Commission of Utah
(UPSC)Rule 746-1-602 and 746-1-603.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.13
OCS Data Request 8.13
Refer to the Confidential response to OCS 1.60 and to Section 4.02 of IRS Notice 2013-
29 that defines Physical Work of a Significant Nature.Related to the approximate 300+
MW of potential QFs,or other,supplied turbine equipment,please indicate whether the
Company believes the related equipment would qualify for the Physical Work test.In
other words,was the equipment procured out of the vendor's inventoryor was it
manufactured subsequent to a binding written contract?Please explain why or why not.
Response to OCS Data Request 8.13
The Company objects to this request as vague,ambiguous,and requesting information
that is outside of the Company's custody,possession,or control.Without waiving these
objections,the Company responds as follows.
The Company does not have sufficient information about "300+MW of potential QFs,or
other,supplied turbine equipment"to determine whether it qualifies under Internal
Revenue Service guidance.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.14
OCS Data Request 8.14
Refer to Section 4.06 of IRS Notice 2013-29 that defines Continuous Construction
related to Physical Work.Refer also to the additional provisions regarding the Continuity
Requirement in Section 4 of IRS Notice 2016-31.Related to the approximate 300+MW
of turbine equipment purchased by the Company from GE to meet the 5%safe harbor
requirements,does the Company believe it will be able to justify Continuous
Construction based on the events that have occurred from the procurement of the
equipment in 2016 until the present if the Safe Harbor date conditions are not met.
Please explain why or why not.
Response to OCS Data Request 8.14
To clarify,the Company did not purchase "300+MW of turbine equipment"to meet the
five-percent safe-harbor requirement.As described in the Company's response to OCS
Data Request 1.60,the Company timely purchased and took possession of 32.2
megawatts (MW)of equipment to qualify new wind projects of up to approximately 300
MW to 320 MW under the five-percent safe-harbor method under Section 5.01 of the
Internal Revenue Service (IRS)Notice 2013-29.
Whether a taxpayer satisfies the ContinuityRequirement of continuous construction is
determinedbased on the relevant facts and circumstances surrounding the timing of the
physical work to be performed on the wind facility as set out in Section 4.02 of IRS
Notice 2016-31.No other specific guidance defining relevant facts and circumstances has
been issued by the IRS.The IRS did provide a list of non-exclusive excusable disruptions
that will not be considered as indicating that a taxpayer has failed to maintain a
continuous program of construction.The Company,however,fully intends to readily
meet the four-year safe-harbor standard.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.15
OCS Data Request 8.15
Confidential Request -Refer to Section 4.06 of IRS Notice 2013-29 that defines
Continuous Construction related to Physical Work.Refer also to the additional
provisions regarding the ContinuityRequirement in Section 4 of IRS Notice 2016-31.
Related to the approximate 500 MW of turbine equipment reported to have been procured
by the outside developer,
M to meet the 5%safe harbor requirements,does the Company believe it will be
able to justifyContinuous Construction based on the events that have occurred from the
procurement of the equipment in 2016 until the present if the Safe Harbor date conditions
are not met.Please explain why or why not.
Confidential Response to OCS Data Request 8.15
The Company objects to this request as not reasonably calculated to lead to the discovery
of admissible evidence and as requiring information outside of the Company's custody,
control or possession.Without waiving these objections,the Company responds as
follows:
Confidential information is provided subject to Public Service Commission of Utah
(UPSC)Rule 746-1-602 and 746-1-603.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.16
OCS Data Request 8.16
Refer to Section 4.06 of IRS Notice 2013-29 that defines Continuous Construction
related to Physical Work..Refer also to the additional provisions regarding the Continuity
Requirement in Section 4 of IRS Notice 2016-31.Related to the approximate 300+MW
of potential QFs,or other,supplied turbine equipment,does the Company believe it will
be able to justify Continuous Construction based on the events that have occurred from
the procurement of the equipment in 2016 until the present if the Safe Harbor date
conditions are not met.Please explain why or why not.
Response to OCS Data Request 8.16
The Company objects to this request as vague,ambiguous,and requesting information
that is outside of the Company's custody,possession,or control.Without waiving these
objections,the Company responds as follows.
The Company does not have sufficient information about "300+MW of potential QFs,or
other,supplied turbine equipment"to determine whether it qualifies under Internal
Revenue Service guidance.
17-035-40 /Rocky Mountain Power
October 20,2017
OCS Data Request 8.17
OCS Data Request 8.17
If interconnection transmission delays force the completion date for the wind projects to
occur after the 5%Safe Harbor date of December 31,2020,will the Companies have a
chance due to any exclusions to maintain eligibilityfor 100%of the PTCs if the
Continuous Construction conditions found in IRS Notice 2013-29 and IRS Notice 2016-
31 cannot be proven to have been met.Please explain and cite any perceived exclusions.
Response to OCS Data Request 8.17
The Company objects to this request as vague,ambiguous,and speculative.Without
waiving these objections,the Company responds as follows:
As discussed in the Company's response to OCS Data Request 8.14,the Company fully
intends to satisfy the Continuous Construction requirement under the four-year safe
harbor,rather than followingthe more challenging alternative of documenting continuous
construction.Both methods are set out in Section 4.02 of Internal Revenue Service (IRS)
Notice 2016-31.
For any Wyoming wind projects which did not achieve commercial operation by
December 31,2020,due to the unlikely delay in completion of the Wyoming
transmission projects but otherwise have facilitated synchronization to the transmission
grid and commissioning of individual wind turbines under IRS guidance,the Company
would,based on facts and circumstances,treat a completed and functional wind turbine
as being placed in service regardless of any transmission constraints affecting a Wind
Project.In Private Letter Ruling(PLR)20033403,the IRS ruled that if a wind turbine has
all necessary operating permits and licenses,has been synchronized to the power grid,the
critical tests for the components of the wind turbine have been completed,the wind
turbine has been placed in the control of the taxpayer by the contractor,the taxpayer has
sold electricity that has been produced by the wind turbine,and the wind turbine is
putting power onto the grid on a regular basis,then the wind turbine has been placed in
service for income tax purposes.This is even if the wind project is not producing
transmission-level electricity due to a delay in a transmission project and has not been
deemed to be under commercial operation by a regulatory commission.A PLR may not
be relied on as precedent by other taxpayers;however,it is indicative of the IRS position
on certain matters.In this instance,the repowered wind facilities would be deemed to
meet the four-year safe-harbor requirement and qualify for the 100 percent PTC.