20171130PAC to Staff 4th Suppl WY NLRA Set 2 (1-9).pdf

ROCKY MOUNTAIN
POWER
A DIVISION OF PAClFICORP 1407 W North Temple,Suite 330
Salt Lake City,Utah 84116
November 9,2017
Crystal J.McDonough
WY State Bar #7-4927
McDonough Law LLC
1635 Foxtrail Dr.#327
Loveland,CO 80538
Attorneyfor NLRA
[e-mail] (C)
RE:Wyoming Docket 20000-520-EA-17
NLRA 2nd Set Data Request (1-9)
Please find enclosed Rocky Mountain Power's Responses to NLRA 2nd Set Data Requests 2.1-
2.9.If you have any questions,please call me at [phone].
Sincerely,
Stacy Splittstoesser,
Manager,Regulation
Enclosures
C.C.:Meridith Bell/WPSC [e-mail](C)
Lori L.Brand/WPSC [e-mail] (W)
John Burbridge/WPSC [e-mail] (W)
Michelle Bohanan/WPSC [e-mail] (W)
Kara Seveland/WPSC [e-mail](W)
Morgan Fish/WPSC [e-mail] (W)
Dave Walker/WPSC [e-mail] (W)
Perry McCollom/WPSC [e-mail](W)
Abigail C.Briggerman/WIEC [e-mail]
Patti Penn/WIEC [e-mail](W)
Bob Pomeroy/WIEC [e-mail] (W)
Adele Lee/WIEC [e-mail] (W)
Thor Nelson/WIEC [e-mail] (W)
Emanuel Cocian/WIEC [e-mail] (W)
Nik Stoffel/WIEC [e-mail] (W)
Christopher Leger/OCA [e-mail] (C)
Lisa Tormoen Hickey/[e-mail] (C)
Brandon L.Jensen/RMSC [e-mail] (C)
20000-520-EA-17 /Rocky Mountain Power
November 9,2017
NLRA Data Request 2.1
NLRA Data Request 2.1
Mr.Link's testimony indicates that energy imbalance market revenues are a factor in the
economics of the proposal.Will these revenues be credited to system ratepayers and
thereby reduce rates?
Response to NLRA Data Request 2.1
Yes.First,to clarify,the energy imbalance market (EIM)benefit is identified as a
"value"stream in the Direct Testimony of Company witness,Rick T.Link at page 8,
lines 16-19,rather than as a "revenue."The EIM benefit will result in a reduction of net
power costs (NPC)that will be returnedto customers through the energy cost adjustment
mechanism (ECAM)and resource tracking mechanism (RTM).As stated in Exhibit
RMP JKL-1 page 1:"The ECAM has a 70%/30%sharing of the difference between
base NPC and actual NPC.The RTM will capture the 30%savings not included in the
ECAM related to incremental energy production associated with the Wind Projects,and
pass these savings back to customers."The RTM will continue to credit the full
incremental NPC benefits associated with the Wind Projects until the projects are
included in base rates.
Respondent:Terrell Spackman
Witness:Jeffrey K.Larsen
20000-520-EA-17 /Rocky Mountain Power
November 9,2017
NLRA Data Request 2.2
NLRA Data Request 2.2
Public accounts indicate that PacifiCorp and the California IndependentSystem Operator
(CAISO)may enter an agreement that would enable PacifiCorp to buy and sell energy as
a participant in the CAISO system.
(a)What are the net revenues PacifiCorp anticipates from implementing such an
agreement;and
(b)would these revenues offset net power costs and,therefore,reduce electricityrates,
for Wyomingratepayers?
(c)If the proposed new transmission line and new wind is built,how would that change
your answers to both (a)and (b)above?Please provide details,calculations,
worksheets,and examples.
Response to NLRA Data Request 2.2
PacifiCorp is not currentlyengaged in any process related to the creation of a regional
Independent System Operator (ISO)in coordination with the California ISO.The
California legislature did not pass legislation to effectuate a regional ISO during its 2017
legislative session,which effectivelyended the referenced effort.
Respondent:Kelcey Brown
Witness:Jeffrey Larsen
20000-520-EA-17 /Rocky Mountain Power
November 9,2017
NLRA Data Request 2.3
NLRA Data Request 2.3
In its previous two IRPs (2013 and 2015),PacifiCorp's preferred portfolio did not
contemplate major transmission upgrades or additional generationuntil the mid-late
2020s.Meanwhile,at the time of the 2013 IRP,the PTC remained available.What
circumstances have led PacifiCorp to move to the preferred portfolio described in the
2017 IRP and in the application the subject of this proceeding?
Response to NLRA Data Request 2.3
The Company disagrees with the assertion that its 2013 integrated resource plan (IRP)
did not contemplate major transmission upgrades or generation.The 2013 IRP included:
The 100-mile Mona-to-Oquirrhtransmission line (Energy Gateway
Segment C),which was completed May 2013;
The 14-mile Oquirrh-to-Terminaltransmission segment;
The 400-mile Windstar-to-Populus line as part of the preferred portfolio;
and
Major Wyoming wind additions of 650 megawatts (MW),added in the
period 2024 through 2025.
At the time of the 2013 IRP,the wind production tax credits (PTCs)expired
December 31,2013.
For 2015 IRP,the wind PTCs had expired and were not available.The timing for
completion of the 14-mile Oquirrh-to-Terminaltransmission segment changed to
June 2021.
In the 2017 IRP,PacifiCorp presents a cost-conscious plan to transition to a cleaner
energy future with near-term investments in both existing and new renewable resources,
new transmission infrastructure,and energy efficiency programs.The circumstances in
the 2017 IRP that differ from prior IRPs include a known phase-out schedule for federal
PTCs,providing time to complete the proposed transmission project before expiration of
the PTCs,and reduced costs for new wind resources.
Respondent:Dan Swan
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
November 9,2017
NLRA Data Request 2.4
NLRA Data Request 2.4
Will the winningbid wind projects in the RFP become the new proxy for new wind
projects contemplated in Wyoming PUC Order 20000-388-20416?Please explain your
answer in full with calculations/worksheets/examples,etc.
Response to NLRA Data Request 2.4
No.The avoided cost methodology for qualifyingfacilities under Schedule 38 is based
on the cost of deferrableproxy wind resources identified in the Company's most recent
integrated resource plan preferred portfolio.Once the Company makes a commitment to
acquire new wind resources,they are no longer considered deferrable.Thus,a wind
qualifyingfacility would then defer other wind resources identified in the IRP preferred
portfolio.
Respondent:Dan MacNeil
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
November 9,2017
NLRA Data Request 2.5
NLRA Data Request 2.5
How will the GRID runs for the PDDRR methodology for QFs in Wyoming and in other
states throughout PacifiCorp's system be affected based on
(a)the available new transmission if the proposed transmission is built,and
(b)based on outcome of the RFP?
Response to NLRA Data Request 2.5
(a)The Generationand Regulation Initiative Decision Tool (GRID)runs using the partial
displacement differential revenue requirement (PDDRR)methodology are currently
based on the 2017 IntegratedResource Plan (IRP)preferred portfolio,which includes
the Aeolus-to-Bridger/Anticlineportion of Energy Gateway (segment D2)as an
integral component of the preferred portfolio.Assuming the new transmission
continues to be part of the IRP and IRP Update preferred portfolios,it will continue to
be included in GRID.
(b)The GRID runs using the PDDRR methodology will be updated to incorporate
executed contracts and commitments to acquire assets.In particular,the proxy wind
resources identified in the 2017 IRP preferred portfolio will be replaced by the
specific resources selected in the 2017 Renewable Request for Proposals (2017R
RFP),and the updated modeling wouldinclude resource-specific capacity factors and
locations.
To the extent the 2017R RFP does not result in wind resource commitments and the
proposed transmission upgrades are withdrawn,these changes would also be
incorporated in GRID.
In either case,once the Company's 2017 IRP Update is filed (currentlyexpected
March 31,2018),the GRID runs will be updated to reflect the preferred portfolio
from that filing and any additional changes since the IRP Update was prepared.
Respondent:Dan MacNeil
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
November 9,2017
NLRA Data Request 2.6
NLRA Data Request 2.6
Please explain in detail who keeps the PTC if the winningbidder in the RFP is someone
other than the Company under all options available under the RFP.
Response to NLRA Data Request 2.6
Bidders in the 2017 Renewable Request for Proposals (2017R RFP)can propose two
structure types:(1)a power-purchase agreement (PPA)where PacifiCorp purchases the
output from the bid project at an agreed price and term;and a build-transfer agreement
(BTA)where the bidder develops,constructs,and starts-up the project,selling the project
to PacifiCorp upon commercial operation.Under the 2017R RFP,a party submitting a
PPA would retain the production tax credits (PTCs).A party bidding a BTA would
transfer ownership of the PTCs to PacifiCorp at closing.PacifiCorp has also submitted a
self-build proposal (benchmark bid)where the Company would develop,construct and
operate the project,retaining the PTCs.
Respondent:Bruce Griswold
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
November 9,2017
NLRA Data Request 2.7
NLRA Data Request 2.7
Why is it important for the PTC to be passed on to ratepayers?
Response to NLRA Data Request 2.7
The Company seeks to align the costs and benefits of the Combined Projects so that
customers and shareholders are both treated fairly.This would include passing the
Combined Projects'benefits,such as production tax credits (PTCs),to the customers to
offset the costs that would be passed on to customers.Without a complementary
matching of costs and benefits,either customers or shareholders would be unfairly
impacted.
Respondent:Terrell Spackman
Witness:Jeffrey K.Larsen
20000-520-EA-17 /Rocky Mountain Power
November 9,2017
NLRA Data Request 2.8
NLRA Data Request 2.8
Is there any circumstance in this proceeding where the PTC will not be passed on to
ratepayers?Please explain those circumstances in detail and provide
calculations/worksheets/examples.
Response to NLRA Data Request 2.8
No,not under the Company's proposal.With the successful implementation of the
Resource Tracking Mechanism (RTM),the PTC benefit would be passed on to customers
along with other costs and benefits.Please refer to Exhibit RMP_(JKL-2)and Exhibit
RMP_(JKL-3)accompanying the Direct Testimony of Jeffrey K.Larsen for examples.
Respondent:Terrell Spackman
Witness:Jeffrey K.Larsen
20000-520-EA-17 /Rocky Mountain Power
November 9,2017
NLRA Data Request 2.9
NLRA Data Request 2.9
It is NLRA's understandingthat the RFP was issued in order to foster competition.Can
you please explain in as much detail as possible how an RFP creates competition and
how that impacts customers?
Response to NLRA Data Request 2.9
In general,a request for proposals (RFP)process requires bidders to bid against one
another,which encourages competition and allows the Company to evaluate bids against
one another.The Company will select the combination of bids that maximizes customer
benefits.In addition,the 2017 Renewable RFP was issued to comply with both the
Public Service Commission of Utah and the Public Utility Commission of Oregon
competitive bidding guidelines,which requires an independentevaluator (IE)be hired by
or report to their respective utility commission.The IE provides oversight and review of
the RFP process and evaluation on behalf of the commission and customers.
Respondent:Bruce Griswold
Witness:Rick Link