20180208PAC to Staff WY RMSC Set 3 (1-3) (2).pdf

ROCKY MOUNTAIN
POWER
A DIVISION OF PACIFICORP 1407 W North Temple,Suite 330
Salt Lake City,Utah 84116
February 1,2018
Brandon L.Jensen
BUDD-FALEN LAW OFFICES,LLC
300 East 18th Skœt
Post Office Box 346
Cheyenne,Wyoming82003-0346
RE:Wyoming Docket 20000-520-EA-17
Rocky MountainSheep Company 3rd Set Data Request (1-3)
Please find enclosed Rocky Mountain Power's Response to RMSC 3rd Set Data Request 3.3.
Sincerely,
Stacy Sph tstoesser,
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)
Thor Nelson/WIEC [e-mail] (C)(W)
Emanuel Cocian/WIEC [e-mail] (W)
Nik Stoffel/WIEC [e-mail] (W)
Adele Lee/WIEC [e-mail] (W)
Christopher Leger/OCA [e-mail] (C)
Crystal J.McDonough/[e-mail] (C)
Callie Capraro/NLRA [e-mail]
Lisa Tormoen Hickey/[e-mail] (C)
Roxane Perruso/TOTCO [e-mail]
Jane M.France/TOTCO [e-mail] (C)
Constance E.Brooks/Anadarko [e-mail](C)
Danielle Bettencourt/Anadarko [e-mail] (C)(W)
Paul Kapp/Anadarko [e-mail] (C)
Lisa Christian/TOTCO [e-mail] (C)
J.Kenneth Barbe/Southland kbarbe wsmtlaw.com (C)
20000-520-EA-17 /Rocky Mountain Power
February 1,2018
RMSC Data Request 3.3
RMSC Data Request 3.3
Please advise,in as much detail as possible,how your application for a CPCN would be
impacted if the state's tax on wind was increased to $5 per megawatt hour.
Response to RMSC Data Request 3.3
A speculative increase in Wyoming's state tax on wind to $5 per megawatt-hour
($/MWh)would impact the application for a certificate of public convenience and
necessity (CPCN)primarily by affecting the economics of the bids submitted into the
2017R Request for Proposals (RFP).
If the Wyomingwind tax increased to $5/MWh it would erode customer benefits and
increase customer costs associated with the Wind Projects.While many fmal short list
bids may still yield customer benefits in certain price-policy scenarios,such an increase
would require the Company to perform additional modeling using its long-term dispatch
models (i.e.,the system optimizer model (SO model)and the planning and risk model
(PaR)to determine how the tax increase would affect the selection of bids to the final
short list and the overall economics of the projects selected.
In addition,the impact of an increase to the Wyomingwind tax would differ depending
on the timing of the change.If state tax changes occurred before mid-April 2018,then:
The increased tax could impact power purchase agreement (PPA)bid
offers.While a Bidder's PPA pricing was deemed firm as of December 2018,
a change in the Wyomingwind tax could impact a Bidder's decision to
execute a PPA with PacifiCorp without a price adjustment (although
performance/security deposits have been collected from all Bidders).
For Benchmark or build-transfer bids,an increase in the Wyoming wind tax
occurring before mid-April2018 would increase PacifiCorp's costs after the
commercial operations date (COD)accepted in final short list for the 2017R
RFP.
If state tax changes occurred after mid-April2018,then:
The increased tax would impact PPA Bidders'economics,but the impact
would not be passed through to PacifiCorp.PacifiCorp would be subject to
project default risk.
The increased tax would increase PacifiCorp costs after the COD for any
Benchmark or build-transfer bids accepted in final short list 2017R RFP.
Respondent:Ron Scheirer
Witness:Rick Link