20180208PAC to Staff WY WIEC Set 14 (1-38).pdf

ROCKY MOUNTAINPOWER
A DIVISION OF PAClFICORP 1407 W North Temple,Suite 330
Salt Lake City,Utah 84116
February 5,2018
Abigail C.Briggerman,#7-5476
Holland &Hart LLP
6380 South Fiddlers Green Circle,Suite 500
GreenwoodVillage,CO 80111
[e-mail] (C)
RE:Wyoming Docket 20000-520-EA-17
WIEC 14th Set Data Request (1-38)
Please find enclosed Rocky Mountain Power's Responses to WIEC 14th Set Data Requests
14.14-14.15,14.17-14.19,14.21-14.25,and 14.28-14.29.The remaining responses will be
provided separately.Also provided is Attachment WIEC 14.17.Provided on the enclosed
Confidential CD is Confidential Attachment WIEC 14.14.Confidential information is provided
subject to the terms and conditions of the protective agreement in this proceeding.
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)
Patti Penn/WIEC [e-mail](W)
Thor Nelson/WIEC [e-mail] (C)(W)
Emanuel Cocian/WIEC [e-mail] (W)
Adele Lee/WIEC [e-mail] (W)
Nik Stoffel/WIEC [e-mail] (C)(W)
Christopher Leger/OCA [e-mail] (C)
Crystal J.McDonough/[e-mail] (C)
Callie Capraro/NLRA [e-mail]
Lisa Tormoen Hickey/[e-mail] (C)
Brandon L.Jensen/RMSC [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/[e-mail] (C)
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.14
WIEC Data Request 14.14
Referring to Rick Link's rebuttal testimony at page 10,lines 5-8.
(a)Are resource portfolios with more uncommitted FOTs higher cost than resource
portfolios that include the Combined Projects over the next 5 years?
(b)Are resource portfolios with more uncommitted FOTs higher cost than resource
portfolios that include the Combined Projects over the next 10 years?
(c)Are resource portfolios with more uncommitted FOTs higher cost than resource
portfolios that include the Combined Projects over the next 15 years?
Response to WIEC Data Request 14.14
(a)Yes.Based on the January 16,2018 supplemental direct testimony analysis,when the
Combined Projects are added,front office transactions (FOT)are displaced and
system costs are reduced in each five-yearincrement.Please refer to Confidential
Attachment WIEC 14.14,which calculates the "Net (Benefit)/Cost"for the addition
of each five-year increment,specifically row 61.
(b)Yes.Please refer to the Company's response to subpart (a)above.
(c)Yes.Please refer to the Company's response to subpart (a)above.
Confidential information is provided subject to the protective order issued in this
proceeding.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.15
WIEC Data Request 14.15
Referring to Rick Link's rebuttal testimony at page 10,lines 12-14.Please explain how
PacifiCorp addressed risk associated with market-reliance in the 2017 IRP.
Response to WIEC Data Request 14.15
PacifiCorp reviewed projections of regional resource adequacy and historical purchase
volumes when establishing its assumed level of front office transaction (FOT)limits used
for resource planning.Based on this review,PacifiCorp has established FOT limits that
are conservative,considering those limits are below historical purchase levels made
during peak periods.Moreover,when developing resource portfolios,FOT resources
generally do not hit these limits,particularlyin the near term.Please refer to Volume II,
Appendix J (Western Resource Adequacy Evaluation)of PacifiCorp's 2017 Integrated
Resource Plan (IRP)for discussion of the market availabilityin the west.The Company
also included market depth discussions in Volume I,Chapter 6 (Resource Options);
specifically page 141 and 142,includingTable 6.16.
The Company's 2017 IRP is publicly available and can be accessed by using the
followingwebsite link:
http://www.pacificorp.com/es/irp.html
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.17
WIEC Data Request 14.17
Referring to Rick Link's rebuttal testimony at page 10,line 21 through page 11,lines 14-
19.
(a)What were the maximum uncommitted FOT limits in the 2017 IRP in 2021,2022,
2023,2024,and 2025?
(b)What were the projected levels of FOTs in portfolios without the Combined Projects
in 2021,2022,2023,2024,and 2025 in the 2017 IRP?
Response to WIEC Data Request 14.17
(a)The Company included market depth discussions in the 2017 Integrated Resource
Plan (IRP),Volume I,Chapter 6 (Resource Options);specifically page 141 and 142,
includingTable 6.16.
(b)Please refer to Attachment WIEC 14.17,reporting the front office transaction (FOT)
selections for the OP-NT3 and FS-GW4 cases,2021 to 2025.The OP-NT3 case does
not include incremental new wind and the Aeolus-to-Bridger/Anticline transmission
line.The FS-GW4 case is the final preferred portfolio,which includes incremental
new wind and the Aeolus-to-Bridger/Anticlinetransmission line.
Please refer to the 2017 IRP,Volume II,Appendix K (Capacity Expansion Results
Detail)for portfolio results on all 2017 IRP cases.The cases referenced here are
found on pages 192 (OP-NT3)and 222 (FS-GW4).
The Company's 2017 IRP is publicly available and can be accessed by using the
followingwebsite link:
http://www.pacificorp.com/es/irp.html
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.18
WIEC Data Request 14.18
Referring to Rick Link's rebuttal testimony at page 11,lines 8-14.Are uncommitted
FOTs firm or variable resources?Please explain your answer in detail.
Response to WIEC Data Request 14.18
Front office transactions (FOT)are firm forward market purchases contributing to both
energy and capacity.For planning purposes,FOTs represent market capacity that can be
used to meet system need.The volume of FOTs selected in a resource portfolio can
change annually.Consistent with operations,the level of FOTs identified in any given
least-cost resource portfolio represents the optimal level of FOTs that could be procured
on an hour-ahead,day-ahead,balance-of-month,month-ahead,quarter-ahead,or years-
ahead basis.,based on a conservative assessment of availability.Please refer to the
Company's response to WIEC Data Request 14.15 (includingreferences to PaciflCorp's
2017 IntegratedResource Plan (IRP))for additional details regarding FOTs.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.19
WIEC Data Request 14.19
Referring to Rick Link's rebuttal testimony at page 12,lines 7-9.Would PacifiCorp
agree that the Combined Projects are a fixed cost hedge against FOT resources in the near
term?Please explain your answer in detail.
Response to WIEC Data Request 14.19
The Company agrees that the Combined Projects serve as a hedge against market
volatility,includingthe cost of front office transactions (FOT).However,the Combined
Projects are not included in the preferred portfolio simply because they provide a hedge
against FOTs.The Combined Projects were included in the preferred portfolio because
when included in the resource mix,they are lower cost and lower risk relative to
portfolios that do not include the Combined Projects.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.21
WIEC Data Request 14.21
Referring to Rick Link's rebuttal testimony at page 19,lines 11-14.Please explain why a
market participant would be unwillingto commit the capital required to enter and
maintain long-term contracts.
Response to WIEC Data Request 14.21
As reported in the rebuttal testimony of Company witness,Rick T.Link,Figure 2
(NYMEXHenryHub Natural Gas Futures)on page 19,market participants are focused
on short-term and near-term opportunities,and are less interested in long-term contracts.
The Company cannot speak to any market participant's individual motives,but points to
the historyof natural gas prices in recent years as a possible long-term contract
disincentive.Note:the Company mitigates the risks inherent in forecasting by evaluating
portfolios across nine price-policy scenarios covering a wide range of possible outcomes.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.22
WIEC Data Request 14.22
Referring to Rick Link's supplemental direct testimony at page 6,lines 4-11.
(a)Were the results from the 2017S RFP included as part of the portfolio development
phase used to determine the least-cost combination of bids?If not,please explain
why such bids were not included as part of the portfolio developmentstage.
(b)Please provide a comparison of the cost of the solar proxy-resource alternatives used
to develop resource portfolios in the 2017 IRP with the results of the 2017S RFP.
(c)Please provide a comparison of the cost of the wind proxy-resource alternatives used
to develop resource portfolios in the 2017 IRP with the results of the 2017S RFP.
Response to WIEC Data Request 14.22
(a)No.The 2017R Request for Proposals (2017R RFP)seeking wind bids and the 2017S
RFP seeking solar bids are being implemented on different timelines.The bid
selection process for both RFPs are being implemented in accordance with the two
RFPs that were issued to the market at different times.However,the Company
performed sensitivity analysis using bids received for the 2017S RFP,to demonstrate
that regardless of the outcome of the 2017S RFP,the benefits from the Combined
Projects do not deteriorate.Please refer to the supplemental direct testimony of
Company witness,Rick T.Link,page 33,line 6 through page 36,line 13.These
sensitivities demonstrate that should the Company choose to pursue solar bids
through the 2017S RFP,the resulting solar power purchase agreements (PPA)would
not displace the Combined Projects as an alternative means to deliver economic
savings for customers.
(b)As the results of the 2017S RFP have not yet been determined,they are not available
to conduct the requested comparison at this time.
(c)As the results of the 2017S RFP have not yet been determined,they are not available
to conduct the requested comparison at this time.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.23
WIEC Data Request 14.23
Referring to Rick Link's supplemental direct testimony at page 8,lines 5-6.
(a)Please explain how the System Optimizer model tests for variability in power
production from the Wind Projects.
(b)Please explain how the Planning and Risk model tests for variability in power
production from the Wind Projects.
(c)Please explain all steps taken by PacifiCorp to evaluate the sensitivity of the
economic benefits of the Combined Projects to variability in power production from
the Wind Projects.
Response to WIEC Data Request 14.23
(a)The wind profiles for new wind resources are modeled in the System Optimizer (SO)
model as an index,using annual hourly pattern data (365 days by 24 hours).This
data,covering the 8,760 hours in a year,incorporates such factors as locational wind
profile,turbine technology,seasonal and time-of-day variances,and wind "wake"
(which considers the size and distance between turbines at a given site as well as the
proximity of other wind facilities).The annual pattern represents the hourly capacity
factor.The SO model internallycalculates "time of day"blocks from the hourly data,
representing summer and winter peak,off-peak and super-peak patterns.
(b)The Planning and Risk (PaR)modeling is similar to SO except a sample week is
selected each month to determine wind generationlevels,which is then scaled within
PaR for the relevant month.To eliminate the unintended distortion of monthly wind
shapes due to relyingon a sample week,the PaR inputs are recast such that every
week of a given month has the same pattern but preserves the expected monthlyand
annual generation.
(c)In addition to the variability in wind shapes captured in the annual hourly pattern data
(described in the Company's response to subpart (a)above),the PaR model includes
load variance as a stochastic parameter in the 50 stochastic iterations evaluatedfor
each study.In addition to representing literal variance in load,load volatilityis also a
proxy for volatilityin generation.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.24
WIEC Data Request 14.24
Referring to Rick Link's supplemental direct testimony at page 8,lines 14-22.
(a)Please explain how the capacity factor adjustments applied by PacifiCorp impacted
the projected benefits to customers from the bids.
(b)Please explain how a reduced capacity factor impacts the levelized cost of energy
from the Wind Projects.
Response to WIEC Data Request 14.24
(a)Capacity factor adjustments (reducing net energy),applied to two bids,impacted
benefits and costs that are based on generation levels.For instance,the benefits from
production tax credits (PTC)applicable to the build transfer agreement (BTA)are
reduced,the cost,but not the price,of the power purchase agreement (PPA)is
reduced,net power cost (NPC)benefits from both the BTA and the PPA are reduced,
the cost of the Wyomingwind tax and the cost of operations and maintenance (O&M)
associated with the BTA are reduced,and the cost of integration applicable to the
BTA and PPA are reduced.
(b)A reduced capacity factor would increase the levelized cost of energy because project
costs are being "spread"over fewer megawatt-hours (MWh)of expected output.
Respondent:Ron Scheirer
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.25
WIEC Data Request 14.25
Referring to Rick Link's supplemental direct testimony at page 11,lines 1-19.Please
explain why the SO model replaces two BTA bids and a benchmark bid with two PPAs if
the PTCs in the bids are levelized.
Response to WIEC Data Request 14.25
When product tax credit (PTC)benefits,which are applicable to build transfer agreement
(BTA)and benchmark bids,are levelized,these benefits are spread out over the full 30-
year life of the asset (i.e.,through 2050).Moreover,the levelized benefits of PTCs
beyond 2036 are not even recognized in the System Optimizer model (SO model)when
making its bid selections.This reduces the present-valuebenefits of the PTCs,thereby
increasing the present value cost of BTA and benchmark bids relative to power purchase
agreement (PPA)alternatives.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.28
WIEC Data Request 14.28
Referring to Rink Link's supplemental direct testimony at page 17,lines 13-15.
(a)Please identify the amount of terminal-value benefits from the BTA and EPC-
benchmark bids included in the updated economic analysis.
(b)Were any terminal-value benefits included in the Company's economic analysis
included with the initial filing in this proceeding?
Response to WIEC Data Request 14.28
(a)Due to the ongoing nature of the 2017R Request for Proposals (2017R RFP),the
financial models of each bid and each bid alternative associated with the 2017R RFP
are considered commercially sensitive and highly confidential.The Company does
not typically permit access to commercially sensitive 2017R RFP documentation until
the RFP has been concluded.Please contact Stacy Splittstoesser at [phone] or
Yvonne Hogle at [phone] to make arrangements for review.
(b)No,terminal-value benefits were omitted in the Company's economic analysis
included with the Company's direct testimony filing.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
February 5,2018
WIEC Data Request 14.29
WIEC Data Request 14.29
Referring to Rick Link's supplemental direct testimony at page 18,lines 18-21.
(a)Does the updated load forecast cause the Company's first new natural gas resource to
be added later than projected in the 2017 IRP (i.e.,later than 2029)?
(b)How much further would the Company's load forecast have to be reduced to cause
the first new natural gas resource to be added later than 2029?
Response to WIEC Data Request 14.29
(a)Depending on the price-policy scenario,there are either two,one,or zero combined
cycle gas units in the capacity expansion plan.Fewer combined cycle gas resources
are selected as you move from low to high gas and carbon dioxide (CO2)
assumptions.System optimization is impacted concurrentlyby all inputs,and a
separate study would be required to determine if the load update is a sufficient driver
to move a resource selection in a particular manner.The Company has not performed
the indicated study.
Please refer to the confidential work papers supporting the supplemental direct
testimony of Company witness,Rick T.Link,specifically the detailed portfolio
selection information is available in folder:SO Summary Reports",and the
"Portfolio"worksheet of each file.
(b)The Company has not performed the indicated study.Please refer to the response to
the Company's response to subpart (a)above.
Respondent:Randy Baker
Witness:Rick Link