20180319Pac to Staff 71-80.pdf

RECEIVED
ROCKY MOUNTAINPOWER 2018 MAR 19 AM 9:34
A onasson or exci"°""1407 W North Temple,Suite 330
UB L.I C Salt Lake City,Utah 84116COMMISSION
March 16,2018
Diane Hanian
Idaho Public Utilities Commission
472 W.Washington
Boise,ID 83702-5918
[e-mail] (C)
RE:ID PAC-E-17-07
IPUC 7*Set Data Request (71-80)
Please find enclosed Rocky Mountain Power's Responsesto IPUC 7th Set Data Requests 71-80.
Also provided are Attachments IPUC 73 and 76-3.Provided on the enclosed Confidential CD
are Confidential Attachments IPUC 72,75,and 76 1-2).Confidential information is provided
subject to the terms and conditions of the protective agreement in this proceeding.
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/PIIC [e-mail] (W)
Brian C.Collins/Brubaker&Associates [e-mail] (C)(W)
James R.Smith/Monsanto [e-mail] (C)(W)
Maurice Brubaker/Monsanto mbrubaker consultbai.com (C)(W)
Katie Iverson/Monsanto [e-mail] (C)
Eric Olsen/IIPA [e-mail] (C)
AnthonyYankel/IIPA [e-mail](C)
Randall C.Budge/Monsanto [e-mail] (C)
Thomas J.Budge/Monsanto tibŒracinelaw.net (C)(W)
PAC-E-17-07 /Rocky Mountain Power
March 16,2018
IPUC 7th Set Data Request 71
IPUC Data Request 71
Please provide a breakdown for all categories of costs and benefits that are
labeled as "Cost of Projecf'in the Corrected Second Supplemental filing for all
price policy scenarios of the levelized wind analysis referenced as tab:PaR -RFP
FSLW Studies within file:EV2020 Workpapers Second Supp Results Summary
File -VOM adjusted CONF.Please use the same categories of costs and benefits
in the Project Net Costs included in the Company s Nominal PVRR(d)analysis.
For each category of cost,please provide the following:
(a)specific costs and benefits for each year between 2017 and 2036;
(b)a detailed description of the cost or benefit;
(c)the source of the data:and
(d)how the costs were calculated or derived (including the useful life of the asset
and the number of years included if it is a capital cost,and the specific range
of years of nominal cost that were levelized).
Response to IPUC Data Request 71
The Company provides the narrative and details by request to assist with
responding to this data request.For all discussion to follow,please refer to the
confidential work papers supporting the second supplemental direct testimony of
Company witness,Rick T.Link,specifically the file "EV2020 Workpapers
Second Supp Results Summary File -VOM adjusted.xlsx".worksheet "PaR -
RFP FSLW Studies provided on February 23,2018.
Results Development:
The Present Value of Revenue Requirements (PVRR)outcomes reported on this
worksheet are the result of two models:(1)System Optimizer model (SO model),
and (2)Planning and Risk (PaR)model.For a description of these models and
their purposes,please refer to the Company's 2017 Integrated Resource Plan
(IRP),Chapter 7 (Modeling and Portfolio Evaluation Approach),pages 145
through 169.PacifiCorp s 2017 IRP is publicly available and can be accessed by
utilizingthe following website link:http://www.pacificorp.com es/irp.html.
Please also refer to the direct testimony of Company witness,Rick T.Link,page
16.line 19 through page 20,line 10.
In brief,the SO model determines a portfolio consisting of the least-cost mix of
resources needed to meet capacity needs over the 20-year planninghorizon.PaR
uses the resource portfolio produced using the SO model as a basis for stochastic
analysis,which calculates how the portfolio is expected to perform.accounting
for volatilityand uncertainty in market prices,hydro generation.load.and thermal
PAC-E-17-07/Rocky Mountain Power
March 16,2018
IPUC 70'Set Data Request 7l
unit outages.These stochastic variations help to ensure that the portfolio being
examined is robust under a range of circumstances,and therefore not
unreasonably vulnerable to volatilityand uncertainty in system conditions as they
are likely to occur in the future.In this sense,PaR assesses both portfolio value
and portfolio risk.
Price-Policy Scenarios:
The "PaR -RFP FSLW Studies"worksheet provides summary PaR output data
for nine price-policy scenarios.The first price-policy scenario is labeled "Medium
Gas,Medium CO2 ($milliony'in row 7."Medium Gas"means that the prices for
this price-policy scenario are based on a medium or expected assumption for how
gas prices will develop over the 20-year study period.This equates to an
assumption that market prices for electricity will develop moderately,as opposed
to trending unexpectedly high or low."Medium COa°'indicates that the analysis
assumes there will be a moderate federal carbon dioxide emissions policy in place
by the year 2030.
Each price-policy scenario is comprised of four color-coded sections.The blue
section of the "Medium Gas.Medium COr scenario is labeled "R17-Base-MM -
Before Projects".This is the base case,which establishes the status quo baseline
PVRR costs of operating PacifiCorp s system.(Note:the case name ('·RI7-Base-
MM")is the name given to this particular model run,and can be used to locate
detailed input and output data in a variety of additional work papers).
The green section,starting in row 25.summarizes the PVRR (benefit)/cost of the
proposed portfolio.The 'raw"PVRR(d)(defined as the PVRR difference
between the base case and the comparison casc)is located in cell D65.The
negative value of $333 million is a net reduction in costs,and is therefore
considered a benefit relative to the comparison case.
The purple section starting row 69 reports a breakdown of cost elements.and is
used to quantify and explain where the PVRR(d)(benefit)/cost in cell D65 comes
from.In this example,cells C70 through C77 show that the added project cost of
S840 million in the comparison case is more-than-offset by cost savings,
particularly in net power costs (NPC)($882 million)and system fixed cost (S219
million).For this price-policy scenario this means that adding the new wind and
transmission reduces NPC expense such as thel costs,as the new wind generation
displaces more expensive fuel-dependent energy resources.The net benefit of
S357 million is reported in cell C78.Note:this value differs from the 5333
million figure reported in cell D65 becauseof the variable operations and
maintenance (VOM)adjustments that were explained in the cover letter
accompanying the replacement pages of testimony filed on February 23,2018.
Cost of Project (real levelized):
PAC-E-17-07 /Rocky Mountain Power
March 16,2018
IPUC 7"'Set Data Request 71
The "Cost of Project"in row 70 of the purple section is a calculated summary of
data broken down by category in the section immediately above.For example,in
the medium gas.medium carbon dioxide (CO2)price-policy scenario,please refer
to row 70.Columns E through X of row 70,representing years 2017 through
2036,contain formulas to sum rows 52 through 57.Because these studies do not
include data from the 2017 Solar Request for Proposals (2017S RFP)or
repowering projects.only rows 52 through 54 are relevant.
The real levelized "Cost of Project".2017 through 2036,totals S840 million in
every price-policy scenario.These data reflect the application of real levelized
revenue requirement for all capital related costs and nominal application of all
other project costs.As noted in Mr.I ink s direct testimony,the use of real
levelized revenue requirement for capital costs is used to avoid potential
distortions in the economic analysis of capital-intensive assets that have different
lives and in-service dates (Link Direct.page 27.lines 3-22).
Project net Costs (nominal):
The red section starting row 96 reports the nominal "Project Net Costs .2017
through 2050,which totals S1.616 million in everv price-policy scenario.
Nominal values are represented in the year they actually occur for all cost
elements,including revenue requirement associated with capital.This is important
because the purpose of the red section is get an indication of how the proposed
projects might affect customers relative to the base case (without the proposed
projects).Extrapolation of (benefits)/cost beyond the 20-year study period
captured by the SO model and PaR allows for calculation of the costs and benefits
on a present-value revenue requirement basis.
Real levelized rows 52 through 54 (purple section)map 'to the Project Net
Costs"(red section)categories as follows:
Net New Wind Fixed Cost (row 52):
Row Cost Category
100 Capital Recovery-New Wind
101 Network -New Wind
103 TerminalValue -New Wind
104 PTCs -New Wind
Net New Wind Tax and Integration Costs (row 53):
Row Cost Category
102 O&M/Wind Tax -New Wmd
Transmission Project Cost (row 54):
Row Cost Category
98 Transmission Project Capital Recovery
99 IncrementalTransmission Revenues
PAC-E-17-07|Rocky Mountain Power
March 16,2018
IPUC 7"'Set Data Request 71
Cost Inputs and Development:
For calculations supporting the transmission project costs in rows 98 and 99,
please refer to the confidential work paper supporting Mr.Link s second
supplemental direct testimony,specifically "Energy Gateway GM 2017 03 13
21%US Tax.xlsm",tab "Gateway ,which provides the annual levelized and
nominal cost calculations for these values,located in cells F20:G84 and O20:P84
respectively.
For the new wind project costs,due to the ongoing nature of the 2017 Renewable
Request for Proposals (2017R RFP),the financial models associated with the
20 l 7R RFP that contain the derivation of inputs used in the SO model and PaR
are considered commercially sensitive and highlyconfidential.The Company
does not typicallypennit access to commercially sensitive 2017R RFP
documentation until the RFP has been concluded.Please contact Ted Weston at
[phone] or Yvonne Hogle at [phone] to make arrangements for
review.
The financial models provide requested information regarding useful life.capital
costs,and the treatment of nominal and levelized costs used to develop the "PaR -
RFP FSLW Studies"worksheet.
For convenience,cost data for the new wind and transmission projects is
summarized by year and category in the worksheet "Wind Costs"in file "EV2020
Workpapers Second Supp Results Summary File -VOM adjusted".referenced in
above.
Recordholder:Randy Baker
Sponsor:Rick Link
PAC-E-17-07 /Rocky Mountain Power
March 16,2018
IPUC 7th Set Data Request 72
IPUC Data Request 72
Please provide a breakdown for all categories of costs and benents that are
labeled as "Cost of Project"in the Corrected Second Supplemental filing for both
the Medium CO2/Medium Natural Gas and the zero CO2/low natural gas
levelized solar sensitivity analysis referenced as tab:PaR -RFP Solar Sensitivity
within file:EV2020 Workpapers Second Supp Results Sununwy File -VOM
adjusted CONF.Please use the same categories of costs and benefits in the
Project Net Costs included in the Company's Nominal PVRR(d)analysis.For
each category of cost,please provide the following:
(a)specific costs and benefits for each year between 2017 and 2036;
(b)a detailed description of the cost or benefit;
(c)the source of the data;and
(d)how the costs were calculated or derived (including the useful life of the asset
and the number of years included if it is a capital cost.and the specific range
of years of nominal cost that were levelized).
Response to IPUC Data Request 72
Please refer to the Company s response to IPUC Data Request 71,and to the
followingadditional information:
The portfolios selected by the System Optimizer model (SO model)differ
between cases in the solar sensitivities.This is because each model run in SO was
allowed to optimize a new portfolio.with solar bids in competition with wind bids
as well as all other supply-side expansion resources.Please refer to Confidential
Attachment IPUC 72,which provides a listing of the portfolios selected in each
case.Each portfolio carries different costs based on the specific bids selected.
Therefore,unlike in the price-policy scenarios presented in the "PaR -RFP FSLW
Studies"worksheet.the "Cost of Project"and "Projects Net Costs"are not the
same for each case.
Please refer to the confidential work papers supporting the second supplemental
direct testimony of Company witness,Rick T.Link.specifically the file "EV2020
Workpapers Second Supp Results Summary File -VOM adjusted.xlsx",tab "PaR
-RFP Solar Sensitivity".row 55 (Net New Solar Fixed Cost)becomes relevant in
the 2017 through 2036 levelized data.Rows 110 and 111 (Network -Solar and
PPA Cost -Solar)become relevant in the 2017 through 2050 nominal section.
All 2017 Solar Request for Proposals (2017S RFP)project bids were received as
power-purchase agreements (PPA).Due to the ongoing nature of the 2017 Solar
PAC-E-17-07 /Rocky Mountain Power
March 16,2018
IPUC 76'Set Data Request 72
Request for Proposals (2017S RFP),the financial models associated with the
2017S RFP that contain bid costs and energy profiles are considered
commercially sensitive and highlyconfidential.The Company does not typically
permit access to commercially sensitive 2017S RFP documentation until the RFP
has been concluded.Please contact Ted Weston at [phone] or Yvonne
Hogle at [phone] to make arrangements for review.
For convenience,cost data for the solar bids is summarized by year and category
in the worksheet "Solar Costs °in file "EV2020 Workpapers Second Supp Results
Summary File -VOM adjusted",referenced in above.
Confidential information is provided subject to the terms and conditions of the
protective agreement in this proceeding.
Recordholder:Randy Baker
Sponsor:Rick Link
PAC-E-17-07 /Rocky Mountain Power
March l6,2018
IPUC 7*Set Data Request 73
IPUC Data Request 73
Reference the Corrected Second Supplemental Direct Testimony of Rick Link,
"CORRECTED Table 2-SS"and "CORRECTED Table 3-SS ':Please provide a
narrative explanation for why the two referenced tables produce such different
results by identifying the drivers of the differences between NPVRR(d)benefits
of $357 million in CORRECTED Table 2-SS and $167 million in CORRECTED
Table 3-SS under the medium gas,medium CO2 scenario;and by providing a
differential analysis of the different costs and benefit categories for the two tables
as reflected in the Company's nominal analysis spreadsheet(filename:EV2020
Workpapers Second Supp Results Summary File -VOMadjusted Conf;Tab:Par
-RFP FSLW Studies).
Response to IPUC Data Request 73
Please refer to Attachment IPUC 73,which explains how cost and benefit items
included in the economic analyses supporting Tables 2-SS and 3-SS are treated.
In summary,all revenue requirement associated with capital costs reported in
Table 2-SS are levelized.and system benefits (i.e.,reductions to system costs
associated with the new wind and transmission)are modeled through 2036.In
Table 3-SS,revenue requirement associated with project capital costs are nominal
and benefits are extrapolated out from 2037 through 2050 based on modeled
results observed over the period 2028 through 2036.Capital revenue requirement
has more weight in the present-value results reported in Table 3-SS,and offsetting
this impact is an extension of extrapolate benefits beyond 2036.
Recordholder:Rick Link
Sponsor:Rick Link
PAC-E-l7-07 /Rocky Mountain Power
March 16,2018
IPUC 7"'Set Data Request 74
IPUC Data Request 74
For the Company's solar and new wind Nominal PVRR(d)analysis,please
describe in detail how the number of megawatt-hours used to project the System
Impacts from 2037 through 2045 for the solar scenarios and from 2037 through
2050 for the wind scenarios were derived.
Response to IPUC Data Request 74
The volume of generation from all wind is based upon the expected generation
levels supplied by the bidder,with adjustments applied to certain wind bids based
on recommendations from a third-party wind expert as described in the
supplemental direct and second supplemental direct testimony of Company
witness,Rick T.Link.Similarly,the volume of generation from all solar bids is
based upon the expected generation levels supplied by the bidders.For solar
projects,degradation rates supplied by the bidders were used to reduce generation
over the term of the proposed power purchase agreements (PPA).This
information does not change,whether applied to the System Optimizer model (SO
model)and Planning and Risk (PaR)model simulation period through 2036 or
through the end of the asset life or PPA term,as applicable.Consequently,the
volume of generation beyond 2036 is based on the same inf<mnation used to
produce expected volumes prior to 2036.
Recordholder:Rick Link
Sponsor:Rick Link
PAC-E-l7-07 /Rocky Mountain Power
March 12,2018
IPUC 70'Set Data Request 75
IPUC Data Request 75
Please provide a levelized PVRR(d)analysis for all price policy scenarios using
levelized PTC benefits in the Cost of Project similar to the levelized PVRR(d)
analysis submitted in the Company's original Application.
Response to IPUC Data Request 75
Please refer to Confidential Attachment lPUC 75.The example provided is the
final shortlist medium gas,medium carbon dioxide (CO2)case (P_Rl7-FSLW-
MM).however the same estimated present value of revenue requirements (PVRR)
impact (approximately$214 million increased cost)can be applied to all price-
policy scenarios.
Confidential information is provided subject to the terms and conditions of the
protective agreement in this proceeding.
Recordholder:Randy Baker
Sponsor:Rick Link
PAC-E-17-07 /Rocky Mountain Power
March 16,2018
IPUC 70'Set Data Request 76
IPUC Data Request 76
Please provide the levelized and nominal PVRR(d)analysis relative to the base
case for all price policy scenarios locking in the Company's final short-list of
Solar projects that has a comparable level of effectivecapacity/generation to the
new wind scenario.
Response to IPUC Data Request 76
The Company objects to this request as overly broad,unduly burdensome,and
requiring development of a special study or information not readily available in
the format requested or maintained in the ordinary course of business.Without
waiving these objections.the Company responds as follows:
At the time the Company filed its second supplemental direct testimony.it had not
yet established a final shortlist for the 2017 Solar Request for Proposals (2017S
RFP).Since that filing,the Company has completed its 2017S RFP bid-evaluation
and selection process and has determined based on that analysis to not select any
bids to the 2017S RFP final shortlist.The 20l7S RFP bid-evaluationand selection
analyses includes analysis of a 2017S RFP bid portfolio that contains 1,320
megawatts (MW)of bids,which is comparable to the 1.311 MW of wind bids
selected to the 20l7R RFP final shortlist.
Please refër to Confidential Attachment IPUC 76-1,which summarizes the 2017S
RFP bid-evaluationand selection analysis shared with the independent evaluator
(IE)retained by PacifiCorp to monitor the 2017S RFP.Please also refer to
Confidential Attachment IPUC 76-2 and Attachment IPUC 76-3,which contain
the confidential and non-confidentialwork papers supporting this analysis.
Confidential information is provided subject to the terms and conditions of the
protective agreement in this proceeding.
Recordholder:Rick Link
Sponsor:Rick Link
PAC-E-17-07/Rocky Mountain Power
March 16,2018
lPUC 70'Set Data Request 77
IPUC Data Request 77
Please provide information relativeto the nominal solar PVRR(d)analysis
providedby the Company:
(a)What is the useful life of assets assumed in the solar network costs?
(b)Are the assets in the solar network costs dedicated to the solar project and can
they be utilized past the term of the PPA's?
(c)Please describe in detail how the Solar PPA costs were derived and/or
calculated?Are there any differences in inputs or derivations for the 2017
through 2036 timeframe and the 2037 through 2045 timeframe?
Response to IPUC Data Request 77
(a)Interconnection network upgrades associated with solar power purchase
agreement (PPA)bids are assumed to have a 62-year life.
(b)The assumed interconnection network upgrades are required for the bidder to
receive interconnection service.These costs are system costs and not directly
assigned to the bidder.which is the interconnection customer.Please refer to
the Company's response to subpart (a)above.The assumed life of the
interconnection network upgrades is 62-years,which is beyond the term of the
solar PPAs bid into the 2017 Solar Request for Proposals (20l7S RFP).
Consequently,the equipment installed to support the interconnection will
remain operable beyond the proposed PPA term.
(c)The total cost of the solar PPAs are comprised of a PPA cost,interconnection
network upgrades and solar integration.The PPA costs were received from the
bidder.Network upgrade and integration costs are included in the bid models
used to develop model inputs,which are based on information supplied by the
bidder or as estimated by the Company,recognizing that all bidders do not
have completed system impact studies from PacifiCorp's transmission
function.The levelized 2017 through 2036 "Cost of Project"and the nominal
20l7 through 2036 "Project Net Costs"are developed from the same source
data.
Due to the ongoing nature of the 2017S RFP,the financial models associated
with the 2017S RFP that contain bid costs and energy profiles are considered
commercially sensitive and highlyconfidential.The Company does not
typically permit access to commercially sensitive 2017S RFP documentation
until the RFP has been concluded.Please contact Ted Weston at (801)220-
2963 or Yvonne Hogle at [phone] to make arrangements for review.
PAC-E-17-07 /Rocky Mountain Power
March 16.2018
IPUC 7*Set Data Request 77
Recordholder:Randy Baker
Sponsor:Rick Link
PAC-E-17-07 /Rocky Mountain Power
March 16,2018
IPUC 70'Set Data Request 78
IPUC Data Request 78
Please provide information relative to the nominal new wind PVRR(d)analysis
providedby the Company:
(a)Please describe and provide a breakdown of the components contained within
Transmission Capital Recovery category.
(b)What are the useful lives of the assets contained within Transmission Capital
Recovery category?
(c)How far out are the Transmission Capital Recovery costs and benefits
included in the analysis?
(d)Please provide a description and the method used to derive incremental
transmission revenues.
(e)Please describe and provide a breakdown of the components contained within
Capital Recovery -New Wind category.
(f)How far out in time are the Capital Recovery -New Wind costs and benefits
included in the analysis?
(g)Please describe and provide a breakdown of the components c<mtained within
Network -New Wind category.
(h)What are the useftil lives of the assets contained within Network -New Wind
category?
(i)How far out are the Network -New Wind costs and benefits included in the
analysis'?
(j)Please describe and provide a breakdown of the components contained within
the O&M/Wind Tax -New Wind category.
(k)Please describe and provide a breakdown of all the components contained
within the Terminal Value -New Wind category.
(l)Please describe and provide a breakdown of all the components contained
within the PPA Cost -New Wind category.
Response to IPUC Data Request 78
(a)For transmission project costs,please refer to the confidential work paper
supporting the second supplemental direct testimony of Company witness,
PAC-E-17-07/Rocky Mountain Power
March 16,2018
IPUC 7"'Set Data Request 78
Rick T.Link.specifically file "Energy Gateway GM 2017 03 13 21%US
Tax.xlsm",tab "Gateway".which provides the annual levelized and nominal
cost calculations for "Capital Recovery ,located in cells F20:84 and O20:84
respectively.Formulas and underlying data are included in the workbook.
(b)The transmission project has a book life of 62 years,reflected in formulas and
data provided in the confidential work paper supporting Mr.Link's second
supplemental direct testimony,specifically file "Energy Gateway GM 2017 03
13 21%US Tax.xlsm".
(c)The 2050 study period captures the full 30-year life of the wind projects and a
portion of the cost for the transmission projects while capturing the cost and
benefits of both investments over this period.This analysis allows the
Company to show the annual change in revenue requirement through 2050.
PacifiCorp has not included the costs of the transmission that will remain in
rate base beyond 2050,but has also not included any incremental benefits
associated with this transmission asset beyond 2050,when additional
generation,including new wind facilities,could be added to the system to
meet system load.
(d)Wholesale transmission revenue is calculated as 12 percent of the gross
revenue requirement in cach year.as provided in the confidential work paper
supporting Mr.Link°s second supplemental direct testimony.specifically file
"Energy Gateway GM 2017 03 13 21%US Tax.xlsm".
The process around determining the l 2 percent estimate was based on
historical analysis of the relative amount of revenue received from third
parties compared to the transmission revenue requirement for a given year.
The proposal is to use percentages each year based on the actual revenues
collected relative to the overall transmission revenue requirement,which is
calculated each year per transmission formula rate.Transmission wheeling
revenues are allocated to states based on overall allocation fimnula rather than
assignment of transmission assets and respective revenues to specine states
due to the nature of how network service revenues is determined as well as
other drivers.Additional transmission assets including 230 kilovolt (kV)
segmentsplaced in service will increase the transmission revenue
requirement,which will result in increases in third-party wheeling revenues
collected.These revenues are credited back to PaciñCorp s retail customers.
(e)"Capital Recovery --New Wind"is specine to each Enal short list wind bid.
This includes the return on investment,return of investment,income taxes,
deferred income taxes,and property taxes.Due to the ongoing nature of the
2017 Renewable Request for Proposals (2017R RFP),the Snancial models
associated with the 2017R RFP that contain the derivation of inputs used in
the system optimi7er model (SO model)and planningand risk (PaR)model
PAC-E-17-07 /Rocky Mountain Power
March 16.2018
IPUC 7"'Set Data Request 78
are considered commercially sensitive and highlyconfidential.The Company
does not typicallypermit access to commercially sensitive 2017R RFP
documentation until the RFP has been concluded.Please contact Ted Weston
at [phone] or Yvonne Hogle at [phone] to make arrangements
for review.
(f)The levelized analysis includes capital recovery for new wind through 2036.
The nominal analysis includes capital recovery for new wind through 2050.
(g)Network upgrade costs are comprised of revenue requirement for the in-
service initial capital associated with interconnection network upgrades
specific to each wind facility.This reflects return of investment,return on
investment,income taxes,deferred income taxes.and property taxes.Due to
the ongoing nature of the 2017R RFP,the financial models associated with the
2017R RFP that contain the derivationof inputs used in the SO model and
PaR model are considered commercially sensitive and highlyconfidential.
The Company does not typicallypermit access to commercially sensitive
2017R RFP documentation until the RFP has been concluded.Please contact
Ted Weston at (80T)220-2963 or Yvonne Hogle at [phone] to make
arrangements for review.
(h)The interconnection network upgrade costs have a book life of 62 years.
(i)The levelized analysis includes interconnection network upgrade costs for
new wind through 2036.The nominal analysis includes interconnection
network upgrade costs for new wind through 2050.
(j)The "O&M/Wind Tax -New Wind"category is comprised of three parts:(1)
capitalized fixed operations and maintenance (O&M),(2)non-capitalized
fixed O&M,and (3)the Wyoming wind tax for new wind resource located in
the state of Wyoming.These elements are summarized for convenience by
year and resource in the confidential work papers supporting Mr.Link's
second supplemental direct testimony,specifically file "EV2020 Workpapers
Second Supp Results Summary File -VOM adjusted.xlsx",tab "Wind Costs".
(k)Non-PPA new wind resources include a terminal value.Components of
terminal value include:development rights:transmission assets (i.e..network
upgrades);and non-transmission infrastructure (i.e..roads).The first two
components were modeled using a 62-year life.the third was modeled using a
45-year life.For each month starting fi·om the commercial operation date
(COD)of an asset,the remaining life of each component,after depreciation,is
revalued at inflation (assumed at 2.2 percent per year).The terminal value of
the project is the sum of the three components.after deprecation and
revaluation,at the retirement date of the generation asset.The calculation is in
the "Terminal Value Calculation"worksheet of each of the Company s
PAC-E-17-07/Rocky Mountain Power
March l6,2018
IPUC 7a'Set Data Request 78
fmancial models.Due to the ongoing nature of the 2017R RFP,the financial
models associated with the 2017R RFP that contain the derivation of inputs
used in the SO model and PaR model 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 Ted Weston at [phone] or Yvonne Hogle at
[phone] to make arrangements for review.
(1)The "PPA Cost"is the cost of the PPA as presented by the bidder.
Recordholder:Randy Baker
Sponsor:Rick Link
PAC-E-17-07 |Rocky Mountain Power
March 16,2018
IPUC 7"'Set Data Request 79
IPUC Data Request 79
Is the Company proposing to recover the costs associated with the combined
projects consistently with the way the revenue requirements are modeled in its
levelized analysis?If not,please explain why not?
Response to IPUC Data Request 79
No.The Company is proposing to recover the costs associated with the Combined
Projects consistently with the way revenue requirements would be calculated if
included in base rates.That is,the Company proposes to recover the nominal
revenue requirements through the resource tracking mechanism (RTM)until such
time that the Combined Projects are included in base rates.
Recordholder:Terrell Spackman
Sponsor:Joelle Steward
PAC-E-17-07|Rocky Mountain Power
March 16,2018
IPUC 7*Set Data Request 80
IPUC Data Request 80
How are the revenue requirements that flow into Joelle Stewards analysis
modeled.using levelized revenue requirements or nominal revenue requirements?
Please explain the rationale for this approach in detail?
Response to IPUC Data Request 80
The revenue requirements that flow into Joelle Steward s exhibits are calculated
as nominal revenue requirements.Using nominal revenue requirements is the best
representation of what the actual revenue requirement costs and benefits would be
if the Combined Projects were placed in base rates during that same period.
Recordholder:Terrell Spackman
Sponsor:Joelle Steward