20180329PAC to Staff WY WIEC Set 21 (1-13) (1).pdf

ROCKY MOUNTAINPOWER
A DIVlSION OF PACIFICORP 1407 W North Temple,Suite 330
Salt Lake City,Utah 84116
March 14,2018
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 216*Set Data Request (1-13)
Please find enclosed Rocky Mountain Power's Responses to WIEC 216'Set Data Requests 21.6-
21.13.The remaining responses will be provided separately.Provided on the enclosed
Confidential CD is Confidential Attachment WIEC 21.11.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
March 14,2018
WIEC Data Request 21.6
WIEC Data Request 21.6
Please provide a full and detailed description of the cost components included in the
terminal value assumption and fully executable work papers.
Response to WIEC Data Request 21.6
Please refer to page 17,line 18 through page 18,line 9 in the supplemental direct
testimony of Company witness,Rick T.Link for a description of 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 from the commercial operation date 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 fmancial models.
Due to the ongoing nature of the 2017 Renewable Request for Proposals (2017R RFP),
the financial models associated with the 2017R RFP that contain the derivation of inputs
used in the system optimizer (SO)model and planning and risk model (PaR)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.
Respondent:Alex Lee
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
March 14,2018
WIEC Data Request 21.7
WIEC Data Request 21.7
The Company's 2017S RFP timeline indicates the Company will execute any solar
agreements on June 28,2018.
(a)Please indicate whether the Company intends to execute any solar agreements.
(b)Please provide all regulatory approvals the Company must obtain prior to executing
the solar agreements.If any necessary regulatory approvals will be sought after
execution of the agreements,please indicate what those approvals are.
(c)Please provide all regulatory approvals the Company may seek,whether required or
not,prior to executing the solar agreements.
(d)If the Company does not intend to seek any regulatory approvals,please so indicate
and explain why not.
Response to WIEC Data Request 21.7
(a)No.The Company completed its final shortlist evaluation and submitted its
recommendationto the IndependentEvaluator (IE)on March 12,2018 which
recommends not selecting any bids from the 2017 Solar Request for Proposals (2017S
RFP),and to reassess potential benefits from solar resource opportunities in the 2019
Integrated Resource Plan (IRP).
(b)Please refer to the Company's response to subpart (a)above.
(c)Please refer to the Company's response to subpart (a)above.
(d)Please refer to the Company's response to subpart (a)above.
Respondent:Bruce Griswold
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
March 14,2018
WIEC Data Request 21.8
WIEC Data Request 21.8
Please provide a breakdown for all categories of costs and benefits that are labeled as
"Cost of Project"in the Second Supplementalfiling 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 specific costs
and benefits for each year between 2017 and 2036,a detailed description of the cost or
benefit,the source of the data,and 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 WIEC Data Request 21.8
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 FSL"
provided on February 23,2018.The "Cost of Project"for each price-policy scenario 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.Rows 52 through 54 "map"to the "Project Net
Costs"categories as follows:
Net New Wind Fixed Cost (row 52):
Row Cost Category
100 Capital Recovery -New Wind
101 Network -New Wind
103 Terminal Value -New Wind
104 PTCs -New Wind
Net New Wind Tax and Integration Costs (row 53):
Row Cost Category
102 O&M/Wind Tax -New Wind
Transmission Project Cost (row 54):
Row Cost Category
98 TransmissionProject Capital Recovery
99 Incremental Transmission Revenues
The levelized "Cost of Project",2017 through 2036,totals $840 million in every price-
policy scenario.The nominal "Project Net Costs",2017 through 2050 totals $1,616
million in every price-policy scenario.
20000-520-EA-17 /Rocky Mountain Power
March 14,2018
WIEC Data Request 21.9
WIEC Data Request 21.9
Please provide a breakdown for all categories of costs and benefits that are labeled as
"Cost of Project"in the Second Supplementalfiling 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 Sensitvity 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 specific costs and benefits for
each year between 2017 and 2036,a detailed description of the cost or benefit,the source
of the data,and how the costs were calculated or derived (includingthe 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 WIEC Data Request 21.9
Please refer to the Company's response to WIEC Data Request 21.8,and to following
additional information:
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 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 highly
confidential.The Company does not typically permit access to commercially sensitive
2017S RFP documentationuntil the RFP has been concluded.Please contact Stacy
Splittstoesser at [phone] or Yvonne Hogle at [phone] to make
arrangements for review.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
March 14,2018
WIEC Data Request 21.10
WIEC Data Request 21.10
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 WIEC Data Request 21.10
With regard to the new wind projects,please refer to the Company's response to WIEC
Data Request 14.23.
With regard to solar generation,profiles for new solar resources are modeled in the
System Optimizer model (SO model)as an index,using annual hourlypattern data (12
months by 24 hours).This data,covering the 8,760 hours in a year,incorporates such
factors as locational solar profile,solar degradation over time,and seasonal and time-of-
day variances.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.The Planning and Risk (PaR)modeling is
similar to SO modeling,but because the solar data is already configured as a monthly
shape,the PaR sample week,described in the Company's response to WIEC Data
Request 14.23,is not relevant.In addition to the variabilityin solar shapes captured in the
annual hourlypattern data,the PaR model includes load variance as a stochastic
parameter in the 50 stochastic iterations evaluated for each study.Also,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
March 14,2018
WIEC Data Request 21.11
WIEC Data Request 21.11
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 WIEC Data Request 21.11
Please refer to Confidential Attachment WIEC 21.11.The example provided is the final
shortlist medium gas,medium carbon dioxide (CO2)case (P_R17-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.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
March 14,2018
WIEC Data Request 21.12
WIEC Data Request 21.12
Please provide the levelized and nominal PVRR(d)analysis relative to the base case for
all price policy scenarios locking in the Company's short-list of Solar projects that has a
comparable level of effective capacity/generationto the new wind scenario.
Response to WIEC Data Request 21.12
The Company objects to this request as overlybroad,undulyburdensome,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:
Existing cases Rl7-FSSR-MM (optimized solar-only sensitivity)and Rl7-FSLW-MM
(optimized wind-onlyprice-policy scenario)have similar amounts of wind capacity
(1,419 megawatts (MW)solar bid capacity and 1,311 MW wind bid capacity
respectively).The solar case reports a levelized present value of revenue requirements
differential (PVRR(d))benefit of $206 million,whereas the wind case reports a levelized
PVRR(d)benefit of $333 million,for an increased relative wind benefit of $127 million.
The solar case reports a nominal PVRR(d)cost of $60 million,whereas the wind case
reports a levelized PVRR(d)benefit of $196 million,for an increased wind benefit of
$256 million.
With regard to the 2017 Renewable Request for Proposals (2017R RFP)and 2017 Solar
RFP (2017S RFP),the System Optimizer model (SO model)provides an optimized
portfolio expansion plan,including as much new wind and solar generationbased on bids
received to produce a least-cost combination of resources that meets system
requirements.These determinations are made in competition with all other supply-side
resource options.The Company believes that the evaluation of a speculative combination
of resources or pre-determined amount of resources not otherwise studied within the
price-policy scenarios would not be useful.
Respondent:Randy Baker
Witness:Rick Link
20000-520-EA-17 /Rocky Mountain Power
March 14,2018
WIEC Data Request 21.13
WIEC Data Request 21.13
Please provide information relative to the nominal solar PVRR(d)analysis provided by
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?
(d)Please provide information relative to the nominal new wind PVRR(d)analysis
provided by the Company:
(e)Please describe and provide a breakdown of the components contained within
Transmission Capital Recovery category.
(f)What are the useful life of the assets containedwithin Transmission Capital
Recovery category?
(g)How far out are the Transmission Capital Recovery costs and benefits included in
the analysis?
(h)Please provide a description and the method used to derive incremental
transmission revenues.
(i)Please describe and provide a breakdown of the components contained within
Capital Recovery -New Wind category.
(j)How far out in time are the Capital Recovery -New Wind costs and benefits
included in the analysis?
(k)Please describe and provide a breakdown of the components contained within
Network -New Wind category.
(1)What are the useful life of the assets containedwithin Network -New Wind
category?
(m)How far out are the Network -New Wind costs and benefits included in the
analysis?
(n)Please describe and provide a breakdown of the components contained within the
O&M/Wind Tax -New Wind category.
20000-520-EA-17 /Rocky Mountain Power
March 14,2018
WIEC Data Request 21.13
(o)Please describe and provide a breakdown of all the components contained within
the Terminal Value -New Wind category.
(p)Please describe and provide a breakdown of all the components contained within
the PPA Cost -New Wind category.
Response to WIEC Data Request 21.13
(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 (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 (2017S RFP).
(c)Solar PPA costs are comprised of a PPA cost,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 developmodel inputs.The
levelized 2017 through 2036 "Cost of Project"and the nominal 2017 through 2036
"Project Net Costs"are developedfrom 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 highly confidential.The Company does not typically
permit access to commercially sensitive 2017S RFP documentation until the RFP
has been concluded.Please contact Stacy Splittstoesser at [phone] or
Yvonne Hogle at [phone] to make arrangements for review.
(d)Please refer to the Company's responses below.
(e)For transmission project costs,please refer to the confidential work paper
supporting the second supplemental direct testimony of Company witness,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
underlyingdata are included in the workbook.
(f)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 GatewayGM 2017 03 13 21%US
Tax.xlsm".
(g)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
20000-520-EA-17 /Rocky Mountain Power
March 14,2018
WIEC Data Request 21.13
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,includingnew wind facilities,could
be added to the system to meet system load.
(h)Wholesale transmission revenue is calculated as 12 percent of the gross revenue
requirement in each 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".Please also refer to the Company's response to
OCA Data Request 1.68.
(i)"Capital Recovery-New Wind"is specific to each final short list wind bid.Due to
the ongoing nature of the 2017 Renewable Request for Proposals (2017R RFP),the
financial models associated with the 2017R RFP that contain the derivation of
inputs used in the system optimizer model (SO model)and planning and risk (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 Stacy
Splittstoesser at [phone] or Yvonne Hogle at [phone] to make
arrangements for review.
(j)The levelized analysis includes capital recovery for new wind through 2036.The
nominal analysis includes capital recovery for new wind through 2050.
(k)Network upgrade costs are comprised of revenue requirement for the in-service
initial capital associated with interconnection network upgrades specific to each
wind facility.Due to the ongoing nature of the 2017R RFP,the financial models
associated with the 2017R RFP that contain the derivation ofinputs 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 Stacy Splittstoesser at [phone] or Yvonne Hogle at [phone]
to make arrangements for review.
(1)The interconnection network upgrade costs have a book life of 62 years.
(m)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.
(n)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 Wyomingwind 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".
20000-520-EA-17 /Rocky Mountain Power
March 14,2018
WIEC Data Request 21.13
(o)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 from 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 generationasset.The calculation is in the "Terminal Value Calculation"
worksheet of each of the Company's financial 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 documentationuntil the RFP
has been concluded.Please contact Stacy Splittstoesser at [phone] or
Yvonne Hogle at [phone] to make arrangements for review.
(p)The "PPA Cost"is the cost of the PPA as presented by the bidder.
Respondent:Randy Baker
Witness:Rick Link