20200115PAC to IIPA UT 18-035-36 WRA Set 2 (1-15).pdf

November 18, 2019 Nancy Kelly
Western Resource Advocates
9463 N. Swallow Rd. Pocatello ID 83201 [e-mail] (C)
Sophie Hayes
Western Resource Advocates 307 West 200 South, Suite 2000 Salt Lake City UT 84102 [e-mail] (C)

Penny Anderson [e-mail] (W) Mike Majoros
Snavely King Majoros
3 Larbo Rd. Millersville, MD 21108 [e-mail]
RE: UT Docket No. 18-035-36
WRA 2nd Set Data Request (1-15) Please find enclosed Rocky Mountain Power’s Responses to WRA 2nd Set Data Requests 2.1-2.15. Also provided are Attachments WRA 2.5- (1-2), 2.6, and 2.10.

If you have any questions, please call me at [phone]. Sincerely,

___/s/___ Jana Saba Manager, Regulation
Enclosures
C.c. Division of Public Utilities [e-mail] (C) Roxie McCullar/DPU [e-mail] (C) Cheryl Murray/OCS [e-mail] (C)
Donna Ramas/OCS [e-mail] (C)
Salt Lake City, UT 84116
Gary A. Dodge/UAE [e-mail] (W) Phillip J. Russell/UAE [e-mail] (C) Kevin Higgins/UAE [e-mail] (C)
Neal Townsend/UAE [e-mail] (C)(W)
Courtney Higgins/UAE [e-mail] (C)(W) Justin Bieber/UAE [e-mail] (C)(W) Hunter Holman/UCE [e-mail] (C) Sarah Wright/UCE [e-mail] (C)

18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.1 WRA Data Request 2.1 Pages 3 to 4 of the Company’s Application state, “The application of the depreciation
rates in the Depreciation Study would increase annual depreciation expense by approximately $100.1 million on a Utah basis, based on projected plant balances as of December 31, 2020, and the inter-jurisdictional allocation methodology currently in effect (the 2017 Protocol approved in Docket Nos. 15-035-86 and 17-035-06). In addition, the proposed termination of excess reserve amortizations also increases the
depreciation expense by approximately $28.0 million on a Utah basis. Combined, the changes would increase depreciation expense by approximately $128.1 million on a Utah basis.” Please provide in both hard copy and electronic formats an itemized translation of these depreciation expense increases into their resulting incremental Utah basis revenue requirement using the Company’s currently authorized cost of capital. By Utah-specific,
we mean allocated or situs-assigned to Utah. Response to WRA Data Request 2.1 Please refer to “RMP McDougal Workpapers 10 – Depreciation Rate Comparison” that
was provided as part of Company’s Depreciation Study filing. Tab “WY, UT, ID” contains a complete list of the Company’s proposed depreciation rates to depreciable plant balances which resulted in a combined increase of depreciation expense by approximately $128.1 million on a Utah basis.
Due to the depreciation expense being a pass through item, the above mentioned $128.1 million increase is an actual incremental change in Utah’s revenue requirement. The Company’s currently authorized cost of capital is irrelevant in calculating incremental Utah revenue requirement due to increased depreciation expense.

18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.2 WRA Data Request 2.2 Provide all tabulations included in the Utah-specific Depreciation Study and all data
necessary to recreate in their entirety all analyses and calculations performed for the preparation of the Utah-specific Depreciation Study. By Utah-specific, we mean allocated or situs-assigned to Utah. Please provide this and all electronic data in Excel (or .txt format if appropriate), with all formulae intact. Please provide any record layouts necessary to interpret the data. Include in the response electronic spreadsheet copies of all
of the schedules and/or tables included in the Depreciation Study, with all formulae intact, including Summary Statements and account-specific statements for each account. Identify and explain all unique spreadsheet formulae or assumptions required to recreate in their entirety all of the witness’ calculations given the inputs.
Response to WRA Data Request 2.2 Please refer to responses to DPU Set 1 for all tabulations included in the Depreciation Study. The attachments to DPU Set 1, Question 3 includes key data necessary to recreate in their entirety all analyses and calculations.

18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.3 WRA Data Request 2.3 For each Utah-specific plant account, and for each year since the inception of the account
up to and including December 31, 2017, please provide the following standard depreciation study data as identified at pages 27-30 of the August 1996 NARUC Public Utility Depreciation Practices Manual (“NARUC Manual”). By Utah-specific, we mean allocated or situs-assigned to Utah. At a minimum, the data provided should be the same data set used to conduct the life analyses included in the Company’s filed depreciation
study. Provide the data in electronic format (Excel or .txt). Provide aged vintage data if available. Use the codes identified for each type of data, unless the Company regularly uses other codes. In those circumstances, identify and explain the Company’s coding system.

Response to WRA Data Request 2.3 Please refer to the attachments in DPU 1.3 for the requested information. The transaction codes used in the life and net salvage analyses data use the same as listed in this request.

18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.4
WRA Data Request 2.4
If the depreciation study data provided in response to the preceding question is not the
exact set of data used for the Depreciation Study submitted in this case, please explain all differences and reconcile the amounts provided to those used in the Depreciation Study.
Response to WRA Data Request 2.4
The Depreciation Study data provided in response to Data Request DPU 1.3 and referenced in WRA 2.3 is the same data use for the Depreciation Study submitted in this case.
18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.5 WRA Data Request 2.5 Please provide all amortization workpapers and calculations in electronic format (Excel)
with all formulae intact. Include all workpapers and support for the selection of the proposed amortization periods. Response to WRA Data Request 2.5
The amortization lives of the general plant accounts as shown on page V-4 of the 2018 depreciation study, Exhibit RMP_(JJS-2) were established in 1996 for all of the listed accounts except 397.00 – Communication Equipment, which was established in 2012. Please refer to Attachment WRA 2.5-1 for the work papers establishing the lives for accounts 391.00 - Office Furniture, 391.20 - Personal Computers and Printers, 391.30 –
Office Equipment, 393.00 - Stores Equipment, 394.00 – Tools, Shop, and Garage Equipment, 395.00 – Laboratory Equipment, 397.20 – Mobile Radio Communication Equipment, and 398.00 – Miscellaneous Equipment. These amortization lives were initially filed in the 1997 depreciation study in Docket No. 98-2035-03. Please refer to Attachment WRA 2.5-2 for the work papers establishing the life for account 397.00 –
Communication Equipment. This amortization life was initially filed in the 2012 depreciation study in Docket No. 13-035-02.
18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.6 WRA Data Request 2.6 Please provide the following annual accumulated depreciation amounts for all plant
accounts for the last five years (up to, and including December 31, 2018). If the requested data is not available for the last five years, please provide the data for as many years as are available. Please provide data in both hard copy and electronic format (Excel or .txt): (a) Beginning and ending reserve balances;
(b) Annual depreciation expense; (c) Annual retirements;
(d) Annual cost of removal and gross salvage; (e) Annual third-party reimbursements. Response to WRA Data Request 2.6
Please refer to Attachment WRA 2.6, which provides the requested data for the last 5 years through December 31, 2018.
18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.7 WRA Data Request 2.7 If not provided in the workpapers, please provide the retirement rate and SPR (simulated
plant record) analysis summaries ranking the best-fit life/curve combinations for each account. Response to WRA Data Request 2.7
Please refer to the company’s response to DPU 1.3 in this case.
18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.8 WRA Data Request 2.8 For any accounts where Mr. Spanos or the Company discounted or disregarded the results
of Mr. Spanos’s statistical life analysis, please provide a narrative explanation for this decision, including any supporting documentation relevant. Response to WRA Data Request 2.8
As described in Part III of the Depreciation Study, the statistical analyses is only part of the process of life analyses. Life analyses includes review of statistical analyses of data; Company policies and outlook as determined during discussions; and survivor curve estimates from previous studies of the Company, as well as other electric companies. Additionally in Part III, it is stated that in 103 accounts or subaccounts the statistical
analyses was a good indicator of life characteristics of the account. For the other accounts, the statistical data was limited or inconclusive, so informed judgement was a key factor. For example, Transmission Account 358, Underground Conductor and Devices, has had limited activity and 98 percent is still surviving, thus, understanding the nature of the assets in the account and the causes of retirement, and the estimate currently
used by the Company as well as those used by others has an impact on the curve selected.
18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.9 WRA Data Request 2.9 For all accounts and locations for which the life span method is proposed, provide the
following information to support the final retirement dates: (a) Economic studies. (NARUC Depreciation Manual, p. 146) (b) Retirement plans. (NARUC Depreciation Manual, p. 146)
(c) Forecasts. (NARUC Depreciation Manual, p. 146) (d) Studies of technological obsolescence. (NARUC Depreciation Manual, p. 146)
(e) Studies of adequacy of capacity. (NARUC Depreciation Manual, p. 146) (f) Studies of competitive pressure. (NARUC Depreciation Manual, p. 146) (g) Relationship of type of construction to remaining life span.
(h) Relationship of attained age to remaining life span. (i) Relationship of observed features and conditions at the time of field visits to remaining life span.
(j) Relationship of specific plans of management to remaining life span. Response to WRA Data Request 2.9
The life span method is proposed for production FERC Account 311 through FERC Account 346. PacifiCorp conducts periodic resource and economic analysis to determine assumed retirement dates for each of the production units. One of the purposes of the resource plans is to recommend the capital improvements necessary to enable PacifiCorp
to continue to provide quality service that meets the needs of its customers. The resource
plan examines adequacy of growth, assesses production capacity and unit efficiency. As part of the operational planning process, PacifiCorp assesses the adequacy of existing, major facilities and the need to make capital improvements, including complete
replacement, of such facilities during the time horizon studied. In so doing, various
factors are considered, including engineering criteria, quality of service, evolving regulatory standards, environmental regulation and cost. This process forms the basis for the Company’s development of detailed capital budgets and financing plans which, in turn, drive the specific capital projects that are completed each year.

18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.10 WRA Data Request 2.10 Specifically identify who or what law or statute or commission imposed the AROs
identified in Kobliha Workpaper 16; include AROs created by promissory estoppel. Response to WRA Data Request 2.10 Please refer to Attachment WRA 2.10 which provides the obligating reason for each asset
retirement obligation (ARO) identified in the ARO work paper.
18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.11 WRA Data Request 2.11 Does PacifiCorp have any legal AROs to incur the plant decommissioning costs, as
discussed in Mr. Spanos’s Testimony at page 9 limes 179 to 195 and included in Mr. Spanos’s production plant depreciation rate calculations? Response to WRA Data Request 2.11
PacifiCorp’s estimate for decommissioning costs in Exhibit RMP_(CAT-2) reflects costs that the company believes it will incur to decommission plant units which it then includes in its proposed depreciation rates. Asset Retirement Obligation (ARO) reporting is a Securities and Exchange Commission
(SEC) financial reporting requirement that the company is required to recognize in its financial statements. There are amounts included in the decommissioning costs shown in Exhibit RMP__(CAT-2) which also have been designated as ARO costs for SEC reporting.

18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.12 WRA Data Request 2.12 With regard to any generating plant or unit retired by PacifiCorp, for each retired plant or
unit, provide the status of the plant or unit. Did the Company decommission the plant or unit in conformance with the decommissioning approaches underlying Mr. Spanos’s proposed depreciation rates? If yes, for each retired plant or unit, please provide complete and detailed explanations and supporting documents and references.
Response to WRA Data Request 2.12 Owned and operated thermal generating plants retired: Mid-Jordan Steam: decommissioned, demolished, property repurposed.
Hale Steam Plant: decommissioned, demolished, property remediated, repurposed and/or sold. Carbon Plant: decommissioned, demolished and property in remediation phase.
Owned hydro generating facilities retired: Condit Hydroelectric Project: Federal Energy Regulatory Commission (FERC) 2342, dam and water conveyance removed, powerhouse remains.
Powerdale Hydroelectric Plant: FERC 2659, dam and water conveyance demolished and removed, powerhouse remains.
Cove Hydroelectric Plant: FERC 20, facilities demolished and removed.
American Fork Hydroelectric Plant: FERC 696, facilities demolished and removed from National Forest Service lands.
Cline Falls Hydroelectric Plant: facilities removed from lands leased from Central
Oregon Irrigation District (COID). Owned wind generating facilities and units:
No wind plants were decommissioned.
The decommissioning costs included in the proposed depreciation rates in this proceeding are in conformance with the decommissioning approach of prior retired plants. Retired steam plants, as noted above, were decommissioned, demolished, and the property
remediated. The decommissioning estimates as shown in Exhibit RMP__(CAT-2)
represent costs to decommission, demolish, and remediate the property of each plant site. The hydro decommissioning reserve for minor hydroelectric facilities was stipulated in
18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.12 the 2007 depreciation study (Docket No. 07-035-13) and was established for the removal of small hydroelectric facilities such as noted above. This reserve was updated with the current projection of small plants where the company has estimated some probability of
their decommissioning in the future.
18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.13 WRA Data Request 2.13 Revised. Mr. Spanos states the following at page 9, lines 188 – 191: “Based on studies
for other utilities and the Company’s cost estimates, I determined that the ‘dismantlement or decommissioning’ costs for steam production and other production facilities is best calculated on a $/KW factor based on surviving plant at final retirement.” a. What is the difference, if any, between a dismantlement versus a decommissioning of
surviving plant at final retirement? Please define dismantlement and separately define decommissioning. b. If there is a difference between a dismantlement and a decommissioning of surviving plant at final retirement, is there any corresponding difference in the costs, and, if yes,
what are they? Response to WRA Data Request 2.13 On page 9, line 189 of Mr. Spanos’ direct testimony, he is discussing studies of other
utilities which have been referenced as dismantlement or decommissioning studies when establishing a terminal net salvage component. Thus, there is no difference in this reference between the two types of costs/studies.
18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.14 WRA Data Request 2.14 Revised. See Spanos’s testimony at page 9, lines 188 – 191, and question 2-13 above. Is
Mr. Spanos proposing the inclusion of dismantlement costs or decommissioning costs in production and other production facilities? Response to WRA Data Request 2.14
The values in the Depreciation Study reflect costs estimated to return the location to a brownfield state. This is most commonly regarded as a dismantlement study. The cost estimates include tearing down the plant, as well as remediating all landfills, ponds, etc.
18-035-36 / Rocky Mountain Power November 18, 2019
WRA Data Request 2.15 WRA Data Request 2.15 Could the Company sell retired plants or units to a scrap metal dealer and let the dealer
dismantle the plant and retain the proceeds from the scrap metal? If not, please explain in detail. Response to WRA Data Request 2.15
PacifiCorp could contract for demolition of a generating facility with the contractor taking the risk for proceeds from scrap. PacifiCorp used this approach in the demolition of the Carbon generating facility in 2016. However, an “as-is” sale of a generating facility to a scrap metal dealer is not practicable.
First, the cost of decommissioning, demolition, closure of ponds, closure of landfills, remediation, reclamation and liabilities exceed the value of scrap metal. The net of costs and salvage value were shown in Exhibit RMP_(CAT-2). Second, scrap metal dealers are not in the business of buying and selling property to obtain scrap metal. Third, the liabilities and obligations to properly mitigate and monitor closure of potential
environmental and property liabilities are retained by PacifiCorp and are not practicably transferred by an “as-is” sale of a facility.