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1 BOISE, IDAHO, TUESDAY, NOVEMBER 22, 1994, 2:15 P. M.
2
3
4 COMMISSIONER MILLER: We'll go on the
5 record. I had made a previous commitment for about
6 15 minutes at 3:00 o'clock; so we'll have to take a little
7 recess right at 3:00 o'clock for 15 minutes, and in
8 addition to that, other commitments mean that we really
9 can't go past 5:00 o'clock tonight; so we're going to have
10 to finish this hearing by 5:00 o'clock, if possible.
11 MR. FELL: Our people from Salt Lake City
12 have a flight at 4:55. It makes it real tough for them to
13 go past 4:15.
14 COMMISSIONER MILLER: Well, let's shoot for
15 a 4:15 completion and planning on a 15-minute recess at
16 3:00 o'clock.
17 Mr. Orndorff.
18 MR. ORNDORFF: Thank you, Mr. Chairman. I'd
19 like to introduce two new exhibits, Exhibits, I believe
20 it's, 82 and 83.
21 (Ms. Orndorff distributing documents.)
22
23
24
25
477
CSB REPORTING COLLOQUY
Wilder, Idaho 83676
1 RONALD D. BLENDU,
2 recalled as a rebuttal witness at the instance of Rosebud
3 Enterprises, Inc., having been previously duly sworn,
4 resumed the stand and was further examined and testified
5 as follows:
6
7 DIRECT EXAMINATION
8
9 BY MR. ORNDORFF: (Continued)
10 Q Mr. Blendu, maybe you could tell us if you
11 recognize first Exhibit C, Page 1 of 1.
12 A I recognize that.
13 Q Can you tell us what that is?
14 A It's a sketch I made off of the other sketch
15 that you just handed out as a result of discussions
16 between myself, Mr. Lowe of PacifiCorp, and Mr. Witbeck of
17 Utah Power & Light, the regional engineer.
18 Q And maybe you could now tell us what
19 Exhibit B, Page 1 of 1 is.
20 A Exhibit B, Page 1 of 1, is a sketch of the
21 PacifiCorp transmission system in the Arco area that
22 Mr. Witbeck drew on the back of a napkin for me at lunch
23 as he described what the interconnect situation was in
24 lieu of the situation we thought existed prior to our
25 arrival at the site.
478
CSB REPORTING BLENDU (Di-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 MR. ORNDORFF: I would propose marking
2 Exhibit C, Page 1 of 1, as Exhibit 82 and Exhibit B,
3 Page 1 of 1, as Exhibit 83.
4 (Rosebud Enterprises, Inc. Exhibit
5 Nos. 82 & 83 were marked for identification.)
6 Q BY MR. ORNDORFF: Now, Mr. Blendu,
7 Mr. Witbeck, is he a Pacific Power employee?
8 A The card I have says he is a Utah Power &
9 Light regional engineer for Idaho out of Rexburg.
10 Q Now, with the benefit of these two exhibits,
11 can you relate these to Exhibit 127 which I believe was
12 sponsored by PacifiCorp this morning and tell us how you
13 understood the transmission situation at Arco?
14 A The Exhibit 127 that was put in this morning
15 differs somewhat from what was explained to me in Arco and
16 it differs somewhat from what I observed and it's a little
17 bit misleading in the way it's represented. For example,
18 when we toured the site, there is only one Arco
19 substation. Exhibit 127 would tend to cause one to
20 conclude there's two. If you look at my sketch where I
21 took the information from Mr. Witbeck, I attempted to
22 characterize it as there's a substation in Arco and
23 there's a switch from the Utah Power & Light that
24 basically keeps them separated and off line from supplying
25 power to Lost River.
479
CSB REPORTING BLENDU (Di-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 As it was explained to me, there's a 38
2 megawatt rated 69 kV line that's used for backup purposes
3 only out of the Scoville substation owned by Idaho Power.
4 It's normally not used, only in emergency, at which time
5 they close the switch. The Exhibit 127 also differs from
6 what Mr. Witbeck told me in that -- so if you'll bear with
7 me, let's just draw a box around the Arco and the Lost
8 River substation and assume that's one substation. To
9 make Exhibit 127 a little bit more accurate, I put two
10 miles between the proposed Rosebud site and the Arco
11 substation where it says the PacifiCorp has a sub. I put
12 about two miles between the proposed site and PacifiCorp's
13 230 kV line. There's about ten miles of 230 kV line
14 Mr. Witbeck explained to me that was owned exclusively by
15 BPA. Exhibit 127 would cause one to conclude that it's
16 jointly owned by BPA and Lost River; so I have no
17 information that the Lost River REA owns any 230 kV
18 transmission system.
19 From what we observed, about three miles
20 south of town, previously when we looked at the site, we'd
21 see the main PP&L line -- excuse me, PacifiCorp line --
22 coming in towards the Arco sub and so when we previously
23 looked at the site, one would conclude that that continued
24 all the way to the Arco sub. In reality, what Mr. Witbeck
25 described is the line actually continued ten miles further
480
CSB REPORTING BLENDU (Di-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 upstream and tied into the Lost River substation at
2 Moore.
3 Exhibit 127 is not clear to me whether
4 PacifiCorp is now indicating -- it has an arrow to the
5 right saying Moore is somewhere off someplace; so it's not
6 clear to me whether PacifiCorp is now indicating that that
7 230 kV is jointly owned by BPA and Lost River and going
8 into the Arco substation or if that's really where they
9 say Lost River/BPA 230/69 kV, if they're indicating that
10 as a jointly-owned substation between Lost River and BPA
11 at Moore. If that's the case, then where there's a 69 kV
12 connecting the Lost River at Arco with the Lost River/BPA,
13 that's about a ten-mile run. If that's not the case and
14 they're indicating that BPA goes into the Arco substation,
15 then that whole system would be one substation as near as
16 I can tell.
17 What was surprising to us from the
18 information we had is that we could hook in at Arco to a
19 69 kV and where it was characterized as PacifiCorp's 69 kV
20 system. What Mr. Witbeck explained to me on his drawing
21 is basically that system was only a 69 kV line 20 miles
22 long between Idaho Power's INEL station, which they claim
23 is all, or at least it's indicated on here is all, owned
24 by Idaho Power and the Arco substation and that I'd have
25 to find a way to get out of Scoville.
481
CSB REPORTING BLENDU (Di-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 The 230 kV line that terminates as a direct
2 termination point, it says the Lost River REA substation.
3 It says a 230 kV line from Darlington terminated and
4 interconnected with PacifiCorp's 230 kV system in a Lost
5 River substation. What was being referred to this time
6 was the Lost River substation at Arco because none of the
7 discussions or any drawings showed any PacifiCorp
8 ownership beyond the Arco sub; so the information we had
9 said PacifiCorp came into Arco and interconnected, their
10 230 kV system interconnected, at Arco or at least some
11 Lost River substation. Even if one wanted to conclude
12 that there's a little fuzziness in the letter, they
13 indicated they interconnected with PacifiCorp 230 kV lines
14 in the area.
15 When we got there, as I mentioned before,
16 the two-mile line between, if you look at Exhibit 127,
17 between the Arco sub and the Rosebud proposed site was
18 actually about a 12.5 kV distribution line that went right
19 down alongside our property site. We looked at that
20 previously. We concluded worst case we would have to do
21 is replace that 12.5 kV line, give new distribution to the
22 area on the length of that line and then over-build that
23 with the higher voltage that we needed to hook into
24 PacifiCorp.
25 When we got there and saw that PacifiCorp
482
CSB REPORTING BLENDU (Di-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 didn't go to any substation, they just pointed to a board
2 or something that was up on the lines and said that's
3 where we stop, the only way we could have gotten there is
4 to head cross country through farmland to get some
5 easements and things like that and build a 2-$3 million
6 substation out in the middle of a right of way.
7 The second option we were presented to was,
8 well, we're rated for 38 megawatts on this line, but we
9 only run three on it; so we don't know what it's good for
10 it anymore, but we certainly wouldn't let you put 40; so
11 you could build us 20 miles of 69 kV, go down to Scoville,
12 make whatever arrangements you need to make with Idaho
13 Power, and then come off on 138 kV and send it over to us
14 in Antelope.
15 Both of those options required wheeling
16 arrangements, pricing far above and beyond what we had
17 been led to believe we could get to. As our discussion
18 progressed, Pacific indicated, you know, don't care where
19 you put the power out here in the east as far as these
20 interconnects go, and we batted that around a bit that no
21 place was good and one was as good as another, and from
22 that, I indicated that neither of these options, the
23 230 kV interconnect and a substantial substation, running
24 20 miles of line, was palatable to us and we would go back
25 and rethink our location, which is what we did.
483
CSB REPORTING BLENDU (Di-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 Q Now, in originally siting the plant at Arco,
2 did you rely on the information in Exhibit 16?
3 A Exhibit 16 is the May 15th letter?
4 Q Yes, 1990.
5 A The May 15th, 1990, letter, I heavily relied
6 on the information that PacifiCorp had both 230 kV
7 interconnection capabilities and 69 kV capabilities in the
8 Arco area.
9 Q Mr. Blendu, in your experience, does a
10 utility normally know the structure of its system?
11 A I would have to say that that would be a
12 reasonable expectation that, yes, they would normally know
13 what their ownership is.
14 Q Okay, Mr. Blendu, would you turn now to
15 Exhibit 69?
16 A Yes.
17 Q And in that second paragraph of Exhibit 69,
18 you've heard some discussion about what would be the
19 second and third sentence. Would you tell us the
20 difference between interconnection as you understand it
21 and integration and what those two studies might be?
22 A Yes, I can, and I recall very vividly the
23 discussions between you and I that led up to this and I
24 heard the testimony earlier and I was somewhat astounded
25 that there was confusion between the two, and as a result,
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CSB REPORTING BLENDU (Di-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 while we were on break, I called three separate electrical
2 engineers to see if it was reasonable to expect people to
3 know the difference, and while people could understand,
4 you know, there may be cause for question, traditionally,
5 most people would understand an interconnect study that
6 this letter says Rosebud would pay for to mean Rosebud
7 would pay for the hardware and equipment and the cost of
8 going in and making an interconnection.
9 What Rosebud was objecting to in this
10 particular letter was a system integration study where you
11 do massive load flow studies and line losses, shifts in
12 power phases which could be a study of gigantic
13 proportions. We just recently received some of that kind
14 of material in terms of load flow studies from PacifiCorp
15 last week and it's a pretty massive undertaking. I think
16 that's what we were objecting we did not want to get
17 into.
18 What's particularly dumbfounding is that if
19 someone says I'll pay for the interconnect, but I won't
20 pay for system integration studies that no one would even
21 call if they didn't know the difference and ask if there
22 is a difference.
23 MR. ORNDORFF: Thank you, Mr. Blendu. I
24 have no more questions.
25 COMMISSIONER MILLER: Cross-exam.
485
CSB REPORTING BLENDU (Di-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 CROSS-EXAMINATION
2
3 BY MR. FELL:
4 Q Mr. Blendu, would you please turn to
5 Exhibit 16?
6 A Yes.
7 Q And would you also place before you
8 Exhibit No. 127? Would you please explain what it is in
9 the letter of May 15, 1990, the Exhibit 16, that is
10 incorrect?
11 A The May 15th letter, when we were proposing
12 a Darlington project, we were proposing hooking into a BPA
13 line that went near Darlington and running that power in
14 through BPA to Goshen. The May 15th letter says we don't
15 go into Goshen, we go into a Lost River substation which
16 is a point of interconnection with PacifiCorp's 230 kV
17 system. I took that to mean that at the Lost River/BPA
18 sub, and in further discussions with PacifiCorp, we were
19 meaning the Arco substation, not the one in Moore --
20 Q Excuse me.
21 A Could I finish?
22 Q No, I'm sorry, but --
23 MR. ORNDORFF: You're interrupting the
24 witness, I object.
25 COMMISSIONER MILLER: Mr. Orndorff, this is
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CSB REPORTING BLENDU (X-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 the fourth time I've suggested that if you have problems
2 you address them to the Chair and not bicker with opposing
3 counsel.
4 MR. ORNDORFF: I'm sorry, it's been a long
5 day.
6 COMMISSIONER MILLER: Now, what's the
7 problem, Mr. Fell?
8 MR. FELL: The problem is that the witness
9 was going a little fast for me and I was going to have to
10 ask him to go back and do this again, because when he
11 started switching substations, I got lost. I wanted him
12 to slow down on that.
13 THE WITNESS: Okay, I'm sorry. The May 15th
14 letter indicated PacifiCorp did not interconnect with BPA
15 at Goshen, but in lieu, interconnected 230 kV
16 interconnection at the Lost River substation, and that
17 refers to BPA's line coming down out of Darlington, Idaho,
18 and the line running through Darlington interconnecting
19 with PacifiCorp at a Lost River substation.
20 Q Very well. Now, what is it in the letter of
21 May 15, 1990, that is incorrect?
22 A Well, one, PacifiCorp at least in the area
23 of Arco or any of the Lost River substations doesn't come
24 anywhere near the Lost River REA at Moore and it certainly
25 is not an interconnection point at the other Lost River
487
CSB REPORTING BLENDU (X-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 substation at Arco.
2 Q Let's take what is shown on Exhibit 127 as
3 Lost River/BPA, if that is intended to be also what you
4 describe as the Moore substation.
5 A Yes, and we put ten miles under 230 kV at my
6 suggestion.
7 Q All right. Now,, you're saying that the
8 letter is wrong because BPA has ten miles ownership of the
9 230 kV line?
10 A It says it terminates at the Lost River
11 substation, terminates, ends, not continues for ten miles,
12 and it says it's a point of interconnection, which means
13 it could be a point of interconnection for me as well at
14 that substation with PacifiCorp.
15 Q Now, it says that the BPA 230 kV line
16 terminates at the Lost River substation and that's the one
17 coming from Darlington?
18 A That's what this letter says. It says
19 there's a line coming from Darlington that terminates at
20 the Lost River substation, a point of interconnection with
21 PacifiCorp's 230 kV system.
22 Q Is it that last clause that you think is
23 wrong?
24 A Certainly.
25 Q Is it your position, then, that that is the
488
CSB REPORTING BLENDU (X-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 misleading information that caused you to locate at Arco?
2 A It's one of them. If you go down to the
3 next line further, it says I could also run a new 69 kV
4 line down from Darlington and interconnect into
5 PacifiCorp's 69 kV system, and when we get there, as near
6 as I can tell, the system consisted of a 20-mile line
7 between Scoville and Arco.
8 Q Let me just have a minute so I can read what
9 this says.
10 A Okay.
11 Q It does say that that is an option, but I'm
12 trying to decide what part of this caused you somehow to
13 locate in Arco without any further investigation of the
14 implications of your location.
15 A Well, I wouldn't assume there was no further
16 investigation, okay?
17 Q Let me say, then, that no further
18 investigation of the transmission system.
19 A I wouldn't say that, okay?
20 Q Did you have any further communications with
21 PacifiCorp about your decision to relocate?
22 A As I understand the earlier testimony, we're
23 distinguishing that we did not relocate Darlington to
24 Arco, okay. I'm understanding that when we talked to
25 PacifiCorp about a project at Darlington, they sent a
489
CSB REPORTING BLENDU (X-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 letter back that said I have interconnection capabilities
2 into my 69 kV system at Arco and I have a termination into
3 the Lost River substation and, again, at the discussions
4 that also went on at the time and the transmission
5 drawings show PacifiCorp ownership into Arco and they show
6 no PacifiCorp ownership beyond Arco up to the Moore
7 substation; so it's pretty hard to conclude that that's
8 the one that was being referred to, but I assume that you
9 could make that interpretation.
10 Based on that letter with regards to
11 Darlington, yes, I concluded that we could hook directly
12 in to PacifiCorp either on 69 kV/230 kV, avoid wheeling
13 agreements, avoid substantial transmission line rebuilding
14 other than the two miles of interconnection line from our
15 proposed site to the Arco sub based on that letter.
16 Q Your answer, just to give you some
17 background on this, your answer to me is mixing
18 interconnecting at the Arco 69 kV sub with interconnecting
19 at the Lost River 230 kV sub. I just want to --
20 MR. ORNDORFF: Excuse me, I'd like to
21 object. He's arguing with the witness and he's going over
22 and over it and I don't think we're going anyplace fast.
23 COMMISSIONER MILLER: Why don't we see what
24 the question actually is and then if you have an
25 objection, you could state it.
490
CSB REPORTING BLENDU (X-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 Q BY MR. FELL: Speaking only as to the 230
2 Lost River sub, the only difference between the letter of
3 May 15, 1990, and what you know now, if I understand this
4 correctly, is that ten miles of that 230 kV line going
5 into the sub are owned by BPA; is that correct?
6 A That's not correct.
7 Q Staying on the 230 kV line, between the
8 proposed Rosebud site and the Lost River substation, what
9 else is different?
10 A What's different is when I met the
11 PacifiCorp people in the morning, they said our drawings
12 are wrong, our 230 kV system does not go into the Arco
13 substation, and while, I'll repeat, one can conclude that
14 this is referring to the Lost River substation at Moore,
15 that is not consistent with the discussions, it's not
16 consistent with the understanding and it's not consistent
17 with the discussion of the PacifiCorp people when we
18 scheduled the trip there. We were all under the
19 impression that PacifiCorp had a 230 kV interconnect at
20 Arco.
21 Q When you say "at Arco," what do you mean "at
22 Arco"?
23 A At the Arco substation.
24 Q You're saying that PacifiCorp believed its
25 Arco 69 kV substation was a 230 substation?
491
CSB REPORTING BLENDU (X-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 A Yes.
2 MR. FELL: Well, there's no reason to go
3 further on this, then.
4 THE WITNESS: I think it's amusing, too.
5 MR. FELL: No further questions.
6 COMMISSIONER MILLER: Redirect,
7 Mr. Orndorff.
8 MR. ORNDORFF: I have nothing.
9 COMMISSIONER MILLER: Sir, thank you once
10 again for your help.
11 (The witness left the stand.)
12 MR. ORNDORFF: Can I ask to have
13 Mr. Blendu permanently excused now?
14 COMMISSIONER MILLER: You can be permanently
15 excused, subject to call.
16 MR. ORNDORFF: I don't expect to call,
17 though.
18 COMMISSIONER MILLER: All right, Mr. Fell,
19 thank you for accommodating that out-of-order witness.
20 We'll go back to your presentation now.
21 MR. FELL: PacifiCorp calls John Lowe.
22
23
24
25
492
CSB REPORTING BLENDU (X-Reb)
Wilder, Idaho 83676 Rosebud Enterprises
1 JOHN R. LOWE,
2 produced as a witness at the instance of PacifiCorp,
3 having been first duly sworn, was examined and testified
4 as follows:
5
6 DIRECT EXAMINATION
7
8 BY MR. FELL:
9 Q Mr. Lowe, would you please state your name
10 for the record and your position with PacifiCorp?
11 A Yes, my name is John R. Lowe. I'm a member
12 of the resource acquisition staff.
13 Q Mr. Lowe, did you attend a meeting in Boise
14 with Rosebud on December 30, 1993?
15 A Yes, I did.
16 Q What was the purpose of that meeting,
17 Mr. Lowe?
18 A The primary purpose was to discuss the
19 contract, comments from, I believe it was, October by
20 Rosebud, Rosebud's comments.
21 Q In their October, 1993 --
22 A That's correct.
23 Q And had that meeting been scheduled a week
24 or so earlier originally?
25 A My recollection was that it had been and I
493
CSB REPORTING LOWE (Di)
Wilder, Idaho 83676 PacifiCorp
1 believe that I was in a skiing accident and delayed the
2 meeting for some week or two.
3 Q You have before you what we have marked as
4 130. Would you please explain what this exhibit is?
5 A Notes from the December 30th discussion
6 between myself, Mr. Fell, Mr. Orndorff, Mr. Roberts, and
7 Mr. Blendu, and Dr. Slaughter.
8 MR. FELL: Mr. Chairman, to keep things
9 absolutely clear, on the third page of that document,
10 there are two lines in the margin on the right, those were
11 put there later. They're not part of the meeting notes,
12 so that we are absolutely correct about that.
13 Q BY MR. FELL: Mr. Lowe, do these minutes of
14 that meeting fairly reflect what occurred at the meeting
15 from your perspective?
16 A I'd have to study them. I've only looked at
17 them very briefly earlier today. That's the first time
18 I've seen them for a little while. They appear to
19 generally reflect what I recall about the meeting.
20 MR. ORNDORFF: Is now the appropriate time
21 to renew my objection, Mr. Chairman?
22 MR. FELL: I think if you're going to
23 object, yes. Excuse me, Mr. Chairman.
24 COMMISSIONER MILLER: No further foundation
25 that you need to lay?
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CSB REPORTING LOWE (Di)
Wilder, Idaho 83676 PacifiCorp
1 MR. FELL: Mr. Chairman, I have two ways of
2 proceeding. One is to introduce the meeting notes. The
3 other would be to ask Mr. Lowe to explain what transpired
4 in that meeting and in doing that, he is allowed under the
5 rules to refresh his recollection by using the notes; so
6 he would be able to go through this item by item.
7 MR. ORNDORFF: Mr. Chairman, I will object
8 to both if that's where Mr. Fell is going. I presume,
9 although he hasn't told us, that if he goes the second
10 way, that's more supplemental direct testimony. This
11 record is -- you know, we all worked very hard to get
12 supplemental direct on and there aren't even any exhibits
13 that he has. I have introduced the contract draft that
14 was the discussion of the document, the comments that were
15 put in, and Mr. Fell's notes, while they're interesting,
16 for putting them into the record as to what was said and
17 having Mr. Lowe sponsor them who has just refreshed his
18 memory in three minutes seems a bit outrageous.
19 We have in the record the contract. We have
20 in the record the fact that there was a meeting. I'm not
21 sure that it lends anything to the science to put some
22 hearsay information in or to have Mr. Lowe give us his
23 spontaneous recollections of something that occurred over
24 a year ago, is it a year, yes, getting close to a year,
25 and if the Commission wants to entertain this testimony, I
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CSB REPORTING LOWE (Di)
Wilder, Idaho 83676 PacifiCorp
1 obviously will want Mr. Blendu to be able to respond. I
2 had no idea this was going to happen when I entered the
3 stipulation. I guess that's the danger of entering a
4 stipulation. I can have Mr. Roberts respond if you'd
5 like, but I obviously will want somebody and the right to
6 offer rebuttal.
7 MR. FELL: Mr. Chairman.
8 COMMISSIONER MILLER: Mr. Fell.
9 MR. FELL: The genesis of this is
10 Mr. Orndorff's questioning of Mr. Duvall about
11 specifically how the Company responded to his October,
12 1993 contract draft and comments. Mr. Duvall said this
13 meeting occurred, Mr. Duvall said these minutes existed.
14 We have explained how we responded, but this is the piece
15 that Mr. Orndorff apparently does not want in the record,
16 but this meeting was in response to that contract draft.
17 COMMISSIONER MILLER: It appears to me that
18 there is a general acknowledgment and no dispute the
19 meeting did occur, the fact of a meeting is established,
20 that seems to be clear; so I wonder if I could ask, what
21 is it in this document that is relevant to some other
22 issue of fact that remains disputed?
23 MR. FELL: The other issue, Mr. Chairman,
24 that remains disputed is the statement on the third page
25 of the minute notes, of the meeting notes, that says, that
496
CSB REPORTING LOWE (Di)
Wilder, Idaho 83676 PacifiCorp
1 attributes to Mr. Lowe, "We've moved through the rate
2 issues, we will need to quickly move to interconnection
3 study," and then a second note, "Rosebud says: We need to
4 get past the rate issue before we start spending money."
5 COMMISSIONER MILLER: So you would propose
6 to prove in one manner or another that a Rosebud
7 representative said those words or words to that effect at
8 that time; is that what we're boiling down to?
9 MR. FELL: That's correct. This is
10 corroboration of our point that they were not ready to
11 spend the money on the interconnection study.
12 COMMISSIONER MILLER: All right, I think
13 we're getting at least focused in on the relevance here,
14 Mr. Orndorff. Putting aside hearsay and other problems,
15 is there a dispute with respect to that or its relevance?
16 MR. ORNDORFF: Absolutely, there's a
17 dispute. That's a characterization of PacifiCorp's
18 attorney as to spending money without any specificity.
19 We're obviously spending buckets of money in this
20 proceeding and have spent buckets of money trying to get a
21 contract and it's a little bit much to imagine that we
22 aren't spending money trying to move this project
23 forward.
24 Now, I don't know what he was referring to
25 when he wrote this note. I definitely agree that it says
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CSB REPORTING LOWE (Di)
Wilder, Idaho 83676 PacifiCorp
1 that, but, then again, that isn't what happened and I will
2 offer testimony. You know, if the Commission wants to
3 entertain that quality of evidence, then I certainly will
4 bring forth rebuttal testimony what that really meant and
5 we can get into whose note says what and whose
6 recollection -- what is relevant is what I think the
7 Chairman earlier said today, we want to look at what
8 happened and why and look at events and not get into
9 argumentative-type testimony.
10 COMMISSIONER MILLER: Well, we've been
11 plagued throughout this case with the problem of what
12 happens when lawyers are negotiators and then litigators
13 and then face the rule they can't be witnesses. Let's
14 take a short break here.
15 (Off the record discussion.)
16 COMMISSIONER MILLER: Well, the Commission
17 will more fully set forth the basis for its ruling on this
18 matter, if necessary, in a final order, but just by way of
19 indication, it does appear that the document itself would
20 constitute hearsay and even though a document that is
21 otherwise hearsay can be admitted if it's a recorded
22 recollection of events that previously occurred,
23 generally, the recorded recollection should be by the --
24 the witness sponsoring it should be the witness who wrote
25 it, although there is a provision that the document can be
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CSB REPORTING LOWE (Di)
Wilder, Idaho 83676 PacifiCorp
1 adopted by another person, although Mr. Lowe has testified
2 that he has only a general familiarity with it but seems
3 generally to be what he thinks happened, although his
4 degree of endorsement of the document was so vague that we
5 think it would probably be best not to put this document
6 in the record.
7 MR. FELL: That's fine. I think we'll rely
8 on the record as it stands, then, without this and I have
9 no further questions.
10 COMMISSIONER MILLER: Very good. Thank
11 you. Mr. Lowe, you can be excused. Thank you for your
12 attempted help.
13 (The witness left the stand.)
14 MR. ERIKSSON: Our next witness is
15 Dr. Weaver.
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CSB REPORTING LOWE (Di)
Wilder, Idaho 83676 PacifiCorp
1 RODGER WEAVER,
2 produced as a witness at the instance of PacifiCorp,
3 having been first duly sworn, was examined and testified
4 as follows:
5
6 DIRECT EXAMINATION
7
8 BY MR. ERIKSSON:
9 Q Dr. Weaver, will you please state your name
10 and business address?
11 A My name is Roger Weaver. My business
12 address is 825 N.E. Multnomah, Portland, Oregon.
13 Q And your position with PacifiCorp?
14 A My position is the power systems regulation
15 manager.
16 Q And have you had -- have you prepared and
17 caused to be filed direct testimony in this case
18 consisting of 26 pages and four exhibits identified as
19 Exhibits 112 through 115?
20 A Yes, I have.
21 Q Do you have any corrections to the testimony
22 or exhibits?
23 A No.
24 Q If I asked you the same questions as are
25 contained in your testimony today, would your answers be
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CSB REPORTING WEAVER (Di)
Wilder, Idaho 83676 PacifiCorp
1 the same?
2 A Yes, they would.
3 MR. ERIKSSON: I'd ask that Dr. Weaver's
4 direct testimony be spread on the record and the attached
5 exhibits be identified as Exhibits 112 through 115.
6 COMMISSIONER MILLER: All right, if there's
7 no objection, it will be so ordered.
8 (The following prefiled testimony of
9 Dr. Rodger Weaver is spread upon the record.)
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CSB REPORTING WEAVER (Di)
Wilder, Idaho 83676 PacifiCorp
1 Q Please state your name, business address and
2 present position with PacifiCorp (the Company).
3 A My name is Rodger Weaver. My business
4 address is 825 NE Multnomah, Suite 625, Portland, Oregon
5 97232. My present position is Power System Regulation
6 Manager.
7 Q Please briefly describe your education and
8 business experience.
9 A I received an undergraduate degree in
10 Economics and a Ph.D. in Economics from the University of
11 Utah. I worked for the Public Service Commission of Utah
12 from 1984 - 1987 as a Senior Economist, and the Utah
13 Division of Public Utilities from 1987 - 1992 as a Senior
14 Economist. In 1992 I began working for PacifiCorp as a
15 Manager of Power System Regulation.
16 Q Please describe your current duties.
17 A I am responsible for the direction and
18 coordination of net power cost and related analyses. In
19 addition, I represent the Company on power resource issues
20 and provide information to various regulatory commissions.
21 Q What is the purpose of your testimony?
22 A The purpose of my testimony is to explain
23 how the Company computed its adjustment to the currently
24 approved avoided costs to produce the prices included in
25 its July 11, 1994, proposal to Rosebud. This price
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1 proposal is structured as separate prices for each of
2 three products to be provided by
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1 Rosebud: (1) capacity, (2) on-peak energy, and (3)
2 off-peak energy.
3 Q What avoided costs did you use as the
4 starting point for your calculations?
5 A I used those in effect prior to January 14,
6 1994. The Company's position is that Rosebud's project
7 had not been developed sufficiently to justify a finding
8 that Rosebud is entitled to priced based on those avoided
9 costs. Rosebud's project should be priced based on the
10 avoided costs to be established by the Commission in the
11 current avoided cost case.
12 The July 11, 1994, pricing proposal illustrates the
13 appropriate adjustments to the SAR-based rates for the
14 Rosebud project. It does not waive the Company's
15 objection to Rosebud's grandfathering claim.
16 Q Please explain how the Company's proposed
17 prices were calculated.
18 A The Company took its published SAR-based
19 avoided costs as the starting point and broke the capacity
20 and energy elements out separately. It then calculated
21 on- and off-peak energy prices based on values contained
22 in the currently approved SAR-based avoided costs. As
23 explained by Mr. Morris and me, the different pricing for
24 off-peak energy reflects the energy costs that Rosebud
25 would allow the Company to avoid. These adjustments
implement the "ability to schedule" line item
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1 upon which the Commission allows negotiation. Ability to
2 schedule refers to the utility's ability to shape
3 operation of the facility to meet system load shape
4 requirements, i.e., to dispatch the facility.
5 The Company's proposal assumes that the Company
6 will not have the ability to schedule Rosebud's operation.
7 Without the ability to schedule Rosebud's operation to
8 match system requirements, it is necessary to structure
9 the purchase prices to reflect the system costs that would
10 be avoided. This pricing structure allows the Company to
11 take Rosebud's output into its system while leaving its
12 customers financially indifferent to the source of the
13 power; i.e., to neither impose additional cost nor award
14 customers a windfall cost reduction.
15 Q Are there any other advantages to the
16 multi-part pricing structure in the Rosebud context?
17 A Yes. As Mr. Ramisch explains, we have been
18 unable to get from Rosebud a clear understanding of its
19 operating plans and expectations. A clear understanding
20 of plant operations would be necessary to develop
21 all-energy pricing that even approximately matches the
22 costs the project would allow the Company to avoid. Use
23 of multi-part pricing removes this uncertainty as a
24 Company concern. The Company would pay for the products
25 as Rosebud delivers them at prices reflective of the costs
avoided. Operational concerns become the sole
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1 responsibility and concern of the project with no
2 possibility of imposition of unintended and unjustified
3 costs on the Company and its customers.
4 Q Please discuss the meaning of the term
5 dispatchability and its significance to the determination
6 of published rates.
7 A Dispatchability refers to whether the
8 utility has control over when and to what extent the
9 resource is run -- resources are usually dispatched in
10 lowest-running cost first or economic merit order.
11 Dispatchability does not, in general, refer to the
12 specific technological characteristics, construction costs
13 or realized capacity factors of generating resources. In
14 some instances, however, technology can limit
15 dispatchability. Wind, traditional solar and some hydro
16 resources must operate when the primary energy source is
17 available and cannot be run at other times.
18 Utility-owned resources will typically be
19 dispatchable. This is true of base-loaded units such as
20 the Company's Dave Johnson plant, which is operated at
21 over a 90 percent capacity factor, through swing units
22 such as Gadsby at just under 50 percent and peaking
23 resources such as the Southern California Edison (SCE)
24 winter capacity purchase, which has been operated at a
25 less than 10 percent capacity factor. All these resources
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1 are dispatchable. They represent different technologies
2 and both their construction and their operating costs vary
3 widely. Their differing capacity factors result
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1 from the Company's economic dispatch decisions as to how
2 much they should be operated. Thus, it is the ability to
3 control a facility that determines whether it is
4 dispatchable. On this basis, power purchases can be
5 dispatchable, depending on the terms of the agreement.
6 For example, the SCE winter capacity contract is a
7 dispatchable purchase. Traditional QFs, which are run at
8 the convenience of the project and not the Company, are
9 classic non-dispatchable resources whether they are high
10 load factor cogeneration resources or low load factor
11 seasonal irrigation based hydro projects. It is important
12 to understand that, contrary to the view apparently taken
13 by Dr. Slaughter, a base load resource may well be
14 dispatchable. In fact, as indicated, all of the Company's
15 base loaded units are dispatchable and are operated at
16 high capacity factors because their low incremental costs
17 to the system lead the Company's operators to run them as
18 much as possible.
19 Q How is the concept of dispatchability
20 reflected in the Company's Rosebud pricing proposal?
21 A The Company proposes to price Rosebud's
22 output to reflect the dispatchable nature of the Powder
23 River coal SAR costs as if the SAR were dispatchable. To
24 do so, Rosebud's output is broken down into three
25 products. The first is capacity defined in standard
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1 electric industry terms as the ability of the plant to
2 produce power at the time it is most needed by
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1 the utility. It is measured in watts and is priced on the
2 basis of dollars per kW per month ($/kW-mo). The second
3 product is energy delivered during on-peak hours and is
4 priced at the fully loaded energy cost of the SAR. This
5 product is measured in kilowatt hours (kWh) and priced on
6 the basis of mills per kWh. This product represents the
7 value of SAR-produced energy to the system when use of the
8 output is not constrained. The third product is energy
9 delivered during off-peak hours, also measured in kWh and
10 priced in mills per kWh. This product is priced in terms
11 of the SAR running cost the Company can avoid by accepting
12 Rosebud energy into the system during times when its use
13 is constrained. This approach mimics the use the Company
14 would be able to make of its existing system if a new
15 resource were added in Idaho, Wyoming or Utah.
16 Q Can the value of dispatchability to the
17 system be reflected in one-part or energy-only prices?
18 A No. Any one-part price must necessarily be
19 based on anticipated, rather than realized, project
20 performance and timing deliveries. A one-part price will
21 result in the same payment for each kilowatt hour provided
22 by the QF regardless of the value of the power to the
23 utility at the time of delivery. In addition, a one-part
24 price also produces payment at higher than avoided costs
25 any time the QF operates at a higher capacity factor than
that used in
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1 computing the price. For example, assume a QF paid
2 current approved all-energy prices operates at a capacity
3 factor higher than 75%. It would be paid more than the
4 avoided SAR capital costs since the SAR rates are based on
5 a 75% capacity factor. The multi-part pricing approach
6 automatically conforms payment for QF power to estimates
7 of actual costs avoided, and limits recovery of capital
8 costs to those which the QF actually allows the Company to
9 avoid. Note that in Case No. PPL-E-93-5/UPL-E-93-7 the
10 Commission staff recommends consideration of this pricing
11 approach as an alternative for large projects. Further,
12 the Commission approved separation of prices into capacity
13 and energy components in Order No. 25706.
14 Q Why does the Company price capacity at the
15 capital cost of a simple cycle combustion turbine (SCCT)
16 rather than at the full capital cost of the currently
17 approved SAR?
18 A SCCT technology is used because it is a
19 reasonable current estimate of the cost the Company would
20 have to incur in order to acquire an alternative resource
21 for meeting peak capacity needs. It is well recognized
22 that the capital costs associated with resources expected
23 to be base-loaded, such as the SAR, are properly allocated
24 between energy and capacity classifications. For example,
25 the National Association of Regulatory Utility
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1 Commissioners (NARUC) in its 1991 Electric Utility Cost
2 Allocation Manual (Draft) states on page 53:
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1 There is evidence that energy loads are a major
determinant of production plant costs. Thus,
2 cost of service analysts may incorporate energy
weighting into production plant [capital] costs.
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4 Dr. Hethie S. Parmesano states the issue in terms more
5 directly related to avoided cost considerations in her
6 September 17, 1987, Public Utilities Fortnightly article,
7 "Avoided Cost Payments to Qualifying Facilities: Debate
8 Goes On":
9 ... a system planner can justify a high capital
cost base-load unit only if the unit is expected
10 to run for many hours of the year and provide
energy savings compared to producing that energy
11 with other resources. In fact, a least-cost
resource plan should involve spending for demand
12 reasons no more than the per kilowatt cost of
peaking resources.
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14 The peaking resources Dr. Parmesano refers to in
15 the article are either SCCTs or capacity purchases
16 depending on circumstances.
17 Thus it is appropriate to assign peaking resource
18 costs to avoided capacity costs and the balance of capital
19 cost of plants expected to run at higher-than-peaking
20 capacity factors to energy costs. This is the approach
21 taken by the Company.
22 I would further point out that the Company's
23 avoided costs approved in Washington, Oregon,
24 California, Montana, Wyoming and Utah are all separate
25 capacity and energy rates
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PacifiCorp
1 with the classification of capital costs between capacity
2 and energy done using the same peaking resource-based
3 method used in the Company's proposal to Rosebud.
4 Q Does this discussion impact the calculation
5 of avoided costs using the SAR method for smaller
6 projects?
7 A No. It is irrelevant when calculating
8 all-energy costs using the Commission's SAR spreadsheet
9 model. In that model, capital costs are spread over
10 energy production at the assumed capacity factor without
11 regard to energy vs. capacity classification of capital
12 cost. This calculation assumes use of the SAR output is
13 never constrained and that the SAR would run at the
14 assumed capacity factor. It does not account for
15 dispatchability to conform to the costs the QF would
16 actually allow the system to avoid. Only in negotiation
17 of contracts with projects above the Commission
18 established maximum size limit does the classification
19 issue play a role.
20 Q How does the Company's pricing proposal
21 implement these dispatchability considerations into an
22 adjustment from the SAR starting point?
23 A The Company's proposal as it was presented
24 to Rosebud appears as Exhibit 112. The first two pages of
25 the exhibit are the narrative description of the
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1 procedure. The last page presents the actual
2 calculations. The spreadsheet uses exactly the same
3 calculations and data as approved in Order No. 23358
4 and corrected in Order No. 23429, except, of
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1 course, it excludes the steps which convert to the all-energy
2 formulation. It computes the yearly tilted capital cost
3 for the SAR in Column (1) and converts this to a $/kW-mo
4 basis in Column (2). Column (3) computes annual capacity
5 cost using the same calculation procedures and inputs, but
6 applying them to the capital cost of a SCCT. Column (4)
7 then converts these to a kW-mo basis. This column is the
8 price proposed for capacity provided by the project.
9 Column (5) is the difference between Columns (2)
10 and (4) and is the portion of total SAR capital cost
11 classified as energy-related. Column (6) then converts
12 Column (5)'s $/kW-mo figures to a mills/kWh basis for
13 application to energy production. This conversion is
14 based on the 88% capacity factor provided by Rosebud.
15 Column (7) adds the annual non-adjustable O&M costs from
16 Order No. 25578. Column (8) is the sum of Columns (6) and
17 (7) and is the value of energy from the SAR when the
18 energy can be fully integrated into the system. This is
19 one of the two components of the price proposal for the
20 on-peak energy product.
21 Column (9) is the Adjustable Portion of the SAR
22 avoided costs. The value shown for 1994 is the Adjustable
23 Portion currently established by the Commission. As
24 indicated, the values shown for 1995 through 2018 are
25 illustrative only. They would be established year by
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PacifiCorp
1 year using current Commission-established methods. In
2 the spreadsheet, they are
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1 based on the 5.13 percent annual escalation rate used in
2 the -170 case. Column (9) is the price proposal for the
3 off-peak energy product. It is the SAR-based proxy for
4 the only cost which could be avoided during the off-peak
5 period; i.e., the running cost of existing eastside coal
6 resources. Column (9) is also the second of two
7 components of the price proposal for the on-peak energy
8 product. Note that the sum of Columns (8) and (9), shown
9 in Column (10), is the total proposed price for the
10 on-peak energy product.
11 Q Why should the energy produced by the
12 project be broken into on- and off-peak components with
13 different prices for each?
14 A This procedure is necessary to reflect
15 certain operational limitations on the system and their
16 implications for the SAR-based costs a QF would allow the
17 Company to avoid. As Mr. Morris explains in detail, the
18 Company has a limited ability to move power from its
19 eastside generation resources to its westside load
20 centers. This limitation imposes a constraint on the use
21 of those resources during the off-peak hours when the
22 eastside resources are used to meet westside requirements,
23 including return of BPA Capacity/Energy Exchange energy,
24 net of westside resources. The use of these existing
25 resources for this purpose is an important source of
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1 efficiency in the operation of the Company's system.
2 However, this use is constrained by the limited
3 east-to-west transmission capacity described by
4 Mr. Morris. Thus, all the
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PacifiCorp
1 costs that any added eastside generation would allow the
2 Company to avoid during off-peak hours are the running
3 costs of the existing low-running-cost resources. To base
4 eastside QF prices on these avoided costs, it is necessary
5 to identify off-peak energy as a separate product.
6 On-peak energy, on the other hand, is properly priced
7 based on the full cost of the avoidable resource, the SAR
8 in this case.
9 Q Can you describe the load/resource balances
10 in the east and west sides of the system during off-peak
11 hours?
12 A Yes. Exhibit 113 presents the off-peak
13 loads and the resources available to meet those loads on
14 the two sides of the system. The off-peak resource
15 availabilities are characteristic of actual resource
16 operation during off-peak hours. Coal resources are
17 operated at full capacity, purchases are reduced to
18 minimum contract requirements, and Company-owned hydro
19 resources are backed off to the extent possible in order
20 to preserve impounded water for use as a peaking resource
21 during heavy load hours. Westside off-peak load includes
22 return of energy to BPA in conjunction with the Company's
23 capacity purchase from BPA.
24 Q Please describe the BPA Capacity/Energy
25 Exchange.
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1 A The BPA Capacity/Energy Exchange contract
2 represents approximately one-third of PacifiCorp's west
3 side capacity requirement. Under the exchange, BPA
4 provides up to 1,100 MW of capacity is provided to
5 PacifiCorp during on-peak hours;
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1 this is by far BPA's largest capacity exchange contract
2 with a utility. In exchange, the Company returns the
3 equivalent amount of energy to BPA during off-peak hours.
4 In this way, PacifiCorp's low cost off-peak coal-fired
5 energy costs can be "shaped" into low cost capacity. The
6 energy delivered to BPA allows BPA to effectively store
7 energy in the Federal hydro system.
8 The capacity exchange contract is important to the
9 efficient operation of the Company's total complement of
10 resources. Eighty percent of the Company's energy is
11 produced from base loaded coal-fired units. The capacity
12 exchange contract allows the Company to shape this low
13 cost energy into the peak load hours, thereby reducing the
14 need to acquire higher cost peaking energy. This method
15 of system operation is unique to PacifiCorp and must be
16 taken into account in calculating the costs which any new
17 resource would allow the Company to avoid.
18 Q How do these load and resource conditions
19 relate to the need to price off-peak energy differently
20 from on-peak energy?
21 A During on-peak hours, resources on both
22 sides of the system are balanced with loads to the extent
23 that existing east-to-west transfer rights are adequate to
24 move eastside generation to meet westside loads. When
25 requirements on the east side drop off during off-peak
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1 hours, generation capacity available for transfer to
2 the west side increases. This
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1 available off-peak generation exceeds the Company's
2 contractual transfer rights over Idaho Power Company's
3 system as explained by Mr. Morris. As a result,
4 additional off-peak energy on the east side is of limited
5 value to the system. Accepting additional off-peak
6 eastside energy would require that lower-cost coal
7 resources be backed down. Thus the running cost of these
8 resources would be the only costs a new resource would
9 allow the Company to avoid during these hours.
10 Q Does such a limitation exist during peak
11 load hours?
12 A No. Eastside loads are, of course, much
13 higher during on-peak hours. East-to-west transfer
14 capabilities are sufficient to move available on-peak
15 eastside net generation to the westside load centers. It
16 is for this reason that the Company proposes full
17 SAR-based energy prices for Rosebud's on-peak energy
18 deliveries.
19 Q Has Rosebud responded to PacifiCorp's July
20 11, 1994, pricing proposal?
21 A No, Rosebud did not respond to the Company.
22 Rather, on July 14, 1994, it filed an alternative pricing
23 proposal with the Commission.
24 Q Please describe Rosebud's alternative
25 proposal.
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1 A The alternative consists of capacity and
2 energy prices derived from the all-energy SAR
3 non-levelized prices. Beyond this, the alternative is
4 difficult to understand in that there is no description
5 of the derivation or justification of
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1 the prices, nor is there any contract language
2 establishing how Rosebud intended the prices be applied.
3 Q Is Rosebud's July 14, 1994, alternative a
4 reasonable basis for pricing the project's output?
5 A No. This alternative is based on the
6 inappropriate classification of all fixed costs as
7 capacity costs. As I discussed earlier, a substantial
8 portion of such costs are properly classified as energy
9 costs. This portion should be included in the energy
10 prices, not the capacity prices.
11 Q What is the practical effect of Rosebud's
12 proposed pricing?
13 A These prices result in Rosebud's being able
14 to collect 75% of the SAR-based avoided costs on the basis
15 of capacity to produce rather than on the basis of actual
16 delivery of energy to the Company. This would make it of
17 little importance to Rosebud whether its plant runs
18 reliable or not, since the small energy price would return
19 relatively little margin above costs of the fuel
20 transportation and limestone needed to operate.
21 Q How does Rosebud derive its proposed prices?
22 A It is difficult to say because of the
23 absence of explanation. As indicated, what is being
24 proposed is a two-part price structure. The energy price
25 is the Commission-approved 1994 adjustable portion --
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1 10.89 mills/kWh -- held constant over the 25 years of
2 prices shown. However, it is possible that Rosebud
3 intends the energy payment to be updated annually
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1 using the Commission-approved Adjustable Portion. The
2 capacity price appears to be derived by subtracting this
3 value from each year's Non-Levelized prices from Order
4 No. 25575 and converting to $/kW by applying a 95%
5 availability factor mentioned in the text of the filing,
6 applied as if it were a capacity factor. Note that this
7 application of a capacity factor to the non-adjustable
8 portion generates a premium on the SAR capital cost above
9 that which is included in computing non-levelized rates.
10 This is because these rates are already based on a 75%
11 capacity factor. As with the entire proposal, no
12 justification for this procedure is offered. This
13 capacity price is then discounted by 5% as indicated in
14 the column heading. In fact, the 5% discount was applied
15 twice, producing an actual discount of 9.75%. Note that
16 the double application of the 5% discount cancels out the
17 use of the 95% capacity factor discussed above and
18 produces the same prices as if a 100% capacity factor and
19 a single application of the 5% discount had been used. It
20 is very difficult to negotiate with a party who presents
21 information of this sort without explanation and with no
22 offer to discuss the proposal.
23 Q Have you compared Rosebud's alternative
24 proposed prices with other proposals and projects?
25 A Yes. I have compared them with the
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1 Company's July 11, 1994 proposal, the Company's
2 proposed avoided costs in the current
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1 avoided cost case, and with the prices at which the
2 Company will purchase power from the Hermiston project.
3 Hermiston is a 474 MW natural gas-fired cogeneration
4 facility located in eastern Oregon. The prices for the
5 project are set out in the Long-Term Power Sales Agreement
6 Between Hermiston Generating Company, L. P. and
7 PacifiCorp, which was signed on October 7, 1993.
8 Hermiston is scheduled to come on line in July, 1996.
9 These comparisons are presented in Exhibit 114. From this
10 exhibit, it can be seen that Rosebud's proposal is 124% of
11 the Company's proposed prices on a 20-year levelized
12 basis. Comparisons against other measures of currently
13 avoidable costs are also in the 120% range.
14 Q How do these pricing differences translate
15 into total purchased power cost differences which would be
16 imposed by the Rosebud project?
17 A Exhibit 115 presents this comparison. For
18 additional background, the cost of purchases from
19 Hermiston, if it produced the same output as Rosebud is
20 projected to produce, is also included in the comparison.
21 From the exhibit, it can be seen that purchasing the
22 proposed Rosebud project's output at the prices most
23 recently proposed by Rosebud would impose a total cost
24 over a 20-year contract of over $398 million. These costs
25 are $68 million higher than would be incurred purchasing
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1 the project's output at the Company's proposed prices.
2 Even the Company's proposed prices are $16 million
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1 higher than purchases at Hermiston prices. Rosebud's
2 proposed prices are $84 million higher than the prices
3 charged for Hermiston's output.
4 Q On page 4 of his testimony, Dr. Slaughter
5 reminds the Commission of its direction that,
6 ... while the design of a rate structure for
facilities over 10 MW is a matter for
7 negotiation, a utility's perception of its own
load/resource balance and current needs cannot be
8 unilaterally made binding on a QF [.]
9 Has the Company complied with this direction in
10 preparing its July 11, 1994, proposal?
11 A Yes. The Company's proposal is based on the
12 load and resource balance and plant costs upon which the
13 SAR-based rates to which Rosebud seeks grandfathering are
14 based. The Company's proposal is in complete compliance
15 with Commission directives.
16 Q On page 4 of his testimony, Dr. Slaughter
17 goes on to say that since a capacity factor of 75% is used
18 in computing contract prices for smaller QFs, the capacity
19 cost portion of these small QF prices is equal to the
20 inverse of the capacity factor times the capital cost of
21 the SAR. Please respond.
22 A The statement is a non sequitur. The fact
23 that the capacity factor used to compute an all-energy
24 price appears in the denominator of the required
25 calculation tells nothing about the cost of capacity.
I have discussed the true economic
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1 cost of capacity as being the lowest cost alternative
2 source of additional capacity. There is simply no
3 relationship between this cost and either the reciprocal
4 of the capacity factor used to compute all energy prices
5 or the capital cost of a plant, such as the coal SAR,
6 which is designed with low running costs in order to be
7 run at a high capacity factor.
8 In addition, the contentions about the appropriate
9 capacity factor to be used in computing all-energy prices
10 is irrelevant in the context of multi-part prices. With
11 separate capacity and energy prices, the capacity factor
12 plays no pricing role at all. The capacity price is paid
13 for actual capacity delivered. It is not rolled into an
14 energy rate based on any assumptions about plant operation
15 and production.
16 Q On page 4 and continuing onto page 5,
17 Dr. Slaughter posits an all-energy priced purchase with
18 the price based on a 75% capacity factor and compares it
19 to a rate-based resource with equal capital and operating
20 costs. He asserts that customers would be indifferent
21 between the two resources with both running at either 75%
22 or 90% capacity factors. Please respond.
23 A This contention is simply wrong. It is
24 based on Dr. Slaughter's erroneous understanding that the
25 Company's revenue requirement is based on an assumed
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1 capacity factor. In fact, the capital cost portion of
2 generation plant revenue
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1 requirement recovered through depreciation expense. This
2 procedure allows the company to recover no more than 100%
3 of the capital cost of the plant regardless of the
4 capacity factor at which it is used. It does not allow
5 recovery of an amount computed by dividing such capital
6 cost by any capacity factor. All-energy prices are, of
7 course, based on this division.
8 If both resources do, in fact, operate at the 75%
9 capacity factor used to compute the all-energy purchased
10 resource price, then customers would be indifferent
11 between them. If they both operate at higher capacity
12 factor, however, customers would see lower total costs
13 from the rate-based resource than from the purchased
14 resource.
15 Q Why is this?
16 A This is because, as the rate-based resource
17 produces additional energy, i.e., as its capacity factor
18 increases, the only additional costs to be met by the
19 utility and its customers are the fuel and other variable
20 O&M costs. On the other hand, if the purchased resource
21 produces additional energy, the price the utility and its
22 customers must pay for that energy includes both capital
23 and the variable costs. Here, Dr. Slaughter's reciprocal
24 of the capacity factor is relevant. If 75% is used to
25 compute the all-energy resource purchase price, then the
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1 additional capital cost imposed by the additional energy
2 would be based on 133% of the capital
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1 cost of the pricing resource -- the SAR in this case.
2 This additional cost to the utility is, of course, a
3 windfall gain to the QF because it experiences no increase
4 in its capital cost in order to receive the additional
5 revenue.
6 Q On replacement page 6 of his testimony,
7 Dr. Slaughter complains about the Company's proposed use
8 of Rosebud's 88% capacity factor for converting the energy
9 portion of capital cost to a mills/kWh basis. Please
10 respond.
11 A Dr. Slaughter apparently would prefer "the
12 utility's CF [capacity factor]." PacifiCorp's actual
13 capacity factors for its large eastside coal units is in
14 the 90 to 95% range, not the 75% used to compute SAR-based
15 energy-only rates for small QFs.
16 Q Does any of Dr. Slaughter's discussion of
17 capacity factors carry into Rosebud's July 14, 1994,
18 alternative pricing proposal?
19 A No. That proposal, as I have indicated
20 above, is for a two-part capacity and energy pricing
21 structure. Appropriately, capacity factor has no role in
22 those prices.
23 Q On page 8 of his testimony, Dr. Slaughter
24 lists the elements in the SAR all-energy pricing method
25 for small QFs which are included in the non-adjustable
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1 portion of those rates. He then states: "All of these
2 components are properly considered capacity costs." Is
3 this a reasonable classification of these cost elements?
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1 A No. Dr. Slaughter is fundamentally
2 confusing capital costs with capacity costs when, in fact,
3 capital costs must be classified between capacity and
4 energy components. I have addressed the issue of
5 classification of the capital cost of coal-SAR-type
6 generation units. Only the portion of such costs
7 corresponding to the lowest priced alternative capacity
8 resource are properly classified as capacity-related
9 costs. The balance are properly classified as
10 energy-related. As indicated, the cost of a SCCT is the
11 appropriate basis for costing capacity. It is not
12 surprising that this issue has not been addressed in
13 establishing SAR-based rates for small QFs. It is
14 irrelevant to the calculation of such all-energy rates.
15 When the Commission allows negotiation of separate
16 capacity and energy rates for larger QFs like Rosebud,
17 this issue arises for the first time. No guidance on the
18 valuation of capacity can be derived from the thinking
19 behind the proper calculation of small QF all-energy
20 rates. I would note that Dr. Slaughter continues with his
21 confusion between capacity and capital costs elsewhere in
22 his testimony such as his discussion on page 11. His
23 arguments there are equally invalid for the same reasons
24 as discussed here.
25 Q Beginning on page 10, Dr. Slaughter suggests
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1 a power purchase arrangement between Rosebud and
2 PacifiCorp based on the Commission's Order No. 25706 in
3 Rosebud's Idaho Power complaint case. Do you agree with
4 this suggestion?
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1 A No. This is the first time such a
2 suggestion from anyone connected with Rosebud appears. It
3 is inconsistent, for example, with both the October 1993
4 and the July 1994 Rosebud proposals. PacifiCorp has not
5 evaluated an Idaho Power-like pricing option. This
6 suggestion is too late and too ill-defined to be given
7 serious attention at this time.
8 Q On page 11 of his testimony, Dr. Slaughter
9 states that peaking facilities are "of little use to
10 ratepayers." Is this a reasonable characterization?
11 A No. Dr. Slaughter is saying that there is
12 little value to customers in the utility being able to
13 deliver power at precisely the times when the customers
14 are expressing the highest desire or need for power.
15 Indeed, peaking resources are "of use" to ratepayers,
16 because without them, either power could not be delivered
17 when it is wanted most or high capital cost resources
18 would have to be maintained on the system and paid for by
19 customers to meet those relatively few hours of the year
20 when the power is needed.
21 Q On page 1 of his testimony, Mr. Roberts
22 refers to what he calls record load growth in the
23 Company's Idaho service territory. What is your response?
24 A The Company is not experiencing record load
25 growth in its Idaho service territory. In fact, the
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1 Company's Idaho loads have been relatively flat over the
2 last five years. Growth
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1 is nowhere near record levels in Utah Power's Idaho
2 service territory.
3 The Company submitted an interrogatory regarding
4 the basis of Mr. Robert's claim. The response was a
5 voluminous report prepared by Idaho Power Company on
6 economic and demographic trends in its service territory.
7 There was nothing in the response referring to load growth
8 -- record or otherwise -- in Utah Power's Idaho service
9 territory. The part of the state served by Utah Power is
10 not comparable Idaho Power's service territory, which
11 includes the high growth areas around Boise.
12 Q On pages 8 and 9 of his testimony,
13 Mr. Roberts claims that, "...PacifiCorp has refused to
14 make an offer consistent with existing rates and
15 methodology...." Is that a legitimate characterization?
16 A Not at all. I have described the Company's
17 pricing proposal in extensive detail. It consists of two
18 straightforward adjustments to the published rates using
19 the approved methodology. The adjustments are consistent
20 with Commission directives and are appropriate to produce
21 rates which reflect the existing coal-SAR-based costs
22 which the project would actually allow the Company to
23 avoid.
24 Q On pages 14 and 15 of his testimony,
25 Mr. Roberts discusses dispatchable SAR-method pricing.
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1 He asserts that if the Commission adopts dispatchable
2 SAR-based pricing, "system
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1 losses" included in PacifiCorp's July 11, 1994, proposal
2 become irrelevant. Please respond to those statements.
3 A I believe Mr. Roberts is referring to the
4 transmission limitation between the east and west sides of
5 the Company's system, as discussed by Mr. Morris, and not
6 to system losses. This transmission limitation, not
7 system losses, is the basis of computing the
8 dispatchability adjustment to the existing approved
9 avoided costs. The role of system losses in computing the
10 Company's proposal is exactly the same as it is in
11 computing the existing SAR-based avoided costs approved by
12 the Commission. If losses were removed, avoided costs
13 would decline by about 1.8 percent. The Company has not
14 proposed such removal.
15 Q Mr. Roberts asserts that, "... ratepayers
16 will receive substantial benefits" from the low cost
17 off-peak energy in the Company's proposal. Is this
18 correct?
19 A No. I have demonstrated that the Company's
20 proposal is fair to both customers and the QF developer.
21 It is fair to customers in that, to the extent that the
22 current SAR-based prices truly reflect avoided costs, it
23 leaves customers indifferent between power from Rosebud
24 and power from any alternative resource. There is neither
25 windfall benefit nor harm to customers. The Company's
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1 proposal is fair to the developer because it represents
2 the full costs that the project would allow the Company to
3 avoid by accepting project
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1 output. The Company's proposal also is more than
2 sufficient to encourage the development of cost effective
3 new generation. It is, in fact, $16 million higher than
4 the Company would be paying for an equivalent amount of
5 power from the Hermiston project.
6 Q Does this complete your direct testimony?
7 A Yes.
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1 (The following proceedings were had in
2 open hearing.)
3 MR. ERIKSSON: And I have some surrebuttal
4 that I'd like to have Dr. Weaver address.
5 COMMISSIONER MILLER: All right, we'll give
6 it a try.
7
8 DIRECT EXAMINATION
9
10 BY MR. ERIKSSON: (Continued)
11 Q Dr. Weaver, have you read the rebuttal
12 testimony of Dr. Slaughter?
13 A Yes, I have.
14 Q Will you please turn to Page 10 of that
15 testimony?
16 A Yes, I have it.
17 Q On that page, Dr. Slaughter agrees with you
18 that since Rosebud would be a marginal resource, energy
19 provided off peak has value only to the extent that fuel
20 is saved at other PacifiCorp Utah plants as he identifies
21 it; however, he suggests that your perspective, as he
22 calls it, should not be adopted by the Commission. How do
23 you respond to that?
24 A I'd like to first point out that my
25 perspective from within the Company is the perspective of
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1 the interest of our Company's customers. What I've done
2 in designing these prices is to design a set of prices to
3 pay Rosebud a coal SAR-based cost which its output would
4 allow us to avoid. This is in pursuit of the PURPA
5 ratepayer indifference standard. Clearly, that's the
6 appropriate perspective for consideration of all QF
7 pricing issues.
8 Now, as to the three reasons that
9 Dr. Slaughter offers why the Commission should not adopt
10 the consumer's interest perspective that I've adopted, I'd
11 like to deal with those. The first two perspectives -- I
12 mean reasons not to adopt that perspective seem somewhat
13 to run together. They seem to be a combined claim that
14 the transmission limitation on which this particular piece
15 of the analysis depends results from a combination of poor
16 planning and an excessive orientation on the part of the
17 Company to base load resources.
18 First of all, that's not true. The
19 existence of base load resources to the extent they exist
20 on the system in the way we're allowed to use them allows
21 us to meet a very substantial portion of our customers'
22 total energy needs from high efficiency coal burning
23 resources on the east side of our system. That's a
24 benefit to our customers and paying Rosebud prices higher
25 than those that I proposed would take away a portion of
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1 that benefit by paying Rosebud higher prices than what the
2 customers would otherwise have to pay in costs; however,
3 even if it were true that the limitation that results in
4 this condition limiting the value of Rosebud's output off
5 peak did come about as a result of poor planning and come
6 about as a result of excessive orientation to base load
7 resources, under PURPA that's irrelevant. Avoided cost
8 pricing is to be based on increments to the existing
9 system as built and operated, and, clearly, my analysis
10 starts with the existing system as built and as operated
11 and is consistent with that aspect of PURPA.
12 Now, the third item, reason why
13 Dr. Slaughter suggests not adopting my perspective is that
14 load growth on the east side of the Company's system, over
15 a relatively short time he implies, will eliminate the
16 effect of the transmission limitation, and that's not a
17 trivial point to raise; however, in order to respond to
18 it, I'd like to describe the analysis that supports my
19 Exhibit 113, the load growth elements in my Exhibit 113.
20 Those load growths, recall, the load numbers
21 appearing in 113 are off-peak loads on the system. They
22 don't reflect on-peak loads. Now, those loads themselves
23 are not based on RAMPP-3 numbers which Dr. Slaughter
24 refers to in his rebuttal testimony. Instead, they're
25 based on the ongoing analysis generating the updated load
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1 growths which will appear in RAMPP-4. They are in fact
2 updated numbers.
3 Second, and this is important, the numbers
4 are off-peak loads. Our off-peak loads consist of a
5 higher proportion than do our on-peak loads of high load
6 factor, industrial, manufacturing and mining loads. Those
7 customer segments on our system are growing much less
8 rapidly than are the low load factor on-peak loads in the
9 residential and commercial segment of our business.
10 Therefore, it's perfectly reasonable to expect that the
11 off-peak load growth rates are going to be slower than
12 on-peak load growth rates.
13 Finally, my Exhibit 113 load growths account
14 for some specific load losses which are not accounted for
15 in RAMPP-3, including loss of Wyoming Oil load, which
16 we've got 90 megawatts of that which we are in the process
17 of losing right now. That is a 100 percent load factor
18 load.
19 Also, it includes the loss of the
20 Montana-Dakota Utility sale, a 50 megawatt sale, which
21 also has a high load factor. Both of those elements were
22 not included in RAMPP-3. They are included in my
23 Exhibit 113, but, of course, I've been a forecaster a long
24 time and the one thing you know about forecasts is they're
25 going to be wrong. It is entirely possible that the load
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1 growths appearing in my Exhibit 113 will turn out to be
2 too low. It's also possible it will turn out to be too
3 high, but I would like to point out that in order for east
4 side off-peak load growth to eliminate the effect of the
5 transmission limitation that Mr. Morris describes, we'd
6 need to have an increase of 1,300 megawatts in east side
7 off-peak load. That's the magnitude of the surplus. In
8 order to increase load by 1,300 megawatts between '95 and
9 the year 2000, which is the period of that analysis, I
10 would have to have an annual average growth rate of eight
11 percent.
12 Q Is that for off-peak load?
13 A That is the off-peak load, exactly.
14 Dr. Slaughter correctly points out that RAMPP-3 calls for
15 an increase of load on the east side of the system on peak
16 of 500 megawatts in that interval. 500 megawatts is just
17 something over a third of the 1,300 megawatts we'd need
18 and recall again that that 500 megawatts is on-peak load,
19 not off-peak load.
20 Finally, RAMPP-3 also talks about something
21 like a two percent rate of growth. If we were to apply
22 that two percent off peak, even though I'd claim that
23 that's not the reasonable thing to do, if we were to do
24 that, it would take 20 years for load growth to grow to
25 the extent that that 1,300 additional megawatts would
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1 occur. If the three percent load growth, again applied
2 off peak, not on, that's established in the last, the 170
3 case were to be applied, it would take something
4 approaching 15 years to eliminate or to provide the 1,300
5 megawatts necessary to eliminate the effect of the
6 transmission limitation.
7 One other point, all of this analysis
8 assumes that there are no new resources added on the east
9 side. I'd like to point out, clearly, there's one
10 prospect for additional resource being added, that being
11 the Rosebud project that we're discussing here, and that's
12 only 40 megawatts of what we're now looking at under
13 discussion of something nearly 700 megawatts of QF power
14 on the east side, most of that right now in the State of
15 Utah, three projects in the State of Utah and one that has
16 just approached us that is talking about locating itself
17 either in the State of Wyoming or the State of Montana.
18 Of course, any additional resource occurring on the east
19 side would further extend the period during which the
20 transmission limitation is effective.
21 The conclusion of all that, of course, is
22 that the transmission limitation is in fact a long-term
23 phenomenon and one which load growth can't be expected to
24 eliminate anything like the near term.
25 There's one other consideration. To the
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1 extent that Rosebud is concerned about eventually the
2 transmission limitation becoming ineffective, we'd
3 consider the possibility of including a reopener clause in
4 any contract that we would ultimately negotiate. We would
5 want, of course, such a reopener to be negotiated in the
6 context of an overall contract which may have other
7 reopeners to serve, protect the interests of PacifiCorp
8 and its customers as well as possibly, other ones that
9 might protect the interests of Rosebud.
10 All of that is to suggest that with regard
11 to this point, I have adopted the correct customer
12 interest perspective and none of the reasons that
13 Dr. Slaughter deduces that the Commission ought not to
14 adopt that customer interest perspective are persuasive
15 and, therefore, the analysis stands and should be accepted
16 by the Commission.
17 Q On Page 10, he makes a point, makes a claim
18 about PacifiCorp not having previously raised this issue
19 in avoided cost cases. Is this issue raised for the first
20 time that you're aware of with Rosebud?
21 A To my knowledge, it is. Rosebud is the
22 first QF larger than 10 megawatts that we've had to deal
23 with in the State of Idaho and it's the first time I
24 believe that this issue has been raised.
25 Q If you could turn to Page 7 of
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1 Dr. Slaughter's rebuttal, the last line on that page and
2 carrying over on to Page 8, Dr. Slaughter says, "What
3 Mr. Weaver has done is to substitute an entirely different
4 surrogate plant under the guise of a scheduling
5 adjustment." Is that what you've done?
6 A No, that is not what I have done. As I've
7 explained extensively in my testimony, what I've done is
8 constructed a price scheme for a large non-dispatchable QF
9 on the east side of the system which would pay the QF
10 exactly the costs which its production would allow the
11 Company to avoid. What Dr. Slaughter is referring to here
12 is my use of the simple cycle CT. What I've done with
13 that is standard practice. It's exactly the same practice
14 as we use in all of the other states where we establish
15 avoided costs to classify the capital cost of the SAR unit
16 between a capacity component and an energy component.
17 At that stage of the analysis not a single
18 dollar of SAR costs are eliminated. All I've done with
19 the simple cycle CT is to properly classify the total
20 capital of building one of those kinds of units between
21 the cost of providing capacity to the system and the cost
22 of providing energy to the system.
23 Q On the same page, this is Lines 24 to 25, he
24 states: "The cost of QF power to the utility does not
25 rise because a developer produces above the 75 percent
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1 level"; is that correct?
2 A What page are we on?
3 Q Page 5.
4 A I'm sorry.
5 Q It's at the very bottom of the page.
6 A Yes, he does say that and, no, that's not
7 correct. What he's comparing here is the cost of power
8 purchased from the QF to the cost of the same amount of
9 power produced by a company-owned SAR, and I've gone
10 through this in my direct testimony, also. If the Company
11 owns the SAR, it recovers investment in the SAR through
12 the depreciation expense included in established revenue
13 requirement. If the Company is buying power from a QF and
14 the QF's -- then its price goes up, the total spending I
15 mean on the product goes up when more quantity is
16 purchased; however, the amount by which the spending to
17 the QF goes up includes additional recovery of capital for
18 each additional megawatt-hour produced and sold. The cost
19 of a company-owned rate based resource when production
20 goes up above 75 percent is just the additional running
21 cost. It does not increase capital at all, capital costs
22 at all; therefore, the cost of the increased production
23 from the QF costs ratepayers more than does the same
24 amount of increased production from a company-owned rate
25 based resource.
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1 Q On Page 5, Lines 6 through 8, he states:
2 "Under the PacifiCorp proposal, for peak energy only,
3 Rosebud receives the same payment as the SAR only if it
4 produces 88 percent capacity, relative to the SAR's
5 75 percent"; is that correct?
6 A Yes, that is correct, and I just explained
7 why and it's entirely appropriate that that happen. It's
8 appropriate because that would represent exactly the
9 capital cost and running cost that the QF's production
10 allows the Company to avoid. If it weren't the case, then
11 the QF would be receiving more than the total capital cost
12 that it allows the Company to avoid. In fact, the 75
13 percent that's used, 75 percent capacity factor that's
14 used, to compute the all energy rate for small QFs, those
15 less than 10 megawatts, is appropriate in that it would
16 allow the QFs as a group to exactly be compensated for the
17 costs they avoid if that group would average about 75
18 percent capacity factor on average. That way the group of
19 QFs would be compensated exactly to the amount that they
20 allow the Company to avoid in costs and that, again, is
21 the ratepayer interest perspective that all of this
22 analysis is based upon.
23 However, with a large single QF like
24 Rosebud, in order to convert the energy portion of the
25 capital spending required to build the SAR into a per
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1 kilowatt-hour basis so they can be collected with energy
2 production, it's necessary that the QF's capacity factor
3 be used to make that conversion. Again, if that isn't the
4 case, then the QF will be overcompensated. It will get
5 more in return for its production than it allows the
6 Company to avoid in capital costs.
7 A lower capacity factor, a 75 percent
8 capacity factor, used to convert capital costs to a per
9 kilowatt-hour basis for a QF that runs a higher capacity
10 factor than that would overcompensate the QF, pay it more
11 than it allows the Company to avoid.
12 Q I'm sorry for skipping around a bit here,
13 but if we go back down towards the bottom of that page, if
14 you would read Lines 21 through 24 and tell me if you
15 agree with that.
16 A Lines 21 through 24 says, "If a developer
17 brings on line a plant with higher than 75 percent
18 capacity factor the utility avoids additional costs
19 associated with construction of more 75 percent capacity
20 factor plant." I don't believe that that's the case.
21 There are other resources that are available to acquire
22 just energy. Other resources on the system could be run
23 harder; therefore, their energy production could go up or
24 for just producing energy, not capacity, there are
25 resources in the market. Simply going into the market and
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1 buying energy at much less cost than building a whole new
2 plant is available in the market. Those are the real
3 costs that this additional energy produced by the QF
4 operating at higher than 75 percent would allow us to
5 avoid.
6 I'd like to point out one other thing. I've
7 suggested in this computation that for the Rosebud QF
8 which has a high capacity factor, our calculations would
9 impose their capacity factor in converting capital to
10 energy. We would adopt exactly the same practice if we
11 were dealing with a large QF with a low capacity factor.
12 In that case, the low capacity factor would be appropriate
13 to use in converting capital to energy basis.
14 Q Could you turn to Page 2 of the rebuttal
15 testimony, and at the bottom of that, there's a sentence
16 that carries on to Page 3 in which Dr. Slaughter asserts
17 that you pointedly reject the capacity cost calculation
18 inherent in Commission methodology. Do you see that as a
19 correct -- or how do you respond to that?
20 A Well, I think that's simply an inappropriate
21 characterization of what I've done. There isn't really in
22 the Commission's spreadsheet model a method for dealing
23 with capacity, per se. What the spreadsheet model deals
24 with is spreading the capital cost of the SAR into an all
25 energy rate. Order 22865, for example, discusses using
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1 the capacity factor or, in fact, the equivalent
2 availability factor to convert capital cost to an energy
3 basis, not to convert capacity cost to an energy basis.
4 Looking at Commission Order 22636, they make
5 it clear that they expect a capacity portion of a
6 multi-part pricing arrangement like the one we're
7 proposing for Rosebud to be substantially less than the
8 total capital cost that gets spread to an all energy rate
9 in the standard published avoided costs for small QFs.
10 I'd like to point out that this confusion
11 between capital and energy, the inappropriate
12 classification of all capital costs as being capacity
13 costs is an error that occurs in Dr. Slaughter's testimony
14 in a number of places, but its corresponding error on the
15 energy side is also there. On Page 6 of his testimony,
16 Lines 20 to 26, he characterizes the adjustable portion of
17 the Commission's all energy rate as being the energy
18 portion. In fact, the adjustable portion is just part of
19 the energy payment. The capitalized energy portion is the
20 other part. My analysis properly classifies total capital
21 between capacity and energy, prices them both as separate
22 products, and that's the appropriate way to structure such
23 a contract as this.
24 Q On Page 3, also, he states that, this
25 appears at Line 6, that your pricing calculation penalizes
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1 a QF for efficiency. Do you see that as a correct
2 statement?
3 A No. My pricing structure is designed to
4 exactly pay the QF, a large non-dispatchable QF, exactly
5 the cost that it allows the Company to avoid; thereby,
6 again, pursuing the interests of the ratepayers,
7 protecting the interests of the ratepayers. The
8 efficiency of the QF, whether it's high or low, is not a
9 concern or a target of the pricing mechanism. It's got
10 nothing to do with it. If the QF can operate under these
11 prices efficiently or inefficiently, that's up to them.
12 It's got nothing to do with what we're engaged in here.
13 Q On Page 4, Lines 20 to 24, he has a question
14 and answer about the explanation of how your Column 6 of
15 your price calculation, that is, Exhibit 112, represents
16 payment for capacity. Is there an inaccuracy in this
17 question and answer there?
18 A The inaccuracy is in the formulation of the
19 question. It asks how my Column 6 in my Exhibit 112
20 proposes to pay for capacity. It simply doesn't. It
21 proposes to pay for energy, not capacity. Again, this
22 simply is a continuation of another instance of the
23 confusion between the terms capital and capacity. What
24 Column 6 is doing is structuring the price for the energy
25 component of the capital involved in building the SAR.
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1 Q And in that answer, he says that the effect
2 is to reduce avoided cost?
3 A He says that. I'd simply replace that word
4 "reduce" with "reflect." The effect is to reflect
5 avoided costs, properly incorporate them in the pricing
6 structure.
7 Q And on Page 6, Lines 15 to 16, he states
8 that you still propose a 75 percent capacity factor for
9 rates covering this period of time. Does he properly
10 characterize the status of the Company's interim rate
11 proposal?
12 A No. The interim rates, our interim rate
13 proposal was denied by the Commission. They granted an
14 alternative form of interim relief. Our interim proposal
15 has no effect at all.
16 Q On Page 10 of his rebuttal, he asserts that
17 the effect of the Company's contract with BPA, that is,
18 the BPA exchange agreement, is to make the coal plants
19 dispatchable. How do you respond to that?
20 A Well, the BPA contract neither makes the
21 coal plants dispatchable, nor does it make them
22 indispatchable. The coal plants are dispatchable because
23 of the fact that we own the things and we can run them
24 based on our own determination of the economic efficiency
25 of each individual unit. They're part of the system,
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1 they're dispatched.
2 The BPA contract does support our ability to
3 dispatch them to a higher extent than we would otherwise,
4 which is a very good thing. If we couldn't do that, then
5 we'd have to have higher energy costs. We might also have
6 to have more costly capacity resources than the BPA
7 allows.
8 Further, this seems to indicate
9 Dr. Slaughter's recognition of the fact that coal plants
10 are dispatchable. He says that the BPA contract allows us
11 to run the coal plants harder than we otherwise would.
12 That's the very essence of dispatchability. We get to
13 decide based on all the cost elements on the whole system
14 how hard to run those plants. That's the very essence of
15 dispatchability, that coal plants in fact are
16 dispatchable.
17 Q Further down on the same page, Lines 13
18 through 16, essentially, he says that you argue that any
19 new QF resource must be designed to provide power only
20 during peak periods. Is that what you argue?
21 A My pricing structure, as I said a number of
22 times, is designed simply to compensate a large
23 non-dispatchable resource for exactly the cost it allows
24 the Company to avoid. It doesn't say a thing about how a
25 QF should design its power, design its -- yeah, how its
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1 resource must be designed to provide power. It's not the
2 concern of the Company given this pricing structure how
3 Rosebud or any other QF designs and operates its
4 non-dispatchable resource. We would simply pay them the
5 costs that they allow us to avoid, which is the
6 appropriate thing for us to do.
7 MR. ERIKSSON: I have nothing further and
8 he's available for cross.
9 COMMISSIONER MILLER: All right, he's
10 available for cross. Mr. Orndorff.
11
12 CROSS-EXAMINATION
13
14 BY MR. ORNDORFF:
15 Q Mr. Weaver, could you tell me how the rates
16 in Exhibit 63 were calculated?
17 A Exhibit 63, I don't have a copy of that with
18 me. Exhibit 63 is a letter dated January 13th, 1993, to
19 Mr. Orndorff from Mr. Fell. It has an attachment called
20 "Avoided Cost Prices for Purchase Power," and it shows
21 three -- five, I mean, years of firm energy prices,
22 winter, summer, average, and what those appear to me to be
23 is the then current, probably, energy component avoided
24 costs from, it looks like, Oregon from its structure.
25 The way they're computed is by using our
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1 production dispatch model. The production dispatch model
2 is run assuming a given set of resources and then it's run
3 again assuming that there's a 50 megawatt zero running
4 cost resource, which, of course, any dispatched model
5 would run all the time. The total power cost difference
6 between the with and without 50 free megawatt resource run
7 is then converted into these avoided energy cost numbers.
8 They then get seasonalized simply by proper accumulation
9 of months. It's a monthly model. The winter months are
10 used to produce the winter column, the summer months to
11 produce the summer column.
12 Q As far as you know, does that exhibit, do
13 those rates have any similarity to the SAR method used in
14 Idaho for computing avoided cost?
15 A I believe not.
16 Q Can you tell me how the rates in Exhibit 104
17 were calculated?
18 A Maybe I can do that. Yes, this is the
19 April 16th informational pricing letter which the Company
20 prepared for Mr. Orndorff coming out of one of the
21 prehearing conferences, I don't remember which one,
22 characterized as being informational and for the purpose
23 of allowing Rosebud to investigate the feasibility of its
24 project.
25 These were produced by looking at then
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1 current market alternatives that the Company faced. In
2 specific, it included the Hermiston project which was then
3 nearing completion; a very similar project to be located
4 in the Cowlitz area in the State of Washington which had
5 similar pricing provisions, it hasn't come to fruition;
6 the James River 50 megawatt cogeneration facility; and the
7 new Sunnyside, additional Sunnyside, Utah QF capacity
8 contract, all of those taken as an investigation of what
9 the market was like at that time and those were the bases
10 for these numbers here.
11 Q Have you ever reviewed Commission
12 Order 24383?
13 A I expect that I know that you're generally
14 going to ask the question what have these prices got to do
15 with -- I should just answer the question. In general, I
16 think I probably know what that's about.
17 Q You have reviewed the Order?
18 A I don't know it by name.
19 Q I believe it's attached to Exhibit 65 and
20 the relevant page might be the last page in Exhibit 65.
21 A I don't have Exhibit 65 -- I do have
22 Exhibit 65. The last page of text I take it you mean?
23 Q Of the Order. I believe it's entitled,
24 "Average Non-Levelized Avoided Cost Rates" for
25 PacifiCorp.
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1 A Yes, I see that.
2 Q Have you reviewed those rates?
3 A I'm generally familiar with these rates,
4 yes.
5 Q And when providing the rates for Exhibit 63
6 and Exhibit 104, it's your testimony you really didn't
7 review these rates at all?
8 A It's my testimony that those rates were
9 produced as I said that they were produced.
10 Q Now, on Page 2, Lines 5 through 11 --
11 MR. ERIKSSON: What are you referring to?
12 MR. ORNDORFF: I'm referring to his
13 testimony.
14 MR. ERIKSSON: Thank you.
15 Q BY MR. ORNDORFF: On Page 2, Lines 5 through
16 11, you indicate that you have used avoided costs in
17 effect prior to January 14th, 1994. Do you see that?
18 A Yes.
19 Q Didn't you change the SAR methodology to
20 adjust the rates as explained in Exhibit 112?
21 A What I did was started with the approved
22 coal SAR-based rates and computed two adjustments that
23 allow us to reflect the coal SAR-based rates that the
24 Rosebud project would allow us to avoid, recognizing it as
25 a non-dispatchable resource and basing that on the line
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1 item adjustment that the Commission has allowed dealing
2 with schedulability.
3 Q Did you change the assumptions in the SAR
4 methodology?
5 A I did not change any of the assumptions in
6 the SAR methodology.
7 Q I see. Would you read with me now on
8 Exhibit 112, second paragraph, third sentence, first page?
9 A I've got the exhibit. Tell me the lines you
10 want again.
11 Q Second paragraph, third sentence. It starts
12 off, "The non-approved-SAR-method assumptions...."
13 A Yes.
14 Q Would you read that sentence to us?
15 A "The non-approved-SAR-method assumptions are
16 the construction cost of the simple cycle combustion
17 turbine peaking resource, the escalation rate applied to
18 the SCCT construction cost, and the Montpelier project
19 capacity factor."
20 Q I'd like to ask you again, did you change
21 the assumptions?
22 A And I'll give you the same answer. As you
23 can see by looking at the Page 3 of 3 of that exhibit,
24 none of the SAR adjustments have been changed. What has
25 been done is I've used the simple cycle combustion turbine
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1 construction cost to classify the capital component of the
2 SAR project into a capacity component and an energy
3 component. That does not entail changing any SAR
4 assumptions. I used the 88 percent of Rosebud's -- the
5 88 percent capacity factor set by Rosebud in its then
6 current, it's called Exhibit A, I forget what it was
7 attached to, Appendix A, to convert the capital cost, the
8 energy component of the capital cost to a per
9 kilowatt-hour basis.
10 Q Have you reviewed Commission Order 25454 and
11 that's in the Idaho Power-Rosebud case?
12 A I haven't paid particular attention to that
13 Order. As you say, it's the Idaho Power case.
14 Q Mr. Weaver, who determines avoided costs?
15 A In the State of Idaho, the Idaho Public
16 Utilities Commission determines avoided costs.
17 Q Have you filed this methodology that you
18 propose with the Idaho Commission prior to Rosebud's
19 complaint?
20 A No, we've never been involved in pricing
21 output for a project above 10 megawatts in the State of
22 Idaho before; therefore, we've never addressed this
23 problem and we've never filed anything to do deal with
24 this problem before.
25 Q Mr. Weaver, does Utah Power and PacifiCorp
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1 have the ability to sell energy into the Southwest through
2 Utah?
3 A Yes, we do.
4 Q Do you know what the size of those
5 interconnections are?
6 A I can't testify to the transmission
7 capacities on our system.
8 Q Does Utah Power have any transmission
9 enhancements scheduled for construction in the next five
10 years?
11 MR. ERIKSSON: I think these questions will
12 go to Mr. Morris more appropriately. He's testified as to
13 the transmission constraints.
14 MR. ORNDORFF: Okay.
15 Q BY MR. ORNDORFF: Now, Mr. Weaver, you, I
16 gathered, sponsored an economic forecast as part of your
17 rate methodology; is that correct? I'm looking at
18 Exhibit 113.
19 A Oh, well, one component of Exhibit 113 is
20 expected off-peak native growth for the period 1995 to
21 2000.
22 Q Have you had a chance to review Commission
23 Order 23358?
24 A I frankly don't know whether I have or not.
25 Q Are you aware --
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1 MR. ERIKSSON: Excuse me, could he have a
2 specific question with respect to the Order? I mean, is
3 it directed at something in the Order?
4 COMMISSIONER MILLER: To the extent that's
5 an objection, we'll overrule it and allow Mr. Orndorff to
6 proceed.
7 MR. ORNDORFF: Thank you, Mr. Chairman.
8 Q BY MR. ORNDORFF: Are you aware that as part
9 of the SAR methodology, the Commission in that Order
10 adopted a three percent growth projection as an
11 assumption?
12 A Yes, I am and, in fact, I've talked about
13 that already this afternoon. That three percent is, of
14 course, consistent with the SAR methodology for small QFs
15 and on-peak oriented load growth. These off-peak numbers
16 that we're showing here for reasons I've already talked
17 about reflect current off-peak expectations, and as I also
18 said, if we were to apply that three percent growth to the
19 1995 native load numbers that are relevant to determining
20 how effective the transmission limitation is, even at
21 that, the transmission limitation would be maintained for
22 something approaching 15 years, but I've also said that
23 the three percent is not relevant to these kind of
24 numbers.
25 Q I only have one more area I want to pursue
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1 with you, Mr. Weaver. You mentioned a reopener in your
2 supplemental or surrebuttal. What is a reopener? I
3 believe you've never brought that up with Rosebud; is that
4 true?
5 A Well, it is true that we haven't. The point
6 of my mentioning it at this point is simply that it would
7 be a reasonable negotiation issue if in fact we would ever
8 be engaged in negotiation. You seem to be concerned with
9 the prospect of the transmission limitation being
10 eliminated. One way to accommodate your concern would be
11 to open the possibility of investigating on an annual
12 basis whether that's happened.
13 I've got nothing to say right now about how
14 we would structure such a reopener or how we would verify
15 whether the limitation had been eliminated, but given all
16 of that, it would be possible to negotiate an element in
17 the contract to reopen the off-peak energy price issue
18 when and if through negotiated processes and verification
19 techniques the limitation were eliminated. It's only an
20 attempt to recognize that there are ways to deal with such
21 issues.
22 Q I'm not really familiar, Mr. Weaver, with
23 the Firth contract. I presume the Firth contract had a
24 similar provision and a reopener?
25 A No idea. I didn't do the Firth contract.
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1 Q Does the Sunnyside contract have a reopener
2 in it?
3 A I don't believe that it does.
4 Q Do you have any contract that has a reopener
5 in it as you describe?
6 A To my knowledge, not, although I wouldn't
7 say for sure that we don't; however, we haven't raised --
8 this particular concern hasn't been raised in negotiations
9 up to date and as I said, I only put it there as an
10 indication that issues such as the magnitude and duration
11 of the transmission limitation could be subject to
12 negotiation. It was something that we would be willing to
13 talk about for the benefit of Rosebud.
14 MR. ORNDORFF: Mr. Chairman, I have nothing
15 more for Mr. Weaver.
16 COMMISSIONER MILLER: Thank you,
17 Mr. Orndorff.
18 Commissioner Nelson.
19 COMMISSIONER NELSON: Thank you.
20
21 EXAMINATION
22
23 BY COMMISSIONER NELSON:
24 Q I had one question come to my mind. Did I
25 understand you to say that you're pricing Rosebud as
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1 though it were non-dispatchable?
2 A Yes, absolutely.
3 Q Wouldn't it be just synonymous to say that a
4 peaking unit would have to be dispatchable?
5 A I'm sorry, I don't understand the question.
6 Certainly, if we owned a peaking unit, it would be
7 dispatchable.
8 Q Well, my concern is that you are pricing the
9 capital portion of this based on that SCCT which would be
10 a peaking unit, which to me, just by its nature, is a
11 dispatchable unit and yet, you stated that Rosebud is
12 non-dispatchable.
13 A What I've done is tried to structure prices,
14 and I've tried to make this clear, in such a way that
15 Rosebud would be paid for the capacity and energy costs
16 that it actually allows us to avoid. Capacity is a
17 product which can be bought on the market either in the
18 form of buying company-owned peaking-type units like a
19 simple cycle CT or, alternatively, simply buying what's
20 called naked capacity from other utilities.
21 We have three such contracts on our system
22 now that I can think of, one being the BPA contract that
23 we've talked about in testimony here; another one being a
24 winter capacity purchase from Southern Cal Edison; and a
25 third one being Water Power's summer capacity purchase.
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1 Those are paid for based on the ability to deliver power
2 when the Company needs it on peak.
3 The capacity price in my calculation to
4 Rosebud is exactly analogous to that. Rosebud would be
5 paid the capacity price on a megawatt delivered basis, not
6 megawatt-hours, not energy. It's the ability to deliver
7 power on peak and that price is based on a standard in the
8 industry of the cost of such peaking resources. That's
9 what they would get paid for capital, and the total
10 contract of which this pricing scheme is a part sets out
11 the mechanism under which the amount of capacity they
12 deliver each month is determined. All of that is quite
13 standard contract language.
14 Then the other portion of the capital cost
15 of the simple cycle CT is a large chunk of capital that is
16 built that so these plants can produce energy
17 efficiently. It's not to do with providing capacity to
18 meet peak demand. It's concerned with providing energy on
19 a low cost total energy production basis. This is also
20 very standard practice, and, again, the energy cost of
21 running a large coal-fired plant includes the cost of this
22 extra capital in moving to a base load-type of unit,
23 there's a lot more capital wrapped up in one of those than
24 a peaking simple cycle CT, plus the running costs. Those
25 are the two elements of the energy cost, and that's
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1 exactly what I've done here to convert the SAR total cost
2 into a realistic capital and energy component. Have I
3 answered your question, I hope.
4 Q Yeah, I would just say in response that you
5 don't sign contracts with any of those other sources for
6 6,000 hours a year worth of energy.
7 A Actually, we do sign contracts that call for
8 both capacity and energy, and when we sign such a
9 contract, the amount of energy that is to be generated,
10 delivered under those contracts, is specified and it's not
11 at all uncommon to have the capital -- I'm sorry, that's
12 what I don't want to do -- a capacity quantity specified
13 in the contract, a capacity price specified in the
14 contract, an energy quantity specified in the contract and
15 an energy price specified in the contract. Just like I
16 said here, those are not at all uncommon in the industry.
17 COMMISSIONER NELSON: Okay, thank you.
18 COMMISSIONER MILLER: Redirect.
19 MR. ERIKSSON: Nothing. Thank you.
20 COMMISSIONER MILLER: Mr. Weaver, thank you
21 very much for your help.
22 THE WITNESS: Thank you.
23 (The witness left the stand.)
24 MR. FELL: Mr. Chairman, there was one
25 question asked about those five-year energy rate only
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1 numbers that were in Exhibit 63, this is a legal issue.
2 Those numbers reflect what is required to be made
3 available to the public under the FERC PURPA regulations,
4 18 Code of Federal Regulations, Section 292.302(b)1. No
5 witness has said that because they don't feel they should
6 be citing those things, but rather than wait to say that
7 in my brief, that is what that is.
8 COMMISSIONER MILLER: Well, we'll note that
9 observation for the record. Let's reconvene at
10 4:00 o'clock.
11 (Recess.)
12 COMMISSIONER MILLER: All right, Mr. Fell or
13 Mr. Eriksson.
14 MR. ERIKSSON: We call Mr. Morris.
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1 KENNETH N. MORRIS,
2 produced as a witness at the instance of PacifiCorp,
3 having been first duly sworn, was examined and testified
4 as follows:
5
6 DIRECT EXAMINATION
7
8 BY MR. ERIKSSON:
9 Q Would you please state your name and
10 business address?
11 A Kenneth N. Morris, 1407 West North Temple,
12 Salt Lake City, Utah.
13 Q And your position with PacifiCorp?
14 A I'm manager of system transmission planning.
15 Q And have you in the scope of that position
16 prepared and had filed in this case direct testimony
17 consisting of 11 pages of narrative and five exhibits
18 numbered 116 through 121?
19 A Yes, I have.
20 Q And do you have any corrections -- I'm
21 sorry, that was 116 through 120.
22 A Yes, 120.
23 Q Any corrections to that?
24 A I do. On Page 5 of my testimony, on
25 Line 10, the Exhibit 118 should be 119.
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CSB REPORTING MORRIS (Di)
Wilder, Idaho 83676 PacifiCorp
1 Q And with that correction, if I were to ask
2 you the same questions today as are contained in your
3 testimony, would your answers be the same?
4 A Yes, they would.
5 MR. ERIKSSON: I'd ask that Mr. Morris'
6 testimony be spread on the record and the exhibits
7 identified as Exhibits 116 through 120.
8 COMMISSIONER MILLER: So ordered.
9 (The following prefiled testimony of
10 Mr. Kenneth Morris is spread upon the record.)
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CSB REPORTING MORRIS (Di)
Wilder, Idaho 83676 PacifiCorp
1 Q Please state your name, business address and
2 present position with PacifiCorp (the Company).
3 A My name is Kenneth N. Morris and my business
4 address is 1407 West North Temple, Salt Lake City, Utah.
5 I am manager of System Transmission Planning for
6 PacifiCorp.
7 Q Have you prepared an exhibit which shows
8 your education, business experience and duties at the
9 Company?
10 A Yes, Exhibit No. 116 provides that
11 information.
12 Q What is the purpose of your testimony in
13 this proceeding?
14 A I will address the impact that transmission
15 limitations have on the relationship between the
16 availability of new generation resources located on the
17 eastside of the Company's system, cogeneration and small
18 power production facilities located in Idaho in
19 particular, and the Company's ability to avoid costs
20 through the deferral of capital additions and the
21 displacement of existing resources.
22 I will briefly describe the Company's bulk
23 electrical system with emphasis on transmission
24 capabilities which set the upper limit on the Company's
25 ability to transfer resources from the eastside to the
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1 westside of its system. I will show that under certain
2 conditions, particularly during off-peak hours, additional
3 generation located on the eastside of the Company's system
4 (Idaho/Utah/Wyoming) could not be operated without
5 curtailing existing lower cost generation due to
6 transmission limitations. This requires that the
7
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1 Company determine the value of any additional generation
2 located on the eastside of its system on a case by case
3 basis. The evaluation will have to consider location,
4 size, operating characteristics, and timing of the
5 generation addition.
6 Q How would you characterize the Company's
7 bulk power system.
8 A For the purpose of this discussion, the
9 Company's bulk power system can be represented by two
10 major load/resource areas as depicted in Exhibit No. 117.
11 The westside (Northwest) area represents the Company's
12 system in the states of Oregon, Washington, Montana,
13 California, and northern Idaho (Sandpoint area). The
14 eastside includes Utah, Wyoming, and the UP&L service area
15 in southern Idaho. Transmission constraints limit the
16 Company's capability to transfer power between the two
17 major areas. In Exhibit No. 117, the 1415 MW by the line
18 that connects the areas represents the Company's firm
19 transfer capability in the transmission path connecting
20 the two areas.
21 Q Would you describe the basis for the
22 transmission transfer capability in the transmission path
23 shown on Exhibit No. 117.
24 A Yes, transfer capabilities are based on
25 contractual rights in transmission paths that have
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Morris, Di
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1 recognized transfer ratings. The transmission path
2 ratings are determined from studies utilizing computer
3 simulations of the transmission system. The criteria that
4 are applied to the results are consistent
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1 with standard utility engineering practice and in
2 particular the "WSCC Reliability Criteria for System
3 Design." The transmission path ratings are limited by one
4 or more of the following criteria: (1) first swing
5 voltage dip following loss of a system element, (2)
6 thermal overload due to the loss of a system element, (3)
7 steady-state thermal limitations with all elements
8 in-service, (4) post-disturbance voltage deviations
9 following loss of a system element. Contracts allocate
10 the transmission path rating among parties with transfer
11 rights in the path. The Company's contractual right
12 (transfer capability) is identified in Exhibit No. 117.
13 Q What are the principle contractual
14 limitations the Company faces in transferring power from
15 the eastside to the westside of its system?
16 A The transfer capability of 1415 MW east to
17 west shown in Exhibit No. 117 is a contractual right the
18 Company has with Idaho Power Company (IPC). The contract
19 provides the Company the firm transfer right to transfer
20 the output of the Company's ownership of the Bridger
21 Generating Station plus some of the Company's Wyoming
22 resources up to a total transfer schedule of 1415 MW. The
23 Company makes delivery to IPC at its points of
24 interconnection with IPC in eastern Idaho and IPC
25 transfers such power to points of interconnection with the
Company in western Idaho.
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PacifiCorp
1 Q Can you quantify the Company's resources
2 available in the Idaho/Utah/Wyoming area that could be
3 transferred on the transmission paths to serve loads in
4 the Northwest area?
5 A Yes, Exhibits No. 117 through 120 indicate
6 total requirements and total resources projected for the
7 years 1995 and 2000 during summer and winter off-peak load
8 periods. I have chosen summer and winter off-peak load
9 conditions to demonstrate a range of available resources
10 and load requirements on a seasonal basis.
11 This analysis is based on the area loads and
12 resources data presented by Dr. Weaver in Exhibit No. 113.
13 The numbers in each area represent total requirements
14 which include load, firm sales, exchange returns, and
15 reserves, and total resources which include Company owned
16 resources and firm purchases. The "net" is calculated by
17 subtracting the total requirements from the total
18 resources. When requirements are greater than resources,
19 there is a net requirement for additional resources in the
20 area and the net requirement is shown in parenthesis.
21 Exhibits No. 119 and No. 120 illustrate the
22 requirement and resource balances that are projected for
23 the year 2000 during winter and summer off-peak load
24 periods, respectively. Referring to Exhibit No. 119,
25 during winter off-peak load periods, resources exceed
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1 total requirements by 2746 MW in the Idaho/Utah/Wyoming
2 area while there is a 2048
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1 MW net requirement in the Northwest area. During summer
2 off-peak load periods, total resources exceed total
3 requirements by 2669 MW in Idaho/Utah/Wyoming area and
4 there is a corresponding net requirement in the Northwest
5 area of 1555 MW.
6 Q Is there a need in the Company's Northwest
7 area for the Idaho/Utah/Wyoming resources?
8 A Yes, as indicated by Dr. Weaver, there is a
9 significant need in the Northwest for resources during
10 off-peak hours. As shown in Exhibits No. 117 and 119, the
11 need for additional resources ranges from 2336 MW in 1995
12 to 2048 MW in the year 2000 for winter off-peak
13 conditions. Dr. Weaver describes the resources and
14 requirements on the east and west sides of the system
15 during off-peak periods. He shows that there is
16 substantial generation available on the east side to meet
17 westside requirements if sufficient firm transmission
18 capability is available.
19 Q What transfer capability does the Company
20 have to transfer Idaho/Utah/Wyoming resources to the
21 Northwest?
22 A As shown in Exhibit No. 117, firm transfer
23 capability is available to transfer 1415 MW from
24 Idaho/Utah/Wyoming to the Northwest. At the same time the
25 net requirement in the Northwest area for resources is
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PacifiCorp
1 2336 MW and there are 2693 MW available in
2 Idaho/Utah/Wyoming for export.
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1 During the 1995 summer off-peak periods, presented
2 in Exhibit No. 118, there is approximately 2678 MW of
3 resources available for transfer from the
4 Idaho/Utah/Wyoming area. The net requirement for
5 additional resources in its Northwest area is 1868 MW.
6 Q During these off-peak periods when the
7 Company's net requirements in the Northwest exceed the
8 Company's ability to transfer resources from the eastside
9 of its system, how does the Company meet its requirements?
10 A There are several options available to the
11 Company to meet Northwest requirements in excess of the
12 Company's firm east to west transfer capability. The
13 Company's wheeling agreement with Southern California
14 Edison Co. (SCE) allows the transfer of a fixed annual
15 amount of energy to the Northwest. The amount transferred
16 during any hour is at the sole discretion of SCE.
17 Non-firm wheeling paths are also available through members
18 of the InterCompany Pool (at approximately $1.50/MWh), or
19 through California utilities (approximately $6.00 MWh).
20 The Company can often purchase non-firm energy from
21 utilities in the Northwest, usually at a substantially
22 higher cost than Company owned eastside resources.
23 Finally, the Company can operate the power system in a
24 sub-optimal fashion by taking more energy from energy
25 limited resources in the Northwest (such as hydro) during
heavy load hours and thus reduce the off-peak return
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PacifiCorp
1 requirement to BPA. This ultimately increases the cost of
2 meeting retail requirements.
3 Q With these non-firm wheeling options
4 available to the Company, couldn't the Company accommodate
5 additional QF generation on the eastside of its system?
6 A No, it would not be in the best interest of
7 the Company's customers to increase its reliance on
8 non-firm wheeling to meet firm load obligation. Since
9 there is no major east to west transmission planned, there
10 is no reason to assume that more non-firm wheeling will
11 become available in the future. In fact, it is likely to
12 decrease as competition increases. The only sure way to
13 accommodate additional energy on the eastside during
14 off-peak hours is to curtail existing Company low cost
15 resources. Energy that relies on non-firm transmission
16 capability is itself non-firm and should not be paid firm
17 energy prices.
18 Q How would you expect the conditions you have
19 described to change over time?
20 A There are three factors that impact these
21 conditions: (1) load growth, (2) resource additions, and
22 (3) possible transmission additions between
23 Idaho/Utah/Wyoming and the Northwest.
24 Referring to Dr. Weaver's Exhibit No. 113, the net
25 resources available for transfer from Idaho/Utah/Wyoming
remain relatively constant during the 5-year period. The
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PacifiCorp
1 available eastside resources and the net westside
2 requirements exceed the transfer capability of the
3 transmission path to transfer the resources to the
4 Northwest area throughout this period.
5 The Northwest resources reported in Dr. Weaver's
6 Exhibit No. 113 reflect the addition of the purchase of
7 capacity and energy from the Hermiston generation project
8 (474 MW) in 1996. This resource addition reduces the
9 magnitude of the need for resources to be transferred from
10 the Idaho/Utah/Wyoming area into the Northwest area.
11 However, during off-peak load periods, the resource
12 requirement in the Northwest area continues to be greater
13 than the transfer capability from Idaho/Utah/Wyoming to
14 the Northwest.
15 The addition of major transmission could
16 significantly increase the ability to utilize existing and
17 new Idaho/Utah/Wyoming resources to meet Northwest
18 requirements. However, there is no current plan to
19 construct major transmission for this purpose.
20 Q If new transmission were constructed, what
21 would it likely cost?
22 A Transmission additions occur in discrete
23 sizes (voltage class and rating), that is, 500 kV,
24 345 kV, or 230 kV lines, which have capacities
25 corresponding to their physical characteristics. Due
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PacifiCorp
1 to the distances involved from Idaho/Utah/Wyoming to
2 the Northwest, it is likely that a 500
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1 kV transmission line would be required for economic as
2 well as environmental reasons. A 500 kV line would have
3 approximately 1000 MW of capacity. The approximate cost
4 of such a line would be in excess of $500 million.
5 Q What is the impact of adding additional
6 generation in the Idaho/Utah/Wyoming area without
7 additional transmission?
8 A To the extent that the resource additions
9 exceed load growth in the Idaho/Utah/Wyoming area, the
10 amount of energy and capacity that is constrained due to
11 transmission limitations increases. If the additions are
12 less than load growth, the constrained capacity will
13 decrease over time. As I previously stated in reference
14 to Dr. Weaver's Exhibit No. 113, the projection for the
15 next 5 years is that resources in excess of requirements
16 in the Idaho/Utah/Wyoming area will remain at a fairly
17 constant level. Any additional eastside resource would
18 add to the projected "bottlenecked" energy I have
19 described. This "bottleneck" condition will not be
20 eliminated until the combination of eastside requirements
21 and east to west transfers falls below the level of
22 eastside resources.
23 Q You have described the Company's
24 transmission constraint between the eastside and westside
25 of its system. Given this constraint, does the Company
operate as a single integrated system?
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1 A Yes. The Company operates as a "single
2 integrated system" within its transmission limitations.
3 The Company schedules all of its generation, purchases,
4 and sales to meet its total system requirements in an
5 economical and reliable manner from one scheduling office.
6 There are times when schedules of specific resources must
7 be restricted due to transmission limitations.
8 Any utility can face operating restrictions due to
9 transmission limitations. Because of the distances
10 involved in the Company's system, PacifiCorp may be unique
11 in the magnitude of the investment required to reduce or
12 eliminate its limitations.
13 Q Prior to the UP&L/PP&L merger did PP&L
14 operate as a "single integrated system"?
15 A Yes. Prior to the UP&L/PP&L merger, there
16 was a westside area (California, Oregon, Washington,
17 Montana, northern Idaho) and an eastside area
18 (PP&L-Wyoming). There was one scheduling office that
19 scheduled all of PP&L's generation and purchases/sales to
20 meet total PP&L system requirements in an economical and
21 reliable manner.
22 Q Did transmission limitations exist in the
23 PP&L system prior to the UP&L/PP&L merger?
24 A Yes. There were times, primarily during
25 off-peak load periods, that PP&L resources located in
Wyoming could not be
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PacifiCorp
1 operated at full capacity because of transmission
2 limitations between Wyoming and the Northwest.
3 Q How do the economic considerations of a
4 qualifying facility affect the constrained energy?
5 A Since a qualifying facility (QF) receives
6 payments for the amount of energy produced, it is in the
7 QF's best interest to produce as much energy as possible.
8 If the QF produces energy in addition to the Company's net
9 resources that exceeds the transfer capability out of the
10 area, then the Company's resources must be curtailed.
11 Therefore, during the off-peak constrained hours, the QF
12 hasn't added any usable generation capacity to the system.
13 The energy delivered by the QF would be equal in value
14 during the constrained hours to the incremental fuel cost
15 of the Company owned generation that would have to be
16 curtailed. This would be the avoided cost of such QF
17 resources during those hours.
18 Q Does this conclude your direct testimony?
19 A Yes.
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1 (The following proceedings were had in
2 open hearing.)
3 MR. ERIKSSON: And I just have a few
4 surrebuttal questions to ask of Mr. Morris.
5
6 DIRECT EXAMINATION
7
8 BY MR. ERIKSSON: (Continued)
9 Q Mr. Morris, have you read Dr. Slaughter's
10 rebuttal testimony?
11 A Yes, I have.
12 Q And turning to Pages 14 and 15 of that
13 testimony, Dr. Slaughter refers to some transmission lines
14 identified by WSCC which he characterizes as planned
15 transmission additions to PacifiCorp's system as well as
16 an Idaho Power line from Midpoint to the Southwest. Are
17 you familiar with those lines?
18 A Yes, I am.
19 Q On Page 14, he says that they appear to tie
20 into the Southwest market. If they were built, would they
21 tie into the Southwest market?
22 A Of the lines that are listed there, the
23 Idaho line, the Southwest intertie line, would connect
24 Midpoint and an area south of -- well, actually, now it's
25 north of Las Vegas which would be considered Southwest,
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Wilder, Idaho 83676 PacifiCorp
1 and the Sigurd to Glen Canyon line is also a line that
2 would tie to the Southwest.
3 Q What's the status of the Sigurd line?
4 A The Sigurd line as well as most of these
5 lines on here, except for the Miners-Foote Creek line, are
6 very tentative. The Sigurd-Glen Canyon line will not
7 appear in the next document that Dr. Slaughter referenced,
8 the WSCC significant additions report, and the Emery-Green
9 River and Green River-Grand Junction are really one line.
10 The Green River is a substation in the middle of that
11 project. That line also was originally reported by
12 PacifiCorp and will not be reported by PacifiCorp in the
13 next report.
14 The Terminal to Stateline project, really,
15 Stateline is just where the line crosses the Utah-Nevada
16 border. It really goes on to Wells, Nevada. That line
17 simply is put in as a tentative project. We're doing a
18 little bit of feasibility in terms of right of way to see
19 if the line could even be built if it were justified. It
20 goes through the Dougway Bombing Improving grounds and so
21 there's some question of whether or not that line could be
22 built.
23 I'd like to just say that the report that
24 Dr. Slaughter referenced, the WSCC report, just so you
25 understand the nature of the lines in there, he prefaced
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Wilder, Idaho 83676 PacifiCorp
1 his exhibit with a title page which I think doesn't
2 accurately capture what this report is meant to say. It
3 says it's the WSCC Transmission Construction Report, which
4 it really isn't. I'd like to read, if I could, just from
5 the forward to that report just so you understand the
6 nature of what's reported in this type of report.
7 MR. ORNDORFF: I'd like to inquire,
8 Mr. Chairman, is this going to be an exhibit? I don't
9 believe the forward is in Dr. Slaughter's exhibit.
10 COMMISSIONER MILLER: Mr. Eriksson.
11 MR. ERIKSSON: I don't think it needs to
12 be. Mr. Morris can simply testify as to what is reported
13 in the WSCC document.
14 COMMISSIONER MILLER: All right, we'll allow
15 him to do that on the condition that the full document is
16 shown to Mr. Orndorff to aid in his cross-examination if
17 he desires.
18 MR. ERIKSSON: Thank you.
19 THE WITNESS: Basically, what I wanted to
20 say is the direction under which items are to be reported
21 in this report to WSCC are both tentative as well as
22 committed projects and these are basically tentative
23 projects, except for the Miners-Foote Creek which is a
24 29-mile line in the State of Wyoming that doesn't
25 interconnect to anyone. It's an internal line to
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1 PacifiCorp, and I don't want to be misrepresented by
2 saying that I'm saying the SWIP line, Idaho's line, is
3 tentative. They'll have to speak to that for themselves.
4 I'm not making any representation as to their line and how
5 committed it is.
6 Q BY MR. ERIKSSON: If that line were built,
7 that is, what you referred to as the SWIP line, is that
8 the Idaho Power line referred as the Midpoint to, well,
9 Midpoint, Idaho to the Southwest market?
10 A That's right. SWIP stands for Southwest
11 intertie project.
12 Q If that line were to be built, would that
13 allow the Company to alleviate the constrained east side
14 energy during the off-peak hours?
15 A No, we have no plans to participate in that
16 line and have no direct rights to get to Midpoint.
17 Q Is Dr. Slaughter correct in saying that
18 these lines are expected to be operating prior to Rosebud,
19 which I take it to mean 1999?
20 A Again, in the report, they did show
21 in-service dates of December, '98 and December, '99.
22 Those were strictly just a date to put in for study
23 purposes, and as I've said, except for the Miners-Foote
24 Creek, they're really not committed projects; so I would
25 fully anticipate they will not be in-service by those
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Wilder, Idaho 83676 PacifiCorp
1 dates shown there.
2 Q Turning to Page 16 of Dr. Slaughter's
3 testimony, that is, his rebuttal testimony, Line 6,
4 he states that you originally testified that there would
5 be no avoidable transmission integral with an SAR located
6 in PacifiCorp's service territory in the 170 case, and
7 then goes on to state that the Commission rejected that
8 contention. Is that an accurate characterization of what
9 occurred?
10 A No. Those are really two unrelated items.
11 During the course of that hearing, I did acknowledge that
12 there would be some avoidable transmission associated with
13 the SAR in the Powder River Basin so there was no need for
14 the Commission to reject that contention. This quote in
15 Dr. Slaughter's testimony is related to the weighting
16 factors that would be applied to my calculation of sort of
17 a surrogate transmission line.
18 MR. ERIKSSON: Okay, that's all I have and
19 he's available for cross.
20 COMMISSIONER MILLER: Cross-exam.
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1 CROSS-EXAMINATION
2
3 BY MR. ORNDORFF:
4 Q Mr. Morris, what's the nearest generating
5 resource to the largest city you have in eastern Idaho in
6 your service area?
7 A The largest city that we have?
8 Q Do you know what the largest city is in the
9 service area?
10 A From our load standpoint?
11 Q Uh-huh.
12 A I don't know the exact -- it would be in the
13 Rexburg area.
14 Q Are you familiar with the service area at
15 all?
16 A Reasonably.
17 Q Do you know what the large cities are in the
18 service area?
19 A I don't know the populations.
20 Q I'm talking about loads. What's your
21 largest load, firm load?
22 A It's the Rexburg area.
23 Q What's the nearest generating resource to
24 Rexburg that PacifiCorp has now?
25 A I could tell you that it's not very large.
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Wilder, Idaho 83676 PacifiCorp
1 Q Maybe I can make this easier, Mr. Morris.
2 What's the nearest 40 megawatt or larger resource you
3 have?
4 A To the Rexburg area?
5 Q Yeah, where your loads are.
6 A That would be probably Notten.
7 Q How many transmission miles is that,
8 roughly?
9 A This would just be an estimate.
10 Q Sure.
11 A Oh, probably, I'll say 150.
12 Q How many transmission miles is it to the
13 Ovid substation?
14 MR. ERIKSSON: Could we have that clarified
15 whether or not that's from the Ovid substation to the
16 Rexburg area or to Notten?
17 MR. ORNDORFF: No, to the load center at
18 Rexburg.
19 THE WITNESS: It could be probably not more
20 than 50 miles.
21 Q BY MR. ORNDORFF: Generally, in the
22 transmission business, Mr. Morris, does fewer miles equate
23 to less line losses?
24 A Generally speaking. It depends on kind of
25 the prevailing flow, I guess. Sometimes you add
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1 generation, it will add to the flow. Sometimes it will
2 decrease the flow.
3 Q Isn't it typical that you try to match your
4 resources with your loads as far as minimizing your
5 transmission costs?
6 A That is to minimize transmission costs.
7 There's generally, of course, as you understand, other
8 overriding factors.
9 Q Is there a 40 megawatt resource in the Idaho
10 service area?
11 A Not one unit that's 40 megawatts.
12 Q Is there a combination of units that you buy
13 in the Idaho service territory that total 40 megawatts?
14 A I'm not sure. We have several small hydro
15 units, but they probably don't add over 40.
16 Q Anywhere close to 40?
17 A Probably in the less than 20.
18 Q Are you familiar with the Energy Policies
19 Act of 1992 and the openness access provisions?
20 A Only generally, not specific.
21 Q Have you received an open access request?
22 A I believe we received a request, but I don't
23 believe the clock has started on it. It may have been
24 withdrawn; so I'm not quite sure how to answer that, if
25 there's an active request before us or not. I guess I'm
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1 not aware that there is one.
2 Q In wheeling your power to the Southwest,
3 what is the charge on an open access fully embedded cost?
4 A I'm not sure what our current rate is.
5 Q The resources are, though, marketed by
6 PacifiCorp on a normal basis; is that right?
7 A We market resources, yes.
8 Q Do you market Montana Power's power from
9 Colstrip?
10 A I'm not aware that we market for a third
11 party.
12 Q You do wheel it, though, don't you?
13 A There is an intercompany pool agreement for
14 some non-firm wheeling, but sometimes we may wheel for
15 them. I'm not aware directly of any times we have done.
16 MR. ORNDORFF: That's all I have,
17 Mr. Chairman.
18 COMMISSIONER MILLER: Commissioner Nelson.
19 COMMISSIONER NELSON: Not for me. Thank
20 you.
21 COMMISSIONER MILLER: Redirect.
22 MR. ERIKSSON: If I could approach the
23 witness and show him a document which may help to answer a
24 question regarding additional generation in the Idaho
25 area.
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Wilder, Idaho 83676 PacifiCorp
1 COMMISSIONER MILLER: Certainly.
2 MR. ORNDORFF: Could I have a copy of that,
3 Mr. Chairman?
4 COMMISSIONER MILLER: Show it to
5 Mr. Orndorff first.
6 (Mr. Eriksson approached the witness.)
7
8 REDIRECT EXAMINATION
9
10 BY MR. ERIKSSON:
11 Q Mr. Morris, does the Company have hydro
12 generation in the Idaho area and northern Utah?
13 A Yes, it does.
14 Q And is that generation in excess of
15 40 megawatts nameplate rating?
16 A Yes, in total it is. There's the Grace
17 plant at 33 megawatts, the Oneida at 30 megawatts for a
18 total of 66 megawatts.
19 Q Others as well?
20 A And Soda is 14 megawatts.
21 MR. ERIKSSON: That's all I have.
22 COMMISSIONER MILLER: All right, Mr. Morris,
23 thank you for your help.
24 (The witness left the stand.)
25 MR. ERIKSSON: May he be excused?
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1 COMMISSIONER MILLER: Certainly.
2 (Off the record discussion.)
3 COMMISSIONER MILLER: All right, I think we
4 can go back on the record. It's my impression that we're
5 now concluded with the evidentiary presentations. We have
6 a couple of exhibit question marks that still, at least
7 according to my notes, need to be resolved. There's the
8 question with respect to Exhibit 60, and then from my
9 notes yesterday, I thought there was going to be further
10 foundation or identification of Exhibits 121 and 123. I
11 don't know if in your view that has occurred or not
12 occurred or whether it's critical one way or the other.
13 MR. ORNDORFF: I will not object to the
14 admission of 121 and 123.
15 COMMISSIONER MILLER: All right, since
16 there's no objection, those two will be admitted. We do
17 then have Exhibit 60. I guess the way to start this is I
18 could give you my thought on it and then each party could
19 respond. It seems to me that Exhibit 60 is offered to
20 show, at least for one purpose, that PacifiCorp knew that
21 the project was of sufficient maturity so as to entitle it
22 to the right of substantive negotiations, but that
23 notwithstanding that knowledge, PacifiCorp engaged in a
24 course of conduct designed to prevent or thwart
25 substantive negotiations, and if my understanding of the
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1 purpose for which it's offered is correct, it seems to me
2 a necessary foundation is a showing that the document
3 actually came into the possession or knowledge of
4 PacifiCorp and at this point that's denied by PacifiCorp
5 and as far as I can tell there is no independent proof
6 that would contravene the denial and allow it to be
7 entered into evidence. That's how I'm thinking about it
8 right now.
9 MR. ORNDORFF: Well, Mr. Chairman, I only
10 have one problem with that analysis and that is that the
11 Staff was involved in this discussion, it has been ongoing
12 for over a year, and they received their copy, they
13 certainly had it in their files. PacifiCorp was here for
14 at least four prehearing conferences. The Staff files,
15 they're not closed. You know, it's unfortunate that
16 PacifiCorp doesn't have their copy, but query when a QF
17 makes a good showing, sends it to the Staff, sends it, I
18 certainly allege I sent it out and they have part of it,
19 there are two parts. They can't prove they didn't lose it
20 just like I can't prove for sure I sent out two parts, and
21 the best indication that the two parts went out is the
22 Staff has both parts.
23 COMMISSIONER MILLER: It sounds to me
24 like -- we'll let Mr. Fell respond, but it sounds to me
25 like the factual question of whether there is sufficient
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1 other circumstantial evidence of delivery that would
2 permit an inference that it was more likely than not
3 delivered is probably a question of fact that the
4 Commission should deliberate on as part of its overall
5 decision in the case rather than the Chair ruling as an
6 evidentiary matter now. I think we understand what the
7 circumstantial evidence surrounding the question is; so
8 we'll let Mr. Fell have a concluding comment, but I would
9 propose not to rule on the admission of the exhibit.
10 We'll include that as part of our deliberations in the
11 case as this does appear to be a disputed factual issue;
12 so, Mr. Fell, what would you like to say to us?
13 MR. FELL: I'm satisfied with withholding
14 the ruling. If there's anything that the record in this
15 case has to offer, we can address it in our briefs. I
16 don't believe it's appropriate to use, to attribute
17 knowledge to PacifiCorp on the basis of what was given to
18 the Staff, particularly a Staff attorney. We do not ever
19 ask to review Staff attorney files, nor do we know when
20 the Staff might have gotten their copy. Maybe the Staff
21 copy has a date on it, but that hasn't been brought up
22 either. In any case, the real material issue here is
23 whether PacifiCorp had it and from our perspective, there
24 were plenty of opportunities that were available if
25 Rosebud had met with us to talk about the facts of the
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1 generation that we surely would have started going through
2 that, but time and again they did not want to do that.
3 COMMISSIONER MILLER: Well, we'll confine
4 our decision on this point, obviously, to the record as
5 it's been developed and determine whether to admit
6 Exhibit 60 when we engage in our subsequent
7 deliberations. All right, that takes care of the exhibits
8 then. There remains, there have been hints throughout
9 that the parties would like the opportunity for
10 posthearing submissions.
11 MR. ORNDORFF: There's one other matter,
12 Mr. Chairman. You asked for a rendition of the two
13 projects and how they all fit together. Is that still of
14 interest or did we get that clarified to your
15 satisfaction?
16 COMMISSIONER MILLER: I think at this point
17 the Commission now has a clear view of those
18 circumstances.
19 MR. ORNDORFF: That's fine.
20 MR. FELL: We should also note that
21 Exhibit 130 was not admitted; so that if there's a blanket
22 admission of exhibits, it does not include 130.
23 COMMISSIONER MILLER: Let's at this point,
24 then, for the record admit all the exhibits with the
25 exception of 130 and with the observation that the
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1 Commission is reserving its ruling on Exhibit 60.
2 (All exhibits previously marked for
3 identification, with the exception of Exhibits 60 and 130,
4 were admitted into evidence.)
5 COMMISSIONER MILLER: Now, are we ready to
6 discuss briefs? What would the parties desire in terms of
7 a schedule?
8 MR. FELL: Mr. Chairman, we have an avoided
9 cost hearing coming up next week which is a surprise to
10 everybody. The court reporter will need to get the
11 transcript out and if we could start perhaps with some
12 idea of when the transcript will be ready, we could work
13 from that. We will want opening and reply briefs so that
14 we can respond to Rosebud's brief.
15 MR. ORNDORFF: Mr. Chairman, I believe I'm
16 the Complainant in this case and I don't believe
17 PacifiCorp gets a reply to my -- I mean, if we're going to
18 do opening briefs, I file, the normal custom is we file a
19 brief, they file a brief. I mean, are we going to go
20 through the briefing cycle in a rotation? That seems to
21 me to be taking it to the extreme. I mean, I normally get
22 the opening brief and the closing brief if we're going to
23 do it that way. They don't get the last reply. I know
24 they'd like it, but that's not normally how it's done.
25 COMMISSIONER MILLER: Let's take this one
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1 step at a time. Let's start with, Madam Reporter, your
2 estimate of when the transcript will be available.
3 THE REPORTER: It will be available next
4 week. I can't give you a specific day, probably Wednesday
5 or Thursday.
6 MR. FELL: So we would have it by the end of
7 the week.
8 COMMISSIONER MILLER: Let's assume
9 transcript availability by Friday. All right; so that's
10 when the clock starts. How much time do we need for
11 simultaneous opening briefs? Let's see, that's
12 December 2nd?
13 MR. FELL: Friday is December 2nd? So if we
14 had two weeks, that would go to December 16, and I often
15 do a lot of brief writing on weekends; so what I would
16 like is Tuesday after that. There is a significant record
17 here.
18 COMMISSIONER MILLER: So that would be
19 Tuesday, what date?
20 MR. FELL: I think it's the 20th. Tuesday
21 is the 20th.
22 MR. ORNDORFF: Mr. Chairman, I'd inquire
23 just generally what the decision meeting schedule is
24 before we have maybe a change in the Commission and maybe
25 we should work backwards as to how we set the schedule.
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1 There is a very substantial record and it would seem to be
2 a waste to be in a briefing schedule where the people that
3 are making the decision aren't on the Commission; so
4 perhaps working backwards would be a better way to
5 approach it.
6 COMMISSIONER MILLER: Well, we're going to
7 have to decide this case sometime in the first days of
8 January.
9 COMMISSIONER NELSON: I'm available.
10 COMMISSIONER MILLER: What would two weeks
11 after the 20th be?
12 MR. FELL: That would be January 3rd and I
13 think January 2nd is probably a holiday; so if it were the
14 next day, that would allow us to get it delivered. We
15 could get an overnight delivery Tuesday and file
16 Wednesday.
17 COMMISSIONER MILLER: Wednesday the 4th?
18 MR. FELL: Yes. Actually, 1, 2, 3, 4, yes.
19 COMMISSIONER MILLER: Well, the Commission,
20 of course, will try to decide this within the first 10
21 days or so of January. Since it's a fully submitted and
22 contested matter, we are permitted by law to deliberate it
23 outside of a public meeting. I'm assuming the Staff help
24 that we receive on this could be in-progress so that if we
25 receive the final reply briefs from both parties on the
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1 4th, we'll be in a position where we can read those,
2 integrate that into the work we've done up until then and,
3 hopefully, get something out almost immediately after
4 that.
5 I think what I would suggest is simultaneous
6 reply briefs. Each party would have a reply opportunity
7 to address the briefs of the others; so if that's
8 agreeable, we will set Tuesday the 20th as the date for
9 the filing of the initial briefs, Wednesday the 4th as the
10 date, January 4th as the date, for simultaneous reply
11 briefs if they're desired. Is that agreeable with
12 everyone?
13 MR. FELL: That is agreeable.
14 MR. ORNDORFF: Yes, Mr. Chairman.
15 COMMISSIONER MILLER: What else needs to
16 come before us then? If nothing, thanks for your
17 dedicated effort in this case and the effort to ensure
18 that the Commission has a full record. We'll be adjourned
19 and issue our decision as soon as it's possible for the
20 Commission.
21 (The Hearing concluded at 4:35 p.m.)
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1 AUTHENTICATION
2
3
4 This is to certify that the foregoing
5 proceedings held in the matter of Rosebud Enterprises,
6 Inc., Complainant, versus PacifiCorp, dba Utah Power &
7 Light Company, Respondent, commencing at 9:30 a.m., on
8 Monday, November 21, and continuing through Tuesday,
9 November 22, 1994, at the Commission Hearing Room,
10 472 West Washington, Boise, Idaho, is a true and correct
11 transcript of said proceedings and the original thereof
12 for the file of the Commission.
13 Accuracy of all prefiled testimony as
14 originally submitted to the Reporter and incorporated
15 herein at the direction of the Commission is the sole
16 responsibility of the submitting parties.
17
18
19
20 CONSTANCE S. BUCY
Certified Shorthand Reporter #187
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