20021015ex245-247.pdf

Exhibit 245
Page 1 of 2Valuation Of Monsanto Interruptibility
Based on PacifiCorp's Methodology
PacifiCorp Corrected Corrected
Rebuttal by PacifiCorp and with
Testimony In Surrebuttal Monsanto
(1)(2)(3)
1 A. ECONOMIC CURTAILMENT
2 1. Avoided Reservation Fee
3 Capacity Charge ($/kW-mo)$3.08 $3.08 $3.08
4 Capacity - kW 46,000 67,000 67,000
5 Amount 1,699,450$ 2,475,286$ 2,475,286$
6 2. Avoided Energy Cost
7 Curtailments per year (Hrs)500 500 500
8 Times Capacity (MW)46 67 67
9 MWH Curtailed 23,000 33,500 33,500
10 Market Price - SuperPeak ($ per MWH)$59.25 $59.25 $59.25
11 Amount 1,362,750$ 1,984,875$ 1,984,875$
12 3. Total Avoided Costs (ln 5 + ln 11)3,062,200$ 4,460,161$ 4,460,161$
13 4. Lost Retail Revenue
14 MWH Curtailed 23,000 33,500
15 Retail Cost $31.40 $16.31
16 Amount 722,200$ 546,385$
17 5. Economic Curtailment (ln 12 - ln 16)2,340,000$ PP 3,913,776$ PP 4,460,161$ PP
18 B. OPERATING RESERVES CURTAILMENT
19 1. Avoided Reservation Fee
20 Reservation Fee ($/kW-mo)$2.73 $3.44 $3.44
21 Capacity - kW 95,000 95,000 95,000
22 Amount 3,112,200$ 3,922,193$ 3,922,193$
23 2. Avoided Energy Cost
24 Curtailments per year (Hrs)288 288
25 Times Capacity (MW)95 95
26 MWH Curtailed 27,360 27,360
27 Retail Price $31.40 $16.31
28 Amount 859,104$ 446,242$
29 3. "Market Opportunity" (ln 22 + ln 28)3,971,304 4,368,435 3,922,193
30 4. Lost Retail Revenue
31 MWH Curtailed 27,360 27,360
32 Retail Cost $31.40 $16.31
33 Amount 859,104$ 446,242$
34 5. Operating Reserves (ln 29 - ln 33)3,112,200$ PP 3,922,193$ PP 3,922,193$ PP
35 C. SYSTEM INTEGRITY
36 Capacity (MW)162 162 162
37 System Interruption per year 12 12 12
38 MWH Interrupted 1,944 1,944 1,944
39 FERC Cap ($ per MWH)$250 $250 $1,000
40 System Integrity 486,000$ PP 486,000$ PP 1,944,000$ PP
41 TOTAL VALUATION
42 A. Economic Curtailment 2,340,000$ 3,913,776$ 4,460,161$
43 B. Operating Reserves 3,112,200$ 3,922,193$ 3,922,193$
44 C. System Integrity 486,000$ 486,000$ 1,944,000$
45 Total 5,938,200$ 8,321,969$ 10,326,354$
46 Divided by 1,354,000 MWH usage $4.39 $6.15 $7.63
47 SUMMARY OF PRICING ($ PER MWH)
48 A. Firm Price $31.39 $31.39 $28.30
49 B. Interruptible Valuation (ln 46)$4.39 $6.15 $7.63
50 C. Net Price $27.00 $25.24 $20.67
Exhibit 245
Page 2 of 2Valuation Of Monsanto Interruptibility
Based on PacifiCorp's Methodology
Explanation of Calculations:
Column (1): PacifiCorp Rebuttal Testimony August 23, 2002
Column (2): Corrected by PacifiCorp in Surrebuttal September 5, 2002
Column (3): Corrected and With Monsanto Adjustments
PacifiCorp Rebuttal Testimony filed August 23, 2002, Exhibit Nos. 13, 14 and 15. Line 46 is
the value of the interruptibility on a "per MWH" basis using Monsanto usage of 1,354,000
MWH as proposed by PacifiCorp in Exhibit No. 11.
At the hearing, PacifiCorp updated its calculation by revising line 4 up to 67 MW, and revising
according to PacifiCorp's proposed rate design. PacifiCorp agreed that Monsanto would not
need to sell 1,000 hours of interruptibility since the second 500 hours were shown to have a
negative value.
Column (3) starts with the corrected Column (2) and represents three adjustments made by
Monsanto to arrive at the net price of $20.67 per MWH. These adjustments include
eliminating lost revenues from the valuation, increasing the FERC Rate Cap to $1,000 per
MWH, and starting with a firm price of $28.3 per MWH.
Exhibit 246
Page 1 of 2
Valuation Of Monsanto Interruptibility
Based on the Avoided Peaker Resource
OR WA UTAH OR WA CT
Simple Simple 3 Furnaces
Cycle CT Cycle CT 800 Hrs
(1)(2)(3)
1 A. AVOIDED CAPACITY
2 Total Fixed Cost ($/kW-year)$73.48 $86.63 $73.48
3 kW Curtailed 116,500 116,500 162,500
4 kW Adjusted for Reserve Margin of 10%128,150 128,150 178,750
5 Value of Avoided Capacity 9,416,462$ 11,101,635$ 13,134,550$
6 B. AVOIDED ENERGY
7 Total Variable Costs ($/MWH)$22.52 $23.78 $22.52
8 MWH Curtailed:
9 500 hours/year of 67 MW 33,500 33,500
10 300 hours/year of 116.5 MW 34,950 34,950
11 800 hours/year of 162.5 MW - - 130,000
12 Total MWH per year 68,450 68,450 130,000
13 Value of Avoided Energy 1,541,494$ 1,627,741$ 2,927,600$
14 TOTAL AVOIDED PEAKER COSTS
15 A. Avoided Capacity 9,416,462$ 11,101,635$ 13,134,550$
16 B. Avoided Energy 1,541,494$ 1,627,741$ 2,927,600$
17 Subtotal 10,957,956$ 12,729,376$ 16,062,150$
18 Adjusted for losses of 5.19%11,526,674$ PP 13,390,030$ PP 16,895,776$ PP
19 TOTAL VALUATION 11,526,674$ 13,390,030$ 16,895,776$
20 Divided by 1,354,000 MWH usage $8.51 $9.89 $12.48
21 SUMMARY OF PRICING ($ PER MWH)
22 A. Firm Price $28.30 $28.30 $28.30
23 B. Interruptible Valuation (ln 20)$8.51 $9.89 $12.48
24 C. Net Price $19.79 $18.41 $15.82
Exhibit 246
Page 2 of 2
Valuation Of Monsanto Interruptibility
Based on the Avoided Peaker Resource
Explanation of Calculations:
Column (1): OR WA Simple Cycle CT
Column (2): UTAH Simple Cycle CT
Column (3): OR WA CT, 3 Furnances, 500 Hours Only
Avoided costs based on the resource cost of a simple cycle CT built in Oregon or Washington
according to PacifiCorp's RAMPP-6 planning documents. Both Mr. Schunke and Dr. Rosenberg use
the avoidance of this resource in their valuation of Monsanto's interruptibility. Curtailed capacity and
energy amounts are from Monsanto's original proposal. The curtailed energy of 68,450 MWH was
detailed by Mr. Schunke in his Exhibit 101. Line 20 is the value of the interruptibility on a "per MWH"
basis using Monsanto usage of 1,354,000 MWH as proposed by PacifiCorp in Exhibit No. 11.
The costs for a simple cycle CT built in Utah are also presented in the RAMPP-6 planning documents,
and result in a higher valuation. This resource was used by Mr. Yankel in his testimony, and referenced
by Dr. Rosenberg in his rebuttal. The curtailed capacity and energy amounts are the same as those
shown in Column (1), and are based on Monsanto's original proposal.
Column (3) uses the avoided costs of a CT built in Oregon or Washington, similar to that used in
Column (1). The curtailed capacity and energy amounts reflect Monsanto's updated proposal for
interrupting all three furnaces. The avoided capacity is 162.5 MW before reserves or losses. The
energy curtailed is equal to 800 hours x 162.5 MW, or 130,000 MWH.
Exhibit 247
Page 1 of 4
Summary of Economic Curtailment Valuations
Capacity Curtailed:67 MW
Strike Price:$31.40 per MWH
First 500 Next 500 Total 1,000
Ln Price Curve Date Hours Hours Hours
(1)(2)(3)
1 26-Sep-02 $3,144,068 ($704,097)$2,439,971
2 19-Sep-02 3,312,340 (676,646)2,635,693
3 03-Sep-02 3,015,000 (390,948)2,624,052
4 29-Aug-02 3,197,002 (695,000)2,502,002
5 22-Aug-02 3,283,309 (483,309)2,800,000
6 25-Jul-02 2,523,277 (724,237)1,799,040
7 18-Jul-02 2,244,193 (713,592)1,530,601
8 27-Jun-02 2,019,659 (740,194)1,279,465
9 20-Jun-02 1,485,791 (761,161)724,630
10 30-May-02 1,462,843 (772,429)690,414
11 23-May-02 1,899,241 (757,271)1,141,971
12 25-Apr-02 2,216,764 (752,967)1,463,797
13 18-Apr-02 1,913,095 (750,668)1,162,427
14 28-Mar-02 2,226,134 (782,676)1,443,459
15 21-Mar-02 2,306,547 (768,874)1,537,672
16 28-Feb-02 3,197,271 (807,574)2,389,697
17 21-Feb-02 2,908,109 (817,119)2,090,990
18 31-Jan-02 1,992,492 (853,143)1,139,349
19 24-Jan-02 1,454,368 (870,279)584,089
20 27-Dec-01 1,897,649 (845,942)1,051,706
21 20-Dec-01 2,215,053 (842,411)1,372,642
22 28-Nov-01 2,686,315 (736,100)1,950,214
23 21-Nov-01 3,056,172 (720,337)2,335,835
24 29-Oct-01 4,416,284 (692,890)3,723,394
25 18-Oct-01 3,929,740 (740,542)3,189,198
26 Minimum $1,454,368 ($870,279)$584,089
27 Maximum 4,416,284 (390,948)3,723,394
28 Average 2,560,109 (736,016)1,824,092
29 Number of Times Value is Negative 25
30 % Reduction in going from maximum down to minimum 84.3%
Column (1): Econ. Curtail. from even pages of Exhibit No. 36 (500 hours).
Column (2): Column (3) - Column (1)
Column (3): Econ. Curtail. from odd pages of Exhibit No. 36 (1,000 hours)
Note: This page uses the first box of each page of Exhibit No. 36.
Exhibit 247
Page 2 of 4
Summary of Economic Curtailment Valuations
Capacity Curtailed:46 MW
Strike Price:$31.40 per MWH
First 500 Next 500 Total 1,000
Ln Price Curve Date Hours Hours Hours
(1)(2)(3)
1 26-Sep-02 $2,205,529 ($511,791)$1,693,737
2 19-Sep-02 2,341,048 (495,174)1,845,874
3 03-Sep-02 1,875,000 243,967 2,118,967
4 29-Aug-02 2,245,218 (506,293)1,738,925
5 22-Aug-02 2,340,000 210,000 2,550,000
6 25-Jul-02 1,670,341 (524,020)1,146,321
7 18-Jul-02 1,419,108 (517,574)901,534
8 27-Jun-02 1,227,228 (533,672)693,556
9 20-Jun-02 765,485 (546,379)219,106
10 30-May-02 751,025 (553,191)197,834
11 23-May-02 1,122,584 (544,006)578,578
12 25-Apr-02 1,401,041 (541,397)859,644
13 18-Apr-02 1,139,081 (540,022)599,059
14 28-Mar-02 1,390,959 (559,398)831,561
15 21-Mar-02 1,459,515 (551,024)908,491
16 28-Feb-02 2,382,470 (574,483)1,807,987
17 21-Feb-02 2,135,167 (580,278)1,554,889
18 31-Jan-02 1,346,810 (602,101)744,709
19 24-Jan-02 881,736 (612,474)269,262
20 27-Dec-01 1,256,773 (597,726)659,047
21 20-Dec-01 1,526,593 (595,582)931,011
22 28-Nov-01 1,752,551 (531,199)1,221,352
23 21-Nov-01 2,071,191 (521,627)1,549,564
24 29-Oct-01 3,248,644 (504,979)2,743,665
25 18-Oct-01 2,855,316 (533,876)2,321,439
26 Minimum $751,025 ($612,474)$197,834
27 Maximum 3,248,644 243,967 2,743,665
28 Average 1,712,416 (484,972)1,227,444
29 Number of Times Value is Negative 23
30 % Reduction in going from maximum down to minimum 92.8%
Column (1): Econ. Curtail. from even pages of Exhibit No. 36 (500 hours).
Column (2): Column (3) - Column (1)
Column (3): Econ. Curtail. from odd pages of Exhibit No. 36 (1,000 hours)
Note: This page uses the second box of each page of Exhibit No. 36.
Exhibit 247
Page 3 of 4
Summary of Economic Curtailment Valuations
Capacity Curtailed:67 MW
Strike Price:$16.31 per MWH
First 500 Next 500 Total 1,000
Ln Price Curve Date Hours Hours Hours
(1)(2)(3)
1 26-Sep-02 $3,988,831 $89,678 $4,078,509
2 19-Sep-02 4,160,393 123,491 4,283,884
3 03-Sep-02 4,025,469 618,481 4,643,950
4 29-Aug-02 4,039,832 95,772 4,135,604
5 22-Aug-02 4,006,187 375,699 4,381,886
6 25-Jul-02 3,352,638 50,735 3,403,373
7 18-Jul-02 3,074,840 63,612 3,138,452
8 27-Jun-02 2,845,120 25,234 2,870,354
9 20-Jun-02 2,306,666 (4,424)2,302,243
10 30-May-02 2,278,160 (23,377)2,254,783
11 23-May-02 2,719,428 (4,269)2,715,159
12 25-Apr-02 3,033,652 (2,737)3,030,915
13 18-Apr-02 2,726,336 (693)2,725,643
14 28-Mar-02 3,045,955 (54,063)2,991,892
15 21-Mar-02 3,126,240 (37,131)3,089,109
16 28-Feb-02 4,013,202 (91,685)3,921,516
17 21-Feb-02 3,720,278 (106,502)3,613,776
18 31-Jan-02 2,793,957 (160,595)2,633,362
19 24-Jan-02 2,250,605 (186,506)2,064,100
20 27-Dec-01 2,697,497 (154,714)2,542,783
21 20-Dec-01 3,018,358 (149,796)2,868,562
22 28-Nov-01 3,506,751 (7,046)3,499,705
23 21-Nov-01 3,877,966 13,304 3,891,270
24 29-Oct-01 5,242,137 46,283 5,288,419
25 18-Oct-01 4,743,467 (17,427)4,726,040
26 Minimum $2,250,605 ($186,506)$2,064,100
27 Maximum 5,242,137 618,481 5,288,419
28 Average 3,383,759 20,053 3,403,812
29 Number of Times Value is Negative 15
30 % Reduction in going from maximum down to minimum 61.0%
Column (1): Econ. Curtail. from even pages of Exhibit No. 36 (500 hours).
Column (2): Column (3) - Column (1)
Column (3): Econ. Curtail. from odd pages of Exhibit No. 36 (1,000 hours)
Note: This page uses the third box of each page of Exhibit No. 36.
Exhibit 247
Page 4 of 4
Summary of Economic Curtailment Valuations
Capacity Curtailed:46 MW
Strike Price:$16.31 per MWH
First 500 Next 500 Total 1,000
Ln Price Curve Date Hours Hours Hours
(1)(2)(3)
1 26-Sep-02 $2,757,667 $10,022 $2,767,690
2 19-Sep-02 2,895,165 30,517 2,925,681
3 03-Sep-02 3,312,000 104,441 3,416,441
4 29-Aug-02 2,796,188 13,708 2,809,896
5 22-Aug-02 3,384,329 615,671 4,000,000
6 25-Jul-02 2,213,115 (13,547)2,199,568
7 18-Jul-02 1,962,674 (5,747)1,956,927
8 27-Jun-02 1,767,656 (28,997)1,738,659
9 20-Jun-02 1,303,123 (46,959)1,256,164
10 30-May-02 1,285,318 (58,454)1,226,864
11 23-May-02 1,659,831 (46,883)1,612,948
12 25-Apr-02 1,936,304 (45,963)1,890,341
13 18-Apr-02 1,672,103 (44,694)1,627,409
14 28-Mar-02 1,927,978 (77,047)1,850,931
15 21-Mar-02 1,996,474 (66,778)1,929,696
16 28-Feb-02 2,917,131 (99,811)2,817,320
17 21-Feb-02 2,667,539 (108,783)2,558,757
18 31-Jan-02 1,872,703 (141,571)1,731,132
19 24-Jan-02 1,404,453 (157,261)1,247,192
20 27-Dec-01 1,781,702 (138,025)1,643,678
21 20-Dec-01 2,053,615 (135,025)1,918,590
22 28-Nov-01 2,289,937 (48,549)2,241,388
23 21-Nov-01 2,609,422 (36,235)2,573,186
24 29-Oct-01 3,789,350 (16,250)3,773,100
25 18-Oct-01 3,388,631 (54,824)3,333,807
26 Minimum $1,285,318 ($157,261)$1,226,864
27 Maximum 3,789,350 615,671 4,000,000
28 Average 2,305,776 (23,882)2,281,895
29 Number of Times Value is Negative 20
30 % Reduction in going from maximum down to minimum 69.3%
Column (1): Econ. Curtail. from even pages of Exhibit No. 36 (500 hours).
Column (2): Column (3) - Column (1)
Column (3): Econ. Curtail. from odd pages of Exhibit No. 36 (1,000 hours)
Note: This page uses the fourth box of each page of Exhibit No. 36.