20180117Vail Supplemental Direct - Redacted.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO.PAC-E-17-07
OF ROCKY MOUNTAIN POWER FOR A )
CERTIFICATE OF PUBLIC )SUPPLEMENTAL DIRECT TESTIMONY
CONVENIENCE AND NECESSITY AND )OF RICK A.VAIL
BINDING RATEMAKING TREATMENT )REDACTED
FOR NEW WIND AND TRANSMISSION )
FACILITIES )
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ROCKY MOUNTAIN POWER
CASE NO.PAC-E-17-07
January2018
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l Q.Are you the same Rick A.Vail who previously provided direct and rebuttal
2 testimony in this case on behalf of Rocky Mountain Power ("Company"),a
3 division of PacifiCorp?
4 A.Yes.
5 PURPOSE AND SUMMARY OF TESTIMONY
6 Q.What is the purpose of your supplemental direct testimony?
7 A.Based on the results of the 20l7R Request for Proposals ("RFP"),I update the status
8 of the Aeolus-to-Bridger/Anticline line'and network upgrades (collectively,the
9 "Transmission Projects")that support the Company's decision to construct or procure
10 four new wind resources ("Wind Projects")(collectively,the "Combined Projects").I
ll explain the important progress the Company has made on the Transmission Projects,
12 as well as their decreasing risk.
13 Q.Please summarize your testimony.
14 A.I address the following key issues for the Transmission Projects:
15 An update on the status of:
16 ·Expected design and cost for the Transmission Projects based on the outcome
17 of the 20l7R RFP.
18 Engineering,Procurement,and Construction ("EPC")contracts,and required
19 easements.
20 Technical analysis demonstrating that the Company s Aeolus-to-Bridger/Anticline
21 line will enable interconnection of up to 1,270 MW of additional resources and
22 increase transfer capability by 750 MW from east to west across Wyoming.
As defined in my direct testimony at page 2,lines 4-12.
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1 The need for the Aeolus-to-Bridger/Anticline line,and its integral role in regional
2 transmission planning.
3 UPDATE ON THE TRANSMISSION PROJECTS
4 Q.Since the rebuttal filing,has the Company maintained the project schedule and
5 cost estimates for the Aeolus-to-Bridger/Anticlineline?
6 A.Yes.The Company has made significant progress and is on track to meet its
7 development schedule at or below the costs estimated in its direct filing.
8 Q.Did the results of the 2017R RFP affect the costs or design of the Aeolus-to-
9 Bridger/Anticline line?
10 A.No.The results of the 2017R RFP did not affect the estimated costs or the design of the
11 Aeolus-to-Bridger/Anticline line.The Company is currently in a competitive selection
O 12 process for an EPC contractor for the line and the preliminary results of this process
13 confirm the cost estimates included in the initial filing.As I noted in my rebuttal
14 testimony,the Aeolus-to-Bridger/Anticline line is approximately85 percent of the total
15 costs of the Transmission Projects,and therefore the execution of EPC contracts will
16 be a significant milestone in confirming final project costs.
17 Q.What is the current status of the EPC contract?
18 A.Negotiations are currently ongoing to finalize the terms and conditions,and the
19 Company expects to complete these negotiations in January 2018.The EPC contracts
20 for the Aeolus-to-Bridger/Anticline line remain on track to be in place by October 2018.
21 Q.Have the network upgrades described in your testimony changed because of the
22 final shortlist Wind Projects from the 2017R RFP?
23 A.Yes,there are changesto the network upgrades resulting from the Wind Projects chosen
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l for the final shortlist for the 2017R RFP.The Wind Projects are four facilities in
2 Wyoming totaling approximately 1,170 MW-McFadden Ridge II,TB Flats I and II,
3 Cedar Springs,and Uinta.
4 Q.Please describe the updated network upgrades required to interconnect the Wind
5 Projects.
6 A.The 230 kV network upgrades for the McFadden Ridge II and TB Flats I and II projects
7 that were identified in my direct testimony are still necessary to interconnect these
8 Wind Projects because they were selected for the 2017R RFP final shortlist.2
9 addition,the McFadden Ridge II project will require a new three-breaker 230-kV point-
10 of-interconnection ring-bus substation on the High Plains to Foote Creek 230-kV line,
11 roughly two miles southwest of High Plains substation,as shown in Exhibit 36.There
12 are also additional network upgrades required for the other projects that were selected
13 through the 2017R RFP.
14 First,to interconnect the Cedar Springs project,the Company must install two
15 230-kV (3000 ampere)breakers and two line positions with associated switches at
16 Windstar substation.The Company must also install high-speed relaying to switch off
17 the shunt capacitor banks at the Riverton 230 kV bus,which are required for high-
18 voltage conditions,and rebuild approximately 56 miles of the Dave-Johnston-Amasa-
19 Difficulty-ShirleyBasin 230-kV line with 2-1272 bundled conductor.
20 Second,to interconnect the Uinta project,the Company must construct a new
21 three-breaker 138-kV point-of-interconnection ring-bus substation southwest of the
2 DetaiÌS regarding these network upgrades can be found in my direct testimony (page 2,lines 12-22 and Exhibit
Nos.4,and 10 through 2l).The Ekola project that was also included as a benchmark resource in the initial filingOdidnotrequirenetworkupgradestointerconnect,and therefore all network upgrades discussed in my direct
testimony were related to the McFadden Ridge II and TB Flats I and Il projects.
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REDACTED
1 Whitney Canyon Tap (near structure 116).with associated switches and line
2 terminations.The Company must also re-conductor approximately 13.7 miles of the
3 Q0715 -Railroad 138 kV line with l-1272 ACSR/phase (line has 1-795 ACSR/phase),
4 and modify the existing Naughton remedial action scheme ("RAS")to allow redundant
5 communication to the project.
6 Exhibit No.36 details the specifics of these additional network upgrades.
7 Q.What are the updated costs for the network upgrades?
8 A.Confidential Table 1 summarizes the updated costs for the network upgrades:
9 Confidential Table I
Network Upgrades
ITEM VALUE
Transmission Line S
Substation $
Engineering S
Right-of-Way Acquisition S
PM/Environmental/Support $
In-directs S
TOTAL $
10 Q.Have these costs been included in the updated economic analysis included in
11 Company witness Mr.Rick T.Link's testimony?
12 A.Yes.
13 Q.Why did the network upgrade costs increase by approximately million
14 compared to the Company's initial estimate?
15 A.The selection of the Cedar Springs and Uinta projects to the 2017R RFP shortlist
16 required additional network upgrade costs that were not included in the original
O 17 estimate.Notably,however,although the network upgrade costs increased relative to
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l the initial filing,the overall costs ofthe Combined Projects remains roughly unchanged
2 even though customers are now receiving substantially more capacity for the same
3 overall project cost of approximately $2 billion,as discussed further by Mr.Link in his
4 supplemental direct testimony.
5 Q.Will these additional network upgrades delay the completion of the Transmission
6 Projects?
7 A.No.The types of additional upgrades needed are fairly routine projects that the
8 Company performs in the ordinary course of business,and they can be completed well
9 before the end of 2020.Thus,the status of the Transmission Project design work I
10 described in my rebuttal testimony remains unchanged.
ll Q.Have you included the information required by Idaho Code §§61-526 and Rule
12 112 of the Idaho Public Utilities Commission for the new facilities describedO13above?
14 A.Yes.Exhibit No.36 submitted with this supplemental direct testimony along with the
15 exhibits that were submitted with my direct testimony include the relevant information
16 required for the Commission to grant a CPCN for the additional network upgrades.
17 Q.What is the current status of the EPC contracts for the network upgrades?
l8 A.The additional network upgrades have not materially changed the Company's timeline
19 or process for fmalizing the EPC contracts.The Company still intends to competitively
20 source both the transmission line and substation construction via existing term "Line
21 Service Agreements"the Company holds with over one dozen qualified contractors
22 capable of working in Wyoming.
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1 Q.What is the status of the technical studies that are necessary to support the
2 Transmission Projects?
3 A.Now that the Wind Projects have been identified through the 2017R RFP,the Company
4 has begun additional studies and technical analysis.I expect these studies and analyses
5 to confirm that the Aeolus-to-Bridger/Anticline line will increase the system's stiffness
6 factor sufficiently to enable interconnection of up to 1,270 MW of additional resources
7 and increase transfer capability by 750 MW from east to west across Wyoming.
8 Q.What is the status of the Company's acquisition of rights-of-waynecessary for the
9 Transmission Projects?
10 A.The Company has contacted all landowners where easements for access or transmission
11 rights-of-way (or both)are required.To date,24 offers of options for rights-of-way
12 have been issued to landowners.Four landowners have accepted and three additional
13 landowners have provided counteroffers.All remaining offers for the 500 kV project
14 will be issued by January 3 l,20 l 8.The acquisition of rights-of-way remains on track
15 to support the planned construction start date of April l,2019.
16 Q.Does the Aeolus-to-Bridger/Anticlineline remain a necessary project that is in the
17 public interest even if the Wind Projects are not developed?
18 A.Yes.There is an independent need for the Aeolus-to-Bridger/Anticline line,even if the
19 new Wind Projects are not constructed because it will improve system performance and
20 reliability and directly serve customers.Even ifthe Wind Projects are not approved,the
21 Company's and region's long-term transmission plans still call for the construction of
22 the Aeolus-to-Bridger/Anticline line by 2024.Thus,the Company will need to
23 construct this transmission line in the near future.The question is whether it is built in
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1 2020 when PTC-eligible wind can offset the costs and produce net benefits for
2 customers,or in 2024 at full cost to customers.
3 Q.Does this conclude your supplemental direct testimony?
4 A.Yes.
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