HomeMy WebLinkAbout20180216Crane 2nd Suppl Direct.pdfidaho Public Utilities Commission
Office of the SecretaryRECElVED
FEB 1 6 2018
Boise,Idaho
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 )SECOND SUPPLEMENTAL DIRECT
CONVENIENCE AND NECESSITY AND )TESTIMONY OF CINDY A.CRANE
BINDING RATEMAKING TREATMENT )FOR NEW WIND AND TRANSMISSION )FACILITIES )
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ROCKY MOUNTAIN POWER
CASE NO.PAC-E-17-07
February2018
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1 Q.Are you the same Cindy A.Crane who previously filed testimony in this case on
2 behalf of Rocky Mountain Power ("Company"),a division of PacifiCorp?
3 A.Yes.
4 PURPOSE AND SUMMARY OF TESTIMONY
5 Q.What is the purpose of your second supplemental direct testimony?
6 A.I support the request that the Idaho Public Utilities Commission ("Commission")grant
7 certificates of public convenience and necessity ("CPCNs")for new wind resources
8 ("Wind Projects")and for the Aeolus-to-Bridger/Anticline line and network upgrades
9 ("Transmission Projects")(collectively,the "Combined Projects")and approve the
10 Company's proposal for binding ratemaking treatment to capture the costs and benefits
11 of these facilities.I update the Company's policy testimony based on the updated
12 results of the Company's 2017R request for proposals ("2017R RFP").O 13 Q.Please summarize your testimony.
14 A.The Company updated the 2017R RFP final shortlist to reflect the results of the
15 interconnection restudy process and new system impact studies ("SISs").The updated
16 final shortlist replaces one Company benchmark resource,McFadden Ridge II,with
17 another benchmark resource,Ekola Flats.The Company's economic analysis for the
18 updated final shortlist shows an increase in customer benefits,demonstrating that the
19 20l7R RFP was robust and produced favorable resource opportunities for customers.
20 SECOND SUPPLEMENTAL DIRECT TESTIMONY
21 Q.Why is the Company making this second supplemental filing?
22 A.In its first supplemental filing,the Company explained that it had selected four Wind
23 Projects,totaling 1,170 megawatts ("MW"),for the 2017R RFP final shortlist:TB Flats
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l I and II;McFadden Ridge II;Cedar Springs;and Uinta.At that time,however,the
2 Company had not concluded its interconnection restudy process for the Aeolus-to-
3 Bridger/Anticline line or updated its SISs for resources interconnecting to that line,
4 including resources on the 2017R RFP final shortlist.This second supplemental filing
5 updates the 2017R RFP final shortlist to reflect the results of the interconnection
6 restudy process and updated SISs.The updated 2017R RFP shortlist consists of 1,311
7 MW,replacing the McFadden II benchmark resource,totaling 109 MW,with another
8 Company benchmark resource,Ekola Flats,totaling 250 MW.
9 Q.Why did the Company select the final shortlist in the 2017R RFP before it had SIS
10 results?
11 A.In the original draft of the 2017R RFP filed in Utah in Docket No.17-035-23,the
12 Company proposed that all bidders have a completed SIS to qualify.The UtahO13independentevaluatorandcertainintervenorsproposedthattheCompanyrequireonly
14 that bidders show they have requested a SIS.The Company removed the requirement
15 of a completed SIS in the final 2017R RFP approved by the Commission.When the
16 Company announced the final shortlist in January 2018,it still had not completed the
17 interconnection restudy process and updated the SISs.While the interconnection
18 restudy process ultimately affected the final shortlist,the potential implications of the
19 restudy process,if any,on bid selections were not known until the interconnection
20 restudy process was finalized.
21 Q.What were the results of this process?
22 A.As explained by Company witness Mr.Rick A.Vail and Mr.Rick T.Link,there were
23 two important findings.First,the interconnection restudy process identified that
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1 projects with interconnection queue positions higher than a certain point were not
2 viable without Energy Gateway South,a PacifiCorp transmission project that is not
3 scheduled to be built before the expirationof production tax credits ("PTCs")in 2020.
4 McFadden Ridge II has a queue position higher than the cutoff point,so the Company
5 removed it from the final shortlist.
6 Second,the restudy identified 1,510 MW of total interconnection capacity for
7 projects in eastern Wyoming,up from 1,270 MW.The Company updated its System
8 Optimizer ("SO")model simulations taking into account these findings.The SO model
9 continued to select TB Flats I and II,Cedar Springs,and Uinta,but replaced McFadden
10 Ridge II with Ekola Flats for the 2017R RFP final shortlist now that more
11 interconnection capacity was identified.
12 Q.Did the Company update its SO and Planning and Risk ("PaR")studies to reassessO13theeconomicbenefitsoftheCombinedProjects?
14 A.Yes.As explained by Company witness Mr.Link,the Company updated the SO and
15 PaR studies for all nine price-policy scenarios.Mr.Link's updated economic analysis
16 demonstrates increased customer benefits of $196 million in the medium case through
17 2050 (as compared to $137 million in the original filing and $177 million in the first
18 supplemental filing),and an increased benefit range of $333 million to $405 million in
19 the medium case through 2036.Moreover,the updated economic analysis demonstrates
20 the Combined Projects continue to provide net customer benefits under all scenarios
21 studied through 2036,and in seven of the nine scenarios through 2050.
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l Q.Did the Company prepare new sensitivity analyses to test the likelihood of
2 achieving these economic benefits?
3 A.Yes,as in the first supplemental filing,the Company updated several different scenarios
4 to determine their impact on the Combined Projects'economic benefits,including a
5 scenario reflecting the Company's proposal for wind repowering,and one comparing
6 the benefits with and without projects from the pending solar RFP,using the latest
7 pricing information from that RFP.In each case,the scenarios confirm the significant
8 customer benefits associated with the Combined Projects.
9 Q.Based on the results of the 2017R RFP,what modifications is the Company making
10 to its request for resource approval related to the Wind Projects?
l 1 A.In its first supplemental direct testimony,the Company sought approval to construct or
12 procure four new Wyoming wind projects with a total capacity of 1,170 MW,includingO13threeofthebenchmarkfacilities(TB Flats I and II,now combined as a single project,
14 and McFadden Ridge II),and two new facilities (Cedar Springs and Uinta).
15 In this second supplemental filing,the Company still seeks approval of three of
16 the benchmark facilities,but has replaced McFadden Ridge II with Ekola Flats.The
17 Company seeks resource approval for Wind Projects totaling 1,311 MW,consisting of
18 1,111 MW of Company-owned facilities,and a 200 MW Power PurchaseAgreement.
19 Of the 1,311 MW total,there are 1,150 MW of Wind Projects in eastern Wyoming
20 enabled by the Aeolus-to-Bridger/Anticline transmission line.
21 Q.Has any aspect of the Aeolus-to-Bridger/Anticlinetransmission line changed as a
22 result of the updated final shortlist?
23 A.No.The proposed route and facilities required for the construction of the Aeolus-to-
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l Bridger/Anticline transmission line have not changed.
2 Q.Are there any modifications to the network upgrades included in this second
3 supplemental filing?
4 A.Yes.The network upgrades required to interconnect McFadden Ridge II are no longer
5 needed.Based on the results of the updated SISs,however,some additional network
6 upgrades to other Wind Projects are required.Mr.Vail provides a detailed description
7 of these network upgrades.
8 Q.The Company's original and supplemental filings contained a capital cost estimate
9 of approximately $2 billion for the Combined Projects.With additional wind
10 resources and network upgrades,have the total costs of the Combined Projects
ll changed?
12 A.Yes.Adding the Ekola Flats wind resource increases total projected capital costs for theO13CombinedProjectsfromapproximately$2 billion to $2.245 billion.Mr.Link explains,
14 however,the Company's capital costs have declined by 18 percent from the initial filing
15 on cost-per kilowatt basis.The per-unit capital cost for the benchmark wind projects
16 was $l,590/kW in the initial filing,and $1,320/kW in the first supplemental filing.The
17 total capital for the Wind Projects in the final shortlist is now $1,310/kW.
18 Q.Based on the Company's updated economic analysis,has the Company updated
19 its forecast of the near-term rate impact to Idaho customers?
20 A.Yes.As explained in the testimony of Ms.Steward,the first-year revenue requirement
21 of the Combined Projects is less than 1.7 percent in 2021,the first full year of operation.
22 This is 0.2 percent lower than the increase projected in the initial filing and 0.1 percent
23 higher than the increase projected in the first supplemental filing.
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l Q.Considering the updated results of the 2017R RFP and the Company's updated
2 analysis of benefits,costs,and risks,do the Combined Projects satisfy the public
3 interest standard?
4 A.Yes.The Combined Projects are the least-cost,least-risk path available to serve the
5 Company's customers by meeting both near-term and long-term needs for additional
6 resources.The Combined Projects provide significant benefits to customers under
7 virtually all scenarios and sensitivities studied.
8 Q.Does this conclude your second supplemental direct testimony?
9 A.Yes.
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