20180226Certificate of Service.pdf

RECElVEDROCKYMOUNTAIN 1407 W.North Temple,Suite 330
ER ,.Salt Lake City,UT 84116W20\8FEB26 AM 9:20
A DIVISION OF PACIFICORP
February 23,2018 ·M MISSION
VL4 ELECTRONIC FILING
AND OVERNIGHT DELIVERY
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472 W.Washington
Boise,ID 83702
Re:CASE NO.PAC-E-17-07
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
FOR CERTIFICATES OF PUBLIC CONVENIENCE AND NECESSITY AND
BINDING RATEMAKING TREATMENT FOR NEW WIND AND
TRANSMISSION FACILITIES
Attention:Ms.Hanian
On January 16,2018,Rocky Mountain Power (the "Company")filed its supplemental
direct testimony to update the filing for the results of the 2017R Request for Proposals ("2017R
RFP").On February 16,2018 the Company filed its second supplemental testimony to update thefilingforthe2017RRFPfinalshortlisttoreflecttheresultsoftheinterconnectionrestudyprocess
and new system impact studies ("SISs").
While drafting a response to a data request,the Company identified an error in its treatment
of certain wind project costs that affect the net economic benefits of the Combined Projects as
derived from Planning and Risk model ("PaR")studies.The data request was submitted in
responseto the Company's January 16,2018 supplemental direct filing and asked if certain wind
project costs modeled as variable operations and maintenance costs ("VOM")were included in the
Company's 2036 and 2050 studies.
These VOM costs include two types of costs for the proposed new wind facilities-
Wyoming wind tax costs and wind integration costs.The Company subsequently confirmed that
these costs were accurately captured in System Optimizer ("SO")model studies,which were used
to produce economic analysis through 2036.However,application of these costs were not
accurately captured in PaR studies used in the economic analysis through 2036 and through 2050.
The misapplication of these costs is present in the economic analysis supporting the Company's
supplemental direct and second supplemental filings.
Both elements of the VOM costs were included as a project cost in the PaR studies used to
develop economic analysis through 2036.However,PaR was also configured to include
incremental regulation reserve requirements associated with the new wind projects.The wind
integration cost element of VOM captures the cost of holding incremental regulation reserves
needed to integrate the new wind facilities,and thus,wind integration costs were being double
counted in the PaR studies.The SO model cannot be configured to capture these incremental
regulationreserve requirements,and thus,inclusion of wind integration costs in the SO model was
appropriate.Eliminating the wind integration cost element of VOM in the PaR studies through
2036 eliminates double counting and improves customer benefits by $22 million in all price-policy
scenarios in the Company's supplemental direct filing and by $24 million in all price-policy
scenarios in the Company's second supplemental filing.
The PaR studies used to develop the economic analysis through 2050 did not include any
of the VOM cost elements described above.Considering that PaR was configured to hold
incremental regulationreserves needed to integrate the new wind facilities,the only element of the
VOM costs that should have been included in these studies is the cost associated with the Wyoming
wind tax.Including the cost of the Wyoming wind tax in PaR studies used to develop the economic
analysis through 2050 reduces customer benefit by $26 million in all price-policy scenarios in the
Company's supplemental direct filing and by $29 million in all price-policy scenarios in the
Company's second supplemental filing.
As noted above,these adjustments do not apply to SO model results,which appropriately
include the wind integration cost element of VOM costs.Considering that the SO model was used
to make bid-selections for the 2017R RFP and is unaffected by these corrections,selection of
winning bids to the 2017R RFP final shortlist is unaffected.Moreover,upon discovering the
misapplication of certain VOM costs,all calculations in the Company's filing were reviewed to
ensure that,once the corrections described above were made,all project-cost elements and
projected benefits were appropriatelyflowing into the economic analysis.The Company did not
find any other issues during this review.
To ensure the record in this proceeding is accurate and to correct the single error discussed
above,Rocky Mountain Power hereby submits replacement pages of testimony for witnesses Rick
T.Link and Cindy A.Crane as well as corrected exhibits and workpapers for Mr.Link as follows:
Supplemental Direct Testimony
o Exhibit No.37
o Exhibit No.38
o Confidential Workpaper Table 2-SD,Table 3-SD,Figure 5 FSL Results
Summary File -VOM Adjusted 2.21.18
Second Supplemental Direct Testimony
o Exhibit No.55
o Exhibit No.56
o Exhibit No.61 which now includes the highly confidential Oregon Independent
Evaluator Final Report
o Confidential Workpaper EV2020 Second Supp Results Summary File -VOM
adjusted
The only change reflected in these replacement pages,exhibits,and workpapers is the
treatment of the VOM cost elements discussed above.Rocky Mountain Power respectfully
requests that filed Supplemental Direct and Second Supplemental testimony and exhibits be
replaced by the corrected testimony and exhibits in this case
Informal inquiries may be directed to Ted Weston at [phone].
Since ly,
Joelle Steward
Vice President,Regulation
CERTIFICATE OF SERVICE
I hereby certify that on this 23rd day of February,2018,I caused to be served,via emailand/or overnight delivery,a true and correct copy of Rocky Mountain Power's Corrected
Supplemental and Second Supplemental Direct Testimony in Case No.PAC-E-17-07to thefollowing:
Service List
IDAHO IRRIGATION PUMPERS ASSOCIATION,INC.
Eric L.Olsen (C)Anthony Yankel (C)
ECHO HAWK &OLSEN,PLLC 12700 Lake Avenue,Unit 2505
505 Pershing Ave.,Ste.100 Lakewood,Ohio 44107
P.O.Box 6119 E-mail:[e-mail]
Pocatello,Idaho 83205
E-mail:[e-mail]
MONSANTO COMPANY
RandallC.Budge (C)Brubaker&Associates (C)
Racine,Olson,Nye &Budge,Chartered 16690 Swingley RidgeRd.,#140
P.O.Box 1391;201 E.Center Chesterfield,MO 63017
Pocatello,Idaho 83204-1391 E-mail:[e-mail]
E-mail:[e-mail] [e-mail]
PIIC
Ronald L.Williams (C)Jim Duke (C)
Williams Bradbury,P.C.IdahoanFoods
P.O.Box 388 E-mail:[e-mail]
Boise ID,83701
E-mail :[e-mail]
Kyle Williams (C)Val Steiner (C)
BYU Idaho Nu-West Industries,Inc.
E-mail :[e-mail] E-mail :[e-mail]
Bradley Mullins (C)
333 SW Taylor,Suite 400
Portland,OR 97204
E-mail:[e-mail]
COMISSION STAFF
BrandonKarpen(C)
Deputy Attorney General
Idaho Public Utilities Commission
472 W.Washington(83702)
PO Box 83720
Boise,ID 83720-0074
E-mail:[e-mail]
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PACIFICORP,DBA ROCKY MOUNTAIN POTVER
Ted Weston Yvonne Hogle
PacifiCorp,dba Rocky Mountain Power PacifiCorp,dba Rocky Mountain Power
1407 West North Temple 1407 West North Temple
Suite 330 Suite 320
Salt Lake City,UT 84116 Salt Lake City,UT 84116
E-mail:[e-mail] E-mail:[e-mail]
Data Request Response Center
PacifiCorp
825 NE Multnomah,Suite 2000
Portland,OR 97232
E-mail:[e-mail]
Dated this 23rd day of February,2018.
Kaley McNay
Senior Coordinator,Regulatory Operations
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