20210527Owen Direct.pdf

BEI'ORE THE IDAIIO PIIBLIC UTILMIES COMMISSION
IN THE IUATTEROF THE
APPLICATION OT'ROCI(Y
MOIINTAIN POWERI'OR
AUTHORITY TO INCREASE ITS
RATES AI\ID CHARGES IN IDAEO
AI\ID APPROVAL OT PROPOSEI)
ELECTRIC SERVICE SCHEDIII,ES
AI\[D REGT]LATIONS
)) cAsE NO. PAC-EA,4,7
)
) Direct Testimony of James C. Orven
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ROCI(Y MOI'NTAIN PO}VER
CASE NO. PAC.E-2I47
May 2021
TABLE OX'CONTEIYTS
r. TNTRODUCTTON A]\rD QUALIFrCATrONS....................
tr. PURPOSE OF TESTIMONY
M. SELECTTVE CATALYTIC REDUCTION RETROFTT PROJECTS
Craig Unit 2 SCR.............
Hayden Unit 2 SCR..........
Jim Bridger Units 3 and 4 SCRS
ry. CONCLUSIONA}.ID RECOMMENDATION
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I. INTRODUCTIONAI\DQUALIFICATIONS
Please state your name, business address, and present position with PacifiCorp
d/b/a Rocky Mountain Power ("Rocky Mountain Power'o or the "Company").
My name is James C. Owen and my business address is 1407 West North Temple, Suite
210, Salt Lake City, Utah 84116. I am currently employed as Director of
Environmental. I am testifuing for Rocky Mountain Power.
Please describe your education and professional experience.
I have a Bachelor of Science Degree in Mining Engineering, a Masters of Business
Adminishation Degree, and a Juris Doctorate of Law Degree, all from the University
of Utah. I joined the Utah Department of Natural Resources - Division of Oil Gas and
Mining in November 2008, and held positions of increasing responsibility within the
agency, including responsibilities for environmental permitting, enforcement of
environmental compliance, engineering design, oversight of mine reclamation
bonding, environmental program management, and legislative and policy management.
I joined PacifiCorp in February 2018. My current responsibilities encompass strategic
planning, stakeholder engagement, regulatory support, support of major generation
resource additions, and direct oversight of major environmental compliance projects.
II. PT]RPOSE OF TESTIMONY
What is the purpose of your direct testimony in this case?
My testimony supports the prudence of certain selective catalytic reduction ("SCR")
retrofit projects installed since the Company's last general rate case. Specifically,
I discuss the SCR projects at Craig UnitZ, Hayden UnitZ, and Jim Bridger Units 3 and
4, which have been in service since December 2017 ,August 2016, and December 2015
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I and20l6, respectively. The SCRs at these facilities were installed in accordance with
2 state and federal environmental compliance requirements for the individual units, as
3 well as for continued safe, reliable, and cost-effective operation of the facilities.
4 a. Please summarize your direct testimony.
5 A. My testimony demonstrates that the installation of the SCRs on Craig Unit 2, Hayden
6 Unit 2, and Jim Bridger Units 3 and 4 were prudent and in the public interest. The
7 projects were required to comply with both state and federal environmental laws,
8 namely the RegionalHaze Rule, established pursuant to the Clean Air Act by the U.S.
9 Environmental Protection Agency ("EPA") and administered through state
10 implementation plans ("SIPs") by the respective state agencies in which the units are
11 located.
12 III. SELECTIYE CATALYTIC REDUCTION RETROFIT PROJECTS
13 a. What was the Company's cost to complete the SCR retrolit projects included in
14 this proceeding?
15 A. The cost of the Craig Unit 2 SCR system included in this proceeding is $37.8 million
16 on a total-company basis. The cost of the Hayden Unit 2 SCR system included in this
17 proceeding is $9.7 million on a total-company basis. The combined cost of Jim Bridger
18 Unit 3 and 4 SCR systems included in this proceeding is $218.6 million on a total-
19 company basis. These capital additions are reflected in the revenue requirement and
20 incorporated in the exhibits of Mr. Steven R. McDougal in this rate case.
2l Craig Unit 2 SCR
22 a. Please describe the Craig facility.
23 A. The Craig facility is a three-unit coal-fired electrical generating facility located in
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Moffat County, Colorado. Units I and 2, which can generate a combined
837 megawaffs ("MW"), are jointly owned by Tri-State Generation and Transmission
Association, Inc. ("Tri-State"), Salt River Project, Platte River PowerAuthoriry Public
Service Company of Colorado ("PSCo"), and the Company. The Company owns
19.28 percent of Units I and2. Unit 3 is solely owned by Tri-State. Tri-State operates
all units at the facility.
Please provide a general description of the Craig Unit 2 SCR system.
The Craig lJnit2 SCR system is primarily comprised of a reactor with multiple catalyst
levels; inlet and outlet ductwork; an ammonia reagent system; certain boiler structure
and ancillary infrastructure retrofis; electrical and control system installation and
integration with the existing plant.
Was the emissions control retrofit project included in this proceeding intended to
extend the operational life of Craig Unit 2?
No. The Craig Unit 2 emissions control retrofit was required to continue operations in
Colorado to meet state environmental compliance requirements.
What was the required timeline for Tri-State to install the SCR system at Craig
Unit 2?
Installation of the Craig Unit 2 SCR was required by the Regional Haze Rule and
Colorado's associated Regional Haze SIP These rules required the SCR to be installed
by January 30, 2018. Colorado's Regional Haze SIP was first approved by the Colorado
Air Quality Control Commission in January 2011 and was submitted to EPA for review
and approval on May 25,2011.
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Did EPA approve the State of Colorado's Regional Haze SIP compliance
requirements for Craig Unit2?
Yes. EPA published its approval of the Colorado Regional Haze SIP compliance
requirements for Craig Unit 2 in the Federal Register on December 31, 2012.r EPAs
final rule became effective January 30,2013.
Please generally describe the joint ownership governance of Craig Unit 2.
The terms and conditions of joint ownership in Craig Unit 2 are governed by a
participation agreement (the "Craig ParticipationAgreement"). The Craig Participation
Agreement mandates the installation of capital improvements that are required by
applicable law. The Craig Participation Agreement also places an independent
obligation on Tri-State, as the operating agent for the unit, to operate Craig Unit 2 in
accordance with applicable laws.
As operating agent, Tri-State is also responsible for development of operating
budgets and capital investrnent recommendations to be provided forjoint owner review
and approvals. The Craig Participation Agreement's provisions for approval of capital
expenditures require that the proposed expenditures be included in the annual capital
expenditure budget prepared by the operating agent and that the annual capital
expenditure budget is approved by a majority vote (i.e., greater than 50 percent
ownership share) of the joint owners.
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I See codified regulation at 40 C.F.R 52.320.
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Did Tri-State request approval of the Craig Unit 2 SCR capital investment in
accordance with the terms of the Craig Participation Agreement and was it
approved by greater than 50 percent ownership share of the joint owners?
Yes. Tri-State initially included costs associated with the Craig Unit 2 SCR in the 2013
capital expenditures budget for review and approval pursuant to the Craig Participation
Agreement. The project was approved by a greater than 50 percent ownership share of
the joint owners.
Did the Company independently assess the benefits associated with the Craig Unit
2 SCR project?
Yes. [n July 2013, the Company independently assessed the benefits associated with
the Craig Unit 2 SCR project using a hypothetical scenario that assumed the Company
could unilaterally effectuate an accelerated shutdown of the unit. This hypothetical
scenario was not a realistic option because the Company cannot unilaterally effectuate
an accelerated shutdown of the Craig units based on the language of the Craig
Participation Agreement. The Company's hypothetical assessment did not support the
installation of SCRs.
What position did the Company take with respect to the Craig Unit 2 SCR project
capital budget approval?
The Company voted 'no' with respect to the Craig Unit 2 SCR project. As a minority
owner, the Company recognized that under the terms of the Craig Participation
Agreement, its vote alone would not change the outcome with the other joint-owners
voting 'yes,'and the Company remained obligated to pay its share of the Craig Unit 2
SCR.
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Did the Company also independently assess its legal options with respect to the
capital expenditures approval process incorporated into the Craig Participation
Agreement?
Yes. In June 2013, the Company engaged external counsel to independently assess the
Company's rights under the Craig Participation Agreement with respect to payment
options and dispute resolution that may occur with a majority decision on capital
expenditures that was not supported by the Company. The ultimate determination of
the legal review of the Craig ParticipationAgreement was that while the Company had
the right to challenge the majority's decision through arbitration or litigation, there was
little to no likelihood such a challenge would be successful. This was primarily because
the project approval process met the requirements under the Craig Participation
Agreement, specifically: (i) the project was required by applicable law (the Colorado
Regional Haze SIP); (ii) Craig Unil 2 was required to be operated in accordance with
applicable law under the Craig Participation Agreement, and (iii) the majority of the
Craig Unit 2 joint-owners (in fact all joint-owners other than the Company) voted in
support ofthe project.
Considering the terms and conditions of the Craig Participation Agreement, did
the Company pursue arbitration or litigation of the Craig Unit 2 SCR project
decision?
No, for the reasons explained above.
What was the Company's cost to complete the Craig Unit 2 SCR system?
The cost of the Craig UnitZ SCR system included in this proceeding is $37.8 million
on a total-company basis with an in-service date of December 2017.
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What is the current status of the Craig Unit 2 SCR system?
Completion of the Craig Untt 2 SCR system satisfied the compliance deadlines
established for the unit, as well as the prescribed emissions reductions. Installation of
this major emissions conffol retrofit project was aligned with scheduled major
maintenance outages for the affected unit to mitigate replacement power cost impacts
while benefiting from overlapping major maintenance outage time frames. These
environmenal compliance projects allow the retrofitted facilities to continue to operate
as low-cost generation resources for the benefit of customers.
To date, has PacifiCorp received approvals to reflect its Craig Unit 2 SCR
investment in rates from state commissions in the jurisdictions that it has
requested recovery?
Yes. PacifiCorp has received approval from the state commissions in Califomia,
Oregon, and Utah to reflect this investment in rates.2 In particular, the Public Service
Commission of Utah found that the Company should be allowed full recovery of the
Craig Unit2 SCR costs. In doing so, the Commission specifically rejected a proposed
disallowance on a portion of the costs. Regarding the Company's Craig Unit 2 SCR
investment, the Commission stated that:
[Rocky Mountain Power] took every reasonable action to prevent the
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2 See In the Matter of the Application of PacifiCorp (U90lE), and Oregon Company, for an Order Authorizing a
General Rate Increase Effective January l, 2019, D.20-02-O25 at 34-35 (Feb. 18, 2O2O); In the Matter of
PacifiCorp, dba Pacific Power Request for a General Rate Revision, Docket No. UE 37 4, Order No. 20-473 at
55 (Dec. I 8, 2020); Application of Roclcy Mountain Power for Authority to Increase its Retail Electric Utility
Serrice Rates in Utah and for Apprcval of its Proposed Electric Service Schedules and Electric Sertice
Regulations, Docket No. 20-035-04, Order at 43 (Dec. 30, 2020). In Wyoming, during public deliberations on
May 18, 202l,the Public Service Commission verbally approved the inclusion of all Craig Unit 2 SCR costs in
rates, the final written order is pending. See In the Matter of the Application of Rocky Mountain Powerfor
Authority to Increase ils Retail Eleclric Service Rates by Approximately $7. I Million per Year or I . I Percent, to
Revise the Energy Cosl Adjustment Mechanism, and to Discontinue Operations at Cholla Unil 4, Docket No.
20000-578-ER-20.
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majority partners in the Craig Participation Agreement from
undertaking the SCR project, including conducting an economic
assessment of the SCR project compared to an early closure of Craig,
and exploring the possibility of legal action to stop or withdraw from
participation in the SCR project. Additionally, we may only evaluate
RMP's negotiation of the Craig Participation Agreement based on what
was known or knowable at the time the agreement was negotiated.3
Hayden Unit 2 SCR
O. Please describe the Hayden Facility.
A. The Hayden plant is a 441 MW, two-unit coal-fired electrical generating facility located
in Routt County, Colorado. Unit I is jointly owned by PSCo and the Company. The
Company owns 24.5 percent of Unit 1. Unit 2 is jointly owned by PSCo, Salt River
Project, and the Company. The Company owns 12.6 percent of Unit 2. PSCo operates
the plant.
a. Please provide a general description of the Hayden Unit 2 SCR system.
A. The Hayden Unit 2 SCR system is primarily comprised of: reactors with multiple
catalyst levels; inlet and outlet ductwork; ammonia reagent systems; certain boiler
structures and ancillary infrastructure retrofits; electrical and control systems
installation; and integration with the existing plant.
a. What was the required timeline for the Company to install the SCR system at
Hayden Unit 2?
A. Installation ofthe Hayden Unit 2 SCR was required by the State of Colorado's Regional
Haze SIP no later than December 31, 2016.
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3 Docket No. 20-035-04, Order at 43.
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Did EPA approve the state of Colorado's Regional Haze SIP compliance
requirements for Hayden Unit 2?
Yes. The EPA published its approval of the Colorado Regional Haze SIP in the
Federal Register on December 31, 2012.4 EPA s final approval made these emissions
reduction compliance requirements at Hayden Unit 2 federally enforceable, in
addition to being enforceable under state law.
What regulations required the Hayden Unit 2 SCR project to be installed?
In December 2010, the Colorado Air Quality Control Commission promulgated new
Best Available Retrofit Technology ("BART") determinations and emissions control
requirements for the Hayden unis in the Colorado Regional Haze SIP These BART
determinations set an emissions limit of 0.07 pounds of nitrogen oxide per million
British thermal units ("NO/IVIMBtu") for Hayden Unit 2. Although the BART
determinations did not speciry how the limit was to be achieved, installation of SCR
was the only technically feasible method available.
Was a CPCN acquired for the Hayden Unit 2 SCR system in the state of Colorado
where the project was constructed?
Yes. On January 26,2011, the Colorado Public Utilities Commission approved the
installation of the SCR system on Hayden Unit 2, finding that PSCo had demonstrated
that the installation of the project was in the best interest of customers, but still required
the filing of a modified CPCN application primarily to elicit more cost information.s
a https://wwwepa. eov/sips-com.
s In re Public Service Co. of Coloradob Plan in Compliance with House Bill 10-I365, "Clean Air-Clean Jobs
Act", Docket No. l0M-245E, Decision No. Cl0-1328 atpp.4445,51, 86 (Jan. 26,2011) (available at:
http://www.dora.state.co.us/PUC/DocketsDecisions/decisions/20 l0iC l0- 1328- l0M-245E.doc).
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The Colorado Public Utilities Commission approved the CPCN application on July 18,
2012.6
a. Please generally describe the joint ownership governance of Hayden Unit 2.
A. Joint ownership in Hayden Unit 2 is governed by a Participation Agreement (the
"Hayden Participation Agreement"). The Hayden Participation Agteement mandates
the installation of capital improvements that are required by applicable law. The
Hayden Participation Agreement also places an independent obligation on PSCo, as
operating agent, to operate Hayden Unit 2 in accordance with applicable laws.
0. What is the current status of the Hayden Unit 2 SCR system?
A. The Hayden Unit 2 SCR system was placed in service in August 2016, following the
planned major maintenance overhaul for the unis. Completion of the Hayden Unit 2
SCR system satisfied the compliance deadline established for the unit, as well as the
prescribed emission reduction.
The installation of the SCR was aligned with a scheduled major maintenance
outage for Hayden Unit2 to mitigate replacement power cost impacts while benefiting
from overlapping major maintenance outage time frames. This project also allows the
retrofitted facility to continue to operate as a low-cost generation resource for the
benefit of customers.
a. Was the emissions control retrofit project included in this proceeding intended to
extend the operational life of Hayden Unit 2?
A. No. The Hayden Unit 2 emissions control retrofit project was required to continue
6 In re Public Service Co. of Colorado's Applicationfor a Certificate of Public Convenience and Necessityfor
the Hayden Emissions Control Projecl, Docket No. I lA-917E, Decision No. C l2-0843 at pp. l, 6 (July 18,
2012) (available publicly at https://www.dora.state.co.usipls/efi/EFI-Search_UI.search).
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I operations in Colorado to meet state environmental compliance requirements. In
2 addition, the Hayden Unit 2 SCR was a key component of the NOx reduction plan
3 submission by PSCo (the operator of Hayden Unit 2) to the Colorado Public Utilities
4 Commission under the Colorado Clean Air Clean Jobs Act. The Colorado Public
5 Utilities Commission approved NOx reduction plan, including the Hayden Unit 2 SCR
6 on December 9,2010.7
7 Q. To date, has PacifiCorp received approvals to reflect its Hayden Unit 2 SCR
8 investment in rates from state commissions in the jurisdictions that it has
9 requested recovery?
l0 A. Yes. PacifiCorp has received approval from the state commissions in California,
11 Oregon, and Utah to reflect this investment in rates.8 The Hayden Unit 2 SCR
12 investment was an uncontested issue in both the California and Utah rate case
13 proceedings. Although the matter is still pending in Wyoming, it was also an
14 uncontested issue.e
15 Jim Bridger Units 3 and 4 SCRs
16 a. Please describe the Jim Bridger plant and the operating features of Units 3 and 4.
17 A. The Jim Bridger plant consists of four coal-fueled units which are two-thirds co-owned
l8 by PacifiCorp and one-third co-owned by Idaho Power Company. The plant is
19 maintained and operated by PacifiCorp. Unit 3 began commercial operation n 1976
T http://www.dora.state.co.usiPUCl/DocketsDecisions/decisions/2010/Cl0-1328_l0M-245E.pdt.
8 See D.20-02-025 at 34-35; Docket No. UE 374, Order No.20-473 at 55; Docket No. 20-035-04, Order (Dec.
30,2020).
e See In the Matter of lhe Application of RoclE Mountain Power for Authority to Increase it.s Retail Electric
Service Rales by Approximately $7.1 Million per Year or l.l Percent, to Revise the Energt Cost Adjustment
Mechanism, and to Discontinue Operations al Cholla Unit 4, Docket No. 20000-578-ER-20.
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and Unit 4 followed n 1979. Unit 3 and Unit 4 have nominal net (or "net reliable")
generation capacities of 52310 and 530 MW respectively, of which the corresponding
PacifiCorp two-thirds share is 349 and353 MW. Both units are configured withAlstom
(formerly Combustion Engineering) controlled circulation, tangentially fired,
pulverized coal boilers and General Electric steam turbine-generators. Nominal steam
conditions are2,400 pounds per square inch gauge pressure at 1,000 degrees Fahrenheit
at the turbine-generator throttle valve. Both units are configured with closed loop
circulating water cooling systems that include mechanical draft cooling towers and
electrostatic precipitators. Unit 4 was originally equipped with a sodium-based wet flue
gas desulfurization ("FGD") system, and Unit 3 was retrofitted in 1985 with a sodium-
based wet FGD system.
The plant has been, and remains, integral to the Company meeting its charge of
providing electrical service to its customers, in all states served by the Company. The
Jim Bridger substation is contiguous to the plant and connects six transmission lines.
The plant is dispatched on a system-wide basis to serve the Company's customers.
Please provide a general description of the emissions control investments included
in the Company's long-term emissions control plan and the benefits gained from
the investments.
The emissions control equipment investments included in the Company's long-term
emissions control plan primarily result in the reduction of SOz, NOx and particulate
matter ("PM") emissions from generation facilities subject to federal and state
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r0 On February 22,2012, a Unit 3 re-rating from 530 to 523 MW was executed. The economic evaluation
represented herein was based on an assumed Unit 3 total net reliable capacity of 530 MW and accounting for
the incremental increase in auxiliary power consumption by the addition of the SCR system on each unit.
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emissions requirements. The Company's emissions control plan focuses on maintaining
a reasonable balance between protecting the interests of customers, meeting the
obligation to serve the current and reasonably projected demands of customers, and
complying with environmental requirements, all in the face of an uncertain regulatory
environment.
The Company's environmental control equipment projects are required to
comply with the existing Regional Haze Rule, Regional SOz Milestone and Backstop
Trading Programs, and other applicable environmental requirements. The projects are
also required to comply with requirements in state SIPs, BARI permits, construction
permits, and approval orders enforceable by the laws of the respective states.
Please describe the specific emissions control investments at Jim Bridger Units 3
and 4 for which the Company is seeking approval.
The Jim Bridger Units 3 and 4 emissions control investments in this filing are SCR
systems and associated ancillary equipment for each unit. Each SCR system is
comprised of two separate universal reactors, with multiple catalyst levels; inlet and
outlet ductwork; a shared ammonia reagent system, an economizer upgrade; stuctural
reinforcement of the boiler and flue gas path ductwork and equipment; and extension
of the existing plant distributed control system. An induced draft fan upgrade and an
associated auxiliary power system variable frequency drive insertion is required on
Unit 4 only.
Why were the emissions control equipment projects at Jim Bridger Units 3 and 4
installed?
The EPAs Regional Haze Rule, the Jim Bridger facility BART permit issued by the
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state of Wyoming, a BART appeal settlement agreement with the state of Wyoming,
and the Wyoming Regional Haze SIP all required the installation of the SCR on Unit 3
by the end of 2015 and on Unit 4 by the end of 2016.
Did the EPA approve the state of Wyoming's Regional Haze compliance
requirements for Jim Bridger Units 3 and 4?
Yes. The EPA proposed approval of the SIP requirements for Jim Bridger Units 3 and
4 in the Federal Register onJune 4, 2012.T"he EPA subsequently finalized its approval
ofthese requirementsinthe Federal Register on January 30,2014. EPA s final approval
made these reffofit and emissions reduction compliance requirements at Jim Bridger
Units 3 and 4 federally enforceable, in addition to being enforceable under state law.
Did the Company file a CPCN for the Jim Bridger Units 3 and 4 SCR systems in
Idaho?
No. However the Company did file a CPCN in Wyomingin2}l2, where the Wyoming
Public Service Commission found the installation of the SCRs for Jim Bridger 3 and 4
to be a public necessity.ll Subsequently, the Company was found to have prudently
managed the costs and implementation of the Jim Bridger Units 3 and 4 SCR projects
in accordance with the CPCN in the Company's 2015 Wyoming rate case.12
tt In the Malter of the Applicalion of PacifiCorp for a Certificate of Public Convenience and Necessily to
Construct Selective Catalytic Reduction Systems on Jim Bridger Units 3 and 4, Docket No. 20000-418-EA-12
(Record I 33 I 4), Memorandum Opinion, Findings and Order Granting Application tbr a Certificate of Public
Convenience and Necessity at l7 (May 29,2013).
t2 In the Matter of the Applicalion of Roclry Mountain Powerfor Apprcval of a General Rate Increase In lts
Retail Electic Utility Service Rates in WJtoming of $32.4 Million Per Year or 4.5o%. Docket No. 20000-469-EA-
l5 (Record 14076), Memorandum Opinion, Findings of Fact, Decision at 36 (Dec. 30,2015).
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Did Idaho Power frle a CPCN for the Jim Bridger Units 3 and 4 SCR systems in
Idaho?
Yes, and on December2,2013, the Idaho Public Utilities Commission approved Idaho
Power's application for a CPCN in the investment of SCRs on Jim Bridger units 3 and
4.13 The Commission found that the SCRs were in the public interest. Rocky Mountain
Power did not file for a CPCN in Idaho but is requesting that the Commission find that
the decision to install SCRS on Jim Bridger Units 3 and 4 was prudent and in the public
interest.
Should the Commission find the SCRs for Jim Bridger Units 3 and 4 prudent?
Yes. The SCRs were necessary to satisfu federal and state mandated environmental
requirements. The costs and implementation of the Jim Bridger Units 3 and 4 SCR
projects included in this case have been prudently incurred and managed and the
project met the established compliance deadlines. As such, the Company requests that
the Commission grant the requested recovery of these prudently incurred costs.
Did the Company file a Voluntary Request for Approval of Resource Decision to
Construct the Jim Bridger Units 3 and 4 SCR systems in the state of Utah?
Yes. On August 24, 2012, the Company filed its application requesting the Public
Service Commission of Utah to review and approve in advance construction of the Jim
Bridger SCR projects.ra On May 10, 2013, the Public Service Commission of Utah
t3 In the Matter of the ldaho Power Companyb Applicationfor a Cerlificate of Public Convenience and
Necessityfor the Investmenl in Selective Catalytic Reduction Conlrols on Jim Bridger Units 3 and 4. CaseNo.
IPC-E-13-16, Report and Order at 12 (Dec.2,2013).
ta In the Matter of the Voluntary Requesl of Roclqt Mountain Power for Approval of Resource Decision lo
Construct Selective Catalytic Reduction Systems on Jim Bridger Unils 3 and 4,Docket No. l2-035-92. Order
(May 10, 20 I 3 ), Order of Clarification (May 30, 20 l3).
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approved the Company's request for a Resource Decision to add the SCR systems on
Jim Bridger Units 3 and 4.15 The costs of the Jim Bridger Units 3 and 4 SCR system
investment were incorporated into the Company's Utah rates in its recently concluded
Utah general rate case.16
a. To date, has PacifiCorp received apprcvals to reflect its Jim Bridger Units 3 and
4 SCR system investment in rates from state commissions in the jurisdictions that
it has requested recovery?
A. Yes. In Wyoming and California, PacifiCorp has received approval from the state
commissions for full recovery of the Jim Bridger Units 3 and 4 SCR system
investment.lT tn Oregon, PacifiCorp was allowed recovery of the investment with a
retum on invesffnent limited to its cost of long-term debt.l8 Finally, in Washingtoq
PacifiCorp was allowed recovery of its investrnent.le
IV. CONCLUSIONAI\DRECOMMEIYDATION
a. Please summarize your testimony.
A. The Company prudently managed the analysis and appropriately exercised its rights
under the Craig Participation Agreement with respect to the Craig Unit 2 SCR project.
The project was completed on time to meet applicable federal and state environmental
15 Docket No. 12-035-92, Order at 34.
16 Docket No. 20-035-04, Order (Dec. 30, 2020).
t7 D.20-02-O25 at 34-35; In the Matter of the Application of Rocky Mountain Power for Approval of a General
Rate Increase in its Retail Electric Utility Service Rates in Wyoming of $32.4 Million Per Year or 4,5 Percent;
Docket No. 20000-469-ER-15 (Record No. 14076), Memorandum Opinion, Findings of Fact, Decision and
Order (Dec. 30,2015), fl73.r8 Docket No. UE 374, Order No. 20-473 at 80-81. The Oregon Commission questioned whether sufticient
reevaluation of the investment was completed and whether PacifiCorp sufficiently explored alternatives.
te WUTC v. Pacific Power & Light Company, Docket No. UE-152253, Order 12 at40 (Sept. l, 2016). The
Washington Commission stated that there was a lack of contemporaneous documentation of the decision-
making.
Owen, Di - 16
Rocky Mountain Power
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compliance deadlines and performance requirements, and was administered by the
plant operating agent, and approved by a majority vote of the unit's joint owners, in
accordance with the Craig ParticipationAgreement terms and conditions.
The Company's support of the Hayden Unit 2 SCR installations included in this
case is in accordance with applicable law and the Hayden Participation Agreement
governing that unit. The Hayden Unit 2 SCR project was also completed on time to
meet applicable federal and state environmental compliance deadlines andperformance
requirements.
The Company prudently managed the costs and implementation of the Jim
Bridger Units 3 and 4 SCR projects to comply with state and federal law. The projects
met federal and state environmental compliance deadlines and performance
requirements.
These environmental compliance projects have allowed the retrofitted facilities
to continue to operate as low-cost generation resources for the benefit ofthe Company's
customers.
Based on these conclusions, I recommend that the Commission approve each
of the projects described in my testimony for inclusion in rates.
Does this conclude your direct testimony?
Yes.
Owen, Di - 17
Rocky Mountain Power
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