20101203Hearing Exhibits 616-623.pdf

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,."Case. No. PAC-E-1O-07
Cross-Examination Exhibit No. 616
Witness: Chad A. Teply
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
PACIFICORP IDAHO INUSTRIL CUSTOMERS
Cross-Examiation Exhibit of Chad A. Teply
Response to PIIC Data Request 150
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PAC-E-l 0-07/Rocky Mountain Power
November 24,2010
PILC Data Request 150
PacifiCorp Idaho Industrial Customers
Cross-Examination Exhibit No. 616 Page 1 of 1
Case No. PAC-E-10-07
Witness: ChadA Teply
PIle Data Request 150
Please refer to Teply Di-Reb-5,line 23. Explain how the liquidated damages
payment was credited to Idaho retail customers. Explain where the adjustment
was made in this case or in a pnor case.
Response to PUC Data Request 150
Due to the timig of ths incident and the related payment ofliquidated damages,
neither the costs of the incident nor the liquidated damages payment were passe
on to customers. The Company's first ECAM filing in Idao covered the penod
of July though November 2009, and the liquidated daages payment was not
included as a credit to customers. However, the NPC baseline set in the previous
general rate case did not reflect the cost of the event. Now that an ECAM is
estblished, the cost of similar events occurng in the futue, net of any liquidated
damages received, will be passed on to customers through that mechansm.
Recordholder:
Sponsor:
Steve McDougall Hui Shu
Steve McDougall Hui Shu
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Case. No. PAC-E-I0-07
Cross-Examination Exhibit No. 617
Witness: Chad A. Teply
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
,PACIFieORP IDAHO INDUSTRIL CUSTOMERS
eross-Examiation Exhibit of ehad A. Teply
OPUC Order 10-414 in UM 1355
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PacifCorp Idaho Industrial Customers
Cross-Examination Exhibit No. 617 Page 1 of 2
Case No. PAC-E-10-07 ORDER NO. 10-414
Witness: Chad A. Teply ENTERED 10/22/10
BEFORE THE PUBLIC UTILITY COMMISSION
OF OREGON
UM 1355
In the Matter of the
PUBLIC UTILITY COMMISSION OF
OREGON
ORDER
Investigation into Forecasting Forced Outage
Rates for Electrc Generating Units.
DISPOSITION: METHODOLOGY FOR CALCULATION OF FORCED
OUTAGE RATES FOR COAL-FIRD GENERATING
PLANTS ADOPTED; STIPULATIONS ADOPTED AS TO
SPECIFIC UTILITIES, RELATED MATTERS;
INSTIGATION DOCKET CLOSED
In this order, we establish the methods for calculating the forced outage rate
(FOR) for electrc generating plants owned by or operated under the direction of PortlandGeneral Electrc Company (PGE), PacifiCorp, dba Pacific Power (Pacific Power) and Idao
Power Company (Idaho Power). We also address certin ratemaking aspects of forecasting
outages and their use in regulatory proceedings as agreed upon by the pares in stipulations
submitted to the Commission for approval.
I. INTRODuenON
We opened ths investigation to determine the appropriate methodology to
forecast FORs for electrc generatig units. PGE, Pacific Power, Idaho Power, the Citizens'
Utility Board of Oregon (CUB), and the Industral Customers of Nortwest Utilties (lCNDall became paries to the proceeding. Numerous conferences were held, and all paries, as
well as the staff of the Public Utility Commission of Oregon (Staff fied testimony
addressing the methods of calculating the rates for forced and planed outages of varous
categories of generating plants for ratemakng puroses.
Durg the coure of the proceedings, the pares entered into settlement
agreements. The settlement agreements for PGE and Idaho Power resolved all of the issuesamong the paries, including the treatment of forced outages of exceptionally long duration
when calculating rates. The Pacific Power settlement settled all issues except for the
methodology for calculating the FOR and for the application of the heat rate cure to
determine the output of electrc generating plants.
.'PacifiCorp Idaho Industrial Customers
Cross-Examination Exhibit No. 617 Page 2 of 2
Case No. PAC-E-10-07 ORDER NO. 10-414
Witness: Chad A. Teply
Idaho Power because it failed to account for Idao Power's generating fleet's unique physical
and operational conditions.9
2. Commission Analysis and Resolution
The evidentiar record supports including a method that wil lessen the impact
of extraordinarily lengthy forced outage events on the calculation of the forecasted rate. The
methodology must balance often conflcting factors, such as the advantage of having a
longer, larger data set and the reliabilty and interpretation of older records.
Having considered all of the evidence and the argument presented by the
paries, we conclude as follows with regard to PGE and Pacific Power:
1. The utilities should develop plant-specific FORs for each coal-
fired generating plant.
2. The FOR shall be the average ofthe FORs for the previous four
year.
3. In the event that, in anyone year, the FOR falls outside the 10th or
90th percentile for comparable NERC coal units, that year shall be
declared an "outlier year."
4. When an outler year occurs, the data for that year shall be
discarded in calculating the respective four- or three-year rolling
average.
5. For the outler year, the discarded data point shall be replaced by
the 20-year rolling average FOR, or, if the plant has been in service
less than 20 years, the average FOR over the life of the plant. In J
calculatig either historical average FOR, the length of anyone "
forced outage shall be capped at 28 days.
6. In preparig the 20-year rolling average FOR, the utility must
utilze only available direct data and shall submit an affdavit to the
Commssion to that effect. The utilities may not attempt to
recreate data by seeking to analyze whether a parcular outage was
forced or maintenance-related.
7. If the Commission fids that any plant outage in the previous four
years was due to utilty imprudence, the FOR(s) for the year(s) of
the outage shall be replaced in the four-year rollng average by the
historical average FOR as determined in step 5 above. Furer, for
any determination of imprudence related to an outage occurg
durng the period of the historical average, the year(s) of the outage
shall not be included in calculating the historical average FOR.
We make the same conclusions with regard to Idaho Power, with one
exception. As noted above, the Idao Power Stipulation adopted the Order No. 09-479
9 CUB's Reply Bnefat 2-4.
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Case. No. PAC-E-I0-07
Cross-Examination Exhibit No. 618
Witness: Chad A. Teply
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
PACIFICORP IDAHO INDUSTRIAL CUSTOMERS
Cross-Examiation Exhibit of Chad A. Teply
OPUC Order 07-446 in UE 191
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PacifiCorp Idaho Industrial Customers
Cross-Examination Exhibit No. 618 Page 1 of 2
Case No. PAC-E-10-07
Witness: Chad A. Teply
ORDER NO. 07-446
ENTERED lO/17/07
BEFORE THE PUBLIC UTILITY COMMISSION
OF OREGON
UE 191
In the Matter of
PACIFICORP, dba PACIFIC POWER
)
)
)
)
)
ORDER
2008 Transition Adjustment Mechanism.
DISPOSITION: NET VARILE POWER COSTS APPROVED,
SUBJECT TO ADJUSTMNTS ADOPTED IN
DECISION
I. BAeKGROUN
In Order No. 04-516 (Docket No. UM 1081), the Public Utilty Commission
of Oregon (Commission) adopted an interim trsition adjustment mechanism (TAM) for
PacifiCorp, dba Pacific Power (Pacific Power) to use for direct access durng the fall 2004
open enrollment window. The Commission stated its desire was to develop a TAM that
values resources based not only on Pacific Power's actual operational responses, but actual
operational responses that are based on appropriate planing. In Order No. 04-516, the
Commission ordered Pacific Power to file a TAM by November 15,2004.
Pacific Power complied with the Order by fiing its TAM, as par of its
general rate case filing. (Docket UE 170) In Order No. 05-l050, the Commission adopted
the TAM proposed by Pacific Power in DE 170, with anual updates and specific 2006
adjustments agreed to by the Public Utility Commission Staff (Staff and Pacific Power.
In Order No. 05-1050, the Commission Staff observed that the purose of the
TAM is not to promote direct access. Rather, the purose of the TAM is to captue costs
associated with direct access, and prevent unwarted cost shiftg. Having adopted the
TAM, however, the Commssion Staff expressed its view that fuer investigation into some
of the concerns raised by the paries would be necessar. The Commission Staff noted that it
was "somewhat concerned" about establishing the TAM with its anual update because of
the one-sidedness to Pacific Power's anual updates without concomitat adjustments by
intervenors and Staff. The Commission Staff stated that it would contiue to look at the
TAM and "investigate to whatever extent we believe is necessar."
Pacific Power's next TAM filing was in docket UE 179, another general rate
case. TAM related issues were resolved in a stipulation that was approved by the
Commission in Order No. 06-530. That stipulation included a provision "capping" the net
PacifiCorp Idaho Industrial Customers
Cross-Examination Exhibit No. 618 Page 2 of 2
Case No. PAC-E-10-07
Witness: Chad A. Teply
ORDER NO. 07-446
Pacific Power did show that the manufactuer had taken full responsibilty for the cost of the
repair.
Where the Company already has held the manufactuer accountable for its
defect, application of the policy adopted in the PGE decision would not provide a meaningful
incentive and it is not applied in this case. However, given the apparent durtion of
the
resulting outage, we do adopt an adjustment to normalize its effect on rates.
The Company documents show that the anticipated durtion of the resulting
outage was five to seven weeks. An outage of that duration, no matter what the cause, is
anomalous, and raises issues regarding its inclusion in normalized rates. In this case, we find
that a 28-day period is a reasonable limit on the lengt of the outage for the purose of
calculating the TAM adjustment factor. To the extent the actul outage exceeded 28 days,
the Company should make an appropriate adjustment to the outage rate used in ruing the
GRI modeL.
3. GP Camas Contract Costs
a. ICNU Position
ICNU states that Pacific Power increased its costs associated with the Georgia
Pacific (GP) Camas contrct, even though the Company has not actully made any payments
to GP. Although the effect on revenue requiement is not great ($118,000), ICNU
characterizes this issue as important in limiting the scope of TAM proceedings.
ICNU cites the language in Order No. 05-1050 to the effect that we are
concerned that "there is a certain amount of one-sidedness to Pacific Power's anual updates
without concomitant adjustments by intervenors and Staff." (p. 21) ICNU argues that
Pacific Power's treatment of the GP Camas contrct is a "one-sided" increase that would
allow the Company to increase NVC to reflect an "arificial" contrct price increase.
ICNU states that because the price for the GP Camas contract has increased,
the Company proposes to increase NVC to reflect this increase. According to ICN, the
contract is complex, however, and there are numerous "offsets" in the contract that reduce
the actul costs to the point that Pacific Power will not pay any additional amounts. These
contractual offsets are in an "Other Revenue" account that is not included in the TAM.
b. Pacific Power Reply
Pacific Power argues that ICNU's GP Camas contract adjustment should be
rejected because it is outside the scope of the TAM proceeding.
According to Pacific Power, puruant to its GP Camas mill contrct, the
Company built a steam tubine and is recovering the capacity investment over the twenty-
year term of the contract. Pacific Power's NVC includes the contrct costs of energy for
the GP Camas unt as a purchased power expense. Pacific Power does not include the credit
21
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Case. No. PAC-E-1O-07
Cross-Examination Exhibit No. 619
Witness: Cindy Crae
BEFORE THE IDAHO PUBLie UTILITIES eOMMISSION
PAeIFeORP IDAHO INDUSTRIL eUSTOMERS
eross-Examiation Exhibit of eindy erane
Response to PIle Data Request 141
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PAC-E-lO-07/Rocky Mountain Power
November 23, 2010
PUC Data Request l4l
PacifiCorp Idaho Industrial Customers
Cross-Examination Exhibit No. 619 Page 1 of 1
Case No. PAC-E-10-07
Witness: Cindy Crane
PIle Data Request 141
Please refer to Crae, Di-Reb, page l2,lines 2-7. Does Ms. Crane agree tht ifthe
Company is successful in these effort it will improve coal quaity for Bndger?
Response to Pile Data Request 141
Bndger Coal Company has initiated these efforts to reduce delivered coal quality
vanability. Although the quality composition of both the underground and
surace coal does not change, the Company anticipates that the consistency of the
heat value and ash coal quality will improve.
Recordholder:
Sponsor:
Cindy Crae
Cindy Crane
Case. No. PAC-E-lO-07
Cross-Examination Exhibit No. 620
Witness: Hui Shu
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
PACIFICORP IDAHO INDUSTRIL CUSTOMERS
Cross-Examiation Exhibit of Hui Shu
Response to PIle Data Request 156
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PAC-E-I0-07/Rocky Mountain Power
November 23,2010
PUC Data Request 156
PacifiCorp Idaho Industrial Customers
Cross-Examination Exhibit No. 620 Page 1 of 1
Case No. PAC-E-10-07
Witness: Hui Shu
PUC Data Request 156
Please refer to Shu-Di-Reb-3, lines 6-8. Has Dr. Shu performed any analysis of
and demonstrated the prudence of the costs referenced? If not, what is Dr. Shu's
basis for assuming the costs listed were in fact, all prudent?
Response to PIle Data Request 156
No. The Company continualy strves to operate in a prudent maer. The
Company believes that all of the listed costs are incurred prudently to serve its
obligations.
Recordholder:
Sponsor:
Hui Shu
Hui Shu
~
Case. No. PAC-E-I0-07
Cross-Examination Exhbit No. 621
Witness: Hui Shu
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
PACIFICORP IDAHO INDUSTRIAL CUSTOMERS
Cross-Examiation Exhibit ofHui Shu
Response to PUC Data Request 155
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PAC-E-1O-07/Rocky Mounta Power
November 23, 2010
PUC Data Request l55
PacifiCorp Idaho Industrial Customers
Cross-Examination Exhibit No. 621 Page 1 of 1
Case No. PAC-E-10-07
Witness: Hui Shu
PUC Data Request 155
Please refer to Shu-Di-Reb-3, lines 6-8. Has Dr. Shu made any anysis ofthe
extent to which load varations, hydro and wind genertion deviations, or the like
have impacted the level ofNPC for the perods referenced.
Response to Pile Data Request 155
No.
Recordholder:
Sponsor:
Hui Shu
Hui Shu
Case. No. PAC-E-1O-07
Cross-Examination Exhbit No. 622
Witness: Stephen McDougal
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
PACIFICORP IDAHO INDUSTRIL CUSTOMERS
Cross-Examiation Exhibit of Stephen McDougal
Response to PIle Data Request 186
evt/I/).1-
. r'PAC-E-IO-07/Rocky Mountain Power
November 24,2010
PIIC Data Request 186
PacifiCorp Idaho Industrial Customers
Cross-Examination Exhibit No. 622 Page 1 of 2
Case No. PAC-E-10-07
Witness: Stephen McDougal
PIle Data Request 186
For each of the capital projects projected to be in service by December 31, 20 10
in and included in the Company's direct fied revenue requirement calculation,
please list all changes in expected in-service dates.
Response to PUC Data Request 186
Please refer to Attachment PIle 186 for the requested information.
Recordholder:
Sponsor:
Steve McDougal
Steve McDougal
¡ '¡'o'C'
i
10 PAC-E-10-07
Pile 186
Rocky Mountain Power
Idaho General Rate Case
Attach PIIC 186
Pro'ect Descrl tlon
Steam Production
Dave Johnston: U3 S02 & PM Emission Cntrl Upgrades
Huntington U1 Clean Air - PM .
Hunter: 301 Turbine Upgrade HP/IP/LP
Huntington: U1 Turbine Upgrade HP/IP/LP
~ U1 Huntington Clean Air. S02
Jim Bridger: U1 S02 & PM Em Cntrl Upgrades
Dave Johnston: U3 Low Nox Burners
Hunter: 301 Main Controls Replacement
Dave Johnston: U3 - Replace BoilerfTurbine Controls
Jim Bridger: U1 Turbine Upgrade HPIIP
Huntington: U1 Clean Air - NOx
Jim Bndger: U1 Reheater Replacement 10
Huntington: U1 Economizer Replacement
"-Huntington Water Efficiency Mgt Project
Jim Bridger: U1 Clean Air - NOx
Hunter: 301 Economizer Replacement
Huntington: U1 Boiler Finish SH Pendants Replacement
Jim Bridger: U1 Generator Rewind
Hunter: 301 Low Temp. SH Replacement
Dave Johnston: U3 - Honzontal SH Replace
Hydro Production
INU 11.5 Lemolo 1 Forebay Expansion & We
Other Production
Dunlap I Wind Project
Transmission
Populus to Terminal (Populus to Ben Lomond)
Populus to Terminal (Populus to Ben Lomond)
Populus to Terminal (Ben Lomond to Terminal)
Populus to Terminal (Ben Lomond to Terminal)
Three Peaks Sub: Install 345 kV Substation - Phase II
-Camp Willams - 90th South Double Circuit 345 kV line
Red Butte -St George 138 kv dbl cld, (345 kv Const)
Pinto 345 kV Senes Capacitor
Dunlap Ranch Wind Farm Phase 1 Interconnection
Upper Green River Basin Superior Project - Transmission Part
'oquirrh - New 345-138 kV Sub & 138 kV Switchyard
Parnsh Gap Const Nw 230-69kV Sub
Line 37 Cony to 115kV Bid Nickel Mt Sub - Trans
- Chappel Creek 230 kV Cimarex Energy 20 MW Phase II
_ Community Park Convert to 115-12.5 kV - Transmission Part
Intangible
TriP II Energy Trading Systems Capital
Mining
Deer Creek-Reconstruct Longwall System
Attach Pile 186
Attachment Pile 186
PacifiCorp Idaho Industrial Customers
Cross-Examination Exhibit No. 622 Page 2 of 2
Case No. PAC-E-10-07
Witness: Stephen McDougal
Account Factor In-Service Date
312 SG May-10 No Change
312 SG Nov-10 No Change
312 SG Apr-10 No Change
312 SG Nov-10 No Change
Waste Handling Phase
312 SG Nov-10 Mar2011
312 SG Jun-10 No Change
312 SG Aug-10 May-10
312 SG Apr-10 No Change
312 SG May-10 No Change
312 SG Jun-10 No Change
312 SG Nov-10 No Change
312 SG Jun-10 No Change
312 SG Nov-10 No Change
$3.8m in-service in May10. the
remainder forecasted for
312 SG Jun-10 Dec10
312 SG Jun-10 No Change
312 SG Apr-10 No Change
312 SG Nov-10 No Change
312 SG Jun-10 No Change
312 SG Apr-10 No Change
312 SG May-10 No Change
332 SG-P Aug-10 No Change
343 SG Nov-10 Oct-10
355 SG Nov-10 No Change
355 SG Oct-10 No Change
355 SG Mar-10 No Change
355 SG Apr-10 No Change
355 SG Jun-10 Aug-10 ~ (¡t,
355 SG Dec-10 NOv-ll)~
355 SG May-10 No Change
355 SG Nov-10 No Change
355 SG Aug-10 No Change
355 SG Dec-10 No change
355 SG Jun-10 Dec-10
355 SG Jun-10 Jul-10
355 SG Mar-10 Jun-10
355 SG Dec-10 Sep-11
355 SG Oct-10 Jun-11
303 SG Dec-10 No Change
399 SE Dec-10 No Change
Page 1 of 1
10 PAC-E-10-07
PIIC 147 Attachment PIIC 147
~ PACIFICORP
November 18,2010
Stochastic Loss of Load Study for the
2011 Integrated Resource Plan
INRODUCTION
PacifiCorp evaluates the desired level of capacity planning reserves for each integrated resource
plan. For the 2011 IR, the Company conducted a stochastic loss of load study to help identify
the target capacity planning reserve margin (PRM to use for resource portfolio development.
The PRM value used for the 2008 IR and 2008 IRP Update was 12%.
This study utilzed the Company's stochastic production cost simulation system, Planning and
Risk (PaR), to determine the relationship between PRM and resource adequacy as measured by
Loss of Load Probabilty (LOLP) index. Loss of load probabilty represents the probabilty that
generation in a given hour is insuffcient to serve load. Accumulating the number of hours for
which the system experiences unserved load over a given period, tyically one year, yields the
LOLP index. Once the relationship between LOLP and PRM is established for PacifiCorp's
system, a target LOLP level is selected to determine the PRM for subsequent resource portfolio
development. This report describes the loss of load study and modeling assumptions, the
selection of a target loss of load criterion, and the adoption of a PRM for portfolio development.
The last comprehensive stochastic study conducted was for PacifiCorp's 2004 IR. i Major
differences between this study and the last one include (1) significantly more wind resources and
incorporation of incremental wind operating reserves in the resource portfolio simulations, (2)
expansion of the transmission topology from two bubbles to 26, and (3) incorporation of energy
efficiency programs as a resource with a reserve credit rather than a reduction to the load
forecast.
Note that while this study reports the incremental resource cost for achieving a given loss of load
frequency and associated reserve margin level using a stadard reliabilty resource tye, it does
not assess the trade-off between reliabilty and cost or the optimal resource mix to achieve a
given reliability leveL. PacifiCorp compares different resource portfolios based on the amount
and cost of unserved load (megawatt-hours of "Energy Not Served" or ENS) resulting from
stochastic simulations of many portfolios built to meet a given PRM leveL. This stochastic
analysis reveals the reliabilty impacts and costs associated with different resource mixes.
LOSS OF LOAD PROBABILITY METRIeS
The metric used to derive the LOLP index is Loss of Load Hours (LOLH). The PaR model
records a LOLH event when load is not met for an hour. This condition results from unit outages
that reduce available generation capacity in a load area below the load derived from the Monte
Carlo draws conducted by the PaR modeL. The LOLH event also has an associated Energy Not
Served value, which is the magnitude of the lost load for the hour.
i See Appendix N of the 2004 IRP Technical Appendix Volume.
Attach PIIC 147,pdf Page 1 of 11 qÁ~J3
l' 10 PAC-E-10-07
PIIC 147 Attachment PIIC 147
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support is tageted for units at least 200 MW in size, is provided only to the unit with the largest
capacity in the event that two or more units experience simultaneous outages, covers only one
outage event per month, and covers less than the full unit capacity due to a smaller pool of
member reserves available. Given these offsetting limitations, PacìfiCorp assumes that a PRM
reduction of 1.5 percentage points is a reasonable proxy for the NWPP's reserve sharing benefit.
STUDY RESULTS
Figure lO reports the LOLH counts for the five PRM levels modeled, while Figure 1l reports the
resulting LOLP index values (the stochastic average for the 100 Monte Carlo iterations). Fitted
curves highlight the smooth relationship between the reliability statistics and the PRM leveL.
Figure 12 report the total fixed cost of meeting each PRM level based on the incremental IC
aero SCCT resource capacity required. The per-unit fixed cost is approximately $l91/kW-year,
which is grossed up to account for a 2.7% expected forced outage rate. Each percentage point
increase in the PRM translates into an incremental fixed cost of about $42 mìlion.
in Level
2014 LOLH
20
15
::
010-i
5
0
0 5 10 15 20
Reserve Margin (%)
8
Attach PIIC 147:pdf Page 8 of 11
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