20211108Collins Direct-Redacted.pdf

{i fr i" f: lV F{]r f b !/ L
;Liii i4il? -8 PH 2:36
BEFORE THE
IDAHO PUBLIC UTILITIES COMiIIISSION
IN THE MATTER OF THE
APPLICATION OF ROCKY MOUNTAIN
POWER FOR AUTHORITY TO
INCREASE ITS RATES AND CHARGES
IN IDAHO AND APPROVAL OF
PROPOSED ELECTRIC SERVICE
SCHEDULES AND REGULATIONS
)
)
)
)
)
)
)
)
)
cAsE NO. PAC-E-21-07
Redacted Direct Testimony of
Brian G. Collins
On behalf of
Bayer Corporation
P4 Production, L.L.G.
November 8,2021
-_-==
-:-=BRuslKE n & fu soclrrrs, I Nc.
Project 1 1 150
1
2
3
o
A
o
A
PACIFICORP dba ROCKY MOUNTAIN POWER
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
cAsE NO. PAC-E-21-07
Direct Testimonv of Brian C. Collins
PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.
Brian C. Collins. My business address is 16690 Swingley Ridge Road, Suite 140,
Chesterfield, MO 63017.
WHAT IS YOUR OCCUPATION?
I am a consultant in the field of public utility regulation and a Principal of Brubaker &
Associates, lnc. ("BAl"), an energy, economic and regulatory consulting firm.
PLEASE DESCRIBE YOUR EDUCATIONAL BACKGROUND AND EXPERIENCE.
This information is included in Appendix A to my testimony.
ON WHOSE BEHALF ARE YOU APPEARING IN THIS PROCEEDING?
I am appearing on behalf of P4 Production, L.L.C., an affiliate of Bayer Corporation
(hereinafter "Bayer"), a special contract customer of Rocky Mountain Power ("RMP'
or "Company"). RMP is a division of PacifiCorp.
I have previously appeared on behalf of Bayer, formerly Monsanto Company,
in Gase No. PAC-E-10-07.
WHAT IS THE SUBJECT OF YOUR TESTIMONY?
! provide testimony regarding Bayer's support for the ldaho Public Utilities
Commission ("Commission") to enter an order approving the Settlement Stipulation
Collins, Di- I
Bayer Corporation
4
5
6
7
8
o
A
o
A
I
10
11
12
13
14
15
16
17
o
A
1
2
3
4
5
6
7
I
I
("Stipulation") between the Company, Staff and lntervenors ("Parties") settling all
issues in this proceeding. The Stipulation provides for an $8 million increase in the
Company's base rates. The Stipulation also includes a provision for valuing the
intenuptibility provided by Bayer to the Company under the new Electric Service
Agreement ("ESA') between Bayer and the Company.
As described by Mr. Mike Veile of Bayer in his testimony, the ESA terms and
conditions have now been finalized and agreed to by both parties and submitted to
the Commission for approval. Under the ESA effective January 1, 2022, Bayer
provides two curtailment products to RMP, an operating reserves product and an
economic curtailment product.
IS THE SETTLEMENT REACHED BY ALL PARTIES IN THIS RATE CASE
REASONABLE?
Yes. Bayer undertook an active role in the review of the Company's rate filing. Bayer
engaged a large team of expert consultants from three different firms, Brubaker and
Associates, lnc. (primary witnesses Brian C. Collins, Greg R. Meyer, and Christopher
C. Walters), Energy Strategies (primary witness Kevin Higgins) and Aegis lnsight
(primary witness Lance Kaufman).
Baye/s consulting team conducted extensive discovery and made a thorough
review of the Company's rate filing, scrutinizing all aspects of the Company's filing.
As a result, Bayer identified an extensive list of adjustments to the Company's
revenue requirements and rate base to be included in filed testimony and exhibits.
These adjustments were shared with the Parties.
Commencing on September 13, 2021, the Parties held several meetings
which culminated in a settlement agreement, the details of which are set forth in the
Stipulation submitted to the Commission for approval.
Collins, Di - 2
Bayer Corporation
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
o
A
1
2
3
4
5
6
REDACTED
When considering all aspects of the global settlement, and recognizing that
the settlement is a compromise of disputed claims, Bayer believes that the terms and
conditions of the Stipulation are fair, just, reasonable, and in the public interest. All
Parties independently and collectively reached this same conclusion, upon which the
Commission is urged to enter an order approving the Stipulation, including Bayer's
new ESA and the valuation of Baye/s interruptibilty.
WHAT AMOUNT OF INTERRUPTIBILIW DOES BAYER PROVIDE RMP IN THE
NEW ESA?
The 2022 ESA specifically provides for two types of interruption of Bayer's furnace
loads: (1)Operating Reserves of at least 95 MW (Furnaces 7 and 8) which can be
called upon 188 hours per calendar year; and (2) Economic Curtailment of 67 MW
(Furnace 9) which can be called upon for 1,600 incidents of 15 minutes each per
calendar year. Thus, Bayer provides both an operating reserve product and an
economic curtailment product.
HOW WAS BAYER',S I MILL|ON CURTATLMENT PRODUCT VALUE
ARRIVED AT IN THE SETTLEMENT AND WHY SHOULD THE COMMISSION
APPROVE IT AS PART OF THE SETTLEMENT?
When considered in the context of the global settlement that resolves all issues in the
case, the value of Baye/s curtailment product is a reasonable compromise among all
Parties. As a result, the Commission shoutd approve the ! million as part of the
settlement agreed upon by all Parties.
Gollins, Di-3
Bayer Corporation
7
I
I
10
11
12
13
14
15
16
17
18
19
20
21
o
A
o
A
I
2
3
4
5
6
7
I
I
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
a
A
REDACTED
PLEASE DESCRIBE THE COMPROMISE REACHED REGARDING BAYER'S
INTERRUPTIBILITY VALUATION.
The Company offered its valuation of Bayer's interruptibility through the Direct
Testimony of RMP witness Craig Eller. Mr. Eller's valuation analysis resulted in a
value of f million for Baye/s interruptibility. By contrast, Bayefs valuation
analysis resulted in a value range of I million to I million.
Both the Gompany and Bayer recognize capacity value for both the operating
reserve and economic curtailment products provided by Bayer. One of the primary
differences between the Company's valuation and Baye/s valuation lies in the
specific capacity resource used as a prory for valuing Bayer's interruptibility.
RMP uses Baye/s interruptible load resource much like it would a simple
cycle combustion turbine ('SCCT'), which is a peak generation resource or "peaker."
Bayer's provision of operating reserves and economic curtailment to RMP under the
2022 ESA effectively avoids the cost of constructing and operating an SCCT
resource. Bayer calculated the avoided peaker cost under two different scenarios.
The first scenario is based on two separate SCCT resources - an Aeroderivative
("Aero") SCCT for the operating reserve product and a Frame F SCCT for the
economic curtaitment product - and resulted in a value of I mitlion. This
valuation is based on values from PacifiCorp's 2019 lntegrated Resource Plan
('!RP). The second scenario is based on a single proxy resource that would replace
both Bayer's operating reserye and the economic curtailment products and resulted in
a value of approximate[ ! mittion. Thus, Bayer determined a range of its
intenuptibility value of between I million and ! million.
Based on the context of the global settlement, and all things considered,
including the settlement of all revenue requirement issues in the amount of an
$8 million increase for the Company, the f million for Bayer's interruptibility
Collins, Di-4
Bayer Corporation
1
2
a
A
3
4
valuation is a reasonable compromise between all Parties and should bo approved by
the Commission.
DOES THIS CONCLUDE YOUR DIRECT TESTITONY?
Yes, it does.
Colllns, Di -5
BayerCorpoafion
1
2
3
4
5
6
o
A
o
A
Qualifications of Brian C. Collins
PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.
Brian C. Collins. My business address is 16690 Swingley Ridge Road, Suite 140,
Chesterfield, MO 6301 7.
WHAT !S YOUR OCCUPATION AND BY WHOM ARE YOU EMPLOYED?
I am a consultant in the field of public utility regulation and a Principal with the firm of
Brubaker & Associates, Inc. ('BAl'), energy, economic and regulatory consultants.
PLEASE STATE YOUR EDUCATIONAL BACKGROUND AND WORK
EXPERIENCE.
I graduated from Southern lllinois University Carbondale with a Bachelor of Science
degree in Electrical Engineering. I also graduated from the University of lllinois at
Springfield with a Master of Business Administration degree. Prior to joining BAl, I
was employed by the lllinois Commerce Commission and City Water Light & Power
("CWLP') in Springfield, lllinois.
My responsibilities at the lllinois Commerce Commission included the review
of the prudence of utilities' fuel costs in fuel adjustment reconciliation cases before
the Commission as well as the review of utilities' requests for certificates of public
convenience and necessity for new electric transmission lines. My responsibilities at
CWLP included generation and transmission system planning. While at CWLP, I
completed several thermal and voltage studies in support of CWLP's operating and
planning decisions. I also performed duties for CWLP's Operations Department,
including calculating CWLP's monthly cost of production. I also determined CWLP's
Appendix A
Collins, Di- 1
Bayer Corporation
7
I
I
10
11
12
13
14
15
16
17
18
19
20
21
o
A
1
2
3
4
5
o
7
I
I
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
allocation of wholesale purchased power costs to retail and wholesale customers for
use in the monthly fuel adjustment.
ln June 2001, I joined BAI as a Consultant. Since that time, I have
participated in the analysis of various utility rate and other matters in several states
and before the Federal Energy Regulatory Commission ("FERC'). I have filed or
presented testimony before the Arkansas Public Service Commission, the California
Public Utilities Commission, the Delaware Public Service Commission, the Public
Service Commission of the District of Columbia, the Florida Public Service
Commission, the Georgia Public Service Commission, the Guam Public Utilities
Commission, the ldaho Public Utilities Commission, the lllinois Commerce
Commission, the lndiana Utility Regulatory Commission, the Kentucky Public Service
Commission, the Public Utilities Board of Manitoba, the Minnesota Public Utilities
Commission, the Mississippi Public Service Commission, the Missouri Public Service
Commission, the Montana Public Service Commission, the North Carolina Utilities
Commission, the North Dakota Public Service Commission, the Public Utilities
Commission of Ohio, the Oklahoma Corporation Commission, the Oregon Public
Utility Commission, the Rhode lsland Public Utilities Commission, the Public Service
Commission of Utah, the Virginia State Corporation Commission, the Public Service
Commission of Wisconsin, the Washington Utilities and Transportation Commission,
and the Wyoming Public Service Commission. I have also assisted in the analysis of
transmission line routes proposed in certificate of convenience and necessity
proceedings before the Public Utility Commission of Texas.
ln 2009, I completed the University of \Msconsin - Madison High Voltage
Direct Current ("HVDC') Transmission Course for Planners that was sponsored by
the Midwest lndependent Transmission System Operator, lnc. ("MlSO").
Appendix A
Collins, Di - 2
Bayer Corporation
1
2
3
4
5
6
7
8
9
10
11
BAI was formed in April 1995. BAI and its predecessor firm has participated in
more than 700 regulatory proceedings in forty states and Canada.
BAI provides consulting services in the economic, technical, accounting, and
financial aspects of public utility rates and in the acquisition of utility and energy
services through RFPs and negotiations, in both regulated and unregulated markets.
Our clients include large industrial and institutional customers, some utilities and, on
occasion, state regulatory agencies. We also prepare special studies and reports,
forecasts, surveys and siting studies, and present seminars on utility-related issues.
ln general, we are engaged in energy and regulatory consulting, economic
analysis and contract negotiation. ln addition to our main office in St. Louis, the firm
also has branch offices in Phoenix, Arizona and Corpus Christi, Texas.
Appendix A
Gollins, Di- 3
Bayer Corporation
422105