BEFORE THE PUBLIC SERVICE COMMISSION OF …psc.state.wy.us/oca/Cases/RMP2012/Stipulation Testimony...
Transcript of BEFORE THE PUBLIC SERVICE COMMISSION OF …psc.state.wy.us/oca/Cases/RMP2012/Stipulation Testimony...
BEFORE THE PUBLIC SERVICE COMMISSION OF WYOMING
IN THE MATTER OF THE APPLICATION OF )ROCKY MOUNTAIN POWER FOR )APPROVAL OF A GENERAL RATE ) Docket No. 20000-405-ER-il
INCREASE IN ITS RETAIL ELECTRIC ) (Record No. 13034)UTILITY SERVICE RATES IN WYOMING OF )$62.8 MILLION PER YEAR OR 10.4 PERCENT )
IN THE MATTER OF THE APPLICATION OF )ROCKY MOUNTAIN POWER TO INCREASE )RATES BY $29.3 MILLION OR 4.82 PERCENT ) Docket No. 20000-410-EP-12
TO RECOVER $29.3 MILLION IN DEFERRED ) (Record No. 13117)
NET POWER COSTS THROUGH THE )ENERGY COST ADJUSTMENT MECHANISM )
IN TIlE MATTER OF THE APPLICATION OF )ROCKY MOUNTAIN POWER FOR A )DEFERRED ACCOUNTING ORDER ) Docket No. 20000-413-EA-12
REGARDING COSTS INCURRED FOR ) Record No. 13158
NAUGHTON UNIT 3 SELECTIVE )CATALYTIC REDUCTION SYSTEM, PULSE )JET FABRIC FILTER SYSTEM AND )RELATED ENVIRONMENTAL UPGRADES )
IN THE MATTER OF THE APPLICATION OF )ROCKY MOUNTAIN POWER FOR A )DEFERRED ACCOUNTING ORDER TO ) Docket No. 20000-414-EA-12
DEFER TIlE COSTS RELATED TO THE ) (Record No. 13159)
DECOMMISSIONING OF THE CARBON )PLANT )
STIPULATION TESTIMONY OF
Bryce J. Freeman
On Behalf of the Office of Consumer Advocate
Testimony Filed: June 20, 2012
1 Contents2 QUALIFICATIONS 2
3 CONTEXT AND OBJECTiVES 3
4 SUPPORTING ELEMENTS 6
5 CARBON AND NAUGHTON 19
6 OTHER ISSUES 20
7 CONCLUSTION 24
8
9
Bryce J. Freeman 1 Docket Number 20000-405-ER-il
i QUALIFICATIONS2
3 Q. PLEASE STATE YOUR NAME, ADDRESS AND OCCUPATION.
4 A. My name is Bryce J. Freeman. My business address is 2515 Warren Avenue, Suite 304,
5 Cheyenne, WY, 82002. I am the Administrator of the Wyoming Office of Consumer
6 Advocate (OCA). The OCA is an independent consumer advocacy agency that was
7 created by an act of the legislature in the 2003 general session.
8 Q. ARE YOU THE SAME BRYCE FREEMAN THAT OFFERED DIRECT
9 PREFILED TESTIMONY IN THIS PROCEEDING?
10 A. Yes,Iam.
11 Q. WHAT IS THE PURPOSE OF YOUR SUPPLEMENTAL TESTIMONY IN THIS
12 PROCEEDING?
13 A. The purpose of my supplemental testimony in this proceeding is to describe and support
14 the Stipulation and Agreement reached by the parties in this proceeding that resolves all
15 of the contested issues raised by the parties in their answer testimony filed on March 30,
16 2012. The parties who filed testimony in this case include the Wyoming Office of
17 Consumer Advocate (OCA), Wyoming Industrial Energy Consumers (WIEC) and AARP.
18 Parties who were granted intervention in this proceeding but which did not file answer
19 testimony include QEP Field Services Company (QEP), United States Department of
20 Energy (DOE) and Kinder Morgan Interstate Gas Transmission, LLC (Kinder Morgan).
21 The Stipulation and Agreement was negotiated and executed between Rocky Mountain
22 Power (RMP or Company) and OCA, WIEC, QEP and Kinder Morgan (settling parties).
23 Hereafter, when I refer to parties I am referring to the settling parties unless otherwise
24 noted. After extensive review and case preparation, and after exhaustive discussions with
25 the other settling and non-settling parties in this proceeding, the OCA is convinced that
26 the Stipulation and Agreement, as presented, is in the public interest and urges its
27 adoption by the Commission.
28 Q. HOW IS YOUR SUPPLEMENTAL TESTIMONY ORGANIZED?
Bryce J. Freeman 2 Docket Number 20000-405-ER-li
1 A. As evidenced by the Joint Motion to Consolidate Dockets filed contemporaneously with
2 the filing of the Stipulation and Agreement in this matter, the parties are proposing to
3 resolve four pending dockets; this rate case (Docket Number 20000-405-ER-i 1), the
4 2012 ECAM docket (Docket Number 20000-410-EP-12), the Naughton Unit 3 deferral
5 docket (Docket Number 20000-413-EA-12), and the Carbon power plant deferral docket
6 (Docket Number 20000-4i4-EA-12). My supplemental testimony is presented in four
7 parts. In the first part I will discuss the goals of the OCA in engaging in settlement
8 discussions with RMP and the other parties and the conceptual framework of the
9 Stipulation and Agreement that achieves our goals with respect to the four cases cited
10 above. In the second part of my testimony I will describe the specific elements of the
11 Stipulation and Agreement related to this rate case and the pending ECAM docket that
12 support the concept of rate mitigation and stabilization, and make it consistent with the
13 public interest. In the third portion of my testimony I will discuss the resolution of the
14 Carbon and Naughton 3 dockets and how they fit into the overall settlement
15 recommended by the parties in this case. In the fourth and final portion of my testimony I
16 will briefly discuss the remaining agreements and stipulations of the parties which largely
17 relate to work that the parties have committed to doing prior to the filing of the
18 Company’s next rate case.
19 CONTEXT AND OBJECTIVES
20 Q. WHAT WAS YOUR OBJECTWE IN ENGAGING IN SETTLEMENT
21 DISCUSSIONS WITH THE COMPANY IN TifiS PROCEEDING?
22 A. My objective in engaging in these discussions remains the same as settlement discussions
23 that take place in every other contested proceeding in which the OCA intervenes, namely
24 to fmd a resolution of the disputed issues that balances the interests of ratepayers in
25 reliable and affordable service with the interests of the Company’s shareholders in the
26 opportwiityto recover prudently incurred investments and expenses.
27 As the Commission is painfully aware, RMP has filed approximately annual rate cases
28 since 2003. While the resulting rate increases have generally been much smaller than
29 originally requested by the Company, they have nevertheless been substantial when
Bryce 3. Freeman 3 Docket Number 20000-405-ER-il
1 considered on a cumulative basis. Since 2003 RMP has been granted revenue increases
2 totaling nearly $200 million or approximately 33% on average. Some customer classes,
3 particularly the larger customers taking transmission level service, have seen a cumulative
4 increase approaching 50% over that same period.
5 The parties to these rate proceedings, including the OCA and WIEC, among others, as
6 well as the Company, have become increasingly aware of the cumulative effects of these
7 increases on customers, particularly since the beginning of the recession in 2008. I won’t
8 speak for the desires or objectives of other parties to this proceeding, but WIEC
9 specifically has commented publicly on the magnitude and frequency of the rate increases
10 requested by RMP in the recent past on several occasions. Indeed, in past public hearing
11 sessions held by the Commission, residential customers have also protested what appears
12 to be an endless continuum of rate case applications by RMP.
13 In view of the public sentiment surrounding continued large annual rate increases, the
14 parties have, for some time, been engaging in productive informal dialog regarding
15 potential solutions. The settlement discussions and Stipulation and Agreement now
16 before the Commission are the culmination of that dialog. My objective in these
17 discussions remains as stated previously, namely to balance the interests of ratepayers and
18 shareholders, but to do so in a way that will provide temporary relief from annual rate
19 cases, mitigate sharp rate changes to customers, and sustain the Company’s capital and
20 operating needs through a period of relatively flat revenues.
21 Q. DID THE PARTIES CONSIDER OTHER WAYS TO RESOLVE THIS CASE IN
22 ADDITION TO THE RECOMMENDED SETTLEMENT NOW BEFORE THE
23 COMMISSION?
24 A. Yes. The parties engaged in wide ranging discussions regarding all of the elements of
25 this proceeding. The parties considered the resolution of the issues raised in this case in
26 isolation, treatment of a more limited set of issues than the four cases proposed in the
27 Stipulation and Agreement, and various mechanisms such as incentive rates, and others.
28 In the end, the parties agreed that resolution of the issues contained in the Stipulation and
29 Agreement provides the most value for all of the intervening parties, although the parties
Bryce 3. Freeman 4 Docket Number 20000-405-ER-li
1 will continue to consider various forms of alternative ratemaking as I will discuss later in
2 my testimony.
3 Q. ARE THERE OTHER EFFORTS ONGOING THAT ATTEMPT TO FIND WAYS
4 TO ALLEVIATE THE BURDEN OF ANNUAL RATE CASES ON CUSTOMERS?
5 A. Yes. It is my understanding that the Company, in view of the expressed public sentiment
6 regarding annual rate increases, is continuing to reassess its capital spending plans and
7 operations in Wyoming to determine what investments and expenses can be avoided or
8 deferred without jeopardizing service quality and reliability. I think that RMP has heard
9 consumers’ concerns with ever increasing rates and is earnestly looking for ways to
10 reduce the need for annual rate case filings. Better management of investments and
11 expenses is one of the reasons that RMP might be comfortable in committing to forego
12 any further rate changes for a period of approximately fourteen months as set out in the
13 Stipulation and Agreement.
14 Q. WHY DID THE PARTIES FIND IT NECESSARY TO ASK THE COMMISSION
15 TO CONSOLIDATE THE CURRENT ECAM PROCEEDING WITH THIS RATE
16 CASE PROCEEDING?
17 A. There are two things that can cause the Company’s rates to change; base rate increases
18 and changes to net power costs. Base rates are set by the Commission in general rate
19 proceedings such as this one and incremental net power costs are accumulated and
20 amortized through the approved Energy Cost Adjustment Mechanism (ECAM) on an
21 annual basis. Increases in either base rates or the ECAM amortization rate may have a
22 substantial impact on customer rates. The combined impact of both a base rate increase
23 and an increase in the ECAM surcharge can be dramatic, especially for some customer
24 classes.
25 For example, the currently pending ECAM surcharge that is in effect on an interim basis
26 is an average increase of 4.84%. The proposed average increase in base rates that would
27 result from this case, if approved as requested in RMP’s application, is 10.4%. For the
28 Large General Service — Transmission (48T) class, however, the resulting increases from
Bryce J. Freeman 5 Docket Number 20000-405-ER-il
1 the base rate and ECAM proposals would be nearly 20%. The combined impact on the
2 residential customers would be approximately 12%. Both classes of customers would be
3 substantially impacted by a onetime annual rate increase of this magnitude.
4 Consequently, the parties concluded that it would be in the public interest to find a way to
5 mitigate the impact of a single year rate increase of this magnitude. However, the parties
6 also concluded that a resolution of the general rate case by itself would provide
7 insufficient value, in terms of total dollars, to significantly mitigate the rate impact
8 created by implementation of both the base rate increase and the ECAM surcharge in the
9 current year. For that reason the parties began looking at ways to resolve both the base
10 rate increase in this case as well as current and future ECAM cases in a way that would
11 substantially reduce the impact of a single year implementation.
12 Q. ARE THERE OTHER WAYS TO RESOLVE THE DISPUTED ISSUES iN TifiS
13 CASE?
14 A. Yes, and as I alluded to earlier the parties considered many of those options before
15 agreeing to the terms set forth in the Stipulation and Agreement. The parties could have
16 resolved the rate case in isolation, or resolved only a subset of the issues raised in the four
17 cases the parties are proposing to consolidate. However, it is the collective wisdom of the
18 parties that the Stipulation and Agreement, as presented, best balances the interests of
19 customers with that of the Company. The OCA believes the Stipulation and Agreement
20 now before the Commission is in the public interest and urges its adoption.
21 SUPPORTING ELEMENTS
22 Q. PLEASE DESCRIBE THE ELEMENTS OF THE STIPULATION AND
23 AGREEMENT THAT SUPPORT YOUR BELIEF THAT IT IS IN THE PUBLIC
24 INTEREST.
25 A. Certainly. In the following pages I will discuss the elements of the Stipulation and
26 Agreement that have convinced me that it is in the public interest. While this is not
27 meant to be an exhaustive list of the items addressed in the parties’ settlement
28 discussions, nevertheless, I believe it is important to be as transparent as possible with
Bryce J. Freeman 6 Docket Number 20000-405-ER-Il
1 regard to how the settlement was developed and why the OCA believes it is in the public
2 interest. The parties have the burden to support the Stipulation and Agreement on its
3 merits if it is to be approved by the Commission.
4 The first substantive element of the Stipulation and Agreement, discussed beginning at
5 paragraph 10, is resolution of the revenue increase requested in the instant proceeding.
6 The parties have agreed that RMP should be granted a revenue increase of $50 million to
7 be implemented in two steps. The first step will increase base revenues by $32 million
8 effective on October 22, 2012, and the second step will provide an additional increase of
9 $18 million effective October 1, 2013.
10 Q. HOW DID THE PARTIES ARRIVE AT THE AGREED UPON $50 MILLION
11 REVENUE INCREASE?
12 A. The agreed upon revenue increase is a purely negotiated figure. There is no agreement
13 among the parties, other than the agreements specifically called out in the Stipulation and
14 Agreement with regard to certain issues, regarding adjustments to the Company’s filed
15 rebuttal position that lead to the agreed upon revenue increase. Rather, the parties agree
16 that the $50 million revenue increase, to be implemented in two phases, best balances the
17 benefits to customers of a multi-year rate settlement and deferral of ECAM costs, with the
18 Company’s continuing obligation to fund necessary investments and recover prudent
19 expenses.
20 Q. WHAT BENEFIT WILL THIS TWO STEP INCREASE HAVE FOR
21 RATEPAYERS?
22 A. Absent this stepped rate increase, as I discussed earlier, customers would be faced with
23 the prospect of a onetime base revenue increase of over 8%. Deferring a portion of the
24 agreed upon increase for recovery in 2013 reduces the initial increase in October of this
25 year to approximately 5%.
26 Q. HOW LIKELY IS IT THAT RMP WOULD HAVE BEEN GRANTED THE FULL
27 $57 MILLION DOLLAR INCREASE REQUESTED IN ITS REBUTTAL CASE
28 HAD THIS CASE BEEN FULLY LITIGATED?
Bryce J. Freeman 7 Docket Number 20000-405-ER-il
I A. None of us can know the outcome of a litigated case, unless, of course, it is litigated.
2 Perhaps the Commission would have determined that a lower increase than the total $50
3 miffion agreed to by the parties would have been warranted. However, that increase
4 would be implemented in a single step. The OCA perceives value in deferring the
5 recovery of some of the increase coming out of this case until next year. We also believe
6 that the Company’s agreement not to seek additional rate relief effective prior to January
7 1, 2015 has tremendous value for customers. Therefore, while we cannot know with
8 certainty the outcome of a fully litigated proceeding, we can be sure that such an outcome
9 would not include the benefit of deferring a portion of the rate increase for later recovery
10 (without carrying charges) or the agreement of the Company not to seek additional rate
11 relief for a certain period of time, both of which have value to customers.
12 Q. HOW DID THE PARTIES DETERMINE TIlE APPROPRIATE BALANCE
13 BETWEEN THE AGREED UPON REVENUE INCREASE AND THE BENEFIT
14 OF THE DEFERAL, THE EXTENDED ECAM AMORTIZATION, AND THE
15 OTHER ELEMENTS OF THE STIPULATION AND AGREEMENT?
16 A. The value of the agreement to each settling party is largely intrinsic to individual parties
17 based on the issues raised by that party and that party’s individual assessment of the likely
18 outcome of litigation of those issues as well as other options available to that party.
19 However, each potential resolution, whether it be a single case resolution or multi-year
20 resolution, can be reduced to revenue to be granted to the Company. Each one of those
21 different resolutions has a distinct cash flow impact to the Company and hence a distinct
22 net present value.
23 For example, the agreed upon two step $50 million increase has a lower net present value
24 to RMP than the $57 million onetime increase requested in its rebuttal testimony. The
25 Company’s agreement not to seek additional rate relief effective before 2015 has a
26 different net present value than accepting a onetime increase now but retaining the right
27 to file for additional rate relief at will. As the settlement discussions progressed in this
28 case the parties were acutely aware of the tradeoffs as measured in terms of net present
29 value and I believe strove to balance the outcome with respect to those tradeoffs. The
Bryce J. Freeman 8 Docket Number 20000-405-ER-Il
1 terms and conditions articulated in the settlement explicitly recognize those tradeoffs
2 among the parties and the Company.
3 In the end, however, since each alternative is evaluated relative to the assumed outcomes
4 of all other alternatives, each party must make its own decision regarding whether or not
5 its interests are fairly balanced with those of other parties and the Company. The
6 Commission can be assured that the parties worked very hard to ensure that all interests
7 were fairly balanced including the agreed upon revenue increase and deferral period, the
8 agreed upon ECAM amount and future amortization period, the amortization period for
9 the 2013 ECAM proceeding, and all other elements of the Stipulation and agreement.
10 Q. DOES THE STIPULATION AND AGREEMENT IN THIS CASE ATTEMPT TO
11 RESOLVE FUTURE CASES BEFORE THEY ARE ACTUALLY FILED?
12 A. Not from my perspective. Although the Stipulation and Agreement presented by the
13 parties avoids a general rate case that would otherwise almost certainly be filed later this
14 year, in my view the value for customers is in the avoidance of that rate case and the rate
15 stability that flows from it. While the value to customers of avoiding a base rate increase
16 for a defined period is not tied directly to the estimated outcome of the potential 2013 rate
17 case, still one must make certain assumptions about that outcome in order to assess the
18 value of avoiding it. I believe the parties collectively, and each from its own unique
19 viewpoint, have made those assessments and determined that their constituents will be
20 better served under this agreement than either by litigating this case or resolving this case
21 without consideration of the ECAM cases and other issues discussed in the document. In
22 other words, the parties agree that a total revenue increase of $50 million to be
23 implemented in two steps fairly includes the value of the of the “stay out” provision
24 contained in paragraph 13 of the Stipulation and Agreement, as well as the extended
25 ECAM amortization periods and other elements of the Stipulation and Agreement that
26 provide benefits to customers.
27 Q. IS THE PHASED IMPLEMENTATION OF A BASE RATE INCREASE
28 UNPRECIDENTED?
Bryce J. Freeman 9 Docket Number 20000-405-ER-il
1 A. No. In the stipulation adopted by the Commission in Docket Number 20000-352-ER-09,
2 RMP implemented a $35.5 million total revenue requirement increase consisting of a
3 phase I increase of $25.5 million and a phase H increase of $10 million approximately
4 seven months later. This schedule recognized the fact that future plant investments,
5 although included in the test year, would not be used and useful for serving customers
6 until around the time the phase II increase was implemented. Similarly, in this case RIvIP
7 anticipates that several large plant investments, including the Lakeside 2 plant and the
8 Mona to Oquirrh transmission line, will come into commercial service in 2013. The
9 phase II rate increase of $18 million in October 2013 is timed to roughly coincide with
10 the commercial availability of these investments.
11 Q. WILL THE COMPANY HAVE ACCESS TO OTHER REVENUES TO OFFSET
12 INVESTMENTS IN THE LAKSIDE, MONA TO OQUIRRII, OR OTHER
13 FACILITIES DURING THE PENDENCY OF THE STAY OUT PERIOD?
14 A. Very little if any. Beyond the $50 million base revenue increase agreed to in this case,
15 and customer growth and usage, the Company’s revenues will be flat through at least
16 January of 2015. It will, however, have a continuing obligation to provide safe and
17 reliable service during that period and will need to make investments in its plant and
18 equipment commensurate with that obligation. In that sense, it is important to recognize
19 the interests of customers in safe and reliable service on par with their interest in stable
20 and affordable rates. The revenue increase agreed to by the parties recognizes both of
21 these interests by implementing a rate increase in two phases that mitigates the impact of
22 a onetime rate increase on customers while allowing the Company adequate revenues to
23 satisfy its public service obligations during the stay out period.
24 Q. WHAT IS THE CUSTOMER IMPACT OF EXTENDING THE AMORTIZATION
25 PERIOD OF THE ECAM TO THREE YEARS RATHER THAN COLLECTING
26 THOSE UNDER RECOVERED AMOUNTS IN ONE YEAR AS CALLED FOR IN
27 THE TARIFF UNDER ORDINARY CIRCUMSTANCES?
28 A. As I discussed earlier in my testimony the ECAM that is currently in effect on an interim
29 basis increased revenue from customers an average of 4.84%; more for some classes and
Bryce J. Freeman 10 Docket Number 20000-405-ER-Il
1 less for others. Under the terms of the Stipulation and Agreement the amount collected
2 from customers would be reduced by $2.3 million to $27 million and amortized over a
3 three year period through May 15, 2015. This agreement has a dramatic impact on the
4 amount of revenue that is required from customers during 2012.
5 Since the ECAM surcharge is already in effect on an interim basis, the effect of the
6 ECAM agreement will be to reduce the rates that customers are actually paying currently
7 by an average of 3.5% effective July 1, 2012. Thereafter, when phase I of the base rate
8 increase goes into effect on October 22, 2012, customers will see an average increase of
9 1.78% over the present level of revenues.
10 Amortizing the current ECAM over three years reduces the annual amount that must be
ii collected from customers from $29.3 million to $8.1 million or about $21.2 million
12 dollars which in turn offsets a large portion of the $32 million base rate increase that will
13 be implemented in October of 2012. Bottom line: customers will see a much smaller
14 impact from the base rate and ECAM increases in 2012 than they would have seen absent
15 the Stipulation and Agreement. All of these numbers can be seen on Attachments A
16 through D attached to the Stipulation and Agreement.
17 Q. IS THERE ANYTHING ELSE REGARDING THE TREATMENT OF THE BASE
18 RATE AND ECAM INCREASES IN 2012 THAT YOU PARTICULARLY WISH
19 TO HIGHLIGHT?
20 A. Yes, as stated in paragraph 25 of the Stipulation and Agreement, the deferred balance of
21 the ECAM will not be subject to a carrying charge in the form of interest collected on the
22 unamortized balance of the account through the period to May of 2015. Similarly, there
23 will be no carrying charge associated with the deferral of the $18 million in base revenues
24 for recovery beginning in October of 2013. Additionally, the parties agree that there will
25 be no carrying charge associated with any ECAM amounts required to be recovered as
26 part of the 2013 ECAM filing which will be filed in March of 2013. This is certainly a
27 benefit to customers and makes the net present value of the available alternatives much
28 easier to measure. Had the Company insisted on a carrying charge for either base revenue
Bryce J. Freeman ii Docket Number 20000-405-ER-il
1 deferral or the ECAM extended amortization, I suspect that would have changed the
2 value proposition for all the parties.
3 Q. DO YOU HAVE ANY FURTHER OBSERVATIONS REGARDING THE
4 EXTENDED AMORTIZATION PERIODS FOR THE UPCOMING ECAM
5 PROCEEDINGS?
6 A. I would only observe that what the parties are proposing in the Stipulation and Agreement
7 is to allow the Company to recover costs that it has already incurred to serve customers
8 over a period that is much longer than contemplated in the ECAM tariff. This, of course,
9 has the advantage of reducing what customers must pay now while increasing what they
10 would otherwise pay in the future. Inherent in that trade off is the assumption that
11 markets will not change materially over the future amortization period. If fuel and
12 purchased power markets were to change dramatically over that period, the rates that
13 customers pay could become disconnected from those markets. For example, if fuel and
14 purchased power prices were to rise precipitously before the end of the three year
15 amortization period, customers might be faced with the prospect of increasing future
16 amortizations at the same time past costs are still being amortized from this proceeding.
17 Conversely, if market prices fall, customers will still be committed to amortizing the
18 remaining unrecovered costs from this proceeding and any costs that arise out of the 2013
19 ECAM.
20 Q. IS THIS A MAJOR CONCERN FOR THE OCA?
21 A. No. The parties have taken steps within the framework of the settlement to mitigate the
22 risk that rates will become seriously disconnected from markets while the ECAM
23 deferrals are being amortized. First, I believe the parties have taken care to ensure that
24 the amortization periods for ECAM deferrals do not extend for an unreasonably long
25 period of time. Such a strategy, while further reducing the dollars that customers have to
26 pay now, would unnecessarily expose customers to the risk that market power and fuel
27 prices could change dramatically. Secondly, and more importantly, the parties are
28 recommending base net power costs that will minimize the size of any under recovered
29 net power costs while the deferred power costs are being collected. Since the size of
Bryce J. Freeman 12 Docket Number 20000-405-ER-Il
1 ECAM adjustments are based on the departure of actual net power costs from base net
2 power costs included in rates, establishing a higher base net power cost, all other things
3 equal, will tend to reduce the amount of unrecovered net power costs included in future
4 ECAM proceedings. As shown in paragraphs 10 and 11 of the Stipulation and
5 Agreement, this means that by the time the second phase of the base revenue increase is
6 implemented in October of 2013 the net power costs included in base rates used to
7 calculate the ECAM deferral will be $245.7 million which equals the base net power cost
8 advocated by the Company in its rebuttal testimony. I believe the three year amortization
9 period agreed to by the parties for both the 2012 and 2013 ECAM deferrals, in view of
10 these protections, is reasonable.
11 Q. ARE YOU COMFORTABLE WITH THE $27 MILLION IN ECAM EXPENSES
12 AGREED TO BY THE PARTIES IN THIS PROCEEDING?
13 A. Yes, I am. Although I understand that parties have not yet established positions of record
14 on the level of the currently pending ECAM, I am conlldent that the $27 million agreed to
15 by the parties is fair to customers and is in the range that would be reasonable even if that
16 case were fully litigated. The extended amortization period also has substantial value in
17 assessing the reasonableness of the $27 million on a net present value basis.
18 The parties discussed at length the complicated issues associated with resolving the
19 current ECAM in this proceeding without a clear record for doing so. In the end, the
20 parties concluded, based on the discovery and analysis already done in that proceeding,
21 and the adjustments that might be offered in that proceeding, that the $27 million in
22 deferred net power costs is a reasonable amount to include in the agreement resolving this
23 case. WIEC in particular was helpful in advancing adjustments in net power cost
24 modeling that it would have proposed had the ECAM case proceeded on a stand alone
25 basis.
26 In my view, given the history of ECAM adjustments, it is unlikely that the parties could
27 have justified an ECAM adjustment substantially lower than the agreed upon $27 million.
28 In fact, the average reduction agreed to by parties in ECAM (formerly PCAM)
29 proceedings since 2006 has been about $2.4 million, almost exactly the amount of the
Bryce J. Freeman 13 Docket Number 20000-405-ER-il
1 reduction agreed to by the parties in this case. The following figure shows the requested
2 and approved ECAM adjustments for RMP since 2006:
3 Docket Requested Approved Difference
20000-410-EP-12 $29.3 $27.0 $2.3
20000-389-EP-li $15.9 $13.6 $2.3
20000-363-EP-lO $7.9 $4.4 $3.5
20000-341-EP-09 $26.8 $25.5 $1.3
20000-315-EP-08 $31.0 $28.9 $2.1
20000-266-EP-07 $2.8 $2.5 $0.3
20000-233-EP-05 $16.1 WithdrawnAverage $2.0
4
5 From a historical perspective the $2.3 million reduction to the ECAM requested increase
6 of $29.3 million is consistent with past agreements and is reasonable, particularly given
7 the Company’s willingness to extend the amortization of the $27 million without carrying
8 charges.
9 Q. HAVE THE PARTIES RESOLVED TIlE AMOUNT OF ANY FUTURE ECAM
10 PROCEEDINGS IN THIS STIPULATION AND AGREEMENT?
ii A. No. The parties have agreed to support the amortization of $27 million of deferred net
12 power costs from the currently pending ECAM through May of 2015. The parties have
13 further agreed that any excess net deferred power costs resulting from the 2013 ECAM
14 that are required to be collected from customers will also be amortized over a three year
15 period. However, the parties retain all rights to challenge any amounts included in the
16 2013 ECAM filing and that filing will proceed as specified in the tariff except for the
17 extended amortization period. The Stipulation and Agreement does not address any other
18 future ECAM proceedings that may be filed for Commission consideration.
19 Q. EARLIER IN YOUR TESTIMONY YOU STATED THAT CERTAIN ISSUES
20 RESOLVED BY THE PARTIES ARE CALLED OUT SPECIFICALLY IN THE
21 STIPULATION AND AGREEMENT. WIlY DID THE PARTIES FIND IT
22 NECESSARY TO SPECIFICALLY IDENTIFY THOSE ISSUES?
Bryce 3. Freeman 14 Docket Number 20000-405-ER-il
1 A. As I indicated earlier in my testimony, the agreed upon base revenue increase of $50
2 million is purely a negotiated number and together with the ECAM agreements reflects
3 the value that individual parties ascribe to the settlement as a whole. The parties could
4 not agree upon individual adjustments that would produce the $50 million revenue
5 increase. Further, the parties are not asking the Commission to determine the prudence of
6 any adjustment offered by any party in this proceeding.
7 However, the parties are mindful of the Commission’s continuing regulatory oversight
8 responsibility and have endeavored to agree upon and explicitly state certain key metrics
9 that are necessary for the Commission to oversee the operations of the Company once the
10 rates in this case become effective.
11 To that end, as shown in paragraphs 10 and 11 of the Stipulation and Agreement, the
12 parties have agreed to rate base amounts to be used for purposes of earnings
13 demonstrations that correspond to both the step one and step two increases. As with the
14 revenue and expense adjustments discussed earlier, the parties are not advocating specific
15 adjustments to the rate base supported in the Company’s rebuttal filing. Rather, the
16 parties have agreed to these rate base levels which are simply a ratio of the Company’s
17 rate base in rebuttal based upon the ratio of each step revenue increase as compared to the
18 revenue increase requested in the Company’s rebuttal testimony. The calculation of the
19 agreed upon rate base amounts is shown in the following figure:
20
Bryce J. Freeman 15 Docket Number 20000-405-ER-Il
1
Wyoming RateBase ($
Millions)Docket Number 20000-384-ER-b $1,782.0Rebuttal Rate Base $1,836.6
Total Change $54.6
RevenueIncrease
Step 1 (Percent of Rebuttal) $32.0 56.54%Step 2 (Percent of Rebuttal) $50.0 8 8.34%Rebuttal Revenue Requirement $56.6
Step 1 Rate Base($54.6 million x 56.54% + $1782) $1,812.9
Step 2 Rate Base($54.6 million x 88.34% + $1782) $1,830.2
2
3 In paragraph 14 of the Stipulation and Agreement, the parties express their agreement that
4 the return on equity (ROE) should be set at 9.8%. As with the rate base and expense
5 adjustments proposed by the parties, the agreed upon ROE is not intended as
6 quantification of the agreed upon overall revenue increase. Rather, it is a guide post
7 agreed to by the parties meant to assist the Commission in determining whether the
8 Company’s ongoing earnings are just and reasonable after the rates from this proceeding
9 become effective. Importantly, it is also the ROE level that the parties agree will be used
10 to calculate Allowance for Funds Used During Construction (AFUDC) amounts during
11 the rate effective period, and for all other purposes for which an explicit ROE is required.
12 Q. DO YOU BELIEVE THE RATE BASE LEVELS AND ROE SET OUT IN THE
13 STIPULATION AND AGREEMENT ARE ADEQUATE FOR PURPOSES OF
14 CONTINUING COMMISSION OVERSIGHT?
Bryce J. Freeman 16 Docket Number 20000-405-ER-Il
1 A. Yes. It is common knowledge that the Company is in a period of ongoing capital
2 investment. The agreement among the parties recognizes that the Company will continue
3 to make capital investments in spite of its agreement in this proceeding not to seek
4 additional rate relief to be effective prior to January 2015. For oversight purposes the
5 parties have agreed that rate base should increase roughly commensurate with increases in
6 revenue. This is a reasonable assumption in my view.
7 Regarding the ROE, while it is not tied directly to the agreed upon revenue increase in the
8 Stipulation and Agreement, nevertheless, I believe that it will provide a useful benchmark
9 from which the Commission can fairly assess the reasonableness of the Company’s future
10 earnings levels in the interim prior to the next rate case filing. Even though the agreed
11 upon ROE is higher than what I recommended in my direct testimony in this proceeding,
12 I believe there are several reasons to support it both in absolute terms and on a relative
13 basis.
14 First, and perhaps most practically, due to its continuing capital investment program,
15 R1VIP has not achieved earnings in recent memory that come anywhere close to its
16 authorized earnings level. In fact, RMP has perennially earned at a level 300 to 400 basis
17 points below its authorized ROE, hence the need for annual rate filings. Assuming that
18 the Company’s capital investment program continues on its present path there is no
19 reason to believe that it will exceed its authorized ROE or its return on rate base (ROR)
20 during the rate effective period.
21 Secondly, the Commission should not overlook the fact that the Company has agreed not
22 to file a new rate case until at least March of 2014, thus limiting its right to remedy any
23 under earnings that might develop over that period. This translates to additional risk
24 borne by the Company that would not accrue if the current rate case were settled in
25 isolation and the Company retained its right to seek additional rate relief at any time in
26 the future. The parties have recognized this incremental risk in the form of a slightly
27 higher recommended ROE than would otherwise be justified in the absence of the agreed
28 upon stay out period.
Bryce J. Freeman 17 Docket Number 20000-405-ER-Il
1 Third, on a relative basis the 9.8% stipulated ROE strikes me as reasonable and rational.
2 The Commission has considered at least two other rate cases recently in which the ROE,
3 among other issues, was in dispute. One was a litigated case and the other involves a
4 settlement among the parties. In Questar Gas (Docket Number 30010-1 l3-GR-l) OCA
5 witness Kimber Wichman recommended an ROE of 8.4% while the Company proposed a
6 10.25% ROE. At deliberations the Commission authorized a return on invested equity
7 capital for Questar of 9.16% (a fmal order in that case is still pending). Questar is an A
8 rated natural gas distribution company with commensurate risk. In the Cheyenne Light
9 Fuel & Power (CLF&P) proceeding (Docket Numbers 20003-114-ER-il and 30005-157-
10 GR-1 1) I recommended a 9.25% ROE while the Company proposed a 10.9% ROE.
11 CLF&P is a BBB rated combination gas and electric utility. CLF&P subsequently agreed
12 to a 9.6% ROE in a settlement that was approved by the Commission on June 18, 2012
13 (written order still pending). In this case I recommended a 9.0% ROE for RIVIP which,
14 like Questar, is an A rated utility.
15 Implicit in the Commission’s determination in the Questar case is an upward adjustment
16 in the OCA recommended ROE of 59 basis points. The parties in the CLF&P proceeding
17 agreed to an upward adjustment of 35 basis points to my recommended 9% ROE.
18 Although the risk profiles of RMP, CLF&P and Questar are not directly comparable, and
19 I make no attempt to assess their comparability here, still the upward adjustment in the
20 allowed ROE for Questar provides some rationale for the positive correlation between
21 what the Commission views as a market based rate of return and what the parties have
22 agreed to in the RMP case.
23 The risk return relationship discussed at length in my direct testimony would dictate that
24 as an A rated company RMP would require an ROE somewhat less than CLF&P, a BBB
25 rated company, notwithstanding the different business risks faced by each company.
26 Assuming an adjustment similar to the adjustment made by the Commission in the
27 Questar case and agreed to in the CLF&P case, the stand alone market cost of equity of
28 RMP would be in the 9.4% to 9.6% range. This implies a risk increment for the stay out
29 provision of the stipulation of 20 to 40 basis points which is entirely reasonable in my
30 view.
Bryce J. Freeman 18 Docket Number 20000-405-ER-il
1 CARBON AND NAUGHTON
2 Q. WHAT HAVE THE PARTIES AGREED TO WITH REGARD TO THE CARBON
3 AND NAUGHTON CASES CITED EARLIER IN YOUR TESTIMONY?
4 A. The Carbon plant is a coal fired generation plant located in Utah that was built in the
5 1950s. The Company is faced with upgrading the plant to comply with current
6 environmental regulations or retiring the plant in the near future. Unfortunately, Carbon
7 is located in the mouth of a canyon with little to no space available to add the additional
8 environmental control equipment. The Company has determined that upgrading the plant
9 to comply with applicable environmental regulations is technically infeasible and
10 therefore expects to retire the plant in early 2015.
11 The current depreciation life of the Carbon plant runs through 2020, its previously
12 planned retirement date. Retirement and removal of the plant from the Company’s books
13 in 2015 would require the remaining undepreciated plant balance to be amortized over a
14 period of approximately one year. Such an increase in depreciation expense would have a
15 material impact on customer rates during that period.
16 In view of that fact, the parties have agreed to allow the Company to continue to
17 depreciate the plant through the end of its planned life in 2020. Under this agreement
18 there will be no change in the depreciation rate for the Carbon plant and customer rates
19 will not be impacted by accelerated depreciation expenses due to the early retirement of
20 the plant.
21 Q. WHAT CONSIDERATIONS DID YOU MAKE IN AGREEING TO THIS TERM
22 OF THE STIPULATION AND AGREEMENT?
23 A. The tradeoff here relates to the fact that current customers could be materially impacted
24 by accelerating the depreciation of the Carbon plant, but future customers will be paying
25 depreciation expenses for a plant that is no longer used and useful for providing service if
26 the remaining plant balance is recovered through 2020. This creates some degree of
27 generational inequity between current and future customers.
Bryce J. Freeman 19 Docket Number 20000-405-ER-Il
I On this issue the OCA agrees that it would be inadvisable to cause a one year spike in
2 depreciation expense at a time when customers are already seeing frequent increases in
3 their rates. Although the remaining balance of the Carbon plant will be amortized over a
4 period during which the plant is not in service, considering the age of the plant and its
5 remaining balance, the OCA does not believe that accelerated recovery of the remaining
6 plant balance is in the best interest of customers.
7 Q. WHAT IS THE AGREEMENT ON NAUGHTON 3 DEVELOPMENT COSTS?
8 With regard to the Naughton Unit 3 agreement, the parties have agreed that the Company
9 should be allowed to amortize the permitting and development costs incurred to support
10 the environmental upgrades, up to the point in time that the Company decided to cease
11 development of the environmental upgrades. This amounts to approximately $1.2 million
12 on a Wyoming allocated basis. Naughton 3 is a coal fired generation plant located near
13 Kemmerer in western Wyoming. It must be upgraded to comply with current
14 environmental regulations by the end of 2014 or be retired or repowered. Pursuant to its
15 CPCN application in Docket Number 20000-400-EA-1 1, the Company has decided to
16 convert Naughton 3 to bum natural gas rather than pursuing the environmental upgrades
17 necessary for the plant to continue to burn coal.
18 The most important point for the Commission to understand about the parties’ agreement
19 on the Naughton plant is that although the Company will be allowed to amortize the
20 development costs, that amortization will not increase the amount of agreed upon revenue
21 increase in this case. Rather, the Naughton 3 amortization expense is assumed to be
22 included in the $50 million revenue increase agreed to by the parties. The OCA believes
23 this is an equitable resolution of a contentious issue. The Company is allowed to recover
24 the costs without additional burden to rate payers.
25 OTHER ISSUES
26 Q. HAVE THE PARTIES MADE AGREEMENTS IN OTHER AREAS OF THIS
27 CASE?
Bryce J. Freeman 20 Docket Number 20000-405-ER-il
1 A. Yes. These agreements relate both to issues raised by the parties in this case and to work
2 that the parties have committed to do during the interim prior to the filing of the
3 Company’s next general rate case. I’ll discuss the resolution of issues raised by parties in
4 the case first.
S Paragraph 15 of the Stipulation and Agreement discusses the treatment of the
6 depreciation study that the Company will be filing later this year. Ordinarily, changes in
7 depreciation expense would be reflected in the rates flowing from the next general rate
8 case. However, because RIvIP has agreed not to file an application for new rates to be
9 effective until at least January of 2015, there will be a one year period (2014) during
10 which the Company would be foreclosed from reflecting depreciation expense changes in
11 rates. The parties agree to the establishment of a deferral of depreciation expense
12 changes during this one year period until they are reflected in rates pursuant to the next
13 general rate case. There will be no carrying charge on this deferral and the parties have
14 reserved their right to contest the Company’s depreciation study when it is filed.
15 In her direct testimony in this case, Denise Parrish of the OCA advocated extending the
16 period over which the remaining investment in the Klamath hydro facilities are
17 depreciated since the actual retirement date is uncertain and depends on Congressional
18 action. Pursuant to paragraph 21 of the stipulation the parties have agreed that the
19 remaining balance of the Klamath project will continue to be amortized over its currently
20 authorized life for purposes of settlement in this proceeding. However, the parties reserve
21 their right to raise this issue in future proceedings.
22 The parties have also agreed, as reflected in paragraph 22 of the Stipulation and
23 Agreement, that the investment in the Hunter units 1 and 2 environmental controls, as
24 well as increased operating expenses associated with those controls, should be deemed
25 prudent by the Commission. WIEC witness Howard Gephart recommended in his
26 testimony that the investment and increased operating expenses associated therewith be
27 excluded from recovery through customer rates. As with the Naughton Unit 3
28 development costs, allowing these investments in rate base in this case has no corollary in
29 the negotiated revenue increase of $50 million. The additional costs associated with the
Bryce J. Freeman 21 Docket Number 20000-405-ER-il
1 Hunter environmental controls are assumed to be included in the $50 million revenue
2 increase agreed upon in this case.
3 Paragraph 17 of the Stipulation and Agreement addresses the disposition of revenue
4 associated with RMP’s pending FERC transmission rate case. Essentially, the parties
5 have agreed that additional wholesale transmission revenues collected with the effective
6 date of rates in this case and continuing until rates from the next rate case are effective
7 will be deferred and credited back to customers through the ECAM mechanism.
8 Paragraph 19 of the Stipulation and Agreement discusses the parties’ agreement on rate
9 spread and rate design. Because of the agreement in the Cost of Service Collaborative
10 that was held last year, no party in this proceeding has objected to the cost of service
11 study presented by the Company in this proceeding. This substantially narrows the
12 contestable issues regarding rate spread and rate design, although it does not eliminate
13 them. Specifically, in its direct testimony AARP advocated a residential monthly
14 customer charge decrease of $2 per month to $18 rather than the $20 residential monthly
15 customer charge that is currently in effect. The Company proposed a $2 monthly increase
16 to $22 per month for the monthly residential customer charge. In its direct testimony, the
17 OCA advocated leaving the $20 residential monthly customer charge unchanged. The
18 settling parties agree that the $20 residential monthly customer charge should remain at
19 $20. However, AARP did not sign the agreement and may contest this issue at the
20 hearing.
21 Q. WHAT ARE THE ISSUES RAISED BY INTEVENERS IN THIS CASE FOR
22 WHICH THE PARTIES HAVE AGREED TO DO MORE WORK BEFORE THE
23 FILING OF THE COMPANY’S NEXT RATE CASE?
24 A. There are several. In her direct testimony Ms. Parrish recommended a substantial
25 expense reduction related to hedging losses the Company suffered during the test period.
26 Over the last several rate cases Ms. Parrish has questioned the Company’s hedging
27 policies and suggested that its hedging program might be exposing customers to
28 imprudent risk, even though in those cases the hedging program produced net gains. The
29 focus in her analysis was on the mechanics of the program and not necessarily whether
Bryce J. Freeman 22 Docket Number 20000-405-ER-Il
1 that program resulted in gains or losses, although in the instant case Ms. Parrish did
2 recommend that half the Company’s hedging losses during the test period be disallowed.
3 The parties have agreed in the Stipulation and Agreement to engage in a Hedging
4 Collaborative, as discussed in paragraph 24, which is designed to fully vet the Company’s
5 hedging policies to determine if changes in that policy are reasonable and appropriate. If
6 any agreements are reached, those policy changes will be implemented by RMP.
7 However, the parties retain their rights to contest any unresolved issues and further, the
8 impact on future rates any policy changes implemented by the Company would be subject
9 to review and approval in future proceedings before the Commission.
10 On the issue of the two tier residential rate design, the parties have also agreed that the
11 Company will conduct a residential energy usage study. In her testimony, Ms. Wichmann
12 proposed that the separation between the tier one and tier two rates be set at 600 kWhs of
13 usage per month. The study conducted by the company will incorporate a number of
14 elements to assist the parties in determining the appropriate energy usage for each tier in
15 the in the residential energy rate structure. The parties also intend to meet once the study
16 is complete to discuss its results and possibly agree on a revision to the residential usage
17 blocks to be included in the Company’s next rate case filing.
18 Finally, and coming full circle to where I started my supplemental testimony, the parties
19 have agreed, as set out in paragraph 20 of the Stipulation and Agreement, to engage in
20 collaborative discussions regarding the potential development of unbundled rates and
21 alternative rate making mechanisms. From my perspective, the objective of these
22 discussions will be to assess the potential for alternative rate mechanisms to reduce the
23 frequency and magnitude of future rate increases bringing a measure of predictability and
24 stability to RMP’s rates. My expectation is that nothing will be off the table in these
25 discussions and that the parties will have a robust discussion of what alternatives might
26 benefit customers while incenting the Company to manage its costs and operational
27 performance. The parties agree to report the results of these discussions to the
28 Commission.
Bryce J. Freeman 23 Docket Number 20000-405-ER-il
1 Q. ARE THERE ANY OTHER PROVISIONS OF THE STIPULATION THAT YOU
2 WISH TO CALL ATTENTION TO?
3 A. There is one other provision that I think is important and should be called out specifically
4 here. Paragraph 29 of the Stipulation and Agreement describes the notice that the
5 Company has agreed to provide to its customers regarding the two step rate increase. The
6 OCA believes that customers deserve adequate notice of rate changes when they take
7 place. This provision of the Stipulation and Agreement will provide customers timely
8 notice of the 2012 rate increase as well as advance notice of the 2013 rate increase and a
9 second notice of that rate change closer to the 2013 effective date, all to be reviewed in
10 advance by the Commission Staff. We recognize that these rate changes will be noticed
11 according to the requirements of the Wyoming Administrative Procedures Act but we
12 think it is also important to provide customers with individual notice in terms that are
13 generally understood by customers. The OCA is satisfied that this provision will give
14 customers adequate notice of the agreed upon rate changes.
15 CONCLUSTION
16 Q. IS THE COMMISSION BOUND BY THE TERMS OF THE AGREEMENT
17 REACHED BY THE PARTIES IN THIS PROCEEDING OR OTHEWISE
18 OBLIGATED TO APPROVE THE AGREEMENT?
19 A. No, most certainly not. The Commission, by law, is charged with supporting and
20 protecting the public interest. It does so by rendering decisions based upon evidence that
21 is brought before it in public hearings. If the Commission fmds that the evidence
22 supports the Stipulation and Agreement submitted by the parties in this proceeding, then
23 the Commission can approve the agreement. If, on the other hand, the Commission finds
24 that the Stipulation and Agreement is not supported by the evidence of record, then it can
25 reject the stipulation.
26 From my perspective, this Stipulation and Agreement is an option for the Commission to
27 consider in resolving this case in the public interest. It is an option that has the support of
28 the vast majority of the interveners as well as the Company. It has been fully vetted in
29 lengthy and contentious negotiations among all of the parties in this case. But more than
Bryce J. Freeman 24 Docket Number 20000-405-ER-il
1 that, it has the added advantage, if approved, of finding value for customers outside of the
2 four corners of the filed rate case. The parties, by incorporating elements of not only the
3 rate case but also the Carbon, Naughton and ECAM cases have added rate payer value to
4 this settlement that would likely be unattainable through a litigated resolution of the
5 issues if litigated separately. I have come to realize the value of these types of settlement
6 agreements in providing additional options for the Commission to consider that are
7 beyond the ability of parties, or the Commission on its own motion, to create out of whole
8 cloth.
9 While the resolution of these cases in this proceeding might not be precisely how the
10 OCA or other parties would have argued these cases individually, nevertheless, the
11 combined value of the result to customers is greater than the sum of the individual cases
12 in combination. Therefore, I fmd this Stipulation and Agreement to be consistent with
13 the public interest and urge its adoption.
14 Q. DOES THAT CONCLUDE YOUR SUPPLEMENTAL TESTIMONY IN THIS
15 PROCEEDING?
16 A. Yes, it does.
Bryce J. Freeman 25 Docket Number 20000-405-ER-Il
BEFORE TIlE PuBLIC SERVICE COMMISSION OF WYOMING
IN TIlE MATTER OF THE APPLICATION OF )ROCKY MOUNTAIN POWER FOR )APPROVAL OF A GENERAL RATE ) Docket No. 20000-405-ER-liINCREASE IN ITS RETAIL ELECTRIC ) (Record No. 13034)UTILITY SERVICE RATES IN WYOMING OF )$62.8 MILLION PER YEAR OR 10.4 PERCENT )
IN THE MATTER OF THE APPLICATION OF )ROCKY MOUNTAIN POWER TO INCREASE )RATES BY $29.3 MILLION OR 4.82 PERCENT ) Docket No. 20000-410-EP-12TO RECOVER $29.3 MILLION IN DEFERRED ) (Record No. 13117)NET POWER COSTS THROUGH THE )ENERGY COST ADJUSTMENT MECHANISM )
IN THE MATTER OF THE APPLICATION OF )ROCKY MOUNTAIN POWER FOR A )DEFERRED ACCOUNTING ORDER ) Docket No. 20000-413-EA-12REGARDING COSTS INCURRED FOR ) Record No. 13158NAUGHTON UNIT 3 SELECTIVE )CATALYTIC REDUCTION SYSTEM, PULSE )JET FABRIC FILTER SYSTEM AN]) )RELATED ENVIRONMENTAL UPGRADES )
IN THE MATTER OF THE APPLICATION OF )ROCKY MOUNTAIN POWER FOR A )DEFERRED ACCOUNTING ORDER TO ) Docket No. 20000-414-EA-12DEFER THE COSTS RELATED TO THE ) (Record No. 13159)DECOMMISSIONING OF THE CARBON )PLANT )
AFFIDAVIT, OATH AND VERIFICATION
Bryce J. Freeman (Affiant) being of lawful age and being first duly sworn, hereby deposes andsays that:
Afflant is the Administrator of the Wyoming Office of Consumer Advocate which is aparty intervener in the general rate increase application pursuant to its Notice ofIntervention filed on December 22, 2012.
Affidavit of Bryce J. Freeman
Affiant prepared and caused to be filed the foregoing testimony. Affiant has, by allnecessary action, been duly authorized to file this testimony and make this Oath andVerification.
Affiant hereby verifies that, based on Affiant’s knowledge, all statements andinformation contained within the testimony and all of its attached schedules are true andcomplete and constitute the recommendations of the Affiant in his official capacity asAdministrator of the Wyoming Office of Consumer Advocate.
Further Affiant Sayeth Not.
Dated this 20th day of June, 2012.
STATE OF WYOMNG )) SS:
Bryce J. eem AdministratorWyoming Office of Consumer Advocate2515 Warren Avenue, Suite 204Cheyenne, WY 82002(307) 777-5742
COUNTY OF LARAMIE )
The foregoing was acknowledged before me by Bryce J. Freeman on this 20th day ofJune, 2012. Witness my hand and official seal.
My Commission Expires: co - ti — /3Notary
£2 1&&’-
Affidavit of Bryce J. Freeman