FILED MAY BEFORE THE WYOMING PUBLIC SERVICE COMMISSION OF WYOMING IN THE MATTER OF THE APPLICATION ) OF ROCKY MOUNTAIN POWER TO )

Transcription

1 IN THE MATTER OF THE APPLICATION ) OF ROCKY MOUNTAIN POWER TO ) PUBLIC SERVICE COMMISSION OF WYOMING MAY Testimony of Bryce J. Freeman 1 Docket No EA-1 1 Hearing Date: August 1, 2011 Filed: May 26, 2011 On behalf of the Wyoming Office of Consumer Advocate Bryce J. Freeman PRE-FILED DIRECT TESTIMONY OF IMPLEMENT A PERMANENT AVOIDED ) Docket No EA-1 1 COST METHODOLOGY FOR CUSTOMERS ) Record No THAT DO NOT QUALIFY FOR TARIFF ) SCHEDULE 37 ) FILED BEFORE THE WYOMING PUBLIC SERVICE COMMISSION OF WYOMING

2 1 Q. PLEASE STATE YOUR NAME, ADDRESS AND OCCUPATION. 2 A. My name is Bryce J. Freeman. My business address is 2515 Warren Avenue, Suite 304, 3 Cheyenne, WY, I am the Administrator of the Wyoming Office of Consumer 4 Advocate (OCA). The OCA is an independent consumer advocacy agency that was 5 created by an act of the legislature in the 2003 general session. 6 Q. WHAT IS THE FUNCTION OF THE OCA? 7 A. Pursuant to W.S , 8 The office of consumer advocate shall represent the interests of Wyoming 9 citizens and all classes of utility customers in matters involving public 10 utilities. In the exercise of its powers the office of the consumer advocate 11 shall consider all relevant factors, including, but not limited to, the 12 provision of safe, efficient and reliable utility services at just and 13 reasonable prices. 14 Q. ARE THE ANALYSES AN]) RECOMMENDATIONS OF THE OCA, IN THIS OR 15 ANY OTHER CASE BEFORE THE COMMISSION, INFLUENCED OR 16 DIRECTED BY THE COMMISSION? 17 A. No. Although the OCA is a division within the Commission according to W.S , it is a separate division with no reporting or supervisory links to the Commission. 19 The OCA has the right under W.S (u) to appeal decisions of the Commission 20 that it does not find in the public interest. The only link between the OCA and the Public 21 Service Commission is the source of common funding provided by the assessment on 22 gross utility operating revenues; this assessment funds both the Commission and the 23 OCA. Additionally, as Administrator of the OCA, I report directly to the Governor of 24 Wyoming. 25 Q. PLEASE DESCRIBE YOUR EDUCATIONAL BACKGROUND AND 26 OCCUPATIONAL EXPERIENCE. 27 A. I received a Bachelor of Science degree in business administration from the University of 28 Wyoming in The area of concentration in my undergraduate work was statistics. 29 After graduating from the University of Wyoming, I was employed for three years by the 30 Laramie County Treasurer as Deputy Treasurer, and then for six years by the Wyoming Testimony of Bryce J. Freeman 2 Docket No EA-1 1

3 1 Department of Revenue as a Principal Appraiser dealing primarily with utility valuation 2 and capital cost issues. I came to the Wyoming Public Service Commission in April of , in the capacity of Senior Economist, serving in that position for approximately two 4 years. In 1996 I accepted a position as Lead Rate Analyst in the rates and pricing section 5 on the Commission Staff, and in May of 2003, I was appointed Administrator of the 6 OCA. 7 In July of 2004, I was appointed to a two-year term of service on the board of the 8 Wyoming Infrastructure Authority (WIA). In July of 2006, I was reappointed to a four 9 year term and in 2010, I was appointed to a second four year term on the WIA Board. I 10 currently serve as secretary of the WIA Board of Directors. Also in 2004, I was elected to 11 the position of Secretary of the National Association of State Utility Consumer Advocates 12 or NASUCA, which is a national trade association composed primarily of state chartered 13 consumer advocate offices throughout the country. In November of 2010, I stepped down 14 as NASUCA Secretary and currently serve on the NASUCA Executive Committee. My 15 participation in both of these organizations provides me with unique knowledge and 16 experience upon which I can draw in formulating advocacy positions on behalf of 17 Wyoming utility consumers. 18 In 2010, I was appointed by the Board of Directors of the Western Electricity 19 Coordinating Council (WECC) to serve as a consumer representative on the Scenario 20 Planning Steering Group (SPSG). The SPSG was created to facilitate the development of 21 a Regional Transmission Expansion Plan (RTEP) pursuant to a contract that WECC 22 entered into with the U.S. Department of Energy (DOE). Funding for the RTEP project 23 was provided by DOE under the terms of the American Recovery and Reinvestment Act 24 (ARRA). My participation in the RTEP project is another source of unique and valuable 25 insight into regional electricity issues that assist me in advocating for the interests of 26 Wyoming consumers. 27 Q. HAVE YOU TESTIFIED BEFORE THIS COMMISSION IN PREVIOUS 28 PROCEEDINGS? 29 A. Yes. I have detailed the cases in which I have testified before this Commission in 30 Appendix A, attached to my testimony. I have also offered testimony before the Federal Testimony of Bryce J. Freeman 3 Docket No EA-1 1

4 1 Communications Commission, the Federal Energy Regulatory Conmiission and the 2 United States Congress. 3 Q. ON WHOSE BEHALF DO YOU APPEAR HERE TODAY? 4 A. I appear here today on behalf of the OCA. As I indicated previously, the OCA is an 5 independent party in this proceeding, separate and apart from the Commission or its 6 advisory staff. 7 Q. AS A MEMBER OF THE OCA, DO YOU ADVOCATE THE INTERESTS OF 8 CERTAIN GROUPS OF CONSUMERS OVER OTHERS? 9 A. No. As a member of the OCA, it is my statutory obligation to advocate the best interest 10 of all citizens in the state. Specifically, W.S states that the OCA shall 11 represent the interests of Wyoming citizens and all classes of utility customers in 12 matters involving public utilities. This public interest standard requires the OCA to 13 represent the broadest possible utility consumer constituency, even though some of those 14 consumers may also be represented independently as parties in this case. The OCA is 15 responsible for balancing the positions and recommendations of the Company, and of 16 other parties, to arrive at a set of recommendations that serve the overall long term public 17 interest. 18 Q. ARE YOU SPONSORING ANY EXHIBITS IN THIS PROCEEDING? 19 A. No, all of the information that I wish to present to the Commission in this proceeding is 20 contained in the body of my direct testimony. 21 Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY IN THIS PROCEEDING? 22 A. My testimony presents a review and critique of Rocky Mountain Power s (RMP) 23 proposed Avoided Cost Methodology and new tariff, Schedule 38, governing timelines, 24 and contract terms and conditions for Non-Standard Qualifying Facilities (QFs). Non- 25 Standard QFs are qualifying facilities under the terms of the Public Utilities Regulatory 26 Policies Act (PURPA) that do not qualify for avoided cost pricing under Schedule which governs avoided cost pricing for Standard QFs. Standard QFs have a capacity 28 rating of 10 megawatts (MWs) or less while Non-Standard QFs have a capacity rating of Testimony of Bryce J. Freeman 4 Docket No EA-1 1

5 1 more than 10 MWs. In its application in this case RMP is proposing an avoided cost 2 pricing methodology for Non-Standard QFs as well as formal conditions and timelines 3 that must be met in order for Non-Standard QFs to obtain avoided cost pricing. Since this 4 particular proposal does not impact avoided cost prices for Standard QFs under Schedule 5 37, I will refer to Non-Standard QFs simply as QFs unless otherwise noted in my 6 testimony. 7 Q. PLEASE PROVIDE THE COMMISSION WITH SOME BACKGROUND 8 REGARDING RMP S QF PROPOSAL IN THIS PROCEEDING. 9 A. Certainly. As the Commission will recall, the establishment of avoided cost prices for 10 RIvIP began with Docket Number ER-07, an RMP general rate case. As part 11 of the stipulation and agreement resolving that case the parties agreed to convene a 12 pricing and load growth collaborative to discuss the potential resolution of certain issues 13 relating to increased Wyoming load growth, particularly among RMP s industrial 14 customers. Although the parties to the collaborative discussed and reported on a wide 15 variety of issues pursuant to the collaborative, discussion of updated avoided cost prices 16 is most germane to this case. In the final report to the Commission, the parties agreed 17 that RIvIP would file an application establishing a defmitive pricing methodology for QFs 18 seeking avoided cost prices. RMP filed its application in Docket Number ER onfebruary 3, Ultimately the parties to that proceeding entered into a settlement agreement that resolved 21 all of the outstanding issues in that proceeding. The Commission subsequently approved 22 the agreement with slight modifications pursuant to an order issued on November 30, The stipulation in that case is the framework for establishing avoided cost prices 24 for QFs that is currently in effect and which is the subject of RMP s application in this 25 proceeding. 26 Q. WHAT WERE THE MAIN ISSUES RAISED IN THE EARLIER CASE? 27 A. The main issues in the earlier case generally fell into three categories: 1) the method and 28 assumptions used in establishing avoided cost prices for QFs between 10 and 100 MWs, Testimony of Bryce J. Freeman 5 Docket No EA-l 1

6 1 2) the term over which those fixed avoided cost prices would be in effect for eligible QFs, 2 and 3) the process that would govern the development of a Power Purchase Agreement 3 (PPA) between RMP and eligible QFs. 4 Q. CAN YOU BE MORE SPECIFIC WITH REGARD TO THOSE ISSUES? 5 A. Certainly. With regard to the avoided cost methodology, RMP proposed to use a Partial 6 Displacement Differential Revenue Requirement (PDDRR) method to establish the 7 starting point for negotiating prices in a PPA. The development and operation of the 8 PDDRR method was well vetted and thoroughly explained in the earlier proceeding so I 9 won t rehash it here. There were, however, some concerns expressed by the parties in 10 that proceeding regarding how the Company planned to implement the PDDRR method. ii One of the major concerns expressed by parties, including me, is that RMP proposed to 12 calculate the capacity deferral value of all QF resources based on the partial displacement 13 of a natural gas Combined Cycle Combustion Turbine (CCCT) as a proxy for the deferred 14 capacity. For example, the capacity deferral value of a wind QF would have been based 15 on the value of deferring a portion of the capacity of a CCCT even though the wind QF 16 would have a dramatically different capacity factor than a CCCT. I argued that the value 17 of capacity deferred by a QF should be based on a proxy similar in character to the QF s 18 resource. In other words, the value of QF capacity supplied by wind should be measured 19 against the value of Company deferred wind capacity and the value of CCCT capacity 20 should be based on Company deferred CCCT capacity, and so on. 21 RMP also proposed to devalue the capacity provided by QFs located in the east of 22 Naughton transmission area since there is no transmission capacity available to move that 23 generation out of the local area. This basically means that generation located in this area, 24 either Company owned or QF, essentially displaces existing local generation since it 25 cannot be moved to another area on the system to serve load. I argued that it would be 26 unfair to QFs to devalue their additional capacity when RMP has located much of its new 27 wind generation in this area and is currently ramping its local coal plants to follow the 28 wind. QF generation should be on an equal footing with Company owned or third party 29 generation as a matter of compliance with the requirements of PURPA. Testimony of Bryce J. Freeman 6 Docket No EA-ll

7 I RMP also proposed that fixed avoided cost prices only be available to QFs for a period of 2 five years after which the QF developer would be required to negotiate a new PPA with 3 the Company. The Company argued that it did not wish to be locked into a long term 4 PPA that, at some point in the future, might be above market. I argued that even 5 Company owned and third party generation resources might be above market at some 6 point in the future but that the Company has very little if any risk of not recovering their 7 investment in these resources once they are included in rate base. As a practical matter, 8 QFs would not be able to obtain financing for project development if avoided cost prices 9 are only known for five years into the future. Again, as matter of fairness and compliance 10 with PURPA, QFs should be treated in the same manner as Company owned or third 11 party generation resources. 12 Finally, there were a number of issues raised with regard to the information that would 13 need to be supplied by a QF before PPA negotiations could begin as well as when that 14 information would be required in the PPA negotiation process and what obligations the 15 Company would have to respond to it. RMP requires detailed information regarding the 16 location, type of equipment and interconnection arrangements, among others, undertaken 17 by the QF developer, before it will enter into good faith negotiations on a PPA. On the 18 other hand, QF developers need some assurance that the Company s contracting practices 19 will not lead to unreasonable delays in developing the QF project. 20 Q. WERE ALL OF THESE ISSUES RESOLVED AMONG THE PARTIES IN A 21 MUTUALLY AGREEABLE WAY? 22 A. Yes. I believe the Stipulation and Agreement in that case, as amended and approved by 23 the Commission, resolved all of the outstanding issues in a way that was satisfactory to 24 all parties involved. From my perspective, I advocated changes to the Company s 25 proposal that I believed would make the process of establishing avoided costs and 26 developing PPAs more fair to QFs while ensuring that customers would not be harmed as 27 a result of the utility having to purchase the output of a QF. As I said in that case, if a QF 28 project can provide resources that are beneficial to customers then they ought to be Testimony of Bryce J. Freeman 7 Docket No EA-l 1

8 1 considered alongside any plans the utility has to add resources of its own of the same 2 general quality and character. 3 Q. HOW DID THE STIPULATION AND AGREEMENT RESOLVE THE MAIN 4 ISSUES YOU DISCUSSED ABOVE? 5 A. On the issue of the proxy resource to be used in valuing the deferred capacity of a QF 6 resource the Company agreed to use a wind proxy to value the capacity of a QF wind 7 resource and a CCCT as the proxy for other resources. On the issue of the term for 8 receipt of fixed prices, the parties structured a stratified arrangement to be consistent with 9 the Company s Integrated Resource Plan (IRP). Any new QF wind resource seeking 10 avoided cost pricing for commercial deliveries in 2010 was limited to a five year contract 11 term. Wind QFs with commercial deliveries beginning in 2011 would receive 20 year 12 fixed prices, but only for the first 50 MWs in the queue. The same is true for the first MWs of commercial deliveries in The parties assumed that a new process would 14 be in place that would address QF issues going forward after Importantly, RMP 15 agreed that there would be no QF capacity devaluation based on the location of QF 16 projects in the east of Naughton transmission area. The parties also agreed on a process 17 to govern the development and execution of PPAs which included the resolution of 18 pricing issues related to contract queuing. Although there were some ancillary issues and 19 agreements addressed in the Stipulation, these were the agreements on the main issues 20 that arose in the earlier case and which the Commission approved. 21 Q. IS THE COMPANY PROPOSING A WHOLESALE REVISION TO THE 22 PROCESS AND STRUCTURE FOR AVOIDED COST PRICING THAT WAS 23 DEVELOPED IN THE AGREEMENT IN THE EARLIER PROCEEDING? 24 A. No. In fact, RMP is proposing to continue the current practices and methods for 25 developing and implementing avoided cost prices largely unchanged. Capacity valuation 26 will still be based on a resource specific proxy for wind QFs and a CCCT proxy for all 27 others, as described above. The Company also proposes that the limit of 50 MWs of 28 commercial deliveries per year in 2011 and 2012 be eliminated for deliveries in 2013 and 29 beyond, and that all QF wind projects be eligible for contract terms of up to 20 years. Testimony of Bryce J. Freeman 8 Docket No EA-1 1

9 I QFs are projects between 10 and 100 MWs; QF wind projects over 100 MWs would still 2 be required to bid into an official supply side RFP, and projects 10 MWs and under 3 would still get fixed avoided cost pricing pursuant to Schedule 37 of the Company s 4 Wyoming tariff. 5 The Company also proposes that the capacity deferral be based on the most current IRP 6 information available at the time a QF requests avoided cost prices. This mitigates, but 7 does not completely eliminate, the timing issue that I discussed in my testimony in the 8 earlier case whereby a QF could be receiving capacity prices based on an IRP that is 9 nearly two years old. The Company also proposes that any changes to the GRID model 10 (the GRID model is used to develop avoided energy costs as well as avoided capacity 11 costs) that are ordered by the Commission in a general rate case proceeding, will be 12 incorporated into the GRID model for purposes of developing avoided cost prices. These 13 types of improvements to the GRID model would not be subject to approval for use in the 14 PDDRR calculations. 15 Finally, the Company is requesting approval of a new tariff, Schedule 38, that will govern 16 the negotiation, development and adoption of a PPA between RMP and QF developers. 17 While this tariff is new and does represent a change to the current tariffs effective in 18 Wyoming, it does not change current practice regarding this process which was 19 established in the last avoided cost docket. It simply codifies the current practice, in tariff 20 form, and which all parties agreed to in the most recent avoided cost docket. 21 Q. IS THE CURRENT PRACTICE FOR DEVELOPING PPAS WORKING WELL 22 FOR BOTH THE COMPANY AND POTENTIAL QF DEVELOPERS? 23 A. By all accounts it is working as intended. The stipulation in the earlier case allowed for MWs of new QF wind in 2011 and an additional 50 MWs in According to the 25 stipulation those purchases receive fixed pricing for a term of up to 20 years and the 26 capacity value is determined using the next IRP wind resource as the deferral proxy. QF 27 wind projects over and above the first 50 MWs receive fixed pricing for a term of up to 28 five years using a wind proxy for the deferral, or a term of up to 20 years using a CCCT Testimony of Bryce J. Freeman 9 Docket No EA-1 1

10 I proxy. Non-gas QFs receive fixed pricing for a term of up to five years. Non-wind 2 projects greater than 100 MWs are required to bid into a Company RFP. 3 RMP reports that it received nine requests for avoided cost pricing between December and March Eight of these were for QF wind projects and one was for a non- 5 wind QF. Of the nine requests two developed into PPAs, both wind projects and both 6 with a 49.5 MW nameplate capacity rating. Both projects are being sponsored by the 7 same developer. It is my understanding that the first project is well underway and will 8 reach commercial operation by the end of The second project, which has been the 9 subject of recent consideration by the Commission, was scheduled to reach commercial 10 operation by the end of However, due to unforeseen and evolving environmental 11 regulations that project will not be in service by the end of Q. DID YOU RAISE CONCERNS IN THE EARLIER PROCEEDING THAT WERE 13 ADDRESSED IN THE STIPULATION? 14 A. Yes, I raised two principal concerns. First, I objected to the fact that the Company s 15 PDDRR methodology for establishing avoided cost prices, by using a CCCT as the 16 generic proxy for all QF resources, didn t accurately capture the cost the Company would 17 avoid by purchasing the output of a wind QF. Second, I objected to RMP s proposal to 18 limit capacity payments to QFs located east of Naughton based on the limited 19 transmission capacity available to move the output of those QF resources to other 20 delivery points on RMP s system. The Company proposed to limit capacity payments to 21 QFs located east of Naughton until such time as the Gateway West transmission project is 22 completed. My objection was based on the fact that most of RIvIP s new wind generation 23 capacity has been located in the east of Naughton transmission area and QF generation 24 capacity should be treated no different than Company owned generation capacity. 25 Q. WERE YOUR CONCERNS ADDRESSED IN THE STIPULATION THAT WAS 26 APPROVED BY THE COMMISSION? 27 A. Yes. In the stipulation the parties agreed that the Company should use a wind proxy in 28 calculating the value of avoided capacity for wind QFs. The parties also agreed that the Testimony of Bryce J. Freeman 10 Docket No EA-1 1

11 capacity deferral will be applicable to all QFs, regardless of location, and will not be 2 conditioned on the completion of the Gateway West transmission project. 3 Q. WERE THERE OTHER ISSUES RAISED BY OTHER PARTIES THAT WERE 4 NOT SPECIFICALLY ADDRESSED IN THE STIPULATION? 5 A. Yes. In the earlier proceeding there were a number of issues raised by other parties that 6 were not specifically addressed in or resolved by the stipulation, primarily because the 7 Company agreed to file a new avoided cost application by January 14, It is likely 8 that some of the unresolved issues from the earlier proceeding will reappear in this 9 proceeding. For example, Questar Gas Management (QGM) advocated that the contract 10 term for capacity payments under the PDDRR methodology match the expected life of the 11 underlying deferred resource. QGM also expressed some concern with the indefinite 12 nature of the Company s proposed security requirements which would have to be met by 13 any QF seeking to execute a PPA with the Company. 14 Q. DO YOU HAVE AN OPINION TO OFFER ON ANY OF THESE ISSUES IN THE 15 CURRENT PROCEEDING? 16 A. No, and there are a couple of reasons for this. First, most, if not all, of these issues appear 17 to me to be related to the specific facts and circumstances of individual contract 18 negotiations between the Company and potential QF developers. It has not been the 19 practice of the Commission in the past to supervise or control the development and 20 execution of contracts between private parties. Second, I believe there are opportunities 21 for the Commission to address such issues, should they arise, without addressing them 22 within the rigid confmes of Schedule Q. WHAT OTHER VENUES ARE AVAILABLE TO AGRIEVED QFS OR THE 24 COMMISSION TO ADDRESS THE TERMS OF PPAS OUTSIDE OF 25 SCHEDULE 38? 26 A. There are at least two ways, outside of the Schedule 38 process, for the Commission to 27 ensure that contracts are negotiated in good faith and that they are fair to both the 28 Company and its customers and to the QF. First, Schedule 38 contains a provision Testimony of Bryce J. Freeman 11 Docket No EA-l I

12 2 complain to the Commission about any specific power purchase agreement terms not 3 agreed on by the QF and the Company. This gives the QF the ability to bring any 4 concerns to the Commission that it believes need to be resolved by the Commission. It 5 also provides the Commission with an opportunity to review the issues associated with Testimony of Bryce J. Freeman 12 Docket No EA-l 1 1 whereby after a period of sixty days a QF seeking a contract with the Company can 6 negotiating a PPA generally in the context of a specific PPA. 7 Secondly, all contracts executed by jurisdictional utilities must be filed with and accepted 8 by the Commission, including PPAs. If a compelling public interest reason is shown, 9 either by the Commission itself or an interested party, that the contract should not be 10 accepted by the Commission, the Commission has the authority to reject any such 11 contract as being contrary to the public interest. 12 Either of these avenues seems to be more efficient and appropriate than having the 13 Commission establish a policy or even rules dictating the framework in which 14 negotiations between the Company and a QF take place. The types of projects and 15 companies that enter the Schedule 38 process will vary widely so that establishing a 16 standard set of terms and conditions for negotiating PPAs may not serve either the 17 Company or the QF well in any given PPA negotiation. For example, what constitutes a 18 fair and prudent security requirement for one QF may be entirely different than what 19 could be fairly applied to another QF. Such matters should be negotiated among the 20 affected parties with the Commission weighing in only in the case of impasse. 21 Q. MR. FREEMAN, WHAT IS YOUR INTEREST IN THIS PROCEEDING? 22 A. My interest is the overall public interest and that has not changed since avoided cost rates 23 were last examined by the Commission. I cannot and do not advocate for the interests of 24 individual customers or groups of customers. Rather, I must advocate for the best 25 interests of the citizens of the state of Wyoming. More specifically, in this case I am not 26 advocating for the interests of RMP or any particular QF developer. I believe, in general, 27 that QF projects may be an economic means of providing service to customers and, if so, 28 QFs should have a fair and reasonable opportunity to sell their energy and capacity to 29 RMP, as required by federal law. QFs should be assured of avoided cost prices that fairly

13 1 value their resources while leaving customers indifferent as to whether those resources 2 are supplied by the QF or the utility. I believe the avoided cost pricing methodology and 3 the process set out in Schedule 38, as proposed by the Company, accomplishes those 4 public interest objectives. 5 Q. DOES THAT CONCLUDE YOUR TESTIMONY 1 THIS PROCEEDING? 6 A. Yes, it does. Testimony of Bryce J. Freeman 13 Docket No EA-l I

14 APPENDIX A CASES IN WHICH BRYCE FREEMAN HAS PRESENTED TESTIMONY BEFORE THE WYOMING PUBLIC SERVICE COMMISSION AS OF 6/20/2011 Subject Hearing Of Docket Number Company Date Testimony GR-94-8 Pinedale Natural Gas Company 10/26/1994 ROR TR Silver Star Telephone Company, Inc. 12/6/1994 ROR ER Black Hills Power & Light 8/14/1995 ROR, IRP, DSM, AFOR TR US WEST Communications, Inc. 10/2/1995 TSLRIC General Order No.73 Commission Rule Making 4/11/1996 TSLRIC ER PacifiCorp, Inc. 6/17/1 996 ROR, AFOR, PBR TR Dubois Telephone Company 8/5/1996 ROR, TSLRIC GR Wyoming Industrial Gas Company 10/16/1996 ROR TR Pacific Telecommunications, Inc. 12/10/1996 TSLRIC TT US West Communications, Inc. 1/1 0/1997 AFOR, Jurisdiction TR U S West Communications, Inc. 1/28/1997 TSLRIC, RATE DESIGN TR U S West Communications, Inc. 5/26/1997 TSLRIC, Imputation GR-97-5l Cheyenne Light, Fuel & Power, Inc. 8/25/1997 ROR 7001 l-tr-97-i5 Tn-County Telephone Association, Inc. 3/31/1998 TSLRIC TR-97-7 TCT West, Inc. 3/31/1998 TSLRIC WR-98-6 Vista West Water Company 8/31/1998 Cost of Service EA-98-14l PacifCorp, Inc. 7/6/1999 Merger GR Questar Gas Company 10/28/1999 ROR, Revenue Requirement ER Cheyenne Light, Fuel & Power, Inc. 1/18/2000 ROR, Rate Design GR Cheyenne Light, Fuel & Power, Inc. 1/18/2000 ROR, Rate Design ER-99-l45 PacifUorp, Inc. 1/26/2000 ROR, Rate Design WR-99-8 Vista West Water Company 3/22/2000 Rate Design 300I0-GA Questar Gas Company/Wyoming Industrial Ga 6/12/2001 Merger/Acquisition GA-Ol ER-0-l62 PacifiCorp, Inc. 7/9/2001 Rate Design TA Qwest Communications 9/6/2001 TSLRIC TA-OI-700 Qwest Communications 3/15/2002 TELRTC 700l3-TR-02-I7 All West Communications, Inc. 10/28/2002 TSLRIC TI Silver Star Telephone Company, Inc., Teton TA Telecom 12/17/2002 TSLRIC ER-02-I 84 PaciflCorp, Inc. 1/7/2003 Power Cost G Kinder Morgan, Inc. 2/3/2003 Choice Gas ER-02-l98 PacifiCorp, Inc. 1/16/2004 Power Cost EA MEHC/PacifiCorp 12/15/2005 Merger/Acquisition GR-06 Kinder Morgan, Inc. 9/18/2006 ROR EA-06 Rocky Mountain Power 1/10/2007 Avoided Costs GA-06 Source Gas/Kinder M0rganIKMRUH; Knight. 2/18/2007 Sale/Acquisition/Reorganization GA-06 HoldCo LLC, Knight Acquisition Co GR-06 Pinedale Natural Gas Comrianv 3/21/2007 General Rate Case/ROR 100l6-47-CR-06 WYRULEC 7/2/2007 General Rate Case H2GR07 Cheyenne Light, Fuel & Power, Inc. 10/22/2007 General Rate Case/W i GEN II Prudence TT-07 Embarq Communications 11/2/2007 Access Charges/USF CR-06 WYRULEC 12/10/2007 Amended General Rate Case ER-07 Rocky Mountain Power 3/3/2008 General Rate Case/ROR EA-06 Rocky Mountain Power 5/27/2008 Amended DSM Application TR-08 Chugwater Telephone Company 8/21/2008 General Rate Case ER-08 Rocky Mountain Power 3/23/2009 General Rate Case/ROR GR Questar Gas Company 4/1 /2009 General Rate Case/ROR ER-08 Montana/Dakota Utilities 4/7/2009 General Rate Case/ROR ER-08 Wyoming Gas Company 5/1 8/2009 General Rate Case/ROR EA-09 Rocky Mountain Power 9/1/2009 Avoided Costs ER-09 Rocky Mountain Power 4/16/2010 ROR ER-09 Black Hills Power, Inc. 5/10/20 10 ROR I48-GR-lO Source Gas Distribution LLC 7/19/2010 Energy Efficiency/Decoupling EA EA-10 Cheyenne Light, Fuel & Power, Inc. 1/27/2011 DSM EA-I0 Rocky Mountain Power 5/11/2011 DSM ER-lO Rocky Mountain Power 6/20/2011 General Rate Case/ROR ER-b Rocky Mountain Power 8/1/2011 Avoided Costs ROR RATE OF RETUR,, IRP = INTEGRATED RESOURCE PLANNING, DSM = DEMAND SIDE MANAGEMENT; AFOR ALTERNATIVE FORM OF REGULATION; TSLRIC TOTAL SERVICE LONG RUN INCREMENTAL COST, PBR = PERFORMANCE BASED RATE MAKING AFOR = ALTERNATIVE FORM OF REGULATION

15 Further Affiant Sayeth Not. Bryce J. Freeman (Affiant) being of lawful age and being first duly sworn, hereby deposes and Dated this 26th day of May, OF ROCKY MOUNTAiN POWER TO ) says that: TN THE MATTER OF THE APPLICATION ) BEFORE TIlE PUBLIC SERVICE COMMISSION OF WYOMING Affida of Bryce J.F i 1eeman Docket No EA-1 I oi 1 My ission Expires: COUNTY OF c and official seal. The fore oin was acknowledged before me by Bryce J. Freeman on this 26 STATE OF WYOMNG ) ) SS: COUNTY OF LARAMIE ) (307) Warren Avenue, Suite 204 Bryce. Free, Administrator Wyoming Office of Consumer Advocate Cheyenne, WY Office of Consumer Advocate. information contained within the testimony are true and complete and constitute the recommendations of the Affiant in his official capacity as Administrator of the Wyoming Affiant hereby verifies that, based on Affiant s knowledge, all statements and Affiant prepared and caused to be filed the foregoing testimony. Affiant has, by all necessary action, been duly authorized to file this testimony and make this Oath and Verification. Affiant is the Administrator of the Wyoming Office of Consumer Advocate which is a party intervener in this matter pursuant to its Notice of Intervention filed on January 28, AFFIDAVIT, OATH AND VERIFICATION COST METHODOLOGY FOR CUSTOMERS ) Record No THAT DO NOT QUALIFY FOR TARIFF ) SCHEDULE 37 ) IMPLEMENT A PERMANENT AVOIDED ) Docket No EA- 1 th day of

16 (service electronically) Robyn A. Kashiwa Holland & Hart LLP Denver, CO rakashiwa(.iho1landhart.com 555 Seventeenth St., Suite 3200 Paul J. Hickey Hickey & Evans, LLP Cheyenne, WY P0 Box 467 Wyoming Regulatory Manager 320 W. 25 th Street, Suite 301 David M. Mosier Rocky Mountain Power Cheyenne, WY South Main Street, Suite 2300 Rocky Mountain Power Daniel Solander Salt Lake City, UT CERTIFICATE OF SERVICE Cristopher J. Castillo, Sr. Attorney Denver, CO th St., Ste. 500 QEP Field Services Company Walter F. Eggers, III, P.C. Holland & Hart, LLP Cheyenne, WY (Counsel for WIEC) weggers(hollandhart.com 2515 Warren Avenue, Suite S. Fiddlers Green Circle, Ste. 500 Robert M. Pomeroy, Jr. Thorvald Nelson Holland & Hart, LLP (Counsel for WIEC) Greenwood Village, CO datareguestpacificorp.com 825 NE Multnomah, Suite 2000 Data Request Response Center Portland, OR PacifiCorp Salt Lake City, UT S. Main St, Ste Jeffrey K. Larsen, Vice President Regulation, Rocky Mountain Power of Bryce J. Freeman was served, via USPS mail andlor electronic mail to the following: I hereby certify that on May 26, 2011, a copy of the foregoing Pre-filed Direct Testimony

17 Dale W. Cottam Whitney M. Agopian Hirst & Applegate, LLP Attorneys for QEP Field Services Company P.O. Box 1083 Cheyenne, WY dcottam(hirstapplegate.com wagopian(hirstapplegate.com Perry Richards, Vice President QEP Field Services Company QEP Field Services Company 1050 St., Ste. 500 Denver, CO perry.richards(ciuestar.com th 17 Lisa Tormoen Hickey, Esq. ALPERN MYERS STUART LLC Counsel for Interwest Energy Alliance 14 North Sierra Madre, Suite A Colorado Springs, CO lisahickey@coloradolawyers.net Craig Cox Executive Director Interwest Energy Alliance P.O. Box Lakewood, CO cox(interwest.org %m Ivan H. Williams, Senior Counsel (5-2976) Wyoming Office of Consumer Advocate 2515 Warren Avenue, Suite 304 Cheyenne, Wyoming Phone: Fax: ivan.williams(wyo.gov