2017 Annual Update to the PSE Formula Rate

Transcription

1 2017 Annual Update to the PSE Formula Rate PSE Transmission Customer Meeting Lynn Dillender Federal and Regional Policy Chelsey Neil Supervisor Transmission Services July 20, 2017

2 Agenda Formula Rate Annual Update process and timelines Rates Comparison from prior year 2017 Formula Input Notables 2017 Annual Update Exhibit C and Prior Period Adjustment EIM 2

3 Formula Rate Annual Update Introduction In May 2013 FERC approved a settlement between PSE and its customers that implements changes to the PSE Open Access Transmission Tariff (OATT) Schedules 1, 7, 8, and 10. Schedules 1, 7, 8 and 10 changed from Stated Rates to Formula Rates. Full details regarding the rate formula, implementation protocols, etc. are located in PSE s OATT - Attachment H, H-1, and H-2 PSE OATT is available on PSE OASIS ( 3

4 Formula Rate Annual Update Every Year PSE conducts an Annual Update which updates the inputs to the agreed upon formula to calculate new rates Generally a Formula Rate = calendar year actual costs + projected capital costs + true up adjustment Each year PSE is required to post on its OASIS and file with FERC (for informational purposes) the following: Actual Annual Transmission Revenue Requirement (ATRR) for previous calendar year Projected Annual Transmission Revenue Requirement (ATRR) for current year True up adjustment Additional OASIS posting and FERC filing for the 2017 Annual Update Exhibit C - detail for the Prior Period Adjustment 4

5 Formula Rate Annual Update Formula Rate Protocols Definitions Rate Year is defined as June 1 through May 31 Annual Transmission Revenue Requirement (ATRR) annual transmission revenue requirement calculated in accordance with the Formula Rate True-Up Adjustment difference between the transmission charges based on the Projected ATRR for a given calendar year and such charges based on the Actual ATRR for that Calendar Year, plus interest Calculated on Attachments 6, 6A, and 6B of the Formula Annual Update Calculation and publication of Actual ATRR for the prior calendar year Projected ATRR (including True-Up adjustment) Ancillary Service Schedule 1: Scheduling, System Control and Dispatch Service 5

6 Formula Rate Annual Update Annual Update Process April - PSE files FERC Form 1 May - PSE calculates its transmission rates based on FERC Form 1 and year-ahead projected capital additions. PSE also calculates true-up from previous year June PSE posts the Annual Update on OASIS; new formula rates go into effect based on Form 1 data and capital projections June to October Discovery Period where customers may issue reasonable information requests to PSE. June to November Review Period for customers during which customers may raise preliminary challenges with PSE. December to January - If PSE and the customers are unable to reach resolution after a good faith effort to resolve a preliminary challenge, the process allows for parties to file formal challenges with FERC. 6

7 Formula Rate Annual Update Annual Update Process 4 Review Period Discovery Period Rate Year June 2017 May 2018 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC PSE files FERC Form actuals 3 New Rates go into effect: Rate year June May; Annual update posted on OASIS 2 PSE calculates Projected Transmission Rate (subject to true up) based on 2016 actuals budgeted capital additions [including a true-up adjustment] 7

8 Updated Rates & Schedules on PSE OASIS Annual Update 2016 Annual Update 2017 effective June 1, 2017 Difference ( ) means decrease Percentage Difference ( ) means decrease WA Area Revenue Requirement $113,302,423 $131,124,228 $17,821, % Monthly Rate ($/kw) $1.95 $2.28 $ % Colstrip Revenue Requirement $21,101,754 $18,481,560 $(2,620,194) (12.45)% Monthly Rate ($/kw) $2.65 $2.32 $(0.33) (12.45)% Southern Intertie Revenue Requirement $7,870,368 $9,228,667 $1,358, % Monthly Rate ($/kw) $1.09 $1.28 $ % 8

9 2017 Formula Rate Notables Correcting Adjustment from 2016 Annual Update Generator Interconnection Facilities ( GIF ) remain in total Net Property, plant, and Equipment thus proper implementation of the Inclusion Ratio (formula line 160) Attachment 6, 6A, 6B Estimation and Reconciliation Worksheet: Prior year True up removal in Step 8 of the True up now follows the Rate Year rather than the Calendar Year Rates in effect in Prior Year times actual loads in each Month Month Rates Charged Actual Monthly Loads Rate x Loads Less any Prior Year True up Actual Revenues Received Jan ,500 9,896,700-9,896,700 Feb ,089 9,157,147-9,157,147 Mar ,034 9,058,180-9,058,180 Apr ,354 7,834,588-7,834,588 May ,245 7,638,453-7,638,453 Jun ,690 9,145, ,532 8,410,410 Jul ,701 9,167, ,532 8,431,861 Aug ,814 9,387, ,532 8,652,222 Sep ,245 8,278, ,532 7,542,618 Oct ,319 8,422, ,532 7,686,925 Nov ,933 9,619, ,532 8,884,283 Dec ,642 11,002, ,532 10,266,900 Sum 103,460,286 9

10 2017 Annual Update Exhibit C Prior Period Adjustment Detail Attachment 6 Estimate and Reconciliation Worksheet 1Summit Buyout sign reversal Issue: Worksheet 1 - Revenue Credits; Account Other Electric Revenues; signs were backwards. Correction: Reversed the signs resulting in "Summit Buyout" to be positive (increase revenue credit) rather than negative as originally filed (decreasing the revenue credit) 2ADIT account balance change Issue: The beginning balance for account 190, Pensions and Other Compensation, for 2015 FERC Form 1 was different than the ending balance in the 2014 FERC Form 1. Tax accounting in 2014 did not allocate common costs to electric and gas segments, however, they did allocate common costs to electric and gas in 2015 FERC Form 1. PSE filed it's formula rate having transferred the 2014 ending balance as the 2015 beginning balance, but the 2015 FERC Form 1 beginning balance was different since it included allocated comon costs. Correction: Change the beginning balance for account 190 (1-ADIT; account 190, Pernsions and Other Compensation) in the formula to tie to the beginning balance as reported in the 2015 FERC Form 1. 3GIF reclass error Issue: Certain GIF plant like LSR was erroneously transferred to distribution plant. Also discovered some GIF was never transferred to transmission. Correction: Plant accounting transferred GIF that was not in transmission plant to transmission plant and resubmitted 2015 FERC Form 1. Both transmission and distribution plant totals changed Worksheets Updated: Worksheet 5 - Plant Balances, Worksheet 3 - GIFs, Depreciation expense formula line 83 Other Effected Areas: Net and Gross Plant allocators, Attachment 5 - Cost Support links updated to correct cells in Worksheet 5 4Inclusion Ratio adjustment Issue: Inclusion Ratio removes GIF effect from Cost of Service and Rate Base; however GIF were excluded from plant balances thus double removing GIF from formula Correction: Do not remove GIF from plant balances (reinsert GIF plant to plant balances of filed 2015 Annual Update). 5Formula line 50 (Transmission Materials and Supplies) linking error Issue: formula line 50 (excel J87) was incorrectly linked to "5 - Cost Support" cell Q211, should be linked to "5 - Cost Support" cell Q210 Correction: Fixed link, formula line 50 links to "5 - Cost Support" cell Q210 6Interest Hedges Issue: Worsheet 6 - Cost of Capital shows three interest rate hedges, yet only one of them flow through the formula Correction: All 3 hedges are interest rate hedges and should not flow through the formula return/capitalization calculation of the formula as a hedge adjustment per formula Note Q "The gains and losses on hedges, except for interest rate locks for new debt issuances, are removed from the revenue requirement on this line. " Hedge adjustment changed to zero since they are all interest rate locks on new debt issuances 10

11 2017 Annual Update Exhibit C Prior Period Adjustment Detail Puget Sound Energy FERC Form 1 Page # or Instructio n Total Transmission WA Area Colstrip Southern Intertie Total Transmission WA Area Colstrip Southern Intertie Total Transmission WA Area Colstrip Southern Intertie Formula Rate -- Attachment H-1Notes 2015 AS REVISED 2015 AS FILED 2016 Annual Update 2015 DIFFERENCE Plant In Service (Note O) 15 Transmission Plant In Service teattachment 5 1,373,883,363 1,191,440,195 94,139,090 88,304,078 1,213,875,973 1,036,922,097 88,649,798 88,304, ,007, ,518,098 5,489, New Transmission Plant Additions for CurrAttachment 6 29,086,108 29,086, ,086,108 29,086, Total Transmission Plant In Service (Line ) 1,402,969,471 1,220,526,303 94,139,090 88,304,078 1,242,962,081 1,066,008,205 88,649,798 88,304, ,007, ,518,098 5,489, Common Plant Attachment 5 323,287, ,287, ,287, ,287, ,287, ,287, ,287, ,287, ASCM Allocation % % % % % 0.000% 156 Gross Revenue Requirement (Sum Lines 175,294, ,959,995 15,702,139 8,632, ,172, ,503,468 15,567,137 8,627,507 12,122,219 11,456, ,003 5,037 Adjustment to Remove Revenue Requirements Associated with Excluded Transmission Facilities 157 Transmission Plant In Service (Line 17) 1,402,969,471 1,220,526,303 94,139,090 88,304,078 1,242,962,081 1,066,008,205 88,649,798 88,304, ,007, ,518,098 5,489, Excluded Transmission Facilities teattachment 5 178,439, ,939,608 5,499, ,774, ,274,579 5,499, ,665,029 38,665, Included Transmission Facilities (Line ,224,530,324 1,047,586,695 88,639,551 88,304,078 1,103,187, ,733,626 83,150,259 88,304, ,342, ,853,069 5,489, Inclusion Ratio (Line 159 / % 85.83% 94.16% % 88.75% 87.40% 93.80% % Gross Revenue Requirement (Line 156) 175,294, ,959,995 15,702,139 8,632, ,172, ,503,468 15,567,137 8,627,507 12,122,219 11,456, ,003 5, Adjusted Gross Revenue Requirement(Line 160 * ,999, ,570,073 14,784,832 8,632, ,823, ,931,587 14,601,403 8,627,507 8,176,197 7,638, ,428 5, Revenue Credits & Interest on Network Credits 163 Revenue Credits Attachment 3 18,421,141 17,786,605 24, ,202 18,090,060 17,455,544 23, , Interest on Network Credits teattachment Net Revenue Requirement (Line ,578, ,783,468 14,760,497 8,022, ,733, ,476,043 14,577,807 8,016,588 7,845,117 7,307, ,690 5, Average of the 12 CP teworksheet 4 4,841,750 4,841, , ,000 4,841,750 4,841, , , Annual Point-to-Point and Network Transm(Line 181 / 182) Monthly rate (Line 182 / 12)

12 EIM Resources and History on OASIS PSE OASIS has an EIM folder housing EIM implementation documents PSE EIM customer announcements Record of the stakeholder process including stakeholder comments and PSE responses EIM Stakeholder meeting presentations CAISO EIM Trainings Record of Tariff changes EIM settlement disputes and resolutions PSE OASIS: 12

13 What is the EIM? 13

14 EIM Related Revisions to PSEI OATT Rates Ancillary Services Schedule 1A EIM Administrative Service Schedule 4 Energy Imbalance Service Schedule 4R Energy Imbalance Service for Retail Customers Schedule 9 Generator Imbalance Service Schedule 12 Washington Real Power Losses Schedule 12A Colstrip and Southern Intertie Real Power Losses Attachment O Section 8 EIM Uplifts 14

15 PSEI Transmission in the EIM 15

16 PSEI Transmission for EIM use Bi-lateral use of PSEI.SYSTEM to BPAT.PSEI posted path on PSEI s system Uses NERC Priority 0 Service Lowest priority service. Lower priority than all Firm, Non-Firm, and Secondary service First to get cut It s the leftovers communicated to CAISO in advance of the market run so they know the limits of what the market can transfer Does not decrement any Firm, Non-Firm, or Secondary ATC postings The Commission rejected prior arguments by Powerex that transmission made available using this methodology and used for EIM Transfers should have a charge associated with it. Nevada Power Co., 151 FERC 61,131 at PP , order on reh g, 153 FERC 61,306 at PP (2015).

17 Questions?