DOCKET NO. APPLICATION OF SOUTHWESTERN PUBLIC SERVICE COMPANY FOR AUTHORITY TO CHANGE RATES PUBLIC UTILITY COMMISSION OF TEXAS DIRECT TESTIMONY of JEFFREY C. KLEIN on behalf of SOUTHWESTERN PUBLIC SERVICE COMPANY (Filename: KleinRRDirect.doc) Table of Contents GLOSSARY OF ACRONYMS AND DEFINED TERMS... LIST OF ATTACHMENTS... I. WITNESS IDENTIFICATION AND QUALIFICATIONS... II. ASSIGNMENT AND SUMMARY OF TESTIMONY AND RECOMMENDATIONS... III. LONG-TERM POWER PURCHASE PROCESS AND PRACTICES... IV. LONG-TERM PURCHASED POWER CONTRACTS... V. REASONABLENESS OF SPS S CAPACITY-RELATED COSTS... AFFIDAVIT... Klein Direct Revenue Requirement Page RR - Page of 0 0
GLOSSARY OF ACRONYMS AND DEFINED TERMS Acronym/Defined Term BEA Commission FERC LPP MW Oneta Oneta I Oneta II Operating Companies O&M PPA Meaning Borger Energy Associates, L.P. Public Utility Commission of Texas Federal Energy Regulatory Commission Lea Power Partners, LLC megawatt Oneta Power, LLC (formerly Calpine Energy Services, L.P.) PPA during the period January, 0 through December, 0 PPA during the period June, 0 through May, 0 Northern States Power Company, a Minnesota corporation; Northern States Power Company, a Wisconsin corporation; Public Service Company of Colorado, a Colorado corporation; and SPS operation and maintenance purchased power agreement Rate Year Twelve months starting August, 0 RFP SPS Rate Filing Package Southwestern Public Service Company, a New Mexico corporation Test Year October, 0 through September 0, 0 Total Company or total company Total SPS (before jurisdictional allocations) Update Period October, 0 through December, 0 Klein Direct Revenue Requirement Page RR - Page of 0 0
Acronym/Defined Term Xcel Energy XES Meaning Xcel Energy Inc. Xcel Energy Services Inc. Klein Direct Revenue Requirement Page RR - Page of 0 0
LIST OF ATTACHMENTS Attachment JCK-RR- JCK-RR- JCK-RR- JCK-RR- Description Summary of SPS PPAs (Filename: JCK-RR-.doc) Summary of PPA Charges (Filename: JCK-RR-.xls) Timeline of PPAs (Filename: JCK-RR-.xls) Workpapers of Jeffrey C. Klein (Filename: JCK-RR-.xls) Klein Direct Revenue Requirement Page RR - Page of 0 0
DIRECT TESTIMONY OF JEFFREY C. KLEIN 0 I. WITNESS IDENTIFICATION AND QUALIFICATIONS Q. Please state your name and business address. A. My name is Jeffrey C. Klein. My business address is 00 Larimer Street, Suite 000, Denver, Colorado 00. Q. On whose behalf are you testifying in this proceeding? A. I am filing testimony on behalf of Southwestern Public Service Company, a New Mexico corporation ( SPS ) and wholly-owned electric utility subsidiary of Xcel Energy Inc. ( Xcel Energy ). Xcel Energy is a utility holding company that owns several electric and natural gas utility operating companies, a regulated natural gas pipeline, and three electric transmission companies. Q. By whom are you employed and in what position? A. I am employed by Xcel Energy Services Inc. ( XES ), the service company subsidiary of Xcel Energy, as Manager, Structured Purchases. Q. Please briefly outline your responsibilities as Manager, Structured Purchases. A. I am responsible for managing and coordinating the negotiation and administration of long-term (a term of one year or longer) nonrenewable capacity Xcel Energy is the parent company of four utility operating companies: Northern States Power Company, a Minnesota corporation; Northern States Power Company, a Wisconsin corporation; Public Service Company of Colorado, a Colorado corporation; and SPS (collectively, Operating Companies; ). Xcel Energy s natural gas pipeline company is WestGas InterState, Inc. Through a subsidiary, Xcel Energy Transmission Holding Company, LLC, Xcel Energy also owns three electric transmission-only companies: Xcel Energy Southwest Transmission Company, LLC; Xcel Energy Transmission Development Company, LLC; and Xcel Energy West Transmission Company, LLC, all of which are either currently regulated by the Federal Energy Regulatory Commission ( FERC ) or expected to be regulated by FERC. Klein Direct Revenue Requirement Page RR - Page 0 of 0 0
0 0 and associated energy purchased power agreements ( PPA ) and associated legal documents, across all four of the Xcel Energy Operating Companies. I also manage XES s Wholesale Account Managers who are responsible for the administration of long-term wholesale power sales agreements. Q. Please describe your educational background. A. I received a Bachelor of Arts degree in Political Science from California State University, Northridge in May. I also received a Juris Doctor degree from Southwestern University School of Law in May. Q. Please describe your professional experience. A. I began my professional career with Rockwell International s Energy Systems Group in Canoga Park, California in as a Legal Contract Analyst and was responsible for verifying that material procurements and subcontracts were in compliance with company and legal standards. I transferred to the Rockwell Hanford Operations division in Richland, Washington in and continued to work as a Legal Contract Analyst. In, I accepted employment in the contracts department with Perceptronics Inc. in Woodland Hills, California where I negotiated and managed government, commercial, and international defense related contracts and subcontracts. I subsequently became Director, Contracts and Legal Affairs for Perceptronics. In, I accepted employment with Nevada Power Company, the regulated electric utility that primarily serves Las Vegas, Nevada. Initially, I managed the negotiation and administration of transmission and multi-party electric generation contracts. I subsequently became Director of Resource Klein Direct Revenue Requirement Page RR - Page of 0 0
0 0 Procurement and was responsible for the negotiation and administration of all long-term purchased power and fuel supply agreements. In 00, I accepted a position as Manager, Structured Purchases with XES. I currently manage a total of four Purchased Power Analysts and Wholesale Account Managers. The Purchased Power group, where I am one of two managers, is responsible for managing the delivery to Xcel Energy s electric Operating Companies of over,00 megawatts ( MW ) of electric generation consisting of over,00 MW from renewable energy resources and,00 MW of installed capacity from thermal electric generation facilities (structured purchases). I am responsible for administering the structured PPAs. Q. Have you attended or taken any special courses or seminars relating to public utilities? A. Yes. Over my career, I have taken numerous courses and seminars related specifically to the public utility industry, purchased power contracts and negotiations, utility accounting, the Southwest Power Pool Inc. s Integrated Marketplace and its predecessor the Energy Imbalance Service Market, Western Electricity Coordinating Council and North American Electric Reliability Corporation reliability issues, and Midcontinent Independent System Operator market and reliability matters. Q. Are you a member of any professional organizations? A. Yes. I am a member of the State Bar of California and the National Contract Management Association. Klein Direct Revenue Requirement Page RR - Page of 0 0
0 Q. Have you testified or filed testimony before any regulatory authorities? A. Yes. I filed testimony before the Public Utility Commission of Texas ( Commission ) in Docket Nos. 00 and, SPS s last two base rate cases, in support of SPS s PPAs and the capacity-related costs incurred under those PPAs. I have also testified before the Public Utilities Commission of Nevada to support resource plans and PPA approvals. I have testified before the Colorado Public Utilities Commission in Docket No. A-E and filed testimony in Docket No. 0A-E on the issues of PPA negotiation and standard PPA contracts in support of resource plans. In addition, I have testified on SPS s behalf before the New Mexico Public Regulation Commission in Case No. -00-UT, and filed testimony in Case Nos. 0-000-UT and -00-UT, in support of PPA approval, and filed testimony in Case No. -00-UT addressing long-term purchased power costs. Klein Direct Revenue Requirement Page RR - Page of 0 00
II. ASSIGNMENT AND SUMMARY OF TESTIMONY AND RECOMMENDATIONS 0 Q. What is your assignment in this proceeding? A. I am supporting SPS s request to recover long-term PPA costs. There are two major components of purchased power costs: capacity costs and energy costs. Some of SPS s PPAs also include other components of cost such as variable operation and maintenance ( O&M ) costs, start costs, and dispatchability payments. For SPS s Texas retail jurisdiction, capacity and other non-fuel related costs are recovered in base rates. In my testimony, I support recovery of capacity and non-fuel related costs incurred under PPAs. Specifically in my testimony, I will address the following: SPS s long-term purchased power procurement activities and administration of long-term PPAs; and the specific capacity-related costs incurred under PPAs that SPS seeks to recover in base rates and the reasonableness of the costs. 0 Finally, I sponsor or co-sponsor the following Rate Filing Package ( RFP ) Schedules and the portions of the Executive Summary that contain information from these Schedules or regarding long-term PPAs: H-.a, H-.c, I-., I-, I-, I-, I-, I-0(V)(CD), I-, I-, I-, and Q-.. Q. Will your testimony be updated for actual costs incurred in the three months following the Test Year, October 0 through December 0? A. No. As discussed by SPS witness Evan D. Evans, SPS will file an update days after SPS filed this application. The update will include actual costs incurred to replace the estimates provided in the application for the period of October, 0 through December, 0, referred to as the Update Period. No estimates for Klein Direct Revenue Requirement Page RR - Page of 0 0
the Update Period are included in this testimony, therefore, it is not necessary to update expenses for this timeframe. The requested capacity-related PPA costs represent costs to be incurred in the Rate Year, which is the twelve months starting August, 0 ( Rate Year ), as determined by the costs incurred during October, 0 through September 0, 0 ( Test Year ) adjusted for known and measurable changes. Q. Please summarize the key points, recommendations, and conclusions in your testimony. A. Long-term Power Purchase Process and Practices 0 SPS purchases capacity and associated energy under long-term agreements, and administers those agreements to provide its customers with the lowest reasonable cost of power available. SPS uses a number of strategies to ensure that it obtains the lowest reasonable cost of power, and then implements a monthly invoice verification process to verify the accuracy of each invoice. SPS continually updates and improves its process and practices by conducting a review after each solicitation and negotiation. 0 0 Long-term Purchased Power Contracts and Costs All capacity-related costs that SPS incurred during the Test Year were incurred under contracts reviewed in previous base rate cases and fuel reconciliations. Given SPS s need for capacity in 0-0, it was reasonable to make these capacity purchases. SPS reasonably incurred $0,0, (total SPS before jurisdictional allocations, Total Company or total company ) in capacity-related PPA costs during the Test Year. Due to contractually authorized price increases, a PPA termination, changes in operational status, and a change in tested heat rate, pro forma adjustments need to be made to the Test Year data for these known and measurable changes. Capacity-related PPA costs will increase in 0 by $,,0 (total company). The total amount SPS seeks to recover through base rates for capacity-related costs incurred under PPAs is $,, (total company). Klein Direct Revenue Requirement Page 0 RR - Page of 0 0
Incurring these costs is reasonable and necessary to provide SPS s customers with reliable electric service. 0 0 Q. Please describe the information in the H-. series schedules that you sponsor or co-sponsor. A. I co-sponsor Schedules H-.a and c, which summarize Purchased Power Data. SPS witness Jennifer S. Pytlik co-sponsors these schedules. I sponsor the data within the schedules that report the companies with which SPS has long-term PPAs, and the Net MWh (H-.a) and Fixed Costs (H-.c) that resulted from each of the agreements during the Test Year. The data is given by month and totaled for the Test Year. Q. Please describe the information in the I series schedules that you sponsor or co-sponsor. A. I co-sponsor Schedule I-. which addresses non-recurring fuel and purchased power expenses. SPS witness H. Craig Romer also co-sponsors the schedule. I sponsor the schedule as it relates to long-term purchased power expenses. SPS had no such expenses during the Test Year. I co-sponsor Schedule I- which addresses fuel and purchased power procurement practices, and Schedule I- which describes the fuel and purchased power committees. Mr. Romer also co-sponsors these schedules. Mr. Evans and SPS witness Bennie F. Weeks also co-sponsor Schedule I-. Together, these schedules discuss the process for assessing, reviewing, and engaging in transactions regarding fuel and purchased power procurement. I sponsor these schedules as they relate to long-term purchased power expenses. Klein Direct Revenue Requirement Page RR - Page of 0 0
I co-sponsor Schedules I- and I- with Mr. Romer. Schedule I- pertains to fuel and fuel-related contracts and presents summaries of such contracts. The workpapers to this schedule contain the contracts. Schedule I- pertains to a list of fuel or purchased-power related contracts under which costs were incurred. SPS has not filed a fuel reconciliation with its current base rate case. Consequently, the schedules and workpapers present only the contracts 0 0 with variable O&M charges and other non-fuel PPA charges because those are the contracts that have costs that impact base rates. I sponsor the long-term purchased power portion of these schedules and workpapers. I co-sponsor Schedule I-, which presents employee organizational charts, and Schedule I-0(V)(CD), which presents employee ethics documents. Mr. Romer, Ms. Weeks, and Mr. Evans also co-sponsor these schedules. SPS witness Carol C. Bouw also co-sponsors Schedule I-0(V)(CD). I sponsor the purchased power portion of the organization chart and the employee ethics documents as they pertain to these employees. I co-sponsor Schedule I-, which pertains to the methods, assumptions, and sources of information used to determine reasonably predictable fuel and purchased power costs. Mr. Evans also co-sponsors this schedule. I sponsor the portion of the schedule that pertains to long-term purchased power. I co-sponsor Schedule I-, which discusses activities intended to reduce fuel, fuel-related or purchased power energy costs. SPS witness William A. Grant As discussed by Mr. Evans, SPS is not filing a fuel reconciliation with this base rate case in accordance with the Order in Project No. 0 and Tex. Admin. Code. as revised in that project. Klein Direct Revenue Requirement Page RR - Page of 0 0
0 and Mr. Romer also co-sponsor this schedule. I sponsor the portion of this schedule regarding long-term purchased power costs. Q. Please describe the information in Schedule Q-.. A. I sponsor Schedule Q-., which relates to contract prices for firm and non-firm purchases and sales of power and energy. As filed in this RFP, the schedule refers to the workpapers for Schedule I- (described above) for the relevant information. Q. Were Attachments JCK-RR- through JCK-RR- prepared by you or under your direct supervision and control? A. Yes. Q. Were the portions of the RFP Schedules and the portions of the Executive Summary you sponsor or co-sponsor prepared by you or under your supervision and control? A. Yes. Q. Do you incorporate the portions of SPS s RFP Schedules and the portions of the Executive Summary sponsored or co-sponsored by you into this testimony? A. Yes. Klein Direct Revenue Requirement Page RR - Page of 0 0
III. LONG-TERM POWER PURCHASE PROCESS AND PRACTICES 0 Q. What is SPS s goal in entering into long-term PPAs? A. SPS is committed to purchasing power and energy under long-term agreements, and administering those agreements, to provide its customers with the lowest reasonable cost of power available consistent with predicted market conditions, power supply reliability, system reliability, and electric system constraints. Q. What strategy has SPS employed to accomplish this goal? A. SPS works to accomplish this goal through the selection of suppliers as well as the execution and administration of the PPAs. Ms. Weeks discusses the work done by Resource Planning to accomplish this goal. After Resource Planning has selected the preferred bid(s), the Purchased Power group works to achieve the lowest reasonable cost of power purchases for SPS s customers through the negotiation and administration of the final PPA(s). Important elements of this work include the following: 0 Develop Contracts in a Timely Manner. SPS has found that, in order to maintain the viability of power supply proposals through the contract development process, power supply proposals need to be evaluated and contracts developed and executed with the winning bidder(s) within a reasonable time. Include Pay-for-Performance Provisions in Contracts. SPS has attempted, where feasible in contract negotiations, to align the interests of its power suppliers with those of SPS and its customers by including pay-for-performance provisions, such as availability factor adjustments to capacity payments. Maintain Risk and Price as Proposed. SPS ensures that through the contract negotiation process, the level of risk and price proposed in the bid is maintained or improved for the benefit of SPS customers. Prudent Administration. SPS works to ensure that the contracts are prudently administered, including ensuring that the suppliers deliver Klein Direct Revenue Requirement Page RR - Page of 0 0
power based on the terms of the PPA throughout the contract period, and that each PPA invoice is accurate. Q. Please describe how SPS verifies the accuracy of each long-term PPA invoice. A. Through coordination between Purchased Power and Commercial Accounting Services personnel, SPS has implemented monthly invoice verification procedures to: 0 compare invoiced deliveries with the SPS revenue-meter readings or scheduled quantities, as applicable for each PPA; confirm that the invoice pricing complies with the applicable provisions of the contract; and check that the invoice calculations are mathematically correct. 0 Q. Does SPS periodically review its power purchase process and practices to improve their effectiveness? A. Yes. After each power purchase solicitation and negotiation is completed, SPS incorporates lessons learned from that process into the next power purchase solicitation and negotiation process to make it more effective. Typical improvements include changes to the forms that SPS requires bidders to submit so that proposals can be evaluated against each other on a comparable basis, adding new bid requirements to improve operations and performance, or changes to the model PPA included in the bid solicitation to incorporate additional protections for SPS and its customers against performance risks that should be the responsibility of the power supplier. In this way, SPS s power purchase process and practices are continually being updated and improved to enhance effectiveness. Klein Direct Revenue Requirement Page RR - Page 0 of 0 0
IV. LONG-TERM PURCHASED POWER CONTRACTS 0 0 Q. Have you provided attachments that summarize the PPAs under which SPS incurred capacity-related costs during the Test Year and identify the related costs? A. Yes. Attachment JCK-RR- provides a summary of the long-term PPAs under which SPS incurred costs during the Test Year. Attachment JCK-RR- provides the capacity-related costs incurred during the Test Year under each of the contracts. SPS is seeking to recover costs associated with several PPAs. Included in the Test Year costs are known and measurable adjustments to reflect costs that will begin or end before the start of the Rate Year. All of the PPAs under which capacity-related costs were incurred in the Test Year were reviewed by the Commission in previous SPS rate cases and their capacity-related costs were approved by the Commission in SPS s last litigated rate case, Docket No.. Attachment JCK-RR- identifies the start and end dates of the thermal PPAs for which SPS is requesting recovery of some costs through base rates. Q. What costs associated with these contracts does SPS propose to include in base rates in this proceeding? A. Attachment JCK-RR- lists the various charges incurred under PPAs in the Test Year and identifies the charges for which SPS is seeking recovery through base rates. SPS proposes to include in its cost of service the Test Year capacity-related charges with pro forma adjustments. In general, the capacity-related charges are those for capacity or demand and non-fuel items, such as O&M expenses or Application of Southwestern Public Service Company for Authority to Change Rates, Docket No. (Dec., 0). Klein Direct Revenue Requirement Page RR - Page of 0 0
turbine start/scheduling charges. The Test Year capacity-related costs for all contracts totaled $0,0, (total company), before considering pro forma adjustments. Q. Has SPS recovered capacity-related costs as defined above through base rates previously? A. Yes. I am not a regulatory expert, but my understanding is that some capacity-related costs have been recovered through base rates for many years. Variable O&M charges and other non-fuel PPA charges were first included in SPS s base rates adopted in Docket No. based on the Unanimous 0 Stipulation entered into by parties in Docket No.. The continuation of this practice was proposed in Docket Nos., 0, 00, and. This practice is consistent with TAC.(a)(), which prohibits the recovery of demand or capacity costs in fuel costs absent special circumstances. In Docket No., the Commission approved the capacity-related PPA costs proposed under this practice, which SPS proposes to continue in this rate case. Application of Southwestern Public Service Company for Authority to Change Rates, to Reconcile Fuel and Purchased Power Costs for 00 and 00, and to Provide a Credit for Fuel Cost Savings, Docket No. (Jun., 00); and Application of Southwestern Public Service Company for: () Authority to Change Rates; () Reconciliation of its Fuel Costs for 00 and 00; () Authority to Revise the Semi-annual Formulae Originally Approved in Docket No. Used to Adjust its Fuel Factors; and () Related Relief, Docket No., Unanimous Stipulation at (Mar., 00). Application of Southwestern Public Service Company for Authority to Change Rates and to Reconcile Fuel and Purchased Power Costs for 00 and 00, Docket No. (Mar., 0); Application of Southwestern Public Service Company for Authority to Change Rates and to Reconcile Fuel and Purchased Power Costs for the Period January, 00 through June 0, 0, Docket No. 0 (Jun., 0); Application of Southwestern Public Service Company for Authority to Change Rates and to Reconcile Fuel and Purchased Power Costs for the Period July, 0 through June 0, 0, Docket No. 00 (Dec., 0); and Application of Southwestern Public Service Company for Authority to Change Rates, Docket No. (Dec., 0). Klein Direct Revenue Requirement Page RR - Page of 0 0
0 0 V. REASONABLENESS OF SPS S CAPACITY-RELATED COSTS Q. Were the PPA capacity-related costs SPS incurred in the Test Year reasonable? A. Yes. These costs were incurred under contracts reviewed in previous base rate cases and fuel reconciliations. The Lea Power Partners, LLC ( LPP ) PPA and the PPAs with Oneta Power, LLC (formerly Calpine Energy Services, L.P.) ( Oneta ) were the results of competitive solicitations. The Borger Energy Associates, L.P. ( BEA ) contract was certificated by the Commission in. The capacity cost under the contract with the City of Lubbock (Cooke Facility) is $. per kilowatt per month, which is a reasonable cost based on Resource Planning analysis. Given SPS s need for capacity in 0-0, it was reasonable and necessary to make these capacity purchases to provide SPS s customers with reliable electric service. Q. Have you made pro forma adjustments for known and measurable changes? A. Yes. I have made several adjustments. The pro forma adjustments are identified for each contract in the Pro Forma Adjustments column of Attachment JCK-RR-. First, there is a contract with Golden Spread Electric Cooperative, Inc. that expired before the end of the Test Year. Thus, a pro forma adjustment was made equal to the Test Year capacity-related costs incurred under this contract to remove those costs. Please refer to Attachment JCK-RR-, lines -. Application of Southwestern Public Service Company for Certification of Qualifying Facility Purchased Power Contract Under Section.0 of PURA, Docket No. (Oct. 0, ). Klein Direct Revenue Requirement Page RR - Page of 0 00
Second, PPA contract provisions for BEA, Oneta I and II, City of 0 0 Lubbock, LPP, and Sid Richardson specify price terms for capacity-related costs and variable O&M expense that change from the Test Year to the Rate Year, or that allow for capacity testing to change the contracted capacity. The pro forma adjustments for these contracts account for these contract provisions. Please refer to Attachment JCK-RR-, lines -, -, 0-, -, -, and -, respectively. Third, the PPA contract provisions for the City of Lubbock specify capacity payment refunds to SPS when units are not operational. During the Test Year, SPS received capacity payment refunds due to the non-operational status of three units, which are reflected in the Test Year cost. However, two of the units are scheduled to return to service before the start of the Rate Year. Accordingly, SPS does not expect to receive the same level of refunds in the Rate Year. The pro forma adjustment accounts for the change in operational status of the two units that will be online during the entire Rate Year. No adjustment has been made to remove the refunds received in the Test Year for the MW unit that is expected to return to service in the last quarter of the Rate Year. Please refer to Attachment JCK-RR-, line. Fourth, the PPA for LPP includes an adjustment to the monthly energy tolling payment (a variable O&M payment) if the actual net heat rate for the facility is less than % of the PPA s predicted net heat rate (increases variable O&M), or greater than the predicted heat rate (reduces variable O&M). In June of SPS has two PPAs with Oneta: Oneta I runs from January, 0 through December, 0; Oneta II runs from June, 0 through May, 0. Klein Direct Revenue Requirement Page RR - Page of 0 0
0 0, the heat rate test result showed a heat rate less than % of the predicted net heat rate, resulting in an increase to the variable O&M charge. The facility s actual net heat rate has improved due to a permanent plant upgrade that improved the efficiency of the plant. Due to the upgrade at the plant, the improved heat rate is expected to continue for the foreseeable future. Accordingly, the pro forma adjustment accounts for this change, applying to the entire Rate Year the increase to the monthly energy tolling payment that was in effect starting in July of 0. Please refer to Attachment JCK-RR-, line. SPS witness Arthur P. Freitas has reflected these pro forma adjustments in the cost of service study he presents. Q. What is the net change due to all these pro forma adjustments? A. The net change is a $,,0 (total company) increase, which brings the total of adjusted Test Year capacity-related costs to $,, (total company). Q. Does this conclude your pre-filed direct testimony? A. Yes. Klein Direct Revenue Requirement Page 0 RR - Page of 0 0
RR - Page of 0 0
Summary of SPS PPAs Attachment JCK-RR- Page of Docket No. I. Contracts Reviewed in Previous Rate Cases and Fuel Reconciliation Proceedings ) Borger Energy Associates, L.P., dated May, and effective June,. Letter Agreement dated February,. Subject to contractual limitations, SPS dispatches energy purchases under this agreement by verbal communication with the power supplier and upon prior notice. This contract terminates June, 0, subject to SPS s option to extend the term for 0 years. The maximum summer capacity available under this PPA is. MW based on a summer 0 capacity test. ) Oneta Power, LLC (I) (formerly Calpine Energy Services, L.P.) dated May, 00, First Amendment dated August, 00, Second Amendment dated February, 0, and Third Amendment dated June, 0. The term of this PPA is from January, 0 through December, 0. This is day-ahead scheduled delivery of unit firm energy of 00 MW with flexibility to change the schedule to 0 MW. The energy is delivered from the Oneta Energy Center located in Broken Arrow, Oklahoma. ) Oneta Power, LLC (II) (formerly Calpine Energy Services, L.P.) dated May, 0, amended June, 0. The term of this PPA is from June, 0 through May, 0. This is day-ahead scheduled delivery of unit firm energy with flexibility to schedule 0, 0 or 00 MW. The energy is delivered from the Oneta Energy Center located in Broken Arrow, Oklahoma. ) City of Lubbock, Texas (Cooke Units), dated June 0, 00, amended April, 00. This agreement, which was effective July, 00, terminates June 0, 0. SPS dispatches energy purchases under this agreement by verbal communication with the power supplier and upon prior notice. The current capacity rating is MW based on the 0 annual capacity test. ) Golden Spread Electric Cooperative, Inc., dated on or about December, 0 to purchase MW for the term of June, 0 through May, 0, First Amendment dated February, 0. This is a PPA developed pursuant to the terms of the Western Systems Power Pool Agreement, Service Schedule B, Unit Commitment Service. This is unit contingent capacity and associated energy from Golden Spread s Mustang Station Unit. ) Lea Power Partners, LLC, dated October 0, 00, First Amendment dated April, 00, Second Amendment dated May 0, 00, Third Amendment dated September, 00, Fourth Amendment dated September, 00 and the Fifth Amendment dated June 0, 0. The plant began commercial operation on September, 00. The expiration date is September, 0. Capacity billing under this PPA is based on 0 MW. RR - Page of 0 0
Attachment JCK-RR- Page of Docket No. ) Sid Richardson Carbon, Ltd., dated July 0, 00 (effective August, 00), First Amendment dated July, 00 and Second Amendment dated February, 0. The term of this agreement extends through July, 0. SPS purchases energy under this agreement on a must take basis with no dispatch flexibility. The average maximum summer capacity available under this PPA based on the summer 0 capacity test is approximately. MW. The capacity level expected during the Rate Year is. MW. II. New Contracts and Extensions Since June 0, 0 None. RR - Page of 0 0
Attachment JCK-RR- Page of Docket No. Southwestern Public Service Company Summary of PPA Charges For October, 0 through September 0, 0 Base Pro Forma Adjusted Line No. Contract Test Year Adjustments Test Year 0//-/0/ Structured Borger Energy Associates, L.P. - Blackhawk Capacity and Fixed O&M $ 0,, $ 00, $,,0 Variable O & M $,,0 $,0 $,,0 Oneta Power, LLC (// - //) (I) (Formerly Calpine Energy Services, L.P.) Capacity Payment $,,0 $,0 $,0,00 Variable O&M Payment 0,0.00,0.00,.00 Scheduling Charge $,0,00 $,0 $,,0 Oneta Power, LLC (// - //) (II) (Formerly Calpine Energy Services, L.P.) 0 Capacity Payment $ 0,0,000 $,000 $ 0,0,000 Variable O&M Payment,.0,.0 0,0.00 Scheduling Charge $,0,0 $,, $,,0 City of Lubbock (Cooke Units) Capacity Payment $,,0 $ 0,0 $,,0 O&M Payment $ 0,0 $ (0) $ 0,0 Golden Spread Electric Cooperative, Inc. - Mustang Capacity Payment $,,000 $ (,,000) $ - Variable O&M Payment - - - Start Payments $ - $ - $ - 0 Lea Power Partners, LLC - Hobbs Plant Capacity Payment $,,0 $ (,) $,00, Dispatchability Payment,,0.0 (,.0),,.00 Tolling Payment,,.00,.00,,.00 Turbine Starts Payment $,00 $ 0 $,0 Sid Richardson Carbon, Ltd. Capacity Payment $ 0, $ (,) $ 0, Energy Charge $,0 $ 0 $,0 Total $ 0,0, $,,0 $,, RR - Page of 0 0
Attachment JCK-RR- Page of Docket No. Southwestern Public Service Company Timeline of PPAs For Which Recovery is Requested Thermal Purchased Power Agreements Line No. Contract Start Date End Date Borger Energy Associates, L.P. June, June, 0 Oneta Power, LLC (I) fka Calpine Energy Services, L.P. (I) Jan., 0 Dec., 0 Oneta Power, LLC (II) fka Calpine Energy Services, L.P. (II) June, 0 May, 0 City of Lubbock, Texas (Cooke Units) July, 00 June 0, 0 Golden Spread Electric Cooperative, Inc. (Mustang MW Capacity Purchase) June, 0 May, 0 Lea Power Partners, LLC Sept., 00 Sept., 0 Sid Richardson Carbon, Ltd. Aug., 00 July, 0 RR - Page 0 of 0 0
Attachment JCK-RR- Page of Docket No. Southwestern Public Service Company Workpapers of Jeffrey C. Klein Line No. Contracts Borger Energy Per Book Test Year 0//-/0/ Test Year Energy (MWh) 0//-/0/ Pro Forma Adjustment Capacity & Fixed O&M $ 0,, $ 00, $,,0 Rate Year Costs //-// Notes Capacity and fixed O&M Rate = $./kw-month effective June, 0 and $./kw-month effective June, 0 based on 0 budget. Capacity Availability Factor =. based on 0 budget. Capacity =, kw based on July 0 capacity test. Variable O&M Payment $,,0,, $,0 $,,0 Variable O&M rate =.0/MWh effective June, 0 and $./MWh effective June, 0 based on 0 budget. Oneta I (-) Capacity Payment $,,0 $,0 $,0,00 Capacity payment rates in accordance with 0 budget.* Variable O&M Payment $ 0,0,00,.,. Scheduling Charge $,0,00 $,0 $,,0 Based on 0 budget. Variable O&M payment rates in effect // and // in accordance with 0 budget.* Oneta II (-) Capacity Payment $ 0,0,000 $,000 $ 0,0,000 Capacity Payment rates in accordance with 0 budget.* Variable O&M Payment $,,0,. 0,0. Scheduling Charge $,0,0 $,, $,,0 Based on 0 budget. Variable O&M payment rates in effect // and // applied in accordance with 0 budget.* City of Lubbock--Cooke Capacity Payment $,,0 $ 0,0 $,,0 0 O&M Payment $ 0,0,0 $ 0 $ 0,0 Capacity payment rate is fixed at $,0/MW-month for term of PPA. Capacity payment is based on 0 summer capacity test results of MW. Cooke Unit ( MW) not available until May, 0 based on LP&L projections and is not included in Rate Year. Test Year reflects capacity payment refunds for some of the LP&L units being out of service. O&M payment is fixed at $.0/MWh for term of PPA through /0/. RR - Page of 0 0
Attachment JCK-RR- Page of Docket No. Southwestern Public Service Company Workpapers of Jeffrey C. Klein Line No. Contracts Per Book Test Year 0//-/0/ Test Year Energy (MWh) 0//-/0/ Pro Forma Adjustment Rate Year Costs //-// Notes Golden Spread PPA terminated //. Capacity Payment $,,000 $ (,,000) $ - Variable O&M Payment $ - - - Start Payments $ - $ - $ - Lea Power Partners Capacity Payment $,,0 $ (,) $,00, Dispatchability Payment $,,0 (,.0),,.00 Tolling Payment $,,,,,.,,. Turbine Starts Payment $,00 $ 0 $,0 Capacity payment rate & capacity availability factor (CAF) in accordance with 0 budget. Capacity rate=$./kw-month (fixed for term). CAF =.. Dispatchability rate=$./kw-month. Dispatch Availability Rate =. in accordance with 0 budget. Tolling Price of $.0/MWh in effect // and $./MWh in effect // in accordance with 0 budget. Per Book Test Year includes $0, for heat rate adjustments applicable to the Test Year. The Rate Year Costs include $,0, for the heat rate adjustment calculated using the results of the June 0 heat rate test. First successful starts each calendar year are $0 (one start during test year). $ per start in effect // is $,0. Sid Richardson Capacity Payment $ 0, $ (,) $ 0, Capacity payment rate = $.0/KW-month (fixed for term) and average net capacity of.0 MW in accordance with the 0 budget. Energy Charge $,0,0 $ - $,0 Energy Charge fixed at $.00/MWh. 0 Total $ 0,0, $,,0 $,, * Refer to Schedule I-(CONF). RR - Page of 0 0