Docket No. 0000--ER-1 Witness: Joelle R. Steward BEFORE THE WYOMING PUBLIC SERVICE COMMISSION ROCKY MOUNTAIN POWER Rebuttal Testimony of Joelle R. Steward September 01
11 1 1 1 1 1 1 1 1 0 1 Q. Are you the same Joelle R. Steward who presented direct and supplemental testimony in this proceeding? A. Yes. I am. Q. What is the purpose of your rebuttal testimony? A. In my rebuttal testimony, I address the Office of Consumer Advocates ( OCA ) witness Denise K. Parrish s testimony relating to transmission reclassification, and I also respond to Wyoming Industrial Energy Consumers ( WIEC ) witness Kevin C. Higgins testimony concerning disaggregation of transmission line losses. Q. Do either of these issues alter the cost of service, rate spread, or rate design you proposed in your initial testimony for this proceeding? A. No. No party proposed changes to the Company s proposed cost of service, rate spread, or rate design in this proceeding. Accordingly, the Company will use the same approach on these elements that I outlined in my direct testimony on the final ordered revenue requirement in this proceeding. RECLASSIFICATION Q. Please summarize OCA witness Ms. Parrish s comments regarding transmission asset reclassification. A. On pages - in her direct testimony, Ms. Parrish notes that the Company is in the process of reviewing transmission and distribution lines to ensure that they are in the correct category. She recommends that with any proposed reclassification, the Company should be required to address if this reclassification will impact rate Page 1 Rebuttal Testimony of Joelle R. Steward
11 1 1 1 1 1 1 1 1 0 1 schedule changes for customers, including whether creating a new subtransmission tariff would be appropriate. Q. Does the Company agree to address how this reclassification may impact rate schedules at the time it makes a proposal? A. Yes. However, the Company does not currently anticipate changes in the Company s Schedule tariff as a result of this reclassification. Service under the schedule is for customers whose standard transmission service voltage is kv or greater. While the Company may reclassify some lines as transmission or distribution, the underlying voltage of those lines will not change as a result of the Company s investigation. The reclassification will, however, likely impact the transmission line loss factors used for cost of service allocations and is therefore another factor to be considered for the timing of when to update the line loss study as directed by the Commission and discussed below. DISAGGREGATION OF TRANSMISSION VOLTAGE LOSS FACTORS Q. Does WIEC witness Mr. Higgins agree with your reasons for delaying the development of disaggregated transmission line losses as set forth in your supplemental testimony? A. No. In my supplemental testimony, I explain that the Company was deferring the development of disaggregated transmission line loss factors as ordered in Docket No. 0000--ER-1 until after the resolution of its filing with the Federal Energy Regulatory Commission ( FERC ) to update its transmission loss factor in the Company s Open Access Transmission Tariff ( OATT ). Mr. Higgins contends that there is no direct connection between the loss factor filed with Page Rebuttal Testimony of Joelle R. Steward
11 1 1 1 1 1 1 1 1 0 1 FERC and the disaggregated transmission loss study ordered by the Commission. He characterizes the development of the loss factor filed with FERC as an accounting approach and the development of the loss study which is used in the cost of service study as a more in-depth engineering approach. Q. Do you agree that the two approaches are different and therefore irrelevant? A. No. The Company agrees that the approaches are different, however, the Company does not propose to conduct different transmission line loss studies for different jurisdictions, therefore, the updated calculation is relevant. The loss factor recently updated for the Company s OATT is a different methodology than previously used for updating loss factors. The different approach is the result of extensive discussions with parties during the last FERC rate case and was collaboratively developed to address concerns with the previous approach. The Company treats its transmission network as one system that serves both retail and wholesale customers. Developing different loss factors for wholesale versus retail transmission service is unnecessary and confusing. Nonetheless, because of concerns raised about the updated transmission loss factor filing at FERC and the timing required to address those issues before proceeding with preparing a disaggregated study, the Company has not proposed to reflect the updated transmission loss factor, which is an increase over the prior transmission loss factor, in the cost of service study in this proceeding. Q. Does the Company still plan to prepare a disaggregated transmission loss factor study? A. Yes. However, depending on the timing of the Company s next rate case, it may Page Rebuttal Testimony of Joelle R. Steward
not be completed prior to filing that case. One new consideration that has arisen is the reclassification between transmission and distribution mentioned above. This reclassification will necessitate a new loss factor analysis that may, by its nature, reflect a disaggregation of losses above kv. The Company is mindful of the Commission s order in Docket No. 0000--ER-1 and does not think that it is necessary for the Commission to order a specific timeline for the required study in this proceeding. The Company will continue to provide updates to Commission Staff, as directed by the Commission in the last order. Q. Does this conclude your rebuttal testimony? A. Yes. Page Rebuttal Testimony of Joelle R. Steward