Вы находитесь на странице: 1из 180




3 -------------------------------------------------------


5 -------------------------------------------------------




9 -------------------------------------------------------

10 PURSUANT TO NOTICE to all parties in

11 interest, the above-entitled matter came on for hearing


13 WENDY M. MOSER, Commissioners of the Public Utilities

14 Commission, on February 1, 2017; said proceedings

15 having been reported in shorthand by James L. Midyett,

16 Alan Bjork and Harriet S. Weisenthal, Certified

17 Shorthand Reporters.

18 WHEREUPON, the following proceedings were

19 had:
























Direct Examination by Mr. Sopkin 26
4 Cross-examination by Mr. Cocian 28
Cross-examination by Mr. Calvano 37
5 Cross-examination by Ms. Eckert 41
Cross-examination by Mr. Detsky 44
6 Cross Examination by Mr. Minor 99
Cross Examination by Ms. Overturf 106
7 Cross Examination by Mr. Dixon 134
Examination by Ms. McLauthlin 143
8 Examination by Commissioner Koncilja 157
Examination by Chairman Ackermann 167



12 Exhibit No. 1 4 27
Exhibit No. 2 4 27
13 Exhibit No. 3 4
Exhibit No. 4 4
14 Exhibit No. 5 4
Exhibit No. 6 4
15 Exhibit No. 7 4
Exhibit No. 8 4
16 Exhibit No. 9 4
Exhibit No. 10 4
17 Exhibit No. 11 4
Exhibit No. 12 4
18 Exhibit No. 13 4
Exhibit No. 14 4
19 Exhibit No. 15 4
Exhibit No. 16 4
20 Exhibit No. 17 4
Exhibit No. 18 4
21 Exhibit No. 19 4
Exhibit No. 20 4
22 Exhibit No. 21 4
Exhibit No. 22 4
23 Exhibit No. 23 4
Exhibit No. 24 4
24 Exhibit No. 25 4
Exhibit No. 26 4
25 Exhibit No. 27 4
Exhibit No. 28 4


3 Exhibit No. 29 4
Exhibit No. 30 4
4 Exhibit No. 31 4
Exhibit No. 32 4
5 Exhibit No. 33 4
Exhibit No. 34 4 18
6 Exhibit No. 35 4 18
Exhibit No. 36 4 18
7 Exhibit No. 37 4 47
Exhibit No. 38 4 47
8 Exhibit No. 39 4 47
Exhibit No. 40 4 47
9 Exhibit No. 41 4 47
Exhibit No. 42 4 136
10 Exhibit No. 43 4 136
Exhibit No. 44 4 136
11 Exhibit No. 45 4 136
Exhibit No. 46 4 27
12 Exhibit No. 47 40 41
Exhibit No. 48 58 59
13 Exhibit No. 49 58 59
Exhibit No. 50 118 119
14 Exhibit No. 51 129 132
Exhibit No. 52 178
15 Exhibit No. 53 178
Exhibit No. 54 178
16 Exhibit No. 55 178
Exhibit No. 56 178
17 Exhibit No. 57 178









2 (Exhibit Nos. 1 through 46 marked for

3 identification.)

4 CHAIRMAN ACKERMANN: Good morning, ladies

5 and gentlemen.

6 This is Proceedings No. 16A-0396E. This

7 is the matter of the Public Service Company of Colorado

8 for approval of its 2016 Electric Resource Plan.

9 We are webcasting this matter.

10 I am Chairman Jeff Ackermann.


12 Frances Koncilja.

13 COMMISSIONER MOSER: Commissioner Wendy

14 Moser.

15 CHAIRMAN ACKERMANN: I think we will

16 start with entries of appearances. We'll start with

17 the applicant and move our way across the tables.

18 MR. IRBY: Good morning, Mr. Chairman,

19 Commissioners.

20 Christopher M. Irby on behalf of Public

21 Service Company of Colorado. Also with me is Gregory

22 Sopkin and Matthew Larson of the law firm of Wilkinson

23 Barker & Knauer.

24 MR. NOCERA: Good morning, Commissioners.

25 David Nocera, Senior Assistant Attorney

1 General, appearing on behalf of staff of the Public

2 Utilities Commission. And I would also like to enter

3 the appearance of Michael Santisi, Senior Assistant

4 Attorney General.

5 MR. COLEMAN: Good morning, Chairman,

6 Commissioners.

7 My name is Brent Coleman, Assistant

8 Attorney General, representing the Office of Consumer

9 Counsel. I would also like to make the appearance of

10 First Assistant Attorney General Tom Dixon.

11 CHAIRMAN ACKERMANN: Good morning.

12 MS. OVERTURF: Good morning, Mr. Chairman

13 and Commissioners.

14 My name is Erin Overturf, representing

15 Western Resource Advocates.

16 MR. DETSKY: Good morning, Commissioners.

17 My name is Mark Detsky of the law firm of

18 Dietze & Davis, entering my appearance on behalf of the

19 Colorado Independent Energy Association.

20 MR. CALVANO: Good morning Commissioners.

21 My name is Vincent Calvano. I'm

22 representing the Colorado Solar Energy Industry

23 Association also known as CoSEIA.

24 MS. TORMOEN HICKEY: Good morning

25 Commission.
1 I'm Lisa Tormoen Hickey from the law firm

2 of Tormoen Hickey, LLC, representing the Interwest

3 Energy Alliance.

4 MR. COCIAN: Good morning, Commissioners.

5 Emanuel Cocian, Holland & Hart,

6 representing the Colorado Energy Consumers. And I

7 would also like to enter the appearance of Michelle

8 Brandt King.

9 MR. FANYO: Good morning, Commissioners.

10 Richard L. Fanyo, representing Climax

11 Molybdenum Company.

12 MS. KALISH: Good morning, Commissioners.

13 Senior Assistant City Attorney Debra

14 Kalish on behalf of the City of Boulder.

15 MR. DUNBAR: Good morning, Commissioners,

16 Scott Dunbar of the law firm of Keyes &

17 Fox, on behalf of Sustainable Power Group LLC, better

18 known as sPower. I would also like enter the

19 appearance of my colleague Kevin Fox. He's not present

20 today but he's attorney of record on this case.

21 MR. PUTNAM: Good morning, Mr. Chairman

22 and Commissioner.

23 My name is John Putnam from the law firm

24 of Kaplan Kirsch and Rockwell representing Southwest

25 Generation Operating Company.

1 MS. ECKERT: Good morning, Commissioners.

2 My name is Susan J. Eckert.

3 I'm here on behalf of the Rocky Mountain

4 Environmental Coalition and the Colorado Building and

5 Instruction Trades Counsel.

6 MR. HIATT: Good morning, Commissioners.

7 My name is Michael Hiatt, representing

8 Earth Solar. I would also like to enter the appearance

9 of my colleague Joel Minor.

10 MS. McLAUTHLIN: Erin McLauthlin,

11 Assistant Attorney General on behalf of the Commission

12 today. I would also like to enter the appearance of my

13 colleagues Matt Lindsay and also First Assistant

14 Attorney General Paul Gomez.

15 CHAIRMAN ACKERMANN: That sounds like

16 everybody who certainly is in the room. Very good.

17 Okay, preliminary matters then we'll move

18 on to.

19 MR. IRBY: Yes, Mr. Chairman, the company

20 has a few.


22 MR. IRBY: With regard to the witness

23 matrix that we provided in this proceeding, if you will

24 see, I wanted to make the Commission aware of a few

25 scheduling issues. CIEA's witnesses, Mr. Monsen, and

1 Western Resource Advocates' witness Mr. Goggins, we've

2 been informed that the two of them may not be available

3 until Tuesday of next week, so we want to make the

4 Commission aware of that.

5 We also wanted to raise three of the

6 witnesses on the matrix currently do not have any time

7 scheduled for cross from any of the other parties.

8 Those are witnesses Ms. Connie Paoletti of Public

9 Service Company of Colorado and sPower's two witnesses,

10 Mr. Evans and Mr. Isern. My understanding is Mr. Evans

11 and Mr. Isern could be available on Friday but they are

12 currently out of town.

13 Ms. Paoletti can be available in

14 accordance with the schedule. However, if there are no

15 Commission questions for those witnesses, I think that

16 both Public Service and sPower would appreciate knowing

17 that and perhaps they could be excused from the

18 proceeding upon the Commission's time.


20 Thank you.

21 So Commissioners, it's a matter we do not

22 have to deal with at this moment or give you some time

23 to confer or we can deal with it now. What I'm hearing

24 is we have company witness Paoletti as well as sPower

25 witnesses Evans and Isern who have no cross scheduled

1 for them; so it's a matter in front of us as

2 Commissioners and Commission Counsel to discuss whether

3 we anticipate questions or can just accept the

4 testimony into the record and release those witnesses

5 from the schedule?

6 We can deal with if now or we can deal

7 with it later if you are not prepared.


9 we deal with it later.


11 Thanks.

12 COMMISSIONER MOSER: When you say they

13 are out of town; are they flying in, driving in or, you

14 know, within the state and have to drive up.

15 MR. IRBY: I believe you would have to

16 ask Mr. Dunbar.

17 MR. DUNBAR: I can speak to that. Both

18 of the witnesses are out of state but they can come to

19 Colorado to answer any questions that any of you might

20 have.

21 Thank you.

22 CHAIRMAN ACKERMANN: And we'll go back to

23 dealing with the rest of witness availability in a

24 moment. Let's work our way through a couple other

25 preliminary matters if we may.

1 It's my understanding that all the

2 parties have marked exhibits in accordance with the

3 hearing exhibit list as prepared by Public Service,

4 plus additional items. I guess there are about 12

5 additional items, so we are all set with that; is that

6 correct?

7 MR. IRBY: That's my understanding, Your

8 Honor.

9 CHAIRMAN ACKERMANN: I believe we had

10 come in in the last day or two some corrected

11 corrections to exhibits that have been filed so we have

12 corrected copies as well just to make a note that if

13 the corrections are minor, I do not believe we need to

14 have the witnesses walk through all the corrections of

15 your exhibits, but if they are more substantive, I

16 don't think that they would be a good use of time in

17 terms of presenting your witness; but if they are

18 minor, we don't need to actually use live testimony for

19 that.

20 Are there any questions on that?

21 MR. IRBY: No questions, Your Honor. I

22 was going to let the parties know that Public Service

23 Company filed a table of our corrections of what

24 testimony was corrected in what manner and when

25 Ms. Jackson takes the stand the company will ask for
1 leave to introduce that as an exhibit on the direct

2 testimony so that the record is clear as to which

3 changes were made to our witnesses.

4 CHAIRMAN ACKERMANN: Thank you. We can

5 handle that at that point in time. Very good.

6 Also a question to Public Service: You

7 filed on January 31st our annual progress report for

8 the company's 2016 ERP. We would like to confer with

9 you, have you moved that forward as an exhibit into the

10 record if it's not already been done so? And whether

11 we can do that today, do that tomorrow, just to bring

12 them in.

13 MR. IRBY: We have not done that yet,

14 Your Honor, but we would be prepared to do that

15 while -- when the company is on the stand.

16 CHAIRMAN ACKERMANN: Very good. Thank

17 you. That would be fine.

18 So then also to all the parties then, we

19 have received the order of cross-examination filed and

20 the order of witnesses and estimated cross-examination

21 times, with the exception now of what Mr. Irby just

22 raised about some witnesses possibly being available to

23 Tuesday if they are needed. We are now looking as if

24 we can complete this record in four days as opposed to

25 the six that are scheduled. So we're looking at the

1 company's witnesses starting today and through

2 tomorrow. Staff and OCC on Friday. And then all of

3 the witnesses on Monday as sort of our general frame

4 that we're having.

5 Are there other questions regarding

6 witness availability besides those?



9 MS. OVERTURF: Mr. Chairman, I wanted to

10 note WRA's witness Andy Goggins does live out of state.

11 We were planning on putting him to the stand on

12 Tuesday; however it would potentially be possible to

13 have him available Monday afternoon if you would

14 prefer, just understanding the schedule may be

15 shifting.

16 CHAIRMAN ACKERMANN: Okay. Thank you.


18 Mr. Chairman, perhaps we could consider as part of the

19 scheduling whether or not out of state witnesses could

20 appear via phone. I know in the past that was not

21 permitted; but if somebody is coming in for just a few

22 questions, I would be amenable to considering that.

23 Maybe we could talk to counsel at a break.

24 CHAIRMAN ACKERMANN: We'll make a note

25 and we'll discuss that as a protocol matter with

1 counsel.

2 Thank you.

3 A couple other items as we look at our

4 calendar then.

5 MR. PUTNAM: Mr. --


7 MR. PUTNAM: One other issue: Southwest

8 Generation witness Matthew Mooren is also out of state.

9 He's actually planning to come in on Monday morning so

10 he kind of won't be available until Monday afternoon;

11 but he will be available all Monday afternoon through

12 Wednesday, depending on the order of proceedings.


14 Mr. Putnam.

15 So as we're moving through our Monday

16 schedule, we'll see when your witness is available and

17 if need be, we can do some adjusting or it sounds like

18 we are kind of holding open Tuesday as a catch day,

19 depending on how our schedule works out and some

20 availability and matters of Commission and Commission

21 Counsel seeing who they need to cross.

22 So thank you.

23 MR. PUTNAM: Thank you.


25 other questions or topics regarding availability and

1 order of witnesses?

2 (No response.)

3 CHAIRMAN ACKERMANN: Seeing none, a

4 couple of notices: So today, for a couple reasons, is

5 a shortened day with our weekly meeting; so thank you.

6 We're starting late today. We're starting late today

7 and also for other matters sort of pressing upon the

8 Commission, we will make a hard stop in about an hour

9 from now, so about 11:45 and then not reconvene until

10 1:30. So you will get an extended lunch; and then

11 we'll make another hard stop at about 3:45 to clear the

12 room and set up for a public comment period starting at

13 4.

14 So that's the flow today. That's how

15 we'll work today. Tomorrow will be much more of a,

16 quote, unquote, normal today; but when we get around to

17 a Monday, Monday also, because of outside matters also

18 pressing upon us, we will not start Monday until 10 in

19 the morning, which is also why we're holding open

20 Tuesday; although it looks like we may be done by

21 Monday, but we'll hold that open for now.

22 Yeah, that's -- I think that's all

23 matters regarding the schedule as it stands right now.

24 Any other preliminary matters we need to

25 deal with?
1 Mr. Irby.

2 MR. IRBY: Thank you.

3 Last night we discovered that when we

4 filed our corrections to Attachment 3-4.2, we had only

5 filed the cover page. We filed the balance of that

6 attachment this morning, 17 pages.

7 We apologize for the confusion there.

8 The party have had that attachment since Wednesday of

9 last week. It was an attachment to a discovery

10 response. We're sensitive to the fact that the

11 Commission hasn't had it until this morning and we do

12 have copies of it available should you desire those.


14 That was -- you said that was 3-

15 MR. IRBY: 3-4.2.


17 MR. IRBY: That's in Volume 3 of the ERP

18 plan sponsored by Ms. Jackson.


20 Thank you very much.

21 Ms. Overturf?

22 MS. OVERTURF: Mr. Chairman, one other

23 preliminary matter: If the Commissioners read the news

24 as excessively as I do, you have probably seen with the

25 presidential transition there are certain federal

1 agency websites -- particularly those that deal with

2 climate change that are undergoing significant revision

3 or are being wholesale deleted. The long-term

4 availability of information that was cited in WRA

5 witness Tellinghuisen's testimony, we are concerned may

6 not be available for the Commission once the record in

7 this proceeding is closed.

8 So as a result, we are providing copies

9 of certain URL's or reports that were hosted on federal

10 government websites that were cited in Ms.

11 Tellinghuisen's testimonies. I have provided each of

12 the parties with electronic copies of those and I have

13 hard copies for you today. I'll go through quickly

14 what they are. One, which has been marked as Exhibit

15 34 is the EPA website describing the social cost of

16 carbon. One, marked as Exhibit 35, is the 2016 update

17 on the social cost of carbon; and that which has been

18 marked as 36, it's a very voluminous document, which is

19 the regulatory analysis for the clean power plan.

20 That last document, the exhibit which has

21 been marked as Exhibit 35 -- excuse me, 36, is over 400

22 pages in length and so I did not print that out for

23 you, Commissioners; but there is a full copy for you in

24 the record which the court reporter has.

25 This is a somewhat unusual request but

1 WRA would ask the Commission to take administrative

2 notice of these documents and notice the fact that they

3 did exist and they were on federal government websites

4 at the time that Ms. Tellinghuisen's testimony was

5 filed.

6 Would you like me to approach with these

7 copies?

8 CHAIRMAN ACKERMANN: Sure. Thank you.

9 And if I understand correctly then, what

10 you are providing to us being copies of websites are --

11 shows the date and the URL at the time of that date,

12 correct.


14 CHAIRMAN ACKERMANN: I'll let you get

15 back to the microphone to answer that.

16 MS. OVERTURF: Only one of these

17 documents is in fact a print out of a website and that

18 one you can see the date it was accessed and you can

19 see the URL. The other two documents are reports that

20 were hosted on -- they were PDFs that were hosted on

21 federal government websites so the URL and date that

22 they were accessed was not available but we wanted to

23 make sure they remained available for the Commission to

24 consider.


1 administrative notice of those then into the record.

2 We can do that now or do that at the

3 point in time when your witness is on the stand.

4 MS. OVERTURF: I guess I would prefer to

5 do it now since I don't know that there are any

6 questions about them.

7 CHAIRMAN ACKERMANN: I'm fine with that.

8 COMMISSIONER MOSER: Can I just ask about

9 the administrative notice of the 400-page document

10 because I think when we have it in the record as

11 Commissioners we may have an obligation to read

12 everything that's there. And I don't know if there is

13 -- I don't know what's in it, but is there a particular

14 section or a particular point? We may want to see if

15 you could narrow that down to make the point that is

16 being made by the testimony, something along that line?

17 CHAIRMAN ACKERMANN: Are you looking for

18 an executive summary or pointing us to the relevant

19 portions --

20 COMMISSIONER MOSER: Or specific perhaps

21 paragraphs.


23 that's fair to the parties at this late date. They

24 have given us voluminous documents before; we can go

25 through them -- in the middle of the ERP -- in the

1 middle of an ERP hearing to have them point out things

2 and if they point out incorrectly and someone will say

3 it's incomplete. I don't think there is an obligation

4 to read each and every page.


6 correctly, this is either footnoted or otherwise

7 referenced in the testimony; so by extension it's --

8 MS. OVERTURF: Exactly. This was a

9 document that was specifically cited in Ms.

10 Tellinghuisen's testimony; and in case the Commission

11 wanted to review that reference, we wanted to make sure

12 the material was available to the Commission.

13 COMMISSIONER MOSER: I think Commissioner

14 Koncilja had a good suggestion on how to a address it.

15 I agree.


17 preliminary matters before we proceed?

18 MR. IRBY: Yes, Mr. Chairman -- this is

19 the last one from the company.

20 CHAIRMAN ACKERMANN: Is that a promise?

21 MR. IRBY: Promise.


23 promise.

24 MR. IRBY: On Monday of this week, staff

25 of the Commission and the Office of Consumer Counsel

1 filed surrebuttal testimony addressing the company's

2 position that instead of presenting one load forecast

3 and resulting bid portfolios, the company would instead

4 use its Strategis Model to develop three, using a low,

5 medium and high forecast. Staff's testimony sets forth

6 four recommendations for that. The company has had the

7 opportunity to talk to the other intervenors in this

8 case and we thought it might be helpful to the

9 Commission, instead of waiting until statements of

10 position or trying to discern from cross-examination or

11 perhaps other witnesses wanting to weigh in at the

12 beginning of their testimony as to staff's proposal,

13 the general agreement or concern categories of where

14 the parties stand in the case right now on staff's

15 position.

16 As staff indicated in it's testimony, the

17 company is in support of those four recommendations and

18 I'm authorized to state on behalf of the parties in the

19 room today, in a general category support,

20 non-opposition or general concerns, where the parties

21 land at this point on staff's recommendation.

22 CHAIRMAN ACKERMANN: So if I hear you

23 correctly -- I want to make sure I understand exactly

24 what you are asking -- you would be offering a

25 statement now into the record on behalf of Public

1 Service?

2 MR. IRBY: Yes, Your Honor. I would just

3 simply be stating these parties support staff's

4 proposal. These parties --


6 FAR MR. DETSKYORAN: -- have a concern

7 with staff proposal; and then a couple parties didn't

8 get back to us in the time period.

9 There is a lot of consensus, which is why

10 we thought it might be helpful to the Commission to

11 have that information at the start of the hearing; you

12 might gain some efficiencies in where people are coming

13 out on the proposal from staff.

14 CHAIRMAN ACKERMANN: Sure. I'm looking

15 for just sort of proper flow to this, whether to have

16 you just make that statement now or whether you want to

17 have either your first or second witness make that

18 statement as part -- either way would be fine, I guess.

19 MR. IRBY: I'm prepared to give you the

20 listing --


22 MR. IRBY: -- or I could hand the listing

23 off to one of our witnesses.

24 CHAIRMAN ACKERMANN: Is this a written

25 list you want to share with us or do this orally?

1 MR. IRBY: No, Your Honor, I was just

2 going to do it orally.

3 CHAIRMAN ACKERMANN: That works for me.

4 I'm fine with that. Let's proceed with that.

5 MR. IRBY: The parties which are in

6 agreement with staff's four recommendations in its

7 surrebuttal testimony are obviously the staff, Public

8 Service Company of Colorado, the Office of Consumer

9 Counsel, the Colorado Energy Office, Western Resource

10 Advocates, the Colorado Industrial Energy

11 Association -- I think I might have messed that up.


13 MR. IRBY: Independent. Thank you.

14 Southwest Generation, sPower, Vote Solar,

15 Climax, the Rocky Mountain Environmental Labor

16 Coalition and Colorado Building and Construction Trades

17 Council AFL-CIO. And REI -- IREA.

18 The parties which have some degree of

19 concern with staff's proposal are Interwest Energy

20 Alliance, CoSEIA, and the City of Boulder.

21 We did not hear a formal position on

22 staff's proposal from CEC, the Local 111 or Invenergy.

23 Thank you, Your Honor.


25 For the record --

1 MR. COCIAN: Chairman, so just for

2 clarification purposes Colorado Energy Consumers'

3 opposition on this process, generally, we are generally

4 open to the process but we just want the opportunity to

5 cross-examine, ask some questions to make sure there is

6 adequate ratepayer protections in place.


8 It's in the record.

9 Any other preliminary matters?

10 MR. DETSKY: Yes, Your Honor.


12 MR. DETSKY: On behalf of the Colorado

13 Independent Energy Association, I have copies of the

14 Public Service electric resource plan decisions, Phase

15 I and RRR from the 2007 ERP and Phase I, RRR from the

16 2011 ERP and the Phase II decision from the 2011 ERP.

17 I am going to -- I'm making a motion for the Commission

18 to take administrative notice of these decisions under

19 rule 501(c).

20 I am prepared to talk about the exact

21 paragraphs I am asking to be noticed if the Commission

22 would like to hear that.

23 I have circulated copies by e-mail to all

24 the parties. I have copies here for the Commissioners,

25 if I may approach; and I've given copies to Commission

1 advisors and also to the company who requested one,

2 although the parties were okay with the e-mail copy.

3 I've also marked them as Exhibits, 37 through 41. So

4 five decisions. And if I may approach, I could hand

5 those to you.

6 CHAIRMAN ACKERMANN: Before you do, does

7 this relate to your cross of a particular company

8 witness or to your presentation of your witness?

9 MR. DETSKY: It relates to my

10 cross-examination of two company witnesses, witnesses

11 Alice Jackson and Jim Hill. I'm going to be discussing

12 with them. Some of it is just contextual and some for

13 clarification.

14 CHAIRMAN ACKERMANN: The reason I ask is

15 it would probably be helpful to -- I'm sure you are

16 prepared to move in that direction -- to give us some

17 context as to the relevant portions and how it relates.

18 Maybe we take that up right as you come up to present

19 your cross; and we can do it right at the front end of

20 that and you start your cross of the first witness.

21 MR. DETSKY: We could do that. My only

22 preference would be to move them all at once as opposed

23 to going through them each one individually but; other

24 than that I'm fine.

25 CHAIRMAN ACKERMANN: Because now or

1 later, just so we have kind clarity of the relevant

2 portions in front of us, so we understand where you are

3 go with that because there is a lot of material there,

4 I'm assuming. So it might be more helpful at that

5 point in time if we do it right before, I guess, your

6 cross-examination of Ms. Jackson. If that works, we'll

7 going with that.

8 I'm also aware, too, in conferring with

9 our court reporter that some of the items in the record

10 that came in as bound -- just for information notice --

11 the binding is removed from the exhibits as they are

12 put in the record. And I think that's particularly

13 Volumes 1, 2, and 3 of the plan itself. So as you deal

14 with that, if you take it apart, put it back together;

15 we'll try to keep it in one nice clean order and we

16 will all be working with the same document as we move

17 forward. So that would be appreciated.

18 Seeing nothing else preliminary we need

19 to deal with, we have some time now we can proceed,

20 Public Service, with your first witness.

21 MR. SOPKIN: Thank you, Mr. Chairman.

22 Public Service calls Alice Jackson to the

23 stand.


25 having been called as a witness, being first duly

1 sworn, testified as follows:



4 Q Please state your full name for the

5 record.

6 A My name is Alice K. Jackson.

7 Q By whom are you employed and in what

8 capacity?

9 A Xcel Energy Services, Inc., and my title

10 is Vice President Strategic Revenue Initiatives.

11 Q Has your title changed from the time you

12 filed direct testimony to the time you filed rebuttal

13 testimony?

14 A It has.

15 Q Thank you. So did you, Ms. Jackson,

16 cause to be filed what is marked as Hearing Exhibit No.

17 1, direct testimony of Alice K. Jackson and

18 attachments?

19 A Yes.

20 Q And that includes your direct testimony,

21 the application in this ERP case, and Volumes 1, 2, and

22 3 of the ERP?

23 A That is correct.

24 Q Did you also cause to be filed Hearing

25 Exhibit No. 2, the corrected revised rebuttal testimony

1 of Alice K. Jackson and attachments?

2 A I have.

3 MR. SOPKIN: Mr. Chairman, I don't

4 believe this has been admitted yet, so I would move for

5 their admission.


7 have not. So seeing no objections, they are admitted.


9 Q Ms. Jackson, do you have before you what

10 has been marked as Hearing Exhibit 46, entitled

11 Proceeding No. 16A-0396E, the Public Service 2016

12 Electric Resource Plan Table of Corrections?

13 A I do.

14 MR. SOPKIN: And, Your Honor, as Mr. Irby

15 mentioned, this is a document which describes all of

16 the corrections that have been made to the company's

17 testimonies; and, in fact, it was filed with the

18 Commission, I believe, midafternoon yesterday. And we

19 thought it might be helpful to the Commissioners and to

20 the parties to enter this as an exhibit. And so it is

21 marked as Hearing Exhibit 46 and we would move for its

22 admission.


24 objections, it's admitted.

25 MR. SOPKIN: And at this time I would

1 tender Ms. Jackson for cross-examination.


3 So following our order then, who is

4 first, is that the -- looking from staff, CEC -- am I

5 reading that correctly?



8 Q Good morning, Ms. Jackson.

9 A Good morning.

10 Q My name is it Emanuel Cocian. I

11 represent Colorado Energy Consumers in this proceeding.

12 There are a number of uncertainties in

13 this proceeding currently before the Commission with

14 how the parties will kind of -- regarding the resource

15 need that's required; is that correct?

16 A Yes, sir.

17 Q And the company proposes a range of

18 resource scenarios to address that uncertainty,

19 correct?

20 A We do.

21 Q And you would agree that this range of

22 resource approach is a new deviation from the norm, the

23 process that we normally see at the Commission?

24 A The range analysis is. The update

25 portion of it -- of the proposal is not.

1 Q All right. Can you turn with me to your

2 rebuttal testimony at page 16. That's Hearing Exhibit

3 No. 2.

4 A I'm there.

5 Q And looking at lines 6 through 9, your

6 testimony states that you would request that the

7 Commission find that the use of the low, medium and

8 high resource need scenarios to be used in Phase II bid

9 evaluation as described by company witness Mr. James

10 Hill is an appropriate approach to address the

11 uncertainty affecting the company's resource need in

12 this ERP. Did I read that correctly?

13 A Yes, you did.

14 Q Great. Now, staff has recommended a

15 process for review of the range of resource scenarios

16 for Phase II; is that accurate?

17 A Could you define what you mean by a

18 process of review?

19 Q I -- so staff in their surrebuttal

20 testimony suggested a process that I think the company

21 agreed to this morning it's a four-step process where,

22 in Step 1, the company would update its needs scenario

23 and the range of resources, correct?

24 A Yes.

25 Q And then in step 2, comments would be

1 filed by the parties in twenty days.

2 A Correct.

3 Q And the comments would be -- or

4 responsive comments would be filed by the company

5 within twenty days?

6 A That's correct.

7 Q And then the Commission decision would

8 issue three weeks after that.

9 A Correct.

10 Q Now, you would agree that while

11 flexibility may be a good thing if left unchecked, it

12 might give PSCo too much discretion; wouldn't you?

13 A Could you repeat the question, please.

14 Q Sure. While flexibility may be a good

15 thing, if left unchecked, it might give PSCo too much

16 discretion.

17 A That is correct. If we did not have

18 bounds on the way that we are now analyzing the data

19 that's coming in or had accurate information to back up

20 that analysis, it could lead to unintended

21 consequences.

22 Q All right. That process that we

23 discussed a minute ago that staff proposed and the

24 company agreed to --

25 CHAIRMAN ACKERMANN: Mr. Cocian, if you

1 could bring the --

2 (Discussion off the record.)

3 CHAIRMAN ACKERMANN: We're back on the

4 record.

5 Back to you Mr. Cocian.

6 Q Thank you, Mr. Chairman.

7 So for clarification, I believe I

8 misstated when I said twenty days. My understanding --

9 and I just want to verify it's your understanding as

10 well -- that once the company files the update, the

11 process is that two weeks later the parties have an

12 opportunity to comment; is that correct?

13 A Yes. I apologize.

14 Q And then two weeks after, that the

15 company would file responsive comments?

16 A Correct.

17 Q And then three weeks after that, the

18 Commission would issue a decision.

19 A Yes, sir.

20 Q That process, as currently contemplated,

21 does not include the opportunity for discovery; does

22 it?

23 A No, it does not.

24 Q Not even on an expedited basis, correct?

25 A Not that I'm aware of.

1 Q That process does not include the

2 opportunity for an expedited hearing, does it?

3 A Not that I'm aware of.

4 Q And the expedited hearing where PSCo's

5 witnesses would be subject to cross-examination under

6 oath on the range of need and the outcome of that

7 calculation.

8 A It does not.

9 Q That process, as currently contemplated

10 does not include an opportunity for a workshop where

11 the company could present and explain its analysis as

12 opposed to having parties struggle through and try to

13 understand the calculations; is that correct?

14 A That's not contemplated in the current

15 process.

16 Q And yet under the proposed process,

17 ratepayers will be asked to provide comments on the

18 company's filing, correct?

19 A I believe it's the intervenors in the

20 case, not necessarily -- not just ratepayers.

21 Q Understood. And so without any of

22 those -- without discovery, hearing, you are still

23 asking the parties to provide comments regarding the

24 calculation, correct?

25 A I believe so. However, the information

1 that's underlying the data that goes into the different

2 ranges has been discussed in this particular

3 proceeding, is known to the different parties; and it

4 is a matter of looking at the updated forecast. Which,

5 number one, the updated forecast that is underlying the

6 base that's included in this is the same process we've

7 go through in previous ERPs.

8 Q Let me ask this: Absent discovery,

9 cross-examination, or even the opportunity to

10 informally pose questions to the company, how can

11 ratepayers or intervenors meaningfully comment if an

12 issue comes up?

13 A Well, I believe that with the information

14 that they have that's underlying the ranges that are

15 included in the low, medium and high, there has been

16 sufficient information in this particular proceeding to

17 support analysis of, you know, comfort levels or their

18 position as to where the range should land.

19 In the event that the company, you know,

20 presents something and there is concern, that's what

21 the two-week process is for. It's for those parties to

22 be able to voice what those concerns are, for the

23 company to respond to those concerns, and ultimately

24 for the Commission to make a decision.

25 Q Does the company intend to update its

1 resource need during phase -- during the Phase II

2 process?

3 A This would be the update that occurs

4 during the Phase II process.

5 Q So there would be no further updates

6 between this process and -- once the 120-day report

7 comes in?

8 A Not that I'm aware of. But if you would

9 like further clarity, Mr. Jim Hill is the one that

10 would be processing that after that.

11 Q All right. You would agree that the

12 question of resource need is a factual issue; wouldn't

13 you?

14 A I would. That's surrounded by a number

15 of questions and in this particular case as you

16 mentioned, some uncertainties.

17 Q And if the outcome of that updated

18 resource need is substantially different than what the

19 company has presented so far, would the company be

20 amenable to discovery and expedited hearing process?

21 A Can you define would you would determine

22 to be substantial?

23 Q Right now, we don't have any idea of what

24 the need is. We have a general understanding -- it can

25 be anywhere from zero megawatts and plus 500; is that

1 accurate?

2 A Yes, according to the range that's

3 contemplated in the low, medium and high.

4 Q Do you know when the parties and the

5 Commission will know what the actual need of the

6 company is?

7 A Unfortunately it's going to be in the

8 actual year that it occurs; but we have to plan ahead

9 of time, that's why we have the electric resource

10 planning process is to make our best assessment of what

11 that load is going to be on a going-forward basis and

12 that's what we presented in this proceeding.

13 Q At what point will we know that the

14 company's planning on developing in terms of resources?

15 A At the time that this low, medium and

16 high is presented and the Commission makes a decision

17 on whether or not we're doing the low, medium or high

18 case and the resulting portfolios that match that

19 solution.

20 Q Does the company envision the comments

21 that are filed as -- it would be treated as testimony?

22 A I don't know if it's technically correct

23 to call them testimony, but I would anticipate that it

24 would become part of the record that we have in this

25 and the subsequent Phase II proceeding.

1 Q If factual disputes arise and if they are

2 not vetted, how would factual disputes get resolved?

3 A I believe through the process that was

4 contemplated, they are raised by the parties and the

5 concern that they may have with the low, medium and

6 high case and the volumes that were discussed in those;

7 they raise those in their report. The company would

8 respond to that and the Commission would make a

9 decision based off of the information that was

10 presented.

11 Q If the company wants the flexibility of a

12 high, medium and low range for need, is the company

13 willing to have all resource acquisitions during the

14 resource acquisition period come through the ERP?

15 A So if you are talking about the Phase II

16 process that we're going to go through and the megawatt

17 capacity need that is going to result from that Phase

18 II process, and all of that coming through the

19 acquisition process contemplated in Phase II, I believe

20 that's already what we've committed to.

21 Q So all -- let me clarify: All resources

22 through the RAP, through the entire eight-year period

23 will be that the company intends to acquire or that the

24 company via PPA or self-build will be dealt with in

25 this ERP, correct?

1 A The capacity that's identified as part of

2 this Phase I and Phase II process, yes. In the event

3 that something happens outside of that that requires

4 the company to come back to the Commission for a change

5 or for incremental capacity, that would be something

6 that the company would be expected, quite frankly, to

7 pursue independent of the ERP process.

8 MR. COCIAN: Nothing further, Your Honor.


10 So let's see, that brings us to

11 Mr. Calvano, CoSEIA.

12 MR. CALVANO: Thank you, Mr. Chairman,

13 Commissioners.



16 Q Good morning, Ms. Jackson.

17 My name is Vince Calvano.

18 We have met before but I represent the

19 Colorado Solar Energy Industries Association and I have

20 a few questions for you.

21 A All right.

22 Q I would like to start on page 1-49 which

23 is Volume 1 of the what has been has been marked as

24 Hearing Exhibit 1 and admitted, the Electric Resource

25 Plan, AKJ-1.
1 A You said page 49?

2 Q Yes, 1-49.

3 A That's the page at the top that says RAP

4 additions and analysis?

5 Q Right.

6 A All right, I'm there.

7 Q Okay. And I'm going to refer you to that

8 table on that page, Table 1.5-2 on that page; and I

9 would like to draw your attention to the PVRR deltas

10 near the bottom of that table just above the notes

11 section.

12 A I'm there.

13 Q And for the record, could you state what

14 PVRR stands for?

15 A Present value revenue requirement.

16 Q Thank you, Ms. Jackson.

17 As we look at the PVRR deltas for

18 alternatives 2 through 4, we see that adding additional

19 energy to the system leads to lower PVRRs and savings

20 in PSCo's revenue requirement; is that correct?

21 A Adding additional capacity; but, yes, sir

22 from different types of resources.

23 Q Right. And including renewable eligible

24 energy as well?

25 A So these different alternatives plans do

1 incrementally add a variety of renewable resources.

2 Q Thank you.

3 A Uh-huh.

4 Q And just to review -- and alternative 2,

5 there, the addition of 600 megawatts of 100 percent PTC

6 wind, that leads to $440 million of PVRR savings over

7 the all natural gas baseline of alternative 1; is that

8 correct?

9 A It does.

10 Q And similarly in alternative 3, the

11 addition of hundred megawatts of 100 percent PTC and

12 then an addition of 400 megawatts of 80 percent PTC

13 wind leads to $590 million of PVRR savings over the all

14 natural gas baseline of alternative 1; and that means

15 that adding more wind leads to more savings; is that

16 correct?

17 A Yes.

18 Q Okay, thank you.

19 And to follow along, then this

20 alternative IV, we have the addition of 600 megawatts

21 of 100 percent PTC wind and 400 megawatts of 30 percent

22 ITC solar which leads for $570 million in PVRR savings

23 over that alternative 1 baseline; is that correct?

24 A Under the assumptions that are included

25 for the pricing of those resources, yes.

1 Q Right. Thank you.

2 And now these PVRR deltas on this page,

3 Volume 1, are calculated using a discount rate; and

4 that discount rate used is PSCo's average -- after tax

5 weighted average cost of capital or WACC, W-A-C-C, of

6 6.78 percent; is that correct?

7 A It is.

8 Q Okay. And now given a set stream of cost

9 requirements, changing the discount rate will give a

10 different PVRR and therefore different PVRR deltas; is

11 that correct as well?

12 A Yes. Changing the discount rate would

13 change the ultimately resulting PVRR.

14 MR. CALVANO: May I approach?


16 (Whereupon, Exhibit No. 47 was marked for

17 identification.)

18 Q Ms. Jackson, do you have what's been

19 marked in front of you as Hearing Exhibit No. 47?

20 A I do.

21 Q Does this document look familiar to you?

22 A I haven't reviewed this particular

23 discovery response but I have -- prior to today, but I

24 have looked at it and, yes, the answer and the question

25 are in my bailiwick.
1 MR. CALVANO: I would like to move

2 admission of Hearing Exhibit 47.


4 objections, it's admitted.

5 MR. CALVANO: Thank you.

6 I have no further questions.

7 CHAIRMAN ACKERMANN: Okay. That brings

8 us to Mr. Putnam.

9 MR. PUTNAM: No questions, Mr. Chairman.

10 CHAIRMAN ACKERMANN: Okay, thank you,

11 Mr. Putnam.

12 That brings us to Rocky Mountain

13 Environmental Labor, I believe is next, Ms. Eckert.



16 Q Good morning, Ms. Jackson.

17 As you know, I'm Susan Eckert, here on

18 behalf of the Rocky Mountain Environmental Labor

19 Coalition and the Colorado Building and Construction

20 Trades Counsel -- that's a lot to stay.

21 I just have a few questions that relate

22 to one of our primary issues which is the best value

23 employment metrics. From reviewing your direct

24 testimony and the various related attachments, it

25 appears that Public Service has agreed, as part of the

1 Phase II process, to go ahead and include in the

2 request for proposals the requests to the bidders about

3 the best value employment metrics; correct?

4 A Yes, ma'am.

5 Q And those metrics which -- I'll just for

6 the record just so we have those are the availability

7 of training programs, information about Colorado

8 workers used on the projects, compared to out of state;

9 the long-term career opportunities; the industrial

10 standard wages, pension benefits and health care

11 benefits, correct?

12 A Yes, ma'am.

13 Q And it's my understanding from looking at

14 your timeline that in the 120-day report after you

15 received information from the various bidders, you will

16 go ahead and provide that as a highly confidential

17 information to the intervenors and parties of record

18 who have entered into the confidentiality agreements

19 necessary?

20 A Are you asking if we are going to be

21 providing the bids themselves to the parties or

22 specifically the information you were referencing?

23 Q The best value employment information I

24 believe is part of the 120-day report as part of the

25 highly confidential information that will be maintained

1 as opposed to the entire bid.

2 A Subject to check, I believe you are

3 correct.

4 Q Okay. And just understanding the new --

5 how the low, medium, high resource needs approach is

6 going to work, in light of the best value employment

7 metric information, do you anticipate that there will

8 be any change in the process the way the best value

9 employment metrics would be handled as a result of

10 developing these various ranges?

11 A No, ma'am.

12 Q Okay. And I assume that it shouldn't

13 change how the 120-day report is structured either,

14 other than you will have more information than you

15 normally would.

16 A I was going to say there is quite a lot

17 more information in different portfolios that are going

18 to be brought forward looking at different ranges; but

19 aside from that, everything that we was contained in

20 the past will be contained and in that 120-day report.

21 Q Thank you.

22 A Uh-huh.

23 CHAIRMAN ACKERMANN: I believe that

24 brings us to Mr. Detsky.

25 (Discussion off the record.)

1 MR. DETSKY: May I approach, Your Honor?


3 MR. DETSKY: With the aforementioned

4 copies of decisions for you.



7 Q Good morning, Ms. Jackson.

8 A Good morning, Mr. Detsky.

9 Q I'm going to ask you some questions for

10 roughly an hour on behalf of the Colorado Independent

11 Energy Association; but before we do that, I'm going to

12 revisit the motion to administrative notice per the

13 Chairman's request.

14 MR. DETSKY: Mr. Chairman, I'm prepared

15 to walk you through the paragraphs in each decision if

16 you would like that for the record.

17 CHAIRMAN ACKERMANN: Thank you. If you

18 would proceed.


20 Q Ms. Jackson, Jim and I, I think, have

21 brought those out for you; these are marked as Exhibits

22 37 through 41.

23 The first one you have is a decision

24 Phase I decision from the 2007 ERP. And that decision

25 is C08-0929. And the paragraphs I am requesting are

1 from 93 through 110. This concerns modeling potential

2 unit retirements.

3 Paragraphs 174 through 182, which discuss

4 IPP versus utility ownership.

5 Paragraphs 183 through 191, which address

6 cost caps in bidding.

7 Paragraphs 288 through 292 on modeling

8 different plant lives and base case modeling

9 assumptions.

10 That's 37.

11 For 38, which is the RRR decision in that

12 same case, order C08-1153, and there I'm looking at

13 paragraphs 105 through 108 regarding modeling unequal

14 plant lives.

15 Next is No. 39, this is Decision

16 C13-0094, and this is the Phase 1 Decision from the

17 2011 ERP of PSCo. And, there, I'm looking at

18 paragraphs 33 through 42, which involve retirement of

19 RAP 4, 56 through 65, regarding utility and IPP owned

20 generation.

21 Paragraphs 165 through 174 regarding

22 modeling potential plant retirements. And paragraph

23 194 through 198 regarding modeling PPAs after contract

24 terms.

25 Hearing Exhibit 40, is Order 13-0323,

1 which is the RRR in the 2011 PSCo ERP. There I am

2 requesting notice of paragraphs 14 through 18 regarding

3 optimization and annuity backfilling in modeling.

4 And finally, No. 41 is the Phase II

5 decision from the 2011 ERP, that is Decision C13-1566;

6 and I'm looking at noticing paragraphs 37 through 41,

7 regarding future ERP issues.

8 That -- and I would request that those

9 Hearing Exhibits 37 through 41 be admitted in the

10 record for those facts I have just outlined.


12 Detsky.

13 So 37 through 41 have been put forth.

14 Objections?

15 MR. SOPKIN: Your Honor, these are all

16 capable of administrative notice. I just want to note

17 that we still reserve any objections if this witness

18 doesn't particularly have the foundation to answer some

19 questions. And I note from what Mr. Detsky just

20 described, it seems like most of these issues have to

21 do with Mr. Hill's testimony, not Ms. Jackson's.

22 MR. DETSKY: Your Honor, Mr. Sopkin is

23 correct. Some of these I went over will be for Mr.

24 Hill and some for Ms. Jackson.


1 Also I would note that items 37 and 38

2 deal with Docket 07A-447E. For the record, I was

3 advisory staff so that; so just so the record is clear,

4 I have that background connection to those two items as

5 well. So for what it's worth, it's in the record.

6 MR. DETSKY: Thank you.

7 CHAIRMAN ACKEMAN: So with that, we take

8 notice of these and they are admitted -- well, we're

9 not we're taking notice, we're making these hearing

10 exhibits then.

11 MR. DETSKY: Yes.


13 MR. DETSKY: Okay.


15 Q Ms. Jackson, I want to draw your

16 attention to Hearing Exhibit 37 which is the 2007 Phase

17 I Decision and I'm looking on page 60.

18 A I'm on that page.

19 Q Great. So part of the reason why I've

20 gone through the trouble of putting all these in the

21 record is, in these ERP proceedings, we tend to cover

22 some of the same ground. And here we have three new

23 Commissioners -- and so with your indulgence,

24 Commissioners, I'm going to try to walk us through a

25 bit of context and to get us to the cross-examination

1 and I'm going to cover three topics with you today.

2 The first item we're going to talk about

3 point cost caps. And then we're going to talk about

4 IPP versus utility ownership and the utility risks for

5 each. And we'll talk about your rebuttal to Mr.

6 Monsen's testimony regarding at risk coal and Strategis

7 Modeling of plant retirements.

8 So on this page 60, I want to turn your

9 attention to paragraph 187. And can you read the first

10 sentence of that paragraph into the record.

11 A I can. We find that a utility rate based

12 proposal without any form of a cost cap does not meet

13 the competitive acquisition process intended by the ERP

14 rules.

15 Q Thank you. Could you also read the last

16 sentence of that paragraph into the record.

17 A We agree with CIEA and CEC that we must

18 take steps to place the utility proposal on equal

19 footing with fixed price IPP bids.

20 Q Thank you.

21 So to set the context here, this

22 paragraph, when it's talking about equal footing and

23 it's also talking about cost caps, do you agree?

24 A Those are two items that are mentioned in

25 those two sentences, yes.

1 Q So to generally set the stage, when an

2 IPP makes a bid in a Phase II ERP process, that bid can

3 function as a cost cap for the IPP; is that correct?

4 A It's a subject -- for an example, it's

5 the subject of the output of the facility. And it

6 depends on the type of resource that you are talking

7 about. I can't just do a yes-or-no answer on that.

8 The cost cap is per unit produced. It's not

9 necessarily a cost cap on total revenues received; does

10 that make sense?

11 Q Yes.

12 A Okay.

13 Q So they are bidding a price at a certain

14 energy and that price of energy is their cost cap

15 rather than the total amount spent over time --

16 A Correct.

17 Q -- is that what you are saying?

18 And that price of energy includes the

19 IPP's opportunity to recover their cost.

20 A That is correct.

21 Q Okay. So in -- so we've established that

22 that's what this paragraph is talking about. And then

23 if we move on to the next paragraph, I'm at the top of

24 page 61. And on the second sentence, do you see where

25 it says: However, we find that any utility rate base

1 proposal must have a cap in order to be comparable with

2 fixed price IPP bids; do you see that?

3 A I do.

4 Q Then the Commission concluded, Therefore

5 we find that utility rate base proposals without a

6 fixed price will only meet the competitive intent of

7 the ERP rules if such proposal is submitted with a cost

8 cap; do you see that?

9 A I do.

10 Q The last one I want to draw your

11 attention to is the next paragraph, 189, where the

12 Commission in the first sentence said, We direct the

13 company to establish a point cost cap in this proposal;

14 do you see that?

15 A The last sentence of 189?

16 Q This is the first sentence of 189.

17 A That's not what it says.

18 Q After the comma.

19 A Okay, I'm sorry. I do see it that now.

20 Q And then the final sentence in that

21 paragraph, could you please read that one in the

22 record.

23 A We expect this point cost cap level to be

24 the maximum amount that is used in future cost recovery

25 proceedings absent a showing of extraordinary

1 circumstances.

2 Q Okay. So in your rebuttal testimony, the

3 company is now committing to essentially this same

4 treatment -- and what I mean by that is that the

5 Commission stated in this 2007 decision that there will

6 be a point cost cap for utility bids and the company is

7 committing to do that in this ERP.

8 A For the evaluation of which resources are

9 selected, yes, sir.

10 Q Okay. Thank you. So in that case, CIEA

11 and the company are in agreement with respect to that

12 first point.

13 A I believe so, yes.

14 Q Okay. But where we may diverge and where

15 we're not exactly in agreement is how that cost cap

16 would then function for purposes of cost recovery in a

17 rate case; is that correct?

18 A I believe from the discovery responses

19 that I have seen from Mr. Monsen that I'm not sure

20 there is a significant difference between our opinions

21 on how the Commission evaluates the costs associated

22 with the utility provision of service.

23 Q Good.

24 So -- and by that you mean, when we are

25 talking here in the last sentence in paragraph 189 that

1 you just read into the record --

2 A Uh-huh.

3 Q -- is that the company's position now in

4 this case?

5 A So let me be clear on the question that

6 you are asking: The position that the company has in

7 this case is that in the event that we prefer some bids

8 into the Phase II ERP process that are self-build, we

9 would provide a point cost cap associated with those

10 bids that would then be evaluated against the other

11 basis that are presented in the case and presented in

12 the portfolio.

13 In the event that the portfolio that is

14 picked or approved by this Commission results in one of

15 the company's preferred bids for self-build being in

16 that portfolio, we go and we build the project. So we

17 go through the CPCN project and we build the project.

18 Once the project is completed we will know what the

19 costs are and then you proceed to a typical revenue

20 requirement phase of cost recovery.

21 Q And that's in a rate case.

22 A That is in a rate case.

23 And so that rate case process would look

24 at what was the cost that the company presented as

25 would be the capital cost associated with constructing

1 that facility that was selected in the Phase II

2 process, as compared to what was the actual cost

3 incurred?

4 Any deviation above the dollar amount

5 that was presented in the Phase II, the company would

6 have to present evidence to show why there was

7 extraordinary circumstances for those costs that were

8 incurred to be included in rate base.

9 Q Okay. So we had -- and I was looking for

10 the word soft in your testimony because I thought I had

11 seen it there, but it wasn't described as that.

12 A Uh-huh.

13 Q But Mr. Monsen had requested a hard cost

14 cap, correct?

15 A I believe -- yes, that is the terminology

16 he used.

17 Q And then on -- in your rebuttal

18 testimony, you objected to the Commission in this case

19 finding that there would be a hard cost cap for

20 purposes of rate recovery on utility bids; is that

21 correct?

22 A Repeat the question.

23 Q So in your rebuttal testimony --

24 A Yes, sir.

25 Q -- you had objected to Mr. Monsen's

1 characterization or recommendation that a utility bid,

2 if it's selected as you just went through and goes to a

3 rate case, that would be a hard cost cap on that

4 project as opposed to the cost cap that could be

5 exceeded as you just described.

6 A I agree we are not in agreement with Mr.

7 Monson that a hard cost cap would be appropriate. That

8 would be a change to the regulatory compact and the

9 process under which we operate and have for decades in

10 this state and before this Commission.

11 Q And Mr. Monson referred to the recent

12 Rush Creek wind settlement which does have a hard cost

13 cap; is that correct?

14 A It does as a result of a negotiated

15 settlement.

16 Q In that negotiated settlement, am I

17 correct that the parties, the intervenors to that case,

18 agreed to the company being awarded a CPCN for that

19 wind project; is that correct?

20 A We were awarded a CPCN for that project.

21 Q And the parties to that case also agreed

22 the company should be awarded a CPCN for the

23 construction of that transmission line; is that

24 correct?

25 A That is correct.
1 Q So it's your testimony then that the hard

2 cost cap is not a violation of a regulatory compact

3 when it comes in a settlement? Is that correct?

4 A My position is that there was a number of

5 give and takes that resulted in the company being

6 comfortable in that instance with a hard cost cap.

7 Q And some of the give and take you

8 mentioned was this cost share mechanism.

9 A That's part of it. There were many other

10 pieces of the puzzle in that particular case.

11 Q So your testimony is that the Rush Creek

12 settlement then did not violate the regulatory compact;

13 is that correct?

14 A Agreed, because that is a result of a

15 settlement that was reached among many parties for

16 negotiation and consideration.

17 Q Okay. And so is it your testimony that

18 having a hard cost cap to the Rush Creek wind project

19 has cast a chill on the company's ownership for

20 additional projects?

21 A Well, the company's position and the

22 company's understanding of how this goes forward is

23 that the hard cost cap is not the policy nor the way

24 that the Commission would operate; and so therefore

25 there isn't a chill.

1 Q Okay. So next I want to turn this

2 discussion a little bit towards the IPP ownership

3 versus utility ownership, the debate you and Mr. Monson

4 have in your back and forth in your testimonies. And

5 again, this is something that maybe you and I or CIEA

6 and the company have discussed in ERPs past, but we are

7 going to go through a little bit of it here today. And

8 so are you ready?

9 A I believe I'm at your disposal.

10 Q Let's turn to page 56 of your rebuttal.

11 A May I go ahead and put away Exhibit 37 or

12 should I keep it handy?

13 Q Keep those handy, please, because we're

14 going to come back.

15 A Rebuttal, page 57?

16 Q 56, please.

17 A I am there.

18 Q Okay. The first question -- the only

19 question you are asked on this page is: What kinds of

20 risk do PPAs with IPPs carry for customers; do you see

21 that?

22 A We have a pagination issue.

23 Q Okay, what page are you on?

24 A I'm in the corrected revised rebuttal;

25 and on page 56, I have no questions on this page, just

1 an answer.

2 Q I am also on the corrected revised

3 rebuttal. I apologize.

4 A What was the question again? I'll see if

5 I can find it.

6 Q What kinds of risks do PPA with IPPs

7 carry for customers?

8 We're together on this.

9 A Uh-huh.

10 Q So when you say, for customers, you are

11 talking about PSCo's ratepayers; is that correct?

12 A That is correct.

13 Q Okay. And what is on my line 4, you say

14 "Customers remain subject to perhaps the biggest and

15 most important risk of all with regard to IPP

16 facilities, i.e. the ability of an IPP to abandon a

17 project if they are unanticipated increases in project

18 cost that render the project uneconomic for IPP's

19 investors. Do you see that?

20 A I do.

21 Q Are we so the same lines?

22 A We are on the same line.

23 Q Okay, great.

24 So when you are talking about the biggest

25 and most important risk, you are -- if I understand you

1 correctly, you are saying that PSCo has the legal

2 obligation to provide service; is that correct?

3 A That is correct.

4 Q And so PSCo does not have the freedom to

5 necessarily abandon a project; is that correct?

6 A It cannot abandon a project without a

7 solution for that abandonment.

8 Q Whereas your position is that an IPP can

9 walk away and essentially leave customers holding the

10 bag; isn't that correct?

11 A Ultimately it's Public Service holding

12 the bag on behalf of customers; but yes.

13 Q Okay. And then as evidence of this, you

14 point to some occasions over the last few years where

15 IPPs decided not to continue with projects they bid

16 into competitive solicitations after being awarded

17 their bid; do you see that?

18 A That's correct.

19 MR. DETSKY: Mr. Chairman, can I

20 approach?


22 (Whereupon, Exhibit Nos. 48 and 49 marked

23 for identification.)

24 CHAIRMAN ACKERMANN: So we have Exhibits

25 48 and 49?
1 (Discussion off the record.)

2 CHAIRMAN ACKERMANN: So those have been

3 presented.

4 Any objections to those?

5 Seeing none, those are admitted.

6 MR. COLEMAN: Mr. Chairman, I'm going to

7 make a couple more copies.

8 (Discussion off the record.)

9 CHAIRMAN ACKERMANN: Okay, with that now

10 in everyone's hands who needs to respond, 48 and 49 are

11 presented as exhibits. Seeing no objections, those are

12 admitted.

13 And with that we are going to recess.


15 would you consider giving Mr. Detsky some roll-over

16 minutes from the other witness because he has a lot of

17 papers. So I hope we don't hold him real hard to the

18 90-minute timeline.

19 MR. DETSKY: I'm prepared to trade off

20 whatever time I have as well.


22 Very well, we will recess.

23 (Recess.)

24 CHAIRMAN ACKERMANN: Okay. We are back

25 on record. And Mr. Dixon, before I come back to

1 you, just a couple of quick procedural matters,

2 which should not too long, so you can stand.

3 First, Mr. Dunbar, in response to your

4 request regarding your witness, there will not be

5 any cross-examination from the Commissioners or

6 Commission Counsel. So if you would like, on your

7 motion we can move their testimony into the

8 record, if you would like to do that.

9 MR. DUNBAR: Yes, thank you,

10 Mr. Chairman. I would like to move that their

11 testimony be moved into the record.

12 CHAIRMAN ACKERMANN: And let's see.

13 What exhibit numbers, in case we all need to know?

14 We're talking 31, 32, and 33, it looks like.

15 MR. DUNBAR: I believe that's correct.


17 have, so we're clear on that. So that's the --

18 the item before us. Seeing no objections, we will

19 move those items into the record. Okay.

20 Same to you, Mr. Irby and Mr. Sopkin,

21 same for your witness, no cross there. So if you

22 wish to move that testimony into the record, we

23 can do that. And that is Item 13.

24 MR. SOPKIN: Thank you.


1 move that in, seeing no objections. That is into

2 the record.

3 Yes, Mr. Dunbar.

4 MR. DUNBAR: Yes, thank you

5 Mr. Chairman. One clarifying question, as far as

6 witnesses did not attach affidavits to their

7 testimony, in part because they expected that they

8 would, in fact, end up needing to be here, is that

9 something that you would like us to file

10 subsequently just asserting that they would make

11 the same testimony if they were asked on the

12 stand? Is that sort of standard operation?


14 that would be fine. We'll move that into the

15 record.

16 MR. DUNBAR: Is that something that --

17 CHAIRMAN ACKERMANN: I don't know if we

18 absolutely need that.

19 MR. DIXON: Mr. Chairman,

20 Administrative Law Judge Mana Jennings-Fader

21 requires that any time we stipulate to testimony

22 that there be an actual affidavit. It doesn't

23 have to be one going in depth. It just simply

24 swears that the data is true and correct.

25 And the point is to have sworn

1 testimony in the record. And that affidavit

2 supports that. And then the witness doesn't have

3 to appear. So it's a practice she has done, and I

4 would recommend you consider it.


6 Mr. Dixon. Let's go with that, then.

7 MR. DUNBAR: Okay. Thank you,

8 Mr. Chairman.


10 MR. DUNBAR: Given your decision -- and

11 thank you for the prompt answer, by the way --

12 I wonder if I may be excused.

13 MR. NOCERA: Is that an option?

14 MR. DUNBAR: I thought I needed to ask.

15 CHAIRMAN ACKERMANN: That's fine with

16 me. Very good.

17 We have a different court reporter with

18 us this afternoon, someone filling in who is not

19 familiar with the parties here. So if you would

20 do that reporter the favor of introducing yourself

21 and your name so he knows who is speaking as you

22 come up to cross-examine the witnesses or present

23 witnesses, that would be appreciated. Thanks.

24 And I think with that, Mr. Detsky,

25 Ms. Jackson is still under oath. And we can carry

1 on.

2 MR. DETSKY: Mr. Chairman, I just want

3 to point out that we had resolved the pagination

4 issue, and that is that last night PSCo filed a

5 red line copy to make the pages go back in the

6 order they would been previously filed. And I

7 have a clean copy, so, I think, hopefully we're

8 one page off. I'll go that way, and your

9 indulgence is requested on that.

10 And then also I can report that I am

11 ready to waive my testimony of Ms. Marks and

12 Mr. Camp. And I'm doing that because it appears

13 like I may go over my estimated time here.

14 CHAIRMAN ACKERMANN: Okay. Duly noted.

15 Thank you.

16 MR. SOPKIN: I think you meant waive

17 your cross-examination. You said waive my

18 testimony.

19 MR. DETSKY: Thank you. It's a good

20 clarification.

21 CHAIRMAN ACKERMANN: It's best that

22 counsel doesn't testify.

23 MR. DETSKY: correct.


1 Q Ms. Jackson.

2 A Good afternoon.

3 MR. DETSKY: Mark Detsky, D-e-t-s-k-y,

4 again, for the record.


6 Q When last we left off, we were on

7 Page 57, and we were talking about your situation

8 that you described in your testimony where IPP had

9 abandoned their project after winning a bid and

10 that this was the, quote, biggest and most

11 important risk that IPP has posed to ratepayers.

12 Do you recall that?

13 A I do.

14 Q Okay. So if you could turn your

15 attention to Hearing Exhibit 49 that was admitted

16 prior to the break.

17 A 49?

18 Q 49.

19 A I have it.

20 Q Okay. So in this set of discovery

21 questions, CIEA asked you about these projects

22 that you identified. Do you recall that?

23 A I do.

24 Q Okay. And of the projects that you

25 identified here, am I correct that you state that

1 only the Squirrel Creek project had an executed

2 PPA with the company; is that correct?

3 A That is correct.

4 Q So the others that you mentioned did

5 not even get that far; is that correct?

6 A They were selected for the ERP process,

7 and they were in the -- the negotiation stage of

8 establishing the PPA.

9 Q Correct. So none of those IPPs -- or

10 the company never made a payment to any of those

11 IPPs; is that correct?

12 A That's correct. We also didn't make a

13 payment to the Squirrel Creek project either.

14 Q Thank you. That was my next question.

15 So essentially you said there was Squirrel Creek,

16 the project owner of IPP, and the company entered

17 into negotiations regarding the anticipatory

18 breach of the PPA. Do you see that?

19 A In Subpart D?

20 Q Subpart D, yes.

21 A Yes.

22 Q Okay. And then as a result of those

23 negotiations, the PPA was terminated. And instead

24 the company acquired those assets; is that true?

25 A We acquired a portion of the assets.

1 So there was a negotiation for the turbine

2 components. In this instance we managed to turn a

3 lemon into lemonade by acquiring the assets

4 because there was a long lead time on acquiring

5 the turbines in order to meet the required -- the

6 need associated with the 2009 summer.

7 Q Okay. But going to the lemon part of

8 the lemonade, you said that -- your testimony here

9 is that PSCo incurred no cost that came from

10 payments that it would have made under a PPA to

11 any of these entities; is that correct?

12 A We hadn't reached the portion of the

13 development being commercially operational. And

14 we don't issue payment until there's delivery of

15 the services through the PPA.

16 Q Correct. And if I could add one more

17 point to that, you also -- what that means is that

18 the IPP in question is taking all the construction

19 risk in that project; isn't that correct?

20 A That's correct.

21 Q Okay. And so I believe that we've

22 established, then, that for your examples where

23 these IPPs have abandoned their projects, there

24 was no payments made by the company to these IPPs,

25 and therefore no payments -- no cost to ratepayers

1 that stem from payments made to those IPPs; isn't

2 that correct?

3 A For these particular projects, you

4 would be correct.

5 Q Okay.

6 A However, the question is is what is the

7 resulting impact on customers later on for their

8 nonperformance.

9 Q Okay. But their nonperformance would

10 have been an issue had they constructed, correct?

11 In this case you didn't even get to the PPA.

12 A I disagree because the agreement was,

13 in going through the Phase 2, is that that

14 particular resource was selected through the

15 portfolio with an expectation of delivery.

16 Q I agree, but if there had been a PPA in

17 the hypothetical world, let's say you had gotten

18 to a PPA with these entities and the project had

19 been constructed, and then the IPP were to abandon

20 this project. Are you with me there?

21 A I am.

22 Q Okay. Now, in that instance, would a

23 PPA offer some protections to the company?

24 A In what way?

25 Q In the way that, let's say, an IPP

1 cannot perform under a PPA. Okay. It cannot

2 deliver power for whatever reason.

3 A Uh-huh.

4 Q Does a PPA, in general, a standard PPA,

5 have terms and conditions that have penalties or

6 conditions that an IPP must meet under a PPA? In

7 other words, is there a penalty for failure to

8 perform under a PPA?

9 A That depends, I imagine, on the

10 specific PPA. I think what you're trying to refer

11 to are, say, a damages claim or a clause inside of

12 a PPA.

13 Q That would be one example.

14 A What I think that's not being taken

15 into account is that the risk that still remains

16 to the company is the fact that we have a

17 reliability obligation, an obligation to serve.

18 Q I understand that.

19 A So in the event that we rely upon a PPA

20 for delivery of the energy and then that energy is

21 not delivered, then that risk still remains on the

22 shoulders of the company to go out and satisfy so

23 that we don't have a dip in our reliability or our

24 obligation to serve our customers.

25 Q Right, what I'm asking about is the

1 risk in the PPA. So you're saying that there's a

2 reliability risk to your customers. I understand

3 that. I'm talking about who bears the risk of

4 performance under the PPA. Does the IPP have to

5 perform under a PPA?

6 A Well, theoretically you wouldn't enter

7 a PPA unless the IPP had to perform.

8 Q Correct. And in the PPAs, there are

9 provisions about regarding performance obligations

10 in an IPP, correct?

11 A Sure.

12 Q Okay. Now, there's also the idea of a

13 bill transfer agreement. Are you familiar with

14 that type of agreement as well?

15 A I am.

16 Q Okay. Now, that type of agreement is

17 slightly different than a PPA, am I correct?

18 A Correct, in the end result, so once the

19 facility goes operational, it isn't through a,

20 say, dollar per megawatt hour price that's

21 associated with a PPA. It becomes a utility asset

22 once the transfer takes place.

23 Q Right. So the risks are different of a

24 bill transfer agreement versus a PPA; is that

25 correct?
1 A There are similar ones, but there were

2 certainly other ones that are different.

3 Q Okay. So in the -- in the area of

4 construction risk and the abandonment of a project

5 we're talking about here, in a bill transfer

6 agreement, if the IPP were to abandon the project,

7 at that point in time is there a different

8 construction risk on the company's part than under

9 a PPA?

10 A I do not believe so.

11 Q Okay. So your testimony here today is

12 that the IPP would bear all the risk of

13 construction under a bill transfer agreement as

14 well as a PPA; is that correct?

15 A I believe that is accurate.

16 Q Okay. When an IPP enters into a PPA,

17 their cost of power, and I think we touched on

18 this before regarding capital costs, but I also

19 want to make the record clear that it also

20 includes bearing estimates for operation and

21 maintenance costs; is that correct?

22 A That's correct.

23 Q Okay. And if there are unforeseen

24 circumstances that cause an IPP to exceed its own

25 estimates of operation and maintenance costs --

1 are you with me?

2 A Yes, sir.

3 Q Okay. -- in that situation, is there a

4 remedy for an IPP to go back to the company and

5 say let's renegotiate this PPA?

6 A If it's after commercial operation or

7 prior to commercial operation?

8 Q After.

9 A They can certainly ask the question,

10 but whether or not that's going to be accepted is

11 an entirely different story.

12 Q Agreed. So essentially what an IPP has

13 to do is manage its own cost under the PPA; is

14 that correct?

15 A That's correct.

16 Q And as you state in there, that

17 includes their return; is that correct?

18 A Correct.

19 Q And so it's possible that if they

20 exceed their own estimates internally on their own

21 end costs, that can eat into their own estimates

22 of their return; is that correct?

23 A That's correct.

24 Q Okay. Thank you. Now, in the utility

25 situation, we have something a bit different.

1 Now, when you talked earlier about the regulatory

2 compact, what you're saying is that in the case

3 that costs were to go over the company's

4 estimates -- let's focus on operation and

5 maintenance right now -- if their own end costs

6 were to go over the company's estimate, then under

7 the regulatory compact, the company could come

8 back to the Commission in a rate case and justify

9 it's expenditures as prudently needed due to

10 extraordinary circumstances, and the Commission

11 could approve those expenses; is that correct?

12 A On a going-forward basis. However,

13 just like in a PPA situation on a look back, there

14 isn't a true up for operation and maintenance

15 expenses, so therefore for the calendar year in

16 which you would have a higher unexpected expense,

17 the company and the opportunity to earn our return

18 on equity would be similar to that of the PPA in

19 that it would be diminished.

20 Q I see. Okay. Thank you. So in this

21 point cost cap that we discussed at the beginning

22 of your testimony --

23 A Uh-huh.

24 Q -- the company's position is that that

25 point cost cap will include the capital cost, and

1 it will also include their estimated -- the

2 company's estimated own end cost; is that correct?

3 A Yes.

4 Q Okay. And the company further

5 testified that if they -- if you receive a bill

6 transfer proposal, and they -- you find that there

7 are no O&M costs in that proposal, you impute

8 those to the bid; is that correct?

9 A I believe that's the testimony of

10 Mr. Hill.

11 Q Okay. Thank you. But you're familiar

12 with that?

13 A I am familiar with that.

14 Q Okay. Thank you. Can you turn to

15 Page 61 of your rebuttal testimony. On Line 10,

16 do you have a question that starts, "What do you

17 mean when you reference the purported problem"?

18 A I see that.

19 Q Okay. Great. And so you write, "To

20 accept Mr. Monsen's proposal to have any point

21 cost for capital costs provided in the competitive

22 solicitations convert into a hard cost cap if the

23 bid is approved by the Commission, one also has to

24 accept the notion that the company routinely

25 underbids its capital cost amounts in bids in

1 competitive solicitations and then bring higher

2 capital costs to the Commission for recovery." Do

3 you see that?

4 A I do.

5 Q Okay. And can you turn now, then, to

6 Hearing Exhibit 48, which is the other discovery

7 that got admitted just before the break.

8 A I have it.

9 Q Okay. Now, in this question we asked

10 PSCo to provide capital projects for which a hard

11 cap or soft cap was approved by the Commission.

12 Do you see that?

13 A I do.

14 Q Okay. And you list here, we've talked

15 about the Rush Creek project, but we have three

16 other projects. Do you see that in the response?

17 A I do.

18 Q And those are the Comanche plant, the

19 Fort St. Vrain natural gas plant, and the Cherokee

20 plant; is that correct?

21 A They are.

22 Q Okay. So is it your testimony, then,

23 that the Commission accepted the notion of PSCo

24 underbidding and then coming back to the

25 Commission later and approving hard cost caps in

1 these cases?

2 A No, it's not. My position is that if

3 you were to impute the risk that Mr. Monsen is

4 discussing in his testimony, you would then have

5 to subsequently also assume that the risk is is

6 that the utility is regularly underbidding its

7 particular cost and then coming back and

8 increasing those at a later point in time in order

9 to be able to win the bid.

10 Q So if I understand what you're saying,

11 the distinction you're making is that when it's a

12 bid situation, you have to -- the Commission

13 should first accept the notion that PSCo is

14 underbidding, but when it's not a bid, that

15 doesn't apply?

16 A No, I think it applies in both of the

17 situations. In fact, the risk that Mr. Monsen is

18 discussing in his testimony would have to be

19 directly related to the assumption that the

20 utility would be willing to risk its reputation

21 and its ongoing regulation and discussions with

22 the Commission, in revenue recovery situations,

23 that they would sufficiently underbid the resource

24 or under propose the resource in a CPCN on the off

25 chance that it's going to have a methodology to

1 recover higher costs later.

2 Q Okay. I want to turn back to the

3 decisions that we admitted earlier.

4 A Okay.

5 Q And this is Hearing Exhibit 37, please.

6 And I'm at Page 56.

7 A I'm there.

8 Q Okay. Can you read Paragraph 176 for

9 the record, please.

10 A "Regarding optionality, advantages over

11 IPP ownership, we agree that if a utility owns the

12 resource, it can better control its operations and

13 can more easily modify it to match changing

14 circumstances. However, we agree with CIEA and

15 CEC that IPP ownership significantly reduces risk

16 to ratepayers."

17 Q Okay. And in the following sentence

18 the -- the Commission found that both utility and

19 IPP ownership provides significant benefits to

20 ratepayers; isn't that correct?

21 A Yes.

22 Q And would you agree with that

23 statement?

24 A I would agree that there are benefits

25 and risks associated with both.

1 Q Okay. And at the conclusion of that

2 Paragraph 177, the Commission finds that it's

3 "important to maintain a vibrant environment for

4 both utility and IPP generation so that both can

5 continue to advance technological efficiencies and

6 so that they each keep each other sharp through

7 competition." Do you see that?

8 A I do.

9 Q Okay. So correct me if I'm wrong, I

10 think PSCo may argue that whereas IPP has a term

11 of an PPA and they rebid that at the end of its

12 term, on the other hand, when a utility

13 self-builds a plant, that plant can be depreciated

14 over time, and at some point the ratepayers may

15 get a benefit from the cost of that plant being

16 very low in rate base, for example?

17 A Or if the life extends longer than the

18 particular valued depreciation, then yes, there

19 are benefits to ratepayers for it existing longer

20 than that.

21 Q Okay. And is the converse also true,

22 and by that I mean if an IPP project is

23 inefficient or not working for the company's

24 system on a cost basis, or what have you, and an

25 IPP rebids, that bid may not be selected; is that

1 correct?

2 A That is correct.

3 Q And then whereas if the utility has a

4 plant that's fully depreciated but kind of an

5 inefficient junker, then the ratepayers have to

6 keep that, correct?

7 A Not necessarily. That is the decision

8 of the Commission in regards to the asset life and

9 looking at that facility. It would have to be

10 proven to have a cost benefit ratio that benefits

11 the customers.

12 A perfect example of that is our recent

13 refurbishment of Cabin Creek. It's a very old

14 facility, but it's very valuable to our system.

15 And by refurbishing it, we're actually increasing

16 the capacity and extending the life of that asset.

17 Q So if I'm looking at these paragraphs

18 that we just went over, what I'm seeing is that

19 the Commission has found in the past that part of

20 their responsibility is to find a balance between

21 the company's portfolio in terms of PPA generation

22 and utility owned generation. Would you agree

23 with that?

24 A I would.

25 Q Okay. Ms. Jackson, in 2016, the PSCo

1 generation unit called Cherokee 5 and 6, I

2 believe, the two by one combined cycle went into

3 service; is that correct?

4 A I think it was the 5, 6, and 7 unit.

5 Q 5, 6 and 7. Is that correct?

6 A It went into service, what date did you

7 reference?

8 Q 2016, the beginning.

9 A No, it went into service, I believe it

10 was end of August 2015 that that asset went into

11 service.

12 Q And the capacity of that unit is

13 roughly 575 megawatts?

14 A Roughly, yes.

15 Q And PSCo constructed and owns that

16 generation; is that correct?

17 A We do.

18 Q Okay. And is that the largest natural

19 gas combined cycle in the PSCo system?

20 A I'd have to check the books and the

21 volumes we have here. I don't have that

22 memorized.

23 Q Subject to check, you think that's the

24 largest?

25 A That we own?
1 Q Yes.

2 A I believe that's accurate.

3 Q Okay. And that unit was approved by

4 the Commission without competitive bidding; isn't

5 that correct?

6 A It was approved by the process for the

7 Clean Air-Clean Jobs Act process.

8 Q Without competitive bidding, correct?

9 A Correct.

10 Q Okay. And the most recent PSCo

11 generation unit that the company has received a

12 CPCN approval for is the Rush Creek Wind

13 Generation project; isn't that correct?

14 A That's correct.

15 Q And that project has a total capacity

16 of 600 megawatts; is that correct?

17 A Correct.

18 Q And that's the largest wind project on

19 the company's system?

20 A Single largest, yes.

21 Q And PSCo will own that generation, will

22 it not?

23 A We will.

24 Q And that will come on line in 2018; is

25 that correct?
1 A October 31 I believe is the deadline

2 for that in-service date.

3 Q And that unit was approved under

4 Rule 3660(H); isn't that correct?

5 A Yes, sir.

6 Q Okay. So one more topic of discussion

7 for us today, and that is the strategist

8 optimization and the at-risk coal testimony that

9 Mr. Monsen made and you responded to.

10 A Okay.

11 Q So I want to talk to you a little bit

12 about the CIEA's recommendation and your response.

13 And so you respond to this on Page 27 of your

14 rebuttal testimony, if you could turn there.

15 A I'm there.

16 Q Okay. And so you say that he,

17 Mr. Monsen, Line 13, recommended the "Commission

18 consider 25 percent of the coal fire generation as

19 at risk capacity in assessing the potential

20 procurement target in this proceeding." You see

21 that?

22 A I'm sorry, I believe we have a

23 pagination issue again. You said Page 27,

24 Line 13?

25 Q Yes, Line 13.

1 A That's not -- what's the question you

2 were --

3 Q Let me see if I can do that. I got the

4 red line copy.

5 A Oh, I believe it's Page 26, Line 10.

6 Q Okay. That's my copy here. Okay. So

7 then the -- the -- related to this recommendation

8 you write, continuing on, is that the company

9 "should use the strategist's model to optimize

10 portfolio selection while allowing the model to

11 select resources for early retirement if doing so

12 would decrease the present value of revenue

13 requirement or develop additional scenarios." Do

14 you see that?

15 A I don't, I'm sorry.

16 Q I just kept on reading from where I

17 was.

18 A I found it, yes.

19 Q Okay. Now, do you recall that

20 Mr. Monsen testified part of his basis for this

21 statement, in his testimony, is the company's

22 recent decision to retire the Craig 1 coal unit?

23 A I recall the reference, yes.

24 Q Okay. And that project is scheduled to

25 retire in 2025; is that correct?

1 A Yes.

2 Q Okay. And you state, in your

3 testimony, that the decision to retire Craig 1 was

4 made in 2016; is that correct?

5 A I believe it was announced in 2016, so

6 it would follow that that decision was made in

7 2016.

8 Q And that the issues for that retirement

9 were specific to that unit; is that correct?

10 A That's correct. It was -- there was a

11 group discussion in regards to the retirement of

12 that unit, how it might be done between, I believe

13 it was, CDPHE, the EPA, and the owners of Craig.

14 Q So part of the retirement decision was

15 determined by environmental considerations; is

16 that correct?

17 A Yes, sir.

18 Q Specifically the Colorado Regional Haze

19 State Implementation Plan?

20 A That is my understanding.

21 Q And but another part of that decision

22 is economic; isn't that correct?

23 A I wasn't involved in the discussion.

24 I'm familiar with the environmental pieces, but

25 I'm not entirely familiar with the economic

1 evaluation.

2 Q Okay. Was the retirement of -- the

3 Craig 1 retirement decision was not approved in

4 the 2011 ERP; is that correct?

5 A That's correct.

6 Q In fact, we could say that the Craig 1

7 retirement decision was not even known to the

8 Commission or the company at the time of the 2011

9 ERP; is that correct?

10 A That's correct.

11 Q Okay. So we have established that this

12 decision was made in between ERP decisions. And

13 so therefore it was not evaluated in the ERP

14 process; is that correct?

15 A That is correct.

16 Q Okay. So going back to Mr. Monsen's

17 proposal, the company is capable of modeling

18 possible retirements of facilities in the

19 strategist's model; is that correct?

20 A The models are capable of looking at,

21 say, forced retirements versus, you know, the

22 natural progression to the end of life, yes.

23 Q Okay. And, in fact, the company

24 modeled early plant retirements in the 2011 ERP

25 process; isn't that correct?

1 A I believe it was 2007 when we talked

2 about Arapahoe and Cameo. I don't recall that

3 being modeled in 2011, but Mr. Hill was intimately

4 familiar with that case because he also did the

5 modeling. So if you want to follow up with him,

6 that would probably be advisable

7 Q I can follow up, but let me just try

8 and remind you for one second and see if we get

9 anywhere.

10 A Okay.

11 Q So do the words Comanche 4 or

12 Arapahoe 4 mean anything to you?

13 A Comanche 4 and Arapahoe 4?

14 Q Cherokee.

15 A I was going to say no. I know about

16 the Cherokee but not the Comanche.

17 Q Cherokee 4?

18 A Cherokee 4. Yes, I'm familiar with the

19 unit.

20 Q Okay. Do you recall whether the

21 company modeled possible retirement of those units

22 in the 2011 ERP?

23 A I'm sorry, I do not.

24 Q Okay. I will ask those questions of

25 Mr. Hill. You mentioned the 2007 ERP as well.

1 A Yes, sir.

2 Q So you are familiar with the fact that

3 the company modeled early retirements in that

4 company as well?

5 A I'm aware that the company presented

6 early retirements in that case, and thus we

7 modeled them, yes.

8 Q Okay. Can you please turn to

9 Exhibit 37 -- and I'm sorry, I believe I'm at

10 Exhibit 38, and I'm on Page -- I'm sorry, I'm back

11 on 37. Sorry, I'm at Page 32 of Exhibit 37.

12 A Is it Page 32 of Exhibit 37?

13 Q Correct.

14 A I'm there.

15 Q Okay. Paragraph 93, here we see,

16 "Public Service states that the early retirement

17 of Arapahoe Units 3 and 4 and Cameo Units 1 and 2

18 is in the best interest of the public and should

19 be approved in Phase 1." Do you see that?

20 A I do.

21 Q Okay. Now, this is what we were

22 talking about before in terms of a forced

23 retirement, is that correct --

24 A No.

25 Q -- in the model?
1 A I -- as to the precise nature of how it

2 was modeled, I can't answer that. I believe that

3 there were multiple ways, whether it be a forced

4 or you just simply change the end of life

5 assumption. I wouldn't consider that necessarily

6 forced. But that is once again a modeling

7 question that Mr. Hill may be able to answer for

8 you.

9 Q Okay. We will ask that question of

10 Mr. Hill.

11 I want to ask you about your rebuttal

12 testimony, Page 40, at Line -- sorry, it's my

13 Page 40. And the question on the top of my

14 Page 40 says, "Does Mr. Monsen offer any

15 recommendations to the Commission related to his

16 25 percent at-risk resource procurement proposal?"

17 Do you see that?

18 A Yes, it's on my Page 41 for those of

19 you looking at the corrected revised version.

20 Q Red line?

21 A Red line.

22 Q At Line 13 you write, "It still results

23 in the company selecting hypothetical portfolios

24 that take into consideration unscheduled and

25 speculative generation early retirements." Do you

1 see that?

2 A I do.

3 Q Okay. Ms. Jackson, the company puts

4 together Phase 2 proposals -- or puts together

5 portfolio proposals in Phase 2; is that correct?

6 A Yes.

7 Q Okay. And those portfolios are crafted

8 by the company for the Commission's consideration;

9 is that true?

10 A As a result of the bids that are

11 received through the process, yes.

12 MR. DETSKY: Thank you very much. No

13 further questions.




17 Q Thank you, Ms. Jackson. Lisa Hickey

18 representing Interwest Energy Alliance.

19 A Good afternoon.

20 Q I wanted to refer you to Page 20 of

21 your direct testimony, first of all, the value

22 one -- or Exhibit 1.

23 A I'm there.

24 Q Thank you. Line 30 is a question,

25 "What are the primary objectives for the 2016

1 ERP?" And there you indicate there are three

2 primary guideposts for your ERP. First you "want

3 to develop a plan that reliably meets electric

4 energy needs of your customers in a cost effective

5 manner."

6 Second, "Given this era of

7 environmental and regulatory uncertainty, we

8 wanted to ensure the plan allows us the

9 flexibility to adapt to changing conditions over

10 the next 5- to 10-year period."

11 And third you "want to take advantage

12 of market and political conditions, for example,

13 the federal tax policies that are favorable to

14 your customers"; isn't that right?

15 A That's correct.

16 Q So you want a flexible, no regrets

17 portfolio, correct?

18 A The following portion of my testimony

19 does refer to the solution we think that may

20 result as a no-regrets solution regardless of what

21 happens with federal energy policy or otherwise.

22 Q And to come up with that solution, you

23 do not want the Commission to identify a specific

24 number of megawatts coming out of Phase 1; isn't

25 that correct?
1 A Specific number of megawatts as far as

2 generation type or specific number of megawatts as

3 far as what is necessary for the needs of our

4 customers on a going forward basis.

5 Q Thank you. Generation type in the

6 portfolio and the number of megawatts to be

7 included in the portfolio that will meet your

8 needs.

9 A We have not specified and we have

10 requested that the Commission not dictate which

11 type of resources selected as a result of the

12 bidding process. So in other words, that would

13 mean that we haven't said lock in 400 megawatts of

14 wind, lock in 600 megawatts of solar, lock in, you

15 know, three PTCs.

16 What we've said is let the process go

17 through the Phase 2, and let us offer these

18 portfolios to evaluate different outcomes.

19 Q Do you expect the various portfolios

20 may have different numbers of nameplate megawatts

21 in them?

22 A I would because of the contribution of

23 the variety of the resources that would contribute

24 to meeting the peak demand. So, for instance,

25 wind resources don't necessarily contribute as

1 much capacity satisfaction to the demand, yet they

2 have a really large base load or base capacity.

3 Same thing with solar versus, you know,

4 say a fossil based generator would have the

5 ability to meet the peak demand and have a higher

6 contribution to the peak.

7 Q In 2011 you had a relatively low need

8 that you anticipated; isn't that true?

9 A I don't recall the exact need, but I do

10 recall that it was lower than typical.

11 Q And then you recommended a higher

12 amount of renewables than you had previously

13 anticipated during the Phase 1 process because of

14 the resulting bids in the ERPs; isn't that

15 correct?

16 A That and I believe there was an

17 extension of the PTC also in that instance.

18 Q So because of the unprecedented low

19 prices, you acquired a higher amount of renewables

20 than you anticipated, right?

21 A We did.

22 Q You want -- let's turn to your rebuttal

23 testimony. I show Page 31.

24 A I'm there.

25 Q And under the answer to the question,

1 "Does this company have an alternative approach?"

2 your third sentence, I think, indicates your

3 "proposal approach will allow the Commission to

4 decide upon the needs scenario that is in the best

5 interest of customers based on the most recent

6 facts and circumstances"; isn't that correct?

7 A I do.

8 Q So you want the Commission to be fully

9 informed of the actual cost of all alternatives

10 which is derived from the Phase 2 bidding, right?

11 A I believe this particular question is

12 referring to the low, medium, and high, which is

13 the capacity need of the system.

14 And then the resulting portfolios would

15 be presented as addressing low, medium, and high.

16 Q And those portfolios would be filled by

17 actual bids rather than the proxies you used in

18 Phase 1?

19 A Yes, ma'am.

20 Q I had a question that actually relates

21 to Volume 2 of the plan, Page 2-222.

22 A 2 dash 222?

23 Q Yes, I'm sorry, I misspoke, though.

24 It's 2-221, Volume 2, Page 221.

25 A I am there.
1 Q Now, you want the Phase 2 bidding

2 process to result in lease cost portfolios for the

3 Commission to choose from, correct?

4 A One of the portfolios that we would

5 anticipate and has been the case in the past is

6 looking at lease cost opportunities.

7 Q I just had a question, then. You talk

8 about at the bottom of 221, "All bids from

9 existing thermal resources currently under

10 contract with the company and all company

11 proposals will be passed through screening to

12 portfolio development."

13 A I see the sentence.

14 Q Do you include "all company proposals"

15 to mean all bids submitted that would be owned by

16 the company?

17 A This is, once again, one of those

18 modeling questions that would be more accurately

19 addressed by Mr. Hill.

20 Q Thank you. I have a question about the

21 timing of this process leading into Phase 2. Do

22 you know how long it will take to prepare the

23 updated assumptions and tables that will be

24 commented on in the process proposed by staff?

25 A So the anticipation at this point in

1 time is that that -- those updates would be

2 prepared prior to issuing the RFP. So are you

3 asking how long it would take the company between

4 the Commission issuing a decision on Page 1 and us

5 providing that information?

6 Q Yes, and then I wanted to walk briefly

7 through the commencement of Phase 2. I just want

8 to get an idea when you will finish this Phase 2

9 process.

10 A Understood. Okay. I have a little

11 cheat sheet because we've been talking about this

12 internally as well. So we would anticipate that

13 the RFP would issue -- this is, of course,

14 premised on assumptions around when a decision

15 would be made and the process is complete, but we

16 would anticipate issuing the RFP in the July time

17 frame. And so therefore the filing of the update

18 information would occur before then.

19 Q And then you'll have a -- well, when

20 would your 120-day report be anticipated?

21 A The 120-day report we anticipate would

22 be in the February 2018 time frame.

23 Q Do you believe this is quick enough for

24 you to obtain the full benefit of the 100 percent

25 PTC wind resources that are out there?

1 A We do. And I have testimony on this

2 particular fact in that we believe that for those

3 that -- first off, the way that the 100 percent

4 PTC works, developers who were interested in

5 utilizing 100 percent PTC would have already had

6 to put a 5 percent, for lack of a better word,

7 contingency, a payment down to show you that they

8 were making forward progress on their project.

9 And then they have a continuous

10 construction opportunity they need to access

11 in order to be compliant with the safe harbor

12 guidance from the IRS.

13 And so we believe that those that have

14 already -- or that that date has already passed

15 because December 31st of 2016 was the deadline for

16 that 5 percent. So they already met that

17 threshold. The second threshold they have to make

18 is continuous construction, which as long as they

19 have the project in service before the end of, I

20 think it's 2020, December of 2020, then they'll

21 still obtain the 100 percent PTC.

22 Q Do you review the activity in the

23 market in your new role?

24 A I do not.

25 Q Do you know whether there is

1 competition between utilities for these

2 100 percent safe harbor turbines?

3 A I don't know if there's competition

4 between utilities. You also -- just to be clear,

5 the 5 percent isn't specific to a turbine

6 purchase. It's any kind of contribution towards

7 the projects. So it could be a transformer or

8 some other part of the project that you would

9 utilize.

10 Q Thank you. So you're not aware that

11 there might be a time pressure and limited

12 availability of these projects?

13 A I'm not aware of that, no.

14 Q You indicate -- I'm going to change

15 subjects very quickly here -- you indicate, in

16 your rebuttal testimony, Page 31 --

17 A I'm there.

18 Q You -- I'm sorry, I'm going to skip

19 that question. Please go to 48 instead.

20 A Okay.

21 Q Save us a bit of time.

22 A I'm there.

23 Q You indicate that you would support the

24 opening of a rulemaking to discuss how to resolve

25 the inconsistencies between the ERP rules and RES

1 rules.

2 A It's Page 49 in the version that I

3 have, but yes, we are open. We mention this in a

4 couple of different places, that, as you know,

5 through the Rush Creek process, we clearly

6 identified that there are some inconsistencies

7 between the various rules that we have on the ERP

8 and the RES as a result of many years of changes

9 and not necessarily coming back and looking at

10 everything holistically and tying it out but

11 incremental changes being made throughout the

12 rules.

13 And so we are very much supportive of

14 moving forward with the rulemaking that would

15 ensure that all of us have clarity on how we move

16 forward and interacting between the RES rules and

17 the ERP and various projects.

18 Q One of the issues to be decided in the

19 rulemaking would be to indicate whether and to

20 what extent ERP results, in this Phase 2 of this

21 ERP, would be used for reasonable cost

22 calculations in future 3660(H) applications; isn't

23 that right?

24 A I believe one of the questions that

25 came up in the Rush Creek project was how to

1 evaluate reasonable costs. The company's

2 position, in that particular proceeding, was that

3 you could utilize much information outside of the

4 service territory of the property provided we

5 evaluated it based off a deliverability metric.

6 Cost to construct is a variable that we're looking

7 at.

8 Other parties' position on that was

9 that you had to have, essentially, an ERP process

10 or some kind of competitive process that would

11 provide that information.

12 If that's the topic to be discussed, as

13 far as defining what reasonable cost is during the

14 rulemaking, that is the conversation we would

15 engage in. Is it one that we believe is

16 absolutely necessary? Maybe not.

17 Q The rulemaking would also help

18 determine to what extent decisions, such as the

19 coal retirements that Mr. Detsky used as an

20 example, that might arise in between ERP filings

21 should be falling under a 3660(H) proceeding,

22 correct?

23 A I disagree. Coal retirements have no

24 relation to the 3660(H). And also a forced

25 retirement of a coal unit, my understanding is,

1 I'm not a lawyer, but that would be a taking. And

2 so that is something that would have to be briefed

3 between the legal staff, but it would not be

4 something that is permissible under the

5 Commission's rules, or it would be contrary to

6 existing statute at the State and Federal level.

7 Q But a retirement can arise due to other

8 circumstances such as new regulatory requirements

9 raising costs, correct, besides a forced

10 retirement?

11 A If the company were to -- I guess

12 theoretically if they were saying an environmental

13 standard that is passed that would subsequently

14 increase the cost of one of our units, the company

15 could come to the Commission and make a proposal

16 to voluntarily retire that unit early in order to

17 satisfy some of the environmental standards.

18 MS. HICKEY: Thank you. Nothing else.

19 Thank you, Mr. Chairman and Commissioners.


21 think that brings us to Mr. Minor.



24 Q Good afternoon, Ms. Jackson. My name

25 is actually Joel Minor. That's M-i-n-o-r.

1 Mr. Hiatt is my cocounsel. And I represent Vote

2 Solar in this proceeding.

3 A Good afternoon.

4 Q As part of the ERP filing, did the

5 company include six supporting studies detailing

6 various technical inputs and assumptions?

7 A We did.

8 Q And did one of those technical studies

9 examine solar integration costs?

10 A Yes, it did.

11 Q Could you describe, in general terms,

12 what a solar integration cost study evaluates?

13 A Sure. While I'm not the one who

14 performs the studies, my understanding of what

15 we're analyzing in that is what the incremental

16 cost is to the remaining portion of the systems to

17 integrate that solar into the operations of our

18 existing system. That would be transmission

19 upgrades. It would be impacts on other units, a

20 variety of things.

21 Q But the costs identified in the solar

22 integration cost study relate primarily to how

23 solar resources affect production costs and not so

24 much to transmission and distribution costs,

25 right?
1 A It focuses on the incremental ancillary

2 services and other needs.

3 THE REPORTER: I'm sorry, could you

4 slow down. Ancillary.


6 A Ancillary services and other needs.


8 Q Thank you. And do you recall that

9 Page 11 of the study concludes that solar

10 integration costs are immaterial?

11 A I can't say that I have that memorized,

12 but subject to check, I do recall that that is the

13 result of the study.

14 Q Thank you. Now, does the company use

15 the solar integration cost study in other contexts

16 outside of the ERP process?

17 A I'm trying to think of the other. I'm

18 sure we use it for other uses. I can't think of a

19 specific one at this time, though.

20 Q Subject to check, would you agree that,

21 for example, the solar integration costs for a

22 renewable connect were determined using the solar

23 integration cost study?

24 A Yes, they were.

25 Q Thank you. And so this isn't the first

1 time that the company has conducted a solar

2 integration cost study, is it?

3 A I don't believe so. Once again,

4 Mr. Hill would be a prime one to ask how many

5 times we've done it.

6 Q And, in fact, there's one earlier study

7 in 2009. Is that -- does that sound right?

8 A I couldn't confirm or deny the dates,

9 I'm sorry.

10 Q Well, this is a somewhat peripheral

11 point, but would you be surprised and agree,

12 subject to check, that on Page 14 of Mr. Scholl's

13 testimony, he states that there was one previous

14 study in 2009 that was submitted as part of the

15 2007 ERP?

16 A Subject to check.

17 Q Thank you. So in today's ERP

18 proceeding, the company is asking the Commission

19 to approve the 2016 solar integration cost study,

20 correct?

21 A That's correct.

22 Q And the company has historically

23 updated the solar integration cost study about

24 every seven years or so?

25 A I can't confirm or deny. Once again, I

1 don't know how many of them that we've done.

2 Q Okay. But when the company has done

3 these studies, as it's doing now, you ask the

4 Commission to review and approve the study, right?

5 A That's correct.

6 Q And as of right now, does the company

7 have any plans to update this new solar

8 integration cost study?

9 A I believe this is the updated version,

10 so the next update would probably come in the next

11 ERP.

12 Q Okay. So the company, should you

13 update in the future, will likely do so during an

14 ERP proceeding?

15 A Barring an order to do it in another

16 avenue or to update it for purposes of another

17 docket, I would say that's a reasonable

18 expectation.

19 Q And do you agree that it's valuable and

20 important to give the Commission and stakeholders

21 an opportunity to review and vet the methodology

22 and the findings of this type of study?

23 A Of course.

24 Q Thank you. Now, let's talk about a

25 different study. Did one of the studies the

1 company submitted in this proceeding examine the

2 effect of load carrying capability of solar

3 resources?

4 A It did.

5 Q And in a general sense, what does a

6 solar ELCC study examine?

7 A The details of the study, once again, I

8 don't perform the studies. And so therefore if

9 you want to get into some of the details, you'd

10 probably need to talk to Mr. Scholl or Mr. Hill.

11 Q Thank you. Yeah, we'll certainly save

12 our detailed questions for Mr. Scholl, but just so

13 everyone knows what study we're talking about, in

14 a general sense, would you agree an ELCC study

15 determines the capacity credit for -- for solar

16 resources?

17 A Yes, it does.

18 Q And that the higher the ELCC value, the

19 more favorably a solar facility will compare to,

20 say, a natural gas generation production facility

21 in Phase 2 in the ERP proceeding, right?

22 A From the perspective of addressing peak

23 capacity needs, yes.

24 Q Thank you. So does the company use the

25 solar ELCC study results in any other context

1 outside of the ERP process?

2 A Once again, I can't think of a specific

3 example, but I'm sure that we would utilize them

4 as we do with many of the studies resulting from

5 our ERP Phase 1, whether it's in a DSM process or

6 other proceeding.

7 Q Okay. And so subject to checking, you

8 wouldn't be surprised that it had been -- that

9 previously ELCC studies had been used in other

10 proceedings dealing with renewable connects?

11 A It is a reasonable expectation.

12 Q And this is not the first time that the

13 company has conducted a solar ELCC study?

14 A I don't believe it is.

15 Q In fact, the company conducted earlier

16 ELCC studies in 2009 and 2013?

17 A I recall it being included in the last

18 ERP. I would need to further check on the 2009.

19 Q Thank you. And if you were to check,

20 that should be on Page 5 of the ELCC study itself.

21 Okay.

22 So in this ERP proceeding, the company

23 is also asking the Commission to approve the 2016

24 ELCC study, right?

25 A Correct.
1 Q And as of right now, does the company

2 have any plans to update this new solar ELCC

3 study?

4 A Once again, I think it's the same

5 answer as the previous one. I think a reasonable

6 expectation is, barring other orders from the

7 Commission to update it for another docket, we

8 would anticipate updating that in the next ERP.

9 Q Thank you. And you agree that there's

10 also a value in the Commission and stakeholders

11 having the opportunity to review and vet any ELCC

12 study as well?

13 A Yeah.

14 Q Which is why doing so in an ERP

15 proceeding would be logical?

16 A Yes.

17 MR. MINOR: Thank you. No further

18 questions.


20 brings us to Ms. Overturf. The next hour is

21 yours.



24 Q Good afternoon, Ms. Jackson.

25 A Good afternoon, Ms. Overturf.

1 MS. OVERTURF: For the record, my name

2 is Erin Overturf, O-v-e-r-t-u-r-f.


4 Q So Ms. Jackson, before we start this

5 conversation, I would just like to go through some

6 basic definitions and make sure that everybody in

7 the room is on the same page so that we're all

8 talking about the same thing.

9 When the State or the Federal

10 government institutes a new environmental standard

11 like a limit on carbon pollution, for example, a

12 utility is likely to incur costs to comply with

13 that regulation, would you agree?

14 A It depends on the utility, but it is

15 probable that they will incur costs to combine.

16 Q And these are costs like installing new

17 equipment or purchasing emission allowances,

18 things like that?

19 A Or re-dispatching their system. It

20 depends on what alternative is necessary that they

21 need to employ.

22 Q Okay. And those costs ultimately are

23 borne by ratepayers, right?

24 A In large part, yes.

25 Q Okay. So for ease of this

1 conversation, I'm going to refer to that group of

2 dollars as compliance costs, okay, the cost

3 associated with the utility taking action to come

4 into compliance with an environmental regulation.

5 A Okay.

6 Q So not all costs that are borne by

7 society are captured in that compliance cost,

8 would you agree?

9 A There is the potential for other costs

10 to be incurred. Are you -- let me ask a question

11 real quick -- are you meaning with the regulation

12 that has been put forward there are other costs

13 that could be incurred?

14 Q No, I'm sorry. There are compliance

15 costs that the utility incurs in order to come to

16 compliance with an environmental regulation, but

17 there may be other costs that other people in

18 society bear because of the utilities' actions

19 that are not included in that compliance cost.

20 So, for example, there might be

21 consequences of pollution that are borne by

22 society at large and that are not borne by the

23 company and its customers. Would you agree?

24 A I agree with that. Where I was

25 struggling on the previous question is when the

1 company takes action and costs are incurred, those

2 come through the utility still. So the compliance

3 costs would pass on to customers.

4 I'm not aware of another cost that a

5 customer would incur when we come in compliance.

6 Q Right. And so this might be a little

7 bit confusing because when I say "cost" in this

8 context, I'm not really talking about dollars and

9 cents so much as negative impacts that other

10 people in society may incur. Does that make

11 sense?

12 A Yeah.

13 Q So in the most basic terms, if we think

14 back to our Economics 101 textbook, these are

15 externalities, right?

16 A Yes, ma'am.

17 Q An externality is a consequence of a

18 economic activity that's borne by somebody outside

19 of that transaction. Would you agree with that

20 definition?

21 A I think that's a fair representation,

22 yes.

23 Q Okay. Thank you. And would you agree

24 that there are externalities associated with the

25 emission of carbon pollution, from the company's

1 system, that are not directly reflected in costs?

2 A I believe there is the potential for

3 that to occur, yeah.

4 Q All right. So that is the end of the

5 painful getting on the same page definitional

6 conversation. I appreciate your patience.

7 So I may have the same pagination issue

8 that Mr. Detsky had, but I would like to refer to

9 your corrected rebuttal testimony. The version I

10 had is the clean version, so we may have a little

11 bit of a problem. But I'm looking at Page 77.

12 A Can you give me the question you're

13 looking for, and then I can find it?

14 Q In just one second.

15 A Okay.

16 Q Okay. So I'm looking at Page 77,

17 Line 17. And the question is, "How does the SCC

18 differ from the carbon proxy pricing approach?"

19 A So in the version that I have, for

20 those of you that have the red line version, it's

21 Page 78, Line 13.

22 Q Okay. Thank you very much. And on the

23 third line, in the response to that question, you

24 state, "Customers of Public Service will not

25 directly incur the damage costs estimated in the

1 SCC," which for the benefit of anybody who hasn't

2 been tracking this issue, is the social cost of

3 carbon. Do you see that there?

4 A I do.

5 Q Okay. So I'd like to understand this

6 statement in your testimony a little bit better.

7 Consistent with our previous conversation, I think

8 what you're saying here is that customers don't

9 pay for the impacts of climate change or the

10 impacts of carbon pollution through their utility

11 bills; is that correct?

12 A What I'm saying is that of the costs

13 that are included in the social cost of carbon,

14 not all of them come through utility bills.

15 Q Okay. So you do acknowledge that

16 Coloradoans, including those that are in the

17 company's service territory, will experience the

18 effects of climate change that are caused by

19 greenhouse gas pollution, right?

20 A I understand that's what the report's

21 saying. And what I am saying here is that the

22 costs that are estimated in the social cost of

23 carbon don't necessarily come through the utility

24 bill.

25 Our cost of, say, using the compliance

1 cost that you were referencing before, those would

2 be directly borne by our customers through the

3 utility bill.

4 Q But you're disagreeing with me that

5 there are other costs or externalities that

6 customers in your territory will likely incur even

7 though they're not being incurred in a payment on

8 their utility bill?

9 A There is the potential for them to

10 incur those costs, yes.

11 Q Okay. Thank you. So is it your

12 position that in the resource selection process,

13 the Commission should only evaluate those

14 environmental impacts that are likely to directly

15 impact the cost of providing electric service to

16 customers, only the compliance cost?

17 A Yes, it is.

18 Q Okay. So I'd like to -- if we can just

19 hold that thought in your brain for a second. I'm

20 going to come back to that in a minute, but I want

21 to keep talking about this area of your testimony.

22 So would you agree with me that as

23 temperatures rise, customers' demands for heating

24 are likely to decrease?

25 A For heating?
1 Q Yes.

2 A If the assumption is that they're only

3 rising in the summer months and they're also

4 getting colder in the winter months, then under

5 your premise, yes.

6 Q Okay. And would you agree with me that

7 as temperatures rise, customers' demands for

8 air-conditioning are likely to increase?

9 A Yes.

10 Q Thank you. And so generally speaking,

11 would an increase in air-conditioning cause the

12 company to incur costs of new generation,

13 transmission, distribution system upgrades?

14 A Is depends on the capacity that's on

15 the system at that point in time, but if you tip

16 over what is available on the system, reasonably,

17 yes, you would have to incur incremental costs.

18 Q Okay. And those costs are ultimately

19 borne by ratepayers, right?

20 A They are.

21 Q Okay. Are any of those types of costs

22 included in a resource bid or otherwise considered

23 as part of the company's bid evaluation process?

24 A My understanding is that the

25 transmission costs in order to interconnect the

1 resources that are selected are included in the

2 bidding evaluation, but the incremental costs

3 potentially posed by changes in customers

4 consumption patterns due to environmental

5 patterns, no.

6 Q Okay. And let's assume that there's a

7 wildfire or some other national disaster that

8 impairs or damages the company's grid. Would the

9 company, then, incur costs to replace or repair

10 that affected equipment?

11 A Yes.

12 Q And are those costs ultimately passed

13 on to ratepayers?

14 A I would say it depends on which costs

15 you're talking about. For the incurrence of the

16 operations and maintenance expenses, in order to

17 recover from that, so in other words all the O&M

18 expenses, not necessarily.

19 Those are sometimes looked at as one

20 time adjustments. And a perfect example of that

21 is the flood in 2013. When we look at the

22 subsequent rate case that used that historical

23 information from that year, you remove that higher

24 cost, if it's one time expense, and you put it

25 back in normal costs.

1 So it's not necessarily all passed

2 through. However, the capital side of it, I would

3 agree. The capital side would be included in the

4 following rate case for evaluation by the

5 Commission for inclusion in rates.

6 Q Okay. Great. And are you aware that

7 the federal social cost of carbon accounts for

8 these types of energy system costs?

9 A No, I have not specifically reviewed it

10 to that level of detail.

11 Q Okay. I'm happy to point you to a

12 provision in the record, or would you take my word

13 for it that the social cost of carbon, as

14 calculated by the federal government, doesn't

15 include those types of energy system costs?

16 A Subject to check, I'm willing to take

17 your word for it.

18 Q Okay. Thank you. I can follow up

19 later with references. So how does the company

20 account for those direct costs that are

21 attributable to its greenhouse gas pollution in

22 the ERP modeling?

23 A Well, I'm not sure that it is -- well,

24 number one, it's not included in there because we

25 had that conversation before, but secondly, I'm

1 not sure it's the appropriate item to include.

2 Q Even though those are actual costs that

3 will be borne by customers?

4 A It's a potential. The question that we

5 have here is really the cost of monetizing that

6 cost today versus the risk that may be posed by

7 our customers in the future. And that's really

8 the deciding point is do we want to monetize

9 potential costs today for our customers that

10 actually hasn't been incurred or has occurred on

11 our system.

12 Q And whenever we're making resource

13 planning decisions, we're looking forward into the

14 future. None of us have perfect information,

15 right?

16 A You're right, but we are looking at the

17 capacity needs of the system from a perspective of

18 what is the load and the demand going to be on the

19 system, not necessarily what could potentially

20 change that load at the same time or years beyond.

21 And so that's why I struggle with the

22 concept of do we really want to look at monetizing

23 those potential outcomes that are not occurring

24 through the ERP process.

25 Q So let me -- I'm not -- what do you

1 mean when you say "monetizing"?

2 A Well, for example, if you receive a

3 couple of different bids -- and I believe it's the

4 position of WRA that we utilize the social cost of

5 carbon as one of the sensitivities in analyzing

6 the portfolios that are presented -- in the event

7 that you were to use that higher cost of carbon,

8 which goes up as high as, I believe, $123 pure

9 ton, and that changes the order of resources that

10 you're selecting and therefore results in a higher

11 costing resource being selected for a potential

12 unknown outcome, then you are monetizing the cost

13 of that potential today and increasing the cost to

14 customers through their utility bill deliberately

15 by making that decision

16 Q Okay. I think that -- okay. I

17 understand what you're saying now. So I'd like to

18 return back to our previous conversation about

19 which types of environmental impacts are

20 appropriate to consider in the resource planning

21 process. Earlier you said that only those direct

22 compliance costs should be considered by the

23 Commission in -- in the resource planning process.

24 Do you recall that?

25 A I do.
1 Q Okay. Were you involved in the

2 Commission's miscellaneous proceeding concerning

3 net metering, which happened in 2014?

4 A Yes, ma'am.

5 Q It was a good time, wasn't it?

6 A 18 months of fun.

7 Q It was a really good time.

8 MS. OVERTURF: May I approach, Your

9 Honor?


11 MS. OVERTURF: This is one of the ones

12 I e-mailed, so everybody knows.

13 (Whereupon, Exhibit No. 50 was marked

14 for identification.)


16 Q Ms. Jackson, do you recognize this

17 document?

18 A It is the reply comments of Public

19 Service Company of Colorado in the net metering

20 docket.

21 Q Okay. And that was Proceeding

22 No. 14M-0235E; is that correct?

23 A That is correct.

24 Q And these comments, if you turn to the

25 last page, were submitted on June 5th of 2015. Do

1 you see that?

2 A Yes, ma'am.

3 Q Okay. Thank you. Did you participate

4 in the drafting of these comments?

5 A I reviewed the comments, and yes.

6 Q Okay. Thank you. Could you please

7 turn to Page 5 of that document.

8 A I'm there.

9 Q And at the very bottom of that page,

10 the company states, "Public Service notes that

11 externalities such as environmental impacts are

12 already and more appropriately considered through

13 the electric resource plan process." Do you see

14 that?

15 A I do.

16 MS. OVERTURF: I'd like to move for the

17 admission of Exhibit 50.

18 CHAIRMAN ACKERMANN: 50's been moved.

19 Any objections? Seeing none, it is admitted.

20 (Whereupon Exhibit No. 50 was admitted.)


22 Q And how has the company -- consistent

23 with your comments in this previous proceeding,

24 how has the company considered environmental

25 externalities in this resource planning

1 proceeding?

2 A Our recommendation is that they should

3 not be included.

4 Q Okay. Thank you. Could you turn back

5 to your rebuttal testimony on what for me is

6 Page 78. And this is under the question, "Why is

7 the SCC not appropriate for an ERP?"

8 A I'm there.

9 Q Okay. Thank you. And let's see. 10

10 lines down or so, I don't want to give you the

11 line number since I think it's going to be

12 different, you say that "The intended use of the

13 social cost of carbon is not to determine the

14 stringency of a regulation or the carbon

15 reductions required, only the net costs/benefits."

16 Do you see that there?

17 A Just a moment.

18 Q Uh-huh.

19 A Is it the second sentence of the answer

20 where it says, "It is also inappropriate because

21 it is designed only for a cost benefit analysis"?

22 Is that what you're referring to?

23 Q The beginning of the sentence is,

24 "However, in the ERP context" --

25 A I found it.
1 Q Okay. So do you see that statement now

2 that I was referring to earlier? Okay. So I'm

3 afraid that I don't understand this statement, so

4 maybe we can talk about it a little bit more. Is

5 the company concerned that somehow running a

6 sensitivity analysis with the social cost carbon

7 included would somehow create a legal requirement

8 or obligation to reduce carbon pollution?

9 A No.

10 Q Okay. So you recognize that when

11 selecting resources as part of an ERP, the

12 Commission regularly weighs costs and benefits,

13 correct?

14 A Yes.

15 Q Okay. Could you please turn to --

16 actually, it's that same page. Going up a little

17 bit, you say that "The federal social cost of

18 carbon is designed solely for regulatory impact

19 analysis of proposed federal regulations." Do you

20 see that?

21 A I do.

22 Q Okay. Now, when it promulgated the

23 social cost of carbon regulations, the

24 inter-agency working group didn't prohibit or

25 forbid use of that analysis by other decision

1 makers, right?

2 A It did not, but the intention of it was

3 to evaluate the federal policy that was coming out

4 to identify the impacts of that federal policy on

5 its implementation.

6 Q Okay. So to weigh costs and benefits?

7 A That's correct.

8 Q Okay. And other states, such as, for

9 instance, Minnesota, they use the IWG social cost

10 of carbon in their resource community, don't they?

11 MR. SOPKIN: Objection, relevance as to

12 what the State of Minnesota does.

13 CHAIRMAN ACKERMAN: Your response?

14 MS. OVERTURF: Your Honor, the

15 company's claim that use of the social cost of

16 carbon in the regulatory context is inappropriate

17 is plainly belied by the fact that it's used by

18 other regulatory commissions in this exact same

19 way.

20 MR. SOPKIN: Your Honor, we can open up

21 a real big case here as to how every state in the

22 union deals with this situation. And if

23 Ms. Overturf would like, we can get into other

24 states that regulate Xcel operating companies such

25 as North Dakota and exactly what North Dakota

1 does, which I assure you is the opposite of what

2 she's talking about now. I don't think it makes

3 sense to go down this rabbit hole and talk about

4 how every other state treats this issue.

5 MS. OVERTURF: Your Honor, I'm not

6 asking to talk about how every other state treats

7 this issue. I'm talking specifically about

8 Minnesota. And I'm talking specifically about use

9 of this metric in the regulatory context, which

10 the company claims is manifestly inappropriate.

11 MR. SOPKIN: Minnesota has its own

12 regulations. The only thing relevant in this

13 proceeding are the Colorado regulations.


15 think given that context, I think it's still

16 appropriate to let that information come in. With

17 that understanding of the context, we'll proceed.


19 Q Would you like me to restate the

20 question?

21 A Please.

22 Q Okay. So other states such as

23 Minnesota utilize the IWG social cost of carbon in

24 the resource planning process; is that correct?

25 A My understanding is yes, but

1 Ms. Overturf, in your explanation and the

2 discussion there, I believe there's a

3 misunderstanding of our position.

4 Q Okay.

5 A My -- what we are trying to express is

6 that the externality component and the utilization

7 of externalities and the evaluation of portfolio

8 bids is appropriately discussed in the ERP

9 process.

10 It is the company's position that it

11 should not -- the value associated with those

12 externalities should not be included in the

13 portfolio analysis, not that we shouldn't talk

14 about it at all.

15 Q When you say it should not be included in

16 the portfolio analysis, what does that mean?

17 A That means, when we're -- just like the

18 portfolios we were discussing earlier, in previous

19 ERPs. We have determined that an appropriate cost for

20 carbon is $20 per ton in the analysis. We have also

21 determined that we would like an analysis that shows a

22 zero dollar cost per ton for the carbon. Those allow

23 us to look at and to evaluate the probability of those

24 costs coming in the future and then to make a decision,

25 based off of those.

1 Q So Ms. Jackson, if I can interrupt you

2 for just a second. Earlier, in your conversation -- we

3 had a lengthy discussion about two different kinds of

4 cost.

5 A Yes.

6 Q One were compliance costs, what you have

7 referred to, in your testimony, as projected carbon

8 costs expected to be incurred in order to come into

9 compliance with environmental regulations. And there's

10 another subset of values and costs and benefits

11 associated with carbon pollution, and which are not

12 captured in the social cost of carbon. These are two

13 distinct areas, correct?

14 A So, once again, we are talking about the

15 two defined areas that you were discussing earlier, the

16 externalities versus the compliance cost, correct?

17 Q Yes.

18 A And, so, what we're saying is that, so,

19 in the net metering docket, we had said it is more

20 appropriate to discuss externalities in the ERP

21 context. And you asked me the question earlier, in

22 regards to, you know, well, what's the company's

23 position on that? And I said it is to not include

24 that.

25 That wasn't a do-not-include-them in the

1 discussion. It was where we're recommending that they

2 should be valued, not -- the externality components of

3 the cost should not be something that's evaluated as

4 part of the impact of a resource portfolio.

5 Q So, we should talk about them generally,

6 but we shouldn't provide the Commission with the

7 information of looking at how those portfolios would

8 fare with the social cost of carbon included?

9 A No. What we're saying is that this is

10 the appropriate place for us to have the discussion

11 about, if externalities do or do not get included, but

12 the company's recommendation is that they do not.

13 Q I understand your recommendation. Thank

14 you.

15 A Okay.

16 Q Okay. So, you would agree with me, then,

17 I think that, based on this conversation, that while

18 the company's position is that we should not -- well,

19 you could look at the externalities, if you wanted, in

20 the ERP, but we shouldn't -- you're not saying that it

21 is inappropriate or somehow is improper to utilize the

22 social cost of carbon in the resource planning process?

23 A The company's position and opinion, on

24 the social cost of carbon, it is not a valid

25 representation of costs that our customers are going to

1 incur on their bill; and, so, therefore -- and also for

2 the purposes of the creation of the social cost of

3 carbon, it is not the appropriate metric to include in

4 the cost evaluation, because it will not flow through

5 to our customers' bill.

6 Q So, okay. So, as we discussed earlier,

7 the costs that a customer pays in their bill are not

8 the only costs that exist when we are making these

9 types of actions. You would agree with that, correct?

10 A I would agree that the studies that are

11 evaluating the climate change, and the impacts, are

12 impacting company's decisions. So, for example, in the

13 emissions, they don't manifest themselves on our

14 customers' bill, but they do cause other problems, you

15 know, manganese chloride, all of those have side

16 effects, that we utilize, because they help us move

17 toward -- what I am saying is that the social cost of

18 carbon reflects many other costs, and many other

19 impacts, that have nothing to do with our emissions or

20 otherwise. And, so, therefore, they don't manifest

21 themselves, and we shouldn't take them into account.

22 Q So excuse me, Ms. Jackson. If I could

23 just ask a follow-up question there. What types of

24 carbon emissions do you think are included in the

25 social cost of carbon?

1 A Well, it looks at everything, so. . .

2 Q Exactly. It does look at the impact of

3 emissions from the company's system, just as it looks

4 at the impact of a ton of carbon that's emitted

5 anywhere else in our economy, correct?

6 A Well, and my point is that it goes beyond

7 just those that are emitted through utility operations.

8 Q It's at cost per ton, though, correct?

9 A Correct.

10 Q All right. So, in your new capacity, you

11 report -- technically, you're employed by Xcel Energy,

12 correct?

13 A Xcel Energy Services, Inc.

14 Q Okay. I don't completely understand all

15 of the different various organization charts that go on

16 there, but are you aware that the Xcel subsidiary, in

17 Minnesota, filed a resource plan in 2015?

18 A I know they have just recently completed

19 one. I don't know that they have filed it.

20 Q And, okay. Are you aware of, as part of

21 that plan, the company proposed to utilize the social

22 cost of carbon as a sensitivity analysis?

23 A Pursuant to a decision -- statute

24 requiring them to do so.

25 Q Is there anything prohibiting the

1 Commission from looking at the social cost of carbon in

2 Colorado?

3 A No, if that was the Commission decision.

4 Q Thank you. So, are you also aware that

5 the Xcel subsidiary, in Minnesota, in the most recent

6 resource plan, included a carbon price of $21.50 per

7 ton in the basecase analysis?

8 A I don't know the precise number that they

9 included, but, once again, it was pursuant to a

10 decision, a statutory obligation to do so.

11 Q Okay.

12 MS. OVERTURF: May I approach, Your

13 Honor?


15 (Whereupon Exhibit No. 51 was marked for

16 identification.)

17 MS. OVERTURF: For everybody else, I have

18 just the page I am going to refer to.


20 Q Ms. Jackson, do you recognize this as an

21 appendix to the Upper Midwest 2016 through 2030

22 Resource Plan that was submitted by Xcel Energy in

23 Minnesota?

24 A It's labeled, in the lower left-hand

25 corner, the 2016 to 2030 Minnesota Resource Plan. I

1 have yet to see any label that it's submitted in the

2 Minnesota Electric Resource Plan, and I have not seen

3 the document before, so I can't attest to where it

4 comes from.

5 Q Okay.

6 A It does say, "Xcel Energy," in the top

7 left.

8 Q Okay. Can you please turn to page 7 of

9 that document.

10 MR. SOPKIN: Your Honor, I would object

11 to reading from this document. This witness just

12 indicated she is not familiar with the document. She

13 doesn't know the content of it. Before it could

14 obviously be discussed, it would have to be admitted

15 into evidence.

16 CHAIRMAN ACKERMANN: Thank you. So, the

17 first item, then, is, are you moving this forward to be

18 admitted?

19 MS. OVERTURF: Well, I hadn't quite

20 gotten there yet. What I was going to actually do is

21 ask that the Commission take administrative notice of

22 this document. Under the Commission's rules for

23 administrative notice, the Commission is permitted to

24 take notice of facts capable of accurate and ready

25 determination by resort to the accuracy of sources

1 whose accuracy cannot be reasonably questioned.

2 I personally pulled this document off the

3 Minnesota e-filing system. Theirs is not as nice as

4 ours in Colorado, but very easy to navigate. I think

5 this is something the Commission can take

6 administrative notice of.

7 CHAIRMAN ACKERMANN: You are offering

8 this for administrative notice, but it is not as an

9 exhibit?


11 MR. SOPKIN: Your Honor, I object simply

12 to her asking any questions to this witness about this

13 exhibit, because she's confessed that she is not

14 familiar with it. I can't see whether the markings --

15 whether it is what she says it is. I will take her

16 word for it, but I do object to any questions, based on

17 this document.

18 CHAIRMAN ACKERMANN: So, taking this in

19 two parts, first, the matter -- we'll get to whether or

20 not you can cross examine Ms. Jackson about this,

21 secondly, but, first, take administrative notice. Is

22 that the first item?

23 MS. OVERTURF: Yes. Please.

24 CHAIRMAN ACKERMANN: Any objections to

25 that item from anybody?

1 MR. SOPKIN: As long as I'm not waiving

2 relevance or foundation, Your Honor.


4 that, then, I think we'll take administrative notice of

5 this.

6 (Whereupon Exhibit No. 51 was admitted.)

7 CHAIRMAN ACKERMANN: And we'll move to

8 the second point, which I am hearing, is that whether

9 or not this is the appropriate witness to question on

10 this.

11 MS. OVERTURF: Well, respectfully, I

12 haven't asked any questions, because I wasn't going to.

13 So, you don't have to worry about that.

14 MR. SOPKIN: I do object to the relevance

15 of the document, Your Honor, because this has to do

16 with a Minnesota statute. We're not under that

17 Minnesota statute.

18 MS. OVERTURF: May I respond, Your Honor?


20 MS. OVERTURF: WRA certainly recognizes

21 that Minnesota is not Colorado, and that our legal

22 standards are different. Nonetheless, I do think that

23 it is interesting and relevant for the Commission to

24 consider what other Xcel Energy subsidiaries put

25 forward in other resource plans.


2 that, we're not taking this as an exhibit. We're

3 taking it as administrative notice. We're not cross

4 examining on this, but it's just being added to the

5 documents, given that appropriate level of awareness,

6 and understanding, that we're confident as to what it

7 says, that it is coming out of the Minnesota e-filings

8 system, then we would move it into the record, under

9 administrative notice, and not proceed with cross

10 examination on it.

11 MS. OVERTURF: Thank you.


13 Q So, Ms. Jackson, were you here this

14 morning for the Commission's deliberations on the three

15 provision settlements?

16 A I was not.

17 Q You were not. Okay.

18 MS. OVERTURF: Well, then, I suppose that

19 completes my questioning. Thank you very much.


21 Mr. Dixon, to you, sir.

22 MR. DIXON: Thank you, Your Honor.

23 CHAIRMAN ACKERMANN: And we're going to

24 go right up to 3:45, so we'll watch our time there. If

25 we can work it in, that's fine. If not, we'll carry

1 over to tomorrow.



4 Q For the record, I am Tom Dixon, appearing

5 on behalf of the OCC. Good afternoon, Ms. Jackson.

6 A Good afternoon, Mr. Dixon.

7 Q I am pleased to report to the Commission,

8 I am not taking 60 minutes for cross examination of

9 Ms. Jackson. A number of issues we have discussed, and

10 with other parties, have cut mine back substantially.

11 So, I don't expect to go to 3:45.

12 I would like to start off with the

13 stipulation that the Office of Consumer Counsel and

14 Public Service have agreed to, regarding the admission

15 of four data requests that relate to, generally

16 speaking, coal supply, coal supply size. They were

17 addressed by Mr. Neil, and these are responses to

18 discovery requests that I have previously provided to

19 all parties, and to the company.

20 And, just for the record, that we have

21 marked for identification, as Exhibit No. 42, a

22 discovery request to OCC No. 4-5, and it has portions

23 that are removed, because they are not relevant to the

24 coal study and coal supply questions we were raising.

25 So, only Questions G through O and responses are

1 included on that data request. There also was an

2 attachment that is not relevant to that section, which

3 I did not include as well.

4 Secondly, we have a Data Request 5 --

5 again, this is a discovery request, from the Office of

6 Consumer Counsel, 5-25, and it's identified as Exhibit

7 43. And this particular exhibit is a discovery request

8 to OCC 9-12, and it has been marked for identification

9 as Exhibit 44. And, finally, Discovery Request OCC

10 9-14, which has been marked for identification as

11 Exhibit No. 45.

12 As I said, these generally relate to coal

13 issues that were raised by Mr. Neil in his testimony,

14 and rather than walking the witness through each one of

15 these, we thought it was just better to submit them by

16 stipulation. You have the information in the record

17 and we won't talk about them anymore, but, perhaps, on

18 redirect, but not by me.

19 So, at this time, I would request the

20 admission of Exhibits 42, 43, 44 and 45, as stipulated

21 to by the company. I realize others have the right to

22 object.

23 CHAIRMAN ACKERMANN: Okay. The motion

24 is -- the offer is to admit Exhibits 42 through 45, if

25 I heard you right.

1 MR. DIXON: That's right.

2 CHAIRMAN ACKERMANN: To which the company

3 has stipulated. Looking for responses and objections

4 from any other party? Seeing none, we shall move

5 forward with those being admitted.

6 (Whereupon Exhibit Nos. 42 - 45 were

7 admitted.)


9 Q Since we're talking about coal, I am just

10 going to try -- first of all, I am not going to deal

11 with compliance versus SCC. I have an overall

12 question, based on my understanding of what, I believe

13 it's Ms. Stacy Tellinghuisen, is recommending on behalf

14 of WRA, in terms of a carbon adder for the basecase,

15 what would be the impact, if any, on Colorado

16 ratepayers for Public Service if this proposal is

17 adopted. Does it impact ratepayers?

18 A It can, absolutely. That was the

19 conversation I was having with Ms. Overturf earlier,

20 which is the effect of monetizing the costs, the

21 potential costs that are discussed, and throughout the

22 social cost of carbon, and imposing those costs, then,

23 on our customers through the utility bill.

24 And that has to do with changing the bid

25 curve, when you include that cost on the bids that are
1 made, in the evaluation, and the fact that it could

2 switch which resource is evaluated as more or less

3 cost-effective. So, it does have an impact, and could

4 have a direct impact on customers' bills.

5 Q And if I heard you right -- if I am

6 misstating, that's not my intention -- you referred to

7 how it might impact the ultimate solicitation, the

8 Phase 2 solicitation process; is that correct?

9 A Potentially -- well, I mean the outcome

10 of that solicitation process, absolutely.

11 Q That's what you are talking about?

12 A Yes.

13 Q Then you have answered my question.

14 A Okay.

15 Q Thank you. I would like to turn to,

16 actually, some testimony of Mr. Hill, but I think you

17 are the right witness to ask the question.

18 A Okay. Can you give me an exhibit number,

19 please?

20 Q I am going to do that. Exhibit No. 4.

21 A Okay.

22 Q And it's -- I would like to refer to the,

23 for lack of a better term, "the chart." And on, I

24 think it will be page 25. In any case, it's the three

25 scenario chart.
1 A On the version I have, it's on page 24.

2 Q 24. There we go. I guess, for the

3 record, if I understand what's going on on these page

4 numbers -- maybe we ought to make it clear. The

5 version that's in the record is actually the red-line

6 version, not the clear version that Mr. Detsky and I

7 just referred to, for example, am I right?

8 A Correct.

9 Q So, we just need to make clear which one

10 is actually the record version. Now, with regard to

11 that chart --

12 A Yes, sir.

13 Q You reviewed, I assume, the Surrebuttal

14 Testimony of Mr. Neil, which has been marked for

15 identification, I believe, as No. -- I'll double-check.

16 A 21.

17 Q 21. Do you happen to have that in front

18 of you?

19 A I don't, but I can get it.

20 Q And I would like to direct your attention

21 to page 6, line 10, through page 7, line 3, I believe

22 it is. If you could take a look at that?

23 A Just a moment.

24 (Pause.)

1 Q And I am -- that's not a redacted version

2 by me. That's a good page number.

3 A Yes, sir. It is.

4 (Whereupon the Witness read the

5 document.)

6 THE WITNESS: Yes. I have read it.


8 Q All right. Now, that section addresses

9 this table. More particularly on the table that's in

10 Mr. Hill's testimony, it addresses what's known as a,

11 "Rate Design Row," the second row down; am I correct?

12 A Yes, as well as he addresses the third

13 line.

14 Q Exactly. And he made some

15 recommendations concerning -- correcting the

16 percentages in the numbers in those rows. Rather than

17 waiting for him, I would like to see your position on

18 his recommended corrections, first of all, if you

19 agree; and, then, my second question would be, could

20 you explain why?

21 A That's fine. So, no, we do not agree

22 with the recommendations he is making on one of the

23 rows. So, I think the row should stay the same.

24 And I believe the way that he expresses

25 the scenarios to be, he's trying to be consistent

1 between how the IVVO is presented in this low, medium

2 and high, and the residential and commercial rate

3 design changes are presented in the second row.

4 I believe there's a misunderstanding

5 between -- or what the company tried to do, with the

6 representation that we have in the residential and

7 commercial rate design changes row, versus why we did

8 what we did on the IVVO row. And, so, if I could go

9 through what the thought process was behind this, and

10 why we don't agree with his recommended

11 changes. . .

12 Q Okay. I appreciate that. That's the

13 second question I have: Could you explain why not.

14 A Okay. The IVVO row should remain the

15 same, because the recommendations that we understand

16 have come forward, through the advanced grid filing, is

17 that the IVVO should go forward, at least that's the

18 predominant recommendation that we have recognized in

19 that particular filing, because there is some

20 sensitivity around how much of an impact IVVO will

21 actually have on our grid. In other words, it can

22 change some percentages, as, do you get a 2% reduction

23 on feeders, or do you get something greater, or do you

24 get something a little bit less than that?

25 That's why you see -- the variability is

1 also due to some of the timing questions, of when it

2 would actually be implemented. So, we don't recommend

3 that.

4 So, the basecases that were e-filed in

5 that case included the medium needs, and, then,

6 deviations based off of what the percentages could

7 deviate, in the low and the high, just for

8 consideration, to see what those impacts might be.

9 It's a different case for the residential

10 and the commercial rate design. First off, in the

11 advanced grid filing, we provided an evaluation of what

12 we thought, and our resource group performed a study

13 for us, on what the demand elasticity of changing this

14 rate design might be. That was -- at that point we had

15 a grid use charge that we had presented in our Phase 2.

16 As this Commission is familiar with, the

17 three-case docket came forward and resolved how we're

18 going to be looking at rate design on a going-forward

19 basis. Those needs, in that rate design change, don't

20 necessarily have -- result in the original proposal

21 that the company made. So, therefore, there's some

22 variance between what that optimal reduction in

23 consumption might be.

24 There's also a question, in the advanced

25 grid filing, on timing, whether or not we would

1 actually have the implementation of the AMI done in the

2 Year 2023, so that you would have 12 months time for

3 consumers to make changes in their consumption for that

4 to be reflected in the need.

5 So, because of that, we think it's

6 appropriate to adjust the particular needs that we're

7 showing, as the megawatt peak demand reduction, in each

8 of these time periods.

9 Q So, if I can summarize, it sounds like,

10 if I heard you right, you are more certain with the

11 outcome with respect to IVVO, as proposed, and there's

12 greater uncertainty with respect to the column dealing

13 with rate design changes?

14 A Precisely.

15 Q And, therefore, you have no desire to

16 change the numbers in the row as Mr. Neil proposed?

17 A That's correct.

18 Q Thank you. One last question with

19 respect to the discussion you had with Mr. Cocian,

20 concerning what I would call, the "four-step process."

21 What was not clear to me -- and this strictly is in the

22 nature of clarification -- when does the four-step

23 process begin, in the scheme of things, as far as this,

24 the ERP plan?

25 A As soon as the Commission renders a

1 decision from the Phase 1 outcome, approves that

2 particular process.

3 Q And do I assume from that, the updates

4 you're talking about would be based on what's mandated

5 in the decision that comes out of this proceeding that

6 we're talking about today?

7 A Absolutely.

8 Q All right. Thank you.

9 MR. DIXON: I have nothing further.

10 CHAIRMAN ACKERMANN: Okay. Thank you,

11 Mr. Dixon. That brings us to Commission counsel.

12 Ms. McLauthlin.

13 MS. McLAUTHLIN: Thank you, Chairman.



16 Q Ms. Jackson, I know that you are familiar

17 with the Commission's counsel role. Just for

18 clarification for the parties here today, we do not

19 represent a party to this proceeding, and we do

20 represent the Commission. Therefore, my questions,

21 with permission of the Chair, will probably be more

22 than slightly yes-or-no questions, and to get clarity

23 on the record. So, if that's all right with you,

24 Mr. Chairman?

25 CHAIRMAN ACKERMANN: Yes. Thank you.


2 Q So, first of all, to actually follow up

3 with something that OCC was just discussing, which is

4 the timing of this particular -- and, just for

5 convenience of our discussion, I ask that you could

6 turn to Exhibit 1, and specifically this is Volume 2 of

7 your -- of the ERP.

8 And I think -- and I'm looking for 2-216,

9 and I don't believe we have pagination problems with

10 this one. It's labeled, "Indicative Phase 2 Timing."

11 Just let me know when you were there.

12 A I am there.

13 Q Okay. So, today I heard, in your

14 testimony, that you -- the company has plans to issue

15 the RFP in approximately July of 2017; is that correct?

16 A Yes.

17 Q And is that based on assuming that the

18 Phase 1 decision will be issued by March 31st, or the

19 end of March?

20 A So, we have, on our time line, that it

21 would be the middle of April.

22 Q Middle of April. And, again, looking at

23 this particular figure, you would anticipate that the

24 bids would be received approximately 90 days after that

25 RFP issues?
1 A No. The RFP -- I'm sorry. The bids

2 would be received 90 days after, yes.

3 Q Okay. Is that correct?

4 A So, after the RFP is issued, which is --

5 there would be a 90-day period for the bidders to

6 respond, yes.

7 Q Yes. Correct. And, so, based on the

8 timing from July, that would be approximately October

9 or November of 2017?

10 A We're looking at the beginning of

11 October.

12 Q Yes. And the company today, again,

13 stipulated that it agrees with the comment process

14 regarding the three-source need proposed by Mr. Hill;

15 that would be that the high, medium and low load

16 calculations would be updated just before issuance of

17 the RFP?

18 A Yes, ma'am.

19 Q And do you know how in advance of the RFP

20 the company intends to update those?

21 A I don't have a specific date, but I would

22 expect it to be, you know, within the -- so, just to be

23 clear, what we have assumed is that we will probably

24 have a round of ARRR, if not more than one. So, the

25 final ARRR period would close, and we would have a

1 decision in early June.

2 Q Okay.

3 A Once that is done, we'll be actively

4 working on assembling all of the updates to the low,

5 medium, high. We should reasonably be able to file

6 that fairly quickly after that final issuance.

7 Q June of 2017?

8 A We anticipate sometime in June.

9 Q Okay. And under the proposal,

10 intervenors would then have two weeks to comment?

11 A Correct.

12 Q And, then, the company would have an

13 additional two weeks to respond?

14 A Correct.

15 Q And there's the hope that the Commission

16 would, then, have a decision three weeks after that?

17 A Correct.

18 Q And if my simple math is correct, I

19 believe that's 49 days?

20 A Roughly.

21 Q Roughly. And, so, that would be

22 approximately August of 2017?

23 A It could push the RFP issuance to the

24 August time frame.

25 Q Looking at, again, page 2-216, that would

1 allow for that decision to be by the time of bid

2 receipts, that 90 days that we had just talked about?

3 A Yes. It is, well, we will make the

4 filing before the bids -- the RFP is issued. So,

5 people will be informed of what we're looking for. The

6 final decision might come in that period, when bids are

7 being received or the time period that they are being

8 assembled.

9 Q Okay. Thank you. And I also heard, in

10 your testimony today, that the 120-day report, the

11 company anticipated would be around February of 2018?

12 A That is what we're anticipating, under

13 the schedule we're looking at.

14 Q And the company proposes that, also, in

15 Mr. Hill's testimony, but, I believe you can address

16 that. By that 120-day report, the company would have

17 more updated load information?

18 A I'm not sure that we're doing another

19 update to the load information in the 120-day report.

20 You would have to double check with Mr. Hill.

21 Q Thank you.

22 A When he does come up.

23 Q That's helpful, but, in that, you do

24 anticipate that there will be one preferred portfolio

25 out of that 120-day report?

1 A I would. We're presenting a number of

2 portfolios, at the low, medium and high, for the

3 Commission's consideration, and looking at different

4 things. The company typically does, though, make a

5 recommendation as to which one we preferred.

6 Q Okay. Yes. That's exactly the

7 clarification. Maybe it's best to discuss that with

8 Mr. Hill.

9 I also want to discuss something that is,

10 I know, is not in your testimony specifically, but I

11 think you can address it, regarding the flex reserve

12 study and the timing of the Phase 2 process. The

13 company is proposing to update a 4.5 gigawatt flex

14 reserve study in the first Phase 1 decision; is that

15 correct?

16 A That's utilizing the methodology that is

17 approved, through the Phase 1, updating it to some

18 amount, as a concession to, I believe, it was WRA's

19 testimony.

20 Q And do you know how far in advance of the

21 RFP's issuance the company would update this study?

22 A I do not know when that would be put out

23 there. However, I believe the date of that's included

24 in -- the flex reserve study is more pertinent in the

25 evaluation of the bids, after receipt, versus informing

1 bids to be made.

2 Q Right. And that's where my next question

3 is going, is that, am I correct that the study will

4 inform the company of the amount of renewables that

5 will be appropriate on the system?

6 A It will inform the company as to what

7 incremental flexible reserves we need as commensurate

8 with the renewable capacity that is added.

9 Q Right. Which will have a direct relation

10 to how much wind resource would be -- are appropriate?

11 A It could present a cap on the amount of

12 wind resources, and that would be necessary or needed

13 on the system, aside from the fact that you can add

14 more flex reserves, and then that number grows.

15 Q Okay. And just to, again, talk about

16 timing of Phase 2, would the company object to comments

17 on this study, once it is provided?

18 A We weren't thinking that it would be

19 necessary, because it is the exact same methodology

20 that everybody has accepted. We haven't had any

21 adverse testimony or recommendations to change. It's a

22 matter of extending the study a little bit further out

23 on the time horizon. So, we hadn't contemplated that

24 that would be necessary.

25 Q And if it were contemplated in the

1 future, do you believe the Phase 2 timing would allow


3 A Yes.

4 Q And as far as -- let's leave aside the

5 possibility of comments on the flex reserve study.

6 A Uh-hum.

7 Q Could the company file a proposed

8 schedule for Phase 2 prior to the Statements of

9 Position in this case?

10 A Because a lot of that depends on the

11 decision, and when we get the -- it's difficult for us

12 to do so, aside from, we could build in the dates that

13 the Commission gives us, maybe, into that particular

14 answer, but it's highly contingent on when we get that

15 ultimate decision.

16 Q That goes to my next question, whether

17 the company expects the Commission would be approving

18 the schedule within Phase 1, or simply directing --

19 A Yeah.

20 Q -- the company?

21 A I think the indicative time line, what we

22 have used in the past, in most cases, this is how we

23 move through the process. You back into filling that

24 first date, and, then, you use the time line.

25 Q Okay.
1 A So, I believe we would be happy to put a

2 time line that adds these others periods into it, that

3 have been contemplated, with low, medium, high, if that

4 is helpful.

5 Q Okay.

6 A But I hesitate to put in a fixed date of

7 when we would have a decision from the Commission.

8 Q So, similar to prior ERPs, the company

9 would find it appropriate to have a compliance filing

10 for the schedule of Phase 2, after a Phase 1 decision

11 is issued?

12 A Yes, ma'am.

13 Q Thank you. Next, I would like to move

14 just briefly -- and I am still actually going to be in

15 your Volume 2 of the ERP. Just a few questions about

16 the bidding process as it relates specifically to

17 Qualifying Facilities.

18 A Okay.

19 Q And, so, if you could please turn to

20 2-222.

21 A I'm there.

22 Q And looking at the bids for generation,

23 between 100 kW and 10 megawatts, do you see that?

24 A I do.

25 Q And this is a part of the company's

1 proposed bidding procedure, correct?

2 A That is correct.

3 Q And it includes bids as small as 100 kW,

4 right?

5 A Yes, it does.

6 Q And can you explain a bit about why that

7 is?

8 A Well, in previous proceedings, in Phase

9 2s, they have not allowed the bidding to go down to

10 that low of a level, because of the concern that the

11 order of magnitude of bids that would come in would

12 significantly increase, and, therefore, inhibit the

13 processing.

14 We have identified through, I think,

15 since the last ERP process, that we had some gaps in

16 addressing exactly how you look at resources from QFs

17 that are from 100 kW and lower. We had a case on that.

18 We now have a tariff on that.

19 And, then, from 100-kW to 10 megawatts,

20 what do we need to do with that particular range, and

21 this is the appropriate place, we feel, in order to

22 make the modifications, so they can provide bids into

23 the process here.

24 Q Okay. And, for clarity, am I correct

25 that bid fees for proposals in this 10 megawatt to --

1 100-kW to 10 megawatt or less would be different?

2 A That is my understanding, yes.

3 Q Okay. Thank you.

4 A Uh-hum.

5 Q Next I would briefly like to discuss the

6 independent evaluator for the Phase 2 proceeding.

7 Given that the company was granted a partial waiver

8 from proposing an IE before this ERP -- first, has the

9 company continued discussions with staff and the OCC on

10 the proposed IE to this proceeding?

11 A We have had some conversations, but have

12 not come to a resolution.

13 Q Will the company propose an independent

14 evaluator for this proceeding, that you're aware of?

15 A Yes. We're required to.

16 Q Yes. Do you know when you will be?

17 A I don't have a precise date on that, but

18 we could provide that information while the hearing is

19 still ongoing, if you would like.

20 Q Thank you. And I believe you've already

21 answered, as far as the company is continuing to confer

22 on the scope of work with other parties?

23 A We will continue to confer.

24 Q Okay. Thank you. And next, and actually

25 for the last topic, I would like to talk about kind of

1 the future ERPs. So, just with that mindset, and the

2 reserve margin studies, and in particular, and how it

3 kind of fits in. Could you briefly explain the purpose

4 of the reserve margin study?

5 A Sure. The reserve margin study's purpose

6 is to identify what amount of capacity do we need to

7 maintain on our system, for reliability purposes, above

8 our peak load.

9 Q And I'm correct that's currently 16.3%?

10 A Yes, ma'am.

11 Q And the last reserve margin study, if I

12 am correct, it was updated in December of 2008?

13 A Subject to check, yes.

14 Q And the next reserve study is to be filed

15 in 2019?

16 A October of 2019.

17 Q Right. And does the company plan to

18 update the reserve margin study before that next ERP

19 filing?

20 A I don't know if it's something that's on

21 our list. I don't recall the testimony in this

22 proceeding. You might touch base with Mr. Hill on that

23 one as well.

24 Q Okay. And I would like to briefly,

25 again, discussing further ERPs, as this was something;

1 that is an I docket, regarding the Mountain West

2 Transmission Group discussions.

3 A Uh-hum.

4 Q At this time, the Commission has that

5 separate I docket, but you're aware the company has

6 stated that the Mountain West Transmission Group might

7 impact considerations in the next ERP?

8 A Yes.

9 Q And in the future ERP, would an updated

10 reserve margin study consider the Mountain West

11 Transmission Group updates?

12 A It's a potential. It depends on the

13 implementation, and, then, also the RAP periods that

14 would be associated with that future ERP.

15 Q All right. And similarly, again, in a

16 future ERP, could the reserve margin study consider the

17 effects of a Joint Dispatch Agreement?

18 A It could. I am not immediately clear on

19 how it would impact it directly, because it's already

20 the balancing area that we operate in. So, that would

21 have already been taken into account in the existing

22 study.

23 Q Right. That's why I would like to go as,

24 are there any other ways the company plans to address

25 either the Mountain West Transmission Group outcome, or

1 particular JDA effects in a future ERP?

2 A I believe it would be appropriate, to the

3 extent that we do move forward with the Mountain West

4 Transmission Group, that that would be a subject of a

5 future ERP, because it could potentially have an impact

6 on things, such as resource planning.

7 Q Okay.

8 MS. McLAUTHLIN: Thank you. Those are

9 the questions that I have, Chairman.


11 Ms. McLauthlin.

12 MR. DIXON: Mr. Chairman.


14 MR. DIXON: I would like to provide the

15 exhibits. We handed them out. I did not realize that

16 you did not have them.

17 If I may approach, I would like to

18 provide you with Exhibits 43 through 45.


20 MR. DIXON: I apologize.

21 CHAIRMAN ACKERMANN: Okay. Thank you.

22 We are now to Commission questions,

23 starting with you, Commissioner Moser.

24 COMMISSIONER MOSER: I have no questions.

25 Thank you.

2 Koncilja.


4 questions.



7 Q I want to follow up on Mr. Dixon's

8 questions to you, about the carbon adder. From

9 Mrs. Tellinghuisen's testimony -- I don't know if I am

10 pronouncing her name correctly or I've butchered it,

11 the way people butcher my name.

12 My understanding is your testimony, it

13 could impact Colorado ratepayers, use of a carbon

14 adder, because it could impact the outcome of the RFPs,

15 the solicitation you will be doing in Phase 2. Is that

16 a summary of your testimony in response to Mr. Dixon's

17 questions?

18 A Yes, ma'am.

19 Q Okay. So, my question is, because I do

20 love numbers, and I love alternative options for

21 numbers. One is, would there be a problem with -- or

22 walk me through the practical effects of this, if this

23 Commission said, yes, do use a carbon adder, so that we

24 can see the impact it might have on the outcome of the

25 solicitations. Is that operationally possible in those

1 RFPs?

2 A Yes. And it's actually our

3 recommendation to do just that, in some of the

4 sensitivity analyses that we're running, as part of

5 Phase 2. So our recommendation is that the basecase --

6 so the initial case, that you then compare the

7 sensitivities to, does not include a dollar value for

8 the carbon. However, the sensitivities, some of those

9 sensitivities absolutely should. That way the

10 Commission can see the dollar impact between including

11 it and not, and make decisions around that.

12 Q And could you refer me to what -- in

13 either Volume 1 or Volume 2 of your plan, or in

14 somebody else's testimony, where I can look at that

15 recommendation?

16 A Absolutely. I believe it's in Mr. Jim

17 Hill's Rebuttal Testimony.

18 Q Okay. Thank you. And, then, following

19 up on Ms. Overturf's questioning to you, from Exhibit

20 50. This was the one from the filing in the net

21 metering.

22 A Yes, ma'am.

23 Q As I recall, page 5. And Ms. Overturf

24 referred you to a statement, on the bottom of page 5

25 and 6, that Public Service, which we refer to as

1 Ms. Jackson -- you know that, at least while you are

2 here -- Ms. Jackson notes that, first, that the

3 assumptions of environmental impacts are already in and

4 more appropriately considered through the ERP.

5 Are you changing your position, now --

6 which could happen -- are you changing your position

7 now?

8 A No, we're not. And that was what I was

9 trying to clarify, is a misunderstanding between the

10 conversation that Ms. Overturf and I were having. What

11 we are saying is that the topic of the externalities,

12 and whether they should or should not be included in,

13 and what dollar value associated with those, is more

14 appropriately addressed in the ERP process.

15 One of the values of the Phase 1 ERP

16 process is the Commission decides many methodologies

17 and many set points, in fact, that get utilized

18 throughout other cases, in future years, mainly -- like

19 the DSM proceedings. DSM strategic issues will be

20 informed by the methodologies we provide, and what that

21 carbon adder may or might not be in the cost/benefit

22 analyses that are performed there.

23 So, what we are saying, in this

24 proceeding, is that if you want to have a conversation

25 about whether you use that in evaluating things, you

1 should be doing that in ERP processes, which I feel is

2 exactly what we're doing here.

3 Q So, the company does not object to us, in

4 this Phase 1 process, setting it up, so that we can get

5 values for these externalities, and, then, we can

6 decide later whether or not we're going to go one way

7 or the other?

8 A I believe that's what you have in this

9 case; is that the company and WRA have had a

10 conversation, between our testimonies, in regards to

11 whether or not these values should or should not be

12 included, and what the range of that value may be. You

13 have a recommendation, from the company. You have a

14 recommendation from WRA. And that is where the

15 Commission will ultimately make their decision.

16 Q But does the company agree with WRA's

17 approach?

18 A We do not agree that we should include

19 the value associated with the externalities in the

20 evaluation part.

21 Q But you're okay with us recommending

22 that, so that we can determine what's best cost, best

23 for our ratepayers here?

24 A I'm --

25 Q Let me start over. I thought, for that

1 moment, you said that you were agreeing with the

2 Western Resources approach?

3 A What we agree with is that you should

4 take into account a cost of carbon. What we don't

5 agree with is the premise that you run a sensitivity,

6 using the social cost of carbon. Our recommendation is

7 that the zero dollar, in the basecase, and, then, a

8 value associated with the cost per ton of carbon in the

9 sensitivities, so that you can see that impact.

10 Q Okay. Thank you. In your corrected

11 testimony, which was either -- your corrected revised

12 rebuttal, which is either page 48 or 49, because I

13 don't have the red-lined. I have a clean copy. This

14 is where you testified that the company would support a

15 rulemaking.

16 Rulemaking sort of strikes fear into my

17 heart, because I haven't seen any of them, here, that

18 go very quickly. So, help me understand what kind of

19 rulemaking Public Service thinks would be helpful, and

20 the time frame for it. And would you come up with

21 rules, or you are you expecting staff to come up with

22 rules, because it makes staff a little cranky if we

23 keep adding in all of this work for them.

24 A We understand. The rulemaking we have

25 contemplated is really pulling and taking a look at the

1 RES statute that we have, looking at the ERP statute,

2 or the directives of the ERP, and making sure that we

3 are entirely consistent in our rules between the two.

4 I had mentioned earlier, in my testimony,

5 that there have been changes, through time, to the RES

6 statute, which have been promulgated through the rules,

7 but we haven't necessarily gone back and gone, okay,

8 now, does everything match up nicely between the ERP

9 rules, and the RES rules.

10 We would recommend taking both of those

11 sections of the rules -- the company is happy to

12 provide some language associated with that. We would

13 also be happy to work with stakeholders ahead of time,

14 to see if we can come up with a consensus before we

15 bring it into the rulemaking. Then that would go

16 before the Commission.

17 And we decided we would prefer faster

18 rather than slower, but we understand that it does take

19 time, and we need to adhere to due processes.

20 Q You don't think it's necessary for us to

21 do that during this proceeding; that you have enough

22 guidance right now -- we know there's ambiguities and

23 inconsistencies we can perceive. We don't need it done

24 right now.

25 A I think I would agree with that. I think

1 we have, with the situation we have from the

2 Commission, in regards to the Rush Creek process,

3 recognizing, in fact, that there were inconsistencies,

4 that gives us direction to go forward and try and

5 resolve those inconsistencies, so all parties have

6 clarity.

7 Q Do you have any idea of how long you

8 would think the rulemaking might take?

9 A My understanding for rulemakings, they

10 don't have a fixed time line, and there isn't

11 necessarily a deadline for things to be finished. I

12 will anticipate that if we are able to work with the

13 stakeholders, and reach consensus before coming, that's

14 a much shorter rulemaking period. In the event that's

15 possible, I would expect it to take several months.

16 Q Put a different way, in light of

17 everything that's on your plate, on the plate of

18 stakeholders right now, with Phase 1 and Phase 2, and

19 this ERP, do you think it would be a good time to

20 commence that process?

21 A My understanding is there is a number of

22 rate cases going to be filed early this year. And, so,

23 for the economy of all of the parties, we're going to

24 be probably looking at the latter portion of this year.

25 Q Okay. Thank you. I have some questions

1 about Staff Witness Erin O'Neill's Answer Testimony,

2 which I just want to know, if you can, there were a

3 couple of areas in which she thought that the company

4 had not -- I'm trying to figure out how to phrase it,

5 without being extremely negative -- she didn't think

6 you used the proper baseline.

7 So, for example, I believe Staff Witness

8 O'Neill thought you were using all Colorado customers,

9 or the whole State of Colorado, as opposed to the

10 footprint of the Public Service ratepayers, to do some

11 of your economic studying.

12 In any of this additional testimony

13 that's come out, rebuttal, surrebuttal, corrected, did

14 the company respond to Ms. O'Neill's concern in her

15 December 9th testimony?

16 A My understanding is we did. I'm trying

17 to recall if that was in Mrs. Marks's testimony or one

18 of the other witnesses.

19 Q Okay. If you think it's in Ms. Marks's,

20 I can go back and look.

21 A Okay.

22 Q Thank you. Let me talk to you about the

23 Boulder unknown.

24 A Yes, ma'am.

25 Q And I would tell you that, then, that I

1 am troubled that we're going to be called upon to make

2 some decisions in this Phase 1 rate case. We don't

3 know what's going to happen in the Boulder

4 municipalization, which we'll hear in May. And Staff

5 Witness O'Neill had given us some estimates, I think,

6 of a range of which the Boulder municipalization could

7 affect the Public Service Company load.

8 Did you agreed with those estimates she

9 gave?

10 A I believe that the discussion, in regards

11 to the low, medium and high, has resolved the staff's

12 concern on this issue. And in the surrebuttal of

13 Ms. O'Neill, she does address Boulder specifically.

14 And, so, the estimates that she has

15 included, I have not personally checked whether

16 those -- and validated whether those are right

17 estimates, but I do believe there's a comfort level --

18 and you'll have the opportunity to verify with her --

19 but my understanding of her subscript, there's a

20 comfort level with the low, medium, high. It's not as

21 much of a concern.

22 Q Okay. A company as large as yours has a

23 duty to its shareholders, to do a lot of modeling and

24 projections and analysis. I have a hard time believing

25 that no place in Public Service is there analyses of

1 the options of what this is going to do to your revenue

2 stream if the Boulder municipalization goes forward.

3 You are telling me there's no kind of study like that,

4 that the company has? And, then, we'll get to whether

5 or not you could or would share them with us.

6 A Absolutely. There are analyses, as far

7 as what's the capacity -- the current balances of load

8 of Boulder, the projected load growth that they

9 contribute to the system.

10 As far as the revenue side, there are

11 many unknowns associated with that as well,

12 particularly when you have the discussion of stranded

13 costs, how those or may or may not be accounted for by

14 the Federal Energy Regulatory Commission, and also the

15 condemnation court, in regards to the system.

16 Q I am guessing that someplace at Public

17 Service they might have estimates, 1 through 20, or 1

18 through 50, of all of these various mutations that

19 could occur. Does nothing like that exist?

20 A I haven't seen it personally. That

21 doesn't mean it doesn't exist.

22 Q Okay.

23 COMMISSIONER KONCILJA: I have no further

24 questions.


1 Ms. Jackson. We're almost done, or at least until

2 redirect.



5 Q If I may, first, a very general question

6 for you. Going to your Rebuttal Testimony, if I may,

7 on page 3, which the version I am working from, on page

8 3, there is no question that starts that, but if you

9 could just indulge me.

10 What it says there -- I am extracting a

11 part. You are talking about, "It is not the purpose of

12 this Phase 1 proceeding to fundamentally alter the ERP

13 process. . ." but, you finish that sentence by saying,

14 the process, in effect, the purpose, "is filling the

15 incremental resource need with a resource portfolio

16 that is in the public interest."

17 So, I think, bringing you around to that

18 phrase the, "public interest," which is a big part of

19 why we exist. So, that's page 3.

20 Now I am going to take you to page 31, if

21 I may, still in your rebuttal -- excuse me a minute

22 while I work my own way there electronically.

23 And on my version of that, I'm on the

24 very bottom of the page, there's a sentence that

25 starts, "Our proposed approach. . ."

1 A I see that.

2 Q And there it says, "Our proposed approach

3 will also allow the Commission to decide upon the need

4 scenario that is in the best interest of the

5 customers."

6 So, my kind of philosophical question to

7 you, we try to understand, and as I get familiar with

8 this new role here at the Commission, is best interest

9 of customers and public interest, how are they the

10 same? Different? Why did you bring both of those into

11 your testimony?

12 A Absolutely. So, in the business

13 interests of customers, when I refer to that, it's the,

14 I would say, the low-cost scenario public interest is

15 going to be looking at the balance between. So, the

16 conversations -- some of the conversations we were

17 having earlier, ownership, size of the utility, the

18 opportunity and the impact of PPAs on our financing,

19 how investors look at it, and, so, it's a balance

20 between what is best exclusively for customers versus

21 what is best for the company and finding the balance

22 between the two.

23 Q Thank you. So, your direction or advice

24 is, out of this testimony, for the Commission, is for

25 us to meld those two, in terms of the public interest

1 and interest of customers or --

2 A My recommendation is to fulfill the

3 public interest.

4 Q Okay. Thank you. That's helpful.

5 Next, picking up on some things we heard

6 today, in that cross examination from CIEA, where you

7 talked about the balance of IPPs and utility-owned

8 resources. And I think I heard in there -- and it was

9 also referencing the 2007 ERP -- that there was general

10 agreement about a policy of pursuing balance. Am I

11 correct that I heard general agreement there?

12 A The agreement is that we should proceed

13 towards finding a balance. There is disagreement on

14 exactly what that means.

15 Q Thank you. And, so, to that point, just

16 kind of let you fill in for a little bit for a few

17 minutes there. What would those kinds of criteria or

18 particulars be, you would offer to the Commission, that

19 we should use in our pursuit of balance?

20 A No. 1, and primarily would be evaluation

21 of the bids that are received should -- whether it's a

22 utility-owned generation, or it's an IPP, that

23 evaluation should be consistent, because we have to

24 take into account the impacts of that, you know,

25 generation on the customers. And when you look at, if

1 you apply, say, for example, different discount rates

2 for different components of cost, you are changing the

3 way the present value revenue requirement is going to

4 come out, and by altering that application, what you

5 are selecting and favoring, one over the other.

6 So, just as we have litigated, I think,

7 in the 2007 and in the 2011, this conversation around

8 discount rates, the Commission has consistently come

9 back and said, you need to be consistent. So,

10 consistency and in evaluation would be one of the key

11 principles to keep in mind, as we're moving forward

12 into the Phase 2.

13 The other is look at what customers are

14 actually going to be impacted by on their bill. How

15 are the decisions we make here going to impact that

16 bill, and thus impact economic development, and our

17 competitive rates, and what ultimately are they going

18 to see on that bill. That, in my mind, has to be one

19 of the foremost concerns when we are making decisions

20 as far as how to evaluate information and to select a

21 portfolio.

22 And that includes the public interest,

23 because as the conversation we had earlier, foremost,

24 the regulatory compact is important in the state. We

25 have not deregulated. We need to make sure that the

1 utility is able to access low-cost funds, so that we

2 can keep rates as low as we can, for customers.

3 Frankly, making a decision contrary to that is not

4 necessarily meeting the public interest.

5 And, so, making sure that we're ensuring

6 that those are the two primary principles, that, I

7 would put out there as a recommendation, for the

8 Commission to consider.

9 Q Thank you. Another topic that I heard

10 come up today, I think it was from Vote Solar,

11 regarding the ELLC studies. I heard you make a

12 statement about -- that the company is requesting the

13 Commission approve the study. I think that's what I

14 heard as the -- is an aspect of what's included in the

15 ERP.

16 What is meant, as we approve the study --

17 help me understand what exactly we're approving. We're

18 kind of putting our stamp of seal of approval, that was

19 done appropriately, or to go forward and use the

20 outcome, or what exactly are you asking us to approve?

21 A Well, I believe it's both, looking at the

22 methodology that was utilized to assemble the studies,

23 as well as the values that are the outcome of those

24 studies inform our operations, reliability needs, and

25 the portfolios that will come forward.

1 Quite frankly, that is why we bring them

2 to the Commission. They are vetted by the parties, and

3 ultimately the Commission says, yes, we agree with the

4 way that these were done, or modify it.

5 I think -- I believe we don't have any

6 parties contesting the methodology, or, quite frankly,

7 the outcome, other than a request to expand the flex

8 reserve study, to request to go to 5 to 6 megawatts.

9 The company feels that the underlying study really can

10 only be stretched to 4 and 1/2 without changing the

11 methodology.

12 Q Okay. That same concept would apply to

13 the other studies, which are included in the ERP --

14 because there are several studies -- which those are

15 all being asked of the Commission to approve and apply

16 those studies?

17 A Yes, Your Honor. And we would use those

18 studies throughout, like I was saying, into various

19 other proceedings we have before the Commission, as

20 informing how you perform either cost/benefit analyses,

21 or evaluation of what to move forward with.

22 Q Thank you. That was my other question.

23 That's very helpful. I also heard today, with one of

24 the parties, in the conversation about coal retirement,

25 Craig in particular, and how that happened post the

1 2011 ERP, if I remember --

2 A That's correct.

3 Q -- right. And, presumably, then -- and I

4 am going to just talk in broad hypotheticals, versus

5 having specifics in front of me. The 2010 ERP set

6 forth a capacity need or resource need, which was then

7 pursued through procurement, and, then, the Craig

8 retirement of whatever portion that represents to

9 Public Service's system was a kind of post-ERP

10 adjustment to that resource need.

11 A It was. And what I would remind parties,

12 that we have a very small share of the Craig unit.

13 It's about 42 megawatts. So, it's really on the very

14 small scale of the overall picture of the capacity we

15 have on our system.

16 Q That's helpful. I appreciate that.

17 Where I was going with that, is, sitting now, with this

18 2015 or 2016 ERP, and looking forward and recognizing

19 that this is an exercise in trying to best assess an

20 uncertain future, do you feel that -- I am trying to

21 have you kind speak to what level of uncertainty or

22 factor should we be thinking about, in terms of the

23 future retirements that are not yet being contemplated,

24 or at least not publicly discussed, but may well be

25 somewhere in the internal mix, and sort of the

1 resiliency of this process, to deal with that prospect

2 in three or four, eight years in the future?

3 A Well, I believe that a perfect example of

4 that would be the Clean Air-Clean Jobs Act, and the

5 implementation of that followed -- I know there are

6 many people that said that that would happen really

7 quickly, and have fond memories of weekend hearings.

8 At the same time, it was a process that we were able to

9 move through and bring the rate into our planning

10 cycle.

11 It's also important to realize that the

12 ERP process is looking at incremental need. Throughout

13 the rules, that the Commission has, it talks about you

14 identify the existing resources, but it's about

15 additional or new facilities being built to meet that

16 incremental need. Any future retirements, if they were

17 in advance of the estimated end of life, would not be

18 known as new incremental need through an ERP process.

19 It's above and beyond that.

20 And, so, I believe that the adaptness of

21 the Commission was exhibited through the Clean

22 Air-Clean Jobs Act process, and if that were to be the

23 case sometime in the future, we would be able to do

24 that again.

25 Q That's helpful. That goes to my last

1 area of questioning, picking up on Commissioner

2 Koncilja's line of questioning regarding future

3 rulemaking, what are the pros or cons of that.

4 And what I am getting at, less is about

5 the specific -- the rulemaking, more about this

6 process. And just sort of to close, on your thoughts,

7 as we look at this process, what I hear is that, in

8 terms of the -- we're sitting at a place and time

9 period and year, going to our best guess, we're doing

10 this every four years. Obviously, there's a fair

11 amount of uncertainty that happens in between cycles,

12 which are other kinds of processes, the ERP processes,

13 that also deal with more need.

14 A That's right. So the rules -- I think

15 it's important to note that we don't have perfect

16 foresight of exactly what's going to happen on the

17 system. If you look at what happened with the economy

18 back in 2008, there was a very significant change in

19 that consumption on our system, in the load growth.

20 So, it is important that we have the

21 planning process, and we put forth the best available

22 information, when we sit down to talk about this, and

23 we all have broad discussions. But at the same time,

24 things can and do change, whether it's a resource that

25 suddenly doesn't become available, we, at the time, get

1 a new rule from the EPA, or from other areas, we have

2 to be able to adapt and address those between the

3 four-year cycles.

4 And, so, it's important for us, in the

5 rules -- and the rules contemplate the fact that you

6 can come in and do that. If the resources are a size

7 greater than 30 megawatts, you can ask for a waiver, an

8 alternative methodology.

9 So, there is a variety of options for us

10 to address those needs, on a going-forward basis. And

11 that's important. It's important for us. It's

12 important for our customers. It's important to achieve

13 the overall public interest.

14 Q And, then, related to this point, about

15 things to be pondering as we look forward beyond this,

16 to the next ERP, or the rules, would you say, in this

17 process as compared to the last one, or if you can look

18 back and directly recognize the last two, are we

19 dealing with a greater level of uncertainty in this,

20 ever, than we have had in the past?

21 A I think, yes. And I have testified to

22 that, both in my direct and my rebuttal, that we're

23 facing some uncertainty.

24 We have outlined four particular areas of

25 changes that are going to be coming in, and which

1 resulted in the low, medium and high. I think that's,

2 once again, showing the adaptness that we can have, in

3 order to evaluate those changes. And the further out

4 you go, the higher the level of uncertainty you are

5 going to be looking at.

6 And, so, yes, we do have a higher level

7 of uncertainty in this proceeding than we have had in

8 prior years.

9 Q That's helpful.

10 CHAIRMAN ACKERMANN: Thank you very much.

11 That brings us right to 3:45. If we may do redirect in

12 the morning, then we would adjourn now.

13 MR. SOPKIN: We can. Just a couple of

14 housekeeping matters, please.


16 MR. SOPKIN: First off, Commissioner

17 Koncilja had asked whether Ms. O'Neill's testimony was

18 addressed, and we have looked it up. And Ms. Jannell

19 Marks's testimony does address that, Rebuttal

20 Testimony, on page 11 through 15.

21 Second, I believe, you asked,

22 Mr. Chairman, for the company to submit Public Service

23 Company of Colorado annual progress report of the 2016

24 Electric Resource Plan, dated October 31. We have that

25 here. So, we would like to submit that into the

1 record.

2 CHAIRMAN ACKERMANN: Thank you. We can

3 do that. Do we need to mark that now and submit that?

4 Can we do that in the morning? I am happy to do that

5 in the morning.

6 MR. SOPKIN: And, third, I have a number

7 of documents, that I would like to take administrative

8 notice of, related to the Commission rules regarding

9 the informational question you were just asking, the

10 Colorado, Minnesota, North Dakota statutes regarding

11 carbon, as I had foretold. And, I think that's it.

12 So, I would like to go ahead and get that

13 marked and passed out now, so we can be more efficient

14 in the morning, if that works.

15 CHAIRMAN ACKERMANN: Appreciate that and

16 we'll deal with that procedurally in the morning.

17 MR. SOPKIN: Thank you.

18 CHAIRMAN ACKERMANN: With that, we're

19 going to stand in recess. Thank you all. And, then,

20 at 4 o'clock we'll move into the Public Comment

21 Hearing.

22 (Whereupon Exhibit Nos. 52-57 were marked

23 for identification.)

24 (Whereupon these proceedings were

25 adjourned at 3:45 p.m. on February 1, 2017.)



3 Certified and Registered Professional Reporters, in and

4 for the State of Colorado, do hereby certify that we

5 reported the foregoing proceedings in the first

6 instance, and that later the same was reduced to

7 typewritten form under our direct supervision and

8 control; we further certify that the foregoing is a

9 true and complete transcription of our stenographic

10 notes then and there taken.

11 Dated FEBRUARY 2, 2017


13 _______________________




17 ________________________




21 ________________________


23 1560 Broadway, Suite 250