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70 Electric Transinission Cooley SR 1,220,877 27
71 Electric Transinission Cooley SR 43,301 17
72 Electnc Transmission Cooley OT (2,414 90)
73 Electnc Transmission Cooley OT 22,733 46
74 Electric Transmission Cooley RE 51 25
£69 .
10 1
61' a
ud
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1111
Southwestern Public Service Company
Transmission Capital Additions for April 1, 2019 through June 30, 2019
A
Line
Additions to Plant-in-Service
Total Affiliate
No. Asset Class Witness Project Category
(Apr. 2019 - Jun. Charges (Included
in Column D) WBS Level 1 Project Group Name and Description
2019)
SPS Line Capacity - This project surveyed and verified the line ratings of the SPS transmission system for lines above 100-kV This project is a required response to a North Amencan Electnc Reliability Corporation ("NERC") Facility Ratings Alert, issued October 7, 2010 and updated on November 30, 2010, requinng transmission owners to venfy that transmission line ratings are based on actual field conditions and, if not, perform necessary activities to base ratings on actual field conditions The survey was done using Light Detection And Ranging ("LIDAR") technology that uses a laser to make highly accurate distance measurements This project provided for the survey work and any mitigations that were needed to raise the facility capacity ratings if the field results were less than expected
SPS Major Line Refurbishment - This project refurbished various 230-kV lines m the SPS systein.
SPS Sub Communication Network Group 1- These projects provided for the construction of a fiber optics communication infrastructure within the SPS region The first leg of a multi-year effort will start in the Amanllo area by mstalling Optical Ground Wire ("OPGW") in the static position on selected transmission lines to create a redundant fiber optic communication ring with access to the Amarillo Transmission Operations Center This nng provides redundant protection paths for the line sections on which the OPGW is installed as well as provides redundant paths for the Supervisory Control And Data Acquisition ("SCADA") system
SPS Sub Communication Network Group 2- These projects provided for the construction of a fiber optics communication infrastructure withm the SPS region This second leg is the continuation of a multi-year effort in the Amanllo area for installing Optical Ground Wire ("OPGW") in the static position on selected transmission lines to create a redundant fiber optic communication ring with access to the Amarillo Transinission Operations Center This nng provides redundant protection paths for the line sections on which the OPGW is installed as well as provides redundant paths for the Supervisory Control And Data Acquisition ("SCADA") system
STEP Newhart Interchange - This project constructed a new 230/115-kV interchange and substation with associated 115-kV transmission lines near Hart, Texas The project upgraded the transmission system in this area and relieved high transmission loadings on the central part of the SPS transmission system in Castro, Parmer, Swisher, Bailey, Lamb and Hale counties SPP issued SPS a NTC for this project
E -11
11-D
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otut
iaM
W
Southwestern Public Service Company
Transmission Capital Additions for April 1, 2019 through June 30, 2019
A
Line
Additions to Plant-in-Service
Total Affiliate
No. Asset Class Witness Project Category
(Apr. 2019 - Jun. Charges (Included
in Column D) WBS Level 1 Project Group Name and Description
2019)
£6
9 Jo
Z61
7 agd
- V
UN
75 Electric Transmission Cooley RE 6,690 00
76 Electric Transmission Cooley RE 32,500 00
77 Electric Transinission Cooley GI 2,203,625 00
78 Electnc Transmission Cooley EC/TI 466 28
79 Electnc Transmission Cooley RE 209,736 54
80 Electnc Transmission Cooley SR 206,43352
8 l Electric Transmission Cooley RE 500 00
sundown-amoco switch 230kV terminals- This project upgraded the 230-kV Sundown and Amoco station line tennmals and increased the transmission line clearance of the 230-kV line from Amoco to Sundown to provide a summer emergency rating of 547 MVA for this line segment The system limitation caused by this line was identified in SPP's 2016 Near Term study SPP issued SPS a NTC for this project
Tierra Blanca 115kV Substation - This project installed a new 115-kV switching station named Tierra Blanca located approximately one-half mile south of Deaf Smith County Interchange and replaced the relay packages on the remote end line terminals of Deaf Smith Interchange, Hereford Interchange, Northeast Hereford Substation, Castro County Interchange and Canyon West Substation This switching station mitigates thermal and voltage issues for certain contingencies in the Hereford area
Tuco Intg 345/230kV Auto #1 upgrade- This project upgraded the 345/230-kV transformer at TUCO Interchange This project was one of the shared network upgrades required for the connection of generation projects approved by SPP in their DISIS 2014-002 study
TUCO Mooreland (Woodward)- This project constructed a single-circuit 345-kV transmission line between the TUCO Substation, near Lubbock, Texas, and Oklahoma Gas & Electnc's ("OG&E") Woodward Substation near Woodward, Oklahoma SPS constructed the line between the TUCO Substation and OG&E's Border Substation near the Texas and Oklahoma border and OG&E constructed the line from the Border Substation to the Woodward Substation The Project was identified in the SPP's Balanced Portfolio Econoimc Studies SPP issued SPS a NTC for this project.
TUCO S 230 115 Xfmr Upgrade - This project replaced the existing 230/115-kV, 250 MVA circuit 1 autotransfonner at TUCO Substation with a new 284 MVA autotransfonner This project was needed to achieve a minimum einergency rating of 273 MVA for both the circuit 1 and circuit 2, 230/I15-kV autotransfonners at TUCO Substation SPP issued SPS a NTC for this project
Unserviceable - Relays - SPS - This project replaced relays detennmed to be unserviceable dunng maintenance or testing activities
W26 Byrd Tap-Cooper Reconductor- This project rebuilt the 4.9-mile, 115-kV line from Byrd Substation Tap to Cooper Ranch Substation to achieve a minimum suminer emergency ratmg of 166 MVA to address regional reliability issues SPP issued SPS a NTC for this project
W-26 Cooper Ranch-Oil Ctr wreck out rebuild - This project rebuilt the 3 5-mile, 115-kV line froin Cooper Ranch Substation to Oil Center Substation to achieve a minimum summer emergency rating of 163 MVA to address regional reliability issues SPP issued SPS a NTC for this project
W26 Reconductor Cunningham-Monument Tap- This project rebuilt the 6 5-mile, 115-kV line from Cunningham Generation Plant to Monument Substation Tap to achieve a rnmimum summer emergency rating of 184 MVA to address regional rehability issues SPP issued SPS a NTC for this project
W40 Reconductor Canyon West-Deaf Smith - This project wrecked out and rebuilt 26 miles of 115-kV transmission line mnning from Canyon West Substation to Deaf Simth Interchange This project was needed to eliminate the overloading of this segment during certain system conditions SPP issued SPS a NTC for this project
W77 Canyon East Tap to Arrowhead - This project rebuilt 115-kV line W77 from Canyon East tap to Arrowhead substation to provide a higher line capacity. SPP issued SPS a NTC for this project
W77 T75 Reconductor Arrowhead to Randall - This project rebuilt approxiinately 3 5 miles of double-circuit I 15-kV transmission line, W77 (Canyon-West to Randall) and T-75 (Osage to Amanllo South) with phase conductors with a minimum of 240 MVA Summer Emergency rating. This project mitigates the overload of the Randall—Canyon East 115-kV line for vanous outages like the I3ushland Interchange to Deaf Smith County Interchange 230-kV SPP issued SPS a NTC for this project
Western St Sub (TAM) - This project installed a 28 MVA, 115/13 2-kV distnbution substation named Westem Street located in Amanllo, Texas This substation was needed to serve new load in the area and to provide contingency back-up capacity for the other distnbution substations m the area
Yoakum Intg. 230/115 Transformer Upgrades- This project replaced the two existing 230/115-kV, 150 MVA autotransfonners at Yoakum County Interchange with two new 250 MVA transfonners This project was needed to prevent the overloading of one of the 150 MVA transformers for the contingency of the other 150 MVA transformer being unavailable SPP issued SPS a NTC for this project
Z66 Booker/Wade Conversion- This project removed the existing 69-kV line Z-66 (Penyton to Booker) and replaced it with a new 115-kV transmission line It also converted the existing Wade and Booker substations to I15-kV operation This project mitigated low voltage and overload conditions due to a Hrtchland-Oclultree 230-kV line outage and allows for future load growth in the area The new source for these substations is the Ochiltree Substation 115-kV bus
E-N
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elw
Southwestern Public Service Company
Transmission Capital Additions for April I, 2019 through June 30, 2019
A
Line
Additions to Plant-in-Service
Total Affiliate
No. Asset Class Witness Project Category
(Apr. 2019 - Jun. Charges (Included
. in Column D)
WBS Level 1 Project Group Name and Description
2019)
£69. 10
£61
7 a2 g
d -
t ?
RI
82 Electric Transmission
83 Electric Transmission
Cooley
Cooley
RE
RE
500.00
100,000 00
84 Electnc Transmission Cooley RE 19,973 44
85 Electnc Transmission Cooley RE 68,584 19
86 Electric Transmission Cooley RE 3,870,272 30
87 Electnc Transmission Cooley LI 35,000 00
88 Electric Transmission Cooley RE 3,290,947 76
89 Electric Transmission Cooley RE 354,659.95
Chevron South Eddy Fields Load Addition- This project installed a three-way 115-kV switch on transmission lme W-87 west of China Draw substation to provide a new 115-kV service point for a new substation owned by Chevron
Deaf Smith 230kV Breaker Add - This project created a nng bus on the 230-kV side of the Deaf Smith Substation
Eddy County Dbl Bus Dbl Brker 230kV- This project reconfigured the existing Eddy County Interchange 230-kV bus from a inain and transfer bus design to a double bus-double breaker arrangement This project was required to ineet long-tenn firm transmission service requests in the SPP Aggregate Facility Study SPP-20 I3-AG3-AFS-6 SPP issued SPS a NTC for this project
ELR - Relay - SPS - The term "ELR" stands for End of Life Replacement. This project replaced protective relays that had reached the end of their useful life
Facility Upgrade Ancillary Equip - This project provided for the replacement of failing switches, junipers and other ancillaiy equipment
Fault Recorders - SPS - This project installed fault recorders for disturbance monitonng at substations
General Furniture - This project is for purchasing furniture, typically a desk and chairs, for control houses located in substations
GSEC GB NP Howard-Miami - This project rebuilt the existing 69-kV line with a new line using larger conductor and insulated for 115-kV in preparation for future conversion to 115-kV operation SPP issued SPS a NTC for this project
Ink Basin Substation - This project constnicted a new 230/1 I5-kV, three breaker ring bus interchange in the south-central part of Yoakum County, Texas Existing transmission circuits I 15-kV V80 and 230-kV K93 were routed in to and out of the new interchange A new 230/I15-kV, 250 MVA, transformer provides a new source of power for the 115-kV SPP issued SPS a NTC for this project
Interconnection Milwaukee - This project installed the new SPS Quincy Switching Station to provide 115-kV service to South Plains Electric Cooperative to serve new load from thier new Milwaukee Substation
Interconnection XTO Mahoney - This project installed the new Mahoney Switchmg Station to provide a new 230-kV service point to XTO
Lynn Co. 115/69 Xfmr #1 Upgrade - This project replaced the 40 MVA, 115/69-kV transformer at Lynn County substation with a 84 MVA umt. This project was needed to address the overload of the Lynn County Interchange 115/69-kV circuit I transformer for the loss of Lynn County Interchange 115/69-kV circuit 2 transformer. SPP issued SPS a NTC for this project
E-11
11-3
ff lu
ouni
oullY
Southwestern Public Service Company
Transmission Capital Additions for April 1, 2019 through June 30, 2019
A
Line
Additions to Plant-in-Service
Total Affiliate
No. Asset Class Witness Project Category
(Apr. 2019 - Jun. Charges (Included
in Column D) WBS Level 1 Project Group Name and Description
2019)
£6
9 Jo
1761
7 au
cl
90 Electric Transmission Total
$ 160,109,222.79 $ 2,772,446.22
91 Electnc General Plant Cooley LI 17,32007
92 Electnc General Plant Cooley RE 282,62136
93 Electric General Plant Cooley RE 99,108 33
94 Electnc General Plant Cooley SR 126,185 66
95 Electric General Plant Cooley SR 283,005 94
96 Electric General Plant Cooley OT 0 45
97 Electric General Plant Cooley OT 57 70
98 Electnc General Plant Cooley RE 91,199 91
99 Electnc General Plant Cooley RE 311,381 00
100 Elecinc General Plant Cooley LI 406,056 57
101 Electric General Plant Cooley LI 50,000 00
102 Electnc General Plant Cooley RE 93,10277
103 Electric General Plant Cooley RE 301,326 16
104 Electnc General Plant Cooley RE 38,870 41
105 Electnc General Plant Cooley RE 23 42
106 Electric General Plant Cooley RE 22,194 63
107 Electnc General Plant Cooley OT 468,247 45
108 Electric General Plant Cooley LI 1,789,522 53
109 Electnc General Plant Cooley OT 30,000.00
110 Electnc General Plant Cooley SR 24,445 10
£6
9 Jo
561
7 a2 gc
l -
f IR
I
Southwestern Public Service Company
Transmission Capital Additions for April I, 2019 through June 30, 2019
(A) C)
Line
Additions to Plant-in-Service
Total Affiliate
No. Asset Class Witness Project Category
(Apr. 2019 - Jun. Charges (Included
in Column D)
WBS Level 1 Project Group Name and Description
2019)
Mustang-Shell CO2 115kV Line - This project constructed a new 115-kV
transmission line between the Mustang and Shell CO2 substations The project was
needed to address overloads in the area SPP issued SPS a NTC for this project
OPIE 2 Kiowa-Road Runner 345kV Conv_PID 30639 - This project replaced the
existing 230/115-kV transfonner at Roadrunner Substation with a new 345/115-kV
transformer, converted the Kiowa to Roadrunner line from 230-kV to 345-kV
operation, and constructed a new 345/115-kV double circuit transmission line between
the Kiowa and Potash Junction substations. The project was needed for reliability
reasons and SPP issued SPS a NTC for the project
OPIE 3 Kiowa-China Draw 345kV_PID 30638 - This project installed new 345/115-
kV transformers at North Loving and China Draw substations It also constructed a
new 345-kV transmission line from Kiowa to North Loving to China Draw substation.
The project was needed for reliability and SPP issued SPS a NTC for this project
OPIE TUCO-Hobbs 345kV_PID 30376 - This project constructs a single-circuit 345-
kV transmission line between the TUCO Substation, near Lubbock, Texas, the
Yoakum Substation in Texas, and the Hobbs Generating Substation near Hobbs, New
Mexico The project was evaluated and identified in the 2013 SPP High Prionty
Incremental Load Study ("HPILS") as needed for reliability to alleviate loading
violations on the underlying network and voltage violations due to insufficient power
supply to network load additions In addition to its reliability benefits, the project was
also identified by SPP as providing significant economic benefits In 2016, SPP
issued its Integrated Transmission Planning Near-Term study which identified the
TUCO to Yoakum portion of the project as needed as soon as 2017 to mitigate voltage
issues in that area SPP issued SPS NTCs for this project
Physical Security - This project installed Physical Secunty Upgrades affecting SPS
substation protection with specific work varymg by substation location, current layout,
and threat history Typical secunty measures included the installation of equipment
such as cameras and motion sensors at substations
RB - Purnell Sub - This project installed a new 115-kV terminal at SPS's XIT
Substation to provide 115-kV service to Rita Blanca Electnc Cooperative to serve new
load from its new Wolves Substation
RTU - EMS Upgrade - SPS - This project replaced remote terminal units ("RTUs")
that were at the end of their useful service life
S&E - SPS Sub - These projects provided for the storm and emergency work orders
that repaired substation facilities damaged by inclement weather and natural disasters.
E-11
1I-D
ff luo
unli o
nV
Southwestern Public Service Company
Transmission Capital Additions for April 1, 2019 through June 30, 2019
A
Line
Additions to
Plant-in-Service Total Affiliate
No. Asset Class Witness Project Category
(Apr. 2019 - Jun.
2019)
Ch
i
arges (Included
n Column D)
WBS Level 1 Project Group Name and Description
111 Electnc General Plant Cooley OT 368,724 03
112 Electric General Plant Cooley RE 4,005 64
113 Electric General Plant Cooley OT 144,708 67
11, crci
a, 114 Electric General Plant Cooley RE 72,740 30
115 Electric General Plant Cooley OT 29,831 73
VZ) Go4 116 Electnc General Plant Cooley OT 171,568 83
117 Electric General Plant Cooley OT 42,497 15
118 Electnc General Plant Cooley OT 2,858 05
119 Electric General Plant Cooley OT 15,710 45
120 Electnc General Plant Cooley OT 90,890 79
Security Access Control System - This project replaced the existing standard locks on
substation entry gates with locks that use an electronic key to restnct substation access
to authonzed personnel and to meet coinpliance requirements.
seminole intg 230/115kV xfmr #1 & #2 upgrades- This project replaced the two
230/115-kV transformers at Seminole Interchange with two 246/283 MVA units This
project was needed for regional reliability to address the overload of the Seminole
230/115-kV transfonners for the outage of the parallel Seminole 230/115-kV
transformer SPP issued SPS a NTC for this project
SPS Checkpoint Firewalls - This project installed firewall hardware on the fiber
optics cominunications system, which is located on the transmission Imes and
substations These firewall hardware installations were needed to provide data
secunty for the data being transmitted over the fiber optic communication system
SPS Walkemeyer 345 115 280 MVA SUB - This project constructed the new
Carpenter Switching Station (fonnerly Stevens County) which is located on the 345-
kV line from Hitchland Interchange to Finney Switching Station. This project was
needed to address low voltages in the area SPP issued SPS a NTC for this project
Tools - Engineering - This project purchased capital tools for engmeenng purposes,
such as relays and test equipment for commissioning laboratories
Tools COM Substation - These projects purchased capital tools for construction and
maintenance activities
Tools Line Field Ops - This project purchased capital tools for the construction of
capital projects
Tools STAC - This project installed a firewall between the Remote Terminal Units
("RTU") at the Substation Technical Application Center (STAC) and the SPS
Transmission Operations Center to provide required data secunty
Tools System Protection Comm Eng- This project purchased the equipment panels
for the Substation Design, Substation Communications, and System Protection
Engineenng Lab These equipment panels have been used to mount the protective
relaying, communication relaying, power supplies, and metenng equipment used in the
lab These panels and equipment are being used for research and developinent of
advanced communication and protection relaying schemes as well as for event analysis
and troubleshooting of field situations that require engmeenng support
Tools, Training Center - This project purchased capital tools to construct capital
projects and capital tools to be used in the training center.
£-In
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ounl
ogliV
Southwestern Public Service Company
Transmission Capital Additions for April I, 2019 through June 30, 2019
A 13
Line
Additions to Plant-in-Service
Total Affiliate
No. Asset Class Witness Project Category
(Apr. 2019 - Jun. 2019)
Charges (Included in Column D)
WBS Level 1 Project Group Name and Description
£6
9 Jo
L61
7 32
ed
- 17
MI
121
122
123
Electnc General Plant Cooley OT 454,872 11
Electric General Plant Total $ 5,833,077.21 $ 272,611.20
Grand Total $ 165,942,300.00 $ 3,045,057.43
Transportation - SPS - These projects purchased fleet vehicles for operation in the SPS area. The vehicles Included automobiles, trucks, heavy vehicles such as bucket trucks, high-reach bucket trucks, hole-diggers, and trailers Without these vehicles, crews would not have access to a predictable and reliable method of transport nor have the necessary equipment to perform needed transmission construction work
£-11
11-D
ff I
lloun
lou
lly
Attachment JJC-RR-4 Page 1 of 30
2019 TX Rate Case
Xcel Energy-
TOLK GENERATORS CHANGE OF OPERATION STUDY
Transmission Planning South Xcel Energy Services, Inc.
August 11, 2017
RR 4 - Page 498 of 693 02307
Attachment JJC-RR-4 Page 2 of 30
2019 TX Rate Case
Executive Summary Transmission Planning South has performed a system impact study for the limited operations of the Tolk 1 and 2 units only during the summer months. The purpose of this study is
• To determine the system impacts of not operating Tolk units during non-summer months i.e., light load (high wind) and winter peak scenario.
• To determine the benefits of converting existing units to synchronous condenser operation during the winter and spring periods.
The Tolk generators operating assumptions considered for this study are • Between October, 2018 to May, 2019 operate both Tolk units at a partial capacity of
175MW • Between October, 2019 to May, 2020 operate one Tolk unit at partial capacity of
175MW and other unit is shutdown • Starting June 2020 operate both Tolk units only during the summer months
Both steady state and stability analysis were performed to study the system impact. Power flow analysis was performed on the 2012 and 2026 Light Load and Winter peak scenario 0 and 5 models representing the 2017 Southwest Power Pool (SPP) ITPNT Model Series. The stability analysis was performed on 2021 Light Load and Winter peak model representing the 2016 Southwest Power Pool (SPP) MDWG reduced Model Series. Also, to study the impact of high wind scenario a 2021 Light Load scenario 5 model was created with 100% firm wind output and no non-firm wind in the model.
NERC Planning Standard TPL-001-4 P1 single contingency (N-1) events and P3 multiple contingency (loss of generator followed by N-1 345kV and above transmission outage) events for facilities in SPS area were chosen for steady state contingency analysis and the NERC TPL-001-4 P1 events and P2 to P5 EHV events for facilities in SPS area were chosen for stability contingency analysis. NERC TPL-001-4 P1 and P2 to P5 EHV events were primarily chosen since non-consequential load loss or interruption of firm transmission service is not allowed. SPP analyzes the SPS system using many of the same disturbances.
The stability results showed unstable system conditions in 2021 Light Load Scenario 5 model for NERC TPL-001-4 P3 multiple contingency (loss of generator followed by N-1 transmission outage) events due to the high wind penetration and less fossil generation. Refer to Section 4 for the stability analysis results.
The power flow results case showed voltage collapse issues in 2021 Light Load Scenario 5 and 2026 winter peak scenario 5 models for NERC TPL-001-4 P1 single contingency (N-1) and P3 multiple contingency (loss of generator followed by N-1 transmission outage) events due to their high wind penetration and less fossil generation. Refer to Section 4 for the steady state analysis results.
This system impact study performed showed the need to convert one of the Tolk units to synchronous condenser operation immediately and later it is required to convert both the Tolk units to synchronous condenser operation by the mid-2020s to mitigate TPL-001-4 P3 multiple contingency (loss of generator followed by N-1) event issues.
2
RR 4 - Page 499 of 693 02308
Attachment JJC-RR-4 Page 3 of 30
2019 TX Rate Case
It is also observed that there is a huge real power deficiency in the SPS area by mid 2020s causing severe steady state issues. Conversion of both the Tolk units to synchronous condenser operation alone cannot mitigate all the transmission system performance issues in later years. New generation installation will greatly improve system performance with real and reactive power capability with the changed operation of the Tolk units.
3
RR 4 - Page 500 of 693 02309
Attachment JJC-RR-4 Page 4 of 30
2019 TX Rate Case
Table of Contents 1. Introduction 5
2. Study Methodology 5
3. Study Assumptions 5
4. Results 6
Stability Analysis: 6
Steady-State Analysis: 8
5. Conclusion 17
Appendix A 17
4
RR 4 - Page 501 of 693 02310
Attachment JJC-RR-4 Page 5 of 30
2019 TX Rate Case
1. Introduction
Transmission Planning South has performed a system impact study for the limited operations of the Tolk 1 and 2 units only during the summer months.
The generator operating assumptions considered for this study are • Between October, 2018 to May, 2019 operate both Tolk units at a partial capacity of
175MW • Between October, 2019 to May, 2020 operate one Tolk unit at partial capacity of 175MW
and other unit is shutdown • Starting June 2020 operate both Tolk units only during the summer months
The purpose of this study is • To determine the system impacts of not operating Tolk units during non-summer months
i.e., light load (high wind) and winter peak scenario. • To determine the benefits of converting existing units to synchronous condenser operation
during the winter and spring periods.
2. Study Methodology
This study was performed using the Power Technologies, Inc. ("PTI") Power System Simulator for Engineering (PSS/E) program version 33.7.0 and contains a steady-state analysis using AC Contingency Checking (ACCC) with a Fixed Slope Decoupled Newton—Raphson (FDNS) solution. The study was conducted to ensure that current NERC Planning Standards' are fulfilled. As an example, for system intact conditions, bus voltages must be maintained between 0.95 — 1.05 per unit of their nominal value and thermal system intact conditions must not exceed their designated A-rating. For contingencies, the voltages are allowed to deviate between 0.90 — 1.05 per-unit of their nominal value. Additionally, the loading on transmission system equipment cannot exceed 100% of the emergency B-rating.
The existing generators in the SPS area were re-dispatched and no additional or new generators were turned on to compensate for the generation deficiency in the system. The remaining generation was imported from the neighboring area into SPS area.
3. Study Assumptions'
Both steady state and stability analysis were performed to study the system impact. Power flow analysis was performed on the 2012 and 2026 Light Load and Winter peak scenario 0 and 5 models representing the 2017 Southwest Power Pool (SPP) ITPNT Model Series. The stability analysis was performed on 2021 Light Load and Winter peak model representing the 2016 Southwest Power Pool (SPP) MDWG reduced Model Series. Also, to study the impact of high wind scenario a 2021 Light Load scenario 5 model was created with 100% firm wind output and no non-firm wind in the model.
The Tolk generator's operating assumptions considered for this study are • Between October, 2018 to May, 2019 operate both Tolk units at a partial capacity of
175MW • Between October, 2019 to May, 2020 operate one Tolk unit at partial capacity of 175MW
and other unit is shutdown
I Requirement for NERC TPL-001-4 2 Requirement for FAC 002-R1 5
5
RR 4 - Page 502 of 693 02311
Attachment JJC-RR-4 Page 6 of 30
2019 TX Rate Case
• Starting June 2020 operate both Tolk units only during the summer months
4. Results
NERC Planning Standard TPL-001-4 P1 single contingency (N-1) events and P3 multiple contingency (loss of generator followed by N-1 345kV and above transmission outage) events for facilities in SPS area were chosen for steady state contingency analysis and all the NERC TPL-001-4 P1 events and P2 to P5 EHV events for facilities in SPS area were chosen for stability contingency analysis. NERC TPL-001-4 P1 and P2 to P5 EHV events were primarily chosen since non-consequential load loss or interruption of firm transmission service is not allowed. SPP analyses the SPS system using many of the same disturbances.
Stability Analysis:
2021 Light Load scenario 5 case showed system instability for NERC TPL-001-4 P3 multiple contingency (loss of generator followed by N-1 345kV and above transmission outage) events due to the high wind penetration and less fossil generation. Below Table 1 shows the stability analysis results.
Table 1: Stability Analysis Results
Year
NERC TPL- 0014
emit
Contingency
1 Contingency 1
Stability Mikis Results
Comments Telt Min and 1 OFF
TOlk unit 1 converted to SynotwonOOS
Condenser; Talk unit 2 OFF
2021L5 P3 Hobbs unit
1&3 Tuco to OKU 345kV (J01) Unstable (Figure 1) Stable
Loss of Hobbs 1 causes Hobbs 3 a
steam unit to turn off (Hobbs 2 is already off in
model)
2021L5 P3 Hobbs unit
1&3 Tuco to Border 345kV (111) Unstable (Figure 2) Stable
202115 P3 Hobbs unit
1&3 Crossroads to Eddy 345kV
(J02) Un-damped oscillations
observed Stable
2021L5 P3 Hobbs unit
1&3 Tuco to Yoakum 345kV (117)
Un-damped oscillations observed
Stable
2021L5 P3 Hobbs unit
1&3 HOBBS to KIOWA (J20)
Un-damped oscillations observed
Stable
2021L5 P3 Hobbs unit
1&3 HOBBS to YOAKUM (118)
Un-damped oscillations observed
Stable
2021L5 P3 Hobbs unit 3 Tuco to OKU 345kV (J01) Un-damped oscillations
observed Stable
Figures 1 and 2 to below show the stability plots for unstable events listed in the above Table 1. The plots show angular instability and system collapse for the loss of Hobbs unit 1 and 3 followed by Tuco to OKU 345kV (J01) line and Tuco to Border 345kV (J11) line respectively. Refer to Appendix A for the stability analysis result plots.
6
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-50 •
-100
•
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Attachment JJC-RR-4 Page 7 of 30
2019 TX Rate Case
NO11.1•1•111111.-3111111B111111.1111.1111111.11111111111111111111111-11110111-11.1111•1111.1.11111111111111•111111.1111.11111111111111111,111111111111111111111111111111111111.1111111•111•-111111111-111111“1101111111
Hobbs unit 1&3 : Tuco to OKU 345kV (J01)
0 0 5 1 5 2 2.5 3 3 5 4 E Time (seconds)
1 - ANGL-BLACKHAWK1 113.800 1 . P31_345-230_SPS_HOBBSPLT1&3_J01_21L5_3PH
23 ANGL-MUSTANG_1 113 800 1 P31_345-230_SPS_HOBBSPLT1&3_41_21L5_3PH
28 - ANGL-MUSTANG_3 122 008 1 P31_345-230_SPS_HOBBSPLT1&3 J01_21L5_3PH
1.2 15 ANGL-MADDOX_1 113 800 1 P31_345-230_SPS_H B B SPLT1 &3_J 01_21 L5_3PH
1,7 11 - ANGL-HARRNGTON 1 124.000 1 : P31_345-230_SPS_HOBBSPLT1&3 J01_21L5_3PH
1/1110111,111111MEMS•1111111[111•111111.111111••••••••••••••01111•"11111.1,111.16.11MIRNMIIIMM••11•1111131111111"•••••••••••••“••••••••••••••“=“ 1111111•1111"1 1M 111 ••••••“• 1111 ". 1{ 1111111 • 1•M•J
Figure 1: Angular plots for TPL-001-4 P3 event (Hobbs 1&3 followed by J01)
r • 1=611111•1•111"111•111•11111111.-0111111.111112111”1=•=111-•-..-•11111/111111.11111111111011111111.11116111•111.11111.-.“1-•-.=.-•-•-•111111.11111
Hobbs unit 1&3 : Tuco to Border 345kV (J11)
2 5 7 5 10 12 5 15 17 5 20-
Time (seconds)
• .17 1 ANGL-BLACKHAWK1 113 800 1 - P31_345-230_SPS_HOBBSPLT1&3 J11_21L5_3PH
P31_345-230 SPS_HOBBSPLT183_J11_21L.5_3PH 1.7
23 ANGL-M U STANG_1 113 800 1
28 - NGL-M USTANG_.? 122 600 1 P31 :345-230_SPS_H B B SPLT1&3_J11_21L5_3PH •
G L-MADDO 113 806 1 P31_345-230 SPS_H B EISPLT18.3_J 11_21 L5 3PH
1,7 15 - AN X_1
11 - A N GL-HARRN GTO N 1 124.000 1
P31_245-230_SPS_H OBB SPLT18.3_J 11_21 L5_3PH
Figure 2: : Angular plots for TPL-001-4 P3 event (Hobbs 1&3 followed by J11)
7
RR 4 - Page 504 of 693 02313
•
I -50
▪ -180 -
'• -150
-200
Attachment JJC-RR-4 Page 8 of 30
2019 TX Rate Case
Steady-State Analysis:
2021 Light Load scenario 5 case showed voltage collapse for NERC TPL-001-4 P3 multiple contingency (loss of generator followed by N-1) events due to the high wind penetration and less fossil generation. Below Table 2 shows the steady state analysis results for 2021 Light Load scenario 5 model.
Table 2: Steady state analysis results for 2021 Light Load scenario 5 model
_
NW TOL-
0014
event éilRC ngency 2
Staty Analysis Results
d To* Unit/ en 2 OFF Talk unit 1 contorted te Synchronous
ONICienser; To& unit 2 OFF
2021L5 P3 Hobbs unit 3 Tuco to OKU 345kV
(J01)
Solution diverges;
voltage collapse No voltage issues observed
2021L5 P3 Mustang unit 1 Tuco to Yoakum
345kV (117) Solution diverges;
voltage collapse No voltage issues observed
2026 winter peak scenario 5 cases showed voltage for NERC TPL-001-4 P1 single contingency (N-1) and P3 multiple contingency (loss of generator followed by N-1) events due to the high wind penetration and less fossil generation. Below Table 3 shows the steady state analysis results for 2026 winter peak scenario 5 model.
Table 3: Steady state analysis results for 2026 Winter Peak scenario 5 model
Year
MK' Vie 0014 event
Talk tinitt end 2 OFF
lalk unit 1 concerted to Syadvanoes
Condemn Tolk unit 2 OFF
toIun 1
to
2026W5 P3
523461
[BLACKHAWK1
113.800]
526331 [JONES_1 122.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523461
[BLACKHAWK1
113.800]
526332 [JONES_2 122.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523461
[BLACKHAWK1 113.800]
527903 [HOBBS_PLT3 118.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523461
[BLACKHAWK1
113.800]
527655 [RSVLT_CC_E 7345.001-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges,
voltage collapse
No voltage issues
observed
No voltage issues
observed
2026W5 P3 523461
[BLACKHAWK1
113.800]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage issues
observed
2026W5 P3 523462
[BlACKHAWK2 113.800]
526331 [JONES_1 122.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523462
[BLACKHAWK2 113.800]
526332 [JONES_2 122.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523462
[BLACKHAWK2
113.800]
527903 [HOBBS_PLT3 118.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523462
[BLACKHAWK2
113.800]
527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage issues
observed
2026W5 P3 523462
[BLACKHAWK2
113.800]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage issues
observed
8
RR 4 - Page 505 of 693 02314
Attachment JJC-RR-4 Page 9 of 30
2019 TX Rate Case
Year
NERC TP1.- 0014 event
„, .
, Talk WU end 2 ' '
OCR
To& unit1
Syochronous Condensers Yolk '
unit 201*
Tolk tedt 1 and 2
converted to Synchronous Condenser
2026W5 P3
523971
[HARRNGTON1 124.000]
526331 IJONES_1 122.000] Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3
523971
[HARRNGTON1
124.000]
526332 [JONES_2 122.000] Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3
523971
[HARRNGTON1
124.000]
527163 [MUSTANG_3 122.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523971
[HARRNGTON1
124.000]
527903 [HOBBS_PLT3 118.000] Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3
523971
[HARRNGTON1
124.000]
527654 [RSVLT_CC_W 7345.00]-
527655 [RSVLT_CC_E 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523971
[HARRNGTON1
124.000]
527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues observed
No voltage
issues
observed
2026W5 P3
523971
[HARRNGTON1
124.000]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges; voltage collapse
Solution
diverges; voltage
collapse
2026W5 P3
523971
[HARRNGTON1 124.000]
525832 [TLICO_INT 7345.00]-
515458 [BORDER 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523972
[HARRNGTON2
124.000]
526331 [JONES_1 122.000] Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3
523972
[HARRNGTON2
124.000]
526332 [JONES_2 122.000] Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3
523972
[HARRNGTON2
124.000]
527161 [MUSTANG_1 113.800] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523972
[HARRNGTON2
124.000]
527162 [MUSTANG_2 113.800] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523972
[HARRNGTON2
124.000]
527163 [MUSTANG_3 122.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523972
[HARRNGTON2 124.000]
527901 [HOBBS_PLT1 118.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523972
[HARRNGTON2
124.000]
527902 [HOBBS_PLT2 118.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523972
[HARRNGTON2
124.000]
527903 [HOBBS_PLT3 118.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523972
[HARRNGTON2
124.000]
527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523972
[HARRNGTON2
124.000]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3
523972
[HARRNGTON2
124.000]
525832 [TUCO_INT 7345.00]-
515458 [BORDER 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 523973
[HARRNGTON3 526331 [JONES_1 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
9
RR 4 - Page 506 of 693 02315
Attachment JJC-RR-4 Page 10 of 30
2019 TX Rate Case
'
Year
NERC TM, 0014 event
• i:
.
AnaR
Tole Witt and a OFF '
To* unit 1 ' comwtod to
nous; talk ,
' To* unit 1 and i
tonverted to *adamants Condenser
124.000]
observed
2026W5 P3
523973
[HARRNGTON3
124.000]
526332 [JONES_2 122.000] Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3
523973
[HARRNGTON3
124.000]
527161 [MUSTANG_1 113.800] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523973
[HARRNGTON3
124.000]
527162 [MUSTANG_2 113.800] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523973
[HARRNGTON3
124.000]
527163 [MUSTANG_3 122.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523973
[HARRNGTON3
124.000]
527901 [HOBBS_PLT1 118.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 523973
[HARRNGTON3
124.000]
527902 [HOBBS_PLT2 118.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523973
[HARRNGTON3
124.000]
527903 [HOBBS_PLT3 118.000] Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3
523973
[HARRNGTON3
124.000]
527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
523973
[HARRNGTON3
124.000]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3
523973
[HARRNGTON3
124.000]
525832 [TUCO_INT 7345.00j- 515458 [BORDER 7345.00] CKT 1
Solution diverges;
voltage collapse No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524021 [NICHOLS_1
113.800] 526331 [JONES_1 122.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524021 [NICHOLS_1
113.800] 526332 [JONES_2 122.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524021 [NICHOLS_1
113.800] 527903 [HOBBS_PLT3 118.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524021 [NICHOLS_1
113.800] 525832 [TUCO_INT 7345.00]-
511456 [O.K U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524021 [NICHOLS_1
113.800] 525832 [TUCO_INT 7345.00]-
515458 [BORDER 7345.00] CKT 1 Solution diverges; voltage collapse
No voltage issues observed
No voltage
issues
observed
2026W5 P3 524022 [NICHOLS_2
113.800] 526331 [JONES_1 122.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524022 [NICHOLS_2
113.800] 526332 [JONES_2 122.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524022 [NICHOLS_2
113 800] 527903 [HOBBS_PLT3 118.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524022 [NICHOLS_2
113.800]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524022 [NICHOLS_2 525832 [TUCO_INT 7345.00]- Solution diverges; No voltage issues No voltage
1 o RR 4 - Page 507 of 693 02316
Attachment JJC-RR-4 Page 11 of 30
2019 TX Rate Case
Year
NERC TPt- 0014 *vent
Stebilityikturivsts Results
Talk Witt end OFF
Te* unit 1 converted te soithoteatis '
Condenser; Talk unit loff
To& unk 2 and 2
coorerted trS synchronous Condenser
113.800] 515458 [BORDER 7345.00] CKT 1 voltage collapse observed issues
observed
2026W5 P3 524023 [NICHOLS_3
122.000] 526331 [JONES_1 122.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524023 [NICHOLS_3
122.000] 526332 [JONES_2 122.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524023 [NICHOLS_3
122.000] 527903 [HOBBS_PLT3 118.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues observed
2026W5 P3 524023 [NICHOLS_3
122.000]
527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 524023 [NICHOLS_3
122.000]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 524023 [NICHOLS_3
122.000]
525832 [TUCO_INT 7345.001-
515458 [BORDER 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P1 UNIT 1 BUS 526331
[JONES_1 122.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P1 UNIT 1 BUS 526332
[JONES_2 122.000]
Solution diverges; voltage collapse
No voltage issues observed
No voltage
issues observed
2026W5 P3 527161 [MUSTANG_1
113.800] 526331 [JONES_1 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527161 [MUSTANG_1
113.800] 526332 [JONES_2 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527161 [MUSTANG_1
113.800] 527162 [MUSTANG_2 113.800]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527161 [MUSTANG_1
113.800] 527163 [MUSTANG_3 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues observed
2026W5 P3 527161 [MUSTANG_1
113.800] 527884 [CUNINGHAM4 113.800]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527161 [MUSTANG_1
113.800] 527901 [HOBBS_PLT1 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527161 [MUSTANG_1
113.800] 527902 [HOBBS_PLT2 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527161 [MUSTANG_1
113.800] 527903 [HOBBS_PLT3 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527161 [MUSTANG_1
113.800] 528361 [MADDOX_1 113.800]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues observed
2026W5 P3 527161 [MUSTANG_1
113.800]
526936 [YOAKUM_345 345.00]-
527896 [HOBBS_INT 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527161 [MUSTANG_1
113 800]
527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
11
RR 4 - Page 508 of 693 02317
Attachment JJC-RR-4 Page 12 of 30
2019 TX Rate Case
MSC
Coattigasc
1 .
....
Tottruniti
conereted tir Synchronous
Condensed:Toth - unk IOW
Tolkunit 2
gonverose to Syndwonous Condenser
observed
2026W5 P3 527161 [MUSTANG_1
113.800]
527656 [CROSSROADS 7345.00]- 527802 [EDDY_CNTY 7345.00] CKT 1
Solution diverges;
voltage collapse No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527161 [MUSTANG_1
113.800)
527896 [HOBBS_INT 7345.001- 527965 [KIOWA 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues observed
2026W5 P3 527161 [MUSTANG_1
113.800]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527161 [MUSTANG_1
113.800] 525832 [TUCO_INT 7345.00]-
515458 [BORDER 7345.00] CKT 1 Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527162 [MUSTANG_2
113.800] 526331 [JONES_1 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527162 [MUSTANG_2
113.800] 526332 [JONES_2 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527162 [MUSTANG_2
113.8001 527161 [MUSTANG_1 113.800]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527162 [MUSTANG_2
113.800] 527163 [MUSTANG_3 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527162 [MUSTANG_2
113.800] 527884 [CUNINGHAM4 113.800]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527162 [MUSTANG_2
113.800] 527901 [HOBBS_PLT1 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage issues
observed
2026W5 P3 527162 [MUSTANG_2
113.800] 527902 [HOBBS_PLT2 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues observed
2026W5 P3 527162 [MUSTANG_2
113.800] 527903 [HOBBS_PLT3 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527162 [MUSTANG_2
113.800] 528361 [MADDOX_1 113.800]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527162 [MUSTANG_2
113.800] 526936 [YOAKUM 345 345.00]-
527896 [HOBBS_INT- 7345.00]CKT 1 Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 527162 [MUSTANG_2
113.8001
527655 [RSVLT_CC_E 7345.001-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527162 [MUSTANG_2
113.800]
527656 [CROSSROADS 7345.00]-
527802 [EDDY_CNTY 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527162 [MUSTANG_2
113.800]
527896 [HOBBS_INT 7345.00]-
527965 [KIOWA 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527162 [MUSTANG_2
113.800)
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1 Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
12
RR 4 - Page 509 of 693 02318
Attachment JJC-RR-4 Page 13 of 30
2019 TX Rate Case
event
4 cotIngency
a , ,
,
Talc unit 2 ,, converted to sypetwoneuS
Ondensertlettc
nit2OFf "
ink unfit 1
and 2 COneerted %a ,Synehroaons ,
Condenser
2026W5 P3 527162 [MUSTANG_2
113.800]
525832 [TUCO_INT 7345.00]-
515458 [BORDER 7345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000] 523972 [HARRNGTON2 124.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000] 526331 [JONES_1 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527163 [MUSTANG_3
122.000] 526332 [JONES_2 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution diverges;
voltage
collapse
2026W5 P3 527163 [MUSTANG_3
122.000] 527161 [MUSTANG_1 113.800]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000) 527162 [MUSTANG_2 113.800]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000] 527884 [CUNINGHAM4 113.800]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000] 527901 [HOBBS_PLT1 118.000]
Solution diverges; voltage collapse
Solution diverges;
voltage collapse
No voltage issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000] 527902 [HOBBS_PLT2 118.000)
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000] 527903 [HOBBS_PLT3 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527163 [MUSTANG_3
122.000] 528361 [MADDCA_1 113.800]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527163 IMUSTANG_3
122.000]
525549 [TOLK 7345.00]-527656
[CROSSROADS 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527163 IMUSTANG_3
122.000)
525832 [TUCO_INT 7345.00]-
526936 [YOAKUM_345 345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000] 526936 [YOAKUM_345 345.00)-
527896 [HOBBS_INT 7345.001 CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000]
527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000]
527656 [CROSSROADS 7345.00]- 527802 [EDDY_CNTY 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527163 [MUSTANG_3
122.000]
527896 [HOBBS_INT 7345.00]-
527965 [KIOWA 7345.001 CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527163 [MUSTANG_3
122.0001
525832 [TUCO_INT 7345.001-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527163 [MUSTANG_3
122.000]
525832 [TUCO_INT 7345.00]-
515458 [BORDER 7345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
13
RR 4 - Page 510 of 693 02319
Attachment JJC-RR-4 Page 14 of 30
2019 TX Rate Case
Year
„
event
Oantingenty 2 .
Stability Atudysit Resift - ,
sIttik Oen and 2 " OFF
To& unit 1 converted to Synthronous
Condenses To& untt 2OFF
. Tobias* 1 and 2
sowerted to Syndsonoes *indorser
collapse
2026W5 P3
527884
[CUNINGHAM4
113.800]
526331 [JONES_1 122.000] Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3
527884
[CUNINGHAM4
113.800]
526332 [JONES_2 122.000] Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3
527884
[CUNINGHAM4
113.800]
527161 [MUSTANG_1 113.800] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
527884
[CUNINGHAM4
113.800]
527162 [MUSTANG_2 113.800] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
527884
[CUNINGHAM4
113.800)
527163 [MUSTANG_3 122.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
527884
[CUNINGHAM4
113.800]
527901 [HOBBS_PLT1 118.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
527884
[CUNINGHAM4
113.800]
527902 [HOBBS_PLT2 118.000] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527884
[CUNINGHAM4
113.800]
527903 [HOBBS_PLT3 118.000] Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3
527884
[CUNINGHAM4
113.800]
528361 [MADDOX_1 113.800] Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527884
[CUNINGHAM4
113.800]
527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527884
[CUNINGHAM4
113.800]
527656 [CROSSROADS 7345.00]- 527802 [EDDY_CNTY 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3
527884
[CUNINGHAM4
113.800]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3
527884
[CUNINGHAM4
113.800]
525832 [TUCO_INT 7345.00]-
515458 [BORDER 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527901 [HOBBS_PLT1
118.000] 526331 [JONES_1 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527901 [HOBBS_PLT1
118.000] 526332 [JONES_2 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527901 [HOBBS_PLT1
118.000] 527161 [MUSTANG_1 113.800]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527901 [HOBBS PLT1
118.000] - 527162 [MUSTANG 2 113.800]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527901 [HOBBS_PLT1
118.000] 527163 [MUSTANG 3 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527901 [HOBBS PLT1
118.000] - 527884 [CUNINGHAM4 113.800]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
14
RR 4 - Page 511 of 693 02320
Attachment JJC-RR-4 Page 15 of 30
2019 TX Rate Case
year , NERC
TM- 001-4
' event '
TeN oral. convened to Synthnsnons
Condenser; MN . unit 2 OFF
MN oak 1 *Ad 3
eenverted to Synchronous
Condenser
observed
2026W5 P3 527901 [HOBBS_PLT1
118.000] 527902 [HOBBS_PLT2 11.8.000]
Solution diverges; voltage collapse
Solution diverges; voltage collapse
No voltage
issues
observed
2026W5 P3 527901 [HOBBS_PLT1
118.000] 527903 [HOBBS_PLT3 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527901 [HOBBS_PLT1
118.000] 528361 [MADDOX_1 113.800]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527901 [HOBBS_PLT1
118.000]
525832 [TUCO_INT 7345.00]-
526936 [YOAKUM_345 345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues observed
No voltage
issues
observed
2026W5 P3 527901 [HOBBS_PLT1
118.000]
526936 [YOAKUM_345 345.00]-
527896 [HOBBS_INT 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527901 [HOBBS_PLT1
118.000]
527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1 Solution diverges; voltage collapse
Solution diverges; voltage collapse
No voltage
issues
observed
2026W5 P3 527901 [HOBBS_PLT1
118.000]
527656 [CROSSROADS 7345.00]-
527802 [EDDY_CNTY 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527901 [HOBBS_PLT1
118.000]
527896 [HOBBS_INT 7345.00]-
527965 [KIOWA 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527901 [HOBBS_PLT1
118.000]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527901 [HOBBS_PLT1
118.000]
525832 [TUCO_INT 7345.00]-
515458 [BORDER 7345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527902 [HOBBS_PLT2
118.000] 526331 [JONES_1 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges,
voltage
collapse
2026W5 P3 527902 [HOBBS_PLT2
118.0001 526332 [JONES_2 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
2026W5 P3 527902 [HOBBS PLT2
118.000] - 527161 [MUSTANG_1 113.800]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527902 [HOBBS_PLT2
118.000] 527162 [MUSTANG_2 113.800]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527902 [HOBBS_PLT2
118.000] 527163 [MUSTANG_3 122.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues observed
2026W5 P3 527902 [HOBBS PLT2
118.000] - 527884 [CUNINGHAM4 113.800]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 527902 [HOBBS_PLT2
118.000] 527901 [HOBBS_PLT1 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 527902 [HOBBS_PLT2
118.000] 527903 [HOBBS_PLT3 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
Solution
diverges;
voltage
collapse
15
RR 4 - Page 512 of 693 02321
Attachment JJC-RR-4 Page 16 of 30
2019 TX Rate Case
Yar
eent
.
Sissbilitykselysts Results
To* taelti amd2 OFf
Talk Sink 1 , consorted to , 4ischronous Omdurman Talk
user /OFF
Tolksugt 1: tad 2
conversed to Synchronous tors:lenses
2026W5 P3 527902 [HOBBS_PLT2
118.000] 528361 [MADDOX_1 113.8001 Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 527902 [HOBBS_PLT2
118.000) 525832 [TUCO_INT 7345.001-
526936 [YOAKUM_345 345.00] CKT 1 Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 527902 [HOBBS PLT2
118.000] - 526936 [YOAKUM_345 345.001-
527896 [HOBBS_INT 7345.00] CKT 1 Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 527902 [HOBBS PLT2
118.000) - 527655 [RSVLT_CC_E 7345.00)-
527656 [CROSSROADS 7345.00] CKT 1 Solution diverges; voltage collapse
Solution diverges; voltage collapse
No voltage issues
observed
2026W5 P3 527902 [HOBBS_PLT2
118.000] 527656 [CROSSROADS 7345.00]-
527802 [EDDY_CNTY 7345.00] CKT 1 Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 527902 [HOBBS PLT2
118.000] - 527896 [HOBBS_INT 7345.001-
527965 [KOWA 7345.00] CKT 1 Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 527902 [HOBBS_PLT2
118.000] 525832 [TUCO_INT 7345.001-
511456 [0.K.U.-7 345.00) CKT 1 Solution diverges; voltage collapse
Solution diverges; voltage collapse
Solution diverges; voltage collapse
2026W5 P3 527902 [HOBBS_PLT2
118.000] 525832 [TUCO_INT 7345.00)-
515458 [BORDER 7345.00] CKT 1 Solution diverges; voltage collapse
Solution diverges; voltage collapse
No voltage issues
observed
2026W5 P1 UNIT 1 BUS 527903
[HOBBS_PLT3 118.000]
Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 528331 [ASGI10-010
113.800] 526331 [JONES_1 122.000] Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 528331 [ASGI10-010
113.800] 526332 [JONES_2 122.000]
Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 528331 [ASGI10-010 113.800)
527903 [HOBBS_PLT3 118.000] Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 528331 [ASGI10-010
113.800] 527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1 Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 528331 [ASGI10-010
113.800) 525832 [TUCO_INT 7345.001-
511456 [0.K.U.-7 345.00] CKT 1 Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 528361 [MADDOX_1
113.800] 526331 [JONES_1 122.000]
Solution diverges; voltage collapse
Solution diverges; voltage collapse
No voltage issues
observed
2026W5 P3 528361 [MADDOX_1
113.800] 526332 [JONES_2 122.000]
Solution diverges, voltage collapse
Solution diverges; voltage collapse
No voltage issues
observed
2026W5 P3 528361 [MADDOX_1
113.800] 527161 [MUSTANG_1 113.800)
Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 528361 [MADDOX_1
113.800) 527162 [MUSTANG_2 113.800]
Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 528361 [MADDOX_1
113.800) 527163 [MUSTANG_3 122.000]
Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
2026W5 P3 528361 [MADDOX_1
113.800] 527884 [CUNINGHAM4 113.800]
Solution diverges; voltage collapse
No voltage issues observed
No voltage issues
observed
16
RR 4 - Page 513 of 693 02322
Attachment JJC-RR-4 Page 17 of 30
2019 TX Rate Case
NERC
001-11 event
1
.:
yAfl
' Talk Untel and 2 • OW. : "
Talk unit 1 convert:4Ni to - Synchronous "
Condenser; Toth unk .1 OFF
- MN wit 1 and 2
converted to *chrome Condenser
2026W5 P3 528361 [MADDOX_1
113.800] 527901 [HOBBS_PLT1 118 000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues observed
2026W5 P3 528361 [MADDOX_1
113.800] 527902 [HOBBS_PLT2 118.000]
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 528361 [MADDOX_1
113.800] 527903 [HOBBS_PLT3 118.000]
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues observed
2026W5 P3 528361 [MADDOX_1
113.800]
525832 [TUCO_INT 7345.00]-
526936 [YOAKUM_345 345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P3 528361 [MADDOX_1
113.800]
527655 [RSVLT_CC_E 7345.00]-
527656 [CROSSROADS 7345.00] CKT 1
Solution diverges; voltage collapse
Solution diverges; voltage collapse
No voltage
issues
observed
2026W5 P3 528361 [MADDOX_1
113 800]
527656 [CROSSROADS 7345.00]-
527802 [EDDY_CNTY 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues observed
No voltage
issues
observed
2026W5 P3 528361 [MADDOX_1
113.800]
525832 [TUCO_INT 7345.00]-
511456 [0.K.U.-7 345.00] CKT 1
Solution diverges;
voltage collapse
Solution diverges;
voltage collapse
No voltage
issues
observed
2026W5 P3 528361 [MADDOX_1
113.8001
525832 [TUCO_INT 7345.00]-
515458 [BORDER 7345.00] CKT 1
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage
issues
observed
2026W5 P1 Tuco to OKU 345kV
(J01)
Solution diverges;
voltage collapse
No voltage issues
observed
No voltage issues
observed
5. Conclusion
This system impact study performed showed the need to convert one of the Tolk units to synchronous condenser operation immediately and to convert both the Tolk units to synchronous condensers by mid 2020s to mitigate TPL-001-4 P3 multiple contingency (loss of generator followed by N-1 transmission outage) event issues.
It is also observed that there is a huge real power deficiency in SPS area by mid 2020s causing severe steady state issues. Conversion of both the Tolk units to synchronous condenser operation alone cannot mitigate all the transmission system performance issues in later years. New generation installation will greatly improve system performance with real and reactive power capability with the changed operation of the Tolk units.
Appendix A
17
RR 4 - Page 514 of 693 02323
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Attachment JJC-RR-4 Page 18 of 30
2019 TX Rate Case
RR 4 - Page 515 of 693 02324
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2019 TX Rate Case
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2019 TX Rate Case
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2019 TX Rate Case
RR 4 - Page 523 of 693 02332
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Attachment JJC-RR-4 Page 27 of 30
2019 TX Rate Case
RR 4 - Page 524 of 693 02333
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RR 4 - Page 525 of 693 02334
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Attachment JJC-RR-4 Page 29 of 30
2019 TX Rate Case
RR 4 - Page 526 of 693 02335
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Attachment JJC-RR-4 Page 30 of 30
2019 TX Rate Case
RR 4 - Page 527 of 693 02336
DOCKET NO.
APPLICATION OF SOUTHWESTERN § PUBLIC UTILITY COMMISSION PUBLIC SERVICE COMPANY FOR § AUTHORITY TO CHANGE RATES § OF TEXAS
DIRECT TESTIMONY of
DAVID A. LOW
on behalf of
SOUTHWESTERN PUBLIC SERVICE COMPANY
(Filename: LowRRDirect.doc)
Table of Contents
GLOSSARY OF ACRONYMS AND DEFINED TERMS 4
LIST OF ATTACHMENTS 6
I. WITNESS IDENTIFICATION AND QUALIFICATIONS 8
II. ASSIGNMENT AND SUMMARY OF TESTIMONY AND RECOMMENDATIONS 11
III. DESCRIPTION OF RATE FILING PACKAGE SCHEDULES 19
IV. GENERATING FACILITIES 22
V. ENERGY SUPPLY O&M EXPENDITURES 24
VI. HALE WIND PROJECT O&M EXPENDITURES 29
VII. AFFILIATE CLASSES SPONSORED 36
VIII. AFFILIATE EXPENSES FOR THE ES PROJECTS CLASS OF SERVICES 37
A. SUMMARY OF AFFILIATE EXPENSES FOR THE ES PROJECTS CLASS OF SERVICES 37
B. THE ES PROJECTS CLASS OF SERVICES ARE NECESSARY SERVICES 45
C. THE ES PROJECTS CLASS OF SERVICES ARE PROVIDED AT A REASONABLE COST 48
1. ADDITIONAL EVIDENCE 49
2. BUDGET PLANNING 49
3. COST TRENDS 51
4. STAFFING TRENDS 52
5. COST CONTROL AND PROCESS IMPROVEMENT INITIATIVES 52
D. THE COSTS FOR THE ES PROJECTS CLASS OF SERVICES ARE PRICED IN A FAIR MANNER 53
Low Direct — Revenue Requirement Page I
RR 4 - Page 528 of 693 02337
IX. AFFILIATE EXPENSES FOR THE ES ENVIRONMENTAL CLASS OF
SERVICES 57
A. SUMMARY OF AFFILIATE EXPENSES FOR THE ES ENVIRONMENTAL
CLASS OF SERVICES 57
B. THE ES ENVIRONMENTAL CLASS OF SERVICES ARE NECESSARY
SERVICES 60
C. THE ES ENVIRONMENTAL CLASS OF SERVICES ARE PROVIDED AT A
REASONABLE COST 62
1. ADDITIONAL EVIDENCE 62
2. BUDGET PLANNING 63
3. COST TRENDS 64
4. STAFFING TRENDS 65
5. COST CONTROL AND PROCESS IMPROVEMENT INITIATIVES 66
D. THE COSTS FOR THE ES ENVIRONMENTAL CLASS OF SERVICES ARE
PRICED IN A FAIR MANNER 67
X. AFFILIATE EXPENSES FOR THE ES PERFORMANCE
OPTIMIZATION CLASS OF SERVICES 71
A. SUMMARY OF AFFILIATE EXPENSES FOR THE ES PERFORMANCE
OPTIMIZATION CLASS OF SERVICES 71
B. THE ES PERFORMANCE OPTIMIZATION CLASS OF SERVICES ARE
NECESSARY SERVICES 75
C. THE ES PERFORMANCE OPTIMIZATION CLASS OF SERVICES ARE
PROVIDED AT A REASONABLE COST 77
1. ADDITIONAL EVIDENCE 77
2. BUDGET PLANNING 77
3. COST TRENDS 79
4. STAFFING TRENDS 80
5. COST CONTROL AND PROCESS IMPROVEMENT INITIATIVES 80
D. THE COSTS FOR THE ES PERFORMANCE OPTIMIZATION CLASS ARE
PRICED IN A FAIR MANNER 81
XI. AFFILIATE EXPENSES FOR THE ES VP ENERGY SUPPLY CLASS
OF SERVICES 85
A. SUMMARY OF AFFILIATE EXPENSES FOR TIIE ES VP ENERGY
SUPPLY CLASS OF SERVICES 85
B. THE ES VP ENERGY SUPPLY CLASS OF SERVICES ARE NECESSARY
SERVICES 88
C. THE ES VP ENERGY SUPPLY CLASS OF SERVICES ARE PROVIDED AT
A REASONABLE COST 90
1. ADDITIONAL EVIDENCE 90
2. BUDGET PLANNING 90
3. COST TRENDS 92
Low Direct — Revenue Requirement Page 2
RR 4 - Page 529 of 693 02338
4. STAFFING TRENDS 93
5. COST CONTROL AND PROCESS IMPROVEMENT INITIATIVES 93
D. THE COSTS FOR THE ES VP ENERGY SUPPLY CLASS OF SERVICES ARE PRICED IN A FAIR MANNER 94
XII. AFFILIATE EXPENSES FOR THE ES VP OPERATIONS CLASS OF SERVICES 98
A. SUMMARY OF AFFILIATE EXPENSES FOR THE ES VP OPERATIONS CLASS OF SERVICES 98
B. THE ES VP OPERATIONS CLASS OF SERVICES ARE NECESSARY SERVICES 101
C. THE ES VP OPERATIONS CLASS OF SERVICES ARE PROVIDED AT A REASONABLE COST 103
1. ADDITIONAL EVIDENCE 103
2. BUDGET PLANNING 103
3. COST TRENDS 105
4. STAFFING TRENDS 106
5. COST CONTROL AND PROCESS IMPROVEMENT INITIATIVES 106
D. THE COSTS FOR THE ES VP OPERATIONS CLASS OF SERVICES ARE PRICED IN A FAIR MANNER 107
XIII. SPS POWER PLANT O&M PROGRAMS 112
A. SCHEDULED MAINTENANCE PRACTICES 1 12
B. PREDICTIVE MAINTENANCE PRACTICES 115
C. PERFORMANCE ASSURANCE PROGRAMS 120
D. TRAINING OF PLANT OPERATORS AND MAINTENANCE PERSONNEL 130
XIV. RESULTS OF SPS'S O&M PRACTICES 133
XV. OUTAGES 140
AFFIDAVIT 143
Low Direct — Revenue Requirement Page 3
RR 4 - Page 530 of 693 02339
GLOSSARY OF ACRONYMS AND DEFINED TERMS
Acronvm/Defined Term Meaning
Btu British thermal unit
EAF Equivalent Availability Factor
ES Energy Supply business area including both native and affiliate activities
FERC Federal Energy Regulatory Commission
FOR Forced Outage Rates
IM Integrated Marketplace
kWh kilowatt hour
LP Low Pressure
M&D Monitoring and Diagnostic
MW megawatt
MWh megawatt hour
NERC
NERC/GADS
North American Electric Reliability Corporation
North American Electric Reliability Corporation/Generating Availability Data System
NMPRC New Mexico Public Regulation Commission
O&M Operation and maintenance
OEM Original Equipment Manufacturer
Low Direct — Revenue Requirement Page 4
RR 4 - Page 531 of 693 02340
Acronvm/Defined Term Meaning
Operating Companies Northern States Power Company, a Minnesota corporation; Northern States Power Company, a Wisconsin corporation; Public Service Company of Colorado, a Colorado corporation; and SPS.
Operating Company One of the Operating Companies
PTT Productivity through Technology
RFP Rate Filing Package
SMWA Service Maintenance and Warranty Agreement
SPP Southwest Power Pool, Inc.
SPS Southwestern Public Service Company, a New Mexico corporation
Test Year April 1, 2018 through March 31, 2019
Total Company or total Total SPS (before any jurisdictional company allocation)
Update Period April 1, 2019 through June 30, 2019
Updated Test Year July 1, 2018 through June 30, 2019
Vestas Vestas-American Wind Technology, Inc.
VP Vice President
Wind Lease Agreement Lease and easement agreement between SPS and a landowner related to the Hale Wind Project
Xcel Energy Xcel Energy Inc.
XES Xcel Energy Services Inc.
Low Direct — Revenue Requirement Page 5
RR 4 - Page 532 of 693 02341
LIST OF ATTACHMENTS
Attachment Description
DAL-RR-1 Energy Supply Organization Chart (Non-native format)
DAL-RR-2(V)(HS) Service, Maintenance, and Warranty Agreement between Southwestern Public Service Company and Vestas-American Wind Technology, Inc. dated as of June 15, 2018 (Non-native format)
DAL-RR-3(HS) Wind and Easement Lease Agreement (Non-native format)
DAL-RR-4 Tolk Station Annual Equivalent Availability Factors (Filename: DAL-RR-4.xls)
DAL-RR-5
DAL-RR-6
Harrington Station Annual Equivalent Availability Factors (Filename: DAL-RR-5.xls)
Gas Units (200-299 MW) Annual Equivalent Availability Factors (Filename: DAL-RR-6.xls)
DAL-RR-7 Tolk Station Annual Forced Outage Rates (Filename: DAL-RR-7.xls)
DAL-RR-8 Harrington Station Annual Forced Outage Rates (Filename: DAL-RR-8.xls)
DAL-RR-9
DAL-RR-10
Gas Units (200-299 MW) Forced Outage Rates (Filename: DAL-RR-9.xls)
SPS Native Operation and Maintenance Expenses (Filename: DAL-RR-10.xlsx)
Low Direct — Revenue Requirement Page 6
RR 4 - Page 533 of 693 02342
Attachment Description
DAL-RR-A Summary of XES Expenses to SPS by (Updated Test Year) Affiliate Class and Billing Method
(Filename: DAL-RR-ABCD.xlsx)
DAL-RR-B(CD) XES Expenses by Affiliate Class, Activity, (Updated Test Year) Billing Method and FERC Account
(Filename: DAL-RR-ABCD.xlsx)
DAL-RR-C Exclusions from XES Expenses to SPS by (Updated Test Year) Affiliate Class and FERC Account
(Filename: DAL-RR-ABCD.xlsx)
DAL-RR-D Pro Forma Adjustments to XES Expenses (Updated Test Year) by Affiliate Class and FERC Account
(Filename: DAL-RR-ABCD.xlsx)
Low Direct — Revenue Requirement Page 7
RR 4 - Page 534 of 693 02343
DIRECT TESTIMONY OF
DAVID A. LOW
1
I. WITNESS IDENTIFICATION AND QUALIFICATIONS
2 Q. Please state your name and business address.
3 A. My name is David A. Low. My business address is 790 S. Buchanan Street,
4
Amarillo, Texas, 79101.
5 Q. On whose behalf are you testifying in this proceeding?
6 A. I am filing testimony on behalf of Southwestern Public Service Company, a New
7
Mexico corporation ("SPS") and wholly-owned electric utility subsidiary of Xcel
8
Energy Inc. ("Xcel Energy").
9 Q. By whom are you employed and in what position?
10 A. I am employed by SPS as General Manager, SPS Generation.
11 Q. Please briefly outline your responsibilities as General Manager, SPS
12
Generation.
13 A. I am responsible for providing management for the SPS Generation business area
14
within the Energy Supply organization, which provides leadership, strategic
15
direction, and management of the power generation group within the SPS area of
16
Xcel Energy.
17 Q. Please describe your educational background.
18 A. I received a Bachelor of Science in Mechanical Engineering Technology from
19
Texas Tech University in 1983. I also completed course work toward an MBA at
20
West Texas A&M University from 1998 to 2001.
Low Direct — Revenue Requirement Page 8
RR 4 - Page 535 of 693 02344
1 Q. Please describe your professional experience.
2 A. I began my career with SPS in 1983 as a Plant Engineer at Tolk Station. I was
3 promoted to Supervisory Plant/Project Engineer at Tolk Station in 1987. In 1992,
4 I was promoted to Senior Project Engineer at Tolk Station. Then, in 1995, I
5 became the Maintenance Manager for SPS's Harrington Station. In 2003, I was
6 promoted to Plant Director for Public Service Company of Colorado's Pawnee
7 Station. In 2007, I was promoted to Plant Director of SPS's Tolk and Plant X
8 Complex. Finally, in 2011, I was promoted to my current position as General
9 Manager, SPS Generation.
10 Q. Have you attended or taken any special courses or seminars relating to
1 1 public utilities?
12 A. Yes. Over my career, I have taken various courses and seminars related
13 specifically to the public utility industry.
14 Q. Have you testified before any regulatory authorities?
15 A. Yes. I filed testimony at the Public Utility Commission of Texas in Docket
16 Nos. 40824, 42004, 43695, 45524 and 47527, SPS's last five base rate cases, on
17 Energy Supply affiliate expenses, SPS's generation by operating plant and unit,
18 and its power plant operation, maintenance, and cost control practices. I also
19 testified at the New Mexico Public Regulation Commission ("NMPRC") in Case
20 No. 12-00350-UT, on SPS's known and anticipated operation and maintenance
21 ("O&M") expenditures related to chemical and water usage for power plants. In
22 addition, I have filed testimony on SPS's behalf before the NMPRC in Case Nos.
Low Direct — Revenue Requirement Page 9
RR 4 - Page 536 of 693 02345
1 14-00348-UT, 15-00296-UT, 16-00269-UT, and 17-00255-UT addressing SPS's
2 generation and its power plant operation, maintenance, and cost control practices.
Low Direct — Revenue Requirement Page 10
RR 4 - Page 537 of 693 02346
1 II. ASSIGNMENT AND SUMMARY OF TESTIMONY AND 2 RECOMMENDATIONS
3 Q. What is your assignment in this proceeding?
4 A. I support the Updated Test Year (July 1, 2018 through June 30, 2019)1 O&M
5 expenses and the administrative and general expenses in the Energy Supply
6 ("ES") business area overall, which includes native costs and the following five
7 classes of affiliate services:
8 1. ES Projects;
9 2. ES Environmental;
10 3. ES Performance Optimization;
11 4. ES Vice President ("VP") Energy Supply; and
12 5. ES VP Operations.
13 I will also discuss SPS's generation by operating plant and unit, and its power
14 plant operation, maintenance, and cost control practices during the Updated Test
15 Year. In addition, I explain SPS's approach to supporting the O&M needs of the
16 Hale Wind Project, which began commercial operations in June 2019, and support
17 SPS's request for the known and measurable O&M expenses for that facility.
18 Finally, I sponsor or co-sponsor schedules in SPS's Rate Filing Package ("RFP")
19 and the portions of the Executive Summary that contain information from these
20 schedules.
1 The Test Year in this case is April 1, 2018 through March 31, 2019, and the Update Period is April I, 2019 through June 30, 2019. The Updated Test Year consists of the last nine months of the Test Year and the three months in the Update Period (i.e., July 1, 2018 — June 30, 2019). In addition to supporting the Updated Test Year costs, I have also reviewed the costs for the first three months of the Test Year for the native costs and affiliate classes I support and find those costs to be reasonable.
Low Direct — Revenue Requirement Page 11
RR 4 - Page 538 of 693 02347
1 Q. Please summarize your testimony and recommendations.
2 A. SPS operates and maintains its generating facilities in an efficient and reliable
3 manner:
4 • SPS uses tools such as PLEXOS software to schedule maintenance or 5 overhauls on a component basis (instead of complete or major unit 6 overhauls) which helps stabilize maintenance costs from year to year and 7 ensures the efficient and reliable operation of SPS's units;
8 • SPS uses a proactive predictive maintenance program that helps minimize 9 costs, while maintaining unit reliability;
10 • SPS maintains a robust performance assurance program, which includes 11 ongoing monitoring of power plant performance, to improve unit 12 efficiency and find cost-effective ways to reduce fuel costs;
13 • SPS's coal units performed well during the Test Year, most operating 14 within 3% of their Adjusted Design Net Heat Rate; and
15 • During the Test Year, SPS conducted a Steam Path Analysis on Tolk 16 Unit 1, Jones Unit 2, and Harrington Unit 1 turbines, which resulted in 17 greater fuel savings and improvements in heat rates for those units;
18 • SPS requires and provides training of plant operators and maintenance 19 personnel to ensure the safe and reliable operation of its units;
20 • Although SPS continues operating in an efficient manner, the changes to 21 the Southwest Power Pool Inc.'s ("SPP") market has increased unit starts 22 and shortened unit service hours, which has increased O&M expense and 23 will likely do so in the future;
24 In comparison to other utilities, SPS's O&M programs for generation facilities are
25 highly effective:
26 • The overall Equivalent Availability Factor ("EAF") for SPS's coal and gas 27 units compare favorably with the national average for 2017, the most 28 recent North American Electric Reliability Corporation ("NERC") 29 publication of these metrics;
30 • The overall Forced Outage Rates ("FOR") of SPS's coal and gas units also 31 compare favorably to the national average in 2017; and
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1 • Although SPS had several unplanned outages during the Test Year, SPS 2 took all reasonable steps to avoid unplanned outages and to quickly make 3 repairs and bring plants back on-line when needed.
4 Native O&M Expenses — The amounts included in Attachment DAL-RR-10
5 represent, at a total company level, reasonable and necessary Energy Supply
6 O&M costs incurred by SPS to provide safe and reliable electric service to its
7 Texas retail customers.
8 Hale Wind Project O&M Expenses - SPS's approach to O&M for the Hale Wind
9 Project leverages Xcel Energy's experience with other wind projects and
10 efficiently uses experienced contractors and internal personnel. In this case, SPS
11 is requesting a known and measurable adjustment to reflect its O&M expenses for
12 its Service, Maintenance, and Warranty Agreement ("SMWA") with Vestas-
13 American Wind Technology, Inc. ("Vestas"), and for the land lease expenses that
14 SPS will incur during the period rates are in effect. Those costs are reasonable
15 and known and measurable.
16 Affiliate O&M Expenses - The Updated Test Year costs that SPS seeks to recover
17 for the services of each of the five affiliate classes that I support are reasonable
18 and necessary because they support SPS's ability to provide electric service to its
19 Texas retail customers.
20 ES Projects
21 • The estimated Updated Test Year (July 1, 2018 through June 30, 2019) 22 costs for the services of the ES Projects affiliate class that SPS seeks to 23 recover are $690,333 (total company).2
2 "Total company" means the total amount for SPS, before any jurisdictional allocation.
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1 • The costs are for services provided to SPS that include Texas and New 2 Mexico regional capital engineering, design and document services, and 3 construction and project services. These services are necessary to provide 4 the generation plant and systems that enable the provision of safe and 5 reliable electric service to SPS's customers.
6 • The costs are reasonable because they are shared with other affiliates, 7 include reasonable personnel costs, and are subjected to rigorous 8 budgeting and cost control processes.
9 • SPS does not provide these services for itself, and the services do not 10 duplicate services provided by others.
11 • Each charge from SPS's affiliates for these services is no higher than the 12 charge by those affiliates to any other entity for the same or similar 13 service.
14 ES Environmental
15 • The estimated Updated Test Year costs for the services of the ES 16 Environmental affiliate class that SPS seeks to recover are $1,678,242 17 (total company).
18 • The costs are related to services to help ensure plant facilities remain in 19 environmental compliance, including obtaining permits for new and 20 existing facilities and chemistry water resources . These services are 21 necessary to ensured continued, regulatory-compliant, operation of SPS's 22 generation plant facilities.
23 • The costs are reasonable because they are shared with other affiliates, 24 include reasonable personnel costs, and are subjected to rigorous 25 budgeting and cost control processes.
26 • SPS does not provide these services for itself, and the services do not 27 duplicate services provided by others.
28 • Each charge from SPS's affiliates for these services is no higher than the 29 charge by those affiliates to any other entity for the same or similar 30 service.
31 ES Performance Optimization
32 • The estimated Updated Test Year costs for the services of the ES 33 Performance Optimization affiliate class that SPS seeks to recover are 34 $8,044,339 (total company).
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1 • The costs are for plant engineering and technical support, asset 2 management, overhaul management and maintenance support, 3 performance testing and analysis, and reliability maintenance services. 4 These services are necessary to ensure the safe and reliable operation of 5 SPS's generation fleet.
6 • The costs are reasonable because they are shared with other affiliates, 7 include reasonable personnel costs, and are subjected to rigorous 8 budgeting and cost control processes.
9 • SPS does not provide these services for itself, and the services do not 10 duplicate services provided by others.
11 • Each charge from SPS's affiliates for these services is no higher than the 12 charge by those affiliates to any other entity for the same or similar 13 service.
14 ES VP Energy Supply
15 • The estimated Updated Test Year costs for the services of the ES VP 16 Energy Supply affiliate class that SPS seeks to recover are $143,089 (total 17 company).
18 • The costs are for the oversight of VP Performance Optimization, VP 19 Projects, and VP Operations. The services provided by this oversight 20 function are necessary to ensure cost control, engineering and construction 21 execution, technical support, and operational excellence of SPS's 22 generation fleet.
23 • The costs are reasonable because they are shared with other affiliates, 24 include reasonable personnel costs, and are subjected to rigorous 25 budgeting and cost control processes.
26 • SPS does not provide these services for itself, and the services do not 27 duplicate services provided by others.
28 • Each charge from SPS's affiliates for these services is no higher than the 29 charge by those affiliates to any other entity for the same or similar 30 service.
31 ES VP Operations
32 • The estimated Updated Test Year costs for the services of the ES VP 33 Operations affiliate class that SPS seeks to recover are $462,122 (total 34 company).
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1 • The costs are for oversight and management of the Operating Mode13 2 across the Xcel Energy fleet and regional generation organizations, and to 3 provide performance indicators and lead the Energy Supply safety 4 program. These services are necessary to provide leadership in ensuring 5 the safe and reliable operation of SPS's generation facilities.
6 • The costs are reasonable because they are shared with other affiliates, 7 include reasonable personnel costs, and are subjected to rigorous 8 budgeting and cost control processes.
9 • SPS does not provide these services for itself, and the services do not 10 duplicate services provided by others.
11 • Each charge from SPS's affiliates for these services is no higher than the 12 charge by those affiliates to any other entity for the same or similar 13 service.
14 Q. You mention that certain costs that you present in your testimony are
15 estimates. Please explain why this is the case and what items are estimates.
16 A. As explained by SPS witness William A. Grant, SPS will be using an Updated
17 Test Year in this case. SPS's initial filing presents actual expenses for the Test
18 Year (April 1, 2018 through March 31, 2019) and estimated information for the
19 Update Period (April 1, 2019 through June 30, 2019). Accordingly, the first nine
20 months of SPS's Updated Test Year (i.e., July 2018 through March 2019) consist
21 of actual cost information and the last three months (i.e., April through June 2019)
22 contain estimated cost information. For this reason, certain SPS witnesses refer to
23 the Updated Test Year in direct testimony as the "estimated Updated Test Year."
24 Regarding the ES Projects, ES Environmental, ES Performance
25 Optimization, ES VP Energy Supply, and ES VP Operations affiliate costs I
26 support, as explained by SPS witness Melissa L. Schmidt, actual figures for April
3 The "Operating Model" or "Generation Operating Model" provides for the alignment of resources and standardization of the key elements of organizational operation to identify best practices, reduce operating and maintenance cost, and promote excellence.
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1 and May 2019 have been provided and June 2019 figures have been estimated
2 based on the forecasted budget. However, these expenses have not gone through
3 the full pro forma adjustment review process.
4 Regarding the native SPS costs for Energy Supply O&M that I support,
5 which are provided in my Attachment DAL-RR-10, as explained by SPS witness
6 Arthur P. Freitas, actual figures for April and May 2019 have been provided, and
7 June 2019 figures have been estimated based on the forecasted budget.
8 Q. Will your testimony be updated to replace the estimated costs that you
9 present and support with actual costs?
10 A. Yes. SPS will file an update 45 days after the application has been filed. The
11 update will provide actual costs to replace the estimates provided in the
12 application for the Update Period. As part of that process, my Attachments DAL-
13 RR-A through D will be updated to remove estimates of ES Projects, ES
14 Environmental, ES Performance Optimization, ES VP Energy Supply, and ES VP
15 Operations affiliate O&M expenses incurred by SPS during the Updated Test
16 Year and then replace those estimates with actual expenses, which will be used to
17 establish SPS's base rates in this case. Additionally, my Attachment DAL-RR-10
18 will be updated in SPS's 45-day update filing to replace estimates of SPS's native
19 costs relating to Energy Supply O&M with actuals.
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1 Q. Were Attachments DAL-RR-1, DAL-RR-4 through DAL-RR-11, and DAL-
2 RR-A through DAL-RR-D prepared by you or under your direct supervision
3 and control?
4 A. Yes, as to Attachments DAL-RR-1, DAL-RR-4 through DAL-RR-9 and DAL-
5 RR-11. Attachment DAL-RR-10 was prepared by SPS witness Arthur P. Freitas
6 and his staff and is based on the cost of service study. Attachments DAL-RR-A
7 through DAL-RR-D were prepared by Ms. Schmidt and her staff. My staff and I
8 have reviewed these attachments, and I believe them to be accurate. Although the
9 information I have described also is present in Ms. Schmidt's attachments, I have
10 presented this information in the attachments to my testimony for the convenience
11 of those reviewing my testimony.
12 Q. Are Attachments DAL-RR-2 and DAL-RR-3 true and correct copies of the
13 documents you describe?
14 A. Yes.
15 Q. Were the portions of the RFP schedules you sponsor or co-sponsor prepared
16 by you or under your supervision and control?
17 A. Yes.
18 Q. Do you incorporate the portions of the RFP schedules and the Executive
19 Summary sponsored or co-sponsored by you into this testimony?
20 A. Yes.
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1 III. DESCRIPTION OF RATE FILING PACKAGE SCHEDULES
2 Q. What RFP schedules do you sponsor?
3 A. I sponsor or co-sponsor the following RFP schedules:
4 Table DAL-RR-I
H Schedules 1, 1.2, 1.2a, 1.2a1, 1.2a2, 1.2b, 1.2c, 1.2d, 2, 3, 4, 6.2a, 6.2b, 6.2c, 6.3b, 7.1, 7.2, 7.3, 7.4, 7.5, 8, 9, 11.1, 11.2, 11.3, 12.2a, 12.2a1, 12.2b, 12.2b1, 12.2c, 12.2c1, 12.3a, 12.3b, and 12.3c
I Schedules 5.1, 5.2, and 5.3
5 Q. What information is contained in the H schedules?
6 A. The H schedules I sponsor or co-sponsor contain the following information:
7 • Schedule H-1 provides in summary form, the production plant 8 operations and maintenance expenses (excluding fuel) by month for 9 the Test Year and Updated Test Year, by the Federal Energy
10 Regulatory Commission ("FERC") account, by primary fuel type, for 11 all generating plants or units. Schedule H-1.2 provides total company 12 O&M expenses for fossil plants. I co-sponsor this schedule with Mr. 13 Freitas.
14 • Schedule H-1.2a provides a summary of O&M expenses for natural 15 gas plants. I co-sponsor this schedule with Mr. Freitas.
16 • Schedule H-1.2a1 provides O&M expense for natural gas plants 17 (steam generation). I co-sponsor this schedule with Mr. Freitas.
18 • Schedule H-1.2a2 provides O&M expense for natural gas plants 19 (combustion turbine). I co-sponsor this schedule with Mr. Freitas.
20 • Schedule H-1.2b provides a summary of O&M expense for coal plants. 21 I co-sponsor this schedule with Mr. Freitas.
22 • Schedule H-1.2c provides a summary of O&M expense for lignite 23 plants.
24 • Schedule H-1.2d provides a summary of O&M expense for other 25 plants. I co-sponsor this schedule with Mr. Freitas.
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1 • Schedule H-2 provides production adjusted O&M expense for the Test 2 Year and Updated Test Year. I co-sponsor this schedule with Mr. 3 Freitas.
4 • Schedule H-3 provides the summary of actual production O&M 5 expenses incurred.
6 • Schedule H-4 provides a list of all projects, in excess of $100,000, to 7 be charged to production O&M expense in the most current budget or 8 projection.
9 • Schedule H-6.2a provides a list of fossil unit forced outages that 10 occurred during the Test Year.
11 • Schedule H-6.2b provides a list of scheduled outages of fossil units 12 that occurred during the Test Year.
13 • Schedule H-6.2c provides a list of each outage for fossil units 14 scheduled for the next five calendar years.
15 • Schedule H-6.3b provides the incremental cost information for the 16 Test Year for each fossil unit outage, excluding outage costs under 17 $500,000.
18 • Schedule H-7.1 provides a copy of the most recent total company 19 production staffing plan.
20 • Schedule H-7.2 provides a copy of the most recent plan used for 21 personnel staffing.
22 • Schedule H-7.3 provides a summary schedule of the number of 23 personnel assigned to each plant on a calendar year basis during the 24 preceding five calendar years.
25 • Schedule H-7.4 provides a listing of the average number of personnel 26 assigned to each unit for the Test Year, and projected for the rate year.
27 • Schedule H-7.5 provides the production O&M organization charts for 28 plants, systems operations, and corporate personnel with the associated 29 number of personnel.
30 • Schedule H-8 provides a summary of the system-wide production 31 operations programs.
32 • Schedule H-9 provides a summary of the system-wide production 33 maintenance programs.
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1 • Schedule H-11.1 provides the percentage of O&M expenses 2 (excluding fuel) per total production plant expenses (excluding fuel) 3 annually for the Test Year and the previous five years by plant.
4 • Schedule H-11.2 provides the percentage of preventative (including 5 predictive) maintenance man-hours and corrective maintenance 6 man-hours versus the total maintenance man-hours.
7 • Schedule H-11.3 provides the O&M costs (excluding fuel) per 8 megawatt hour ("MWh") generated by each plant grouped by primary 9 fuel type on a monthly and annual basis for the Test Year, and the
10 previous five years.
11 • Schedules H-12.2a and H-12.2a1 provide MWh production by lignite 12 and coal units for the Test Year and the previous five years.
13 • Schedules H-12.2b and H-12.2b1 provide MWh production by unit for 14 natural gas and oil units for the Test Year and the previous five years.
15 • Schedules H-12.2c and H-12.2c1 provide MWh production for other 16 units during the Test Year and previous five years.
17 • Schedules H-12.3 a, H-12.3 b, and H-12.3 c provide generating unit 18 data, unit characteristics, and efficiency and control systems.
19 Q. What information is contained in the I schedules that you sponsor?
20 A. Schedules 1-5.1, 1-5.2, and 1-5.3 provide information regarding combustion
21 residual production, disposal, and disposal costs.
22 Q. Will any of the schedules that you sponsor be updated?
23 A. Yes. Schedules H-1, H-1.2, H-1.2a, H-1.2a1, H-1.2a2, H-1.2b, H-1.2d, and H-2
24 will be updated in the case update filing 45 days after the application is filed.
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1 IV. GENERATING FACILITIES
2 Q. Please describe SPS's generating facilities.
3 A. SPS had the following generating facilities in service during the Test Year:
Steam Production — Gas/Oil • Jones Unit 1 • Jones Unit 2 • Plant X Unit 1 • Plant X Unit 2 • Plant X Unit 3 • Plant X Unit 4
Steam Production — Gas • Cunningham Unit 1 • Cunningham Unit 2 • Maddox Unit 1 • Nichols Unit 1 • Nichols Unit 2 • Nichols Unit 3
Steam Production — Coal • Harrington Unit 1 • Harrington Unit 2 • Harrington Unit 3 • Tolk Unit 1 • Tolk Unit 2
Other Production — Combustion Turbine • Cunningham Unit 3 • Cunningham Unit 4 • Jones Unit 3 • Jones Unit 4 • Maddox Unit 2 • Maddox Unit 3 • Quay County Unit 1
4 SPS's natural gas-fueled plants consist of 12 steam turbine units and
5 7 combustion turbines. SPS's coal-fueled power plants consist of 5 steam units.
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1
SPS's Carlsbad Generating Station was retired on December 31, 2017 and
2
it has been dismantled. A major addition to the SPS generation fleet is the Hale
3
Wind Project. The Hale Wind Project began commercial operation in June 2019.
4
In addition to these SPS-owned facilities, SPS also makes use of four solar
5
generation facilities located in New Mexico.
6 Q. Are any units dedicated for peaking service?
7 A. Yes. The combustion turbines at Jones Units 3 and 4, Cunningham Units 3 and 4,
8
and Maddox Unit 2 are considered peaking units.
9 Q. Are any units used primarily for emergency situations?
10 A. Yes. Quay County and Maddox Unit 3 are designated primarily for emergency
11
use.
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1 V. ENERGY SUPPLY O&M EXPENDITURES
2 Q. What are the types of O&M services and costs specifically associated with
3 SPS's Energy Supply business area?
4 A. SPS's Energy Supply business area provides a wide range of O&M services
5 necessary to support SPS's ability to provide electric service to its Texas and New
6 Mexico retail customers. Those services are provided to SPS directly through
7 SPS and through SPS's affiliate, Xcel Energy Services Inc. ("XES"). Within this
8 business area, SPS and XES employees have separate roles and responsibilities,
9 but work in coordination with each other and under the direction of the XES
10 Energy Supply business area management to provide various services, including:
11 Native and Affiliate Services:
12 • developing and executing projects for new generation and establishing 13 uniform technology, design and equipment standards for capital projects;
14 • implementation and maintenance of an Energy Supply Quality Assurance 15 and Quality Control Program and safety programs;
16 • plant engineering supporting the daily outage planning and execution, 17 reliability maintenance services, and plant equipment and performance 18 testing;
19 • maintaining technical resources on plant equipment to facilitate effective 20 maintenance;
21 • implementing compliance with NERC reliability standards;
22 • storm restoration activities; and
23 • ensuring SPS's continued compliance with environmental rules and 24 regulations including: air quality, water quality, hazardous and solid 25 waste, remediation, storage tanks, and emergency spill response.
26 Exclusively Affiliate Services:
27 • developing and maintaining Energy Supply project management processes 28 for capital projects and complex O&M projects;
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1 • overseeing Energy Supply capital construction projects;
2 • maintaining a working relationship with key suppliers of materials, 3 equipment, and engineering and construction services;
4 • providing environmental permitting and compliance support, training and 5 compliance assistance, auditing of compliance, and managing coal ash 6 contracts;
7 • developing, implementing, and supporting SPS's environmental leadership 8 strategy and associated policy initiatives;
9 • providing strategic asset management that delivers analysis and training 10 expertise in multiple areas, such as plant process chemistry and water 11 resources;
12 • managing the overhaul process to optimize outage planning and execution;
13 • overseeing and managing all testing activities and NERC standards 14 compliance through use of the Operating Model across the generating 15 fleet;
16 • developing and managing the capital budget, project management, Quality 17 Assurance/Quality Control programs, design control, and drawing control 18 processes; and
19 • providing management oversight and direction to the regional generation 20 organization, including the establishment of regional performance 21 indicators, fleet-wide improvement initiatives, and leadership of the 22 Energy Supply safety program.
23 Q. Are the services related to the Energy Supply business area reasonable and
24 necessary for SPS's operations?
25 A. Yes. The services are reasonable and necessary to ensure that SPS's generation
26 fleet, which is essential to providing electric service to SPS's customers, is safely
27 and reliably operated and maintained. For example, these services are necessary
28 to ensure that SPS's generation facilities remain in compliance with
29 environmental regulations and receive sufficient technical support. The Energy
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1 Supply business area provides services that are required by all utilities, and
2 without which SPS would not be able to provide electric service to its customers.
3 Q. What amount is SPS requesting for native Energy Supply O&M?
4 A. The amounts included in Attachment DAL-RR-10 represent, at a total company
5 level, reasonable and necessary Energy Supply O&M costs incurred by SPS to
6 provide safe and reliable electric service to its Texas retail customers.
7 Q. What are the types of charges included in SPS's requested level of O&M
8 expenses related to Energy Supply?
9 A. Energy Supply-related O&M expenses include both native SPS costs and affiliate
10 charges. Native costs are those costs incurred directly by SPS associated with the
11 provision of electric service to customers. These costs include labor, materials,
12 and other non-fuel O&M costs. For example, the salaries of SPS employees are
13 native costs. Affiliate costs are those associated with services provided by XES
14 and the other Operating Companies4 to SPS. It is important to note that within the
15 Energy Supply business area, XES and SPS employees have separate roles and
16 responsibilities, but work in coordination with each other and under the direction
17 of the XES Energy Supply business area management to provide various services.
18 In other words, the services provided by SPS's affiliates are in addition to, and not
19 duplicative of, the services that SPS employees provide.
20 In addition, charges from SPS's affiliates must be provided "at cost," or
21 without profit, and the charges to SPS must be no higher than the charges to other
4 The Operating Companies are Northern States Power Company, a Minnesota corporation; Northern States Power Company, a Wisconsin corporation; Public Service Company of Colorado, a Colorado corporation; and SPS. Charges from the other Xcel Energy Operating Companies are generally related to emergency services, such as storm restoration activities.
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1 Operating Companies for similar services. Ms. Schmidt provides additional
2 details regarding the methodology of charging affiliate costs to SPS from XES
3 and other affiliated entities. My testimony provides additional detail supporting
4 the costs of the Energy Supply affiliate classes.
5 Q. Are the O&M costs related to the Energy Supply business area necessary and
6 reasonable for SPS's operations?
7 A. Yes. As explained in more detail below, the Energy Supply business area
8 monitors its actual expenditures versus its budget. In addition, the costs for these
9 services include labor, materials, and other non-fuel O&M costs. SPS witness
10 Michael T. Knoll provides testimony explaining that SPS's labor costs are
11 reasonable. SPS witness Richard R. Schrubbe provides testimony regarding
12 explaining that SPS's pension and related benefits costs are reasonable. SPS
13 witness Gary J. O'Hara provides testimony explaining that the costs related to
14 sourcing and procurement of goods and services is reasonable, and Ms. Schmidt
15 provides testimony demonstrating that the methodology of billings for affiliated
16 labor and labor related overheads is reasonable.
17 Q During the fiscal year, does the Energy Supply business area monitor its
1 8 actual expenditures versus its budget?
19 A. Yes. Actual versus expected expenditures are monitored on a monthly basis by
20 management within each department of the Energy Supply business area.
21 Deviations are evaluated each month to ensure that costs are appropriate. In
22 addition, action plans are developed to mitigate variations in actual to budgeted
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1 expenditures. These mitigation plans may either reduce or delay other
2 expenditures so that overall spending complies with the authorized budget.
3 Q. Are employees within the Energy Supply business area held accountable for
4 deviations from the budget?
5 A. Yes. All management employees in the Energy Supply business area have
6 specific budgetary targets that are measured on a monthly basis to ensure
7 adherence to the targets and provide for action plan development to address
8 variances.
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1 VI. HALE WIND PROJECT O&M EXPENDITURES
2 Q. Is SPS proposing any adjustments to the Updated Test Year O&M?
3 A. Yes. The Updated Test Year O&M does not reflect the O&M expenses for the
4 Hale Wind Project, which began commercial operation in June 2019. The
5 adjustment requested for O&M expenditures for the Hale Wind Project is
6 $9,598,240 (total company). That amount is reflected in Attachment APF-RR-2
7 presented by Mr. Freitas as well as my Attachment DAL-RR-10, and it is
8 reasonable, necessary, and known and measurable.
9 Q. How was the amount included in the cost of service for the Hale Wind
1 0 Project O&M developed?
11 A. The Hale O&M costs in the cost of service reflect the cost of the SMWA with
12 Vestas of $7,686,240 (total company), as shown in Attachment APF-RR-6(CD)
13 for the year during the period that rates will be in effect. A copy of the SMWA is
14 provided as Attachment DAL-RR-2(V)(HS) to my testimony. The cost of service
15 also reflects the amount associated with SPS's land lease payments for the facility
16 under its Wind and Easement Lease Agreements ("Wind Lease Agreement") for
17 the year during the period that proposed rates will be in effect in the amount of
18 $1,912,000 (total company). A form of the Wind Lease Agreement is provided as
19 Attachment DAL-RR-3(HS) to my testimony. Because those amounts are based
20 in contract, they are known and measurable. In addition to these costs, there will
21 likely be O&M expenses in addition to these two categories that SPS intends to
22 request in future cases.
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1 Q. Please provide a description of the Hale Wind Project.
2 A. The Hale Wind Project is a 478 megawatt ("MW") facility located in Hale
3 County, Texas. To develop the Hale Wind Project, SPS has installed 239 turbines
4 through a combination of Vestas model 2.0 MW V110 and 2.0 MW V116 wind
5 turbines. Site infrastructure includes access roads, foundations, electrical cable
6 collection systems, and a collection system substation. The generation output ties
7 into the SPP transmission system through a generation tie line from the Hale
8 Wind Project collector station to the interconnection tie breaker at the TUCO
9 substation (i.e., the SPP transmission grid point). The Commission granted SPS a
10 generation certificate of convenience and necessity in Docket 46936 that included
11 approval of the Hale Wind Project.5
12 Q. What is involved in the O&M of a wind project?
13 A. O&M activities associated with a wind project generally involve two categories of
14 maintenance: (1) scheduled; and (2) unscheduled. Scheduled maintenance
15 includes general preventative maintenance. Unscheduled maintenance stems
16 from the identification of operational issues from monitoring the wind turbines
17 and the subsequent repair of identified issues.
5 Application of Southwestern Public Service Company for Approval of Transactions with ESI Energy, LLC and Invenergy Wind Development North America LLC, to Amend a Certificate of Convenience and Necessity for Wind Generation Projects and Associated Facilities in Hale County, Texas and Roosevelt County, Nov Mexico, and for Related Approvals, Docket No. 46936, Final Order (May 25, 2018).
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1 Q. Please provide an overview of SPS's plan for operating and maintaining the
2 Hale Wind Project.
3 A. SPS is using a combination of services provided by the Original Equipment
4 Manufacturer ("OEM") and internal personnel assigned to the Hale Wind Project
5 site. SPS has executed a SMWA with Vestas, the OEM.
6 Q. Why did SPS enter into an SMWA with Vestas?
7 A. Vestas is the OEM of the turbines used in building the Hale Wind Project. Xcel
8 Energy has found that using the OEM to perform O&M services offers several
9 benefits, including: (i) lowering the risk of claims of inadequate maintenance
10 during the warranty period; (ii) allowing Xcel Energy to readily obtain controls
11 and software updates that help maintain reliability; and (iii) allowing Xcel
12 Energy's teams to gain greater knowledge of technological advances by working
13 closely with the OEM, which leads to improved O&M on the turbines over their
14 useful lives. Vestas often provides O&M services to other wind projects,
15 providing SPS additional assurance that Vestas is highly qualified to do the O&M
16 work.
17 Q. What types of services will Vestas provide under the SMWA?
18 A. The SMWA obligates Vestas to perform warranty work as well as scheduled and
19 unscheduled maintenance. The SMWA covers warranty work for equipment,
20 including turbines, towers, and climb assists. Examples of warranty work include
21 replacement of failed parts such as bearings, electronic components, and the labor
22 associated with the replacement.
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1 Vestas will also perform all maintenance, diagnostics, repair and
2 replacement services on the serviced equipment, including among other things,
3 performing gearbox borescopes, inspecting wind turbine blades, sampling
4 gearbox and hydraulic unit oil, checking tensioning of tower base section anchor
5 bolts and performing re-tensioning, monitoring and reporting any FAA lighting
6 outages, and repairing and maintaining climb assists at scheduled intervals.
7 Vestas is also required to maintain a suitable inventory of replacement and spare
8 parts for the wind turbines.
9 Q. Could SPS have provided internally the same services as Vestas is providing
10 through the SMWA?
1 1 A. No. SPS does not have employees trained in wind generation O&M, and SPS
12 does not currently have training programs to support such activities.
13 Q. How many internal staff will be assigned to work on Hale O&M?
14 A. There will be four internal staff that will provide plant management, engineering,
15 and administrative services to the Hale Wind Project, in addition to overseeing the
16 SMWA contractors. In addition, XES personnel will provide various support
17 services including providing technical service groups for assistance with
18 engineering issues, material and chemical analysis, grid reliability, equipment
19 analysis, environmental services, safety services, and site security.
20 Q. How does SPS and Xcel Energy work with the OEM to provide O&M
21 activities for a wind generation project?
22 A. Xcel Energy works with the OEM during all phases of the project construction
23 process and thereafter in the operation of the project. Xcel Energy staff monitors
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1 and coordinates with those contractors to perform the O&M needed for the
2 facility. SPS staff coordinates on scheduled maintenance as well as on
3 responding to issues at the site. The contractor bears the responsibility for
4 reporting conditions at the site and any issues, and contractor will inform the
5 internal employees when an operations issue is identified.
6 In an instance where monitoring of SCADA data or other O&M-related
7 monitoring has revealed a potential operations issue, internal staff will direct the
8 external contractors to schedule a technician to go out to the turbine in question.
9 Depending upon the nature of the potential problem, the team that goes out to the
10 turbine may include both internal and external personnel. SPS works hand in hand
11 with the contractor to address the cause of the issue and fix it as timely as
12 possible.
13 Q. Is the SMWA and its terms reasonable and necessary for SPS's operations?
14 A. Yes, the SMWA is an essential part of the Hale Wind Project allowing for the
15 efficient operation of the facility. The SMWA was negotiated in an arm's length
16 transaction with Vestas.
17 Q. What type of plant management technology will the Hale Wind Project use?
18 A. The Hale Wind Project will use Energy Supply's Monitoring and Diagnostic
19 ("M&D") Center as described in Section XIII of my testimony.
20 Q. How will the Hale Wind Project be monitored?
21 A. Xcel Energy has staff on site Monday through Friday during normal business
22 hours, so if an issue arises during this time the staff can respond quickly. After
23 normal business hours, the SCADA system continues to be monitored remotely
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1 by Vestas and personnel can be dispatched if an issue arises that requires an
2 immediate response. Turbines can also be turned off and restarted remotely if a
3 problem is observed and the turbine needs to be taken offline. Under both
4 emergency and non-emergency situations, however, the O&M response is just
5 like any other power plant: when you get an alarm, you go to the site and address
6 it as soon as practicable given the issue.
7 Q. In addition to the SMWA and internal staffing you have presented, are there
8 other O&M costs that SPS is requesting to recover regarding the Hale Wind
9 Project?
10 A. Yes. SPS is seeking recovery for payments to landowners pursuant to Wind Lease
11 Agreements.
12 Q. Please describe the Wind Lease Agreements associated with the Hale Wind
13 Project.
14 A. The transactions approved by the Commission in Docket 46936 included the
15 acquisition of Wind Lease Agreements in Hale County that enabled the
16 construction of the Hale Wind Project. The Wind Lease Agreements secure all
17 land rights necessary for all development activities including wind turbines,
18 overhead and underground electrical distribution, collection, transmission and
19 communication lines, electric transformers, electric substations, roads, wind
20 measurement equipment, and other ancillary facilities, as well as construction
21 activities and uses. Lease payments are made in accordance with formulas set
22 forth in the Wind Lease Agreements as among landowners located in defined
23 project areas.
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1 Q. Are the Wind Lease Agreements and their terms reasonable and necessary
2 for SPS's operations?
3 A. Yes, the Wind Lease Agreements are an essential element allowing for the
4 construction and operation of the Hale Wind Project. Each was negotiated in an
5 arm's length transaction with landowners.
6 Q. Does Xcel Energy have experience with other wind project O&M?
7 A. Yes. Xcel Energy has wind farm O&M experience through multiple, successful
8 company-owned wind projects at its other Operating Companies.6 In total, by the
9 end of 2019 Xcel Energy expects to be operating 1,127 turbines with a nameplate
10 capacity of 2,200 MW, not including the Hale Wind Project.
11 Q. Has SPS applied the knowledge and experience that Xcel Energy has gained
12 from wind projects in other jurisdictions to its plan for operating and
13 maintaining the Hale Wind Project?
14 A. Yes. Xcel Energy and SPS applied the best practices learned from Xcel Energy's
15 experience at those wind farms to SPS's O&M plan for the Hale Wind Project.
16 Based on this experience, SPS believes that its O&M activities and requested
17 amount for the Hale Wind Project are reasonable, necessary, and known and
18 measurable.
6 Xcel Energy's electric operating companies are: Northern States Power Company - Minnesota, Northem States Power Company — Wisconsin, Public Service Company, Public Service Company Colorado and SPS.
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1 vII. AFFILIATE CLASSES SPONSORED
2 Q. Earlier in your testimony, you referred to "affiliate classes." What do you
3 mean by the terms "affiliate classes" or "affiliate classes of services"?
4 A. A portion of SPS's costs reflects charges for services provided by a supplying
5 affiliate, specifically XES or one of the Operating Companies. These charges
6 have been grouped into various affiliate classes, or aggregations of charges, based
7 upon the business area, organization, or department that provided the service or,
8 in a few instances, the accounts that captured certain costs. In her direct
9 testimony, Ms. Schmidt provides a detailed explanation of how the affiliate
10 classes were developed and are organized for this case.
11 Q. Which affiliate classes do you sponsor?
12 A. 1 sponsor the ES Projects, ES Environmental, ES Performance Optimization, ES
13 VP Energy Supply, and ES VP Operations classes of affiliate services.
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1 VIII. AFFILIATE EXPENSES FOR THE ES PROJECTS CLASS OF 2 SERVICES
3 A. Summary of Affiliate Expenses for the ES Projects Class of 4 Services
5 Q. Where does the ES Projects affiliate class fit into the overall affiliate
6 structure?
7 A. Attachment MLS-RR-6 to Ms. Schmidt's direct testimony provides a list and a
8 pictorial display of all affiliate classes, dollar amounts for those classes, and
9 sponsoring witness for each class. As seen on that attachment, the ES Projects
10 affiliate class was part of the Energy Supply business area during the Updated
11 Test Year. Attachment DAL-RR-1 to my testimony is an organization chart
12 showing the Energy Supply organization.
13 Q. What services are grouped into the ES Projects affiliate class?
14 A. The services that are grouped into the ES Projects affiliate class are:
15 • Texas and New Mexico regional capital engineering;
16 • design and document services; and
17 • construction and project services.
18 Q. What is the dollar amount of the Updated Test Year XES charges that SPS
19 requests, on a total company basis, for the ES Projects affiliate class?
20 A. The following table summarizes the dollar amount of the estimated Updated Test
21 Year XES charges for the ES Projects affiliate class. I will update the table below
22 as part of SPS's 45-day case update filing to reflect the actual Updated Test Year
23 costs for the ES Projects affiliate class.
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1 Table DAL-RR-2
Requested Amount of XES Class Expenses Billed to SPS (Total
Company)
Class of Services Total XES
Class Expenses
Requested Amount
% Direct Billed
%
Allocated
ES Projects $3,251,362 $690,333 87.57% 12.43%
Total XES Class Expenses
Requested Amount of XES Class Expenses Billed to SPS (Total Company)
% Direct Billed
% Allocated
Dollar amount of total Updated Test Year expenses that XES charged to all Xcel Energy companies for the services provided by this affiliate class. This is the amount from Column E in Attachment DAL-RR-A.
Requested dollar amount of XES expenses to SPS (total company) for this affiliate class after exclusions and pro forma adjustments. This is the amount from Column K in Attachment DAL-RR-A.
The percentage of SPS's requested XES expenses (total company) for this class that were billed 100% to SPS.
The percentage of SPS's requested XES expenses (total company) for this class that were allocated to SPS.
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1 Q. Please describe the attachments that support the information provided on
2 Table DAL-RR-2.
3 A. There are four attachments to my testimony that present information about the
4 requested SPS affiliate expenses for the ES Projects affiliate class.
5 Attachment DAL-RR-A: Provides a summary of the affiliate expenses
6 for this class during the Updated Test Year. The summary starts with the total of
7 the XES expenses to SPS for the services provided by this affiliate class and ends
8 with the requested dollar amount of XES expenses to SPS (total company) for this
9 affiliate class after exclusions and pro forma adjustments. The columns on this
10 attachment provide the following information.
Column A — Line No. Lists the Attachment line numbers.
Column B — Affiliate Class Lists the affiliate class.
Column C —
Column E —
Column F —
Billing Method (Cost Center)
Total XES Billings for Class to all Legal Entities (FERC Acct. 400-935)
XES Billings for Class to all Legal Entities Except for SPS (FERC Acct. 400-935)
Shows the billing method that XES uses to charge the expenses to the affiliates, and the billing method short title. In her direct testimony, Ms. Schmidt explains the billing methods and defines the codes.
Shows the allocation method applicable to the billing method (cost center).
Shows XES billings to all legal entities for the affiliate class.
Shows XES billings to all legal entities other than SPS for the affiliate class.
Column D — Allocation Method
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Column L —
Shows XES billings to SPS (total company) for the affiliate class.
Shows the total dollars to be excluded from Column G. Exclusions reflect expenses not requested, such as expenses not allowed or other below-the-line items.
Shows XES billings to SPS (total company), for the affiliate class, after the exclusions shown in Column H. The dollar amount in Column I is Column G plus Column H.
Shows the total dollar amount of pro forma adjustments to the dollar amount in Column I. Pro forma adjustments reflect revisions for known and measurable changes to the Updated Test Year expenses. Shows the requested amount (total company) for the affiliate class. The dollar amount in Column K is Column I plus Column J.
Column G — XES Billings for Class to SPS (Total Company) (FERC Acct. 400-935)
Column H — Exclusions
Column I — Per Book
Column J — Pro Formas
Column K — Requested Amount (Total Company)
Percentage of class Shows the percentage of affiliate class charges charges billed using the cost center.
1 In her direct testimony, Ms. Schmidt provides a consolidated summary of
2 affiliate expenses billed to SPS for all classes during the Test Year and Updated
3 Test Year.
4 Attachment DAL-RR-B(CD): Provides the detail of the XES expenses
5 for the ES Projects affiliate class that are summarized on Attachment DAL-RR-A.
6 The detail shows the XES expenses billed to SPS for the ES Projects affiliate
7 class, itemized by the amount with each expense listed by individual activity and
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Column B — Legal Entity Receiving XES Expenses
Column C —
Column D —
Column E —
Column F —
Affiliate Class
Cost Element
Activity
Billing Method (Cost Center)
billing method (cost center). When summed, these amounts tie to the amounts
shown on Attachment DAL-RR-A and the detail regarding the expenses is
organized to support that attachment. Specifically, the columns on this attachment
provide the following information.
Column A — Line No. Lists the Attachment line numbers.
Column G — FERC Account
Shows the legal entity (Xcel Energy or one of its subsidiaries) that received the XES expense.
Lists the affiliate class.
Provides the cost element number
Provides a short title for the activity.
Identifies the billing method and short title. In her direct testimony, Ms. Schmidt explains the billing methods and defines the codes.
Shows the FERC Account in which the expense was recorded.
Shows the itemized amount of the listed XES expense that was billed to all legal entities.
Shows the itemized amount of the listed XES expense that was billed to all legal entities other than SPS.
Shows the itemized amount of the listed XES expense that was billed to SPS. Therefore the sum of this column provides total billings to SPS and ties to the total dollar amount for the affiliate class in Column G of Attachment DAL-RR-A.
Column H — XES Billings for Class to All Legal Entities (FERC Acct. 400-935)
Column I — XES Billings for Class to All Legal Entities Except SPS (FERC Acct. 400-935)
Column J — XES Billings for Class to SPS (Total Company) (FERC Acct. 400-935)
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Column K — Exclusions
Column L — Per Book
Column M — Pro Formas
Column N — Requested Amount (Total Company)
Shows the total dollars excluded from Column J. The total dollar amount for the affiliate class in Column K ties to the total dollar amount for the affiliate class in Column H of Attachment DAL-RR-A.
Shows XES billings to SPS (total company), for the affiliate class after the exclusions shown in Column K. The dollar amount in Column L is Column J plus Column K. The total dollar amount for the affiliate class in Column L ties to the total dollar amount for the affiliate class in Column I of Attachment DAL-RR-A.
Shows the dollar amount of pro forma adjustments to the dollar amount in Column L. The total dollar amount for the affiliate class in Column M ties to the total dollar amount for the affiliate class in Column J of Attachment DAL-RR-A. Shows the requested amount (total company) for the affiliate class. The dollar amount in Column N is Column L plus Column M. The total dollar amount for the affiliate class in Column N ties to the total dollar amount for the affiliate class in Column K of Attachment DAL-RR-A.
1 Ms. Schmidt also provides a consolidated summary of this information for
2 all affiliate classes during the Test Year and the Updated Test Year.
3 Attachment DAL-RR-C: Both Attachments DAL-RR-A and
4 DAL-RR-B(CD) show exclusions to the XES expenses billed to SPS for the ES
5 Projects affiliate class (Attachment DAL-RR-A, Column H; Attachment DAL-
6 RR-B(CD), Column K). Attachment DAL-RR-C provides detail about those
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1 exclusions listed on Attachments DAL-RR-A and DAL-RR-B(CD). The columns
2 on Attachment DAL-RR-C provide the following information.
Column A — Line No. Lists the Attachment line numbers.
Column B — Affiliate Class Lists the affiliate class.
Column C — FERC Account Identifies the FERC Account for the expense that has been excluded.
Column D — Explanations for Provides a brief rationale for the Exclusions exclusion.
Column E — Exclusions (Total Shows the dollar amount of the Company) exclusion.
3 In her direct testimony, Ms. Schmidt describes the calculations underlying
4 the exclusions.
5 Attachment DAL-RR-D: Both Attachments DAL-RR-A and
6 DAL-RR-B(CD) show pro forma adjustments to SPS's per book expenses for the
7 ES Projects affiliate class (Attachment DAL-RR-A, Column J; Attachment DAL-
8 RR-B(CD), Column M). Attachment DAL-RR-D provides information about
9 those pro forma adjustments shown on Attachments DAL-RR-A and DAL-RR-
1 0 B(CD). The columns on Attachment DAL-RR-D provide the following
1 1 information.
Column A — Line No. Lists the Attachment line numbers.
Column B — Affiliate Class Lists the affiliate class.
Column C — FERC Account Identifies the FERC Account affected by the pro forma adjustment.
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Column D — Explanations for Pro Provides a brief rationale for the pro Formas forma adjustment.
Column E — Sponsor Identifies the witness or witnesses who sponsor the pro forma adjustment.
Column F — Pro Formas (Total Shows the dollar amount of the pro Company) forma adjustment.
1 Q. Does XES bill its expenses for the ES Projects affiliate class to SPS in the
2 same manner as it bills other affiliates for those expenses?
3 A. Yes. As discussed by Ms. Schmidt, XES uses the same method for billing and
4 allocating costs to affiliates other than SPS that it uses to bill and allocate those
5 costs to SPS.
6 Q. Are there any exclusions to the XES billings to SPS for the ES Projects
7 affiliate class?
8 A. No. As I mentioned earlier, exclusions reflect expenses not requested, such as
9 expenses not allowed or other below-the-line items. Exclusions are shown on
10 Attachment DAL-RR-A, Column H, and on Attachment DAL-RR-B(CD),
11 Column K. The details for the exclusions are provided in Attachment DAL-RR-
12 C. Ms. Schmidt describes how the exclusions were calculated. In SPS's 45-day
13 case update, I will present an updated Attachment DAL-RR-C that will provide
14 actual exclusions to replace any estimated exclusions included my original
15 attachment.
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1 Q. Are there any pro forma adjustments to SPS's per book expenses for the ES
2 Projects affiliate class?
3 A. Yes. As I mentioned earlier, pro forma adjustments are revisions to Updated Test
4 Year expenses for known and measurable changes. Pro forma adjustments are
5 shown on Attachment DAL-RR-A, Column J, and on Attachment DAL-RR-
6 B(CD), Column M. The details for the pro forma adjustments, including the
7 witness or witnesses who sponsor each pro forma adjustment, are provided in
8 Attachment DAL-RR-D. Given the time of SPS's initial filing, only the first nine
9 months of the Updated Test Year have completed the full pro forma adjustment
10 review process. In SPS's 45-day case update, I will present an updated
11 Attachment DAL-RR-D that will complete the full pro forma adjustment review
12 process for the last three months of the Updated Test Year.
13 Q. Attachment DAL-RR-D shows that you sponsor pro forma adjustments for
14 expenses for the ES Projects affiliate class during the first nine months of the
15 Updated Test Year that result in a net decrease for the ES Projects affiliate
16 class of $803.19 Please explain the adjustments.
17 A. The adjustments that I sponsor remove payroll costs that have been adjusted to
18 remove amounts for life events (a decrease of $713.89) and costs not benefitting
19 SPS (a decrease of $89.30).
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1 B. The ES Proiects Class of Services are Necessary Services
2 Q. Are the services that are grouped in the ES Projects affiliate class necessary
3 for SPS's operations?
4 A. Yes. The services grouped in the ES Projects affiliate class are necessary to
5 ensure that SPS's capital projects are managed efficiently and safely and on
6 schedule. They are functions required by all utilities and without which SPS
7 would not be able to provide electric service to its customers.
8 Q. What are the specific services that are provided to SPS by the ES Projects
9 affiliate class?
1 0 A. The specific services that are provided to SPS by the ES Projects affiliate class
11 are:
12 • developing and maintaining a uniform Energy Supply project 13 management process, including supporting tools, and the design and 14 engineering process;
15 • managing capital projects, and executing larger, more complex O&M 16 projects;
17 • developing and executing projects for new generation (including 18 renewable and innovative technologies), establishing uniform 19 technology, design, and equipment standards for capital projects, 20 developing and managing an Energy Supply process for custody, care, 21 and control of drawing and engineering records;
22 • coordinating development, implementation and maintenance of an 23 Energy Supply Quality Assurance and Quality Control Program; and
24 • maintaining a working relationship with key suppliers of materials, 25 equipment, and engineering and construction services.
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1 Q. Are any of the ES Projects class of services that are provided to SPS
2 duplicated elsewhere in XES or in any other Xcel Energy subsidiary such as
3 SPS itself?
4 A. No. Within XES, none of the services grouped in the ES Projects affiliate class
5 are duplicated elsewhere. No other Xcel Energy subsidiary performs these
6 services for the Operating Companies. In some cases the plant engineers on small
7 capital projects will conduct some of the services that ES Projects typically
8 perform. This is not a duplication of service; rather it utilizes the appropriate
9 resource for the project. It is more efficient for plant engineers to manage
10 commodity projects due to their physical location. Although there are both XES
11 and SPS employees in the ES Projects organization, the SPS employees do not
12 perform the same activities as the XES employees and they have separate
13 responsibilities and roles. The services provided by the SPS employees are not
14 duplicative of the services provided by XES, although they work in coordination
15 with and under the direction of the XES Energy Supply management. In addition,
16 SPS does not perform these services for itself.
17 Q. Do SPS's Texas retail customers benefit from the services that are part of the
1 8 ES Projects class of services?
19 A. Yes. The services of the ES Projects affiliate class benefit SPS's customers in
20 many ways. For example, the ES Projects class develops and deploys capital
21 budget and project management processes that guide funding decisions, minimize
22 project risks, and ensure delivery of targeted value. Working with the plants and
23 other support organizations within Energy Supply allows capital spending to be
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1 optimized to achieve the best overall plant performance. From July 1, 2017
2 through March 31, 2019 (i.e., the first day after the end of the period for which
3 capital additions were approved in Docket No. 475277 through the end of the Test
4 Year), Energy Supply has completed capital projects totaling $62,344,8488 (total
5 company) for SPS, which have had the rigor of the above noted budget and
6 project management processes applied to them. Overall capital project cash flow
7 variance (i.e., actual to budget and forecast) was within the acceptable target
8 range, which results in improved cash management and ensures that capital
9 project schedules are maintained, thus minimizing the potential of cost overruns.
10 This group also performs engineering designs for small to mid-sized capital
11 projects and is the primary interface with third-party contractors and vendors used
12 on plant capital projects. Some O&M support is also provided for the plants with
13 the most significant work being drafting, maintaining, and updating plant
14 drawings.
15 C. The ES Projects Class of Services are Provided at a Reasonable 16 Cost
17 Q. Are the costs of the ES Projects class of services reasonable?
18 A. Yes. The costs of the ES Projects class of services are reasonable. XES provides
19 the services and functions in the ES Projects class of services on a consolidated
20 basis for multiple Xcel Energy legal entities. As a result, SPS benefits from
7 Application of Southwestern Public Sen'ice Company for Authority to Change Rates, Docket
No. 47527, Order (Dec. 10, 2018).
8 Please refer to the Direct Testimony of SPS witness Mark Lytal, Attachment ML-RR-1. Mr. Lytal's Attachment ML-RR-2 provides the Energy Supply capital projects placed in service during the Update Period, which have also had the rigor of the above noted budget and project management processes applied to them.
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1 sophisticated services provided by a pool of talented professionals, the
2 consolidated costs of which are shared. The economies of scale inherent in this
3 system result in reasonable costs for SPS for these services.
4 1. Additional Evidence
5 Q. Is there any additional evidence that supports your opinion that the costs of
6 the ES Projects affiliate class are reasonable?
7 A. Yes. Of the estimated Updated Test Year costs for the ES Projects class,
8 approximately 89.73% are compensation and benefits costs for XES personnel.
9 Mr. Knoll and Mr. Schrubbe establish that the level of Xcel Energy's
10 compensation and benefits is reasonable and necessary.
11 2. Budget Planning
12 Q. Is a budget planning process applicable to the ES Projects class of affiliate
13 costs?
14 A. Yes. Annual O&M budgets are created for the ES Projects organization, which
15 includes the ES Projects class of affiliate costs, using guidelines developed at the
16 corporate level. Each manager within the ES Projects organization carefully
17 reviews historical spend information, identifies changes that will be coming in the
18 future, and analyzes the costs associated with those changes prior to submitting a
19 proposed budget. The budgeting process is discussed in more detail by SPS
20 witness Adam R. Dietenberger.
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1 Q. During the fiscal year, does the ES Projects organization monitor its actual
2 expenditures versus its budget?
3 A. Yes. Actual versus expected expenditures are monitored on a monthly basis by
4 management within each department. Deviations are evaluated each month to
5 ensure that costs are appropriate. In addition, action plans are developed to
6 mitigate variations in actual to budgeted expenditures. These mitigation plans
7 may either reduce or delay other expenditures so that the revised budget supports
8 the authorized budget. If authorized budget adjustments are required, they are
9 identified and approved at an appropriate level of management.
10 Q. Are employees within the ES Projects organization held accountable for
1 1 deviations from the budget?
12 A. Yes. All management employees in the ES Projects organization have specific
13 budgetary goals that are incorporated into their performance evaluations.
14 Performance is measured on a monthly basis to ensure adherence to the goals and
15 provide for action plan development to address variances. All ES Projects
16 employees are required to manage their expenses to support the budgetary goals
17 established by their manager. Failure to meet these performance targets will
18 affect their performance evaluation and overall compensation.
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1 3. Cost Trends
2 Q. Please state the dollar amounts of the actual per book charges from XES to
3 SPS for the ES Projects class of services for the three fiscal years preceding
4 the end of the Updated Test Year and the estimated per book charges for the
5 estimated Updated Test Year.
6 A. The following table shows, for the fiscal years 2016, 2017, and 2018 (calendar
7 years), the actual per book and, for the Updated Test Year, the estimated per book
8 affiliate charges (Column I on Attachment DAL-RR-A) from XES to SPS for the
9 services grouped in the ES Projects affiliate class:
10 Table DAL-RR-3
ES Projects (Per Book) Charges Over Time
Class of Services 2016 2017 2018
Updated Test Year
(Estimated)
ES Projects $1,757,130 $1,346,933 $611,453 $698,517
1 1 Q. What are the reasons for this trend?
12 A. The decrease in costs from 2016 to 2018 reflects a reduction in headcount. The
13 increase from 2018 to the Updated Test Year reflects additional labor charges.
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1 4. Staffing Trends
2 Q. Please provide the staffing levels for the ES Projects class of services for the
3 three fiscal years preceding the end of the Updated Test Year and the
4 Updated Test Year.
5 A. The following table shows, for the fiscal years 2016, 2017, and 2018 (calendar
6 years) and for the Updated Test Year, the average of the end of month staffing
7 levels for the ES Projects class of services.
8 Table DAL-RR-4
Average End of Month # of Staff
Class of Services 2016 2017 2018 Updated Test Year
(Estimated)
ES Projects 122 121 111 108
9 Q. What are the reasons for this trend?
10 A. The average staffing levels from 2016 through the Updated Test Year have
11 dropped due to attrition. Some of these roles were filled with staff augmentation
12 (contractors), and several positions are open and seeking qualified candidates.
13 Some reductions were made as jobs were consolidated based on workloads.
14 5. Cost Control and Process Improvement Initiatives
15 Q. Separate from the budget planning process, does the ES Projects affiliate
16 class take any steps to control its costs or to improve its services?
17 A. Yes. ES Projects leverages requests for proposal for multiple projects together to
18 negotiate better prices on materials and construction costs. ES Projects also
19 contracts with the same engineers across the production fleet to perform similar
20 projects, which lowers costs and improves the quality due to familiarization and
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1 repetition of tasks. Additionally, the Energy Supply affiliate classes have a
2 foundation of Xcel Energy's policies and procedures, which stress the importance
3 of cost control and continuous improvement.
4 D. The Costs for the ES Projects Class of Services are Priced in a 5 Fair Manner
6 Q. For those costs that XES charges (either directly or through use of an
7 allocation) to SPS for the ES Projects class of services, does SPS pay any
8 more for the same or similar service than does any other Xcel Energy
9 affiliate?
10 A. No. The XES charges to SPS for any particular service are no higher than the
11 XES charges to any other Xcel Energy affiliate. The costs charged for particular
12 services are the actual costs that XES incurred in providing those services to SPS.
13 A single, specific allocation method, rationally related to the cost drivers
14 associated with the service being provided, is used with each cost center (billing
15 method). In her direct testimony, Ms. Schmidt discusses the selection of billing
16 methods and XES's method of charging for services in more detail.
17 Q. How are the costs of the ES Projects affiliate class billed to SPS?
18 A. My Attachment DAL-RR-B(CD) shows all of the costs in this class broken out by
19 activity and, in conjunction with Column C in my Attachment DAL-RR-A, shows
20 the billing method associated with each activity. My Attachment DAL-RR-A
21 shows the allocation method (Column D) associated with each billing method
22 (Column C) used in the affiliate class.
23 In SPS's 45-day case update, I will present updated Attachments DAL-
24 RR-A and DAL-RR-B(CD) so that the entries for the last three months of the
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1 Updated Test Year provide actual data and conform to the information provided
2 for the first nine months. In the event the predominant billing methods and
3 associated allocation methods for the ES Projects affiliate O&M expenses on my
4 updated Attachments DAL-RR-A and DAL-RR-B(CD) differ from those
5 discussed below, I will explain those differences in supplemental testimony in
6 SPS's 45-day case update filing.
7 Q. What are the predominant allocation methods used for billing the costs that
8 SPS seeks to recover for the ES Projects affiliate class of services?
9 A. All of the requested XES charges to SPS for this class were charged using one of
10 the following billing allocation methods:
11 • Direct Billing — 87.57% of XES charges to SPS — $604,548.83;
12 • Electric Production Plant/Electric Transmission Plant/Electric Distribution 13 Plant/Gas Transmission Plant/Gas Distribution Plant — 9.33% of XES 14 charges to SPS - $64,393.65; and
15 • MWH Generation — 3.10% of XES charges to SPS — $21,390.39.
16 Q. Why is the "Direct Billing" method appropriate for assigning the costs
17 captured in the cost centers that use that billing method?
18 A. For the cost centers that are assigned using the "Direct Billing" method, the costs
19 normally reflect work that was performed specifically for SPS only. In some
20 cases, however, the direct billing occurred after the application of an off-line
21 allocator that tracks the relevant cost drivers. In either situation, the cost centers
22 charged using the "Direct Billing" method are appropriate because the assignment
23 of costs is in accordance with the distribution of benefits for the services received.
24 For example, the costs related to labor costs related to specific SPS plants were
25 assigned using the "Direct Billing" method. The cost of these services benefited
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1 SPS, the work was performed specifically for SPS alone, and one of the cost
2 drivers is boiler work. Thus, the "Direct Billing" method is appropriate because it
3 assigns costs in accordance with cost causation and benefits received. For the
4 cost centers that assign costs using Direct Billing, the per unit amounts charged by
5 XES to SPS are no higher than the unit amounts billed by XES to other affiliates
6 for the same or similar services and represent the actual costs of the services.
7 Q. Why is it appropriate to allocate costs based upon the "Electric Production
8 Plant/Electric Transmission Plant/Electric Distribution Plant/Gas
9 Transmission Plant/Gas Distribution Plant" method for the costs captured in
1 0 the cost centers that use that allocation method?
11 A. For the cost center charged using the "Electric Production Plant/Electric
12 Transmission Plant/Electric Distribution Plant/Gas Transmission Plant/Gas
13 Distribution Plant" method as the allocator, the costs are driven by environmental
14 services needed. For example, the labor and non-labor costs dedicated to air
15 quality, renewable energy, innovative technology and climate change, developing
16 corporate compliance strategy, regulatory agency interaction (both at the federal
17 and/or state level), permitting and compliance reporting, waste management,
18 combustion byproducts management, environmental compliance auditing,
19 providing support to the Environmental Council, and assisting with environmental
20 communications strategies, which are collected in Cost Center 200181, are
21 assigned using this allocation method. Thus, allocating costs based on the
22 environmental services used is appropriate for the allocation of costs to affiliates
23 because it allocates costs for the services in accordance with cost causation and
24 the distribution of the benefits of the services received. For the cost centers that
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1 assign costs based upon this allocation method, the per unit amounts charged by
2 XES to SPS as a result of the application of this allocation method are no higher
3 than the unit amounts billed by XES to other affiliates for the same or similar
4 services and represent the actual costs of the services.
5 Q. Why is it appropriate to allocate costs based upon the "MW11 Generation"
6 method for the costs captured in the cost centers that use that billing
7 method?
8 A. The costs in the ES Projects class that are associated with engineering labor at
9 SPS generating facilities are assigned using the "MWH Generation" method
10 because such costs are directly related to the support of power plants. Thus,
11 allocating costs based on the MWH Generation method is appropriate for the
12 allocation of costs to affiliates because it allocates costs for the services in
13 accordance with cost causation and the distribution of the benefits of the services
14 received. For example, Cost Center 200135, which uses the MWH Generation
15 method as the allocator, captures the costs associated with labor and non-labor
16 costs of performance analysis, specialists, and analytical services provided to the
17 Operating Companies' generation facilities. For the cost centers that assign costs
18 based upon this billing method, the per unit amounts charged by XES to SPS as a
19 result of the application of this billing method are no higher than the unit amounts
20 billed by XES to other affiliates for the same or similar services and represent the
21 actual costs of the services.
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1
2 IX. AFFILIATE EXPENSES FOR THE ES ENVIRONMENTAL 3 CLASS OF SERVICES
4 A. Summary of Affiliate Expenses for the ES Environmental Class of 5 Services
6 Q. Where does the ES Environmental affiliate class fit into the overall affiliate
7 structure?
8 A. Attachment MLS-RR-6 to Ms. Schmidt's direct testimony provides a list and a
9 pictorial display of all affiliate classes, dollar amounts for those classes, and
10 sponsoring witness for each class. As seen on that attachment, the ES
11 Environmental affiliate class was part of the Energy Supply business area during
12 the Updated Test Year. Attachment DAL-RR-1 to my testimony is an
13 organization chart showing the Energy Supply organization.
14 Q. What services are grouped into the ES Environmental affiliate class?
15 A. The services that are grouped into the ES Environmental affiliate class include:
16 • Environmental Services Air and Water;
17 • Environmental Services Waste Remediation;
18 • Environmental Policy and Services;
19 • Chemistry and Water Resources; and
20 • Environmental Services Audit.
21 Q. What is the dollar amount of the Updated Test Year XES charges that SPS
22 requests, on a total company basis, for the ES Environmental affiliate class?
23 A. The following table summarizes the dollar amount of the estimated Updated Test
24 Year XES charges for the ES Environmental affiliate class. I will update the table
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below as part of SPS's 45-day case update filing to reflect the actual Updated Test
Year costs for the ES Environmental affiliate class.
Table DAL-RR-5
Requested Amount of XES Class Expenses Billed to SPS (Total
Company)
Class of Services Total XES
Class Expenses
Requested Amount
% Direct Billed
% Allocated
ES Environmental $8,081,240 $1,678,242 86.75% 13.25%
Total XES Class Expenses
Requested Amount of XES Class Expenses Billed to SPS (Total Company)
% Direct Billed
% Allocated
Dollar amount of total Updated Test Year expenses that XES charged to all Xcel Energy companies for the services provided by this affiliate class. This is the amount from Column E in Attachment DAL-RR-A.
Requested dollar amount of XES expenses to SPS (total company) for this affiliate class after exclusions and pro forma adjustments. This is the amount from Column K in Attachment DAL-RR-A.
The percentage of SPS's requested XES expenses (total company) for this class that were billed 100% to SPS.
The percentage of SPS's requested XES expenses (total company) for this class that were allocated to SPS.
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1
2
3
1 Q. Please describe the attachments that support the information provided on
2 Table DAL-RR-5.
3 A. There are four attachments to my testimony that present information about the
4 requested SPS affiliate expenses for the ES Environmental affiliate class. I
5 explained these attachments in detail previously in Section VIII.A of my
6 testimony.
7 Q. Does XES bill its expenses for the ES Environmental affiliate class to SPS in
8 the same manner as it bills other affiliates for those expenses?
9 A. Yes. As discussed by Ms. Schmidt, XES uses the same method for billing and
10 allocating costs to affiliates other than SPS that it uses to bill and allocate those
11 costs to SPS.
12 Q. Are there any exclusions to the XES billings to SPS for the ES
13 Environmental affiliate class?
14 A. No. Exclusions are shown on Attachment DAL-RR-A, Column H, and on
15 Attachment DAL-RR-B(CD), Column K. The details for the exclusions are
16 provided in Attachment DAL-RR-C. Ms. Schmidt describes how the exclusions
17 were calculated. In SPS's 45-day case update, I will present an updated
18 Attachment DAL-RR-C that will provide actual exclusions to replace any
19 estimated exclusions included in my original attachment.
20 Q. Are there any pro forma adjustments to SPS's per book expenses for the ES
21 Environmental affiliate class?
22 A. Yes. As I mentioned earlier, pro forma adjustments are revisions to Updated Test
23 Year expenses for known and measurable changes. Pro forma adjustments are
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1 shown on Attachment DAL-RR-A, Column H, and on Attachment DAL-RR-
2 B(CD), Column K. The details for the pro forma adjustments, including the
3 witness or witnesses who sponsor each pro forma adjustment, are provided in
4 Attachment DAL-RR-D. Given the time of SPS's initial filing, only the first nine
5 months of the Updated Test Year have completed the full pro forma adjustment
6 review process. In SPS's 45-day case update, I will present an updated
7 Attachment DAL-RR-D that will complete the full pro forma adjustment review
8 process for the last three months of the Updated Test Year.
9 Q. Attachment DAL-RR-D shows that you sponsor pro forma adjustments for
10 expenses for the ES Environmental affiliate class during the first nine
11 months of the Updated Test Year that result in a net decrease for the ES
12 Environmental affiliate class of $60.88. Please explain the adjustments.
13 A. The adjustments that I sponsor remove amounts for life events (a decrease of
14 $60.88).
15 B. The ES Environmental Class of Services are Necessary Services
16 Q. Are the services that are grouped in the ES Environmental affiliate class
17 necessary for SPS's operations?
18 A. Yes. The services grouped in the ES Environmental affiliate class are necessary
19 to ensure that the plant facilities remain in compliance with environmental
20 regulations. The personnel within this class perform tasks such as seeking
21 amendments and obtaining permits required for existing and new facilities. They
22 are functions required by all utilities and without these functions SPS would be
23 unable to provide electric service to its customers.
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1 Q. What are the specific services that are provided to SPS by the ES
2 Environmental affiliate class?
3 A. The specific services that are provided to SPS by the ES Environmental affiliate
4 class are:
5 • ensuring SPS's continued compliance with environmental rules and 6 regulations, including: air quality, water quality, hazardous and solid 7 waste, remediation, storage tanks, and emergency spill response;
8 • managing the coal ash contracts with contractors;
9 • providing environmental permitting and compliance support, training 10 and compliance assistance services, and auditing of compliance with 11 environmental regulations; and
12 • developing, implementing, and supporting SPS's environmental 13 leadership strategy and associated policy initiatives.
14 Q. Are any of the ES Environmental class of services that are provided to SPS
15 duplicated elsewhere in XES or in any other Xcel Energy subsidiary such as
16 SPS itself?
17 A. No. Within XES, none of the services grouped in the ES Environmental affiliate
18 class are duplicated elsewhere. No other Xcel Energy subsidiary performs these
19 services for the Operating Companies. In addition, SPS does not perform these
20 services for itself. Although there are both XES and SPS employees in the Energy
21 Supply organization, the SPS employees do not perform the same activities as the
22 XES employees and they have separate responsibilities and roles. The services
23 provided by the SPS employees are not duplicative of the services provided by
24 XES, although they work in coordination with and under the direction of the XES
25 management.
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1 Q. Do SPS's Texas retail customers benefit from the services that are part of the
2 ES Environmental class of services?
3 A. Yes. The services of the ES Environmental affiliate class benefit SPS's
4 customers in many ways. For example, the costs associated with the ES
5 Environmental class are incurred to ensure that SPS complies with all federal,
6 state, and local environmental rules and regulations. SPS benefits from
7 sophisticated environmental services provided to the Energy Supply organization,
8 the consolidated costs of which are shared. The economies of scale inherent in
9 this system result in reasonable costs for SPS for these services.
10 C. The ES Environmental Class of Services are Provided at a 11 Reasonable Cost
12 Q. Are the costs of the ES Environmental class of services reasonable?
13 A. Yes. The costs of the ES Environmental class of services are reasonable. The
14 management of the various air quality, water quality, and solid waste permits
15 requires background, expertise, and training in these areas. By having a central
16 organization managing these environmental areas, duplication of personnel and
17 resources at the various facilities subject to regulations is avoided.
18 1. Additional Evidence
19 Q. Is there any additional evidence that supports your opinion that the costs of
20 the ES Environmental affiliate class are reasonable?
21 A. Yes. Of the estimated Updated Test Year costs for the ES Environmental class,
22 approximately 93.96% are compensation and benefits costs for XES personnel.
23 Mr. Knoll and Mr. Schrubbe establish that the level of Xcel Energy's
24 compensation and benefits is reasonable and necessary.
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1 2. Budget Planning
2 Q. Is a budget planning process applicable to the ES Environmental class of
3 affiliate costs?
4 A. Yes. Annual O&M budgets are created for the Environmental Services
5 organization, which includes the ES Environmental class of affiliate costs, using
6 guidelines developed at the corporate level. Each manager within the
7 Environmental Services organization carefully reviews historical spend
8 information, identifies changes that will be coming in the future, and analyzes the
9 costs associated with those changes prior to submitting a proposed budget. The
10 budgeting process is discussed in more detail by Mr. Dietenberger.
11 Q. During the fiscal year, does the Environmental Services organization monitor
12 its actual expenditures versus its budget?
13 A. Yes. Actual versus expected expenditures are monitored on a monthly basis by
14 management in the Environmental Services organization within each department.
15 Deviations are evaluated each month to ensure that costs are appropriate. In
16 addition, action plans are developed to mitigate variations in actual to budgeted
17 expenditures. These mitigation plans may either reduce or delay other
18 expenditures so that the revised budget supports the authorized budget. If
19 authorized budget adjustments are required, they are identified and approved at an
20 appropriate level of management.
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