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Docket No.

20000-___-ER-10
Witness: Darrell T. Gerrard

BEFORE THE WYOMING PUBLIC SERVICE


COMMISSION

ROCKY MOUNTAIN POWER

____________________________________________

Direct Testimony of Darrell T. Gerrard

November 2010
1 Q. Please state your name, business address and present position with

2 PacifiCorp dba Rocky Mountain Power (the “Company”).

3 A. My name is Darrell T. Gerrard. My business address is 825 NE Multnomah, Suite

4 1600, Portland, Oregon 97232. I am Vice President of Transmission System

5 Planning for PacifiCorp.

6 Qualifications

7 Q. Please describe your education and business experience.

8 A. I have a Bachelor of Science degree in Electrical Engineering (Power Systems

9 Major) from the University of Utah and Certificate of Completion with Honors in

10 Electrical Technology from Utah Technical College at Salt Lake. My experience

11 spans more than 30 years in the electric utility business and electric power

12 industry in general. I have working experience and have had management

13 responsibility for a number of functional organizations at PacifiCorp including:

14 Area Engineering, Area Planning, Region Engineering, T&D Facilities

15 Management, Transmission, Substation and Distribution Engineering, System

16 Protection and Control, T&D Project Management and Delivery, Asset

17 Management, Electronic Communications, Hydro System Engineering,

18 Transmission Grid Operations, and most recently Transmission System Planning.

19 Q. What are your responsibilities as Vice President of Transmission System

20 Planning?

21 A. I am responsible for transmission planning activities required to support

22 PacifiCorp’s existing and future bulk transmission system and to ensure a safe and

23 reliable transmission system provides adequate service to our customers

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1 economically. I am also responsible for the conceptual and detailed system

2 planning and architecture associated with the Company’s long-term Energy

3 Gateway transmission expansion strategy (“Energy Gateway”).

4 Q. What is the purpose of your testimony?

5 A. The purpose of my testimony is to provide additional details and technical

6 information on the Company’s decision to build the double-circuit 345 kV Phase

7 II of the Populus to Terminal transmission line, which is part of Segment B of the

8 Energy Gateway Project (see Exhibit RMP___(JAC-1).

9 Overview of Transmission Project

10 Q. Please describe the transmission investment included in this rate case.

11 A. In this Docket, the Company is seeking cost recovery for the Populus to Ben

12 Lomond section of the Populus to Terminal transmission Segment B of Energy

13 Gateway, described in more detail in the direct testimony of Mr. John A.

14 Cupparo. A map showing the entire route of the Populus to Terminal segment is

15 shown in Exhibit RMP___(JAC-2). This remaining section between Populus and

16 Ben Lomond is a critical component of the overall Populus to Terminal

17 transmission project. The existing Ben Lomond substation was expanded to

18 accommodate the new 345 kV transmission lines and termination points, and as of

19 November 2010, the Populus to Ben Lomond project was in service and used and

20 useful to customers. The Company expects the total investment in the Populus to

21 Ben Lomond section to be $553.8 million, based on project costs estimates

22 detailed in Exhibit RMP___(DTG-1).

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1 In addition, the project includes $15.4 million of capital investment on a

2 total Company basis for the Borah to Ben Lomond reconductor, which is part of

3 the Populus to Terminal project. The line reconductor was timed to follow the

4 November 2010 energizing of the Populus to Ben Lomond segment to facilitate

5 necessary outages on the Borah to Ben Lomond line. This final component of the

6 Populus to Terminal project is expected to be in-service March 2011. The project

7 also includes $7.7 million of capital investment on a total Company basis for

8 residual costs incurred for the Ben Lomond to Terminal transmission line,

9 expected to be booked to plant in service by December 2010.

10 Q. Please describe the scale and size of the Populus to Terminal transmission

11 segment.

12 A. Populus to Terminal adds approximately 135 miles of new transmission line, over

13 8,600,000 linear feet of conductor and approximately 900 poles installed on new

14 foundations. The Populus to Ben Lomond section specifically, is approximately

15 90 miles and includes approximately 5,200,000 linear feet of conductor and

16 nearly 650 poles. This section of 345 kilovolt double-circuit transmission line

17 connects the new Populus substation, in Downey, Idaho to the existing Ben

18 Lomond substation in Box Elder County, Utah. The first section of the Populus to

19 Terminal segment from Ben Lomond to Terminal was placed in-service in March

20 2010. The remaining section included in this rate case, the Populus to Ben

21 Lomond section, was placed into service November 2010. Exhibit

22 RMP___(DTG-2) contains photos of assets in place for the Ben Lomond to

23 Terminal and Populus to Ben Lomond sections of the transmission line.

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1 Q. What is the purpose of the Populus to Terminal transmission segment?

2 A. In addition to the project benefits described in the testimony of Mr. Cupparo, the

3 purpose of the Populus to Terminal line project is to:

4 • Increase the overall transmission capacity in the existing transmission

5 system between Southeast Idaho and Northern Utah where the existing

6 system has limited capacity and has demonstrated operational limitations;

7 • Meet the immediate need to improve system reliability in the area by

8 installing transmission capacity to ensure the system can sustain

9 transmission outages north of Ben Lomond and Terminal substations

10 without curtailing loads, generation or impacting the PacifiCorp’s east

11 control area and neighboring transmission balancing authority areas;

12 • Improve the Company’s ability to perform maintenance on transmission

13 facilities between Populus and Terminal by having alternative

14 transmission paths that allow facilities to be taken off-line and maintained;

15 • Integrate with future Energy Gateway segments to increase transfer

16 capability between PacifiCorp’s east and west control areas in order to

17 balance generating resources and loads, enable commercial energy

18 purchases or sales while allowing integration of new renewable generation

19 resources;

20 • Provide PacifiCorp with options and greater flexibility when considering

21 future planned resources in the Company’s current and future Integrated

22 Resource Plans required to meet customers’ growing demands for energy,

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1 and in meeting current and future energy requirements that may be

2 mandated by state and federal regulation;

3 • Facilitate the integration of potential new energy resources in Wyoming,

4 Utah and Idaho, and help support economic development planned in those

5 states; and

6 • In the long-term, provide an incremental increase in transmission capacity

7 and reliability benefits for future Energy Gateway transmission segments

8 planned between Wyoming, Idaho, Utah, Oregon and Washington, and

9 interconnecting the region in general.

10 Q. What analysis or process did the Company use to determine that additional

11 transmission capacity was needed?

12 A. The Company utilizes its Integrated Resource Plan (“IRP”) to review whether

13 additional transmission capacity is needed. The IRP uses a public process to

14 develop a framework for the prudent future actions required to ensure the

15 Company continues to provide reliable and least-cost electric service to its

16 customers, while striking an expected balance between cost and risk over the

17 planning horizon and taking into consideration environmental issues and the

18 energy policies of our states. As stated in the 2008 IRP, “PacifiCorp’s IRP

19 mandate is to assure, on a long-term basis, adequate and reliable electricity supply

20 at a reasonable cost and in a manner consistent with the long-run public interest.”

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1 Q. Describe how the Populus to Terminal transmission segment complies with

2 the IRP and the MidAmerican Energy Holdings Company (“MEHC”)

3 transaction commitment requirements.

4 A. The Populus to Terminal transmission line segment is designed to meet load

5 growth, future customer energy service requirements and improve overall system

6 reliability. Based on the Company’s 2008 IRP forecasts, as amended March 31,

7 2010, by the 2008 IRP Update, PacifiCorp’s network load obligation is expected

8 to grow during the next 10 to 20 years. In addition, system operational reserve

9 obligations required to balance and maintain system reliability will increase over

10 time as they are a function of load served. The existing transmission capacity

11 from southeastern Idaho into Utah is fully subscribed and no additional capacity

12 can be made available without the addition of new transmission lines. The

13 Populus to Terminal line will add significant new incremental transmission

14 capacity (1,400 MW planned) to this area of the system and will help integrate

15 other future planned resources, market purchases and sales as necessary to help

16 control energy costs. The investment also improves the system reliability as

17 needed, which I discuss later in my testimony. All of the above support

18 PacifiCorp’s IRP and the commitments made by MEHC.

19 Q. What other information has been used in determining the need and

20 justification for this investment?

21 A. PacifiCorp’s Open Access Transmission Tariff (“OATT”), as approved by the

22 Federal Energy Regulatory Commission (“FERC”), describes PacifiCorp’s

23 requirements and obligations to provide transmission service. Section 28.2 defines

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1 PacifiCorp’s responsibilities, which include the requirement to “plan, construct,

2 operate and maintain the system in accordance with good utility practice.” Section

3 31.6 defines the requirement for network customers to supply annual load and

4 resource updates for inclusion in planning studies. The Company solicits this data

5 annually in order to determine future load and resource requirements for all

6 transmission network customers including PacifiCorp’s network customers and

7 customers of third parties under our FERC-approved OATT. The Company’s

8 retail loads comprise the bulk of the transmission network customer needs

9 including those in Utah. Section 28.3 includes the requirement for PacifiCorp to

10 provide “firm service over the system so that designated resources can be

11 delivered to designated loads.” These future requirements and needs will be met

12 via Energy Gateway and its segments, including Populus to Terminal, which is an

13 important part of PacifiCorp’s overall transmission plan for Utah and the region.

14 Q. Has the Company demonstrated the need for the project, and its benefits to

15 customers, the public in general and the region overall?

16 A. Yes. Both the Utah Public Service Commission and the Idaho Public Utilities

17 Commission acknowledged the need for the project in granting Certificates of

18 Public Convenience and Necessity (“CPCN”) in September and October 2008,

19 respectively. In its order granting the CPCN for the project, the Utah Commission

20 noted several parties concurred with the need for the project, including the

21 Division of Public Utilities:

22 “The Division states it has examined underlying information upon


23 which a need for these additional transmission facilities may be
24 found and concludes it supports RMP’s decision to build the
25 Transmission Line and confirms RMP’s planned integration and

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1 operation of the line with future utility operations and activities.
2 The Division agrees with RMP’s conclusions that there is a need
3 for the Transmission Line and the Company’s future utility service
4 will be more reliable and efficient with the Transmission Line’s
5 addition.” 1

6 Furthermore, the Idaho Commission Order states:

7 “Thus, Staff believes that the necessity of the Project should be


8 viewed in conjunction with energy resources that are constructed,
9 under way or planned. PacifiCorp elected to undergo a
10 transmission upgrade as part of its preferred resource portfolio of
11 an additional 2,000 MWs of renewable resources by 2013 in the
12 Company’s 2007 IRP. A significant portion of these renewable
13 resources will be located in Wyoming. Staff then listed more than
14 500 MWs of renewable resources that are either under construction
15 or in the final stage of development. In response to a Staff data
16 request, PacifiCorp provided four alternatives that it rejected
17 because the Company did not believe that these would provide
18 sufficient capacity for the new resources. Staff agreed that the
19 Project was necessary in order for the Company to continue to
20 provide reliable service from these new resources to growing load
21 centers.” 2

22 Q. Are there other transmission performance requirements in addition to

23 growing customer energy demand that are driving the need for this system

24 investment?

25 A. Yes. In meeting the current and future customer energy needs described above,

26 the Company must maintain a level of system reliability in order to provide

27 adequate transmission service. The North American Electric Reliability

28 Corporation (“NERC”) and the Western Electricity Coordinating Council

1
In the Matter of the Application of Rocky Mountain Power for a Certificate of Public
Convenience and Necessity Authorizing Construction of the Populus to Terminal 345 kV Transmission
Line Project, Docket No. 08-035-42, Report and Order Granting Certificate and Certificate of Public Need
and Necessity, (September 4, 2008) at p. 3.
2
In the Matter of the Application of Rocky Mountain Power for a Certificate of Public
Convenience and Necessity Authorizing Construction of the Populus-to-Terminal 345 kV Transmission
Line Project, Case No. PAC-E-08-03, Order No. 30657 (October 10, 2008) at pp. 3-4.

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1 (“WECC”) have adopted and enacted a significant number of mandatory

2 standards and guidelines that specify in detail the levels of system performance

3 that entities like PacifiCorp must maintain during the planning, operation and

4 ongoing maintenance of their bulk electric system. NERC’s reliability standards

5 have been approved by FERC and are mandatory for all FERC-jurisdictional

6 entities. These reliability standards are targeted at improving the security and

7 reliability of the nation’s electric infrastructure and, specifically in our case, in the

8 WECC region. Investments being made via this transmission project will help

9 PacifiCorp meet reliability requirements. Further, the investment will provide

10 reliability benefits to future planned high-voltage transmission additions

11 interconnecting Wyoming, Utah and Idaho and the region.

12 Q. Please provide examples of how these new reliability standards and

13 guidelines have influenced investment decisions for the transmission system.

14 A. In early 2008, PacifiCorp performed an operational analysis of the transmission

15 system north of the Ben Lomond substation. As a result of this analysis and

16 reflective of NERC and WECC reliability standards and guidelines, the system

17 firm transmission capacity was reduced from approximately 775 MW to 430 MW

18 during heavy load hours and reduced from approximately 900 MW to 620 MW

19 during light load hours. System capacity was further reduced in 2009 when

20 operational studies were completed. This reduction in firm capacity was a result

21 of NERC and WECC standards and guidelines that require transmission capacity

22 to be reduced due outage risks and system impacts associated with outages of

23 multiple transmission lines located adjacent to each other in common corridors.

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1 The investment in the Populus to Terminal segment is required to increase the

2 firm bi-directional capacity in this part of the transmission system.

3 Q. Have other studies and analyses been performed that demonstrate the need

4 to improve the reliability of the transmission system in this area?

5 A. Yes, in addition to the long-term energy resource needs identified in PacifiCorp’s

6 IRP mentioned above, the Company performed specific analysis in late 2007 and

7 2008 addressing several system disturbance events that severely impacted

8 generation, customers, and the operation of the transmission system affecting

9 Wyoming, Utah and Idaho. These events also impacted other utilities

10 interconnected to PacifiCorp’s transmission system.

11 It is evident from these disturbances and the resulting analysis that the

12 transmission system in this area does not have the necessary capacity and

13 reliability to meet all of the system operating conditions expected today or in the

14 future when demands on the system will be higher. NERC electric system

15 reliability standards require that the system demonstrate adequate performance for

16 all expected operating conditions, including multiple contingencies. There have

17 been five system disturbances since September 2007 for which the Populus to

18 Terminal line directly mitigates the risk of reoccurrence. Three of these

19 disturbances occurred on the system north of the Ben Lomond substation and two

20 occurred south in the Ben Lomond to Terminal section. These disturbances

21 resulted in system overloads, curtailments of schedules, repeated curtailments of

22 interruptible loads and generation reductions in Wyoming, Utah and other

23 surrounding states.

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1 The three disturbances occurred on September 27, October 15 and October

2 21, 2007, during periods of heavy flow northbound from the Terminal substation

3 towards Ben Lomond and into Idaho. As a result, over 1,450 customers were

4 affected by the first outage, and Nucor and Monsanto loads were either

5 interrupted or reduced during all three outages. Generation curtailments and

6 adjustments of more than 1,000 MW had to be requested for all three incidents

7 including reduced generation from the Dave Johnston and Naughton plants in

8 Wyoming. Details and analysis of the system performance during the events and

9 transmission limitations are detailed in the PacifiCorp System Disturbance Report

10 dated November 11, 2007, and PacifiCorp’s Abbreviated System Disturbance

11 Report to WECC dated January 28, 2008.

12 On November 27 and November 30, 2007, two disturbances occurred on

13 the Ben Lomond to Terminal section (refer to Exhibit RMP___JAC-2) of the

14 system, causing overloads on three WECC designated and monitored transmission

15 paths. The disturbances impacted more than 400 MW of PacifiCorp generation

16 along with generation interconnected to three other utilities in surrounding states.

17 Based on the system performance, studies and analysis it is clear that the

18 existing system requires new capacity to meet expected operating conditions and

19 reliability requirements on both a short and long-term basis. The investment in the

20 Populus to Ben Lomond project is a critical step in providing the needed capacity.

21 Q. Please describe the available transmission capacity and limitations on this

22 system prior to the addition of the Populus to Terminal project.

23 A. Prior to the addition of the Populus to Terminal project, the transmission capacity

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1 in the area between Salt Lake City and Southeast Idaho was fully subscribed for

2 firm service and had limited transfer capability between several key transmission

3 substations (Terminal, Ben Lomond, and the new Populus) connecting generation

4 facilities in Idaho, Wyoming and Utah. No new capacity was available until the

5 project was constructed.

6 Q. Does the investment in the Populus to Ben Lomond project provide

7 reliability and capacity benefits to future planned transmission additions in

8 the area?

9 A. Yes. Without investment in the Populus to Ben Lomond project, the full transfer

10 capability on both of the Gateway West and Gateway South Segments would not

11 be possible. To obtain the full capacity of the Gateway West and Gateway South

12 segments, both segments must be electrically interconnected. This interconnection

13 is achieved by building the Populus to Terminal transmission line as part of

14 Gateway Central.

15 Q. What alternatives to the project were considered?

16 A. The Company considered, but rejected four alternatives. The first alternative was

17 to not build the line or to upgrade other existing paths or seek additional

18 transmission corridors. The Company rejected this alternative because it did not

19 improve existing system reliability, did not provide any new incremental

20 transmission capacity required and precluded the ability of new resources to be

21 delivered into Utah from Wyoming, Idaho, or the Northwest in general. New

22 incremental transmission capacity is needed for both load service and for

23 contingencies.

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1 The second alternative considered was to rebuild the majority of the

2 existing 138 kV lines interconnecting Utah and Southeast Idaho and continue

3 operation of these lines at 138 kV. This alternative would have provided only a

4 small incremental increase of 300 MWs or less in transmission capacity across the

5 currently constrained path between Southeast Idaho and Utah. It also would not

6 have provided adequate interconnection capacity between the future Energy

7 Gateway West and Energy Gateway South segments or offer any additional

8 capacity for the future. In addition to the marginal increase in transmission

9 capacity, this alternative had serious constructability issues as it required large

10 segments of the path to be completely removed from service for extended periods,

11 a year or more, as these existing 138 kV facilities were rebuilt. This would have

12 placed significant reliability exposure on the transmission system serving the area

13 to Rocky Mountain Power customers during construction. This alternative did not

14 allow the Company to meet its current firm transmission obligations nor did it

15 meet the long-range resource plans and network load service requirements.

16 The third option considered was to construct a new single circuit 345 kV

17 transmission line from the Populus substation near Downey, Idaho to the Ben

18 Lomond substation in Utah, which would have provided some capacity increase

19 from Idaho to Ben Lomond. The alternative included an upgrade of the existing

20 138 kV line between Ben Lomond and Terminal required to realize a minimum

21 increase in capacity of 300 MW from Ben Lomond to the Terminal substation.

22 However, this alternative would not have provided the necessary future system

23 capacity between Energy Gateway West and Energy Gateway South and would

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1 have failed to take advantage of maximizing transmission capacity installed in the

2 new corridor between Populus and Ben Lomond and our existing corridor

3 between Ben Lomond to Terminal transmission corridor.

4 The fourth option considered was to build a new 500 kV line along the

5 route. The Company rejected this option because of its high cost, its potential for

6 significant siting and community impacts, its requirement for a completely new

7 corridor between the Populus and Terminal substations, and its failure to use

8 existing vacant corridors and property rights that the Company previously

9 obtained.

10 Q. Please explain any further considerations that the Company made in

11 selecting the Populus to Terminal line.

12 A. The Company selected this transmission line project based on several factors:

13 • It meets short-term and immediate reliability needs while prudently

14 planning for the future by adding significant long-term incremental

15 transmission capacity (planned rating 1,400 MWs) across the currently

16 constrained transmission system. There have been several transmission

17 outages since 2007 along this corridor that could have been mitigated with

18 additional transmission facilities. The risk of further unplanned

19 disturbances is too great if the current facilities are not improved.

20 • It allows additional transmission capability up to 1,400 MWs between

21 Wyoming, Utah, Idaho and the Northwest. This new capacity is required

22 to serve long-term load expectations.

23 • Construction benefits occur on a significant portion of the transmission

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1 project due to existing corridors that were acquired by Utah Power many

2 years ago for this purpose. The project optimizes use of limited and scarce

3 transmission corridor lands by maximizing installed transmission capacity

4 in new corridors.

5 • Construction has already occurred that minimized planned outages on

6 existing facilities remaining in service without increasing reliability

7 exposure to the current system.

8 • The Company’s ability to perform required maintenance is improved

9 without significant operational risk associated with taking existing lines

10 out of service.

11 Conclusion

12 Q. Please summarize your testimony.

13 A. The transmission system capacity from southeastern Idaho into Utah was fully

14 subscribed and utilized, and significant operational limitations and a history of

15 disturbances existed on the system in this area due to limited transmission

16 capacity and lack of redundancy. No additional capacity could be made available

17 without the addition of new transmission facilities. The investment in Populus to

18 Ben Lomond transmission facilities is prudent as it completes the Populus to

19 Terminal segment which meets short-term reliability and capacity requirements

20 and meets longer term customer needs by adding significant incremental

21 transmission capacity between Southeast Idaho and Northern Utah.

22 Further, the investment facilitates a stronger interconnection to systems in

23 Idaho, Utah, and Wyoming and to the Northwest in general. The Populus to

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1 Terminal transmission project, especially when integrated with the other proposed

2 Energy Gateway Segments, is fundamental to the development of new renewable

3 and other generation sources in Wyoming, Utah, and Idaho which are needed to

4 serve Rocky Mountain Power customers. The project is an important step in

5 strengthening the Western Interconnection’s transmission infrastructure, which is

6 necessary based upon the projected future energy service requirements of our

7 customers including those in Wyoming.

8 Q. Does this conclude your direct testimony?

9 A. Yes.

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