FORECASTED SWEPCO SHARE of PROJECT COSTS and BENEFITS COMPARED to BASELINE CASE with HIGH NATURAL GAS SCENARIO $ in Millions (Nominal Unless Otherwise Indicated)
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Exhibit KDP-2 Page 2 of 2 FORECASTED SWEPCO SHARE OF PROJECT COSTS AND BENEFITS COMPARED TO BASELINE CASE WITH HIGH NATURAL GAS SCENARIO $ in Millions (Nominal unless otherwise indicated) Project Less Baseline Case with High Natural Gas Scenario Total Year 2020 NPV Nominal 2021 2022 2023 2024 2025 2026 2027 1 Adjusted Production Cost Savings $4,545 $11,782 $274 $284 $292 $305 $317 $332 $354 2 Congestion and Loss Cost ($429) ($1,113) ($27) t $27) (528) (S28) (S28) ($31) ($33) 3. Capacity Value $269 $772 $0 $0 $0 $0 $0 $51 $51 4.Wind Facility Revenue Requirement ($2,689) ($5,638) (S296) ($277) ($276) ($265) ($256) ($261) ($256) 5. Production Tax Credits $1,874 $2,775 $254 $259 $264 $269 $275 $280 $285 6. Gen-Tie Line Revenue Requirement ($1,217) ($2,461) $140) (5135) (5)34) (S1301 tS125) ($122) ;5118) 7. Total Benefits/(Cost) $2,363 $6,118 $65 $103 $118 $151 $182 $248 $283 Project Less Baseline Case with High Natural Gas Scenario Year 2028 2029 2030 2031 2032 2033 2034 2035 2036 1. Adjusted Production Cost Savings $380 $405 $426 $451 $478 $533 $546 $564 $571 2. Congestion and Loss Cost (S36) ($39) ($41) (S44) (547) (548) ($50) ($51) (S52) 3. Capacity Value $51 $51 $51 $51 $51 (S6) (56) (S6) (S6) 4.Wind Facility Revenue Requirement (5251) (S246) ($240) (5236 c (5230) ($225) ($220) (S215) ($210) 5. Production Tax Credits $291 $297 $302 $0 $0 $0 $0 $0 $0 6 Gen-Tie Line Revenue Requirement (5114) ($1101 (5106) (5 1 02) (599) (594) ($90) ($87) (S85) 7. Total Benefits/(Cost) $321 $360 $391 $120 $153 $160 $180 $206 $219 Project Less Baseline Case with High Natural Gas Scenario Year 2037 2038 2039 2040 2041 2042 2043 2044 2045 1. Adjusted Production Cost Savings $580 $548 $557 $571 $579 $591 $603 $616 $626 2. Congestion and Loss Cost t$52) (553) 1$54) (S551 (S56) (557) (S58) ($59) c S60) 3. Capacity Value ($6 $56 $56 $56 $56 $56 $56 $56 $56 4.Wind Facility Revenue Requirement (S205) (S200) (5195) f 5190) (5186) ($182) 4$177) ($173) (S172) 5 Production Tax Credits $0 $0 $0 $0 $0 $0 $0 $0 $0 6. Gen-Tie Line Revenue Requirement (582) (581) (578) (577) (S74) $73) (570) ($69) (S66) 7. Total Benefits/(Cost) $234 $270 $285 $305 $318 $336 $354 $371 $384 500 Exhibit KDP-3 Page 1 of 1 FORECASTED SWEPCO SHARE OF PROJECT COSTS AND BENEFITS COMPARED TO GENERIC WIND CASE $ in Millions (Nominal unless otherwise indicated) Project Less Generic Wind Total Year 2020 NPV Nominal 2021 2022 2023 2024 2025 2026 2027 Adjusted Production Cost Savings $1,699 $4,226 $121 $124 $126 $131 $134 $138 $142 Congestion and Loss Cost $768 $1,917 $62 $59 $57 $54 $52 $56 $60 Curtailment Costs $161 $420 $10 $10 $10 $11 $11 $12 $13 Wind Facility Revenue Requirement ($2,599) ($5,464) ($283) ($266) ($265) ($255) ($247) ($253) ($248) Production Tax Credits $1,874 $2,775 $254 $259 $264 $269 $275 $280 $285 Gen-Tie Line Revenue Requirement ($1,217) ($2,461) ($149) ($135) (5134) (51110) ($125) ($122) ($118) Total Benefits/(Cost) $686 $1,413 $23 $51 $57 $80 $99 $111 $134 Project Less Generic Wind Year 2028 2029 2030 2031 2032 2033 2034 2035 2036 Adjusted Production Cost savings $147 $151 $156 $160 $166 $170 $173 $178 $183 Congestion and Loss Cost $64 $67 $72 $77 $81 $78 $81 $83 $84 Curtailment Costs $13 $15 $15 $16 $17 $18 $19 $19 $19 Wind Facility Revenue Requirement (5243) (S238) ($233) ($228) (5223) (5218) ($214) ($209) ($204) Production Tax Credits $291 $297 $302 $0 $0 $0 $0 $0 $0 Gen-Tie Line Revenue Requirement ($114) ($110) ($106) ($102) (599) ($94) (590) (S87) ($85) Total Benefits/(Cost) $159 $183 $207 (S77) ($58) f$46) ($31) ($16) ($3) Project Less Generic Wind Year 2037 2038 2039 2040 2041 2042 2043 2044 2045 Adjusted Production Cost savings $186 $190 $194 $198 $202 $207 $212 $217 $220 Congestion and Loss Cost $86 $88 $89 $90 $92 $94 $96 $97 $99 Curtailment Costs $20 $20 $20 $21 $21 $22 $22 $23 $23 Wind Facility Revenue Requirement ($199) (5195) (3190) (3185) (S181) (SI77) (5173) (5169) ($168) Production Tax Credits $0 $0 $0 $0 $0 $0 $0 $0 $0 Gen-Tie Line Revenue Requirement (582) ($81) (SM) ($77) (874) (S73) (570) (S69) (S66) Total Benefits/(Cost) $10 $22 $35 $47 $59 $73 $86 $99 $108 501 Exhibit KDP-4 Page 1 of 1 FORECASTED SWEPCO SOURCES AND USES OF ENERGY GWH CHANGE OF PROJECT CASE COMPARED TO BASELINE CASE MNEU PAW: CT CA ' - CHA E; , ,' PERCENICHANGE SOURCigi.PF _ENFAGYi__ ' - . , , TOTAL:0*s 282i'';2048—--'. 1 ' • * 3i , (2) - ^ 0) 'il PY I (i ) . Coal/Lignite 406,426 404,402 (2 024) -0.5% CC Existing 80,078 77,558 (2 520) -3.1% CT 253 242 (1') -4.2% Gas Steam 4,409 4,363 (46) -1.1% SUBTOTAL EXISTING FOSSIL 491,166 486,565 (4,601) -0.9% Wind and Solar PPA Purchases 21,286 21,286 0 0 0% Sundance __ 9,452 9,452 0 0 0% Wind Catcher 0 152,737 152,737 - CC New 57,731 26,950 (30.781) -53.3% TOTAL GEN RESOURCES 579,635 696,989 117,354 20.2% Market Purchases 49,470 21,955 (27 515) -55.6% TOTAL SOURCES ' 829,104 718,944 89;839 14.3% USES OF ENERGY - , ., - BASEUNE CASE PROJECT CASE PERCENT CHANGE TOTAL GWhat iO21 - 20415 , (1) ( ' (3)(2) ( . (4) 0 (3) / ely. Internal Load 562,584 562,584 0 0.0% Market Sales 66,520 156,359 89,839 135.1% TOTAL USES. ' i 629,104 718,944 . ,89839 ' - 14.3% 502 Annual Revenue Requirement ofW ind Facility &Gen -Tie Line ($ Millions) $250 $100 $150 $200 $300 $350 $400 $50 $0 21 2223242526272829303132 Wind CatcherEnergyConnectionProject-EffectofPTCsShaping Wind FarmandGen-TieUnshaped Cost %N. Year — —ShapedCost 33 ..../PAW.11111•••111116RMIffins..11,1111 34 3536373839404142434445 ••• •LevelizedCost MINZI14 . 11. Page 1of Exhibit KDP-5 503 Exhibit KDP-6 Page 1 of 1 FORECASTED SWEPCO SHARE OF PROJECT PROJECT BENEFITS WITH SHAPING OF PTCS $ in Millions (Nominal unless otherwise indicated) Project Less Baseline Case with Shaped PTC Value Total Year 2020 NPV Nominal 2021 2022 2023 2024 - 2025 2026 2027 Total Benefits/(Cost) ' $1,942 $4,166 $22 $56 $69 $100 $130 $193 $224 Less PTCs Earned * $1,874 $2,775 $254 $259 $264 $269 $275 $280 $285 Subtotal without PTCs $68 $1,391 (S232) ($202) (5194) (5168) (5144) (5861 (S62) Shaped PTCs Passed Through $1,874 $2,988 $254 $259 $264 $252 $239 $239 $226 Total Benefits with Shaped PTCs $1,942 $4,378 $22 $56 $69 $84 $94 $153 $164 Project Less Baseline Case with Shaped PTC Value Year 2028 2029 2030 2031 2032 2033 2034 2035 2036 Total Benefits/(Cost) " $261 $295 $329 $59 $88 $102 $124 $147 $160 Less PTCs Earned * $291 $297 $302 $0 $0 $0 $0 $0 $0 Subtotal without PTCs ($31) (S2) $27 $59 $88 $102 $124 $147 $160 Shaped PTCs Passed Through $210 $193 $175 $155 $135 $115 $95 $75 $55 Total Benefits with Shaped PTCs $179 $191 $202 $214 $223 $217 $218 $221 $214 Project Less Baseline Case with Shaped PTC Value Year 2037 2038 2039 2040 2041 2042 2043 2044 2045 Total Benefits/(Cost) ' $177 $196 $211 $227 $239 $256 $273 $288 $303 Less PTCs Earned * $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal without PTCs $177 $196 $211 $227 $239 $256 $273 $288 $303 Shaped PTCs Passed Through $34 $14 $0 $0 $0 $0 $0 $0 $0 Total Benefits with Shaped PTCs $211 $211 $211 $227 $239 $256 $273 $288 $303 *From Exhibit KDP-1 PUC DOCKET NO. PUBLIC UTILITY COMMISSION OF TEXAS APPLICATION OF SOUTHWESTERN ELECTRIC POWER COMPANY FOR CERTIFICATE OF CONVENIENCE AND NECESSITY AUTHORIZATION AND RELATED RELIEF FOR THE WIND CATCHER ENERGY CONNECTION PROJECT DIRECT TESTIMONY OF JOHANNES P. PFEIFENBERGER FOR SOUTHWESTERN ELECTRIC POWER COMPANY JULY 31, 2017 505 TESTIMONY INDEX SECTION PAGE I. INTRODUCTION AND SUMMARY 1 II. CASE DEVELOPMENT BACKGROUND 8 III. SIMULATION TOOLS & KEY ASSUMPTIONS 1 0 IV. BENEFIT METRICS AND METHODOLOGY 1 9 V. ESTIMATING PRICES OF GENERIC WIND PROCUREMENT 26 QUALIFICATIONS OF JOHANNES P. PFEIFENBERGER (Exhibit JPP-1) PROMOD ASSUMPTIONS & BENEFITS EXTRAPOLATION DETAILS (Exhibit JPP-2) PUC DOCKET NO. DIRECT TESTIMONY i JOHANNES P. PFEIFENBERGER 506 1 I. INTRODUCTION AND SUMMARY 2 Q. PLEASE STATE YOUR NAME, TITLE, EMPLOYER, AND BUSINESS 3 ADDRESS. 4 A. My name is Johannes P. Pfeifenberger. I am a Principal at the Brattle Group, and I am 5 based in the company's Boston office. My business address is One Beacon Street, Suite 6 2600, Boston MA 02108. 7 Q, ON WHOSE BEHALF ARE YOU TESTIFYING? 8 A. I am testifying on behalf of the Public Service Company of Oklahoma (PSO) and 9 Southwestern Electric Power Company (SWEPCO). Both PSO and SWEPCO are 10 operating companies of American Electric Power (AEP), jointly the three are the 1 1 "Companies." 12 Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY? 13 A. My testimony explains the analytical framework and description of the benefits metrics 14 that the Companies used for modeling and analyzing the proposed Wind Catcher Energy 15 Connection Project (Project), which includes the Wind Catcher facility and the Wind 16 Catcher Generation Tie Line. The testimony describes in detail the cases modeled, why 17 each case was selected, and the key assumptions used in the PROMOD simulations. I 18 describe the PROMOD tool, how PROMOD simulation results were transferred for use 19 in the Companies PLEXOS simulation, and why both modeling tools were used in 20 supporting the Companies' analysis, including the differences between the two models 21 and how the two models work together.