Transcript Goodhue County Cooperative Electric Association Annual Meeting

Great River Energy
2015 Attachment O
Annual Projected Rate Meeting
October 31, 2014
Agenda
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Introduction
Disclosure
Meeting purpose
Great River Energy corporate profile
Attachment O calculation
Capital projects
Budget risks
Information exchange procedures
Question/answer
Disclosure
All figures in this document are preliminary and
subject to change. Per the revised Formula
Rate Protocols, figures will be finalized after the
Information Exchange, Challenge Procedures,
and MISO’s review are complete1.
1 Awaiting
FERC’s final decision on Docket
ER13-2379 on FERC’s investigation into
MISO Formula Rate Protocols
Meeting purpose
FERC requires GRE to hold an annual projected rate meeting
by October 31 each year to (i) permit GRE to explain and
clarify it’s projected net revenue requirement and (ii) provide
interested parties an opportunity to seek information and
clarifications from GRE about the projected net revenue
requirement
Great River Energy’s projected net revenue requirement and
associated network rate commencing January 1, 2015 is
calculated using GRE’s Attachment O formula rate template
within the MISO tariff
Corporate profile
• 28 member cooperatives
– 650,000 member-consumers
• 4th largest Generation & Transmission
cooperative in the nation
– $3.7 billion assets
– $2.8 billion debt
– $980 million revenue
• 880 employees (MN and ND)
• 3,619 MW generation
– 701 MW renewables
• 4,660 miles transmission
• 102 transmission substations
Attachment O
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Forward rate requirements
GRE revenue requirement distribution
Rate base
Operating expenses
Rate of return
Revenue requirement
Network rate summary
Forward rate requirements
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By June 1 of each year GRE will post on OASIS all information in regards
to our Attachment O, Attachment MM, and Schedule 1 True-Up
Adjustment for the prior year including the associated workpapers and
supplemental notes
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By August 1 of each year GRE will post on OASIS all information in
regards to our Attachment GG True-up Adjustment for the prior year
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By September 1 of each year GRE will post on OASIS our projected
Attachment O, Attachment GG, Attachment MM, and Schedule 1
including the True-Up Adjustments, associated work papers, and
supplemental notes
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By October 31 of each year, GRE will hold an Annual Projected Rate
Meeting to permit GRE to explain and clarify our projected net revenue
requirement
GRE revenue requirement
distribution
GRE NET
ATRR
GRE
PRICING
ZONE
ITCM
PRICING
ZONE
MP
PRICING
ZONE
NSP
PRICING
ZONE
OTP
PRICING
ZONE
Per Schedules 7,8, & 9 of the MISO Tariff, each Transmission Owner's total
revenue requirement is allocated proportionately to each Zone in which the
Transmission Owner owns transmission facilities based on the gross plant
value of its facilities located in that Zone relative to the gross plant value of its
facilities in all Zones, as reflected in Attachment O
* Per Docket ER10-187, the gross plant value to use is transmission gross plant less the gross plant value of transmission
facilities associated with Attachment GG and MM.
Rate base
Rate Base Item
2014 Projected
Amount
2015 Projected
Amount
$ Change
% Change
Explanation
Gross Plant In Service
$ 960,431,604 $ 1,077,306,524 $ 116,874,920
12.17%Remainder of Brookings and Fargo CapX projects going into service
Accumulated Depreciation
$ 322,572,983 $
310,138,514 $ (12,434,469)
-3.85%
Net Plant In Service
$ 637,858,622 $
767,168,010 $ 129,309,388
20.27%Remainder of Brookings and Fargo CapX projects going into service
100% CWIP Recovery for Incentive
Rate Transmission Projects
$ 101,165,538 $
40,815,524
Adjustments To Rate Base
$ (13,256,507) $
(18,023,811) $
Land Held For Future Use
0
29,996,231
$ (60,350,014)
(4,767,304)
0
Working Capital
$
$
Rate Base
$ 755,763,883 $
28,950,392
0
$
818,910,115 $
(1,045,839)
63,146,231
-59.65%Remainder of Brookings and Fargo CapX projects going into service
AFUDC offset increasing due to remainder of CapX projects going
35.96% into service
0
-3.49%
8.36%= Net Plant + CWIP + Adjustments + LHFFU + Working Capital
Operating expenses
2014 Projected
Amount
Expense Item
2015 Projected
Amount
$ Change
% Change
Explanation
Increasing O&M costs associated with: regulatory
compliance activities (NERC), CapX capital additions,
22.00% vegetation management expense
O&M
$
38,190,787
$
46,592,008
$
8,401,221
A&G
$
10,973,064
$
11,301,656
$
328,592
2.99%
Depreciation Expense
$
25,901,568
$
26,070,575
$
169,008
Increasing due to remainder of CapX projects going
0.65% into service
Taxes Other Than Income Taxes
$
2,226,382
$
2,240,317
$
13,935
Income Taxes
$
-
$
-
$
-
Operating Expenses
$
77,291,800
$
86,204,556
$
8,912,756
0.63%
0.00% GRE doesn't pay income taxes
11.53% = O&M + A&G + Depreciation + Taxes
Rate of return
2014 Projected
Amount
2015 Projected
Amount
Change
% Change
Long Term Debt
86.60%
83.82%
-2.78%
Proprietary Capital
13.40%
16.18%
2.78%
Total
100%
100%
Weighted Cost of Long Term Debt
4.52%
4.70%
0.18%
3.99%
Weighted Cost of Proprietary Capital
1.66%
2.00%
0.34%
20.75%
Rate of Return
6.18%
6.70%
0.52%
Explanation
-3.21%
GRE is working on a corporate strategy to
20.75% raise our equity to 20% by 2020
= Debt + Equity
8.49% = (LT Debt * Cost) + (Equity * Cost)
Revenue requirement
2014 Projected
Amount
2015 Projected
Amount
$ Change
$ 818,910,115
$ 63,146,231
% Change
Explanation
Rate Base
$
755,763,883
Return
$
46,689,363
$
54,885,110
$ 8,195,747
17.55% = Rate of Return * Rate Base
Operating Expenses
$
77,291,800
$
86,204,556
$ 8,912,756
11.53% From "Operating Expense" Calculation
Attachment GG Adjustment
$
(22,556,884) $
(31,752,332) $ (9,195,448)
40.77% Attachment GG Revenue Requirement
Attachment MM Adjustment
$
(9,983,045) $
(14,079,982) $ (4,096,937)
41.04% Attachment MM Revenue Requirement
Gross Revenue Requirement
$
91,441,234
95,257,351
Revenue Credits
$
(4,005,472) $
(3,304,621) $
Revenue Requirement w/o True-Up
$
87,435,762
$
91,952,730
Attachment O True-Up
$
2,807,652
$
2,851,351
Net Revenue Requirement
$
90,243,415
$
94,804,082
$
$ 3,816,117
8.36%From "Rate Base" Calculation
4.17% = Return + Operating Expenses - Adjustments
700,851
-17.50%
$ 4,516,968
5.17%
$
2013 True-Up included in 2015 rate may change
1.56% pending MISO's review.
43,699
$ 4,560,667
5.05% = Gross Rev Req - Rev Credits + True-Up
Network rate summary
$4.25
$3.75
$3.25
2015 Projected Rate
$3.76
2014 Projected Rate
$3.71
$/kW/Mo
$2.75
$2.25
$1.75
$1.25
$0.75
Return
$0.27
Op Exp
$0.25
Rev Cr
$0.03
$0.25
$(0.25)
$(0.75)
GG
$(0.34)
MM
$(0.15)
True-Up
$(0.01)
2015 GRE revenue
requirement distribution
GRE NET ATRR
$94,804,082
100%
GRE PRICING
ZONE
$52,005,900
54.9%
ITCM PRICING
ZONE
$2,920,963
3.1%
Attachment GG
$31,300,043
*Inclusive of 2013 True-Up Amounts
MP PRICING
ZONE
$9,228,091
9.7%
NSP PRICING
ZONE
$25,301,984
26.7%
Attachment MM
$13,824,476
OTP PRICING
ZONE
$5,347,144
5.6%
2015 Capital additions
Attachment O
$31.5M
+
Attachment GG
$117.4M
+
Attachment MM
$49.5M
=
•Attachment O facilities do not include “excluded facilities” per page 4 of Attachment O
GRE
PRICING
ZONE
MP
PRICING
ZONE
NSP
PRICING
ZONE
OTP
PRICING
ZONE
ITCM
PRICING
ZONE
$17.7M
$0.8M
$10.4M
$2.3M
$0.3M
2015 Capital additions
Attachment “O” projects > $100K
GRE
Project ID
Project Name
kV
Type
ISD
Control
Area
Forecasted Capital
Addition
200229
201128
75591
200209
202975
203210
202104
82821
200208
Ortman to Big Fork 69 kV 20 mi Transmission Line
Ramsey-Grand Forks (80 mi.) 230 kV Rebuild - Str. 227-307 (2)
Ortman 230/69 kV Substation
Wirt 69 kV 3-way motor operated switch
Dickinson (S062) - 345 kV Breaker Fail/Bus Differential Replacement
Dickinson - Install 345kV Line CCVT's
Cromwell Distribution Switch (SS2912)
Highland 3-Way Manual Load Break 1200A Tap Switch
Jessie Lake 69 kV 1-way manual switch
69KV
230KV
69KV
69KV
345KV
345KV
69KV
69KV
69KV
TRANS.LINE
TRANS.LINE
TRANS.SUBST
TRANS.LINE
TRANS.SUBST
TRANS.SUBST
TRANS.LINE
TRANS.LINE
TRANS.LINE
7/8/2015
3/19/2015
7/16/2015
10/8/2015
5/27/2015
5/11/2015
3/2/2015
5/27/2015
10/8/2015
GRE
GRE
GRE
GRE
GRE
GRE
GRE
GRE
GRE
$7,808,783
$4,002,296
$3,643,809
$344,935
$286,149
$220,688
$176,796
$164,999
$127,047
203031
Heron Lake Relay Replacement
69KV
TRANS.SUBST
10/6/2015
ITCM
$148,896
201719
50401
202118
203081
202418
203034
202450
202005
203082
202419
203122
New Market to Veseli 115kV Double Circuit (6 mi)
Ravenna Distribution Substation (DEA)
CDX Line - Tree Easement Reclamation
Benton County - Replace Bus Diff, Add Sec Diff
Elrosa Switch Upgrade 69 kV 1200A, MOD's, FLB
Dickinson 115kV RTU Replacement
Benton County RTU's
New Market 3-Way Manual Quick Whip 115kV Sw.
Hader 69 kV 3-Way Switch Replacement
Grove Switch Upgrade 69 kV 1200A, FLB
Miesville DA-MIT Tap Realignment
115/69kV
115KV
345kV
345KV
69KV
115/69kV
345KV
115/69kV
69KV
69KV
69KV
TRANS.LINE
TRANS.DISTSUB
TRANS.LINE
TRANS.SUBST
TRANS.LINE
TRANS.SUBST
TRANS.SUBST
TRANS.LINE
TRANS.LINE
TRANS.LINE
TRANS.LINE
12/11/2015
3/16/2015
11/25/2015
10/16/2015
4/13/2015
12/8/2015
1/22/2015
8/21/2015
10/8/2015
10/19/2015
11/11/2015
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
NSP
$6,096,047
$794,744
$669,909
$637,038
$327,756
$298,115
$258,719
$199,998
$198,154
$176,292
$122,450
202378
203007
203212
203033
203032
202444
Miltona - 115/41.6kV Spare Transformer
Cormorant Jct SS2813 115 kV Switch Replacement
Gorton Dist Sub - 3-Way Tap Switch
Kerkhoven RTU Replacement
Marsh Lake RTU Replacement
Roseville Switch - Replace RTU and Transient Study
115/41.6kV
115KV
41.6KV
115/41.6kV
115/41.6kV
41.6KV
TRANS.SUBST
TRANS.LINE
TRANS.LINE
TRANS.SUBST
TRANS.SUBST
TRANS.SUBST
4/28/2015
10/8/2015
7/9/2015
10/27/2015
10/27/2015
4/17/2015
OTP
OTP
OTP
OTP
OTP
OTP
$1,102,422
$297,449
$230,000
$197,929
$197,929
$148,975
2015 Capital additions
Attachment “GG” projects
MISO
Project ID
286
2634
2634
2634
Project Name
CapX 2020 Monticello to Fargo 345kV Line
Gowan Dist.-Cromwell 115kV Line (21mi double circuit)
Savanna-Gowan Dist. 115kV Line (9mi single circuit)
Cromwell Breaker Addition
Estimated
ISD
05/31/15
4/10/2015
3/23/2015
6/11/2015
Forecasted Capital
Addition
$103,350,714
$13,060,604
$3,253,931
$679,805
2015 Capital additions
Attachment “MM” projects
MISO
Project ID
1203
Project Name
CapX 2020 - Brookings -SE Twin Cities 345KV
Estimated
ISD
Forecasted Capital
Addition
03/31/15
$49,465,037
Budget risks
Revenue
Demand/weather
Regulatory filings
Financing
Outages
Timing of capital projects
Tight budgets
Information exchange
procedures
• Interested parties can submit information
requests until December 1, 2014
• GRE will make a good faith effort to respond
within 15 business days of receipt of such
requests
• Any information request must be submitted in
writing to [email protected]
• GRE will post on the MISO website and OASIS
all information requests from interested parties
and GRE’s responses
Questions?
Additional questions may be submitted in writing to
Todd Butkowski
[email protected] or
Seth Nelson
[email protected]