Rochester Public Utilities - Forward-Looking Transmission Revenue Update

Slide Note

Rochester Public Utilities (RPU) presents an update on the forward-looking transmission revenue requirements for calendar year 2021. The presentation covers the regulatory background, rate calculations, and adjustments for the upcoming year. Key topics include the FERC-approved formula rate, true-up mechanisms, cost of proprietary capital, and projections for the 2021 ATRR. Interested parties can gain insights into RPU's transmission revenue allocation across MISO zones. The 2021 update reflects adjustments based on projected expenses and return on transmission rate base. Details on the calculation methodology and the net ATRR amount are provided.

dhwa_3 Follow

Uploaded on Oct 02, 2024 | 0 Views

Download Presentation

Please find below an Image/Link to download the presentation.

The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.

E N D

Presentation Transcript

Rochester Public Utilities Presentation on Forward-Looking Transmission Revenue Requirements Update for Calendar 2021 October 28, 2020

RPU 2021 Forward-looking ATRR Update Meeting Purpose Rochester Public Utilities ( RPU ) uses a FERC-approved Forward-looking Attachment O formula rate with True-up to develop RPU s Annual Transmission Revenue Requirements for all RPU transmission dedicated to MISO (the RPU ATRR ) RPU protocols require that RPU hold an Annual Meeting to provide information on RPU ATRR inputs and allow Interested Parties to ask questions about the inputs This meeting will present information and answer questions on the 2021 Forward-looking RPU ATRR inputs and allocation of that ATRR between MISO Transmission Pricing Zones 16 and 20 - 2 -

RPU 2021 Forward-looking ATRR Update Regulatory Background RPU s Forward-looking formula rate with True-up was filed and approved by FERC under Docket Nos. ER14-2154 and ER15-277 (consolidated). On September 20, 2018 in Opinion No. 564, the Commission affirmed the Presiding Judge s findings that RPU s ATRR for the H-NR Line should be recovered in Zone 16. RPU s 2021 Forward-Looking ATRR Update includes: Adjustments to RPU s Attachment O cost inputs based on projected expenses and return on transmission rate base projected for 2021. RPU has submitted the 2021 Forward-Looking Attachment O to MISO for review. - 3 -

RPU 2021 Forward-looking ATRR Update Regulatory Background, page 2 RPU uses the MISO Base ROE as its cost of Proprietary Capital Consistent with Opinion No. 569-A, RPU set its cost of Proprietary Capital at the 10.02% FERC approved in that Opinion RPU included an RTO Incentive Adder as part of its cost of Proprietary Capital. RPU s inclusion of an RTO Incentive Adder was approved by FERC in Docket No. ER16-432, effective February 1, 2016 Consistent with the above, RPU set its cost of Proprietary Capital at 10.52% for the 2021 Forward-Looking Attachment O. The 10.52% rate is the combination of the MISO Base ROE of 10.02% and the 50 basis point (0.5%) RTO Adder approved for RPU. - 4 -

RPU 2021 Forward-looking ATRR Update Calendar 2021 Look Ahead Calculation RPU used capital and expense amounts from auditor examined calendar year 2019 EIA 412 as a starting point. RPU calculated the 2021 forward-looking ATRR by: Making adjustments for known or anticipated changes that will occur between the end of 2019 and the end of 2021. Including the 2019 Attachment O True-up adjustment of $646,105 RPU s approved Attachment O template was used to calculate RPU s net 2021 Forward-looking ATRR of $5,789,854 Workpapers related to the RPU 2021 projections are posted on the MISO Transmission owner rate page. - 5 -

RPU 2021 Forward-looking ATRR Update Changes in Transmission Investment Expected additions during calendar 2021 RPU does not expect to add any MISO transmission in 2021 so it did not project any transmission additions. - 6 -

RPU 2021 Forward-looking ATRR Update 2019 True-up Adjustment The net RPU 2021 forward looking ATRR includes a True-up Adjustment for calendar 2019. The True-up adjustment (increase) was driven by the following factors: Increase in transmission plant, general & intangible plant allocated to transmission, and working capital Increase in depreciation and amortization expense Decrease in revenue credits which increased 2019 true-up ATRR Decrease in 2019 Attachment GG adjustment allocated away from 2019 Attachment O ATRR Decrease in the divisor (actual 2019 load was less than projected 2019 load) - 7 -

RPU 2021 Forward-looking ATRR Update Zonal Allocation RPU has ownership interests in transmission facilities, some physically located in Zone 16, some located in Zone 20 RPU has allocated its Forward-looking ATRR between Transmission Pricing Zones 16 and 20 based on the Commission s Opinion No. 564. RPU s allocation of a portion of its ATRR to Zone 16 is no longer subject to refund as a result of Opinion No. 564 RPU calculated the pro rata zonal allocations based on the ratio of the expected average gross book value of RPU transmission assets assigned to each zone over the 13 month period from December 2020 - December 2021 The value of cost-shared ( Attachment GG ) facilities was removed before calculating the allocation factor The calculated zonal split is as follows: - 8 -

RPU 2021 Forward-looking ATRR Update Zonal Allocation, page 2 The results of the zonal allocation calculation are summarized in the following table. Less: Gross Plant Net of Plant under Ancillaries and Attachment GG (c) - (d ) (e) transmission plant included in OATT Ancillary Services (b) $ - $ 41,411,904 $ 24,249,223 $ 17,162,681 2,444,064 30,063,329 $ 2,444,064 $ 71,475,233 $ 24,249,223 $ 47,226,010 Gross Plant in Service for Rate Base (2) (a) - (b) ( c) Total Zonal Gross Plant (1) (a) $ 41,411,904 32,507,393 $ 73,919,297 Attachment GG Gross Plant (1) (d) Line No. Allocation Percent (f) 36.34% 63.66% 100.00% Allocated ATRR Amount (g) $ 2,104,033 3,685,821 $ 5,789,854 Pricing Zone 1 2 3 16 (NSP) 20 (SMMPA) Total - 30,063,329 (1) 13 month Avg Gross Book Value from Page 2 of 2, line 14 (2) Total RPU Gross Plant In Service from Att O_RPU, page 2 of 5, line 2, col (5) for 2021 (3) Total RPU ATRR from Att O_RPU, page 1 of 5, line 7 for 2021 Source: Att. O / GG Wkpr Projected - 9 -

RPU 2021 Forward-looking Schedule 1 ATRR RPU receives a Schedule 1 revenue distribution based on RPU s allocable Schedule 1 costs RPU included information on its 2019 True-up and 2021 forward-looking Schedule 1 costs in its posted material Using MISO s Schedule 1 calculation procedure, RPU arrived at the following: RPU 2021 Forward-looking Schedule 1 ATRR for Zone 20: $260,100 RPU 2019 Schedule 1 True-up: $39,092 RPU Net Zone 20 Schedule 1 ATRR contribution for 2020: $299,192 Source: Att. O / GG Wkpr Projected - 10 -

RPU 2021 Forward-looking ATRR Update Source Material RPU has posted source material for the calculation of the RPU 2021 Forward-looking Attachment O ATRR and zonal split. The material is posted on the MISO site under the 2021 section at: https://www.misoenergy.org/markets-and-operations/settlements/to-rate-data/city-of-rochester---a- minnesota-municipal-corp/#nt=%2Frateyear%3A2021&t=10&p=0&s=tsposteddate&sd=desc The posted material includes: A copy of this presentation will be posted The 2021 RPU Projections.zip file that contains Attach GG - RPU 2021 Forward Looking.xlsx Attach O - RPU 2021 Forward Looking.xlsx RPU Attach O_GG 2021 Forward Looking Workpapers - 11 -

RPU 2021 Forward-looking ATRR Update Follow-up Questions? Questions and Comments can be provided in writing to: Tina Livingston Rochester Public Utilities 4000 East River Road NE, Rochester, MN 55906-2813 Or by e-mail to: tlivingston@rpu.org Questions or comments should specifically identify the issue or input, including the page/tab and line reference in the applicable spreadsheet - 12 -