[bouldercouncilhotline] Hotline: Comments on Municipilization Business Plan from Warren Wendling

[kohls at bouldercolorado.gov]

Sender: Wilson, Ken

Warren Wendling is an engineering consultant and retired senior staff member from the Colorado PUC.  He lives in Boulder and I know him from the time I was an expert witness for AT&T in telecom proceedings.  He participated for many years in proceedings involving Xcel, including rate cases.  Warren also had utility experience with the distribution grid before going to the PUC.  I wanted to forward his comments on the business plan for municipilization as I think they are valuable and should be considered as the city's consultants do the next round of refinement on the models.

Ken Wilson

The Analysis you have received for June 14th Study Session on energy future project is flawed.
From
Warren Wendling, PE

There are errors and outright misstatements on almost every page.
The assumptions used in the Model/report appear to be slanted to a particular desired result and are too numerous to enumerate in a simple email, but for example:

Because Boulder Canyon (hydro) does not connect via distribution voltage circuits back to the City, the generation output of the unit would have to be wheeled via the PSCo 115kV to the PSCo substations serving the City’s distribution system.  Therefore a Transmission charge would be levied by PSCo for this service.

Any wind energy projects in Holyoke, CO would also require a separate P2P transmission service agreement.

The estimate of the original cost investment and subsequent RCNLD values are very wrong.
I have attached my “back of the envelope” estimate.
The summary of the Distribution Asset Valuation first appears on page 15 of the DRAFT Feasibility Report (also called Attachment G22).
First note that the investment depicted includes the original cost of the Substations (Boulder Terminal, Leggett, NCAR, Niwot, Gunbarrel, and Sunshine).
Is the City taking delivery at 115kV and does it intend to own, operate and maintain these facilities?
If not then this investment shouldn’t be in the valuation and in lieu an additional rate would have to be paid to PSCo [I didn’t see it mentioned]
The authors seem to be confused about this point.
In Attachment E – they refer to Figure 1 as depicting ”investment in the distribution system” – IT IS NOT!
What they are depicting is primarily the investment in these Substations [Note the peaks in investment by separate years when expansion or new subs were built]
The same problem occurs with Table 1 of Attachment E.
The heart of investments in distribution systems is booked in accounts 364-373 – not in 361 and 362.
Next point:
                The authors say there is only $31,000 invested in poles in city.  TOTALLY Wrong.  All they had to do is look at their own Attachment G55 to see all the poles in the City limits.  Or they could have looked at the steel poles along 30th Street and known that the number was ridiculous. Actual investment is probably closer to $9.8 million.
Next Point:
                They left out Account Number 365-Overhead Conductors – probably about $12 million.
                They left out Account Number 367-Underground Conductor-probably about $60 million.
They left out Account Number 368-Line Transformers [the things that convert 13kV to 120/240V]-probably about $18.5 million.
They left out Account Number 370-Meters- probably about $9.5 million.
In total, the valuation of original cost should have been closer to $175 Million not $95.6.
I disagree that the City could condemn the distribution system and not have to buy the Smart Grid infrastructure as well.  It may not be worth what PSCo invested but a significant purchase price should be included in the study.
Also missing is the property costs of all the new office space for the new employees, trucks, and communication equipment.

In closing I would love to get my hands on the consultant’s original spreadsheet models and run a few alternative scenarios.

 Warren Wendling. PE


Follow-up email from Mr. Wendling

Customer Charge:
Debt Service repayment is entirely in City proposed Customer Charge- page 33 of AttG-Feasibility Study;
City Customer charge is $47.12 [$43.23 plus 9% taxes] see page 35 of AttG {aka Attachment G42};
PSCo residential monthly Service and Facility Charge in Boulder is $7.13 [$6.75 plus riders and taxes] {PSCo tariff PUC No. 7}.
Transmission:
                Page 4 of AttG: Section 3.3:
“The City is currently served by Xcel’s 230,000 Volt transmission grid”.
The statement is only partially true.
Gunbarrel sun which serves only IBM [except in emergencies] is off the 230 kV.  Niwot sub which serves the Gunbarrel area residential load is off the 230kV.  Leggett is a tap 230 kV sub one span west out of the Valmont switchyard and serves some minor City load.
The VAST majority of the City of Boulder load is served by the 115 kV loop from Valmont to Boulder Terminal [three 50 MVA 115-13.2 kV main power transformers and associated switchgear for 12 feeders] the on to Sunshine sub [4 feeders] on to Boulder hydro [service to Magnolia & Nederland] then to NCAR sub  [two 50 MVA 115-13.2 kV main power transformers and associated switchgear for 8 feeders] then to Eldorado sub [no service to City] and back to Valmont.

TOT-   Short for Total 3  [aka WECC path 36]
The description provided is incorrect.
All transmission lines, including the 115kV from Cheyenne to Ponnequin are included as part of TOT 3.   There is no opportunity as the Feasibility Study suggests for available rights for the City.  See attached pdf

TOT-   Short for Total 7
The description provided is incorrect.
All transmission lines, including the WAPA 115 kV are included as part of TOT 7.  [Note this line is being rebuilt by APA to double circuit 115 kV & 230 kV]  There is no opportunity as the Feasibility Study suggests for available rights for the City.

The Boulder – Denver [Front Range area] is SEVERELY transmission constrained.

Access to WAPA and Tri-State is impracticable without the construction of very expensive transmission projects.

Because of these constraints PSCo is the ONLY wholesale market available to the City both at short market clearing at long-term [20 years].

This means the City should use PSCo’s wholesale rates as its inputs to its model runs.

PSCo is NOT resource short. [footnote 8 on page 6]  According to PSCo last update to its IRP it was Over capacity significantly.  {PSCo’s Load & Resource plan calls for significant low cost wholesale purchases including independently owned renewable. }
-------------- next part --------------
A non-text attachment was scrubbed...
Name: Transmission_Constraints[1].pdf
Type: application/octet-stream
Size: 18236 bytes
Desc: Transmission_Constraints[1].pdf
Url : http://list.ci.boulder.co.us/pipermail/bouldercouncilhotline/attachments/20110615/ae61f159/attachment.obj 
-------------- next part --------------
A non-text attachment was scrubbed...
Name: Original_Plant[1].pdf
Type: application/octet-stream
Size: 108410 bytes
Desc: Original_Plant[1].pdf
Url : http://list.ci.boulder.co.us/pipermail/bouldercouncilhotline/attachments/20110615/ae61f159/attachment-0001.obj