welcome to the crsp annual customer meeting may 23, 2017 ... › regions › crsp › rates ›...

118
CRSP – MC Customer meeting Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00 am – 3:00 pm The meeting will begin at 11:00 am MDT We have logged on early for connectivity purposes Please stand-by until the meeting begins. Please remember to keep your phone muted unless you have a question or comment. Handout Materials https ://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx 1

Upload: others

Post on 29-May-2020

6 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

Welcome to the CRSP Annual Customer Meeting

May 23, 201711:00 am – 3:00 pm

The meeting will begin at 11:00 am MDTWe have logged on early for connectivity purposes

Please stand-by until the meeting begins.Please remember to keep your phone muted unless you have a

question or comment.

Handout Materials https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx

1

Page 2: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

Welcome and Introductions

CRSP-MC Annual Customer MeetingMay 23, 2017

11:00 am – 3:00 pm

2

Page 3: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

11:00 – 11:05 am Welcome and Introductions

11:05 – 11:35 am Mark Gabriel, WAPA Administrator and Chief Executive Officer

11:35 – 12:05 am Dawn Roth Lindell, WAPA CIO & Senior VP

12:05 – 12:35 pm Budget update/Transparency EffortsDennis Sullivan, Acting CFO and Senior VP

12:35 – 12:45 am Break

12:45 – 1:05 pm Mountain West Transmission Group Update –

Parker Wicks, Contracts & Energy Services Manager

1:05 – 1:15 pm New Salt Lake City Office Location

Amy Cutler, Asset Manager

Agenda

3

Page 4: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

1:15 – 1:25 pm Asset Management Update

Amy Cutler, Project Manager

1:25 – 1:35 pm Hydrology Update and ROD Implementation

Chrystal Dean, CRSP Project Manager

1:35 – 2:00 pm SLCA/IP and Olmsted Marketing Plan Updates

Steve Mullen/Lyle Johnson - CRSP Contracts

2:00 – 2:45 pm CRSP-MC Rates Presentation

Thomas Hackett/Tony Henriquez – CRSP Rates

2:45 pm Questions and Closing

Brent Osiek, CRSP Power Marketing Manager

Agenda (continued)

4

Page 5: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

WAPA’s position onindustry trendsCRSP Management Center Annual Customer MeetingMay 23, 2017 | Salt Lake City, UT

Mark A. GabrielAdministrator and CEO

Page 6: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 6

The world is changing

Page 7: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 7

• Formal transfer of government• Political appointee turnover• Deputy Secretary Senate hearing Thursday• WLO activity

New administration

Page 8: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 8

Change is upon us

Page 9: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 9

Change brings challenges• Aging infrastructure• Increased regulation• Intermittent resources• Decreased hydro

production• More customer-side

resources• Changing markets• Security

Page 10: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 10

Fundamental changeThe challenge for the utility of today is not only

what is real but what is perceived as real.

Page 11: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 11

Home tech drives benefits4.92 billion wireless devices globally / 66% penetrationSource: Hootsuite, January 2017

Page 12: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 12

Radical thoughts …

• kWh is dead• All-you-can-eat electricity• Time-of-purchase rates NOT

time-of-use rates• Flexing your distribution

system with customers• Utility is the network provider

Page 13: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 13

Mountain West update• Formed 2013• Evaluating options• Expected decision mid-2017• If applicable, market

implementation 2019• May 24 meeting with CEOs

Page 14: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 14

What are we doing about it?

Page 15: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 15

Shift in strategic thinking

• Broader perspective

• Data-driven decisions

• Industry impacts to customers

Page 16: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 16

Increasing requirements• Investments in Security• NERC requirements

o CIP version 5o Audits, mock auditso Alertso Standardso FAC-003 & FAC-008o NATF peer reviews

• FITARA• FISMA modernization• OMB Circular A130

• New endangered species• DHS binding operational

directives• OSHA requirements

o Fall Protection 100% attachment

o Transient over-voltage compliance

• Formalized grounding cable procedures

• GPR monitor for t-lines

Page 17: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 17

Physical security

• Consolidated office in 2013

• All-hazards approach• Assessing all subs

• 203/319 complete• Nearly tripled

investments since 2013• 40,000 hours on CIPv5

Page 18: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 18

Lifecycle considerations

Page 19: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 19

Cost containment

Page 20: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 20

Transparency

Page 21: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 21

Key takeaways

Focus on value and business excellence.Be aware of industry trends and changes.

Continue delivering on mission.

Page 22: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting, Position on industry trends | 22

Contact/follow me

Mark A. [email protected]

wapa.gov

@westernareapowr@MarkAGabriel

Mark Gabriel

WesternAreaPower1

Page 23: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

Cyber Security updateDawn Roth Lindell, Senior Vice President and Chief Information Officer

May 23, 2017CRSP Management Center, Annual Customer Meeting

Page 24: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

WAPA Blocks by Country for April

24CRSP-MC Customer Meeting

Page 25: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

WAPA Blocks by Country- April exclude US

25

Source Geographic

Country/Region

Count

United States 1141425China 162962France 64807Bulgaria 64007Germany 41076Russia 39390Hong Kong 36723United Kingdom 31663Canada 28287Czech Republic 27161India 22296Republic of Korea 21554Vietnam 9960

CRSP-MC Customer Meeting

Page 26: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

WannaCry Ransomware, May 12, 2017

• What?• Worldwide attack• 200,000+ victims in 150 countries• Encrypts all data on the system, pay to unlock it

• How?• Phishing, visiting infected websites• Worm – spread using Eternal Blue, leaked NSA exploit• Infected machine scans subnet• Sends same exploit to all other

vulnerable machines

26

Source: “WannaCrypt Malware Analysis” reported on Blueliv.com on 5/15/2017

CRSP-MC Customer Meeting

Page 27: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

WannaCry Ransomware, May 12, 2017

• Who?• Perpetrators are likely North Korean• Hardest hit – Russia, Taiwan, Ukraine, India• Anyone with outdated, unsupported or pirated versions

of MS Windows

27CRSP-MC Customer Meeting

Page 28: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

What can we learn?STOP. THINK. Connect.Four part cybersecurity plan• Predict – perform exposure analysis• Prevent – deploy defensive solution to reduce

attack surface• Detect – monitor infrastructure for intrusion,

suspicious activity• Respond – identify how attack happened,

impact on system, remediation

28

Source: “Ransomware made you Wannacry? 10 things the Disaster Taught” by Cigniti.com on 5/21/2017

CRSP-MC Customer Meeting

Page 29: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

What can we learn?STOP. THINK. Connect.• Open attachments with extreme caution• Do not take fake tech support calls• Use robust anti virus protection• Keep everything patched and updated• Clean the system of old stuff• Dependable back up needed

29CRSP-MC Customer Meeting

Page 30: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

2016 Key Attacks

30

Security Week, Verizon’s Data Breech Digest, “Attackers Alter Water Treatment Systems in Utility Hack: Report”, reported in 3/22/16 Security Week by Eduard Kovacs

• Unnamed Water UtilityDiscovered during a vulnerability

assessmentHacktivist IP address connected to

payment systemStole 2.5 million customer records

Accessed SCADAAltered water flow & treatment chemical

ratio

CRSP-MC Customer Meeting

Page 31: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

How?• Online connection to payment systemExploited a known vulnerability

• Poor architectureSame IBM AS/400 for financial &

operational tech systems• Old OT technology• At least 4 separate connections in prior

60 days

31

Verizon’s Data Breech Digest “Attackers Alter Water Treatment Systems in Utility Hack: Report”, reported in Mar. 22, 2016 Security Week by Eduard Kovacs

CRSP-MC Customer Meeting

Page 32: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

2016 Key Attacks

March 24, 2016• Bowman Avenue Dam in Rye, NY, attacked

by IraniansDid not gain control Did gain access to process/network diagrams

32

Tripwire Site Article, “3 ICS Security Incidents that Rocked 2016 & What We Should Learn from Them”, Oct. 31, 2016, reported by David Bisson

CRSP-MC Customer Meeting

Page 33: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

2016 Key AttacksAugust 2016• Operation Ghoul Uncovered by researchers at Kaspersky Lab 130 victims- Navy, other military, aerospace, petrochemical,

machine industries

• Spear-phishing campaign targeting industrial organizations in the middle east Email appeared to come from Emirates NBD (a bank) Came with Hawkeye (malware) or with a linkCollects keystrokes, clipboard data, other data

33

Tripwire Site Article, “3 ICS Security Incidents that Rocked 2016 & What We Should Learn from Them”, Oct. 31, 2016, reported by David Bisson

CRSP-MC Customer Meeting

Page 34: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

How?• Exploit the human –

spear phishing• Commercial off the

shelf malware

34

Tripwire Site Article, “3 ICS Security Incidents that Rocked 2016 & What We Should Learn from Them”, Oct. 31, 2016, reported by David Bisson

CRSP-MC Customer Meeting

Page 35: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

2016 Key AttacksOctober 21, 2016• Attack on Dyn- Internet infrastructure company• Provides critical tech services to Twitter, Amazon,

Tumblr, Reddit, Spotify and Netflix among others• DDOS• Mirai Malware

35

Krebs on Security, “Hacked Cameras, DVRs Powered Today’s Massive Internet Outage”, October 21, 2016, by Brian Krebs

CRSP-MC Customer Meeting

Page 36: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

How?

Mirai Malware via the internet• Creator released source code• Looks for IoT with factory default

usernames/passwords DVR’s Cameras- especially with components from

XiongMai Technologies Password is hardcoded into the firmware- web

credentials• Gains access, uploads DDOS flood

36

Krebs on Security, “Hacked Cameras, DVRs Powered Today’s Massive Internet Outage”, October 21, 2016, by Brian Krebs

CRSP-MC Customer Meeting

Page 37: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

How?Researchers at Flashpoint scanned the internet on Oct 6, 2016Found 515,000+ instances

with the vulnerabilityBackdoor to network

WAPA: 37 cameras with the default passwords

37

Krebs on Security, “Hacked Cameras, DVRs Powered Today’s Massive Internet Outage”, October 21, 2016, by Brian Krebs

CRSP-MC Customer Meeting

Page 38: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

2016 Key Attacks

December 18, 2016• Ukraine outage or UkrEnegro “North”

substation Removed 1/5 of Kiev’s energy 75 minute outage

• Note: in the last two months- 6500 Russian attempts on Ukrainian State Institutions per Ukrainian President

38

Washington Post, “Russian operation hacked a Vermont utility, showing risk to U.S. electrical grid security, officials say”, Dec. 31, 2016. Alice Crites, Carol Morello and Ellen Nakashima contributed to this report, also By Juliet Eilperin and Adam Entous

CRSP-MC Customer Meeting

Page 39: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

How?• Initial assessment points to cyber attackSCADA logs show “close” then “open”

commands to breakersUkraine blames Russia

39

Washington Post, “Russian operation hacked a Vermont utility, showing risk to U.S. electrical grid security, officials say”, Dec. 31, 2016. Alice Crites, Carol Morello and Ellen Nakashima contributed to this report, also By Juliet Eilperin and Adam Entous

CRSP-MC Customer Meeting

Page 40: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

ICS Vulnerability Analyses

• Fire Eye Analysis, Jan 2000 – April 2016• 123 vendors affected by vulnerability

disclosures 90% between 2011 – 2015

• 1,552 separate vulnerabilities

33% still not patched

40

Fire Eye, “Sight Intelligence 2016 ICS Vulnerabilities report, Overload: Critical Lessons from 15 Years of ICS Vulnerabilities” by Sean McBride, Jeffrey Ashcraft, & Nathan Belk

CRSP-MC Customer Meeting

Page 41: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

ICS Vulnerabilities• Study by Positive Research Center, October 2015• 146,136 ICS components web accessible• Found 691 vulnerabilities in ICS components 58% high severity 39% medium severity

• By Vendor: Siemens – 124 Schneider Electric – 96 Advantech – 51 GE - 31

41CRSP-MC Customer Meeting

Page 42: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

So how do we tackle these issues?

First: SANS Top 20, #1, #2• Inventory hardware• Inventory software

42

IT and OT have the same cyber security needs.

CRSP-MC Customer Meeting

Page 43: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

So how do we tackle these issues?Challenges:• Collaboration required- mutual respect is critical• Our OT technology is shockingly old Identify first Prioritize based on impact, simplicity of exploit, patchable?

• Embedded tech Asset list Actually embedded

• ICS vendors have been slow- we must push!

43CRSP-MC Customer Meeting

Page 44: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

So how do we tackle these issues?• Threat Intelligence is a must

• Need analysis continuously• Must address across industries• Must share- there is NO shame

44

APPALPPCE- ISAC

Vendor serviceWAPA pilotFBI Infraguard

CRSP-MC Customer Meeting

Page 45: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

So how do we tackle these issues?• Segment network• WAPA: Secure Enclave Support Center for

substations• Network considerations• Prioritize based on CIP

• Of course- separate business from SCADA• Enforce this• Educate field folks• Data transfer

45CRSP-MC Customer Meeting

Page 46: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

So how do we tackle these issues?

• Complete vulnerability assessmentWAPA results of our red teamOnly way to know truly where your

risk isPhysicalCyber

Visibility to InternetWAPA

- old blog site- video conferencing equipment

46CRSP-MC Customer Meeting

Page 47: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

So how do we tackle these issues?• Inadvertent insider Anti phishing campaignsWAPA Results

47

Campaign Sent Users who clicked

Users whocompleted training

1 33 0 N/A2 59 11 43 58 18 64 184 37 8

CRSP-MC Customer Meeting

Page 48: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

We, in this industry, must recognize we are:

•Vulnerable•Under attack•At risk•Responsible to harden our assets• In need of rapid information sharing

48CRSP-MC Customer Meeting

Page 49: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

Questions?

49CRSP-MC Customer Meeting

Page 50: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

50

Budgets & Transparency

Date: 05/23/20172016

Dennis R. SullivanInterim Chief Financial Officer

Page 51: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Budgets & Transparency

• Annual budgets• FYs 17, 18, 19• Improving MOU work plan discussions• Future annual budget guidance

• HQ 10-year capital plans• FY 20 plan meeting September 12th (tentative)• Discuss projects > $1M• Regional beneficiaries participate in evaluation

• WAPA Transparency Act51CRSP-MC Customer Meeting

Page 52: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

52

Mountain West Transmission Group Update – CRSP Customer Meeting

Date: 05/23/20172016

Parker Wicks

Page 53: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• Letter to LAP and CRSP Customers• Transmission Cost Shift Mitigation Update• Brattle Study Results• Argonne Results • CRSP Cost Benefit Analysis• Mitigation• Customer Meetings• Federal Register Notice

Overview

53CRSP-MC Customer Meeting

Page 54: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• LAP and CRSP sent letter to customers January 5th, 2017

• Outlined that Mountain West Participants intended to begin in-depth discussion with the Southwest Power Pool (SPP)

• After issuance of letter, main focus has been on discussions with SPP and working to ensure SPP understands what Mountain West is asking

• MISO and PJM may still be considered if discussion with SPP don’t prove fruitful

Letter To Customers

54CRSP-MC Customer Meeting

Page 55: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• Entities have been working to update the Transmission Cost Shift Mitigation Analysis

• Originally used 2013 data• Updated with 2016 data to include “Known and

Measurable” items

• As update has been finalized, has become necessary to revisit cost shift mitigation

• Entities continuing to work on revised cost shift mitigation plan

Transmission Cost Shift Mitigation

55CRSP-MC Customer Meeting

Page 56: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• Final Report Released to the public• Available here:

https://www.wapa.gov/About/keytopics/Documents/Brattle-Final-Mountain-West-Report_031217.pdf

• Overall Results:

Brattle Study Results

56CRSP-MC Customer Meeting

Page 57: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• CRSP Results:

Brattle Study Results

57CRSP-MC Customer Meeting

2016 Adjusted Production Cost Model – CRSP Results:

CRSP

TWh $/MWh Total ($m/yr)

Case A Case CMR∗CMR-A

Difference Case A Case CMR*C-A

Difference Case A Case CMR*

C-ADiffere

nceProduction 4.38 4.38 0.00 $1.76 $1.76 ($0.00) $7.70 $7.70 $0.00Purchases 1.28 1.28 0.00 $22.24 $21.19 ($2.19) $28.54 $25.73 ($2.81)Sales 0.18 0.18 0.00 $19.35 $18.25 ($1.10) $3.40 $3.21 ($0.19)Total 5.49 5.49 0.00 $5.98 $5.50 ($0.48) $32.85 $30.22 ($2.62)∗CMR=Coal Must Run, this modeled coal units without any additional flexibility and is more reflective of how the coal units operate today.

2024 Adjusted Production Cost Model – CRSP Results:

CRSP

TWh $/MWh Total ($m/yr)

Case A Case CC-A

Difference Case A Case CC-A

Difference Case A Case C

C-ADiffere

nceProduction 5.49 5.49 0.00 $1.76 $1.76 ($0.00) $9.63 $9.63 $0.00Purchases 0.64 0.64 0.00 $25.14 $23.60 ($1.54) $15.98 $15.00 ($0.98)Sales 0.47 0.47 0.00 $28.93 $27.88 ($1.05) $13.72 $13.22 ($0.50)Total 5.65 5.65 0.00 $2.11 $2.02 ($0.09) $11.90 $11.42 ($0.48)

Page 58: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• More in-depth analysis of impact of market operations on CRSP

• Utilized GT Max Model and same modeling assumptions used for LTEMP EIS

• Economic dispatch vs. static schedule

• Showing a cost to CRSP from market participation• Driven by two aspects

• Revenue from sales smaller in a market• Correction to loss calculations from how Brattle modeled them

• Also looking at market costs associated with maintaining Grandfathered and Exchange Agreements

Argonne Analysis

58CRSP-MC Customer Meeting

Page 59: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• Currently estimating cost to CRSP is approx. $12M the first 3 years then dropping to approx. $8M in out years

• Half of this cost driven by estimated admin fees (approx.)

• Other cost driven by • Market Cost• Meter/Comm/IT upgrades• D.C. Tie Revenue Requirement• Miscellaneous Market Charges

• Still working to refine estimates of market charges for Grandfathered and Exchange Agreements

CRSP Cost/Benefit Analysis

59CRSP-MC Customer Meeting

Page 60: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• Due to current estimated cost, CRSP must receive mitigation in order to continue to participate

• Three aspects to current mitigation efforts:• 1 – Receive first distribution of ROTR revenue distribution for

approx. half of CRSP estimated costs• 2 – For other half of costs, establish bi-lateral agreements

with specific entities to ensure CRSP mitigated for any costs not mitigated through ROTR

• 3 – Continue to work to reduce costs where ever possible• Reduction in Admin Fee for WAPA• Working to extend Federal Service Exemption to Grandfathered

and Exchange Agreements• Any other areas discovered as analysis and discussions continue

CRSP Mitigation

60CRSP-MC Customer Meeting

Page 61: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• After mitigation proposal is finalized and accepted, CRSP planning to hold customer meetings

• Format still not determined – may be in person, WebEx, or combination of both

• Will need to hold meetings soon after mitigation finalized

Upcoming Customer Meetings

61CRSP-MC Customer Meeting

Page 62: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• After mitigation principles agreed upon, WAPA plans to issue FRN recommending LAP and CRSP pursue formal negotiations with SPP

• Planning a 45 day comment period • Conduct public meetings • Final decision will then be posted to websites and

sent out to customers• Similar to UGP process

Federal Register Notice

62CRSP-MC Customer Meeting

Page 63: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

• CRSP Mitigation needs to be accepted• CRSP customer meetings• FRN process completed and final decision made• CRSP would begin formal negotiations with SPP• Mountain West participants would work with SPP,

SPP members and each other to draft changes to tariff

• Barring any significant issues, membership agreement could be signed Jan-Feb of 2018

• Go live – could be Spring of 2019

Next Steps

63CRSP-MC Customer Meeting

Page 64: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Questions?

64CRSP-MC Customer Meeting

Page 65: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

65

SLC Office MoveTentatively September 2017

CRSP Customer Meeting

May 23, 2017

Amy Cutler

Page 66: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

We are moving to• 299 South Main Street

Suite 200

• The “Wells Fargo” Building

• Next to Gallivan Plaza UTA Trax Station – Direct line to SL Airport

66CRSP-MC Customer Meeting

Page 67: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

New Building and General Info

• We are reducing our footprint by 28%

• Open work environment • With hoteling concept• Multiple collaboration

areas• Likely move in date:

September 2017

67CRSP-MC Customer Meeting

Page 68: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Office Photos

68CRSP-MC Customer Meeting

Page 69: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

69

Office Layout

CRSP-MC Customer Meeting

Page 70: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or eventCRSP-MC Customer Meeting

Page 71: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or eventCRSP-MC Customer Meeting

Page 72: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

72

Asset Management Update

CRSP Customer Meeting

May 23, 2017

Amy Cutler

Page 73: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Asset Management 2.0• Areas of Focus

• Data Collection and Management• Risk management• Industry Trends and Market Analysis• Maintenance Technical Support• Reliability Centered Maintenance Program• Project Management

73CRSP-MC Customer Meeting

Page 74: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

FY2017 FocusTier I Asset Analysis

• Includes transformers, breakers and T-lines• Metric – Measures Health Index (HI) and Consequence

Score• Major activity – Improve T-Line HI

AM Data Usage• Maintained risk threshold • Metric –Contingency plans• Major activity – Establish Service Request/Mitigation

plans for assets with higher consequences

74CRSP-MC Customer Meeting

Page 75: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

FY2017 Focus ContinuedStrategic Asset Management Plan

• Additional asset classes• Reviewing asset classes with SME• Document new recommendations for improvements

Asset Life Cycle Management/Cost Analysis• Coordination and collaboration • Minimum data set required

75CRSP-MC Customer Meeting

Page 76: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

T-Line HI condition values

Wood Steel Lattice Steel/Concrete PolePole Goat Head PoleCrossarm Arm/Bridge CrossarmBrace K Member/Window BracePole Hardware Body Extension Pole HardwareGuy Leg Member GuyAnchor Foundation AnchorInsulator Guy FoundationPhase/Conductor Anchor InsulatorVibration Damper Insulator Phase/ConductorStatic Wire Phase/Conductor Vibration DamperOPGW Vibration Damper Static WireSigns* Static Wire OPGWDistribution Apparatus* OPGW Signs*

Signs* Distribution Apparatus** Not planning on using in HI Calculations

76CRSP-MC Customer Meeting

Page 77: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Strategic Asset Management Plan• Additional Asset Class

Instrument Transformer Review complete Batteries – SME input received, report drafted Helicopters Switches (including Circuit Switchers and Interrupters) Transmission Lines lower Voltages (30kV to 100kV) Breakers (30kV to 100kV) Right-of-Ways (ROWs) Non-GSA Vehicles and Heavy Equipment

77CRSP-MC Customer Meeting

Page 78: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Asset Groups identified for futureInvestigation

• Communications Systems• Relay & Metering• Remaining Substation

Equipment• Buildings and Equipment• Operations Centers• Information Technology

Assets

CRSP-MC Customer Meeting

Page 79: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Project OverviewCRSP Annual Customer Meeting

May 23rd, 2017

Chrystal DeanCRSP Project Manager

Montrose, CO

Page 80: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting | 80

Glen Canyon Record Of Decision (ROD) Implementation

• The ROD was signed by Reclamation in December 2016– Major differences:

• Monthly Release volumes• Ramp rates• Environmental Experiments

• Began implementing monthly release volume criteria in January 2017– Yet to implement additional scheduling requirements– ROD states it will be implemented prior to the end of the WY

• WAPA and BOR are working collaboratively on updating Operational guidelines.– Waiting to receive comments back from Reclamation and begin steps to

finalize both

Page 81: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting | 81

WY 17 Spring Recap• Early season precipitation was good for all the major

basins– Created above average snowpack and inflows

• Gunnison River Basin - Aspinall Units• 144% of average• Currently spilling at all three units to meet ROD targets

– Green River - Flaming Gorge Dam• Green River 236% of average

– Lake Powell - Glen Canyon Dam• 130% of average• WY17 nearly triggered equalization

Page 82: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting | 82

Current 24 mo. indicates a possibility forEqualization in WY18

Page 83: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting | 83

Planned Maintenance• Aspinall

– Morrow Point Station Service work July – August– Morrow Point and Blue Mesa exciter replacement in the

future – extended outage for each unit

• Flaming Gorge and Fontenelle– Standard Maintenance

• Glen Canyon– Unit #2 rewind should be finished August 2017– Unit #3 will begin August 2017 – May 2018 – last rewind

on this contract

Page 84: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting | 84

Other information• Overall the energy market has been relatively stable.

– Experienced one period of a price spike in early May due to warm weather and a major unit outage on the system.

• This time last year we were being vigilant to the possibility of providing Aliso Canyon emergency assistance – Never needed to respond– Doesn’t seem to be a concern this year.

• Been working with our internal GTMax Superlite expert to get up-to-speed on monthly hydro modeling to better project seasonal purchases

Page 85: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP-MC Customer Meeting | 85

QuestionsChrystal Dean

[email protected]

Page 86: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

•Power Marketing Contracts

Lyle Johnson & Steve Mullen

CRSP Customer Meeting

May 23, 2017

Page 87: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Olmsted Powerplant Replacement Project• The Olmsted Powerplant was acquired by the

United States in 1990• Secured Olmsted Powerplant water rights for the

Central Utah Project• Existing Olmsted Powerplant is over 100 years old• Replacement facility is being constructed

87CRSP Customer Meeting

Page 88: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Proposed Olmsted Power Marketing Plan

• WAPA will be responsible for marketing the energy from the replacement Olmsted Powerplant, which should begin operation in the Summer of 2018.

• The Department of Interior will own the replacement Olmsted Powerplant.

• Energy production will average 27,000 MWh/year.

88CRSP Customer Meeting

Page 89: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Olmsted Proposal cont’d

• WAPA set forth its Proposed Olmsted Power Marketing Plan in 81 FR 87035 (December 2, 2016).

• Final Marketing Criteria and Call for Applications to be published soon

89CRSP Customer Meeting

Page 90: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Olmsted Proposal cont’d

• Proposed point will be the 12.47-kV bus at PacifiCorp’s Hale Substation

• or another substation that may be identified which can be electrically interconnected to the Project.

90CRSP Customer Meeting

Page 91: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Olmsted Proposal cont’d

• Proposed Marketing Area encompasses the following counties in Utah:

• Davis, Morgan, Salt Lake, Summit, Utah, Wasatch, and Weber.

• Proposed that priority will be given to the Central Utah Water Conservancy District as the operator of the Olmsted Powerplant.

• WAPA will take into consideration all existing Federal hydropower allocations an applicant is currently receiving when determining each allocation.

91CRSP Customer Meeting

Page 92: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Contacts

92

Parker WicksContracts and EnergyServices [email protected]

Lyle JohnsonPublic Utilities Specialist [email protected]

Page 93: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

Upcoming 2025 ContractsSteven Mullen | Public Utilities Specialist

05/23/2017

CRSP Customer MeetingSalt Lake City, UT

Page 94: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

SLCA/IP 2025 Marketing Plan

Final Power Marketing Plan • Published November 29, 2016, at 81 FR 85946

• 40-year term for Firm Electric Service (FES) contracts

• Existing Post-89 FES Contracts will serve as the basis for new 2025 FES Contracts

94CRSP Customer Meeting

Page 95: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

SLCA/IP Contracts

Existing Post-1989 and Upcoming 2025 FES Contracts • Post-1989 FES Contracts

• Expire 09/30/2024

• 2025 FES Contracts• Provide existing Contract Rate of Delivery (CROD)

commitments with associated energy to current SLCA/IP customers

• Performance period will be 10/01/2024 to 09/30/2057

• Benefit Crediting Contracts will be available to deliver the benefit of Federal hydropower allocations to tribes

95CRSP Customer Meeting

Page 96: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

SLCA/IP Contracts

2025 FES Contract• Drafting phase

• Initial 60-day customer comment and review • 02/03/2017 to 04/03/2017

• Additional 30-day customer comment and review• Pending: WAPA will distribute the revised template soon

• Signature phase • Contracts finalized 09/01/2017 (tentative)• Begin executing contracts 09/30/2017 (tentative)

96CRSP Customer Meeting

Page 97: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Subject, Office or event

Thanks!

97CRSP Customer Meeting

Steven [email protected]

(801) 524-6383

Page 98: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Annual Rates UpdateThomas Hackett & Tony Henriquez

Page 99: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

1. Transmission Rate

2. Status of Repayment

3. SLCA/IP Firm Power Rate (SLIP-F10)

4. Revenue Requirements Comparison Table

5. SLCA/IP Rate

SLCA/IP Rate

99

Page 100: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

Calculate True-UpFY2017 Transmission Rate

BOOKED TO PLANT

ROOs Schedule 1FY15 FY16

GGCR $ 80,956,013 81,235,580.25 JJCR $ 152,998,295 164,099,219.09 LLCR $ 446,870,716 446,659,164.20

Total $ 680,825,024 $ 691,993,964

Non-Transmission Investment (Plant)FY15 FY16

Loveland Area Office $ 961,464 $ 961,464 Loveland PMOC $ 6,928,498 $ 6,928,498 Montrose Operations Center $ 23,508,963 $ 23,508,963

Total $ 31,398,925 $ 31,398,925

Network CreditOriginal to Back out $ 8,972,499 $ 8,972,499

Recouped to date $ 554,797 $ 1,508,260

Adjusted Booked PlantFY15 FY16

$ 641,008,396 $ 653,130,799

Page 101: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

Calculate True-UpFY2017 Transmission Rate

Adjusted Booked PlantFY15 FY16

$ 641,008,396 $ 653,130,799

PROJECTED TO BOOK IN FY

ProjectionsFY17 FY18

Projection Projected Booked to Plant in FY2017 $ 7,370,468 $ 8,000,000

Network Credit Projections $ 765,349 $ 901,290

Projections + Plant $ 649,144,214 $ 662,032,090

Projected to Actual Comparison $ 3,986,586 NA

True – Up for FY2018 Rate NA $ 3,986,586

ADJUSTED TOTAL PLANT

Adjusted Total Plant – FY18 Rate NA $ 666,018,675

Page 102: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

Calculate True-UpFY2017 Transmission Rate

ATRR Rate(kW-month)

Projected: FY 16 $ 77,765,008 $ 1.483 Based on Projected Investments

Actual: FY 16 $ 77,987,659 $ 1.487 Based on Booked to Plant

Difference: $ (222,651) $ -0.0041

To be collected in FY18’s Transmission rate

Page 103: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

FY2018 Projected Transmission Rate With True-Up

ATRR Rate(kW-month)

Projected: FY 17 $ 77,758,426 $ 1.434 Based on Projected Investments

True Up: FY 16 $ 222,651 $ 0.0041 Based on Booked to Plant

Projected Total FY18 ATRR: $ 77,981,077 $ 1.438 = FY2018 Projected Rate*

*pending evaluation of FY2017 investment projection in August

Page 104: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

Transmission Rate, Historical

$1.44 kW Month is Projected, pending final

2011 Equalization

2013 Glen Canyon Cost Reallocation

Page 105: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

SLCA/IP Rate

105

Page 106: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

SLCA/IP Status of RepaymentAs of September 30, 2016

Investment Repaid

Project Investment Amount($million) ($million) Percent

CRSP (Power Only) 1,304,527 1,174,381 90.02%

CRSP Irrigation/Aid 1,153,695 110.556 9.58%

Collbran 27,088 22,868 84.42%

Dolores 38,386 12,134 31.61%

Rio Grande 25,769 24,737 96.0%

Seedskadee 9,676 9,676 100.0%

(tab 2)

106

SLCA/IP Rate

Page 107: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

SLCA/IP Firm Power Rate

Firm Power Rate (SLIP-F10, Tab 3)• Effective Oct. 1, 2015 • Energy: 12.19 mills/kWh• Capacity: $5.18 kW/month• Composite Rate: 29.42 mills/kWh

Expires September 30, 2020Cost Recovery Charge – (Tab 17)

• 0.00 mills/kWh projected for FY2018

107

Page 108: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

History of SLIP RatesEffective Capacity Energy Composite

Date (CY) $/kW mills/kWh mills/kWh

1993 3.54 8.40 18.70

1995 3.83 8.90 20.17

1998 3.44 8.10 17.57

2002 4.04 9.50 20.72

2005 4.43 10.43 25.28

2008 4.70 11.06 26.80

2009 (FY10) 5.18 12.19 29.62

2015 5.18 12.19 29.42

Step 1

Step 2

108

Page 109: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

SLCA/IP Energy Generated Percentages Based on FY 2016 Data

109

Generated - MWh % of Generation

CRSP 5,268,234 96.99%

Glen Canyon 3,971,663 73.12%

Flaming Gorge 545,432 10.04%

Aspinall 751,140 13.83%

Participating / Integrated Projects

Dolores 24,129 0.44%

Seedskadee 56,220 1.04%

Collbran 40,044 0.74%

Rio Grande 42,834 0.79%

Total Generation: 5,431,461 100.00%

Page 110: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

SLCA/IP Energy Generated

110

Generated - MWh

2011 2012 2013 2014 2015 2016 6 Yr Avg

CRSP 7,223,614 5,495,989 4,244,867 4,059,817 5,089,414 5,268,234 5,222,740

Glen Canyon 5,713,930 4,307,399 3,507,375 3,109,906 3,863,803 3,971,663 4,100,483

Flaming Gorge 640,925 528,976 307,251 361,789 504,135 545,432 468,615

Aspinall 868,760 659,614 430,241 588,123 721,475 751,140 653,643

-

Participating / Integrated Projects-

Dolores 22,241.72 20,803.95 10,046.54 21,364.85 21,118.76 24,129.14 19,115.16

Seedskadee 55,107.28 56,818.26 35,222.49 58,587.86 75,558.54 56,219.66 56,258.89

Collbran 49,599.29 37,226.72 13,850.23 43,754.13 39,247.68 40,044.21 36,735.61

Rio Grande 33,882.82 28,861.26 9,377.32 12,767.88 37,642.42 42,833.55 24,506.34 -

Total Generation: 7,384,445 5,639,699 4,313,363 4,196,292 5,262,981 5,431,461 5,359,356

Page 111: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Annual Revenue RequirementsComparison Table (Tab 5)

Values in 1,000’sWAPA 169 FY 2017 Change

Item 2017 Workplan 2019 Workplan Amount PercentRate Setting Period:

Beginning year 2016 2018Pinchpoint year 2025 2025Number of rate setting years 10 8

Annual Revenue Requirements:Expenses

Operation and Maintenance:Western $52,630 $54,482 $1,852 4%Reclamation $34,535 $33,103 ($1,432) -4%

Total O&M $87,165 $87,585 $420 0%

Purchased Power $10,280 $5,279 ($5,001) -49%Transmission $10,421 $8,276 ($2,145) -21%Integrated Projects requirements $8,610 $8,899 $289 3%Interest $4,706 $6,257 $1,551 33%Other $14,587 $14,540 ($47) 0%

Total Expenses $135,769 $130,836 ($4,933) -4%

Principal paymentsDeficits $0 $0 $0 0%Replacements $30,037 $39,428 $9,391 31%Original Project and Additions $3,937 $5,027 $1,090 28%Irrigation $14,130 $8,731 ($5,399) -38%

Total principal payments $48,104 $53,186 $5,082 11%Total Annual Revenue Requirements $183,873 $184,022 $149 0%

(Less Offsetting Annual Revenue:)Transmission (firm and non-firm) $19,640 $21,302 $1,662 8%Merchant Function $9,918 $7,954 ($1,964) -20%Other $5,118 $5,145 $27 1%

Total Offsetting Annual Revenue $34,676 $34,401 ($275) -1%Net Annual Revenue Requirements $149,197 $149,621 $424 0%

Energy Sales 5,071,804 5,186,871 115,067 2%Capacity Sales 1,407,920 1,415,675 7,755 1%Composite Rate 29.42 28.85 -0.57 -1.9%

111

Page 112: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

ExpensesMay 2017 UpdateValues in 1,000’s

112

2017 Workplan

2019 Workplan Amount Percent

ExpensesOperation and Maintenance: (tab 6)

Western $52,630 $54,482 $1,852 4%

Reclamation $34,535 $33,103 ($1,432) -4%

Total O&M $87,165 $87,585 $420 0%

Purchased Power (tab 7) $10,280 $5,279 ($5,001) -49%

Transmission (tab 9) $10,421 $8,276 ($2,145) -21%

Integrated Projects requirements (tab 10) $8,610 $8,899 $289 3%

Interest $4,706 $6,257 $1,551 33%

MOA, Salinity and Other (tab 11) $14,587 $14,540 ($47) 0%

Total Expenses $135,769 $130,836 ($4,933) -4%

Page 113: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

RepaymentMay 2016 UpdateValues in 1,000’s

113

2017 Workplan 2019 Workplan Amount Percent

Principal payments

Deficits $0 $0 $0 0%

Replacements $30,037 $39,428 $9,391 31%

Original Project and Additions $3,937 $5,027 $1,090 28%

Irrigation (tab 12) $14,130 $8,731 ($5,399) -38%

Total principal payments $48,104 $53,186 $5,082 11%

Total Annual Revenue Requirements $183,873 $184,022 $149 0%

Page 114: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Offsetting RevenuesMay 2016 Update

Values in 1,000’s

114

2017 Workplan

2019 Workplan Amount Percent

(Less Offsetting Annual Revenue:)Transmission (firm and non-firm, tab 13) $19,640 $21,302 $1,662 8%

Merchant Function (tab 14)$9,918 $7,954 ($1,964) -20%

Ancillary Services and Other (tab 14) $5,118 $5,145 $27 1%

Total Offsetting Annual Revenue $34,676 $34,401 ($275) -1%

Page 115: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

Revenue RequirementsMay 2016 Update

Values in 1,000’s

115

WAPA 169 FY 2017 Change

Item 2017 Workplan 2019 Workplan Amount Percent

Rate Setting Period:

Beginning year 2016 2018

Pinchpoint year 2025 2025

Number of rate setting years 10 8

Total Expenses : $135,769 $130,836 ($4,933) -4%

Total principal payments : $48,104 $53,186 $5,082 11%

Total Annual Revenue Requirements : $183,873 $184,022 $149 0%

Less Total Offsetting Annual Revenue: $34,676 $34,401 ($275) -1%

Net Annual Revenue Requirements: $149,197 $149,621 $424 0%

Energy Sales 5,071,804 5,186,871 115,067 2%

Capacity Sales 1,407,920 1,415,675 7,755 1%

Composite Rate 29.42 28.85 -0.57 -1.9%

Page 116: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

Next StepsNo Rate Action Proposed for the SLCA/IP Olmsted Rate Action to establish a rate

Each applicant who receives an allocation will pay its proportional share of the annual expenses of the Project based on their proportional share of the energy produced

Rather than pay a stated rate per kWh for energy, applicants who receive an allocation will pay their proportional share of the Project’s allocable investment and total annual OM&R expenses via an annual installment

Work with LAP on ancillary services

116

Page 117: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

CRSP MC Rates Team

Thomas Hackett 801-524-5503

[email protected]

Brent Osiek – Power Marketing Manager801-524-5495

[email protected]

Tony Henriquez801-524-6388

[email protected]

https://www.wapa.gov/regions/CRSP/rates/Pages/rates.aspx

117

Page 118: Welcome to the CRSP Annual Customer Meeting May 23, 2017 ... › regions › CRSP › rates › Documents › ... · Welcome to the CRSP Annual Customer Meeting May 23, 2017 11:00

CRSP – MC Customer meeting

Discussion&

Comments

118