BEFORE THE PUBLIC SERVICE COMMISSION OF WYOMING IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER FOR APPROVAL OF A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO CONSTRUCT SELECTIVE CATALYTIC REDUCTION SYSTEMS ON JIM BRIDGER UNITS 3 AND 4 LOCATED NEAR POINT OF ROCKS, WYOMING DOCKET NO. 20000-418-EA-12 (Record No. 13314 WYOMING OFFICE OF CONSUMER ADVOCATES RESPONSE IN OPPOSITION TO THE SIERRA CLUB S MOTION FOR A STAY OR CONTINUANCE PENDING FINAL EPA ACTION Filed: January 10, 2013 COMES NOW the Wyoming Office of Consumer Advocate (OCA to submit its Response in Opposition to the Sierra Club s Motion for a Stay or Continuance Pending Final EPA Action with regard to the above docketed matter. Procedural History The Wyoming Department of Environmental Quality (WDEQ submitted a State Implementation Plan (SIP on January 12, 2011, to the Environmental Protection Agency (EPA. This SIP addressed certain requirements of the Clean Air Act. The EPA initiated a Notice of Proposed Rulemaking (NOPR on June 4, 2011. (77 Fed. Reg. 33022. This NOPR proposed, inter alia, to approve the SIP s Best Available Retrofit Technology (BART findings regarding units 3 and 4 of the Jim Bridger power plant. Final action, with regard to the SIP was anticipated to occur in October of 2012. Pursuant to the terms of the Commission approved Stipulation and Agreement (Stipulation in Docket No. 20000-384-ER-10 (Record No. 12702, Rocky Response - 1 - Docket No. 20000-418-EA-12
Mountain Power (Company filed the above docketed application on August 7, 2012. This application seeks a Certificate of Public Convenience and Necessity (CPCN to install certain selective catalytic converter systems (SCR on units 3 and 4, consistent with the SIP. On December 12, 2012, the EPA granted approval of the SIP, with the exception of certain provisions including those of 40 CFR 51.309(g which relate to the Jim Bridger power plant. Contemporaneously, the EPA filed a motion with the United States District Court for the District of Colorado (Court (Consolidated Civil Actions 1:11-cv-0001-CJA-MEH; and 11-cv-00743-CMA-MEH. This motion requested, inter alia, a modification of the final action deadline on the SIP, as contained within the Court entered Consent Decree. Specifically, the motion requested an extension until September 27, 2013. The Court entered an Order approving this request on December 13, 2012. The EPA will now issue a revised NOPR on or before March 29, 2013, with final action to occur on or before the new September deadline. On December 21, 2012, the Sierra Club, a party to this proceeding, filed the subject motion to stay or otherwise continue this proceeding pending the EPA s final action on the SIP. On December 27, the party intervenors to this proceeding, filed a motion seeking an amendment of the Commission established procedural schedule pending the Commission s ruling on the Sierra Club s motion. A two week extension of the intervenor testimony filing deadline was granted, by the Commission, at its open meeting held on January 3, 2013. On December 27, 2012, the Wyoming Industrial Energy Consumers (WIEC, also a party intervenor to this proceeding, filed a response in support of the Sierra Club s motion. In its response, WIEC argues, inter alia, that the revised final action deadline creates enormous regulatory uncertainty and renders the proceeding premature. Response - 2 - Docket No. 20000-418-EA-12
Argument It is not the intention of the OCA to argue the merits of its position with regard to this application. Nevertheless, certain observations of the OCA s intended witnesses reviewing this application are germane to its position with regard to the pending motion. Such observations are clearly indicated in the argument that follows. Pursuant to the terms of the Commission approved Stipulation, approval of the above docketed application would result in the Company receiving authority to proceed and an agreement that the parties to the Stipulation will not challenge prudence or cost recovery of the facilities in future rate proceedings except to the extent that they exceed the estimated costs or there is evidence of mismanagement. Even in the event of Commission approval of the CPCN, the amount, if any, and the timing of such investments being placed into customer rates remains within the Commission s discretion. The Commission explicitly stated this fact in its final order. 1 The Company s customers are not at risk of automatic placement of these investments in rates either prematurely or imprudently. It was originally believed that the WDEQ would not issue construction permits for the SCR facilities until such time as the EPA issued its final approval of those portions of the SIP that relate to units 3 and 4 of the Jim Bridger power plant. There are indications, as of the date of this submission, that the WDEQ may proceed absent final action on the part of the EPA. What approval of the CPCN will allow the Company to do is move forward and begin the design process. The OCA contends that customers are not currently at risk should the Company be permitted to begin this process. The OCA is concerned, however, that an 1 The Commission stated at Paragraph 128 of its order: While the proposed process does not require the Commission to pre-approve such projects, it nonetheless represents a plausible innovation in the Commission s review of such projects, one that will provide value to the Company as well as to those interested in exploring the merits of the proposed projects. Response - 3 - Docket No. 20000-418-EA-12
unnecessary delay could prove to be problematic insofar as it could place the Company in a position of having to pay more, at a later date, to install the SCR systems on what could be a more accelerated schedule. In the opinion of the OCA s intended witnesses, the SCR systems which the Company proposes to install are considered BART. There are no better technologies available. The current emission limits, as set forth in the SIP (0.07 lb/mmbtu with an averaging time of 30 days are achievable. Should the EPA further reduce those limits (an action which would be inconsistent with its approval of the 0.07 lb/mmbtu limit in the Colorado SIP, SCR is still the technology of choice. (EPA approval of the Colorado SIP is found at 77 Fed. Reg. 76872. Certain modifications would be necessary, and those modification would come at an additional cost. However, nothing would prohibit the Commission from revisiting its grant of the requested CPCN subject to the final outcome of the EPA s action. In fact, the OCA would support such action, if necessary. Further, as previously stated, The amount, if any, and the timing of SCR investments being placed into customer rates remains within the Commission s discretion. The emissions limits, as well as the compliance deadlines contained within the SIP were derived through a settlement process involving the Company and the WDEQ. It is this settlement, which has not yet been amended in light of the recent developments at the EPA, that is driving the Company s decision to move forward. In the opinion of the OCA s intended witnesses reviewing this application, the emissions limits established in the SIP, for units 3 and 4 of the Jim Bridger power plant, are unlikely to change in any reproposed decision by EPA during the coming months. Further, in the opinion of these witnesses, the associated deadlines that have been negotiated with the WDEQ, and included in the consent agreement and SIP may remain in effect. Response - 4 - Docket No. 20000-418-EA-12
It has been argued that the additional time would allow the Company to correct numerous major errors and omissions related to the current application, 2 The OCA contends that the use of the term major is highly subjective. While there have been a number of corrections, which actually run both ways, identified in the voluminous discovery to this proceeding, the OCA witnesses reviewing this application have not found that they alter the final outcome of the analysis. To this end, the OCA does not believe that this, alone, constitutes sufficient reason to delay this proceeding. To reiterate a point previously made, approval of this application would not result in the immediate construction of the SCR facilities but would rather allow the Company to begin the design process. It has also been argued that the EPA s action strongly indicates that EPA intends to make significant changes to Wyoming s BART program. 3 The OCA contends that the use of the term strongly indicates is highly subjective and does not concur that this is necessarily the case. As previously stated, the SCR systems which the Company proposes to install are BART and would remain the technology of choice even if the EPA were to decrease the emissions limits currently found in the SIP. As also previously indicated, such action, on the part of the EPA, would be inconsistent with its prior approval of the Colorado SIP. Conclusion To the extent that this response contains observations made by the OCA s intended witnesses reviewing this application, the OCA will make such intended witnesses available, in person or by phone, to respond to any questions the Commission or its staff may have that may not be adequately answered by the undersigned counsel. These witnesses include Mr. Bryce Freeman and Mr. Leo Stander. 2 WIEC Response, p. 3. 3 Sierra Club Motion, p. 5 (Note that the Motion does not contain page numbers. Response - 5 - Docket No. 20000-418-EA-12
Mr. Freeman, as the Commission is aware, in the Administrator of the OCA. Mr. Freeman currently has approximately 18 years experience in the utility industry, 8 of which has been served as the OCA s Administrator. Mr. Stander is a Board Certified Environmental Engineer in the American Academy of Environmental Engineers with approximately 30 years experience working, in various capacities, for the EPA. The OCA urges the Commission to deny the motion filed by the Sierra Club and proceed with hearing this matter and rendering a final decision Respectfully submitted this 10th day of January, 2013. OFFICE OF CONSUMER ADVOCATE Ivan Williams, Senior Counsel # 5-2976 Wyoming Office of Consumer Advocate 2515 Warren Avenue, Suite 304 Cheyenne, WY 82002 Response - 6 - Docket No. 20000-418-EA-12
CERTIFICATE OF SERVICE I hereby certify that on January 10, 2013, I served the foregoing response to the individual(s below, by the method(s indicated. David M. Mosier Wyoming Regulatory Affairs Manager Rocky Mountain Power 320 West 25 th Street, Suite 301 Cheyenne, Wyoming 82001 david.mosier@pacificorp.com Daniel E. Solander, Senior Counsel Rocky Mountain Power 201 South Main Street, Suite 2300 Salt Lake City, Utah 84111 daniel.solander@pacificorp.com Paul Hickey Hickey & Evans, LLP P.O. Box 467 Cheyenne, Wyoming 82003-0467 phickey@hickeyevans.com Data Request Response Center datarequest@pacificorp.com Robert M. Pomeroy Thorvald A. Nelson Sara K. Rundell Holland & Hart, LLP 6380 South Fiddler s Green Circle, Suite 500 Greenwood Village, CO 80111 rpomeroy@hollandhart.com tnelson@hollandhart.com sakrundell@hollandhart.com ppenn@hollandhart.com Shannon Anderson Powder River Basin Resource Council 934 North Main Street Sheridan, WY 82801 sanderson@powderriverbasin.org Response - 7 - Docket No. 20000-418-EA-12
Gloria Smith Travis Ritchie Sierra Club 85 Second Street, Second Floor San Francisco, CA 94105 gloria.smith@sierraclub.org travis.ritchie@sierraclub.org Response - 8 - Docket No. 20000-418-EA-12