psco-windsource-2011-haeger-testimony-10-13-11

7/31/2019 PSCo-Windsource-2011-Haeger-Testimony-10-13-11

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BEFORE THE PUBLIC UTILITIES COMMISSIONOF THE STATE OF COLORADO

* * * * *

IN THE MATTER OF THE APPLICATION OF )PUBLIC SERVICE COMPANY OF COLORADO ) DOCKET NO. 11A-_____FOR APPROVAL OF REVISIONS TO ITS )WINDSOURCE PROGRAM )

DIRECT TESTIMONY AND EXHIBITS OF KURTIS J. HAEGER

ON

BEHALF OF

PUBLIC SERVICE COMPANY OF COLORADO

October 13, 2011


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LIST OF EXHIBITS

Exhibit No. KJH-1 Detailed calculations of the expected costs and benefitsof the proposed Limon II wind project

Exhibit No. KJH-2 A projection of the RESA credit relative to the sliding

scale of natural gas pricesExhibit No. KJH-3 Demonstrates how the Company is proposing toreallocate the costs and benefits of the Limon II windproject to the ECA, RESA and the new program underbase case gas prices

Exhibit No. KJH-4 Demonstrates how the Company is proposing toreallocate the costs and benefits of the Limon II windproject to the ECA, RESA and the new program underthe low gas price scenario


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BEFORE THE PUBLIC UTILITIES COMMISSIONOF THE STATE OF COLORADO

* * * * *

IN THE MATTER OF THE APPLICATION OF )PUBLIC SERVICE COMPANY OF COLORADO ) DOCKET NO. 11A-_____FOR APPROVAL OF REVISIONS TO ITS )WINDSOURCE PROGRAM )

DIRECT TESTIMONY AND EXHIBITS OF KURTIS J. HAEGER

I. INTRODUCTION AND QUALIFICATIONS1

Q. PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.2

A. My name is Kurtis J. Haeger. My business address is 1800 Larimer Street,3

Denver, CO 80202.4

Q. BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY?5

A. I am employed by Xcel Energy Services Inc., the service company subsidiary of6

Xcel Energy Inc., as Managing Director Wholesale Planning. Xcel Energy Inc.7

(Xcel Energy) is a registered public utility holding company and the parent of8

Public Service Company of Colorado.9

Q. ON WHOSE BEHALF ARE YOU SUBMITTING THIS TESTIMONY?10

A. I am submitting this testimony on behalf of Public Service Company of Colorado11

(PSCo or the Company).12

Q. HAVE YOU ATTACHED A DESCRIPTION OF YOUR WORK EXPERIENCE13

AND EDUCATION?14

A. Yes. A copy of my qualifications and experience is attached as Attachment A.15


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II. PURPOSE OF TESTIMONY1

Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY?2

A. The purpose of my testimony is to support the Companys application to expand3

its Windsource program by creating a new WIndsource product and modify the4

existing Windsource product. In doing so I will address how the Company5

proposes to allocate the costs and benefits of the Limon II wind project between6

the ECA, RESA and the Windsource products. I will also quantify the benefits7

that will accrue to the ECA and the RESA as a result of the proposed design of8

the Windsource products and will provide a detailed explanation of the monthly9

and annual processes that will be used to determine the costs and benefits of10

the Limon II wind project. Finally I will demonstrate why the Company believes11

the new Windsource products create a win-win situation for all customers.12

III. PROPOSAL OVERVIEW13

Q. PLEASE SUMMARIZE HOW THE COMPANY IS PROPOSING TO14

INCORPORATE THE LIMON II WIND PROJECT INTO ITS WINDSOURCE15

PROPOSAL.16

A. Public Service is proposing to use the RECs provided by the Limon II project to17

enhance our Windsource program by lowering the cost of participation in our18

Windsource Standard offering available to all customers, while also providing an19

opportunity for our larger customers to contract for the Windsource Long-Term20

Contract product to potentially hedge their exposures to rising natural gas21


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prices. The Companys Windsource proposal allocates the RECs provided by1

the Limon II wind project to our system renewable portfolio that is used for the2

revised Windsource Standard program, to our Wholesale customers, and to the3

new Windsource Long-Term Contract program. If the Commission rejects this4

Windsource Application, but approves the Limon II PPA as a system resource in5

Docket No. 11A-689E, Public Service would allocate the RECs from the Limon6

II wind project just to the Wholesale customers (their load ratio share of the7

Companys generation, which will be approximately 9% in 2013) and to the retail8

customers (91%). In this application, the Company is requesting that we be9

allowed to use the 91% of RECs generated by the Limon II project that would be10

allocated to our retail customers as the basis for the new Windsource programs.11

Of these retail amounts, Public Service proposes that approximately 650,000 of12

the annual RECs allocated to the retail customers be used in the new13

Windsource Long-Term Contract program and that the remaining Limon II14

RECs remain in the Companys system renewable portfolio to be available15

(along with other system wind RECs) to be used in the revised Windsource16

Standard program.17

Q. HOW DID THE COMPANY DETERMINE THE ALLOCATION OF THE LIMON18

II RECS?19

A. The first step of the allocation process for the Limon II RECs was to assign the20

load-ratio share of the RECs to the Wholesale Customers (approximately 9%).21

This is required by Commission Rule 3660(l).The second step was to realize22


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that some years have more wind while other years have less wind and that the1

anticipated design of the Windsource Long-Term Contract product would2

require a fairly constant level of wind production each year. As a result, the3

Company determined that using approximately 85% of the annual wind4

production not allocated to the wholesale customers from Limon II would result5

in fairly constant quantity of RECs that could be offered under the Windsource6

Long-Term Contract product. The total number of RECs allocated to the7

Windsource Long-Term Contract program is a maximum of 650,000 RECs.8

The remainder of the RECs from the Limon II wind project would be reserved for9

the Windsource Standard program to assist in allowing Public Service to lower10

the price of that program to a competitive market price.11

Q. PLEASE SUMMARIZE THE BASIC DESIGN OF THE COMPANYS12

PROPOSED WINDSOURCE LONG-TERM CONTRACT PRODUCT.13

A. The Companys new Windsource Long-Term Contract product was designed to14

ensure that all Public Service customers would share in the energy savings15

benefits from the Limon II PPA. This was accomplished by having volunteering16

Windsource customers pay the difference between the Public Service system17

net avoided cost and the Limon II PPA price, plus provide an additional18

contribution to the RESA. I discuss the specifics of this issue in more detail later.19

Structuring the Windsource Long-Term Contract product this way will allow all of20

our customers, regardless of whether they elect to participate in a Windsource21

program, to share in the benefits of the Limon II project.22


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Q. PLEASE DESCRIBE THE GENERAL MECHANICS OF HOW THE1

COMPANY PROPOSES TO ALLOCATE THE COSTS AND BENEFITS OF2

THE LIMON II WIND PROJECT UNDER THIS NEW WINDSOURCE LONG-3

TERM CONTRACT PRODUCT OFFERING.4

A. In developing the design of the Windsource Long-Term Contract product, the5

Company started with a mechanism that has historically been used to identify6

the allocation of cost and benefits from an Eligible Energy Resource between7

the RESA and the ECA. As required by Commission rules, the incremental cost8

of an Eligible Energy Resource is recovered through the RESA, while the cost9

equal to the cost of the avoided resource is recovered through the ECA. This10

RES/No-RES analyses is the same methodology the Company has used to11

identify the incremental cost of all of its Eligible Energy Resources and was12

presented in Exhibit No. KJH-6 in Docket No. 11A-689E for the Limon II wind13

project. I have included a copy of this same exhibit as Exhibit No. KJH-1 in this14

docket and will discuss this exhibit in more detail later.15

In the development of the Companys Windsource proposal, the Public16

Service took this RES/No-RES methodology and modified it by providing two17

additional credits that will reduce the impact on the ECA and the RESA to the18

benefit of all customers. Typically the Companys RES/No-RES methodology19

boils down to a comparison of the total cost of the Limon II wind project to the20

cost of the resources that would have been used absent the generation of the21

Limon project. The resulting difference between these two costs, the22


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incremental cost or benefit, is typically allocated to the RESA, while the cost of1

the energy that has been avoided (avoided cost) is allocated to the ECA. The2

Companys proposal for the Windsource Long-Term Contract product modified3

the typical RES/No-RES methodology by assigning the incremental costs4

and/or benefits of the Limon II wind project directly to the cost of the new5

Windsource program. In this way, Windsource customers pay for the6

incremental costs (or receive the net benefits) of the Limon II PPA, rather than7

have these costs or benefits paid by all customers through the RESA deferred8

account.9

Next, because we believe that the Limon II PPA will likely prove to be a10

very beneficial resource, we made sure that the non-participating customers in11

Windsource would receive some additional guaranteed benefit from the Limon12

II PPA, In addition to removing the incremental cost of the Limon II PPA from13

the RESA account and recovering it instead from Windsource customers, the14

Company is proposing to provide an additional credit to both the ECA deferred15

account and the RESA deferred account from the Limon II operation. This will16

allow non-Windsource customers to continue to share in the benefits created by17

the Limon II PPA.18

Q. HOW DOES THE COMPANY PROPOSE TO MODIFY ITS TYPICAL RES/NO-19

RES METHODOLOGY FOR THE WINDSOURCE LONG TERM PRODUCT20

TO BENEFIT ALL CUSTOMERS?21


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A. To ensure all customers will benefit from the Limon II wind project, the1

Company is proposing to credit the ECA deferred account (which will lower total2

ECA costs) for the value of the capacity benefit that is provided by the wind3

project. Normally this capacity credit would reduce the incremental cost of the4

wind facility that is assigned for recovery through the RESA. In an effort to share5

the benefits of the Limon II wind project to all customers, the Company is6

proposing to move this capacity credit to the ECA, instead of reducing the cost7

of the Windsource Long-Term Contract program, thereby reducing ECA costs8

for all customers. This is accomplished by reducing the avoided cost assumed9

by the system by the capacity credit. This means that the Windsource10

customers pay this cost because they are assigned the difference between the11

wind contract price and the avoided system costs.12

Q. WHAT IS THE MAGNITUDE OF THE CAPACITY CREDIT THAT WILL BE13

PAID BY WINDSOURCE CUSTOMERS TO REDUCE THE ECA?14

A. The ECA will benefit by approximately $1.2 Million per year beginning in 2013,15

escalating at 2% per year.16

Q. WHAT IS THE SECOND MODIFICATION THE COMPANY IS PROPOSING17

FOR THE COST ALLOCATIONS RELATED TO THE PROPOSED18

WINDSOURCE PRODUCT.19

A. In an effort to provide non-Windsource customers a portion of the potential cost20

savings created by Limon II PPA and to help bring the negative RESA deferred21

account back into balance at an earlier date, the Company is proposing to22


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provide an additional direct credit to the RESA account from the proceeds of the1

Windsource Long-Term Contract program. In other words, in the long term2

contract for differences used for the Windsource Long-Term Contract program,3

the Windsource customer will not be credited all of the cost savings differences4

between the wind contract price and the Companys system avoided costs.5

Instead, the Windsource customer will be charged an additional premium that6

will be directly credited to the RESA. Once the RESA deferred account is back7

in balance, this additional credit to the RESA from this program will allow the8

Commission to determine, in a future proceeding, if the 2 percent RESA charge9

should be reduced or if more renewable energy should be acquired.10

Q. WHAT IS THE MAGNITUDE OF THE ADDITIONAL CREDIT THAT WILL BE11

ALLOCATED TO THE RESA ACCOUNT?12

A. The ultimate value of the credit to the RESA deferred account will depend on13

the level of subscriptions under the Windsource Long-Term Contract program14

and the average cost of natural gas used for generation during the contract15

year. The Company is proposing to start the credit to the RESA at $3/REC for16

2013 and 2014. Beginning in 2015, the Company is proposing to credit the17

RESA using a sliding scale based upon the actual cost of natural gas purchased18

for generation over the contract year, based on the following formula:19

(((actual avg. gas cost) ($5))*1.5) +$3/REC20

I have included a projection of the REC credit relative to the sliding scale of21

natural gas prices in Exhibit No. KJH-2. As shown on this exhibit, if gas prices22


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fall to an average of $3/MMBtu, the RESA credit would fall to $0. If natural gas1

prices stay at $5/MMBtu, the RESA credit would stay at $3/REC. If natural gas2

prices rise to $7/MMBtu, the RESA credit would jump to $6/REC. Based on an3

initial REC credit of $3/REC, the annual RESA credit from the proposed4

Windsource program, assuming 100 % subscription, would be approximately5

$1.9 Million. Based on a natural gas price of $6/MMBtu, the annual credit to the6

RESA would be approximately $3 Million.7

Q. HAVE YOU DEVELOPED AN EXHIBIT THAT DEMONSTRATES THE8

CALCULATIONS AND ALLOCATIONS YOU HAVE DESCRIBED?9

A. Yes, I have included Exhibit No. KJH-1 that includes the detailed calculations of10

the expected costs and benefits of the proposed Limon II wind project as11

originally presented in Docket No. 11A-689E. This exhibit shows the impacts on12

the ECA and RESA, under our base gas price forecast, with Limon II remaining13

as a system resource and not used for Windsource. As demonstrated in that14

Docket No. 11A-689E, when the Company is analyzing the cost impact of a15

wind project like Limon II, we calculate the total cost of the renewable resource,16

less the credit for the capacity that is avoided, and compare this total cost17

against the cost of the alternative resource that would have been used to satisfy18

the system requirements absent the renewable resource. As explained earlier,19

the resulting difference between these two costs has been traditionally labeled20

as the incremental cost and allocated to the RESA, while the cost of the energy21

that has been avoided (avoided cost) is allocated to the ECA. Exhibit No.22


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KJH-1 details the calculations to determine the total cost of the Limon II wind1

project, the capacity credit that typically goes to the reduce the incremental cost2

of the wind project, the allocation of cost to the ECA, and the resulting cost that3

would be allocated to the RESA. In developing the total cost of Limon II wind4

project the Company takes into account the contracted cost of the energy, the5

cost of integrating the wind, the costs associated with cycling the companys6

coal plants to help integrate the wind, and the cost of curtailing the wind when7

the system cannot accommodate the wind. The capacity credit is based on the8

expected contribution of the Limon II wind farm to meeting the Companys peak9

demand (12.5% of the nameplate capacity of the wind project is consider its10

contribution to system peak demands). Exhibit No. KJH-1 shows the typical11

calculations the Company would perform to allocate the costs of a new wind12

farm between the ECA and the RESA.13

Q. HAVE YOU DEVELOPED A NEW EXHIBIT THAT HIGHLIGHTS THE14

MODIFICATIONS THAT ARE BEING PROPOSED FOR THE LONG TERM15

WINDSOURCE PRODUCT?16

A. Yes, Exhibit No. KJH-3 takes the data from Exhibit No. KJH-1 and demonstrates17

how the Company is proposing to reallocate the costs and benefits of the Limon18

II wind project to the ECA, RESA and the new program. These modifications19

are detailed in the Windsource Adjustment section of the exhibit. Exhibit KJH-320

includes the RESA Impact taken directly from Exhibit No. KJH-1, the proposed21

RESA Credit 100% Output that will credit the RESA directly, the Net Capacity22


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Credit Add Back that will credit the ECA, and a total of these costs labeled1

Total Estimated REC Cost. Since these calculations have been completed at2

the aggregate level (no reduction for the wholesale customers) I have also3

included the estimate per unit cost/benefit for each REC that would be available4

in the new program.5

In Exhibit No. KJH-1, the value of the capacity credit of Limon II is added6

to the avoided cost, raising the level of cost included in the ECA and thereby7

reducing the costs allocated to the RESA. In Exhibit No. KJH-3, the value of the8

capacity credit has been removed from the stream of ECA costs by adding9

back this cost to the Windsource program equal to the original credit that was10

provided in the development of the RESA Impact calculations shown on Exhibit11

No. KJH-1. The end result of these modifications is to cancel out the capacity12

credit provided to the RESA, thereby reducing ECA costs by nearly $1.2 Million13

per year and increasing the costs to the Windsource program by the same14

amount. (In the ordinary course of resource planning and acquiring adequate15

capacity resources each year, the 25 MWs of capacity made available by Limon16

II will allow the Company to contract for fewer resources in the future and17

therefore the credit to the ECA (or to the Purchased Capacity Credit18

Adjustment) is automatic and no further adjustment needs to be made to the19

ECA or the Windsource program as a result of the capacity credit). In addition,20

Exhibit No. KJH-3 includes the addition of the $3/REC (in 2013 and 2014) credit21


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to the RESA, (RESA CREDIT 100% Output) which will allow non-Windsource1

customers to share in the savings created by the Limon II PPA.2

Using 2013 as an example of the calculations performed on Exhibit No.3

KJH-3, the incremental cost of the Limon II, labeled as the RESA Impact, is4

$2.652 Million, and is restated in the Windsource Adjustment section as the5

starting point for the calculation of the expected cost of the RECs for the new6

Windsource program. The Company is then proposing to add the cost of the7

RESA Credit (at $3/REC or $2.577 Million) and add back of the cost of the8

capacity credit ($1.201 Million) to develop a Total Estimated REC Cost of9

$6.429 Million. To unitize the REC cost for the Windsource program level, we10

divide the total costs by the expected annual production, establishing a per unit11

Estimated REC Cost of $7.49/REC.12

Q. HAVE YOU QUANTIFIED THE EXPECTED BENEFIT OF THE CAPACITY13

CREDIT TO THE ECA AND THE RESA CREDIT?14

A. Yes, Exhibit No. KJH-3 shows the expected benefit, using our base gas15

forecast, to be nearly $3 Million in 2013 growing to nearly $10 Million in 2036 for16

the retail customers. Based on a NPV basis, the capacity and RESA credits17

have the potential to provide nearly $61 Million of value to the retail customers18

over the term of the Limon II PPA.19

Q. WHAT HAPPENS TO THESE TWO CREDITS IF THE PRICE OF NATURAL20

GAS IS CLOSER TO THE COMPANYS LOW GAS PRICE FORECAST21

PRESENTED IN DOCKET NO. 11A-689E?22


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A. I have included Exhibit No. KJH-4 which estimates the impact of lower gas1

prices on the RESA credit. This exhibit starts with the information provided in2

my Exhibit KJH-5 in Docket No. 11A-689E. The capacity credit is not dependent3

on natural gas prices and therefore there is no impact of the changing gas4

prices on the ECA. Using the Companys low gas price forecast the RESA5

credit under the Companys sliding scale formula is reduced, because the6

savings created by the Limon II PPA are less if gas prices stay low. The overall7

benefit of the Limon II PPA to non-Windsource customers falls by a little over8

$20 Million to approximately $40 Million of savings.9

Q. WHY DOES PUBLICE SERVICE BELIEVE THIS NEW WINDSOURCE10

PROGRAM CAN BE BENEFICIAL TO ALL OF ITS CUSTOMERS?11

A. The new Windsource program will meet the desire of customers who want to be12

more environmentally friendly while also hedging future gas cost risks. The13

proposed program will also provide a benefit to the non-Windsource customer14

by providing essentially a guaranteed savings each year compared to a savings15

that would be highly dependent on natural gas prices if Limon II PPA remained16

a system resource. The system savings/costs provided by Limon II if it is17

retained by the system, as described in Docket No. 11A-689E, would be in the18

range of $100 Million of savings (for the total system including the wholesale19

customers share) based on the Companys base gas forecast to a costof $620

Million when using the Companys low gas price forecast. The system benefit21

or savings from the proposed Windsource program (capacity credit and the22


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RESA) is estimated to be in the range of $40 Million to $60 Million on a NPV1

basis, from low gas prices and base case gas prices, respectively. Therefore2

the non-Windsource customer is trading the potential for higher savings ($1003

Million) with the retention of Limon II as a system resource and the risk that the4

project may actually result in a cost of $6 Million if gas prices drop, for a5

proposal where the savings are less, $40 Million to $60 Million, but are more6

assured if the program attracts Windsource subscribers. The ultimate benefit to7

customers is the increased likelihood of lower overall costs while also appealing8

to those customers who desire to have a greener portfolio.9

Q. WILL THE NON-WINDSOURCE CUSTOMER LOSE THE OPPORTUNITY TO10

ENJOY THE FULL BENEFITS OF THE LIMON II PROJECT IF THE11

COMPANYS WINDSOURCE PROPOSAL IS APPROVED?12

A. Yes. The Companys Windsource proposal replaces the opportunity for the all13

customers to benefit from the total expected savings of the Limon II project with14

a lower savings but more risk-free opportunity.15

Q. PLEASE DESCRIBE WHAT HAPPENS TO THE REMAINING16

INCREMENTAL COST OF THE LIMON II WIND PROJECT IN17

CONJUNCTION WITH THE COMPANYS WINDSOURCE LONG-TERM18

CONTRACT PROGRAM.19

A. As demonstrated on Exhibit No. KJH-1, the incremental costs and/or benefits of20

Limon II would be allocated to the RESA if Limon II remains a system resource.21

Exhibit No. KJH-3 shows the incremental costs and/or benefits, adjusted for the22


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two credits provided to the ECA and the RESA, which will now be allocated to1

the Windsource program. In 2013, the total incremental cost that is being2

proposed to be allocated to the proposed Windsource program is approximately3

$6.4 Million or $7.50 per REC.4

Q. WHAT ULTIMATELY HAPPENS TO THE COSTS OR BENEFITS THAT ARE5

ALLOCATED TO THE WINDSOURCE PROGRAM?6

A. Ultimately it is expected the net costs and/or benefits that have accrued in the7

Windsource program will either be billed (net positive cost balance) or be8

refunded (net negative cost balance) to the customers of the new Windsource9

Long-Term Contract program.10

Q. WILL THE COMPANY USE THE PROJECTIONS PRESENTED IN EXHIBIT11

NO. KJH-3 TO DETERMINE THE ACTUAL COST AND/OR BENEFITS THAT12

WILL BE ASSIGNED TO THE ECA, RESA, OR THE NEW WINDSOURCE13

PROGRAM?14

A. No. The Company is proposing to use the actual billed quantity and cost of the15

wind purchased from Limon II on a monthly basis in the monthly calculation of16

total wind cost. The Company also proposes to use actual historical data to17

calculate the avoided energy cost based upon a re-dispatch of the Companys18

Cost Calculator Dispatch model. Public Service Witness Nicholas Detmer19

explains how this analysis will be completed each month and how this20

evaluation is nearly identical to the evaluation that is completed on a monthly21

basis for the Companys FCA cost development process. Using actual data will22


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ensure the costs allocated to the ECA, RESA and the Windsource program will1

match as close as possible to the actual costs/benefits incurred by the2

Company.3

Q. PLEASE EXPLAIN HOW THE COMPANY PROPOSES TO KEEP TRACK OF4

THE VARIOUS COSTS AND CREDITS?5

A. While Public Service Witness Steven Mudd provides a more detailed6

explanation of the accounting associated with the customers account, the7

following is a description of how the Company proposes to track the various8

cost and credits at a more macro system perspective.9

As the wind from Limon II is generated, Public Service will pay the10

monthly invoices for this wind generation through the ECA. About this same11

time, Public Service will perform the model runs to calculate the avoided energy12

cost of the Limon II project as described by Public Service Witness Nicholas13

Detmer. To determine the total incremental cost and/or benefit of Limon II, the14

Company will add the costs of integrating the wind, based on the Companys15

proposed 2 GW and 3 GW Wind Integration Study results, and the cost of coal16

cycling, identified in the Companys Wind Induced Coal Plant Cycling Costs and17

the Implications of Wind Curtailment Study. The Company will also allocate the18

load ratio share of the wind costs to the Companys FCA. For the remaining19

retail portion of the incremental cost and/or benefit for the Limon II wind20

generation, the Company will transfer the balance of the these costs to the21


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RESA, if the net incremental cost is positive, or credit the RESA account for1

these benefits, if the net incremental cost of the wind is negative.2

Once the remaining incremental costs and/or benefit of Limon II have3

been transferred to the RESA account, all of the remaining cost allocations4

occur within the RESA account. To determine the ultimate cost or benefit to be5

assigned to the new Windsource Long-Term Contract program, the Company6

will perform an annual process to allocate the retail portion of the Limon II wind7

generation to the new Windsource Long-Term Contract program and the8

general RESA account. To match the wind generation and the REC creation,9

the Company will accumulate the total wind production for a year, allocate the10

load ratio share of RECs to the wholesale class, allocate the necessary RECs to11

the Windsource Long-Term Contract program, and then apply any remaining12

RECs to the Public Service system REC inventory (where they will be available13

for use in the Windsource Standard program, along with other wind RECs.)14

Once the Company can identify the percentage share of the Limon II RECs that15

is allocated to the Windsource Long-Term Contract for the year, Public Service16

will go back and allocate this same percentage share of total RECs to the new17

Windsource program each month of production. This monthly allocated share18

of the total generation will then be used each month to calculate the incremental19

cost and/or benefit of the contract for differences for the Windsource Long-Term20

Contract program, resulting in the basis for the allocation of costs, transferred to21

or from the ECA, between the RESA deferred account and the new Windsource22


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program. The final step of determining the final cost/benefit of the new1

Windsource Long-term Contract program is to charge the new Windsource2

program the cost of the RESA credit and administrative costs for all of the3

RECs that are sold in the program.4

Q. DOES THIS COMPLETE YOUR TESTIMONY5

A. Yes, it does.6


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Attachment A

Statement of Qualifications

Kurtis J. Haeger

I graduated from the University of Colorado, Boulder, in 1982 with a Bachelor of

Science Degree in Civil Engineering and from the University of Colorado, Denver, in

1987, with a Master of Business Administration in Finance.

I began my employment with Public Service Company of Colorado in June

1982, as a Gas Distribution Engineer. In June 1988, I was promoted to Supervisor,

Gas Utilization and Testing. In May 1990, I was promoted to System Planning &

Forecasting Manager, and, in October 1994, I was promoted to Gas Supply and

Planning Manager. Upon the merger between Public Service Company of Colorado

and Southwestern Public Service Company in August 1997, I assumed the same

position with New Century Services, Inc., the service company subsidiary of New

Century Energies, Inc. In March 1999, I assumed the position of Director, Gas

Business Support. Upon the merger between New Century Energies, Inc. and

Northern States Power Company in August 2000, I was appointed to the position of

Director, Gas Supply and Supply Planning for Xcel Energy Services Inc. In May 2004, I

was promoted to the position of Managing Director, Wholesale Planning, the position I

currently hold.

Since 1990, my responsibilities have included the development of forecasts of

annual and daily gas requirements, long term price of gas forecasts, cost of gas

budgets, business planning, strategic planning, long range gas supply planning and

gas integrated resource planning, gas supply purchasing, the purchasing of gas


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transportation and storage services and electric resource planning for Public Service

Company, Northern States Power Company and Southwestern Public Service. In my

present position, I am responsible for the resource planning activities for electric

generation, the gas supply planning functions for both the local gas distribution and the

electric generation requirements, and the administration of the upstream gas

transportation and storage contracts for the Xcel Energy operating companies.

I have presented testimony before the Colorado Public Utilities Commission in

Docket Nos. 93A-561G, 94A-447G, 93S-001EG (95I-394G), 02A-267G, 98S-518G,

00A-415G, 97A-622G, 99A-549E, 00A-415G, 01A-181E, 02A-267G, 02S-315EG,

02A-541E, 03A-489EG and Application No. 34815. I have also sponsored testimony

before the Federal Energy Regulatory Commission in Colorado Interstate Gas Co.s

rate case Docket Nos. RP93-99 and RP96-190, Northern Natural Gas Co.s rate

case Docket No. RP03-398 and before the Wyoming Public Service Commission in

Docket No. 30005-GR-97-51.

psco-windsource-2011-haeger-testimony-10-13-11

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