Control Number: 43695

Item Number: 194

Addendum StartPage : 0

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SOAH DOCKET NO. 473-15-1^ 4^28 P^ '^^ 0j

DOCKET NO. 43695 Lj^^^^^ ^ G^#t,^lSSl^^

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APPLICATION OF SOUTHWESTERN § BEFORE THE STATE OFFICE

PUBLIC SERVICE COMPANY FOR § OF

AUTHORITY TO CHANGE RATES § ADMINISTRATIVE HEARINGS

SOUTHWESTERN PUBLIC SERVICE COMPANY'S

RESPONSE TO ALLIANCE OF XCEL MUNICIPALITIES'

TWELFTH REQUEST FOR INFORMATION

QUESTION NOS. 12-1 THROUGH 12-17

(Filename: SPSRespAXM12th.doc; Total Pages: 27)

1. WRITTEN RESPONSES ....................................................................................................... 2

II. INSPECTIONS. .......... . ...............................................................................................„..... 3

RESPONSES ................................................................................................................................. 6

QUESTION NO. AXM 12-1 : ................................................................................,..................... 6

QUESTION NO. AX1VI 12-2: ...................................................................................................... 8

QUESTION NO. AXM 12-3 : ............................................. ................................................... 9

QUESTION NO. AXM 12-4: .................................................................. . ................. .. .............. 10

QUESTION NO. AXM 12-5: .................................................................................................... 11

QUESTION NO. AXM 12-6: .................................................................................................... 13

QUESTION NO. AXM 12-7: .................................................................................................... 14

QUESTION NO. AXM 12-8: ........................... ........................................................... ............. 15

QUESTION NO. AXM 12-9: ......................................................................................,.............. 16

QUESTION NO. AXM 12-10: .................................................................................................. 17

QUESTION NO. AXM 12-11: . ................................................................................................. 19

QUESTION NO. AXM 12-12: ...... ............................................................................................ 20

QUESTION NO. AXM 12-13 : .................................................................................................. 21

QUESTION NO. AX1b112-14 : ......................................................................................,............ 23

QUESTION NO. AXM 12-15: .................. ....... ....................................................................... 24

QUESTION NO. AXM 12-16: .................................................................................................. 25

QUESTION NO. AXM 12-17: ................ ..................................................................... .. ......... 26

CERTIFICATE OF SERVICE ................................................................................................. 27

PUC Docket No. 43695

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Southwestern Public Service Company's Response to

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\ \
SOAH DOCKET NO. 473-15-1556

DOCKET NO. 43695

APPLICATION OF SOUTHWESTERN § BEFORE THE STATE OFFICE

PUBLIC SERVICE COMPANY FOR § OF

AUTHORITY TO CHANGE RATES § ADMINISTRATIVE HEARINGS

SOUTHWESTERN PUBLIC SERVICE COMPANY'S

RESPONSE TO ALLIANCE OF XCEL MUNICIPALITIES'

TWELFTH REQUEST FOR INFORMATION

QUESTION NOS. 12-1 THROUGH 12-17

Southwestern Public Service Company ("SPS") files this response to Alliance of Xcel

Municipalities' ("AXM") Twelfth Request for Information Question Nos. 12-1 through 12-17.

1. WRITTEN RESPONSES

SPS's written responses to AXM's Twelfth Request for Information are attached and

incorporated by reference. Each response is stated on or attached to a separate page on which the

request has been restated. SPS's responses are made in the spirit of cooperation without waiving

SPS's right to contest the admissibility of any of these matters at hearing. In accordance with P.U.C.

PROC. R. 22.144(c)(2)(A), each response lists the preparer or person under whose direct supervision

the response was prepared and any sponsoring witness. When SPS provides certain information

sought by the request while objecting to the provision of other information, it does so without

prejudice to its objection in the interests of narrowing discovery disputes under P.U.C. PROC.

R. 22.144(d)(5). As allowed under P.U.C. PROC. R. 22.144(c)(2)(F), SPS stipulates that its responses

may be treated by all parties as if they were made under oath.

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Southwestern Public Service Company's Response to

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II. INSPECTIONS.

If responsive documents are more than 100 pages but less than eight linear feet in length, the

response will indicate that the attachment is voluminous ("(V)") and, pursuant to P.U.C. PROC.

R. 22.144(h)(2), the exhibit will be made available for inspection at SPS's voluminous room at 401

Congress Avenue, Suite 2100, Austin, Texas 78701; telephone number (512) 370-2867.

Voluminous exhibits will also be provided on CD to any requesting party. Further, SPS will upload

all voluminous documents, along with all native files for review to SPS's Sharepoint website:

https://collaboration.xcelenergy.com/sps/SP SFinalRateCases/default.aspx

All parties will be provided a log in id number at time of intervention to access the Sharepoint

website.

If a response or the responsive documents are provided pursuant to the protective order in this

docket, the response will indicate that it or the attachment is either confidential ("CONF") or highly

Sensitive ("HS") as appropriate under the protective order. Confidential and Highly Sensitive

materials will be served on all parties that have signed and filed the certification under the protective

order entered in this docket. Confidential and Highly Sensitive responsive documents will also be

made available for inspection at SP S's voluminous room, unless they form a part of a response that

exceeds eight linear feet in length; then they will be available at their usual repository in accordance

with the following paragraph. Please call in advance for an appointment to ensure that there is

sufficient space to accommodate your inspection.

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If responsive documents exceed eight linear feet in length, the response will indicate that the

attachment is subject to the FREIGHT CAR DOCTRINE, and, pursuant to P.U.C. PROC.

R. 22.144(h)(3), the attachment will be available for inspection at its usual repository, SP S's offices

in Amarillo, Texas, unless otherwise indicated. SPS requests that parties wishing to inspect this

material provide at least 48 hour notice of their intent by contacting Ron Moss of Winstead P.C., 401

Congress Avenue, Suite 2100, Austin, Texas 78701; telephone number (512) 370-2867; facsimile

transmission number (512) 370-2850; email address rhmoss@winstead.com. Inspections will be

scheduled to accommodate all requests with as little inconvenience to the requesting party and to

SPS's operations as possible.

XCEL ENERGY SERVICES INC.

Respectfully submitted,

WINSTEAD P.C.

Stephen Fogel

State Bar No. 07202010

Matthew P. Loftus

State Bar No. 24052189

816 Congress Avenue, Suite 1650

Austin, Texas 78701-2471

Office: (512) 478-7267

Facsimile: (512) 478-9232

e-mail: stephen.e.fogel@xcelenergy.com

e-mail: matthew.p.loftus@xcelenergy.com

Ron H. Moss

State Bar No. 14591025

401 Congress Avenue, Suite 2100

Austin, Texas 78701

Office: (512) 370-2867

Facsimile: (512) 370-2850

e-mail: rhmoss@winstead.com

PUG Docket No. 43695

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CRAVES, DOUGHERTY, HEARON & MOODY P. C.

Thomas B. Hudson, Jr.

State Bar No. 10168500

401 Congress Avenue, Suite 2200

Austin, Texas 78701

Office: (512) 480-5740

Facsimile: (512) 480-5840

e-mail: thudson@gdhm.com

COURTNEY, COUNTISS, BRIAN & BAILEY, LLP

Amy M. Shelhamer

State Bar No. 24010392

600 S. Tyler, Suite 1700

Amarillo, Texas 79101

Office: (806) 372-5569

Facsimile: (806) 372-9761

e-mail: ashelhamer@courtneylawfirm.com

4

BY:

ATTORNEY F R

SOUTHWES N PUBLIC SERVICE COMPANY

PUC Docket No. 43695

SC3AHDocket No. 473-15-1556

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RESPONSES

QUESTION NO. AXM 12-1:

[Decommissioning] - Regarding the reference to the decommissioning handbook on page 8

of Mr. Seymore's direct testimony, please provide the following:

a. Whether the underlying productivity factors used in the current filing were derived in

part from the data reflected or addressed in the handbook. If so, were the data

reflected or addressed in the handbook based on the full decommissioning and

removal of a power plant or whether it reflected the removal and replacement of

components;

b. The years during which the activities reflected in the productivity factors reflected or

addressed in the handbook were performed;

c. Whether the productivity factors have changed for each decommissioning activity

during the past 35 to 40 years, and if not, all support and justification for such

position;

d. The actual underlying information that supports the productivity factors reflected in

the handbook to the extent any of the information contained therein is reflected in any

of the decommissioning cost estimate components in this proceeding;

e. Whether the labor force used in each of the activities from which the handbook

information was derived was union or non-union labor; and

f. Whether the activities involved in the development of information for the handbook

were associated with first time replacement and/or removal of major nuclear plant

assets.

RESPONSE:

a. Assuming that the handbook referred to is the DOE Decommissioning Handbook

(DOE reference number DOE/EV/10128-1), then no, no labor productivity factors

were taken from this publication for any TLG cost estimate. The DOE Handbook is

referenced in Mr. Seymore's testimony in response to the question generally

regarding whether he had contributed to any studies on decommissioning.

b. Please refer to SPS's response to subpart (a).

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c. Please refer to SPS's response to subpart (a).

d. Please refer to SPS's response to subpart (a).

e. Please refer to SPS's response to subpart (a).

f. Please refer to SPS's response to subpart (a).

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUG Docket No. 43695

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QUESTION NO. AXM 12-2:

[Decommissioning] - Regarding the statements on pages 9 and 10 of Mr. Seymore's direct

testimony relating to the similarities between decommissioning of nuclear facilities and their

applicability to fossil-fired units, please provide the following:

a. All support and justification that the technique used to remove system and structure

components at nuclear plants is expected to be the same as that at all types of fossilfired generating facilities;

b. All support and justification for the assumption that the staffing and compensation

levels will be the same or similar between decommissioning of nuclear power plant

and various fossil-fueled power plants; and

c. All support and justification for the assumption that estimating the number of craft

workers will be the same between nuclear and fossil-fired generating facilities.

RESPONSE:

a. The components listed in TLG's cost model for estimating dismantling costs are for

the most part present in any power station, nuclear or fossil. Certainly some are

unique to one or the other, but for those that are present in both, their function is the

same, and given their purpose, their characteristics are also similar. Therefore, the

removal of a motor control center at a nuclear power plant (from a non-radioactively

contaminated area of the plant) should not be any different than the same design

motor control center at a fossil-fueled power station.

b. The Production Dismantling Cost Study does not assume nuclear power plant staffing

levels; the staffing levels for the utility and the dismantling contractor are

significantly lower for the SPS stations than any nuclear power plant.

c. The number of craft workers is a function of the plant inventory and the effort it takes

to remove each component as identified by its unit cost factor.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUC Docket No. 43695

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QUESTION NO. AXM 12-3:

[Decommissioning] - Regarding the statement on page 11 of Mr. Seymore's direct

testimony that there are many more opportunities for problems to arise in nuclear plant

decommissioning than fossil plants, please identify the many different opportunities referred

to, along with all support and justification for each such assumption.

RESPONSE:

The major differences between fossil power plant dismantling and nuclear power plant

decommissioning can be summarized as follows:

1) Nuclear power plants have spent (used) nuclear fuel that has significant caretaking

costs, which impacts the schedule for decommissioning operations by its presence;

2) Nuclear power plants have a significant security force required to protect the spent

fuel referenced in 1) above. This armed security force is present on site as long as the

spent fuel is on site;

3) Nuclear power plants have significant reporting and regulatory requirements that

require additional personnel to address these requirements;

4) Nuclear power plants have components and structures that have radioactive material

within them; this material impacts how the labor force removing this material must

conduct removal operations, which increases costs; and

5) Nuclear power plants must package and ship for off-site disposal the material

referenced in 4) above.

Fossil power plant dismantling projects do not need to deal with any of the above, and the

TLG estimate for dismantling the SPS fossil fleet does not include any costs for such

activities.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUC Docket No. 43695

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QUESTION NO. AXM 12-4:

[Decommissioning] - Regarding the reference to fewer potential hazards for workers and

thus expected higher overall levels of productivity for decommissioning at fossil-fired plants

compared to nuclear plants as referenced on page 11 of Mr. Seymore's direct testimony,

please specifically identify the adjustments to assumed productivity factors by activity for

work at SPS's fossil-fired plants compared to the assumed productivity factors for nuclear

plants elsewhere. Also, provide all support and justification, including all analyses

performed, to demonstrate that the assumed higher productivity rates for fossil-fired facilities

are in fact reasonable and appropriate estimations.

RESPONSE:

The work difficulty factors used by TLG for typical nuclear power plant decommissioning

cost estimating and for the SPS fossil dismantling estimate are as follows:

Work Difficulty Factors in

TLG Cost Model

Typical Nuclear

Power Plant Estimate

SPS

Dismantling Estimate

ALARA (radiation work area impact)

Protective Clothing

Respiratory Protection

Access (Height / Confined)

Work Break

37%

30%

50%

20%

8.33%

0%

0%

0%

20%

6.67%

For further explanation of the use and development of the work difficulty factors as used in

TLG cost estimates, please refer to the "Guidelines for Producing Commercial Nuclear

Power Plant Decommissioning Cost Estimates" (Publication AIF/NESP-036) for the Atomic

Industrial Forum.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

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QUESTION NO. AXM 12-5:

[Decommissioning] - Regarding the statement that equipment salvage was not included in

the decommissioning cost estimate as referenced on page 14 of Mr. Seymore's direct

testimony, please provide the following:

a. All support and justification for such assumption;

b. Whether Mr. Seymore or TLG are aware of decommissioning instances at other

generating plants where equipment was sold or transfen.red to other generating

facilities rather than scrapped. If so, please state why Mr. Seymore believes such

situations were atypical in nature;

c. All support and justification why black start generators would be considered to be

scrap rather than resalable as a useful asset; and

d. All support and justification why overhead cranes would be considered to be scrap

rather than resalable as a useful asset.

RESPONSE:

a. As discussed in the first paragraph of Section 4 of the Production Dismantling Cost

Study provided as Attachment FWS-RR-1 to Mr. Seymore's Direct Testimony (Vol.

RR4, page 60 of 261), SPS will make economically reasonable estimates to salvage

plant equipment upon final shutdown of any station. But determining a value for such

equipment now, without knowing either the station condition or the condition of the

salvaged equipment market at the time of final shutdown, would be speculative and

should not serve as a financial planning basis. Also, when evaluating the potential to

sell equipment as items for reuse, SPS must consider any liability that it might incur

if injuries or financial losses occur due to failure of such equipment for the

purchasing party.

b. TLG is aware of a gas turbine-generator that was salvaged at the H.D. King power

station (Fort Pierce Florida) dismantling project; TLG was informed by site personnel

that the unit was going to be shipped to Kazahkstan, presumably for eventual use as a

power generating unit. However, Mr. Seymore has no knowledge that such a

repowering actually occurred. Mr. Seymore does not have any further information

regarding the salvaging of equipment from retired fossil generating units. It should be

noted that the dismantling program at H.D. King was similar to the suggested

approach for the SPS units as described in the Production Dismantling Cost Study.

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c. Black-start generators, which typically experience little use but are well maintained,

are nevertheless old equipment at the time of final shutdown, and selling them as

functional components requires removal efforts far in excess of any envisioned in the

Production Dismantling Cost Study. In addition, there is no real market for such a

generator, particularly when the unit is not necessarily reliable.

d. Please refer to SPS's response to subpart (a) of this request. In addition, the crane

must be recertified and brought up to code before it can be reused. It would also be

necessary to pay for relocation of the crane to another site with an identical rail

system. Finally, SPS must evaluate whether it will incur liability if it sells the crane

to another user.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUC Docket No. 43695

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QUESTION NO. AXM 12-6:

[Decommissioning] - Regarding the statement on page 14 of Mr. Seymore's direct

testimony that the cost estimate reflects the removal of all structures on the site to a nominal

level of three feet below grade, please provide all support and justification for such

assumption. Further, provide the cost differential by unit or station between removing

facilities to grade compared to removing assets to three feet below grade. The response

should include all workpapers, assumptions, considerations, and material reviewed and/or

relied upon in sufficient detail to permit verification of the response.

RESPONSE:

The basis for a cut-off at three feet below the local grade of the site is meant to allow native

vegetation to regrow on the site, preventing soil erosion. TLG has been using a three-foot

depth for its entire existence (since 1982). A variation between two feet, four feet, one meter,

or some other similar number would not make a significant difference to the site restoration

cost estimate.

TLG does not have any calculations that examined a cut-off depth other than three foot

below grade for any of the SPS stations.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUC Docket No. 43695

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QUESTION NO. AXM 12-7:

[Decommissioning] - Regarding the reference to controlled engineered dismantling as stated

on page 14 of Mr. Seymore's direct testimony, please provide a detailed definition of such

term. Further, identify the difference between such assumed approach and that associated

with controlled blasting and toppling of equipment, including entire boiler structures and

chimneys with corresponding segmentation at ground level compared to that reflected in the

decommissioning cost estimate.

RESPONSE:

As stated in Mr. Seymore's Direct Testimony, all large components are assumed to be

lowered to grade for additional disassembly. The steel support structures and other site

building structures are dismantled from the top. All plant equipment and their supporting

mechanical and electrical systems are removed by disassembly and segmentation where

necessary. Controlled blasting is used when appropriate, such as in the demolition of large

hyperbolic cooling towers. Toppling large structures without proper preparation, which is

expensive, increases the risk to demolition personnel.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUC Docket No. 43695

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QUESTION NO. AXM 12-8:

[Deconunissioning] - Please identify whether Mr. Seymore and/or TLG are aware that fossil

generating facilities have been dismantled through a process of controlled blasting and

associated toppling rather than a process referred to as reverse engineering or bottom-up

dismantlement.

RESPONSE:

Mr. Seymore and TLG are aware that the exterior portions of structures have been

demolished using controlled explosive techniques. However, TLG has no knowledge of the

condition of any of these projects at the time of the demolition blasting. It is TLG's

understanding that controlled demolition is typically performed following the removal of all

of the components, piping, cabling, etc. prior to the blast. To TLG's knowledge, there is also

no information available regarding the costs for these controlled blasting or toppling

operations, and whether such blasting or toppling is cost effective.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUC Docket No. 43695

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QUESTION NO. AXM 12-9:

[Decommissioning] - Regarding the statement on page 14 of Mr. Seymore's direct

testimony associated with concern for workers safety reinforced the need for a controlled

dismantlement approach, please state whether Mr. Seymore believes that a fossil generating

facility dismantlement approach that relies on controlled explosives and associated toppling

is reasonably or adequately safe. If not, provide all support and justification for such position.

RESPONSE:

Mr. Seymore believes that knowledgeable companies such as Controlled Demolitions

Incorporated (Phoenix, MD) are capable of demolishing a power plant in a safe manner.

TLG does not know what the costs are for such an effort by Controlled Demolitions

Incorporated or similarly qualified firms to perform such projects. It is also Mr. Seymore's

understanding that the preparation of these structures prior to demolition is substantial.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

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QUESTION NO. AXM 12-10:

[Decommissioning] - Regarding the statement on page 15 of Mr. Seymore's direct

testimony that regulatory commissions throughout the United States have accepted the

"bottoms-up" approach for decommissioning, please provide the following:

a. The year, the commission, and the docket number of each instance during the past

five years where the widely accepted bottoms-up approach to decommissioning was

specifically referenced in a final order as it applies to fossil-fired generating units;

b. Whether the bottoms-up approach for fossil-fired generating units was challenged as

the most acceptable method in a fully litigated proceeding;

c. Whether the decision was based on a settlement of the proceeding; and

d. All instances where Mr. Seymore is aware that alternative approaches to the bottomup approach were accepted by a regulatory commission during the past five years,

identifying both the commission and the docket number.

RESPONSE:

a. In the statement cited by this question, Mr. Seymore was referring to all costs

estimates prepared by TLG, not just fossil dismantling estimates. Mr. Seymore did

not conduct an exhaustive search of all instances in which a commission specifically

referenced the bottoms-up approach, however, Mr. Seymore is aware of at least three

instances in which a commission approved salvage and depreciation rates based on

studies that took the bottoms-up approach.

Mr. Seymore is aware that the Florida Public Service Commission ("PSC") has made

rulings regarding this issue within the past five years. That ruling was made in 2010

in Docket Nos. 090079-EI, 090144-El, and 090145-El (Order No. PSC-10-0131-

FOF-El). Mr. Seymore is aware that the New Mexico Public Regulation

Commission ("NMPRC") in its 2014 final order, accepted SPS's proposed

depreciation rates based in part on TLG's Dismantling Study filed in SPS's most

recent New Mexico rate case, Case No. 12-00350-UT. Mr. Seymore is also aware

that in 2010, the Minnesota Public Utilities Commission ("MPUC") approved

salvage and depreciation rates based on a TLG dismantling study that employed the

bottoms-up approach in Docket No. E,G-002/D-10-173.

b. Mr. Seymore understands that the bottoms-up approach for fossil-fired generating

units was challenged in the Florida PSC case referenced above in the response to

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subpart (a) of this request. The issue was not challenged in the MPUC or NMPRC

cases.

c. In the Florida PSC case referenced above in the response to subpart (a) of this

request, the Florida PSC approved several stipulated issues, which were incorporated

into the Commission's final order on the merits of the utility's requested rate

increase. The Florida PSC's order was rendered after a contested case hearing in

which the issue of the utility's fossil dismantlement cost study was a contested issue.

The NMPSC and MPUC orders were not the result of settlement.

d. Mr. Seymore is not aware of any such proceedings within the last five years.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seyinore

PUC Docket No. 43695

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QUESTION NO. AXM 12-11:

[Decommissioning] - Please provide the bare labor rate assumed for each crew member as

reflected in the decommissioning study. Further, identify each specific adder to the bare labor

rate as reflected in the fully-loaded labor rate. Finally, provide all support and justification

for both the bare labor rates and each specific labor adder, including all workpapers,

assumptions, considerations, and material reviewed and/or relied upon in sufficient detail to

permit verification of the information.

RESPONSE:

TLG used a web site, http://www.texoassociation.org/chapter/wagerates.asp, as the source of

craft labor costs. Development of the labor rates used in the Production Dismantling Cost

Study is available in the Microsoft Excel workbooks "Overhead TX.xlsm" and

"Overhead_NM.xlsm" which are included in the workpapers for Francis W. Seymore.

Please refer to Attachment FWS-RR-2(CD) (Vol. RR4, Page 92 of 261, Workbook).

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

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QUESTION NO. AXM 12-12:

[D ecommissionin.g] - Please identify whether the laborers assumed in the decommissioning

process are union or non-union and the support and justification for such assumption.

RESPONSE:

TLG used a web site, http://www.texoassociation.org/ehapter/wagerates.asp, as the source of

craft labor costs. TLG was not able to determine if this web site tracked the union status of

the craft information it included. The site portrays its values as fair wages for the area.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUC Docket No. 43695

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QUESTION NO. AXM 12-13:

jDecommissioning] - Please identify the quantity of water rights directly owned or where

the Company has a financial right to resale or lease water rights for some period of time in

the future at each of the Company's power plants. For each water right where the Company

has ownership or financial interest in water rights, provide the current expected market value

for each such water right and the basis for such estimation.

RESPONSE:

The following table contains the water rights that SPS either owns or has a financial right to:

Plant Name Water right type Water right quantity Resale/lease?

Harrington/Nichols Contract - treatedeffluent 18,355 acre-feet' No

Stations

Jones Station Contract - treated effluent Up to 10,081 acre-feet No

annually

Tolk/Plant X Stations Groundwater Est. >140,000 acre-feet Yes

El

of recoverable water

Cunningham/Maddox Groundwater Approx. 17,364 acre-feet Partially, yes

Stations I annually

'Water usage in 2014.

Upon expiration of the effluent contracts or discontinuation of use for electric generation, the

Harrington/Nichols Stations and Jones Station contract supplies will revert to the supplying

municipalities, which are the City of Amarillo and the City of Lubbock, respectively.

Tolk/Plant X Station water is supplied from SPS-owned water rights in the Ogallala aquifer

of the High Plains region of Texas. In 2014, SPS acquired water rights in the area at a cost of

approximately $1,700 per surface acre. There are several factors that must be considered in

the evaluation of a future market value for these water rights:

1 The Ogallala aquifer is depleting rapidly, and SPS water rights may be effectively

depleted between approximately 2020 and 2023, based on current usage, current

understanding of the anticipated aquifer behavior, and currently available well

technology. "Effectively depleted" is defined as the aquifer having a saturated

thickness equal or less than approximately 40 feet, rendering the water difficult or

impossible to recover using typical industrial wells.

PUC Docket No. 43695

SOAHDocket No. 473-15-1556

Southwestern Public Service Company's Response to

Alliance ofXcel Municipalities' TweNh Request for Information

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2. The High Plains region of the Ogallala aquifer is depleting rapidly on a regional

basis, which may ultimately threaten the viability of irrigated agriculture, the primary

economic activity in the area.

3. Laws or regulations may impose limits on the development and use of groundwater

in the High Plains Ogallala aquifer.

For these reasons, it is impossible to accurately estimate a future market value for these

assets.

Cunningham/Maddox Station water is supplied from the Ogallala aquifer in Eastern New

Mexico. Under New Mexico water law, groundwater which has been beneficially used may

be transferrable in the future, but the portion of the water right that remains conditional may

have little to no sale/lease value. The Cunningham/Maddox stations use approximately

3,000 to 4,000 acre-feet per year.

No valuation study has been completed for these water rights. It is impossible to place a

future value on these water rights because the future market is unknown, as are future

changes in laws or regulations that may limit the use or transferability of these rights.

Finally, as with the Tolk/Plant X water rights, the Ogallala aquifer is declining and, in the

future these water rights may be of limited value or decline to a point at which they become

unrecoverable.

Preparer: Richard Belt

Sponsor: Alan J. Davidson

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QUESTION NO. AXM 12-14:

[Decommissioning] - Please identify if and where in the decommissioning cost estimates

credit has been recognized for water rights that can be sold or leased subsequent to the

retirement of a generating facility. To the extent no value has been recognized for water

rights in the decommissioning cost estimates, specifically so state and provide all support and

justification for such position.

RESPONSE:

TLG did not include any costs or credits related to water rights within the SPS Production

Dismantling Cost Study.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

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Alliance ofXcel Municipalities' Twe6ah Requestfor Information

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QUESTION NO. AXM 12-15:

[Decommissioning] - Please identify the value reflected within the decommissioning cost

estimates for power plant sites subsequent to removal of assets and restoration of the site. To

the extent no such offsetting value has been incorporated into the decommissioning cost

estimates, specifically so state and provide all support and justification for such position.

RESPONSE:

The Production Dismantling Cost Study prepared by TLG does not consider the follow-on

use or disposition of the site after removal of the plant systems and structures. Such a

determination was not within TLG's scope of work.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUC Docket No. 43695

SOAH Docket No. 473-15-1556

Southwestern Public Service Company's Response to

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QUESTION NO. AXM 12-16:

[Decommissioning] -Please identify whether the decommissioning cost estimates reflect the

stripping of insulation from copper wire so that the scrap value increases to bare copper

levels. To the extent the decommissioning cost estimates do not include the stripping of

copper wire, provide all support and justification for such position, including all analyses

performed to the extent any claim is made that the cost to perform such striping operation

would exceed the incremental scrap value.

RESPONSE:

The dismantling estimates for the 2014 SPS fossil fleet do not include specific costs for

removal of insulation from conductors. At the time of actual dismantling of these stations,

project management will weigh the costs of the labor to perform such activities against the

then-current value of scrap material.

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUC Docket No. 43695

SOAH Docket No. 473-15-1556

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QUESTION NO. AXM 12-17:

[Decommissioning] - Provide the source documents and all analyses performed to arrive at

the final per unit scrap value and total scrap value level for each type of scrap material

reflected in the decommissioning cost estimates for each power plant. The response should

include all workpapers, assumptions, considerations, and material reviewed and/or relied

upon in sufficient detail to permit verification of the reasonableness of the final values.

RESPONSE:

Scrap weights were obtained from the website www.scrapindex.com. The downloaded web

pages and the calculations for the development of the unit rates are in the Microsoft Excel

workbook "2014 Monthly Scrap Metal Prices (June 2013 to May 2014)," which is included

in the workpapers for Francis W. Seymore. Please refer to Attachment FWS-RR-2(CD) (Vol.

RR4, Page 92 of 261, Workbook).

The total scrap value calculation is simply the multiplication of the scrap pounds per station

(Table 4.2 of the Production Dismantling Cost Study) (Attachment FWS-RR-1, Vol. RR4,

page 62 of 261) times the unit prices as described above to obtain the final scrap credit

amounts per station. These scrap credits by station are also shown in Table 4.3. Please refer

to Attachment FWS-RR-1 (Vol. RR4, page 63 of 261).

Preparer: Francis W. Seymore

Sponsor: Francis W. Seymore

PUC Docket No. 43695

SOAHDocket No. 473-15-1556

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CERTIFICATE OF SERVICE

I certify that on the 28d' day of January, 2015, a true and correct copy of the foregoing

instrument was served on all parties of record by a combination of electronic service and hand

delivery, Federal Express, regular first class mail, certified mail, or facsimile transmission as allowed

under SOAH Order No. 3, pages 3-4.

PUC Docket No. 43695

SC1AHDocket No. 473-15-1556

Southwestern Public Service Company's Response to

Alliance of,Xcel Municipalities' 71velfllt Request for Information

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