A T T O R N E Y S 421 West M a i n Street Post Of f ice Box 636 Fraiikforl, l(Y 40602-0634 ” - ._ [502] 223-3477 15021 223-4124 Fax www stites corn

\/lay 24, 201 3

HAND DELIVERED (859) 226-2293 (859) 425-7996 FAX kgish@stites corn

.lcrf R. Derouen Exec 11 t i l e Direc tor I3iblic Service Commission 3 I 1 Sower Boulevard P.O. Box 61 5 I’rd<ibrt, KY 40602-06 15

RE: Case No. 2013-00144

Dear Mr. Derouen:

Ericlosed please find and accept for filiiig the original and teii copies of IGsiitucky I’o~ver C‘ompaiiy’s respoiises to the reqnests for inforination propouiided by Commission Stark’. Kenlucky Illdustrial Utility Customers, Iiic., and tlie Office of the Attorney General.

A copy of this letter aiid the Coiiipaiiy’s responses is being served 011 the iiidividnals i nclicated below aiid their associated counsel.

Please do not hesitate to contact me if you have ally questions.

I<G 1 12 iic I osures cc: Michael L,. Kurtz

Jennifer Black Hails

Alexandria, VA Atlanra, GW Franldorr, io‘ Franklin, TN JeHersonville, li\l Lexington, t<V Louisville, I<’/ Nashville, TN

EP N PUBLIC SERVICE co M M IS s I 0 N

BETWEEN THE Case No. 2013-00P44

I<ENTUCKU POWER CONIPANU RESPONSES TO

COMMISSION STAFF'S FIRST SET OF ATA REQUEST§

May 24,2013

VERIFICATION

? 7 I he ruidersigned, Gregory G. Pauley, being didy sworn, deposes and says 11c is the President aiid Chief Operating Officer for Kentiicky Power Company, that he has personal knowledge of the matters set forth in the forgoing respoiises for which he is the idcntified witness aiid that the iiiforiiiatioii coiitaiiied therein is true and correct to the best of his inIoormation, knowledge and belief

COMMONWEALTH OF ICENTUCKY )

COUNTY OF FRANICLJN ) CASE NO. 201.3-00144

Subscribed and sworn to before me, a Notary Pitblic in aiid bel'ore said Coiunty and State, by Gregory G. Pauley, this the ay of May 2013.

My Commission Expires 7

v @A%

The undersigned, Jay F. Godfrey, being duly sworn, deposes and says he is the Managing Director for Renewable Energy, for American Electric Power Service Corporation and he has personal howledge of the matters set forth in the forgoing responses for which he is identified as the witness and that the information contained therein is true and correct to the best of his information, knowledge and belief.

STATE OF OHIO

COUNTY OF FRANKLIN

1 ) CASE NO. 2013-144 )

Subscribed and sworn to before me, a Notary Public in and before said County and State, by Jay F. Godfrey, this the >??JfiL day of May, 2013.

%. Donna J. Stephens *: Notary Puiic, state of Ohio

My Commission Expires 01-O4-2014

VERIFICATION

The tiiidersigned, Raiiie I<. Wolinlias, being duly sworn, deposes and says he is the Managing Director Regulatory and Fiiiaiice for I<entticl<y Power, that lie lias personal laiowledge of the matters set forth in the forgoing responses for which he is the identilied witness and that the inforiiiatioii coiitaiiied therein is true and correct to the best of his inforiiiatioii, knowledge, and belief

Raiiie I<. Woli&as

COMMONWEALTH OF KENTUCKY )

COUNTY OF FRANKLIN ) ) CASE NO. 20 13-00 144

Subscribed and sworn to before me, ry Public in and before said County and State, by Raiiie I<. Wolinhas, this the

My Coiiiiiiissioii Expires: 7

ES

Refer to page 5 of the application, paragraph 11.

a. ICentucky Power estimates, based on 20 12 .jurisdictional reveiiues, that its reveiiue requirement would increase by approximately 7 percent in the first year of the Renewable Energy Power Agreement (“REPA”). The term of tlie REPA is 20 years. Provide an estiiiiate of the approximate iiicrease in I<eiitucky Power’s reveiiue requirement for each year of the 20-year term.

b. This paragraph states that “the REPA could also result in an iiicrease in the Company’s cost of capital depending on regulatory treatinelit aiid other factors.”

i. State whether the increase in the cost of capital referred to in this statenleiit is related to the treatment ofthe REPA by the credit rating agencies discussed in the application and testimony. Identify tlie “other factors” referenced in the statement. ii.

c. This paragraph also states that the contract price will escalate by a fixed percentage each year during the term of tlie agreement. Explain whetlier the escalation rate is a standard rate for such contracts.

d. This paragraph further states that “[ilf the EcoPower facility qualifies for tlie Section 45 Production Tax Credit tlie Contract Price will be adjusted downward.”

i. When will it be luiown whether the facility qualifies for the tax credit?

11. If the facility qualifies for the tax credit, for how long will the tax credit be in effect?

iii. Provide an estiiiiate of the downward adjustment to the contract price if the facility qualifies for tlie tax credit.

..

NS

a. Based on 20 12 jurisdictional revenues, the estimated year over year incremental increase would grow Crom .25% in year two to .39% in year 20. This would result in an approximate 13% iiicsease over tlie 20 yeas period. The actual year by year percent is as follows:

Year2 - .25% Year3 - 2 6 % Yeas4 - .27% Yeas5 - .27% Year6 - "23% Year7 - .29% Year 3 - .29% Year9 - 3 0 % Year 10 - 3 1 %

Year 11 - .32% Year 12 - 3 2 % Year 13 - 3 3 % Yeas 14 - .34% Year 15 - 3 5 % Year 16 - .36% Yeas 17 - .37% Year 13 - .38% Yeas 19 - .33% Year 20 - .39%

b. (i) The increase in the cost olcapital referenced in this paragraph is related to the possible treatment of imputed debt by credit rating agencies if concurrent recovery tlwough a rider or surcliai-ge is not authorized by this Commission. (ii) See (i) above.

c. Yes, an escalation rate is a coiiiiiioii feature in long-term PPAs.

d. (i.) It will be Itiiowii by the elid of 2013 whether the facility qualifies for tlie tax credit. (ii.) If the facility qualifies for the tax credit, the credit will be in effect for 10 years. (iii.) The downward adjustment to the contract price if the facility qualifies for the tax credit is estimated to be $5-9; 1 O/MWh during the term of tlie credit.

SS: Rank IC. WolxdiaslJay I?. Godfrey

Refer to pages 7-5 aiid 10 of the application, paragraphs 17-20 and 27, coiiceriiiiig reiiewable portfolio standards.

a. Provide a inore detailed explaiiatioii suppoi-tiiig ICeiituclty Power’s belief of the high liltelihood of a renewable portfolio staiidard being enacted in I<eiitucky within the 20- year term of the =PA.

b. Of the 37 states and the District of Columbia that have either iinpleineiited a reiiewable poi-tfolio staiidard or iiiipleiiieiited renewable poi-tfolio goals, identify wliicli of those 3 8 jurisdictioiis no longer have a traditioiial cost-based regulatory eiiviroimeiit such as exists in ICeiitucky.

a. The Company has no furtlier explaiiatioii other than described in the referenced pages and paragraphs.

b. Each of the 17 jurisdictions that have coinpetitive iiiarltets also have an RPS staiidard or goal in place. The jurisdictions are:

Arizona, Coixiecticut, D.C., Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, New Hampshire, New Jersey, New Yorlt, Ohio, Oregon, Peruisylvaiiia, Rliode Islaiid aiid Texas.

Tlie other 21 states with an RPS staiidard or goal have traditional cost-of-service regulation.

$NESS: Gregory G Pauley

er Y

Refer to pages 14-1 S of the application, paragraph SO, which states that ICeiitucky Power anticipates seeltiiig approval of a rider or surcharge to base rates as pal? of its next base rate case.

a. When does ICeiitucky Power anticipate filing its next base rate case?

b. Explain why Kentucky Power anticipates that it will seek approval of a rider or surcharge, as opposed to including tlie E P A costs in base rates in a base rate applicatioii tiiiied to coiiicide with wlieii tlie facility becomes operational.

a. Tlie Coiiipany curreiitly plans 011 filing its next base rate case on June 28, 201 3 with a test year of Twelve Moiitlis Eiided March 3 1, 20 13.

b. Assuming tlie Coiimiission approves tlie E P A as filed which iiicludes the initial rate per ltWh and an annual escalation factor, the Company believes the use of a rider or surcharge to pass through those costs when the facility is operational is tlie most efficient way to iiiipleiiieiit these costs. A rider or surcharge that provides for coiicurreiit recovery will also reduce the risk the REPA will be treated as imputed debt oii tlie Company’s boolts.

$NE$$: Raiiie I< Wolmlias

Y

Refer to page 6 of tlie Testimony of Jay F. Godfrey (“Godfrey Testimony”) relating to tlie intercoiuiection point at Kentucky Power’s Engle substation, whicli is located approximately I .4 miles from the EcoPower generating facility.

a. Identify all loads that would be affected after the EcoPower generating facility is interconnected to Kentucky Power’s Engle substation.

I?. Provide the load flow analysis using a systeiii one-line diagram to show tlie percent voltage rise and MVA loading on lines aiid transforiners in this area before aiid after iiitercoiuiections for normal or no-contingency conditiolis under suiniiier and winter peak system load conditions for tlie study period selected by PJM.

c. Provide the load flow analysis using a system one-line diagram to show tlie percent voltage rise and MVA loading 011 lilies and transformers in this area during tlie worst outage contingency conditioiis for summer and winter peak system load conditions for the study period selected by PJM.

d. Provide a list of any low voltages or any overloads that may impact Kentucky Power’s load due to tlie EcoPower’s generatioii iiiterconnection in this area.

a-d The requested information is tlie subject of the PJM System Impact Study for the ecoPower Interconnection Request (queue: Y2-086) wliicli has not been coinpleted by PJM. Tlie study is expected to be completed later this year. To date, the Feasibility Study lias been completed and is attached for reference as KPSC 1-4 Confidential Attaclvlient 1. Additional details regarding tlie status of the Interconnection Request can be viewed at tlie PJM website at: littp://www.pjiri.com/plaiu7ing/genera~ioii- intercoiuiectionlgeiieratioii~qLieLie-active. aspx.

SS: Jay F Godfrey

KPSC Case No 2013-00144 Staffs First Set of Data Requests Received May 10, 2013 Item No. 4 Attachment 1 Page 1 of 31

KPSC Case No 2013-00144 Staffs First Set of Data Requests Received May 10, 2013 Item No 4 Attachment 1 Page 2 of 31

reface Tlie intent of the feasibility study is to deteimine a plan, with ballpark cost and construction time estimates, to connect the subject generation to the PJM network at a location specified by the Interconnection Customer. Tlie Interconnection Customer may request the interconnection of generation as a capacity resource or as an energy-only resource. As a requirement for interconnection, the Interconnection Customer may be responsible for the cost of constructing: (1) Direct Connections, whicli are iiew facilities and/or facilities upgrades needed to connect the generator to the PJM network, and (2) Network Upgrades, wliich are facility additions, or upgrades to existing facilities, that are needed to maintain the reliability of the PJM system.

In some instances a generator interconnection inay not be responsible for 100% of the identified network upgrade cost because other transmission network uses, e.g. another generation interconnection, inay also contribute to tlie need for tlie same network reinforcement. The possibility of sharing the reinforcement costs with other projects inay be identified in tlie feasibility study, but tlie actual allocation will be deferred until the impact study is performed.

The Feasibility Study estimates do not include the feasibility, cost, or time required to obtain property rights and permits for construction of tlie required facilities. Tlie project developer is responsible for the right of way, real estate, and construction permit issues. For properties currently owned by Transmission Owners, tlie costs inay be included in tlie study.

KPSC Case No. 2013-00144 Staffs First Set of Data Requests Received May 10,ZO 13 Item No. 4 Attachment 1 Page 3 of 31

KPSC Case No 201 3-00 144 Staffs First Set of Data Requests Received May 10, 20 13 item No. 4 Attachment I Page 4 of 31

t

KPSC Case No 2013-00144 Staffs First Set of Data Requests Received May 10,2013 item No 4 Attachment 1 Page 5 of 31

KPSC Case No. 2013-00144 Staffs First Set of Data Requests Received May IO, 2013 Item No. 4 Attachment 1 Page 6 of 31

KPSC Case No. 2013-00144 Staffs First Set of Data Requests Received May 10,201 3 Item No. 4 Attachment 1 Page 7 of 31

KPSC Case No 20 13-00 144 Staffs First Set of Data Requests Received May 10,2Q 13 Item No 4 Attachment 1 Page 8 of 31

Exhibit 2: Simplified diagram of proposed 138 kV interconnection

69kV

A EXGLE

T Existing

G 9 W

KPSC Case No. 201 3-00 144 Staffs First Set of Data Requests Received May 10,20 13 Item No 4 Attachment 1 Page 9 of 31

Network Impacts

The Queue Project #Y2-086 was studied as a 62.SMW (Capacity 62.SMW) injection at tlie Eiigle 69 kV substation in the AEP area. Project #Y2-086 was evaluated for coinpliaiice with reliability criteria for suininer peak conditions i n 2016. Potential network impacts were as follows :

Generator Deliverability (Single 01' N- 1 contingencies for the Capacity portion only of tlie inlerconnection)

None

Eight Load Analvsis

Not Applicable

Multinle FacilitV Contingency (Double Circuit Tower Line, Line with Failed Breaker and Bus Fazrlt contirigencies,for the~full energy output)

Short Circuit (Szimmary form of Cost allocation~for breakers will be inserted here if any)

No Overdutied Breakers Identified

KPSC Case No. 2013-00144 Staffs First Set of Data Requests Received May 10, 2013 Item No. 4 Attachment 1 Page 10 of 31

Contribution to Previouslv Identified Overloads (This project coiitribzites to the following contingency overloads, i. e. “Network Inqmcts ‘I, identiJied for earlier generation or transniission interconriection projects in the PJM Queue)

3 f) . . . . . . b b b

KPSC Case No 2013-00144 Staffs First Set of Data Requests Received May 10,20 13 Item Na 4 Attachment 1 Page 1 1 of 31

7. The OSCLNCHR-OSL,EBANO 138 kV line (from bus 242605 to bus 242700 ckt 1) loads from 120.88% to 122.68% (AC power flow) of its normal rating (296 MVA) for non-contingency condition. This project contributes approximately 5.34 MW to the thermal violation.

Please refer to Appendix 8 for a table containing tlie generators having contribution to this flowgate.

KPSC Case No 2013-00144 Staffs First Set of Data Requests Received May I O , 2013 Itern No 4 Attachment 1 Page 12 of 31

KPSC Case No 2013-00144 Staffs First Set of Data Requests Received May 10, 2013 Item No 4 Attachment 1 Page 13 of 31

12. The OSLEBANO-OSELKGAZ 138 kV line (fioin bus 242700 to bus 246766 ckt 1) loads froin 135.65% to 135.9% (AC power flow) of its emergency rating (384 MVA) for the line fault with failed breaker contingency outage of CONTINGENCY DESCRIPTION ('1 52832'). This project contributes approximately 6.0 1 MW to the theiiiial violation.

CONTINGENCY '1 528-C2'

765 24251 1 OSBROADF 765 1

OSBROADF 765 2425 18 OSBROADF 500 4

OSBROADF 500 360106 8SULLIVAN TN 500 1

OPEN BRANCH FROM BUS 2425 10 TO BUS 2425 1 1 CKT 1

OPEN BRANCH FROM BUS 2425 1 1 TO BUS 2425 18 CKT 4

OPEN BRANCH FROM BUS 242518 TO BUS 360106 CKT 1

END

I 2425 10 OSBAKER

I 24251 1

I242518

Please refer to Appendix 13 for a table containing the generators having contribution to this flowgate.

13. The OSCLNCHR-OSLEBANO 138 ItV line (fiom bits 242605 to bus 242700 ckt 1) loads fioin 138.65% to 138.9% (AC power flow) of its emergency rating (384 MVA) for the line fault with failed breaker contingency outage of CONTINGENCY DESCRIPTION ('1 528-C2'). This project contributes approximately 6.01 MW to the therinal violation.

CONTINGENCY ' 1 528-C2'

765 24251 1 OSBROADF 76.5 1

OSBROADF 765 2425 18 OSBROADF 500 4

OSBROADF 500 360106 8SULLNAN TN 500 1

OPEN BRANCH FROM BUS 2425 10 TO BUS 2425 1 1 CKT 1

OPEN BRANCH FROM BUS 2425 1 1 TO BUS 2425 18 CKT 4

OPEN BRANCH FROM BUS 2425 18 TO BUS 360 106 CKT 1

END

I 2425 10 OSBAKER

I 2425 1 1

I 242518

KPSC Case No 201 3-00 144 Staffs First Set of Data Requests Received May 10,20 13 Item No 4 Attachment 1 Page 14 of 31

Please refer to Appendix 14 for a table containing the generators having contribution to this flowgate.

Steady-State Voltage Requirements (Results of tlie steady-state voltage studies should be inserted here)

To be determined

Stability and Reactive Power Requirement (Results of the dynamic studies shoiild be inserted here)

To be determined

KPSC Case No. 2013-00144 Staff's First Set of Data Requests Received May 10, 2013 Item No 4 Attachment 1 Page 15 of 31

KPSC Case No. 2013-00144 Staffs First Set of Data Requests Received May 10, 20 13 Item No 4 Attachment 1 Page 16 of 31

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KPSC Case No 20 13-001 44 Staffs First Set of Data Requests Received May 10, 20 13 Item No 4 Attachment 1 Page 21 of 31

KPSC Case No 20 13-001 44 Staffs First Set of Data Requests Received May 10,201 3 Item No 4 Attachment 1 Page 22 of 3 1

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KPSC Case No 2013-00144 Stars First Set of Data Requests Received May 10,201 3 Item No. 4 Attachment 1 Page 26 of 31

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KPSC Case No 20 13-00 144 Staffs First Set of Data Requests Received May IO, 20 13 Item No 4 Attachment 1 Page 28 of 31

KPSC Case No. 2013-00144 Staffs First Set of Data Requests Received May 10, 201 3 Item No 4 Attachment 1 Page 29 of 3 1

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KPSC Case Na 2013-00144 Staffs First Set of Data Requests Received May 10, 2013 Item Na 4 Attachment 1 Page 31 af 31

Page 11 of 11

Refer to pages 11-12 of tlie Godfrey Testiiiioiiy. Stai-tiiig at the bottoiii of page 11, Mr. Godfrey states that Kentucky Power iiiay sell tlie reiiewable eiiergy credits (“REC”) iii the shoi-t-term aiid credit aiiy proceeds to customers. State the curreiit value of aii REC fioiii tlie type of biomass facility described in the application.

Iiiforinatioii currently obtained from SNL Fiiiaiicial LC indicates a E C value of $2-$6.

WHTNE§S: Jay F Godfrey

owe Y

Refer to page 12 of the Godfiey Testimony. Starting at line 8, Mr. Godfiey states that “provisions in Section 6.1 require ... approvals by the Coiiiiiiissioii aiid FERC of the Mitchell TJiiit transfer transaction.. .“I Also refer to Exhibit JFG-1, pages 12-13 o€ 88, 011 which a “Coiiiiiiissioii Approval Order” is defiiied as being a nonappealable order “granting without iiiodificatioii or coiiditioii all approvals required to accoinplish the Mitchell Transaction. .” aiiioiig other requirements. Explain why the execution of the REPA depends on uimodified and uiicoiiditioiial approval of the Mitcliell transaction.

NSE

The Company iieeds to have the approval of tlie Mitcliell transaction to cover its base load capacity and eiiergy requireiiieiits for tlie iiext 27 years. The biomass facility would be a very siiiall addition that oiily assists with the Company’s total capacity and eiiergy iieeds after the Company‘s base load is covered by the Mitcliell traiiskr. Without the uiicoiiditioiial approval of the Mitchell transaction, the Company would need to re-evaluate in its entirety how it will cover its capacity aiid eiiergy requirements.

SS: Gregory G Pauley

tu c er Y

Refer to page 4 of the Testimony of Gregory G. Pauley (“Pauley Testimony”) coiiceriiiiig tlie decisioii to enter into tlie EcoPower REPA. Provide a detailed description of tlie genesis of this decision, iiicludiiig a thorough discussion of the factors that prompted I<eiitucky Power to enter into tlie REPA, aiid whether there is a need for such power.

The Company was approached by ecoPower in late 20 10 regarding tlie proposed biomass facility in Perry County. Duriiig these discussions, ecoPower informed current Kentucky Power management that it previously had approaclied prior Kentucky Power niaiiageiiieiit concerning the opportunity. Current I<eiitucl<y Power niaiiageineiit is unaware of, aiid has no docuiiientation regarding, tlie previous discussions. At tlie conclusion of these late 20 10 discussions, the Conipaiiy recognized tlie ecoiioinic developiiient potential of the project, but was cautiolis of tlie cost associated with reiiewables and the potential for recovery. Keiitucky Power recommended that ecoPower seek a Reiiewable Portfolio Standard (WS) that would iiialte its project more attractive.

In 201 1 , Kentucky Power was approached by ecoPower coiiceriiing tlie transaction. At the time Kentucky Power alerted ecoPower that any agreement would require appropriate regulatory, aiid contractual safeguards to ensure tlie Company would receive fiill aiid timely cost recovery during tlie entire term of the REPA. ecoPower later presented tlie Company with proposed cost recovery statutory language it planned to submit during the 20 12 legislative process. The Coinpaiiy took no position with respect to tlie proposed legislative language. Thereafter, Kentucky Power begaii preliminary contract discussions with ecoPower. At that time, ecoPower did not have fiiiaiiciiig for the project. Kentucky Power was also evaluating options for tlie disposition of its Big Sandy Plant. Negotiations were teriiiiiiated when the parties could not agree on tlie safeguards to enswe the Company would receive full aiid timely cost recovery during tlie term of tlie REPA.

Contract iiegotiatioiis with ecoPower recoiiiiiieiiced in 20 12 wlieii ecoPower agaiii approached I<eiituclcy Power with proposed cost recovery language. Keiitucky Power again took no position with respect to tlie proposed language. ecoPower's proposed bill was iiitroduced in tlie 20 13 Session of tlie Geiieral Asseiiibly aiid eiiacted into law as Seiiate Bill 46.

Negotiations continued through March 20 1.3. Affer evaluating the fiiiaiicial aiid accounting impacts of tlie REPA, as well tlie ecoiioinic developiiieiit aiid fuel diversity beliefits o€ the project, Kentucky Power executed the REPA on March 15, 2013. Entering into the REPA gives the Coinpaiiy flexibility to meet future load growth, supports economic developinelit in its service area, and diversifies its geiieratioii poi-tfolio.

ITNESS: Gregory G Patiley

Refer to Exhibit JFG-1, page 73 of 88, and the Pauley Testimony. Exhibit JFG-1 sliows the coiistructioii start date to be May 23, 20 13. Page .5 of tlie Pauley Testimony, lines 1.5- 16, states that coiistructioii is expected to begin iii 2014. Clarify tlie date that coiistructioii is expected to begin.

Construction work for the Chipper Building began 011 April 22, 201 3. construction is expected to begin in 20 14.

Major facility

SS: Jay F Godfrey

Y Y

Refer to tlie referelice on pages 6-7 o f the Pauley Testiiiioiiy to the Commission’s rejection of ICeiituclcy Power’s previous proposal to enter into a wind-power contract and tlie reasons in support of tlie proposed bioiiiass power contract.

a. Explain whether the evaluation perforiiied 011 behalf of Kentucky Power of the ecoPower biomass-fueled geiieratioii project is the first evaluation of a biomass-heled generation project perforiiied by or for Kentucky Power.

b. If the answer to a. is no, provide tlie results of the prior evaluation, tlie date it was perforiiied, and a narrative explanation of why ICeiituclcy Power did not pursue that po, j ect .

a. Yes, tlie evaluation per€oriiied on behalf of KPCo o f tlie ecoPower biomass-fiieled generation project is the first evaluation of a biomass-fueled generation project perCoriiied by or for KPCO.

b. Not Applicable.

NESS: Jay F Godfiey

KPSC Case No. 201.3-00144 PSC First

Item No. 10 Page 1 of 1

RE Q 1J E§

Refer to page 7, lines 7 throiigh 9, of Pauley Testiiiiony, which state “[w]ith the upcoming termination of tlie Pool Agreement, the Coiiipany will no longer have ready access to low-cost energy and capacity from the Pool.” Provide the number of hours, during the 12 months eliding April 30, 2013, when the price of energy aiid capacity from the PJM market is greater than tlie price reflected i n the proposed REPA.

RESPONSE

During the 12 months elided April 30, 201 3, the number of hours that the price of energy and capacity from the PJM market was greater than the price reflected i n the proposed REPA was 75 hours.

WITNESS: Raiiie K Wohnlias

Page 1 of P

Que el-

EST

Refer to page 7 of tlie Pauley Testimony, lilies 12-1 9. Provide aiiy ecoiioiiiic studies or analyses that liave been perforiiied in coimection with tlie ecoPower biomass geiieratiiig facility by ICeiitucky Power, Aiiiericaii Electric Power (“AEP”), aiiy AEP subsidiaries or affiliates, by ecoPower.

Neither Kentucky Power, Aiiiericaii Electric Power (”AEP’I) or any AEP subsidiary or affiliate has performed any econoiiiic studies or analyses in coimeciioii with the ecoPower bioiiiass geiieratiiig facility.

WITNESS: Gregory G Pauley

Y

Refer to Exliibit RKW-1 of tlie Rank K. Wohnlias Testimony. Provide the supporting calculations for the Avoided Fuel Costs of $12,780,000 and Avoided Capacity Costs of $2,730,000.

ES SIE

Avoided Fuel Costs - 450,000 MWI-I :$ 25.4 m/ltWli; Avoided Capacity Costs - S8.SMW * .94 EFOR ‘I’ $136 RPM Auction Clearing Price 2015/16 :i: 365

SS: Raiiie I<. Wolxdias

P

we Y

Provide the expected capacity factor of the EcoPower bioiiiass geiieratiiig facility.

The expected capacity factor from the ecoPower provided model is 88%, wliicli can be fouiid in the respoiise to KIUC 1-14.

: Jay F Godfrey

Y

Provide the iiuiiiber of bioiiiass facilities like the oiie described in the application that are owiied and/or operated by EcoPower, their location, the iiuiiiber of years owiied and/or operated by EcoPower, aiid the capacity factors of those facilities.

ecoPower does not own or operate any other biomass facilities.

SS: Jay F Godfrey

Y

JEST

Elaborate on any expectatioii of load growth over the next teii years aiid how Kentucky Power would meet this load growth.

I<eiitucky Power's latest load forecast for 20 13-2023 shows aii approximate 0.2% coinpounded aiuiual growth rate in its winter peak deiiiaiid. With this level of projected growth for the next ten years the Coiiipaiiy is curreiitly iiot plaimiiig to add any fiiitlier generation resources over that time period other thaii the biomass ijcility iii this proceeding aiid the assets described in Case NO. 2012-00578.

TNESS: Raiiie K Woludias

KPSC Case No. 2013-00144 PSC First Set of

Item No. 16 Page 1 of 1

REQUEST

Wodd the power froiii the REPA necessitate additional facility upgrades to the Kentucky Power system? I f yes, provide a schednle of additional upgrades and associated costs.

RESPONSE

Please see respoiisc to KPSC 1-4. Llpgrade facility cost are the respoiisibility of ecoPower.

WITNESS: Jay I; Godfky

Provide the most recent update of the dispositioii of Big Sandy TJiiit 1.

The Company will be evaluating the cost to coiivert Big Sandy Unit 1 to gas against bids received from an RFP issued on March 28, 2013 for up to 250MW of long term capacity and energy. Responses to the RFP are due by June 1 1 ,20 13.

SS: Raiiie I< Wolmhas