Direct Testimony and Schedule STATE OF MINNESOTA BEFORE THE MINNESOTA PUBLIC UTILITIES COMMISSION Eugene R. Kotz II IN THE MATTER OF THE APPLICATION FOR A CERTIFICATE OF NEED FOR THE HOLLYDALE 115 KV TRANSMISSION LINE PROJECT IN THE CITIES OF PLYMOUTH AND MEDINA MPUC DOCKET NO. E-002, ET2/CN-12-113 OAH DOCKET NO. 8-2500-23147-2 DIRECT TESTIMONY OF EUGENE R. KOTZ II On Behalf of NORTHERN STATES POWER COMPANY, A MINNESOTA CORPORATION January 25, 2013 Exhibit
TABLE OF CONTENTS PAGE I. INTRODUCTION AND QUALIFICATIONS... 1 II. PROJECT COST AND SCHEDULE... 2 III. CONCLUSION... 4 i PUC Docket No. E-002, ET2/CN-12-113
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 I. INTRODUCTION AND QUALIFICATIONS Q. PLEASE STATE YOUR NAME AND EMPLOYMENT ADDRESS. A. My name is Gene Kotz, and my business address is 414 Nicollet Mall (MP-8), Minneapolis, Minnesota 55401. Q. BY WHOM ARE YOU EMPLOYED AND WHAT IS YOUR POSITION? A. I am employed as Senior Division Project Manager in TAM Transmission Asset Management by Northern States Power Company, doing business as Xcel Energy ( Xcel Energy ). Q. DESCRIBE YOUR EDUCATIONAL BACKGROUND AND PROFESSIONAL EXPERIENCE. A. In 1990, I received a Bachelor of Science in Electrical Engineering from North Dakota State University. Since 1999, I have been employed by Xcel Energy as a Senior Division Project Manager. In this role, I am responsible for providing strategic project leadership and am responsible for capital project scope, cost, schedule, and risk management for the transmission projects to which I am assigned. I also hold a current real estate license, #20320195, with the Minnesota Department of Commerce, and am actively involved in the development and rehabilitation of homes and businesses in the Twin Cities area. Prior to joining Xcel Energy, I was employed as a Senior Project Manager for Great River Energy. Earlier in my career, I was also employed as an electrical supervisor and senior design engineer with Dominion Resources, an energy company in Richmond, Virginia. During my tenure with Dominion Resources, one of my roles was to manage electrical teams at the North Anna 1 PUC Docket No. E-002, ET2/CN-12-113
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Nuclear Power Station in Mineral, Virginia. My resume is attached as Schedule 1. Q. FOR WHOM ARE YOU TESTIFYING? A. I am testifying on behalf of Xcel Energy and Great River Energy, the applicants for a Certificate of Need for the Hollydale 115 kv Transmission Project ( Project ). Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY IN THIS PROCEEDING? A. The purpose of my testimony is to provide information regarding the estimated costs, schedule, and implementation for the proposed Project. Q. WHAT SCHEDULE IS ATTACHED TO YOUR TESTIMONY? A. Schedule 1: CV of Eugene R. Kotz II II. PROJECT COST AND SCHEDULE Q. WHAT IS THE CURRENT ANTICIPATED SCHEDULE FOR THE PROJECT? A. The anticipated in-service date for the Project is fourth quarter 2015. Construction is expected to take approximately 1.5 years from start to finish. Q. WHAT ARE THE PROJECTED CAPITAL COSTS OF THE PROJECT? A. The estimated cost of the Project is $23 million to $43 million which includes materials, construction, right-of-way acquisition, site preparation, and Project management. These costs assume that the proposed 115 kv transmission line facilities are constructed above-ground along Applicants proposed route. 2 PUC Docket No. E-002, ET2/CN-12-113
1 2 3 4 These costs have been updated from the costs provided on page 15 of the Certificate of Need Application. An explanation of the reasons for the cost differences is also provided in the table below. Project Item Original Cost Adjusted Cost Variance Explanation Rebuild and New 115 kilovolt Transmission Line Facilities (Medina- Hollydale-Pomerleau Lake Substations) $8 million $11 million Adjustment to cost includes an additional $2.6 million in permitting and right-ofway acquisition expenses, plus $400,000 in design estimate escalation. New Pomerleau Lake Substation $8 million $13.5 million Adjustment to cost included a conservative $6.3 million additional for acquisition of land, dependent on economic factors and conditions of sale. Modifications to Existing Medina Substation $2.6 million $2.7 million Adjustment to account for the new in-service date for the Project. Costs from the Application were escalated 1.75% per year according to Great River Energy guidelines. Modifications to Existing Hollydale Substations $4.5 million $5.2 million Adjustment to costs includes two distribution feeders not included in original cost estimates plus miscellaneous permitting charges. Total Project Cost $23.1 million $33.4 million 3 PUC Docket No. E-002, ET2/CN-12-113
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 5136100v1 These costs are provided with a +/- 30 percent accuracy. This range of costs account for considerations related to labor, materials, and varying construction conditions. I note that the costs provided are preliminary Scoping Estimates. A Scoping Estimate is generally based on typical conditions and costs encountered on past construction projects. Xcel Energy makes every effort to produce a representative cost estimate that incorporates as many projectspecific factors as possible, but a Scoping Estimate is generally relied upon only as an indicative estimate of the possible costs that may be incurred during construction of a project. III. CONCLUSION Q. DOES THIS CONCLUDE YOUR PREFILED DIRECT TESTIMONY? A. Yes. 4 PUC Docket No. E-002, ET2/CN-12-113
Testimony Schedule 1 MPUC Docket No. E-002, ET-2/CN-12-113 Page 1 of 2 Eugene Kotz 250 Marquette Ave., 8 th Floor, Minneapolis, MN 55401 Business: 612.330.5625 eugene.kotz@xcelenergy.com Experience Senior Division Project Manager TAM Xcel Energy Minneapolis, MN Provides management for multiple, highly complex, electric delivery system projects, which have right of way, transmission, substation, and/or distribution elements with a cradle to grave approach to managing project execution and funding. Created complete system implementation plans, and directed in-house, and outsourced construction, to achieve project schedule, goals, and budgets. Provided leadership with customers, and coordinated the use of multi-discipline technical teams. I am a widely known, credible, project management resource in Minnesota and Wisconsin, and completely knowledgeable of all utilities and staff, including electric cooperatives, and alternative energy developers A great mentoring influence on existing staff with regards to Project Management, Engineering, and Construction. Excellent track record with management, known for fostering collaborative relations that create a positive team dynamic. Responsible for CII Process and improvements Real Estate Agent and Developer Keller Williams, Minneapolis, MN Department of Commerce License: 20320195, Active Status. Real Estate Agent engaged in property transactions. Responsible for all client interactions pertaining to preparing comps and property valuations, sales and acquisition of residential real estate for clients in various financial categories. Management and Development of Residential Rental Property. Senior Project Manager Transmission Division Great River Energy Elk River, MN Responsible for management and creation of GRE s Transmission Division Budget, and determining which projects were to be pursued in the calendar year. Financial filter on Scope, Cost, and Reality of Execution for projects in portfolio Primary Division Project Manager for Transmission, Substation, and Permitting Responsible for all customer sensitive projects, and have fostered positive relations to those who used to be antagonistic to Great River Energy. Provided leadership with customers, and coordinated the use of multi-discipline technical teams. 5135689v1
Senior Customer Project Manager U.S. Operations Itron Incorporated Eden Prairie, MN Testimony Schedule 1 MPUC Docket No. E-002, ET-2/CN-12-113 Page 2 of 2 Address the internal and external customer service needs of Itron s U.S. customers. Develop integrated service strategies, and work with vendors to implement automated data collection systems for use by electric, gas, and water utility customers. Supervised the development and implementation of projects for Itron markets including Philadelphia, Atlanta, and Denver. Supervised and arranged outsourcing contracts for the utilization of subcontractors used in implementing new Itron systems. This includes the employment of local unions. Responsible for all customer needs during the Sales, Implementation, and Remediation phases of a project. Key technical player in establishing the sales relationship. Boardroom savvy and comfortable dealing with all company personnel levels. Traveled weekly nationally and to Canada numerous times to support my customer groups and projects. Electrical Supervisor / Senior Design Engineer Dominion Resources / Virginia Power Richmond, VA Escalating roles of responsibility during my tenure with Dominion Resources Managed IBEW electrical teams at North Anna Nuclear Power Station out of Richmond, VA as Supervisor of Electrical Construction. Created power plant design packages for various electrical and mechanical systems. Responsible for total management of projects from budgeting approval through implementation. Tremendous aptitude for most electrical and mechanical equipment. Education North Dakota State University Fargo ND BSEE in Electrical Engineering Cretin Military Academy St. Paul, MN College Preparatory Curriculum University of Phoenix, MBA, to be completed in 2012 Real Estate License held in Minnesota. Department of Commerce #:20320195 PMI- Project Management Institute PMP. Preparing to acquire PMP Credential Project portfolio, and references, provided upon request. 5135689v1