HomeMy WebLinkAbout20081103_2396.pdfDECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
DATE: OCTOBER 31, 2008
SUBJECT: CASE NO. PAC-E-08-08 (Rocky Mountain Power)
APPLICATION FOR APPROVAL OF ENERGY COST
ADJUSTMENT MECHANISM (ECAM)
On October 23, 2008, PacifiCorp dba Rocky Mountain Power (Rocky Mountain
Power; Company) filed an Application with the Idaho Public Utilities Commission
(Commission) requesting approval of an energy cost adjustment mechanism (ECAM).
Rocky Mountain Power’s proposed ECAM is designed to defer the difference
between Base net power costs set during a general rate case and collected from customers in their
retail rates and Actual net power costs incurred by the Company to serve retail customers. The
calculation of the deferral would be on a monthly basis by comparing a monthly Base net power
cost (NPC) rate in dollars per megawatt-hour to the Actual NPC rate also in dollars per
megawatt-hour. The resulting monthly NPC differential rate would be applied to actual Idaho
retail sales to calculate the NPC differential for deferral. A carrying charge equal to the
Company’s most recently authorized return on rate base would be applied to the deferred
balance. Annually on April 1 the Company would file an application with the Commission to
adjust the ECAM surcharge rate beginning June 1 to refund or collect the ECAM deferred
balance from the end of the prior calendar year.
The ECAM is designed to recover the sum of all components of net power costs as
traditionally defined in the Company’s general rate cases and modeled in its power supply model
GRID. Specifically, base NPC will include costs typically booked to the following FERC
accounts:
DECISION MEMORANDUM 2
Account 447 – Sales for resale, excluding non-GRID transmission services
and on-system wholesale sales
Account 501 – Fuel, steam generation; excluding fuel handling, start up
fuel/gas, diesel fuel, residual disposal and other non-GRID items
(Start up fuel is accounted for separate from the primary fuel for steam power
generation plants. Start up costs are not accounted for separately for natural
gas plants, and therefore all fuel for natural gas plants is included in actual net
power costs.)
Account 503 – Steam from other sources
Account 547 – Fuel, other generation
Account 555 – Purchased power, excluding BPA residential exchange credit
pass-through if applicable
Account 565 – Transmission of electricity by others
Actual costs booked to the above accounts, will be subject to review by the Commission and
other parties in each of the Company’s applications prior to inclusion in the ECAM surcharge.
The Company’s Application is accompanied by the testimony of Gregory N. Duvall,
Director of Power Costs.
Rocky Mountain Power submits that approval and implementation of the proposed
ECAM as filed, is in the public interest. The Company requests that the Commission issue a
final Order approving the Company’s ECAM effective coincident with the new rates resulting
from its general rate case, Case No. PAC-E-08-07.
COMMISSION DECISION
Rocky Mountain Power has filed an Application requesting approval of an energy
cost adjustment mechanism (ECAM). Staff recommends that the Commission issue a Notice of
Application and establish an intervention deadline. Does the Commission agree with Staff’s
recommended procedure?
Scott Woodbury
Deputy Attorney General
bls/M:PAC-E-08-08_sw