20000317_Schdl70_sw.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
RON LAW
TONYA CLARK
DON HOWELL
STEPHANIE MILLER
DAVE SCHUNKE
RICK STERLING
WORKING FILE

FROM:

DATE: March 17, 2000

RE: PACIFICORP TARIFF ADVICE NO. 00-02
PROPOSED SCHEDULE 70
NEW WIND, GEOTHERMAL AND SOLAR POWER RIDER—Optional

On March 10, 2000, PacifiCorp dba Utah Power & Light Company (PacifiCorp; Company) filed a Tariff Advice with the Idaho Public Utilities Commission for approval of a new renewable energy tariff, Schedule 70 New Wind, Geothermal and Solar Power Rider—Optional. The Company makes this filing pursuant to Commission Order and Company commitment in the recent merger case between PacifiCorp and ScottishPower, Case No. PACE99-01.
The proposed Schedule 70 tariff, the Company states, will allow customers who so choose to purchase blocks of energy from new renewable generation resources. The customer will choose the number of blocks to purchase, which is not dependent on the amount of energy used. Customers who participate will pay an additional $4.75 per month per 100 kWh block of renewable energy. This premium is in addition to the normal billed rate. The premium will be used to cover the costs of the program. These costs include marketing costs, program administration and the incremental cost of the new renewable energy.
For accounting purposes, the Company states that the costs associated with the program will be booked in accordance with normal FERC accounting procedures. For the purpose of earnings demonstrations (i.e., Results of Operations reports, general rate cases, etc.), a normalizing adjustment will be made to remove the revenues, program costs and above-market costs of the energy associated with the program from the revenue requirement calculation. This, the Company states, will assure that no costs are borne by non-participants.
This program, the Company states, is considered by it to be a generation program. As such, all revenues and costs will be allocated system-wide using the generation allocation factors.
The Company states that it will provide annual reports commencing October 31, 2000. The reports will include the revenues received, blocks purchased, blocks generated or contracted for, and other program costs. The annual reports will include both the 12 months ended September 30 period and the period from the program inception. The reports are intended to provide the Company, Commission and interested parties with the information necessary to assure that the program revenues are just sufficient to cover the program costs over the life of the program. After an initial two-year period, the Company states that it will review the revenues and costs associated with the program. The Company may at that time request before the Commission that the program be modified to adjust the price and/or the size of the blocks purchased to match the costs and revenues on an ongoing basis. Attached to the Company’s Application is a program description Q&A with further details. Included in the Q&A is a financial analysis of the program and an example of the program accounting.
In accordance with IDAPA 31.01.01.134, PacifiCorp requests that Schedule 70 become effective April 12, 2000.
Commission Decision
Staff recommends that the Company’s Application be processed as a formal case rather than a Tariff Advice and that comment be solicited pursuant to Modified Procedure. What is the Commission’s preference regarding procedure?

vld/M:Schedule70_sw

DECISION MEMORANDUM 1