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HomeMy WebLinkAboutApplication.tif****************RELIEVED**************** 10/07/2 PUBLI MEGAN GOICOECHEA ALLEN Corporate Counsel mgoicoecheaallen@idahopower.com October 7, 2024 Commission Secretary Idaho Public Utilities Commission 11331 W. Chinden Boulevard Building 8, Suite 201-A Boise, Idaho 83714 «(.:. 411-1II: i,,I;I : POVVER® Re: Case No. IPC-E-24-38 Idaho Power Company's Compliance with Order No. 36402 for Authority to Track Annual Wheeling Revenues in the Power Cost Adjustment Dear Commission Secretary: Attached for electronic filing, please find Idaho Power Company's Application in the above -entitled matter. If you have any questions about the attached documents, please do not hesitate to contact me. Sincerely, Anbr, icoetkeR 64 Megan Goicoechea Allen MGA:sg Attachments 1221 W. Idaho St (83702) P.O. Box 70 Boise, ID 83707 APPLICATION - 1 MEGAN GOICOECHEA ALLEN (ISB No. 7623) LISA D. NORDSTROM (ISB No. 5733) Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-2664 Facsimile: (208) 388-6935 mgoicoecheaallen@idahopower.com lnordstrom@idahopower.com Attorneys for Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY’S COMPLIANCE WITH ORDER NO. 36402 FOR AUTHORITY TO TRACK ANNUAL WHEELING REVENUES IN THE POWER COST ADJUSTMENT. ) ) ) ) ) ) CASE NO. IPC-E-24-38 APPLICATION Idaho Power Company (“Idaho Power” or “Company) respectfully requests that the Idaho Public Utilities Commission (“Commission”) issue an Order authorizing the Company to track third-party transmission wheeling revenues (“wheeling revenues”) in its Power Cost Adjustment (“PCA”) in compliance with the settlement stipulation approved by Order No. 36042 issued in the Company’s 2023 General Rate Case, IPC-E-23-11 (“2023 GRC”). In further support of this Application, Idaho Power represents as follows: I. BACKGROUND 1. The PCA is a rate mechanism that quantifies and tracks annual differences between Net Power Supply Expense ("NPSE") and the normalized or "base level" of NPSE recovered in the Company's base rates for recovery or credit through an annual rate change on June 1. 2. Transmission wheeling revenues are revenues billed according to the Company's Open Access Transmission Tariff ("OATT") rates when a third -party requests to move power across Idaho Power's transmission system and capacity is available to do so. OATT rates, established through an annual formula rate process at the Federal Energy Regulatory Commission ("FERC"), are intended to recover the cost of owning, operating, and maintaining Idaho Power's transmission system. These costs are not considered power supply costs and therefore have not historically been tracked through the PCA. In contrast, third -party transmission expenses, which are costs incurred to bring purchased power into Idaho Power's system or to allow for surplus sales be made to other utilities, are power supply costs and are tracked through the PCA. 3. Wheeling revenues are included in customer base rates as an offset, or credit, to the costs of owning and maintaining the Company's transmission system and are addressed in general rate case proceedings. 4. On April 23, 2013, the Commission issued its Notice of Application in Idaho Power's 2013 PCA case, inviting the parties to "comment on the issue of whether Idaho Power's PCA calculation should continue to include transmission expenses only or APPLICATION - 2 whether both transmission revenue and expense should be included." Through comments filed in that case, Commission Staff ("Staff') supported including wheeling revenue differences in the PCA. Idaho Power disagreed, asserting that third -party transmission wheeling revenues are independent of NPSE, as opposed to third -party transmission expenses that vary directly with the number of purchased power or surplus sales transactions. Ultimately, the Commission ordered that the Company was to include wheeling revenue differences in the PCA once a base level of revenue was set in a general rate case.2 5. On December 23, 2023, the Commission issued Order No. 36042 in Idaho Power's 2023 GRC, which approved the settlement stipulation entered into by Idaho Power, Staff, Clean Energy Opportunities for Idaho, Idaho Irrigation Pumpers Association, Inc., Industrial Customers of Idaho Power, Idaho Hydroelectric Power Producers Trust d/b/a IdaHydro, Micron Technology, Idaho Conservation League, the City of Boise, The United States Department of Energy on behalf of the Federal Executive Agencies, NW Energy Coalition, and Walmart, Inc. (collectively "the Parties"). In the settlement stipulation, Parties agreed that the Idaho -jurisdictional amount of $46,361,643 in third - party point-to-point wheeling revenues would serve as the baseline for potential tracking of these revenues. 6. Since the conclusion of the 2023 GRC, Idaho Power and Staff have held informal discussions regarding a methodology to track wheeling revenues in the PCA, In the Matter of the Application of Idaho Power Company for Authority to Implement Power Cost Adjustment (PCA) Rates for Electric Service From June 1, 2013, Through May 31,2014, Case No. IPC-E- 13-10, Order No. 32796 (April 23, 2013). 2 Id., Order No. 32821, p. 14 (May 31, 2013). APPLICATION - 3 and based on those discussions, the Company believes that the methodology proposed in this Application complies with the Commission's initial order in the 2013 PCA and the terms of the settlement stipulation approved in the 2023 GRC. A summary of the proposed methodology is as follows: II. WHEELING REVENUE TRACKER 7. Based on discussions and input from Staff, Idaho Power proposes to implement a transmission wheeling revenue tracking mechanism that, if approved, would measure the difference between actual wheeling revenues and a sales -adjusted baseline level of wheeling revenues as a component of the PCA Balancing Adjustment effective April 1, 2024. The base level of wheeling revenues from which variances will be tracked will be calculated by multiplying the dollar per megawatt -hour ("MWh") rate of wheeling revenues embedded in base rates, as established in a general rate case or other applicable ratemaking proceeding where transmission costs and wheeling revenues are addressed, by actual Idaho -jurisdictional sales. Based on the wheeling revenues and test year sales included in the 2023 GRC, a base level rate of $3.11 per MWh ($46,361,643 / 14,907,835 MWh = $3.11/MWh) will be used to calculate base level revenues from which future variances will be tracked in the PCA. 8. The amount of wheeling revenues credited or charged to customers in the PCA will be calculated by taking the difference between actual Idaho -jurisdictional wheeling revenues and base level revenues during each April 1st through March 31 st ("PCA Year"), as described above, multiplied by the sharing percentage of 95 percent. Actual system wheeling revenues will be apportioned to the Company's Idaho jurisdiction APPLICATION - 4 utilizing the Idaho percentage share of actual retail sales in the same manner as system NPSE. 9. The Company proposes wheeling revenues be tracked in the PCA beginning April 1, 2024, aligning with the current PCA Year. Calculated differences will be included in the Balancing Adjustment component of the PCA, and the associated Balancing Adjustment rate contained in Schedule 55 10. The methodology proposed in this case complies with Commission Order Nos. 32821 and 36042. However, as the Company has noted in past discussions, third - party wheeling rates are established through a separate annual formula rate process at the FERC in accordance with the Company's OATT. The Company respectfully requests that the Commission carefully consider that the tracking of wheeling revenues as proposed in this Application without accounting for ongoing changes in corresponding transmission system costs could result in an unwarranted and unintended disconnect between transmission cost recovery and transmission revenues tracked through the proposed mechanism. This disconnect could arise because transmission cost recovery is established through distinctly different and separate FERC and state jurisdictional ratemaking processes. Therefore, it is important that the Company and Staff continue to monitor the nature of wheeling revenues and associated cost recovery with regard to the proposed mechanism. In the event of a significant change to the Company's transmission system (e.g., the energization of the Boardman -to -Hemingway transmission line or other large transmission investment) or potential movement to a day -ahead market, this mechanism may need to be modified or discontinued to avoid any unwarranted financial harm to the Company or its customers. APPLICATION - 5 III. MODIFIED PROCEDURE 11. Idaho Power believes that a technical hearing is not necessary to consider the issues presented herein and respectfully requests that this Application be processed under Modified Procedure, i.e., by written submissions rather than by hearing. Rule of Procedures 201, et seq. IV. COMMUNICATIONS AND SERVICE OF PLEADINGS 12. Communications and service of pleadings with reference to this Application should be sent to the following: Megan Goicoechea Allen Lisa D. Nordstrom Regulatory Dockets Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 mgoicoecheaallen@idahopower.com Inordstrom@idahopower.com dockets@idahopower.com Matthew T. Larkin Timothy E. Tatum Jessi Brady Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 mlarkin@idahopower.com ttatum@idahopower.com jbrady(�idahopower.com V. REQUEST FOR RELIEF 13. Idaho Power respectfully requests that the Commission issue an order: (1) authorizing that this matter be processed by Modified Procedure; (2) acknowledging that the Company's proposal outlined herein satisfies the relevant Commission directives pursuant to Order Nos. 32821 and 36042; and (3) authorizing Idaho Power to track wheeling revenues in the PCA, beginning April 1, 2024, as detailed in this Application. DATED at Boise, Idaho, this 7th day of October 2024. 4196410icoet MAA. MEGAN GOICOECHEA ALLEN Attorney for Idaho Power Company APPLICATION - 6