20241219Comments ISO Settlement Stipulation.PDF

HAW LEY
TROXELL P.O. Box1617
Boise, Idaho 83701-1617
Attorneys & Counselors T 208.344.6000
HAWLEYTROX ELL.COM
RON L.WILLIAMS
ADMITTEDTO PRACTICE LAW IN IDAHO AND OREGON RECEIVED
EMAIL:[e-mail] 2024 December 19, 1:23PM
DIRECT DIAL:208.388.4053 IDAHO PUBLIC
DIRECT FAX:[phone] UTILITIES COMMISSION
December 19, 2024
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd.
Building 8, Suite 201A
Boise, ID 83714
Re: Comments ofPacifiCorp Idaho Industrial Customers ("PIIC') In Support of
Settlement Stipulation/Case No. PAC-E-24-04
Introduction
PIIC is a trade association whose members consist of large electric customers served by
Rocky Mountain Power ("RMP") in Idaho. PIIC's membership includes customers receiving
service on Schedule 9. PIIC appreciates the opportunity to provide comments in support of the
Settlement Stipulation entered into by and among all parties in the above-referenced case on
December 6, 2024.
PIIC Support of Settlement Stipulation
PIIC supports the Settlement Stipulation and recommends that the Commission find that
the Settlement Stipulation is in the public interest. All active parties in this proceeding are
signatories to the Settlement Stipulation and no party opposes it. The Settlement Stipulation was
the byproduct of parties' detailed review of RMP's filing through an extensive discovery process,
followed by many rounds of settlement negotiations that took place over an extended period in
October and November of 2024. Importantly,the Settlement Stipulation was a compromise for all
parties involved. While PIIC does not necessarily support all of the provisions included in the
Settlement Stipulation viewed in isolation, PIIC is willing to accept Settlement Stipulation as a
comprehensive whole and finds the Settlement Stipulation to be a reasonable resolution of all
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issues in this proceeding. PIIC appreciates all of the hard work of the parties, Commission Staff
and RMP in reaching this agreement.
Overview of Settlement Stipulation
The Settlement Stipulation provides for a $57.94 million or 16.8% base revenue increase
effective January 1, 2025. This contrasts the $92.4 million, or 26.8%, revenue requirement
increase RMP sought in its initial filing. Thus, the settled revenue requirement in the Settlement
Stipulation represents a 37.3% reduction to the rate increase that RMP sought in its initial filing.
The Settlement Stipulation also provides for further mitigation of the impacts of the overall base
increase by extending recovery of the ECAM deferral balances,which results in a reduction of the
overall rate increase by$32.5 million. Thus,the net rate change effective January 1,2025 is$25.44
million, or 7.4%. This revenue requirement was a negotiated value due primarily to specific
updates and adjustments to RMP's initial proposed revenue requirement, including specific
amortization provisions and the Energy Cost Adjustment Mechanism ("ECAM") parameters
identified in the Settlement Stipulation, although there is a non-specific adjustment of$7.3 million
included in this reduction. While PIIC's revenue requirement recommendation supported a
substantially lower revenue requirement that the level ultimately agreed, PIIC was willing to
accept the value in the Settlement Stipulation in the spirit of compromise and in consideration of
other aspects of the settlement which PIIC found to be reasonable, which are described in more
detail herein.
Rate of Return
The Settlement Stipulation provides for a black box, negotiated rate of return of 7.25%.
Accordingly, parameters such as RMP's return on equity, cost of debt, and capital structure are
not specified. While a"black-box"rate of return settlement is not always preferred,by agreeing to
this value, and related adjustments elsewhere in the Settlement Stipulation, we avoid the need
undertake potentially contentious litigation before the Commission,which is not only costly to the
parties,but adds to the administrative burden of the Commission.
Rate Base
The Settlement Stipulation provides for a base rate increase that includes recovery of the
Gateway South and Gateway West transmission projects, as well as the Rock River I, Foot Creek
II-IV, and Rock Creek I wind projects, conditioned on RMP providing an attestation to the
Commission that the transmission projects are in service prior to the rate effective date. As part of
consideration for including recovery for these assets, RMP and the parties compromised in
reducing RMP's requested revenue requirement by $700,000 for suspended/canceled projects.
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ECAM Deferral and Two Year Stay-Out
PIIC is particularly willing to accept the Settlement Stipulation and the significant
increase in base rates due to the agreed-upon adjustment to the ECAM deferral mechanism and
RMP agreeing to a two year stay out. As described in the Settlement Stipulation,the ECAM rates
on Schedule 94 for recovery of RMP's 2023 deferred costs (Case No. PAC-E-24-05), will be
reduced by 50 percent, effective January 1, 2025 (or rate effective date of this proceeding) with
the remaining balance as of June 1, 2025, to be recovered by RMP over two years with the costs
deferred in 2024. In addition, the costs approved for recovery in RMP's 2025 ECAM filing (for
costs deferred in 2024 and including the remaining balance from the 2024 ECAM filing) will be
recovered over two years, beginning June 1, 2025. PIIC believes this two year ECAM recovery
period, combined with the two year stay out,helps address rate volatility and rate shock that would
otherwise result from the significant increase to base rates.
Conclusion
As described herein, PIIC believes that its major concerns with RMP's initial filing in this
proceeding have been adequately addressed by the Settlement Stipulation and the compromises
made by all parties to reach a satisfactory agreement. Accordingly, PIIC recommends that the
Commission find the Settlement Stipulation presented by the parties in this proceeding to be fair,
just, and reasonable and in the public interest.
Sincerely,
HAWLEY TROXELL ENNIS & HAWLEY LLP
R A l 1,14A,
Ron L. Williams
RWIL:bhel
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