20250512PIIC Comments.pdf

RECEIVED
May 12, 2025
IDAHO PUBLIC
UTILITIES COMMISSION
Ronald L. Williams, ISB No. 3034
Brandon Helgeson, ISB No. 11615
HAWLEY TROXELL ENNIS &HAWLEY LLP
877 W. Main Street, Suite 200
P.O. Box 1617
Boise, ID 83701-1617
Telephone: [phone]
Facsimile: 208.954.5253
Email: [e-mail]
[e-mail]
Attorneys For PIIC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER CASE NO. PAC-E-25-04
REQUESTING APPROVAL OF $66.7
MILLION ECAM DEFERRAL COMMENTS OF PACIFICORP IDAHO
INDUSTRIAL CUSTOMERS
The PacifiCorp Idaho Industrial Customers ("PIIC") appreciate the opportunity to provide
comments in the above-captioned case. PIIC is a trade organization that represents large
industrial customers receiving electrical services from Rocky Mountain Power, a division of
PacifiCorp ("PacifiCorp") in Idaho and is therefore interested in the rate increase under
consideration in this case.
COMMENTS
In this case, PacifiCorp has proposed to recover $76,805,479 through the Energy Cost
Adjustment Mechanism ("ECAM"), including deferred Net Power Costs ("NPC") incurred in
calendar year 2024. Pursuant to the Settlement Agreement in PacifiCorp's 2024 General Rate
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Case, Case No. PAC-E-24-04, the proposed ECAM deferral balance is being amortized over a
two-year period. If approved, PacifiCorp's filing will produce a $4.9 million, or an approximate
1.9%rate increase.
As a threshold matter, PIIC has had little opportunity to review and evaluate the
reasonableness of PacifiCorp's Actual NPC included in the ECAM deferral. PIIC's intervention
was approved on April 30, 2025, and PIIC only received PacifiCorp's workpapers and discovery
on May 6, 2025, one week prior to the deadline for submitting comments in this case. This
timing only provided for an initial review of the filing. While PIIC has not been able to fully
develop them through discovery, discussed below are several issues PIIC identified in its review.
1. Billed vs.Accounting Revenues
In response to PIIC Production Request 5, as well as in the workpapers PacifiCorp
provided in response to PIIC Production Request 2, PacifiCorp indicated that it calculates the
ECAM deferral balance using "billed revenues"not its actual, accrual revenues. In other words,
PacifiCorp excludes unbilled ECAM revenues from its calculation of the deferral. By excluding
accrual accounting for unbilled revenues in the ECAM deferral balance, however, PacifiCorp has
materially understated the deferral balance and overstated interest expense. This is an error,
which may go back many years in the ECAM balance and that needs to be corrected.
PIIC expects that the Commission and its Staff understand the concept of unbilled
revenues, which under GAAP, a utility must consider in its determination of revenue. Therefore,
a detailed explanation of that concept will not be provided here.
Further, due to PacifiCorp not being responsive to PIIC's production requests and the
lack of time available to follow up, PIIC was unable to determine the impact of correcting the
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calculation to be based on accrual revenues. In PIIC Production Request 6, PIIC asked
PacifiCorp to provide the unbilled revenues by month associated with ECAM collections.
PacifiCorp, however, did not provide the requested data, and only reiterated that it did not
consider unbilled revenues in its filing.
When asked to supplement its response to PIIC Production Request 6, PacifiCorp stated
the following:
"The company does not calculate/estimate unbilled ECAM. Unbilled revenue is
calculated at the revenue class level which has ECAM embedded within the calculation."
It may be true that PacifiCorp's calculations are done at a class level, and that the
unbilled revenues for the ECAM are embedded within that amount, although PacifiCorp did not
provide any workpapers to support its assertion regarding the way its calculation was performed.
Schedule 94, however, includes deferred ECAM rates that are separate from the base tariff rates
of the underlying rate classes. PacifiCorp acknowledged that Schedule 94 rates are considered in
the calculation of unbilled revenues, and therefore, the portion of a classes' unbilled revenues
associated with the ECAM should be easily obtainable, regardless of how the calculation is
performed.
PacifiCorp certainly has an incentive not to provide the unbilled revenues associated with
ECAM, because properly considering those unbilled revenues in the ECAM balance will reduce
its rate recovery. Correcting this issue has two impacts on the deferral. First, the interest
expense would need to be recalculated based on the month when the revenues are incurred, not
the month when the revenues are billed. PacifiCorp's cash working capital allowance already
provides recovery of carrying costs associated with the billing cycle, including the carrying cost
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on unbilled revenues. Thus, considering billing lag in the calculation of interest in the ECAM
otherwise double counts the recovery of the billing cycle carrying costs.
Second, the unbilled revenues in May 2025 need to be applied against the 2024 ECAM
(Case No. PAC-E-24-05) deferral. Because customers' bills are sent out after the month of
consumption, a portion of their bills received in June 2025 will relate to recovery of the 2024
ECAM balance That portion of their bills needs to be applied to the 2024 ECAM, or else the
balance in this case will be overstated. For example, if a customer receives a bill on June 15 for
energy consumption over the period May 16 through June 15, approximately 16 days will be
billed at the 2024 ECAM rates and 15 days will be billed under the 2025 ECAM (i.e. this filing)
rates. To accurately account for the deferral balance, those first 16 days of the bill need to apply
to the 2024 ECAM, not the 2025 ECAM. PacifiCorp's method, other the other hand, of using
the billing month rather than accrued revenues, would result in 100% of that customer's bill
towards the 2025 ECAM, including the 16 days that were billed at 2024 ECAM rates, which is
incorrect accounting for those revenues.
2. Interest through the Deferral Period
As noted in PacifiCorp's Response to PIIC Production Request 2, PacifiCorp has
included a new line item in the ECAM deferral to recover approximately $3,579,537 to recover
incremental interest forecast to be accrued over the collection period. This is a new proposed
item in the ECAM calculation, and a change in the way the ECAM deferral has historically been
calculated. Historically, the ECAM balance has accrued interest at the Commission approved
rate, and that interest has been recoverable through the ECAM deferral period in which it is
incurred. In this case, PacifiCorp is proposing to recover those balances prospectively, rather
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than relying on the established method. Changes to the ECAM structure are generally only
considered in a general rate case, and that PacifiCorp did not request nor receive approval of this
change in Case No. PAC-E-24-04. Therefore, PIIC does not believe that making such a change
to the ECAM structure in this case is appropriate. PIIC requests the Commission reject this
change.
It is not known at this time what the interest rates will be in future deferral periods, and it
is preliminary to make assumptions about those rates. Accordingly, PIIC believes the existing
method for recovering interest is the most appropriate.
3. OF Reasonable Energy Price Adiustment
As PacifiCorp noted in response to PIIC Production Request 3, PacifiCorp includes a
$1,512,726 addition to the deferral balance for the 2020 Protocol QF Reasonable Energy Price
("REP") adjustment. Once again, PIIC assumes the Commission and Staff are familiar with the
REP adjustment and will not provide a detailed explanation of that adjustment here. PIIC's
issue, however, is that PacifiCorp applied the REP adjustment outside of actual NPC and not
subject to the 90/10 sharing bands. PIIC believes that this is incorrect, and that the REP
adjustment, like other adjustments used to calculate Idaho-allocated Actual NPC, should be
subject to the 90/10 sharing band.
In response to PIIC Production Request 4, PacifiCorp noted its reasoning for not applying
the 90/10 sharing bands to the REP adjustment as follows:
Because prices for qualified facilities (QF) are set by the state of origin, it is appropriate
that costs above the reasonable energy price are situs-assigned to the state of origin and
not subject to the 90/10 sharing band. QF pricing is set by the state of origin and treated
as direct passthrough costs recovered from customers without utility influence.
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PIIC does not believe that this is valid or correct. The fact that"prices for qualified facilities
(QF) are set by the state of origin" has no bearing on whether the adjustment should be subject to
the 90/10 sharing band in the ECAM. In contrast, the REP adjustment was intended to be used
to determine Idaho's share of total-system Actual NPC. Idaho's share of total-system Actual
NPC, including the REP adjustment, is otherwise subject to 90/10 sharing through the current
structure of the ECAM. Therefore, it is appropriate to apply sharing to the REP adjustment.
Further, the REP adjustment in the 2020 Protocol was not intended to be a pass-through
adjustment, separate and independent from the approved structure of the ECAM. When parties
agreed to the methods in the 2020 Protocol, there was no agreement made to change the structure
of the ECAM.
While PIIC believes it is appropriate to consider the REP adjustment in the ECAM, the
adjustment needs to be considered in Idaho-Allocated NPC and subject to the sharing band, not
as a stand-alone adjustment outside of the sharing band.
CONCLUSION
PIIC appreciates the opportunity to provide these comments and looks forward to
working with parties on further resolution of this case.
Dated this 12th day of May, 2025.
HAWLEY TROXELL ENNIS & HAWLEY LLP
By
RAq � k14,,1,-,
Ronald L. Williams, ISB No. 3034
Brandon Helgeson, ISB No. 11615
Attorneys For PIIC
PIIC COMMENTS - 6
59501.0003.17163702.2

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I caused to be served a true copy of the foregoing
COMMENTS OF PACIFICORP IDAHO INDUSTRIAL CUSTOMERS by the method
indicated below, and addressed to each of the following:
Commission Secretary ❑ U.S. Mail, Postage Prepaid
Idaho Public Utilities Commission ❑ Hand Delivered
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secretgakpuc.idaho.gov ❑ Facsimile
❑ iCourt
Data Request Response Center ❑ U.S. Mail, Postage Prepaid
825 NE Multnomah St. Suite 2000 ❑ Hand Delivered
Portland, OR 97232 ❑ Overnight Mail
datarequestgpacificorp.com Q E-mail:
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Joe Dallas ❑ U.S. Mail, Postage Prepaid
Rocky Mountain ❑ Hand Delivered
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Rocky Mountain Power ❑ Hand Delivered
1407 West North Temple, Suite 330 ❑ Overnight Mail
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Dated: May 12, 2025.
RA"q � V4�t'
Ronald L. Williams, ISB No. 3034
Brandon Helgeson, ISB No. 11615
PIIC COMMENTS - 9
59501.0003.17163702.2