Attch17_PACE003_StaffComments.doc

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 1895

Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF PACIFICORP DBA UTAH POWER & LIGHT COMPANY FOR APPROVAL OF A SPECIAL CONTRACT FOR SERVICE TO NU-WEST INDUSTRIES, INC. )
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CASE NO. PAC-E-00-3

COMMENTS OF THE COMMISSION STAFF

COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of Application and Notice of Modified Procedure issued on April 25, 2000, submits the following comments.
On March 17, 2000, PacifiCorp dba Utah Power and Light Company (Utah Power; Company) filed Tariff Advice 00-03 with the Idaho Public Utilities Commission requesting approval of a Special Contract, a Master Electric Service Agreement (Agreement) dated June 8, 1998, with Nu-West Industries, Inc. (Nu-West). At the Commission’s Decision Meeting on April 12, 2000, the Commission directed that the filing be given a case number and noticed for public comment under the rules for Modified Procedure. The Company’s filing, including the proposed Agreement, is attached.
Nu-West’s load exceeds 15 MW, which requires a Special Contract in Idaho. Reference Utah Power Tariff Schedule 9; Schedule 400. Rates in the new Agreement are 3.3 ¢/kWh for all kWh if Nu-West uses a minimum amount of energy. If Nu-West uses less than the minimum, on an annual basis, it pays 3.4339 ¢/kWh for all kWh. The rates remain constant over the contract term. The Agreement rates, although simplified, are based on rates in the previous Nu-West contract. Reference Nu-West special contract August 17, 1987, Amendment 8, July 31, 1995. The Agreement rates are simplified in that there is no demand component to the rates; instead, the demand portion of the revenue requirement has been blended into the energy rate. The Agreement also provides a market-based rate option for Nu-West in the event that the market is opened to customer choice during the contract term. (Section 4.2)
Nu-West is an “Idaho jurisdictional” special contract customer. As an Idaho jurisdictional customer, all costs of providing service to Nu-west are assigned to the Idaho jurisdiction along with all revenue. Rates in this Agreement (as in the previous contract) were based on a cost-of-service study completed as part of Case No. UPL-E-90-1. The rates are consistent with cost-based rates for comparable customers of Utah Power today. Based on its analysis, Staff concludes that the proposed rates cover the Company’s costs and provide the Company with a reasonable return.
The submitted Agreement was negotiated in 1998 for a three and one-half year minimum term that ends December 31, 2001. After the initial term the Agreement “shall automatically be renewed from year to year subject to the same terms and conditions … unless either party submits written termination notice…” (Section 2.1) An oversight on the Company’s part resulted in the Agreement not being filed for Commission approval until this time. The Company in its filing requested an effective date of August 18, 1998. The prior contract by its terms expired August 16, 1998. The proposed Agreement was to be effective July 1, 1998. (Section 2.1) Pursuant to inquiry, the Company now informs Staff that the effective date it requests is July 1, 1998, not August 18, 1998.
Staff has reviewed the proposed Agreement and recommends that it be approved as filed, for an effective date of July 1, 1998. Staff further recommends that in all future contracts with Idaho customers the Company be required to include language that requires Commission approval to make the contract effective. This is common practice and would make it more difficult to over look filing the contract with the Commission. Staff also recommends that upon approval the Commission require the Company to file a schedule summarizing the contact rates.

Dated at Boise, Idaho, this day of May 2000.

_______________________
Scott Woodbury
Deputy Attorney General

Attachment

Technical Staff: Keith Hessing

SW:gdk:i:umisc/comments/pace003.swkh
STAFF COMMENTS 1 MAY 11, 2000