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Home My WebLink About20070712IPC to ICIP 1-3.pdf, . C' ' "-- IDAHO~POWER~ . I . \..; ; ;.~. ','-' An IDACORP Company BARTON L. KLINE Senior Attorney July 12 , 2007 Jean D. Jewell, Secretary Idaho Public Utilities Commission 472 West Washington Street P. O. Box 83720 Boise, Idaho 83720-0074 Re:Case No. IPC-07- General Rate Case Filing Dear Ms. Jewell: Please find enclosed an original and two (2) copies of Idaho Power s Response to the First Production Request of the Industrial Customers of Idaho Power in the above- referenced matter. I would appreciate it if you would return a stamped copy of this transmittal letter in the enclosed self-addressed , stamped envelope. Barton L. Kline BLK:sh Enclosure O. Box 70 (83707) 1221 W. Idaho St. Boise, ID 83702 '.. ,- '"'" " BARTON L. KLINE ISB #1526 LISA D. NORDSTROM ISB #5733 Idaho Power Company O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-2682 FAX Telephone: (208) 388-6936 , ,; '-" , i '-- ? J i ~;: 1:, iiJ, i~'i"'SiC Attorney for Idaho Power Company Street Address for Express Mail: 1221 West Idaho Street Boise, Idaho 83702 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AUTHORITY TO INCREASE ITS RATES AND CHARGES FOR ELECTRIC SERVICE TO ELECTRIC CUSTOMERS IN THE STATE OF IDAHO ) CASE NO. IPC-07- RESPONSE OF IDAHO POWER TO THE FIRST PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER COMES NOW , Idaho Power Company ("Idaho Power" or "the Company ) and , in response to the First Production Request of the Industrial Customers of Idaho Power to Idaho Power Company dated June 14, 2007, herewith submits the following information: RESPONSE OF IDAHO POWER TO THE FIRST PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - REQUEST FOR PRODUCTION NO.Because Idaho Power s system becoming increasingly capacity constrained why does the cost of service study show a shift of relative costs to high load factor customers? RESPONSE TO REQUEST FOR PRODUCTION NO.1: The results of the cost- of-service study reflect a proportionately larger increase in energy-related costs than demand-related costs since the company s last general rate case. Energy-related costs such as fuel and purchased power have increased by a greater percentage than other cost components such as transmission investment that is considered demand-related. As a result, customer groups having comparatively higher energy usage relative to their demand have been assigned a larger than average proportion of the cost increase. The response to this request was prepared by Tim Tatum , Senior Pricing Analyst, Pricing and Regulatory Services Department, Idaho Power Company, in consultation with Barton L. Kline, Senior Attorney, Idaho Power Company. RESPONSE OF IDAHO POWER TO THE FIRST PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 2 REQUEST FOR PRODUCTION NO.Because residential and small commercial have similar load shapes why does the cost of Service method selected by the Company (3CP/12CP) indicate a much higher increase for small commercial (15.29%) than residential (1.27%)? RESPONSE TO REQUEST FOR PRODUCTION NO.2: Order No. 30035 in Case No. IPC-05-28 (Case No. 05-28) authorized the Company to revise the eligibility criteria for service under Schedule 7, Small General Service and Schedule Secondary, Large General Service. Under the revised eligibility criteria, approximately 000 of the largest energy users on Schedule 7 migrated to Schedule 9 beginning in June 2006. As a result of this change to the composition of the class, the annual energy consumption for the Small General Service class decreased by approximately 30% while the average number of customers within the class only decreased by approximately 7%. Under Schedule 7, Small General Service , the majority of the customer-related fixed costs are recovered through the energy charges. With that in mind , any decrease to energy consumption that is greater than the percentage decrease in customers will result in a decrease to revenue from sales that is greater than the decrease to the customer-related revenue requirement. This relationship between energy usage and fixed-cost recovery combined with the reduction in energy usage per customer is driving the larger revenue deficiency for Small General Service. As can be seen on Exhibit 57 , each of the four cost-of-service study scenarios submitted in this case result in a similar relationship between the increases for Small General Service and Residential Service , including the Company s preferred 3CP/12CP RESPONSE OF IDAHO POWER TO THE FIRST PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 3 method. Small General Service consistently resulted in a near 15% increase under all four scenarios , while Residential Service varied between a 1.71% decrease and a 63% increase.The larger increase for Small General Service as compared to Residential Service is not due to a significant change in the class s load shape , but is mostly attributable to a 25% reduction in energy usage per customer within the Small General Service customer class since the Company s last general rate case , Case No. 05-28. The revenue requirement for Schedule 7 , Small General Service, used for the rate design included in Case No. 05-28 was developed using energy and customer units that were adjusted to account for this reduction in average energy usage per customer. However, the cost-of-service studies included in Case No. IPC-07-08 are the first to include test year data that reflect the actual new class composition. The response to this request was prepared by Tim Tatum , Senior Pricing Analyst, Pricing and Regulatory Services Department, Idaho Power Company, in consultation with Barton L. Kline, Senior Attorney, Idaho Power Company. RESPONSE OF IDAHO POWER TO THE FIRST PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 4 REQUEST FOR PRODUCTION NO.The "base case" and "non-weighted cost of service study (Tatum Exhibit No. 57) filed in this case is said to be the same as those filed in the last case (IPC-05-28), however reference Brilz Exhibit No. 48 in that case which shows the cost of service increases being less for small commercial than residential. What is the explanation for such a large difference? RESPONSE TO REQUEST FOR PRODUCTION NO.3: The answer to this request is included in the Response to Request for Production No. The response to this request was prepared by Tim Tatum , Senior Pricing Analyst, Pricing and Regulatory Services Department, Idaho Power Company, in consultation with Barton L. Kline, Senior Attorney, Idaho Power Company. DATED at Boise, Idaho, this day of July, 2007. BARTON L. KLINE Attorney for Idaho Power Company LISA D. NORDSTROM Attorney for Idaho Power Company RESPONSE OF IDAHO POWER TO THE FIRST PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 5 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this ay of July, 2007 , I served a true and correct copy of the within and foregoing document upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Weldon Stutzman Deputy Attorney General Donovan Walker Deputy Attorney General Idaho Public Utilities Commission 472 W. Washington (83702) O. Box 83720 Boise, Idaho 83720-0074 Industrial Customers of Idaho Power Peter J. Richardson , Esq. Richardson & O'Leary 515 N. 2ih Street O. Box 7218 Boise , Idaho 83702 Don Reading Ben Johnson Associates 6070 Hill Road Boise, Idaho 83702 Idaho Irrigation Pumpers Association, Inc. Eric L. Olsen Racine, Olson, Nye, Budge & Bailey O. Box 1391 201 E. Center Pocatello , Idaho 83204 Anthony Yankel 29814 Lake Road Bay Village , OH 444140 ----X..Hand Delivered- U.S. Mail Overnight Mail FAX ----X.. Email Weldon.stutzman(g)puc.idaho.qov Donovan.walker(g) puc.idaho.qov Hand Delivered --LU.S. Mail Overnight Mail FAX Email peter(g) richardsonandolearv.com Hand Delivered --LU.S. Mail Overnight Mail FAX Email dreadinq (g) mindsprinq.com Hand Delivered --LU.S. Mail Overnight Mail FAX Email elo(g)racinelaw.net Hand Delivered --L U.S. Mail Overnight Mail FAX Email evankel (g) attbLcom RESPONSE OF IDAHO POWER TO THE FIRST PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 6 Kroger Co. Fred Meyer and Smiths Michael L. Kurtz Kurt J. Boehm Boehm , Kurtz & Lowry 36 East Seventh Street, Su ite 151 0 Cincinnati, Ohio 45202 The Kroger Co. Attn: Corporate Energy Manager (G09) 1014 Vine Street Cincinnati , Ohio 45202 Micron Technology Conley Ward Michael C. Creamer Givens Pursley 601 W. Bannock Street O. Box 2720 Boise , Idaho 83701 Dennis E. Peseau , Ph. Utility Resources , Inc. 1500 Liberty Street SE , Suite 250 Salem , OR 97302 Department of Energy Lot Cooke Acting Assistant General Counsel United States Department of Energy 1000 Independence Ave., SW Washington , DC 20585 Routing Symbol GC- 76 Dale Swan Exeter Associates 5565 Sterrett Place, Suite 310 Columbia, MD 20904 Hand Delivered ---2LU.S. Mail Overnight Mail FAX..x Email mkurtzembkllawfirm.com kboehm em bkllawfirm.com Hand Delivered ---2LU.S. Mail Overnight Mail FAX Email Hand Delivered ---2LU.S. Mail Overnight Mail FAX Email cewemqivenspursleV.com Hand Delivered ---2LU.S. Mail Overnight Mail FAX ----X Email dpeseau em excite.com Hand Delivered - U.S. Mail -X.. Overnight Mail FAX ----X Email lot cooke em hq.doe.qov Hand Delivered - U.S. Mail -X.. Overnight Mail FAX Email dswan em exeterassociates.com ---- Barton L. Kline RESPONSE OF IDAHO POWER TO THE FIRST PRODUCTION REQUEST OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER - 7