20100514IPC to IIPA 1-10.pdf

LISA D. NORDSTROM lDAHO PLlBUGLead Counsel i lTILlitES èOMMìSSI
Inordstromc&idahopower.cOhf -
esIDA~POR~
An IDACORP Company
May 14, 2010
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-10-12
2010-2011 peA
Dear Ms. Jewell:
Enclosed for filing please find an original and three (3) copies of Idaho Power
Company's Responses to the Idaho Irrigation Pumpers Association, Inc.'s, First Data
Requests to Idaho Power Company in the above matter. In addition, four (4)disks
containing electronic information responsive to the Irrigation Pumpers' Request Nos: 2, 4,
and 7 have also been enclosed.
Very truly yours,x~l)~~
Lisa D. Nordstrom
LDN:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, ID 83702
LISA D. NORDSTROM (ISB No. 5733)
DONOVAN E. WALKER (ISB No. 5921)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
Inordstrom(iidahopower.com
dwalker(iidahopower.com
RECEIVED
2010 MAY l 4 PM 12: 46
ID"H'.u... P\.,\=i ¡C'.. ..1'"\ _Äl _ ft:':1.it'cfr.:¡i
UTIUTIE;; COI'.,r"Hv,"¡v,~
Attorneys for Idaho Power eompany
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES eOMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER eOMPANY FOR ) CASE NO. IPC-E-10-12
AUTHORITY TO IMPLEMENT POWER )
COST ADJUSTMENT ("PCA") RATES ) IDAHO POWER COMPANY'S
FOR ELECTRIC SERVICE FROM JUNE 1, ) RESPONSES TO THE IDAHO
2010, THROUGH MAY 31, 2011. ) IRRIGATION PUMPERS
) ASSOCATION, INC.'S FIRST DATA
) REQUESTS TO IDAHO POWER
) COMPANY
)
COMES NOW, Idaho Power Company ("Idaho Powet' or the "Company"), and in
response to the Idaho Irrigation Pumpers Association, Inc.'s First Data Requests to
Idaho Power Company dated May 3, 2010, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 1
REQUEST NO.1: In Rebutal testimony in Case No. IPC-E-06-8, page 27,
beginning on line 11, Company witness Said gave the following testimony:
Q. Please summarize your rebuttal testimony.
A. All parties agree that a principal purpose of the PCA load
growth adjustment rate is to eliminate the potential for double
recovery of power supply expenses. Idaho Power believes this
should be the sole purpose of the load growth adjustment.
Does the Company stil believe that the sole purpose of the load growth adjustment in
the PCA is to eliminate potential double recovery of power supply expenses? If not,
please explain.
RESPONSE TO REQUEST NO.1: Yes and no. Mr. Said's referenced
statement was made in the context of growing loads, not declining loads. Further, Mr.
Said's statement was focused on the appropriate rate components to be included in the
derivation of the load growth adjustment rate ("LGAR") and not the application of the
LGAR in the calculation of the PCA.
The current LGAR was derived under the stipulated methodology approved by
the Commission in its Order No. 30715 in Case No. IPC-E-08-19. The LGAR
represents the amount of base level power supply expense and specific generation
related cost recovery that is included in the Company's base rates. In periods of load
growth, the LGAR eliminates the double recovery of power supply expenses and the
potential for double recovery of other specific generation related costs that mayor may
not be increasing. In periods of load decline, the LGAR is consistently applied to ensure
that the Commission-allowed base level power supply costs are appropriately
accounted for in the calculation of the PCA. That is, the LGAR recognizes that the
amount of power supply expenses and other specific generation related costs recovered
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 2
..
through the Company's base rates changes as loads increase or decline. Therefore, a
"load growth adjustment" must be made in order to properly estimate power supply
expenses at a normalized load level, eliminating factors such as weather or stream flow
conditions.
The response to this Request was prepared by Tim Tatum, Manager, Cost of
Service, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 3
REQUEST NO.2: In this case the Expense Adjustment Rate for Growth (EAGR)
or what is sometimes referred to as the Load Growth Adjustment Rate (LGAR)
produces a positive increase in the cost of the PCAfor April 2009 through March 2010
in the amount of $23,680,328.05 as listed on line 13 of Exhibit 1. Is this the first PCA
filng where the annual expense adjustment for the EAGR (found on line 13 of Exhibit 1)
reflected a negative growth, where the energy consumed was less than that which was
in the base rate calculation? If not, please specify the case where this was previously
true and provide the exhibit from that case where this "negative" growth was
demonstrated.
RESPONSE TO REQUEST NO.2: Yes. The 2010 PCA is the first filng where
the annual load growth adjustment reflected negative annual growth. However, the
2009 PCA included a load growth adjustment that was based upon six months of load
growth and six months of load decline, resulting in net positive load growth of 119,299
megawatt-hours. This can be seen on page one of Exhibit No. 1 in Case No. IPC-E-09-
11, which is attached to this response.
The response to this Request was prepared by Tim Tatum, Manager, Cost of
Service, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 4
REQUEST NO.3: Is it a mathematical fact, (given a positive Expense
Adjustment rate like the $26.63 per MWh in this case), that any decrease in load, below
that last established in base rates, produces a result that increase the PCA amount to
be paid in the following year? If no, why not?
RESPONSE TO REQUEST NO.3: The correct application of the Commission-
approved methodology determines that any decrease in annual load, below that last
established in base rates, produces a result that increases the PCA amount to be paid
in the following year.
The response to this Request was prepared by Tim Tatum, Manager, Cost of
Service, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 5
REQUEST NO.4: In this case the EAGR is increasing the PCA revenue
requirement by $23.7 milion. Please explain what power supply expenses this revenue
increase of $23.7 millon is designed to recover.
RESPONSE TO REQUEST NO.4: Please remember that the use of the LGAR
is to adjust actual power. supply expenses to comparable power supply expenses for a
normal load leveL. This adjusted expense is then divided by a normal sales level to
determine the PCA true-up rate. The adjustment is required for consistency between
the numerator and the denominator of the PCA rate determinations.
Attached to this response is Attachment NO.5 from the Company's Petition for
Reconsideration in Case No. IPC-E-08-10. Attachment No. 5 details the derivation of
the load growth adjustment rate under the methodology approved by the Commission in
its Order No. 30715. Attachment NO.5 also describes the specific revenue requirement
components included in the LGAR computation.
The LGAR computed on Attachment No. 5 was later revised to the current
amount of $26.63 by Order No. 30754 to reflect the revenue requirement approved on
reconsideration. However, the underlying methodology used to calculate the $26.63
LGAR is the same as that shown on Attachment NO.5.
The response to this Request was prepared by Tim Tatum, Manager, Cost of
Service, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 6
REQUEST NO.5: Under the assumption that the EAGR is revenue related and
designed to insure that there is no double recovery of power supply expense, and given
the $26.63 per MWh rate used in this case:
a. Would a negative rate of some value make sense within the context of the
EAGR?
b. If a negative rate made sense, what would it mean/reflect with respect to
the expenses/costs on the system and/or the collection of revenues?
RESPONSE TO REQUEST NO.5:
a. It is not entirely clear to the Company what is being .asked in this Request.
With that said, because the LGAR is a positive fraction of the Company's current
positive base rates, a negative LGAR does not make sense.
b. Please see the Company's above response to a.
The response to this Request was prepared by Tim Tatum, Manager, Cost of
Service, Idaho Power eompany, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 7
REQUEST NO.6: If the Company continues to believe that the sole purpose of
the load growth adjustment is to eliminate the potential for double recovery of power
supply expenses (as testified by Company witness Said in his rebuttal testimony in
Case No. IPC-06-8 at page 27), is it true that Purpose is not related to the method/data
used to calculate the rate itself (Le. the calculation of the $26.63 per MWh rate)? If the
Company believes that the purpose of the EAGR is dependent upon the manner in
which the rate is calculated, please define the present purpose of the EAGR under the
present rate of $26.63 per MWh that was developed in the stipulation in Case No. EN-I
9. (Above dollar amount was corrected from $426.63 to $26.63.)
RESPONSE TO REQUEST NO.6: As discussed in the Company's Response to
the Irrigation Pumpers' Request NO.1, the Company continues to believe that, in
periods of load growth, the purpose of the load growth adjustment or LGAR is to
eliminate the potential for double recovery of power supply expenses. The Company
believes that the current method for calculating the LGAR includes costs beyond those
needed to eliminate double recovery. It continues to be the Company's preference that
LGAR be equal to the unit base level power supply expense included in base rates.
However, the Company and the parties agreed to the current method of calculating the
LGAR as a reasonable alternative to the Company's or the parties' proposed
approaches as part of the settlement stipulation in Case No. IPC-E-08-19.
The response to this Request was prepared by Tim Tatum, Manager, Cost of
Service, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 8
REQUEST NO.7: If the Company believes that the purpose of the EAGR is to
recover a certain level of expenses and/or costs:
a. Please site (sic) the exact reference in Commission Orders or other
evidence that support the Company's position that the EAGR is designed to recover
certain revenues/costs.
b. What are those costs and expenses to be recovered?
c. What does it mean with respect to the recovery of those cost and
expenses if the EAGR rate itself is positive?
d. What does it mean with respect to the recovery of those cost and
expenses if the EAGR rate itself is negative?
e. What does it mean with respect to the recovery of those cost and
expenses if the growth (load change) is positive?
f. What does it mean with respect to the recovery of those cost and
expenses if the growth (load change) is negative?
RESPONSE TO REQUEST NO.7:
a. &b.Commission Order No. 30715 in Case No. IPC-E-08-19 approves
the current computational method for the LGAR, including the cost and revenue
components of the rate. This method is detailed on Exhibit A to the Stipulation filed in
that case and is attached to this response.
c. The EAGR or LGAR is a positive rate which reflects the fact that the unit
costs/revenues it represents are also net positive.
d. The method for deriving the LGAR cannot result in a negative number.
Please see the Company's Response to the Irrigation Pumpets Request NO.5.
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 9
e. When load change is positive, the LGAR is used to calculate the level of
additional cost to be removed from the true-up calculation in order to reflect comparable
power supply cost at normal load levels.
f. When load change is negative, the LGAR is used to calculate the level of
reduced cost to be added to true-up calculations in order to reflect comparable power
supply costs at normal load levels.
The response to this Request was prepared by Tim Tatum, Manager, eost of
Service, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 10
REQUEST NO.8: In this case the EAGR (at line 13 of Exhibit 1) results in an
increase to the PCA of $23.7 milion to be collected from the ratepayers. From a
regulatory perspective, what specific expenses/costs are the ratepayers being asked to
pay for (coal costs, purchase power costs, return on rate base, lost revenue, etc.)?
RESPONSE TO REQUEST NO.8: Please see the document provided by the
Company in response to the Irrgation Pumpers' Request NO.4.
The response to this Request was prepared by Tim Tatum, Manager, Cost of
Service, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 11
REQUEST NO.9: In this case the EAGR (at line 13 of Exhibit 1) results in an
increase to the peA of $23.7 millon to be collected from the ratepayers. This primarily
comes about because under the present form of the formula, a reduction in load (below
the base load used in the last rate case) results in an increase in the PCA rate. How
does this result differ from a guarantee of a certain minimum level of revenue recovery?
RESPONSE TO REQUEST NO.9: The LGAR does not guarantee a certain
level of revenue recovery; rather, it is used as a part of an adjustment to ensure the
numerator and denominator in the annual PCA are consistent (at normalized levels).
The response to this Request was prepared by Tim Tatum, Manager, Cost of
Service, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
~~r::i~
s~c--\0fñ~Cfc;; -0_., ç
9èL~t:;
;.':~.
w;¿::(jÕz
;¡ç..
cJ
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC:S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 12
~m("ri-¿
¡1"~.',.....
.j
REQUEST NO. 10: There were some changes to the EAGR that resulted from
the Stipulation filed in Case No. IPC-08-19. Was there anything specific about that
Stipulation that caused the annual EAGR adjustment to increase the PCA this year, as
opposed to the EAGR calculations that were in effect prior to that Stipulation?
RESPONSE TO REQUEST NO. 10: No. The changes to the EAGR (LGAR)
that resulted from the Stipulation filed in Case No. IPC-E-08-19 were focused solely on
the derivation of the rate. There were no changes to the manner in which the LGAR is
applied in the calculation of the PCA resulting from the Stipulation filed in Case No. IPC-
E-08-19.
The response to this Request was prepared by Tim Tatum, Manager, Cost of
Service, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel,
Idaho Power Company.
DATED at Boise, Idaho, this 14th day of May 2010.
~f)~~SÃ õ: NORDš"M
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'SFIRST DATA REQUESTS TO IDAHO POWER COMPANY - 13
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 14th day of May 2010 I served a true and correct
copy of the foregoing IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO
IRRIGATION PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO
POWER COMPANY upon the following named parties by the method indicated below,
and addressed to the following:
Commission Staff
Weldon B. Stutzman
Deputy Attomey General
Idaho Public Utilties Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 8~720-007 4
Industrial Customers of Idaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON & O'LEARY, PLLC
515 North 2ih Street
P.O. Box 7218
Boise, Idaho 83702
Dr. Don Reading
6070 Hil Road
Boise, Idaho 83703
Idaho Irrigation Pumpers
Association, Inc.
Eric L. Olsen
RACINE, OLSON, NYE, BUDGE
& BAILEY, CHARTERED
P.O. Box 1391
201 East Center
Pocatello, Idaho 83204-1391
-- Hand Delivered
U.S. Mail
Overnight Mail
FAX
-- Email Weldon.stutzman(ipuc.idaho.gov
Hand Delivered
-- U.S. Mail
Overnight Mail
FAX
-- Email peter(irichardsonandolearv.com
greg(irichardsonandolearv .com
Hand Delivered
-- U.S. Mail
Overnight Mail
FAX
-- Email dreading(imindspring.com
Hand Delivered
-- U.S. Mail
Overnight Mail
FAX
-- Email elo(iracinelaw.net
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 14
Anthony Yankel
Yankel & Associates, Inc.
29814 Lake Road
Bay Vilage, Ohio 44140
Hand Delivered
-- U.S. Mail
Overnight Mail
FAX
-- Email tony(iyankel.net
~~f2't~iš~Nordstr
IDAHO POWER COMPANY'S RESPONSES TO THE IDAHO IRRIGATION
PUMPERS ASSOCATION, INC.'S FIRST DATA REQUESTS TO IDAHO POWER COMPANY - 15