20041104Stipulation.pdf

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BEFORE THE IDAHO PUBLIC UTILITIES romMlssiON1-~US'SION
In The Matter of the Investigation of Inter-
Jurisdictional Issues Affecting PacifiCorp,
d/b/a Utah Power & Light Company
STIPULATION AND AGREEMENT
Docket No. PAC-O2-
The parties to this Stipulation are PacifiCorp (or the "Company ), the Staff of the Idaho
Public Utilities Commission ("IPUC Staff'), Monsanto Company ("Monsanto ), and AARP
(collectively, the "Idaho Parties
BACKGROUND
As a result of discussions among representatives ofPacifiCorp and Oregon, Utah
Washington, Idaho and Wyoming parties regarding issues arising from PacifiCorp s status as a
multi-jurisdictional utility, the Company has proposed inter-jurisdictional cost allocation
methods that are embodied in a document titled the "Revised PacifiCorp Inter-Jurisdictional Cost
Allocation Protocol" ("Revised Protocol"
).
PacifiCorp has requested that the Idaho Public
Utilities Commission ("Idaho Commission ) and the utility commissions of other jurisdictions in
which it operates, ratify the Revised Protocol and use its allocation methodology in future
regulatory proceedings. A copy of the Revised Protocol and its Appendices is attached as
Exhibit A to this Stipulation. Capitalized terms used in this Stipulation are to have the same
meaning as those set forth in Appendix A of the Revised Protocol.
The Idaho Parties are generally supportive of the Revised Protocol as a means of
achieving consistent allocation methods among the States, but have some concerns regarding
how the Revised Protocol might impact PacifiCorp s Idaho customers. The Idaho Parties are
therefore interested in establishing rate mitigation measures to protect against potential rate
impacts on Idaho customers from the implementation of the Revised Protocol. While Idaho
Parties recognize that the rate mitigation measures embodied in the Utah MSP Stipulation
STIPULATION -
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provide a useful framework for consideration, Idaho Parties believe that there are several factors
that are unique to Idaho that should be given consideration. These factors include the following:
PacifiCorp has not had an Idaho general rate proceeding since 1985.
Consequently, the Idaho Commission has not made a recent definitive determination of inter-
jurisdictional cost allocation methods for PacifiCorp. Over the past 14 years, several allocation
methods have been relied upon for processing of Idaho PacifiCorp dockets, including the
Accord" and "Modified Accord" methods. The MSP analyses, on the other hand, generally
compared future revenue requirement impacts for Idaho against the "Rolled-" method.
Because of this ambiguity, estimates of the impacts of the Revised Protocol might be best
evaluated against the Modified Accord method for comparisons to current rates and against the
Rolled- In method for forward-looking comparisons.
In Docket P AC-03-, PacifiCorp implemented a $3.5 million surcharge to
collect $4.4 million over 16 months related to IRS tax settlements. This surcharge is set to
expire in September 2005. The Company presently intends to request a general rate increase in
early 2005 , to be effective in September 2005. The Revised Protocol will be reflected in rates to
the Company s Idaho customers, consistent with the terms of this Stipulation, as an element of
this general rate proceeding.
Certain ofPacifiCorp s Idaho customers enjoy benefits from the Bonneville
Power Administration ("BP A") that serve to decrease the cost of electric power for these
customers. It is expected that the current level of BP A credits will be reduced over the next two
years, causing upward pressure on these customers' bills. In recognition of this potential upward
pressure on these customers' bills, Idaho Parties would prefer to avoid rate mitigation premiums
in later years.
PacifiCorp s largest Idaho customer, Monsanto, is currently served under a
Special Contract. The current contract expires on December 31 , 2006. Monsanto s current rates
are established by contract and, therefore, not affected by this Stipulation, by the surcharge
STIPULATION - 2
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related to Docket P AC-03-, or by any rate change established in the anticipated general rate
proceeding in calendar year 2005.
The parties to this Stipulation have entered into the following Agreement to respond to
the concerns of the Idaho Parties:
AGREEMENT
The undersigned parties hereby stipulate and agree that they will support the ratification
of the Revised Protocol by the Idaho Commission for establishing PacifiCorp s Idaho results of
operations and that they will defend the Revised Protocol and this Stipulation in any testimony or
written comments filed with the Idaho Commission, except as provided in paragraph 7 below.
Except as otherwise provided below, PacifiCorp agrees that, as long as the Revised Protocol, or
any amended version of the Revised Protocol, is relied upon by the Idaho Commission for
purposes of inter-jurisdictional allocation of the Company s costs, all PacifiCorp s results of
operations and general rate case filings in Idaho will be based upon same. Except as otherwise
provided below, the Idaho Parties agree that, until such time as the Revised Protocol is amended
in accordance with Section XIII., they will support the use of the Revised Protocol for
allocating costs among PacifiCorp s jurisdictions.
Support of the Revised Protocol by the undersigned is contingent upon subsequent
ratification by the Idaho Commission of this Stipulation incorporating use of the Revised
Protocol and the following Rate Mitigation Mechanism that is intended to apply to calculations
of the Company s Idaho revenue requirement for filings made through March 31 2009:
For all Idaho general rate proceedings initiated after the effective date of this
Stipulation and the Revised Protocol, and until March 31 2009, the Company s Idaho revenue
requirement to be used for purposes of setting rates for Idaho customers will be the lesser of: (i)
the Company s Idaho revenue requirement calculated under the Rolled-In Allocation Method
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multiplied by 101.67 percent, or (ii) the Company s Idaho revenue requirement resulting from
use of the Revised Protocol. As shown on Exhibit this Rate Mitigation Measure is designed
to implement the Revised Protocol in the Company s next general rate proceeding with no
additional incremental impact in subsequent cases above 101.67 percent, relative to the Rolled-
Method through March 2009.
F or purposes of establishing Monsanto s cost of service for subsequent Special
Contracts, the Company s Idaho revenue requirement will be calculated consistent with the Rate
Mitigation Mechanism described in subsection (a) above. This Stipulation does not prejudge
how or over what timeframe Monsanto s cost of service will be established and no parties waive
any arguments with respect thereto.
Should the results of the contemplated allocations specified in the Revised Protocol, as
compared to the use of the Rolled-In method, materially depart from PacifiCorp s current
projections as reflected in attached Exhibit B to this Stipulation, or otherwise no longer produce
results that are just, reasonable, and in the public interest, any party to this Stipulation may
propose amendments to the Revised Protocol or propose to the Idaho Commission that the Idaho
Commission depart from its terms, so as to produce results that are just, reasonable and in the
public interest.
As provided for in Section XIII.C of the Revised Protocol, a party s initial support of the
Revised Protocol will not bind that party in the event that unforeseen circumstances cause that
party to conclude that the Revised Protocol no longer produces just and reasonable results.
allow Idaho Parties to monitor the impacts of the Revised Protocol, for the 10 years following
the Idaho Commission s ratification of the Revised Protocol: a) the Company s general rate case
filings with the Idaho Commission shall include calculations of the Company s Idaho revenue
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requirement under both the Revised Protocol and the Rolled-In methods, and b) the Company
shall file annual results of operations with the Idaho Commission which shall include
calculations of the Company s Idaho allocated results of operations under both the Revised
Protocol and the Rolled-In methods. All such submittals shall include and adequately explain all
adjustments, assumptions, work papers and spreadsheet models used by the Company in making
such calculations. The Company will notify parties to this Stipulation in a timely manner of such
submittals and will provide a copy of such submittals to the undersigned parties upon request.
SIGNATURES
This stipulation may be executed in counterparts and each signed counterpart shall
constitute an original document.
DATED this 5th day of November, 2004.
~\\
George Galloway
Attorney for PacifiCorp
BY:
Sion
BY:
Randall C. Budge
Attorney fort Monsanto Company
BY:
Ron Binz
AARP
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requirement under both the Revised Protocol and the Rolled-In methods, and b) the Company
shall file annual results of operations with the Idaho Commission which shall include
calculations of the Company s Idaho allocated results of operations under both the Revised
Protocol and the Rolled-In methods. All such submittals shall include and adequately explain all
adjustments, assumptions, work papers and spreadsheet models used by the Company in making
such calculations. The Company will notify parties to this Stipulation in a timely manner of such
submittals and will provide a copy of such submittals to the undersigned parties upon request.
SIGNATURES
This stipulation may be executed in counterparts and each signed counterpart shall
constitute an original document.
DATED this 5th day of November, 2004.
BY:
George M. Galloway
Attorney for PacifiCorp
BY:
Scott Woodbury,
Staff of Idaho Public Utilities Commission
BY:
Randall C. Budge
Attorney fort Monsanto Company
BY:
on Binz
AARP
STIPULATION - 5
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CERTIFICA TE OF SERVICE
HEREBY CERTIFY THAT I HA VE THIS 5th DAY OF NOVEMBER
2004 SERVED THE FOREGOING JOINT MOTION FOR ACCEPTANCE OF
SETTLEMENT; STIPULATION AND SETTLEMENT, IN CASE NO. PAC-02-, BY
MAILING A COpy THEREOF POSTAGE PREPAID, TO THE FOLLOWING:
SUE ROLFEE
MSP ADMINISTRATIVE COORDINATOR
825 NE MUL TNOMAH, SUITE 300
PORTLAND, OR 97232
ANDREA KELL Y
DIRECTOR REGULATION
ACIFICORP
825 NE MUL TNOMAH
PORTLAND OR 97232
RANDALL C. BUDGE
RACINE OLSON NYE BUDGE & BAILEY
PO BOX 1391
POCATELLO ill 83204-1391
ERIC L OLSEN
RACINE OLSON NYE BUDGE & BAILEY
PO BOX 1391
POCATELLO ID 83204-1391
JAMES F FELL
STOELRIVES LLP
900 SW 5TH AVE
PORTLAND OR 97204
JOHN ERIKSSON
STOEL RIVES LLP
201 S MAIN, SUITE 1100
SALT LAKE CITY UT 84111
JAMES R SMITH
MONSANTO COMPANY
PO BOX 816
SODA SPRINGS ID 83276
ANTHONY Y ANKEL
29814 LAKE ROAD
BAY VILLAGE OH 44140
~~~
SECRETARY
CERTIFICATE OF SERVICE