200302201st Response of PacifiCorp.pdf

-).r7
D. Douglas Larson
Vice President, Regulation
- PACIFICORPPACIFIC POWER' UTAH POWER
RECEIVED
1 rT)t'" ,_
(1)
L--..
201 S. Main Street, Suite 2300
Salt Lake City, UT 84140
[phone] (phone)
[phone] (fax)
20D3FEB 20 AM 9: 06
! '
1 ' "-; r, i i C
UTILi:ll~S Cm1~1fsSION
February 19 2003
- -,."'~..,~.. ..
a..
.-.~...'."
Scott Woodbury
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702-5983
Jean Jewell
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702-5983
RE: IPUC Staff First Production Request, Case No. PAC-03-
Please find enclosed PacifiCorp s responses to IPUC Staff Production Requests 1.1 , 1.2, 1.5, 1.6
1.8, 1.9, 1.10, 1.11 , 1.12, 1.13, and 1.14 in Case No. PAC-03-3. If you have any questions
please call Barry Bell at [phone] or Bob Lively at [phone].
Sincerely,
D. Douglas Larson
PacifiCorp
P AC-03-3/PacifiCorp
February 19, 2003
IPUC 1st Set Data Request No. 1.1
IPUC Data Request No. 1.1
Please provide the proposed amount (rate or rates) for the Load Control Service
Credit (LCSC) in 2003.
Response to IPUC Data Request No. 1.1
Month Monthly KWh Credit ($ per
Participation KWh)
Credit ($ per KW-
month)
June $1.$0.
July $1.$0.
August $2.$0.
September $0.$0.
This response was prepared by Bruce Griswold, Director, Energy Contracts.
P AC-03-3/PacifiCorp
February 19, 2003
IPUC 1st Set Data Request No. 1.2
IPUc Data Request No. 1.2
Please provide a description of the methodology used to calculate the LCSC rate
all the supporting calculations, assumptions and related analysis used in the
development of this value.
Response to IPUc Data Request No. 1.2
Irrigation Load Control Credit - Rider to Schedule
Methodology
From June 1 S\ 2003 to September 15th, 2003, PacifiCorp has the right to
physically curtail the irrigation pumping load associated with Idaho Schedule 10
customers for two six-continuous-hour blocks per week (Monday-Saturday).
PacifiCorp must nominate in advance (March 31 , 2003) those days of the week it
will curtail irrigation pump load. Physical curtailment applies to hours ending
1400 through 1900 Pacific Prevailing Time (2PM to 8PM Mountain Prevailing
Time). In exchange for physical cunailment rights, PacifiCorp foregoes the retail
revenue associated with Schedule 10 customers ' I load and also pays a monthly
credit to the emolled Schedule 10 customers. This credit will be based on the
customer s three-year average historical load level.
Pricing is based on PacifiCorp s next best alternative to serve East Side load, the
forward firm energy market at Mona. PacifiCorp will take six of the most
expensive hours in a given day (HE 14-19 PPT), twice a week. The average
hourly prices for these days are determined by applying the current monthly
forward heavy load hour price at Mona (June, July, August, and September of
2003) to the HE 1400-1900 scalars found in the ID Load Control analysis. The
net value PacifiCorp receives from the curtailment product, on a $/MWh basis, is
the difference between the average scaled hourly Mona price (by month), and the
Schedule 10 weighted average retail rate.
PacifiCorp has estimated that roughly 20% ofthe irrigation load committed to the
program will be unavailable for curtailment when actually called upon. To
account for a portion ofthe projected irrigation load being unavailable during the
curtailment periods, PacifiCorp adjusted the monthly credit down by
approximately 20%. The reasons that load may be unavailable for curtailment
include equipment failure, unexpected differences between the estimated 3-year
I The weighted average retail rate of$43.58/MWh is used as the opportunity cost to PacifiCorp of
curtailing Schedule 10 customers. This weighted average is based on the schedule 10 three retail rates
($54.32/MWh, $38.02/MWh, and $25/MWh), along with the MWh associated with these rates from April
2000 to March 31 , 2001.
P AC-03-3/PacifiCorp
February 19 2003
IPUC 1st Set Data Request No. 1.2
load versus actual load, outright failure of customer to curtail, and customer
termination from the program for previously failing to curtail.
Additional information is also provided as Attachment ID-P AC-03-3 1.2
This response was prepared by Mark Klein, Director, Pricing and Structuring.
P AC-03-3/PacifiCorp
February 19 , 2003
IPUC 1 st Set Data Request No. 1.
IPUc Data Request No. 1.5
In the event of a utility system power failure of an hour or more would the Load
Control Schedule be altered? If so, how? Is this explained in the Service
Agreement?
Response to IPUc Data Request No. 1.5
The load control schedule will not be altered in the event of a utility system power
failure of an hour or more. It is the intent of the Company to adhere strictly to the
load control schedule once it is established for participating customers. The Load
Control Service Agreement will contain a statement informing participating
customers of the Company s intent to strictly adhere to the load control schedule.
This response was prepared by Robert Lively, Manager, Regulation.
P AC-03-3/PacifiCorp
February 19 2003
IPUC 1 st Set Data Request No. 1.
IPUc Data Request No. 1.6
In order to give the irrigator a better idea of what the cost of early termination
would be, could the Company quantify some of the anticipated costs and include
them as a fixed amount in the tariff?
Response to IPUc Data RequestNo. 1.6
The Company proposes to include a statement in the Load Control Service
Agreement regarding the cost of early termination.
This response was prepared by Robert Lively, Manager, Regulation.
P AC-03-3/PacifiCorp
February 19 2003
IPUC 1st Set Data Request No. 1.8
IPUc Data Request No. 1.8
Specifically would there be a cost for replacement power if an irrigator terminated
early?
Response to IPUc Data Request No. 1.8
The irrigator is not charged the cost of replacement power. Per special condition
, if the irrigator does not interrupt, they are removed from the program for the
rest of the year and forfeit the monthly credit.
This response was prepared by Bruce Griswold, Director, Energy Contracts.
P AC-03-3/PacifiCorp
February 19,2003
IPUC 1st Set Data Request No. 1.9
IPUc Data Request No. 1.9
How would the cost of the replacement power be calculated?
Response to IPUc Data Request No. 1.9
The irrigator is not charged the cost of replacement power. Per special condition
, if the irrigator does not interrupt, they are removed from the program for the
rest of the year and forfeit the monthly credit.
This response was prepared by Bruce Griswold, Director, Energy Contracts.
P AC-03-3/PacifiCorp
February 19 2003
IPUC 1 st Set Data Request No. 1.
IPUc Data Request No. 1.10
Instead of allowing the load control service credit to go to zero , does it make
sense to always offer an LCSC of at least the forward market price less 2 mills?
This might encourage some irrigator investment in pumping capacity
modifications that would allow the irrigator to commit to this program. Please
explain your answer.
Response to IPUc Data Request No. 1.10
Paying the forward market price minus 2 mills could result in PacifiCorp paying
above what the product is worth. The intent of the product is to establish the
value of product so irrigators know what the payment would be for the upcoming
season. If market price is used, there is no way for irrigators to know how much
they will be paid until the month is over. They would only have an estimate.
This response was prepared by Bruce Griswold, Director, Energy Contracts.
P AC-03-3/PacifiCorp
February 19, 2003
IPUC 1 st Set Data Request No. 1.
IPUc Data Request No. 1.11
How will the Company factor early terminations into the analysis to determine the
future value of interruption based on reliability?
Response to IPUC Data Request No. 1.11
PacifiCorp will not factor early termination into the value of interruption but will
consider the impact of early termination on participation levels.
This response was prepared by Bruce Griswold, Director, Energy Contracts.
P AC-03-3/PacifiCorp
February 19 2003
IPUC 1st Set Data Request No. 1.12
IPUc Data Request No. 1.12
Procedurally, would the Company prefer to 1) file an Application in the fall of
each year to review the proposed methodology and LCSC rate with approval by
the Commission, or 2) have the methodology approved in this case with a tariff
advice filed and reviewed on an annual basis to establish the LCSC rate? Note:
Method one should allow 3-4 months to process and method two 1 month to
process.
Response to IPUc Data Request No. 1.12
The Company s preference is to have a LCSC methodology approved in this
proceeding with subsequent annual tariff advice filings to update the LCSC rate
for each irrigation season.
This response was prepared by Robert Lively, Manager, Regulation.
P AC-03-3/PacifiCorp
February 19 2003
IPUC 1 st Set Data Request No. 1.
IPUc Data Request No. 1.13
Why does the program require the customer to file an Intent to Participate letter or
form along with signing a Load Control Service Agreement? It seems that two
formal actions with deadlines complicate the process and in all probability reduce
participation.
Response to IPUc Data Request No. 1.13
The Company must have initial information on an annual basis regarding the
number of customers who intend to participate in the scheduled load curtailment
program. The information provided by irrigation customers in the Notice of
Intent to Participate will be necessary for the Company to schedule daily blocks
of curtailment. Once the daily curtailment blocks are established customers will
be notified of their scheduled curtailment days. At that point all the necessary
information is available to the customers and the Company to execute the Load
Control Service Agreements.
This response was prepared by Robert Lively, Manager, Regulation.
P AC-03-3/PacifiCorp
February 19, 2003
IPUC 1st Set Data Request No. 1.14
IPUc Data Request No. 1.14
Program participation is proposed to be subject to meter availability. How many
meters will be available for 2003? What is the Company s educated guess as to
the probability that there will be more irrigators interested in participating than
there are meters available?
Response to IPUC Data Request No. 1.14
All Schedule 10 customers have meters capable of recording usage intervals of no
less than 15 minutes. There is no shortage of meters for current or anticipated
new Schedule 10 customers. The Company proposes deleting the language from
Special Condition No.1 Metering, ofthe proposed tariff, which states
Participation is subject to meter availability.
This response was prepared by Robert Lively, Manager, Regulation.