20171130PAC to Staff Attachment UAE 2.2-1.pdf

UT 17-035-40
UAE 2.2 Attachment UAE 2.2-1
-BEFORE THE PUBLIC SERVICE COMMISSION OF UTAH -
In the Matter of the VoluntaryRequest of )DOCKET NO.12-035-102
Rocky Mountain Power for Approval of )
Resource Decision to Acquire Natural Gas )
Resources )REPORT AND ORDER
ISSUED:April 19,2013
SYNOPSIS
The Commission approves an uncontested settlement stipulation resolving Rocky
Mountain Power's voluntaryrequest for approval of a resource decision to acquire natural gas
resources.
1 of 10
UT 17-035-40
UAE 2.2 Attachment UAE 2.2-1
DOCKET NO.12-035-102
-11-
APPE A RANCES ..........................................................................................................................iii
I.PROCED URALH I STORY ....................................................................................................1
II.SETTLEMENTST I PUL A TI ONSUMM ARY .....................................................................2
III.PA RT I ES 'POS I TI ONS ........................................................................................................3
IV.DISCUSSION,FINDINGS,AND CONCLUSIONS...........................................................5
V.O RDER .....................................................................................................................................5
2 of 10
UT 17-035-40
UAE 2.2 Attachment UAE 2.2-1
DOCKET NO.12-035-102
-111-
APPEARANCES
Daniel Solander,Esq.For PacifiCorp,dba Rocky Mountain Power
Rocky Mountain Power
Patricia E.Schmid,Esq."Division of Public Utilities
Utah AttorneyGeneral's Office
Jerrold S.Jensen,Esq."Office of Consumer Services
Utah AttorneyGeneral's Office
3 of 10
UT 17-035-40
UAE 2.2 Attachment UAE 2.2-1
DOCKET NO.12-035-102
-1-
I.PROCEDURAL HISTORY
On October 24,2012,pursuant to Utah Administrative Code ("UAC")R746-440-
1(2)(a),PacifiCorp,doing business as Rocky Mountain Power,("Company"),filed with the Utah
Public Service Commission ("Commission")notice of its intent to file a voluntaryrequest for
approval of a resource decision resulting from its 2012 Natural Gas Request for Proposals issued
May 14,2012 ("2012 Gas RFP").
On November 15,2012,pursuant to Utah Code Ann.("UCA")§54-17-401 et al.
and UAC R746-440-1,the Company filed a voluntaryrequest with the Commission for approval
of the Company's decision to enter into contracts to acquire natural gas resources ("Voluntary
Request")resulting from the 2012 Gas RFP.The VoluntaryRequest,filed in both confidential
and redacted format,included supporting testimony of three witnesses.Specifically,the
Company requested authorityto execute contracts involvingmultiple bidders from the final short
list of the 2012 Gas RFP,assuming the bids,as updated followingCommission approval of the
VoluntaryRequest,meet specified price parameters and a market ratio as defined in the
VoluntaryRequest.
The statutory parties to this case include the Utah Division of Public Utilities
("Division")and the Utah Office of Consumer Services ("Office").In addition,the Commission
granted the Utah Association of Energy Users and Questar Gas Company leave to intervene.On
December 11,2012,the Commission held a duly-noticed scheduling conference in this docket
and on December 13,2012,issued the Scheduling Order and Notice of Hearing.On January 2,
2013,and February 19,2013,the Company filed errata direct testimony.On March 5,2013,the
Office and the Division filed direct testimony.No other parties filed testimony in this docket.
4 of 10
UT 17-035-40
UAE 2.2 Attachment UAE 2.2-1
DOCKET NO.12-035-102
-2-
On March 19,2013,the Company,the Division,and the Office,(collectively
referred to as the "Parties"),filed an executed,confidential settlement stipulation.On March 21,
2013,as requested in the confidential settlement stipulation,the Commission vacated the
remainder of the schedule in this docket,includingthe April 22nd and 23rd,2013,hearing dates.
Additionally,the Commission provided notice of a hearing to be held on April 1,2013,to
consider the settlement stipulation.On March 28,2013,the Company filed a confidential,
Amended Settlement Stipulation ("Stipulation")in which the Parties agreed to add additional
language to paragraph four of the Stipulation.On April 1,2013,the Commission held a duly-
noticed hearing to examine the Stipulation.At the hearing,the Company offered a clarification
to Footnote 1,page 2,of the Stipulation and was asked by the Commission to file an updated
page for the record.'At the conclusion of the hearing,the Commission issued a bench order
approving the Stipulation,includingthe clarification described for Footnote 1.This Report and
Order memorializes that ruling.
II.SETTLEMENT STIPULATION SUMMARY
A copy of the Stipulation is on file with the Commission,and is incorporated by
reference in this Report and Order.The Stipulation is designated confidential and is available for
review pursuant to UAC R746-100-16.For convenience,a summary of some of the terms in the
Stipulation is provided below.This summary,and other discussion of the terms in this Report
and Order,are not intended to modify the terms of the Stipulation,and the language in the
Stipulation controls.
On April 9,2013,in response to Commission's request,the Company filed a revised page 2 of the Stipulation,with
new language for Footnote 1.
5 of 10
UT 17-035-40
UAE 2.2 Attachment UAE 2.2-1
DOCKET NO.12-035-102
-3-
1.The Parties conducted settlement discussions over the course of several days.
2.The Parties recommend the Commission approve the Stipulation,and all of its
terms and conditions,and request the Commission make findings of fact and
reach conclusions of law based on the evidence,and on the Stipulation,and issue
an appropriate order thereon.
3.The Parties agree the Stipulation resolves all issues in this docket.
4.The Company should execute one or more contracts with the lowest cost bid(s)as
determined by comparison to the Company's forward price curves subject to the
terms,maximum prices and limitations identified in the Stipulation.
5.The Parties will convene a workshop prior to the end of October 2013 to discuss
potential changes to the Company's bid evaluation process for future gas request
for proposals and to address the issues identified in the Stipulation.
6.No part of the Stipulation,or the formulae and methodologies used in its
development or a Commission order approving the Stipulation,shall in any
manner be argued or considered as precedential in any future case except with
regard to issues expressly called-out and resolved by the Stipulation.
7.The Stipulation as a whole is justand reasonable in result and in the public
mterest.
III.PARTIES'POSITIONS
The Parties provided witnesses at hearing to support the Stipulation.No
intervening party provided testimony opposing approval of the Stipulation.
6 of 10
UT 17-035-40
UAE 2.2 Attachment UAE 2.2-1
DOCKET NO.12-035-102
-4-
The Company testifies in support of the Stipulation and believes it is in the public
interest and was negotiated in good faith.While not all intervening parties in this docket signed
the Stipulation,the Company is not aware of any parties opposing it.The Company states the
Parties agree to convene a workshop prior to October 31,2013,to discuss potential changes to
the Company's bid evaluation process for future gas request for proposals.A list of the specific
issues to be addressed at the workshop,although not exhaustive,is provided in the Stipulation.
The Division supports the Company's effort to secure long-term natural gas
resources and supports the Stipulation.The Division testifies the "execution of the proposed
contract would represent a small portion of the total natural gas requirement each year and would
not adversely impact the hedging percent guidelines established through the collaborative
process."2 The Division believes the Stipulation is in the public interest and recommends the
Commission approve the Stipulation.
The Office states it conducted a full review of the Company's VoluntaryRequest
and retained expert consultants to review the bidding and evaluation process used by the
Company in the 2012 Gas RFP.These consultants concluded the Company conducted a robust
and reasonable process.The Office supports the acquisition of long-term natural gas contracts as
described in the Stipulation and asserts the Company has adequatelydemonstrated sufficient
benefit to customers and the Stipulation will result in justand reasonable rates.The Office
testifies it supports the Stipulation,and recommends the Commission approve it.
2Transcript of Hearing,April 1,2013,at 19;lines 2-5.
7 of 10
UT 17-035-40
UAE 2.2 Attachment UAE 2.2-1
DOCKET NO.12-035-102
-5-
IV.DISCUSSION,FINDINGS,AND CONCLUSIONS
The Parties signing the Stipulation represent a diversity of interests and agree the
Stipulation,as a whole,is just and reasonable in result and in the public interest.As we have
noted in previous orders,settlements of matters before the Commission are,by statute,
encouraged at any stage of our proceedings.3 The Commission may approve a stipulation or
settlement after considering the interests of the public and other affected persons,if it finds the
stipulation or settlement "is justand reasonable in result.'94 Our consideration of the Stipulation
is guided by Utah statutory provisions in UCA §54-7-1,et seq.,encouraging informal resolution
of matters brought before the Commission.Our consideration of the VoluntaryRequest is also
guided by UCA §54-17-401 et al.and UAC R746-440-1.
Based on our consideration of the evidence before us,the VoluntaryRequest of
the Company,the testimony and recommendations of the parties,and the applicable legal
standards,we find the Stipulation,and all of its terms and conditions,are just and reasonable in
result and in the public interest,and therefore it is approved.We also find the calculation of
projected costs,as included in the Stipulation and described by the Company at hearing,are
reasonable.We base this finding on the unopposed support for the Stipulation.
V.ORDER
Wherefore,pursuant to the foregoing discussion,findings and conclusions,we
order:
3 See Utah Code Ann.§54-7-1.See also,In the Matter ofthe Application of Questar Gas Company to Adjust RatesforNaturalGasServiceinUtah,et al.,Docket Nos.04-057-04,04-057-11,04-057-13,04-057-09,05-057-01 ,
Report and Order issued January 6,2006,at 26.
4 See Utah Code Ann.§54-7-1(3)(d).
8 of 10
UT 17-035-40
UAE 2.2 Attachment UAE 2.2-1
DOCKET NO.12-035-102
-6-
The terms and conditions of the Stipulation filed in this matter on March 28,
2013,with the clarifications noted at hearing to Footnote 1,are hereby approved,effective April
1,2013.
DATED at Salt Lake City,Utah,this 19th day of April,2013.
/s/Ron Allen,Chairman
/s/David R.Clark,Commissioner
/s/Thad LeVar,Commissioner
Attest:
/s/Gary L.Widerburg
Commission Secretary
D#243462
Notice of Opportunityfor Agency Review or Rehearing
Pursuant to §§63G-4-301 and 54-7-15 of the Utah Code,an aggrieved party may
request agency review or rehearing of this Order by filing a written request with the Commission
within 30 days after the issuance of this Order.Responses to a request for agency review or
rehearing must be filed within 15 days of the filing of the request for review or rehearing.If the
Commission does not grant a request for review or rehearing within 20 days after the filing of the
request,it is deemed denied.Judicial review of the Commission's final agency action may be
obtained by filing a petition for review with the Utah Supreme Court within 30 days after final
agency action.Any petition for review must comply with the requirements of §§63G-4-401 and
63G-4-403 of the Utah Code and Utah Rules of Appellate Procedure.
9 of 10
UT 17-035-40
UAE 2.2 Attachment UAE 2.2-1
DOCKET NO.12-035-102
-7-
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 19th day of April,2013,a true and correct copy
of the foregoing was served upon the followingas indicated below:
By Electronic-Mail:
David L.Taylor ([e-mail])
Mark C.Moench ([e-mail])
Yvonne R.Hogle ([e-mail])
Rocky Mountain Power
Barrie L.McKay ([e-mail])
Colleen Larkin Bell ([e-mail])
Jenniffer Nelson Clark ([e-mail])
Questar Gas Company
Gary A.Dodge ([e-mail])
Hatch,James &Dodge
Kevin Higgins ([e-mail])
Neal Townsend ([e-mail])
Energy Strategies
Patricia Schmid ([e-mail])
Justin Jetter ([e-mail])
Paul Proctor ([e-mail])
Assistant Utah Attorneys General
By Hand-Delivery:
Division of Public Utilities
160 East 300 South,4th Floor
Salt Lake City,Utah 84111
Office of Consumer Services
160 East 300 South,2nd Floor
Salt Lake City,Utah 84111
Administrative Assistant
10 of 10