HomeMy WebLinkAbout20060515_1550.pdfDECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DON HOWELL
DATE:MA Y 11 2006
SUBJECT:IDAHO POWER'S PETITION TO MODIFY THE LOAD GROWTH
ADJUSTMENT RATE CONTAINED IN THE PCA, CASE NO. IPC-06-
On April 13 , 2006 , Idaho Power filed a Petition to modify "the method for
determining the load growth adjustment rate, which is one of the components used to determine
Idaho Power s (annual) Power Cost Adjustment ((PCA)) rate.Petition at 1. The load growth
adjustment rate is typically a reduction to power supply expenses within the PCA. The Petition
states that the load growth adjustment "is intended to compensate for additional revenues
attributable to load growth that occurs between rate cases.Id. As the Company explained in its
Petition, the load growth adjustment rate is a credit during load growth and a debit during load
decline. Id. The load growth adjustment is included in the PCA's true-up computations.
BACKGROUND
In Idaho Power s recent rate case settlement Stipulation, the parties agreed "that the
PCA load growth rate issue will be addressed contemporaneously with the Company s upcoming
PCA" Application. Stipulation at ~ 6(d), Case No. IPC-05-28. Consequently, Idaho Power
filed the present case in compliance with the Stipulation.
THE PETITION
Idaho Power states in its Petition that the currently approved load adjustment rate
uses predicted marginal costs of serving load rather than embedded costs of serving load.
Petition at 2 (emphasis added). Idaho Power asserts that using "predicted marginal costs" is
unfair. Idaho Power argues that it is more appropriate to use current embedded PCA-related
costs of serving load to determine the load growth adjustment rate. Id. The current load growth
adjustment rate approved by the Commission is $16.84 per MWh. Using the embedded PCA-
DECISION MEMORANDUM
related costs of serving load, Idaho Power calculates that the load growth rate should be $6.
per MWh. Id. at 3.
Idaho Power maintains that using the current marginal costs methodology to
calculate the load growth adjustment "credits customers with the higher, marginal PCA-related
cost of serving new customer loads, even though Idaho Power is only allowed to recover the
lower, embedded PCA-related costs of serving new customer loads. This mismatch
automatically penalizes the Company when new customers are added.Id. Consequently, Idaho
Power claims it "is not afforded a reasonable opportunity to recover its PCA-related expenses
associated with serving new customer loads in a timely manner.Id.
In support of its Petition, Idaho Power pre filed the testimony of its witness, Gregory
Said. The Company did not propose a particular process for this case but it stands ready for
immediate consideration of its Petition.
ST AFF RECOMMENDATION
Staff anticipates that adjusting the existing load growth rate in the PCA will be
hotly contested issue. Consequently, Staff recommends that the Commission issue a Notice of
Application/Deadline for Intervention and set this matter for hearing.
COMMISSION DECISION
How does the Commission wish to process this Petition?
Don Howell
bls/M:IPC-O6-08 dh
DECISION MEMORANDUM