20150908_4767.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:MARK ROGERS
DATE:SEPTEMBER 4,2015
SUBJECT:ROCKY MOUNTAIN POWER’S REVISIONS TO THE BPA
RESIDENTIAL EXCHANGE PROGRAM (REP)CREDIT,SCHEDULE
34;TARIFF ADVICE NO.15-04.
On August 20,2015,Rocky Mountain Power,a division of PacifiCorp.filed a tariff
advice with the Commission to revise its Electric Service Schedule No.34,Pacific Northwest
Electric Power Planning and Conservation Act Residential and Farm Kilowatt-hour Credit (the
“REP”Credit).Rocky Mountain proposes that the rate credit be increased from the existing
0.3095 per kilowatt-hour to 0.77620 per kWh to be effective October 1,2015.This credit
reflects the increased level of benefits allocated to eligible Idaho consumers from the Bonneville
Power Administration’s (BPA)Residential Exchange Program (REP),plus amortization of the
remaining balance from the prior REP allocation.
BACKGROUND
This rate credit is designed to pass through to qualifying customers the REP benefits that
PacifiCorp receives from the BPA.The REP was designed to allow the residential and small-
farm customers of investor owned utilities (IOUs)in the northwest to share in the benefits of the
federal Columbia River Power System.PacifiCorp passes these benefits to its qualifying
customers through a rate credit on monthly electric bills.The rate credit applies to residential
and small-farm customers served under Schedules 1,6A,7A,10,23A,35A,36,19 with 6A,19
with 23A and 19 with 35A.
On July 26,2011,the BPA adopted a settlement agreement that included the six lOUs,
the three state commissions (including this commission),the BPA staff,and nearly all of the
DECISION MEMORANDUM 1 SEPTEMBER 4,2015
customer-owned utilities (COUs).The settlement agreement fixed over a 17-year period the
total amount of REP benefits to be paid to all JOUs.The fixed REP benefits are allocated to the
different utilities based on each utility’s relative qualifying load,Average System Cost (ASC)
and Priority Firm (PF)Exchange Rate determined by the BPA.’
The Settlement Agreement also includes a “Reallocation Adjustment”that reallocates
benefits amongst the six lOUs to adjust for the various amounts of “Lookbacks”that each of the
JOUs had repaid to the BPA in prior years.After the BPA calculates the ASC,it is further
adjusted for these reallocations to arrive at the final REP figure for each IOU.Since the BPA
calculates the total amount of REP benefits every two years in conjunction with a BPA rate case,
the ASC for each IOU has changed this year,and will remain the same the following year
THE TARIFF ADVICE
The proposed increase in the rate credit reflects both the FYI6-17 REP benefits as well as
an under-refunded balance from the existing rate credit.PacifiCorp’s share of the FYI6-17 REP
benefits is $129.94 million,or $64.97 million per fiscal year.PacifiCorp’s Tariff Advice 15-04
proposes to allocate to Idaho customers $12.69 million or $7.88 million per fiscal year.The
under-refunded balance for Idaho customers from the existing rate credit is $3.07 million.This
results in a total of$15.76 million to be disbursed to Idaho customers over the next two fiscal
years (October 1,2015 through September 30,2017).The projected usage during this time
period is 2,030,478,000 kWhs.which leads to a rate credit of 0.77620 per kWh.For the average
PacifiCorp residential customer using 840 kWh per month,the increase in credit would result in
a decreased monthly bill of $3 45•2
STAFF ANALYSES
During the previous tariff advice in Case No.PAC-E-13-11,Staff entered into
discussions with PacifiCorp concerning jurisdictional treatment of the “reallocation adjustment”;
more specifically,what percent of the allocation payment each jurisdiction would pay,and what
percent of the allocation benefit each would receive.Staff and PacifiCorp eventually agreed to
When PacifiCorp’s ASC is higher than the PP Exchange rate,The REP credit flows to PaciflCorp.If the ASC is
lower than the PF exchange rate then there are no benefits to pass on to the lOUs eligible customers.The BPA
calculates each IOU’s ASC,and PF Exchange Rate.
2 Average monthly use taken from PAC-E-13-l1 press release from Order No.32901.
DECISION MEMORANDUM SEPTEMBER 4,2015
the difference in allocations based upon lookback payments associated with NorthWestern and
Idaho Power.The final recommendation by Staff in the 2013 case was to close the docket,
accepting the REP credit as calculated by PacifiCorp.3
Given the previous resolution of the reallocation issue,Staff believes that no further
adjustments are necessary.Consequently,Staff believes that the proposed credit of 0.7762 per
kWh has been computed consistently with past years,and is fair and reasonable.The proposed
rate credit is more than double the existing rate credit of 0.30950 per kWh.The large increase in
the REP credit reflects both a large increase in the allocation of REP benefits to PacifiCorp,as
well as an increase in the under-refunded balance remaining in the REP account.
COMMISSION DECISION
Does the Commission wish to approve Rocky Mountain Power’s proposed change to its
BPA residential and small farm energy rate adjustment credit from the existing 0.30950 per kWh
to 0.77620 per kWh to be effective October 1,2015?
4r
Mark Rogers /
Udmemos/Pacificorp Advice 15-04 OPA dcc memo
Decision Memorandum flied December 20,2013 in Case No.PAC-E-13-1 1.
DECISION MEMORANDUM 3 SEPTEMBER 4,2015