20161128_5132.pdf

DECISION MEMORANIMJM
Tth COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:BENTLEY ERDWURM
DATE:NOVEMBER 25,2016
RE:IDAHO POWER COMPANY’S TARIFF ADVICE NO.16-06;
MODIFICATIONS TO SCHEDULE 45-STANDBY SERVICE.
BACKGROUND
On November 1,2016,Idaho Power Company filed a Tariff Advice with the Commission
to revise Schedule 45-Standby Service.As the tariff is currently written,Standby Service is
only available to customers taking service at primary and transmission level voltages under
Schedule 19-Large Power Service.According to Idaho Power,a customer taking service under
Schedule 9-Large General Service,recently installed an on-site generation unit and has
requested Standby Service.Idaho Power now proposes to make Schedule 45-Standby Service
available to Schedule 9 customers taking service at primary and transmission level voltages.
Idaho Power also proposes to reduce the Maintenance Charge for all Schedule 45 customers to
be consistent with the Parallel Operations Section currently approved in the monthly Facilities
Charge under Rule M.Facilities Charge Service.
STAFF ANALYSIS
Staff has reviewed Idaho Power’s methodology for determining the Standby Service
rates,and verified workpapers provided with the Tariff Advice filing.To determine the Standby
Service rates for Schedule 9 customers,Idaho Power used the same methodology it used to
compute the Standby Service rates applicable to Schedule 19 customers,which the Commission
approved in the most recent general rate case (Case No.IPC-E-I1-08,with rates effective
January 1,2012).However,Idaho Power made an adjustment to reflect the inclusion of the
Langley Gulch power plant in base rates by applying the 7.05%rate increase (as approved in
DECISION MEMORANDUM -1 -NOVEMBER 25,2016
Case No.IPC-E-1 2-14,with rates effective July 1.2012)to the cost-of-service study from Case
No.IPC-E-1 1-08.Staff confirmed that the proposed Standby Service rates for Schedule 9
customers are based on the most recent cost-of-service study,as adjusted to include the Langley
Gulch power plant in base rates.
Staff also reviewed Idaho Power’s proposal to reduce the Maintenance Charge for all
Schedule 45 customers.The Maintenance Charge is calculated as a percentage that gets applied
to the cost of a customer’s system protection package;it is currently 0.7 percent per month as
specified in the Parallel Operations section of Schedule 45.According to Idaho Power,the
facilities addressed in Rule M,which refers to Schedule 66 —Miscellaneous Charges are similar
to the system protection package in the Parallel Operations section of Schedule 45.Pursuant to
Rule M and Schedule 66 —Miscellaneous Charges,0.59 percent per month is the operations and
maintenance charge applicable to “Facilities Installed More Than 31 Years.”Investment
components (return,depreciation and income taxes)are excluded for older facilities because they
are fully depreciated.According to Idaho Power,rate treatment for these facilities over 31 years
should be similar to rate treatment for the system protection package covered under the
Maintenance Charge in Schedule 45.because the customer has funded the system protection
package and should not pay the investment costs.Consequently,Idaho Power proposes to equate
the Schedule 45 Maintenance Charge to the Schedule 66 Miscellaneous charge applicable to
“Facilities Installed More Than 31 Years,”which insures the Maintenance Charge in Schedule
45 only covers operation and maintenance expenses.
STAFF RECOMMENDATION
Staff believes that approval of the Company’s proposed modifications to Schedule 45
expand opportunities for Standby Service when customers have on-site generation at their
facilities.It also aligns the Maintenance Charge in Schedule 45 with the Facilities Charge in
Rule M.improving the accuracy and transparency of monthly charges.Thus,Staff recommends
Commission approval of the Modifications to Schedule 45,Standby Service.
DECISION MEMOR4NDUM -2 -NOVEMBER 25,2016
COMMISSION DECISION
Does the Commission wish to approve the Company’s proposed modifications to
Schedule 45,Standby Service,to be applicable December 1,2016?
Bentley Erdwurm
Udmeiiios.’rar11Advice No.16-06 Schcdulc 15 Standby
DECISION MEMORANDUM -3-NOVEMBER25,2016