20101117Motion.pdf

KRSTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
TELEPHONE: [phone]
E-MAIL: kris.sasser(ßpuc.idaho.gov
IDAHO BAR NO. 6618
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Street Mailing Address:
472 West Washington Street
Boise, Idaho 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION'S
INQUIRY INTO LOAD GROWTH
ADJUSTMENTS THAT ARE PART OF
POWER COST ADJUSTMENT
MECHANISMS.
)
) CASE NO. GNR-E-IO-03
)
) COMMISSION STAFF MOTION
) TO CONSIDER PROPOSED
) METHODOLOGY
Power supply costs represent a significant portion of a utilty's total revenue
requirement and are subject to a high degree of volatilty largely outside the utilty's control.
Power cost adjustment mechanisms allow a utilty to collect from customers or credit to
customers the majority of the difference between actual net power costs incured by the utilty to
serve its customers and the normalized amount of power supply costs collected from customers
through rates set in a general rate case.
In a recent case (PAC-E-IO-Ol), the Commission observed that in periods of
declining load the mechanism "appears to operate much the same as a decoupling mechanism
reimbursing the Company for lost revenue for reductions in customer usage (sales)." Order No.
31033. The Commission directed Staff to hold a workshop "to discuss this phenomenon and
report continued justification for use of an LGAR (load growth adjustment rate L when loads
decline." ¡d.
COMMISSION STAFF MOTION
TO CONSIDER PROPOSED METHODOLOGY 1
On June 9, 2010, Commission Staff met with representatives from Avista, Idaho
Power and Rocky Mountain Power to identify and discuss differences in the three load growt
adjustment mechanisms. On September 10, 20 I 0, the Commission initiated this case and issued
a Notice of Workshop to provide a foru for the exploration of issues related to load growth
adjustments. The workshop was held September 28, 2010. Representatives from Avista, Idaho
Power, and Rocky Mountain Power were in attendance as well as Commission Staff and other
interested paries.
Avista and Idaho Power utilze a Power Cost Adjustment mechanism (PCA). Rocky
Mountain Power's mechanism is characterized as an Energy Cost Adjustment Mechanism
(ECAM). All three mechanisms are designed to recover/rebate abnormal power supply costs in
similar ways. All three curently contain a load growth adjustment mechanism. The
Commission and other paries have expressed concern over costs added to the adjustment
mechanisms due to declining loads.
Some parties support an asymmetrical approach that would remove dollar amounts
from recovery by the utilties when load grows with no adjustment when load declines. Others
believe that the adjustment can be made symmetrical and fair by eliminating the load growth
adjustment mechanism entirely. At the September 28 workshop, Avista offered a compromise
position that amounts to a revision of curent methodology. The proposal maintains symmetr in
growing and declining load scenarios and substantially reduces the load growth adjustment rate
(LGAR) such that the impact of imputed costs to the various utilities in declining load scenaros
is reduced but not eliminated.
The proposal bases the rate on the energy classified portion of embedded production
revenue requirement. Presently, the rate for Idaho Power and Rocky Mountain Power is based
on all embedded production revenue requirement. Avista's current rate is based on all
production and transmission revenue requirement. The proposed change reduces load decline
imputed costs that accumulate in the three cost adjustment mechanisms. It also potentially
eliminates the issue of decoupling from the cost adjustment mechanisms and avoids the
possibilty of double recovery of demand classified embedded production revenue requirement
that Idaho Power recovers from residential and small commercial customers through a Fixed
Cost Adjustment (FCA) mechanism. The following table shows the LGARs under present
methodology and Avista's proposed methodology for all three utilties.
COMMISSION STAFF MOTION
TO CONSIDER PROPOSED METHODOLOGY 2
CURRNT PROPOSED
UTILITY UNITS METHODOLOGY METHODOLOGY
Avista $/MWH 48.00 30.16
Idaho Power $/MWH 26.63 15.43
Rocky Mountain Power $/MWH 19.53 4.88
By this Motion, Staff requests that the Commission allow the interested paries to
proceed on the consideration of this proposal though the use of Modified Procedure, set a
comment deadline of Januar 14, 2011, and a response comment deadline of Januar 28, 2011.
Respectfully submitted this 17th day of November 2010.
~~!1e ~Å4A
Kristine A. Sasser
Deputy Attorney General
N:GNR-E-IO-03_ks_LGAR Motion
COMMISSION STAFF MOTION
TO CONSIDER PROPOSED METHODOLOGY 3
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS I r¡L~ DAY OF NOVEMBER 2010,
SERVED THE FOREGOING COMMISSION STAFF MOTION TO CONSIDER
PROPOSED METHODOLOGY, IN CASE NO. GNR-E-I0-03, BY MAILING A COPY
THEREOF, POSTAGE PREPAID, TO THE FOLLOWING:
LISA NORDSTROM
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
MIKE YOUNGBLOOD
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
MARK C MOENCH
DANIEL E SOLANDER
ROCKY MOUNTAIN POWER
201 S MAIN STREET SUITE 2300
SALT LAKE CITY UT 84111
TED WESTON
ROCKY MOUNTAIN POWER
201 S MAIN STREET SUITE 2300
SALT LAKE CITY UT 84111
DAVID J MEYER
A VISTA UTILITIES
PO BOX 3727
SPOKANE W A 99220
KELL Y NORWOOD
A VISTA UTILITIES
PO BOX 3727
SPOKANE WA 99220
ATLANTA POWER COMPANY
POBOX 10
ATLANTA ID 83601-0010
~~
SECRETARY
CERTIFICATE OF SERVICE