20040319Brilz Rebuttal.pdf

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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC SERVICE
TO ELECTRIC CUSTOMERS IN THE STATEOF IDAHO.
CASE NO. IPC-O3-
IDAHO POWER COMPANY
DIRECT REBUTTAL TESTIMONY
MAGGIE BRILZ
Please state your name.
My name is Maggie Brilz.
Are you the same Maggie Brilz that has
previously presented direct testimony in this case?
Yes, I am.
Have you had the opportunity to review the
pre-filed direct testimony of Micron Technology, Inc.
witness Dr. Peseau, Industrial Customers of Idaho Power
witnesses Dr. Reading and Mr. Teinert, Idaho Irrigation
Pumpers Association witness Mr. Yanke 1 , Kroger Company
witness Mr. Higgins, Federal Executive Agencies witness Dr.
Goins, AARP witness Dr. Power, and Commission Staff
witnesses Mr. Hessing, Mr. Schunke, and Ms. Parker?
Yes, I have.
What is the scope of your rebuttal testimony?
My testimony will focus on issues raised by
the intervening parties and the Commission Staff regarding
the Company s cost-of-service study and rate design
proposals as well as several issues raised specifically by
the Industrial Customers of Idaho Power.It should be noted
that any omission on my part in addressing issues raised by
the parties does not indicate my concurrence with those
issues.
Are you sponsoring any exhibi ts wi th your
direct rebuttal testimony?
BRILZ, Di-Reb
Idaho Power Company
Yes.I am sponsoring Exhibit Nos. 76 and 77.
COST-OF-SERVICE
Weiqhted 12 CP MethodoloGY
Weighted generation and transmission demand-
related allocation factors were derived for use in the cost-
of-service study by averaging the actual coincident demands
and the coincident demands weighted by marginal costs.
Staff witness Mr. Hessing and Federal Executive Agencies
wi tness Dr. Goins recommend the Commission approve this
weighted 12 CP methodology.Do any witnesses recommend the
Commission adopt a different methodology?
Yes. Micron Technology witness Dr. Peseau and
Irrigation witness Mr. Yanke 1 do not support this
methodology .
What methodology does Dr. Peseau recommend?
Dr. Peseau contends that in each of the past
three Idaho Power Company general rate cases the Commission
has endorsed the weighted 12 CP methodology and not an
alternative methodology or some averaging of different
methodologies.Dr. Peseau urges the Commission to continue
to endorse the weighted 12 CP methodology.
Has the Commission ever approved a variation
to the weighted 12 CP methodology?
Yes.In Case No. IPC-94-5 the Company
computed the weighted 12 CP demand allocation factors by
BRILZ , Di - Reb
Idaho Power Company
mul tiplying the monthly coincident peaks by the
corresponding monthly marginal costs.The Company
analysis indicated no capacity-related marginal costs for
the months of September and October resulting in a zero
weighting for those two months.In Order No.2 5880 issued
in Case No. IPC-94-5, the Commission found the use of zero
weighting factors to be inconsistent with the purpose of
spreading cost responsibility on a seasonal basis and
assigned weighting factors to the months of September and
October equal to the weighting factors for the months of
April and May.
Do you believe the Commission should approve
the weighted 12 CP methodology used by the Company in this
case?
Yes, I do.The Commission has in the past
found a variation in the determination of the weighted 12 CP
allocation factors to be reasonable.I believe the
variation used by the Company in this case is also
reasonable and should be approved by the Commission.
Do you concur with Dr. Peseau ' s finding that
using the weighted 12 CP allocation factors as he recommends
rather than the average weighted factors used by the Company
resul ts in a lower cost of service for all customer classes
other than the irrigation class and a higher cost of service
for the irrigation class?
BRILZ , Di - Reb
Idaho Power Company
Yes, I do.
What methodology does Mr. Yanke 1 recommend?
Mr. Yankel recommends the use of the 12 CP
methodology instead of the weighted 12 CP methodology.
Has the Commission previously approved the
use of the 12 CP methodology in an Idaho Power general rate
case proceeding?
To my knowledge, the Commission has not
previously approved the use of the 12 CP methodology in an
Idaho Power proceeding.The weighted 12 CP methodology, or
some variation of that weighted methodology, was approved by
the Commission for setting Idaho Power s rates in Case No.
1006-185, Case No. U-1006-265A, and Case No. IPC-94-
In Case No. U-1006-159 the Commission did not approve a
specific methodology but did indicate its inclination to use
the results of the "positive excess demand" (PED) and 12 CP
methods to select rate levels for customer classes.
However, in utilizing the results of the PED and 12 CP
methods, the Commission stressed the failure of the embedded
studies to deal with the phenomenon of time and to address
non-historic cost considerations (Order No. 16688).
Classification and Allocation of Distribution Plant
In his direct testimony Irrigation witness
Mr. Yankel recommends that 16.86 percent of the Company
investment recorded in FERC Account 364 be classified as
BRILZ, Di-Reb
Idaho Power Company
secondary- related.This recommendation would increase the
amount of FERC Account 364 investment classified as
Secondary by $14,273,651 for a total investment classified
as Secondary of $28,305,647.Is Mr. Yankel's recommendation
reasonable?
No.Mr. Yankel asserts that simply because
the amount of investment in FERC Account 364 classified as
Secondary is 8.4 percent and the amount of investment in
FERC Account 365 classified as Secondary is 16.9 percent,
the investment in FERC Account 364 classified as Secondary
is incorrect.Mr. Yankel's recommendation to reclassify
over $14 million of the investment in FERC Account 364 to
Secondary based on the percentage of investment in FERC
Account 365 classified as Secondary is arbitrary.
What would be the effect of reclassifying
over $14 million in FERC Account 364 investment from Primary
to Secondary?
The revenue requirement for customer classes
that utilize the secondary distribution system, such as
residential, small commercial, and Schedule 9 Secondary
Service Level customers, would increase while the revenue
requirement for customer classes that do not utilize the
secondary distribution system, such as Schedules 9 and 19
Primary and Transmission Service Level customers and
irrigation customers, would decrease.
BRILZ , Di - Reb
Idaho Power Company
Irrigation witness Mr. Yankel also recommends
that no costs associated with the Company s investment in
underground facilities recorded in FERC Accounts 366 and 367
be allocated to the irrigation class.Do you agree wi th Mr.
Yankel's recommendation?
No.Mr. Yanke 1 has proposed a one-sided
adjustment to the factors used to allocate distribution
plant to the various customer classes.I believe this
adjustment is inappropriate.
Please explain.
Since the Company began preparing class cost-
of-service studies, the demand-related investment in
distribution plant has been allocated to the various
customer classes based on the non-coincident peak demands of
each customer class.This methodology recognizes that local
area loads are the major factors in sizing distribution
facili ties.Consequently, no class-specific characteristics
or demographics, such as rural versus urban location,
average number of distribution line miles per customer in
each class, or customer density per feeder, are utilized in
the derivation of the class non-coincident peak demand
allocation factors.Rather, the methodology relies entirely
on the class non-coincident peak demands for assigning
costs.All demand-related distribution plant, including
both overhead and underground facilities, is allocated based
BRILZ, Di - Reb
Idaho Power Company
on the class non-coincident peak demands.All customer-
related distribution plant is allocated based on the number
of customers in each class.While this allocation method is
not flawless, I believe it is a reasonable methodology for
allocating distribution costs.
Why do you believe Mr. Yankel's recommended
adjustment is inappropriate?
Mr. Yankel recommends that the allocation
factors used to assign underground facilities costs be set
to zero for the irrigation class since irrigation customers
utilize very few underground facilities.However, he does
not recommend a corresponding adjustment to the allocation
factors used to assign overhead facilities cost to the
irrigation class in recognition of the fact that irrigation
customers are rural and tend to have fewer customers served
per line mile.Mr. Yankel's adjustment is one-sided and
should not be adopted.
What effect would Mr. Yankel's adjustment
have on the revenue requirement of the various customer
classes?
Mr. Yankel's adjustment would decrease the
revenue requirement for the irrigation class and increase
the revenue requirement for all other standard tariff
customer classes.
What methodology do you recommend the
BRILZ, Di-Reb
Idaho Power Company
Commission approve for allocating distribution costs to
customer classes?
I recommend the Commission approve the
methodology used by the Company in the cost-of-service study
filed in this case.
Normalized Peak Demand
Industrial witness Dr. Reading and Irrigation
wi tness Mr. Yankel suggest that the Company utilize
normalized peak demands in developing its cost-of-service
analysis.What is the Company s response to this
suggestion?
The Company s load research experts believe
that the present method using actual peak data is sufficient
to accurately assign costs and has several advantages
including the fact that it is a simple, straightforward, and
transparent analysis.
Do you support Mr. Yankel's development of
normalized demand values as detailed on his Exhibit Nos. 307
through 311?
No.While Mr. Yankel's methodology for
computing normalized peak demands may be conceptually
reasonable for a quick and simple analysis, his actual
development of normalized demand values has several errors.
As a starting point in his analysis, Mr. Yanke 1 attempts to
adjust energy data into calendar months.He then uses the
BRILZ, Di-Reb
Idaho Power Company
adjusted data in his computation of normalized peaks.
However, the energy data that he uses has already been
adjusted into calendar months.As a result, his analysis
uses data that is distorted due to this "double" adjustment.
Second, Mr. Yanke 1 includes in his analysis several months
of customer level irrigation data that is greater than the
monthly generation level irrigation data.Generation level
data is simply the customer level data adjusted for losses.
It is not possible for the customer level usage to be
greater than the generation level usage.And third, Mr.
Yankel uses an incorrect loss factor in his analysis for the
Schedule 9 Primary Service Level normalized peak demands.
As a result of these errors, Mr. Yankel's analysis produces
incorrect results and his recommended adjustments to the
peak demand values are not appropriate.
RATE DESIGN
Service Charqe
AARP witness Dr. Power states in his direct
testimony that the Company is seeking to collect
distribution costs that are not demand-related through a
monthly service charge.Please clarify the Company s intent
regarding the costs included in the proposed monthly service
charge?
It is the Company s intent to include in the
service charge a portion of the investment in distribution
BRILZ, Di - Reb
Idaho Power Company
facilities, the investment in meters and service drops, and
meter reading, billing, and other customer service related
expenses.For customer classes that are billed demand
charges, the portion of the distribution system classified
as demand-related is included in the demand charge while the
portion of the distribution system classified as customer-
related is included in the service charge.For residential
and small commercial classes, all of the costs associated
with the distribution system are classified for inclusion in
the service charge.The Company has not stated that only
customer-related" costs be included in the service charge.
Blocked Rates
Both Staff witness Mr. Schunke and AARP
wi tness Dr. Power recommend the Commission approve a blocked
rate structure, although each witness recommends a slightly
different version.Does the Company support the
implementation of blocked rates?
No.The Company believes that the proposed
blocked rates have no cost basis, penalize customers who
utilize electric energy for space heating, and provide an
artificially low price signal to customers who use less than
the second-block threshold amount.
Please explain your assertion that blocked
rates have no cost basis.
The cost of energy is based on several
BRILZ, Di-Reb
Idaho Power Company
variables, including the time of day and time 0 f year during
which it is produced or purchased, the balance between
supply and demand, and the availability of transmission
capaci ty.The total quantity of energy consumed by an
individual customer does not determine the total cost
incurred to provide that energy.Rather, it is a
combination of variables, such as those previously
mentioned, that determines the total cost.The cos t
serve a customer who consumes 400 kWh a month but whose
consumption occurs mainly during the peak hours can be
greater than the cost to serve a customer who consumes 1,000
kWh a month but whose consumption occurs mainly during the
off-peak hours.There simply is no cost basis for
establishing variable energy prices based solely on the
quanti ty of energy consumed by a customer.
How do blocked rates unfairly penalize
customers who utilize electric energy for space heating?
Although some customers with electric space
heat may have the ability to conserve some energy without
endangering their health by lowering their thermostats, they
do not necessarily have more ability to conserve electricity
than do other customers who use other fuel sources for space
heating. Blocked rates simply cause customers with electric
space heat, many of whom do not have an alternative form of
space heating available, to pay higher bills while other
BRILZ, Di-Reb
Idaho Power Company
customers with other forms of space heat receive an
artificially low price signal.
Dr. Power has recommended an ini tial block of
400 kWh with all usage above 400 kWh priced at a rate 33
percent higher than the initial block rate.Does this block
structure provide a benefit to electric space heat
customers?
No.The blocked rate structure proposed by
Dr. Power, compared to the flat rate structure proposed by
the Company, provides a benefit to customers who consume
less than 876 kWh a month during the non-summer months
(reference Power, Direct, p. 35).Most customers who
utilize electricity for space heating consume more than 876
kWh per month during the winter heating season.
How does a blocked rate structure provide an
artificially low price signal to customers who use less than
the ini tial block threshold level?
A blocked rate structure implies that the
energy consumed by high-use customers is more valuable than
energy consumed by low-use customers and, therefore,
provides more emphasis on energy conservation by high-use
customers than by low-use customers.I believe all
customers should receive the same price signal to conserve
energy .The flat, seasonal rates proposed by the Company
for residential and small commercial customers conveys to
BRILZ, Di-Reb
Idaho Power Company
all customers that each kilowatt-hour of energy that is
conserved has value without placing the onus for
conservation on customers with usage above the threshold
level.
In his testimony, Mr. Schunke recommends the
implementation of blocked rates only during the summer
mon ths He proposes an initial block of 800 kilowatt-hours
with all usage above 800 kWh charged a rate that is 20
percent higher than the initial block rate.Does Mr.
Schunke s proposal convey the same price signal to customers
during the summer months as does the Company s proposal?
The blocked rate proposal recommended by Mr.
Schunke would provide the price signal that energy
consumption during the summer becomes more expensive as more
is used.However, it would only convey this message to
customers who use more than 800 kWh.Cus tomers who
routinely use less than 800 kWh would receive no price
signal during the summer to encourage reduced consumption.
Exhibi t No.7 6, which utilizes the residential bill
frequency data provided in the Company s Response to Request
No. 76 of Staff's Third Production Request, demonstrates
that almost 45 percent of customers would see no increase in
price over the course of the three-month summer period under
Mr. Schunke ' s proposal.Under the Company s proposal, all
customers would receive a price signal during the three-
BRILZ, Di-Reb
Idaho Power Company
month summer period.
Do you still recommend the implementation of
flat, seasonal rates for residential and small commercial
customers?
Yes, I do.
Proration of Bills on Customer Statements
Staff witness Ms. Parker raises concerns
regarding the appearance of customer bills in regards to
seasonal rates that would take effect on June 1 and then
again on September Ms. Parker recommends that in order
to avoid the prorating of charges on customer bills, and
therefore customer confusion over understanding their bills,
the seasonal rates become effective on a rolling basis
coincident with each customer s meter reading date.As an
acceptable alternative to implementing seasonal rates on a
rolling basis, Ms. Parker has suggested the Company alter
its billing system so that any fixed charges or credits not
affected by the seasonal change are not prorated due to
seasonal rates.What are your thoughts regarding Ms.
Parker s recommendations?
Ms. Parker has raised legitimate issues
regarding the Company s prorated bills and customers
difficulty in understanding them.As Ms. Parker noted, the
Company s current billing setup will result in prorated
bills when the Power Cost Adjustment (PCA) rate goes into
BRILZ, Di-Reb
Idaho Power Company
effect.Since the PCA rate will become effective on June 1
coincident with the effective date of the summer rates,
customers ' bills will be prorated each June.However, this
proration will occur only once a year when the PCA changes.
At the end of the summer season when the non-summer rates as
proposed by the Company become effective, only the seasonal
components will prorate.For example, for residential
customers, the bill prepared when the non-summer rates
become effective will not include prorated fixed charges or
credi ts; only the seasonal components will be prorated in
this situation.I have included as Exhibit No. 77 a sample
residential bill that illustrates how seasonal charges will
appear when the non-summer rates become effective.
stated by Ms. Fullen in her direct rebuttal testimony, the
Company is exploring ways to address the issues identified
by Ms. Parker regarding prorated bills.
Does the bill presentation you have just
described match the option Ms. Parker has suggested as an
acceptable alternative to Staff's recommendation to
implement seasonal rates on a rolling basis?
Generally, yes.I believe Ms. Parker
alternative option is met for the bills that are prepared
when the non-summer rates become effective.However, under
the Company s current billing process, the bills that are
prepared when the PCA rate changes, which will be coincident
BRILZ, Di-Reb
Idaho Power Company
with when the summer rates become effective, wi 11 still show
the proration for all components.
Do you believe Staff's proposal to make
seasonal rates effective on each customer s meter reading
date would be less confusing to customers than the
alternative option you have just described?
I believe it would be very confusing toNo.
customers to have to track their meter reading schedule in
order to know when the seasonal rates become ef fecti ve
Time-of-Use Rates
Wi tnesses Dr. Power, Mr. Higgins, and Staff
support the Company s proposal to adopt mandatory time-of-
use rates for all Schedule 19 customers.ICIP wi tness Mr.
Teinert opposes the adoption of time-of-use rates for
Schedule 19 customers and instead recommends the
continuation of the flat, non-seasonal rate structure
currently in place.Mr. Teinert' s rationale for a continued
flat rate is that the Schedule 19 customers contribute very
little seasonal variance to the Company s load shape.
you agree with Mr. Teinert's rationale?
Time-of-use rates are intended to moreNo.
closely match the price of energy with the cost of energy
throughout the periods of the day and across the different
seasons.Matching the price charged for energy during a
particular period of the day with the cost of energy for
BRILZ, Di-Reb
Idaho Power Company
that same period better matches the cost to serve an
individual customer, based on that customer s usage pattern,
wi th the prices charged an individual customer.Time-of-use
rates simply better match price with cost.The fact that a
customer class'load shape fairly constant throughout
the year does not mean that the cos to serve that class
are constant across the day or across seasons.
In his direct testimony, Mr. Teinert states
that the proposed mandatory time-of-use rates proposed for
Schedule 19 are radically different from those currently in
place.Do you believe this difference is a valid reason to
reject the Company s time-of-use proposal?
No.I agree with Mr. Teinert that the
proposed rate design is different from that in place today.
I believe, however, that Schedule 19 customers are able to
understand the pricing.It is not uncommon for customers
taking service under Schedule 19 to have staff devoted to
managing energy consumption.In addition, several Schedule
19 customers have facilities in other states where time-of-
use rates are already in place.Given the sophistication
and experience of the Schedule 19 customers, I do not
believe a change in rate structure is a valid reason to
rej ect the proposal.
Given Mr. Teinert's opposition to mandatory
time-of-use pricing, do you believe it would be appropriate
BRILZ, Di-Reb
Idaho Power Company
to make time-of-use pricing available to Schedule 19
customers on a voluntary basis?
No.Voluntary time-of-use programs generally
attract participation from customers whose electric bills
would be lower without any change in consumption.Al though
the lower electric bills reflect the fact that the
customers' usage patterns are less expensive to serve than
the class average, the result is a reduction in revenue for
the Company without any corresponding benefit.Mandatory
time-of-use rates match the price of energy with the cost of
energy for all customers in the class.Those customers
whose cost to serve is lower due to their patterns of energy
consumption pay less.Those customers whose cost to serve
is higher due to their patterns of energy consumption either
pay more or have an incentive to shift their usage patterns
in order to reduce their bills.
Are mandatory time-of-use rates fairly common
for customers of comparable size to Schedule 19 in other
western states?
Yes.In Table KCH-1 included at page 10 of
his direct testimony, Mr. Higgins identified several
utilities that require time-of-use rates for customers with
loads greater than 500 kW.In addition to the numerous
Cali fornia utili ties listed by Mr. Higgins, other
neighboring utilities that require time-of-use pricing for
BRILZ, Di-Reb
I daho Power Company
customers with loads of 1,000 kW or more are Sierra Pacific
Power in Nevada and Pacific Power & Light in Washington and
Wyoming.
Mr. Teinert has indicated that the Company
has not met with its customers to fully explain its proposed
time-of-use rates
proposal.you
No.
and the potential financial impact of that
agree with Mr. Teinert' s assertion?
Members of Idaho Power's management,
including Mr. Gale and myself, met with the Industrial
Customers of Idaho Power at their September 2, 2003 meeting.
At that meeting, the time-of-use proposal for Schedule
was discussed in detail.Several members of the
organization shared their thoughts and concerns with the
Company regarding the proposal.In addition, following the
filing of this case, the Company s Delivery Services
Representatives provided detailed information on the time-
of-use proposal to over 70 percent of the Schedule
customers through a direct mailing or a personal visit.
addition, customers were informed that a detailed
spreadsheet showing the potential financial impact of the
proposal on their specific facility was available.Over 3
percent of the Company s Schedule 19 customers requested and
received the spreadsheet detailing the potential financial
impact of the proposal.
Mr. Higgins recommends voluntary time-of-use
BRILZ, Di-Reb
Idaho Power Company
rates be made available as part of this proceeding for
Schedule 9 customers.Do you support Mr. Higgi ns '
recommendation?
No.I believe the implementation of time-
of-use rates should be taken in steps.While the Company is
fully prepared to implement time-of-use rates for Schedule
19 customers, I appreciate that any new rate design creates
the need for increased customer communication and assistance
as well as potential system issues that cannot be identified
until implementation occurs.I recommend time-of-use rates
for Schedule 19 customers be implemented and evaluated prior
to offering time-of-use rates to Schedule 9 customers.
If the Commission were to decide that time-
of-use rates should be made available to Schedule 9
customers as part of this proceeding, are there any issues
which you believe should be considered?
Yes.Time-of-use pricing requires that
metering equipment be in place to correctly record the
amount of usage consumed during the various periods of the
day.Customers taking service under Schedule 9 Primary and
Transmission Service Levels currently have the metering in
place to facilitate time-of-use pricing.Should the
Commission decide time-of-use rates should be made available
to Schedule 9 customers as part of this proceeding, I
recommend it be limited to Primary and Transmission Service
BRILZ , Di - Reb 2 a
Idaho Power Company
Level customers.
Relationship Between Schedule 9 and Schedule 19 Rates
In its proposal for Schedule 9 and Schedule
19 rates, the Company attempted to maintain the relationship
between the Service, Basic, and Demand Charges for the
corresponding Service Levels on each schedule.For example,
the Company proposed a $0.65 Basic Charge for Primary
Service for both Schedule 9 and Schedule 19.Staff'
proposed rates for Schedules 9 and 19 do not maintain this
relationship.Does this proposal cause you any concerns?
In order to respond I believe it is necessary
to provide some background.Service levels were first
implemented in May 1995 as a result of the outcome of the
Company s last general rate case, Case No. IPC-E-94-
Prior to May 1995 all customers on Schedule 9 were charged
the same rates as were all customers taking service under
Schedule 19.Service levels were added to more accurately
match prices to the costs associated with taking service at
various voltage levels, to facilitate the movement of
customers between Schedule 9 and Schedule 19, and to reduce
the discrepancy in prices between Schedule 9 and Schedule 19
so there was limited incentive for a customer to use
additional energy in order to qualify for Schedule 19.
Experience over the past nine years has shown that the
service level pricing strategy has been successful.The
BRILZ, Di-Reb
Idaho Power Company
Company s proposed rates for Schedules 9 and 19 attempt to
maintain the service level relationships between Schedules 9
and 19, specifically for the Service and Basic Charges.The
introduction of time-of-use rates for Schedule 19 has made
it more difficult to maintain the service level
relationships for the Energy and Demand Charges.
Given this background, do you have concerns
regarding Staff's proposed rates for Schedules 9 and 19?
While I would prefer to keep the existing
service level relationships between the Service and Basic
Charges on Schedules 9 and 19, I do not believe the
relationships between Staff's proposed rates are
inappropriate, particularly in conjunction with the adoption
of mandatory time-of-use pricing for Schedule 19.My main
concern regarding the relationship in the rates between
Schedule 9 and Schedule 19 is that the service level
objectives be kept in mind so that the issues that existed
prior to the adoption of service levels do not reappear.
Would your view of the relationships between
Staff's proposed rates for Schedule 9 and Schedule 19 change
if the Commission were to decide not to approve mandatory
time-of-use rates for Schedule 19?
Yes, it would.The introduction of mandatory
time-of-use rates for Schedule 19 creates a fundamental
difference between the service offered under Schedule 9 and
BRILZ, Di-Reb
Idaho Power Company
the service offered under Schedule 19.This difference
makes it difficult to evaluate any uneconomic incentive to
move from one rate schedule to another.However, if
mandatory time-of-use rates are not approved for Schedule
19, the evaluation becomes quite simple.In that situation
I would recommend the service level relationship between the
Service, Basic, and Demand Charges currently in place
between Schedules 9 and 19 be maintained with any difference
in revenue requirement balanced on the Energy Charge.
Tariff Lanquaqe Chanqes
Staff witness Ms. Parker has recommended
several language changes to the tariffs proposed by the
Company.Would you please identify the recommended changes?
Yes.First, Staff recommends that the
Company s proposed "Service Reconnection Charge " be renamed
Service Connection Charge Second, Staff recommends that
the sentence "The Company reserves the right to modify meter
reading schedules as required by changing condi tions " not be
added to Rule And third, Staff suggests some alternative
language to the Company s proposed Rule L as detailed in
Staff's Exhibit No. 141.
Does the Company agree with Staff'
recommenda t ions?
Yes.The Company agrees with all three of
Staff's recommendations.
BRILZ, Di-Reb
Idaho Power Company
Miscellaneous
ICIP witness Mr. Teinert states that he
disagrees with the Company s line extension provisions
included in the proposed Schedule 19.Is the Company
proposing any changes to its line extension policy as part
of this general rate case?
No.The specific language in Schedule 19
referring to additional facilities was first approved in
January 1993.No changes have been made or proposed since
that time.
In his direct testimony Mr. Teinert concludes
that transformer capacity for Schedule 19 customers is 96
percent greater than Schedule 19 peak demand.Is Mr.
Teinert's conclusion based on sound analysis?
No.Mr. Teinert has used the sys tem
coincident peak for Schedule 19 for the month of July, which
measures the total load of the Schedule 19 class at the time
of the system coincident peak, as the measure of total
distribution transformer capacity requirements.He then
divides this value into the total capacity of Company-owned
transformers installed at each customer s service location.
Transformers installed at the customer s location are sized
to meet the specific needs of the customer at that location.
In order for Mr. Teinert' s analysis to be conceptually
correct, he would need to divide the total capaci ty of
BRILZ, Di-Reb
Idaho Power Company
transformers installed at each customer s location by the
sum of each customer s peak billing demand.
Mr. Teinert relies on his conclusion that
transformer capacity for Schedule 19 customers far exceeds
the capacity needed in asserting that Schedule 19 customers
are overcharged for transformer capacity through
Contribution in Aid of Construction (CIAC) charges and
inflated distribution rate base.Is Mr. Teinert' s assertion
correct?
No.First, the transformer capacity Mr.
Teinert refers to is the capacity of the transformers
installed on the customers ' property to serve the specific
needs of each customer.Customers do not make CIAC payments
for these transformers; rather, they pay monthly facilities
charges based on the total investment in the facilities.
Second, the investment in transformers installed on
Schedule 19 customers' property is directly assigned to the
Schedule 19 customer class along with the revenue derived
from the monthly facilities charges.The direct assignment
of the specific investment in transformers to the
Schedule 19 class results in a matching of the rate base
attributed to the Schedule 19 customer class with the
facilities used by the Schedule 19 customer class and does
not result in an inflated distribution rate base as Mr.
Teinert asserts.
BRILZ, Di-Reb
Idaho Power Company
Mr. Teinert disagrees with the Company
proposal to increase the power factor requirement from
percent to 90 percent and states that since the Company has
offered no evidence that its delivery system is capacity
constrained due to power factor, the change is not
warranted.Do you agree wi th Mr. Teinert?
No.The 2002 IRP identified multiple
delivery system capacity constraints.Addi tionally, Idaho
Power s distribution system is typically voltage and
capaci ty constrained.The Company s distribution planning
engineer has informed me that these constraints require the
reactive loads on Idaho Power's distribution system to be
fully compensated. In order to minimize losses and maintain
system capacity, Idaho Power must install capacitors to
correct for loads with less than unity power factors.The
increase in the minimum power factor from 85 percent to 90
percent brings the requirement for reactive load for
individual customers closer to the system requirement.
Did the Company take the power factor
requirements of neighboring utilities into account in making
its determination to increase the minimum power factor from
85 percent to 90 percent?
Yes.The listing below shows the sample of
utilities reviewed.
BRILZ, Di-Reb
Idaho Power Company
Utility Power Factor
Reauiremen t
Nevada Power
Utah Power ( ID)
Portland General Electric
Pacific Gas & ElectricSierra Pacific (NV and CA)
San Diego Gas & Electric
Avi s ta
Pacific Power & Light
95%
85%
93%
85%
90%
90%
80%
93%
Mr. Teinert states that Idaho Power does not
administer any conservation programs for Schedule 19
customers and therefore should not be required to contribute
Energy Efficiency Rider funds.Is Mr. Teinert correct in
his understanding of the availability of conservation
programs for Schedule 19 customers?
No.Idaho Power s Industrial Efficiency
program was launched in October 2003.This program is
targeted specifically at customers with 500 kW or more of
load.This program allows customers to propose energy
efficiency measures tailored specifically to their own
processes.Currently, two proposals have been approved for
implementation and an additional three proposals are
undergoing the approval process.
Does this conclude your direct rebuttal
testimony?
Yes, it does.
BRILZ, Di-Reb
Idaho Power Company
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. I PC-O3-
IDAHO POWER COMPANY
EXHIBIT NO. 76
M. BRill
Residential Bill Frequency Analysis
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1
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-O3-
IDAHO POWER COMPANY
EXHIBIT NO. 77
M. BRILl
Sample Bill
Seasonal Proration
Page: 1 of 2
www.idahopower.com
Questions? Contact us at:
PO Box 30, Boise, II) 8372L
Or call us a\ 388-5083 (Treasure Valley)
or [phone] Se habla espanol
For faster service please call
Tuesday through Friday, 7:30 a,m. to 6:30 p,
Customer Name: James R Customer
Account Number: 6428882444
Billing Date: 09/15/2004Print Date: 09/16/2004
IDAHO
:"W POWER
An IDACDRP Company
Due Date
09/30/04
Please Pay
$64.
Account
Activity
Previous Balance ................................................................ $86.Payments - Thank You ................,.........................,...,.,...... $86.70 CR
Balance Forward....,..........................................,.........,... .................................
Current Charges..........................................................,........................... .........
$0,
$64.43
Account Balance
........... ......................................................... ........,...,.... ........
$64.43
Please Note: Any unpaid balances will be assessed a monthly charge of one percent (1 %) for Idaho customers, Returned checks may be resubmitted
electronically for payment. Checks remaining unpaid will be charged a $20 fee,
--------------------------------------------------------______n--------______n__------------______n_____------__n----________n__---------______n-__nnn--
IDAHO
-.. POWER
An IDACORP Company
Please retwn this ponion with your payment and write your account number on your check or money order made payable to Idaho Power.
Please bring in entire bill when paying in person, Thank You!
Please Pay:
Due Date:
$64.
09/30/2004
Account Number:6428882444 Amount Enclosed:
Project Share pledge - noted on reverse side
Address/phone cotTection - printed on reverse side
50021 A V 0,255 ****AUTO** 5-DIGIT 83204
JAMES R CUSTOMER
1001 MAIN ST
HOMETOWN, ill 80000-0000
Idaho Power
O, Box 30
Boise, ill 83721
64288824446000012633 000006670 000012633 0122
Exh ibit No. 77
Case No, IPC-O3-
M. Brilz, IPCo
Page 1 of 2
IDAHO
....
POWER
An IDACORP Company
www.idahopower.com
Questions? Contact us at:
PO Box 30, Boise, ID 83721.
Or call us at 388-5083 (Treasure Valley)
or [phone] Se habla espanol
For faster service please call
Tuesday through Friday, 7:30 a.m. to 6:30 p.
Customer Name:
Account Number:
Billing Date:
Print Date:
Page:
James R Customer
6428882444
09/15/2004
09/16/2004
20f2
Service Agreement No.: 7044458886
Service Location: 12 MAR VISTA DRJPOCA TELLO, ID
Next Read Date: 10/13/2004
Meter Service Period Number Reading Meter Readings Meter KWh
Number From of Days Type Previous Current Constant Used
002160006253 08/12/04 09/13/04 Regular 98419 99419 1000
Residential
Rate Schedule
101
Average
Daily Use
Comparison
08/12/04 - 09/13/04 32 days..................................................................
Service Charge.... .
.. ... . ... . .. .. . ... .. . .. ... . .. ....". ... .. ... .... .. . .. ... ... . .. . .. . . . , . . . . . . ...
Non-Summer Energy Charge (g) $0.049101 per kWh, 12 days............................
Summer Energy Charge (g) $0,061375 per kWh. 20 days..................................
Franchise Fee 1
..............................................................................
Conservation Program Funding Charge
....."....,...,...................,......,....,.,..
Federal Columbia River Benefits Supplied by BPA.. ...
.,......... ... .,......,.,.. .,. ,..,
Current Charges - Electric Service......................................................
$0.
$10.
$18.
$38.
$0.
$0.30
$3.31 CR
$64.
This Month This Year:
Days =
kWh Billed = 1000
kWh per Day = 31.2
This Month Last Year:
Days =
kWh Billed = 1218
kWh per Day = 38.
CR = Credit BLe = Basic Load Capacity
kWh = Kilowatt-hour G = Generation
kW = Kilowatt
* Available after 12 months of service at this location
------------------------------------------------------------------------------------------------------------------------------------------______n__-------------
IDAHO
....
POWER
An IDACORP Company
If writing infonnation below, please check the appropriate box on the reverse side.
6428882444
NEW CONTACT INFORMATION:
Does Idaho Power have your correct mailing address
And phone number? If not, please write any changes below:
New Telephone Number:
Account Number:
PROJECT SHARE PLEDGE
Please add the amount indicated to my monthly bill.
0$2 0$5 0$10
C I would like to make a one-time contribution in the
amount of $
Please round-up my monthly bill amount to the
Nearest dollar and contribute the difference to Project Share.
Thank you and please remeIJ1hpr to track vour tax-
deductible donations. Exhibit No. 77
Case No, IPC-O3-
M. Brilz, IPCo
Page 1 of 2