20040319Teinert 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
STATE OF IDAHO. CASE NO. IPC-E-O3-13
REBUTTAL TESTIMONY AND EXHIBITS OF
PIKE TEINERT
ON BEHALF OF
INDUSTRIAL CUSTOMERS OF IDAHO POWER
Teinert, Reb
IPC-O3-
PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.
My name is Pike Teinert and my business address is
834 Harcourt Road Boise, Idaho 83702.
ARE YOU THE SAME PIKE TEINERT WHO FILED DIRECT
TESTIMONY AND EXHIBITS IN THIS MATTER?
Yes, I am.
Q. ARE YOU SPONSORING ANY EXHIBITS WITH THIS TESTIMONY?
A. Yes. I am sponsoring Exhibits Nos. 209 through 212.
WHAT IS THE SCOPE OF YOUR REBUTTAL TESTIMONY?
The scope of my rebuttal addresses issues wi thin the
scope of the rate design of Idaho Power s proposed Schedule 19
incl uding ,
adj ustment .
mandatory serviceTOO,charge and power factor
will unfairaddressthediscriminatory,
unprecedented and inequitable nature of Idaho Power s proposed
Schedule 19 mandatory TOO tariff. I will address an excessive,
unprecedented proposed increase in service charge for Schedule 19
customers.Lastly,will address the unsupported proposed
increase in Schedule 19 customer power factor minimum from 85% to
90% .
Teinert, Reb
IPC- E-O3-
Q. WHY ARE YOU LIMITING YOUR REBUTTAL TO THE THREE ISSUES
OF MANDATORY TOU , SERVICE CHARGE AND POWER FACTOR ADJUSTMENT?
A. Because they are the most discriminatory, unsupported
and egregious components in the proposed Schedule 19.
DID STAFF AND INTERVENER DIRECT TESTIMONY ADDRESS
MANDATORY TOU RATES?
Yes.However both Staff and directDOE testimony
recommend that the Commission adopt the Company s proposal for
mandatory TOO rates for Schedule 19 customers even though there
have been no supporting studies and analyses undertaken by any of
these parties that can substantiate any benefit associated with
mandatory TOO rates for the Company and Schedule 19 customers.
Q. DOES THE DOE HAVE ANY MAJOR CONCERN WITH THE PROPOSAL
TO MAKE SCHEDULE 19 A TIME OF USE RATE?
A. Yes. Mr. Goins in his Direct Testimony on behalf of DOE
states beginning on page 20, line 21:
While I do not obj ect to the manner in which IPC
designed the rate,I am concerned about the law of unintended
consequences.IPC claims that the new rate design is revenue
neutral.However,if large commercial and industrial customers
are not prepared to operate cost-effectively under the new rate,
Teinert, Reb
IPC-O3-
they may incur unexpected unacceptably high bills for their
energy use.
Q. WHAT IS YOUR OPINION OF THE DOE'S DIRECT TESTIMONY ON
THE MANDATORY TOU RATE FOR SCHEDULE 19 CUSTOMERS?
A. I find Mr. Goins ' testimony on behalf of DOE to be both
surprising and perplexing.Since they represent at least one
Schedule customer,surprising that they offer
supporting analysis and study of the proposed rate that confirms
the benefits and costs for the Company and Schedule 19 customers.
I am perplexed that the DOE cautions about the "law of unintended
consequences but does follownot through and recommend
cost/benefi t analysis/ study for all parties impacted
mandatory TOO rate before a tariff is proposed and approved.
Q. WHAT IS YOUR OPINION ABOUT THE STAFF'S RECOMMENDATION
THAT MANDATORY TOU RATES IMPLEMENTED FOR SCHEDULE
CUSTOMERS?
A. Staff's position is completely unsupported. The Company
has offered no study and analysis that calculates the costs and
benefi ts of mandatory TOO rates. The Staff's direct testimony on
rate design is also contradictory.
Q. DOESN'T STAFF TESTIMONY RECOMMEND THAT TOU RATES
IMPLEMENTED IN A MANNER CONSISTENT WITH THE COMPANY'S PROPOSAL?
A. Yes.
Teinert, Reb
IPC- E-O3-
HASN'THE COMPANY ITS PROPOSAL OFFERED ANALYSIS AND
STUDIES THAT ANALYZE COSTS AND BENEFITS TO SCHEDULE 19 CUSTOMERS
AND THE COMPANY FOR MANDATORY TOU RATES?
No.ICIP'Discovery Request No.response
Teinert fromExhibi t No.209)regarding benefit and savings
implementation of mandatory TOO rates, the Company says:
No analyses attempting to identify any potential
benefits or savings associated with mandatory time-of-use rates
for Schedule 19 customers have been performed.
Additionally, in response to ICIP's Discovery Request
(Teinert Exhibit No.No.210)regarding TOO studies for any
rate class, the Company responded:
September 2002 Idaho submittedPower the
Commission a Residential Time-of Ose Pricing Viability Study. A
the study enclosed with thiscopy otherresponse.
studies have been prepared.(emphasis added)
These two responses by the Company and the Staff'
recommendation to implement the proposed mandatory TOO Schedule
19 tariff without rate class studies or analyses are perplexing
and uncharacteristic of the Staff.
Teinert, Reb
IPC-03-
Q. WHY IS IT PERPLEXING?
A. The Staff's Rate Design direct testimony in this case
is replete with careful analysis of service charge proposals,
energy charge proposals,base usage rates,demand charges and
rate increase caps.However,in its rate design testimony its
logic for implementing mandatory TOO rates for only Scheduling 19
customers , the staff states, beginning on page 28, line 24:
TOO rates most appropriateare for Schedule
customers who are sophisticated enough to understand them and
where the metering equipment already exists.
The staff offers no independent supporting studies and
analysis for their recommendation to implement the proposed TOO
rate design.
SHOULD THE STAFF RECOMMEND STUDIES THAT ANALYZE THE
COSTS AND BENEFITS OF TOU RATES FOR SCHEDULE 19 CUSTOMERS AND
CUSTOMERS OF ANY RATE CLASS?
Yes.Staff witness Schunke comments in its testimony
that they recommend TOO rates "wherever they are practical" and
that "the first objective of rate design is to set rates that are
closely aligned cost providing service. "However
regards to TOO for Schedule 19 customers, no studies and analyses
Teinert, Reb
IPC- E-O3-
have been provided by any party in this case that confirm that
mandatory TOO rates are practical and aligned with the cost of
providing service for Schedule 19 customers.
It is clearly discriminatory to select only Schedule 19
customers experiment with mandatory TOO wi thoutrates
competent study and analysis of Schedule 19 and all other rate
classes to determine the most effective rate class (es)for TOO
rate implementation.
Q. DO YOU HAVE OTHER CONCERNS ABOUT THE STAFF'S TESTIMONY
REGARDING MANDATORY TOU RATES FOR SCHEDULE 19 CUSTOMERS.
Yes.Staff'designrate testimony recommends
simplicity,minimizing shockrate recognition end use
characteristics to differentiate between rate classes and pursuit
of pilot and TOO rates.programs However,these rate design
recommenda t ions in Staff'testimony are contradictory to its
recommendation to implement Schedule 19 mandatory TOO rates.
I am also concerned about Staff's oversimplification of
revenue neutrality for Schedule 19 customers.
Q. WHAT IS CONTARDICTORY ABOUT THE STAFF'S RECOMMENDATION
FOR SIMPLICITY AND MINIMIZING RATE SHOCK?
A. Beginning on page 6, line 24 Mr. Schunke states:
Teinert, Reb
IPC- E-O3-
It is also an objective to keep rates reasonable by
balancing the cost of service goals with goals for simplicity,
for minimizing shockrate and for promoting conservation
especially during high cost periods.
However,beginning 28,line Staffpage
testimony states:
TOO rates appropr ia temost forare Schedule
customers who are sophisticated enough to understand them and
where metering equipment already exists.
direct testimony contrast the existing
Schedule 19 rate with the proposed mandatory TOO for Schedule 19
customers. The proposed rate has three demand and five different
energy charges while the existing rate has only one demand and
one energy charge. Clearly the proposed rate does not meet the
Staff's recommendation for simplicity.
Also,Schedule 19 customers will experience "rate shock"
if they must instantaneously begin on June 1 of this year to
understand and adj ust to a rate that will require maj or changes
in their daily operations and production to avoid much higher
bills for peak hour consumption.
Teinert, Reb
IPC-O3-
Q. WHAT IS CONTRADICTORY IN THE STAFF'RECOMMENDATION
THAT RATE DESIGN RECOGNIZE END-USE CHARACTERISTICS
DIFFERENTIATE BETWEEN RATE CLASSES?
Beginning line Mr.Schunkepage
testimony,explains Staff'designrate obj ecti ve
differentiate between residential and industrial customer based
on end-use characteristics.Clearly the end-use characteristic
that contributes most to peak load during June, July and August
Residential air condi tioning load.However the Staff
recommends mandatory TOO rates for the industrial,Schedule 19
customer class that has a relatively flat load throughout the
In contrast its testimony,year.the Staff recommendation
places the Residential end-use characteristic in the industrial,
Schedule 19 rate design.
Q. WHAT IS CONTRADICTORY ABOUT STAFF'S RECOMMENDATION TO
PURSUE PILOT PROGRAMS AND TOU RATES?
A. On page 13, beginning on line 11 of his testimony, Mr.
Schunke enumerates the pilot programs and TOO rates in existing
Idaho Power tariffs as additional support for its recommendation
of the proposed Schedule 19 rate. However these are voluntary
pilot programs and TOO rates that are optional within the rate
class.contrast,the proposed mandatory TOO rate design
supported by the Staff is neither optional nor a voluntary pilot
program. It is mandatory.
Teinert, Reb
IPC- E-O3-
WHAT YOUR CONCERN ABOUT STAFF'PERSPECTIVE
REVENUE NEUTRALITY IN THE PROPOSED SCHEDULE 19 RATE?
A. Al though Mr. Schunke, beginning on page 28, line 19 of
his direct testimony says that the proposed changes for Schedule
19 rate design are revenue neutral,the Company response to
DiscoveryICIP'Request No.(Teinert Exhibi t No.211)
demonstrates that the burden of the mandatory TOO rate design is
very unequally distributed throughout the rate class.In fact
based on the information in Teinert Exhibit No. 211, over 60% of
Schedule 19 customers rates will rise above the average requested
increase,14% will see an increase approximately equal to the
average increase and only 26% will experience an increase below
the increase for the class.rateaverage Revenue neutrali ty
normally strives for relative equity wi thin a rate class. This
rate design clearly does not.
Q . DOES THE DOE OBJECT TO THE PROPOSED SERVICE CHARGE FOR
SCHEDULE 19 CUSTOMERS?
The Company proposal toNo.increase the service
charge for any rate class from 500%+ to 9000%+ is unprecedented.
They propose increased service charges for other rate classes in
this rate case.TheBut,none approach an increase of 9000%.
Company incl ude addi tional fixedmove servicecosts
charges for other customer classes in this rate class has reached
nowhere the 9000%increase level.Thisnear clearly
Teinert, Reb
IPC-O3-
discriminatory treatment of Schedule 91 secondary service level
customers. However, it is perplexing that even though the DOE is
a Schedule 19 customer it does not object to a discriminatory
and extremely large increase service charge.The Staff
recommends no increase.
WHY ARE YOU CONCERNED ABOUT THE UNSUPPORTED POWER
FACTOR ADJUSTMENT PROPOSAL IN SCHEDULE 19?
The Doe recommends approval of the increase in the
minimum from 85% to 90% for Schedule 19 customers, even though
they Schedule customer and thereare study and
analysis verifying that the Company distribution system
constrained due excessi ve reacti ve flow.thepower
contrary,excessi ve reactive power flow would result in higher
losses and reduce system capacity.Idaho Power response to
ICIP'Discovery Request No.(Teinert Exhibi t No.212)
indicates that system reliability indices , SAIDI and SAIFI, have
continuously improved over the last 38%and 29%years
respectively.
Q. DOES THIS END YOUR REBUTTAL TESTIMONY?
A. Yes, it does.
Teinert, Reb
IPC-O3-
REQUEST NO.2: Please provide any and all data and analyses of the
benefits, savings and increased revenues from implementation of mandatory time-of-
use rates for Schedule 19 versus other IPC rate classes.
RESPONSE TO REQUEST NO.2: No analyses attempting toidenti~
any potential benefits or savings associated with mandatory time-of-use rates for
Schedule 19 customers have been performed. The time-of-use rates are designed to
be revenue neutral. As such, no increased revenues are anticipated from the
implementation of time-ot-use rates.
The response to this request was prepared by Maggie Brilz, Director of
Pricing, Idaho Power Company, in consultation with Barton L. Kline, Senior Attorney,
Idaho Power Company.
Case No. IPC-03-
Exhibit 209 (Reb) Page 1 of
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
REQUEST NO.3: Please provide any and all data and analyses of the
benefits, savings and increased revenues from implementation of mandatory time-of-
use rates for any other rate class.
RESPONSE TO REQUEST NO.3: In September 2002 , Idaho Power
submitted to the Commission a Residential Time-of-Use Pricing Viability Study. A copy
of the study is enclosed with this response. No other studies have been prepared.
The response to this request was prepared by Maggie Brilz, Director of
Pricing, Idaho Power Company, in consultation with Barton L. Kline , Senior Attorney,
Idaho Power Company. '
Case No. IPC-03-
Exhibit (Reb) 210 Page 1 of
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
IPC-O3-
EXHIBIT 211
PAGES 1-
CONFIDENTIAL
REQUEST NO. 48: Please provide copies of all of Idaho Power
Distribution Reliability Indices records from 1993 to 2003.
RESPONSE TO REQUEST NO. 48:
Idaho Power Company System Performance (10 Years)
YEAR SAIDI SAIFI
1993 9022 3385
1994 2510 6847
1995 5403 1205
1996 9135 3411
1997 1792 1 .6738
1998 7211 0315
1999 0318 7448
2000 0356 2.4564
2001 9772 8059
2002 9099 2389
2003 5054 '9843
SAIDI (System Average Interruption Duration Index) = Sum of Customer Interruption
Durations / Total number of Customers Served.
SAIFI (System Interruption Frequency Index) = Total number of Customer
Interruptions / Total number of Customers Served.
The response to this request was prepared by Darrell R. Tomlinson
Finance Team Leader, Financial Research/Support, Idaho Power Company, in
consultation with Barton L: Kline , Senior Attorney, Idaho Power Company.
Case No. IPC-03-
Exhibit (Reb) 212 Page 1 of
IDAHO POWER COMPANY'S RESPONSE TO FIRST PRODUCTION REQUEST
OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER