20040223Higgins Direct.pdf

r,"r \tt="D
\\:-"-....
e- i \ C:'
. '. ,,-
ill
00"\1, r:Cp 2. M'l g: \ 0
Lbe; , \ L-'-'
('C
" i
sS\OfH\U\lt:"J ,-,u
DIRECT TESTIMONY OF KEVIN C. HIGGINS
On Behalf of The Kroger Co.
Doing Business as Fred Meyer and Smith'
Case No. IPC-03-
February 20, 2004
DIRECT TESTIMONY OF KEVIN C. HIGGINS
Introduction
Please state your name and business address.
Kevin C. Higgins, 39 Market Street, Suite 200, Salt Lake City, Utah
84101.
By whom are you employed and in what capacity?
I am a Principal in the firm of Energy Strategies, LLC. Energy Strategies
is a private consulting firm specializing in economic and policy analysis
applicable to energy production, transportation, and consumption.
On whose behalf are you testifying in this proceeding?
My testimony is being sponsored by The Kroger Co.
, ("
Kroger ), doing
business as Fred Meyer and Smith's. Kroger is one of the largest grocers in the
United States. Kroger has over 25 accounts served by Idaho Power, which
together consume over 40 million kwh per year.
Please describe your professional experience and qualifications.
My academic background is in economics, and I have completed all
coursework and field examinations toward a Ph.D. in Economics at the University
of Utah. In addition, I have served on the adjunct faculties of both the University
of Utah and Westminster College, where I taught undergraduate and graduate
courses in economics :trom 1981 to 1995. I joined Energy Strategies in 1995
where I assist private and public sector clients in the areas of energy-related
economic and policy analysis, including evaluation of electric and gas utility rate
matters.
Prior to joining Energy Strategies, I held policy positions in state and local
government. From 1983 to 1990, I was economist, then assistant director, for the
Utah Energy Office, where I helped develop and implement state energy policy.
From 1991 to 1994, I was chief of staff to the chairman of the Salt Lake County
Commission, where I was responsible for development and implementation of a
broad spectrum of public policy at the local government level.
Have you testified before utility regulatory commissions in other states?
Yes. I have testified numerous times on the subject of electric utility rates
before state utility regulators in Arizona, Colorado, Georgia, Indiana, Michigan
Nevada, New York, Ohio, Oregon, South Carolina, Utah, Washington, and
Wyoming.
A more detailed description of my qualifications is contained in Kroger
Exhibit No. 901 , attached to this testimony.
Overview and conclusions
What is the purpose of your testimony in this proceeding?
I have been asked to evaluate the merits of the rate spread and rate design
proposed in Idaho Power s general rate case filing, with particular emphasis on
Schedule 9 impacts. I also have been asked to recommend any adjustments to the
Company s proposals that might be necessary to ensure results that are just and
reasonable. Absence of comment on my part regarding a particular issue does not
signify support (or opposition) toward the Company s filing with respect to the
non-discussed issue.
What conclusions have you reached in your analysis of Idaho Power s rate
spread and rate design proposals?
A. (1) With respect to rate spread, Idaho Power proposes a significant subsidy to the
Irrigation class. According to the Company s cost-of-service analysis, it would
require a 67 percent increase in Irrigation base rates for this class to fully recover
its costs if the Company s requested overall base-rate increase of 18 percent is
approved. To mitigate the impact of the base-rate increase for this class, the
Company proposes to cap the Irrigation increase at 25 percent, with the difference
spread to the other rate classes. I agree that mitigating the impact of a large rate
increase for this class is reasonable, but propose some modifications to the
Company s proposal that: (1) would apply in the event the Company s proposed
rate increase is reduced by the Commission, and (2) provide for an additional
phase-in toward cost-of-service rates in subsequent years.
(2)With respect to rate design, I generally agree with Idaho Power s approach to
weighting any rate increases relatively more heavily on the demand charge, as
opposed to the energy charge, for those rate schedules with demand meters. This
approach reflects the composition of the Company s underlying costs, and thus is
consistent with cost causation.
(3)ldaho Power proposes to make time-of-use rates mandatory for Schedule 19 in
order to send improved price signals. The Company also has an optional time-of-
use rate for Irrigation service that is in place on a pilot basis. Yet there are no
time-of-use options available for Schedule 9, which consumes 26 percent of the
retail energy on the Company s system. I recommend adopting a voluntary time-
of-use option for Schedule 9 that offers peak, mid-peak, and off-peak energy
prices that properly reflect time-of-use cost differences. At a minimum, such a
rate should be made available to Schedule 9 customers on a pilot project basis.
Irri2ation subsidy
Please describe Idaho Power s proposal for subsidizing Irrigation rates.
According to the Company s cost-of-service analysis, it would require a
67 percent increase in Irrigation base rates for this class to fully recover its costs if
the Company s requested overall base-rate increase of 18 percent is approved.! To
mitigate the rate impact on this class, the Company proposes to cap the Irrigation
base-rate increase at 25 percent, with the difference spread to the other rate
classes, as shown in Idaho Power Exhibit No. 61.
What is your assessment of the Company s proposal to mitigate the impact of
the requested rate increase on Irrigation customers?
Capping the base rate increase at 25 percent for any customer class for the
purpose of limiting rate shock is reasonable. However, I think it is also important
to adopt additional guidelines for spreading rates in the event that the Company
proposed overall rate increase is reduced by the Commission.
What approach to rate mitigation do you recommend if the Company
proposed overall rate increase is reduced by the Commission?
I Pre-filed direct testimony ofJohn R. Gale, p. 11 , lines 2-3. Also Idaho Power Exhibit No. 41 , p. 1 , line
233.
If the Company s proposed rate increase is reduced by the Commission
I recommend that the base-rate increase to Irrigation should be capped at 25
percent, or twice the system average increase, whichever is less. This would retain
the 25 percent cap proposed by the Company, but would also apply a sliding scale
to the Irrigation increase that would lessen the amount of the subsidy to the extent
the rate increase grew smaller. So, for example, if the Commission approved an
overall base-rate increase of 10 percent, the base-rate increase to Irrigation would
be capped at 20 percent.
Please describe the phase-in toward cost-of-service rates that you are also
recommending.
While it is reasonable to lessen the initial impact of moving Irrigation rates
toward cost-of-service, I think it is also reasonable to adopt a multi-year phase-
toward cost-of-service rates to relieve other classes of the subsidy costs over time.
This could be accomplished by setting a cost-of-service target and taking
incremental steps toward that target over several years. Specifically, I recommend
adopting a rate plan that moves Irrigation base-rates one-third of the way to full
cost-of-service rates in three steps over three years, measured ITom the initial rates
approved in this proceeding. The revenue ITom the annual adjustments would be
used to alleviate the subsidy paid by the other rate classes by reducing their rates
on an equal percentage basis each of the three years.
Can you provide an example of how this would work?
Yes. The maximum phase-in adjustment would occur if the Company
proposed base-rate increase of 18 percent is adopted. This case is illustrated in
Kroger Exhibit No. 902. In this case, Irrigation customers would require a 67
percent base-rate increase to move to cost-of-service rates, but would only receive
a 25 percent initial increase. Movement to full cost-of-service rates would require
another 42 percent increase, one-third of which is 14 percent. The latter would
represent the phase-in target, which would be reached in three installments over
three years of 4.7 percent per year.
The revenues ITom the 4.7 percent annual phase-in would be used to
reduce the subsidy ITom other classes, amounting to a .67 percent annual base-rate
decrease for those classes each year, for a cumulative base-rate reduction of 2
percent.
Why should a phase-in be adopted instead of simply making appropriate
adjustments in future rate cases?
There is no assurance that a rate case will be filed in the next three years.
Indeed, it has been about ten years since the last Idaho Power rate case. Locking in
a significant subsidy for an indefinite period of time is not reasonable to the
customer classes providing the subsidy. The phase-in approach accomplishes the
worthwhile goal of blunting the initial impact on an under-recovering class, while
continuing to move toward cost-of-service rates over time.
If a rate case is filed during the phase-in period, then any rates approved
from that case should supercede the phase-in rates, as of the rate-effective period
associated with the new case.
Rate desi2n: demand vs. ener2V
What is your assessment of the Company s proposal to weight any rate
increases relatively more heavily on the demand charge, as opposed to the
energy charge, for those rate schedules with demand meters?
I agree with the Company s basic approach in this regard. Weighting any
increase toward the demand charge would tend to reflect the composition of the
Company s underlying costs, as shown in Idaho Power Exhibit No. 42 , and
discussed in the pre-filed direct testimony of Maggie Brilz? For this reason, if
there is an increase, weighting it toward the demand charge is preferable to
weighting it toward the energy charge.
Time-of-use rates for Schedule 9
What is your assessment of the Company s approach to time-of-use rates?
Idaho Power is proposing mandatory time-of-use rates for Schedule 19 in
order to send improved price signals to customers. The Company also has an
optional time-of-use rate for Irrigation service that is in place on a pilot basis.
However, the Company neither has, nor proposes, any time-of-use options for
Schedule 9 customers, who represent 26 percent of the retail energy consumed on
the Idaho Power system.
In my opinion, it would be beneficial for time-of-use rates to be available
to Schedule 9 customers, so that these customers could better respond to price
2 Pre-filed direct testimony of Maggie Brilz, p. 50, lines 18-25.3 Derived from Idaho Power Exhibit No. 43
, p. 1 , col. 3.
signals, as well as pay rates that are more closely aligned with the costs they
cause.
Why is it important that improved price signals be available to Schedule 9
customers?
Energy costs vary across the hours of the day, with the most expensive
hours typically occurring ITom the late morning to early evening. Designing the
energy price to end-use customers to reflect these variations in energy costs sends
the proper signal to customers regarding the relative cost to operate the system
during the peak, mid-peak, and off-peak hours. Customers would then use this
pricing information to alter their discretionary patterns of usage, increasing
efficiency and lowering the overall cost of energy to the system.
As Schedule 9 customers represent over a quarter of the retail energy
consumption on the Idaho Power system, the failure to offer time-of-use rates to
them deprives this class of customers of the opportunity to save money by
responding to appropriate price signals. It also deprives the system of the benefit
of a more efficient load pattern that would result ITom this responsive behavior.
Are there other reasons besides economic efficiency to make time-of-use rates
available to Schedule 9 customers?
Yes. Basic fairness dictates that customers whose patterns of energy
consumption is less expensive to serve than the average in their class should see
that lower cost reflected in their bills. Idaho Power is moving in this direction for
Schedule 19. The Company should also take steps in this direction for Schedule 9.
Are time-of-use rates widely available for customers of comparable size to
Schedule 9 in other western states?
Yes. Time-of-use rates are widely available throughout the west for
customers of comparable size to Schedule 9. Table KCH-l below is a partial list
of other western utilities that offer time-of-use rates to customers with billing
demands of 1000 kw ofless, comparable to Schedule 9.
Table KCH-
Western Utilities with Time-of-Use Rates for Customers with
BillingDemands of 1000 kw or less
State Utility Type
Arizona Arizona Public Service Pilot*
Arizona Salt River Project Optional
Arizona Tucson Electric Power Optional
California LADWP Optional .c500 kw
California LADWP Mandatory /500 kw
California PG&E Optional.c500 kw
California PG&E Mandatory /500 kw
California SDG&E Optional .c500 kw
California SDG&E Mandatory /500 kw
California So. Cal. Edison Optional .c500 kw
California So. Cal. Edison Mandatory /500 kw
California SMUD Mandatory
Colorado Public Service Colorado Optional
Nevada Sierra Pacific Optional
Oregon PacifiCorp Optional
Oregon Portland General Optional
Utah PacifiCorp Optional
* Permanent Tau rate proposed in pending rate case
In Idaho, PacifiCorp offers an optional time-of-use rate, but the rate design
only differentiates between on-peak and off-peak demand - not energy. As such
it is not a design I am recommending here.
How should a time-of-use rate for Schedule 9 be implemented?
I recognize that with such a large class it is impractical to mandate an
immediate change to time-of-use rates. Therefore, Schedule 9 time-of-use rates
should be made available for the upcoming rate-effective period on a voluntary
basis. At a minimum, such a rate should be offered as part of a pilot program
which could be used to gather information on the price responsiveness and
benefits derivable ITom expanding time-of-use rates more broadly to Schedule 9
customers.
How should such a rate be designed?
I recommend adopting a voluntary time-of-use option for Schedule 9 that
offers peak, mid-peak, and off-peak energy prices that properly reflect time-of-use
cost differences. I do not believe it is necessary to add the complexity of the two-
tiered demand charge that the Company is proposing for Schedule 19.
Instead of adopting a voluntary time-of-use rate now, should this issue
simply be studied and adopted at some later time?
No. A general rate case is the best time to adopt a new time-of-use rate, as
it allows for the full consideration of the revenue effects that accompany the
creation of a new rate schedule. In addition, Idaho Power has noted its increased
gas price risk in recent years associated with purchased power, with the attendant
higher energy costS.4 It is important to take appropriate rate design steps now
rather than delaying. If it is another ten years until the next Idaho Power rate case
and this issue is simply deferred for later action, the opportunity to send efficient
price signals for Schedule 9 customers could be delayed a decade.
What recommendation do you make to the Commission on the issue?
The Commission should order Idaho Power, as part of any compliance
filing in this case, to file a voluntary time-of-use rate for Schedule 9 customers
that provides peak, mid-peak, and off-peak energy prices that properly reflect
time-of-use cost differences.
Does this conclude your direct testimony?
Yes, it does.
4 See, for example, pre-filed direct testimony of 1. LaMont Keen, p. 5, line 21 - p. 6, line 20.
Kroger Exhibit No. 901
Page 1 of 10
KEVIN C. HIGGINS
Principal, Energy Strategies, L.
39 Market St., Suite 200, Salt Lake City, UT 84101
[phone]
Vitae
PROFESSIONAL EXPERIENCE
Principal.Energy Strategies, LLC., Salt Lake City, Utah, January 2000 to present. Responsible
for energy-related economic and policy analysis, regulatory intervention, and strategic
negotiation on behalf of industrial, commercial, and public sector interests. Previously Senior
Associate, February 1995 to December 1999.
Adjunct Instructor in Economics, Westminster College, Salt Lake City, Utah, September 1981 to
May 1982; September 1987 to May 1995. Taught in the economics and M.RA. programs.
Awarded Adjunct Professor of the Year, Gore School of Business, 1990-91.
Chief of Staff to the Chairman, Salt Lake County Board of Commissioners, Salt Lake City, Utah
January 1991 to January 1995. Senior executive responsibility for all matters of county
government, including formulation and execution of public policy, delivery of approximately 140
government services, budget adoption and fiscal management (over $300 million), strategic
planning, coordination with elected officials, and communication with consultants and media.
Assistant Director, Utah Energy Office, Utah Department of Natural Resources, Salt Lake City,
Utah, August 1985 to January 1991. Directed the agency s resource development section, which
provided energy policy analysis to the Governor, implemented state energy development policy,
coordinated state energy data collection and dissemination, and managed energy technology
demonstration programs. Position responsibilities included policy formulation and
implementation, design and administration of energy technology demonstration programs
strategic management of the agency s interventions before the Utah Public Service Commission
budget preparation, and staff development. Supervised a staff of economists, engineers, and
policy analysts, and served as lead economist on selected projects.
Utility Economist, Utah Energy Office, January 1985 to August 1985. Provided policy and
economic analysis pertaining to energy conservation and resource development, with an
emphasis on utility issues. Testified before the state Public Service Commission as an expert
witness in cases related to the above.
Kroger Exhibit No. 901
Page 2 of 10
Acting Assistant Director, Utah Energy Office, June 1984 to January 1985. Same responsibilities
as Assistant Director identified above.
Research Economist, Utah Energy Office, October 1983 to June 1984. Provided economic
analysis pertaining to renewable energy resource development and utility issues. Experience
includes preparation of testimony, development of strategy, and appearance as an expert witness
for the Energy Office before the Utah PSC.
Operations Research Assistant, Corporate Modeling and Operations Research Department, Utah
Power and Light Company, Salt Lake City, Utah, May 1983 to September 1983. Primary area of
responsibility: designing and conducting energy load forecasts.
Instructor in Economics, University of Utah, Salt Lake City, Utah, January 1982 to April 1983.
Taught intermediate microeconomics, principles of macroeconomics, and economics as a social
SCIence.
Teacher, Vernon-Verona-Sherrill School District, Verona, New York, September 1976 to June
1978.
EDUCATION
Ph.D. Candidate, Economics, University of Utah (coursework and field exams completed, 1981).
Fields of Specialization: Public Finance, Urban and Regional Economics, Economic
Development, International Economics, History of Economic Doctrines.
Bachelor of Science, Education, State University of New York at Plattsburgh, 1976 (cum laude).
Danish International Studies Program, University of Copenhagen, 1975.
SCHOLARSHIPS AND FELLOWSHIPS
University Research Fellow, University of Utah, Salt Lake City, Utah 1982 to 1983.
Research Fellow, Institute of Human Resources Management, University of Utah, 1980 to 1982.
Teaching Fellow, Economics Department, University of Utah, 1978 to 1980.
New York State Regents Scholar, 1972 to 1976.
Kroger Exhibit No. 901
Page 3 of 10
EXPERT TESTIMONY
In the Matter of the Applications of the Ohio Edison Company, the Cleveland Electric
Illuminating Company and the Toledo Edison Company for Authority to Continue and Modify
Certain Regulatory Accounting Practices and Procedures, for Tariff Approvals and to Establish
Rates and Other Charges, Including Regulatory Transition Charges Following the Market
Development Period " Public Utilities Commission of Ohio, Case No. 03-2144-EL-ATA. Direct
testimony submitted February 6, 2004.
In the Matter of the Application of Arizona Public Service Company for a Hearing to Determine
the Fair Value of the Utility Property of the Company for Ratemaking Purposes, To Fix a Just
and Reasonable Rate of Return Thereon, To Approve Rate Schedules Designed to Develop Such
Return, and For Approval of Purchased Power Contract Arizona Corporation Commission
Docket No. E-01345A-03-0437. Direct testimony submitted February 3 2004.
In the Matter of Application of the Detroit Edison Company to Increase Rates, Amend Its Rate
Schedules Governing the Distribution and Supply of Electric Energy, etc.Michigan Public
Service Commission, Case No. U-13808. Direct testimony submitted December 12 2003
(interim request).
In the Matter ofPacifiCorp s Filing of Revised Tariff Schedules " Public Utility Commission of
Oregon Docket No. UE-147. Joint testimony regarding stipulation submitted August 21 2003.
Petition of PSI Energy, Inc. for Authority to Increase Its Rates and Charges for Electric Service
etc.Indiana Utility Regulatory Commission, Cause No. 42359. Direct testimony submitted
August 19 2003. Cross examined November 5 , 2003.
In the Matter of the Application of Consumers Energy Company for a Financing Order
Approving the Securitization of Certain of its Qualified Cost Michigan Public Service
Commission, Case No. U-13715. Direct testimony submitted April 8, 2003. Cross examined
April 23 , 2003.
In the Matter of the Application of Arizona Public Service Company for Approval of
Adjustment Mechanisms Arizona Corporation Commission, Docket No. E-01345A-02-0403.
Direct testimony submitted February 13, 2003. Surrebuttal testimony submitted March 20 2003.
Cross examined April 8 , 2003.
Re: The Investigation and Suspension of Tariff Sheets Filed by Public Service Company of
Colorado, Advice Letter No. 1373 - Electric, Advice Letter No. 593 - Gas, Advice Letter No. 80
- Steam Colorado Public Utilities Commission, Docket No. 02S-315 EG. Direct testimony
submitted November 22 2002. Cross-answer testimony submitted January 24,2003.
Kroger Exhibit No. 901
Page 4 of 10
In the Matter of the Application of The Detroit Edison Company to Implement the
Commission s Stranded Cost Recovery Procedure and for Approval of Net Stranded Cost
Recovery Charges Michigan Public Service Commission, Case No. 13350. Direct testimony
submitted November 12 2002.
Application of South Carolina Electric & Gas Company: Adjustments in the Company
Electric Rate Schedules and Tariffs " Public Service Commission of South Carolina Docket
No. 2002-223-E. Direct testimony submitted November 8 , 2002. Surrebuttal testimony submitted
November 18 2002. Cross examined November 21 2002.
In the Matter of the Application of Questar Gas Company for a General Increase in Rates and
Charges Utah Public Service Commission, Docket No. 02-057-02. Direct testimony submitted
August 30, 2002. Rebuttal testimony submitted October 4, 2002.
The Kroger Co. v. Dynegy Power Marketing, Inc.Federal Energy Regulatory Commission
EL02-119-000. Confidential affidavit filed August 13 2002.
In the matter of the application of Consumers Energy Company for determination of net
stranded costs and for approval of net stranded cost recovery charges Michigan Public Service
Commission, Case No. U-13380. Direct testimony submitted August 9 2002. Rebuttal testimony
submitted August 30, 2002. Cross examined September 10, 2002.
In the Matter of the Application of Public Service Company of Colorado for an Order to Revise
Its Incentive Cost Adjustment Colorado Public Utilities Commission, Docket 02A-158E.
Direct testimony submitted April 18, 2002.
In the Matter ofthe Generic Proceedings Concerning Electric Restructuring Issues Arizona
Corporation Commission, Docket No. E-00000A-02-0051
, "
In the Matter of Arizona Public
Service Company s Request for Variance of Certain Requirements of A.A.c. R14-1606
Docket No. E-1345A -01-0822
, "
In the Matter of the Generic Proceeding Concerning the
Arizona Independent Scheduling Administrator " Docket No. E-00000A-OI-0630
, "
In the Matter
of Tucson Electric Power Company s Application for a Variance of Certain Electric Competition
Rules Compliance Dates " Docket No. E-01933A-02-0069
, "
In the Matter of the Application of
Tucson Electric Power Company for Approval of its Stranded Cost Recovery," Docket No. E-
01933A-98-0471. Direct testimony submitted March 29 2002 (APS variance request); May 29
2002 (Track A proceeding/market power issues); and July 28 2003 (Arizona ISA). Rebuttal
testimony submitted August 29 2003 (Arizona ISA). Cross examined June , 2002 (Track A
proceeding) and September 12 2003 (Arizona ISA).
Kroger Exhibit No. 901
Page 5 of 10
In the Matter of Savannah Electric & Power Company s 2001 Rate Case Georgia Public
Service Commission, Docket No. 14618-U. Direct testimony submitted March 15 2002. Cross
examined March 28, 2002.
Nevada Power Company s 2001 Deferred Energy Case " Public Utilities Commission of
Nevada PUCN 01-11029. Direct testimony submitted February 7 2002. Cross examined
February 21 2002.
2001 Puget Sound Energy Interim Rate Case Washington Utilities and Transportation
Commission, Docket Nos. UE-011570 and UE-011571. Direct testimony submitted January 30
2002. Cross examined February 20, 2002.
In the Matter of Georgia Power Company s 2001 Rate Case Georgia Public Service
Commission, Docket No. 1400-U. Direct testimony submitted October 12, 2001. Cross examined
October 24, 2001.
In the Matter of the Application ofPacifiCorp for Approval of Its Proposed Electric Rate
Schedules and Electric Service Regulations Utah Public Service Commission, Docket No. 01-
35-01. Direct testimony submitted June 15, 2001. Rebuttal testimony submitted August 31
2001.
In the Matter of Portland General Electric Company's Proposal to Restructure and Reprice Its
Services in Accordance with the Provisions of SB 1149 " Public Utility Commission of Oregon
Docket No. UE-115. Direct testimony submitted February 20 2001. Rebuttal testimony
submitted May 4, 2001. Joint testimony regarding stipulation submitted July 27 , 2001.
In the Matter of the Application of APS Energy Services, Inc. for Declaratory Order or Waiver
of the Electric Competition Rules Arizona Corporation Commission, Docket No.01933A-
00-0486. Direct testimony submitted July 24, 2000.
In the Matter of the Application of Questar Gas Company for an Increase in Rates and
Charges Utah Public Service Commission, Docket No. 99-057-20. Direct testimony submitted
April 19, 2000. Rebuttal testimony submitted May 24 2000. Surrebuttal testimony submitted
May 31 , 2000. Cross examined June 6 & 8, 2000.
In the Matter of the Application of Columbus Southern Power Company for Approval of
Electric Transition Plan and Application for Receipt of Transition Revenues " Public Utility
Commission of Ohio Case No. 99-1729- EL- ETP; "In the Matter of the Application of Ohio
Power Company for Approval of Electric Transition Plan and Application for Receipt of
Transition Revenues " Public Utility Commission of Ohio, Case No. 99-1730-EL-ETP. Direct
testimony prepared, but not submitted pursuant to settlement agreement effected May 2, 2000.
Kroger Exhibit No. 901
Page 6 of 10
In the Matter of the Application of FirstEnergy Corp. on Behalf of Ohio Edison Company, The
Cleveland Electric illuminating Company, and the Toledo Edison Company for Approval of
Their Transition Plans and for Authorization to Collect Transition Revenues " Public Utility
Commission of Ohio, Case No. 99-1212-EL-ETP. Direct testimony prepared, but not submitted
pursuant to settlement agreement effected April 11 , 2000.
2000 Pricing Process Salt River Project Board of Directors, oral comments provided March
2000 and April 10, 2000.
Tucson Electric Power Company vs. Cyprus Sierrita Corporation Arizona Corporation
Commission, Docket No. E-000001-99-0243. Direct testimony submitted October 25, 1999.
Cross examined November 4, 1999.
Application of Hildale City and Intermountain Municipal Gas Association for an Order
Granting Access for Transportation of Interstate Natural Gas over the Pipelines of Questar Gas
Company for Hildale, Utah Utah Public Service Commission, Docket No. 98-057-01. Rebuttal
testimony submitted August 30, 1999.
In the Matter of the Application by Arizona Electric Power Cooperative, Inc. for Approval of Its
Filing as to Regulatory Assets and Transition Revenues Arizona Corporation Commission
Docket No. E-01773A-98-0470. Direct testimony submitted July 30, 1999. Cross examined
February 28 , 2000.
In the Matter of the Application of Tucson Electric Power Company for Approval of its Plan
for Stranded Cost Recovery,Arizona Corporation Commission, Docket No. E-01933A-98-
0471; "In the Matter of the Filing of Tucson Electric Power Company of Unbundled Tariffs
Pursuant to A.C. R14-1601 et seq." Docket No. E-01933A-97-0772; "In the Matter of the
Competition in the Provision of Electric Service Throughout the State of Arizona " Docket No.
RE-00000C-94-0 165. Direct testimony submitted June 30, 1999. Rebuttal testimony submitted
August 6, 1999. Cross examined August 11-, 1999.
In the Matter of the Application of Arizona Public Service Company for Approval of its Plan
for Stranded Cost Recovery,Arizona Corporation Commission, Docket No. E-01345A-98-
0473; "In the Matter ofthe Filing of Arizona Public Service Company of Unbundled Tariffs
Pursuant to A.C. R14-1601 et seq." Docket No. E-01345A-97-0773; "In the Matter of the
Competition in the Provision of Electric Service Throughout the State of Arizona " Docket No.
RE-00000C-94-0165. Direct testimony submitted June 4, 1999. Rebuttal testimony submitted
July 12, 1999. Cross examined July 14, 1999.
Kroger Exhibit No. 901
Page 7 of 10
In the Matter of the Application of Tucson Electric Power Company for Approval of its Plan for
Stranded Cost Recovery," Arizona Corporation Commission, Docket No. E-01933A-98-0471;
In the Matter of the Filing of Tucson Electric Power Company of Unbundled Tariffs Pursuant to
A.A.C. R14-1601 et seq." Docket No. E-01933A-97-0772; "In the Matter of the Application
of Arizona Public Service Company for Approval of its Plan for Stranded Cost Recovery,
Docket No. E-01345A-98-0473; "In the Matter of the Filing of Arizona Public Service Company
of Unbundled Tariffs Pursuant to A.A.C. R14-1601 et seq." Docket No. E-01345A-97-0773;
In the Matter of the Competition in the Provision of Electric Service Throughout the State of
Arizona " Docket No. RE-00000C-94-0165. Direct testimony submitted November 30, 1998.
Hearings on Pricing," Salt River Project Board of Directors, written and oral comments
provided November 9, 1998.
Hearings on Customer Choice " Salt River Project Board of Directors, written and oral
comments provided June 22, 1998; June 29, 1998; July 9, 1998; August 7, 1998; and August 14
1998.
In the Matter of the Competition in the Provision of Electric Service Throughout the State of
Arizona " Arizona Corporation Commission, Docket No. U-0000-94-165. Direct and rebuttal
testimony filed January 21 , 1998. Second rebuttal testimony filed February 4, 1998. Cross
examined February 25, 1998.
In the Matter of Consolidated Edison Company of New York, Inc.' s Plans for (1) Electric
Rate/Restructuring Pursuant to Opinion No. 96-12; and (2) the Formation of a Holding Company
Pursuant to PSL, Sections 70, 108, and 110, and Certain Related Transactions " New York
Public Service Commission, Case 96-0897. Direct testimony filed April 9, 1997. Cross
examined May 5, 1997.
In the Matter of the Petition of Sunnyside Cogeneration Associates for Enforcement of Contract
Provisions " Utah Public Service Commission, Docket No. 96-2018-01. Direct testimony
submitted July 8 , 1996.
Questar Pipeline Company," Federal Energy Regulatory Commission, Docket No. RP95-407.
Direct testimony prepared, but withheld subject to settlement. Settlement approved July 1
1996.
In the Matter of Arizona Public Service Company s Rate Reduction Agreement " Arizona
Corporation Commission, Docket No. U-1345-95-491. Direct testimony prepared, but withheld
consequent to issue resolution. Agreement approved April 18, 1996.
Kroger Exhibit No. 901
Page 8 of 10
In the Matter of the Application of PacifiCorp, dba Pacific Power & Light Company, for
Approval of Revised Tariff Schedules and an Alternative Form of Regulation Plan Wyoming
Public Service Commission, Docket No. 2000-ER-95-99. Direct testimony submitted April 8
1996.
In the Matter of the Application of Mountain Fuel Supply Company for an Increase in Rates and
Charges Utah Public Service Commission, Case No. 95-057-02. Direct testimony submitted
June 19, 1995. Rebuttal testimony submitted July 25 , 1995. Surrebuttal testimony submitted
August 7, 1995.
In the Matter of the Investigation of the Reasonableness of the Rates and Tariffs of Mountain
Fuel Supply Company,Utah Public Service Commission, Case No. 89-057-15. Direct
testimony submitted July 1990. Surrebuttal testimony submitted August 1990.
In the Matter ofthe Review of the Rates of Utah Power and light Company pursuant to The
Order in Case No. 87-035-Utah Public Service Commission, Case No. 89-035-10. Rebuttal
testimony submitted November 15, 1989. Cross examined December 1 , 1989 (rate schedule
changes for state facilities).
In the Matter of the Application of Utah Power & Light Company and PC/UP&L Merging Corp.
(to be renamed PacifiCorp) for an Order Authorizing the Merger of Utah Power & Light
Company and PacifiCorp into PC/uP&L Merging Corp. and Authorizing the Issuance of
Securities, Adoption of Tariffs, and Transfer of Certificates of Public Convenience and Necessity
and Authorities in Connection Therewith Utah Public Service Commission, Case No. 87-035-
27; Direct testimony submitted April 11 , 1988. Cross examined May 12, 1988 (economic impact
ofUP&L merger with PacifiCorp).
In the Matter of the Application of Mountain Fuel Supply Company for Approval of
Interruptible Industrial Transportation Rates Utah Public Service Commission, Case No. 86-
057 -07. Direct testimony submitted January 15 , 1988. Cross examined March 30, 1988.
In the Matter ofthe Application of Utah Power and light Company for an Order Approving a
Power Purchase Agreement Utah Public Service Commission, Case No. 87-035-18. Oral
testimony delivered July 8, 1987.
Cogeneration: Small Power Production Federal Energy Regulatory Commission Docket
No. RM87-12-000. Statement delivered March 27, 1987, on behalf of State of Utah, in San
Francisco.
In the Matter of the Investigation of Rates for Backup, Maintenance, Supplementary, and
Standby Power for Utah Power and Light Company,Utah Public Service Commission, Case
Kroger Exhibit No. 901
Page 9 of 10
No. 86-035-13. Direct testimony submitted January 5, 1987. Case settled by stipulation
approved August 1987.
In the Matter of the Application of Sunnyside Cogeneration Associates for Approval of the
Cogeneration Power Purchase Agreement Utah Public Service Commission, Case No. 86-
2018-01. Rebuttal testimony submitted July 16, 1986. Cross examined July 17, 1986.
In the Matter of the Investigation of Demand-Side Alternatives to Capacity Expansion for
Electric Utilities Utah Public Service Commission, Case No. 84-999-20. Direct testimony
submitted June 17, 1985. Rebuttal testimony submitted July 29, 1985. Cross examined August
, 1985.
In the Matter ofthe Implementation of Rules Governing Cogeneration and Small Power
Production in Utah Utah Public Service Commission, Case No. 80-999-, pp. 1293-1318.
Direct testimony submitted January 13 , 1984 (avoided costs), May 9, 1986 (security for levelized
contracts) and November 17, 1986 (avoided costs). Cross-examined February 29, 1984
(avoided costs), April 11 , 1985 (standard form contracts), May 22-, 1986 (security for
levelized contracts) and December 16-, 1986 (avoided costs).
OTHER RELATED ACTIVITY
Participant, Oregon Direct Access Task Force (UM 1081), May 2003 to present.
Participant, Michigan Stranded Cost Collaborative, March 2003 to present.
Member, Arizona Electric Competition Advisory Group, December 2002 to present.
Board of Directors, ex-officio, Desert STAR RTO, September 1999 to February 2002.
Advisory Committee, Desert STAR RTO, September 1999 to February 2002. Acting Chairman
October 2000 to February 2002.
Board of Directors, Arizona Independent Scheduling Administrator Association, October 1998 to
present.
Acting Chairman, Operating Committee, Arizona Independent Scheduling Administrator
Association, October 1998 to June 1999.
Kroger Exhibit No. 901
Page 10 of 10
Member, Desert Star ISO Investigation Working Groups: Operations, Pricing, and Governance
April 1997 to present. Legal & Negotiating Committee, April 1999 to December 1999.
Participant, Independent System Operator and Spot Market Working Group, Arizona
Corporation Commission, April 1997 to September 1997.
Participant, Unbundled Services and Standard Offer Working Group, Arizona Corporation
Commission, April 1997 to October 1997.
Participant, Customer Selection Working Group, Arizona Corporation Commission, March 1997
to September 1997.
Member, Stranded Cost Working Group, Arizona Corporation Commission, March 1997 to
September 1997.
Member, Electric System Reliability & Safety Working Group, Arizona Corporation
Commission, November 1996 to September 1998.
Chairman, Salt Palace Renovation and Expansion Committee, Salt Lake County/State of
Utah/Salt Lake City, multi-government entity responsible for implementation of planning,
design, finance, and construction of an $85 million renovation of the Salt Palace Convention
Center, Salt Lake City, Utah, May 1991 to December 1994.
State of Utah Representative, Committee on Regional Electric Power Cooperation, a joint effort
of the Western Interstate Energy Board and the Western Conference of Public Service
Commissioners, January 1987 to December 1990.
Member, Utah Governor s Economic Coordinating Committee, January 1987 to December 1990.
Chairman, Standard Contract Task Force, established by Utah Public Service Commission to
address contractual problems relating to qualifying facility sales under PURP A, March 1986 to
December 1990.
Chairman, Load Management and Energy Conservation Task Force, Utah Public Service
Commission, August 1985 to December 1990.
Alternate delegate for Utah, Western Interstate Energy Board, Denver, Colorado, August 1985 to
December 1990.
Articles Editor Economic Forum September 1980 to August 1981.
Line
No,Tariff Description
Uniform Tariff Rates
Residential Service
Small General Service
Total Large General Service
Dusk to Dawn Lighting
Large Power Service
Agricuiturallrrigation Service
Unmetered General Service
Street Lighting
Traffic Control Lighting
Total Uniform Tariffs
Special Contracts
Micron
J R Simplot
DOE
Total Special Contracts
Total Idaho Retail Sales
Data Sources:
1. IPCo Exhibit No. 43, p, 1 of 22
2, IPCo Exhibit No. 41
Note:
3. Annual adjustment for 3 years.
Example ot Three-Year Phase-In Toward Cost-ot-Service Rates
Using Idaho Power s Proposed $86 Million Base Rate Increase
Nonn.l~ed 12.Monthe endIng Decembe, 31. 2003
(1)(2)(3)(4)(5)(6)(7)(8)
COS COSRateCurrentCOSCOSIPCo Proposed IPCo Proposed Phase-Phase-inSch.Base Revenue Percent Revenue Percent Annual Annual
No.Revenue ustments Chanae ustments Chanae ustment ustment'
($)
214,289,414 28,666058 13,38%786,881 19,03%67%426,221)
16,798 476 563,674 15.26%529,614 21,01%67%(111 804)
107,669,012 10,309059 57%194 270 15.04%67%(716 600)
389 106 412294)101.67%69,323 99%67%(9,245)
55,063,573 660409 46%639 707 13,87%67%(366 480)
291 575 456,288 67.10%15,078,364 25,01%68%819,769
907,689 (221 178)24,37%246 98%67%041)
809,269 (267,473)14.78%219 99%67%(12,D42)
284,145 21,332 51%598 12.88%67%11.891)
458,502 259 775,875 18.49%83,470,222 18.20%04%169,445
16,204,104 465,070 87%296,405 00%67%(107,848)
632 571 (82,642)78%144,341 12%67%(30,832)622,414 403,609 73%654,392 14,16%67%130.765)
459,089 786,037 09%095 138 23%67%(169,445)
483,961 348 85,561,911 17.68%565,360 17,68%00%(0)
KROGER EXHIBIT NO, 902
CASE NO, IPC-03-
K. C, HIGGINS
PAGE 1 OF 1