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HomeMy WebLinkAbout20081024Hessing Direct.pdfBEFORE THE RECEIVED 20De OCT 24 PH 3: 28 IDAHO PUBLIC UTILITIES COMMISSION IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION ) OF IDAHO POWER COMPANY FOR ) CASE NO.IPC-E-08-10 AUTHORITY TO INCREASE ITS RATES ) AND CHARGES FOR ELECTRIC SERVICE ) TO ELECTRIC CUSTOMERS IN THE STATE)OF IDAHO. ) ) ) ) DIRECT TESTIMONY OF KEITH HESSING IDAHO PUBLIC UTILITIES COMMISSION OCTOBER 24, 2008 1 2 the record. Q.Please state your name and business address for 3 A.My name is Keith D. Hessing and my business 4 address is 472 West Washington Street, Boise, Idaho. 5 6 Q.By whom are you employed and in what capacity? A.I am employed by the Idaho Public Utilities 7 Commission as a Public Utilities Engineer. 8 9 Q.What is your education and experience background? A.I am a Registered Professional Engineer in the 10 State of Idaho. I received a Bachelor of Science Degree in 11 Civil Engineering from the University of Idaho in 1974. 12 Since then, I worked six years for the Idaho Department of 13 Water Resources, and two years for Morrison-Knudsen. I 14 have been continuously employed at the Commission since 15 August 1983. 16 As a member of the Commission Staff, my primary 17 areas of responsibility have been electric utility power 18 supply, cost allocation, rate design and power cost 19 adjustment (PCA) mechanisms. 20 Q.What is the purpose of your testimony in this 21 proceeding? 22 A.I will address the areas of Jurisdictional 23 Separations, Customer Class Cost of Service, Revenue 24 Allocation and the Power Cost Adjustment (PCA) Mechanism. 25 Q.Please summarize your testimony. CASE NO. IPC-E-08-1010/24/08 HESSING, K (Di) STAFF 1 1 A.I accept the Company's Jurisdictional Separations 2 methodology and allocators and the results they produce 3 using Staff adjusted accounting information. Those results 4 are presented in Staff witness Cecily Vaughn's testimony. 5 I accept the Company's proposal to change cost of 6 service methodology to the 3CP/12CP method from the Base 7 Case method that was approved in Case No. IPC-E- 03 - 13. S Based on a 1.44 percent overall increase in revenue, I 9 propose that individual class increases be capped at 4.9 10 percent and that no class receive a decrease. I propose 11 that classes not impacted by the cap or floor be moved to 12 full cost of service. 13 I propose that PCA computational factors, such as 14 base case power supply costs, energy amounts and the 15 jurisdictional energy allocator used in the Company's Power 16 Cost Adjustment (PCA) mechanism, be updated to reflect 17 Staff's case. I propose that cloud seeding base costs and 1S revenues remain unchanged. I also propose that the load 19 growth adjustment factor used in the PCA remain unchanged 20 while the Commission processes Case No. IPC-E-OS-19 which 21 addresses the methodology and proposes a new load growth 22 adjustment factor. 24 23 JUISDICTIONAL SEPARTIONS Q.What is the purpose of Jurisdictional 25 Separations? CASE NO. IPC-E-OS-1010/24/0S HESSING, K (Di) STAFF 2 1 A.The Jurisdictional Separations process identifies 2 the Idaho jurisdiction's share of total Company costs and 3 revenues and establishes the Idaho jurisdictional revenue 4 requirement. 5 Q.What causes the Idaho jurisdictional revenue 6 requirement to change between rate cases? 7 A.In general there are three items that can cause S the revenue requirement to change between rate cases - 9 changes in accounting information, changes in 10 jurisdictional characteristics (demand, energy and customer 11 numbers) and changes in separations methodology. I will 12 briefly discuss each of the three. 13 Account balances change every year. Some cost 14 categories increase and some decrease. Generally, costs 15 increase, but so do revenues as new customers are added to 16 the system. Other Staff witnesses have testified 17 concerning accounting data and appropriate adjustments. 1S Account balances change between rate cases and those 19 changes appropriately drive changes in the Idaho 20 jurisdictional revenue requirement. 21 Jurisdictional characteristics also change every 22 year. These are things like coincident peak demands, 23 annual energy use and numbers of customers by jurisdiction. 24 The fact that these characteristics change on a relative 25 basis is important because they are used to separate or CASE NO. IPC-E-OS-1010/24/0S HESSING, K (Di) STAFF 3 1 allocate total Company costs to the various jurisdictions. 2 Staff Exhibit No. 129 demonstrates the changes that have 3 occurred in these characteristics over the Company's four 4 most recent general rate cases including this one. For 5 demonstration purposes only one demand, one energy and one 6 customer allocator are shown. Each category has one or 7 more other allocators that are also used in the 8 jurisdictional separations study. It is significant that 9 while energy and peak loads have grown along with total 10 system costs, the Idaho jurisdiction's share of the 11 Company's costs has changed very little since the Company's 12 last case. This can be observed by the change from the 13 last rate case to this rate case in the major demand and 14 energy allocators. The D10 allocator has not change from 15 .950 and the E10 allocator grew from .947 to .948. In 16 other words, the Idaho jurisdiction was allocated 95.0% of 17 demand related costs in the last rate case and in this case 18 Idaho ratepayers would again be allocated 95.0% of system 19 demand related costs. 20 As pointed out in Company testimony, 21 jurisdictional separations methodology has remained largely 22 unchanged for a very long period of time. When 23 Jurisdictional Separations methodology does not change and 24 major allocators change little, the accounting data drives 25 the changes in the Idaho Jurisdictional Revenue CASE NO. IPC-E-08-1010/24/08 HESSING, K (Di) STAFF 4 1 Requirement. 2 Q.Do you accept Idaho Power's Jurisdictional 3 Separations study? 4 A.I accept the methodology and allocation factors 5 proposed by the Company ¡however, other Staff witnesses 6 have proposed adjustments to the accounting data and the 7 Return on Equity. Staff's Jurisdictional Separations 8 results are presented as Staff Exhibit No. 125 to Staff 9 witness Cecily Vaughn's testimony. Staff proposes 10 an Idaho Jurisdictional revenue requirement of $682,850,888 11 that requires an overall rate increase of $9,681,348 or 12 1.44 percent 13 CLASS COST OF SERVICE 14 Q.What is the purpose of a Customer Class Cost of 15 Service Study? 16 A.A Customer Class Cost of Service Study divides 17 the Idaho Jurisdictional Revenue Requirement that results 18 from the Jurisdictional Separations Study among the various 19 Idaho rate classes. 20 The process is generally the same as previously 21 described in the Jurisdictional Separations discussion. 22 Costs are identified as energy, demand or customer related 23 and each rate class's percentage share of energy use, 24 demand use or number of customers is applied to the costs 25 to divide them among the various rate classes or rate CASE NO. IPC-E-08-10 10/24/08 HESSING, K (Di) STAFF 5 1 schedules. 2 Q.Is the Company proposing to change the Cost of 3 Service method most recently accepted by the Commission? 4 A.Yes. In the IPC-E-03-13 general rate case the 5 Commission used a method that the Company calls "Base Case" 6 as a guide in allocating costs to the various rate classes. 7 In this case the Company is proposing a change to a method 8 that the Company calls "3CP/12CP". The IPC-E-05-28 general 9 rate case that followed the IPC-E-03-13 case was a settled 10 case that spread costs to classes on a uniform percentage 11 basis and, therefore, did not use cost of service results. 12 Case No. IPC-E-07-8 that followed the 05-28 case was also a 13 settled case that used no specific cost of service study to 14 allocate the Idaho jurisdictional revenue requirement to 15 customer classes. 16 Q.What are the differences between the Base Case 17 method and 3CP/12CP method? 18 A.The differences are in the classification and 19 allocation of Production Plant. The Base Case method 20 classifies all production plant investment, except the 21 Company's gas fired peaking unit investment, as energy and 22 demand related based on the Idaho jurisdictional load 23 factor. The Idaho jurisdictional load factor is 59.38%. 24 Therefore, approximately 59% of these costs were classified 25 as energy related and allocated using an energy allocator, CASE NO. IPC-E-08-10 10/24/08 HESSING, K (Di) STAFF 6 1 and approximately 41% were classified as demand related and 2 allocated using a demand allocator. Gas fired peaking unit 3 investment was classified as 100% demand related. Both 4 energy and demand allocators were based on twelve months of 5 data weighted by the marginal cost of energy or demand, 6 respectively, from the Company's marginal cost study. 7 The proposed 3CP/12CP cost of service method 8 classifies base load and intermediate load plant 9 investment, hydro and thermal generating resources, as 10 energy related and demand related based on the Idaho 11 jurisdictional load factor just as the Base Case method 12 does. The Company's peaking resource investment in natural 13 gas fired plant is classified as 100% demand related as in 14 the Base Case study. However, different demand allocators 15 are applied. Demand related peaking unit investment is 16 allocated using an unweighted 3CP allocator based on the 17 Company's three summer peak months of June, July and 18 August. Other demand related production investment 19 associated with serving base and intermediate load is 20 allocated using an unweighted 12CP allocator. The energy 21 related portion of base and intermediate load production 22 plant investment is allocated based on marginal cost 23 weighted class energy use. 24 Q.What other changes in cost of service methodology 25 from IPC-E-03-13 is the Company proposing? CASE NO. IPC-E-08-10 10/24/08 HESSING, K (Di) STAFF 7 1 A.The Company is proposing to classify Account 555 2 - Purchased Power costs (market purchases and PURPA 3 purchases) as energy and demand related based on the system 4 load factor. The IPC-E-03-13 rate case classified 5 purchased power costs as almost entirely energy related. 6 Another cost of service change that has occurred 7 since the 03-13 case is a change in the way coincident peak 8 demand allocators are determined. The 03 - 13 cost of 9 service study used actual test year coincident peak demands 10 to determine the allocation factor. Following that case 11 workshops were held to discuss a number of cost of service 12 issues. As part of that process the parties agreed to use 13 a 5 -year median coincident peak demand to normalize the 14 allocation factor. The Company has applied this 15 methodology in all cases since the 03 - 13 case. 16 Q.What is the difference in study results between 17 the 03-13 Base Case method and the 3CP/12 CP method 19 18 proposed by the Company in this case? Company witness Tatum presents the results ofA. 20 three cost of service studies that he prepared in Company 21 Exhibit No. 69. The results of the Base Case study and the 22 3CP/12CP study are included and show similar trends. 23 Q.Which method do you propose the Commission 25 24 accept? I recommend that the Commission accept theA. CASE NO. IPC-E-08-10 10/24/08 HESSING, K (Di) STAFF 8 1 3CP/12CP method proposed by the Company. 2 Q.Does your testimony include an exhibit showing 3 Cost of Service results using the 3CP/12CP method applied 4 to the Idaho jurisdictional revenue requirement proposed by 6 5 Staff? 7 A.Yes. Staf f Exhibit No. 130 shows those results. Q.Do your results show the same general pattern as 9 8 the results presented by the Company in Exhibit No. 69? Yes. The special contract customers, Micron,A. 10 Simplot and DOE, along with the Large Power customers 11 served under Schedule 19 and the Irrigation class show a 12 need for a much higher than average increase if their rates 13 are to be set at full cost of service. Residential 15 14 customers are shown to deserve a decrease. Q.Ar~ these results similar to cost of service 16 results from the IPC-E-03-13 case? 17 No. Cost of service results did not indicateA. 18 higher than average cost increases for the high load factor 20 19 customer classes in that case. 21 cost of service results that have occurred since the Q.How do you explain the significant changes in 23 22 IPC-E-03-13 case? A.There are a number of circumstances that have 24 caused changes in cost of service results. Load growth, 25 substantially in the residential class, has occurred in CASE NO. IPC-E-08-1010/24/08 HESSING, K (Di) STAFF 9 1 record amounts. The cost of power supply to meet the 2 growing load, at approximately 6Ç/kWh, has been much higher 3 than it used to be. Under cost of service methodology a 4 disproportionately larger share of all costs, old and new, 5 are allocated to the residential class because the 6 residential classes percentage share of energy, peak demand 7 and customers has increased.A mix of old and new costs 8 is also allocated to all other classes even if they 9 experienced no load growth. No customer class is entitled 10 to rates based on a grandfathered share of old costs. In 11 the cost of service model the residential class received 12 credi t for all of the revenue from its load growth at near 13 6ç/kWh and a portion of the production cost increases at 14 about the same rate. In the cost of service study the 15 increased revenues offset the increased costs and the 16 Residential Class is shown to deserve an increase below the 17 Idaho Jurisdictional average, or even a decrease as 18 demonstrated in Staff's results. 19 High load factor customer groups are situated 20 differently. They are allocated a reduced portion of all 21 costs, old and new, and have little or no new revenue to 22 offset the new costs. The new costs more than offset the 23 cost reduction due to the decrease in the allocation 24 percentages and without additional revenue rates go up. 25 Therefore, cost of service results indicate increases CASE NO. IPC-E-08-1010/24/08 HESSING, K (Di) 10 STAFF 1 higher than the average. 2 Even if there were substantial growth in the high 3 load factor classes, their revenue at about 3Ç/kWh would 4 not offset marginal power supply costs at about 6Ç/kWh. 5 The size of the increase may be decreased, but there would 6 still be an above average increase for high load factor 7 customers. 8 Q.Does your explanation explain cost of service 9 trends since the IPC-E- 03 - 13 case? 10 A. There are many moving parts in a cost of service 11 study. The explanation that I have provided addresses the 12 cost trends for the large customer classes. There are many 13 other factors that are also driving changes in cost of 14 service results such as differences in methodology, 15 allocation factors, distribution and transmission costs, 16 etc. 17 The explanation that I have provided addresses 18 the trend of disproportionate increases to the high load 19 factor classes observed in the Company's three most recent 20 general rate case filings - IPC-E-05-28, IPC-E-07-8 and the 21 current case. 22 Q.Is there any reason to believe that the trend 23 will not continue? 24 A.No. It is largely driven by the high marginal 25 power supply cost of serving new load. I expect load to CASE NO. IPC-E- 08 - 1010/24/08 HESSING, K (Di) 11 STAFF 1 continue to grow and marginal costs to remain significantly 2 higher than high load factor customer rates. 4 3 REVENU ALLOCATION 5 Service results contained in Staff Exhibit No. 130? Q.How do you propose the Commission use the Cost of 6 A.In general, I propose that Cost of Service 7 results be used as a guide in establishing class revenue 8 requirements for the various rate classes. I view Cost of 9 Service results as an imprecise science that is 10 appropriately used as a starting point in revenue 11 allocation. 12 Q.What customer class allocation of the Idaho 13 Jurisdictional revenue requirement do you recommend? 14 A.Staff's Cost of Service results are based on an 15 average Idaho jurisdictional retail rate increase of 1.44 16 percent. However, some individual class increases vary 17 substantially from the average. For this reason I 18 recommend that cost of service results not be strictly 19 followed, but that the results be used as a guide in 20 establishing class revenue requirements. 21 It is my recommendation that no class receive a 22 rate decrease and that increases be capped at 4.9 percent. 23 All customer classes in between would be moved to full cost 24 of service. This approach diminishes rate shock and moves 25 all classes toward cost of service. CASE NO. IPC-E-08-1010/24/08 HESSING, K (Di) 12 STAFF 1 Q.Have you prepared an exhibit that shows the 3 2 resul ts of your proposal? Yes. I have prepared Staff Exhibit No. 131. AsA. 4 you can see, Schedules 19, 24, 42 and the special contract 5 customer schedules would receive the maximum increase of 6 4.9%. Schedules 1, 7, 15, 40 and 41 would receive no 7 increase or decrease. Schedule 9 would be moved to full 8 cost of service. 9 Q.Have you prepared an exhibit that compares your 10 Revenue Allocation proposal to Idaho Power's Revenue 11 Allocation proposal? 12 A.Yes. Staff Exhibit No. 132 makes that 13 comparison. 15 14 POWER COST ADJUSTMNT (PCA) MECHAISM Q.What Power Cost Adjustment (PCA) components are 16 established in a general rate case? 17 A.Company Exhibit No. 51 identifies most of the 18 "PCA Computational Factors" that are established in a 19 general rate case. The Company proposes that the PCA 20 computational factors be updated to the 2008 test year 22 21 level. Q.Have you prepared a similar exhibit that presents 23 your quantification of appropriate PCA computational 25 24 factors? A.Yes, I have. Staff Exhibit No. 133 contains the CASE NO. IPC-E-08-1010/24/08 HESSING, K (Di) 13 STAFF 1 information in the Company's proposal from Company Exhibit 2 No. 51 along with my proposal. My proposal is based on 3 Staff's case. 4 Q.Please discuss the factors presented in your 5 proposal to the extent that they differ from the Company's 6 proposal. 7 A.The Company and Staff proposals for Normalized 8 Power Supply Expense differ because the expense amounts 9 come from the AURORA power supply model and Staff assumed a 10 different natural gas price input to that model than the 11 Company did. This difference is discussed in more detail 12 in Staff witness Rick Sterling's testimony. Also the Staff 13 proposes to continue the use of the Commission ordered base 14 revenue and cost amounts for cloud seeding. These 15 differences are also the cause of the difference in the 16 Normalized Base PCA Rate that is calculated using the 17 Normalized Power Supply Expense and Cloud Seeding expense 18 and revenue. 19 Q.Are there other PCA computational factors that 20 are normally established in a general rate case? 21 A.Yes. The load growth adjustment rate, also 22 called the Expense Adjustment Rate for Growth (EARG), and 23 the forecast equation. 24 Q.Please discuss your recommendation for the load 25 growth adjustment rate. CASE NO. IPC-E-08-10 10/24/08 HESSING, K (Di) 14 STAFF 1 A.In the Company's most recent general rate case, 2 the IPC-E-07-8 case, the Commission accepted a settlement 3 stipulation. In that stipulation, the load growth 4 adjustment rate was based on a 2007 marginal cost 5 calculation of $62. 79/MWh and was applied to one-half of 6 the load growth. I propose that the currently approved 7 rate continue to be used and that it continue to be applied 8 to one-half the load growth. 9 Q.Have the Company and Staff calculated new 10 marginal costs that could be used to update the load growth 11 adjustment rate? 12 A.Yes. Company Exhibit No. 50 shows a 2008 13 marginal power supply cost of $56.48 per MWh. Staff 14 Exhibit No. 134 shows a 2008 marginal power supply cost of 15 $54.07 per MWh. The difference is caused by different 16 assumptions in monthly natural gas prices. 17 Q.Why are you not proposing to update the load 18 growth adjustment rate? 19 A.The Commission currently has Case No. IPC-E- 08 - 19 20 before it which contains a stipulated settlement that 21 changes the computational method and the rate. I believe 22 that it is appropriate for load growth adjustment rate 23 changes to be considered in that case. 24 Q.You said that the PCA Forecast equation is also 25 normally updated in a general rate case. Please discuss CASE NO. IPC-E-08-1010/24/08 HESSING, K (Di) 15 STAFF 1 the PCA forecast equation. 2 A. The Company filed an updated PCA forecast 3 equation. The calculations are shown on Company Exhibit 4 No. 49. The Staff has not prepared such a calculation 5 because Case No. IPC-E-08-19 also proposes to change 6 forecast methodology. If the Commission does not accept 7 the settlement proposed in that case, an updated regression 8 formula based on Commission approved power supply costs 10 9 could be prepared at that time. Does this conclude your direct testimony in thisQ. 11 proceeding? 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Yes, it does.A. CASE NO. IPC-E- 08 - 1010/24/08 HESSING, K (Di) 16 STAFF Case No. IPC-E-08-10 Comparison of Historic Jurisdictional Allocators Oregon & Classification Allocator Case No.Units Idaho FERC Total Demand 010 IPC-E-03-13 kW 2,076,437 121,967 2,198,404 010 IPC-E-05-28 kW 2,102,069 121,411 2,223,480 010 IPC-E-07-08 kW 2,281,542 120,809 2,402,351 010 IPC-E-08-10 kW 2,335,595 121,919 2,457,514 010 IPC-E-03-13 Allocator 0.945 0.055 1.000 010 IPC-E-05-28 Allocator 0.945 0.055 1.000 010 IPC-E-07-08 Allocator 0.950 0.050 1.000 010 IPC-E-08-10 Allocator 0.950 .0.050 1.000 Energy E10 IPC-E-03-13 kWh 13,275,012 832,564 14,107,576 E10 IPC-E-05-28 kWh 13,950,521 868,631 14,819,152 E10 IPC-E-07-08 kWh 14,784,934 827,764 15,612,698 E10 IPC-E-08-10 kWh 15,036,726 826,902 15,863,628 E10 IPC-E-03-13 Allocator 0.941 0.059 1.000 E10 IPC-E-05-28 Allocator 0.941 0.059 1.000 E10 IPC-E-07-08 Allocator 0.947 0.053 1.000 E10 IPC-E-08-10 Allocator 0.948 0.052 1.000 Customer CW903 IPC-E-03-13 Weighted Customers 6,581,117 292,716 6,873,833 CW903 IPC-E-05-28 Weighted Customers 8,910,067 379,961 9,290,028 CW903 IPC-E-07 -08 Weighted Customers 8,910,067 379,961 9,290,028 CW903 IPC-E-08-10 Weighted Customers 7,873,470 309,347 8,182,817 CW903 IPC-E-03-13 Allocator 0.957 0.043 1.000 CW903 IPC-E-05~28 Allocator 0.959 0.041 1.000 CW903 IPC-E-07 -08 Allocator 0.959 0.041 1.000 CW903 IPC-E-08-10 Allocator 0.962 0.038 1.000 Exhibit No. 129 Case No. IPC-E-08-10 K. 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Hessing, Staff 10/24/08 Id a h o P o w e r Co m p a n y St a f f C a s e Re v e n u e A l l o c a t i o n S u m m a r y 12 M o n t h s E n d i n g D e c e m b e r 3 1 , 2 0 0 8 Ra t e Li n e Sc h e d u l e Pe r c e n t Re v e n u e No . Ta r i f f D e s c r i p t i o n No . Ch a n g e Re v e n u e C h a n q e Al l o c a t i o n Un i f o r m T a r i f f S c h e d u l e s 1 Re s i d e n t i a l S e r v i c e 1 0. 0 0 % $ - $ 31 7 , 9 5 6 , 4 6 1 2 Sm a l l G e n e r a l S e r v i c e 7 0. 0 0 % - 15 , 1 6 1 , 3 7 9 3 La r g e G e n e r a l S e r v i c e 9 0. 6 0 % 94 0 , 7 9 8 15 8 , 3 8 5 , 0 6 3 4 Du s k / D a w n L i g h t i n g 15 0. 0 0 % - 1, 0 0 4 , 5 0 8 5 La r g e P o w e r S e r v i c e 19 4. 9 0 % 3, 4 4 4 , 3 7 3 73 , 7 1 5 , 4 7 9 6 Ir r i g a t i o n S e r v i c e 24 4. 9 0 % 3, 7 7 6 , 4 2 7 80 , 8 2 2 , 0 0 1 7 Un m e t e r e d S e r v i c e 40 0. 0 0 % - 96 6 , 4 9 1 8 Mu n i c i p a l S t r e e t L i g h t i n g 41 0. 0 0 % - 2, 3 1 4 , 2 6 1 9 Tr a f f i c C o n t r o l L i g h t i n g 42 4. 9 0 % 7, 6 0 7 16 2 , 8 1 0 10 To t a l Id a h o R a t e s 1. 2 7 % 8, 1 6 9 , 2 0 5 65 0 , 4 8 8 , 4 5 3 Sp e c i a l C o n t r a c t s 11 Mi c r o n 26 4. 9 0 % $ 98 0 , 5 0 4 $ 20 , 9 8 4 , 4 6 2 12 J R S i m p l o t 29 4. 9 0 % 24 5 , 9 6 8 5, 2 6 4 , 1 2 7 13 DO E / I N L 30 4. 9 0 % 28 5 , 6 7 1 6, 1 1 3 , 8 4 6 14 To t a l S p e c i a l s 4. 9 0 % 1, 5 1 2 , 1 4 2 32 , 3 6 2 , 4 3 4 15 To t a l Id a h o R e t a i l S a l e s 1. 4 4 % $ 9, 6 8 1 , 3 4 7 $ 68 2 , 8 5 0 , 8 8 7 16 Re v e n u e R e q u i r e m e n t S h o r t f a l l $ 0 .. : ; ( J t r o. p : ~ N: : r i e : .t ( l c r -- ¡ n Z - ' O¡ n . . 00 _ . 0 Z :: . (f . . 0 ~ " ' . cz ( J . . .. I \ . p: t r . . :: i 000I..0 Comparison of Cost Of Service Results and Revenue Allocation Proposals Case No. IPC-E-08.10 Company Staff COS COS Results Results Rate 3CP/12CP 3CP/12CP Line Sch.Percent Company Percent Staff No Tariff Description No.Change Proposal Change Proposal %%%% Uniform Tariff Rates: 1 Residential Service 1 3.71 6.31 (4.51)0.00 2 Small General Service 7 7.91 10.63 (1.02)0.00 3 Large General Service 9 8.73 11.46 0.60 0.60 4 Dusk to Dawn Lighting 15 (41.85)2.51 (50.19)0.00 5 Large Power Service 19 15.87 15.00 6.77 4.90 6 Agricultural Irrigation Service 24 28.54 15.00 19.74 4.90 7 Unmetered General Service 40 (2.57)2.51 (10.22)0.00 8 Street Lighting 41 (29.24)2.51 (37.87)0.00 9 Traffic Control Lighting 42 44.20 15.00 33.68 4.90 Special Contracts: 10 Micron 26 24.41 15.00 14.51 4.90 11 J R Simplot 29 28.14 15.00 17.91 4.90 12 DOE 30 25.37 15.00 15.63 4.90 13 Total Idaho 9.89 9.89 1.44 1.44 Exhibit No. 132 Case No. IPC-E-08-10 K. Hessing, Staff 10124/08 peA Computational Factors Case No. IPC.E.QS.10 Normalized PCA Expense Normalized Power Supply Expense Normalized CSPP Cloud Seeding Expense Cloud Seeding Revenue Normalized PCA Expense Normalized Base PCA Rate Computation Normalized System Firm Sales Normalized Base PCA Rate Idaho Jurisdictional Percentage Computation Normalized System Firm Load Idaho Jurisdictional Firm Load Idaho Jurisdictional Percentage Expense Adjustment Rate for Growth Applied to one-half of load growth Units MWh Ø/kWh MWh MWh % $/MWh 2007 Settlement $ $ $ $ $ 34,964,670 93,080,631 892,084 (1,427,334) 127,510,051 14,239,222 0.8955 15,612,699 14,784,934 94.7% 62.79 Company Staff Proposal Proposal 2008 2008 Test Year Test Year 88,421,246 77,576,480 63,269,889 63,269,889 892,084 (1,427,334) 151,691,135 140,311,119 14,465,151 14,465,151 1.0487 0.9700 15,863,628 15,863,628 15,036,726 15,036,726 94.8%94.8% 62.79 Exhibit No. 133 Case No. IPC-E-08-10 K. Hessing, Staff 10/24/08 MA R G I N A L E N E R G Y C O S T S SU M M A R Y T O T A L BA S E CA S E Ye a r Ty p e Un i t s Ja n u a r y Fe b r u a r y Ma r c h Ap r i l Ma y Ju n e Ju l y Au g u s t Se p t e m b e r Oc t o b e r No v e m b e r De c e m b e r An n u a l 20 0 8 En e r g y MW h 1, 2 8 4 , 7 5 1 1, 1 1 3 , 7 2 6 1, 1 0 6 , 6 2 5 98 3 , 3 0 0 1, 1 3 5 , 2 5 4 1, 3 1 5 , 0 5 5 1, 6 1 1 , 8 2 6 1, 4 7 4 , 1 8 5 1, 1 7 7 , 2 9 9 1, 0 5 5 , 3 7 5 1, 1 1 8 , 3 6 8 1, 3 7 4 , 2 5 8 14 , 7 5 0 , 0 2 2 20 0 8 Co s t ($ x 1 0 0 0 ) $ 6 , 4 5 9 . 7 $ ( 9 , 5 8 0 . 1 ) $ ( 8 , 4 9 8 . 2 ) $ ( 7 , 2 0 4 . 5 ) $ 51 7 . 8 $ 8 , 9 1 2 . 4 $ 2 5 , 2 5 9 . 4 $ 1 8 , 9 4 8 . 6 $ 1 1 , 3 3 8 . 4 $ 5 , 3 5 3 . 5 $ 1 2 , 8 5 7 . 7 $ 1 3 , 2 1 1 . 9 $ 7 7 , 5 7 6 . 5 20 0 8 Co s t l M W h $/ M W h $ 5. 0 $ (8 . 6 ) $ (7 . 7 ) $ (7 . 3 ) $ 0. 5 $ 6. 8 $ 15 . 7 $ 12 . 9 $ 9. 6 $ 5. 1 $ 11 . 5 $ 9. 6 $ 5. 3 BA S E C A S E P L U S 5 0 a M W Ye a r Tv p e Un i t s Ja n u a r v Fe b r u a r v Ma r c h Ap r i l Ma v Ju n e Ju l v Au g u s t Se p t e m b e r Oc t o b e r No v e m b e r De c e m b e r An n u a l 20 0 8 En e r g y MW h 1, 3 2 2 , 1 7 9 1, 1 4 6 , 5 0 7 1, 1 3 9 , 3 8 2 1, 0 1 3 , 1 2 4 1, 1 6 9 , 9 9 5 1, 3 5 4 , 8 4 0 1, 6 5 9 , 8 3 6 1, 5 1 8 , 3 0 7 1, 2 1 2 , 8 0 2 1, 0 8 6 , 8 9 3 1, 1 5 1 , 1 1 0 1, 4 1 4 , 2 2 4 15 , 1 8 9 , 1 9 9 20 0 8 Co t ($ x 1 0 0 0 ) $ 8 , 5 9 5 . 4 $ ( 7 , 8 1 8 . 5 ) $ ( 6 , 8 4 1 . 0 ) $ ( 5 , 8 6 1 . 5 ) $ 1 , 9 7 7 6 $ 1 0 , 3 3 8 . 8 $ 2 8 , 3 1 8 . 6 $ 2 1 , 5 5 4 . 0 $ 1 3 , 2 9 5 . 2 $ 7 , 1 5 5 . 1 $ 1 4 , 8 6 3 . 9 $ 1 5 , 7 4 6 . 0 $1 0 1 , 3 2 3 . 6 I 20 0 8 Co t l M W h $/ M W h $ 6. 5 $ (6 . 8 ) $ (6 . 0 ) $ (5 . 8 ) $ 1.7 $ 7. 6 $ 17 . 1 $ 14 . 2 $ 11 . 0 $ 6. 6 $ 12 . 9 $ 11 . 1 $ 6 . 7 Ye a r ~ME C Un i t s Ja ~ $5 7 . 0 6 Fe b r u a r y $5 3 . 7 4 Ma r c h $5 0 . 5 9 ~$4 5 . 0 3 MA R G I N A L C O S T O F E N E R G Y Ma y J u n e J u l y $4 2 . 0 2 $ 3 5 . 8 5 $ 6 3 . 7 2 Au g u s t $5 9 . 0 5 Se p t e m b e r $5 5 . 1 2 Oc t o b e r $5 7 . 1 6 No v e m b e r De c e m b e r 20 0 8 $/ M W h $6 1 . 2 8 $6 3 . 4 1 An n u a l $5 4 . 0 7 -~ \ . t r O. ¡ i X t: . . v . : : .r . . C P . . . -. C P z c r o ~ ; : . 00 . . . 0 Z =: . (J - 0 ~ ~ . (. \ . - , .. I W a, t r . r "" I o00i-o CERTIFICATE OF SERVICE I HEREBY CERTIFY THAT I HAVE THIS 24TH DAY OF OCTOBER 2008, SERVED THE FOREGOING DIRECT TESTIMONY OF KEITH HESSING, IN CASE NO. IPC-E-08-1O, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE FOLLOWING: BARTON L KLINE LISA D NORDSTROM DONOV AN E WALKER IDAHO POWER COMPANY POBOX 70 BOISE ID 83707-0070 E-MAIL: bkline(iidahopower.com Inordstrom(iidahopower .com dwalker(iidahopower.com PETER J RICHARDSON RICHARDSON & O'LEARY PO BOX 7218 BOISE ID 83702 E-MAIL: peter(irichardsonandolear.com RANDALL C BUDGE ERICLOLSEN RACINE OLSON NYEET AL PO BOX 1391 POCATELLO ID 83204-1391 E-MAIL: rcb(iracinelaw.net elo(iracinelaw.net MICHAEL L KURTZ ESQ KURT J BOEHM ESQ BOEHM KURTZ & LOWRY 36 E SEVENTH ST STE 1510 CINCINATI OH 45202 E-MAIL: mkurz(iBKLlawfrm.com kboehm(iBKLlawfrm.com BRADMPURDY ATTORNEY AT LAW 2019 N 17TH ST BOISE ID 83702 E-MAIL: bmpurdy(ihotmail.com JOHN R GALE VP - REGULATORY AFFAIRS IDAHO POWER COMPANY POBOX 70 BOISE ID 83707-0070 E-MAIL: rgale(iidahopower.com DR DON READING 6070 HILL ROAD BOISE ID 83703 E-MAIL: dreading(imindspring.com ANTHONY Y ANKEL 29814 LAKE ROAD BAY VILLAGE OH 44140 E-MAIL: yanel(iattbi.com KEVIN HIGGINS ENERGY STRATEGIES LLC PARKS IDE TOWERS 215 S STATE ST STE 200 SALT LAKE CITY UT 84111 E-MAIL: khiggins(ienergystrat.com LOTH COOKE ARTHUR PERRY BRUDER UNITED STATE DEPT OF ENERGY 1000 INDEPENDENCE AVE SW WASHINGTON DC 20585 E-MAIL: lot.cooke(ihq.doe.gov arhur. bruder(ihg .doe. gOY CERTIFICATE OF SERVICE DWIGHT ETHERIDGE EXETER ASSOCIATES INC 5565 STERRTT PLACE, SUITE 310 COLUMBIA MD 21044 E-MAIL: detheridge(iexeterassociates.com DENNIS E PESEAU, Ph.D. UTILITY RESOURCES INC 1500 LIBERTY STREET SE, SUITE 250 SALEM OR 97302 E-MAIL: dpeseau(iexcite.com CONLEY E WARD MICHAEL C CREAMER GIVENS PURSLEY LLP 601 W BANNOCK ST PO BOX 2720 BOISE ID 83701-2720 E-MAIL: cew(igivenspursley.com KEN MILLER CLEAN ENERGY PROGRAM DIRECTOR SNAKE RIVER ALLIANCE PO BOX 1731 BOISE ID 83701 E-MAIL: kmiler(isnakeriverallance.org ~~SECRETAR CERTIFICATE OF SERVICE