20090417IIPA Comments.pdf

W. MARCUS W. NYE
RANDALL C. BUDGE
JOHN A. BAILEY, JR.
JOHN R. GOODELL
JOHN B. INGELSTROM
DANIEL C. GREEN
BRENT O. ROCHE
KIRK B. HADLEY
FRED J. LEWIS
ERIC L. OLSEN
CONRAD J. AIKEN
RICHARD A. HEARN, M.D.
DAVID E. ALEXANDER
LANE V. ERICKSON
PATRICK N. GEORGE
SCOTT J. SMITH
STEPHEN J. MUHONEN
BRENT L. WHITINGJUSTIN R. ELLIS
JOSHUA D. JOHNSON
JONATHON S. BYINGTON
DAVE BAGLEY
CAROL TIPPI VOLYN
THOMAS J. BUDGE
CANDICE M. MCHUGH
JONATHAN M. VOLYN
MARK A. SHAFFER
LAW OFFICES OF
RACINE OLSON NYE BUDGE Be BAILEY
CHARTERED BOISE OFFICE
101 SOUTH CAPITOL
BOULEVARD, SUITE 208
BOISE, IDAHO 83702TELEPHONE: [phone] .
FAC5IMILE: [phone]
201 EAST CENTER STREET
POST OFFICE BOX 1391
POCATELLO, IDAHO 83204-1391
TELEPHONE [phone]
FACSIMILE [phone]
IDAHO FALLS OFFICE
477 SHOUP AVENUE
SUITE 203A
IDAHO FALLS, 1083402
TELEPHONE: [phone] ° 1
FACSIMILE: (208) 528-6'09ww.raclnelaw.net
COEUR D'ALENE OFFICE
250 NORTHWEST
BOULEVARD, SUITE i0eA
COEUR D'ALENE. ID 83814
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SENDER'S E-MAIL ADDRESS:eloliracinelaw.net
ALL OFFICES TOLL FREE(877) 232-6'01
April 17, 2009
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Jean D. Jewell, Secretar
Idaho Public Utilties Commission
PO Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-08-22
Dear Ms. Jewell:
Enclosed for filing in the captioned matter, please find the original and seven (7) copies of
Idaho Irrigation Pumpers Association, Inc. 's Comments in the above matter.
ELO:nj
Enclosures
cc: Serice List
Sincerely,
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ERIC L. OLSEN
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Eric L. Olsen, ISB #481 i
RACINE, OLSON, NY, BUDGE &
BAILEY, CHATERED
P.O. Box 1391; 201 E. Center
Pocatello, Idaho 83204-1391
Telephone: [phone]
Fax: [phone]
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Attorneys for Idaho Irgation Pumpers Association, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO PO~R COMPANY FOR )
AUTHORITY TO MODIFY ITS RULE H LINE )
EXTENSION TARIFF RELATED TO NEW )
SERVICE ATTACHMENTS AN )
DISTRIBUTION LINE INSTALLATIONS )
)
CASE NO. IPC-E-08-22
IDAHO IRRGATION PUMPERS ASSOCIATION, INC.'S COMMNTS
IDAHO IRGATION PUMPERS ASSOCIATION, INC. ("IIPA"), by and
through its attorneys, hereby respectfully submits the following comments on Idaho
Power Company's ("IPC") proposed changes to update Rule H.
COMMENTS
In general, the IIPA believes that IPC's proposals to update Rule H in this case
are well founded. For the last couple of decades growth on the system has placed a large
financial burden on existing customers. To the extent the Rule H changes can fairly
mitigate certin costs associated with growt, the LIP A strongly supports these changes.
However, it must be remembered that the proposed Rule H changes do not in anyway
address the incremental costs of growth as it applies to associated Transmission and
Generation costs.
IDAHO IRRGATION PUMERS ASSOCIATION, INC.'S
COMMENTS -1
As the LIP A understands the proposed changes, there wil be importnt updates to
reflect today's costs, to clarify procedures regarding collection of fees from subdivisions,
and to clarify changes in distribution configurations requested by governental agencies.
All of these changes appear to bring about the desired shift in some of the cost of growth
(at the distribution level) to the parties causing that growth.
The IIPA's concern deals with IPC's proposal associated with what is now being
termed "Standard Terminal Facilties" and the "Attachment Allowances" associated with
these Standard Terminal Facilties. It is the IIPA's position that the Attachment
Allowance for a single-phase Standard Terminal Facility does little, if anything, to extract
some payment for the cost of growth of these customers, while the Attachment
Allowance for a three-phase Standard Terminal Facility ignores economies of scale and
actully places more burden upon the larger customers (that can be served at a lower cost
per unit), than the smaller customers for which the allowance is designed. In short, the
use of the concept of a Standard Terminal Facilty bypasses the concept of making the
more expensive customers pay additional for their new service and little to spread the
cost of growth upon those causing those costs.
The Standard Terminal Facilities for both single-phase and three-phase service are
more of a Minimum Service Design rather than a Standard Service Design. These
Standard Services are not the "average" size nor do they represent the "average"
customer. Both are simply geared to meet the minimum design load (200 amp) for which
IPC plans to build any terminal facilty.
IDAHO IRRGATION PUMERS ASSOCIATION, INC.'S
COMMENTS-2
For single-phase customers, a 200 amp load is large enough to serve the load of
most customers in this category, It makes no economic/engineering sense to provide
smaller transformers that may need to be up-graded in 1 or 5 years. From an overall cost
point of view, it makes sense that for single-phase service that a 200 amp, 15 kVA
transformer be considered standard. However, from a Rule H perspective, this means
that virally all single-phase customers wil be given an allowance that covers this
installation-even if the customer has minimal usage that wil not recover the cost of that
installation through rates based upon expected usage. Thus, very little, if any, of the
distrbution costs of growth wil be placed upon these new customers.
Just the opposite occurs under IPC's proposed Standard Terminal Facilties for
three-phase customers. Once again IPC is proposing a 200 amp service as a standard.
Once again, this is an appropriate minimum level for economic/engineering reasons.
However, the three-phase customers are far less homogeneous than the single-phase
customers. Although it is possible to have smaller three-phase customers that wil not
pay for their facilities through their normal biling, it is far more likely that there wil be
three-phase customers that wil use considerably more energy than this-requiring larger
(more expensive) transformers. Under the proposed Rule H, these larger customers
would have to pay some sort of contrbution because the proposed Attachment Allowance
would not cover larger transformers.
The problem with this logic is that there are large economies of scale in the cost
of transformers and the installation of those transformers. It costs far less (per unit) to
install larger transformers than it does the 15 kVA transformers proposed by IPC. The
end result is that the larger (cheaper to serve) customers end up paying an attachment
IDAHO IRGATION PUMERS ASSOCIATION, INC.'S
COMMENTS-3
charge, while the smaller (more expensive to serve) customers wil pay no attachment
charge.
Where does IPC and the Commission wish to go with these Rule H charges? If
the desire is to collect some portion of the cost of growth from new customers, then the
Standard Terminal Facilties allowance that covers virtally all of the single-phase
customers, as well as all of the smaller (more expensive) three-phase customers is not
going to do the job.
If the desire is to offer some minimum allowance to all customers, then IPC's
proposal does that, but its treatment of customers requiring a larger service is misplaced.
If the same Attachment Allowance is going to be given to all customers, for larger
installations IPC should be required to do a costienefit analysis to determine if the
customer wil pay for the new installation through standard rates (based upon expected
usage), or if the expected usage is too low and some level of contrbution should be
required.
The lIP A recognizes that there are competing goals that the Commission must
balance when it comes to questions of attchment charges. If the Commission decides
that every new customer should be entitled to some minimum level of service (200 amps)
at no charge, then the LIP A accepts this position. However, the Commission should not
penalize larger customers (that are less expensive to serve on a per unit base) without a
costienefit analysis being done first. If the costienefit ratio of providing terminal
facilties for a large customer is lower than the average costienefit ratio of serving all of
the customers utilizing a 200 amp service (on a per unit basis), then those larger
customers should not incur an attachment charge. Large customers should not be
IDAHO IRRGATION PUMPERS ASSOCIATION, INC.'S
COMMENTS-4
penalized for simply being larger. Under this practice, if the cost!enefit ration for a
large customer turns out to be higher than that to service the average customer receiving
the standard terminal facility, then that customer should pay the difference.
As pointed out above, providing all customers with a minimum size terminal
facilty at no cost may do little to have growth pay for itself (even at only the distrbution
level). If it is the Commission's intention to get customers to pay for at least a portion of
their new distrbution costs, then a formula must be developed that wil equally treat
customers such that each customer's contrbution results in an equal cost!enefit ration
for all new customers.
DATED this 17th day of April, 2009.
RACIN, OLSON, NYE, BUDGE &
BAILEY, CHATERED
By ~~ ,..,/~ER~eyfor'
Idaho Irrgation Pumpers Assn., Inc.
IDAHO IRGATION PUMPERS ASSOCIATION, INC.'S
COMMENTS-5
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on this 17th day of April, 2009, I served a tre, correct
and complete copy ofthe foregoing document, to each ofthe following, via the method
so indicated:
Jean D. Jewell, Secretary
Idaho Public Utilties Commission
P.O. Box 83720
472 W. Washington Street
Boise, Idaho 83720-0074
j j ewell(iuc. state.id. us
LJ Via Hand Delivery
Lisa D. Nordstrom
Barton L. Kline
Idaho Power Company
P.O. Box 70
Boise, Idaho 83720-0070
Inordstrom(fidahopower,com
bkline(fidahopower .com
U ViaE-Mail
Scott Sparks
Gregory W. Said
Idaho Power Company
P.O. Box 70
Boise, Idaho 83720-0070
ssparks(fidahopower .com
gsaid(fidahopower, com
U ViaE-Mail
Krstine A. Sasser
Deputy Attorney General
Idaho Public Utilties Commission
472 W. Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
his. sasser(iuc.idaho. gov
U ViaE-Mail
Michael C. Creamer
Givens Pursley LLP
601 W. Bannock St.
Boise, Idaho 83702
mcc(fgivenspursley.com
U ViaE-Mail
IDAHO IRGATION PUMERS ASSOCIATION, INC.'S
COMMENTS-6
, ' 'J
Matthew A. Johnson Ll Via E-Mail
Davis F. VanderVelde
White Peterson Gigry Rossman Nye & Nichols
Suite 200
5700 E. Frankin Rd.
Nampa, ID83687
mjohnson(iwhitepeterson.com
dvandervelde(iwhitepeterson.com
Michael Kurtz, Esq. Ll Via E-Mail
Kurt J. Boehm, Esq.
Boehm, Kurz & Lowr
36 E. Seventh Street, Suite 1510
Cincinnati, OH 45202
mkrtz(iBKLlawfirm.com
kboehm(iBKLlawfirm.com
Kevin Higgins (_l Via E-Mail
Energy Strategies, LLC
Parkside Towers
215 S. State Street, Suite 200
Salt Lake City, UT 8411 1
khiggins(ienergystrat.com
~..Jb-ERICL~ /
IDAHO IRRGATION PUMERS ASSOCIATION, INC.'S
COMMENTS-7