20090514IIPA 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. WHITING
JUSTIN 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 & BAILEY
CHARTERED BOISE OFFICE
101 SOUTH CAPITOL
BOULEVARD, SUITE 208
BOISE. IDAHO 83702
TELEPHONE: [phone]
FACSIMILE: (208) 433-0'67
201 EAST CENTER STREET
POST OFFICE BOX 1391
POCATELLO, IDAHO 83204-1391
TELEPHONE [phone]'
FACSIMILE [phone]
IDAHO FALLS OFFICE
477 SHOUP AVENUE
SUITE 203AIDAHO FAL.LS, 1083402
TELEPHONE: (208) 528~61 0 1
FACSIMILE: [phone]www.racinelaw.net
COEUR D'ALENE OFFICE
250 NORTHWEST
BOULEVARD. SUITE t06ACOEUR D'ALENE. ID 83814
TELEPHONE: [phone]
SENDER'S E-MAIL ADDRESS:elo(Qracinelaw.net
ALL OFFICES TOLL FREE
(877) 232-6'0'
LOUIS F. RACINE (1917-2005)
WILL.IAM D. OLSON. OF COUNSEL
May 14,2009
Case No. IPC-E-09-11 ..~\.
Jean D. Jewell, Secretar
Idaho Public Utilities Commission
PO Box 83720
Boise, Idaho 83720-0074
Re:
Dear Ms. Jewell:
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Enclosed for fiing in the captioned matter, please find the origial and seven (7) copies of
Idaho Irrigation Pumpers Association, Inc. 's Comments in the above matter.
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Enclosures
cc: Service List
Sincerely,lr
ERIC L. OLSEN
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Eric L. Olsen, ISB #4811
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
P.O. Box 1391; 201 E. Center
Pocatello, Idaho 83204-1391
Telephone: [phone]
Fax: [phone]
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Attorneys for Idaho Irrgation Pumpers Association, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO IMPLEMENT POWER
COST ADJUSTMENT ("PCA") RATES
FOR ELECTRIC SERVICE FROM JUNE 1,
2009 THROUGH MAY 31, 2010
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CASE NO. IPC-E-09-11
IDAHO IRRGATION PUMPERS ASSOCIATION, INC.'S COMMENTS
IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. ("LIP A"), by and
though its attorneys, hereby respectfully submits the following comments with regard to
Idaho Power Company's ("IPC") anual Power Cost Adjustment ("PCA") filing.
COMMENTS
This is one of the largest requests for a PCA increase ever fied by IPC. It
amounts to an approximate 11.4% rate increase for system customers. This is far larger
than any general rate increase granted by the Commission in recent years. This increase
is being requested in a time of severe financial conditions that are impacting all customer
classes across IPC's whole service tertory.
Combining all of the relevant inputs and calculations, the PCA filings have been
set up by the Commission to be processed very quickly under modified procedure. On a
normal basis, there is very little time provided between the filing of a PCA case and the
IDAHO IRRGATION PUMPERS ASSOCIATION, INC.'S
COMMENTS-l
deadline for interested parties to file comments. Generally speaking, this condensed
timeframe is appropriate because, in most cases, the PCA filing is little more than a pass-
though of prudently incured costs or projections of future costs that IPC wil incur to
serve its customers. However, given the magntude of the requested increase, the limited
time for review, and the concerns that have arisen during the course of lIP A's limited
review with respect to IPC's actual power costs for a portion of the PCA period, the LIP A
believes that ths is an appropriate case to request under Rule of Procedure 203 that the
Commission order that a workshop or some other forum be convened to allow the lIP A
and other interested paries more time to review the prudency of IPC's actual power costs
incurred between April 2008 and March 2009.
The basis for this request arses from the lIP A's limited review of the power cost
data which lIP A had from the IPC-E-08-10 rate case for a portion of the PCA period
from April though June of 2008. The lIP A believed that it would be wise to review
these power costs given the unusual size of the PCA and the fact that actual power costs
make up a signficant portion ofthe PCA. IIPA's review of the April though June 2008
time perod generated 87 data requests focusing on the prudency of the transactions. The
IIPA also asked to get the actual power cost data from July of 2008 though March of
2009. These data requests have been filed with the Commission.
Given the looming deadline for comments and the time it would take IPC to
respond to the data requests, LIP A and IPC arranged a meeting to discuss the IIPA's
questions on May 12, 2009. This meeting was also attended by members of the
Commission Staff. IPC's verbal responses have been ver helpful and cleared up a
number of questions and concers which the LIP A had. IPC has subsequently provided
IDAHO IRRGATION PUMERS ASSOCIATION, INC.'S
COMMENTS-2
the lIP A with the power cost data for the remaining nine months of the PCA perod at
issue. However, the time limitations associated with the comment period and the vast
amount of data to be reviewed have precluded a full review of all data requests and the
concerns raised thereby. Likewise, the additional nine months of power cost data
provided yesterday has not been reviewed, let alone questions raised and reviewed with
IPC representatives.
The lIP A's concerns primarly relate to prudency of the actual power costs
incurred. Although, many of these concers have been eased through the informal
workshop, not all questions have been satisfactorily answered. For example, in Data
Request No. 15, IPC was asked:
15. On May 19, 2008 the Company began on-peak "Balance of the
Month" purchases from eight different Sources. The daily purchase
amounted to 3,200 MWH at a price of$194,600 or an average cost of
$60.81 per MWH. On May 23, 2008 the Company began on-peak
"Balance of the Month" sales to eight different Sources. The daily sales
also amounted to 3,200 MWH and were sold at a price of$118,660. This
relationship continued for the rest of the month. What caused the
Company to enter into these "Balance of the Month" purchases and
subsequent "Balance of the Month" sales at such different prices?
The basic question is why would the company star purchasing 3,200 MWH per day on
May 19th and then 4 days later sell that same power at a loss of$75,940 per day for each
day of the rest of the month. In this regard, IPC has indicated that it's "water forecast"
had changed, but the magntude of this change in just a 4-day perod is of concer.
Another example of the IIPA's concers can be found in Data Request No. 56:
56. On June 9, 2008, why was the Company operating Danskin after
HR16 when it appears that the hydro generation appeared to be backed-
off?
IDAHO IRRGATION PUMERS ASSOCIATION, INC.'S
COMMNTS-3
Additionally, the Company's natural gas fuel costs for its peaking units seem to
have been much higher in some months than found in the Company's forecast
(base case). For example, Exhibit 1 of the Company's fiing lists a base cost for
April 2008 gas costs as $293,778 ($201,811 for Danskin and $91,967 for Bennett
Mountain) while it lists an actual cost of$1,140,840 ($795,176 for Danskin and
$345,664 for Bennett Mountain).
The lIP A does not have a strong basis at this time for taking a position that theses
representative transactions were imprudent, but neither can it be said that what appears to
be inappropriate actions were in fact prudent without further inquiry. The inabilty to
resolve these issues is due to time constraints in processing PCA cases. Given the
unprecedented 11.4% increase, the lIP A believes that furter review of the actual power
costs is waranted in this case.
In conclusion, lIP A has concerns about the prudency of IPC 2008 through 2009
power costs that have not been resolved in the compressed time frame for PCA review.
The LIP A requests pursuant to Rule of Procedure 203 that the Commission order that a
workshop or some other forum be convened to allow the LIP A and other interested paries
more time to review the prudency of IPC' s actual power costs for this PCA perod. In
making this request, the lIP A is not seeking to delay or postpone implementation of the
new PCA rate. Rather, the LIP A wants to continue to have a forum to review the power
costs included in this PCA filing in order to verify IPC's requested PCA increase. If
some of these costs are ultimately found to be imprudent, an adjustment could be made to
reflect this in the next PCA filing.
IDAHO IRRGATION PUMPERS ASSOCIATION, INC:S
COMMENTS-4
DATED this 14th day of May, 2009.
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
~By ~i~1~é'
Idaho Irrgation Pumpers Assn., Inc.
IDAHO IRRGATION PUMPERS ASSOCIATION, INC.'S
COMMENTS-5
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CERTIFICATE OF MAILING
I HEREBY CERTIFY that on this 14th day of May, 2009, I sered a tre, correct
and complete copy of the foregoing document, to each of the following, via the method
so indicated:
Jean D. Jewell, Secretar
Idaho Public Utilities Commission
P.O. Box 83720
472 W. Washington Street
Boise, Idaho 83720-0074
j j ewell(fpuc.state.id. us
U Via Hand Deliver
Donovan E. Walker
Baron L. Kline
Idaho Power Company
P.O. Box 70
Boise, Idaho 83720-0070
dwalker(fidahopower.com
bklìne(fidahopower.com
(~ Via E-Mail
Scott Wright
Gregory W. Said
Idaho Power Company
P.O. Box 70
Boise, Idaho 83720-0070
swr ght(fidahopower. com
gsaid(fidahopower.com
(~ Via E-Mail
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IDAHO IRRGATION PUMERS ASSOCIATION, INC.'S
COMMENTS-6