20120302Application.pdf

JASON B. WILLIAMS
Corporate Counsel
jwilliamstaidahopower.com
esIDA~POR~
An IDACORP company
March 2, 2012
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilties Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-12-12
IN THE MA TTER OF THE APPLICA nON OF IDAHO POWER COMPANY
FOR AUTHORITY TO IMPLEMENT FIXED COST ADJUSTMENT ("FCA')
RATES FOR ELECTRIC SERVICE FROM JUNE 1, 2012, THROUGH MA Y
31,2013
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of Idaho Power
Company's Application in the above matter.
In addition, enclosed are nine (9) copies of the testimony of Zachary L. Harrs filed in
support of the Application. One copy of Mr. Harris' testimony has been designated as the
"Reporter's Copy." In addition, a disk containing a Word version of Mr. Harris' testimony is
enclosed for the Reporter.
Lastly, four (4) copies of Idaho Power Company's press release and customer
notice are also enclosed.
Very truly yours,
d~~~
JBW:kkt
Enclosures
JASON B. WILLIAMS (ISB No. 8718)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street
P.O. Box 70 (83702)
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
iwilliams~idahopower.com
Inordstrom~idahopower.com
RECEIVED
2DI2 MAR -2 PM~: 49
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO.IPC-E-12-12
AUTHORITY TO IMPLEMENT FIXED )
COST ADJUSTMENT ("FCA") RATES FOR ) APPLICATION
ELECTRIC SERVICE FROM JUNE 1, 2012, )
THROUGH MAY 31,2013. )
)
Idaho Power Company ("Idaho Power" or "Company"), in accordance with Idaho
Code §§ 61-502, 61-~03, and RP 052, hereby respectfully makes application to the
Idaho Public Utilities Commission ("Commission") for an order authorizing Idaho Power
to implement Fixed Cost Adjustment ("FCA") rates for electric service from June 1,
2012, through May 31,2013.
In support of this Application, Idaho Power represents as follows:
I. BACKGROUND
1 . Idaho Power and the Commission have long agreed that promotion of
cost-effective energy efficiency and demand-side management ("DSM") "is an integral
part of least-cost electric service." See, e.g., Order No. 30267 at 13. Traditional rate
APPLICATION - 1
design, however, discourages utilties that recover their fixed costs through each
kilowatt-hour sold from reducing their sales volume through investment in energy
efficiency and DSM.
2. Recognizing that "opportunities exist(ed) for improvements in operating
efficiency that would benefit the Company shareholders and its customers," the
Commission opened an investigation in Case No. IPC-E-04-15 to consider options for a
performance-based mechanism that adjusts revenues when annual energy
consumption is either above or below normaL. Order No. 29558 at 1, citing Order No.
29505 at 68-69. The FCA mechanism is the collaborative result of that docket.
3. In Order No. 30267 issued in Case No. IPC-E-04-15 on March 12,2007,
the Commission approved a Stipulation ("Stipulation") for the implementation of a three-
year FCA pilot program applicable to Residential Service (Schedules 1, 3, 4, and 5) and
Small General Service (Schedule 7) customers. On October 1, 2009, the Company
filed an application seeking authority to convert Schedule 54, the FCA tariff schedule,
from a pilot program to an ongoing, permanent program. Case No. IPC-E-09-28. The
Commission denied Idaho Power's request to make the FCA mechanism permanent
and, instead, extended the pilot program for an additional two-year period. Order No.
31063. This is the Company's second FCA adjustment filing since the Commission
issued the extension, and the Company's fifth overall FCA adjustment filng.
II. FIXED COST ADJUSTMENT MECHANISM
4. The FCA mechanism enables Idaho Power to separate, or "decouple," its
fixed cost revenues from its volumetric energy sales, and provides symmetry through a
surcharge or credit when fixed cost recovery per customer varies above or below a
APPLICATION - 2
Commission-established base. Put differently, the FCA provides a "true-up" of the
collection of fixed costs per customer to recover the difference between the fixed costs
actually recovered by the Company through rates and the fixed costs authorized for
recovery in the Company's most recent, applicable general rate case.
5. The FCA works identically for both the Residential and Small General
Service classes. For each class, the actual number of customers is multiplied by the
fixed cost per customer rate ("FCC"), which is established as a part of determining the
Company's allowed revenue requirement in a general rate case. The product of this
calculation establishes the "allowed fixed cost recovery" amount. This allowed fixed
cost recovery amount is then compared to the amount of fixed costs actually recovered
by Idaho Power. To determine the "actual fixed costs recovered" amount, the Company
takes weather-normalized sales for each class and multiplies that sales figure by the
fixed cost per energy rate ("FCE") as established in the Company's most recent
applicable general rate case. The difference between these two numbers (the "allowed
fixed cost recovery" amount minus the "actual fixed costs recovered" amount) is the
fixed cost adjustment for each class.
6. The Commission affirmed the FCA calculation methodology, finding that
the FCC and FCE values to be used in calculating the FCA "shall accurately represent
the level of fixed costs previously established by the Commission in IPC-E-08-10 and
remain at that level until such time as they can be more thoroughly examined and re-
established by the Commission in the context of the Company's next general rate case
filng." Case No. IPC-E-1 0-21, Order No. 32171 at 6.
APPLICATION - 3
II. PROPOSED 2012-2013 FCA RATE ADJUSTMENT
7. As part of its continuing efforts to promote energy efficiency and demand-
side management, Idaho Power actively pursued numerous, additional opportunities
throughout 2011. These efforts are more described at a high level in the accompanying
Direct Testimony of Zachary L. Harris ("Harris Testimony") and wil be more fully
described in the Company's Demand-Side Management 2011 Annual Report, which wil
be submitted on or before March 15, 2012.
8. As shown on Exhibit No.3 of the Harris Testimony, the FCA shows a
positive $8,837,352.59 for the Residential class and a positive $1,478,574.74 for the
Small General Services class, for a total amount of $10,315,927.33. The current FCA
rate surcharge does not allow the Company an opportunity to fully recover the total FCA
amount. Accordingly, with this Application, Idaho Power is proposing an FCA increase
of $1,159,520 for the Residential and Small General Service classes to allow the
Company an opportunity to recover its authorized revenues as determined by the FCA
mechanism. Harris Testimony, pp. 12-14.
9. To be consistent with the FCA methodology applied in all previous phases
of the FCA Pilot, the Company is proposing a combined rate increase for Residential
and Small General Service customers of 0.28 percent over current rates. This increase
equates to new FCA rates of 0.2028 cents per kilowatt-hour ("kWh") for the Residential
class and 0.2597 cents per kWh for the Small General Service class. Harris Testimony,
p.13.
10. Idaho Power requests that the FCA rate become effective on June 1,
2012, coincident with Idaho Power's Power Cost Adjustment and with the
APPLICATION - 4
commencement of seasonal rates. The Company requests that the FCA rate remain in
effect unti May 31,2013.
11. The proposed FCA tariff (clean version), Schedule 54, is attached hereto
as Attachment No.1 to this Application. The Schedule 54 tariff in legislative format is
attached hereto as Attachment No.2.
iv. MODIFIED PROCEDURE
12. Idaho Power believes that a technical hearing is not necessary to consider
the issues presented herein and respectfully requests that this Application be processed
under Modified Procedure, Le., by written submissions rather than by hearing. RP 201
et seq. The Company has, however, contemporaneously filed the Harris Testimony and
stands ready to present its testimony and support the Application if the Commission
determines that a technical hearing is required.
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
13. In conformance with RP 125, this Application wil be brought to the
attention of Idaho Power's customers by means of both a press release to media in the
Company's service area and a customer notice distributed in customers' bils, both of
which accompany this filing. The customer notice wil be distributed over the course of
the Company's current billng cycle, with the last notice being sent on April 23, 2012. In
addition to describing this fiing, these customer communications also describe
proposed rate changes associated with the Company's Langley Gulch power plant and
revenue sharing mechanism filings made simultaneously with this Application. Idaho
Power will also keep its Application, testimony, and exhibits open for public inspection at
its offices throughout the state of Idaho. The above procedures are deemed by Idaho
APPLICATION - 5
Power to satisfy the Rules of Practice and Procedure of this Commission; however, the
Company will, in the alternative, bring the Application to the attention of its affected
customers through any other means directed by this Commission.
14. Communications and service of pleadings with reference to this
Application should be sent to the following:
Jason B. Willams
Lisa D. Nordstrom
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
iwilliams~idahopower.com
Inordstrom~idahopower.com
Zachary L. Harris
Greg Said
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
zharriscæidahopower.com
gsaid~idahopower.com
VI. REQUEST FOR RELIEF
15. Idaho Power respectfully requests that the Commission issue an Order:
(1) authorizing that this matter be processed by Modified Procedure and (2) authorizing
Idaho Power to implement Fixed Cost Adjustment rates for electric service from June 1,
2012, through May 31,2013, as described above.
DATED at Boise, Idaho, this 2nd day of March 2012.
~ú&C · ~
J N B. WILLIAMS
tt fuo Power Company
APPLICATION - 6
BEFORE THE
IDAHO PUBLIC UTilITIES COMMISSION
CASE NO. IPC-E-12-12
IDAHO POWER COMPANY
ATTACHMENT NO.1
PROPOSED TARIFF
Idaho Power Company Fourth Revised Sheet No. 54-2
Cancels
Third Revised Sheet No. 54-2I.P.U.C. No. 29. Tariff No. 101
SCHEDULE 54
FIXED COST ADJUSTMENT
(Continued)
ACTUAL FIXED COSTS RECOVERED AMOUNT
The Actual fixed costs Recovered amount is computed by multiplying the weather-normalized
energy load for Residential and Small General Service customers by the appropriate Residential and
Small General Service FCE rate.
FIXED COST ADJUSTMENT
The Fixed Cost Adjustment (FCA) is the difference between the Allowed Fixed Cost Recovery
Amount and the Actual Fixed Costs Recovered Amount divided by the estimated weather-normalized
energy load for the following year for Residential and Small General Service Customers.
The monthly Fixed Cost Adjustment for Residential Service (Schedules 1, 3, 4, and 5) is 0.2028
cents per kWh. The monthly Fixed Cost Adjustment for Small General Service (Schedule 7) is 0.2597
cents per kWh.
EXPIRATION
The Fixed Cost Adjustment included on this schedule wil expire May 31, 2013.
IDAHO
Issued per Order No.
Effective - June 1, 2012
Issued by IDAHO POWER COMPANY
Gregory W. Said, Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, Idaho
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-12-12
IDAHO POWER COMPANY
ATTACHMENT NO.2
TARIFF IN LEGISLATIVE FORM
Idaho Power Company ::Fourth Revised Sheet No. 54-2
Cancels
I.P.U.C. No. 29. Tariff No. 101 SecondThird Revised Sheet No. 54-2
SCHEDULE 54
FIXED COST ADJUSTMENT
(Continued)
ACTUAL FIXED COSTS RECOVERED AMOUNT
The Actual fixed costs Recovered amount is computed by multiplying the weather-normalized
energy load for Residential and Small General Service customers by the appropriate Residential and
Small General Service FCE rate.
FIXED COST ADJUSTMENT
The Fixed Cost Adjustment (FCA) is the difference between the Allowed Fixed Cost Recovery
Amount and the Actual Fixed Costs Recovered Amount divided by the estimated weather-normalized
energy load for the following year for Residential and Small General Service Customers.
The monthly Fixed Cost Adjustment for Residential Service (Schedules 1, 3, 4, and 5) is
0.18010.2028 cents per kWh. The monthly Fixed Cost Adjustment for Small General Service
(Schedule 7) is 0.22730.2597 cents per kWh.
EXPIRATION
The Fixed Cost Adjustment included on this schedule will expire May 31, 2012~.
IDAHO
Issued per Order No. ~
Effective - June 1,20142.
Issued by IDAHO POWER COMPANY
Gregory W. Said, Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, Idaho