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Home My WebLink About20130315Application.pdfBe . An IDACORP Company .......:R5 PM 12: 37 LISA D. NORDSTROM Lead Counsel Inordstrom(idahopower.com ILl l! March 15, 15, 2013 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilities Commission 472 West Washington Street P.O. Box 83720 Boise, Idaho 83720-0074 Re: Case No. IPC-E-13-06 Fixed Cost Adjustment Rates for June 1, 2013, Through May 31, 2014 - Idaho Power Company's Application and Testimony Dear Ms. Jewell: Enclosed for filing in the above matter please find an original and seven (7) copies of Idaho Power Company's Application. In addition, enclosed are nine (9) copies of the testimony of Zachary L. Harris filed in support of the Application. One copy of Mr. Harris's testimony has been designated as the "Reporter's Copy." In addition, a disk containing a Word version of Mr. Harris's 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, 0 Lisa D. Nordstrom LDN :csb Enclosures 1221 W. Idaho St. (83702) P.O. Box 70 Boise, ID 83707 LISA D. NORDSTROM (ISB No. 5733) JULIA A. HILTON (ISB No. 7740) Idaho Power Company (83702) 1221 West Idaho Street P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-5825 Facsimile: (208) 388-6936 Inordstromidahopower.com ihiItonidahopower.com 2013MAR15 PMI2:38 iihJ '-S 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-13-06 AUTHORITY TO IMPLEMENT FIXED ) COST ADJUSTMENT ("FCA") RATES FOR ) APPLICATION ELECTRIC SERVICE FROM JUNE 1, 2013, ) THROUGH MAY 31, 2014. ) Idaho Power Company ("Idaho Power" or "Company"), in accordance with Idaho Code §§ 61-502 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, 2013, through May 31, 2014. In support of this application ("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 APPLICATION -1 part of least-cost electric service." See, e.g., Order No. 30267 at 13. Traditional rate design, however, discourages utilities that recover their fixed costs through each kilowatt-hour ("kWh") sold from reducing their safes 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 sought 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. During the fifth year of the pilot program, the Company filed an application on October 19, 2011, seeking authority to convert the FCA to an ongoing, permanent program. Case No. IPC-E-1 1-19. Order No. 32505, issued March 30, 2012, approved the Company's request to convert the FCA to a permanent program for Residential and Small General Service customers. The Commission's subsequent Order No. 32731 in that case directed that the FCA mechanism continue with its existing methodology. 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 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 level of fixed costs actually recovered by the Company through rates and the level of 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 the most recent general rate case. The product of this calculation establishes the "authorized fixed cost recovery" amount. This authorized 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 multiplies the weather-normalized sales for each class 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 "authorized fixed cost recovery" amount minus the "actual fixed costs recovered" amount) is the fixed cost adjustment for each class. APPLICATION -3 III. PROPOSED 2013-2014 FCA RATE ADJUSTMENT 6.The determination of the FCA amount and corresponding rates are described in the Direct Testimony of Zachary L. Harris ("Harris Testimony") contemporaneously filed with this Application. 7.As shown on Exhibit No. 3 of the Harris Testimony, the FCA deferral balance reflects $8,362,974.20 for the Residential class and $533,387.45 for the Small General Services class, for a total amount to be recovered of $8,896,361.65. Harris Testimony, pp. 8, 10. The proposed FCA deferral balance is an incremental decrease below the FCA balance currently collected in customers' rates. Accordingly, with this Application, Idaho Power is proposing an FCA rate decrease 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. The proposed FCA rates would result in a reduction to total billed revenue, including the FCA, for the affected customer classes of 0.30 percent. Harris Testimony, p. 12. 8.To be consistent with the FCA methodology applied in previous phases of the FCA, and in compliance with Order No. 32505 wherein the Commission directed that the FCA deferral balance be recovered or refunded equally between the Residential and Small General Service customer classes, the Company is proposing a combined rate decrease for Residential and Small General Service customers of 0.30 percent below current rates. This decrease equates to new FCA rates of 0.1770 cents per kWh for the Residential class and 0.2262 cents per kWh for the Small General Service class. Harris Testimony, p. 10. APPLICATION -4 9. Idaho Power requests that the FCA rate become effective on June 1, 2013, coincident with Idaho Power's Power Cost Adjustment and with the commencement of seasonal rates. The Company requests that the FCA rate remain in effect until May 31, 2014. 10.The proposed FCA tariff (clean version), Schedule 54, is attached hereto as Attachment I to this Application. The Schedule 54 tariff in legislative format is attached hereto as Attachment 2. IV. MODIFIED PROCEDURE 11.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; i.e., 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 12.In conformance with RP 125, this Application will 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' bills, both of which accompany this filing. The customer notice will be distributed over the course of the Company's current billing cycle, with the last notice being sent on or about April 23, 2013. Idaho Power will also keep its Application, testimony, and exhibits open for public inspection at its offices throughout the state of Idaho. Idaho Power believes the above procedures satisfy the Rules of Practice and Procedure of this Commission; however, APPLICATION -5 the Company will, in the alternative, bring the Application to the attention of its affected customers through any other means directed by this Commission. 13.Communications and service of pleadings with reference to this Application should be sent to the following: Lisa D. Nordstrom Regulatory Dockets Idaho Power Company P.O. Box 70 Boise, Idaho 83707 lnordstromidahopower.com docketsidahoDower.com Zachary L. Harris Greg Said Idaho Power Company P.O. Box 70 Boise, Idaho 83707 zharrisidahopower.com Qsaid(idahopower.com VI. REQUEST FOR RELIEF 14.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, 2013, through May 31, 2014, as described above. DATED at Boise, Idaho, this 15 th day of March 2013. LISA D. NORDSTROM Attorney for ldahtPower Company APPLICATION -6 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-13-06 IDAHO POWER COMPANY ATTACHMENT I PROPOSED TARIFF Idaho Power Company Fifth Revised Sheet No. 54-2 Cancels I.P.U.C. No. 29, Tariff No. 101 Fourth 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 0.1770 cents per kWh. The monthly Fixed Cost Adjustment for Small General Service (Schedule 7) is 0.2262 cents per kWh. EXPIRATION The Fixed Cost Adjustment included on this schedule will expire May 31, 2014. IDAHO Issued by IDAHO POWER COMPANY Issued per Order No. Gregory W. Said, Vice President, Regulatory Affairs Effective - June 1, 2013 1221 West Idaho Street, Boise, Idaho BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-13-06 IDAHO POWER COMPANY ATTACHMENT 2 TARIFF IN LEGISLATIVE FORMAT I Idaho Power Company Fourthfi! Revised Sheet No. 54-2 Cancels I.P.U.C. No. 29, Tariff No. 101 ThirdFourth 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 0.20281770 cents per kWh. The monthly Fixed Cost Adjustment for Small General Service (Schedule 7) is 0.25972262 cents per kWh. EXPIRATION The Fixed Cost Adjustment included on this schedule will expire May 31, 20134. IDAHO Issued by IDAHO POWER COMPANY Issued per Order No. 32541 Gregory W. Said, Vice President, Regulatory Affairs Effective - June 1, 20123 1221 West Idaho Street, Boise, Idaho