20131010Petition for Reconsideration.pdf

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An IDACORP Company
LISA D. NORDSTROM
Lead Counsel
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October 10,2013
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-13-09
Glanbia Foods, lnc.'s Petition - ldaho Power Company's Petition for
Clarification and/or Reconsideration of Order No. 32893
Dear Ms. Jewe!!:
Enclosed forfiling in the above matterare an originaland seven (7) copies of ldaho
Power Company's Petition for Clarification and/or Reconsideration of Order No. 32893.
Sincerely,
&-*n(*u",-.-
Lisa D. Nordstrom
LDN:csb
Enclosures
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
LISA D. NORDSTROM (lSB No. 5733)
JULIA A. HILTON (lSB No. 7740)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I no rd strom@ idahopower. co m
i h ilto n@ ida hopower. com
Attorneys for ldaho Power Company
IN THE MATTER OF THE PETITION OF
GLANBIA FOODS, INC. FOR
APPROVAL OF A LINE EXTENSION
ALLOWANCE PURSUANT TO IDAHO
POWER COMPANY'S RULE H.
,'+:, fl1'f t ni
CASE NO. IPC-E-13.09
IDAHO POWER COMPANY'S
PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF
oRDER NO. 32893
BEFORE THE IDAHO PUBLIC UTILITIES COMMISS]ON
ldaho Power Company ("ldaho Power" or "Company"), petitioner herein, pursuant
to RP 33,325, and 331, ef seg., and ldaho Code S 61-626, respectfully petitions the
ldaho Public Utilities Commission ("Commission") for clarification and/or reconsideration
of final Order No. 32893, dated September 19, 2013, issued in Case No. IPC-E-13-09
("Orded'). ldaho Power seeks clarification of the following issues: (1) calculation of the
allowance, (2) reservation of excess capacity and requirements of Glanbia Foods, lnc.
("Glanbia") to provide forecasted load information, and (3) collection of Vested lnterest
payments from customers subject to the jurisdiction of the Federal Energy Regulatory
Commission ("FERC"). To the extent that the Commission believes the requested
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO, 32893. 1
clarification goes beyond the scope of a clarification, then ldaho Power respectfully
requests reconsideration of the issues identified herein. See RP 325.
I. BACKGROUND
On April 5, 2013, Glanbia filed its Petition with the Commission asking for
approval of an allowance pursuant to ldaho Power's Rule H. Glanbia asked the
Commission to require the Companyto (1) provide it an allowance of $2,318,000, (2)
provide it with Vested lnterest in the newly upgraded facilities, (3) compensate it for the
freed up capacity in the abandoned facilities, and (4) competitively bid the project and
provide Glanbla with audited records of the same.
On April 26, 2013, the Company filed its response to Glanbia's Petition. The
Company clarified its treatment for Large General Service, Schedule 19, customers'
requests for transmission and substation upgrades, differentiating these requests from
the types of requests handled by the Company under Rule H. The Company asserted
that Rule H was not applicable and Glanbia's request should be denied.
On June 5,2013, the Commission Staff ("Staff') and Glanbia filed Comments in
this case. Staff argued for an allowance for Glanbia based on an embedded rate
methodology which they had previously supported in Case No. IPC-E-08-22 and argued
the Company should provide a Vested lnterest on the transmission line. Glanbia
reiterated its positions stated in its Petition.
On June 14,2013, the Company filed its Reply Comments, maintaining that both
Staff and Glanbia ignored the fact that Rule H does not apply to transmission or
substation facilities. The Company clarified its position regarding treatment of
customers' requests for transmission and substation upgrades, reiterating that Glanbia
had been treated in a manner consistent with past policies and practices for Schedule
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893 - 2
19 customers. The Company further clarified what types of distribution facilities
Schedule 19 customers use and how those facilities are treated under Schedule 19,
Rule Hl, and Rule M2.
On July 11, 2013, the Commission issued Order No. 32848 directing the parties
to "file written comments discussing an appropriate calculation of an allowance for
G !an bia's proposed electric facilities upgrade. "3
On August 22, 2013, the Company and Glanbia filed Additional Comments and
Staff filed Supplemental Comments. ln its Additional Comments, the Company
recommended, if the Commission determined an allowance was appropriate, a fixed
allowance of $197,202; Staff recommended a scalable, per megawatt ("MW") allowance
for a total allowance for Glanbia of $1 ,248,946; and Glanbia recommended the entire
cost of the substation, $3,784,127, be provided as an allowance.
On September 19, 2013, the Commission issued its final Order No. 32893
directing the Company to (1) provide Glanbia with an allowance of $1 ,248,946, (2)
implement a new Schedule 19 allowance policy, (3) grant Glanbia a Vested lnterest in
the transmission facilities being constructed for a period of five years, and (4) ensure
that Glanbia has access to excess capacity in the facilities for no less than five years.
II. REQUESTED CLARIFICATION
The Company understands that Commission Order No. 32893 creates a new
substation allowance for Schedule 19 customers and it seeks clarification from the
Commission as to how the allowance wil! be applied. The Company also seeks
1 |.P.U.C. No.29, Tariff No. 101, Rule H New Service Attachments and Distribution Line
lnstallations or Alterations.
2 t.p.U.C. No. 29, Tariff No. 101, Rule M Facilities Charge Service.
3 ln the Mafter of the Petition of Gtanbia Foods, lnc. for Approval of a Line Extension Allowance
Pursuant to ldaho Power Company's Rule H, Case No. IPC-E-13-09, Order No. 32848 at 7.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893 - 3
clarification on the amount of excess capacity to be reserved and affirmation that
Glanbia will provide ldaho Power with additiona! information in order to allow the
Company to set aside such capacity for Glanbia. Finally, the Company seeks
confirmation from the Commission that Vested lnterest payments will not be collected
from FERC jurisdictional customers.
A. Calculation of the Schedule 19 Allowance.
ln its Order, the Commission states the total allowance will be "$65,734 per MW
times the number of megawatt capacity being added by the customer, resulting in an
allowance to Glanbia in the amount of $1 ,248,946."4 The Company respectfully notes
that Glanbia is only adding 7 MW of load to the system, not 19 MW. The Company is
currently able to serve Glanbia with 12 MW of capacity from existing facilities-facilities
that Glanbia did not pay for upfront and that are being recovered through rates paid by
Glanbia and other customers. lf the calculation is based upon a per MW basis added
by the customer, then using $65,734 per MW times the 7 MW of projected load added,
the resulting maximum possible allowance would be $490,138.
The Company believes a scalable allowance is appropriately applied based on
incremental load added by the customer at a specific premise. Otherwise, if every
industrial customer who requested an upgrade received an allowance based on existing
load plus new load, the practice could lead to duplicative allowances over time and an
inappropriate building of rate base. The Company believes that Glanbia already
received a benefit akin to an allowance when it was not required to fund a substation
Contribution in Aid of Construction ("C!AC") in order to receive the 12 MW of existing
capacity. While the record may not have been clear on this point, Glanbia is not
o Case No. IPC-E-13-09, Order No. 32893 at 11.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893 - 4
relocating its load to a new site; rather, it requested a new transmission line and
substation be constructed in lieu of a different, distribution only option to provide an
additional 7 MW of load at the same customer premise.
While the Commission accepted Staff's recommendation on how to calculate a
Schedule 19 allowance, the Commission may have based its determination on a
misunderstanding regarding how other utilities might treat an expansion of this nature.
ln its Supplemental Comments, Staff states, "Furthermore, such an approach is
consistent with the industrial line extension policies of both Avista and PacifiCorp,
whose allowances increase with the size of the customer."S Based upon ldaho Power's
conversations with the other ldaho electric utilities, Staffs recommended allowance
based on the full 19 MW of load is not consistent with how either Avista or PacifiCorp
would apply an allowance under the circumstances as they exist in this case. Both
Avista and PacifiCorp indicated an allowance in this case would have been based on
the 7 MW of incremental Ioad under their line extension policies, not the combined total
of existing load plus the incremental load.
The Company believes this clarification is important not only in how it will
calculate Glanbia's allowance, but to ensure a consistent and prudent approach for
other requests going forward. A determination that allowances only apply to new or
incremental load wil! ensure the Company is not duplicating previous allowances,
overbuilding its system, or inappropriately adding to its rate base.
u Case No. IPC-E-13-09, Staff Supplemental Comments at 7.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893 - 5
B. Beselvation of "Excess Gapacitv."
The Commission's Order states, "ldaho Power must ensure that Glanbia has
access to excess capacity in the facilities for no less than five years."6 The Company
stated in its Reply Comments that its "practice is to maintain capacity for a project that
has been funded by an offsetting CIAC for a reasonable period of time,"7 and the project
requested by Glanbia was to provide 19 MW of capacity (comprised of the existing 12
MW of capacity plus the additional 7 MW requested).
1. ."
The Company has previously and will continue to commit to providing the
customer with up to 19 MW of service for five years while Glanbia's load comes on-line.
This is consistent with the Company's treatment of similar requests, as the Company
does not "reserve capacity" in facilities paid for by a customer above and beyond a
customer's planned load because, as described in more detail below, such a
reservation above a customeds planned load would be inconsistent with the
requirements to reserve transmission capacity set forth in the Company's Open Access
Transmission Tariff ("OATT'). The Company seeks clarification from the Commission
that it will be required to provide service to Glanbia for up to the requested 19 MW, but
not the total capacity of the proposed transmission line section and substation facilities
paid for by Glanbia, for a period of five years.s Glanbia would be entitled to up to 19
MW of service with no additional costs to be borne by Glanbia for that five-year period.
u Order No. 32893 at 11.
'Case No. IPC-E-13-09, ldaho Power Company's Reply Comments at 12.
I The proposed transmission line section will be constructed with a conductor having 144.6
megavolt ampere (.MVA') of capacity. The proposed substation transformer will have a nameplate
capacity of 30 MVA.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893.6
This treatment would be consistent with the Commission's Order to provide
Glanbia with the opportunity to receive Vested lnterest payments from other customers
who may connect to the transmlssion facilities paid for by Glanbia. !f the Commission
were to order the Company to reserve the entire capacity of the transmission facilities,
there would be no opportunity for Glanbia to receive Vested lnterest payments because
the Company would be precluded from allowing another customer to attach to those
facilities. lf the Commission intended for the Company to reserve the entire capacity of
the facilities paid for by Glanbia, the Company seeks reconsideration of the
Commission's Order requiring the Company to provide an opportunity for Vested
lnterest Refunds for Glanbia.
2. OATT Requirements.
lf the Commission intends for the Company to reserve excess capacity for
Glanbia, the Company would require Glanbia to provide an annually updated load
forecast for the five-year Vested lnterest period to ensure compliance with ldaho
Poweds OATT. This forecast allows ldaho Power to reserve the required transmission
(establish a transmission network set aside) for Glanbia's load service under Part Ill of
ldaho Power's OATT.e An annually updated forecast for the five-year period would
allow Idaho Powerto designate resources and loads, as required in Section28.2 of the
Company's OATT. Additionally, Glanbia would need to provide ldaho Power with timely
written notice of material changes in its load forecast. Section 2 of ldaho Powe/s
t See ldaho Power's OATT, Part lll, SS 28.2, 31.6 (August 5, 2O1O),
http://wvnv.oasis.oati.com/IPCO/lPCOdocs/lPC OATT lssued 2012-11-06.pdf. Section 28.2 states that
the Transmission Provider, ldaho Power, must designate resources and loads for its Native Load
Customers, here Glanbia, in the same manner as a Network Customer. Section 3'1.6 states that Network
Customers must provide the Transmission Provider, ldaho Power, with annual updates and timely written
notification of material changes.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893 - 7
Transmission Business Practice defines a material change as an increase of greater
than 1 MW.1o
C. Gollection of Vested lnterest Pavments.
The Commission also directed ldaho Power to grant Glanbia a Vested lnterest in
its transmission facilities.ll While ldaho Power can grant a Vested lnterest for
customers taking ldaho jurisdictional service, this is problematic for FERC-jurisdictional
transmission and interconnection service customers.
The line at issue is a 138 kilovolt transmission line.12 FERC has exclusive
jurisdiction over the transmission or sale of electric energy in interstate commerce and
"a!! facilities for such transmission or sale of electric energy."13 FERC requires all public
utilities that own, control, or operate transmission facilities to have an open access
transmission tariff, the goal of which is to eliminate undue discrimination or preference.la
As described in the Company's Reply Comments, ldaho Power cannot apply a Vested
lnterest charge to FERC-jurisdictional customers.ls Any requirement for FERC-
jurisdictional transmission customers to pay a Vested lnterest payment to Glanbia would
need to be approved by FERC and included in ldaho Powe/s OATT, approval for which
10 ldaho Power's Transmission Business Practice S 2 (February 25, 2013),
http://www.oasis.oati.com/IPCO/IPCOdocs/lPC BPJINAL Section 2 Network lntegration Transmission Service
v15 02-25-2013.odf
" Order No. 32893 at 10-11.
" FERC defines a "transmission line" as "A system of structures, wires, insulators and associated
hardware that carry electric energy from one point to another in an electric power system. Lines are
operated at relatively high voltages varying from 69 kV up to 765 kV, and are capable of transmitting large
quantities of electricity over long distances." Federal Energy Regulatory Commission Reliability
Standards, Glossary of Terms at 71 (February 11, 2013).
" 16 u.s.c. S 824(b)(1).
1a Non-discriminatory Open Access Iransmlssion Tariff,18 CFR 35.28(a), (c) (2012); Preventing
Undue Discrimination and Preference in Transmission Service, Order No. 890, FERC Stats. & Regs. fl
31 ,241 , order on reh'7, Order No. 890-A, 121 FERC 1[ 61,297 (2007).
'u ldaho Power Company's Reply Comments at 1O-11.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893 - 8
would require a showing that the Vested lnterest payment was just, reasonable,
nondiscriminatory, and not a barrier to access.
Therefore, the definition of eligible customers should specifically exclude FERC-
jurisdictional transmission and interconnection service customers. The Company seeks
confirmation from the Commission that ldaho Power would not be required to collect a
Vested lnterest payment from a FERC-jurisdictiona! customer. The Company will
collect Vested lnterest payments for a period of five years from its retail customers
and/or Public Utility Regulatory Policies Act of 1978 generators whose requests for
service require connection to the transmission line paid for by Glanbia, provided that the
Commission did not intend for the entire capacity of the transmission line be reserved
for Glanbia.
I!I. CONCLUSION
Commission Rule of Procedure 331 requires that ldaho Power state the nature
and extent of evidence or argument it will present or offer if reconsideration is granted.
Should the Commission determine that any of the requested issues for clarification are
more appropriate for reconsideration, ldaho Power believes that the evidentiary record
could be augmented by written comments or oral argument at the discretion of the
Commission, and the Company is prepared to do so in support of its Petition.
ldaho Power respectfully requests the Commission clarify and/or reconsider
Order No. 32893 to clarify that:
o The Schedule 19 allowance will be calculated based on the
additiona!/incremental load ;
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893.9
o The reservation of excess capacity in transmission facilities be based
on the customer's planned load, allowing additional capacity to be available for Vested
lnterest Refunds by subsequent customers interconnecting;
. Glanbia will provide the Company with an annually updated load
forecast for a period of five years; and
o Vested lnterest payments will be collected from customers taking
ldaho-jurisdictional transmission service, but not collected from customers subject to
FERC jurisdiction.
Respectfully submitted this 10h day of October 2013.
IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893 - 1O
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this lOth day of October 2013 t served a true and
correct copy of IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893 upon the following named
parties by the method indicated below, and addressed to the following:
Gommission Staff
Weldon B. Stutzman
Deputy Attomey General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-007 4
Glanbia Foods, lnc.
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
P.O. Box 7218
Boise, ldaho 83707
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IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION
AND/OR RECONSIDERATION OF ORDER NO. 32893 - 11