20130415DIRECT T. Tatum.pdf

1 will suspend the operation of two of its three demand
2 response programs in 2013. What impact does the suspension
3 of the demand response programs have on this year's PCA
4 Forecast?

5 A. As compared to last year's PCA Forecast,
6 reduced demand response incentive costs are forecast to
7 benefit Idaho customers by approximately $10.1 million on
8 an Idaho jurisdictional basis.

9 Q. Are there any other factors contributing to
10 the year-over--year difference in required PCA Forecast
11 revenue?

12 A. Yes. On June 29, 2012, the Langley Gulch
13 combined cycle power plant became operational. On July 1,
14 2012, the Company was authorized to change its base rates
15 to reflect the incremental revenue requirement associated
16 with the Langley Gulch plant. At the same time, the
17 Company reduced the Base Level NPSE included in base rates
18 by approximately $7.7 million to reflect the economic
19 benefits of this new plant. Because the PCA Forecast
20 represents the difference between the NPSE forecast from
21 the March Operating Plan and the Base Level NPSE recovered
22 in the Company's base rates, this change in Base Level NPSE
23 related to Langley Gulch serves to increase the deviation
24 measured by the PCA Forecast. In other words, when
25 comparing the year-over-year change in the PCA Forecast,
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Idaho Power Company
1 one must also consider that the Base Level NPSE was reduced
2 by approximately $7.7 million, resulting in a direct
3 increase to the measured deviation.
4 IV. HISTORY OF PA MITIGATION
5
Q. How does this year's PCA compare to
6 historical PCA rate adjustments?
7 A. To provide a meaningful comparison of PCA
8 rate adjustments over time, PCA amounts should be compared
9 without the revenue sharing component. While revenue
10 sharing is currently a component of the PCA, it was not a
11 component prior to the 2012-2013 PCA Year; therefore, the
12 inclusion of revenue sharing would not allow for an
13 equivalent comparison across all years.
14 This year's total PCA amount as measured from Base
15 Level NPSE, excluding revenue sharing, is $165.6 million
16 and represents a year-over-year change of $120.3 million or
17 approximately a 13.1 percent increase over current billed
18 revenue of $915.2 million. Since the inception of the PCA
19 in 1993, the single largest PCA increase was $244.4 million
20 in 2002 associated with the 2002-2003 PCA Year. The second
21 largest year-over-year change in PCA revenue was associated
22 with the PCA approved in 2001, which allowed recovery of an
23 incremental $217.2 million in PCA revenue phased in over
24 two rate adjustments. The first PCA rate adjustment
25 occurred on May 1, 2001, and allowed collection of $168.3
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Idaho Power Company