20140205Reply Comments.pdf

3Iffi*.
An IDACORP Companv
itilrf:i 'l
LISA D. NORDSTROM
Lead Gounsel
February 5,2014
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
47 2 W est Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-14-01
Schedule 19 Update - ldaho Power Company's Reply Comments
Dear Ms. Jewell:
Enclosed forfiling in the above matterare an originaland seven (7) copies of ldaho
Power Company's Reply Comments.
Very truly yours,
F. /) s--ttaIu^.9 Y[^u-r *
Lisa D. Nordstrom
LDN:csb
Enclosures
1221 W. ldaho St. (83702)
P.O. Box 70
Boise, lD 83707
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I nord strom@idahopower. co m
Attorney for ldaho Power Company
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY TO
IMPLEMENT A SCHEDULE 19
SUBSTATION ALLOWANCE AND
TMNSMISSION VESTED INTEREST
(TARTFF ADVTCE NO. 13-08)
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC.E-14-01
!DAHO POWER COMPANY'S
REPLY COMMENTS
ldaho Power Company ("ldaho Powe/' or "Company") hereby respectfully
submits to the ldaho Public Utilities Commission ("Commission") its Reply Comments in
response to Comments submitted by the lndustria! Customers of Idaho Power (.lClP")
on January 28,2014.
t.
THE COMPANY'S PROPOSED LANGUAGE OUTLINES HOW REQUESTS FOR
NEW TRANSMISSION AND/OR SUBSTATION FACILITIES ARE TREATED AND IS
NOT APPROPRIATELY INCLUDED IN RULE H.
First, although lClP impliesl that Rule H was the appropriate location to address
requests for new transmission and/or substation facilities, it is important for the
' tClP states, "Rather than amend its Rule H to incorporate the Commission's findings, ldaho
Power has chosen to modify the industrial rate Schedule 19." lClP Comments, p. 1.
IDAHO POWER COMPANY'S REPLY COMMENTS - 1
Commission to understand it was never the Company's intent that the new language
would be included in Rule H. Rule H governs the Company's treatment of installations
or alterations to the Company's distribution system. Because Rule H specifically states
it "does not apply to transmission or substation facilities"2 and because Schedule 19
customers are sometimes required to fund Company installations of transmission and/or
substation facilities, it is appropriate the new language describing any substation
allowances or possible transmission vested interest be explained outside of Rule H and
contained within Schedule 19. Schedule 19 already states:
lf additional distribution facilities are required to supply the
desired service, those facilities provided for under Rule H will
be provided under the terms and conditions of that rule. To
the extent that additional facilities not provided for under
Rule H, including transmission and/or substation facilities,
are required to provide the requested service, special
arrangements will be made in a separate agreement
between the Customer and the Company.'
The proposed new Schedule 19 language starts with the heading "Special
Arrangements for Substation Allowances and/or Transmission Vested lnterest" to
differentiate it from the distribution-related terms contained within Rule H. The
proposed new language sets forth certain considerations which must be included in the
special arrangements explained in the "Availability" section of Schedule 19.
Further, the Company's proposed Schedule 19 tariff modifications assume
nothing has changed in regards to Rule H. Moreover, the new Schedule 19 provisions
do not limit or chanqe how an industrial custome/s request for installations of
distribution facilities is treated under Rule H. Although lClP expresses concern that
'|.P.U.C. No.29, Tariff No. 101, Rule H New Service Attachments and Distribution Line
lnstallations or Alterations, First Revised Sheet No. H-1.
3 l.P.U.C. No. 29, Tariff No. 101, Schedule 19 Large Power Service, First Revised Sheet No. 19-
1.
IDAHO POWER COMPANY'S REPLY COMMENTS - 2
somehow a primary voltage level Schedule 19 customer requesting a distribution line
extension under Rule H would not receive the benefit of all of the provisions contained
within Rule H,a this concern is unfounded. lf a Schedule 19 customer requires a
distribution line be installed, that installation would be handled in accordance with Rule
H (and subject to the Vested lnterest provisions contained therein). Likewise, if a
Schedule 19 customer's request for service requires that transmission facilities be
installed, that portion of the request would be handled in accordance with proposed
Schedule 19 provisions (and subject to the Transmission Vested lnterest provisions
contained therein).
lClP states "it would be discriminatory for Idaho Power to restrict such benefits to
just transmission level industrial customers and not also to primary level industrial
customers."S lt should be noted that the proposed language does not limit either the
allowance or vested interest provisions for Schedule 19 customers to only transmission
level customers; rather, it limits the provisions to transmission and/or substation
facilities. When the lClP points to Glanbia as an example, it should be remembered
that Glanbia is not a transmission leve! customer; it is a primary service Ievel customer,
as are the majority of the Company's Schedule 19 customers.
[.
THE COMPANY DOES NOT EARN A RETURN ON A GONTRIBUTION IN
AID OF CONSTRUCTION ("CIAC") BECAUSE THESE CONTRIBUTIONS
DIRECTLY OFFSET PLANT AND ARE NOT INCLUDED IN RATE BASE.
ICIP believes the Commission's Order No. 32893 authorizing Schedule 19
customers to receive a substation allowance over a period of five years constitutes
o "ldaho Power is making the vested interest rights only available when a customer installs
transmission voltage levels . . . the vested interest rights for a Schedule 19 customer should extend to
Schedule 19 customers of all voltage levels." lClP Comments, p. 3.
s ld.
IDAHO POWER COMPANY'S REPLY COMMENTS - 3
disparate treatment and suggests the so-called inequity might be "ameliorated
somewhat by having the un-refunded portion of the allowance accrue interest."6 ICIP
misunderstands the accounting associated with a refundable CIAC. The Company is
not "holding" these funds with an opportunity to earn interest or a return; rather, the
funds are immediately deployed for the construction of the requested plant and
equipment. The Company will not have an opportunity to earn a return on the
requested plant and equipment until the time the allowance is refunded. That is, the
Company increases its investment in plant when it issues payment to the customer in
accordance with Commission Order No. 32893 and the proposed Schedule 19
language. lt is not appropriate to pay interest because the Company is not holding
cash, but rather will have used those funds to complete the construction of the
requested facilities and the resulting impact to rate base is zero until the refunds are
issued.
lll.
THE COMPANY'S PROPOSED METHOD FOR ISSUING
REFUNDS IS CONSISTENT WITH THE COMMISSION'S DIRECTIVE
FOR THE ALLOWANGE TO BE BASED ON SUSTAINED USAGE.
lClP argues that the Company "did not use the exact formula for calculating the
size of the Schedule 19 allowance from the Commission's order,"7 pointing out the
Company's tariff language says "change" instead of "increase." The Company met with
Commission Staff to work through examples of how a customer might receive refunds
based on the Commission's ordered formula.s As the original formula was written, the
yearly allowance amount would be adjusted upward but never downward based on the
6lClP Comments, p. 2.
'rd.
t Order No. 32893, p. 8, footnote 1.
IDAHO POWER COMPANY'S REPLY COMMENTS - 4
realized usage of the customer. However, the Commission stated the customer would
receive a full allowance "as long as maximum load is maintained."e Because the result
of the formula is added to the prior yea/s allowance to determine the refund to the
customer, if the Company did not use the word "chaflg€," it would suggest a Customer
could continue to receive a refund based on the usage established during the first year
of service, regardless of whether or not that load was maintained. The formula is an
adjustment to the allowance received in the prior year, not a stand-alone determination
of the annual allowance amount. This modification does not, as lClP suggests, indicate
that a customer would "have an obligation to pay ldaho Power;"1o it means that an
allowance paid one year may be smaller than the allowance paid in the prior year if a
custome/s usage is less than it was the prior year. This result is consistent with the
Commission's discussion that "increases in load less than the amount projected will
result in smaller credits."11
tv.
CONCLUSION
The Company believes its proposed tariff language encapsulates what was
directed by the Commission in Order Nos. 32893 and 32914, and requests the
Schedule 19 tariff modifications be approved as filed.
Respectfully submitted this sth day of February 2014.
n Order No. 32893, p. 8.
'o lclP comments, p. 3.
" Order No. 32893, p. 8.
IDAHO POWER COMPANY'S REPLY COMMENTS - 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this Sth day of February 20141 served a true and
correct copy of IDAHO POWER COMPANY'S REPLY COMMENTS upon the following
named parties by the method indicated below, and addressed to the following:
Commission Staff
Weldon B. Stutzman
Deputy Attomey Genera!
!daho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
lndustrial Customers of Idaho Power
Peter J. Richardson
Gregory M. Adams
RICHARDSON ADAMS, PLLC
515 North 27th Street
Boise, ldaho 83702
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IDAHO POWER COMPANY'S REPLY COMMENTS - 6