20140314Application.pdf

SI'ffi*.
An IDACORP Company
LISA D. NORDSTROM
Lead Counsel
I [e-mail]
March 14,2014
LDN/KKI
Enclosures
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, ldaho 83720-007 4
Re: Case No. IPC-E-14-03
Fixed Cost Adjustment Rates for June 1, 2014, Through May 31, 2015 -
ldaho Power Company's Application and Testimony
Dear Ms. Jewell:
Enclosed forfiling in the above matter please find an origina! and seven (7) copies
of ldaho Power Company's Application.
ln addition, enclosed are nine (9) copies of the testimony of Zachary L. Hanis filed in
support of the Application. One copy of Mr. Harris's testimony has been designated as the
'Reporter's Copy." ln addition, a disk containing a Word version of Mr. Harris's testimony
is enclosed for the Reporter.
Lastly, four (4) copies of ldaho Power Company's press release and customer
notice are also enclosed.
Very truly yours,
K"*OW^/-+*N
Lisa D. Nordstroni
1221 W. ldaho St. (83702)
PO. Box 70
8oise. lD 83707
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street
P.O. Box 70 (83702)
Boise, ldaho 83701
Telephone: [phone]
Facsimile: [phone]
I no rd strom @ id a ho power. co m
Attorney for ldaho Power Company
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO IMPLEMENT FIXED
cosT ADJUSTMENT ("FCA") RATES FOR
ELECTRIC SERVICE FROM JUNE 1,2014,
THROUGH MAY 31,2015,
1,2014, through May 31 ,2015.
ln support of this Application,
t.
1. ldaho Power and the
cost-effective energy efficiency and
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
ldaho Power Company ("ldaho Powe/' or "Company"), in accordance with ldaho
Code SS 61-5O2, and RP 052, hereby respectfully makes application ("Application") to
the ldaho Public Utilities Commission ("Commission") for an order authorizing ldaho
Power to implement Fixed Cost Adjustment ("FCA") rates for electric service from June
CASE NO. IPC-E-14-03
APPLICATION
ldaho Power represents as follows:
BACKGROUND
Commission have long agreed that promotion of
demand-side management (.DSM") "is an integral
APPLICATION.l
part of least-cost electric service." See, e.9., Order No. 30267 at 13. Traditional rate
design that recovers fixed costs through each kilowatt-hour ("kwh") sold discourages
utilities 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. !PC-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. ln Order No. 30267 issued in Case No. IPC-E-O4-15 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 ldaho Powefs 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 yearof the pilot program, the Companyfiled an application in
Case No. IPC-E-11-19 on October 19, 2011, seeking authority to convert the FCA to an
ongoing, permanent program. Order No. 32505, issued March 30,2012, approved the
Company's request to convert the FCA to a permanent program for the Residential and
APPLICATION - 2
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 ldaho 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 "actua! fixed costs recovered"
amount) is the fixed cost adjustment for each class.
APPLICATION - 3
III. PROPOSED 2014.2015 FCA RATE ADJUSTMENT
6. The determination of the FCA amount and corresponding rates are
described in the accompanying Direct Testimony of Zachary L. Harris ("Harris
Testimony").
7. As shown on Exhibit No. 2 of the Harris Testimony, the FCA shows
$14,339,006.18 for the Residential class and $573,4g6.34for the Small General Service
class, for a total amount of $14,912,442.52. Harris Testimony, p 7. The proposed FCA
deferra! balance is an incremental increase above the current FCA balance currently
collected in customers' rates. Accordingly, with this Application, ldaho Power is
proposing an FCA rate increase for the Residential and Small Genera! 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 an increase to total
billed revenue, including the FCA, for the affected customer classes of 1.18 percent.
Harris Testimony at 10.
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 the
Company 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 increase for Residential and Small General Service customers of 1.18
percent above current rates. This increase equates to new FCA rates of 0.2913 cents
per kWh for the Residential class and 0.3709 cents per kWh for the Small General
Service class. Harris Testimony at 9-10.
APPLICATION - 4
9. ldaho Power requests that the FCA rate become effective on June 1,
2014, coincident with Idaho Powe/s Power Cost Adjustment and with the
commencement of seasona! rates. The Company requests that the FCA rate remain in
effect until May 31,2015.
10. 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
11. ldaho 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
ef seg. The Company has, however, contemporaneously filed the Hanis 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. ln conformance with RP 125, this Application will be brought to the
attention of ldaho Powe/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 21,
2014. ldaho Power will also keep its Application, testimony, and exhibits open for public
inspection at its offices throughout the state of ldaho. ldaho 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
ldaho Power Company
P.O. Box 70
Boise, ldaho 83707
I nord strom @ idahopower. co m
dockets@ idahopower. co m
Zachary L. Harris
Greg Said
ldaho Power Company
P.O. Box 70
Boise, ldaho 83707
zharris@ ida hopower. co m
[e-mail]
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,
2014, through May 31 ,2015, as described above.
DATED at Boise, ldaho, this 14h day of March 2014.
Attorney for ldaho Power Company
APPLICATION - 6
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPG-E-14-03
IDAHO POWER COMPANY
ATTACHMENT NO. 1
PROPOSED TARIFF
ldaho Power Company Sixth Revised Sheet No. 54-2
Cancels
I.P.U.C. No. 29. Tariff No. 101 Fifth Revised Sheet No. 5zt-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 0.2913
cents per kWh. The monthly Fixed Cost Adjustment for Small General Service (Schedule 7) is 0.3709
cents per kWh.
EXPIRATION
The Fixed Cost Adjustment included on this schedule will expire May 31 ,2015.
IDAHO
lssued per Order No.
Effective - June 1, 2014
lssued by IDAHO POWER COMPANY
Gregory W. Said, Vice President, Regulatory Affairs
1221West ldaho Street, Boise, ldaho
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC.E.14.O3
IDAHO POWER COMPANY
ATTAGHMENT NO.2
TARIFF IN LEGISLATIVE FORM
ldaho Power Company Fifthsi(h Revised Sheet No. 5ut-2
Cancels
|.P.U.C. No. 29. Tariff No. 101 FeudhFifth 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
SmallGeneral 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=#790.2913 cents per kWh. The monthly Fixed Cost Adjustment for Smal! General Service
(Schedule 7) is +?2€2!!3709 cents per kWh.
EXPIRAT!ON
The Fixed Cost Adjustment included on this schedule wil! expire May 31 ,20145.
IDAHO
lssued per Order No. 32814
Effective - June 1,2013!
lssued by IDAHO POWER COMPANY
Gregory W. Said, Vice President, Regulatory Affairs
1221West ldaho Street, Boise, ldaho