20150313Application.pdf

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LISA D. NORDSTROM
Lead Gounset
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March 13,2015
VIA HAND DELIVERY
Jean D. Jewell, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-15-05
Fixed Cost Adjustment Rates for June 1,2015, Through May 31,2016
ldaho 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 ldaho Power Company's Application.
ln addition, enclosed are an original and eight (8) copies of the Direct Testimony of
Zachary L. Harris filed in support of the Application. One copy of Mr. Hanis's testimony
has been designated as the "Reporte/s Copy." ln addition, a disk containing a Word
version of Mr. Harris's testimony is enclosed for the Reporter.
Lastly, four(4) copies each of ldaho PowerCompany's press release and customer
notice are also enclosed.
Very truly yours,
An IDACORP Company
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Lisa D. Nordstrok
LDN:csb
Enclosures
1221 W. ldaho St. (83702)
PO. Box 70
Boise, lD 83707
LISA D. NORDSTROM (lSB No. 5733) ;{ i i,, L. i
ldaho Power Company
1221west ldaho street (83702) iili; fliq I I Fii 3: S I
P.O. Box 70
Boise, Idaho 83707 ,,-r, ilrr''i;r,, -
Telephone: [phone] ri i ll- l': ! :' :i r^ 'l ' ' l j; ;i l
Facsimile: [phone]
I nordstrom @ idahopower. com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
rN THE MATTER OF THE APPLTCATTON )
oF IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-15-05
AUTHORTW TO TMPLEMENT F|XED )cosT ADJUSTMENT ("FCA',) RATES FOR ) APPLTCATTON
ELECTRIC SERVICE FROM JUNE 1,2015, )
THROUGH MAY 31,2016.)
)
ldaho Power Company ("ldaho Powe/'or "Compo[y"), in accordance with ldaho
Code S 61-502 and RP 052, hereby respectfully makes application to the ldaho Public
Utilities Commission ("Commission") for an order authorizing Idaho Power to implement
Fixed Cost Adjustment (.FCA") rates for electric service from June 1,2015, through May
31, 2016.
ln support of this Application, ldaho Power represents as follows:
I. BACKGROUND
1. ldaho 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.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. 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 case.
3. ln Order No. 30267 issued in Case No. IPC-E-04-15 on March 12,2007,
the Commission approved a 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 Powe/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 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 Small General
APPLICATION - 2
Service customers. The Commission's subsequent Order No. 32731
directed that the FCA mechanism continue with its existing methodology.
4. This filing is to request recovery of the 2014 FCA balance and is separate
from Case No. IPC-E-1 4-17, an inquiry into the components comprising the FCA
mechanism.
II. FIXED COST ADJUSTMENT MECHANISM
5. The FCA mechanism enables ldaho 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, on a weather-nomalized
basis, varies above or below a Commission-established base. ln other words, 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 on a weather-normalized
basls by the Company through rates and the level of fixed costs authorized for recovery
in the Company's most recent, applicable general rate case.
6. The FCA works identically for both the Residential and Small General
Service classes. For each class, the number of customers is multiplied by the fixed cost
per customer rate (FCC), which is established as 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 "actualfixed 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
APPLICATION - 3
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.
III. PROPOSED 2015.2016 FCA RATE ADJUSTMENT
7. The determination of the FCA amount and corresponding rates are
described in the Direct Testimony of Zachary L. Harris ("Harris Testimony") filed
contemporaneously with this Application.
8. As shown on Exhibit No. 3 of the Hanis Testimony, the proposed FCA is
$15,992,109.41 for the Residential class and $889,600.99 for the Small General Service
class, for a total amount of $16,881 ,710.40. Harris Testimony at 7-8. The proposed
FCA deferral 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 Residentia! and Sma!! 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 an
increase to total billed revenue, including the FCA, for the affected customer classes of
0.35 percent. Harris Testimony at 11.
L 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 recover or refund the FCA deferral balance 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 0.35 percent
above current rates. This increase equates to new FCA rates of 0.3258 cents per kWh
APPLICATION - 4
for the Residential class and 0.4099 cents per kWh for the Small General Service class.
Hanis Testimony at 9.
10. ldaho Power requests that the FCA rates become effective on June 1,
2015, coincident with ldaho Powe/s Power Cost Adjustment and with the
commencement of seasona! rates. The Company requests that the FCA rates remain
in effect until May 31,2016.
11. The proposed FCA tariff (clean version), Schedule 54, is attached hereto
as Attachment 1 to this Application. The Schedule 54 tariff in legislative format is
attached hereto as Attachment 2.
IV. MODIFIED PROCEDURE
12. 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 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
13. 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 cunent billing cycle, with the last notice being sent on or about April22,
2015. ldaho Power wil! also keep its Application, testimony, and exhibits open for public
APPL]CATION - 5
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,
the Company will, in the alternative, bring the Application to the attention of its affected
customers through any other means directed by this Commission.
14. 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 no rd stro m @ ida hopowe r. co m
dockets@id ahopower. com
Zachary L. Hanis
ldaho Power Company
P.O. Box 70
Boise, ldaho 83707
zharris@ idahopower.com
VI. REQUEST FOR RELIEF
15. ldaho Power respectfully requests that the Commission issue an order (1)
authorizing that this matter be processed by Modified Procedure and (2) authorizing
ldaho Power to implement Fixed Cost Adjustment rates for electric service from June 1,
2015, through May 31 ,2016, as described above.
DATED at Boise, ldaho, this 13h day of March 2015.
Attomey for ldaho Power Company
APPLICATION - 6
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
gASE NO. IPC-E-I5-05
IDAHO POWER COMPANY
ATTAGHMENT 1
PROPOSED TARIFF
ldaho Power Company Seventh Revised Sheet No. 54-2
Cancels
|.P.U.C. No. 29. Tariff No. 101 Sixth 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
Smal! 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 Residentia! Service (Schedules 1, 3, 4, and 5) is 0.3258
cents per kWh. The monthly Fixed Cost Adjustment for Small General Service (Schedule 7) is 0.4099
cents per kWh.
EXPIRATION
The Fixed Cost Adjustment included on this schedule will expire May 31, 2016.
IDAHO
lssued per Order No.
Effective - June 1,2015
lssued by IDAHO POWER COMPANY
Gregory W. Said, Mce President, Regulatory Affairs
1221 West ldaho Street, Boise, ldaho
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-15-05
IDAHO POWER COMPANY
ATTACHMENT 2
TARIFF IN LEGISLATIVE FORMAT
ldaho Power Company @!h Revised Sheet No. 54-2
Cancels
LP.U.C. No. 29. Tariff No. 101 FifrhSixth 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
0.29133258 cents per k\Mr. The monthly Fixed Cost Adjustment for Small General Seruice (Schedule
7) is 0.@ cents per kWh.
EXPIRATION
The Fixed Cost Adjustment included on this schedule will expire May 31, 20150.
IDAHO
lssued per Order No.33047
Effective - June 1,20145
lssued by IDAHO POWER COMPANY
Gregory W. Said, Vice President, Regulatory Affairs
1221 West ldaho Street, Boise, ldaho