20140516Comments.pdf

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Peter J. Richardson (ISB # 3195)
Gregory M. Adams (lSB # 7454)
Richardson Adams, PLLC
515 N.27ft Street
P.O. Box 7218
Boise,ldaho 83702
Telephone: [phone] I
Fax: [phone]
peter@richardsonando leary.com
[e-mail]
Attorneys for the Industrial Customers
of Idaho Power
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IN THE MATTER OF THE APPLICATION OF )IDAHO POWER COMPANY FOR )
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
Case No. IPC-E-14-05
AUTHORITY TO IMPLEMENT POWER )
COST ADJUSTMENJ{'jP_CA') BATES FOR ) conavENTS OF THE TNDUSTRTALELECTRIC SERVICE FROM JUNE 1,2014, ) CUSiOMERS OF IDAHO pOWER
THROUGH MAY 31,2015, AND TO UPDATE )
BASE RATES IN COMPLIANCE WITH )
ORDER NO. 33000 )
)
)
)
Pursuant to that Notice of Application and Notice of Modified Procedure issued by the
Idaho Public Utilities Commission ("Commission") issued on April 22,2014, the Industrial
Customers of Idaho Power ("ICIP") by and through its attomey of record, Peter J. Richardson,
and herby provides its Comments. Idaho Power Company ("[daho Power" or the "Company)
seeks approval to implement this year's power cost adjustment ("PCA") for the 201412015 PCA
year and also to update its net base power supply expenses to become effective June I ,2014.
Idaho Power filed its Application on April 14,2014, seeking authorization to increase its
total system "base level" net power supply expense ("NPSE") in compliance with Commission
Page I - COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER
Order No. 33000, and to implement the PCA for the 201412015 year. The Company proposes to
mitigate the impact on ratepayers of these changes with a one-time transfer of some of the
surplus in the ldaho Energy Efficiency Rider ("DSM RideC') with the net effect of a PCA
increase to billed revenue of approximately $l l.l million.
The Commission Should Use Actual - Not Forecast Data for the True-un
Two years ago, in the20l2l20l3 PCA Case ([PC-E-12-17) the Commission Staff
recommended in their Comments:
Instead of using normalized energy sales to estimate forecast revenues in determining
true-up revenue, Staff believes it may be more appropriate in future PCA years for the
Company to use actual energy sales and the approved forecast rate to determine true-up
revenue. Staffproposes to immediately initiate discussions with the Company to resolve
the issue on a prospective basis.l
The Commission supported Staff s recommendation in its Order:
We also encourage Staff to discuss with the Company Staff s concerns about using
normalized data versus actual data in the true-up component of the PCA mechanism.
These discussions should take place well before the filing of next year's PCA
application.2
The Company and Staff complied with the Commission's directive in the following20l3l20l4
PCA in Case No. IPC-E-13-10. In deciding the question of the use of normalized energy data to
calculate revenue from the prior year's forecast the Commission observed:
Staff said it discussed this with the Company and the Company has agreed to implement
the change with the new PCA rates on June l, 2013, if approved by the Commission. . . .
Based on our review of the record, we find it reasonable for the Company to apply actual
Idaho jurisdictional energy sales to the forecast rate in the calculation of the true-up
component of the PCA mechanism. We direct the Company to implement this change
with the new PCA rates on June I ,2013.3
Idaho Power filed this year's PCA using a calculation of trued-up revenues based on normalized
' Staff Comments, May I 5, 2012, IPC-E-12-17, p. 9.
' Orde. No. 32552, May 31, 2012,IPC-E-12-17, p.7 .
'Order No.32821, May 31,2013, IPC-E-13-10, p. I L
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MWh usage for the months of April and May 2013, along with an adjustment for MWh usage
for June and July. According to the Company the use of normalized revenues for April and May,
and trued-up revenues for June and July was, "to appropriately account for the transition to
actual billing month sales with a June l,2Ol3, effective date," rather than using actual MWh for
the full PCA true-up year. A literal reading of the Commission's Order directing the Company,
"to implement this change with new PCA rates on June 1,2013" might lead one to believe the
change from normalized versus actual MWh begins with the month of June. The result of such a
reading, however creates a possibly unintended mix of normalized and actual data in the true-up
calculation.
Staffls recommendation did not suggest a mix of normalized and actual date was the
appropriate method to use. Staff stated clearly that it "believes it may be more appropriate in
future PCA years for the Company to use actual energy sales and the approved forecast rate to
determine true-up revenue." The Commission's finding also did not suggest a mix of
actual/normalized data was the appropriate method. The Commission found that it is
"reasonable for the Company to apply actualjurisdictional energy sales to the forecast rate true-
up component of the PCA mechanism." The ICIP believes that the Commission Staff and the
Commission itself may have intended that actual MWh data should be used for the full true-up
PCA period of April2014 through March 2015.
Obviously, only the Commission can articulate what it meant in its Order. However,
based on the ICIP's reading of the record and the Commission's Order, actual MWh values were
substituted into the Company's Exhibit 5, line 5 and true-up revenue was recalculated. Actual
data was provided by the Company in response to Staff s Data Request No. 8. The result of
' Idaho Power Response to Commission Staff Request for Date No. 8.
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using actual rather than normalized MWh data for the full true-up year of April 2013 through
March 2014 results in additional forecasted true-up revenues of $7.2 million more than what the
Company forecasted by using two months of normalized revenue for April and May.
Idaho Power is asking for an increase of $l l.l million in this year's PCA - inclusive of
proposed revenue sharing and mitigation measures. By subtracting the $7.2 million in increased
ffue-up revenues resulting from the use of actual data rather than normalized data results in a
PCA increase ofjust $3.9 million. Based on assumed system revenues of $900 million, the $3.9
million increase in the PCA would mean an overall percentage increase of only 0.43o/ol, Should
the Commission agree with the ICIP's understanding of the use of actual data for the full PCA
true-up period, then the $3.9 million would need to be further allocated so that a portion would
be spread on a per kWh basis and a portion assigned on a per billed amount. However, with an
estimated increase of less than one half of one percentage point, it would be entirely reasonable
for the Commission to implement no PCA rate change for the 201412015 PCA year. This would,
indeed, be welcome news for ldaho Power's ratepayers.
The Commission Should Reduce the DSM Rider bv One Percent
Idaho Power is recommending a one-time PCA mitigation measure using $16 million of
the surplus in the DSM rider account. In addition, the Company predicts that maintaining the
four percent DSM rider assessment will result in, "an estimated surplus of $9.8 million at May
31,2015."s The Company has made what the Commission has termed, oa business decision'6 to
curtail its DSM programs, while at the same time it proposes to continue to collect from
ratepayers funds for programs it does not intend to implement. The four percent DSM rider
collection percentage will mean the Company will receive revenues that exceed the expected
t Tatum, Dl atp.27.
u Order No. 33016, Case No. IPC-E-13-21 p. 5.
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level of expenditures for those programs. It is unreasonable for the Company to be allowed to
continue to collect revenues from the ratepayers to fund phantom programs and then to deign to
allow some of the over-collected ratepayer funds to mitigate some of the impacts of this year's
PCA.
Based on $900 million base revenues, the expected over-collection of $9.8 million in
DSM Rider funds equals approximately one percent of the Company's overall revenues. The
ICIP sees no rational basis for the Company to be allowed to collect ratepayer funds for DSM
expenditures it is not going to make. The ICIP therefore proposes that the Commission reduce
the DSM rider by one percentage point to three percent just for the 201412015 PCA year. When,
and if, the Company engages in cost effective DSM programs at higher levels than can be funded
with three a three percentage assessment on the customers' bills, then the DSM Rider could be
returned to a level supportive of those higher levels of activity.
Conclusion
The ICIP recommends the Commission direct Idaho Power to use actual MWh, rather
than an asymmetrical mix of normalized and actual data to calculate the true-up amount for the
201412015 PCA year. The use of actual date, coupled with ldaho Power's mitigation measures,
results in a $3.9 million (0.43o/o) increase in the PCA. Such a low level of increase warrants no
change in the PCA rate this year. Finally, the ICIP recommends the Commission temporarily
lower the DSM Rider percentage from 4Yoto 3Yo so that Idaho Power will not over-collect funds
the Company does not intend to use for DSM programs it will not be implementing.
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Respectfully submitted this l6th day of May,2014.
RICFI,ARDSON ADAMS, PLLC
Peter J. Richardson (ISB No: 3195)
Gregory M. Adams (ISB No. 7454)
Attorneys for the ICIP
CERTIFICATE OF SERVICE
I hereby certify that on this 16ft day of May 2}l4,true and correct copies of the
foregoing COMMENTS OF THE INDUSTRIAL CUSTOMERS OF IDAHO POWER were
delivered to the following persons via the indicated method.
Commission Staff(hand delivery and email)
Karl T. Klein
Idaho Public Utilities Commission
47 2 W est Washington Street
Boise,Idaho 83702
Karl. klein@puc. idaho. gove
Idaho Conservation League (US Mail and email)
Ben Otto
710 N.6ft St.
Boise, Idaho83702
botto@ idahoconservation.ors
Idaho Irrigation
Eric L. Olsen
Pumpers Association (US Mail and email)
201 East Center Street
PO Box l39l
Pocatello, Idaho 83204-139 I
[e-mail]
Idaho Power Company (US Mail and email)
Lisa Nordstrom
Regulatory Dockets
PO Box 70
Boise,ldaho 83707
lnordstrom @ idahopower.com
dockets@ idahopower.com
Anthony Yankel
29814 Lake Road
Bay Village, Ohio 44140
[e-mail]
Tim Tatum
Greg Said
PO Box 70
Boise,Idaho 83707
ttatum@ idahopower.com
[e-mail]
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