20150421Comments.pdf

Benjamin J. Otto (ISB No. 8292)
710 N 6'h Street
Boise,ID 83701
Ph: [phone]x12
Fax [phone]
botto@idahoconservation. org
Attorney for the Idaho Conservation League
IPC-E-14-17
ICL COMMENT
CASE NO. IPC-E-14-17
IDAHO CONSERVATION LEAGUE
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
COMMISSION'S INQUIRY INTO
IDAHO POWER COMPANY'S FIXED
COST ADJUSTMENT MECHANISM
COMMENTS
The Idaho Conservation League (ICL) recommends the Commission approve this
settlement stipulation regarding Idaho Power's Fixed Cost Adjustment (FCA). ICL applauds the
Commission for continuing to support one of the longest operating fixed cost mechanisms in the
country. While not without controversy, overall the FCA represents good public policy by
separating fixed cost recovery from volumetric energy sales. ICL supports this policy because it
balances sending price signals to customers through electric rates while ensuring Idaho Power
has an opportunity to recover the fixed costs of service. In this settlement, the signatories agree
to four key terms that will improve the mechanics of the FCA today and set a reasonable path
forward for continued improvements.
ICL supports altering the FCA to use actual billed sales instead of weather normalized
sales. The FCA is intended to ensure ldaho Power annually collects no more and no less than the
actual fixed costs for that year. Using weather normalized sales data instead of actual sales data
frustrates this purpose. Using actual energy sales will allow stakeholders to determine the actual
fixed cost recovery and any necessary true-up.
ICL supports Idaho Power's current method for calculating the rate adjustment cap. ICL
recommends the Commission endorse this methodology.
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April21,2015
ICL agrees with Staff that it is critical to carefully calculate the fixed cost per energy and
the fixed cost per customer. ICL also agrees that calculating these values is most appropriate as
part of a larger recalculation of base rates and other inputs.
ICL agrees to consider modifications to the rate design for residential and small
commercial customers. The design of electric rates serves a variety of purposes and policy goals.
For example, one goal is to provide utilities with an opportunity to recover the cost of service.
Another common goal is to send price signals to customers to encourage efficient use of the
electric system. Today Idaho Power offers a variety of rate designs unique to each customer
class. Importantly, these rate designs are not an accident or created by chance. Rather, in a
general rate case, stakeholders intentionally design rates to achieve identified goals. ICL agrees
that designing rates should be an ongoing process that periodically identifies the goals
underlying rate design and ensures current practices and achieving these goals. Another critical
step when considering rate design changes is to understand the true cost of service for each
customer class. Accordingly, ICL looks forward to reviewing an updated, robust cost of service
study and working together with other stakeholders to define rate design goals.
The FCA is a critical piece of Idaho's rate design framework that allows Idaho Power an
opportunity to recover costs while sending price signals to customers. This framework is good
public policy. The terms of this stipulation will improve the FCA and set a reasonable path
forward for further refinements. Accordingly,ICL recommends the Commission approve the
stipulation.
Respectfully submitted this 2l't day of April2015,
Benjamin J Otto
Idaho Conservation League
IPC-E-14-17
ICL COMMENT April2l,2015
CERTIFICATE OF SERVICE
I hereby certiff that on this 2lst day of April2015,I delivered true and correct copies of
the foregoing COMMENTS to the following persons via the method of service noted:
Hand delivery:
Iean Jewell
Commission Secretary (Original andT copies)
Idaho Public Utilities Commission
42TW.Washington St.
Boise,lD 83702-5983
Electronic Mail:
Lisa D Nordstrom
Zachary L. Harris
Greg Said
Idaho Power Company
1221 West Idaho Street
Boise, Idaho 83707 -0070
[e-mail]
zharris@idahopower. com
[e-mail]
Peter J. Richardson
Richardson Adams, PLLC
515 N.27'h St
Boise,lD 83702
[e-mail]
Dr. Don Reading
6070 Hill Rd.
Boise,ID 83703
dreading@mindspring. com
Ken Miller
Snake River Alliance
PO Box 1731
Boise,ID 83701
[e-mail]
TPC-E-T4-17
ICL COMMENT
Benjamin I. Otto
April21,2015