20170315Application.pdf

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LISA D. NORDSTROi,I
Lead Counse!
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Enclosures
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An IDACORP CompanY
122 1 W. ldaho 5t. (83702)
P.O. Box 70
Boise, lD 83707
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March 15,2017
VIA HAND DELIVERY
Diane M. Hanian, Secretary
ldaho Public Utilities Commission
472 W esl Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-17-02
Fixed Cost Adjustment Rates for June 1,2017, through May 31 ,2018
ldaho Power Company's Application and Testimony
Dear Ms. Hanian:
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. Harris's testimony
has been designated as the "Reporter's Copy." A disk containing a Word version of Mr.
Harris's testimony is enclosed for the Reporter.
Also enclosed are eight (8) copies of a disk containing the Excelfiles of Mr. Harris's
exhibits.
Lastly, four (4) copies each of ldaho Power Company's press release and customer
notice are also enclosed.
Very truly yours,
Lisa D. Nordstrom
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221\Nest ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
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lnordstrom@id ahooower.com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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,
2017 , THROUGH MAY 31,2018.
CASE NO. !PC-E-17-02
APPLICATION
ldaho Power Company ("!daho Power" or "Company"), 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 ldaho Power to implement
Fixed Cost Adjustment ('FCA') rates for electric service from June 1,2017 , through May
31, 2018, and to approve the Company's corresponding Schedule 54, Fixed Cost
Adjustment.
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 integra!
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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 volumes 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 annua! 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 Genera!
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 Power'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
Service customers. The Commission's subsequent Order No. 32731 in that case
directed that the FCA mechanism continue with its existing methodology.
APPLICATION - 2
4. ln Order No. 33295 issued in Case No. IPC-E-14-17, the Commission
approved a settlement stipulation that changed the methodology to calculate the level of
actual fixed costs recovered used to determine the FCA. The modification to the
calculation of the actual !eve! of fixed costs recovered replaced weather-normalized
billed sales with actual billed sales and began with the determination of the 2015 FCA.
5. In this filing, the Company requests recovery of the 2016 FCA balance
and approval of the corresponding rates.
II. FGA MECHANISM
6. 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 an actual billed sales
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 recovered on an actual billed sales basis by
the Company through rates and the level of fixed costs authorized for recovery in the
Company's most recent, applicable general rate case.
7. The FCA removes the financial disincentive that exists when the Company
invests in DSM resources and energy efficiency activities. On a system-wide basis,
ldaho Power achieved 170,792 megawatt-hours of incremental annua! energy efficiency
savings in 2016, which is a 4 percent increase from savings reported in 2015.
8. 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
authorized revenue requirement in its most recent general rate case. The product of
APPLICATION - 3
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 actual billed 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 "actual fixed costs recovered" amount) is the fixed cost
adjustment for each class.
III. PROPOSED 2017.2018 FCA RATE ADJUSTMENT
9. The determination of the FCA deferral balance and corresponding rates
are described in the Direct Testimony of Zachary L. Harris ("Harris Testimony") fibd
contemporaneously with this Application.
10. As shown on Exhibit No. 4 of the Harris Testimony, the proposed FCA is
$33,762,766 for the Residential class and $1 ,249,276 for the Small General Service
class, for a total amount of $35,012,042. Harris Testimony at 8. The proposed FCA
deferral balance is an incremental increase above the current FCA deferral balance
currently collected in customers' rates. Accordingly, with this Application, ldaho Power
is proposing an FCA rate increase for the Residential and Small 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
1.29 percent. Harris Testimony at 12.
11. 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
APPLICATION .4
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 1.29 percent
above current rates. This increase equates to new FCA rates of 0.6728 cents per kWh
for the Residential class and 0.8576 cents per kWh for the Small General Service class.
Harris Testimony at 10.
12. ldaho Power requests that the FCA rates become effective on June 1,
2017, coincident with the Company's Power Cost Adjustment and with the
commencement of seasonal rates. The Company requests that the FCA rates remain
in effect until May 31,2018.
13. 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
14. 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
15. In conformance with RP 125, this Application will be brought to the
attention of ldaho Power'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
APPLICATION - 5
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,
2017. ldaho Power wil! also keep its Application, testimony, and exhibits open for public
inspection at its offices throughout the state of Idaho. Idaho 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.
16. Communications and service of pleadings with reference to this
Application should be sent to the following:
Lisa D. Nordstrom
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
I n ord strom @ ida h opowe r. com
d ockets@ idahopower. com
Zachary L. Harris
ldaho Power Company
1221\Nest ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
zha rris@ idahopower. com
VI. REQUEST FOR RELIEF
17. 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 Gost Adjustment rates for electric service from June 1,
2017, through May 31 ,2018, as described above.
DATED at Boise, ldaho, this 1sth day of March 2017.
LISA NORDST
APPLICATION .6
Attorney for ldaho Power Company
BEFORE THE
IDAHO PUBLIC UTILITIES GOMMISSION
GASE NO. IPC.E.17.O2
IDAHO POWER GOMPANY
ATTACHMENT 1
PROPOSED TARIFF
ldaho Power Company Third Revised Sheet No. 34-'1
Cancels
l.P.U.C. No. 29. Tarffi No. 101 Second Revised Sheet No. 54-1
SCHEDULE 54
FIXED COST ADJUSTMENT
APPLICABILIry
This schedule is applicable to the electric energy delivered to all ldaho retail Customers
receiving service under Schedules 1, 3, 4, or 5 (Residential Service) or under Schedule 7 (Small
General Service).
FIXED COST PER CUSTOMER RATE
The Fixed Cost per Customer rate (FCC) is determined by dividing the Company's fixed cost
components for Residential and Small General Service Customers by the average number of
Residential and Small General Service customers, respectively.
FIXED COST PER ENERGY RATE
The Fixed Cost per Energy rate (FCE) is determined by dividing the Company's fixed cost
components for Residential and Small General Service customers by the weather-normalized energy
load for Residential and Small GeneralService customers, respectively.
ResidentialFCC
Effective Date
January 1,2012
Small General Service FCC
Effective Date
January 1,2012
ResidentialFCE
Effective Date
January 1,2012
Small General Service FCE
Effective Date
January 1,2012
Rate
$650.63 per Customer
Rate
$360.57 per Customer
Rate
5.16020, per kWh
Rate
6.86336 per kWh
ALLOWED FIXED COST RECOVERY AMOUNT
The Allowed Fixed Cost Recovery amount is computed by multiplying the average number of
Residential and Small General Service customers by the appropriate Residential and Small General
Service FCC rate.
IDAHO
lssued per Order No. 32426
Effective - November 1,2012
lssued by IDAHO POWER COMPANY
Gregory W. Said, Vice President, Regulatory Affairs
1221 West ldaho Street, Boise, ldaho
ldaho Power Company Ninth Revised Sheet No. 54-2
Cancels
|.P.U.C. No. 29. Tariff No. 101 Eiohth Revised Sheet No. 54-2
SCHEDULE 54
FIXED COST ADJUSTMENT
(Continued)
The Actualfixed costs Recovered amount is computed by multiplying the actual 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 dffierence 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 0.6728
cents per kWh. The monthly Fixed Cost Adjustment for Small General Service (Schedule 7) is 0.8576
cents per kWh.
EXPIRATION
The Fixed Cost Adjustment included on this schedule will expire May 31 ,2018
IDAHO
lssued per Order No
Effective - June l, ZOtl
lssued by IDAHO POWER COMPANY
Timothy E. Tatum, Vice President, Regulatory Affairs
1221 West ldaho Street, Boise, ldaho
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-17-02
IDAHO POWER COMPANY
ATTACHMENT 2
TARIFF IN LEGISLATIVE FORMAT
ldaho Power Company Third Revised Sheet No. 54-'1
Cancels
l.P.U.C. No. 29. Tariff No. 101 Second Revised Sheet No. 54-1
SCHEDULE 54
FIXED COST ADJUSTMENT
APPLICABILIry
This schedule is applicable to the electric energy delivered to all ldaho retail Customers
receiving service under Schedules 1,3,4, or 5 (Residential Service) or under Schedule 7 (Small
General Service).
FIXED COST PER CUSTOMER RATE
The Fixed Cost per Customer rate (FCC) is determined by dividing the Company's fixed cost
components for Residential and Small General Service Customers by the average number of
Residential and Small General Service customers, respectively.
The Fixed Cost per Energy rate (FCE) is determined by dividing the Company's fixed cost
components for Residential and Small General Service customers by the weather-normalized energy
load for Residential and Small General Service customers, respectively.
Residential FCC
Effective Date
January 1,20'|.2
Small General Service FCC
Effective Date
January 1,2012
ResidentialFCE
Effective Date
January 1,2012
Small General Service FCE
Effective Date
January 1,2012
Rate
$650.63 per Customer
Rate
$360.57 per Customer
Rate
5.16020, per kWh
Rate
6.86330 per kWh
The Allowed Fixed Cost Recovery amount is computed by multiplying the average number of
Residential and Small General Service customers by the appropriate Residential and Small General
Service FCC rate.
IDAHO
lssued per Order No. 32426
Effective - November 1,2012
lssued by IDAHO POWER COMPANY
Gregory W. Said, Vice President, Regulatory Affairs
1221West ldaho Street, Boise, ldaho
I lOano Power Company EighthNjtth Revised Sheet No. 54-2
Cancels
I l.P.U.C. No. 29. TarifF No. 1Olse\renthEiqhth Revised Sheet No. 54-2
SCHEDULE 54
FIXED COST ADJUSTMENT
(Continued)
ACTUAL FIXED COSTS RECOVERED AMOUNT
The Actualfixed costs Recovered amount is computed by multiplying the actual 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
I O.S+fS0Z2g cents per kWh. The monthly Fixed Cost Adjustment for Small General Service (Schedule
| 7) is 0.68758576 cents per kWh.
EXPIRATION
I ff,e Fixed Cost Adjustment included on this schedule will expire May 31 ,20179.
IDAHO
lssued per Order No.33527
Effective - June 1,20162
lssued by IDAHO POWER COMPANY
Timothy E. Tatum, Vice President, Regulatory Affairs
1221 West ldaho Street, Boise, ldaho