20180524Settlement Stipulation.pdf

JULIA A. HILTON (lSB No. 7740)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
ihilton@idahopower,com
Attorney for ldaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMlSSION
REC E IVE I]
20lB H.{Y 2tr AH t0: 36
tilii:-) P,JiLlC
iiT I LlTiES C0LtMtssloN
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER TO ESTABLISH A
METHOD OF RECOVERY FOR COSTS
ASSOCIATED WITH PARTICIPATION IN
THE WESTERN ENERGY IMBAI-ANCE
MARKET
CASE NO. IPC-E-17-16
SETTLEMENT STIPULATION
AND MOTION TO APPROVE
SETTLEMENT STI PULATION
)
)
)
)
)
)
)
ldaho Power Company ("ldaho Power" or "Company") requests that the ldaho
Public Utilities Commission ("Commission") approve the settlement stipulation
("Settlement Stipulation") contained in this filing. ldaho Power's Application requested an
order authorizing the Company to establish an interim method of recovery for costs
associated with participation in the western Energy lmbalance Maket ('ElM'), through a
temporary rate component in Tariff Schedule 55, Power Cost Adjustment ("Schedule 55").
The Settlement Stipulation modifies the Company's proposed interim method of recovery
of EIM costs. The Settlement Stipulation is entered into between ldaho Power and
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 1
Commission Staff ("Staff'), hereafter jointly referred to as "Signing Parties" or singularly
as "Signing Party."
l. TNTRODUCTTON ANp !V!OT|ON
1. The terms and conditions of this Settlement Stipulation are set forth herein.
The Signing Parties agree that this Settlement Stipulation represents a fair, just, and
reasonable compromise of the dispute(s) between the Signing Parties, and that this
Settlement Stipulation is in the public interest. The Signing Parties maintain that the
Settlement Stipulation as a whole and its acceptance by the Commission, if it is accepted,
represents a reasonable resolution of all issues between the Signing Parties identified
herein. Therefore, the Signing Parties hereby respectfully move the Commission, in
accordance with RP 56 and RP 274-76, for an order approving the Settlement Stipulation
executed between the Signing Parties and all of its terms and conditions without material
change or condition and closing the current proceeding.
II. BACKGROUND
2. On November 14, 2017, ldaho Power filed its Application in this case
requesting an order authorizing the Company to establish an interim method of recovery
for costs associated with participation in the western ElM, through a temporary rate
component in Schedule 55.
3. On November 29, 2017, the Commission issued an order providing notice
of the Application and setting a deadline for interventions. Order No. 33938. No petitions
to intervene were filed in this case.
4. On January 25,2018, the Commission issued an order providing notice of
modified procedure and establishing comment deadlines. Order No. 33970.
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION.2
5. Statf conducted a review of the Company's filing. Staff issued and the
Company responded to 10 production requests.
6. On January 31 ,2018, Staff and the Company met to discuss the Company's
Application and models prepared in support of the Application. Based on this discussion,
the Signing Parties agree to the terms and conditions set forth herein as a compromise
of the respective positions of the Signing Parties and for other considerations as set forth
below.
7. On February 13,2018, the Signing Parties notified the Commission of
settlement and requested the Commission vacate the comment schedule and stay further
discovery. On February 20,2018, the Commission issued Order No. 33989 vacating the
schedule.
III. TERMS OF THE SETTLEMENT STIPULATION
8. The Signing Parties agree to modify the proposed recovery mechanism as
follows:
o ldaho Power will not include forecasted EIM participation costs or
benefits in the forecast component of its Schedule 55.
r ldaho Power will add a calculated ElM-related monthly revenue
requirement to its monthly Power Cost Adjustment ('PCA") deferral calculation based on
actual EIM participation costs. Actual ElM-related benefits will be reflected in ldaho
Power's actual monthly net power supply expenses ("NPSE").
o ldaho Power will add lines to its PCA deferral report to record its actual
monthly revenue requirement associated with EIM participation. ldaho Power will also
provide the detail showing the underlying revenue requirement calculation. The actual
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 3
EIM revenue requirement for April 2018 is provided as Confidential Attachment 1 to this
Settlement Stipulation. ln future years, ldaho Power will use this method to recover the
actual EIM revenue requirement until these costs are included in base rates in a future
filing.
r As of April 1,2018, ldaho Power will cease deferring incremental EIM-
participation operations and maintenance start-up costs. lnstead, upon Commission
approval of the Settlement Stipulation, the Company will begin deferring the monthly
revenue requirement associated with EIM participation to the PCA deferral account.
. lf the Commission approves the Settlement Stipulation filed in GNR-U-
18-01, related to the U.S. Tax Cuts and Jobs Act ("2017 Tax Act"), a portion of the
deferred tax non-cash reduction will be used to offset the EIM Regulatory Asset account
established in Order No. 33706. The entire EIM deferral amount will be offset in 2018,
and is therefore not included in ConfidentialAttachment 1 to this Settlement.
o The EIM revenue requirement calculation will include rate base (return
on and return of) and operating costs incurred. The revenue requirement will be
recalculated monthly using actual balances and allocated to ldaho based on jurisdictional
allocation percentages determined in the last rate case. Amounts associated with rate
base will represent one-twelfth of the current month's annual revenue requirement for
those elements.
. Annual EIM benefits from each PCA year (April through March), as
reported in the California lndependent System Operator Western EIM Benefits Report
("Benefits Report"), will be used to set a soft cap for the actual annual EIM revenue
requirement included in the PCA deferral. Any amount associated with the actual annual
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 4
EIM revenue requirement that exceeds the annual benefits from the Benefits Report will
be identified by the Company in its annual PCA filing. The Company's discussion of these
costs will address the factors that led to costs exceeding benefits over the PCA year,
provide justification for these costs, and include a comparison of the actual annual EIM
costs from the PCA year to the original cost estimate provided in Case No. IPC-E-16-19.
The Company's filing will also provide a proposal for recovery of any annual costs in
excess of annual benefits.
. Except for Public Utility Regulatory Policies Act of 1978 (PURPA)
expenses and demand response incentive payments, the PCA allows the Company to
pass through to its customers 95 percent of the difference between actual NPSE and
base level NPSE. These accounts are referred to as "95 percent sharing accounts." EIM
participation costs will be treated in the same manner as costs included in the 95 percent
sharing accounts, with 95 percent of the EIM participation costs deferred for future
recovery through the PCA deferral.
o Amounts included in the new EIM participation cost section of the PCA
deferral report will be reviewed by Staff in conjunction with the normal annual review of
the PCA deferral.
o EIM participation costs will continue to be reported as an element of
actual power supply costs on the PCA deferral report until such costs are transferred into
base rates in a future rate proceeding.
o Upon approval by the Commission, the above provisions will be effective
as of the beginning of the April 2018 PCA deferral period.
9. The Signing Parties submit this Settlement Stipulation to the Commission
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 5
and recommend approval in its entirety pursuant to RP 274-76. The Signing Parties will
support this Settlement Stipulation before the Commission and will not appeal a
Commission order approving the Settlement Stipulation or an issue resolved by the
Settlement Stipulation. lf this Settlement Stipulation is challenged by anyone who is not
a party to the Settlement Stipulation, then each Signing Party reserves the right to file
responsive comments or testimony, cross-examine witnesses, and put on such case as
it deems appropriate to respond fully to the issues presented, including the right to raise
issues that are incorporated in the settlements embodied in this Settlement Stipulation.
Notwithstanding this reservation of rights, the Signing Parties agree that they will continue
to support the Commission's adoption of the terms of this Settlement Stipulation.
10. lf the Commission or any reviewing body on appeal rejects any part or all of
this Settlement Stipulation or imposes any additional material conditions on approval of
this Settlement Stipulation, then each Signing Party reseryes the right, upon written notice
to tne Commission and the other Signing Parties to this proceeding within 14 days of the
date of such action by the Commission or any reviewing body, to withdraw from this
Settlement Stipulation. ln such case, no Signing Party will be bound or prejudiced by the
terms of this Settlement Stipulation and each Signing Party will be entitled to seek
reconsideration of the Commission's order, file testimony as it chooses, cross-examine
witnesses, and do all other things necessary to put on such case as it deems appropriate.
ln such case, the Signing Parties immediately will request the prompt reconvening of a
prehearing conference for purposes of establishing a procedural schedule for the
completion of Case No. IPC-E-17-16, and the Signing Parties agree to cooperate in the
development of a schedule that concludes the proceeding on the earliest possible date,
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 6
taking into account the needs of the Signing Parties in participating in hearings and
preparing briefs.
11. The Signing Parties agree that this Settlement Stipulation is in the public
interest and that all of its terms and conditions are fair, just, and reasonable.
12. No Signing Party shall be bound, benefited, or prejudiced by any position
asserted in the negotiation of this Settlement Stipulation, except to the extent expressly
stated herein, nor shall this Settlement Stipulation be construed as a waiver of rights
unless such rights are expressly waived herein. Except as otherwise expressly provided
for herein, execution of this Settlement Stipulation does not constitute an
acknowledgment by any Signing Party of the validity or invalidity of any particular method,
theory, or principle of regulation or cost recovery. Signing Parties do not agree that any
method, theory, or principle of regulation or cost recovery employed in arriving at this
Settlement Stipulation is appropriate for resolving any issues in any other proceeding in
the future. No findings of fact or conclusions of law other than those stated herein shall
be deemed to be implicit in this Settlement Stipulation. This Settlement Stipulation sets
forth the complete understanding of the Signing Parties, and this Settlement Stipulation
includes no other promises, understandings, representations, arrangements, or
agreements pertaining to the subject matter of this Settlement Stipulation, or any other
subject matter, not expressly contained herein.
13. The obligations of the Signing Parties are subject to the Commission's
approval of this Settlement Stipulation in accordance with its terms and conditions and
upon such approval being upheld on appeal, if any, by a court of competent jurisdiction.
All terms and conditions of this Settlement Stipulation are subject to approval by the
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 7
Commission, and only after such approval, without material change or modification, has
been received shallthe Settlement Stipulation be valid.
14. This Settlement Stipulation may be executed in counterparts and each
signed counterpart shall constitute an original document.
IV. PROCEDURE
15. Pursuant to RP 274, the Commission has discretion to determine the
manner with which it considers a proposed settlement. ln this matter, the Signing Parties
have reached agreement on a final resolution to this case. This Settlement Stipulation is
reasonable and in the public interest. Pursuant to RP 201 and 202,lhe Signing Parties
believe the public interest does not require a hearing to consider the issues presented by
this Motion and request it be processed by Modified Procedure without Waiving the right
to a hearing on the previously disputed matters in this proceeding should the Commission
reject the settlement.
16. All Signing Parties, recommend the following schedule to process review of
the Settlement Stipulation by Modified Procedure:
. June 19, 2018: Comments in Support of or Opposition to the
Settlement Stipu lation
V. REQUESTED RELIEF
NOW, THEREFORE, the Signing Parties respectfully request that the Commission
process review of this Settlement Stipulation using Modifled Procedure with a June 19,
2018, deadline for Comments in support of or opposition to the Settlement Stipulation,
and then enter its order approving the Settlement Stipulation without material change or
condition by June 29,2018.
DATED this 24th day of May 2018.
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 8
ldaho Power Company ldaho Public Utilities Commission Staff
A.
Attorney Power Company Staff
SETTLEMENT STIPULATION AND MOT]ON TO APPROVE SETTLEMENT STIPULATION .9
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-17-16
IDAHO POWER COMPANY
ATTACHMENT 1
THE ATTACHMENT
IS CONFIDENTIAL AND
WILL BE PROVIDED TO
THOSE PARTIES THAT
HAVE EXECUTED THE
PROTECTIVE AGREEMENT
IN THIS MATTER