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HomeMy WebLinkAbout20190315Aschenbrenner Direct.pdf-l rt 1nF.l BEEORE THE IDAHO PUBLTC UTILITIES COMM]SSION IN THE MATTER OF THE APPL]CATION OF IDAHO POWER COMPANY FOR AUTHORITY TO IMPLEMENT FIXED COST ADJUSTMENT ("FCA") RATES FOR ELECTR]C SERVICE EROM JUNE 7, 20L9, THROUGH MAY 3L, 2020. IDAHO POWER COMPANY DIRECT TESTIMONY OE CONNIE G. ASCHENBRENNER CASE NO. ]PC-E-19-10 1 Z 3 4 5 6 1 B 9 O Please state your name, business address, and present position "Company"). with ldaho Power Company ("Idaho Power" or A. My name is Connie G. Aschenbrenner. My business address is 7227 West Idaho Street, Boise, Idaho 83102. I am employed by Idaho Power as the Rate Design Senior Manager in the Regulatory Affairs Department. O. Pl-ease describe your educational- background. A. In May of 2006, I received a Bachelor of Business Administration deqree in Einance from Boise State University in Boise, a Master of Business Idaho. In December of 201L, I earned Administration degree from Boise State 10 11 L2 13 74 15 1,6 L1 20 University. In addition, utllity ratemaking course Training for the ELectric through New Mexico State Utilities. I have attended the electric The Basr.cs: Industry, a Univers j-ty's PracticaL Requlatory course offered Center for Pubfic 1B Pfease descrlbe your work experience with 19 Idaho Power. 27 A. In 2072, I was hired as a Regulatory Analyst in the Company's Regulatory Affairs Department. My primary responsibilities incl-uded support of the Company's Commercial- and Industrial customer cfass's rate design and general support of tariff rules and regulations. In 20L5, I assumed responsibil-ities assocj-ated with Residential- and 22 23 24 ASCHENBRENNER, D] 7 Idaho Power Company 25 1 Sma1l General- Servj-ce rate desi-gn, as well as activj-tles 2 associated with demand-side management ("DSM"). In 2016, I 3 was promoted to a Senior Regulatory Analyst and my 4 responsibil-ities expanded to include the development of 5 complex cost-rel-ated studies. In 20!1 , I was promoted to 6 Rate Design Manager for Idaho Power and, in 20L9, I was 7 promoted to my current rol-e of Rate Design Senior Manager. 8 I am currently responsible for the management of the rate 9 design strategies of the Company, management of the 10 Company's Fixed Cost Adjustment (*FCA"), and oversight of 11 all tarif f admini-stration. 72 O. What is the purpose of your testimony? 13 A. The purpose of my testimony is to describe the 1,4 Company's request to implement its annual FCA rates in 15 conformance with Idaho Publ-ic Utilities Commission 76 ("Commission") Order No. 32505 (Case No. IPC-E-11-19), !7 which approved the FCA as a permanent rate mechanism for 18 the Residential- and Smal-l- General Service customers. The !9 Company is seeking authority to collect the 20tB ECA 20 deferral bal-ance of $34,188,216 through its proposed 2019- 21, 2020 FCA rates, which is an j-ncrease of $19,181,565 from 22 the current FCA deferral- balance of $15,606,71,1,. This 23 represents a 3.64 percent i-ncrease over current authorized 24 billed revenue for the Residential and Sma1l Generaf 25 Service cl-asses. ASCHENBRENNER, DT 2 Idaho Power Company 1 Because the $34,788,216 2078 FCA deferral exceeds 2 the 3 percent dlscretionary cap adopted by the Commissionl 3 by $4,852,3'19, the Company is al-so presenting the 4 Commission with al-ternate 201,9-2020 FCA rates shoul-d the 5 Commission choose to impose the discretionary 3 percent cap 6 and defer collection of 2078 FCA deferral- costs in excess 1 of the cap to a subsequent year. 8 Q. How is your testimony organized? 9 A. My testimony will discuss the following areas 10 rel-ated to the FCA mechanj-sm and the Company's request to 11 implement new rates for Schedule 54, Eixed Cost Adjustment: 72 (1) I wil-l- briefly discuss the FCA mechanism itsel-f and how 13 the ECA amount is determined; (2) I wil-l- describe the 14 determination of the 20lB FCA amount; (3) I will discuss 15 the calculation of the FCA rates the Company is proposi-ng 1,6 to be effective June l, 2019, through May 31, 2020; (4) I 11 wil-l discuss how the 3 percent discretionary cap is 18 calculated and impacts the Commission may wish to consider 19 before imposing, (5) I will present the Commission with the 20 calculation of the FCA rates the Company would implement to 2L be effective June L, 2019, through May 31, 2020, should the 22 Commission choose to impose the discretionary cap of 3 1 fn Order No. 3026'l (Case No. IPC-E-04-15), the Commission approved a di-scretionary rate adjustment cap for annual- FCA-related changes. In Order No. 33295 (Case No. IPC-E-14-17), the Commission approved a settfement stipu"lation that cfarified the manner in which the cap j-s determined each year. ASCHENBRENNER, DI 3 Idaho Power Company 1 2 3 4 5 6 1 B 9 percent; and (6) I will dlscuss the Company's compliance with Order No. 34019. I. FI]GD COST ADWSTMENT MECTIA}IISM What is the purpose of the FCA mechanism?O. A. "decoupl es , " in order to The ECA is a mechanism thattrue-up billedor separates, remove the financial energy safes disincentive from revenue that exists when the Company invests in DSM resources and activities. Under the FCA, rates for Residential- Service (Schedules 7, 5, and 6) and Small- General Servj-ce (Schedul-es 7 and10 3, 4, 11 B) customers are adjusted annually to recover or refund the 72 difference between the l-evel of fixed cost recovery 13 authorized by the Commission in case and the l-evel the Company's most recent of fixed cost recovery thatl4 15 t6 t7 1B 79 20 27 )) 23 24 general rate the Company sal-es during o. A. received based upon the actual billed energy the previous cal-endar year. Pfease describe the FCA mechanism. For both the Residential- and Smal-l- General Service cl-asses, the FCA mechanism is the same. The f ormul-a used to determine the FCA amount is: FCA : (CUST X FCC) (ACTUAL X ECE) Where: FCA : Fixed Cost Adjustment; CUST : Average Number of Customers, FCC : Eixed Cost per Customer rate, by cl-ass; by class; ASCHENBRENNER, DI 4 Idaho Power Company 1 2 3 4 5 6 1 9 ACTUAL Actual Bil-l-ed kil-owatt-hours (*kwh") Energy FCE : Fixed The ECA amount is the l-evel- of the level- "authorized fixed cost recovery" of "actual fixed cost recovery" Can the FCA deferral bal-ance Sal-es, by cl-ass; and Cost per Energy rate, by class. difference between the Company's (CUST X FCC) and (ACTUAL X FCE) . be either or negative? . Yes. A positive FCA indicates the Company's customer has A No. The 23 the 2078 FCA deferral o positive A 10 authori-zed l-evef of fixed cost recovery is greater than the 11 Ievef of fixed costs recovered through the energy rate. 72 This would occur when energy use per 13 decreased. The effect would be that the Company has under 74 collected its authorized l-evel- of fixed costs. In a 15 similar fashion, a negative FCA indlcates the Company's 16 authorized fixed cost recovery amount is fess than the 11 fj-xed costs determined to have been recovered through the 18 energy rate and results in a refund to customers. L9 II. FcjA DETERMINATION FOR CALEIIDAR YE,AR 2018 20 O Dld the FCC and FCE rates used to determine bal-ance change from prior years? FCC and FCE rates used to determine bafance are unchanged from the prior 2L the 2018 FCA deferra] 24 22 25 year. The ECC Company's most and FCE rates were established in the recent general rate case, Case No. ASCHENBRENNER, DI 5 Idaho Power Company 1 2 3 4 q 6 7 o 9 recovery derived? A The authorized level of fixed cost recovery is rPC-E-11-08, Schedule 54, O. the product of by class. The on the number end of each month. methodology that was This approach applies the same used to determine customer counts in and can be found in the Company's tariff under Fixed Cost Adjustment. How is the authorized leve1 of fixed cost the FCC and the average number of customers, Company uses a prorated customer count based of active utility service agreements at the 10 11 the Company's most recent L2 average customer count is 13 average of the 12 monthly 74 15 determlned? t6 A 23 estimated monthly report provided to24 rate case. The annual by calculating the customer counts general derived prorated O.How is the actual level of fixed cost recovery In compliance with Order No. 33295, the actual l1 level of fixed cost recovery is the product of the FCE and the cal-endar year,18 the actual billed energy sales for 19 measured in kwh 20 Does the Company compute a monthly FCA 2L deferral balance? 22 A Yes.S j-nce 2009, FCA deferral the Company has reported the o balance in t.he monthly ECA the Commission. Exhibit No. 1 is a copy ASCHENBRENNER, DT 6 Idaho Power Company 25 1 2 3 4 5 6 7 B 9 of the monthly ECA report for calendar year 20LB with year- end information. Although the FCA is an annual mechanism that is ultimately calculated and determined using customer counts and bil-Ied energy sales data for the entire calendar year, a monthly FCA deferral balance is estimated and recorded in the Company's accounting records to maintain compliance with Generally Accepted Accounting Principles. This estimated monthly FCA deferral balance is provided to the Commission in the monthly FCA report. O. Is it possible for the reported monthly ECA deferral- balance estimate to differ from the annual amount? A. Yes. Because the monthly FCA deferral bal-ance is computed using monthly customer counts while the annual FCA deferral balance is computed using the average customer count for the year, the sum of the monthly calculations may differ from the annual cal-cul-ation. O. How is the reported monthly estimate adjusted to align with A. the authorized annual amount? At year-end, once the annual ECA amount is determi-ned, an adjustment is made to the sum of the previously recorded t2 monthJ-y estimates to align with the annual- FCA deferral balance. Because the annual customer 24 count is the average of 10 11 72 13 74 15 76 71 1B 79 ZU 27 a) 23 the 72 monthly customer counts, it year-end. ASCHENBRENNER, DI 7 Idaho Power Company 25 is not avai]able until 1 2 3 4 5 O. What adjustments were made to the 2078 monthly finalestimates to year-end 2078 A. align FCA these amounts with the Company's deferral- balance? To align with the annuaf FCA amount to be recorded in the Company's 2018 financial statements, dD 6 upward adjustment of $127,892 was made for the Residential 7 customer class, reflected on l1ne 6, column O of Exhibit 8 No. 1. An upward adjustment of $1,845 was made for the 9 Small- General Service customer class, reflected on l-ine 20, 10 column O of Exhibit No. 1. The total upward adjustment for 11 both customer classes is $123,737. 72 O. What is the tota] amount of the FCA, not 13 including interest? 74 A. The total amount of the ECA for both the 15 Residential and Small General Service customer classes, not !6 including interest, is $34,337,922. Exhibit No. 2 shows L7 the calcul-ation of the FCA for each customer cl-ass. The 18 calculation of the ECA uses the average annual- customer 19 count and the annual- billed sales amount, whi-ch are 20 incl-uded in Exhibit No. 3. 27 The calcu]ated FCA deferral ba]ance for the 22 Residentlal customer class, not including interest, is 23 $33,088,346. An amount of $33,088,344 is found in Exhibit 24 No. 7, line 6, column P. The $2 difference between Exhibit 25 No. 1 and Exhibit No. 2 is due to rounding. The cal-cul-ated ASCHENBRENNER, DI B Idaho Power Company 1 2 3 4 5 6 1 o 9 ECA deferral balance for the SmalI General Service customer c1ass, not including interest, is $1,249,576. This amount is al-so found in Exhibit No. 1, line 20, column P. O. What is the total- amount of the 20L8 FCA, including interest? A. The total amount of the 2078 FCA is $34,788,275.89, reflected on l-ine 32, column V, of Exhibit No. 4. The ECA for the Residential- cl-ass is $33,522,802.44,ref l-ected on Iine 15, for the Small Generaf column V, of Exhibit Service Cl-ass is10 No. 4. The FCA 11 $1,265,413.45, refl-ected on line 29, column V, of Exhibit 72 No. 4. Exhibit No. 4 shows the ECA deferral- ba]ances and 13 adjustments, plus 4 and Exhibit No. interest, through May 20L9. Exhibit No. 74 15 the FCA report Exhibit No. 4 sent to the Commission each month,' however, 1 both contain the same information as 16 77 1B 19 25 2078 calculates interest from January 20lB that information fn through onlyMay 2079 for the whil-e Exhibit No. 1 shows cal-endar year. What is the significance of these numbers withO 20 respect to the Company's recovery of its fixed costs? 2l A. Because the Residential FCA is a positive 22 number, it means that the cal-cul-ated 23 customer has decreased from the level 24 Company' s l-ast generaJ- rate case. approved mechanism, the Residential class will recei-ve an average use per establ-ished i-n the accordance with the ASCHENBRENNER, DI 9 Idaho Power Company 1 2 3 4 5 6 1 9 adjustment to al-l-ow for recovery of the were not recovered through actual billed during the year. The Smal-l- General- Service ECA is number, meaning that the cal-culated use this class has also decreased from the fixed costs that energy charges al-so a positive customer for the Company's most recent general has not recovered its authorized rate per Ievel CASC level- of fixed established in and the Company costs based on actual billed sales for the Small- General Service cl-ass. 10 Eor both customer classes, the average use per customer 11 based on actual billed sales for the year were lower than 12 the level established in the Company's most recent general 13 rate case. L4 III. CAICT'I.ATION OF THE 2019-2020 FCA RATE 15 O. Pl-ease describe the cal-culation of the FCA rates the Company proposes go into effect on June L, 2019. A. The FCA rates the Company proposes to go into effect on June 7, 2079, were calculated by taking the ECA deferral- balances for each customer cl-ass described above L6 L1 1B L9 and dividing by the respective sales forecast for the June 7, 22 time frame class normalized energy 2079, through May 31, 2020, forecasted June 1 through 20 2t 23 24 ( "Test frame Year"). The is theMay 31 time historically same period used for the that has been used Power Cost Adjustment ASCHENBRENNER, DI 1O Idaho Power Company 25 mechanism. and is also 1 2 3 4 5 6 1 B 9 What has the Company determined the forecast r to be for both the Residenti-al- andnormalized energy sal-es Small- General- Service cl-asses? A. The Company's forecasted normalized energy sales are 5,103,484,'723 kwh for the Residential class and 133,563,135 kwh for the Small General Service class. The forecasted normalized energy sal-es are found in Exhj-bit No. 5, column b. u As defined in the approved mechanism, what are for the Residential and Smafl-10 the corresponding FCA rates 11 Genera1 Service cl-asses based on a combined and equal FCA L2 rate change? 13 A To recover the authorized level of fixed 74 cost s , 0.6598 Sma11 the FCA rate for the Residential class would be 15 76 L] The cafcufation of these rates is found in 1B In Order No. 32505, the Commission ordered that the 79 FCA deferral- ba]ance will- conti-nue to be recovered or ZU refunded equally between the Residential- and SmalI General- Service classes. Order No. 32505 at 9. Because the cents per kwh and the corresponding General Servi-ce class woul-d be 0.8366 rate for the cents per kwh. Exhibit No. 5. 27 22 Residential and SmaII General- Service classes reduced their 23 energy consumption per customer such that the Company under 24 collected its authorized level of fi-xed costs as 25 ASCHENBRENNER, DI 11 ldaho Power Company 1 2 3 4 5 6 1 a 9 establ-1shed in Case No. IPC-E-11-08, rate surcharge. O. Incl-uding the current each cl-ass requires a FCA rates in effect, as measured 37, 2020. This would represent an annual- percent from current billed revenue for what is the percentage change in bil-l-ed revenue from total bil-Ied amounts currently recovered from Residential- and Smal-l- General Service classes? A. The Company proposes to col-l-ect the resulting increase of $19,181,565 in the FCA rates effective June 7, 10 2079, through May increase of 3.64 11 the affected customer cl-asses. The percentage change in 12 billed revenue is found in Exhibit No. 6. This proposed 13 increase resul-ts in an approximate $3.49 increase to the L4 monthly bill of a typical residential- customer using 950 15 kWh per month. 16 O. How w111 the Company incorporate the ECA 71 surcharges classes on A. for the Residential and Sma11 General- Servi-ce 1B customers' biIIs? 19 The Company proposes to include the FCA with 20 the Fixed and Power Cost Adjustments2 line item on 27 Residential and Smal-l General Service customers' bi11s. )) 2 The Company previously collected the FCA surcharge through the "Annuaf Adjustment" fine item. fn response to customer feedback and after consultation with Commj-ssion Staff, the fine item will- be updated effective with each customer's April 2019 billing cycIe. ASCHENBRENNER, DI 12 Idaho Power Company 1 Q. What is the difference between the FCA 2 deferral bal-ance currently in amortization and the proposed 3 ECA deferra1 balance to be collected through the ECA rate? 4 A. In this filing, the Company is proposing to 5 col-l-ect rates based on an FCA deferral bal-ance of 6 $34,188,276, which is $19,181,565 more than the current FCA 7 deferral ba1ance of $15, 60 6,111. The current deferra1 8 balance was approved 1n Order No. 34079, issued in Case No. 9 IPC-E-18-02, with rates based on that balance effective for 10 the period June l, 20L8, through May 31, 2079. 11 IV. RATE AD.]US${ENT CAP t2 O. When did the Commission adopt a 3 percent cap that coul-d be applied to the FCA deferral- col-lectj-on? A. In Case No. IPC-E-04-15 (subsequent to severa1 workshops attended by parties to that case), the Company, Commission Staff, and the NW Energy Coal-iti-on signed a sett1ement stipulation presenting the framework for an FCA pi1ot. In its request for the Commission's approval of that settlement stipulation, the Company also requested the Commission adopt a 3 percent discretionary cap on any upward rate change that could be implemented at the option of the Commissi-on. O. Why did the Company initial-l-y request the Commission adopt a cap? 13 74 15 16 77 1B 19 20 27 22 24 ASCHENBRENNER, DI 13 Idaho Power Company 25 1 2 3 4 5 6 1 B 9 A The cap proposal was initially intended to mitigate some occur with the simi1ar to why a cap was imposed for the Company's Power Cost Adjustment ("PCA") mechanism.3 The Company proposed that in future years, the Commissi-on, at its discretion and judgment, can impose the cap or l-et the rate change as cal-culated. At the time of the Company's proposal, it noted that, historically, under the PCA mechanism, the Commission has been rel-uctant to impose the cap for various reasons, including the dil-ution of the price signal and to avoid a situation where deferred cost recovery is compounded with a subsequent year's rate adjustments, often referred to as "pancakinq." Nevertheless, the cap is there as a tool for the Commission's potential- use. O. How is the cap calculated? A. As agreed to in the stipulation approved by 18 the Commission of the potential introduction of rate impacts that might a new rate mechanism, 10 11 72 13 74 15 16 71 t9 20 27 22 23 in Order No. 33295, the Company cafculates cap on annual- i-ncreases by dividing thethe 3 percent proposed ECA revenue. a. exceed the 3 deferral change by the forecasted base rate Does the proposed collection of $34,188,216 percent cap approved by the Commj-ssion? 3 Case No. IPC-E-04-15, Gale Direct Testimony, page 11 ASCHENBRENNER, D] 14 Idaho Power Company 24 1 2 3 4 5 6 7 I 9 A Yes. Pl-ease reference Exhibit No. 5. To determi-ne if the FCA deferral balance exceeds Company Change / In this was compared to and the deferral forecasted base the cdp, the ECA Deferral 3 percent. collected in percent revenue currentl-y being which results in a 4.02 first determines whether the Proposed Forecasted Base Rate Revenue exceeds case, the 201,8 FCA deferral bal-ance ($34, 188,216) the 2071 FCA deferral- balance ($15,606,17L) change ($19,181,555) is divided by the rate 11 rates ($411 ,639, 518 ) , 10 increase. 72 O. If the Commission percent discretionary cap, what FCA balance be?13 76 would seek to recover 71 $13, B 68,952 from the Smal-l- General1B t9 u What 20 for coflection 1n were to implement the 3 woul-d the resulting 20L8 an incremental $14,329,786- Residential- cfass and $450,233 from t4 A As shown in Exhibit No. 5 in column i, if the 15 Commission were to implement the 3 percent cdp, the Company the Service cl-ass. amount of the 20LB FCA would be deferred a future period? 2t 22 Z3 A. the Company amounts to If the Commi-ssion efects to implement the cdp, woul-d defer a total of $4,852,379 in 20!8 FCA collect in a future period-$4,553,522 from the class and $298,85'l from the Smal-l- General24 Residential 25 Service customer class. ASCHENBRENNER, DI 15 Idaho Power Company 1 2 3 4 5 6 1 x 9 0.What potential implications should the Commissj-on consj-der as it contemplates the deferral- of a portion of the 2078 FCA deferra1 balance for col-Iection in a future period? A. As mentioned earlier in my testJ-mony, it is my undersLanding that the Commission has been careful to avoj-d a situation where deferred cost recovery is compounded with a subsequent year's rate adjustment, often referred to as "pancakinq." In liqht of this view, the Company be1ieves it is important for the Commission to consj-der two known components of this year's 2019/2020 PCA that wil-l- represent one-time rate reduction benefits to customers beginning 10 11 t2 13 June l, 20L9, and ending May 31, 2020. The first 14 beneficial- 201,9/2020 PCA component is the Company's 15 determination of revenue sharing benefits of approxj-mately L6 $5 mill-ion stemming from the revenue sharing mechanism L7 approved by Order No. 33149. The second beneficial 18 2079/2020 PCA component is rel-ated to the provision of 19 temporary benefits of approximately $2.1 mil1ion associated 20 with the Tax Cuts and Jobs Act of 2071 and its Access Transmission Tariff impact on rates,27 22 z3 24 the Company's Open approved in Order reduce rates this thereby helping to No. 34017. WhiIe these components wiff 25 ECA, these components will approximateJ-y $1 .1 mil1ion, other rate increases l-ike the also represent known, or 1ike1y, year by offset ASCHENBRENNER, DI 76 Idaho Power Company 1 increases to customer rates next year when they expi-re. 2 Deferring the collection of a portion of this year's FCA 3 deferral balance wil-l only add to these probable rate 4 increases next year. 5 It is also j-mportant to consider the Company has 6 filed to reduce its Energy Efficiency Rider collection by 1 7 percent effective June L, 2019 (Case No. IPC-E-19-06), 8 which is only slightly offset by the Company's proposed 9 0.11 percent increase attributed to rate impacts associated 10 with the Company's request (Case No. IPC-E-19-08) to 11 recover j-ncremental annuaf levelized revenue requirement 12 associated with its Valmy plant to become effective, if 13 approved, on the same date. To the extent this potential L4 combined net rate decrease coul-d offset the uncapped 15 incremental- increase in the 2019-2020 FCA rates, any L6 concern of rate pancaking could be avoided, and j-t may 77 reduce rate volatility for customers. 18 0. How does the 2018 FCA deferral balance compare 19 to the balance prior A. A final Commission relates to to l-ast year's large decrease? /tt 2t are driving this year's customer in 201,8 was22 2078 FCA increase. While use per 23 lower in comparison to 201,1, use per customer in 2018 was 24 quite similar to the l-evel- that existed in 2016. To 25 illustrate thls relationship, it is helpful to consider the ASCHENBRENNER, DI 11 Idaho Power Company point of consideration for the factors that 1 ) 3 4 q 6 1 I 9 level of FCA col-lection which was approximately the l-evel of this year's the Commission el-ects not associated with cal-endar year 2076, $35 million or just slightly above 10 coIJ-ection, the leve1 of uncapped FCA deferral balance. If to apply a cap to this year's FCA allowed collection would still be less than the FCA collectlon approved for the 2076 FCA. Last year, collection related to the FCA decreased from approximately $35 m11l-ion in the prior year to approxj-mately $16 million, largely related to weather impacts on sales. This year's uncapped FCA increase wou1d simply reverse the majori-ty of l-ast year's FCA coll-ection decrease and bring the level- of col-l-ection in line with 11 L2 24 13 that which existed during the 2011 /2018 col-lection perlod. t4 u.Do you believe it is in the best interest of 15 customers to defer coll-ection of a portion of the 20lB ECA? 76 No. For the reasons described above, the l7 Company does not bel-ieve implementing the cap in this 18 instance is warranted nor woul-d it serve in the best 79 interests of customers. 20 \I. PROPOSED FCA RATES WITH IMPLEMENTATION OF THE CAP 27 Did the Company calcul-ate the 2019-2020 FCA 22 rates that wou]d result if the Commission chooses to 23 implement the cap? A. Yes . Bel-ow I wil-l present the resul-ts of the 25 alternate 2019-2020 FCA rates based on a capped 2078 ASCHENBRENNER, DI 18 Idaho Power Company O 1 FCA deferral- bal-ance to help inform the Commission's 2 decision on this matter. 3 Q. Please descri-be the cal-cul-ation of the FCA 4 rates the Company would implement on June L, 2019, if the 5 Commission decides to implement the cap. 6 A. The alternate FCA rates were cal-cul-ated by 7 taking the capped FCA deferral- balances for each customer 8 class described above ($28,969,280.15 for Residential- and 9 $966,61,6.49 for Smal-l- General Service) and dividing by the 1O respective class normal-ized energy sales forecast for the 11 June t, 2019, through May 31, 2020, Test Year. 72 0. What has the Company determined the forecast 13 normal-ized energy sales to be for both the Residential and L4 Smafl- General- Service cl-asses? 15 A. The Company's forecasted normalized energy !6 sal-es are 5,103,484,723 kwh for the Residential cl-ass and 71 133,563,135 kwh for the Small General Service cfass. The 18 forecasted normalized energy sal-es are found in Exhibit No. 19 5, cofumn n. 20 O. As defined in the approved mechanism, what are 27 the corresponding capped ECA Smal-l- General Service cl-asses rates for the Residential- and based on a combined and equal 23 FCA rate change? 24 A. Under the capped alternative, to recover the 25 capped level of fixed costs, the FCA rate for the ASCHENBRENNER, DI 19 Idaho Power Company )) 1 2 3 4 5 6 1 U 9 Residential cl-ass woufd be 0.5611 cents per kwh and the Genera] Service cfasscorresponding rate for the Smal-l- woul-d be 0.7L99 cents per kwh. in Exhibit No.5, columns m through s O. Including the current ECA rates in effect, what is the percentage change in bi1led revenue as measured from total billed amounts currently recovered from Residential- and Small General Service cfasses under the al-ternate rates ? A. Under the capped alternative, the Company would collect the resulting j-ncrease of $74,329,786 in the FCA rates effective June L, 20L9, through May 31, 2020. This woul-d represent an annual j-ncrease of 2.13 percent. from current billed revenue for the affected customer classes. The percentage change in billed revenue is found in Exhibit No. 1. This proposed increase resul-ts in an approximate $2.62 increase to the monthly bill of a typical residential- customer using 950 kWh per month. O. If the Commission implements the 3 percent cdp, what is the capped 20L8 deferral- balance? A. Exhibit No. 5 contains a derivation of the 20tg ECA deferral balance, if the Commission decides to implement the cdp, to be col-l-ected through the FCA rate. Elrst, forecasted 2019-2020 base rate revenues by cJ-ass The cal-culation of these rates is found 10 11 t2 13 74 15 t6 71 1B 79 20 27 z3 24 25 (column c) are multiplied by the 3 percent annual increase ASCHENBRENNER, DI 2O Idaho Power Company 1 2 3 4 5 6 1 a 9 cdp, resulting in a capped increase of $13,868,952.41 for the Residential class and $460,233.01 for the Small General- Service class (column i). Second, the capped increase j-s then added to the 20L1 FCA Doll-ars by class as approved in Order No. 34019, $15,100,327.68 for the Residential- class and $506,383.42 for the Smal-l General Service cl-ass (col-umn h), leaving 2078 FCA deferral balances of $28,969,280.15 to be coll-ected from for the Residential- class and $956,61,6.49 to be collected from the Smal-I General Service cl-ass 10 (column j). 11 O What is the remainder of the 2078 FCA deferred 72 bal-ance to be collected in a future period if the cap?13 Commission chooses to implement the 14 As shown in Exhibit No. 5, the remainder of 15 the 20tB ECA deferred ba]ance if the Commi-ssion el-ects to 76 implement the cap is $4,553,522.29 for the Residential class and $298,856.96 for the Small Genera1 Service class (col-umn 1) . VI. COMPLIANCE WTTH COMMISSION ORDER NO. 34079 l1 1B 19 20 O. In the Company's 2011 FCA filing, Case No. 2! IPC-E-L8-02, the Commission encouraged the Company to 22 col-l-aborate with Commission St.aff ("Staff") in advance of 23 the 20L9 FCA filing to address i-ssues Staff raised in its 24 comments. Order No. 34019 at 4. Did the Company meet with 25 Staff in advance of this FCA filing? ASCHENBRENNER, DI 27 Idaho Power Company A 1 2 3 4 5 6 7 9 A. Yes. On January 28, 20L9, Idaho Power met with Staff to discuss concerns raised in its comments i-n Case No. IPC-E-]-B-02. O. Did the meeting between the Company and Staff result in any proposed modifications to the ECA for the Commission's consi-deration in this case? A. No. While the discussions covered a number of aspects of the FCA and incl-uded a robust exchange of views and ideas between the Company and Staff, no speciflc modifications to the mechanism were discussed or agreed upon. However, the Company remains committed to continuing discussions with Staff regarding the FCA mechanism, if such discussions are deemed warranted by Staff or the Commission. vrr. coNctusroN Please summarize the Company's request in this 10 13 74 15 76 L7 case. 18 A. The Company requests that L9 determine the 2018 FCA deferral balance 20 11 L2 27 22 Z5 u the Commission of $34,188 ,21 6 with Order No. has been correctly calculated in conformance 32505. Further, the Company requests the authorize the collection of the proposed which is an j-ncrease of $19,181,565 from Commission 2079-2020 FCA, the current ECA 24 deferral balance of $15,606,1LT. This represents a 3.64 25 ASCHENBRENNER, DT 22 Idaho Power Company 1 2 3 4 5 6 7 x 9 percent increase over current authorized revenue to become effective June l, 20L9. In the alternative, should the Commission wish to apply the discretj-onary 3 percent cdp, the Company requests the Commj-ssion approve its cal-cul-ation of the proposed capped 2078 FCA in the amount of $29,935,896.64. This l-evel- of col-l-ection would represent an increase of $74,329, 186 from $15,506,777, or a 2.13 percent increase over to become effective June 1 the current FCA deferral- balance of 10 authorized revenue current 20L9. 11 72 13 74 15 t6 71 1B 79 20 27 22 ,/1 24 r) A Does this complete your testimony? Yes, it does. ASCHENBRENNER, DI 23 Idaho Power Company 1 2 3 4 5 6 1 B 9 ATTESTATION OF TESTIMONY STATE OE IDAHO ae County of Ada 10 I, Connie G. Aschenbrenner, having been duly sworn to testify truthfully, and based upon my personal knowledge, state the following: I am employed by Idaho Power Company as the Rate Design Senior Manager in the Regulatory Affairs Department and am competent to be a witness in this proceeding. f decl-are under penalty of perjury of the laws of the state of Idaho that the foregoing pre-fiIed direct testimony and exhj-bits are true and correct to the best of my information and belief. DATED this 15th day of March 2019. 11 72 13 74 15 t6 I1 1B 79 20 2t)) Z5 Connie G. Aschenbrenner 24 SUBSCRIBED AND SV0ORN to before me this 15th day of March 201,9.25 26 )1 ZO 29 30 .1 tt No ary Pub ic for Ida o Idahos.Residing at: Meridj-an My commission expires:02/04/2021 ASCHENBRENNER, DI 24 Idaho Power Company or t"*C^u^Itnw,v BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-I9-10 IDAHO POWER COMPANY ASCHENBRENNER, DI TESTIMONY EXHIBIT NO. 1 Exhibit No. 1 Case No. IPC-E-19-10 C. 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Eal, o)oc(u (ud)o.cc.coc)d] o Eooo c =o E c)oco(!dlo.c.E'cuJ j.ioo)Ic t Eo =o o- f -c (Ef o(-) s 6fcc (, 6t oo, o E E Eo = o.x]Ubc oo os ->cco = o (Eoooo =oo o0) o)c toILo(,.E ou) 6 ocoo .E Ev, EoF tro Eo oooEo.xlI- .EoF o.q cuJ No(')tlr)N No(')N@ o)o,o) oooox CDO)ro o(r)ot\t O)o)o) ooooxo)o)rr) o(f)(\ttt O)o)C') ooooxo)(nlr) o o o @ N o o @ r c o Exhibit No. 1 Case No. IPC-E-19-10 C. Aschenbrenner, IPC Page 2 of 2 I BEFORE THE IDAHO PUBLIG UTILITIES COMMISSION GASE NO. IPC-E-19-10 IDAHO POWER COMPANY ASCHENBRENNER, DI TESTIMONY EXHIBIT NO.2 2018 Annual Fixed Cost Adjustment Deferral Calculation Residential Customer Count FCC Authorized Recovery Amount Billed Sales in kWh FCE Actual Recovery Amount Residential FCA Small General Service Customer Count FCC Authorized Recovery Amou nt Billed Sales in kWh FCE Actual Recovery Amount Small General Service FCA Total FCA 5289,824,633 4,975,3L5,596 s0.0s1602 445,452.30 Soso.og 5256,736,287 S33,088,34G 28,534.22 s350.s7 s10,288,583 13L,700,601 So.oosogg Sg,o39,oo7 51,249,s76 5g4,gg7,9zz Exhibit No. 2 Case No. IPC-E-19-10 C. Aschenbrenner, IPC Page 1 of 1 BEFORE THE IDAHO PUBLIG UTILITIES COMMISSION GASE NO. IPC-E-I9-1 0 IDAHO POWER COMPANY ASCHENBRENNER, DI TESTIMONY EXHIBIT NO.3 2018 Monthly Customer Count and Billed Sales Month January February March April May June July August September October November December Residential Customer Class Customer Count Billed Sales 440,978.70 542,542,040 441,L74.65 474,993,849 44L,948.78 474,79'1,'.1,53 443,028.58 379,031,315 443,787.92 318,495,572 445,084.20 336,654,579 445,552.8L 472,953,672 446,575.39 5t0,756,796 447,626.42 385,8L1,L12 448,743.29 3!4,4t0,464 449,873.61 352,7L0,584 451,053.31- 472,t49,580 Annual Average Customer Count 445,452.30 Total Annual Billed Sales 4,975,3t6,596 Smal! General Service Customer Class Month Customer Count Billed Sales January 28,473.!3 13,293,538 February 28,323.92 72,63O,t3L March 28,585.49 L2,734,924 April 28,374.22 10,170,395 May 28,377.03 9,329,590 June 28,877.02 9,443,358 July 28,434.59 10,794,L72 August 28,581.06 12,5L4,931 September 28,533.16 10,558,591 October 28,569.57 9,572,118 November 28,596.30 9,581,709 December 28,679.13 LL,577,044 Annual Average Customer Count 28,534.22 Total Annual Billed Sales 13L,700,501 Exhibit No. 3 Case No. IPC-E-19-10 C. Aschenbrenner, IPC Page 1 of 1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION GASE NO. IPC-E-I9-10 IDAHO POWER COMPANY ASCHENBRENNER, DI TESTIMONY EXHIBIT NO.4 o)oooo oq @o@-o@ @_ N oq @so @oo ocNoo-o$N$N o@. oa@o s oIo N N$od Nq o$-s NI i s@@_sN oqooo- N@ oq No d oq @Nooioo oc!o oo s @qo @NNN Nq @ N. 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Noo\taN No No ooo ooooxooo o o$$ooo ooooxooo o Nstooo ooooxooa o o t @oo N ooo ooooxooo BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION GASE NO. !PC-E-l9-1 0 IDAHO POWER COMPANY ASGHENBRENNER, DI TESTIMONY EXHIBIT NO.5 o oa, EsotraO-Utrpt b!tr =o o 6.EEOUo-g UUr oo? Hfre t,Eb9bEcbulz 3og,E o ^_ooo\. (o OJrv! E')<u c .9 IE .E E o OJo GI lE 0c (Jlr I -o (o >RNo+ o Jco oEo a!4 o0t!o oou0t! c0,I 0,4ottcoLo E I .E =cc @Fl Lnoi(n(o FiN<llJ) OJ =co oc,o t!G,olit!@ T'o .!oo o u')(otJ) Fl6ri Ctlr-l1r> Or o$rYt o otr,R' LaE6.10,Obt-.!LI!OJ s0,l0JiE? E$o3EE*H;E*t ==vrC.= od.b a<XLI.JlU ll rr F{ '.OF.r r\r\Nd oo'oco\ON,ri +t-{ (n1r1 <t> >Ro r\,1r. oq Oq o.oqr4NN cO@F-j (f)e @ ao.(t).o F-'f..{@ @lr) co. 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