20190419Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:MATT HUNTER
DEPUTY ATTORNEY GENERAL
DATE: APRIL 19,2019
SUBJECT: IDAHO POWER,S ANNUAL POWER COST ADJUSTMENT
CASE NO. IPC-E-I9-16
On April 15, 2019, Idaho Power Company (the Company) applied for an Order
authorizing the Company to implement its Power Cost Adjustment (PCA) rates effective June l,
2019, through May 31,2020.If approved, the Company's PCA adjustment would decrease rates
in all customer classes, with an average residential customer's bill decreasing by about $3.35 per
month.
Since 1993, the PCA mechanism has allowed the Company to adjust its rates up or
down to reflect the Company's annual "power supply costs." Because about half of the Company's
generation is from hydropower facilities, the Company's actual cost to provide electricity (its
power supply cost) varies from year-to-year depending on changes in stream flows, the amount of
purchased power, fuel costs, the market price of power, and other factors.
The Company states that if the Application is approved, its Idaho customers
collectively would pay about $50.1 million (4.34%) less for electricity in the upcoming year than
they do now. The Company's Application would impact major customer classes as follows:
Percentage Decrease from Current Billed Rates
Residential
Small
General
Service
Large
General
Service Large Porver Irrigation
0verall
Charge
-3.49%-2.79%-4.80%-6.06%-4.33%-4.34%
IDECISION MEMORANDUM
Besides the PCA, the Company has filed three additional cases that, if approved, will
impact rates for the same period. These cases involve the Company's annual Fixed Cost
Adjustment (FCA), a revision to its Energy Efficiency Rider Tariff (EE Rider), and an adjustment
to recover incremental revenue associated with the Company's exit from operations at the North
Valmy power plant (Valmy). If the Commission approves all four rate adjustments as filed,
residential customers will see a total price decrease of 0.65% effective June 1 , 2019. Other
customer classes are impacted as follows:
Proposed 2019 Revenue Impact by Class:
Percentage Decrease from Current Billed Rates by Proposed Change
Fixed Cost ustment
Power Cost ustment
ustment
EE Rider Ad ent
Total Combined
2
Residential
Small
General
Service
Large
General
Service Large Power Irrigation
3.64%3.70%N/A N/A N/A
Residential
Small
General
Service
Large
General
Service Large Power Irrigation
-3.49%-2.79%-4.75%-6.29%-4.33%
Residential
Small
General
Service
Large
General
Service Large Power Irrigation
0.ll%o 0.r0%0.tt%0.tt%0.11%
Small
General
Service
Large
General
Sen'ice Larqe Power IrrigationResidential
-0.90%-0.91%-0.91%-0.89%-0.91%
Residential
Small
General
Service
Large
General
Service Large Power Irrigation
-0.65%0.10%-5.55%-7.06%-5.13Yo
DECISION MEMORANDUM
The Company attributes this year's PCA decrease to lower-than-anticipated power
supply and natural gas costs, and better-than-expected water conditions. The Company's proposed
PCA adjustments are reflected in an updated Schedule 55, which is attached to the Application.
The Company requests that the new rates take effect on June 1,2019, and that the case be processed
by Modified Procedure.
STAFF RECOMMENDATION
Staff concurs with the use of Modified Procedure. Staff recommends that the
Commission issue a Notice of Application and Notice of Modified Procedure setting a May 15,
2019 comment deadline, and a May 22,2019 reply deadline.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and Notice of Modified
Procedure setting a May 15,2019 comment deadline, and a May 22,2019 reply deadline?
att Hunter
Deputy Attomey General
I Legal\ELECTzuC\lPC-E- I 9- I 6IPCE I 9 I 6_mh.doc
JDECISION MEMORANDUM