20191017Larkin Direct.pdf

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.r rri ,'i"i-:i {l0i"il*illj$l0N
BEFORE THE ]DAHO PUBLIC UTIL]TIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY' S APPLICATION EOR
AUTHORTTY TO DECREASE ITS RATES
FOR ELECTR]C SERV]CE FOR COSTS
ASSOCIATED WITH THE BOARDMAN
POWER PLANT.
CASE NO. IPC_E-19_32
IDAHO POWER COMPANY
DIRECT TEST]MONY
OF
MATTHEW T. LARKIN
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present position with
"Company").
A. My name
address is L22L West
am employed by Idaho
fdaho Power Company ("Idaho Power" or
Please state your name, business address, and
is Matthew T. Larkin. My business
Idaho Street, Boise, Idaho 83102.
Power as the Revenue Requirement
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Senior Manager in the Regulatory Affairs Department.
O.Please descri-be your educational background.
A. I received a Bachel-or of Business
Administration degree in Einance from the Unj-versity of
Oregon in 2001. In 2008, I earned a Master of Business
Administration degree from the University of Oregon. I
have al-so attended electric utility ratemaking courses,
including the ELectric Rates Advanced Course, offered by
the Edlson Electric Institute, and Estimation of
El-ectricity Marqinaf Costs and Application to Pricinq,
presented by National Economic Research Associates, Inc.
O. Pl-ease describe your work experience with
Idaho Power.
A. I began my employment with Idaho Power as a
Regulatory Analyst in January 2009. As a Regulatory
Analyst, I provided support for the Company's regulatory
activities, lncluding compliance reporting, financial
analysis, and the development of revenue forecasts for
regulatory filings.
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LARKIN, Df
Idaho Power
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Company
1 In January 2074, I was promoted to Senior Regulatory
2 Analyst where my responsibilities expanded to include the
3 development of complex cost-rel-ated studies and the
4 analysis of strategic regulatory issues.
5 Since becoming the Revenue Requirement Senior
6 Manager in March 20L8, I have overseen the Company's
7 regulatory activities related to revenue requirement, such
I as power supply expense modeling, jurisdi-ctional separation
9 studies, and Idaho Power's Open Access Transmission Tariff
10 f ormul-a rate.
11 r. OVERVTEST
72 What is Idaho Power's request in thls case?
13 The Company is requesting authorization to
74 decrease customer rates to reflect the incremental annual
15 levellzed revenue
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the
requirement pursuant to the cost recovery
Boardman power plant ("Boardman") approvedL6
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approach for
by the Idaho PubIic Utilities Commlssion ("Commission") int1
18 Order No. 32451.Speci ficaIly,
find that aII79 the Commission (1)
20 investments through December 31,
27 incurred, (2) approve an
through 2020 at Boardman
Idaho Power is requesting
actual Boardman
20L8, were prudently
to forecasted investments
included in the levelized
update
to be
23 revenue requirement mechanism established by Order No.
24 32451, and (3) decrease customer rates $1.06 million to
25 reflect the decrease i-n collections associated with the
LARKIN, DI
Idaho Power
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Company
1 Boardman levelized revenue requirement effective January l,
2 2020, which equates to an overall decrease of 0.09 percent.
3 Q. How is your testimony organized?
4 A. My testimony begins with a summary of the
5 Boardman balancing account mechanism approved with Order
6 No. 32451 and the Boardman i-ncremental annual levefized
7 revenue requirement approved with Order No. 32549. My
I testimony then summarizes the requested reduction of $1.06
9 million to the Boardman levelized revenue requlrement
10 currently in customer rates, with a requested effective
11 date of January 7, 2020, including updates to refl-ect the
12 (1) decrease in the annual Ievelized revenue requirement of
13 $38,922, (2 ) galn of $251 ,0'l'l associated with an Asset
74 Purchase Agreement (*APA") with Portland General- Electric
15 ("PGE"), (3) true-up of $473,097 in over collection of
L6 prior years' revenues, and (4 ) over col-l-ection of $295, 158
L1 in prevj-ous years' revenue requirement amounts.
1B Do you have any exhlbits?
19 Yes. Exhiblt No. 1 to my testimony provides a
20 summary of the updated levelized revenue requirement
cal-culations by cost category and compares the amount to
the l-evel-ized revenue requirement approved with Order No.
32459 that is currently included in customer rates. Exhibit
No. 2 provides the quantification of the true-up associated
with prior years' revenue col-l-ections.
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Idaho Power
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II. BACKGROT'IID
O. Pl-ease describe Boardman.
A. Boardman is a pulverized-coal plant located in
north-central Oregon. It went into service in 1980 and
consists of a single generating unit. Idaho Power owns a
10 percent interest , or 58.5 megawatts (net dependable
capacity), in Boardman. After adjusting for routine
schedul-ed maintenance periods and estimated forced outages,
the Company's share of the plant's annual energy generating
capability is approximately 50 average megawatts. PGE has a
90 percent ownership. As the majority partner of the
pIant, PGE operates the Boardman facility. Cessati-ons of
coal--fired operations at Boardman, which was approved by
federal and state regulators in 2010 and 2011, wil-l occur
December 31, 2020.
O. Did Idaho Power update customer rates to
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18 operations?
19 A. Yes. On September 26, 2017, in Case No. IPC-
20 E-11-18, Idaho Power fil-ed an application wj-th the
27 Commission requesting an order (1) accepting the Company's
22 accounting and cost recovery plan for the early shutdown of
23 Boardman and (2) allowing the Company to establish a
24 balancing account to track shutdown-related costs and
25 benefits. In February 2072, the Commission issued Order
LARKIN, Df
Idaho Power
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Company
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No. 32451 authorizing the Company
account to track the incremental
to establ-ish a balancing
costs and benefits
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associated with the early shutdown of Boardman.
0.Please describe the Boardman balancing account
mechanism.
A. The balancing account tracks the incremental
costs associated with the accel-erated Boardman end-of-Iife
date, including (1) the return on undepreciated capital
investments at Boardman until its shutdown, (2 ) the
accelerated depreci-atj-on associated with Boardman
j-nvestments, and (3) decommissioning costs related to the11
12 Boardman shutdown. Each of these revenue requirement
13 components are subsequently "levelized" by calculating the
74 present value of each of the individual j-tems and
15 converting the values into an annuity or level payment
16 stream from customers over the remaining fife of Boardman
l7 using a return on equity of 9.5 percent, dS approved in
18 Order No. 32451.
19 The Boardman balancing account smooths revenue
20 requirement impacts of the early Boardman retirement over
27 the remaining years of the plant's life and provides an
22 opportunity for ful-l recovery of Boardman-related costs by
23 Boardman life end. In addition, it more closely aligns
24 the cost recovery perlod with the remaining operating l-ife
25 of the p1ant, resulting in a better matching of cost
LARKIN, DI
Idaho Power
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1 recovery from customers who benefit from the plant's
2 operatj-ons while mitigating the risk of future customers
3 bearing the costs of a plant that will no longer be
providing service.
0. When were costs tracked in the Boardman
bal-ancing account first reflected in customer rates?
A. On February 15, 2072, in Case No. TPC-E-12-091
Idaho Power
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9 recovery of
requested authority to
the l-evelized revenue
10 with Boardman's 2020 end-of-life
increase rates to begin
requirement associated
The Company replaced the
11 then current non-Ievellzed base rate revenue recovery
72 associated with Idaho Power's existing investment 1n
13 Boardman with a levelized revenue requirement that is
14 tracked in the Boardman bal-ancing account. On May 7J ,
15 2072, the Commission issued Order No. 32549,
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implementation of the cost recovery
Order No. 32457 and increasing the
requj-rement by $7,525, 501 ef fective
reflect the new levelized Boardman
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changes in
requirement
A.
SINCE
No.
approach
Company's
June t,2012, to
revenue requirement.
Has Idaho Power adjusted customer rates for
the Boardman annual fevelized revenue
authori zrnq
approved in
annual revenue
Order No. 32459 was issued?
On March L2, 20t3, pursuant to Order Nos
Idaho Power filed 1ts Boardman Power Plant24 32457 and 32549,
25 Annual Review report for the year ending 2072. The Company
LARKIN, DI
Idaho Power
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1 dld not request to adjust rates at that time because the
2 difference in the updated Boardman levelized revenue
3 requirement did not warrant a rate change and any
4 differences are tracked in the Boardman balancing account
5 for future collection from or refund to customers. Idaho
5 Power committed to conti-nue to revi-ew the Boardman
7 bal-ancing account annually and update the quantification of
8 the Boardman leve1ized revenue requj-rement. Idaho Power
t has fil-ed its Boardman Power Plant Annual Revi-ew each year
L0 since then and has not requested to adjust rates.
11 O. Did the U.S. Tax Cuts and Jobs Act of 2071
L2 ("Tax Act") impact the total- Boardman level-ized revenue
13 requirement?
74 A. Yes. Idaho Power's income tax expenses and
15 deferred tax liabillties included in the Boardman level-ized
16 revenue requirement amounts were calculated in accordance
71 with the Internal Revenue Code
18 signed into law on December
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the
of 1986. The
2071, amends
reduction in
Tax Act,
sections of
the federalL9 the 7986 code, most notably
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corporate income tax rate from 35 percent to 2t percent.
However, all changes to the Boardman levelized revenue
requirement resulting from provisions of the Tax Act were
cal-cul-ated and determlned with Order No. 34071 in Case No.
GNR-U-18-01, the Commission's investigation into the impact
of federal tax code revisj-ons on utility costs and
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ratemaking, and were reflected in revenue requj-rement
amounts approved in that case. Therefore, tax rates
incl-uded 1n the revenue requirement calculations in this
flling reflect those tax rates in effect prior to the Tax
Act.
III. THE BOARDInN LE\IELIZED RE\rENt E REQUIREMENT MECHAIIISM
O. How was the levelized revenue requirement
approved wlth Order No. 32549 determined?
A. The level-ized revenue requirement is
determined by calculating the present value of the revenue
requirement of each of the individual- balancing account
items and converting the val-ues into a level payment stream
from customers over the remaining recovery period. Order
L4 No. 32549 approved
of $1.53
an incremental revenue requirement
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leve I i zed76 Boardman-related
for a total Idaho jurisdictional
revenue requirement of
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$5, 1'7 4,'194. The $5. 17 million levef ized revenue
requirement incl-uded (1) all- Boardman-related plant
investments as of May 31, 20L2, which was based on actual
plant balances through December 3L, 207L, and forecasted
plant balances from January 7, 20L2, through May 3L, 2012,
(2) projected additions to the Boardman plant from June
2012 through 2020, and (3) estimated decommissioning and
salvage costs.
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O. You stated Idaho Power's annua] review of the
Boardman balancing account indicated the difference in the
updated Boardman levelized revenue requirement did not
warrant a change to customer rates. Why is the Company
proposing to update the l-evel-ized revenue requirement now?
A. Idaho Power is proposing to update the
Boardman levelized revenue
2020, because the plant
cessation of coal-fired
account contains true-up
operations and
amounts that
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requirement
nearing its
effective January 7,
December 31, 2020,
the balancing
reflect a refund due10
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to customers. The Company wants to appropriately match
rate recovery with the useful- l1fe of the p1ant.
0. Will this be the last ad3ustment to the
Boardman level-ized revenue requi-rement the Company will-t4
15 make?
76 A No. The intent of Idaho Power's request in
71 this case i-s to update the Boardman annual levelized
18 revenue requlrement to reflect the most current bal-ancing
19 account amounts now that cessation of coal--fired operations
20 is near. However, as I wifl
the Company will
of-Iife that will
Ievelized revenue
customers pay no
discuss later in my testlmony,
costs through Boardman's end-
refl-ected in a final annual
still incur
need to be
25 related costs. fn addition, the Boardman level-ized revenue
requi-rement computation to ensure
more or no l-ess than actual Boardman-
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Idaho Power
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requirement amounts approved with Order No.
an estimate for anticipated decommissioning
costs. An adjustment to customer rates will-
32549 include
and salvage
required to
with those
be
true-up
amounts
Boardman
rv.
actual decommissioning and salvage costs
collected from customers when decommissioning of
is complete.
THE LEVELIZED REVENT'E REQUIREMENT QUAI{TIFICATION
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I What is the updated levefized revenue
requirement the
customers ?
Company is proposing to be recovered from
A. Updating the Boardman l-evelized revenue
requirement components results in an annual level-ized
revenue requirement of $5,135,872 on an Idaho
jurlsdictional basis, or an annual decrease to the Idaho
jurisdictional levelized revenue requirement of $38,922.
Exhibit No. 1 summarizes the changes to the l-evelized
revenue requirement on a system basis by component and
presents the Idaho jurisdictional share of each.
O. Pl-ease describe the updates to the Boardman
l-evelized revenue requirement components.
A. Idaho Power is proposing to update all three
components of the l-evelized revenue requirement
computation: the revenue requirement associated with all-
Boardman-related plant investments as of May 31, 2072, the
revenue reguirement on incremental j-nvestments made after
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Idaho Power
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1- May 31, 2072, and the decommissioning and salvage cost
estimate.
0. What is the Company's update to the levelized
revenue requirement component associated with existing
Boardman-related plant investments as of May 31, 2012?
A. The revenue requirement component related to
existing investments is based on the Boardman-related plant
bafances in effect prior to the establishment of the
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at May 31, 20L2. fn Case No. IPC-E-72-09, the
acceferated depreciation expense was based on a
investments
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net plant
December12 balance that included actual plant values as of
13 31, 20L7, and
2072. Idaho
forecasted reserve balances through May 37,
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exist ing
balances
Boardman
miflion.
investment
as of May
net plant
has updated the revenue requj-rement on
component to incl-ude actual plant
31, 20L2. As of May 31, 20L2, the
investment was approximately $22.51
O. How does this compare to the Boardman-related
net plant investments approved in Case No. IPC-E-72-09?
A. In Case No. IPC-E-72-09, the Commission
approved Boardman-related net plant investments of
approximately $27.65 mil-]ion, or approximately $920,000
Iess than actual Boardman-related plant investments at May
25 31, 20L2.
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Idaho Power
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O. Is Idaho Power proposing any additional
updates to the levelized revenue requirement on existing
i-nvestments ?
A. Yes. Subsequent to Order No. 32549, Idaho
Power discovered an error in the calculatj-on of the present
value of the revenue requirement on
The formula embedded in the models
existing investments.
used in prior years'
annual- reviews was incorrectly discounting
requirement for 2072, or the first year of
the revenue
the l-evel-1zed
10 revenue requirement determinatj-on. The effect of this
11 error was an inappropriate
12 the year
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BoardmanL4
to the base
discounting
year of the
Commission
Review for
of i-nvestments to
analysis. The
of this error in its
the year ending
in the
prr_or
flrst notified the
Power Plant Annua1
15 2071.1 Idaho Power has corrected the error
76 quantificatlon of the j-ncremental l-evel-lzed revenue
l1 requlrement associated with Boardman in this case.
18 O. What is the resulting 1evelized revenue
19 requirement on exj-sting investments as of May 31, 2072,
20 incl-uded in the leve1ized revenue requirement calcul-atlon?
27 A. The result is a total l-evel-ized revenue
22 requirement on existing Boardman-related investments at May
23 37, 2012, of $3,936,546 on an Idaho jurlsdictional- basis.
I Eited in compliance with Order No. 32549 (Case No. IPC-E-12-09),
March 23, 20L8, pp. 3-4.
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O. How does this compare to the level-ized revenue
requirement on existing investments currently included in
customer rates?
A. The updated leve1ized revenue requirement on
existing j-nvestments is an increase of approximately
$400,000 primarily due to higher than forecasted plant
investments through May 31, 2072.
O. What changes is the Company proposing to the
revenue requirement on incremental investments made after
May 31, 20L2?
A. The l-evelized revenue requirement component
related to incremental- investments captures alI plant
investments made at Boardman after May 31, 20L2, or when
the Boardman balancing account was established. The ldaho
jurisdictiona1 Boardman-related levelized revenue
requirement of $5,174,794 approved with Order No. 32549
included $1.1 mil-l-ion associated with new plant investments
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forecasted to be
forecasted plant
between June 7,
most recent forecast
Idaho jurisdictional
made after May 3L, 2072. Updating the
investments with actual- investments made
20L2,through December 31, 2078, and the
of investments for 2079, results in an
levelized revenue requirement of
LARKIN, DI 13
Idaho Power Company
$753,452, or a decrease of approximately $370,000.
O. Why has Idaho Power excluded a forecast for
new Boardman-related plant investments made in 2020?
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A.
with repairs
forecast for
ZCTO.
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The Company anticipates any costs associated
in 2020 will be expensed, therefore the
Boardman-related plant investments in 2020 is
How does the amount of actual investments made
between June 7, 2072, through December 31, 20L8, compare to
computation of the
with Order No.Ievelized revenue requirement approved
')') tr, / o)
A The levelized revenue requirement approved
11 wlth Order No. 32549 included incremental plant investments
72 after June 7, 2072, of $8.01 million. However, actual
13 investments made between June 7, 20t2, through
than $3 million
investments are
December 31,
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expected to
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investments77 i-ncremental result in a decrease in the Idaho
18 jurisdictional level-ized revenue requirement of
19 approximately $370,000.
20 O. Please summarize the incremental investments
27 made at Boardman sj-nce the balancing account mechanism was
22 establlshed June L, 2012.
23 A. The Environmental Protection Agency approved
24 PGE's Boardman shutdown plan with coal-fired operations
but required investments have25 ceasing on December 3L, 2020,
what was forecasted and included in the
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20l1l were $a
anticipated.
be fess than
9B million, more
Eorecasted 2019
l-ower than
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The lower than forecasted
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been made and normaf maintenance repairs have been
performed to
the Revenue
of Exhibit
keep the plant
Requirement on
No. 7, capital
operationaf. As can be seen in
Incremental fnvestments sectlon
additions made at the Boardman
plant
20r4.
remained under $300,000 in aII years except 2013 and
I will summarize the i-nvestments over $300,000 that
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were made since June 7, 2012
In 2013, obsolete and unsupported variable frequency
drives that are a part of the draft fans were replaced, dD
emergency repair to col-d reheat piping was made, and the
shop warehouse, which provides needed work space for
equipment repair and overhaul- and allows plant personnel to
perform the necessary maintenance activities, required an
expansion. Investments for sul-fur dioxide controls,
upgrading to a dry sorbent injection technology, and fj-re
protection equipment, were made in 20L4.
O. Is Idaho Power proposing any updates to the
levellzed revenue requirement associated with
decommissioning and salvage costs?
A. Yes. Idaho Power's initial estimate of the
decommissloning and salvage costs was determined by
applylng the Company's 10 percent ownership percentage to
the decommissioning study performed by Bl-ack & Veatch for
PGE and compl-eted in 2071. In 2075, PGE contracted with
CH2M Hill to prepare a decommissioning, demolition, and
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1 final closure plan for Boardman. The focus of the new plan
2 was to provide pJ-anning guidance, rather than detailed cost
3 estimates. Al-though the plan did not provide updated cost
4 estimates, through the work with CH2M Hill, PGE identified
5 three decommissioning cost elements that coul-d be updated:
5 (1) the elj-mj-nation of Carty reservoir removal costs as the
7 site wil-I remaj-n, (2) transmission assets that wil-1 not
I need to be removed, and (3) the Tower Road extension costs
9 will no longer be incurred. The update to the
10 decommissioning costs and expected salvage resulted in a
11 decrease of approxlmately $174,000 in Idaho Power's share
L2 of the costs. This decrease equates to a l-evel-ized revenue
13 requirement of approximately $445,8'15 on an Idaho
74 jurisdictional- basis, approximately $60,000 less than the
15 amounts included in the l-evelized revenue requirement
16 approved with Order No. 32549.
L7 0. Has PGE initiated any additional
18 decommissi-oning activltles now that Boardman is nearing its
19 end-of-1ife?
20 A. Yes. In 20L8, PGE issued a request for
2l proposal seeking an owner's engineer to complete design and
22 permitting work in preparation for decommissionlng
23 activities in 2019, including capping the ash disposal
24 area, demolishj-ng structures at Boardman (i.e., coal
25 handling systems), remediating the coal yard, and other
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selective demolition work across the site (i.e., support
buildings, features supporting coal, coal handling, and
coal ash handling). With the results, PGE anticipates
completing an updated decommissioning cost-estimate study
Iater in 2019.
0. What is the resultj-ng total- levelized revenue
requirement?
A. The Company's proposed update to the fevelized
revenue requirement assocj-ated with Boardman incl-udes
$3, 936,546 associated with existing investments, $753, 452
related to j-ncremental investments, and $445,8'15 in
decommissioning and salvage costs, for a total levelized
revenue requirement of $5,135,872 on an Idaho
j urisdictional- basis .
O. What 1s the existing revenue requirement
associated with Boardman that is currently included in the
Company's base rates?
A. The Idaho jurisdictional levelized revenue
requirement approved with Order No. 32549 is $5,174,194.
O. How does the total levelized revenue
requirement compare to the existing levelized revenue
requirement currently in customer rates?
A. The total- Idaho jurisdictional levelized
revenue requirement of $5.14 mil]ion, Iess the Idaho
jurisdictional share of the existing revenue requirement of
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Idaho Power
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$5.17 million, results in an incremental annual- Ievelized
revenue requirement of negative $38,922 on an ldaho
jurisdictional basis.
V. ADDITTONAI REVENITE REQUIREMENT ADin STIT{ENTS
Is the Company proposing any additional
adjustments to
requirement of
di s cus sed?
the lncremental annual levelized revenue
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negative $38,922 that have not already been
A. Yes. Idaho Power is proposing additional
adjustments to the incremental- annual levelized revenue
requirement. First, the Company is proposing to add to the
incremental annual levelized revenue requirement of
negatJ-ve $38,922 the gain associated with the APA between
Idaho Power and PGE. In addition, in Case No. IPC-E-72-09,
the Company proactively committed to tracking two
additional- components: (1) the monthly deviations between
forecast revenue collection and actual- revenue collection
and (2) deviations between existing fevel-ized revenue
requirement calcu1ations and updated levelized revenue
requirement cal-cul-ations. Therefore, Idaho Power is
proposing to include an adjustment to the Boardman
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22 level-ized revenue requirement for both the
23 years' revenue collections and the true-up
24 deviations in levelized revenue requirement
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true-up of prior
associated with
amounts
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O. Pl-ease describe the APA between Idaho Power
and PGE.
A. In 2074, Idaho Power and PGE entered into an
APA for the conveyance and sale of a partial- interest in
certain Boardman components and common facilities necessary
or convenient to the operation of PGE's Carty Generation
Station,2 collectively referred to as "Shared Eacilities."
The purchase price associated with the APA for
of Shared Facilities at Boardman was $620,205,
the purchase
resulting in
shown in
2074 actual
10 a gain
Exhibit
of $264,060 on a total system basis, as
No. 1. Idaho Power has included in the11
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pJ-ant balances a
book value of the
reductlon of $356,745 to reflect the net
Shared Eacilities conveyed to PGE. In
addition, the Company is proposing to provide the Idaho
jurisdictional portion of the gain associated with the sal-e
of the Shared Facllities, or $251,071, to customers as part
of the request in this case. This amount is refl-ected on
the Conveyance of Shared Facilities Gain fine of Exhibj-t
No. 1.
O. Please describe the true-up associated wlth
prior years' revenue coll-ections.
22 A Idaho Power proactively committed to tracking
col-l-ecti-on23 the monthly deviations between forecast revenue
2 The Carty Generatinq Station j-s a new 44O-megawatt, natural gas-
fired plant that was constructed next to the Boardman coal-fired p1ant.
PGE owns and operates the facility whi-ch came online in JuIy 2016.
LARKIN, DI
Idaho Power
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and actual revenue coll-ection. The Company is proposing to
lncl-ude an adjustment reflecting the true-up associated
wlth amounts collected from June L, 2072, through September
30, 20L9, that is a result of actual Idaho jurlsdictional
sales vol-umes that were higher than forecasted volumes over
the same period. Order No. 32549 approved an incremental
annual revenue requirement of $I,525,501 effective June l,
20L2, and Idaho Power adjusted base rates accordingly using
forecasted annual sales of 13,172,433 megawatt-hours. The
Company has compared actual- sales from June L, 20L2,
through September 30, 20L9, to the forecasted used to
establish rates in 2012.
II What is the Company's quantification of the
revenue coll-ections ?true-up associated with
A. As can be
prior years'
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15 seen on Exhibit No. 2, at September
76 30, 2079, the total over collection associated wlth higher
11 safes volumes is $473,09'1. Idaho Power is proposing to add
1B thls over coll-ection to the updated incremental level-ized
L9 revenue requirement effective January 7, 2020. The totaf
20
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22 O What is the true-up associated with the
23 l-evelized revenue requirement amounts collected in previous
24 years?
over collection of $473,091
Pri-or Year Collections Iine
is reflected on the True-Up of
of Exhibit No. 1.
LARKIN, DI
Idaho Power
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Company
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A As described earlier in my testimony, the
updated annual
with Boardman
l-evelized revenue requirement associated
is $38,922 lower than what the Company is
currently collecting from customers, meaning customers will
have paid $38,922 per year more than the updated l-evelized
revenue requirement indicates the Company should have
collected. The true-up is computed by converting the
annual- incremental l-evelized revenue requirement of
negative $38,922 to a monthly amount, or an over col-Iection
of $3,244 per month, and multiplying it by the 91-month
in previous years
$1,058,255.
10
11 collection period from June I, 20L2, through December 31,
12 2079. The resul-t is a true-up of $295,158. This amount is
13 reflected on the True-Up of Levelized Revenue Requirement
L4 line of Exhibit No. 1.
15 O. Pl-ease summarize the additional- adjustments
L6 Idaho Power is proposing be added to the updated levelized
77 revenue requirement.
18 A. AtI three adjustments result in a refund to
79 customers. When added to the reduction of $38,922 in the
20 Idaho jurisdictional annual l-evelized revenue requirement,
27 the Shared Facil-ities gain of $251 ,0'17, the $473,091 in
22 over collection of prior years' revenues, and the $2951 158
of fevelized revenue requirement amounts
resul-ts in a total refund to customers of
23 in over collection
24
25
LARKIN, DI
Idaho Power
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Company
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VI. RECOMMENDED RATE}IAI(ING TREATMENT
O. Why is the Company proposing a January L,
2020, effectj-ve date for the requested rate decrease?
A. Idaho Power acknowl-edges the Company is
requestlng a rel-atively expedited review of its request in
thls case. However, while the reduction in the annual
l-evelized revenue requj-rement resulting from updated costs
is minimal, adding to it the gain associated with the sale
of the Shared Eacilities and both true-ups associated with
coll-ections of revenue requirement amounts since June 7,
2012, results in a customer refund of $1.06 million. The
Company believes it is reasonable and appropriate to
provide this refund to customers over Boardman's final-
year of coal-fired operations, ensuring the appropriate
matching of rate recovery wlth the useful life of the
plant.
In addition, Idaho Power has been keeping the
Commission apprised of changes to the Boardman fevelized
revenue requirement through the Company's Boardman Power
Pl-ant Annual Review since the first report was filed in
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27 March 201-3 and annually thereafter
22 proposing that the request in this
23 Boardman Power Pl-ant Annual Review
The Company is
case suffice for the
for
24 20L9, dS to not provide the Commission
25
the year endj-ng
with duplicate
LARK]N, DI
Idaho Power
22
Company
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information already provided as part of Idaho Power's
request 1n this case.
O. How does the Company propose to al-l-ocate the
decrease associated with Boardman Ievelized revenue
requirement of $1,058,255 to each cl-ass of customers?
A. The Company requests that the approximately
$1.06 mi-11-ion associated with Boardman level-ized revenue
requirement be refunded to all customer classes through a
uniform percentage decrease to aII base rate components
except the service charge.10
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O.
presents
under the
A.
presents
customer
decrease
$38 ,922,
PGE, (3)
Has the Company prepared a
the revenue spread results for
proposed aflocationCompany's
Yes.Attachment No. 1 to
schedule that
each customer class
methodol-ogy?
the Application
a summary of the
class.
VII.
in the annual levelized revenue
proposed revenue lmpact for each
CONCLUSION
a. Please summarize your testimony.
A. Pursuant to the Boardman balancing account
mechanj-sm approved with Order No. 32451, Idaho Power is
proposing to reduce the collections associated with the
Boardman levelized revenue requirement to refl-ect the (1)
as sociated
requirement of
with an APA with(2) gain of $25I,01'l
true-up of $473,091 1n over coll-ection of prior
LARKIN, DI
Idaho Power
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Company
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A
years' revenues, and (4) over col-lection of $295,158 in
previous years revenue requirement
seeks approval of the adjustment of
to rates effective date of January 1
to an overalf decrease of 0.09 percent
amounts. Idaho Power
negative $1.06 million
, 2020, which equates
Does this complete your testimony?
Yes, it does.
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LARK]N, DI
Idaho Power
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Company
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ATTESTATION OF TESTIMONY
STATE OF IDAHO
SS.
County of Ada
10
It Matthew T. Larkin, having been duly sworn to
testlfy truthfully, and based upon my personal knowledge,
state the following:
I am employed by Idaho Power Company as the Revenue
Requirement Senior Manager in the Regulatory Affairs
Department and am competent to be a witness in this
proceeding.
f declare under penalty of perjury of the laws of
the state of Idaho that the foregoing pre-filed testimony
and exhibits are true and correct to the best of my
information and belief.
DATED this 17th day of October 20L9.
11
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2t Matthew T. Larkin
22
23 SUBSCRIBED AND SWORN to before me this 17th day of
24 October 20L9.
25
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No ary Pub for Idaho
Boise, IdahoResiding a
My commission expires:72/20/2020
LARKIN, DI
Idaho Power
25
Company
KIMBERLY K. TOWELL
coMMtsstoN #16958
NOTARY PUBLIC
STATE OF IDAHO
BEFORE THE
IDAHO PUBLIG UTILITIES COMMISSION
CASE NO. IPC-E-19-32
IDAHO POWER GOMPANY
LARKIN, DI
TESTIMONY
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