20210315Application.pdf

NATHAN F. GARDINER
Senior Counsel
[e-mail]
March 15, 2021
VIA ELECTRONIC FILING
Jan Noriyuki, Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd., Bldg 8,
Suite 201-A (83714)
PO Box 83720
Boise, Idaho 83720-007 4
! ··' i ? 1 : : i'-<,_L.1~:
• • ·: ~ ~· ! "'· ~ \.: (.' t~::-,1: s ·;i. i aj !
Re: Case No. IPC-E-21-03
An IDACORP company
Fixed Cost Adjustment Rates for June 1, 2021 through May 31, 2022
Idaho Power Company's Application and Testimony
Dear Ms. Noriyuki:
Enclosed for electronic filing, pursuant to Order No. 34781 , please find Idaho Power
Company's Application, Testimony of Pawel P. Goralski, customer notice and press release, in
the above-entitled matter.
If you have any questions about the enclosed documents, please do not hesitate to
contact me.
NFG:slb
Enclosures
Very truly yours,
Nathan F. Gardiner
NATHAN F. GARDINER (ISB No. 4104)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-21-03
AUTHORITY TO IMPLEMENT FIXED )
COST ADJUSTMENT ("FCA") RATES ) APPLICATION
FOR ELECTRIC SERVICE FROM JUNE 1, )
2021, THROUGH MAY 31, 2022. ) ________________ )
Idaho Power Company ("Idaho Power" or "Company"), in accordance with Idaho
Code § 61-502 and RP 052, hereby respectfully makes application to the Idaho Public
Utilities Commission ("Commission") for an order authorizing Idaho Power to implement
FCA rates for electric service from June 1, 2021, through May 31, 2022, and to approve
the Company's corresponding Schedule 54, Fixed Cost Adjustment. With this filing the
Company proposes a $2,816,643, or 0.38 percent, increase for Residential and Small
General Service customers. If the FCA is approved as filed, a typical residential customer
using 950 kilowatt-hours per month will see an approximate $0.37 increase to their
monthly bill.
APPLICATION -1
In support of this Application , Idaho Power represents as follows:
I. BACKGROUND
1. Idaho Power and the Commission have long agreed that promotion of cost-
effective energy efficiency and demand-side management ("DSM") "is an integral part of
least-cost electric service." See, e.g., 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 annual 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. In 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 General
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
Idaho 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
APPLICATION -2
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.
4. In 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 level of fixed costs recovered replaced weather-normalized billed
sales with actual billed sales and began with the detennination of the 2015 FCA.
5. In this filing, the Company requests recovery of the 2020 FCA balance and
approval of the corresponding rates.
II. FCA MECHANISM
6. The FCA mechanism enables Idaho 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. In 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. Since 2012, Idaho Power has
achieved a cumulative claimed approximately 430,000 megawatt-hours ("MWh") of Idaho
APPLICATION - 3
Residential energy savings. In 2020, on a system-wide basis, Idaho Power achieved
196,809 MWh of incremental annual energy efficiency savings, which is the second­
highest savings achievement since the implementation of the Energy Efficiency Rider in
2002. The Company also invests in significant DSM educational and awareness
activities, support of codes and standards, and marketing efforts that are likely to result
in energy savings experienced by the customer but are not quantified or claimed as part
of Idaho Power's annual savings.
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 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 Idaho 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.
111. STAKEHOLDER ENGAGEMENT IN 2021
9. Idaho Power met with Idaho Public Utilities Staff ("Staff') on January 21 ,
2021, and again on March 1, 2021, to discuss concerns raised by Staff in previous FCA
filings, and in study of rate designs that provide the Company the opportunity to recover
APPLICATION - 4
Idaho Power's fixed costs as encouraged by the Commission in the 2019 FCA Order No.
34685 issued in Case No. IPC-E-20-14.
10. The Company proposes to address Staffs concerns and meet the
Commission's objective through developing studies to better understand and quantify the
impacts of modifying rate design on the Company's FCA mechanism. The studies will
leverage the Fixed Cost Report accepted by the Commission in Case No. IPC-E-18-16.
The Company will share the studies with Staff for their input, with completed analysis
presented to Staff, other interested parties, and ultimately submitted to the Commission.
IV. PROPOSED 2021-2022 FCA RA TE ADJUSTMENT
11. The determination of the FCA deferral balance and corresponding rates are
described in the Direct Testimony of Pawel P. Goralski ("Goralski Testimony") filed
contemporaneously with this Application.
12. As shown on Exhibit No. 4 of the Goralski Testimony, the proposed FCA is
$36,706,200 for the Residential class and $1,609,299 for the Small General Service
class, for a total amount of $38,315,499. Goralski Testimony at 16. The proposed FCA
deferral balance is above the current FCA deferral balance currently collected in
customers' rates. Accordingly, with this Application, Idaho Power is proposing an FCA
rate increase for the Residential and Small General Service classes. The proposed FCA
rates would result in an annual increase of 0.38 percent from current billed revenue for
the affected customer classes. Goralski Testimony at 19. This increase equates to new
FCA rates of 0.7008 cents per kWh for the Residential class and 0.8864 cents per kWh
for the Small General Service class. Goralski Testimony at 18.
APPLICATION - 5
13. Idaho Power requests that the FCA rates become effective on June 1, 2021,
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,
2022.
14. 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.
V. MODIFIED PROCEDURE
15. Idaho 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,
et seq. The Company has, however, contemporaneously filed the Goralski Testimony
and stands ready to present its testimony and support the Application if the Commission
determines that a technical hearing is required.
VI. COMMUNICATIONS AND SERVICE OF PLEADINGS
16. In conformance with RP 125, this Application will be brought to the attention
of Idaho 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 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 24, 2021.
Idaho Power will 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
APPLICATION - 6
Company will, in the alternative, bring the Application to the attention of its affected
customers through any other means directed by thi$ Commission.
17. Communications and service of pleadings with reference to this Application
should be sent to the following:
Nathan F. Gardiner
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
[e-mail]
Pawel P. Goralski
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
VII. REQUEST FOR RELIEF
18. Idaho Power respectfully requests that the Commission issue an order (1)
authorizing that this matter be processed by Modified Procedure and (2) authorizing Idaho
Power to implement Fixed Cost Adjustment rates for electric service from June 1, 2021,
through May 31, 2022, as described above.
DATED at Boise, Idaho, this 15th day of March 2021.
1.JL_ F 4-,L._
NATHAN F. GARDINER
Attorney for Idaho Power Company
APPLICATION - 7
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-21-03
IDAHO POWER COMPANY
ATTACHMENT NO. 1
PROPOSED TARIFF IN CLEAN FORMAT
Idaho Power Company Thirteenth Revised Sheet No. 54-2
Cancels
I.P.U.C. No. 29, Tariff No. 101 Twelfth Revised Sheet No. 54-2
SCHEDULE 54
FIXED COST ADJUSTMENT
(Continued)
ACTUAL FIXED COSTS RECOVERED AMOUNT
The Actual fixed 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, 5, and 6) is 0. 7008
cents per kWh. The monthly Fixed Cost Adjustment for Small General Service (Schedules 7 and 8) is
0.8864 cents per kWh.
EXPIRATION
The Fixed Cost Adjustment included on this schedule will expire May 31 , 2022.
IDAHO
Issued per Order No.
Effective -June 1, 2021
Issued by IDAHO POWER COMPANY
Timothy E. Tatum, Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, Idaho
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-21-03
IDAHO POWER COMPANY
ATTACHMENT NO. 2
PROPOSED TARIFF IN LEGISLATIVE FORMAT
Idaho Power Company Twelfth Thirteenth Revised Sheet No. 54-2
Cancels
I.P.U.C. No. 29, Tariff No. 101 Eleventh Twelfth Revised Sheet No. 54-2
SCHEDULE 54
FIXED COST ADJUSTMENT
(Continued)
ACTUAL FIXED COSTS RECOVERED AMOUNT
The Actual fixed 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, 5, and 6) is
0.~7008 cents per kWh. The monthly Fixed Cost Adjustment for Small General Service (Schedules
7 and 8) is 0.8~64 cents per kWh.
EXPIRATION
The Fixed Cost Adjustment included on this schedule will expire May 31, 2024-i.
IDAHO
Issued per Order No. 34685
Effective -June 1, 20201
Issued by IDAHO POWER COMPANY
Timothy E. Tatum, Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, Idaho