HomeMy WebLinkAbout20210505Notice_of_Application_Order_No_35032.pdf
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35032 1
Office of the Secretary
Service Date
May 5, 2021
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY’S APPLICATION FOR
AUTHORITY TO IMPLEMENT POWER
COST ADJUSTMENT (PCA) RATES FOR
ELECTRIC SERVICE FROM JUNE 1, 2021
THROUGH MAY 31, 2022
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CASE NO. IPC-E-21-10
NOTICE OF APPLICATION
NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 35032
On April 15, 2021, Idaho Power Company (the “Company”) filed its annual power cost
adjustment (“PCA”) Application. The Company seeks an Order approving an update to Schedule
55 reflecting a $39.1 million increase in the PCA rates now in effect (or an average increase of
approximately 3.36% of current billed revenue), effective June 1, 2021 through May 31, 2022. If
approved, a typical residential customer’s bill would increase by about $2.57 per month. The
Company requests that its Application be processed under Modified Procedure. With its
Application, the Company included proposed tariffs, supporting exhibits, and the prefiled direct
testimony of Nicole A. Blackwell.
Besides the PCA, the Company recently filed its annual Fixed Cost Adjustment
(“FCA”) which, if approved, will impact rates for the same period. Id. at 8; see also Case No.
IPC-E-21-03. If approved as filed, the proposed PCA and FCA rate adjustments would combine
to increase the Company’s current billed revenue by $41.2 million, or 3.55%, effective June 1,
2021. Id. at 9.
The Commission now approves the request to process the Application using Modified
Procedure and establishes deadlines for written comments. Interested persons are invited to
comment on the Application.
THE PCA MECHANISM
The PCA mechanism permits the Company to increase or decrease its PCA rates to
reflect the Company’s annual “power supply costs.” Due to its diverse generation portfolio, the
Company’s actual cost of providing electricity (its power supply cost) varies from year to year
depending on changes in such things as the river streamflow, the amount of purchased power, fuel
costs, the market price of power, and other factors. The annual PCA surcharge or credit is
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35032 2
combined with the Company’s “base rates” to produce a customer’s overall energy rate. The
Company states that neither it nor its shareholders receive any financial return from the PCA –
money collected from the surcharge can be used only to pay power supply expenses. Application
at 2.
The annual PCA mechanism consists of three major components. First, projected
power costs for the coming PCA year (June 1, 2021 to May 31, 2022) are calculated using the
Company’s most recent “Operating Plan.” The projected power costs include fuel costs,
transmission costs for purchased power, Public Utility Regulatory Policies Act of 1978
(“PURPA”) contract expenses, surplus sales revenues, and revenues from the sale of renewable
energy credits and sulfur dioxide allowances. The Company may recover 95% of the difference
between the non PURPA projected power costs and the approved base power cost, 100% of the
costs of its PURPA contracts, and 100% of its demand-side management incentive and
conservation costs. See Order Nos. 30715 and 32426 at 3.
Second, because the PCA includes forecasted costs, the preceding year’s forecasted
costs are “trued-up” based upon the actual costs incurred during the prior year. The Company
includes its actual costs of Western Energy Imbalance Market participation from April 2020
through March 2021 in the true-up. See Order No. 34100.
Finally, the Company reconciles the previous year’s true-up by crediting to or
collecting from customers through the PCA rate any surplus or deficit from the prior year’s true-
up. This third “reconciliation” component (the “true-up of the true-up”) ensures the Company
recovers its actual approved costs while ratepayers pay only for the actual amount of power that
the Company sold to meet native load requirements. In other words, ratepayers receive a rate credit
when power costs are low and are assessed a rate surcharge when power costs are high.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that this year’s PCA Application requests a total
revenue increase of $39.1 million for the 2021-2022 PCA year. Application at 1.
YOU ARE FURTHER NOTIFIED that the Company attributes this year’s PCA
increase to several factors. Id. at 6. The Company represents the increase in this year’s PCA is
primarily due to a smaller credit to customers through the true-up component. See Direct
Testimony of Nicole A. Blackwell at p. 6. The Company also states this year’s PCA forecast reflects
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35032 3
expected increases to power costs primarily due to weaker forecast water conditions, which would
result in less low-cost hydro generation available to serve customers, and higher costs associated
with power purchase agreements under PURPA. Application at 6-7.
YOU ARE FURTHER NOTIFIED that under Order No. 33149, the Commission
requires the Company to share revenue with its customers if the Company’s Idaho jurisdictional
year-end return on equity (“ROE”) is 10.0% or greater. The Company asserts its Idaho
jurisdictional year-end ROE in 2020 was 9.98% and does not meet the threshold for revenue
sharing. Id. at 8.
YOU ARE FURTHER NOTIFIED that the Company calculated the proposed increase
by combining the three standard PCA components—projected power cost, true-up, and
reconciliation. Id. at 7. The Company calculated the three standard PCA components to be: (1)
projected power costs for the 2021-2022 PCA are 0.8793 cents per kilowatt-hour (“kWh”); (2) the
negative 0.1535 cents per kWh for the 2021-2022 true-up portion of the PCA; and the 0.0313 cents
per kWh for the PCA reconciliation. Id. These three standard PCA components combine for an
approximate 0.7571 cents per kWh charge for all rate classes. Id. at 8.
YOU ARE FURTHER NOTIFIED that on March 15, 2021, the Company filed its
annual FCA in Case No. IPC-E-21-03. The Company’s 2021 FCA filing proposes a $2.1 million
increase in current billed revenue, or a 0.38% increase, for Idaho Residential and Small General
Service customers, effective June 1, 2021 through May 1, 2022. Id.
YOU ARE FURTHER NOTIFIED that if the PCA and the FCA are approved as filed,
the combined impact is an overall increase in current billed revenue of $41.2 million, or 3.55%.
The impact by revenue class is:
Proposed 2021 Revenue Impact by Class:
Percentage Increase from Current Billed Rates by Proposed Change
Power Cost Adjustment
Residential
Small
General
Service
Large
General
Service
Large Power
Irrigation
2.66% 2.12% 3.78% 4.79% 3.44%
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35032 4
Fixed Cost Adjustment
Residential
Small
General
Service
Large
General
Service
Large Power
Irrigation
0.38% 0.38% N/A N/A N/A
Total Combined Impact
Residential
Small
General
Service
Large
General
Service
Large Power
Irrigation
3.04% 2.50% 3.78% 4.79% 3.44%
See Application, Attachment 2; Case No IPC-E-21-10, Application, Attachment 1.
YOU ARE FURTHER NOTIFIED that the Company has proposed to implement the
PCA rates on June 1, 2021.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter, and that it will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Commission’s Rules of Procedure, IDAPA
31.01.01.201 through .204. The Commission notes that Modified Procedure and written comments
have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that anyone desiring to state a position on this
Application must file a written comment in support or opposition with the Commission by May
18, 2021. The comment must explain why the person supports or opposes the Application.
Persons desiring a hearing must specifically request a hearing in their written comments. Written
comments concerning this Application shall be sent electronically, unless e-mail is not available,
to the Commission and the Applicant at the e-mail addresses reflected below:
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NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35032 5
For the Idaho PUC:
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
secretary@puc.idaho.gov
Street Address for Express Mail:
11331 W. Chinden Blvd.
Building 8, Suite 201-A
Boise, ID 83714
For Idaho Power Company:
Nathan F. Gardiner
Matthew T. Larkin
Timothy E. Tatum
Idaho Power Company
P.O. Box 70
Boise, ID 83707-0070
ngardiner@idahopower.com
dockets@idahopower.com
mlarkin@idahopower.com
ttatum@idahopower.com
Comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at www.puc.idaho.gov. Click the “Case Comment Form” under
“Consumers,” and complete the comment form using the case number as it appears on the front of
this document. These comments must also be sent to the Applicant.
YOU ARE FURTHER NOTIFIED that the Company must file any reply comments by
May 24, 2021.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set, the Commission will consider this matter on its merits and enter its Order
without a formal hearing. If written comments are received within the time limit set, the
Commission will consider them and, in its discretion, may set the same for formal hearing.
O R D E R
IT IS HEREBY ORDERED that the Company’s Application be processed by Modified
Procedure, Rule 201-204 (IDAPA 31.01.01.201-.204). Persons interested in submitting written
comments must do so by May 18, 2021. The Company must file any reply comments by May 24,
2021.
IT IS FURTHER ORDERED that parties should continue to comply with Order No.
34602, issued March 17, 2020. All pleadings should be filed with the Commission electronically
and shall be deemed timely filed when received by the Commission Secretary. See Rule 14.02.
Service between parties should also be accomplished electronically. Voluminous discovery-related
documents may be filed and served on CD-ROM or a USB flash drive.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35032 6
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 5th day
of May 2021.
PAUL KJELLANDER, PRESIDENT
KRISTINE RAPER, COMMISSIONER
ERIC ANDERSON, COMMISSIONER
ATTEST:
Jan Noriyuki
Commission Secretary
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