20211222Comments.pdf

TAYLOR BROOKS
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITMS COMMISSION
PO BOX 83720
BOISE, IDAHO 83720.0074
[phone]
IDAHO BAR NO. 11542
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Street Address for Express Mail:
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BOISE,ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITTES COMMISSION
IN THE MATTER OF IDAIIO POWER
COMPAI\TY'S APPLICATION FOR
MODIFICATION OF TIIE POWER COST
ADJUSTMENT MECHANISM
CASE NO. IPC-E.2I.38
COMMENTS OF THE
COMMISSION STAFF
COME NOW the Staffof the Idaho Public Utilities Commission, ("Staff') by and through
its Attorney of record, Taylor Brooks, Deputy Attorney General, and submits the following
comments:
BACKGROUND
On November 4, 202l,Idaho Power Company ("Company") applied to the Commission
seeking authorization to simplify its power cost adjustrnent ("PCA") mechanism by replacing the
"true-up" and "true-up of the true-up" comlrcnents of the PCA with a balancing account-
combining the two true-up components into one balancing account rate. The Company requested
that its Application be processed by Modified Procedure and requested a March 3l,zDz2,effective
date for the proposed modification to the PCA.
The Commission has approved modifications to the PCA over time to ensure the
mechanism achieves its desired purpose of providing consistency and stability to rates.
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ISTAFF COMMENTS DECEMBER22,2O2I
The current PCA mechanism includes three separately calculated rates: (l) the forecast
rate; (2) the "true-up" rate; and (3) the "true-up of the true-up" rate which is designed to ensure
that the Company neither over nor under-recovers its share of the variance in net power supply
expenses ("NPSE-).1
The Company represents that this proposed change does not affect the overall cost
recovery under the PCA, except that the current mechanism with the true-up components
excludes interest from the carrying charges cumulative prior month balance of the balancing
account and the balancing account modification will include interest from the carrying charges
cumulative prior month balance-
The Company's proposed changes also necessitate modiffing its rate Schedule 55 Power
Cost Adjustment.
STAF'F'REVIEW
Staff has reviewed the proposed modifications to the PCA mechanism and recommends
that the Commission approve the modifications as filed in the Application. Staff supports the
modifications because they make the PCA easier to understand, more transparent relative to the
mechanism's intent, and is mathematically equivalent to the existing method with the exception of
a minor difference in how interest is calculated. Staffhas also reviewed the revised Schedule 55
tariffprovided with the Application and supports the proposed changes to the tariff.
In Order No. 35054, the Commission ordered the Company to initiate discussions with
interested parties to review the PCA mechanism and determine whether it should be modified.
Order No. 35054, pp. 4-5. Staff, as the only responding party, provided the Company with two
suggested improvements for the PCA mechanism.
The first improvement Staffsuggested to the Company was to eliminate the "true-up" and
the "true-up of the true-up" accounts and replace them with a base-to-actual deferral and a single
balancing account. Staffbelieves combining the two accounts into one account simplifies the PCA
mechanism. Staffhas reviewed the differences between the two-account method and the single
balancing account method and determined that the two methods are mathematically equivalent
except for the calculation of interest.
I See Order No. 35054, p.l -2
2STAFF COMMENTS DECEMBERZZ,2A2I
ln the Application, the Company calculated the 2020-2021 PCA using the proposed
method. The results were identical except for a difference of $505.38 artributed to the calculation
of interest. Staff agrees with the Company that this difference between the two methods is
immaterial. The Company's proposal to combine the two'true-up" rates into one "balancing
account" aligns with Staff s first suggested improvements.
The second improvement Staffsuggested to the Company was to eliminate the collection
ofthe forecast rate revenue from the base-to-actual defenal and to place it in the balancing account
as a line item along with other PCA revenue collections. By only including the base-to-actual
differences in the deferral, it provides transparency and quantification related to the primary
purpose of the PCA.2 This deferral amount is what should ultimately be collected through the
PCA rates associated with net power supply expense.
Staff believes that including the forecast collections in the defenal hides the intent of the
PCA and places the focus on the accuracy of the previous year's forecast relative to base-to-actual
differences. Both the purpose of the forecast and the forecast rate allow the Company to recover
the following year's base-to-actual differences as they occur. Since the forecast is just another
way to collect the base-to-actual differences, Staff does not believe the forecast should be the
primary focus of the PCA.3
Staff discussed the issue of transparency and format of the PCA on several occasions in
the past and informally agreed to address them at a later time. The Company's proposed
modifications in this Application adequately address Staffs concerns. The Company's proposed
modifications make the PCA easierto understand and aligns the format of the recovery mechanism
with those used by other ldaho Electric Utilities. It is reasonable to make the changes effective on
or before March 31,2022,to have the changes in place before the next PCA is filed.
CUSTOMER NOTICE
No notice is required because the Company is not proposing an increase in
rates. Customers were given until December 22,2021, to file comments. As of December 21,
2021, no customer comments were filed.
2 The purpose of the PCA is to "ensure the amount recovered is no more or less than the actual power costs paid by
the Company." See Order Nos. 30828 and 33049.
3 See Company's Application, at Attachment I which provides an example of the modified workpaper.
aJSTAFF COMMENTS DECEMBERZZ,2O2I
STAtrI'RECOMMENDATIONS
Staffrecommends the Commission approve the modifications as filed in the Application
with an effective date on or before March 31,2022. Staffalso recommends Schedule 55 be
approved as fild.
MLRespectfully submitted this ZZ day of December 2021.
Deputy Attorney General
Technical Staff: Michael Eldred
I(attry Stockton
Curtis Thaden
i:umisc./oomcdipe2 I 3tttoddsct oomments
4STAIry COMMENTS DECEMBER 22,2021
CERTM'ICATE OF SERVICE
I IIEREBY CERTIFY THAT I HAVE THIS 22"d DAY OF DECEMBER 202I,
SERVED TI{E FOREGOING COMMENTS OF TIIE COMITfiSSION STAFF, IN CASE
NO. IPC-E.2I.38, BY E-MAILING A COPY THEREOF, TO TIIE FOLLOWING:
LISANORDSTROM
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
dockets@ idatropower. com
MATT LARKIN
IDAHO POWER COMPA}IY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: [e-mail]
manni s @ idahopower. com
CERTIFICATE OF SERVICE