20220315Application.pdf

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P.O. Box 70 (8!1707)
lzll W. Hlho 5t.
Boisc, lD E3702
LISA D. NORDSTROM
Lead Gounsel
I [e-mail]
March 15,2022
Jan Noriyuki, Secretary
!daho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-22-07
ldaho Power Company's Application for Authority to lmplement Fixed Cost
Adjustment ("FCA") Rates for Electric Service from June 1,2022Through May
31,2023.
Dear Ms. Noriyuki:
Attached for electronic filing, pursuant to Order No. 35058, is ldaho Power Company's
Application in the above entitled matter.
ln addition, please find attached the Direct Testimony of Pawel P. Goralski filed in
support of the Application. A Word version of the testimony will also be sent in a separate
email for the convenience of the Reporter.
Accompanying this filing is the Company's Press Release and Customer Notice
lf you have any questions about the attached documents, please do not hesitate to
contact me.
Sincerely,
X;!.("u,,-*,
LDN:sg
Enclosures
Lisa D. Nordstrom
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
LN [e-mail]
Attorney for ldaho Power Company
BEFORE THE !DAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORIW TO IMPLEMENT FIXED
cosT ADJUSTMENT ("FCA") RATES
FOR ELECTRIC SERVICE FROM JUNE 1,
2OZ?THROUGH MAY 31 ,2023.
CASE NO. IPC-E-22-07
APPLICATION
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ldaho Power Company ("ldaho Powef' or "Company"), in accordance with /daho
Code S 61-502 and RP 052, hereby respectfully makes application to the ldaho Public
Utilities Commission ("Commission') for an order authorizing ldaho Power to implement
Fixed Cost Adjustment ('FCA") rates for electric service from June '1,2022 through May
31, 2023, and to approve the Company's corresponding Schedule 54, Fixed Cost
Adjustment. With this filing the Company proposes a $4,890,772, or 0.81 percent,
decrease for Residential and Smal! General Service customers. If the FCA is approved
as filed, a typical residential customer using 950 kilowatt-hours per month will see an
approximate $0.81 decrease to their monthly bill.
ln support of this Application, ldaho Power represents as follows:
APPLICATION - 1
I. BACKGROUND
1. ldaho 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.9., Order No. 30267 at 13. Traditional rate design that
recovers fixed costs through each kilowatt-hour ("k!ryh") 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 annualenergy 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. ln 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. !PC-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. !PC-E-1 1-19 on
October 19, 2011, seeking authority to convert the FCA to an ongoing, permanent
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
APPLICATION - 2
customers. The Commission's subsequent Order No. 32731 in that case directed that
the FCA mechanism continue with its existing methodology.
4. ln 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 levelof fixed costs recovered replaced weather-normalized billed
sales with actual billed sales and began with the determination of the 2015 FCA.
5. ln Order No. 35273 issued in Case No. IPC-E-21-39, the Commission
approved a modification to the FCA mechanism that instituted separate and reduced fixed
cost tracking and recovery for new Residential and Small General Service customers
added to the Company's system starting January 1,2022. Through this modification, the
authorized level of fixed cost recovery for new customers excludes generation and
transmission-related fixed costs but continues to include distribution and other customer-
related fixed costs. The approved modification did not impact the 2Q21 FCA deferral
calculation.
6. ln this filing, the Company requests recovery of the 2021 FCA balance and
approval of the corresponding rates.
II. FCA MECHANISM
7. The FCA mechanism enables ldaho 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 otherwords, the FCA provides
a "true-up" of the collection of fixed costs per customer to recover the difference between
the leve! of fixed costs recovered on an actua! billed sales basis by the Company through
APPLICATION - 3
rates and the level of fixed costs authorized for recovery in the Company's most recent,
applicable general rate case.
8. The FCA removes the financial disincentive that exists when the Company
invests in DSM resources and energy efficiency activities. On a system-wide basis, ldaho
Power achieved 143,971 megawatt-hours of incremental annual energy efficiency
savings in 2021, which are enough energy to power approximately 12,600 average
homes a year in Idaho Power's service area. These energy savings are more particularly
described in the 2021 DSM Annual Report filed in Case No. IPC-E-22-08. The Company
also invests in significant DSM educationaland awareness activities and marketing efforts
that are likely to result in energy savings experienced by the customer but are not
quantified or claimed as part of ldaho Power's annual savings.
9. 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 recove4/ 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.
APPLICATION - 4
III. PROPOSED 2022.2023 FCA RATE ADJUSTMENT
10. 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.
11. As shown on Exhibit No. 4 of the Goralski Testimony, the proposed FCA is
$33,810,563.43 for the Residential class and $1 ,392,684.23 for the Small General
Service class, for a total amount of $35,203,247.66. Goralski Testimony at 13. The
proposed FCA deferral balance is less than the current FCA deferral balance currently
collected in customers' rates. Accordingly, with this Application, ldaho Power is proposing
an FCA rate decrease for the Residential and Small General Service classes. The
proposed FCA rates would result in an annual decrease of 0.81 percent from current billed
revenue for the affected customer classes. Goralski Testimony at 16. This decrease
equates to new FCA rates of 0.6153 cents per kWh for the Residential class and 0.7788
cents per kWh for the Small General Service class. Goralski Testimony at 15.
12. ldaho Power requests that the FCA rates become effective on June 1,2022,
coincident with the Company's annual Power Cost Adjustment, the proposed increase in
rates to recover costs associated with the Jim Bridger Power Plant (Case No. IPC-E-21-
17), and with the commencement of seasonal rates. The Company requests that the
FCA rates remain in effect until May 31,2023.
13. 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 aftached
hereto as Attachment 2.
APPLICATION - 5
IV. MODIFIED PROCEDURE
14. ldaho 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,
ef seg. 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.
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
15. ln conformance with RP 125, this Application will be brought to the attention
of ldaho Powe/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 cycles, with the last notice being sent on or about April 26,
2022. ldaho Power will also keep its Application, testimony, and exhibits open for public
inspection at its offices throughout the state of ldaho. Idaho Power believes the above
procedures satisff the Rules of Practice and Procedure of this Commission; however, the
Company will, in the alternative, bring the Application to the attention of its affected
customers through any other means directed by this Commission.
16. Communications and service of pleadings with reference to this Application
should be sent to the following:
APPLICATION - 6
Lisa D. Nordstrom
Regulatory Dockets
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
lnordstrom@ida hopower.com
[e-mail]
Pawel P. Goralski
Connie Aschenbrenner
ldaho Power Company
1221 West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
poora lski@ idahopower.com
[e-mail]
VI. REQUEST FOR RELIEF
17. ldaho Power respectfully requests that the Commission issue an order (1)
authorizing that this matter be processed by Modified Procedure and (2) authorizing ldaho
Power to implement Fixed Cost Adjustment rates for electric service from June 1,2022,
through May 31 ,2023, as described above.
DATED at Boise, ldaho, this 15h day of March 2022.
&'- !.("1-t^-*,
LISA D. NORDSTROM
Aftorney for ldaho Power Company
APPLICATION - 7
ldaho Power Company Fifieenth Revised Sheet No. 54-2
Cancels
l.P.U.C. No. 29. Tariff No. 101 Fourteenth Revised Sheet No. 54-2
SCHEDULE 54
FIXED COST ADJUSTMENT
(Continued)
FIXED COST PER ENERGY RATE (Continued)
ResidentialFCE
Effective Date
January 1,2012
Residential FCE-Dist
Effective Date
January 1,2022
Small General Service FCE
Effective Date
January 1,2012
Small General Service FCE-Dist
Effective Date
January 1,2022
Rate
5.1602i, per k\&h
Rate
2.51990 per k\flh
Rate
6.8633d per k\Mr
Rate
4.8783i, per k\Mr
ALLOWED FIXED COST RECOVERY AMOUNT
The Allowed Fixed Cost Recovery amount is computed by summing 1) the product of the average
number of existing Residential and Small General Service customers multiplied by the appropriate
Residential and Small General Service FCC rate and 2) the product of the average number of new
Residential and Small General Service customers multiplied by the appropriate Residential and Small
General Service FCC-Dist rate.
ACTUAL FIXED COSTS RECOVERED AMOUNT
The Actual Fixed Costs Recovered amount is computed by summing 1) the product of the actual
energy load for existing Residential and Small General Service customers multiplied by the appropriate
Residential and Small General Service FCE rate and 2) the product of the actual energy load for new
Residential and Small General Service customers multiplied by the appropriate Residential and Small
General Service FCE-Dist 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 CostAdjustmentfor ResidentialService (Schedules 1,3,4,5, and 6) is 0.6153
cents per k\/Vtt. The monthly Fixed Cost Adjustment for Small General Service (Schedules 7 and 8) is
0.7788 cents per kWh.
EXPIRATION
The Fixed Cost Adjustment included on this schedule will expire May 31 ,2023.
IDAHO
lssued per Order No.
Effective - June 1,2022
lssued by IDAHO POWER COMPANY
Timothy E. Tatum, Vice President, Regulatory Affairs
1221 West ldaho Street, Boise, ldaho
ldaho PowerCompany@Revised Sheet No. 54-2
Cancels
|.P.U.C. No. 29. Tariff No. lOlThideenthFourteenth Revised Sheet No. 54-2
SCHEDULE 54
FIXED COST ADJUSTMENT
(Continued)
FIXED COST PER ENERGY RATE (Continued)
ResidentialFCE
Effective Date
January 1,2012
Residential FCE-Dist
Effective Date
January 1,2022
Small General Service FCE
Effective Date
January 1,2012
Small General Service FCE-Dist
Effective Date
January 1,2022
Rate
5.1602i, per k\/Vtt
Rate
2.51990 per k\/Vtt
Rate
6.86330 per k\ffh
Rate
4.87830, per k\Mr
ALLOWED FIXED COST RECOVERY AMOUNT
The Allowed Fixed Cost Recovery amount is computed by summing 1) the product of the average
number of existing Residential and Small General Service customers multiplied by the appropriate
Residential and Small General Service FCC rate and 2) the product of the average number of new
Residential and Small General Service customers multiplied by the appropriate Residential and Small
General Service FCC-Dist rate.
ACTUAL FIXED COSTS RECOVERED AMOUNT
The Actual Fixed Costs Recovered amount is computed by summing '1) the product of the actual
energy load for existing Residential and Small General Service customers multiplied by the appropriate
Residential and Small General Service FCE rate and 2) the product of the actual energy load for new
Residential and Small Genera! Service customers multiplied by the appropriate Residential and Small
General Service FCE-Dist 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 0.7ee8
6153 cents per k\Nh. The monthly Fixed Cost Adjustment for Small General Service (Schedules 7 and
8) is 0.88647788 cents per k\M.
EXPIRATION
The Fixed Cost Adjustment included on this schedule will expire May 31 ,20229.
IDAHO
lssued per Order No. 35373Effective__@
lssued by IDAHO POWER COMPANY
Timothy E. Tatum, Vice President, Regulatory Affairs
1221 West ldaho Street, Boise, ldaho