20231115Direct Taylor Thomas in Support of Stipulation and Settlement.pdf

BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSIGI
IN THE MATTER OF THE APPLICATION )OF IDAHO POWER COMPANY FOR )CASE NO.IPC-E-23-11
AUTHORITY TO INCREASE ITS RATES )AND CHARGES FOR ELECTRIC SERVICE )IN THE STATE OF IDAHO AND FOR )ASSOCIATED REGULATORY )ACCOUNTING TREATMENT
DIRECT TESTIMONY OF TAYLOR THOMAS
IN SUPPORT OF THE STIPULATION
AND SETTLEMENT
IDAHO PUBLIC UTILITIES COMMISSION
NOVEMBER 15,2023
I
1 Q.Please state your name and business address for
2 the record.
3 A.My name is Taylor Thomas.My business address is
4 11331 W.Chinden Blvd.,Ste.201-A,Boise,ID 83714.
5 Q.By whom are you employed and in what capacity?
6 A.I am employed by the Idaho Public Utilities
7 Commission ("Commission")as a Program Manager overseeing
8 the Technical Analysis department of the Utilities
9 Division.
10 Q.Please describe your educational background and
11 professional experience.
12 A.I was hired by the Commission in 2020 and I have
13 provided numerous recommendations in proceedings before
14 the Commission.My educational background and professional
15 experience are provided in more detail in Exhibit No.102.
16 Q.What is the purpose of your testimony in this
17 proceeding?
18 A.The purpose of my testimony is to describe the
19 proposed comprehensive Stipulation and Settlement
20 ("Settlement")reached by the signing parties ("Parties")
21 in this case based on the Application for Idaho Power
22 ("Company")to increase its rates and charges for electric
23 service and explain Staff's support for the Settlement.
24 Q.How is your testimony organized?
25 A.My testimony is subdivided under the following
CASE NO.IPC-E-23-11 Thomas,T.(Stip)111/15/23 STAFF
1 headings:
2 -Cost-of-Service Methodology Page 2
3 -Rate Design Page 3
4 -Separate Informal Proceedings Page 6
5 -Non-Revenue Agreements Page 7
6
7 Cost-of-Service Methodology
8 Q.How does the Settlement discuss the Company's
9 Cost-of-Service methodology?
10 A.The Parties did not agree to a cost-of-service
11 methodology within this Settlement.However,the Parties
12 used the filed cost-of-service study as a guide to allocate
13 the revenue requirement of $54.7 million among the
14 different customer classes.
15 The Parties generally recognized that certain
16 customer classes were paying more or less than their
17 relative cost of service.The Parties agreed to a method
18 of increasing the rates for each customer class by at least
19 a factor of 0.5 times,but not more than 1.3 times,with
20 no increase for any customer class above 120 percent of
21 the cost-of-service index.
22 Staff believes this is in the interest of customers
23 because it spreads the overall revenue increase of 4.25
24 percent across all classes in an equitable manner in
25 relation to their cost-of-service.
CASE NO.IPC-E-23-11 Thomas,T.(Stip)211/15/23 STAFF
1 Q.Was the cost-of-service study updated to reflect
2 the settled revenue requirement?
3 A.Yes,but the updated version was used on a limited
4 basis.It was necessary to update the cost of service to
5 ensure the following were accurately derived:the Sales
6 Based Adjustment Rate ("SBAR")used in the PCA,the fixed
7 cost per customer and the fixed cost per energy used in
8 the Fixed Cost Adjustment ("FCA"),Schedule 20 Speculative
9 High-Density Load Interruption Compensation,and certain
10 special contract rates.
11
12 Rate Design
13 Q.Did the Parties discuss rate design?
14 A.Yes.
15 Q.Did the parties agree to change the summer
16 season?
17 A.Yes.The Parties agreed to extend the summer
18 season from June 15 through September 15 to June 1 to
19 September 30,as proposed by the Company.
20 Q.Please explain what the Settlement accomplished
21 for rate design for residential services:Schedule 1,
22 Residential Service Standard Plan,and Schedule 6,
23 Residential Service On-Site Generation.
24 A.For Schedules 1 and 6,the Parties agreed to use
25 the customer billing determinants proposed by the Company
CASE NO.IPC-E-23-11 Thomas,T.(Stip)311/15/23 STAFF
1 in this case but maintain the current percentage
2 differential between each block.For Schedules 1,5,and
3 6,the Parties agreed to increase the residential service
4 charge from $5 per month to $10 per month on January 1,
5 2024,and to $15 per month on January 1,2025.
6 Q.Why are these changes reasonable?
7 A.Staff believes that the current residential
8 service charge does not allow the Company to recover the
9 fixed costs associated with customer charges (billing and
10 meter reading)or distribution;therefore,an increase is
11 necessary to allow more recovery of fixed cost from the
12 residential service charge.However,in conjunction with
13 an increase to the service charge,an elimination of the
14 blocked tiered rates,as proposed by the Company,could
15 send customers price signals that no longer encourage
16 energy conservation.Therefore,Staff believes the
17 Settlement is reasonable as an increase in the service
18 charge will increase recovery of fixed costs while the
19 blocked tiered rates continue to encourage customers to
20 conserve energy.
21 Q.Did the Settlement discuss Schedule 5,
22 Residential Service Time-of-Use ("TOU")Plan?
23 A.Yes.The Parties agreed to align the optional
24 TOU plan to the Company's hours of highest risk and to
25 introduce larger differentials,as discussed in the
CASE NO.IPC-E-23-11 Thomas,T.(Stip)4
11/15/23 STAFF
1 Company's Application.Additionally,the Parties agreed to
2 introduce a summer mid-peak period from 3 p.m.to 7 p.m.
3 Q.Why is it necessary to introduce a mid-peak
4 period to Schedule 5?
5 A.Staff believes the mid-peak creates alignment
6 with Schedule 9,Large General Service,and Schedule 19,
7 Large Power Service.Additionally,Staff believes it sends
8 price signals to TOU customers to conserve during a time
9 of moderate risk for the Company.Finally,in the Company's
10 concurrent Export Credit Rate filing,Case No.IPC-E-23-
11 14,the Company proposed a Summer On-Peak period of 3-10
12 p.m.for customer generators exports.Staff believes the
13 mid-peak proposal for Schedule 5 helps to create alignment
14 between the hours of highest risk for the Company between
15 the two filings.
16 Q.Please discuss additional areas of rate design
17 in the Settlement.
18 A.The Parties agree the Small General Service
19 Charge will increase from $5 to $25 per month on January
20 1,2024.Additionally,the revenue requirement allocated
21 to Schedule 30,U.S.Department of Energy Special Contract,
22 will be effectuated by setting the demand charge at
23 $9.75/kW and the energy charge at $0.040951/kWh.Lastly,
24 the Schedule 8 tariff sheet will be updated to reflect the
25 inclusion of September as part of the summer season as
CASE NO.IPC-E-23-11 Thomas,T.(Stip)511/15/23 STAFF
1 reflected in Attachment No.2 to the Motion.
2 Separate Informal Proceedings
3 Q.Does the Settlement include agreements for other
4 actions to follow this rate case?
5 A.Yes.
6 Q.Please explain how the Settlement addresses what
7 the Company and Parties will need to do following this
8 case.
9 A.First,Clean Energy Opportunities for Idaho
10 ("CEO")will coordinate and lead two series of workshops.
11 The first workshop will explore revenue neutral bill
12 protection for residential customers taking service on TOU
13 schedule,and a second series of workshops to explore
14 class-cost-of-service methodology and analysis,TOU option
15 for irrigators,and TOU concerns and opportunities.
16 Second,the Company and IdaHydro will meet to discuss
17 Qualified Facility interconnection operations and
18 maintenance charges after updating schedule 72 to reflect
19 current operation costs and assumptions.
20 Third,the Company will work with Staff and interested
21 parties to discuss an evaluation of the Company's
22 transmission system related to radial transmission lines.
23 Fourth,the Company will work with Staff to discuss
24 test year sales derivation methodology prior to the filing
25 of the Company's next general rate case.
CASE NO.IPC-E-23-11 Thomas,T.(Stip)611/15/23 STAFF
1 Fifth,to aid in future prudence review of the
2 Company's Wildfire Mitigation Plan ("WMP"),the Company
3 will add a component that breaks down internal labor costs
4 within its WMP.Additionally,the Company will expand the
5 WMP to forecast each version for five years.
6
7 Non-Revenue Agreements
8 Q.Please explain the non-revenue agreements that are
9 included in the Settlement between the Company and the
10 Parties.
11 A.There are several agreements including:
12 1.The Parties agreed that the Company's share of
13 all capital expenditures at the jointly owned Jim Bridger
14 Power Plant ("Bridger")and North Valmy Power Plant
15 ("Valmy")through year end of 2022 were prudently incurred.
16 Staff believes that the Company has sufficiently shown
17 prudence of its coal partnered plants.
18 2.At the time of signing the Settlement,Staff had
19 not completed its review of all of the Company's capital
20 investments.For Settlement purposes,Staff agreed to
21 include the full amount of capital investments into test
22 year rate base.Staff will update the Company on our
23 progress by November 15,2023,and will have the capital
24 investment prudence review finalized by December 1,2023.
25 If there are any prudence concerns,Staff agreed to
CASE NO.IPC-E-23-11 Thomas,T.(Stip)711/15/23 STAFF
1 determine prudence of those identified items in the
2 Company's next general rate case.Additionally,Staff and
3 the Company will have further discussion on capital project
4 information and documentation necessary for Staff and other
5 parties to effectively conduct prudence reviews for all
6 capital projects,including the Company's partnered
7 plants.
8 3.The Settlement uses a new base system Net Power
9 Supply Expense "NSPE"of $484,907,243.The Parties agreed
10 to transfer $168.3 million base level NPSE from the PCA to
11 base rates.Staff supports this transfer as the Company
12 will be able to recover these expected expenses within base
13 rates and ratepayers get the benefit of a reduced PCA
14 charge.In addition,the Parties agreed to use the filed
15 class cost-of-service updated to reflect the settled
16 revenue requirement for purposes of determining the SBAR
17 to be applied in the PCA.As proposed by the Company in
18 the case,the resulting SBAR is $30.90 per megawatt-hour.
19 4.The Settlement reflects changes to the FCA due
20 to increased monthly Service Charges to the Residential
21 and small Commercial customer classes.For Residential
22 customer classes,the monthly service charge will be $10
23 per month in 2024 and $15 per month in 2025.The monthly
24 service Charge for Small Commercial will be $25 per month.
25 Staff supports these changes as the recovery of fixed
CASE NO.IPC-E-23-11 Thomas,T.(Stip)811/15/23 STAFF
1 expenses shifts away from the volumetric charges.
2 5.Tracking of Third Party Wheeling:The Settlement
3 identified $46,361,643 of Idaho's jurisdictional share of
4 third-party point-to-point wheeling revenues.
5 Identification of this amount complies with Commission
6 Order No.32821 and will be used as a baseline for potential
7 annual tracking and adjustments in the PCA.
8 6.Lastly,the Parties agreed that the Company defer
9 without carrying charge and amortize annual differences
10 between certain periodic maintenance costs at the Company's
11 natural gas-fired power plants.
12 Q.Do you have any other comments on the Settlement?
13 A.Yes.Staff looked at each revenue requirement
14 adjustment,class cost-of-service study,proposed rate
15 design,and other issues under consideration and determined
16 that the Settlement between the Parties was as good or
17 better than what could be expected by fully litigating the
18 case.Staff believes that the rate stability and certainty,
19 along with the reduced revenue increases,provided in the
20 Settlement,represents a fair,just,and reasonable
21 compromise of the positions put forth by the Parties and
22 is in the public interest.Therefore,Staff recommends that
23 the Commission approve the Settlement without material
24 changes or modification.
25 Q.Does this conclude your testimony in this
CASE NO.IPC-E-23-11 Thomas,T.(Stip)911/15/23 STAFF
1 proceeding?
2 A.Yes.
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
CASE NO.IPC-E-23-11 Thomas,T.(Stip)1011/15/23 STAFF
Professional Qualifications
Of
Taylor Thomas
Program Manager -Technical Analysis
Idaho Public Utilities Commission
EDUCATION
Mr.Thomas earned a Bachelor of Arts Degree in Environmental
Economics from California State University at Chico in 2016.
Studies for this degree focused on energy,the environment,andsustainability.In addition to his formal education,Mr.Thomas
has attended National Association of Regulatory Commissioners
("NARUC")Utility Rate School and the Practical RegulatoryTrainingprogrambytheNewMexicoStateUniversityCenter for
Public Utilities.
BUSINESS EXPERIENCE
Prior to joining the Idaho Public Utilities Commission
("IPUC"),in 2017,Mr.Thomas was a Service Supervisor for a
solar company in Granite Bay,California.In that capacity,Mr.
Thomas analyzed,designed,and supervised multiple solar systemprojectstoincludeintegration,installation,and maintenance
of commercial sized solar arrays and residential utility
systems.He completed analysis of all company solar systemprojectstomaintainoptimalefficiencyandprovidedmaintenance
for projects when defects or optimal efficiency rates were notbeingmet.
Mr.Thomas joined the IPUC in 2020 as a Technical Analyst
with a focus on Energy Efficiency.In 2022,he was promoted to
Program Manager of the Technical Analysis Department within the
Utilities Division.During his employment at IPUC,he has
supervised Staff and worked on a variety of cases to regulate
electric,natural gas,and water utilities.His assignments and
responsibilities include cases involving prudence determination
of major utility investments,integrated resource plans,
distributed energy resources,cost adjustment mechanisms,
demand-side management,sales of utilities and their assets,
wildfire,and rate design.Mr.Thomas participates in Energy
Exhibit No.102
Case Nos.IPC-E-23-11
T.Thomas,Staff
11/15/23 Page 1 of 2
Efficiency Advisory Groups and External Stakeholder Advisory
Committees for Idaho Power,Avista Utilities,Rocky Mountain
Power,and Intermountain Gas Company.He is a member of the
NARUC State Working Group on Electric Vehicles,Regional
Technical Forum,Demand Response Advisory Committee,and
Conservation Resource Advisory Committee.
Exhibit No.102
Case Nos.IPC-E-23-11
T.Thomas,Staff
11/15/23 Page 2 of 2
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 15th DAY OF NOVEMBER 2023,
SERVED THE FOREGOING DIRECT TESTIMONY OF TAYLOR THOMAS IN
SUPPORT OF THE STIPULATION AND SETTLEMENT,IN CASE NO.IPC-E-23-11,BY E-MAILING A COPY THEREOF,TO THE FOLLOWING:
LISA D NORDSTROM TIMOTHY TATUM
DONOVAN E WALKER CONNIE ASCHENBRENNERMEGANGOICOECHEAALLENMATTLARKIN
IDAHO POWER COMPANY IDAHO POWER COMPANY
PO BOX 70 PO BOX 70
BOISE ID 83707-0070 BOISE ID 83707-0070
E-MAIL:E-MAIL:[e-mail]
[e-mail] [e-mail]
[e-mail] [e-mail]
[e-mail]
[e-mail]
KELSEY JAE MICHAEL HECKLER
LAW FOR CONSCIOUS LEADERSHIP COURTNEY WHITE
920 N CLOVER DR CLEAN ENERGY OPPORTUNITIES
BOISE ID 83703 3778 PLANTATION RIVER DR
E-MAIL:[e-mail] STE 102
BOISE ID 83703
E-MAIL:
[e-mail]
[e-mail]
ERIC L OLSEN LANCE KAUFMAN PhD
ECHO HAWK &OLSEN PLLC 2623 NW BLUEBELL PLACE
PO BOX 6119 CORVALLIS OR 97330
POCATELLO ID 83205 E-MAIL:lance aegisinsight.com
E-MAIL:elo echohawk.com
PETER J RICHARDSON DR DON READING
RICHARDSON ADAMS PLLC 280 SILVERWOOD WAY
515 N 27TH ST EAGLE ID 83616
BOISE ID 83702 E-MAIL:[e-mail]
E-MAIL:[e-mail]
CERTIFICATE OF SERVICE
JIM SWIER AUSTIN RUESCHHOFF
MICRON TECHNOLOGY INC THORVALD A NELSON
8000 S FEDERAL WAY AUSTIN W JENSEN
BOISE ID 83707 HOLLAND &HART LLP
E-MAIL:[e-mail] 555 17TH ST STE 3200
DENVER CO 80202
E-MAIL:[e-mail]
[e-mail]
[e-mail]
[e-mail]
clmoser hollandhart.com
TOM ARKOOSH
ARKOOSH LAW OFFICES
PO BOX 2900
BOISE ID 83701
[e-mail]
erin.cecil arkoosh.com
ED JEWELL WIL GEHL
DARRELL EARLY ENERGY PROGRAM MANAGER
DEPUTY CITY ATTORNEY BOISE CITY DEPT OF PUBLIC WORKS
BOISE CITY ATTORNEY'S OFFICE PO BOX 500
PO BOX 500 BOISE ID 82701-0500
BOISE ID 83701-0500 E-MAIL:weehl citvofboise.org
E-MAIL:[e-mail]
ejewell citvofboise.org
dearly cityofboise.org
MATTHEW NYKIEL BRAD HEUSINKVELD
ID CONSERVATION LEAGUE ID CONSERVATION LEAGUE
710 N 6TH ST 710 N 6TH ST
BOISE ID 83702 BOISE ID 83702
E-MAIL:[e-mail] E-MAIL:
bheusinkveld idahoconservation.org
PETER MEIER DWIGHT ETHERIDGE
US DEPT OF ENERGY EXETER ASSOCIATES
1000 INDEPENDENCE AVE SW 5565 STERRETT PLACE
WASHINGTON DC 20585 STE 310
E-MAIL:[e-mail] COLUMBIA MD 21044
E-MAIL:detheridge exeterassociates.com
CERTIFICATE OF SERVICE
F.DIEGO RIVAS BENJAMIN J OTTO
NW ENERGY COALITION 1407 W COTTONWOOD CT
1101 8TH AVE BOISE ID 83702
HELENA MT 59601 E-MAIL:[e-mail]
E-MAIL:diego nwenergy.org
NORMAN M SEMANKO JUSTINA A CAVIGLIA
PARSONS BEHLE &LATIMER PARSONS BEHLE &LATIMER
800 W MAIN ST STE 1300 50 W LIBERTY ST STE 750
BOISE ID 83702 RENO NV 89502
E-MAIL:[e-mail] E-MAIL:[e-mail]
STEVE W CHRISS
DIR ENERGY SERVICES
WALMART INC
2608 SOUTHEAST J ST
BENTONVILLE AR 72716
E-MAIL:stephen.chriss walmart.com
SECRETARY
CERTIFICATE OF SERVICE