20041109Notice of Stipulation and Agreement.pdf

Office of the Secretary
Service Date
November 9, 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE INVESTIGATION
OF INTER-JURISDICTIONAL ISSUES
AFFECTIN G P CIFI CO RP DBA UT AH POWER & LIGHT COMPANY
CASE NO. P AC-O2-
NOTICE OF STIPULATION AND
AGREEMENT
NOTICE OF JOINT MOTION
FOR ACCEPTANCE OF
SE TTLEMENT
NOTICE OF MODIFIED
PROCEDURE
NOTICE OF COMMENT!
PROTEST DEADLINE
BACKGROUND
On March 5, 2002, PacifiCorp dba Utah Power & Light Company (PacifiCorp;
Company) petitioned the Idaho Public Utilities Commission (Commission) to initiate an
investigation of inter-jurisdictional issues affecting the Company as a consequence of its status
as a multi-jurisdictional utility subject to the jurisdiction of six state regulatory Commissions.
By Order No. 28978 in Case No. PAC-02-, the Commission established a docket for
investigation, established an intervention deadline and approved a joint Multi-State Process
(MSP) for analyzing PacifiCorp inter-jurisdictional issues (Idaho Code 9 61-505) and established
initial MSP scheduling (Idaho Code 9 61-501).
On September 30, 2003 , PacifiCorp filed a Motion, direct testimony and exhibits in
Case No. P AC-02-3 seeking Commission ratification of an Inter-jurisdictional Cost Allocation
Protocol (Protocol).
On July 14, 2004, PacifiCorp filed a Revised J?rotocol and Supplemental Testimony
in Case No. PAC-02-3. The Revised Protocol is the culmination of an extended series of joint
multi-state process (MSP) meetings, technical workshops and telephone conferences for
analyzing PacifiCorp s inter-jurisdictional cost allocation issues. MSP meetings were attended
NOTICE OF STIPULATION AND AGREEMENT
NOTICE OF JOINT MOTION
FOR ACCEPTANCE OF SETTLEMENT
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/ PROTEST DEADLINE
by representatives of some 18 entities from the states of Utah, Oregon, Wyoming, Washington
and Idaho. Participants included representatives of state commission policy staffs advocacy
staffs, individual customers and consumer groups. The Company s filing in Idaho is identical to
contemporaneous filings made with the regulatory commissions in Utah, Oregon and Wyoming.
In Washington, PacifiCorp filed the Revised Protocol as part of the Company s rate case in that
state.
The Revised Protocol filed by PacifiCorp is the Company s "MSP solution." The
Revised Protocol describes how PacifiCorp s generation, transmission and distribution costs will
be allocated or assigned to PacifiCorp s six retail jurisdictions. The Revised Protocol also
describes mechanisms for ensuring continued dialogue among interested parties regarding
PacifiCorp inter-jurisdictional cost allocation issues and procedures, and for resolving concerns
and inconsistent policies that may arise among the Company s state jurisdictions in the future.
PacifiCorp anticipates that ratification of the Revised Protocol will resolve current
differences among PacifiCorp s retail jurisdictions concerning needed new resources and cost
allocation methods. PacifiCorp contends that ratification will provide the Company assurance
that it will have a reasonable opportunity to recover prudent investments in new generation and
transmission facilities and required improvements to existing facilities. This, in turn, it states
will ensure that the Company s customers continue to receive safe and reliable electricity service
at reasonable prices.
Key elements of the Revised Protocol are: a hydro endowment reflecting the cost
difference of hydro-electric resources and certain contracts attributed to the former Pacific Power
and Light states; an assignment recognizing the cost difference of state-specific qualifying
facilities; and an allocation for seasonally specific resources. All other resources will continue to
be allocated based on the peak and energy requirements of each state on the integrated system.
In addition, the Revised Protocol addresses treatment of a number of items and
potential situations including: (i) refunctionalization and allocation of transmission costs and
revenues, (ii) treatment of the costs of special contracts, (iii) means of accounting for and
accommodating state specific policies, such as direct access, and (iv) the process and
NOTICE OF STIPULATION AND AGREEMENT
NOTICE OF JOINT MOTION
FOR ACCEPTANCE OF SETTLEMENT
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/ PROTEST DEADLINE
infrastructure for resolving issues in order to further secure the sustainability of the allocation
methodology in the future.
YOU ARE HEREBY NOTIFIED that on November 4, 2004, PacifiCorp and
Commission Staff filed a Joint Motion in Case No. P AC-02-3 requesting acceptance and
Commission approval of a Stipulation and Agreement (Stipulation) negotiated by PacifiCorp,
Staff, Monsanto Company, and AARP as full settlement of the inter-jurisdictional cost allocation
issues affecting PacifiCorp as a consequence of its status as a multi-jurisdictional utility subject
to the jurisdiction of six state regulatory Commissions. The stipulating parties request
Commission approval of the inter-jurisdictional cost allocation methods embodied in the Revised
Protocol filed with the Commission on July 14, 2004, as a means of achieving consistent
allocation methods in the jurisdictional states served by PacifiCorp.
Public workshops for PacifiCorp customers in eastern Idaho were held in Preston on
October 4, 2004 and in Rexburg on October 5 , 2004. At the workshops Commission Staff
presented a summary of the Company s Petition, MSP Revised Protocol and discussed its
participation in settlement negotiations.
Included in the Stipulation are rate mitigation measures intended to apply to
calculations of the Company s Idaho revenue requirement for any PacifiCorp rate filing made
through March 31 , 2009. In the near term through 2008, the Revised Protocol methodology
results in a 2% higher revenue requirement to Idaho than under Rolled-, an alternate allocation
methodology that Idaho Staff would favor in the absence of agreement to the Revised Protocol.
The results to Idaho beyond 2008 are more favorable because future hydro relicensing costs will
be assigned directly to the Pacific Power & Light states, primarily Washington and Oregon. In
addition, Idaho customers will continue to benefit from the efficiencies of PacifiCorp
integrated six state system while PacifiCorp will be provided greater certainty for a recovery of
its prudently incurred costs.
The stipulating parties agree that the Stipulation and rate mitigation mechanism is in
the public interest and that all of the t~rms of the Stipulation are fair, just and reasonable. The
parties recommend that the Commission approve use in Idaho by PacifiCorp of the Revised
Protocol methodology and rate mitigation mechanism for purposes of inter-jurisdictional
NOTICE OF STIPULATION AND AGREEMENT
NOTICE OF JOINT MOTION
FOR ACCEPTANCE OF SETTLEMENT
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allocation of the Company costs and Idaho results of operations in future regulatory
proceedings.
YOU ARE FURTHER NOTIFIED that the Commission has preliminarily found that
the public interest in this matter may not require a hearing to consider the issues presented and
that the issues raised in the submitted Stipulation and Agreement and Joint Motion for
Acceptance of Settlement and related Revised Protocol may be processed under Modified
Procedure, i., by written submission rather than by hearing. Reference Commission Rules of
Procedure, IDAP A 31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that the deadline for stipulating parties and
parties of record, including PacifiCorp, to file comments with respect to the Revised Protocol
Stipulation and Agreement and Joint Motion for Acceptance of Settlement is Tuesday,
November 23, 2004.
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or
protests by the public with respect to the Revised Protocol, Stipulation and Agreement and
Joint Motion for Acceptance of Settlement and is Monday, December 6, 2004.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the established deadlines, the Commission may consider the matter on its merits
and may enter its Order without a formal hearing. If comments or protests are filed within the
established deadlines, the Commission will consider them and in its discretion may set the matter
for hearing or may decide the matter and issue its Order on the basis of the written positions
before it. Reference IDAP A 31.01.01.204.
YOU ARE FURTHER NOTIFIED that written comments concerning Case No. PAC-
02-3 should be mailed to the Commission and the Company at the addresses reflected below:
NOTICE OF STIPULATION AND AGREEMENT
NOTICE OF JOINT MOTION
FOR ACCEPTANCE OF SETTLEMENT
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/ PROTEST DEADLINE
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
James F. Fell
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204
Street Address for Express Mail:Andrea Kelly
Director 0 f Re gulati on
PacifiCorp
825 NE Multnomah Street
Portland, OR 97232
472 W. Washington Street
Boise, ID 83702-5983
All 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.state.id.. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document.
YOU ARE FURTHER NOTIFIED that the Company Application in Case
No. PAC-02-3 may be viewed at the Commission s website www.puc.state.id.by clicking
on "File Room" and "Electric Cases" or can be viewed during regular business hours at the Idaho
Public Utilities Commission, 472 West Washington Street, Boise, Idaho and at the Idaho offices
ofPacifiCorp in Rexburg, Preston, Shelley and Montpelier, Idaho.
DATED at Boise, Idaho this qY-41 day of November 2004.
/Jo aJLh GlML- 'Lill
Barbara Barrows
Assistant Commission Secretary
bls/N:P ACE0203 sw2
NOTICE OF STIPULATION AND AGREEMENT
NOTICE OF JOINT MOTION
FOR ACCEPTANCE OF SETTLEMENT
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/ PROTEST DEADLINE