20050128Final Order No 29697.pdf

Office of the Secretary
Service Date
January 28 2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
ACIFICORP DBA UTAH POWER & LIGHT
COMP ANY FOR APPROVAL OF REDUCTIONS)
IN BONNEVILLE POWER ADMINISTRATION
REGIONAL EXCHANGE CREDITS.
CASE NO. P AC-O4-
ORDER NO. 29697
On December 15 , 2004, PacifiCorp dba Utah Power & Light Company (PacifiCorp;
Company) filed an Application with the Idaho Public Utilities Commission (Commission)
requesting authority to reduce the Bonneville Power Administration s (BP A) Regional Exchange
Credits in Idaho and revise the Schedule 24 kilowatt-hour credit adjustment for all qualifying
kilowatt-hours of residential and/or farm use. The proposed reduction reduces the Schedule 34
BP A credit by an annual amount of $6.8 million in order to eliminate a $6.8 million deficit
reflected in the Company s Residential Exchange Program (REP) balancing account. The
Company requests an effective date of January 31 , 2005. The Commission in this Order
approves the proposed reduction in the Schedule 34 BP A credit.
As a northwest regional utility, PacifiCorp is entitled to participate in the Residential
Exchange Program (REP) that extends the benefits of the Columbia River Federal Power
Program to residential and small farm consumers served by investor-owned utilities in the
region. Section 5c of the Northwest Power Act, 16 U.C. 9839(c). The REP is administered by
the Bonneville Power Administration (BP A). The Residential Exchange Settlement Agreement
between PacifiCorp and BP settled the parties' rights and obligations for the Residential
Exchange Program for the ten-year term of the Agreement, July 1 2001 through July 30, 201l.
As required by the REP Settlement, PacifiCorp established balancing accounts
tracking the differences in the program credits provided to the Company s customers and the
monetary payments received from BP A pursuant to the REP Settlement. As of September 2004
the Idaho balancing account showed an REP deficit of $6.8 million because PacifiCorp had paid
out $6.8 million more in benefits to Idaho residential and small farm customers than it had
received from BP A.
Following discussions with the Commission Staff, the Idaho Irrigation Pumpers
Association, and irrigation customers, PacifiCorp seeks Commission authorization to correct the
ORDER NO. 29697
deficit in the BP A balancing account in a manner that will ease the customer impact
elimination of the deficit. PacifiCorp proposes to reduce the BP A credit by $6.8 million.
achieve the targeted zero balance in the BP A balancing account by September 30, 2006
additional adjustments may be necessary.
The Company s proposal retains the existing ratio of regional exchange benefits
between irrigation and non-irrigation customers, although the benefits are reduced. The
Schedule 34 kilowatt-hour credit adjustment for irrigation customers (Schedule No. 10) will
decrease from $0.039377 to $0.031546 per kilowatt-hour, or 20.47%. The kilowatt-hour credit
adjustment for qualifying non-irrigation customers (Residential Schedules 1 and 36; Commercial
and Industrial Schedules 6A, 10 and 23A, 19 with 23A, 19 with 35A; and Public Street Lighting
Schedule 7 A) will decrease from $0.023327 to $0.019216 per kilowatt-hour, a decrease for
Residential Schedule 1 of6.96% and Schedule 36 of9.55%.
On January 4, 2005, the Commission issued Notices of Application and Modified
Procedure in Case No. P AC-04-6. The deadline for filing written comments was January 20
2005. The Commission Staff and four customers were the only parties to file comments. Staff
recommends that the Commission approve the Company s Application as filed. The customers
express concern with the increase in rates that results from the credit adjustment and recommend
denial.
The reduction in BP A exchange program credits proposed by PacifiCorp in this case
Staff notes, is not based on any recent reduction in credits received by PacifiCorp from BP
Rather, the reduction is proposed to eliminate a balancing account deficit created by paying out
more credits to PacifiCorp customers over the prior three-year period than were actually received
from BP A. Based on its review of information provided by the Company, Staff has verified that
PacifiCorp has paid $6.8 million more in credits to customers than was received by the Company
from BP A. Staff has further determined that the responsibility for the credit over-payment lies
proportionately with each customer group. Historically, the percentage of credit revenue
received by each customer group closely matches the percentages anticipated when the credit
rates were approved.
While the reduced credits proposed by PacifiCorp appear to reduce the percentage of
credit revenue received by some customer classes, Staff contends that the reduction is slight and
highly dependent upon actual energy consumption in each class.Staff believes that the
ORDER NO. 29697
percentage of revenue that will ultimately be received by each customer class under the
Company s proposal is reasonable when compared to historic percentages. Staff recognizes the
potential for creating a surplus in the balancing account over the 20-month period. Staff believes
any resulting surplus can be applied to mitigate both planned and unplanned future reductions in
BP A regional exchange credits.
COMMISSION FINDINGS
The Commission has reviewed the filings of record in Case No. P AC-04-
including the comments and recommendations of Commission Staff and customers.
continue to find it reasonable to process the Company s Application pursuant to Modified
Procedure, i., by written submission rather than by hearing. Reference IDAP A 31.01.01.204.
PacifiCorp in this docket proposes to reduce its BP A exchange credit to eliminate a
$6.8 million deficit in its Idaho Schedule 34 Residential Exchange Program balancing account.
The adjustment, we find, is not based on any recent reduction in credits received by PacifiCorp
from BP A, but is the result of paying out more to customers over the prior three years than the
Company received from BP A. Regarding the three-year period of deficit accrual, the
Commission believes that the credit adjustment for differences between actual and estimated
usage must occur sooner. We therefore direct the Company to assess or evaluate the imbalance
in its Schedule 34 account and need for BP A credit adjustment (if any) on an annual basis at the
end of its fiscal year and to share the results of such analysis by letter with Commission Staff.
The Commission is satisfied that the overpayment to customers reflected in the
Schedule 34 balance account deficit and the responsibility for the credit overpayment lies
proportionately with each customer group. We further find that the historical percentage of
credit revenue received by each customer group closely matches the percentages anticipated
when the credit rates were approved. We accordingly find it reasonable to approve the
Company-proposed reduction in the Schedule 34 BP A credit for an effective date of January 31
2005.
ORDER NO. 29697
CONCLUSIONS OF LAW
The Commission has jurisdiction over PacifiCorp dba Utah Power & Light Company,
an electric utility, and the issues presented in Case No. P AC-04-6 pursuant to the authority and
power granted it under Title 61 of the Idaho Code.
ORDER
In consideration of the foregoing and as more particularly described above, IT
HEREBY ORDERED and the Commission does hereby approve PacifiCorp s proposal to reduce
the Schedule 34 BP A regional exchange credit in Idaho by $6.8 million to eliminate the deficit
currently reflected in the Company s Residential Exchange Program balancing account. We
approve the submitted tariff changes for an effective date of January 31 2005.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 9 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ;l. c;t
fI'-
day of January 2005.
(SWk U
MARSHA H. SMITH, COMMISSIONER
DENNIS S. HANSEN, COMMISSIONER
ATTEST:~(JJe D. Jewell
Commission Secretary
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ORDER NO. 29697