20050812Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DA TE:AUGUST 10, 2005
SUBJECT:CASE NO. PAC-05-1 (PacifiCorp)
PETITIONS FOR INTERVENOR FUNDING
On January 15 , 2005 , PacifiCorp dba Utah Power & Light Company (PacifiCorp;
Company) filed an Application for authority to increase the Company s general rates for electric
servIce.
On June 13, 2005, a Stipulation (and Proposed Settlement) was filed by PacifiCorp,
Commission Staff, the Idaho Irrigation Pumpers Association, Community Action Partnership
Association of Idaho, Agrium, Inc., 1.R. Simplot and Timothy 1. Shurtz. Monsanto Company, an
intervenor, did not sign the Stipulation, specifically objecting to Paragraph 9 of the Stipulation, a
provision that addresses the tariff versus contract standard as it pertains to special contract
customers and future service contracts.
On July 22, 2005, the Commission in final Order No. 29833 approved the Stipulation
and Settlement with the exception of Paragraph 9. Reference IDAPA 31.01.01.276.
On July 28 and 29, 2005, Petitions for Intervenor Funding in Case No. PAC-05-
were filed respectively by the Idaho Irrigation Pumpers Association, Inc. (Irrigators) and
Community Action Partnership Association of Idaho (CAP AI). Reference Idaho Code ~ 61-
617A; IDAPA 31.01.01.161-165. The Irrigators request $38 197.40. CAPAI requests
157.47.
Idaho Code ~ 61-617 A includes a statement of policy to encourage participation by
intervenors in Commission proceedings. The Commission determines an award for intervenor
funding based on the following considerations:
DECISION MEMORANDUM
(a) A finding that the participation of the intervenor has materially
contributed to the decision rendered by the commission; and
(b) A finding that the costs of intervention are reasonable in amount and
would be a significant financial hardship for the intervenor; and
(c) The recommendation made by the intervenor differed materially from
the testimony and exhibits of the commission staff; and
(d) The testimony and participation of the intervenor addressed issues of
concern to the general body of users or consumers.
The Petitions of the Irrigators and CAP AI can be summarized as follows:
Irrigators
The Petition of the Irrigators (attached) conforms with the requirements of RP 162.
The summary of expenses set forth in Exhibit A is as follows:
Legal Fees:
Eric L. Olsen: 70.9 hours at $175
Costs:
Long distance/postage
Travel:
Total Work and Costs:
Consultant Anthony J. Yankel
193 hours at $125 per hour
Expenses:
Travel, room and meals
Total Work and Costs:
TOT AL FEES AND EXPENSES
$13 860.
212.40
$14 072.40
$24 125.
$24 125.
$38 197.40
detailed log of hourly charges is included for legal expense. Exhibit A. Detailed costs
identified in the Exhibit A summary as long distance/postage include a May 31 $29.40 billing for
a client lunch. Exhibit A, Attachment 1. A detailed log of consultant time is set out in Exhibit
, Attachment 2. Exhibit B is 30 pages of prepared testimony.
CAP
The Petition of CAPAI (attached) conforms with the requirements of RP 162. A
summary of expenses set forth in Exhibit A is as follows:
DECISION MEMORANDUM
Costs:
Photocopies
Telephone conferencing costs
Postage
Total Costs
Legal Fees:
Brad M. Purdy: 50.70 hours at $120
Total Fees
TOTAL EXPENSES
$36.
21.63
15.
$73.47
084.
084.
157.47
COMMISSION DECISION
Submitted for Commission consideration are Petitions for Intervenor Funding filed
by the Idaho Irrigation Pumpers Association Inc. and Community Action Partnership
Association of Idaho.Pursuant to Idaho Code ~ 61-61 7 A(2) the Commission may order
PacifiCorp to pay all or a portion of the costs of one or more parties for legal fees , witness fees
and reproduction costs, not to exceed a total for all intervening parties combined of $40 000 in
any proceeding before the Commission. The combined total requested by the Irrigators and
CAPAI is $44 354.87. What award of intervenor funding, if any, does the Commission find
reasonable for the Irrigators and CAPAI? Pursuant to Commission Rule 165.03 awards of
intervenor funding shall be chargeable to the class of customers represented by the intervenors.
Awards of intervenor funding paid by PacifiCorp are an allowable business expense. Does the
Commission authorize recovery of such expense in the utility s 2006 rate case?
Scott D. Woodbury
bls/M:PACEO501 sw2
DECISION MEMORANDUM
. " ,"" ,..
Eric L. Olsen, ISB No. 4811
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
O. Box 1391; 201 E. Center
Pocatello, Idaho 83204-1391
Telephone: [phone]
Fax: [phone]
f,ECEIVEf.J (1)!LEO
ZO05 JUL 28 AM 10: 11
iDt\HO PUBLIC
UT1LITIES COt'lt'1ISSION
Attorneys for Intervenor
Idaho Irrigation Pumpers Association, Inc.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
ACIFICORP DBA UTAH POWER & LIGHT
CaMP ANY FOR AUTHORITY TO INCREASE
ITS RATES FOR ELECTRIC SERVICE TO
ELECTRIC CUSTOMERS IN THE STATE OF ID~O
CASE NO. P AC-05-
APPLICATION FOR INTERVENOR FUNDING OF
THE IDAHO IRRIGATION PUMPERS ASSOCIA TION~ INC.
COMES NOW the Idaho Irrigation Pumpers Association, Inc. ("Irrigators ), by and through
counsel of record, Eric L. Olsen, and hereby respectfully makes application to the Idaho Public
Utilities Commission ("Commission ) for intervenor funding pursuant to Idaho Code ~ 61-617 A and
IDAPA 31.01.01.161 through .165 as follows:
(A)A summary of the expenses that the Irrigators request to recover broken down into
legal fees, consultant fees and other costs and expenses is set forth in Exhibit "A" attached hereto
and incorporated by reference. Itemized statements are also included as Attachments 1 and 2 to
Exhibit "A" in support of said summary and are incorporated by reference.
(B)The Irrigators ' counsel, Eric L. Olsen, and Consultant, Anthony J. Yankel, P ., fully
participated in this proceeding. Procedurally, this case began as a full blown rate case. Mr. Olsen
APPLICATION FOR INTERVENOR FUNDING OF IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. -
ATTACHMENT A
and Mr. Yankel were active in reviewing "the filing, preparing and reviewing approximately 90 data
requests and responses, and drafting direct testimony. However, once the Irrigators and other parties
objected to the inclusion of costs associated with Monsanto Company s ("Monsanto ) special
contract in this case, PacifiCorp s focus clearly changed from continuing on with the case to a
settlement posture. Thereafter, Irrigators participated fully in the settlement discussions, were parties
to the resulting stipulation, and filed comments in support thereof with the Connnission. Because
it was not known until late in the process that any party would propose settlement, and even later
before one was reached, the Irrigators still had to substantially prepare for the presentation of their
direct case before the Commission. The proposed findings or positions that the Irrigators would
have urged the Commission adopt are contained in the draft direct testimony of Mr. Yankel which
is attached hereto as Exhibit and incorporated by this reference herein.The Irrigators
independently but concurrently with staff, determined that PacifiCorp had inappropriately included
the Monsanto special contract costs in this case, and the Irrigators' objection was noted in the
Stipulation.
(C)The expenses and costs incurred by the Irrigators set forth in Exhibit and
accompanying attachments are reasonable in amount and were necessarily incurred in reviewing and
evaluating PacifiCorp s filing, preparing data requests and reviewing data responses, developing
direct testimony for the scheduled technical hearings, evaluating the merits of the proposed
settlement in this case, participating in the settlement discussions, and communicating with its
members regarding the same. The fact that the parties settled the case does not lessen the fact that
the Irrigators had to prepare as though the case was going to hearing.
APPLICATION FOR INTERVENOR FUNDING OF IDAHO IRRIGATION PUMPERS ASSOCIATION, INc. - 2
(D)The costs described in Paragraph (A) above constitute a financial hardship for the
Irrigators. The Irrigators currently have approximately $12 392.00 in the bank. Accounts payable
for legal and consultant fees and costs in this case total $38 197.40 as set out in Exhibit ", none
of which have been paid.
The Irrigators are an Idaho nonprofit corporation qualified under I.R.C. ~ 501(c)(5)
representing farm interests in electric utility rate matters affecting farmers in southern and central
Idaho. The Irrigators rely solely upon dues and contributions voluntarily paid by members, together
with intervenor funding to support activities and participate in rate cases. Each year mailings are
sent to approximately 7500 Idaho Irrigators (approximately two-thirds in the Idaho Power Company
service area and one-third in the PacifiCorp service area), soliciting annual dues. The Irrigators
recommend members make a voluntary contributions based on acres irrigated or horsepower per
pump. Member contributions have been falling which are believed to be attributable to the
depressed agricultural economy and increased operating costs and threats, particularly those relating
to water right protection issues. From member contributions the Irrigators must pay all expenses
which generally include mailing expenses, meeting expenses and shared office space in Boise, Idaho
in addition to the expenses relating to participation in rate cases. The Executive Director, Lynn
Tominaga, is the only part-time paid employee, receiving a retainer plus expenses for office space
office equipment, and secretarial services. Officers and directors are elected annually and serve
without compensation.
It has been and continues to be a financial hardship for the Irrigators to fully participate in
all rate matters affecting its members. As a result of financial constraints, participation in past rate
cases and in this case has been selective and, primarily, on a limited basis.
APPLICATION FOR INTERVENOR FUNDING OF IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. -
(E)Where the case is settled before direct testimony has been filed or a complete record
otherwise being established, it may not be apparent how the Irrigators' positions would materially
differ from the Commission Staffs positions. However, as shown in Mr. Yankel's draft testimony
(Exhibit "), the Irrigators pointed out (1) that PacifiCorp was not including known and measurable
adjustments in its filing with respect to the actual irrigation curtailment, (2) that there other ways of
modeling how the curtailment credit can be derived based on straight forward cost of service
principles and how the credit should be treated on a system or situs basis, (3) that there are problems
with PacifiCorp s load research data from a quality prospective and from taking into account the
curtailment that the Irrigators are providing under the load control program, and (4) that there were
problems with allocation of costs associated with PacifiCorp s substations and primary distribution
lines. Based on the foregoing and its discussions with Commission Staff during the case, the
Irrigators believe that these issues were not going to be directly addressed by Commission Staff in
this case. Thus, the Irrigators 'positions and recommendations did materially differ from those
which the Irrigators believed that the Commission Staff were going to focus on, notwithstanding the
fact that the vast majority of all parties' positions converged with the ultimate negotiation and
presentation of the Stipulation.
(F)The Irrigators' participation addressed issues of concern to the general body of users
or consumers on PacifiCorp s system. It has been approximately two decades since there as been
a full blown rate case. Although there were interruptible rates for the Irrigators at the time of the last
rate case, there was not any consistent, annual curtailment of the Irrigators until implementation of
the current load control program in 2003. This case gave the Irrigators the chance to analyze the
effects of actual curtailment in the context of what it accomplished for the jurisdiction as a whole
APPLICATION FOR INTERVENOR FUNDING OF IDAHO IRRIGATION PUMPERS ASSOCIATION, INc. - 4
and for the Irrigators specifically. The curtailment of the Irrigators reduces the summer coincident
peak for the system and the Idaho jurisdiction, as well as for the irrigation class. A reduction of this
summer peak not only benefits the Irrigators as a class by reducing its demand, but it also reduces
the Idaho system demand and the resulting system costs that are allocated to all PacifiCorp s Idaho
tariff customers. Continuation and expansion of the irrigation load control program may also defer
the building of additional generation plant as indicated in PacifiCorp s 2004 Integrated resource
plan. Avoiding these type of costs is also a benefit to all PacifiCorp s Idaho tariff customers.
(G)The Irrigators represent the irrigation class of customers under Schedule 10.
Based on the foregoing, it is respectfully submitted that the Irrigators are a qualifying
intervenor and should be entitled to an award of costs of intervention in the amount of$38 197.40
pursuant to Idaho Code ~ 61-617 A and IDAP A 31.01.01.161 through .165.
DATED this 27th day of July, 2005.
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
APPLICATION FOR INTERVENOR FUNDING OF IDAHO IRRIGATION PUMPERS ASSOCIATION, INc. - 5
Brad M. Purdy
Attorney at Law
Bar No. 3472
2019 N. 17th St.
Boise, ID. 83702
[phone]
FAX: [phone]
bm urd hotmai1.com
Attorney for Petitioner
Community Action Partnership
Association of Idaho
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1:
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IlJ
1005 JUL 29 PM t: 10
lDt~!HJ PUBLIC
UIIL I fitS CO~1MISSIOH
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLI CA TI ON OF
ACIFICORP DBA UTAH POWER & LIGHT
COMP ANY FOR APPROVAL OF CHANGES
TO ITS ELECTRIC SERVICE SCHEDULES
CASE NO. PAC-05-
COMMUNITY ACTION
PARTNERSHIP ASSOCIA-
TION OF IDAHO'
PETITION FOR INTER-
VENOR FUNDING
COMES NOW, petitioner Community Action Partnership Association of Idaho
(CAP AI) and, pursuant to I daho Code ~ 61-61 7 A and Rules 161-165 0 f the
Commission s Rules of Procedure, IDAPA 31.01.01 , petitions this Commission for an
award of intervenor funding.
Rule 162 Requirements
(01) Itemized list of Expenses
Consistent with Rule 162(01) of the Commission s Rules of Procedure, an
itemized list of all expenses incurred by CAP AI in this proceeding is attached hereto as
Exhibit "
CAP AI PETITION FOR INTERVENOR FUNDING
ATTACHMENT B
(02) Statement of Proposed Findings
CAP AI's proposed fmdings are set forth in the settlement agreement executed by
all parties to this proceeding and which this Commission ultimately approved. Though
the settlement was executed prior to filing direct testimony, CAP AI, through extensive
negotiations with PacifiCorp, addressed issues of importance to the general body of
PacifiCorp s ratepayers, including the Company s overall proposed rate increase and the
impact it would have on its low-income customers.
As the settlement agreement reflects, CAP AI proposed an increase in the total
annual funding level of PacifiCorp' s low-income weatherization program by 300%.
addition, PacifiCorp agreed to adopt U.S. Department of Energy standards for energy
efficiency rather than insisting upon its own standards. This change brings the Company
into line with Idaho Power and A vista and facilitates the work of the community action
agencies. PacifiCorp also agreed to reimburse low-income customers for 50% of
refrigerators and compact fluorescent light bulbs. CAP AI's proposed fmdings are that
the Commission adopt these changes.
It is fair to say that CAPAI's efforts and proposed fmdings in this case were quite
similar to those in the Idaho Power and A vista general rate cases, both for which this
Commission awarded intervenor funding. As in the A vista case, CAP AI was able to
settle all issues prior to hearing.
PacifiCorp did not propose changes to its low-income weatherization program in
its direct case. Because of its involvement in this case and negotiations with PacifiCorp,
the company agreed to implement CAPAI's proposed changes to the low-income
weatherization program as set forth in the settlement. Were it not for the involvement of
CAP AI PETITION FOR INTERVENOR FUNDING
and negotiations by CAP AI, therefore, these changes would not have been agreed to for
consideration by this Commission.
(03) Statement Showing Costs
Attached hereto as Exhibit "A" is a statement showing the costs incurred by
CAP AI in this proceeding. CAP AI submits that the costs and fees incurred are
reasonable. Because of the speed at which this case was settled, CAPAI's costs are
considerably less in this proceeding than in Idaho Power, Avista s and United Water
general rate cases. For example, they are roughly one-half of the costs incurred in the
A vista general rate case, though both resulted in a similar settlement agreement.
CAP AI did not retain an expert witness in this case, but relied upon the expertise
it has acquired in recent cases and, primarily, on its legal counsel for negotiation and
consultation purposes. CAP AI is on an extremely limited budget and, by necessity, must
minimize its costs to the greatest extent possible.
(04) Explanation of Cost Statement
CAP AI is a non-profit corporation overseeing a number of agencies who fight the
causes and conditions of poverty throughout Idaho. CAP AI's funding for any given
effort might come from a different variety of sources, including governmental. Many of
those funding sources, however, are unpredictable. Some contain conditions or
limitations on the scope and nature of work eligible for funding. The cost to CAP AI of
participating in this proceeding constitutes a significant fmancial hardship.
This Commission has been extremely accommodating to CAPAI's regular
involvement in significant proceedings such as this, and the Commission has awarded
CAP AI its reasonable costs in past rate cases. If it were not for this fact, CAP AI would
CAP AI PETITION FOR INTERVENOR FUNDING
simply not be able to afford to participate and advance the interests of not only low-
income ratepayers, but all ratepayers. In spite of the Commission s honorable decisions,
there is never a guarantee that CAP AI will recover the costs it incurs in these
proceedings. Furthermore, even if the Commission does ultimately award full recovery
through intervenor funding, CAP AI must pay its costs as it goes. This is a tremendous
struggle, in terms of cash- flow, for non-profits organizations, such as CAP AI, who
operate on unpredictable and limited budgets.
No other intervenor in this proceeding represented, exclusively, the interests of
the residential class, particularly the low-income sector of that class. CAP AI raised
issues, and represented the interests of, the general body ofPacifiCorp s ratepayers. For
example, the low-income weatherization program for which CAP AI seeks increased
funding reduces the consumption of electricity during PacifiCorp s summer peak season
helping to defer the acquisition of marginally-priced resources and provides other
system-wide benefits including the reduction of bad debt and arrearages.
(05) Statement of Difference
Unlike the Idaho Power, Avista and United Water general rate cases, Staff was
not involved at all in the negotiations between CAPAI and PacifiCorp. There was no
deliberate design accounting for this, other than the fact that Staff has demonstrated a
preference to allow CAP AI to make specific proposals and fight for them on its own
without intervention other than to opine, after the fact, whether CAP AI's position, falls
within a range of reasonableness. Thus, it is fair to say that where CAP AI takes specific
positions on issues that Staff does not address in detail, there are significant differences
between CAP AI and Staff for purposes of intervenor funding requests.
CAP AI PETITION FOR INTERVENOR FUNDING
(06) Statement of Recommendation
CAP AI's participation in this case addressed issues of concern to the general body
of ratepayers. The problems facing PacifiCorp s low-income customers are societal
problems that affect us all. Those problems, if not addressed, adversely affect all utility
ratepayers in the form of increased collection and associated costs as well as the write-off
of uncollectible accounts. These are costs that are passed on to all ratepayers. Iflow-
income customers are enabled to lower their electric bills through a Company-funded
weatherization program, this decreases the likelihood that they will be unable to pay their
bills and, consequently, the Company avoids incurring the aforementioned costs.
Furthermore, because the low-income weatherization program is a DSM program,
it represents a resource to the Company. It is in the best interests ofPacifiCorp
ratepayers for the Company to have a healthy diversity of resources. By promoting the
conservation of electricity consumption, the Company is able to defer the acquisition of
new, marginally higher cost, resources.
This case is quite unique in comparison to past general rate cases. In both the
A vista and United Water cases, CAP AI was able to reach a settlement with the utilities
that was put before and approved by the Commission at hearing. In this case, CAP AI
was aware that settlement negotiations were pending between PacifiCorp and certain
other parties months ago. Because the substance of those negotiations did not appear
relevant to CAP AI's issues, and because CAP AI was independently negotiating with the
Company, joinder in those other negotiations would have resulted in unnecessary costs
for CAP AI.
CAP AI PETITION FOR INTERVENOR FUNDING
Once CAP AI learned that PacifiCorp intended to reach settlement on all issues in
the case, CAP AI accelerated the pace of its negotiations with the Company and reached
an agreement in time to become a signatory to the global settlement. CAPAI was
informed that the Commission would reschedule the original prefile and hearing dates
and, ultimately, schedule the hearing for the purpose of addressing the settlement.
order to minimize costs, and because it intended at participate in the hearing and testify in
support of the settlement, CAP AI did not prefile any testimony regarding the settlement
which it obviously supported as evidenced by its execution of the document and which it
would justify at hearing. It was only after the prefile deadline for direct testimony was
cancelled, did CAP AI learn that the Commission would not conduct a hearing after all.
CAP AI points this out simply to establish that it did everything in its power to
minimize costs, while leveraging its position in the interests of all ratepayers.
Consequently, though a hearing was never conducted, CAP AI's participation in
this case contributed materially toward shaping the scope, and focus of the issues and
evidence presented to the Commission and, thus, the ultimate outcome of this proceeding,
by offering a perspective not offered by any other party.
(07) Statement Showing Class of Customer
To the extent that CAP AI represented a specific PacifiCorp customer class, it is
the residential class.
RESPECTFULLY SUBMITTED, this 29th day of July, 2005.
~ c2Il:l Brad M. Purdy
CAP AI PETITION FOR INTERVENOR FUNDING