20080725Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER REDFORD
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER KEMPTON
COMMISSION SECRETARY
LEGAL
FROM:T J GOLO
DATE:JULY 25, 2008
RE:PROPOSED MODIFICATION TO PERFORMANCE STANDARDS AND
CUSTOMER GUARANTEES; CASE NO. P AC-05-
BACKGROUND
On June 4, 2008, PacifiCorp dba Rocky Mountain Power submitted a proposal to revise
three Network Performance Standards. The Company proposes a retroactive effective date of
April 1 , 2008, to provide a seamless transition between the original and new standards for purposes
of filing reports with the Commission. The Company implemented a Service Standards Program
comprised of Network Performance Standards and Customer Service Performance Standards and
Guarantees in 1999 and committed to a five-year term that expired on March 31 , 2005. The
program was initially extended voluntarily but was later affirmed and extended through December
2011 , as part of MidAmerican s acquisition ofPacifiCorp in Case No. PAC-05-08.
Commitment No. 45 in that case states:
MEHC and PacifiCorp commit to continue customer service guarantees
and performance standards as established in each jurisdiction, provided that
MEHC and PacifiCorp reserve the right to request modifications ofthe
guarantees and standards after March 31 , 2008, and the right to request
termination (as well as modification) of one or more guarantees or standards
after 2011. The guarantees and standards will not be eliminated or modified
without Commission approval.
According to the Company, the guarantees and standards have been successful in
improving service to the customers and system reliability. The Company is not proposing any
changes to the Customer Performance Standards and Customer Guarantee Program and will
continue that program until December 31 , 2011. Similarly, it will not change its Network
Performance Standard regarding restoration of service. However, PacifiCorp requests that three
Network Performance Standards be slightly modified.
DECISION MEMORANDUM - 1 -JULY 25 , 2008
The Company is proposing to change the targets for the Network Performance Standards
, 2, and 3. The modified targets will be developed around the "Controllable Distribution
outages which are "outage events that are of a controllable nature on the distribution system.
The Company will focus the most cost-effective projects to improve system reliability and
maintain responsiveness during outages.
STAFF ANALYSIS
Staff has reviewed the proposed modifications for the Network Performance Standards 1
2 and 3 , which are shown below. The proposed targets are focused towards the controllable
outage events at the distribution level. These types of events include power lines coming into
contact with each other, vegetation contact with power lines, animal interference or equipment
failure. The Company can prevent these events from occurring through their engineering
programs. Outages caused by a car hitting a pole, severe weather and transmission outages are
not avoidable through engineering programs and are not considered controllable outage events.
The targets presented by the Company were fairly aggressive but reasonable based on the types
of outage events included in the metric. The modified targets will be accomplished within the
proposed time period without affecting the allocated budget for the program and will have no
effect on rates.
Service Standard Commitment Proposed Modification
Network Performance Standard The Company will improve Improve controllable distribution
SAIDI by 6%from March outage duration by 46% over the
Improve System Average 2005 to March 2008.three-year nine-month
Interruption Duration Index performance period resulting in
(SAIDI)a SAIDI target of no more than
30.5 minutes.
Network Performance Standard The Company will improve Improve controllable distribution
SAIFI by 6%from March outage frequency by 37% over
Improve System Average 2005 to March 2008.the three-year nine-month
Interruption Frequency Index performance period resulting in
(SAIFI)a SAIFI target of no more than
297 events.
Network Performance Standard The Company will select a The Company will select a
maximum offive under-maximum of two under-
Improve Under Performing performing circuits in Idaho on performing circuits in Idaho on
Circuits an annual basis and will an annual basis and will
undertake corrective measure to undertake corrective measure to
reduce the average CPI by 20%reduce the average CPI by 20%
within 5 years.within 5 years.
DECISION MEMORANDUM - 2-JULY 25, 2008
STAFF RECOMMENDATION
Staff recommends Commission approval of the proposed modification to Network
Performance Standards 1 , 2, and 3 with an effective date of April 1 , 2008.
COMMISSION DECISION
Does the Commission accept the three proposed modifications to Rocky Mountain
Network Performance Standards?
TJ Golo
i:udmemos/mod to performance standards and customer guarantees pac-e-O5-
DECISION MEMORANDUM - 3 -JUL Y 25 2008