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HomeMy WebLinkAbout20071026Rockney rebuttal.pdf. RECEiVE!" ZDU7DCT 26 MilO: 51 IDfi;1-IO PUBLIC UTILITIeS COMMISSION BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER FOR APPROV OF CHANGES TO ITS ELECTRIC SERVICE SCHEDULES Rebuttal Testimony of Carole A. Rockney CASE NO. PAC-07- ROCKY MOUNTAIN POWER CASE NO. PAC-07- October 2007 Please state your name, business address and present position with the Company (also referred to as Rocky Mountain Power). My name is Carole A. Rockney. My business address is 825 N.E. Multnomah Street, Suite 800, Portland, Oregon, 97232. My present position is Director Customer & Regulatory Liaison, in the Customer Services Department. Are you the same Carole A. Rockney that previously submitted testimony in this proceeding? Yes. Purpose of Rebuttal Testimony What is the purpose of your rebuttal testimony? The purpose of my rebuttal testimony is to respond to the testimony of Ms. Teri Ottens and Mr. John Howat representing the Community Action Partnership Association of Idaho (CAPAI) and to respond to the testimony of Mr. Daniel Klein and Mr. Bryan Lanspery representing the Idaho Public Utilities Commission Staff (Staff). In addition, I am proposing minor changes to my direct testimony and Exhibits Nos. 38 and 39, which were originally provided with my direct testimony. Rebuttal to Ms. Ottens Do you agree with page 2 of Ms. Ottens ' testimony where she states that low income customers are an important part of the Company s customer base? Yes. Rocky Mountain Power demonstrates our commitment to low income customers by contributing funds to the Lend A Hand program that provides energy assistance payments through donated funds, and through our low income Rockney, Di-Reb - Rocky Mountain Power weatherization program, which has been in place since the early 1990's. Funding for both programs was increased in 2007 as part of Rocky Mountain Power commitment in the MidAmerican Energy Holdings Company (MEHC) transaction to provide additional benefits and as a result of a negotiated agreement with CAP AI in 2006. In the first year of the MEHC commitment (July 1 , 2006- June 30, 2007), Rocky Mountain Power contributed over $29,000 to South Eastern Idaho Community Action Agency and Eastern Idaho Community Action Partnership for the Lend A Hand program with total contributions to the program of $40 000. This is an increase of 65 percent over total Lend A Hand donations compared to 2005. Additionally, in April 2007, Rocky Mountain Power s rebate on weatherization measures increased from covering 50 percent of approved energy efficiency measures to 75 percent. The additional funds are intended to increase the number of homes weatherized. Do you have any additional comments regarding the direct testimony of Ms. Ottens? Yes. On page 3 of her testimony Ms. Ottens expresses concerns regarding proposed increases in fees" and the impact on low income customers. With regard to the fee associated with collection agencies, customers who received energy assistance payments represent only 4.8 percent of the total dollars that were assigned to collection agencies during 2006. Consequently, the majority of low income customers are currently subsidizing collection agency fees. To the extent that collection fees are paid by inactive customers, this helps reduce the Company s overall costs for all active customers of Rocky Mountain Power Rockney, Di-Reb - 2 Rocky Mountain Power including low income customers. In addition, collection fees are not assessed to any former customers who reapply for service with Rocky Mountain Power unless legal action is involved. (Where legal action is required, the inactive customer could reapply for service but their past due arrears would remain with the collection agency for collection along with the associated fees. With regard to reconnection charges, customers receiving energy assistance represent only about eight percent of those customers who are assessed a reconnection charge. The majority of low income customers pay their electric bill in a timely manner and would not be "most likely" to be disconnected due to nonpayment as indicated on page 4 of Ms. Ottens' testimony. Do you agree with Ms. Ottens' testimony regarding the costs relating to the disconnection of a customer for non payment not matching information provided in the "Low Income Arrearage Study" submitted to the Commission in March 2007 (page 30)? No. The information Ms. Ottens references in the "Low Income Arrearage Study" relates to the cost of the visit to the site during normal working hours for the purpose of collecting past due arrears or disconnecting service for non payment - not to the cost of reconnection. Do you agree with Ms. Ottens' testimony on page 3, line 23 that Idaho ranks number four in the nation with the highest energy burden? No. According to the 2007 Fisher, Sheehan & Colton Public Finance and General Economics report, Belmont, Massachusetts, Definitions and Explanations , " The Rockney, Di-Reb - 3 Rocky Mountain Power state with the rank of#1 has the lowest average home energy burden for households with income below 50 percent of the Federal Poverty Level while the state with the rank of #51 has the highest average home energy burden." Idaho ranks number four in the nation with the lowest energy burden, not the highest energy burden as indicated by Ms. Ottens. This ranking seems intuitive given the low cost of energy in Idaho compared to the rest of the country. Rebuttal to Mr. John Howat Do you agree with the direct testimony of Mr. Howat regarding the proposed changes to Regulation 10 relating to the cost for collection agency fees on closed accounts in Idaho? No. Mr. Howat expresses concern that Rocky Mountain Power s proposal will have a disproportionate adverse impact on low income customers. His concern is not supported by facts. First, Mr. Howat incorrectly assumes that accounts are closed only for non-payment. It should be noted that accounts are often closed because the customer has moved. Furthermore, collection agency fees are only assessed on closed accounts with past due arrears. An inactive customer with a closed account that had been assigned to a collection agency could reapply for service with Rocky Mountain Power, pay their past due arrears and any applicable deposits, and no collection agency fee would be assessed, unless legal action had been taken. Second, as previously stated, contrary to Mr. Howat's assertion, low income customers are not "more likely to have their accounts referred to a collection agency" (page 5, lines 15-16). Customers who have received energy Rockney, Di-Reb - 4 Rocky Mountain Power assistance payments represent only a small percentage of the total dollars assigned to collection agencies. The majority oflow income customers are currently subsidizing the cost of collection agency fees assessed on closed accounts in their rates. Based on the above information, Mr. Howat's statement on pages 5 and 6 of his testimony that "The prospective collection charges would increase the likelihood that low income households would suffer protracted loss of necessary service and decrease the general security of these households" is incorrect and unsupported. Active customers, including low income customers, of Rocky Mountain Power are currently subsidizing the cost of collection agency fees that are associated with closed accounts and Rocky Mountain Power is simply attempting to address this inequity in this request. In addition, an inactive customer could reapply for service and no collection agency fees would be assessed. Do you agree with Mr. Howat's statement that there are no controls in place regarding the amount of collection agency fees that may be assessed on closed accounts? No. Rocky Mountain Power has agreements in place with each collection agency to cap fees that may be assessed on closed accounts. The cap is 20 percent. For any closed account that requires legal action, the cap on fees is 30 percent. Only approximately five percent of collection activity requires legal action, so for the majority of closed accounts, the fee is capped at 20 percent. In addition, as a regulated public utility, Rocky Mountain Power cannot recover its costs unless Rockney, Di-Reb - 5 Rocky.Mountain Power they are prudently managed, giving the Company a strong incentive to monitor the reasonableness of overall collection costs and policies. Do you agree with Mr. Howat's comment on page 5 of his testimony that customers paying fees associated with collecting unpaid debt is a movement away from traditional ratemaking and reflects a "blame the victim approach? No. The proposed change is not a movement away from traditional ratemaking, nor is it a "blame the victim" approach. A guiding principal of traditional ratemaking is that individuals who cause a cost to be incurred should pay for the cost and that fees should be fair and equitable. My proposal is intended to do just that. Proposing that collection agency fees be paid directly to the collection agency by inactive accounts with past due arrears better reflects cost causation and eliminates the subsidization of this service by all active customers of Rocky Mountain Power. Do you have any comments regarding Mr. Howat's recommendation to implement an "Affordable Energy Bargain" in Idaho? While expanding assistance programs for low income customers in Idaho appears to be a legislative matter, Rocky Mountain Power would be willing to discuss with other parties more comprehensive payment assistance and efficiency programs as suggested by Mr. Howat. Rockney, Di-Reb - 6 Rocky Mountain Power Rebuttal to Mr. Daniel Klein - Reconnection of Service Fees Do you agree with the conclusions that Mr. Klein reached with regard to reconnection of service fees? No. With regard to reconnection fees, on page 3 of his testimony one ofthe reasons Mr. Klein gives for his lack of support for the Company s proposal to better reflect the cost of reconnection is the Commission s rejection of imposing a charge for actual "disconnection of service" in Case No. U-I008-289, O. 21939, p. Is Rocky Mountain Power proposing that a separate fee be assessed for disconnection of service in Idaho? No. However, this does not mean that the cost of reconnecting service should ignore the fact that a visit to disconnect service was part of the reconnection cycle. Rocky Mountain Power believes it is appropriate to consider the full cost of reconnecting service, which is approximately $47 during normal office hours and approximately $150 after normal office hours. Do you agree that Rocky Mountain Power s proposed reconnection charges are the highest in Idaho? No. According to Mr. Klein s Exhibit No. 114, Idaho Power charges up to $40 for certain rate schedules for reconnection during normal office hours and up to $100 after normal office hours for certain rate schedules. Additionally, Atlanta Power Company, Idaho Power, and Intermountain Gas Company all assess service connection charges during normal working hours where currently Rocky Mountain Power does not assess a fee for this service. Setting the issue aside of Rockney, Di-Reb - 7 Rocky Mountain Power what other utilities ' fees may be , each utility s unique cost structure and unique service territory needs to be considered when determining the appropriate fee structure for that utility. Do you agree with page 5 of Mr. Klein s testimony that "after hours reconnection costs are driven up unnecessarily" because 34 percent of all after hours reconnections are performed by journeymen linemen and only 12 percent of all reconnects during normal office hours are done by linemen? No. Only journeymen linemen are qualified to perform pole work or work on three phase service. In addition, journeymen linemen are called out after hours if collectors are not available. There are six collectors in Idaho and 47 linemen available for after hours work. This is the appropriate staffing level for the typical work week where collectors perform the majority of reconnections during normal office hours. It is logical that collectors will not be as "available" after normal office hours to the extent that journeymen linemen are "available" due to the fact that there are six collectors to call upon after hours compared to 47 linemen. Thus, journeymen linemen will be dispatched after hours more frequently than they would be during normal office hours. Do you agree with Mr. Klein s criticism on page 5 of his testimony regarding the Company s labor contracts and how these contracts may impact after hours costs? No. A two-hour minimum call out provision is common in the industry and is very reasonable. Twenty-five minutes for an average visit is a conservative estimate of the time required for a reconnection visit. In some areas of Idaho Rockney, Di-Reb - 8 Rocky Mountain Power there is a lineman who is "on call" during the evening hours and this employee takes home with him a Company truck and the necessary materials to perform work after office hours. In other areas, however, there is no "on call" lineman to perform this work after hours and the time required to reconnect service after hours could easily take two hours since the employee would need to drive to the field office, get any necessary equipment or vehicles, perform a safety check, and then proceed to the customer s location and complete the work. After the reconnection is complete, the employee would need to reverse these activities. Connection of Service Fees for After Hours In addition to your earlier testimony on reconnection of service fees, do you have any other points on Mr. Klein s testimony on connection of service fees for after hours? Yes. Mr. Klein states that while Oregon and California s after hours connection fees are higher at $175 compared to the $100 being proposed in Idaho, these fees are not comparable because they are assessed on weekends or holidays in Oregon and California. There is comparability between the Oregon and California fee of $175 for weekends and holidays and the proposed fee of $100 in Idaho for weekends and holidays. In addition, in Oregon, the weekday fee for this work is $75 but this service is only available for one hour during weekdays between 5:00 m. and 6:00 p.m. Finally, customers in Utah who may require after hours connection would be assessed $100 after 5:00 p.m. on weekdays and all day on weekends and holidays, which is directly comparable to the $100 after hours service connection fee proposed in Idaho. Rockney, Di-Reb - 9 Rocky Mountain Power Are there any other points you would like to make with regard to Mr. Klein testimony on connection of service fees for after hours? Yes. The Company takes exception to Mr. Klein s characterization of its response to IPUC Production Data Request 43 regarding why the Company does not charge customers for connections performed during regular office hours. On Page 8 of Mr. Klein s testimony, he states that "The Company considers connection during business hours to be a cost of doing business to be recovered through rates instead of a fee directly charged to individual customers." To the contrary, in response to data request 43 , the Company stated that assessing a fee for this service is not something Rocky Mountain Power has explored in Idaho but that such a charge was in effect in Utah. Furthermore, Rocky Mountain Power has not ruled out the possibility of proposing a service connection fee in Idaho during normal office hours. As noted in Mr. Klein s Exhibit No. 114, this is a practice currently followed by Atlanta Power Company, Idaho Power, and Intermountain Gas Company. Changing Availability of After Hours Reconnection Do you agree with Mr. Klein s testimony that the Company s proposed change to the availability of after hours reconnection during weekdays should not be reduced to between 4:00 p.m. and 6:00 p.m. instead of the current 4:00 p.m. to 7:00 p. No. With only 12 customers during 2006 requesting an after hours reconnection between 6:00 p.m. and 7:00 p., Rocky Mountain Power does not believe it is cost effective to provide this service for such a small number of customers. This Rockney, Di-Reb - 10 Rocky Mountain Power is especially true given that the existing fee for this service is significantly below the cost of providing the service. The Company would be agreeable to keeping the hours the same if the fee for this service could be increased to better reflect the cost of providing the service. Collection Agency Fees On page 11 of his testimony, did Mr. Klein accurately portray how the collection agencies used by Rocky Mountain Power operate? No. Accounts that remain unpaid after a closing bill is rendered are sent to a collection agency for collection. At that time the agency notifies the former customer that the past due arrears have been turned over to them for collection and that if the debt is paid within 21 days, no collection fees are assessed. If the debt is not paid within 21 days, but collected by the collection agency say, within 60 days, under the current system, Rocky Mountain Power s active customers would end up paying the fees for this closed account. Rocky Mountain Power is proposing that the individual with the closed account with past due arrears pay the collection agency fees, which, as Mr. Klein indicates in his testimony, is the typical way that collection agencies work. Do you agree with Mr. Klein s statement that because the amount paid by Rocky Mountain Power for collection agency fees on closed accounts in Idaho is not "excessive" the Company s proposal regarding collection agency fees should be rejected? No. As stated above, this is a matter of equity and assigning costs to the individuals who cause the cost. It is appropriate to propose that active customers Rockney, Di-Reb - 11 Rocky Mountain Power of Rocky Mountain Power not continue to subsidize the collection agency fees associated with closed accounts. Rebuttal to Mr. Brian Lanspery Do you any comments with regard to Mr. Lanspery s testimony in response to the Company s proposed changes to line extension? Yes. The Company only intended to characterize the four proposed clarifying changes as "housekeeping" changes. To eliminate any confusion over what the Company considers "housekeeping" changes and what it does not, my direct testimony should be changed to remove the word "housekeeping" from page 7 line 13. Would the Company be agreeable to filing line extension changes as a separate stand-alone filing as proposed by Mr. Lanspery? Yes. The Company is willing to make a separate filing to address line extension changes. This filing would include the changes proposed in this case and any . other line extension issues that may arise in the interim. Should the Commission decide not to address the Company s request in this proceeding, the Company could make such a filing after an order is issued in this docket. Other Changes to Direct Testimony Are there any other changes you would like to make to your direct testimony? Yes. As indicated in my response to IPUC Production Data Request 64, I would like to change the cost of the after hours service connection shown on Page 4, line 5, of my testimony from $200 to $127. In addition, I would like to change the Rockney, Di-Reb - 12 Rocky Mountain Power cost of the after hours reconnection shown on Page 7, line 8, of my testimony from $220 to $150 and change the wording on lines 4 and 5 to indicate that Work that is done after normal office hours is performed by both collectors and journeymen linemen." In some of the states served by the Company, only journeymen linemen can perform work after hours, but in Idaho this work may be performed by collectors resulting in a cost savings for Idaho customers. I have also revised Exhibit Nos. 38 and 39 and these updated exhibits are provided with my rebuttal testimony as Exhibit Nos. 55 and 56. Do these changes affect the proposed increase to the after hours service connection or reconnection fee? No. The cost of providing these services at $127 and approximately $150 respectively, is still significantly above the Company s proposed increase in these fees to $100. Does this conclude your rebuttal testimony? Yes. Rockney, Di-Reb - 13 Rocky Mountain Power C1\IFC' f'\1 .I\...1~'"" ZUUIOCT 26 ArltO: 5 \ IDAHO PU~L\Q .. (1\ UTiLITIES Co~.,MISSI,- ;., Case No. P AC-07- Exhibit No. 55 Witness: Carole A. Rockney BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ROCKY MOUNTAIN POWER Exhibit Accompanying Rebuttal Testimony of Carole A. Rockney Revised Exhibit 38 October 2007 RE V I S E D - A n a l y s i s f o r a f t e r h o u r c o n n e c t a c t i v i t y c o s t s Id a h o Af t e r h o u r co n n e c t v i s i t c o s t a n a l y s i s (S i n g l e P h a s e ) Jo u r n e y m a n l i n e m a n h o u r l y a c t i v i t y r a t e Co l l e c t o r h o u r l y a c t i v i t y r a t e Wo r k c o m p l e t e d 3 4 % b y j o u r n e y m a n l i n e m a n a n d 6 6 % b y c o l l e c t o r SA P A c t i v i t y R a t e se e n o t e a ) $ 9 9 . se e n o t e a ) $4 5 . 2 2 $6 3 . (s e e n o t e s a , b , a n d c ) Ho u r s Ac t u a l C o s t s af t e r h o u r s c o n n e c t c o s t 21 $1 2 7 . 4 7 1 No t e : a) La b o r c o s t b a s e d o n c o l l e c t o r a n d j o u r n e y m a n l i n e m a n a c t i v i t y r a t e b) Ca l l o u t s b e t w e e n 6 : 0 0 - 6: 3 0 p . m. i n c u r m e a l c o s t s w h i c h a r e n o t i n c l u d e d . c) Mi n i m u m t w o h o u r c a l l o u t a p p l i e s a f t e r h o u r s p e r l a b o r a g r e e m e n t Jo u r n e v m a n L i n e m a n 2 0 0 7 SA P A c t i v i t v R a t e Id a h o j o u r n e y m a n l a b o r c o s t s - $ 9 9 . Co l l e c t o r 2 0 0 7 S A P A c t i v i t y R a t e Id a h o c o l l e c t o r l a b o r c o s t s - $ 4 5 . Ac t i v i t y r a t e t o i n c r e a s e 3 % p e r y e a r f o r t h e n e x t t h r e e y e a r s p e r l a b o r a g r e e m e n t ~~ ~ ~ 1! ~ ~ Q f: ! z z 3 : n? o g ~ ' " " ; . . 0 )- v . g " n 0 )- & 1 '" " ;; t I ~ o. "0 9" Re v i s e d 1 0 / 2 2 / 0 7 \L. ,! v L, ZO01 OCT 26 Af110: ~Jse No. PAC-07- iDAHO PUBLIC Ex?ibit No. 56 UTiLITIES COMMlsS"W);ttless: Carole A. Rockney BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION ROCKY MOUNTAIN POWER Exhibit Accompanying Rebuttal Testimony of Carole A. Rockney Revised Exhibit 39 October 2007 RE V I S E D - A n a l y s i s f o r D i s c o n n e c t f R e c o n n e c t A c t i v i t y C o s t s Id a h o Di s c o n n e c t f R e c o n n e c t V i s i t C o s t A n a l y s i s Jo u r n e y m a n l i n e m a n h o u r l y a c t i v i t y r a t e Co l l e c t o r h o u r l y a c t i v i t y r a t e No r m a l O f f i c e H o u r s Wo r k c o m p l e t e d 1 2 % b y j o u r n e y m a n l i n e m a n a n d 8 8 % b y c o l l e c t o r Af t e r N o r m a l O f f i c e H o u r s Wo r k c o m p l e t e d 3 4 % b y j o u r n e y m a n l i n e m a n a n d 6 6 % b y c o l l e c t o r SA P A c t i v i t y R a t e se e n o t e a ) $ 9 9 . se e n o t e a ) $4 5 . 2 2 $5 1 . 7 6 $6 3 . (s e e n o t e s a , b , c , a n d d ) fi e l d s e r v i c e c o l l e c t i o n / d i s c o n n e c t v i s i t ( f s c / d ) re c o n n e c t i o n ( i n c l u d e s f s c / d v i s i t af t e r h o u r s c o n n e c t c o s af t e r h o u r s r e c o n n e c t i o n ( i n c l u d e s f s c / d v i s i t Ho u r s Ac t u a l C o s t s 0. 4 2 $2 1 . 7 4 $4 3 . 4 7 $1 2 7 . 4 7 2. 4 2 $1 4 9 . 2 1 No t e : a) La b o r c o s t b a s e d o n c o l l e c t o r a n d j o u r n e y m a n l i n e m a n a c t i v i t y r a t e b) Ca l l o u t s b e t w e e n 6 : 0 0 - 6: 3 0 p . m. i n c u r m e a l c o s t s w h i c h a r e n o t i n c l u d e d c) Av e r a g e o f 1 0 m i l e s p e r v i s i t a n d a v e r a g e o f 2 5 m i n u t e s p e r v i s i t d u r i n g no r m a l w o r k i n g h o u r s . d) Mi n i m u m t w o h o u r c a l l o u t a p p l i e s a f t e r h o u r s p e r l a b o r a g r e e m e n t Jo u r n e y m a n L i n e m a n 2 0 0 7 SA P A c t i v i t y R a t e Id a h o j o u r n e y m a n l a b o r c o s t s - $ 9 9 . Co l l e c t o r 2 0 0 7 S A P A c t i v i t y R a t e Id a h o c o l l e c t o r l a b o r c o s t s - $ 4 5 . Ac t i v i t y r a t e t o i n c r e a s e 3 % p e r y e a r f o r t h e n e x t t h r e e y e a r s p e r l a b o r a g r e e m e n t ~~ ~ ~ if ~ g q ~ Z z 3:: (" ) ? ? g ~ ' " ' " = ~ f ; " ' )0 r r , ' " ;. , S 0, "0 8" - Re v i s e d 1 0 / 2 2 / 0 7