20070525Application.pdf

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201 South Main, Suite 2300
Salt Lake City, Utah 84111
May 24 2007
VIA EXPRESS MAIL
Idaho Public Utilities Commission
472 W. Washington
Boise, ill 83702-5983
Attention:Jean D. Jewell
Commission Secretary
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PAC-of( --
Re:In the Matter of the Application of Rocky Mountain Power for Approval of
Reductions in Bonneville Power Administration Regional Exchange Credits
Rocky Mountain Power, a division ofPacifiCorp, hereby submits for filing an original and seven
copies of its Application of Rocky Mountain Power for Approval of Reductions in Bonneville
Power Administration Regional Exchange Credits.
Service of pleadings, exhibits, orders and other documents relating to this proceeding should be
served on the following:
Brian Dickman
Manager, Idaho Regulatory Affairs
201 South Main, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
Facsimile: [phone]
E-mail: Brian.Dickman(fYPacifi Corp. com
Dean Brockbank
Senior Counsel
201 South Main, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
Facsimile: [phone]
E-mail: Dean.Brockbank(fYPacifi Corp. com
It is respectfully requested that all formal correspondence and Staff requests regarding this
matter be addressed to:
By E-mail (preferred):
By Fax:
By regular mail:
datarequest(fYpacificorp. com
[phone]
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
Enclosures
Dean Brockbank
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
FAX: [phone]
Dean.B rockbank
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Pacifi Corp .com
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Attorney for Rocky Mountain Power PAc - 8- - o7-
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER
FOR APPROVAL OF REDUCTIONS IN
BONNEVILLE POWER ADMINISTRATION
RESIDENTIAL EXCHANGE CREDITS
APPLICATION OF
ROCKY MOUNTAIN POWER
Pursuant to Idaho Code ~~ 61-301
, -
307, -622, and -623, Rocky Mountain Power, a
division of PacifiCorp (the Company), applies to the Idaho Public Utilities Commission (the
Commission) for approval of a revised Electric Service Schedule No. 34, submitted herewith.
The Company seeks changes to sections of Rocky Mountain Power s Schedule 34 to revise the
Kilowatt-Hour Credit Adjustment for all qualifying kilowatt-hours of residential and/or farm use.
This schedule provides residential and small farm customers of Rocky Mountain Power with a
direct pass through of monetary benefits received from the Bonneville Power Administration
(BP A) under the Residential Exchange Program. BP A has announced that it is ceasing to pay
these benefits for the time being; thus, the effect of this revision is to reduce the level of credits
provided to Rocky Mountain Power s eligible customers as described below. In support of this
Application, Rocky Mountain Power states as follows:
Rocky Mountain Power does business as a public utility in the state of Idaho and
is subject to the jurisdiction of the Commission with regard to its public utility operations.
Rocky Mountain Power also provides retail electric service in the states of Utah and Wyoming.
APPLICATION OF ROCKY MOUNTAIN POWER - 1
This Application is filed pursuant to the Idaho statutes referenced above. In
particular, Idaho Code section 61-623 empowers the Commission to address the propriety of
requested rate schedule increases, sections 61-307 and -622 require Commission approval prior
to any increase in rates and section 61-301 requires Idaho retail electric rates to be just and
reasonable.
The Residential Exchange Program is contained in section 5( c) of the Pacific
Northwest Electric Power Planning and Conservation Act (Northwest Power Act) and is a
mechanism for allocating a share of the economic benefits of the federal hydroelectric system to
the residential and small farm customers of the Northwest investor-owned utilities.This
program is also available for publicly-owned utilities.
In contrast to BPA's public power utility customers, which benefit from the federal
hydroelectric system primarily through their preferential access to low-cost federal power
investor-owned utility residential and small farm customers share in the benefits of the federal
hydroelectric system through the Residential Exchange Program - typically receiving bill credits
instead of low-cost federal power. These benefits, in total, are directly passed through to Rocky
Mountain Power s Idaho customers as a credit on their electric bills via Schedule 34.
On May 3, 2007 , the United States Ninth Circuit Court of Appeals issued a
decision that concluded that the Residential Exchange Program 2000 Settlement Agreement for
Fiscal Year 2002-2006 was inconsistent with the Northwest Power Act. As a result of this
decision BPA announced on May 21, 2007, that it will cease providing payments to the investor-
owned utilities - including Rocky Mountain Power - under the Residential Exchange Program.
A copy ofthe letter announcing BPA's intentions is provided with this filing as Exhibit 1.
APPLICATION OF ROCKY MOUNTAIN POWER - 2
With BPA's immediate cessation of these payments, it is necessary to adjust the
credit currently provided under Schedule 34. The proposed revisions contained herein will
eliminate the credit for residential customers, and continue the credit to eligible irrigation
customers into the first part of the current irrigation season. The Commission previously
authorized Rocky Mountain Power to implement a balancing account for tracking the receipt of
benefits from BP A and the payment of benefits to customers under Schedule 34. As of April 30,
2007, the balancing account contained a positive balance, i.e. Rocky Mountain Power had paid
out less in benefits to eligible customers than it had received from BP A. As the credit continues
to be passed on to irrigation customers the existing surplus in the balancing account will be
reduced to zero, at which time all credits will be eliminated.
Because the irrigation season is now just beginning, eligible irrigation customers have not
yet received a material level of the BPA benefits for the year. Continuing their credit until the
balancing account funds are exhausted will provide some level of benefit during at least part of
the current year s irrigation season. The Company expects that with the proposed changes the
balancing account will be depleted in July 2007; as such, the credit for irrigation customers
would continue to be effective for service through July 12, 2007, and the credit would then be
eliminated for service on and after July 13, 2007. Actual disbursement of funds remaining in the
balancing account is subject to actual customer usage. The Company will closely monitor the
amount of credits remaining and, if necessary, will apply with the Commission to revise the rate
of payment to accurately pass-on benefits previously received from BP A with payments made to
eligible customers. Even with the proposed changes, the Company may ultimately disburse
more or less than the funds currently in the balancing account. Such over/under-disbursement of
APPLICATION OF ROCKY MOUNTAIN POWER - 3
funds will be tracked in the existing balancing account and its treatment for ratemaking would be
determined with the Commission at a future date.
As a result of the proposed revisions, the net monthly bill for Rocky Mountain Power
average Idaho residential customer using 1000 kWh will increase 28 percent. On average, the
net monthly bill for Rocky Mountain Power s small farm customers taking service for irrigation
will increase 51 percent for service rendered on and after July 13,2007.
The Company submits the following to provide additional support for the relief
requested in this Application:
(a) Exhibit 1: A copy of a letter to Rocky Mountain Power announcing BPA'
intentions regarding the elimination of benefits for the time being;
(b) Exhibit 2: A balancing account study reflecting the Company s BP A
balancing account history and its anticipated depletion;
(c) Exhibit 3: The Company s Schedule 34 showing the proposed tariff
changes, pursuant to Rule of Procedure 121.01a; and,
(d) Affidavit of Jeffrey K. Larsen: Mr. Larsen confirms the urgent nature of the
Company s request and its request for expedited treatment.
Communications regarding this Application should be addressed to:
Brian Dickman
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
Fax: [phone]
E-mail: bri an. dickman (Wpacificorp.com
Dean Brockbank
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
Fax: [phone]
E- mail: dean.brockbank (Wpacificoro.com
In addition, PacifiCorp respectfully requests that all data requests regarding this matter be
addressed to:
APPLICATION OF ROCKY MOUNTAIN POWER - 4
Bye-mail (preferred)
By regular mail
datarequest (Wpacificorp.com
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
By facsimile [phone]
Informal inquires also may be directed to Brian Dickman at [phone].
Rocky Mountain Power stands ready for immediate consideration of this
Application. The Company respectfully requests expedited treatment of this filing, with the
revised Schedule 34 to become effective on June 1 2007. Pursuant to Idaho Code ~ 61-307 and
Rule of Procedure 123 the Commission may order an effective date earlier than 30 days after the
filing of an application for good cause. Less than the statutory delay is warranted given the
urgent need to match the Schedule 34 credit with the level of benefits that BP A will be providing
under the Residential Exchange Program - zero - in order to ensure an accurate price signal
relayed to small farm customers prior to the irrigation season and that customers are not paid
credits that exceed the benefits received from BP A.
APPLICATION OF ROCKY MOUNTAIN POWER - 5
WHEREFORE, Rocky Mountain Power respectfully requests that the Commission enter
its Order authorizing the revision of the Schedule 34 Residential Exchange Program credit as
described above.
DATED this 24th day of May, 2007.
Respectfully submitted,
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Dean Brockbank ,
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Attorney for Rocky Mountain PQ~er
APPLICATION OF ROCKY MOUNTAIN POWER - 6
Exhibit 1
Page 1 of2
Department of Energy
Bonneville Power Administration
O. Box 3621
Portland, Oregon 97208-3621
POWER SERVICES
May 21, 2007
In reply refer to: PS-
Mr. Colin Persechetti, Director
Marketing and Trading Contracts
PacifiCorp
825 NE. Multnomah, Suite 2000
Portland, OR 97232
Dear Mr. Persechetti:
As we have recently informed you or your representatives, the law provide~ that a Federal
Certifying Officer is personally responsible and accountable for certifying the legality of a
proposed payment, and is personally accountable for making a payment prohibited by law. See
31 US.C. ~ 3528; Principles of Federal Appropriations, Second Edition, Volume II, 9-88 - 9-
145. In the Ninth Circuit Court of Appeal's (Court) recent May 3, 2007 PGE and Golden
Northwest Aluminum decisions, the Court concluded that certain Bonneville Power
Administration (BP A) actions in entering residential exchange settlements in 2000 with your
company and other Investor Owned Utilities were "not in accordance with law." This quite
understandably raised substantial question whether the BP A Certifying Officer could certify
additional payments under the settlement agreements; indeed, the Court has asked for briefing as
to the effect of its rulings on pending challenges to other outstanding settlement agreements.
We have concluded that this uncertainty created by the Court's decisions means that we must at
this time suspend payments. You have acknowledged that BP A is, thus, currently prevented by
reasons beyond its control from continuing payment pending final decisions by the Ninth Circuit
in the outstanding Ninth Circuit challenges, and that in light of this uncertainty created by the
Court's decisions you agree not to assert BP A is in breach of contract as a result of the
suspension. Accordingly, BP A is immediately suspending payments (including conservation and
renewable discounts and any other credits) under the challenged BP A agreements pending final
decisions by the Ninth Circuit in the outstanding Ninth Circuit challenges. Such temporary
suspension and acknowledgement shall not constitute an admission or waiver of, and is subject
, any statutory, contractual and other rights and obligations of the parties that may exist, so the
suspension is without prejudice to the issue of whether the suspended amounts must at some later
point be paid (or credited). BP A's suspension in no way affects the continued existence of the
settlement agreements.
We very much regret that it is necessary for us to suspend payments at this time, since we
understand that this will rapidly result in large and, for some, severe rate consequences for your
Exhibit 1
Page 2 of2
residential and small farm customers. We have spent considerable effort seeking to find means
to continue the payments to allow more time for the parties to fmd a way to address the issues
raised by the Court, but without success.
BP A currently anticipates that such suspension will continue at least until any petitions for
rehearing on the Court's decisions are fmally resolved. We believe the Court's decisions on the
settlements are in error, and we are exploring all potential viable avenues for rehearing, including
by the full Court if possible. BP A agrees that this suspension is only an interim measure and
does not represent a final action by the Administrator, and it will not assert otherwise. BP
agrees it will inform you of its final decision regarding the suspended and any remaining
payments (and credits) within a reasonable period of time after the decisions by the Ninth Circuit
are final in the outstanding Ninth Circuit challenges.
In the interim we will be consulting with key stakeholders informally as to any ideas for finding
a way to resolve these issues consistent with the Court's decision. This is made more
challenging by the fact that the Court has not ruled yet on the significant 2001 and 2004
amendments to the contracts that the Court did rule on. We want to resolve this issue as quickly
as possible, but also recognize that any work now may be undone by further rulings from the
Court.
This is a most vexing problem, and we look forward to working with you and others in the
Pacific Northwest region to find a resolution that best serves the interest of all Northwest
citizens.
Sincerely,
----
Mark O. Gendron
Vice President, Requirements Marketing
cc:
Scott Brattebo
EXHIBIT 2
ROCKY MOUNTAIN POWER
BALANCING ACCOUNT STUDY
Exhibit 2
Page 1 of 1
Idaho BPA
BPA Variance Customer Interest Accumulated
Month Payments Booked Credits Booked Balance
May-931,564 167,640)763 924 49,068 11,898,182
Jun-931,564 498,657 430,221 757 446,282
Ju1-931 564 915,286 846,849 41,761 572,758
Aug-931 564 631 166 562,730 35,066 976,658
Sep-O6 931,564 984,006 915.570 29,907 022,558
Oct-775,504 (188,588)586,916 31,915 243,061
Adj 10/06 \3,837 256,959
Noy-789,341 (420,798)368,543 32,876 710,634
Dec-789,341 (168 008)621 333 938 9\3,580
Jan-789,341 128,303 917,644 527 819,804
Feb-789,341 58,519 847,860 31,026 792,311
Mar-789,341 (529 995)259,346 36,912 359,218
Apr-090,539 090,539 38,918 7;307,597
May-538 201)538,201 28,577 797 973
Jun-(777,730)777,730 23,641 043,885
Jun-(2,142 510)142 510 363 918,738
Ju1-(3,310,040)310,040 523 (385,779)
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Exhibit 3
Page 1 of 2
C. No.Fffst-Second Revision of Sheet No. 34.
Canceling Original First Revision of Sheet No. 34.
ROCKY MOUNTAIN POWER
ELECTRIC SERVICE SCHEDULE NO. 34
STATE OF IDAHO
Pacific Northwest Electric Power Planning and Conservation Act
Residential and Farm Kilowatt-Hour Credit
APPLICATION AND AVAILABILITY: This Schedule is applicable and available to qualifying
Residential and/or Farm Customers of the Company under the jurisdiction of the Idaho Public Utilities
Commission.
MONTHLY RATES: The monthly charges for service under each of the Electric Service
Schedules shown below shall be reduced by the appropriate monthly kilowatt-hour credit adjustment shown
per kilowatt-hour for all qualifying kilowatt-hours of residential and/or farm use.
Kilowatt-Hour Credit Adjustments
Service through Service on and after
Jul 2007 July 13. 2007
Irrigation Customers:
Schedule No. 10
$0.026415 per kWh $0.00 per kWh
Non-Irrigation Customers:$0.QQQQQ16757 per kWh
Schedule Nos. 1 , 6A, 7 A, 23A
35A, 36, 19 with 6A
19 with 23A, 19 with 35A
$0.00 per kWh
(Continued)
I Submitted Under '\dvice Case bettef--No. 07 01 & Docket No. Pf"E 07 01PAC-07-
I ISSUED: J8:ffilary 4, 2007May 24+. 2007 EFFECTIVE: February 16, 2007June~n. 2007
~~~~OUNTAIN
Exhibit 3
Page 2 of 2
C. No.Second Revision of Sheet No. 34.
Canceling First Revision of Sheet No. 34.
ROCKY MOUNTAIN POWER
ELECTRIC SERVICE SCHEDULE NO. 34
STATE OF IDAHO
Pacific Northwest Electric Power Planning and Conservation Act
Residential and Farm Kilowatt-Hour Credit
APPLICATION AND AVAILABILITY: This Schedule is applicable and available to qualifying
Residential and/or Farm Customers of the Company under the jurisdiction of the Idaho Public Utilities
Commission.
MONTHLY RATES: The monthly charges for service under each of the Electric Service
Schedules shown below shall be reduced by the appropriate monthly kilowatt-hour credit adjustment shown
per kilowatt-hour for all qualifying kilowatt-hours of residential and/or farm use.
Kilowatt-Hour Credit Adjustments
Irrigation Customers:
Schedule No. 10
Service through
July 12, 2007
$0.026415 per kWh
Service on and after
July 13, 2007
$0.00 per kWh
Non-Irrigation Customers:$0.00 per kWh
Schedule Nos. 1, 6A, 7A, 23A
35A, 36, 19 with 6A
19 with 23A, 19 with 35A
$0.00 per kWh
(Continued)
Submitted Under Case No. PAC-07-
ISSUED: May 24, 2007 EFFECTIVE: June , 2007
Dean S. Brockbank, Sr. Counsel
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
Facsimile: [phone]
Attorney for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILmES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER FOR
APPROVAL OF REDUCTIONS IN
BONNEV~LE POWER ADMUilSTRA TION
RESIDENTIAL EXCHANGE CREDITS
AFFIDAVIT OF
JEFFREY K. LARSEN
JEFFREY K. LARSEN, first being duly sworn, hereby deposes and states:
I am the Vice President of Regulation for Rocky Mountain Power. As part of my
responsibilities, I oversee the ratemaking process for Rocky Mountain Power in the State of
Idaho and I have personal knowledge of the facts attested to in this Affidavit.
I am submitting this Affidavit in support ofthe Application of Rocky Mountain
Power and specifically in Rocky Mountain Power s request for expedited treatment of that
Application.
In the Application, the Company seeks changes to sections of Rocky Mountain
Power s Schedule 34 to revise the Kilowatt-Hour Credit Adjustment for all qualifying kilowatt-
hours of residential and/or farm use. This schedule provides residential and small fann
636 :349224v3
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customers of Rocky Mountain Power with a direct pass through of monetary benefits received
from the Bonneville Power Administration (BP A) under the Residential Exchange Program.
The BP A Residential Exchange Program is a mechanism for allocating a share of
the economic benefits of the federal hydroelectric system to the residential and small farm
customers of certain Northwest utilities.
On May 3, 2007, the United States Ninth Circuit Court of Appeals issued a
decision that concluded that the Residential Exchange Program 2000 Settlement Agreement for
Fiscal Year 2002-2006 was inconsistent with the Northwest Power Act. As a result of this
decision, BPA announced on May 21 , 2007, that it will cease providing payments to the investor-
owned utilities - including Rocky Mountain Power - under the Residential Exchange Program.
A copy of the letter announcing BPA's intentions is provided with the Application.
With BP A's immediate cessation of these payments, Rocky Mountain Power filed
the Application in order to obtain a Commission order authorizing Rocky Mountain Power to
adjust the credit currently provided under Schedule 34. Expedited treatment of the Application
is necessary to ensure that when BP A ceases funding the credit, Schedule 34 accurately reflects
that action.
DATED this 24th day of May, 2007
636 :349224v3
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STATE OF UTAH
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COUNTY OF SALT LAKE
Subscribed and sworn to me this 24th day of May 2007, by Suzanne Mangel.
:Jt. )J( arI
NOTARY PUBLIC
SUZANNE W. MANGEL
201 S Main St.. Ste. 2200
SalllakeCity. Utah 84111
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'f' My Commission Expires
April 26. 2008
STATE OF UTAH
636 :349224...3