20070618Application.pdf

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Salt lake City, Utah 84111
June 15 2007
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VL4 OVERNIGHT DELIVERY
Idaho Public Utilities Commission
472 West Washington
Boise, ID 83702-5983
Attention:Jean D. Jewell
Commission Secretary
Re:PAC-07-
In the Matter of Rocky Mountain Power s Petition to Revise the Published
A voided Cost Rates to Include Monthly Price Multipliers to Differentiate for
Energy Delivered During Heavy Load Hours and Light Load Hours
Dear Ms. Jewell:
Rocky Mountain Power, a division ofPacifiCorp, hereby submits for filing an original and seven
copies of its Petition in the above referenced matter. Rocky Mountain Power requests that
Attachment 2 to the enclosed Petition be treated as confidential. Attachment 2 is provided
separately on yellow colored paper, and Attachment 3 contains an attorney s certificate citing the
specific grounds and legal authority for such confidential treatment.
Service of pleadings, exhibits, orders and other documents relating to this proceeding should be
served on the following:
Dean Brockbank
Senior Counsel
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Dean.Brockbank~Pacifi Corp. com
Brian Dickman
Manager, Idaho Regulatory Affairs
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Brian.Dickman~Pacifi Corp. com
It is respectfully requested that all formal correspondence and Staff requests regarding this
material be addressed to one or more of the following:
Bye-mail (preferred):datarequest~pac ifi corp. com
By regular mail:Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, Oregon, 97232
By fax:[phone]
Sincerely,
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Jeffrey K. Larsen
Vice President, Regulation
Enclosures
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Dean Brockbank
Senior Counsel
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
FAX: [phone]
Dean.Brockbank (g) PacifiCorp.com
Attorney for Rocky Mountain Power
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNrAIN
POWER'S PETITION TO REVISE THE
PUBLISHED A VOIDED COST RATES TO
INCLUDE MONTHLY PRICE
MULTIPLIERS TO DIFFERENTIATE FOR
ENERGY DELIVERED DURING HEAVY
LOAD HOURS AND LIGHT LOAD HOURS
CASE NO. PAC-O7~M.
PETITION OF
ROCKY MOUNTAIN POWER
Rocky Mountain Power, a division of PacifiCorp ("RMP" or the "Company
pursuant to Rule of Procedure 53, hereby requests that the Idaho Public Utilities
Commission (the "Commission ) issue its order revising RMP's published avoided cost
rates for qualifying facilities ("QFs ) under Sections 201 and 210 of the Public Utility
Regulatory Policies Act of 1978 ("PURPA") to include monthly price multipliers to
recognize the monthly difference in value between energy delivered by QFs during heavy
load hours and energy delivered by QFs during light load hours. This revision would not
change the computation of annual avoided costs but could change the total revenues
received by QFs depending on which month and when during the day they deliver
energy. This Petition is based on the following:
I. BACKGROUND
Idaho Power Company ("Idaho Power ), in its Petition dated February 6, 2007,
Case No. IPC-07-03, has requested that the Commission issue an order revising Idaho
Power s published avoided cost rates paid to QFs to recognize the difference in value
between energy delivery by QFs during heavy load hours and energy delivered during
light load hours. Idaho Power already has in place the recognition of their seasonal load.
A vista Corporation requested, and the Commission approved, a similar daily
shape adjustment (Commission Order No. 301111 issued in Case No. A VU-06-04).
Rocky Mountain Power s comments filed in Case No. IPC-07-03 stated RMP'
support ofIdaho Power s Petition, and advised that it too would be seeking approval
from the Commission for similar changes, which it stated "are necessary to protect its
Idaho customers from paying too much for wind QF generation.RMP agrees with
Idaho Power that energy has a different value based on season and time of day deliveries.
At the present time, the Company would pay the same price to a QF that delivers
entirely during light load hours as a QF that delivers entirely during heavy load hours.
Likewise, it would pay the same price to a QF that delivers entirely in a peak load month
as a QF that delivers entirely in a non-peak load month. The Company believes that the
existing payment structure is inappropriate as it does not provide proper incentives to
QFs, and is neither fair to customers nor to the QF because it could result in either under
or overpayments for the value of the power.
II. PUBLISHED AVOIDED COST RATES TO DIFFERENTIATE
BETWEEN HEA VY LOAD HOURS AND LIGHT LOAD HOURS
In this Petition, RMP is requesting that the Commission allow RMP to include in
its published avoided cost rates a monthly price multiplier to differentiate for energy
delivered during heavy load hours and energy delivered during light load hours. This
revision, to reflect month and time of day shaping, does not change the computation of
annual avoided costs; it merely adjusts the computed avoided costs to more appropriately
value energy being delivered, based on which month and when during the day the energy
is being delivered.
The Company s proposed heavy load hour and light load hour monthly price
multipliers are attached to this Petition as Attachment 1. These multipliers were
calculated by applying the following steps:
Determine the percentage of market transactions as a result of a new OF
resource bv month. bv market.The Company prepared two production cost computer
simulations (GRID scenarios) to calculate the percentage change in market transactions
resulting from a new QF. The first study (the "Base Case ) was a 48-month GRID study;
January 1 2007 through to and including December 31 , 2010. The second study (the
Avoided Cost Case ) was a copy of the Base Case, except with a 10 MW 100% capacity
factor avoided cost resource added. From both studies, the Company extracted monthly
system balancing market sales and purchases megawatt hours, reflecting heavy load hour
and light load hour transactions at the California-Oregon Border ("COB"), Four Corners,
Mid-Columbia and Palo Verde wholesale market hubs. The delta of these megawatt-hour
transactions, by heavy load hour and light load hour, are used to compute the percentage
of monthly market transactions at each of the above mentioned markets.
Determine the average monthly and annual market price based on 48-
months of historical data.The Company referenced 48 months of historical daily Dow
Jones firm market data for COB, Four Corners, Mid-Columbia and Palo Verde to
calculate the average market price. The 48 months reflected in the Company s analysis
were April 1, 2003 through March 31, 2007, inclusive. The percentage of monthly
transactions, as described in subsection 1 above, was used to blend the daily prices from
the four Dow Jones markets into a blended daily weighted average market price for heavy
load hours and light load hours. The blended daily weighted average market price, over
the 48-month period, was used to compute an average monthly price and average annual
pnce.
Determine the monthly heavy load and light load monthly price multiplier.
The ratio of the monthly price to the annual price, by heavy load and light load time
periods, are the monthly price multipliers. These represent the monthly price multipliers
that RMP is requesting the Commission to include in RMP's published avoided cost rates
to more appropriately recognize the difference in value between energy delivered by QFs
during heavy load hours and energy delivered by QFs during light load hours, as set out
in Attachment 1.
The Company s confidential work papers are provided to the Commission as
Attachment 2 to this Petition. Pursuant to Rule of Procedure No. 67, the Company
requests that the Commission consider Attachment 2 as confidential information. An
Attorney s Certificate attached to this Petition as Attachment 3, states that the contents of
Attachment 2 constitute confidential information. Attachment 2 is printed on yellow
paper and is provided separately from this Petition.
III. RECOMMENDED PROCEDURE FOR PROCESSING THIS PETITION
RMP has provided this Petition via e-mail to all intervenors in Case No. IPC-
05-, and other entities that participated in the workshops that followed the issuance of
Order No. 29839, advising them of this filing. If the Commission concurs, RMP
proposes to expeditiously schedule and conduct at least one workshop to discuss this
Petition; the Company believes that a Commission-sanctioned workshop or process could
facilitate settlement discussions at an early stage of this case.
Based on all of the foregoing, RMP respectfully requests that the
Commission:
1. Issue an order revising RMP's published avoided cost rates for QFs under
Sections 201 and 210 of the Public Utility Regulatory Policies Act of 1978 to
include monthly price multipliers to recognize the difference in value between
energy delivered by QFs during heavy 10ad hours and energy delivered by QFs
during light load hours; as set out in Attachment 1;
2. Treat Attachment 2 to this Petition as confidential information; and
3. Such other relief as the Commission may deem appropriate.
Respectfully submitted this ISf4A.day of June 2007.
Dean Brockbank
Attorney for Rocky Mountain Power
Attachment 1
Month Jan Feb Mar Apr May Jun Jul Aug SeD Oct Nov Dec
HLH 103%105%95%95%92%94%121%121%109%115%110%129%
LLH 94%97%80%76%63%65%92%106%99%105%96%120%
Note: These monthly price multipliers are derived from:-
(1)48-months of historical daily Dow Jones firm market data for the COB, Four
Corners, Mid-Columbia and Palo Verde wholesale market hubs. The 48-months
reflected in this analysis is from April 1, 2003 through to and including March 31,
2007; and
(2)48-months of system balancing data extracted from two GRID scenarios; a Base
Case and an Avoided Cost Case. The 48-months reflected in these studies is from
January 1,2007 through to and including December 31,2010.
These multipliers are subject to change if different 48-month periods are selected.
TT ACHMENT 2
THIS ATTACHMENT ALLEGEDLY
CONTAINS CONFIDENTIAL MATERIAL AND
IS SEPARATELY FILED
ATTACHMENT 3
ATTORNEY'
CERTIFICA TE
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Dean Brockbank, Sr. Counsel
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
FAX: [phone]
Dean. Brockbank(illPacifi Corp. com
Attorney for Rocky Mountain Power
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN
POWER'S PETITION TO REVISE THE
PUBLISHED AVOIDED COST RATES TO
INCLUDE MONTHLY PRICE
MUL TIPLIERS TO DIFFERENTIATE FOR
ENERGY DELIVERED DURING HEAVY
LOAD HOURS AND LIGHT LOAD HOURS
CASE NO. PAC-O7-..B
ATTORNEY'S CERTIFICATE
STATE OF OREGON
: SS
COUNTY OF MULTNOMAH
Dean S. Brockbank, being first duly sworn under oath, deposes and states that the
following is true and correct to the best of his knowledge, information and belief:
I am an in-house attorney employed by Rocky Mountain Power.
I am familiar with certain documents, data, information, studies and other
material relating to Rocky Mountain Power s calculation of avoided costs that are
claimed to be trade secrets, proprietary and of a confidential nature (herein referred to as
Confidential Information
This Attorney s Certificate is being filed together with that certain
Petition, requesting that the Commission approve a revision of Rocky Mountain Power
published avoided cost rates for qualifying facilities ("QF") under Sections 201 and 210
of the Public Utility Regulatory Policies Act of 1978 to include monthly price multipliers
to recognize the difference in value between energy delivered by QFs during heavy load
hours and energy delivered by QFs during light load hours.
In connection with the monthly price multipliers that Rocky Mountain
Power developed, Rocky Mountain Power has certain work papers that it is including
with the Petition. Rocky Mountain Power claims that those work papers are Confidential
Information.
The work papers that were used to develop the monthly price multipliers
represent confidential pricing inputs and forecasts. The disclosure of Confidential
Information of Rocky Mountain Power would damage Rocky Mountain Power and its
ratepayers.
Accordingly, within the meaning ofI.C. 48-801(5), it is my opinion the
work papers that were used to develop the monthly price multipliers requested in the
Petition are trade secret information and should not be generally known to the public, and
is the subject of efforts that are reasonable under the circumstances to maintain secrecy.
Except for the work papers, the remaining terms of the Petition are not
considered to be trade secrets or Confidential Information. Accordingly, pursuant to Rule
of Procedure 67 a copy of the Petition will be made available and filed with only the
work papers redacted as Confidential Information.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
FURTHER YOUR AFFIANT SA YETH NAUGHT.
Respectfully submitted this 15th day of June 2007,
, ,
By ~l.
Dean S. Brockbank
SUBSCRIBED AND SWORN TO before me this 15th day of June, 2007.
OFFICIAL SEAL
JANNA L LEASY
.I NOTARY PUBLIC-OREGON
COMMISSION NO. 372059
MY COMMISSION Eyp:n:cc';,EPT 28 , 2007
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