20090206Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL

DATE: FEBRUARY 6, 2009

SUBJECT: CASE NO. PAC-E-08-07 (Rocky Mountain Power)
SETTLEMENT STIPULATION

On September 19, 2008, PacifiCorp dba Rocky Mountain Power (Rocky Mountain
Power; Company) filed an Application with the Idaho Public Utilities Commission
(Commission) for authority to increase the Company’s base rates for electric service by $5.9
million annually, or 4.0%. The increase in base rates would vary by class of customer and actual
usage. The rate increase does not apply to Agrium or Monsanto, whose rates are controlled by a
separate Commission-approved Stipulation. Intervening parties to this case are: Monsanto
Company; Idaho Irrigation Pumpers Association, Inc.; Community Action Partnership of Idaho;
and Agrium, Inc.
Public workshops for PacifiCorp customers were scheduled to occur on January 7,
2009 in Rexburg, Idaho and January 8, 2009 in Preston, Idaho. On January 6, 2009, the
workshops were cancelled by the Commission based on the existing and forecasted weather
conditions, road conditions and snow.
On January 8, 2009, the Commission Staff filed with the Commission a Notice of
Intent to Engage in Settlement Discussions. RP 272. A settlement conference was subsequently
held on January 15, 2009 and was attended by all parties to the case with the exception of
Agrium, Inc.
Pursuant to discussions, PacifiCorp, Commission Staff, Idaho Irrigation Pumpers
Association and Community Action Partnership of Idaho have entered into a Stipulation and
negotiated settlement that purports to resolve all issues raised in this proceeding. The Stipulation
DECISION MEMORANDUM 2
does not impact or propose any changes to Monsanto or Agrium’s rates. Monsanto participated
in the settlement discussions and while they do not adopt the Stipulation they have no objection
to the Commission approving the same. The Stipulation was filed with the Commission on
February 5, 2009. The stipulating parties represent that the Stipulation is in the public interest
and that all of its terms and conditions are fair, just and reasonable.
Under the terms of the Stipulation, Rocky Mountain Power would be authorized to
recover $4,382,632 (3.1%) in additional annual electric revenue from non-contract customers.
The increase would be effective April 18, 2009 for all affected customers.
The terms of the Stipulation include the following terms:
● The parties agree that their proposal is a “black box” settlement with no
party accepting a specific methodology for the revenue requirement
determination. The parties agree that the overall increase represents a fair,
just and reasonable comprise of the issues raised in this proceeding and
that the Stipulation is in the public interest.

● The parties agree to establish the total Company base rate net power cost
at $982 million, as filed in this Application, which will be necessary for
calculation purposes in Rocky Mountain Power’s currently pending
application for approval of an energy cost adjustment mechanism in Case
No. PAC-E-08-08.

● The parties agree that Rocky Mountain Power’s acquisition of the
Chehalis generating plant in Chehalis, Washington was a prudent decision
and in the public interest, and costs related to the plant acquisition and
operation included in this case are reasonable and are included in rate
base.

● The parties agree that the demand-side management programs proposed
by Rocky Mountain Power in Case No. PAC-E-08-01 are prudent.
Further, the parties agree that a total of $50,000 of demand-side
management program funds will be made available to Southeastern Idaho
Community Action Agency and Eastern Idaho Community Action
Partnership to be used to support conservation education as a component
of Rocky Mountain Power’s Low Income Weatherization Program,
Schedule 21.

● The parties agree that the issue raised in the Company’s testimony related
to the Energy Trust of Oregon Funding of the Goodnoe Hills Wind
Generation plant will be deferred to Rocky Mountain Power’s next filed
general rate case.

DECISION MEMORANDUM 3
● Rocky Mountain Power agrees that it will include an inverted tier rate
design proposal or option for residential customers in its next filed general
rate case for the Commission’s consideration.

● The parties agree to the rate spread set forth in the following table. The
calculations are based on the ratio of Rocky Mountain Power’s proposed
revenue requirement increase of $5,871,441 to the settled revenue required
increase of $4,382,632. Details of the rate spread are included in
Attachment 1 to the Stipulation.

Customer Class Proposed Settled
–
–

● The parties agree that the design of rates by rate schedule (rate design)
shall be consistent with the Company’s filed proposals as adjusted for the
revenue requirement in this settlement.

The stipulating parties recommend that the Commission approve the Settlement
Stipulation for an April 18, 2009 effective date. RP 274. The parties recognize that the proposed
settlement is not binding on the Commission (RP 276), and that the parties to the settlement
carry the burden of showing that the settlement is reasonable, in the public interest, and is in
accordance with law or regulatory policy. RP 275.
In furtherance of the Stipulation, Staff recommends that the following scheduling be
adopted:

–

DECISION MEMORANDUM 4
The parties also agree that the previous scheduling in Case No. PAC-E-08-07 be vacated.
COMMISSION DECISION
A Settlement Stipulation in Case No. PAC-E-08-07 has been presented. Does the
Commission agree with the Settlement Stipulation related scheduling proposed by Staff?

Scott Woodbury
Deputy Attorney General

bls/M:PAC-E-08-07_sw3