20090629Withdrawal.pdf

~
'~
~ROCKY MOUNTAINPOR. A._WC...GY~"GSOO... 2069 JUN 29
RcCr:I\fç:f)i- ..1 \i A, ".
June 29, 2009
AM to: 16201 S. Main Street, Suite 2300
'" ,$al! Lake Cit, UT 841112.\').\
VI OVERNIGHT DELIVERY
Jean D. Jewell
Commssion Secretar
Idaho Public Utilties Commssion
472 W. Washigton
Boise, ID 83702
Re: In the Matter of the Application Rocky Mountain Power for Approval of an
Energy Cost Adjustment Mechanism (ECAM -- Case No. PAC-E-08-08; and
Notice to Withdraw Application for Rocky Mountain Power's General Rate
Case -- Case No. PAC-E-09-03
Dear Ms. Jewell:
Please find enclosed for fiing an original and seven (7) copies of the ECAM Stipulation and
Agreement entered into between Rocky Mountain Power and the followig paries of record in
the above captioned matter: Sta for the Idaho Public Utilities Commission; Idaho Irrgation
Pumpers Association, Inc.; and Monsanto Company.
Testimony supportg ths stipulation will be filed with the Idaho Public Utilities Commssion no
later than Friday, July 31, 2009.
Please be advised that ths cover letter also serves as notice to the Idaho Public Utilties
Commission of Rocky Mountain Power's intent to withdraw its application to file a general rate
case (Case No. PAC-E-09-03) as agreed to and specified in item number 13 of the Stipulation
and Agreement.
All formal correspondence regarding ths fiing should be addressed to:
Yvonne R. Hogle
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, Uta 84111
Telephone: [phone]
Email: yyonne.hogle~pacificorp.com
Ted Weston
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
Email: ted.weston~pacificorp.com
Than you for your assistace with ths filing.
Very trly yours,
Jë~~ k. lw-ef' /Jeffry K. Larsen / (I ~
Vice President, Reguation
cc: Service List
Page 2
CERTIFICATE OF SERVICE REceIVED
i hereby certify that on this 29th day of June, 2009, I caused to be served, via E-maiiOJ~H 29 AM 10:' 6
overnght delivery, a tre and correct copy of Rocky Mounta Power's Stipulation in IDAHO PUt~, i¡,e,
PAC-E-08-08 to the followig: UTILITIES CO'¡Al/ŠS10N
Radall C. Budge (E-mail & Hard Copy)
Racine, Olson, Nye, Budge & Bailey,
Charered
201 E. Center
P.O. Box 1391
Pocatello,ID 83204-1391
E-Mail: rcb~racinelaw.net
Katie Iverson (E-mail & Hard Copy)
Brubaker & Associates
17244 W. Cordova Cour
Surrise, AZ 85387
E-mail: kiverson(iconsultbai.com
Anthony Yanel (E-mail only)
29814 Lake Road
Bay Vilage, OH 44140
E-mail: tony~yanel.net
Randy Lobb (E-mail & Hard Copy)
Scott Woodbur (E-mail & Hard Copy)
Idaho Public Utilties Commssion
472 W. Washigton
Boise, ID 83702
E-mail: Randy.lobb(ipuc.idaho.gov
E-mail: Scott.woodbur~puc.idaho.gov
Eric L. Olsen (E-mail only)
Racine, Olson, Nye, Budge & Bailey,
Charered
201 E. Center
P.O. Box 1391
Pocatello,ID 83204-1391
E-Mail: elo~racinelaw.net
James R. Smith (E-mail only)
Monsanto Company
POBox 16
Soda Springs, ID 83276
E-mail: jim.r.smith~monsanto.com
Jean Jewell
Commssion Secreta
Idao Public Utilties Commission
472 W. Washigton
Boise,ID 83702
E-mail: Jean.jewell~puc.idaho.gov
CM~~
Coordinator, Admnistrtive Services
Yvonne R. Hogle
Admitted Pro Hac Vice
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, Utah 84111
[phone]
Yvonne.hogle§pacificorp.com
Attorney for Rocky Mountain Power
RECEIVED
2909 JUN 29 AM \0: '6
\0": 'tì PUgL\:~ .¡i""Mv "lThL~t(~#"'I,('j\~
UTIUTiES COri'1t~;¡'J~ V"
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION ROCKY MOUNTAIN
POWER FOR APPROVAL OF AN
ENERGY COST ADJUSTMENT
MECHANISM (ECAM)
)
) CASE NO. P AC-E-08-08
)
) ECAM STIPULATION
)
)
)
)
This ECAM stipulation ("Stipulation") is entered into by and among Rocky Mountain
Power, a division of PacifiCorp ("Rocky Mountain Power" or "the Company") and the following
parties of record in Case No. PAC-E-08-08: Staff of the Idaho Public Utilties Commission
("Staff'); the Idaho Irrigation Pumpers Association, Inc. (LIP A), and Monsanto Company
(Monsanto). The Company, Staff, IIPA, and Monsanto shall hereinafter be referred to,
collectively, as the Parties.
I. INTRODUCTION
1. The terms and conditions of this Stipulation are set forth herein. The Parties
agree that this Stipulation represents a fair, just and reasonable compromise of the issues raised
in this proceeding and that this Stipulation is in the public interest. The Parties, therefore,
recommend that the Idaho Public Utilities Commission ("Commission") approve the Stipulation
and all of its terms and conditions. See IDAPA 31.01.01.271, 272, and 274.
CASE NO. PAC-E-08-08
STIPULATION - Page 1
II. BACKGROUND
2. On October 23, 2008, Rocky Mountain Power fied an application
("Application") seeking approval of an energy cost adjustment mechanism ("ECAM"). Rocky
Mountain Power's proposed ECAM is designed to defer the difference between base net power
costs set during a general rate case and collected from customers in their retail rates and actual
net power costs incurred by the Company to serve retail customers. The calculation of the
deferral would be on a monthly basis by comparing the monthly base net power cost ("NPC")
rate in dollars per megawatt-hour to the actual NPC rate also in dollars per megawatt-hour. The
resulting monthly NPC differential rate would be applied to actual Idaho retail load to calculate
the NPC differential for deferraL. The net power costs of $982 milion, as stipulated and
approved in Rocky Mountain Power's general rate Case No. PAC-E-08-07, Order No. 30783,
wil be the base NPC for the ECAM until re-set in the next general rate case.
3. With a view toward resolving the issues raised in the Application, the Parties met
on February 26 and May II, 2009 and conference calls were held June I and June 2, 2009,
pursuant to IDAP A 31.01.01.271 and -.272, to engage in settlement discussions. Based upon the
settlement discussions among the Parties, as a compromise of the Parties' positions in this
proceeding, and for other consideration as set forth below, the Paries have reached a
compromise agreement as set forth below that resolves all outstanding issues and which the
Paries believe is in the public interest.
III. TERMS OF THE STIPULATION
4. Subject to the terms and conditions herein, the Paries agree that the design,
format and accounts of the ECAM shall be as set forth in the Company's Application in Case
No. PAC-08-08 and as to be described in more detail by the Company in its Stipulation
CASE NO. PAC-E-08-08
STIPULATION - Page 2
supporting testimony. The Parties further agree that the ECAM is to be effective July 1, 2009,
provided the Commission has issued an order approving the ECAM consistent with the terms in
the Stipulation.
5. The Paries agree that the ECAM wil include a symmetrical sharing band
wherein when there is a difference between actual NPC and base NPC, customers pay (if there is
an increase in NPC) or receive (if there is a decrease in NPC) 90 percent of the difference, and
the Company is responsible for the remaining i 0 percent.
6. The Parties agree that the anual deferral period to be used in the ECAM wil be
December 1 to November 30, and that anually, on Februar 1, the Company wil fie an
application with the Commission to adjust the surcharge or surcredit ("ECAM Rate") effective
April I each year, refunding or collecting the ECAM deferred balance from the prior deferral
period.
7. The Paries agree that a symmetrical load growth adjustment rate (LGAR) of
$17.48 per MWH wil be applied to the incremental load from the base load established in Case
No. PAC-E-08-07, and that the LGAR and base load wil be updated each time base net power
costs are updated in a general rate case.
8. The Parties recognize that the Company has made significant investments in
renewable generation projects that are not yet being recovered in Idaho rates and that these
projects provide significant benefits to customers through the ECAM. Therefore from the
effective date of the ECAM to the effective date of rates in the next rate case, the Paries agree
that the ECAM wil include a renewable generation investment offset adjustment. The
adjustment recognizes that actual power costs have been reduced by power generated from these
renewable generation projects, but that the costs of these projects are not yet being recovered in
CASE NO. P AC-E-08-08
STIPULA nON - Page 3
Idaho rates. The adjustment wil be based on $55.00 per MWh, as calculated in Attachment 1,
attached hereto, multiplied by the actual MWh output generated by the renewable resources that
were not included in rate base in Rocky Mountain Power's Case No. PAC-E-08-07.
9. The Paries further agree that a carrying charge equal to the Commission-
approved customer deposit rate wil be applied symmetrically to the monthly ECAM deferred
balance;
10. In the event the Company intends to seek an increase to the ECAM Rate
exceeding seven (7) percent, the Company agrees to meet with the Staff and interested parties to
discuss the underlying drivers of such a change at least 30 days prior to filing an application with
the Commission for approval of the change to the ECAM Rate.
11. The Company agrees to work with the Paries to develop rates that reflect line
losses and that distinguish transmission, primary and secondary voltage delivery service in the
implementation of the ECAM Rates. A technical conference wil be convened by August 15,
2009 to begin discussions on a methodology and will use line loss information from the 2008
general rate case (Docket P AC- E-08-7) as a starting point for the discussions. In the event an
agreement on rate design for the ECAM Rate is not reached by April 1, 20 I 0, the ECAM Rate
wil be applied to all schedules and customers on a flat kWh usage basis until an agreement is
reached or a method is ordered by the Commission.
12. The Company agrees to hold a risk management hedging seminar to educate
Paries about the Company's risk management practices and hedging strategies.
13. In recognition for and as a result of the implementation of the ECAM with an
adjustment for renewable generation projects not yet in rate base as specified in Paragraph 8
above, the Company agrees not to file a general rate case prior to May 1,2010.
CASE NO. PAC-E-08-08
STIPULA nON - Page 4
14. The Paries agree that S02 sales made after June 30, 2009 wil be included as an
offset to the ECAM deferral with the same 90% / 10% sharing band explained above in
Paragraph 5. The Parties further agree that sales made prior to such date wil continue to be
amortized over fifteen years consistent with curent practice as reflected in Case No. P AC-E-06-
04 (Larson Direct Testimony, Exh. 1, pp. 3.6 and 3.6.1.).
15. The Company's filed Case No. PAC-E-08-07 included an annual level of
amortization of three regulatory liabilties for West Valley lease, administrative and general
expense merger commitment, and the gain on the sale of the Goose Creek transmission line
which reduced the revenue requirement used in establishing the current base rates. The curent
rates wil continue until new rates are set at the end of 2010 or later and, as a result, customers
continue to receive the benefit of the amortization in rates until that time. As of December 31,
2010, an unamortized balance of $156,434 for the Goose Creek sale wil remain on the
Company's books and records. The Parties stipulate and agree that upon Commission approval
of this Stipulation the Company wil credit the ECAM deferral for the Goose Creek sale in the
amount of $156,434. Accordingly, the Parties agree that the Company can write-off the
remaining balances of the regulatory liabilities after this transfer and upon Commission approval
of the Stipulation.
iv. GENERAL PROVISIONS
16. The Paries agree that this Stipulation represents a compromise of the positions of
the Paries on all issues in this proceeding. Other than the above referenced positions and any
testimony fied in support of the approval of this Stipulation, and except to the extent necessary
for a Party to explain before the Commission its own statements and positions with respect to the
CASE NO. PAC-E-08-08
STIPULA nON - Page 5
Stipulation, all negotiations relating to this Stipulation shall not be admissible as evidence in this
or any other proceeding regarding this subject matter.
17. The Paries submit this Stipulation to the Commission and recommend approval
in its entirety pursuant to IDAPA 31.01.01.274. The Paries shall support this Stipulation before
the Commission, and no Party shall appeal any portion of this Stipulation or Order approving the
same. If this Stipulation is challenged by any person not a party to the Stipulation, the Paries to
this Stipulation reserve the right to cross-examine witnesses and put on such case as they deem
appropriate to respond fully to the issues presented, including the right to raise issues that are
incorporated in the settlement embodied in this Stipulation. Notwithstanding this reservation of
rights, the Paries to this Stipulation agree that they wil continue to support the Commission's
adoption of the terms of this Stipulation.
18. In the event the Commission rejects any part or all of this Stipulation, or imposes
any additional material conditions on approval of this Stipulation, each Pary reserves the right,
upon written notice to the Commission and the other Paries to this proceeding, within 15 days of
the date of such action by the Commission, to withdraw from this Stipulation. In such case, no
Pary shall be bound or prejudiced by the terms of this Stipulation, and each Pary shall be
entitled to seek reconsideration of the Commission's order, fie testimony as it chooses, cross-
examine witnesses, and do all other things necessary to put on such case as it deems appropriate.
19. The Paries agree that this Stipulation is in the public interest and that all of its
terms and conditions are fair, just and reasonable.
20. No Pary shall be bound, benefited or prejudiced by any position asserted in the
negotiation of this Stipulation, except to the extent expressly stated herein, nor shall this
Stipulation be construed as a waiver of the rights of any Party unless such rights are expressly
CASE NO. PAC-E-08-08
STIPULA nON - Page 6
waived herein. Execution of this Stipulation shall not be deemed to constitute an
acknowledgment by any Pary of the validity or invalidity of any particular method, theory or
principle of regulation or cost recovery. No Party shall be deemed to have agreed that any
method, theory or principle of regulation or cost recovery employed in arriving at this Stipulation
is appropriate for resolving any issues in any other proceeding in the future. No findings of fact
or conclusions of law other than those stated herein shall be deemed to be implicit in this
Stipulation.
21. The obligations of the Paries under this Stipulation are subject to the
Commission's approval of this Stipulation in accordance with its terms and conditions and, if
judicial review is sought, upon such approval being upheld on appeal by a court of competent
jurisdiction.
(This page intentionally left blank)
CASE NO. PAC-E-08-08
STIPULA nON - Page 7
,cDRespectfully submitted this 1-': day of June, 2009.
Rocky Mountain Power Idaho Irrigation Pumpers Association,
Inc.B Â By
Idaho Public Utilities Commision Staff Monsanto Company
BiC~Ç).(d:n:~á7 By
CASE NO. PAC-E-08-08
STIPULATION - Page 8
¡C
Respectfully submitted this J.' day of June, 2009.
Rocky Mountan Power Idaho Irrigation Pumpers Association,
Inc.B~~By &-ìCi L . ~ fz-Z.6--f
"''I RëßIdaho Public Utiities Commission Staff Monsanto Company
By BY~ a.4 6-U.()
CASE NO. PAC~E~08~08
STIPULATION - Page 8
ATTACHMENT 1
1) Market Price Forecast for Mid-Columbia and Palo Verde.
Source: Company's Offcial Forward Price Curve dated 3/31/2009
Month Mid-C PV Mid-C/PV
Average
Jul2009 $31.28 $37.03 $34.15
Aug 2009 $36.54 $37.00 $36.77
Sep 2009 $33.08 $30.88 $31.98
Oct 2009 $32.41 $28.42 $30.41
Nov 2009 $36.04 $28.56 $32.30
Dec 2009 $45.16 $32.08 $38.62
Jan 2010 $49.89 $38.69 $44.29
Feb 2010 $43.03 $36.70 $39.86
Mar 2010 $35.54 $34.10 $34.82
Apr 2010 $34.32 $38.15 $36.24
May 2010 $24.93 $35.81 $30.37
Jun 2010 $23.46 $40.81 $32.13
Jul 2010 $44.10 $53.66 $48.88
Aug 2010 $50.17 $54.51 $52.34
Sep 2010 $49.16 $47.02 $48.09
Oct 2010 $48.30 $40.67 $44.48
Nov 2010 $49.05 $39.74 $44.40
Dec 2010 $51.37 $41.67 $46.52
Average $39.88 $38.64 $39.26
2) Idaho Schedule 37 prices for Wind Resources.
Contract Non-Levelized Wind Integration Wind Resource
Year Rates Charge Rate
(1 )(2)(1)-(2)
2009 $76.73 $5.10 $71.63
2010 $75.83 $5.10 $70.73
Average*$71.03
*Weighted average for the period 7/1/09 - 12/31/10
3) The resultant average cost per megawatt of wind generation is calculated as an
average of 1 &2 above.
($39.26/ MW+$71.03/ MW)Average = =
2 I $55 I