20110328Answer to PAC Petitions.pdf

D. NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 6864
RECEIVED
ioii MAR 28 PM a: 2 I
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF ROCKY MOUNTAIN POWER FOR )
APPROVAL OF CHANGES TO ITS )
ELECTRIC SERVICE SCHEDULES AND A )
PRICE INCREASE OF $27.7 MILLION, OR )
APPROXIMATELY 13.7 PERCENT )
)
)
CASE NO. PAC-E-IO-07
STAFF'S ANSWER TO ROCKY
MOUNTAIN POWER'S PETITION
FOR CLARIFICATION AND
RECONSIDERATION
COMES NOW the Staff of the Idaho Public Utilties Commission ("Commission"),
by and through its attorney of record, D. Neil Price, Deputy Attorney General, and, pursuant to
Commission Rule of Procedure 331.05, IDAPA 31.01.01.331.05, does hereby submit Staffs
Answer to Rocky Mountain Power's Petition for Clarification and Rec~nsideration.
PROCEDURAL BACKGROUND
On May 28, 2010, PacifiCorp dba Rocky Mountain Power ("Rocky Mountain" or
"Company") filed an Application for authority to increase the Company's general rates for
electric service by an average of 13.7%.
On February 28, 2011, the Commission issued final Order No. 32196 in the above
titled case.
On March 21, 2011, Rocky Mountain filed a timely Petition for Clarification and
Reconsideration, pursuant to Commission Rules of Procedure 325 and 331, IDAPA 31.01.01.325
and 31.01.01.331, and requested a formal hearing to provide additional evidence.
STAFF'S ANSWER TO
ROCKY MOUNTAIN POWER'S PETITION
FOR CLARIFICATION AND RECONSIDERATION 1
STAFF'S ANSWER TO ROCKY MOUNTAIN
POWER'S PETITION FOR RECONSIDERATION
In its Answer to Rocky Mountain's Petition for Clarification and Reconsideration,
Staff has chosen to comment on some, but not all, of the issues presented in the Company's
Petition. Failure to comment on an issue addressed by the Company should not be construed as
acceptance by Staff of the Company's position. In such instances, Staff believes that the
Commission has either reached the appropriate conclusion in its final Order or that other parties
(CAPAI, Monsanto, and Rocky Mountain) in this case have presented sufficient information to
adequately assist the Commission in its deliberation regarding the proposed clarification and
reconsideration of final Order No. 32196.
i. Clarification on Carring Charges and Depreciation Related to Plant Held for Future Use
Staff believes the record related to carring charges and depreciation on the
investment in the Populus to Terminal transmission line in plant held for future use (PHFU) is
clear. Staff recommends no carring charge be accrued on the PHFU portion of this line. Staff
also recommends that depreciation not be taken on the line in PHFU until it is included in rate
base. Staff believes the Order should be clarified on these two items.
II. Clarification on Wages May Have Merit
A. Rocky Mountain's Assertion that the Order "Unintentionally Removed Annualization of
Wage Increases Given to Employees During 2008" is Correct.
Staffs adjustment to salary and wages was intended to remove all wage increases
given to employees during 2009 and 2010. The 2008 annual wage figure used to calculate
Staffs adjustment was an actual amount for wages paid during 2008. However, the amount was
not annualized to account for increases granted in 2008 to reflect those increases as if they were
in place for a full 12 months. Annualizing 2008 wage increases would actually increase the
Company's wage expense by $1,660,215 total Company, or $95,597 on an Idaho allocated basis.
Staff acknowledges that the anualized 2008 amount better reflects the January 1, 2009 level of
salaries and wages.
B. The Company's Argument that the State of Idaho Awarded a 3% Increase in Wages to its
Employees Effective June 2009 is Erroneous.
The Company contends that State of Idaho employees received a 3% wage increase
effective June 2009. See id., p. 17. As the Commission is aware, this is simply not correct. In
STAFF'S ANSWER TO
ROCKY MOUNTAIN POWER'S PETITION
FOR CLARIFICATION AND RECONSIDERATION 2
2009, there were only 838 State employees who received a raise, which is approximately 3% of
all State of Idaho employees. In fact, Idaho Governor Butch Otter ordered state agencies to
reduce payroll costs by 5% in 2009.
III. Addendum A to the Petition for Reconsideration Identifies Five Suggested Corrections.
These Corrections May Have Merit
1. Staff agrees that the $261,233 reversal related to the Idaho Irrigation Load
Control Program was overlooked.
2. Staff agrees that the adjustments to net power supply costs for wind integration,
CAL ISO fees and Call Option Contracts were allocated for the Order using the "SE" factor.
Staff acknowledges that the "SG" factor is consistent with the allocation of these costs in the
Company's case and should be used for these adjustments.
3. Staff agrees that the Company's rebuttal removed $1,367,359 in wind integration
costs. Therefore, there was a double removal of these costs included in the final Order. Also an
integration charge of $285,007 was included in the Company's rebuttal for the "Top of the
World" purchase contract. This is not consistent with the methodology approved for wind
integration costs in net power supply cost. The net amount of these adjustments is $1,082,352.
Staff agrees that the Commission's decision to exclude wind integration costs from base power
supply should result in an adjustment of $33.1 milion.
4. Staff agrees that the wage and benefit allocation to Idao should be 5.7581 %.
5. Staff agrees that the SERP allocation to Idaho should be 5.7581%. Staff also
agrees that the pension adjustment should be allocated using the "SO" factor.
The revenue requirement wil change if the Commission accepts the corrections noted
above in Sections II and III. If accepted, Staff calculates the new corrected revenue requirement
as $14,351,096 or 7.07%.
CONCLUSION
Inasmuch as Staff believes the final Order in this case inadvertently miscalculated the
Company's total labor expenses for 2008 and reflected the adjustments improperly as shown in
Addendum A to the Petition, the Order should be modified. To the extent the Order failed to
provide adequate guidance to Rocky Mountain on carring charges and depreciation associated
with the Populus to Terminal transmission line in PHFU or to Rocky Mountain and Monsanto in
crafting their Energy Sales Agreement, Staff believes that the Order should be clarified to
STAFF'S ANSWER TO
ROCKY MOUNTAIN POWER'S PETITION
FOR CLARIFICATION AND RECONSIDERATION 3
address these issues. However, Staff asserts the remaining issues addressed by the Company in
its Petition do not merit clarification or reconsideration. Accordingly, Staff respectfully requests
that the Commission deny Rocky Mountain Power's Petition for Clarification and
Reconsideration of Commission Order No. 32196 for those issues.
Respectfully submitted this 28th day of March 2011.
¡J::flJ%---
Neil Price
Deputy Attorney General
N:PAC-E-IO-07 _np _Answer
STAFF'S ANSWER TO
ROCKY MOUNTAIN POWER'S PETITION
FOR CLARIFICATION AND RECONSIDERATION 4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 28th DAY OF MARCH 2011,
SERVED THE FOREGOING COMMISSION STAFF'S ANSWER TO ROCKY
MOUNTAIN POWER'S PETITION FOR CLARIFICATION AND RECONSIDERATION,
IN CASE NO. PAC-E-I0-07, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
TED WESTON
ID REGULATORY AFFAIRS MANAGER
ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
E-MAIL: ted.weston(fpacificorp.com
E-MAIL: ONLY
MARK C MOENCH
DANIEL E SOLANDER
ROCKY MOUNTAIN POWER
E-MAIL: mark.moench(fpacifìcorp.com
daniel. solander(fpacificorp.com
RANDALL C BUDGE
RACINE OLSON NYE ET AL
PO BOX 1391
POCATELLO ID 83204-1391
E-MAIL: rcb(fracinelaw.net
E-MAIL: ONLY
JAMES R SMITH
MONSANTO COMPANY
E-MAIL: jim.r.smith(fmonsanto.com
ANTHONY YANKEL
29814 LAKE ROAD
BAY VILLAGE OH 44140
E-MAIL: tony(fyanel.net
PAUL J HICKEY
HICKEY & EVANS LLP
1800 CAREY AVE., SUITE 700
PO BOX 467
CHEYENNE WY 82003
E-MAIL: phickey(fhickeyevans.com
E-MAIL: ONLY
DATA REQUEST RESPONSE CENTER
PACIFICORP
E-MAIL: datarequest(fpacificorp.com
E-MAIL: ONLY
KATIE IVERSON
BRUBAKER & ASSOCIATES
E-MAIL: kiverson(fconsultbai.com
ERIC L OLSEN
RACINE OLSON NYE ET AL
PO BOX 1391
POCATELLO ID 83204-1391
E-MAIL: elo(fracinelaw.net
CERTIFICATE OF SERVICE
TIM BULLER
JASON HARRS
AGRIUMINC
3010 CONDA RD
SODA SPRINGS ID 83276
E-MAIL: tbuller(fagrium.com
jahariscmagrium.com
BENJAMIN J OTTO
IDAHO CONSERVATION LEAGUE
710 N 6TH STREET
PO BOX 844
BOISE ID 83702
E-MAIL: botto(fidahoconservation.org
E-MAIL: ONLY
DR. DON READING
E-MAIL: dreading(fmindspring.com
MELINDA J DA VISON
DAVISON V AN CLEVE, P.C.
333 SW TAYLOR, SUITE 400
PORTLAND, OR 97204
E-MAIL: mjd(fdvclaw.com
RONALD L WILLIAMS
WILLIAMS BRADBURY, P.C.
1015 WHAYS STREET
BOISE ID 83702
E-MAIL: ron(fwiliamsbradbury.com
BRAD MPURDY
ATTORNEY AT LAW
2019 N 17TH STREET
BOISE ID 83702
E-MAIL: bmpurdy(fhotmail.com
~~.
SECRETARY
CERTIFICATE OF SERVICE