20110201Application.pdf

~~~OUNTAIN
201 South Main, Suite 2300
salt Lake City, Utah 84111
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Febru 1, 2011
VI OVERNIGHT DELIVERY
Jean D. Jewell
Commssion Secreta
Idaho Public Utiliies Commssion
472 W. Washington
Boise,ID 83702
Re: Case No. PAC-E-II-07
In the Matter of the Application of Rocky Mountan Power for Authority to Increae
Rates by $11.0 Milion to Recover Deferrd Net Power Costs Though the Energy Cost
Adjustment Mechansm
Dear Ms. Jewell:
Please find enclosed for fiing an original and nie (9) copies of Rocky Mountan Power's
Application in the above referenced mattr, along with Rocky Mounta Power's direct
testimony, exhbits and confdential information attestation letter. Also enclosed is a CD
contang the Application, direct testimony, exhbits and attestation letter.
All formal correspondence and questions regarding ths Application should be addressed to:
Ted Weston
Idao Reguatory Affai Manger
Rocky Mounta Power
201 South Main, Suite 2300
Salt Lake City, Uta 84111
Telephone: [phone]
Emal: ted.weston(ßpacificorp.com
Yvonne R. Hogle
Senior Counsel
Rocky Mountain Power
20 i South Mai, Suite 2300
Salt Lake City, Uta 84111
Telephone: [phone]
Email: yyonne.hogle(ßpacificorp.com
Communcations regarding discovery matters, includig data requests issued to Rocky Mounta
Power, should be addressed to the following:
By E-mail (preferred):dataeguest(ßpacificorp.com
By reguar mail:Data Request Response Center
PacifiCorp
825 Multnomah, Suite 2000
Portland, cngon 97232
Idaho Public Utilties Commssion
Febru 1,2011
Page 2
Informal inquies may be diected to Ted Weston, Idaho reguatory afairs maager, at (801)
220-2963.
Sincerely,
/Wí~ h~ (/(j
Jeffy K. LarJn,
Vice President, Reguation
Enclosurs
Mark C. Moench
Yvonne R. Hogle
201 South Mai Street, Suite 2300
Salt Lake City, Uta 84111
Telephone No. [phone]
Facsimle No. [phone]
E-mail: yvonne.hogle(ßpacificorp.com
r"t,)'
iUI FEB -I AM 10= 28
John R. Hamond, Jr., ISB No. 5470
Local Counsel
BAIT FISHER PUSCH & ALDERMN, LLP
U S Ban PLaZ 5th Floor
10 1 South Capitol Boulevard
P.O. Box 1308
Boise, Idaho 83701
[phone]
[phone] facsimile
jrh(ßbattfisher .com
Attorneys for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMSSION
IN THE MATTER OF THE APPLICATION ) CASE NO. PAC-E-11-07
OF ROCKY MOUNTAIN POWER FOR )
AUTHORITY TO INCREASE RATES BY ) APPLICATION OF ROCKY
$11.0 MILLION TO RECOVER DEFERRD ) MOUNAI POWER
NET POWER COSTS THROUGH THE )ENERGY COST ADJUSTMENT )MECHAISM )
Rocky Mounta Power, a division of PacifiCorp ("Company" or "Rocky
Mounta Power"), in accordace with Idao Code §61-502, §61-503, and RP 052,
hereby respectflly submits this application ("Application") to the Idao Public Utilties
Commssion ("Commission") pursuat to its approved energy cost adjustment
mechasm ("ECAM"), requesting approval to adjust Schedule 94, Energy Cost
Adjustment, and establish the ECAM rate for all customer classes excludig taff
contracts basd on the deferr period begig December 1, 2009 thug November
30, 2010. The Company is proposing to recover approximately $12.8 milion in tota
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defered net power costs for the period beging April 1, 2011 thoug Marh 31, 2012,
representing an increase of $11.0 millon over Schedule 94 rates curntly in effect as
approved in Order No. 31033 of Case No. PAC-E-10-0l. Rocky Mounta Power
respectfly requests that ths increase in Idao rates become effective on April 1,2011,
pursuat to Schedule 94. In support of its Application, Rocky Mounta Power states as
follows:
1. Rocky Mounta Power is a division of PacifiCorp, an Oregon
corporation, which provides electrc servce to retal customers through its Rocky
Mounta Power division in the sttes of Idaho, Wyoming, and Uta. Rocky Mounta
Power is a public utilty in the state of Idao and is subject to the Commssion's
jursdiction with respect to its prices and terms of electrc service to retal cusomers in
Idaho. Rocky Mountain Power is authorized to do and is doing business in the state of
Idao providig retal electrc servce to approxiately 73,000 customers in the state.
2. Communcations regarding this fiing should be addressed to:
Ted Weston
Idaho Reguatory Affai Manger
Rocky Mounta Power
201 South Main, Suite 2300
Salt Lake City, Uta 84111
Telephone: [phone]
Email: ted.weston(ßpacificorp.com
Yvonne R. Hogle, Senior Counsel
Rocky Mountan Power
201 South Main, Suite 2300
Salt Lae City, Uta 84111
Telephone: [phone]
Email: Yvonne.hogle(ßpacificorp.com
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3. In addition, Rocky Mounta Power requests that all data reuest
regardig ths Application should be sent in Microsoft Word or plain text formt to the
followig:
By email (preferred):datarequest(ßpacificorp.com
By reguar mail: Data Request Response Center
PacifiCorp
825 Multnomah, Suite 2000
Portland, Oregon 97232
Informal questions may be directed to Ted Weston, Idao Reguatory Afairs
Manager at [phone].
Brief Overview of the ECAM
4. On October 23, 2008, Rocky Mounta Power fied an Application with
the Commission, Case No. P AC-E-08-08, seekig approval of an ECAM. Afer meeting
with sta and other paies over a period of approxiately four month, the Company
and the pares entered into a stipulation ageing to the tye of ECAM that would be
acceptable to all the paries. On June 29, 2009, the pares filed said ECAM Stipulation
with the Commssion.
5. On September 29, 2009, by Order No. 30904 issued in Case No. PAC-E-
08-08, the Commssion approved the implementation of an anua ECAM.
6. By agreement, the costs tht are to be included in the ECAM are net
power costs ("NPC") that ar defined in the Company's general rate cases and modeled
by the Company's production dispatch model GRI. Specifically, base and actu NPC
include amounts booked to the followig FERC accounts:
· Account 447 (sales for resale, excluding on-system wholesae sales and
other revenues not modeled in GRID),
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. Account 501 (fuel, stea generation, excluding fuel handling, sta up
fuel/gas, diesel fuel, residual disposal and other costs not modeled in
GRI),
. Account 503 (steam from other sources),
. Account 547 (fuel, other generation),
. Account 555 (purchased power, excluding BPA residential exchange
credit pass-though if applicable), and
. Account 565 (transmission of electrcity by others).
7. The ECAM allows the Compay to collect or credit the differences
between the actul NPC incured to serve customers in Idao and the NPC collected from
Idaho customers though rates set in general rate cases.
8. On a montWy basis, the Company compares the actu system net power
costs ("Actu NPC") to the net power costs embedded in rates from the most recent
genera rate cas ("Base NPC"), Case No. PAC-E-08-07, and defers the differences into
the ECAM balancing account. This comparson is on a system-wide basis and on a dollar
per megawatt-hour basis.
9. In addition to the comparson of Actu NPC to Base NPC, the ECAM
includes four additional components: the Load Growth Adjustment Rate ("LGAR"), a
credit for SOi allowance sales, an adjustment for the treatment of coal stpping costs,
and a renewable resource adder for renewable resources that are not yet in rate base.
These components ar described in more detal below.
10. Finally, the ECAM includes a symetrcal sharng band of 90 percent
(customers) / 10 percent (Company) tht shaes the NPC differential between Actual
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NPC and Base NPC, LGAR SOi sales, and the coal strpping costs adjustment between
the customers and the Company. The shang band is also described in more detal below.
11. On Februar 1, 2010, the Company fied an Application with the
Commission (Case No. PAC-E-I0-0l) seekig approval to recover approxiately $2.2
milion in deferred net power costs associated with the first ECAM deferral period of July
1,2009 to November 30, 2009. By Order No. 31033, the Commission approved recovery
of approximately $2.0 milion in defered net power costs thugh Schedule 94, Energy
Cost Adjustment, effective April 1,2010.
Proposed Deferred ECAM Rate Increase
12. In support of this Application, Rocky Mountain Power has filed the
testimony and exhbits of Company witness Hui Shu. Dr. Shu's testimony provides the
ECAM rate to be effective April 1, 2011 for the April 1, 2011 though March 31, 2012
period. Dr. Shu describes the Actu NPC incured by the Company to serve retal load
for the historical 12-month period ended November 30,2010.
13. In ths Application, Dr. Shu's Exhibit 1, par of which is confdential
("Exhbit 1 "), to her testimony ilustrtes the detaled calculation of the deferred NPC
adjustment. Staing with the base NPC in the amount of approximately $982 millon,
previously approved by the Commssion in its Order 30783, the Company taes the
montWy NPC from tht amount and divides it by the montWy normalized load used to
determe NPC to express the costs on a dollar per megawatt-hour basis (line 1 of
Exhibit 1). The actu NPC rate on a dollar per megawatt-hour basis is then calculated
by tang the monthly actu NPC and dividing it by the actual montWy system load (line
4 of Exhibit 1).
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14. Next, the deferr amount is calculated on a montWy basis by subtrting
the montWy base NPC rate from the actu NPC rate. Ths results in a montWy NPC rate
differential (line 5 of Exhibit 1) which is then multiplied by actu Idao rel load at
input, excluding the taff contrt load (lines 6 and 7 of Exhibit 1). This results in the
NPC differential for deferr (line 8 of Exhibit 1).
15. As described in Dr. Shu's testiony, the LGAR is a symetrca
adjustment to offset over or under collection of the Company's production related
revenue requiement, excluding NPC, due to varances in Idao load. Puuat to
Commission Order No. 30904, the Commssion-approved symetrcal LGAR is $17.48
per megawatt-hour. Dr. Shu's testimony describes how the LGAR adjustment was
derived. Line 12 of Exhibit 1 in Dr. Shu's testony ilustrates the LGAR adjustment
used in ths docket.
16. Under ths Application, credits for SOi allowance saes revenues received
by the Company from December 1, 2009 to November 30,2010 are included as an offset
to the NPC defer. Dr. Shu's testiony describes how the SÛi saes revenues were
offset against deferred NPC in this docket. Line 17 of Exhibit 1 in Dr. Shu's testiony
contas the total Company SOi sales revenues credited agait the deferrd NPC.
17. Though Order No. 30987 in the Company's Case No. PAC-E-09-08, the
Commission grted authorization of the Company's Application to defer costs
associated with coal mine strpping activities recorded under treatment prescrbed by the
Financial Accounting Stadads Board ("FASB") Emerging Issues Task Force stadad
04-6 ("EITF 04-6"). Based on this authorization~ the Company records to Other
Reguatory Assets the mie strpping costs and amorts the costs to fuel expense when
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coal is extracted and consumed. The Company has included an adjustment to reflect ths
tratment in the deferrd NPC on line 20 of Exhibit 1.
18. Line 21 of Exhibit 1 in Dr. Shu's testimony contai the ECAM deferral
that is the NPC differential for defer (line 8) plus the LGAR adjustment (line 12) plus
the S02 saes revenues (line 17) plus the coal strpping cost adjusent (line 20).
19. A shag band between customers and the Company is included such that
customers pay/receive the increase/decrease in Actu NPC when compared to Base
NPC, and the Company incur/retans the remaing 10 percent. The sharng bands also
apply to the SOi, LGAR and coal strpping cost adjustments. Line 23 of Exhibit 1 in Dr.
Shu's testimony reflects the customers' shar of these components.
20. As approved in Case No. P AC-E-08-08, the ECAM includes a renewable
resource adder which will contiue from the effective date of the ECAM to the effective
date of rates set in a general rate cae occurg subsequent to the 2008 rate case (Case
No. P AC-E-08-07). Investments in renewable generation facilties not included in rate
base in the 2008 rate case are included in the renewable resource adder until the effective
date of rates set in the 2010 rate case (Case No. PAC-E-10-07). The renewable resource
adder recognzes that the Company has made signficant investments in renewable
generation projects that were not included in rates effective durg the ECAM deferal
period, even though these projects provide signficant benefits to customers. Specifically,
the adjustment reognzes that actu NPC were reduced by power generated from these
renewable generation projects. Pusuat to Commssion Order No. 30904, the
Commssion approved a renewable resource adjustment of $55.00 per megawatt-hour
multiplied by the actu megawatt-hour output generated by the renewable resources tht
were not included in rate base in Case No. PAC-E-08-07. Lines 24 through 30 of
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Exhibit 1 in Dr. Shu's testimony include a detaled calculation of ths adjustment. Dr.
Shu's testimony also includes the renewable generation projec tht are included in the
renewable resoure adder in ths docket.
21. In addition to the ECAM caculation components discussed above, the
deferr balance reflects Schedule 94 revenues authorized in the 2010 ECAM, Case No.
PAC-E-I0-0l, which total approximately $1.3 milion from April 1, 2010 to November
30,2010 on lie 35 of Exhibit 1, as an offset to the deferred NPC. The Company has also
reflected interest chages on the montWy balances in the deferred NPC, as ilustrted on
line 37 of Exhibit 1.
22. The deferred ECAM balance of $13.6 millon as of November 30, 2010
(line 38 of Exhibit 1) is the sum of the components described above: 90% X (deferred
NPC + LGAR + SOi revenues+ coal strpping costs adjustment) + the renewable resource
adder + interest charges + under collection of 2010 ECAM deferr (described below).
Lines 32 though 38 of Exhibit 1 in Dr. Shu's testimony ilustrate the detaled
calculations that valdate ths balance. Approximtely $760,000 of ths balance represents
an under collection of the $2.0 milion ECAM deferr tht was approved in Case No.
PAC-E-lO-Ol and scheduled for recovery though Schedule 94 rates from April 1,2010
to March 31, 2011. The Company has subtracted ths amount from the $13.6 milion
November 2010 balance to calculate the $12.8 millon collecton proposed in ths
Application as it is expected tht the approximate $760,000 under collection will largely
be recovered through Schedule 94 rates from December i, 2010 to March 31, 201 1.
Based on customer loads assumed in the 2010 rate case (Case No. PAC-E-10-07),
Schedule 94 revenue at curent rates is expected to be approximtely $1.8 milion. Any
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over or under collections of the origial $2.0 millon deferr will be addressed in futu
ECAM filins.
23. Dr. Shu's testimony includes a more detailed explanation of (1) how the
Company calculated the Idao deferred ECAM, (2) the tyes of adjustments that were
made to Actu NPC durg the deferr period for ths Application, and (3) the priar
drvers tht caused Actu NPC to be different from Base NPC.
Allocation of Deferred ECAM to Retail Taris
24. Puuat to Schedule 94, the deferred ECAM balance is allocated to all
retal taff rate schedules based on delivery voltae levels adjusted for line losses as
established in the 2010 Idaho genera rate case. Dr. Shu's testiony describes in greater
detal the calculation of the proposed Schedule 94 rates. Exhibit 2 of Dr. Shu's testimony
ilustrtes the allocation of the deferred NPC price chage across rate schedules and the
biling determnants used for each rate Schedule. Exhibit 3 shows the proposed taff
Schedule 94.
25. Rocky Mounta Power is notifyng its customers of ths Application by
mean of a press release sent to local media organzations and messages in customer bils
over the course of a biling cycle. In addition, copies of ths Application will be made
available for review at the Company's local offces in its Idao servce terrtory.
26. WHREFORE, Rocky Mountain Power respectfly requests that the
Commission issue an order (1) authorizing that ths matter be processed by Modified
Procedure; (2) approve the ECAM deferred balance; and (3) implement the proposed
electrc service schedule 94 as fied in Exhibit 3.
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DATED ths 1st day of Febru 2011.
Respectfly submitted,
ROCKY MOUNTAI POWER
!(L~1- )ú( ~'k it /i/7i /
Mark C. Moench
Yvonne R. Hogle
201 South Main Street, Suite 2300
Salt Lake City, Uta 84111
Telephone No. [phone]
Facsimle No. [phone]
E-mail: yvonne.hogle(ßpacificorp.com
John R. Hamond, Jr., ISB No. 5470
Local Counel
BAIT FISHER PUSCH & ALDERMN, LLP
U S Ban Plaz 5th Floor
101 South Capitol Boulevard
P.O. Box 1308
Boise, Idaho 83701
Attorneys for Rocky Mountain Power
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