20110323Reply Comments.pdf

~~~OUNTAIN RECEI r:
201 South Main, Suite 2300
2UII MAR 23 AM 9: 59 Salt Lake Cit, Utah 84111
March 23, 2011
VI OVERNIGHT DELIVRY
Jean D. Jewell
Commssion Secreta
Idaho Public Utilities Commssion
472 W. Washigton
Boise, ID 83702
Re: Case No. PAC-E-1 1-07
In the Matter of the Application of Rocky Mountain Power for Authority to Increase
Rates by $ 11.0 Milion to Recover Deferred Net Power Costs Thugh the Energy Cost
Adjustment Mechansm
Dear Ms. Jewell:
Please fmd enclosed Rocky Mountan Power's reply comments in the above referenced matter.
Informal inquiries may be diected to Ted Weston, Idaho Reguatory Manger at (801) 220-
2963.
Very try your,
~(LaM/~
Jeffey K. Laren
Vice President, Regulation
Enclosures
Mark C. Moench
Danel E. Solander
Rocky Mountan Power
201 S. Mai St., Suite 2300
Salt Lake City, UT 8411 1
Telephone: [phone]
Fax: [phone]
RECEIVED
lOll MAR 23 AM 9: 59
Attorneys for Rocky Mounta Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMSSION
IN THE MATTER OF THE )
APPLICATION OF PACIFICORP DBA ) CASE NO. PAC-E-11-07
ROCKY MOUNTIAN POWER FOR )
AUTHORITY TO INCREASE RATES BY )
$11.0 MILION TO RECOVER ) REPLY COMMENTS OF
DEFERRD NET POWER COSTS ) ROCKY MOUNTAI POWER
THROUGH THE ENERGY COST )
ADJUSTMENT MECHASM (ECAM. )
COMES NOW PacifiCorp dba Rocky Mountain Power ("RM" or the
"Company") and pursuat to Rules 56 and 256 of the rues of Procedure of the Idao
Public Utility Commssion (the "Commssion"), submits comments in the above
referenced case.
Backgound
On Febru 1,2011 the Company filed an Application for authority to recover its
2010 deferred net power costs pursuat to the Energy Cost Adjustment Mechasm
(ECAM. In the Application the Company requested authority to recover an additional
$ 1 1 milion in deferred net power costs ("NPC") above the curent collection rate for a
tota of$12.8 millon, staring April 1,2011 though March 31,2012 though the energy
cost adjustment rates contaed in service Schedule No. 94.
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On March 16, 2011 the Commission sta (the "Sta') fied comments on ths
Application. Sta s audit of the Application confrmed that the amount requested by the
Company was appropriate and accurtely reflected the actu NPC incured by the
Company to serve its retail customers.
Whle the Company's Application requested reovery of the NPC deferral over a
twelve-month period Stas comments propose amortizing the Load Growt Adjustment
("LOA") porton of the Application over a two-year period with interest.
Comments
The Company does not object to Stas recommendation to amortize the LOA
component of the ECAM deferral over a two-year period with the followig comments.
First, the Company agrees with Sta that the Commssion's recent Order No. 32206
(March 2011), which reduced the LOAR will mitigate the futue impact of the LOAR /
LCAR. Second, the renewable resource adder will not be included in the ECAM in the
futue, which made up approximately 21 percent of the curent balance. The
Commssion's Order No. 32196 (Febru 2011), included these resources in bas rates
thereby elimnating the need to included them in the ECAM in the futue. Finally, Staffs
proposal if approved by the Commssion will increase the recovery level ofNPC though
the ECAM rider, Schedule No. 94, to approximtely $12.2 milion ($1.8 milion from
2009 plus the $10.4 for 2010) above base rates.
Whle the Company appreciates Stas concern and effort to mitigate price
increases pushing additional costs into futue periods ru the risk of only compounding
similar increases next year. The Company points to the actul NPC in ths Application
for 2010 of$1.172 bilion compard to the recently approved base net power costs (Order
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No. 32196) of $1.023 bilion. Based on the Company's recently filed general rate case in
Wyoming, 2011 NPC are expected to be approxiately $1.377 bilion, an increase of
$354 millon over base rates. On a dollar per MWh bais there is a $5.20 per MW
difference, ($17.82 per MWh compared to $23.02 per MWh), which equates to an Idao
allocated increase of approximately $19 millon in NPC above base rates. If the
Commission approves Stas recommended chage to Schedule No. 94 approxiately
$10.4 milion a year will be collected through Schedule No. 94. Durg 2012 ifNPC are
in line with the Company's estite Schedule No. 94 would need to be increased to
collect approximately $9 millon for increased NPC, plus the $2 millon LGA deferral,
plus associated interest. Second, in Order No. 32196 (Febru 2011), the Commission
approved a dollar for dollar trackig of renewable energy credit ("REC") revenues and
set the base at $92 millon. The Company does not expect to match ths level of RBC
sales in the futue which will also add upward pressure on next year's application. The
Company's only intent of providing ths information is to inorm the Commssion that it
expects NPC to increase signficantly durng the 2011 deferr penod.
Stas comments recommended that the second year's amortiztion of the LGA
be cared in the deferral balance with interest for futue recovery. However, their
recommendation was not specific what interest rate should be applied. The Company
assumes Stas intention was to apply the Commssion approved customer deposit rate.
Curently the Commssion approved customer deposit interest rate is one percent.
Typically the Company would object to such a low carng charge. However for ths
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limited sitution the Company does not object to Staffs recommendation to alortiziRe
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LGA over two-years with interest at the customer deposit rate. ,~~;~~: ~
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Conclusion
WHEREFORE, Rocky Mountain Power requests tht:
· (1) the Commssion approve the ECAM rates as proposed by Staf to collect
approximately $10,421,294; and
· (2) the Commssion approve the customer deposit rate as the appropriate interest
rate to be applied to $2,378,721 deferral of the LOA; and
· (3) the Commssion order that the $2,378,721 deferral plus interest and any over
or under recovery of the $10,421,294 frm the 2010 deferal will be collected
from the Company's retal customers excludig the load served on taff contrts
for Monsanto Company and Agrum, Inc.
DATED ths 23rd day of March, 2011.
ìlMl r: YJ~1 ~
Mark C. Moench
Danel E. Solander
Attorneys for
Rocky Mounta Power
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