20110217notice_of_application_order_no_32187.pdf

Office of the Secretary
Service Date
February 17 2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF P ACIFICORP DBA ROCKY MOUNTAIN CASE NO. PAC-11-
POWER FOR AUTHORITY TO INCREASE
RATES BY $11.0 MILLION TO RECOVER NOTICE OF APPLICATION
DEFERRED NET POWER COSTS
THROUGH THE ENERGY COST NOTICE OF
ADJUSTMENT MECHANISM (ECAM)MODIFIED PROCEDURE
ORDER NO. 32187
On February 1 , 2011 , PacifiCorp dba Rocky Mountain Power filed an Application for
authority to recover its deferred net power costs pursuant to the Energy Cost Adjustment
Mechanism (ECAM) approved in Order No. 30904 (Sept. 2009). The ECAM is designed to
annually adjust Rocky Mountain s rates upward or downward to reflect the difference between the
Company s actual power supply costs and those costs embedded in base rates. Rocky Mountain
actual costs of providing electric service (its "power supply costs ) vary from year to year
depending on the Company s fuel (gas and coal) costs, the surplus power sales, the power
purchases, and the market price of power. In this Application, the Company is proposing to recover
an additional $11 million in deferred net power costs starting April 1 , 2011 , and ending March 31
2012. The energy cost adjustment rates are contained in service Schedule No. 94. Rocky Mountain
requested that this Application be processed by Modified Procedure.
BACKGROUND
A. The ECAM
YOU ARE HEREBY NOTIFIED that the ECAM is designed to recover all components
of net power costs as traditionally defined in the Company s general rate cases and modeled in its
production dispatch model GRID. The ECAM is calculated to collect or credit the accumulated
difference between total Company base net power costs ("Base NPC") and the total Company
actual net power costs ("Actual NPC") incurred to serve customers in Idaho calculated on a cents-
per-kilowatt-hour basis. In this case the Company requests authority to recover its net power costs
for the deferred period December 1 , 2009 to November 30, 2010. Application at 1. The annual
ECAM surcharge or credit is combined with the Company s base rates to produce a customer
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32187
overall energy rate. The ECAM rate adjustment is applicable to all customer classes excluding
tariff contract customers (Monsanto Company and Agrium, Inc.
YOU ARE FURTHER NOTIFIED that the ECAM rate component is in effect for one
year, usually from April 1 through March 31 of the following calendar year. The mechanism
addresses only power cost expenses and does not include any costs associated with fixed-cost
recovery, i., capital investment in rate base. Specifically, base and actual NPC will include costs
typically booked to the following Federal Energy Regulatory Commission (FERC) accounts:
Account 447 - Sales for resale, excluding on-system wholesale sales and other
revenues that are not modeled in GRID.
Account 501 - Fuel , steam generation, excluding fuel handling, start-up
fuel/gas 2 diesel fuel, residual disposal and other costs that are not modeled in
GRID.
Account 503 - Steam from other sources.
Account 547 - Fuel, other generation.
Account 555 - Purchased power, excluding BP A residential exchange credit
pass-through, if applicable.
Account 565 - Transmission of electricity by others (wheeling).
In addition to the comparison between actual NPC to base NPC , the ECAM includes
four additional components: (1) the load growth adjustment rate (LGAR); (2) a credit for the sale of
SO2 emission credits; (3) an adjustment for coal stripping costs; and (4) a renewable resource adder
for renewable resources not yet in rate base.
YOU ARE FURTHER NOTIFIED that under the ECAM , the Company and its
ratepayers share the differences between the actual NPC and base NPC, SO2 sales, and LGAR
revenues. The sharing percentage is 90% for ratepayers and 10% for the Company. In good years
Rocky Mountain s Idaho customers are credited with 90% of the below normal cost savings. In
high cost years, Idaho customers pay 90% of the Company s abnormal power supply costs. In last
I Tariff contract loads (Monsanto and Agrium) are not subject to any ECAM surcharges/credits until January I , 20 II.
Order No. 30482 (Case No. PAC-07-05).
2 Start-up fuel is accounted for separately from the primary fuel for steam-powered generation plants. Start-up costs are
not accounted for separately for natural gas plants, and therefore all fuel for natural gas plants is included in the
determination of both base NPC and actual NPc.
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NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32187
year s ECAM case, the Commission approved recovery of approximately $2.0 million in deferred
net power costs for the first ECAM deferral period from July 1 2009 to November 30 2009. Order
No. 31033.
B. The Current Application
YOU ARE FURTHER NOTIFIED that the current Application represents an increase of
$11.0 million over the Schedule 94 ECAM rates currently in effect. Application at 2. The current
Application would recover the deferred power supply costs for the 12-month period ending
November 30 2010. Application at ~ 12. As shown below, the Company is requesting authority to
recover a total of $12.8 million (existing $1.8 million + $11 million increase).
YOU ARE FURTHER NOTIFIED that the ECAM includes a deferral for renewable
resources that recognizes the Company s investments in renewable generation projects that are not
yet being recovered in Idaho rates, even though these projects provide significant benefits to
customers. Specifically, the adjustment recognizes that actual NPC were reduced by power
generated from these renewable generation projects.3 Pursuant to Commission Order No. 30904
the Commission approved a renewable resource adjustment of $55 per megawatt-hour (MWh)
multiplied by the actual MWh output generated by the renewable resources that were not included
in rate base in Case No. PAC-08-07. Id. at ~ 20.
YOU ARE FURTHER NOTIFIED that the components making up the deferred ECAM
balance are reflected in the following table:
NPC Differential for Deferral
LGAR
SO2 Credit
EITF 04-6 Adjustment
Total
$ 6 073 522
286 046
(93 906)
(108,588)
$11 157 074
90%
$10 041 366
696 763
760 036
61,885
$13 560 051
(760,036)
$12 800 015
Customer Responsibility
Renewable Resource Adder
Unamortized Previous Balance
Interest
November 2010 Deferral Balance
Less ECAM Balance
Proposed ECAM Recovery
Source: Dir. Testimony at 10.
3 The renewable wind resources included in this Application are: Glenrock; Glenrock II; Seven Mile; Seven Mile
II;Rolling Hills; High Plains; McFadden Ridge; and Dunlap. Dir. Testimony at 8.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32187
YOU ARE FURTHER NOTIFIED that the Company calculates that the change in
ECAM rates in Schedule 94 , if approved, will result in an overall increase of 7.4% or $11 million
for the ECAM year (April 1 , 2011 through March 31 , 2012). The ECAM will increase the
following rates schedules:
Residential Customers (Schedule 1) - a 6.1% increase, i., approximately $5.
per month for the average residential home using 839 kWh per month.
Residential Time-of-Day (Schedule 36): 7.
Irrigation Customers (Schedule 10): 7.
General Service
Schedule 23/23A: 7.1 %
Schedule 6/6A: 8.
Time-of-Day (Schedule 35): 11.
High Voltage (Schedule 9): 10.
Commercial/Industrial (Schedule 19): 8.
Public Street Lighting (Schedules 717A , 12): 2.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and will proceed under Modified Procedure
pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission s Rules of Procedure
IDAPA 31.01.01.201 through .204. The Commission notes that Modified Procedure and written
comments have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission no later
than March 16.2011 The comment must contain a statement of reasons supporting the comment.
Persons desiring a hearing must specifically request a hearing in their written comments. Written
comments concerning this Application shall be mailed to the Commission and the Applicant at the
addresses reflected below:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32187
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
201 S. Main, Suite 2300
Salt Lake City, UT 84111
E-mail: ted.weston~pacificorp.com
472 W. Washington Street
Boise, ID 83702-5918
Yvonne R. Hogle
Senior Counsel
Rocky Mountain Power
201 S. Main, Suite 2300
Salt Lake City, UT 84111
E-mail: Yvonne.hogle~pacificorp.com
All comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.idaho.gov Click the "Comments and Questions
icon and complete the comment form using the case number as it appears on the front of this
document. These comments must also be sent to PacifiCorp at the e-mail addresses listed above.
YOU ARE FURTHER NOTIFIED that the deadline for the Company to file reply
comments is March 23, 2011.
YOU ARE FURTHER NOTIFIED that the Application, prefile testimony and exhibits
may be viewed at www.puc.idaho.gov by clicking on "File Room" and "Electric Cases " and then
click on the case number of this case. The document in this case may also be viewed during regular
business hours at the Idaho Public Utilities Commission, 472 W. Washington Street, Boise, Idaho
and at the Idaho offices of PacifiCorp dba Rocky Mountain Power, located in Rexburg, Preston
Shelley and Montpelier, Idaho.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the deadline, the Commission may consider the matter on its merits and may enter its Order
without a formal hearing. If comments or protests are filed within the deadline, the Commission
will consider them and in its discretion may set the matter for hearing or may decide the matter and
issue its Order based on the written positions before it. IDAP A 31.01.01.204.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held pursuant
to the Commission s jurisdiction under Title 61 of the Idaho Code and specifically Idaho Code
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32187
61-307 61-503 61-524, and 61-622. The Commission may enter any final Order consistent with its
authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that the Commission Staff will convene a public
workshop for the purpose of dispensing information about the case and advising customers how to
participate in the case. The schedule for the public workshop will be issued in a separate document.
YOU ARE FURTHER NOTIFIED that on February 1 2011 , PacifiCorp filed a Motion
for Limited Admission of Yvonne R. Hogle pursuant to Bar Commission Rule 227 and Commission
Rule 43.05. The Motion certifies that Ms. Hogle is an active member in good standing with the
Utah Bar and that she maintains a regular practice of law at Rocky Mountain Power. The Motion
states that local counsel for the Company in this matter is John R. Hammond, Jr., Fisher Pusche &
Alderman, LLP.
Based upon our review of the Motion, we find that reasonable grounds have been
provided to grant limited admission to Ms. Hogle to represent PacifiCorp in this matter. We further
find there is good reason to excuse the appearance of Mr. Hammond in this proceeding unless
needed by Rocky Mountain Power.
ORDER
IT IS HEREBY ORDERED that this matter be processed under Modified Procedure.
Persons desiring to comment on PacifiCorp s Application shall file written comments with the
Commission by March 16, 2011. If necessary, PacifiCorp may file reply comments by March 23
2011.
IT IS FURTHER ORDERED that the Motion for Limited Admission is granted.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32187
DONE by Order ofthe Idaho Public Utilities Commission at Boise, Idaho this /7-f1o.
day of February 2011.
Qff. ~4. KEMPTON, P IDENT
ir~
MARSHA H. SMITH , COMMISSIONER
ATTEST:
tI f(f-P1D. Jewel
Commission Secretary
bls/O:PAC-II-07 dh
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32187