20110527Summary of Testimony.pdf

ROCKY MOUNAI POWER RECEIVEDSUMY OF TESTIMONY 281PAC-E-l1-12 · I HAY 27 AM 10: 30
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Rocky Mounta Power, a divìsion ofPacifiCorp, provides ths s~~¥~k~~öP~,,,,~."' '."""'lvCiI! ,.,'filed in support of its genera rate case application. Copies of the Company's filing are v, '~
available online at htt://ww.rockymountainpower.net/about/rar/iri.html#; click on
"News and Ino" and then select "Reguatory Inormation" and "Idao." Copies of the
filing may also be reviewed durg reguar business hour at the offces of the Idao
Public Utilties Commission in Boise and in these Rocky Mountan Power offces:
. 25 East Mai, Rexburg
. 509 South 200 East, Preston
. 852 East 1400 Nort, Shelley
. 24852 U.S. Highway 89, Montpelier
A. RICHA W ALJE
President, Rocky Mountain Power
Company President Walje provides an overvew of the Compay's justification for its
case, identifies the major capita investment the Company is makg to serve its
customers, as well as the cost control effort the Company is undertg to mimie
rate impact on customers. Mr. Walje testifies that the Company requires an increase to
revenues of $32.7 millon or a 15.0 percent average increase over Rocky Mountan
Power's curent rates to enable the Company to contiue to provide safe, reliable, and
low-priced electrc service to over 72,400 customers in Idaho.
Steven R. McDougal
Director, Revenue Requirement
Company witness McDougal provìdes testimony explaining the calculation of the
Company's Idaho revenue requirement and the rate relief requested by the Company
based on its cost of service. Specifically, Mr. McDougal addresses: (l) calculation of the
overall revenue increase requested by the Company to recover the cost incured to serve
Idaho customers; (2) the inter-jursdictional allocation of cost, including utilzation of
2010 Protocol and tratment of Idaho's Irgation Load Control Progr costs and other
Class 1 demand side mangement costs; (3) the test period proposed in this case,
includig the treatment of rate base and jursdictiona loads; (4) the results of operation
for the test period, demonstrating that under curnt rates the Company will ear an
overall retu on equity in Idao of 5.3%, which is signficantly below the retur on
equity requested in ths case and the curent authorized retu; and (5) calculation of the
Load Chage Adjustment Rate ("LCAR") based on costs in ths fiing for use in the
Energy Cost Adjustment Mechansm ("ECAM"). In addition, Mr. McDougal discusses a
number of items that were addressed by the Commssion in Case No. PAC-E-10-07 and
explais their tratment in ths cas. Finly, Mr. McDougal explais two accountig
chages included in the Company's fiing related to the elimation of captive insurance
coverage, and the accelerated depreciation of cert hydro generation facilties on the
Klamath river.
Bruce N. Williams
Vice President and Treasurer
Company witness Wiliams provìdes testimony concernng the Company's cost of debt,
preferred stock and capital strctue. Mr. Wiliam testifies in support of an overall cost
of capita of 8.25 percent, includg a common equity level of 52.3 percent.
Dr. Samuel C. Hadaway
Principal, FINANCO, Inc.
Dr. Hadaway testifies on behalf of Rocky Mountain Power regarding the rate of retu on
equity. Dr. Hadaway's anysis and revìew of recent interest rate increases and
projections for even higher interest rates durg the coming year, indicates the
appropriate retu on equity for RM is 10.5 percent.
Cathy S. Woollums
Senior Vice Presidnt of Environmental Services and Chief Environmental Counsel,
MidAmerican Energ Holdings Company
Company witness Woollums testfies in support of the prudence of the Company's
pollution control expenditus for coal-fired power generation plants and describes the
Company's processes to identify environmental policy and compliance drvers tht
infuenced the instalation of the emissions controls tht are subject to review in ths case.
Chad A. Teply
Vice President of Resource Development and Constructin, PacifCorp Energy
Company witness Teply provìdes testiony supportng the pruence of capital
investments in pollution control equipment, generation plant, and hydro projects being
placed in servce durng the test period. In addition, Mr. Teply support the prudence of
incrementa generation operations and maitenance costs associated with cer new
resources, new pollution control equipment, and other generation fleet operationa
changes impacting ths case.
Darrell T. Gerrard
Vice President of Transmision System Planing
Company witness Gerrard provìdes testimony explaing and supporting the major
capita investments in the Company's trsmission grd. He explai the primar drvers
creating the need for these projects, and describes the benefits to customers and the
electrcal system overalL. Mr. Gerrard also provides additiona inormation supportng
rate recovery of all of the Populus to Termal transmission line.
Gregory N. Duvall
Director, Long Range Planning and Net Power Costs,
Company witness Duvall presents the Company's proposed net power costs ("NPC") for
the test period. He describes the major cost drvers in the test period NPC and addresses
the specific issues related to the GRID model described in the Commssion order in the
Company's 2010 general rate case.
Cindy A. Crane,
Vice President, Interwest Mining Company and Fuel Resources, PacifCorp Energy
Company witness Crae provides testimony explaining the Company's overall approach
to providing the coal supply for the Company's coal plants. Specifically, Ms. Crae will
discuss the coal cost increases reflected in the test period and descbes the primar
reasons for the increaes and provide inormation on the thrd-par coal contrct
revisions tht are drving the majority of the increase in coal costs in ths case. In
addition, Ms. Crae reviews the Company's afliate mine coal costs and compares them
to other supply alternatives, and reviews the Company's fuel stock levels incorporated in
ths test period.
Erich D. Wilon
Director, Human Resources,
Company witness Wilson provìdes an overvew of the compensation and benefit plans
provided to Company employees and supports the costs related to these aras included in
the test period. Mr. Wilson's testiony also provides an overview of the Company's
bas pay, anual incentive, pension and healthcare benefit plans, and explains how these
plans are designed to allow the Company to attact and reta the employee taent
necessar to deliver sae and reliable service at a reasonable cost. Mr. Wilson also
describes the cost control efforts of the Company to control wage and benefit expenses
which have produced a seven percent reduction in tota compenstion expense since
2006.
Paul H. Clements
OriginatorlPower Marketer, PacifCorp Energy,
Company witness Clements provides testimony sumarzing the statu of the Company's
effors to enter into a long-term contract with Monsanto for curlment products and
offers an update to the curilment valuation basd on curent conditions utilzing the
Commssion approved methods from the 2010 general rate case.
Barbara A. Coughli
Director of Customer and Regulatory Liaison
Company witness Coughin provìdes testimony describing the progress the Company has
made working with Commssion staff on the miscellaneous consumer and customer
sece issues and present the Company's position on low income weatherization
assistace, as directed by the Commssion in Order No. 32224.
C. Craig Paice,
Regulatory Consultant in Pring and Cost of Service,
Company witness Paice provides testony explaig the Company's class cost of
service study used to allocate costs in the case.
Willam R. Griffth
Director of Pring and Cost of Service
Company witness Grffth provides testimony supporting the Company's rate spread and
rate design proposals. Mr. Grffth recommends that the Commssion increase the curent
Monthy Customer Service Chage for Residential - Schedule 1 service by $1.00 frm
$5.00 to $6.00. Rocky Mounta Power proposes the followig allocation of the net price
increase for major customer classes:
Customer Class
Residential- Schedule 1
Residential- Schedule 36
General Service
Schedule 23/23A
Schedule 6/6A
Schedule 9
Schedule 19
Irgation
Schedule 10
Special Contracts
Schedule 400
Schedule 401
Public Street Lightig
Schedules 7/7 A, 1 1, 12
Tota Overall Increas
Proposed Price Chae
7.2%
15.9%
11.8%
10.8%
11.2%
9.7%
19.9%
18.7%
19.9%
0%
15.0%