20111109notice_of_proposed_settlement_order_no_32399.pdf

Office of the Secretary
Service Date
November 9,2011
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF PAC1FICORP,DBA ROCKY MOUNTAIN )CASE NO.PAC-E-1l-12
POWER,FOR APPROVAL OF CHANGES )
TO ITS ELECTRIC SERVICE SCHEDULES )NOTICE OF
)PROPOSED SETTLEMENT
)
)NOTICE OF PUBLIC HEARINGS
)
_________________________________
)ORDER NO.32399
On May 27,2011,PacifiCorp dba Rocky Mountain Power (“Rocky Mountain Power”
or “Company”)filed an Application with the Commission seeking approval to increase its rates
for electric service to its retail customers in Idaho by approximately $32.7 million,or an overall
average rate increase of 15%.
On June 8,2011,the Commission issued a Notice of Application and Notice of
Intervention Deadline and suspended the rates and schedules for electric service filed by Rocky
Mountain Power in Case No.PAC-E-11-12 for a period of thirty (30)days plus five (5)months
from June 27,2011,or until such time as the Commission enters an Order accepting,rejecting or
modifying the Company’s Application.See Order No.32263.Subsequently,the following
parties formally requested and were granted intervention by the Commission:Monsanto
Company;Idaho Irrigation Pumpers Association,Inc.;PacifiCorp Idaho Industrial Customers;
Community Action Partnership Association of Idaho;and Idaho Conservation League.
On August 3,2011,the Commission issued a Notice of Schedule and Notice of
Technical Hearing that included a settlement conference.See Order No.32309.Thereafter,all
of the parties participated in settlement conferences on August 23,2011 and September 22,2011.
Following the settlement conferences,all of the parties,’except CAPAT,entered into a
Stipulation that proposes to settle nearly all of the issues in the rate case.On October 18,2011,
Rocky Mountain Power filed the Stipulation and exhibits with the Commission.
On October 14,2011,ICL filed a Notice of Withdrawal from the instant case.Accordingly,ICL is not a signatory
to the Stipulation.
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF PUBLIC HEARINGS
ORDERNO.32399 1
On November 2,2011,the Company and Staff filed testimony in support of the
Stipulation.
NOTICE OF PROPOSED SETTLEMENT
The following is a summary of the substantive terms included in the redacted
settlement filed by the Company and signed by all the Parties except CAPAI:
1.A two-year rate plan with annual rate increases of $17 million per year,
resulting in an overall average annual revenue increase of approximately
7.8 percent in 2012 and 7.2 percent in 2013.The first increase to base
rates will occur January 1.2012.The second increase to base rates will
occur January 1,2013.The Company will make a compliance filing on
November 1,2012 to implement the second year increase of $17 million
effective January 1,2013 and will include revised tariffs.
2.The Settlement is a ‘black box”settlement.with no agreement or
acceptance by the Parties of any specific revenue requirement adjustments,
cost allocation or cost of service methodology.The Parties agree that the
starting point of the Stipulation was to accept all Commission ordered
adjustments from Case No.PAC-E-10-07.Order No.32196.
Power Costs
3.The Parties agree that based on the revenue requirement split specified in
paragraph 1,net power costs in base rates will increase from the current
level of$l.025 billion to $1.205 billion in 2012 and from $l.205 billon to
$l.385 billion in 2013.These amounts will become the total Company
base net power costs for tracking in the Company’s energy cost
adjustment mechanism (“ECAM”).
4.The Parties agree that $78.8 million,on a total Company basis,or
$6,526,622 allocated to Idaho (RMP Exhibit 2 page 3.5)of renewable
energy certificate (“REC”)revenue is included in rates in 2012 and 2013.
The Idaho-allocated amount will become the base for purposes of tracking
at 100 percent in the Company’s ECAM mechanism.
5.The Parties agree to update the Idaho load in the 2012 ECAM load change
adjustment revenue (“LCAR”)calculation to the 2010 actual load included
in PAC-E-1 1-12 for the 2012 ECAM deferral calculation and use 2011
actual load reported in the Annual Results of Operations Report for the
2013 ECAM deferral calculation.The LCAR unit value would be frozen
over the rate plan period at the current rate of $5.47 per MWh,pursuant to
Commission Order in Case No.PAC-E-l0--07.
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF PUBLIC HEARINGS
ORDER NO.32399
6.The Parties agree that the Company shall amortize and collect Agrium and
Monsanto’s share of Commission-approved ECAM balances,which
includes deferred net power costs,deferred RECs.LCAR adjustments and
other ECAM components.including the irrigation load control credit as
specified in paragraph 10.over the tbllowing periods:
(a)The 2012 ECAM balance (2011 deferrals)over a period of three
years;
(b)The 2013 ECAM balance (2012 deferrals)over a period of three
years:
(c)The 2014 ECAM balance (2013 deferrals)over a period of two
years;
(d)Beginning with the 2015 ECAM balance (2014 deferrals).
Monsanto and Agrium will pay new ECAM costs based on a 12-
month collection period.
Any over-collection or under-collection at the end of the
amortization periods identified in paragraphs 6(a)though 6(c)
above will be trued up for each contract customer and refunded or
collected as part of a subsequent ECAM collection period from
these contract customers and not from other retail customers.All
other customers will continue to pay ECAM changes on the 12-
month collection period as they currently do during the rate plan.
7.The Parties agree that Idaho’s share of the customer load control service
credit will be tracked in the ECAM.The Parties agree that $1,045,423
(RMP Exhibit 2 page 4.4.1)is Idaho’s base amount to be tracked in the
ECAM for 2012 and 2013.
Rate Spread and Rate Design
8.The rate spread,based upon $17 million in annual increases for 2012 and
2013,is described in detail in Attachment ito the Stipulation.
9.The Parties agree that the design of rates by rate schedule (rate design)
shall be consistent with the Company’s proposals filed in its Application
and adjusted for the revenue requirement specified in this Stipulation.See
Stipulation,Attachment 2.
10.The Parties agree that the Company’s residential customer service charge
for Schedule 1 and 36 will remain at $5.00 per month and $14.00 per
month,respectively,during the time period covered by the Stipulation.
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ORDER NO.32399
Other Items
11.The Parties agree that the value of Monsanto’s curtailment products will
be increased from $[redactedj million in 2011,to $[redactedj million in
2012,and $[redacted]million in 2013.Monsanto and the Company will
execute a new energy service agreement for 2012 and 2013 in order to
reflect the terms of the Stipulation.
12.The Parties agree that this Stipulation does not change or alter the
irrigation load control service credit in 2012 or prior agreements
governing the irrigation load control program that require the irrigation
load control service credit to be renegotiated for the 2013 season and
beyond.
13.The portion of the Populus to Terminal transmission line determined by
the Commission in Case No.PAC-E-10-07 to be plant held for future use
(PHFU)is now used and useful.The Parties agree that the Commission
should make a specific finding that the entire Populus to Terminal
transmission line is now used and useful.The portion of the transmission
line deemed PHFU in Case No.PAC-E-10-07 shall not be included in
rates until on or after January 1,2014.As called for in the Stipulation,
Staff and the Company have filed a Joint Motion to Suspend the Appeal
now pending in the Idaho Supreme Court,Docket No.38930-2011.Upon
receipt of a final Order from the Commission approving the Stipulation,
the Company agrees that it will,within 10 days thereof,file a stipulation
for dismissal of the appeal with each party to bear its own costs.
14.The Parties agree that the Company will continue to defer the depreciation
expense associated with the Populus to Terminal transmission line,
pursuant to Order No.32224,until it is included in rates on January 1,
2014,and that the accumulated deferral balance will be amortized over
three years from the date the costs are included in rates.
15.The Parties agree that the Company will work with the Parties to establish
hedging limits consistent with workgroup processes established in Utah
and Oregon for costs beginning January 1,2013,and forward.
16.The Parties agree that,in recognition of the two-year rate plan covered by
this Stipulation,Rocky Mountain Power will not file another general rate
case before May 31,2013,with new rates not effective prior to January 1,
2014.Rocky Mountain Power will continue to file annual Results of
Operations Reports with the Commission to enable the Commission to
ensure that rates during the two-year rate plan continue to be just and
reasonable.This Stipulation does not prohibit the Company from revising
rates due to the ECAM,which will still occur April 1 each year.
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NOTICE OF PUBLIC HEARINGS
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NOTICE OF PUBLIC HEARINGS
YOU ARE FURTHER NOTIFIED that the Commission has decided to convene three
public hearings in this case.The Commission will hold a public hearing for Rocky Mountain
Power customers on WEDNESDAY,DECEMBER 7,2011,AT 7:00 P.M.,DOWNEY
SENIOR CITIZENS CENTER,21 S.MAIN STREET,DOWNEY,IDAHO.The purpose of
the public hearing is for the Commission to take the formal testimony of customers and
interested members of the public.Testimony will be recorded and made part of the
Commission’s formal record.The Company’s customers and interested members of the public
are encouraged to attend and give testimony.
YOU ARE FURTHER NOTIFIED that the Commission will hold a public hearing
for Rocky Mountain Power customers on THURSDAY,DECEMBER 8,2011,AT 7:00 P.M.,
FREMONT COUNTY ANNEX ROOM,125 N.BRIDGE STREET,ST.ANTHONY,
IDAHO.The purpose of the public hearing is for the Commission to take the formal testimony
of customers and interested members of the public.Testimony will be recorded and made part of
the Commission’s formal record.The Company’s customers and interested members of the
public are encouraged to attend and give testimony.
YOU ARE HEREBY NOTIFIED that the Commission will hold a telephonic public
hearing for Rocky Mountain Power customers on MONDAY,DECEMBER 19,2011,AT 7:00
P.M.,IDAHO PUBLIC UTILITIES COMMISSION HEARING ROOM,472 W.
WASHINGTON STREET,BOISE,IDAHO.The purpose of the public hearing is for the
Commission to take the formal testimony of customers and interested members of the public.
Testimony will be recorded and made part of the Commission’s formal record.The Company’s
customers and interested members of the public are encouraged to participate and give
testimony.
YOU ARE FURTHER NOTIFIED that persons wishing to offer testimony
telephonically or listen to the proceedings may dial the following toll-free number:(1-800-920-
7487)followed by the Participant Code-(76373262#).The telephonic hearing will be held in
the following manner:
•All participants will be able to hear the proceeding;
•A participant’s phone will be automatically muted except when testifying;
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF PUBLIC HEARINGS
ORDERNO.32399 5
•If you would like to testify,press *I (star one)on your phone key pad.
This will sign you up (put you in the queue)to testify;
•When it is your turn to testify,you will hear the prompt “ask your
question.”At that time,you will be sworn in,asked to state your full
name,spell your last name,and give your full address;
•When you testify please be sure to eliminate any background noise,such
as the TV,radio,etc.,in order that your testimony can be heard clearly and
recorded by the court reporter.At the conclusion of your testimony you
may be asked questions;
•If at any time after you sign up to testify,you decide that you do not want
to testify,simply push the #(pound)key on your phone and you will be
taken (out of the queue)off the list to testify.
YOU ARE FURTHER NOTIFIED that the aforementioned telephonic hearing is in
addition to the previously scheduled on-site public hearings occurring on December 7-8,
2011,in the Idaho cities of Downey and St.Anthony.Those hearings will continue to be held.
The Commission has made the telephonic hearing option available to Rocky Mountain customers
who wish to offer testimony regarding Rocky Mountain’s Application but were unable to do so
at the December 7 and December 8 public hearings.
YOU ARE FURTHER NOTIFIED that the Stipulation and the Company’s
Application,together with supporting workpapers.testimonies and exhibits,in Case No.PAC-E
11-12 have been filed with the Commission and are available for public inspection during regular
business hours at the Commission offices,472 W.Washington Street,Boise,Idaho.The
Company’s Application may also be viewed on the Commission’s web site,vvw.puc.idaho.gov
by clicking on “File Room”and then “Electric Cases”under the corresponding case number.
PAC-E-11-12,for this proceeding.
YOU ARE FURTHER NOTIFIED that the Commission is not bound by any
settlement reached by the parties.The Commission will independently review any proposed
settlement to determine whether the settlement is just,fair and reasonable,and in the public
interest,or otherwise in accordance with law or regulatory policy.The Commission may accept
the settlement,reject the settlement,or state additional conditions under which the settlement
will be accepted.IDAPA 31.01.01.274-.276.
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YOU ARE FURTHER NOTIFIED that all hearings in this matter will be held in
facilities meeting the accessibility requirements of the Americans with Disabilities Act (ADA).
Persons needing the help of a sign language interpreter or other assistance in order to participate
in or to understand testimony and argument at a public hearing may ask the Commission to
provide a sign language interpreter or other assistance at the hearing.The request for assistance
must be received at least five (5)working days before the hearing by contacting the Commission
Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
P0 BOX 83720
BOISE,IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
E-mail:secretary(puc.idaho.gov
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 that 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 3 1.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that public hearings in the instant case shall be convened
on the dates and times described above.
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ORDERNO.32399 7
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this L71
day of November 2011.
PAUL KJELLA1 ,PRESIDENT
)
\4 I
MACK A.REDFO,1!COIS{MISSIONER
kL d
ARSHA H.SMITH,COMMISSIONER
ATTEST:
Jçn D.Jewe11
Commission Secretary
O:PAC-E-II 1 2np4 Settlement
NOTICE OF PROPOSED SETTLEMENT
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ORDERNO.32399 8