20120629final_order_no_32583.pdf

Office of the Secretary
Service Date
June 29,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF PACIFICORP DBA ROCKY MOUNTAiN )CASE NO.PAC-E-12-02
POWER FOR MODIFICATIONS TO THE )
SERVICE AND PERFORMANCE QUALITY )
REPORTPG STANDARDS )ORDER NO.32583
________
)
On January 23,2012,PacifiCorp dba Rocky Mountain Power (Rocky Mountain)filed
an Application requesting authorization to modify the Company’s performance standards
program.including a customer guarantee provision.The performance standards program was
implemented as part of the merger between ScottishPower and PacifiCorp.The Company
committed to a fiveyear term for the program beginning February 29.2000.The program was
voluntarily extended in 2005.and later was extended through December 31,2011,by Order No.
29998.In the Commission’s final Order No.32432 entered in Rocky Mountain’s 2011 general
rate case,the Commission ordered the Company to continue its service performance and quality
reporting requirements.
On February 15.2012.the Commission issued a Notice of Application and iotice of
Modified Procedure establishing a comment period through March 12,2012,on Rocky
Mountains Application.Thereafter,Commission Staff and the Company discussed changes to
the standards.As a result,on March 5.2012,Rocky Mountain filed an erratum identifying
significant changes to the matrix attached to the Company’s Application.On March 8,2012,
Staff filed a Motion to vacate the March 12,2012 comment deadline,stating that Staff and the
Company will recommend a new process or comment deadline for the Commission to complete
its review of the Company’s Application.The Commission granted Staffs Motion and vacated
the March 12,2012 date for filing comments.Order No.32484.
On May 11.2012,Rocky 1ountain filed an Amended Application,proposing no
changes to the Customer Guarantees and Customer Service Performance Standards,and
requesting Commission approval of modifications to Network Performance Standards 1,2,and
3.Network Performance Standards I and 2 are based on improving controllable distribution
outage events.The Company proposed modifications to these standards to “re-establish baseline
performance targets from the current controllable distribution outage events to reporting
ORDER NO.32583 1
reliability performance based on underlying distribution events.”Amended Application.p.4.
The Company contends that targets based on underlying distribution events better represent the
overall outages customers experience,align better to the normal day-to-day reliability
performance of the distribution system.and provide a consistent view of the performance of the
system to evaluate trends.Id.
For Network Performance Standard 3.the Company proposes to target under-
performing areas of concern instead of under-performing circuits,and to develop a new
performance indicator to establish baseline performance.Standard 3 currently provides that the
Company will select a maximum of two underperforming circuits in Idaho on an annual basis
and will take corrective measures to reduce the average circuit performance indicator by 20%in
five years.The Company proposes to modify this standard to allow it to identify at least one
underperiorming area of concern,rather than an underperforming circuit,and take corrective
measures to reduce the reliability performance indicator by 10%within five years after
identification.The Company contends that shifting the focus of the standard to underperforming
areas will allow the Company to more effectively create improvement plans.
On May 22,2012,the Commission issued a Notice of Amended Application and
Notice of Modified Procedure.establishing a comment period that ended .June 12.2012.Written
comments were filed only by the Commission Staff.Staff reviewed all of the Customer
Guarantees.Network Performance Standards,and Customer Performance Standards proposed by
the Company.Staff evaluated the Company’s proposed changes given the Company’s current
commitments,its past performance,and Commission Order No.32432 entered in the 2011
general rate case.
The Company’s Amended Application proposes the following modifications to the
current N et ork Performance Standards:
1)Network Performance Standards 1 and 2
The Company proposes the System Average Interruption Duration Index
(SAIDI)and System Average Interruption Frequency Index (SAIFI)
baseline performance targets be based on underlying outages,instead of
controllable outages.
2)Network Performance Standard 3
The Company proposes selecting at least one under-pertbrming area based
upon a Reliability Performance Indicator (RPI).and then taking corrective
ORDER NO.32583
measures to reduce the RPI by an average of 1 0%for the areas selected in
a given year.The Company currently focuses on identifying under-
performing circuits,and then takes corrective measures to reduce the
average Circuit Performance Indicator (CPI)by 20%within five years on
an annual basis for a maximum of two under-performing circuits.
Performance Standards 1 and 2
The Company asserts that performance targets based on underlying distribution
events better represent the overall outages customers experience,moderately align to the normal
day-to-day reliability performance of the distribution system,and provide a consistent view of
the performance of the system to evaluate trends.”Amended Application,p.4.Staff reviewed
the prior number of outages classified as underlying distribution events and controllable
distribution events in order to evaluate the different approaches for determining the baseline
performance targets.In 2011.there were 3.292 underlying events excluding two prearranged
outage categories.Of these events.47%were classified as controllable.There were 12,787,928
underlying outage minutes,excluding two prearranged outage categories,associated with the
underlying events.Of these outage minutes,27%were classified as controllable.Therefore,
73%of outage minutes in 2011 were classified as non-controllable,with just over one-third of
the non-controllable outage minutes caused by loss of supply due to substation and transmission
outages.
Staff stated that establishing performance targets using underlying distribution events
better represents the overall outages customers experience and reflects the true day-to-day
reliability performance of the distribution system.Underlying events include transmission
outages categorized as loss of supply.which typically result in longer outages and impact more
customers than other outages.The Company should consider more closely evaluating the loss of
supply category to determine whether these causes can be classified as controllable or non-
controllable.By classifying the loss of supply category as controllable or non-controllable,the
Company can target substation and transmission improvements that have a high probability of
avoiding future outages.This guiding principal will keep costs down,improve reliability,and
ultimately benefit ratepayers.
The Company proposes to continue reporting on total and controllable outages in its
bi-annual report to provide a rolling 1 2-month performance for controllable,non-controllable,
and underlying distribution events:and to provide explanations of performance for actual
ORDER NO,32583 3
performance variations from underlying baseline performance.If necessary,the Company also
proposes to determine the appropriate course of action for improvement.Staff supports the
Company’s proposed reporting requirements,and its proposal to base its future Performance
Standards 1 and 2 targets on underlying distribution events.
Performance Standard 3
The Company contends that shifting the focus of the standard from under-performing
circuits to under-performing areas will allow the Company to more effectively create
improvement plans.The improvement plan focusing on under-performing circuits seems to have
been effective,but Staff realizes it may be more cost-effective to focus on under-performing
areas to improve reliability.The current proposal allows the Company flexibility in its
improvement plans to target areas of the system yielding the largest economic benefit to
ratepayers,whereas the current standard limits the Company’s focus to improving the two worst-
performing circuits.
Staff reviewed the Company’s proposal to use the Reliability Performance Indicator
(RPI)to develop the baseline performance targets.The RPI is calculated exclusive of breaker
lockouts and major events,whereas the Circuit Performance Indicator (CPI)includes breaker
lockouts and major events.The average annual improvement in CPI since 2006 averages 17%
per year.A reduction in the RPI by an average of 10%for the areas selected within a given year
is a reasonable starting point,given the change to focus on under-performing areas,rather than
circuits.As the Company develops its program and determines the most cost-effective ways to
prioritize corrections,the Company can revisit the performance target.Staff supports the
Company’s proposed reporting requirements,and its proposal to shift the Performance Standard
3 focus to address under-performing areas.
Historical Performance
The Company requested the Commission acknowledge that MidAmerican Energy
Holding Company (MEHC)fulfilled its merger commitments by implementing the Customer
Guarantees,Network Performance Standards,and Customer Performance Standards programs
through December 31,2011.Staff verified the Company met its Customer Guarantees 99.9%of
the time and successfully met its Customer Performance Standards during 2011.Regarding the
Network Performance Standards,Staff determined that although the Company did not meet its
targets for Network Performance Standards 1 and 2,it did meet the standard to improve
ORDER NO.32583 4
controllable distribution interruptions,consistent with the interruption indexes in the Network
Performance Standards.Staff reviewed the Companys overall controllable distribution
performance throughout the commitment period and found,with the exception of 2010,the
Cornpaiws interruptions for controllable distribution showed steady improvement.Accordingly,
the record indicates that MEHC met its merger commitment by successfully delivering the
Customer Guarantees,Network Performance Standards.and Customer Performance Standards
programs through December 31,2011.
The Commission finds the Performance Standards proposed in the Company’s
Amended Application,as modified.are appropriate and will allow the Company to continue to
improve Network Performance.and the Commission approves them.The Commission
acknowledges that MEHC met its merger commitment through December 31,2011,and hereby
approves the Network Performance Standards proposed in the Company’s Amended Application
filed on May 11,2012.
ORDER
IT IS HEREBY ORDERED that Rocky Mountain Power’s Amended Application,
filed May 11,2012,requesting approval of modifications in Network Performance Standards 1,2
and 3 is approved.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (‘21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration.any other person may cross-petition for
reconsideration.See Idaho Code §6 1-626.
ORDER NO.32583 5
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this 2
day of June 2012.
PAUL KJELLAND R,PRESIDENT
MACK A.REDFORD,COMMISSIONER
e7>jZ/J•t&
MARSHA H.SMITH,COMMISSIONER
ATTEST:
/1•‘i
/4L /Li
Jén D.Jewel$J
Commission Secretary
bls/O:PAC-E-1 2-02ws4
ORDER NO.32583 6