20120626Comments.pdf

ROCKY MOUNTAIN
I POWER
A DIVISION OF PACIFICORP
June 26, 2012
VIA OVERNIGHTDELIVERY
Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
RECEIVE £)
2U2 JUN 26 AMIO:OO
'UbLI. UTILT;E L)MSS!C4N
201 South Main, Suite 2300
Salt Lake City, Utah 84111
Re: Case No. PAC-E-12-03
In the Matter of the Application of Rocky Mountain Power for Authority to Increase
Rates Through the Energy Cost Adjustment Mechanism
Dear Ms. Jewell:
Please find for filing an original and seven copies of Rocky Mountain Power's reply comments
in the above referenced matter.
All formal correspondence and questions regarding this Application should be addressed to:
Ted Weston
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
Yvonne Hogle
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
Fax: [phone]
Email: Yvonne.hogle(,pacificoriD.com
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
TJ eyK.
Vice President, Regulation & Government Affairs
Enclosures
Mark C. Moench
Yvonne R. logic
Rocky Mountain Power
201 S. Main St., Suite 2300
Salt Lake City, UT 84111
Telephone: [phone]
Fax: [phone]
Attorneys for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE )
APPLICATION OF PACIFICORP DBA ) CASE NO. PAC-E-12-03
ROCKY MOUNTAIN POWER FOR )
AUTHORITY TO INCREASE RATES )
THROUGH THE ENERGY COST ) COMMENTS OF ROCKY
ADJUSTMENT MECHANISM ) MOUNTAIN POWER
)
)
COMES NOW PacifiCorp, dba Rocky Mountain Power ("RMP" or the
"Company"), pursuant to Rules 56 and 256 of the rules of Procedure of the Idaho Public
Utility Commission (the "Commission"), and in response to Reconsideration Order No.
32554 issued on May 18, 2012, hereby submits the following comments in the above
referenced case.
Background
On February 1, 2012 the Company filed its annual application for authority to
adjust Schedule 94, Energy Cost Adjustment Mechanism ("ECAM") rate by $2.6 million,
establishing the ECAM rate for all customer classes including Monsanto Company
("Monsanto") and Agrium, Inc. ("Agrium") based on the deferral period beginning
December 1, 2010 through November 30, 2011 ("Deferral Period").
1
The Company requested authorization to add $18.1 million into the ECAM
balancing account for the Deferral Period, which would bring the total balance of the
account to 124.1 million as of November 30, 2011. The Company proposed to adjust
Schedule 94 to collect approximately $13.0 million over the period beginning April 1,
2012 through March 31, 2013, representing an increase of $2.6 million over the current
Schedule 94 rate.
On March 30, 2012, the Commission issued final Order No. 32507 approving the
Company's ECAM application with adjustments reducing the deferral by $192,201 for
line loss, replacement energy and third party wind integration costs.
On April 20, 2012, Monsanto filed a Petition for Reconsideration. On May 18,
2012, the Commission issued Order No. 32554 granting in part and denying in part
Monsanto's Petition for Reconsideration. The Commission denied Monsanto's Petition
for Reconsideration of forced outages and ordered parties to participate in a public
workshop to analyze the appropriate load treatment and ECAM scheduling in the future.
Specifically the Commission ordered that parties should participate in workshops to
discuss and develop recommendations to be presented to the Commission regarding the
following issues:
(1)the appropriate load split percentage (normalized and actual) for Monsanto,
Agrium and the Company's remaining tariff customers;
(2)the proper apportionment and attribution of "line losses" occurring on the
Company's Idaho system to specific customer groups; and
(3)scheduling of the Company's future ECAM filing.
2
Comments
On June 4, 2012, representatives from the Idaho Public Utilities Commission
Staff, Monsanto, and the Company met at the Commission's offices to discuss the issues
raised by the Commission.
Base Load
The parties agreed that the Idaho jurisdictional Base load for the ECAM was
established in the general rate case; however, that customer class loads were not
identified. At the workshop, the parties agreed that the class cost of service loads, at input
level, from that same general rate case were the appropriate starting point for specific
customer classes. However the customer class loads do not tie to the Idaho jurisdictional
load due to line losses associated with wholesale sales and other items. The parties
determined that the appropriate approach to align these loads was to start with the
customer class loads at input and escalate them to tie to the Idaho's jurisdictional load by
the ratio of the customer class load to Idaho jurisdictional load by month. And that the
ratio should then be applied to each customer classes' load so the sum of the customer
classes equaled Idaho's jurisdictional load utilized for jurisdictional allocation factors.
Monsanto claimed in its Petition for Reconsideration that its replacement energy
should be removed from base load for purposes of calculating that ECAM. The 2010
Protocol agreement specifies the treatment of replacement energy for jurisdictional
allocation purposes which the Company has followed. It is the Company's position that
load should be treated consistently as specified by 2010 Protocol for purposes of
jurisdictional allocations, class cost of service, rate design, and the ECAM. It is not
appropriate to remove Monsanto's replacement energy from the base load.
Actual Load
At the workshop, the parties agreed that Idaho's jurisdictional base and actual
loads included wholesale energy losses. However Monsanto's and Agrium's base and
actual loads were at the customer meter which does not include any line losses. The
parties agreed that Monsanto's and Agrium's actual load should be adjusted for line
losses by the same ratio used for their base load.
Monsanto also proposed that all curtailment or replacement energy should be
excluded from actual loads. After the workshop, Staff recommended that any load
associated with Monsanto's economic curtailment when it does not buy through should
be added to Monsanto's actual load. This adjustment is consistent with the treatment of
base load and would be used for the LCAR calculation only.
While the Company is willing to agree to this adjustment, this continues to
demonstrate why the LCAR is not an appropriate component of RMP's ECAM. The
ECAM is designed to track actual net power costs and was never intended to be a fixed
cost tracking mechanism. RMP's ECAM design is different from the PCA for Idaho
Power and Avista, RMP calculates its base net power costs on a dollar per megawatt hour
basis, contrary to Avista and Idaho Power which compare total base net power costs to
actual net power costs. The $/MWh approach accounts for variance due to volumetric
changes and eliminates the need for a LCAR.
Staff's proposal unnecessarily complicates the Company's ECAM for the sole
purpose of facilitating the LCAR that should never have been part of the ECAM.
Scheduling
4
In the Company's Answer to Monsanto's Petition for Reconsideration the
Company noted that it files quarterly ECAM reports with the Commission and offered to
make those available to interested parties. In the workshop the Company made the same
offer and encouraged parties to review the information on a timelier manner. Monsanto
indicated that this approach would probably address its concerns with scheduling.
Recommendations
The Company has reviewed Staffs proposal for calculating the deferral costs for
the ECAM. For purposes of resolving the 2012 ECAM application, the Company
recommends the Commission accept the agreed upon revisions to base load for line
losses and Monsanto replacement energy and line losses for actual load. The Company
will make the quarterly ECAM report available to any interested parties upon request,
after the appropriate confidentiality arrangements are in place. The Company
recommends that its annual ECAM filing continue to be made February 1 with an April 1
rate effective date. The Company respectfully requests that the Commission reconsider
inclusion of the LCAR as a component of the ECAM.
DATED this 26th day of June, 2012.
M ~A . C, At~o ,g
Mark C. Moench
Yvonne R. Hogle
Attorneys for
Rocky Mountain Power
CERTIFICATE OF SERVICE
I hereby certify that on this 26th of June, 2012, I caused to be served, via e-mail and U.S.
Mail, a true and correct copy of the foregoing document in PAC-E-12-03 to the
following:
James R. Smith (E-mail Only)
Monsanto Company
P.O. Box 816
Soda Springs, Idaho 83276
E-Mail: [e-mail]
Brubaker & Associates
16690 Swingley Ridge Rd., #140
Chesterfield, MO 63017
E-Mail: [e-mail]
Randall C. Budge
Racine, Olson, Nye, Budge & Bailey,
Chartered
201 R Center
P.O. Box 1391
Pocatello, ID 83204-1391
E-Mail: [e-mail]
Came Meyer
Coordinator, Regulatory Operations