20120518reconsideration_order_no_32554.pdf

Office of the Secretary
Service Date
May 18,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )OF ROCKY MOUNTAIN POWER FOR )CASE NO.PAC-E-12-03
AUTHORITY TO INCREASE RATES )THROUGH THE ENERGY COST )ORDER NO.32554
ADJUSTMENT MECHANISM (ECAM))
On February 1,2012,PacifiCorp dba Rocky Mountain Power (“Rocky Mountain”or
‘Company”)submitted its annual Energy Cost Adjustment Mechanism (“ECAM”)Application
in accordance with Idaho (‘ode §61-502,61-503 and Rule 52.On February 15,2012,the
Commission issued a Notice of Modified Procedure establishing a comment deadline of March
13,2012.
On March 20,2012,the Commission issued Order No.32493 granting Monsanto
Company’s (‘Monsanto”)Petition to Intervene and Monsanto’s Motion to Extend the Comment
Deadline until March 20,2012.Comments were submitted by Commission Staff (“Staff’)and
Monsanto,and Rocky Mountain submitted reply comments.
On March 30,2012,the Commission issued Final Order No.32507 approving Rocky
Mountain Power’s ECAM Application with certain adjustments.’On April 20,2012,Monsanto
filed a timely Petition for Reconsideration.The Company filed an answer to Monsanto’s
reconsideration petition.
After reviewing the record in this case,the Commission grants in part and denies in
part Monsanto’s Petition for Reconsideration.As more fully outlined below,reconsideration is
granted on the issues of load split percentage “line losses”and scheduling of future ECAM
filings,and denied on the issue of “forced outage.”
BACKGROUND
A.Rocky Mountain’s E€’AM Application
Rocky Mountain requested authority to recover its power costs for the ECAM
deferral period of December 1,2010 through November 30,2011.Application at 1.More
specifically,the Company requested approval to recover $18.1 million in the deferral balancing
account (tariff customers $10.425 million;Agrium $51 1,600;and Monsanto $7.196 million).Id.
An Errata to Final Order No.32507 was issued on April 3,2012.
ORDER NO.32554 1
To recover its deferral costs,Rocky Mountain proposes to adjust Schedule 94
(Energy Cost Adjustment rates)to collect approximately $13.0 million over the period beginning
April 1,2012 through March 31,2013.This represents a rate increase of $2.6 million over the
current Schedule 94 rates in effect as approved in Order No.32216 (Case No.PAC-E-l1-07).
Id.at 2.Rocky Mountain requested an effective date of April 1,2012,for the proposed Schedule
94 rate changes.Id.
Rocky Mountain noted that “effective January 1,2011,Monsanto and Agriurn’s loads
are included in the calculation of the ECAM balances in this ECAM filing.”Id.at 5.Pursuant to
a stipulation approved by the Commission in the Company’s last general rate case No.PAC-E
11-12,the Company will amortize and collect Monsanto and Agrium’s share of the Commission-
approved 2011 ECAM balances over a three-year period.Order No.32432 at 4.8-1 1.
Rocky Mountain did not request a change in the ECAM surcharge rate to recover the
full $24.1 million projected to accumulate in the ECAM deferral balancing account.Application
at 9.The Company asserted that “approximately $3.0 million of the balance will be recovered
through Schedule 94 rates from December 1,2011 to March 31,2012.”Id.The Company stated
that it intends to address the remaining balance “in future ECAM filings.”Id.Rocky Mountain
projected that “an increase in the collection rate this year would be followed by a decrease in the
rate next year.”Id.
B.The Commission ‘s Prior Final Order
In the Commission’s final Order No.32507,we approved Rocky Mountain’s ECAM
Application with certain adjustments.See Order No.32507 at 11.The Commission approved
adjustments to the Company’s ECAM deferral balance for the transmission line loss percentage,
“replacement energy consumed by Monsanto when it buys through curtailment events,”and the
removal of “the costs of integrating wind resources ...associated with intra-hour charges.”Id.
at 9-10.
The Commission declined to accept “Monsanto’s proposal to offset any...liquidated
damages paid to Rocky Mountain by its construction contractors.”Id.at 10.We found that
Rocky Mountain’s plan to defer recovery of the ECAM balance from all customers,except
Monsanto and Agrium,until future years was “reasonable and appropriate”in light of the recent
history of “repeated and frequent rate increases.”Id.
ORDER NO.32554 2
C.Monsanto’s Petitionfor Reconsideration
Monsant&s Brief in Support of its Petition states that “it is critical to develop a
proper method to...“enable the tracking of “the ECAM balances for Monsanto and Agrium..
separately through their three-year amortization periods.”Briefat 4.As set out in greater detail
below,Monsanto raises three issues:(1)the proper allocation of Idaho base load;(2)forced
outages;and (3)the future scheduling of Rocky Mountain’s ECAM applications.According to
Monsanto,the proposed adjustments presented in Ms.Iverson’s testimony offer an improvement
upon the Company’s established ECAM allocation.Id.Rocky Mountain opposed
reconsideration.
ISSUES FOR RECONSIDERATION
A.Legal Standards
Reconsideration provides an opportunity for a party to bring to the Commission’s
attention any question previously determined and thereby affords the Commission with an
opportunity to rectify any mistake or omission.Washington Waler Power Co.v.Kootenai
Environmental Alliance,99 Idaho 875,879,591 P.2d 122,126 (1979).The Commission may
grant reconsideration by reviewing the existing record by written briefs,or by evidentiary
hearing.See Commission Rule 311,IDAPA 31.01.01.311.03.
If reconsideration is granted,“the matter must be reheard,or written briefs,comments
or interrogatories must be filed,within thirteen (13)weeks after the date for filing petitions for
reconsideration.”Idaho Code §61-626(2).“The commission must issue its order upon
reconsideration within twenty-eight (28)days after the matter is finally submitted for
reconsideration.”Id.
B.Proper Allocation ofIdaho Base Load
Monsanto claims in its Reconsideration Brief that although Rocky Mountain
appropriately “corrected the transmission loss factor for Monsanto and Agrium to 3.605%for
actual loads and properly removed replacement energy from both the jurisdictional total as well
as Monsanto[,J”the actual and base loads “are still incorrect.”Id.at 5.Monsanto believes that
the Company has failed to:(1)“accurately split base load between Monsanto,Agrium and the
remaining customers”;(2)remove “the replacement energy from the idaho jurisdictional base
load”;and (3)adjust “actual sales each month ...to account for the ‘extra’losses associated
with moving energy for wholesale sales.”id.According to Monsanto,“the ECAM ending
ORDER NO.32554 3
balances should be reduced $14,523 for tariff customers,$407,631 for Monsanto,and $41,402
for Agrium,a total of $463,556.See,Iverson Di,p.13,Table 1.”Id.
Monsanto requests that the Commission adjust the “ECAM balances based on
corrections to base load and actual loads to reduce tariff customers’balances in the amount of
$14,523,Monsanto’s by $407,631,and Agrium’s by $41,402,a total of $463,556.”Id.at 7.
In its answer to Monsanto’s Petition,Rocky Mountain argues that the Commission
should deny Monsanto’s Petition proposing additional ECAM adjustments on the merits.Rocky
Mountain counters Monsanto’s claim that the Company did not “accurately split Base load
between Monsanto,Agrium,and the remaining tariff customers”by pointing out that Monsanto
agrees that its load at the meter should be 1,385,173 MWh,the line loss factor should be 3.605%,
and that Monsanto’s responsibility for wholesale losses is 2.26%for the base period.Rocky
Mountain Answer at 6,8.Utilizing these numbers results in a calculation that is slighter higher
for Monsanto than the Company utilized in its ECAM calculation.Id.at 6-7.
The Company also maintains that Monsanto’s proposed adjustment to Idaho
jurisdictional base loads for “buy-through”energy is incorrect because “once Base loads are
established in a general rate case and embedded in rates,they should not be changed in the
ECAM.’Id.at 6.The Company relies on the testimony of Company witness Steven McDougal
and his Exhibit No.2 in Case No.PAC-E-10-07 addressing the jurisdictional base load amount.
Id.According to the Company,the jurisdictional base load quoted in Exhibit No.2,and utilized
in the Company’s current ECAM filing,“does not include buy-through energy.”Id.Therefore,
removal of this buy-through energy as proposed by Monsanto witness Iverson on reconsideration
would amount to a double removal of the “buy-through”energy from the already established
jurisdictional base load.Id.
in summary,the Company maintains that Monsanto’s proposed adjustments to actual
load to reflect “extra”line losses is improper because “the source of the Idaho Actual load is the
same as the Idaho jurisdictional state metered load reported in Company Exhibit No.2,which
includes the ‘extra’or wholesale energy losses.”The Company states that Monsanto’s
adjustment to actual load “doubles these losses”and is not appropriate.The Company states that
Monsanto and Agrium metered loads were only adjusted for the line losses and “all of the
additional losses were captured in the remaining customer’s load.”
ORDER NO.32554 4
Commission Findings:After reviewing Monsanto’s Petition,including its brief and
attached testimony,and Rocky Mountain’s answer,we find that the “line loss”issue and the
issue of the proper apportionment of the jurisdictional base load between Monsanto,Agrium and
the Company’s remaining tariff customers is ripe for reconsideration and further analysis.
Therefore,the Commission grants Monsanto’s Petition for Reconsideration on these issues.
Reconsideration shall be granted to allow for the establishment of workshops for the
Parties to discuss and develop recommendations 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 onRockyMountainPower’s idaho system to specific customer groups;and
3.Scheduling of Rocky Mountain Power’s future ECAM filings.
As more fully discussed below,the Commission denies reconsideration on the “forced outage”
issue presented in Monsanto’s Petition.
The Commission orders the parties to work cooperatively with Staff to schedule and
participate in workshops regarding the development of a methodology,to be used in the
Company’s ECAM filings going forward,for the proper attribution of “line losses”to specific
customer groups and the appropriate split of Rocky Mountain’s Idaho jurisdictional base load
between Monsanto,Agrium and its remaining tariff customers.
C.Forced Outage Adjustment
In its brief,Monsanto began by summarizing the procedural problems it experienced
in obtaining information during discovery regarding the Company’s record of “boiler tube failure
forced outages.”Id.at 5-6.According to Monsanto,it was forced to file its initial comments on
March 19,2012 (deadline for comments --March 20,2012)before it obtained a response to its
discovery request regarding forced outages.See RMP Response to Data Request 33 dated
March 20,2012,Id.at 6.Monsanto reiterated that its late-filed comments of March 30,20122
addressed the forced outage information provide by Rocky Mountain Power,but these comments
“were not considered by the Commission because it was filed after deliberations in the matter
2 on March 30,2012,Monsanto filed “Reply”to Rocky Mountain’s Reply Comments.Monsanto’s “Reply”wasnotconsideredbecauseitwasfiledafterourdeliberationinthismatter.Moreover,our procedural Rules do notprovideforapartytorespondtoaReply.See Rule 202.
ORDER NO.32554 5
and because the procedural rules do not provided for a party to respond to a reply.”Id.at 6;see
also Order No.32507 at 9,n.5.Thus,Monsanto witness Mark T.Widmer addresses the
proposed adjustment for excess outages”for the first time in its Petition for Reconsideration.
Id.
Monsanto suggests that ‘PacifiCorp’s forced outages significantly exceed industrial
averages,is not representative of prudent operations and warrants adjustments.”Id.Monsanto
presented Table I in Mr.Widmer’s testimony purporting to demonstrate that “PacifiCorp’s
outages exceed industry averages by a range of approximately 219%to 489%.”Id.Based on
that information,Monsanto proposes “reductions in the ECAM balance for Idaho retail
customers of $303,072,for Monsanto in the amount of $173,703,and for Agrium in the amount
of $6,601.”Id.
Rocky Mountain argues that the Commission should dismiss Monsanto’s Petition
because Monsanto improperly relied upon evidence that is not contained in the record of the
case.Answer at 3.The newly proffered evidence should be rejected because it is “not intended
to correct any mistake made by the Commission,but rather to support new arguments that
allegedly strengthen Monsanto’s case.”Id.Allowing the admission of the Iverson and Widmer
testimony without a hearing or an “adequate opportunity to respond”would be procedurally
improper.Id.at 4.Rocky Mountain asserts that the purpose of reconsideration is to correct
errors,if any,in the Commission’s Final Order and not to allow parties to “expand”their
arguments based upon new evidence that could have been presented during the established
comment period.Id.
According to Rocky Mountain,Monsanto witness Widmer selectively introduced
industry data from 2010 regarding select NERC codes.Id.at 8.According to the Company,this
evidence amounts to an “improper year-to-year comparison”to outages occurring on the Rocky
Mountain system from December 2010 to November 2011.Id.Rocky Mountain introduces
several tables and charts which purport to establish that the Company’s forced outage rate are in
line with industry averages.Id.at 8-12.Contrary to Mr.Widmer’s focus on “a few select NERC
codes,on select units,over a relatively short period of time[,J”the charts and tables provide a
more representative picture of the Company’s performance relative to the industry as a whole.
id.at 12.
Commission Findiiis:The Commission denies reconsideration on the issue of
ORDER NO.32554 6
forced outages.The allowed scope of reconsideration process is addressed in Idaho Code §61-
626(1);IDAPA 31.01.01.331.01.“After an order has been made by the commission,any
corporation,public utility or person interested therein shall have the right,within twenty-one
(21)days after the date of said order,to petition for reconsideration in respect to any matter
determined therein.”Idaho Code §61-626(2)(emphasis added).Given the literal wording of
Idaho Code §61-626(2)reconsideration is limited to matters determined in our final Orders.
After thoroughly reviewing our final Order No.32507.we find that the issue of forced outages
was not raised or addressed in the Order.
The appropriate scope of the Commission’s review is also addressed by our Supreme
Court in Idaho Underground Water Users Assoc.v.Idaho Power Co.,89 Idaho 147,404 P.2d
859 (1965).There the Court ruled that reconsideration is “confined to matters urged at the
original hearing,and may not include new points raised for the first time,or matters not in the
record when the case was decided.”Id.at 154,404 P.2d at 862 (emphasis added and citation
omitted).The Court explained that reconsideration “is a phase of the doctrine requiring the
exhausting of administrative remedies before judicial consideration will be given to issues on
appeal.”Id.(citations omitted).
The “forced outage”issue presented by Monsanto in its Petition was not addressed by
the Commission in final Order No.32507.As we noted in that Order,and Monsanto has
subsequently acknowledged,Monsanto attempted to introduce new evidence regarding forced
outages on the Company’s Idaho system outside of the established comment period.See Order
No.32507 at 9;see also Monsanto Briefat 2.For that reason,the evidence was excluded and the
Commission did not deliberate on the forced outage issue before issuing Order No.32507.
Therefore,we find that the forced outage issue is not properly before us and consequently deny
reconsideration on this issue.
D.Future ECAM Scheduling
Monsanto next argues that the scheduling of this case was too “compressed”and
“imposed a heavy burden and unreasonable constraint on Monsanto’s ability to conduct
discovery and thoroughly review and carefully analyze the ECAM filing.”Monsanto Petition at
6.Monsanto stated that in hindsight it probably should have requested a “full hearing”but
refrained from doing so because it felt that the “Company and Commission desired to adhere to
ORDER NO.32554 7
an expedited schedule to ensure that the ECAM adjustment went into effect April 1,2012.”Id.
Accordingly,Monsanto recommends the following:
a.An expanded comment period for future ECAM filings in order to afford a
greater measure of “due process[;j”
b.A workshop or “other appropriate collaborative process”to discuss
technical aspects of future ECAM filings;and
c.A discussion amongst the parties regarding complex issues such as “the
proper split of jurisdictional load into the three customer classes
(Monsanto,Agriurn and tariff customers),excess outages.”etc.,should
take place in advance of the Company’s ECAM filing with the
Commission.
Id.at 6-7.
On reconsideration,Monsanto does not request an evidentiary hearing but that the
Commission issue a reconsideration Order based upon the record,including the attached
testimony of Mr.Widmer and Ms.Iverson.Id.at 3.
Rocky Mountain responded by stating that it is generally “supportive”of Monsanto’s
proposal to hold workshops to discuss the technical aspects of the ECAM.Id.at 12.The
Company states that it is willing to provide any interested party with the quarterly ECAM
updates currently provided to Staff.Id.at 12-13.Rocky Mountain opposes Monsanto’s proposal
to extend the current review schedule for all future ECAM Applications.Id.at 13.
Commission Finding’s:The Commission acknowledges that ECAM cases (and PCA
cases)are typically processed in a relatively compressed timeline.Given that this case is the first
time that “Monsanto and Agrium’s loads are included in the ECAM balances ...[.J”the
Commission finds that Monsanto’s request to set an appropriate comment period for interested
parties and persons to review and comment on Rocky Mountain’s future ECAM applications is
reasonable.Order No.32507 at 2;Application at 5.A full and insightful analysis of the
Company’s ECAM application is a substantial undertaking,requiring both expertise and time.
The Commission is encouraged that the Company has agreed to provide quarterly ECAM
updates to interested parties such as Monsanto.Such open disclosure will likely facilitate a
greater understanding of the ECAM and how it affects ratepayers.In addition,quarterly ECAM
reports will hasten the timely processing of future ECAM cases.
ORDER NO.32554 8
Therefore,similar to our ruling above regarding the appropriate load split between
Monsanto.Agriurn and other general tariff customers,the Commission directs the parties to
participate in public workshops wherein the parties will analyze and make appropriate
recommendations regarding the scheduling and processing of Rocky Mountain’s ECAM
applications in the future.
CONCLUSIONS OF LAW
After fully considering the record and based upon the foregoing analysis,the
Commission grants in part and denies in part,Monsanto’s Petition for Reconsideration of Order
No.32507 as more fully described above.After careful consideration of the record,the
Commission finds that our decision to grant in part,and deny in part,reconsideration is based
upon substantial evidence and is fair,just and reasonable.
ORDER
IT IS HEREBY ORDERED that Monsanto’s Petition for Reconsideration of final
Order No.32507 is granted in part and denied in part.More specifically,reconsideration is
denied on the issue of forced outages but granted on the issue of allocating base load and future
ECAM scheduling.
IT IS FURTHER ORDERED that the parties shall participate in workshops to discuss
and develop recommendations to be presented to the Commission regarding the following issues:
(I)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 Rocky Mountain’s Idaho system to specific customer groups;and (3)
scheduling of Rocky Mountain’s future ECAM filings.
THIS IS A PARTIAL FINAL ORDER ON RECONSIDERATION.Any party
aggrieved by the forced outage issue finally decided in this Order may appeal to the Supreme
Court of Idaho pursuant to the Public Utilities Law and the Idaho Appellate Rules.See Idaho
Code §61-627.The issues of ECAM scheduling and the appropriate allocation of base load are
not final.
ORDER NO.32554 9
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /
day of May 2012.
PAUL KJELAN E .
a Li
MARSHA H.SMITH,COMMISSIONER
ATTEST:
c /1
Jean D.Jewell.
Commission Secretary
O:PAC-E-I 2-O3np5_Reconsideration
ORDER NO.32554 10