20120608final_order_no_32568.pdf

Office of the Secretary
Service Date
June 8,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF ROCKY MOUNTAIN POWER FOR )CASE NO.PAC-E-12-06
APPROVAL OF ITS ENERGY SALES )
AGREEMENT WITH AGRIUM COMPANY )ORDER NO.32568
__________________________________________________________________________________
)
On April 13,2012,PacifiCorp dba Rocky Mountain Power (“Rocky Mountain
Power”or “Company”)submitted an Application seeking Commission approval of its Electric
Service Agreement (ESA)with Agrium Company (“Agrium”).Application at 1.
On May 4,2012,the Commission issued a Notice of Application and Modified
Procedure with a 21-day comment period.Commission Staff was the only party to submit
written comments within the established comment period.See Order No.32545.
THE APPLICATION
Rocky Mountain Power’s Application states that “Agrium Company is a Delaware
corporation that owns and operates an elemental phosphorous plant at a site near Soda
Springs City,Idaho in Caribou County.”Id.at 2.After the Company’s last general rate
case,PAC-E-1 1-12,“Agrium and the Company agreed to execute a new ESA.”Id.The
parties reached an agreement and “the contract was executed on April 10,2012.”Id.
In order to “avoid filing a new ESA every time the Commission approves changes
to Agrium’s tariff contract,Electric Service Schedule No.401,or the Energy Cost
Adjustment,Electric Service Schedule No.94,the parties agreed to modify this section to
reference the appropriate service schedules rather than specific rates.”Id.In addition,“a
section was added to establish procedures for routine meter testing and verification of
equipment accuracy as well as specify the process if tests indicate that the metering
equipment is not registering accurately.”Id.A copy of the parties’executed ESA is
attached to the Application.
STAFF COMMENTS
Staff remarked that prior to the new ESA the parties previously entered into multi
year contracts which detailed Agrium’s base line monthly charges,and outlined the process of
adjusting charges within the contract term (Sections 4.1 and 4.2 in prior ESAs).Contrary to
ORDER NO.32568 1
other tariff customers,Agrium and Rocky Mountain Power negotiated rate adjustment schedules
to reflect a portion of the identified revenue requirement,with a provision that Commission-
approved rate adjustments would apply under the agreement (Section 8.3).
Staff noted that the parties’previous ESA expired December 31,2010,coinciding
with Agrium’s movement to a full tariff standard whereby its annual revenue requirement was
established by the Commission (Case No.PAC-E-l0-07).Staff believes it is appropriate for
Agrium and the Company to maintain an ESA that provides detailed service requirements not
specified under Schedule No.401,including:terms for contract termination,delivery of power,
minimum power factor,billing agreements,metering and operational guidelines.
The Company’s Application identifies revisions to the termination policy (Section
1.17);elimination of monthly charges and adjustment mechanism (Sections 4.1 and 4.2);and
new procedures for routine meter testing and verification of equipment accuracy (Section 5.2).
Staff supports the first two modifications because they minimize the need for an additional filing
to amend the ESA when rates for Agrium change.Additionally,the parties have instituted a
policy to allow for 180 days’notice if either party seeks to terminate the agreement.Staff
supports the 180-day notification provision because it provides both parties adequate insurance if
circumstances require future revisions to the ESA or some unforeseen circumstance causes the
Company to discontinue service to Agrium.
Staff quoted the revised Section 4.1 of the ESA which mirrors the language found in
Electric Service Schedule No.401:
The charges specified in Section 4.1 of this Agreement shall be adjusted so
that the charges equal the Commission-approved rates applicable to NuWest,
including but are not limited to,customer charges,demand charges,energy
charges,surcharges,and credits,as specified in Electric Service Schedule
Nos.401 and 94 [Energy Cost Adjustment]and any other applicable charges
that should apply.
Staff believes this section appropriately acknowledges Agrium’s movement to a tariff standard
and avoids any perceived inconsistencies with Section 8.3.Any billing changes would only
impact the tariff sheet.
Staff does not oppose the addition of Section 5.2 outlining the parameters and
procedures for testing meter accuracy.Staff believes that,while there is no history of billing
ORDER NO.32568 2
disputes between the parties stemming from faulty metering equipment,it is important to ensure
that such equipment is properly maintained and meets current industry standards.
Staff supports the proposed amendments to the ESA.Staff recommended that the
Commission approve the Electric Service Agreement between Agrium and Rocky Mountain
Power,dated April 10,2012.
COMMISSION FINDINGS AND DECISION
The Commission has reviewed Rocky Mountain Power’s Application requesting
Commission approval of its ESA with Agrium.The Commission finds that the ESA negotiated
by Rocky Mountain Power and Agrium is fair,just,and reasonable.The ESA clarifies the exact
terms and conditions of the electric service to be provided by Rocky Mountain Power to Agrium
not otherwise specified under Schedule No.401.Therefore,the Commission approves the
parties’Agreement.
ORDER
IT IS HEREBY ORDERED that Rocky Mountain Power’s Application seeking
Commission approval of its Electric Service Agreement with Agrium Company is approved.
The terms and conditions of the ESA shall be effective as of April 10,2012.
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 §61-626.
ORDERNO.32568 3
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of June 2012.
ATTEST:
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PAUL KJELLAER,PRESIDENT
MARSHA H.SMITH,COMMISSIONER
AI,IijcX’(
iean D.Jewel4
Commission secretary
O:PAC-E-I 2-06_np2
ORDER NO.32568 4