20120525Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
P0 BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 6864
201 ?plAy25 M1Ij:g
IBAHC PU3Lc
UTILITIES CQMM!SS!Q:
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
ROCKY MOUNTAIN POWER FOR APPROVAL) CASE NO. PAC-E-12-06
OF ITS ENERGY SALES AGREEMENT WITH )
AGRIUM COMPANY. ) COMMENTS OF THE
) COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Neil Price, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure in Order No. 32545 issued on May 4, 2012, submits
the following comments.
BACKGROUND
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"). Agrium is a Delaware corporation that,
through its wholly owned subsidiary Nu-West Industries, owns and operates an elemental
phosphorous plant at a site near Soda Springs, Idaho in Caribou County.
Following the Company's last general rate case, PAC-E-ll-12, Agrium and the Company
agreed to execute a new ESA. The parties reached an agreement and a formal contract was executed
on April 10, 2012. In order to avoid filing a new ESA every time the Commission approves changes
STAFF COMMENTS 1 MAY 25, 2012
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 their agreement to reference the
appropriate service schedules rather than specific rates.
STAFF REVIEW
The proposed agreement between Rocky Mountain Power and Agrium updates the ESA
approved by the Commission in Order No. 29940. See Case No. PAC-E-05-1 1. Previously, the
parties entered into multi-year contracts that provided, among other items, 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 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).
The 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. See
Case No. PAC-E-10-07. While Electric Service Schedule No. 401 specifies the charges applicable to
Agrium, it does not contain the terms for contract termination, delivery of power, minimum power
factor, billing agreements, metering and operational guidelines. 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.
Aside from the three specific revisions discussed here, the general provisions of the
agreement have remained relatively unchanged in the last several iterations of the ESA. The
identified modifications in this filing are: 1) Revision of the termination policy (Section 1.17);
2)Removal of the monthly charges and adjustment mechanism (Sections 4.1 and 4.2); and
3)Establish procedures for routine meter testing and verification of equipment accuracy (Section
5.2). The first two modifications minimize the need for an additional filing to amend the ESA when
rates for Agrium change. The parties have agreed to replace a firm termination date with a policy
that allows 180 days notice if either party sought to terminate the agreement. Staff supports
modifying the ESA to a more open-ended contract, especially given the removal of specific charges
from the agreement. The 180-day notification provision provides both parties adequate insurance
should the ESA need further revision or some unforeseen occurrence causes service to Agrium to
cease.
STAFF COMMENTS 2 MAY 25, 2012
The revised Section 4.1 incorporates the following language, which replicates the language in
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 Nu-
West, 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 and any other applicable charges that should
apply.'
Staff believes this properly reflects Agrium's movement to a Tariff Standard, and avoids any
perceived inconsistencies with Section 8.3, as noted by Staff in Case No. PAC-E-05-1 1. Any billing
changes would only impact the tariff sheet.
Staff does not oppose the addition of Section 5.2 in the ESA. This section provides for meter
accuracy testing parameters and procedures. While there is no history of billing disputes between the
parties stemming from faulty metering equipment, Staff believes it is important to insure that such
equipment is properly maintained and up to current industry standards.
Staff is supportive of the amendments to the ESA. In conjunction with Electric Service
Schedule 401, the rates, terms of service, operational guidelines and billing agreements between
Rocky Mountain Power and Agrium are clear and thoroughly explained.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the Electric Service Agreement between
Agrium and Rocky Mountain Power, dated April 10, 2012.
Respectfully submitted this day of May 2012.
Price
Deputy Attorney General
Technical Staff: Bryan Lanspery
i:/umisc/comments/pace I 2.6npbl eomment.doc
'Staff notes that as of April 1, 2012, Agrium is subject to rates under Schedule 94, the Energy Cost Adjustment
Mechanism, which it previously was not subject to.
STAFF COMMENTS 3 MAY 25, 2012
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 24TH DAY OF MAY 2012,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. PAC-E-12-06, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
TED WESTON
ID REGULATORY AFFAIRS MANAGER
ROCKY MOUNTAIN POWER
201 SMAIN ST STE 2300
SALT LAKE CITY UT 84111
E-MAIL: [e-mail]
DATA REQUEST RESPONSE CENTER
E-MAIL ONLY:
datareguest(pacificorp.com
DANIEL E SOLANDER
REGULATORY COUNSEL
ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
E-MAIL: [e-mail]
SECRETIY
CERTIFICATE OF SERVICE