20120921notice_of_modified_procedure_order_no_32649.pdf

Office of the Secretary
Service Date
September 21,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF PACIFICORP DBA )
ROCKY MOUNTAIN POWER’S )CASE NO.PAC-E-12-07
APPLICATION FOR AN ACCOUNTING )
ORDER REGARDING COSTS INCURRED )NOTICE OF MODIFIED
FOR NAUGHTON UNIT 3 )PROCEDURE
)
_________________________________
)ORDER NO.32649
On May 3,2012,PacifiCorp dba Rocky Mountain Power applied to the Commission
for an Order authorizing it to record a regulatory asset associated with its costs to meet emission
requirements at Naughton Unit 3.According to the Company,Idaho’s share of the regulatory
asset would be about S479,000.The Company says it does not seek to recover that amount in
this proceeding.Rather,it will seek recovery in its next general rate case.
The Commission issued a Notice of Application on May 23,2012.With this Order,
the Commission sets comment deadlines and orders that the case be processed by Modified
Procedure.
THE APPLICATION
In the Application,the Company claims it has worked with state,tribal,and federal
agencies to develop a Comprehensive Air Initiative (CAl)to improve visibility in national parks
and wilderness areas.The CAT is designed to reduce power plant emissions in accordance with
regional haze and other air-quality regulations while balancing customer interests and the
obligation to serve current and reasonably projected demands.Application at 2-3.
The Company says it has incurred costs to develop,design,engineer and procure
environmental upgrades including Selective Catalytic Reduction (SCR)and Pulse Jet Fabric
Filter (PJFF)systems.Id.at 1.The Company must comply with environmental requirements
such as U.S.Environmental Protection Agency Clean Air Act regional haze rules.The Company
says it must also comply with Wyoming’s regional haze state implementation plan (SIP)and best
available retrofit technology (BART)analysis,detennination,decision and permit MD-6042,
Amended BART permit MD-6042A,and a related settlement agreement which establishes a
December 31,2014 emissions control compliance and SCR and PJFF systems installation
deadline.Id.at 3.
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32649 1
The Company says it began its compliance-planning activities for Naughton Unit 3 in
response to Wyoming regulations requiring Naughton Unit 3 and similar emission sources to
submit a BART application by December 15,2006 (the Company received a 1-month extension).
Id.at 4.Earlier,in November 2003,the Company began engineering assessments and evaluating
emission control equipment for Naughton Unit 3.The Company says these assessments and
evaluations,which it has continued to update and refine,were critical to establishing an
environmental compliance plan and to mitigate SCR and PJFF systems-development risk.Id.
The Company says it began in 2010 to execute its critical path schedule in order to
meet the December 2014 regional haze compliance deadline.Id.This included developing
detailed project procurement specifications and requesting proposals related to SCR and PJFF
engineering,procurement,and construction (EPC).Id.The Company entered a limited notice to
proceed (LNTP)EPC contract on December 1,2011.Id.at 5.The LNTP contemplates detailed
engineering and design of time-critical systems,development of equipment procurement
specifications and preliminary three-dimensional modeling,development of project execution
deliverables and procedures,site subsurface assessments,site geotechnical investigations and
preliminary foundation design activities.Id.However,the Company subsequently learned that
the environmental improvements contemplated for Naughton Unit 3 were no longer
economically supported.Id.(citing Company’s April 9,2012 rebuttal testimony filed in
Wyoming Docket No.20000-400-EA-1 1).Accordingly,the Company suspended the EPC
contract LNTP activities as of the end of February 2012.Id.
The Company says it has prudently incurred $7,914,547.69 in necessary costs related
to Naughton Unit 3 environmental compliance project permitting,development,engineering,and
site assessment activities.Id.(citing Application Attachment 1,detailing the costs).With this
Application,the Company seeks to transfer this amount out of FERC Account 107 (Construction
Work in Progress)and record a regulatory asset in FERC Account 182.3 (other Regulatory
Assets).The Company says Idaho’s share of the regulatory asset will be established based on
the system generation (SG)allocation factor,resulting in about $479,000 allocated to Idaho.Id.
The Company says it will seek to recover this regulatory asset in its next general rate case,and
that it would propose that amortization begin in that test period.Id.at 5-6.
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32649 2
NOTICE OF MODIFIED PROCEDURE
YOU ARE HEREBY NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission’s Rules
of Procedure.IDAPA 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Joint Application may file a written comment in support or opposition with the Commission
within sixty (60)days from the service date of this Notice.The comment must contain a
statement of reasons supporting the comment.Persons desiring a hearing must specifically
request a hearing in their written comments.Written comments concerning this Application
shall be mailed to the Commission and Rocky Mountain at the addresses reflected below:
Commission Secretary Ted Weston
Idaho Public Utilities Commission Idaho Regulatory Affairs Manager
P0 Box 83720 Yvonne R.Hogle
Boise,ID 83720-0074 Senior Counsel
Rocky Mountain Power
Street Address for Express Mail:201 S.Main Street Suite 2300
Salt Lake City,UT 84111
472 W.Washington Street E-Mail:ted.weston(pacificorp.com
Boise,ID 83702-5918 yvonne.hogle(à’pacificorp.com
All comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at www.puc.idaho.gov.Click the “Comments and Questions”
icon and complete the comment form using the case number as it appears on the front of this
document.These comments must also be sent to Rocky Mountain at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set,the Commission will consider this matter on its merits and
enter its Order without a formal hearing.If written comments are received within the time limit
set,the Commission will consider them and,in its discretion,may set the same for formal
hearing.
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32649 3
YOU ARE FURTHER NOTIFIED that the Application,supporting workpapers,and
exhibits have been filed with the Commission and are available for public inspection during
regular business hours at the Commission offices.The Application and workpapers are also
available on the Commission’s web site at www.puc.idaho.gov by clicking on “File Room”and
then “Electric Cases.”
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be held
pursuant to the Commission’s jurisdiction under Title 61 of the Idaho Code and specifically
Idaho Code §61-118,61-119,61-307,61-502,and 61-623.The Commission may enter any
final Order consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission’s Rules of Procedure,IDAPA 3 1.01.01.000,ei’seq.
ORDER
IT IS HEREBY ORDERED that Rocky Mountain Power’s Application be processed
by Modified Procedure.Persons interested in submitting written comments in this matter must
do so no later than sixty (60)days from the date of this Order.
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32649 4
DONE by Order of the Idaho Public Utilities Commission at Boise.Idaho this 9/‘
day of September 2012.
PAUL KJELLANb,PRESIDEN-
CN
MACK A.REDFORDe6MMISSIONER
1ccYNU
MARSHA H.SMITII,COMMISSIONER
ATTEST:
Jean D.Jewell
Commission Secretary
O:PAC-E-I 2-07kk2
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32649 5