20130122Application.pdf

ROCKY MOUNTAIN
POWER
A DIVISION OF PACIFICORP 201 South Main, Suite 2300
2013 JAN22 U4110:32. Salt Lake City, Utah 84111
January 22, 2013
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Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
Re: Case No. PAC-E-13-02
In the Matter of Rocky Mountain Power's Application for an Order Authorizing
Changes in Depreciation Rates Applicable to Electric Property
Dear Ms. Jewell:
Rocky Mountain Power, a division of PacifiCorp, hereby submits for filing an original and
nine (9) copies of its Application, testimony, and exhibits in the above-referenced matter.
All formal correspondence and regarding this Application should be addressed to:
Ted Weston Daniel E. Solander
Rocky Mountain Power Rocky Mountain Power
201 South Main, Suite 2300 201 South Main Street, Suite 2300
Salt Lake City, Utah 84111 Salt Lake City, Utah 84111
Telephone: [phone] Telephone: [phone]
Fax: [phone] Fax: [phone]
Email: [e-mail] Email: [e-mail]
Communications regarding discovery matters, including data requests issued to Rocky
Mountain Power, should be addressed to the following:
By E-mail (preferred): datarequest(pacificorp.com
By regular mail: Data Request Response Center
PacifiCorp
825 NE Multnomah St., Suite 2000
Portland, OR 97232
Idaho Public Utilities Commission
January 22, 2013
Page 2
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours, 3 ~ ~—.
Jeffrey K. Larsen
Vice President, Regulation & Government Affairs
Daniel E. Solander (ISB # 893 1)
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone No. [phone]
Facsimile No. [phone]
E-mail: [e-mail]
Attorney for Rocky Mountain Power
2q13 JAN 22 AN 10: 32
0. Pui - rrr-- "r'•I 1 L
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN ) CASE NO. PAC-E-13-02
POWER'S APPLICATION FOR AN ORDER )
AUTHORIZING CHANGES IN DEPRECIATION )
RATES APPLICABLE TO ELECTRIC PROPERTY )
APPLICATION FOR A CHANGE IN DEPRECIATION RATES
APPLICABLE TO ELECTRIC PROPERTY
Rocky Mountain Power, a division of PacifiCorp (the "Company"), pursuant to
Section 61-525 of the Idaho Code and Rule 52 of the Idaho Public Utilities Commission
("Commission") Rules of Procedure hereby respectfully applies to the Commission for
approval of proposed changes to depreciation rates applicable to Rocky Mountain Power's
depreciable electric plant. The Company requests that the proposed depreciation rates be
effective on January 1, 2014. In support of this Application, Rocky Mountain Power states as
follows:
1. Rocky Mountain Power is a public utility in the state of Idaho and is subject to
the jurisdiction of the Commission with regard to its public utility operations, retail rates,
service, and accounting practices. The Company also provides retail electricity service under
Application for Order Authorizing a Change in Depreciation Rates 1
the name Rocky Mountain Power in the states of Utah and Wyoming and under the name
Pacific Power in the states of Oregon, Washington and California.
2.Communications regarding this Application should be addressed to:
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, UT 84111
E-mail: [e-mail]
Daniel E. Solander
Senior Counsel
201 South Main Street, Suite 2300
Salt Lake City, UT 84111
Rocky Mountain Power
E-mail: [e-mail]
In addition, Rocky Mountain Power requests that all data requests regarding this
matter be sent in Microsoft Word or plain text format addressed to:
By email (preferred) datareguest@pacificori,.com
Or by regular mail to: Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
3.The Commission is empowered to ascertain and determine the proper and
adequate rates of depreciation of the Company's property used in the rendering of retail
electric service under the provisions of Section 61-525 of the Idaho Code. Each utility under
the Commission's jurisdiction is required to conform its depreciation accounts to the rates
ascertained and determined by the Commission. The Commission may make changes in such
rates of depreciation from time to time.
4.The Company's last depreciation application, Case No. PAC-E-07-14, was
Application for Order Authorizing a Change in Depreciation Rates 2
filed by the Company on August 31, 2007, and was approved by the Commission in Order
No 30499, issued February 8, 2008, with rates effective January 1, 2008
5 The Company has performed an updated depreciation study (the
"Depreciation Study") and requests authorization to implement the depreciation rates set
forth in the Exhibit No 3 The Depreciation Study has identified changes that have occurred
since the Company's last depreciation study, measured the effect of the changes on the
prudent recovery of presently surviving capital, and is proposing revisions to the depreciation
rates. The application of the depreciation rate changes based on the Depreciation Study
would result in an increase in annual depreciation expense of approximately $83.9 million
($160.8 million including the accelerated depreciation associated with early retirement of the
Carbon plant) on a total Company basis, based on projected plant balances as of December
31, 2013 The proposed changes would result in an estimated increase to the Idaho
jurisdictional depreciation expense of approximately $4.5 million ($8.9 million including the
early retirement of the Carbon plant). The Company proposes to record the Depreciation
Study's recommendations on its books and records beginning January 1, 2014.
6. In support of this Application, the Company presents the direct testimony of
Henry E. Lay, Corporate Controller of PacifiCorp. Mr. Lay's testimony summarizes the
effect on annual depreciation expense from applying the proposed depreciation rates to
depreciable plant balances. Mr. Lay also provides background on the Depreciation Study
process, identifies a number of significant issues considered during the preparation of the
Depreciation Study, and calculates the Idaho jurisdictional impact of the proposed changes to
the depreciation rates. Additionally, Mr. Lay introduces the other Company witnesses
providing testimony.
Application for Order Authorizing a Change in Depreciation Rates 3
7.The Company also presents the direct testimony of John J. Spanos, Senior
Vice President of Gannett Fleming, Inc. Mr. Spanos testimony is supported by Exhibit No. 3
which is the Depreciation Study, he describes how the Depreciation Study was prepared,
presents the depreciation rates for which the Company is seeking Commission approval, and
discusses the basis for the recommended changes in depreciation rates.
8.Finally, the Company presents the direct testimony of K. Ian Andrews,
Manager of Resource Development for PacifiCorp Mr. Andrews' testimony describes the
process to evaluate the current plant depreciable lives for steam generation plants and the
procedure used to estimate the retirement date for the Company's gas, wind, and
hydroelectric generation resources He also demonstrates that the estimated retirement dates
proposed for the Company's generation plants are reasonable and appropriate for use in the
Depreciation Study. Mr. Andrews also explains why the rates the Company proposes to
include as terminal net salvage, or "decommissioning costs," in the calculation of
depreciation rates for generating plants are reasonable and prudent.
9.For administrative and economic efficiencies, the Company prefers to
maintain uniform utility accounts, including depreciation rates, across its six state service
territories. To maintain consistent depreciation rates across its states, the Company is also
filing the Depreciation Study in Oregon, Utah, Wyoming, and Washington Accordingly, the
Company requests that the Commission issue a Notice, and establish a procedural schedule
that will allow for review of this Application in time for updated depreciation rates to go into
effect January 1, 2014.
Application for Order Authorizing a Change in Depreciation Rates 4
III. REQUEST FOR RELIEF
10. For the reasons described above and in the testimony and exhibits supporting
this Application, PacifiCorp respectfully requests that the Commission issue an order finding
a.The Depreciation Study recommendations regarding depreciation rates are
proper and adequate depreciation rates for the Company;
b.Adoption of the Depreciation Study's recommendations into Idaho electric
rates will results in fair and reasonable rates and accurately impose costs
on those customers for whom such costs are incurred; and
c The Depreciation Study's recommended depreciation rates should be
reflected in the Company's accounts and records beginning on January 1,
2014
DATED: January 22, 2013. Respectfully submitted,
"I-) ,, "'i (~ - 's
Daniel E. Solander
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone No [phone]
Facsimile No. [phone]
E-mail: daniel.solander(2i.pacificorp.com
Attorney for Rocky Mountain Power
Application for Order Authorizing a Change in Depreciation Rates 5