20130201Application.pdf

ROCKY MOUNTAIN
POWER
A DIVISION OF PAcIFICORP
February 1, 2013
VIA OVERNIGHTDELIVERY
Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702
201 South Main, Suite 2300
Salt Lake City, Utah 84111
Re: Case No. PAC-E-13-03
In the Matter of the Application of Rocky Mountain Power for Authority to
Increase Rates by $2.2 Million to Recover Deferred Net Power Costs Through the
Energy Cost Adjustment Mechanism
Dear Ms. Jewell:
Please find enclosed an original and nine (9) copies of Rocky Mountain Power's Application in
the above referenced matter, along with Rocky Mountain Power's direct testimony and exhibits.
Also enclosed is a CD containing the Application, direct testimony, exhibits and confidential
workpapers
All formal correspondence and questions regarding this Application should be addressed to:
Ted Weston Yvonne Hogle
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: Yvonne.hogle(pacificorp.com
Communications regarding discovery matters, including data requests issued to Rocky Mountain
Power, should be addressed to the following:
By E-mail (preferred) [e-mail]
By regular mail Data Request Response Center
PacifiCorp
825 NE Multnomah St., Suite 2000
Portland, OR 97232
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
'-La— IL LCAlwo/g
effrey K. Larsen
Vice President, Regulation and Government Affairs
Enclosures
Mark C. Moench (ISB# 8946)
Yvonne R. Hogle (ISB# 8930)
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone No. [phone]
Facsimile No. [phone]
E-mail: yvonne.hole(nacificorD.com
Attorneys for Rocky Mountain Power
rtfl 3:21+
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) CASE NO. PAC-E-13-03
OF ROCKY MOUNTAIN POWER FOR )
AUTHORITY TO INCREASE RATES BY ) APPLICATION OF ROCKY
$2.2 MILLION TO RECOVER DEFERRED ) MOUNTAIN POWER
NET POWER COSTS THROUGH THE )
ENERGY COST ADJUSTMENT )
MECHANISM )
Rocky Mountain Power, a division of PacifiCorp ("Company" or "Rocky
Mountain Power"), in accordance with Idaho Code §61-502, §61-503, and RP 052,
hereby respectfully submits this application ("Application") to the Idaho Public Utilities
Commission ("Commission") pursuant to its approved energy cost adjustment
mechanism ("ECAM"). The Company is requesting approval of $15.9 million deferred
net power costs from the deferral period beginning December 1, 2011 through November
30, 2012 ("Deferral Period") and proposing to revise Schedule 94, Energy Cost
Adjustment, to recover approximately $15.2 million in total deferred net power costs for
the collection period beginning April 1, 2013 through March 31, 2014. The $15.2 million
includes the second amortized payment from Monsanto and Agrium, as further explained
below. Recovery of this amount represents an increase of approximately $2.2 million
over Schedule 94 rates currently in effect as approved in Order No. 32597 in Case No.
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PAC-E-12-03, and will apply exclusively to Monsanto and Agrium. The Company is
proposing no increase to the standard tariff customers Rocky Mountain Power
respectfully requests that the increase in Idaho rates become effective on April 1, 2013,
pursuant to Schedule 94 In support of its Application, Rocky Mountain Power states as
follows:
1. Rocky Mountain Power is a division of PacifiCorp, an Oregon
corporation, which provides electric service to retail customers through its Rocky
Mountain Power division in the states of Idaho, Wyoming, and Utah Rocky Mountain
Power is a public utility in the state of Idaho and is subject to the Commission's
jurisdiction with respect to its prices and terms of electric service to retail customers in
Idaho. Rocky Mountain Power is authorized to do business in the state of Idaho providing
retail electric service to approximately 72,300 customers in the state.
2 Communications regarding this filing should be addressed to
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, Utah 84111
Telephone [phone]
Email ted weston(à)pacificorp corn
Yvonne R. Hogle, Senior Counsel
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, Utah 84111
Telephone: [phone]
Email: vvonne.hogle(,pacificorp.com
3 In addition, Rocky Mountain Power requests that all data requests
regarding this Application be sent in Microsoft Word or plain text format to the
following:
By email (preferred): [e-mail]
By regular mail: Data Request Response Center
PacifiCorp
825 Multnomah, Suite 2000
Portland, Oregon 97232
Informal questions may be directed to Ted Weston, Idaho Regulatory Affairs
Manager at [phone].
Brief Overview of the ECAM
4.The ECAM became effective July 1, 2009, pursuant to an agreement
among parties in Case No PAC-E-08-08, as approved by the Commission September 29,
2009, Order No 30904 The ECAM allows the Company to collect or credit the
difference between the actual net power costs ("NPC"), incurred to serve customers in
Idaho and the NPC collected from Idaho customers through rates set in general rate cases.
5.The costs that are included in the ECAM are NPC defined in the
Company's general rate cases and modeled by the Company's production dispatch model
GRID. Specifically, NPC include amounts booked to the following FERC accounts:
• Account 447 (sales for resale, excluding on-system wholesale sales and
other revenues not modeled in GRID),
• Account 501 (fuel, steam generation, excluding fuel handling, start-up
fuel/gas, diesel fuel, residual disposal and other costs not modeled in
GRID),
• Account 503 (steam from other sources),
• Account 547 (fuel, other generation),
• Account 555 (purchased power, excluding BPA residential exchange
credit pass-through if applicable), and
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. Account 565 (transmission of electricity by others).
6.On a monthly basis, the Company compares the actual system net power
costs ("Actual NPC") to the net power costs embedded in rates ("Base NPC") from the
effective general rate case during the Deferral Period and defers the difference into the
ECAM balancing account. This comparison is on a system-wide, dollar per megawatt-
hour basis.
7.In addition to the comparison of Actual NPC to Base NPC, the ECAM
includes four additional components: the Load Change Adjustment Rate ("LCAR"), a
credit for SO2 allowance sales, an adjustment for the treatment of coal stripping costs,
i.e., Emerging Issues Task Force ("EITF") 04-6, and an additional true-up of 100 percent
of Renewable Energy Credit ("REC") revenues, as approved by Commission Order No.
32196. These components are described in more detail below.
8.Finally, the ECAM includes a symmetrical sharing band of 90 percent
(customers) / 10 percent (Company) that shares the NPC differential between Actual
NPC and Base NPC, LCAR, SO2 sales, and the coal stripping costs adjustment between
the customers and the Company. The sharing band is also described in more detail below.
Chan2es to ECAM Calculation
9.In accordance with Commission Order 32597 in Case No. PAC-E-12-03,
the Company has reflected changes to the ECAM calculation ordered by the
Commission, as described in detail in Mr. Brian S. Dickman's Direct Testimony.
Proposed Deferred ECAM Rate Increase
10.In support of this Application, Rocky Mountain Power has filed the
testimony and exhibits of Company witnesses Brian S. Dickman and Joelle R. Steward.
Mr. Dickman's testimony and exhibit, describes the Actual NPC incurred by the
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Company to serve retail load for the historical twelve-month period ended November 30,
2012 and explains the main increases between Actual NPC and Base NPC. Ms. Steward's
testimony supports the new ECAM tariff surcharge rates to be effective April 1, 2013
through March 31, 2014.
11.Commission Order No. 32432 approved a stipulation entered into by
parties in the Company's 2011 general rate case ("2011 GRC"), agreeing to amortize the
ECAM deferral for the deferral period in the 2012 ECAM over three years for Monsanto
and Agrium ("2011 GRC Stipulation"). The proposed rate change for Monsanto and
Agrium in this case covers two ECAM deferral periods. The first is the 2011 ECAM
deferral for the period of December 1, 2010 through November 30, 2011. This filing
includes the second year amortization from that deferral - $2.4 million for Monsanto and
$0.2 million for Agrium. The second is for the 2012 deferral period covered in this case,
December 1, 2011 through November 30, 2012. The 2011 GRC Stipulation specified that
amounts owed by Monsanto and Agrium related to the Deferral Period in this case will
also be amortized over a three-year period. Monsanto's and Agrium's share in the
Deferral Period is approximately $6.3 million and $.5 million, respectively. Thus, this
filing includes the first amortized payment of those amounts: approximately $2.1 million
for Monsanto and approximately $0.1 million for Agrium. Combined, the two ECAM
deferrals result in tariff surcharge rates in this case for Monsanto and Agrium in Schedule
94 equal to approximately $4.5 million and $0.3 million, respectively.
12.This Application is supported by Mr. Dickman's testimony and
confidential Exhibit No. 1 ("Exhibit 1") which illustrates the detailed calculation of the
deferred NPC adjustment. During the Deferral Period, the Base NPC in rates originated
from two rate cases: Case No. PAC-E-10-07 ("2010 GRC") for December 1, 2011
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through January 9, 2012 and the 2011 GRC for January 10, 2012 through November 30,
2012. In the 2010 GRC and the 2011 GRC, the Base NPC were set at $1.025 billion and
$1.205 billion, respectively. The combined Base NPC for the Deferral Period are $1.176
billion.
13.The deferral amount is calculated on a monthly basis by subtracting the
monthly base NPC rate from the actual NPC rate. This results in a monthly NPC rate
differential which is then multiplied by three groups of actual Idaho retail load at input:
tariff customers, Monsanto, and Agrium to calculate the NPC differential for deferral for
each group. For the twelve-month period ended November 30, 2012, the NPC differential
for deferral was approximately $18.4 million before the 90/10 sharing band.
14.As described in Mr. Dickman's testimony, the LCAR is a symmetrical
adjustment to offset over- or under-collection of the Company's production energy
related revenue requirement, excluding NPC, due to variances in Idaho load. The LCAR
reduced the deferral balance by approximately $0.7 million before sharing during the
Deferral Period mainly due to higher irrigation usage during the summer.
15.Credits for SO2 allowance sales revenues received by the Company from
December 1, 2011 to November 30, 2012 are also included as an offset to the NPC
deferral. Mr. Dickman's testimony describes how the SO2 sales revenues were credited
against the NPC differential for deferral.
16.A third component of the ECAM is Idaho's allocated differences between
including coal stripping costs incurred by the Company and recorded on the Company's
books pursuant to the guidance of the accounting pronouncement EITF 04-6, and the
amortization of the coal stripping costs when the coal was excavated. The EITF 04-6
deferral adjustment is added to the NPC differential for deferral.
rol
17. The total NPC deferral adjusted for LCAR, S02 revenue, and EITF 04-6
deferral is applied to the sharing band between customers and the Company such that
customers pay/receive 90 percent of the increase/decrease in Actual NPC when compared
to Base NPC, and the Company incurs/retains the remaining 10 percent.
18.In addition to the ECAM calculation components discussed above, the
deferral balance reflects the difference between actual REC revenues during the Deferral
Period and the amount of REC revenues included in base rates. The REC revenue true-up
included in the ECAM is symmetrical but no sharing band is applied.
19.The deferred ECAM balance of $25.5 million as of November 30, 2012 is
the sum of the components described above: 90% X (deferred NPC + LCAR + SO2
revenues + coal stripping costs adjustment) + interest charges + REC revenues. Exhibit 1
illustrates the detailed calculations for tariff customers, with an ending balance of $12.8
million; Monsanto, with an ending balance of $11.9 million; and Agrium, with an ending
balance of $.8 million. The sum of the three groups' ending balances total the November
30, 2012, ECAM deferral balance of $25.5 million. As stated above, the Company will
amortize and collect Monsanto's and Agrium's share of the deferral balance, as approved
by the Commission in this case, over three years pursuant to the 2011 GRC Stipulation.
As part of the deferral balance the Company is also collecting the second year of the
amortized payment from Monsanto and Agrium that resulted from the 2012 ECAM case.
20.The Company is not requesting a change to existing Schedule 94 rates for
standard tariff customers at this time. Based on usage levels from the 2011 GRC the
Company projects that the current Schedule 94 rate for these customer classes will be
sufficient to collect their ECAM deferral balance.
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Allocation of Deferred ECAM to Retail Tariffs
21 Ms Steward's testimony describes in greater detail the calculation of the
proposed Schedule 94 rates. Exhibit No. 2 of Ms. Steward's testimony illustrates
metered loads, the line loss adjusted loads, the allocation of the ECAM price change, and
the percentage change by rate schedule based on the second year present revenues based
on rates ordered in the 2011 GRC. Exhibit No. 3 is tariff Schedule 94 containing the
proposed rates by electric service schedule.
22.Rocky Mountain Power is notifying its customers of this Application by
means of a press release sent to local media organizations and messages in customer bills
over the course of a billing cycle In addition, copies of this Application will be made
available for review at the Company's local offices in its Idaho service temtory.
23.WHEREFORE, Rocky Mountain Power respectfully requests that the
Commission issue an order (1) authorizing that this matter be processed by Modified
Procedure; (2) approve the $15.9 million ECAM deferral; and (3) implement the
proposed Electric Service Schedule 94 as filed in Exhibit No. 3.
DATED this 1st day of February 2013.
Respectfully submitted,
ROCKY MOUNTAIN POWER
M kl& C. iidi/j1 Marl C. Moench
Yvonne R. Hogle
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Telephone No. [phone]
Facsimile No [phone]
E-mail yvonne hogle@pacificori com
Attorneys for Rocky Mountain Power
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