20131220Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF

FROM: DON HOWELL
DEPUTY ATTORNEY GENERAL

DATE: DECEMBER 17, 2013

SUBJECT: ROCKY MOUNTAIN POWER’S BPA REP CREDITS,
CASE NO. PAC-E-13-11

On August 20, 2013, PacifiCorp dba Rocky Mountain Power filed Tariff Advice No.
13-01 to revise its tariff Schedule No. 34, commonly referred to as the Bonneville Power
Administration (BPA) residential exchange program (REP) credit. In its tariff advice, Rocky
Mountain proposed that the REP credit for residential and small farm customers be increased
from the existing 0.1839¢ per kilowatt-hour (kWh) to 0.3095¢ per kWh effective October 1,
2013. At its Decision Meeting held September 30, 2013, and in Order No. 32901 issued October
1, 2013, the Commission partially approved the tariff advice and opened the present docket so
the Commission Staff could further examine one issue.
THE TARIFF ADVICE
In its tariff advice, Rocky Mountain proposed to increase its residential exchange
credit for Idaho customers in both FY14 and FY15. The Company reported that its FY14-15
REP benefits for Idaho, Oregon and Washington is $34.741 million per fiscal year. Rocky
Mountain proposed to allocate Idaho customers $3.188 million per year. In Order No. 32901,
the Commission conditionally approved the Company increase in the BPA rate credit.
The one issue left for further examination concerns the “reallocation” of REP benefits
contained in the REP Settlement Agreement approved by the BPA Administrator in late 2010
and by this Commission in April 2011. Section 6 of the REP Settlement Agreement contains a
mechanism for reallocating REP benefits among the six investor-owned utilities (IOUs). This
“reallocation” agreed to by the IOUs and the three State Commissions became necessary so the
benefits of settling the various BPA cases are roughly equal among the IOUs.
DECISION MEMORANDUM 2
Under Section 6 of the REP Settlement Agreement there are two primary reallocation
adjustments. First, the “annual” adjustment is allocated among the four IOUs (excluding PSE
and NorthWestern) based on each IOUs share of the “Lookback” adjustments. Table 6.2.2. The
second adjustment relates to NorthWestern Energy. This latter adjustment reallocated funds to
NorthWestern. Under both adjustments, the amount of Idaho Power’s reallocation to the other
IOUs was contingent upon it first receiving REP benefits.
For example, Idaho’s jurisdictional share of the reallocation adjustment paid to other
IOUs is 28.5%, while Rocky Mountain calculated that its Idaho jurisdictional share of the
adjustment paid to NorthWestern is 12.95%. Table 1 summarizes Rocky Mountain’s proposed
jurisdictional treatment of the two reallocation adjustments.
Section 6
Reallocation
Adjustments
Annual
Adjustment
FY14-FY15
Basis for
Jurisdictional
Treatment

Idaho Share

Idaho Annual
Adjustment1
state’s share of
–
state’s share of

As reflected in the table above, Staff was concerned about the consistency of the reallocation
adjustments. Rocky Mountain maintained there was a reasonable basis for the proposed different
treatment. Staff and representatives of Rocky Mountain met on October 10, 2013, to further
discuss this issue.
Following that discussion and further analysis by Staff, Staff now recommends this
docket be closed and the REP rate credits remain as calculated by Rocky Mountain. Staff
recognizes the reallocations to NorthWestern were unique. At the time of the Settlement
Agreement, NorthWestern had paid its Lookback amounts and had resolved its deemer issues. In
addition, Idaho Power was in a unique position because it was generally contemplated that Idaho
Power would not qualify REP benefits in the near term and thus Idaho Power would have no
means of reallocating REP benefits to the other IOUs for Lookback, or pay NorthWestern.

1 The Idaho annual adjustment does not equal the annual adjustment times the Idaho share due to rounding.
DECISION MEMORANDUM 3
In addition, changing Rocky Mountain’s allocation to the Idaho jurisdiction would
either require other jurisdictions to agree to the change or Rocky Mountain would be responsible
for funding the change in jurisdictional allocation. Based upon the unique facts of the settlement
agreement, Staff believes that the difference between its concern and the Company’s proposal is
de minimus. Consequently, Staff recommends this docket be closed and no further adjustment to
the REP rate credit take place in this FY14-15 cycle.
COMMISSION DECISION
Does the Commission agree with Staff’s recommendation to close this docket without
further adjustment to Rocky Mountain’s REP credit?

bls/M:PAC-E-13-11_dh