20140110Comments.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
Street Address for Express Mail:
472W WASHINGTON
BOISE rD 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-13-15
OF A CUSTOMER CREDIT TO REFUND )
0VER-COLLECTTON OF CUSTOMER )
EFFICIENCY SERVICES RATE. ) COyMENTS OF THE) covtMrssloN srAFF
)
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through
its Attorney of record, Weldon B. Stutzman, Deputy Attorney General, and in response to the
Notice of Application and Notice of Modified Procedure issued in Order No. 32935 on
November 27,2013, submits the following comments.
BACKGROUND
On November 7,2013, Rocky Mountain Power filed an Application requesting approval
of a one-time bill credit to customers to refund the amount of $ 1 .4 million effective February 1,
2014. The proposed refund results from the Company's over-collection through its Schedule 191
Customer Efficiency Services Rate that funds the Company's demand-side management (DSM)
programs. The Company requests the Commission adopt a new electric service tariff, Schedule
95 Customer Efficiency Services Credit, to issue the bill credit.
STAFF COMMENTS JANUARY IO,2OI4
Since 2006, Schedule 191 funds DSM through a percentage rate charged on customers
monthly bills. The rate has fluctuated over time from L5% - 4.12% to align DSM revenues with
expenditures. The Company's filing is the result of a continued overfunded DSM Rider account.
In Case No. PAC-E-Lz-ll, the Company received Commission approval effective August 1,
2012 to decrease the Rider rate to reduce a growing surplus in the Rider account. In that filing,
the Company projected revenues of $4.541 million from Schedule l9l during the year, but
collected $5.245 million. Application,p.4. The Company projects an over-collection during
2013 of $710,200, resulting in an accumulated balance of $1.5 million as of December 31, 2013.
If no adjustment is made to the Schedule l9l rate, Rocky Mountain projects a balance at the end
2014 of $2.3 million. Application, p. 5.
The Company proposes to implement the bill credit through a new electric service
Schedule 95, Customer Efficiency Services Credit. Schedule 95 would apply to each active
retail customer as of February 1,2014 that was subject to Schedule l9l and incurred charges
from October l, 2013 through September 30,2013. The credit would be calculated and applied
to each individual customer's bill. The Company proposes to apply the bill credit beginning
February 1 and complete the bill credits no later than March 31,2014.
STAFF REVIEW
Staff reviewed the Company's Application and supplemental information and supports
the Company's proposal to issue a one-time bill credit of approximately $1.4 million to
customers. The one-time bill credit will refund the over-collection of Rider revenue to
customers, yet will not impair the Company's ability to pursue all cost-effective DSM. Because
the Rider rate is applied to a customer's overall bill, a one-time bill credit better matches the
refunded amount to the individual contributor. Staff does not believe a new Schedule 95 is
necessary to provide a one-time bill credit to customers.
Tariff Rider
Rocky Mountain Power has consistently attempted to align the revenue collected for
energy efficiency expenses with the actual (and forecasted) expenditures. The Company's
Schedule 191 rate was initially set at l.5Yo in 2006 and was increased to 3.72% in May 2008.
Order No. 30543. In February 2010, Rocky Mountain filed an application requesting an increase
to 5.85oh, but the Commission approved a rate of 4.72%. Order No. 32023. The Commission
STAFF COMMENTS JANUARY IO,2OI4
approved changes for funding the Company's dispatchable irrigation load control program in the
Company's next general rate case, and reduced the Schedule l9l rate to 3.4%. Order No. 32196.
In May 2012, the Company filed an application to reduce the collection rate from3.4Yoto 2.lYo,
anticipating the reduction would result in annual revenue collections of $3.5 million. As of
September 30,2013, the Company had a credit balance in the Tariff Rider Account of
approximately $ 1 .4 million (Company owes ratepayers), with a projected credit balance of $ 1.5
million on December 31, 2013.
To determine the derivation of the account balance, Staff reviewed the Company's DSM
expense and tariff revenue projections filed in PAC-E-12-111 and compared them to actuals
through September 30,2013.2 Staffls analysis confirms that the credit balance in the DSM Tariff
Rider account resulted from an increase in revenues and not a decrease in DSM expenditures.
Although the Company's actual DSM expenditures exceeded its forecasts, heavy summer loads
during 2012 and 2013 resulted in higher than forecasted rider revenues. During the months of
June through August 2012, actual tariff rider revenues exceeded forecasts by $772,463. For
those same months in2013, an additional $351,622 over forecasted revenues was collected by
the Company. Although2013 DSM expenses decreased slightly when compared to 2012levels,
the Company's actual DSM expenses exceeded its forecasts by more than $200,000 during the
same period.
To refund the credit to Customers, the Company is proposing a pro-rata bill credit based
on the amount each customer contributed to the rider. During the period of October 2012
through September 2013, the Company collected rider revenues of $3,786,656 from active
customers. A refund of $1.4 million would be 37% of the rider revenues collected during that
12-month period. Therefore, the Company plans on issuing a bill credit to each customer equal
to 37Yo of the amount that each individual customer paid into the rider during those 12 months,
resulting in an average residential bill credit of $8.32. Staff has reviewed the Company's
calculations and believes that it accurately reflects the over-collected balance as of September
2013.
' The Company filed Case No. PAC-E-I2-11 on May 30,2Ol2 with actual data through April2Ol2, and forecasted
tariffrider revenue and expenditures through 2013.
2 In this case, actual data was provided through September 30,2Ol3 with forecasts through 2015.
STAFF COMMENTS JANUARY IO,2OT4
There has been one other case in recent history where a utility company issued a one-time
credit to customers, Case No. INT-G-12-01. Staff reviewed the record in that case to determine
if Rocky Mountain Power's calculation of the individual customer bill credit was consistent with
what the Commission approved for Intermountain Gas Company. In Case No. INT-G-12-01,
Intermountain Gas Company refunded $11.9 million to customers by dividing the $11.9 million
by actual sales volumes over the time period the credit was generated, resulting in a per therm
credit applied to customers bills. Rocky Mountain Power's approach is analogous to the
approach of Intermountain Gas, but rather than calculating a kWh credit, the Company will
calculate a credit based on what each individual customer paid into the rider over a 12-month
period. Staff believes the Company's methodology used to develop the bill credit results in a
more precise transfer of funds back to individual customers.
Staff notes that the Company is expected to continue collecting more in rider revenue
than forecasted DSM expenditures. After accounting for the credit, the Company projects a
positive rider balance (Company owes customers) as of December 3 1, 201 5 of $815,000,
indicating that another adjustment may be needed at some point in the future.
Energy Efficiency Expenditures & Savings
The proposed one-time bill credit has no impact on the Company's future DSM
expenditures or energy savings. Rather, the Company projects DSM spending through 2014 to
remain constant with a forecasted increase in 2015. To forecast potential energy savings, the
Company contracted Cadmus to conduct a system-wide 20-year Conservation Potential
Assessment (CPA) to broadly estimate future DSM resource opportunities. The CPA helped
inform the 2013 Integrated Resource Plan (IRP) process. The IRP methodology bundles
measures of similar levelized cost and selects cost-effective resources by state. The bundled
measures, grouped by levelized cost, may contain a mix of residential, commercial, industrial
and inigation measures. The methodology does not calculate program or sector-level savings,
but results in a portfolio-level energy savings goal by individual state.
Staff reviewed the Company's historical and forecasted Class 2 (energy efficiency
programs) energy savings from its DSM Annual Reports and its 2013 IRP. Table 8.9 from the
2013 IRP indicates that the Company's portfolio-level saving targets for incremental energy
savings are expected to slightly increase. The following table highlights the Company's Class 2
expenditures, IRP savings and its reported savings since its most recent DSM prudency case for
STAFF COMMENTS JANUARY IO,2OI4
program year 2009. Staffnotes that spending in the residential sector is expected to grow at a
faster rate through 2015 than the commercial/industrial or irrigation sectors.
YEAR EXPENDITURE
Class 2 DSM
IRP SAVINGS
(MWh)*
REPORTED SAVINGS
(Mwh)
Gross Savinss w/line loss**
20t0 $3.2 m lon 16.824 13.096
20t1 $2.6 m lon 15.650 9.513
20t2 $3.4 m lon 9.375 t2.615
20t3 $3.2 m lon 10,690 15.61 5
20r4 $3.2 m ion (forecast)1 1.090 (forecast)nla
20t5 $4.0 m on (forecast)11.470 (forecast)nla
*Source:2013IRP
**Source: 2010,2011,2012 DSM Annual Report
Staff notes that an increase in expenditures does not always equate to an increase in
energy savings, nor does it indicate cost-effectiveness or prudently incurred expenses. Staff will
fully review DSM expenditures incurred since 2009 when the Company files its next DSM
prudency case.
CUSTOMER RELATIONS
Customer Notice and Press Release
The customer notice and press release were not included in Rocky Mountain Power's
Application. Upon request, Staff was provided a copy of RMP's press release, issued November
6,2013, and a draft copy of the proposed Customer Notice. Because the Company is not asking
to change rates, it is not required by the Commission's Rules of Procedure to send a customer
notice or press release with its Application. The Company intends to include a notice with
cyclical billings beginning in January 2014 and ending in February 2014 contingent upon
Commission approval. Through informal discussions with the Company, Staff suggested some
minor modifications to the customer notice and the Company agreed.
Customer Comments
In the Commission's Notice of Application, customers were given until January 10,2014
to file comments. On December 11, 2013, the Commission issued a press release regarding the
Application. As of January 3, 2014, no customers had filed comments.
STAFF COMMENTS JANUARY IO,2OI4
Customer Credit Refund
The Company proposes to provide a one-time bill credit to all retail customers subject to
Schedule 191 who have active service as of February l, 2014. Based on discussions with the
Company, it is Staff s understanding that qualifying customers who had service at more than one
location within the Company's service territory during the 12-month credit period will receive a
credit based on what each customer paid under Schedule 191 for all of his or her service
locations. Staff finds the Company's implementation plan to be reasonable in this respect.
Proposed New Electric Service Schedule 95, Customer Efficiency Service Credit
The Company proposes the Commission adopt a new tariff schedule that describes the
one-time bill credit. Staff believes the administrative work associated with a short-lived tadff
creates an unnecessary administrative burden for both the Company and Commission Staff.
Staff recommends that the Commission not approve proposed Schedule 95. The Company has
indicated that it does not oppose Staff s position.
STAFF RECOMMENDATION
Staff recommends the Commission accept the Company's proposal to issue a one-time
bill credit to refund approximately $1.4 million to customers that were subject to Schedule 191
from October 1,2012 to September 31, 2013, effective beginning February l, 2014. Staff
recommends the Commission reject the Company's proposal to adopt a new electric service
schedule to issue the bill credit.
Weldon B. Stutzman
Deputy Attorney General
Respecttully submitted this blLday of Janu ary 2014.
Technical Staff: Nikki Karpavich
Donn English
Curtis Thaden
i:umisc:comments/pacel3.l 5wsnkdect comments
STAFF COMMENTS JANUARY 1O,2OI4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 10,, DAY oF JANUARY 2014,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. PAC-E-I3-Is, BY E-MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWNG:
TED WESTON DANIEL E SOLANDER
ID REGULATORY AFFAIRS MANAGER SENIOR COI.INSEL
ROCKY MOUNTAIN POWER
2OI S MAIN ST STE 23OO
SALT LAKE CITY UT 84111
E-MAIL: [e-mail]
DATA REQUEST RESPONSE CENTER
E.MAIL ONLY:
datarequest@pacifi corp. com
ROCKY MOUNTAIN POWER
2OI S MAIN ST STE 23OO
SALT LAKE CITY UT 84111
E-MAIL: daniel.solander@f,acificorp.com
CERTIFTCATE OF SERVICE