20140702final_order_no_33070.pdf

Office of the Secretary
Service Date
July 2,2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF PACICORP DBA ROCKY MOUNTAIN )CASE NO.PAC-E-14-02
POWER FOR ADVANCE AUTHORIZATION )
TO TRANSFER SPARE TRANSFORMERS )
PURSUANT TO A SHARING AGREEMENT )ORDER NO.33070
___________________________________________________________________________________
)
On May 23,2014,PacifiCorp dba Rocky Mountain Power (‘Rocky Mountain”or
Company”)filed an Application with the Commission requesting advance authorization to
transfer spare transformers to other participating utility companies,if required,pursuant to a
sharing agreement.
On June 23,2014,the Commission approved Rocky Mountain’s Application via
unanimous voice vote during its weekly decision meeting.
APPLICATION
In its Application,Rocky Mountain outlined the history behind the FERC-approved
Spare Transformer Equipment (“STEP”)Program.The Company says that STEP is a
coordinated approach to increase the electric power industry’s inventory of spare transformers
and streamline the process of transferring those transformers to affected utilities in the event of a
transmission outage caused by a terrorist attack.STEP requires each participating utility to sell
its spare transformers if requested to any other participating utility that suffers a “triggering
event.”A “triggering event”is defined as “an act or coordinated acts of deliberate,documented
terrorism,as defined in the Homeland Security Act of 2002.
According to the Company,the STEP sharing agreement was negotiated among more
than 50 utilities and provides each participating utility with legally enforceable rights to access
readily available spare transformers that have been committed to STEP.Rocky Mountain
believes that if a triggering event occurs,participating STEP utilities possess self-executing and
legally enforceable rights to acquire spare transformers from participating STEP utilities.
Rocky Mountain entered into its STEP agreement on December 6,2013,with other
participating utility companies across the United States.However,the Company’s status as a full
participating member of STEP is contingent upon relevant state regulatory approvals.
ORDER NO.33070 1
Based on preliminary information provided by the Edison Electric Institute (EEI).the
Company believes that its obligation under the sharing agreement will be two spare transformers.
The first transformer is rated as a 500-230 kV and 193 MVA.the second transformer is rated at
345-138 kV and 141 MVA.This obligation is subject to adjustment as determined by a
commitment formula found in the sharing agreement.The commitment of the two transformers
does not prohibit the Company from utilizing the equipment for its own needs so long as the
spare transformers are replaced within 1 8 months.
The Company has evaluated the risk of having to sell a spare transformer to another
STEP participating utility and believes that the combination of committing existing spare
transformers and the low probability of a triggering event result in an acceptable risk.The
Company claims that it takes steps to maintain the safety and security of its substations and it
does not believe it is reasonable or economically feasible to amass a spare transformer inventory
large enough to allow full system restoration following a worst case scenario terrorist attack.
The Company alleges that its customers will benefit from the increased access to available spare
transformers in the event that the Company experiences a triggering event without the added
costs of significant increases in its spare transformer inventory.
The purchase price for transformer(s)transferred to a utility experiencing a triggering
event is defined in the sharing agreement.STEP utilities must pay an annual fee of
approximately $5,000 to participate in the transformer exchange program.The Company does
not request any ratemaking treatment for fees or any new inventory required by the terms of the
agreement.
COMMISSION DISCUSSION AND FINDINGS
On January 3,2007,the Commission approved an equivalent application submitted
by Idaho Power Company (“Idaho Power”),authorizing Idaho Power to participate in its own
Transformer Sharing Agreement.See Order No.30211 at 4.Similarly,the Commission finds
that the proposed Agreement presented by Rocky Mountain complies with the requirements of
Idaho Code §61-328.Id.The Commission finds that participation in STEP,as referenced and
more thoroughly explained above,is in the public interest and will not adversely affect customer
rates because the Company does not seek rate recovery for the sale/exchange of transformers
under their Agreement with participating utilities.
ORDER NO.33070
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over PacifiCorp dba Rocky
Mountain Power,an electric utility,and the issues presented in Case No.PAC-E-14-02 pursuant
to Idaho Code,Title 61,and the Commission’s Rules of Procedure,IDAPA 31.01.01.000 etseq.
ORDER
IT IS HEREBY ORDERED that Rocky Mountain’s Application to participate in the
Spare Transformer Equipment Program is approved.
IT IS FURTHER ORDERED that Rocky Mountain shall advise the Commission if it
is required to purchase additional transformers or if it expands the number of voltage classes
subject to the Spare Transformer Equipment Program.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §61-626.
-iDONEbyOrderoftheIdahoPublicUtilitiesCommissionatBoise,Idaho this
day of July 2014.
PAUL KJELLANb R,PRESIDENT
‘L4A /[i
MARSHA H.SMITH,COMI’vIISSIONER
MACK A.RED’
ATTEST:
p (1
Jean D.Jewell
Commission Secretary
O:PACE-1 4-02_np
ORDER NO.33070 3