HomeMy WebLinkAbout20150202Application.pdfROCKY MOUNTAIN
POWER
201 South Main, Suite 2300
Salt Lake City, Utah 84111
February 2,2015
VA OWRNIGHT DELIWRY
Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
472W. Washington
Boise,lD 83702
Re: Case No. PAC-E-15-01
IN THE MATTER OF THE APPLICATION OF ROCKY MOT]NTAIN POWER
FOR AUTHORITY TO INCREASE RATES BY $10.7 MILLION TO RECOVER
DEFERRED NET POWER COSTS THROUGH THE ENERGY COST
ADJUSTMENT MECHAIIISM
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, exhibits, the
press release, and customer bill insert. Also enclosed is a CD containing the Application, direct
testimony, exhibits and confidential work papers.
All formal correspondence and questions regarding this Application should be addressed to:
Ted Weston
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, Utah 841I I
Telephone: (80 I ) 220-2963
Fax: (801) 220-2798
Email : ted.weston@fracifi corp. com
Yvonne Hogle
Rocky Mountain Power
201 South Main Street, Suite 2400
Salt Lake City, Utatr 84111
Telephone: (801) 220-4050
Fax: (801) 220-3299
Email : Yvonne.ho gle@pacifi corp. com
Communications regarding discovery matters, including data requests issued to Rocky Mountain
Power, should be addressed to the following:
By E-mail (preferred):
By regular mail:
datareq uest@Aacifi corp. com
Data Request Response Center
PacifiCorp
825 NE Multnomah St., Suite 2000
Portland, OR97232
Idaho Public Utilities Commission
February 2,2015
Page2
Informal inquiries may be directed to Ted Westoq Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
Y,-Ltn(^/ff>
Vice President Regulation
Enclosures
CC: Steven D. Spinner
James R. Smith
Randall C. Budge
Katie Iverson
R. Jeff Richards
Yvonne R. Hogle (lSB# 8930)
201 South Main Street, Suite 2400
Salt Lake City, Utah 84111
Telephone No. (801) 220-4050
Facsimile No. (801) 220-3299. E-mail: yvonne.hogle(?pacificorp.com
Attorneys for Rocley Mountoin Powe r
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
rN THE MATTER OF THE APPLICATION ) CASE NO. PAC-E-15-01
oF ROCKY MOUNTAIN POWER FOR )
AUTHORITY TO INCRE,ASE RATES BY ) APPLICATION OF ROCKY
S10.7 MILLION TO RECOVER
DEFERRED NET POWER COSTS
THROUGH THE ENERGY COST
ADJUSTMENT MECHANISM
) MOUNTATN POWER
)
)
)
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 (o'Commission") pursuant to the Company's approved energy cost
adjustment mechanism ("ECAM"). The Company is requesting approval of
approximately $16.6 million deferred net power costs from the deferral period beginning
December I,2013 through November 30,2014 ("Deferral Period") and proposing to
revise Electric Service Schedule No. 94, Energy Cost Adjustment, to recover
approximately $23.3 million in total deferred net power costs for the collection period
beginning April l, 2015 through March 31, 2016. The $23.3 million includes an
amortization of Monsanto's and Agrium's share of 2012, 2013 and 2014 deferrals, as
further explained below. Recovery of this amount represents an increase of
approximately $10.7 million from Schedule 94 rates currently in effect as approved in
Order No. 33008 in Case No. PAC-E-14-01. Rocky Mountain Power respectfully
requests that these changes to Idaho rate Schedule 94 become effective on April l, 2015.
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 73,600 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 8411I
Telephone: (801) 220-2963
Email : ted.rveston(0pacifi corp.com
Yvonne R. Hogle,
Assistant General Counsel
Rocky Mountain Power
201 South Main, Suite 2400
Salt Lake city, utah 841l1
Telephone: (80 I ) 220-4050
Email : vvonne.lrogle@pacifi corp.com
3. In addition, Rocky Mountain Power requests that all data requests
regarding this Application be sent in Microsoft Word to the following:
By emai I (preferred) : datarequ est(O,pacifi corp. co m
By regular mail: Data Request Response Center
PacifiCorp
825 Multnomah Street, Suite 2000
Portland, Oregon 97232
Informal questions may be directed to Ted Weston, Idaho Regulatory Affairs
Manager at (801) 220-2963.
ECAM Overview
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, in 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 as 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:
o 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
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 then effective rates ("Base
NPC") from the 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 difference between Actual NPC and Base NPC, the
ECAM includes five additional components: the Load Change Adjustment Revenues
("LCAR"), a credit for SOz allowance sales, an adjustment for load control costs, an
adjustment for the treatment of coal stripping costs, i.e., Emerging Issues Task Force
("EITF") 04-6, and a true-up of 100 percent of the incremental Renewable Energy Credit
("REC") revenues from the amount 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) / l0 percent (Company) that shares the differential between Actual NPC and
Base NPC, LCAR, SOz sales, load control costs, and the coal stripping costs adjustment
between the customers and the Company. The sharing band is also described in more
detail below.
Chanees to ECAM Calculation
9. In accordance with Commission Order No. 33008 in Case No. PAC-E-I4-
01, the Company has reflected changes to the ECAM calculation ordered by the
Commission to perform a back cast calculation, as described in detail in Mr. Michael
Wilding' s Direct Testimony.
Proposed Deferred ECAM Rate Changes
10. In support of this Application, Rocky Mountain Power has filed the
testimony and exhibits of Company witnesses Michael Wilding and Joelle Steward. Mr.
Wilding's testimony and exhibit describe the Actual NPC incurred by the Company to
serve retail load for the historical twelve-month period ended November 30,2014 and
explain the main differences between Actual NPC and Base NPC. Ms. Steward's
testimony supports the new ECAM tariff surcharge rates to be effective April 1,2015
through March 31,2016.
11. Commission Order No. 32432 from Case No. PAC-E-ll-tz approved a
stipulation entered into by parties in the Company's 20ll general rate case ("2011
GRC"), to amortize prior year ECAM deferrals for Monsanto and Agrium ("201I GRC
Stipulation"). The proposed rate change for Monsanto and Agrium in this case covers
three ECAM deferral periods: l) the third-year amortization of the 2013 ECAM deferral
for the period of December l, 2011 through November 30, 2012; 2) the second-year
amortization of the 2014 ECAM deferral for the period of December l, 2012 through
November 30,2013; and 3) the total amount of the 2015 ECAM deferral for the period of
December 1,2013 through November 30,2014. The 201 I GRC Stipulation specified that
amounts owed by Monsanto and Agrium related to the Deferral Period in this case will be
paid over a 12-month collection period. Combined, the amortization of the amounts from
the three ECAM deferral periods result in tariff surcharge rates in this case for Monsanto
and Agrium in Schedule 94 of approximately $12.7 million and $1.0 million,
respectively.
12. This Application is supported by Mr. Wilding's testimony and Exhibit No.
1 ("Exhibit l") which illustrates the detailed calculation of the ECAM deferral. During
the Deferral Period, Base NPC were $1.385 billion pursuant to Order No. 32432 from
Case No. PAC-E-l l-12.
13. The NPC deferral amount is calculated on a monthly basis by subtracting
the monthly Base NPC rate from the Actual NPC rate. The NPC rate is calculated by
dividing monthly NPC by the corresponding monthly load to express the costs on a dollar
per megawatt-hour basis. The Base NPC average was $23.73 per megawatt-hour, and the
Actual NPC averaged $27.05 per megawatt-hour, $3.32 per megawatt-hour higher. The
monthly incremental difference was multiplied by Idaho's actual load during the Deferral
Period. For the l2-month period ended November 30, 2014, the NPC differential for
deferral was approximately $12.7 million before the 90/10 percent sharing band.
14. The LCAR is a symmetrical adjustment to offset over- or under-collection
of the Company's energy-related production revenue requirement, excluding NPC, due to
variances in Idaho load. The LCAR decreased the deferral balance by $619,086 before
sharing due to higher usage during the Deferral Period.
15. Revenues from SOz emission allowance sales received by the Company
from December l, 2013 to November 30,2014 are also included as an offset to the NPC
deferral. This adjustment reduces the deferral by $71 before sharing.
16. A fourth component of the ECAM tracks Idaho's share of incremental
load control costs. Commission Order 32432 specified that the load control costs would
be tracked in the ECAM. This adjustment increases the deferral by approximately $1.0
million before sharing.
17. The fifth component of the ECAM is the difference between including
coal stripping costs 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. This adjustment decreases the deferral by $66,928 before
sharing.
18. The total NPC deferral adjusted for LCAR, SO2 revenue, load control, and
EITF 04-6 is $13.0 million which is subject to the sharing band between customers and
the Company such that customers paylreceive 90 percent of the increase/decrease in
Actual NPC when compared to Base NPC, and the Company incurs/retains the remaining
l0 percent. After accounting for the sharing band the NPC deferral is $1 1.7 million.
19. 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. During the Deferral
Period actual REC revenue was approximately $6.0 million lower than the amount in
base rates on an Idaho-allocated basis.
20. Pursuant to Order No. 33008 in Case No. PAC-E-14-01, the Company
implemented a back cast calculation to perform a check for over/under-collection of
NPC, load control costs, and RECs. This adjustment reduced the deferral approximately
$1.2 million making the net deferral $16.5 million before interest. Approximately $0.1
million of interest was accrued on this balance during the deferral period making the total
deferral $ I 6.6 million.
21. The deferred ECAM balance of $27.0 million as of November 30, 2014 is
the sum of $10.4 million of uncollected deferrals from prior ECAM filings plus the
components described above. Interest is accrued on the uncollected balance at the
Commission-approved interest rate on customer deposits, currently one percent annually.
During the deferral period interest of $0.3 million was added to the uncollected balances.
Exhibit I summarizes the prior year uncollected deferred balances for tariff customers,
with an ending balance at November 30, 2014 of$l.8 million; Monsanto, with an ending
balance of $8.0 million;and Agrium, with an ending balance of $0.6 million.
Allocation of Deferred ECAM Balance to Retail Tariffs
22. Ms. Joelle Steward's testimony describes the calculation of the proposed
Schedule 94 rates. Exhibit 2 of Ms. Steward's testimony illustrates this calculation based
on metered loads, the line loss adjusted loads, the allocation of the ECAM price change,
and the percentage change by rate schedule based on the present revenues ordered in
Case No. PAC-E-I3-04. Exhibit 3 is a summary of the ECAM balances detailing the
current deferral, prior deferred balances, ECAM rider revenues and an estimate the net
expected balance as of April 1,2015. Exhibit 4 is a clean and legislative copy of Electric
Service Schedule No. 94 containing the proposed rates by electric service schedule based
on the customer's delivery voltage of electric service.
23. Rocky Mountain Power is notiffing its customers of this Application by
means of a press release sent to local media organizations and messages in customers'
bills over the course of a billing cycle. The customer bill inserts will begin on February
12, 2015, and continue through the twenty-one day billing cycle. Copies of the press
release and bill insert are provided with the Application. In addition, copies of the
Application will be made available for review at the Company's local offices in its Idaho
service territory.
WHEREFORE, Rocky Mountain Power respectfully requests that the
Commission (l) issue an order authorizing that this matter be processed by Modified
Procedure; (2) approve the $16.6 million ECAM deferral for the Deferral Period; and (3)
implement the proposed Electric Service Schedule No. 94 as filed in Exhibit 4.
DATED this 2nd day of February 2015.
Respectfully submitted,
ROCKY MOUNTAIN POWER
Yvonne R. Hogle
201 South Main Street, Suite 2400
Salt Lake City, Utah 841l1
Telephone No. (801) 220-4050
Facsimile No. (801) 220-3299
E-mail : yvonne.hosle(dpacilicom.com
Attorneyfor Roclcy Mountoin Power