20150323Reply Comments.pdf

ROCKY MOUNTAIN
POt fER r-i::Ci:r'
201 South Main, Suite 2300
?$:i li,iil a3 flij t: 16 sart Lake citv' Utah 84111
l;li.;.i,March20'2015 uir!*llli.j i)[-;,,,i:, ;':, ,,': r
VA ELECTRONIC FILING
AND 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 OT'ROCKY MOIINTAIN POWER
FOR AUTHORITY TO INCREASE RATES BY $10.7 MILLION TO RECOVER
DEFERRED NET POWER COSTS THROUGH THE ENERGY COST
ADJUSTMENT MECHANISM
Dear Ms. Jewell:
Please find for filing Rocky Mountain Power's reply comments in the above referenced maffer.
The Company has also shipped for overnight delivery a CD with the original and seven copies of
its reply comments and supporting work papers.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at(801)220-
2963.
Very truly yours,
}t'h% v J'oau*l urw
Jeffrey K. Larsen
Vice President, Regulation
Enclosures
Cc: Service List
R. Jeff Richards
Yvonne R. Hogle (ISB# 8930)
201 South Main Street, Suite 2400
Salt Lake City, Utah 84111
Telephone No. [phone]
Facsimile No. [phone]
E-mail: [e-mail]
Attorneysfor RoclE Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) CASE NO. PAC-E-15-01
oF ROCKY MOUNTAIN POWER FOR )
AUTHORITY TO INCREASE RATES BY ) REPLY COMMENTS OF'
$10.7 MTLLION TO RECOYER ) ROCKY MOUNTAIN POWER
DEFERRED NET POWER COSTS )
THROUGH THE ENERGY COST )
ADJUSTMENT MECHANISM )
COMES NOW PacifiCorp, dba Rocky Mountain Power ("RMP" or the
"Company"), ffid, pursuant to Rules 56 and 256 of the rules of Procedure of the Idaho
Public Utilities Commission (the "Commission"), hereby submits reply comments in the
above referenced case.
BACKGROT]ND
On February 2,2015 the Company filed an application ("Application") with the
Commission pursuant to the Company's approved energy cost adjustment mechanism
("ECAM") for approval of approximately $16.6 million deferred net power costs from
the deferral period beginning December 1,2013 through November 30,2014 ("Deferral
Period"). The Company also requested for authority to adjust its Schedule 94, ECAM
rate by $10.7 million.
The requested $16.6 million increase in the ECAM balancing account for the
Deferral Period results in a total ECAM balance of approximately $27.0 million as of
November 30, 2014. The Company proposed to adjust Schedule 94 to collect
approximately $23.3 million over the period beginning April l, 2015 through March 31,
2016, representing an increase of $10.7 million over the current Schedule 94 rate.
On March 13,2015, Monsanto filed comments solely focused the on rate design
in the Application.
Commission Staff ("Staff') also filed comments on March 13,2015 proposing
one adjustment to the Company's calculation of the back cast adjustment related to the
Load Change Adjustment Rate ("LCAR"). Staff also proposed changes to the structure
of the ECAM calculation that, if adopted, it contends would eliminate the need for a back
cast adjustment.
REPLY COMMENTS
Rate Design
The Company adopts Monsanto's proposal of an equal monthly payment and
proposes that it be applied for the collection of the prior period balances for both Tariff
Contract customers. Using this approach, the monthly payment for Tariff Contract 400
will be $518,361 per month in order to pay down its prior period balance of $6,189,351,
including interest during the amortization period, to approximately $0 by the end of
March 2016. The monthly payment for Tariff Contract 401 will be $38,510 per month in
order to pay down its prior period balance of $459,815, including interest during the
amortization period, to approximately $0 by the end of March 2016. These prior period
balances are updated from the initial filing to reflect actual recoveries through February
2015, as proposed by Monsanto.
In addition to the equal monthly payment for prior period balances, the Tariff
Contract customers would be subject to the transmission rate of $0.00465 per kWh for
recovery of the current Deferral Period.
Alternatively, if the Commission is opposed to an equal payment approach for
recovery of the prior period balances from Tariff Contract customers, the Company has
reviewed and is willing to adopt Staffs rate design proposal, which develops separate
energy charges for recovery ofthe prior period balances.
Load Change Adjustment Rate Back Cast
In its comments, Staff proposed an adjustment to the Company's filing to include
a true-up of the LCAR in the back cast adjustment. The back cast adjustment was
originally proposed by Staff in the Company's 2014 ECAM filing as a way to ensure (l)
total recovery through base rates and (2) that the ECAM did not exceed actual costs
incurred during the deferral period. Staff s proposal in the 2014 ECAM included a back
cast adjustment for several ECAM components, including: net power costs ('NPC"),
demand side management ("DSM") costs, revenue from renewable energy credit
("REC") sales, and the LCAR. In the current case, Staff is proposing an adjustment to
the Company's filing because the Company omitted the LCAR from the back cast
adjustment. The Company disagrees with Staffs LCAR adjustment based on the fact
that the base load used by Staff to calculate the LCAR back cast adjustment is incorrect.
Staff s proposed LCAR back cast adjustment incorrectly uses the load from the
base established in Case No. PAC-E-ll-12 ("2011GRC"), and adopting Staff s proposal
would overstates the LCAR in this case. Order No. 32432 in the 2011 GRC established
the 2011 actual load reported in the Annual Results of Operations Report as the base for
the LCAR calculation beginning in 2013. Paragraph 5 from the same order states that the
"LCAR unit value would be frozen over the rate plan period at the current rate of $5.47
per MWh".
Table I below details the LCAR back cast adjustment as proposed by Staff, and
corrected to use the base load from the Annual Results of Operations Report. To
calculate the LCAR back cast adjustment, Staff first uses the Commission-approved
LCAR rate of $5.47 per MWh and multiplies it by Idaho base load at input to arrive at the
actual Idaho jurisdiction Energy Classified Production Costs (ECPC) minus NPC, or the
base LCAR (Line 3). The base LCAR is then divided by the Idaho base load at meter to
arrive at the LCAR embedded in rates (Line 6). The ECPC in rates is then multiplied by
the Idaho actual load at the meter to arrive at the ECPC collected through rates (Line 8).
The LCAR adjustment from the ECAM (line 9) is added to LCAR collected in rates
(Line 8) and compared to the base LCAR (line 3) to arrive at the over- or under-
collection of the LCAR. (Line ll). The sharing band is then applied to any over- or
under-collection of the LCAR to arrive at the LCAR back cast adjustment.
4
Table I
LCAR Back Cast Adjustment
I LCAR
2 Idaho Base [,oad MWH @ inptf
^ Actual Idaho Juisdictbnal ECPC minus NPC,
' B*. LCAR (Asswne Acfi.al : Base)
4 ID Base LCAR Embedded in Rates
5 Annual Idaho Base t oad @ nnter (MWh)
6 LCAR Embedded in Base Rates ($/\4Wh)
7 ID Actual t,oad @ nreter less Replacement Enerry (MWh)
8 Revenrc Collected throtgh Base Rates ($) : Line 6 * Line 7
9 LCARAdjusurEnt per ECAM (befure sharing) Exhbit I Line 17
10 Total Recovery ofLCAR : Line 8 + Line 9
1l (Over)funder Collection before sharing : Line 3 - Line l0
12 (Over)funder Collectbn after sharing :Lirw 11 * 90o/o
*Lines 2 and 5 refect the corrected base load ustng the 201 I Results ofOperatbn
**The 20ll Resuts of Actual tnad @. Inor:t 3.691-675 was for line bss to load at meter of
OrderNo. 32432
Linel*Line2
Line 3
:Lhlrc 4 /Lne 5
Staff
s 5.47
3,685,546
Corrected
5.47
3,691,675
$ 20,175,962 $ 20,193,460
$ 20,175,962 $ 20,193,460
3,328,058 3,390,565
$ 6.062 $ 5.956
3,474,297 3,474,297
$ 21,062,520 s 20,692,148
$ (619,086) $ (619,086
$ 20,443,434 $ 20,073,062
$ (267,472) $ 120,398
$ Q40,725) $ 108,358
As can be seen in Table 1, using the correct LCAR base load per Order No.
32432, the ECPC in rates is approximately $5.9644Wh or $0.1044Wh less than Staffs
calculation, and the coffected LCAR back cast adjustment shows an under-collection of
the LCAR of $108,358. If adopted, Staff s corrected adjustment would result in an
increase of $108,358 to the Company's filing, rather than a reduction of $240,725 as
proposed by Staff.
Additionally, the Company questions whether the back cast calculation can be
appropriately applied to the LCAR. The LCAR is not arate component in the same sense
that NPC, DSM costs, or REC revenues are rate components. Rather, the LCAR is
separate dollar-per-Mwh rate, approved by the Commission that is applied to any
changes in load to account for higher or lower collection of non-NPC energy-related
production costs (i.e. certain costs of energy production not included in NPC and not
otherwise subject to true-up in the ECAM). In Order No. 32206 from Case No. GNR-E-
10-03 the Commission stated "the load growth adjustment portion of the power cost
adjustment mechanism removes some costs from PCA [ECAM] recovery when loads
grow and adds some costs to PCA [ECAM] recovery when loads decline." The LCAR
was never intended to be trued-up as part of the ECAM as though it was a separate and
identifiable component of rates.
Structural Changes to the ECAM
Staff proposes changes to the structure of the ECAM that it contends would
eliminate the need for a back cast adjustment. While the Company is in general
agreement that the current back cast approach is not a sustainable method for calculating
the ECAM, the pending ECAM application before the Commission as filed complies
with the current approved method. The Company opposes making changes to the
structure of the ECAM in this case. If the ECAM were to be changed the Company
believes there are several additional items that should be addressed as part of that
process. The Company is considering a separate future application to address
modifications to the ECAM.
CONCLUSION
The Company supports Monsanto's equal monthly payment approach to recover
the prior period balances from Tariff Contract customers. Altematively, if the
Commission is opposed to an equal payment approach, the Company has reviewed and
agrees with Staff s rate design proposal.
The Company opposes Staff s LCAR adjustment and proposed modifications to
the ECAM. If adopted, StafPs proposal to include the LCAR in the back cast adjustment
should be corrected to rely on the base load approved in Order No.32432, which would
result in an increase to the Company's filing of $108,358. Due to the size of the
corrected adjustment, the Company has not revised its proposed rates in Electric
Schedule 94. If the Commission determined that any of the adjustments were appropriate
the impact to the rate design is minimal. Therefore the Company proposes any
corrections get recorded to the balancing account where any residual balance would be
included in the next annual ECAM frling rate design.
WHEREFORE, Rocky Mountain Power respectfully requests that the
Commission approve:
(l) the Company's deferral of $16,742,966;
(2) a fixed monthly payment to recover Agnurn and Monsanto's prior years balances; and
(3) the revised Electric Service Schedule No. 94 effective April l, 2015.
DATED this 20th day of March,2015.
we#
R. Jeff Richards
Yvonne R. Hogle
Attorneys for
Rocky Mountain Power
CERTIFICATE OF SERVICE
I hereby certify that on this 20th of March, 2015,I caused to be served, via e-mail and
overnight delivery, a true and correct copy of the foregoing document in PAC-E-15-01 to
the following:
James R. Smith (e-mail only)
Monsanto Company
P.O. Box 816
Soda Springs, Idaho 83276
i im.r. [e-mail]
Steven D. Spinner
Monsanto Company
800 N. Lindbergh Blvd
Saint Louis, Missouri 63141-7843
Steven. d. [e-mail]
Brubaker & Associates
16690 Swingley Ridge Rd., #140
Chesterfield, MO 63017
[e-mail]
Val Steiner
Agrium Us IncA.lu-West Industries
3010 Conda Rd.
Soda Springs, ID 8327 6-5301
Val. [e-mail]
Yvonne Hogle
Rocky Mountain Power
201 S. Main Street, Suite 2400
Salt Lake Ciry, Utah 84111
Yvonne.ho gle@pacifi corp.com
Randall C. Budge
Thomas J. Budge
Racine, Olson, Nye, Budge & Bailey, Chartered
201E. Center
P.O. Box l39l
Pocatello, ID 83204-1391
[e-mail]
Ted Weston
Rocky Mountain Power
201 S. Main Street, Suite 2300
Salt Lake Ciry, Utah 841I I
Ted.weston@pacifi com.com
Ronald L. Williams
Williams Bradbury PC
l0l5 W. Hays St.
Boise,ID 83702
[e-mail]
Jim Duke
Idahoan Foods
357 Constitution Way
Idaho Falls, lD 83742
[e-mail]
Data Request Response Center
PacifiCorp
825 NE Multnomah Street, Suite 2000
Portland, Oregon97232
datarequest@pacifi corp. com