20151015Stipulation.pdf

ROCKY MOUNTAIN
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1&7 W. Norft Temple, Suite 310
Salt Lake Clty. t tah 84116
October 15,2015
VA OWRIIAGflT DELIWRY
Jean D. Jewell
Commission SecretarY
Idaho Public Utilities Commission
472W. Washington
Boise,ID 83702
Attention: Jean D. Jewell
Commission Sectetary
RE: CASE NO. PAC-E-Ifl)!)
IN TEE MATTER OF THE APPLICATION ON ROCICY MOTINTNN POWER TO
MODIT"T TEE EI\ERGY COST AIIJUSTMENT MECf,AIUSM AND INCREASE
RATES BY S102 MTLLION, OR APPROXTMATELY 3.9 PERCENT
Enclosod please find the original and nine (9) oopies of the Stipulation entered into by and
among Rocky Mormtain Power, a division of PacifiCorp, and the following partics of reoord in
the above captioned matter: Stafffor the Idaho Public Utilities Commission; the Idaho Irrigation
Punper Association Inc.; Monsanto Company; PacifiCorp Idaho Industrial Customers.
Please contac{ Ted Weston at [phone] if you have any futher questions.
Enolosures
Vice President of Regulation
I hereby certiff that on this 15th of October,
and correct copy of the foregoing document
Randall C. Budge
Racine, Olson, Nye, Budge & Bailey, Chartered
201 E. Center
P.O. Box 1391
Pocatello, lD 83204-1391
[e-mail]
Eric Olsen
Racine, Olson, Nye, Budge & Bailey
201 East Center
PO Box l39l
Pocatello, ID 83204
[e-mail]
Val Steiner
Agrium Us IncA.lu-West Industries
3010 Conda Rd.
Soda Springs, lD 8327 6-5301
[e-mail]
James R. Smith (E-mail only)
Monsanto Company
P.O. Box 816
Soda Springs, ldaho 83276
i im.r. [e-mail]
Yvonne Hogle
Rocky Mountain Power
1407 W. North Temple, Suite 320
Salt Lake City, Utah 84116
Yvonne.ho gle@pacifi com.com
Bradley G. Mullins (E-mail only)
333 S.W. Taylor, Ste.400
Portland OR.,97204
[e-mail]
Brubaker & Associates
16690 Swingly Ridge Road, #140
Chesterfield, MO 63017
[e-mail]
CERTIFICATE OF SERVICE
2015,I caused to be served, via e-mail, a true
in PAC-E-15-09 to the following:
Ronald L. Williams
Williams Bradbury PC
1015 W. Hays St.
Boise,ID 83702
ron@wiliamsbradbury. com
Christina Zamora
Community Action Partnership Assoc. of Idaho
3350 W. Americana Terrace, Suite 360
Boise ID. 83706
[e-mail]
Jim Duke
Idahoan Foods
357 Constitution Way
Idaho Falls, lD 83742
[e-mail]
Ted Weston
Rocky Mountain Power
1407 W. North Temple, Suite 330
Salt Lake Ciry, Utah 84116
Ted.weston@pacifi corp.com
Data Request Response Center
PacifiCorp
825 NE Multnomah Street, Suite 2000
Portland, Oregon97232
datarequest@pac i fi corp. com
Anthony Yankel
29814 Lake Road
Bay Village, OH 44140
[e-mail]
Supervisor, Regulatory Operations
Yvonne R. Hogle (ISB# 8930)
1407 W. North Temple, Suite 320
Salt Lake City, Utah 841l6
Telephone: (80 I ) 220-4050
Facsimile : (80 l) 220 -3299
)rvonne.ho gle@oacifi com.com
Attorneyfor Roclry Mountain Power
IN THE MATTER OF THE APPLICATION )
oF ROCKY MOUNTATN POWER TO )
MODIFY THE ENERGY COST )
ADJUSTMENT MECHAITISM AI\[D )
INCREASE RATES BY $10.2 MILLION, OR )
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. PAC-E-15-09
STIPULATION
APPROXIMATELY 3.9 PERCENT )
)
This Stipulation ("Stipulation") is entered into by and among Rocky Mountain Power, a
division of PacifiCorp ("Rocky Mountain Power" or the "Company"); Staff for the Idaho Public
Utilities Commission ("Staff'); Monsanto Company ("Monsanto"); PacifiCorp Idaho Industrial
Customers ("P[IC"); and Idaho Irrigation Pumpers Association Inc. ("IIPA"). The parties above
are referred to hereinafter, collectively, as ooParties".
I. INTRODUCTION
l. The Parties agree that this Stipulation represents a fair, just and reasonable
compromise of the issues raised in this proceeding and that it is in the public interest. The
Parties recommend that the Idaho Public Utilities Commission ("Commission") approve the
Stipulation, including all of its terms and conditions. See IDAPA 3 I .01 .01 .271 , 272, and 27 4.
STIPULATION (PAC-E-ls-09) - Page I
II. BACKGROUNI)
2. The following Stipulation represents an agreement between the Parties on a two
year rate plan.
3. On May 27,2015, Rocky Mountain Power filed an Application and supporting
testimony requesting (a) a $10.2 million, or 3.9 percent on average, increase to base rates,
effective January 1,2016, to manage the level of net power costs ("NPC") recovered through the
ECAM surcharge, and (b) modifications to the Energy Cost Adjustment Mechanism ("ECAM").
4. To resolve the issues raised in the Company's Application in this proceeding, the
Parties met on August 11,2015, pursuant to IDAPA 31.01.01.271 and 272, to engage in
settlement discussions.
5. Based upon the sefflement discussions among the Parties, as a compromise of the
positions in this proceeding, and for other consideration as set forth below, the Parties stipulate
and agree as follows, subject to Commission approval of the terms and conditions of this
Stipulation.
III. TERMS OF THE STIPULATION
BASE RATES
6. The Parties agree that Idaho retail revenues should increase by $10.2 million (3.9
percent) effective January 1,2016. The Parties further agree this increase will apply to all rate
schedules as set forth in Exhibits 4 and 6 to the Application and as set forth in the tariff sheets
provided in Exhibit 7 and attached hereto.
7. The Parties agree that the $10.2 million increase above current base rates using
2014 loads will consist of: (a) a $3.2 million increase after removing Deer Creek
depreciation/depletion expense from NPC currently approved in base rates, increasing total
STIPULATION (PAC-E-l 5-09) - Page 2
Company base NPC from $1.385 billion (with Deer Creek depreciation) to $1.529 billion
(without Deer Creek depreciation) or $94.8 million Idaho allocated base NPC with Idaho base
energy at meter of 3,483,480 megawatt-hours, or $27.21 per megawatt-hour, (b) a $6.5 million
increase associated with a reduction of the revenue credit from the sale of renewable energy
certificates ("RECs") decreasing the total Company revenue credit from $78 million to $4.4
million which establishes Idaho's allocated RECs base at $0.3 million, (c) a $0.2 million change
in tax affected production tax credits ("PTCs") from a total Company credit of $l 13.1 million to
$115.7 million establishing Idaho allocated base of $6.9 million, and (d) $0.3 million
incremental increase in exchange for the Company agreeing not to file a general rate case with
rates effective priorto January 1,2018.
8. The Parties agree that base rates and base NPC should be updated effective
January 1,2017. The updated base NPC will be the amount reported in the 2015 annual results of
operations report, after appropriate pro forma adjustments for weather and abnormal power
supply expenses. For the rate spread and rate design of the update to base rates, the Company
will use an equal cents per kWh approach consistent with this filing. Rocky Mountain Power
agrees to file an application for review by interested parties and for approval by the Commission
no later than September 1,2016 proposing the change to base rates, the NPC from the 2015
annual results of operations report, the associated rate change and spread to customer classes,
and updated electric service schedules.
9. With the exception of the application to change base rates and base NPC as set
forth in Paragraph 8 above, Rocky Mountain Power agrees that it will not file another application
to increase base rates prior to June l, 2017,with rates effective on or after January l, 2018. The
Parties agree that the base rates established by this Stipulation will, in conjunction with the
STIPULATION (PAC-E-15-09) - Page 3
ECAM, result in reasonable rates for the period January 1,2016 through December 31,2017 (the
"Stay-out Period"). During the Stay-out Period the Parties will not request the establishment of
new regulatory assets or liabilities, which have not been previously approved by the
Commission, except under unique or unforeseen circumstances. Unforeseen circumstances
include natural disasters or emergencies.
ECAM
10. The Parties agree to modify the current ECAM for deferrals on and after January
1,2016 to reflect that the ECAM will be measured on a dollar per megawatt-hour basis using
load at the meter rather than the load at the generator and that base rate recovery will be
calculated using annualized NPC embedded in base rates.
ll. The Parties agree that 100 percentrof the amortization expense associated with
the unrecovered Deer Creek mine investment will be recovered through the ECAM as a separate
line item, without application of the sharing band until fully amortized. Staning January 1,2015,
the ECAM will separate the $1.385 billion ($87,555,188 Idaho Jurisdiction) base NPC into two
separate amounts: (l) base system NPC of 51,374,697,487 ($86,901,906 Idaho jurisdiction), and
(2) base system Deer Creek depreciation/depletion expense of $10,302,513 ($653,282 ldaho
jurisdiction). This will allow a separate Deer Creek depreciation expense ECAM deferral of
approximately $0.6 million for unrecovered Deer Creek mining investment by subtracting
$653,282 in base Deer Creek depreciation/depletion expense from actual Deer Creek
amortization of approximately $1.3 million. Beginning January 1,2016 neither base NPC nor
base rates will include Deer Creek depreciation expense and the entire Idaho allocated Deer
Creek amortization expense of approximately $1.3 million will be deferred and recovered
through the ECAM
I Order No. 33304, Case No. PAC-E-14-10
STIPULATION (PAC-E-I5-09) -Page 4
12. The Parties agree that PTCs will be tracked and trued-up in the ECAM, without
application of the sharing band, beginning January l, 2016. The base PTCs are set at a tax
affected total Company level of $l15.7 million, or 6.9 million Idaho allocated.
13. The Parties agree that the Customer/Company sharing band in the ECAM will
remain at 90110 percent respectively for all ECAM components with the exception of: PTCs,
amortization of the unrecovered Deer Creek mine investment, RECs and the Lake Side 2
resource adder, which are excluded from the sharing band.
14. The Parties agree that the load change adjustment rate ("LCAR') will be updated
to reflect base loads (at sales) corresponding to the period used to set base rates. The 2016
LCAR is summarized below.
[,oad Change Adjustment Rate Calculation
PAC-E 10-07 PAC-E-15-09
Cunent Amount Updated Amount
I Production - Retum on Investner
2 Production - Expense
3 Production - NPC Expenses
Production Revenue
4 Requirement (Exchding NPC)
5 SystemLoad
6 Production $ per MWH
7 Enerry o/o @ermnd & Enerry)
8
9
l0 Idaho Enerry @lrq,*
I I Idaho Production RR
12 Idaho Enerry @ Meter
13 LCAR @Metnr
833,083,414 833,083,414
2,173,162,370 2,173,162,370
I,748,001,871) (1,748,001,871
1,258,243,913 1,258,243,913
57,460,901 60,230,153
21.90 20.892s% 2
5.4? 522
3,691,675 3,786,584
20,193,462 19,776,001
3.328.058 3.483.480
6.07 5.68
15. The Parties agree that effective January 1,2016, SO2 revenues and demand side
management costs will no longer be tracked in the ECAM.
16. The Parties agree that the 2016 ECAM Deferral Period will include 13 months
STIPULATION (PAC-E-I5-09) - Page 5
(December 1,2015 to December 31,2016), and that all subsequent ECAM filings will be based
on calendar year deferrals. The Parties agree that the Company's ECAM applications will be
filed annually on April l, with a rate effective date of June I beginning April I ,2017.
MONSAIITO CONTRACT
17. The Company and Monsanto agree to extend the current terms of the existing
Electric Service Agreement governing curtailment products and payments through December 31,
2017. An executed copy of the contract will be provided separately to the Commission for
approval.
IV. GENERAL PROVISIONS
18. The Parties agree that this Stipulation represents a compromise of their positions
on all issues in this proceeding. Other than the above referenced positions and any testimony or
comments filed in support of the approval of this Stipulation, and except to the extent necessary
for a Party to explain before the Commission its own statements and positions with respect to the
Stipulation, all negotiations relating to this Stipulation shall not be admissible as evidence in this
or any other proceeding regarding this subject matter.
19. The Parties submit this Stipulation to the Commission and recommend approval
in its entirety pursuant to IDAPA 31.01.01 .274. The Parties agree to file comments in support of
the Stipulation on September 18,2015.
20. The Parties agree that no Party shall appeal any portion of this Stipulation or
Order approving the same. If this Stipulation is challenged by any person not a party to the
Stipulation, the Parties to this Stipulation reserye the right to file reply comments as they deem
appropriate to respond fully to the issues presented, including the right to raise issues that are
incorporated in the settlement embodied in this Stipulation. Notwithstanding this reservation of
STIPULATION (PAC-E-15-09) - Page 6
rights, the Parties to this Stipulation agree that they will continue to support the Commission's
adoption of the terms of this Stipulation.
21. In the event the Commission rejects or modifies any part or all of this Stipulation,
or imposes any additional material conditions on approval of this Stipulation, each Party reserves
the right, upon written notice to the Commission and the other Parties to this proceeding, within
l5 days of the date of such action by the Commission, to withdraw from this Stipulation. In such
case, no Party shall be bound or prejudiced by the terms of this Stipulation, and each Party shall
be entitled to seek reconsideration of the Commission's order, file testimony as it chooses, and
do all other things necessary to put on such case as it deems appropriate.
22. The Parties agree that this Stipulation is in the public interest and that all of its
terms and conditions are fair, just and reasonable.
23. No Party shall be bound, benefited or prejudiced by any position asserted in the
negotiation of this Stipulation, except to the extent expressly stated herein, nor shall this
Stipulation be construed as a waiver of the rights of any Party unless such rights are expressly
waived herein. Execution of this Stipulation shall not be deemed to constitute an
acknowledgment by any Party of the validity or invalidity of any particular method, theory or
principle of regulation or cost recovery. No Party shall be deemed to have agreed that any
method, theory or principle of regulation or cost recovery employed in arriving at this Stipulation
is appropriate for resolving any issues in any other proceeding in the future. No findings of fact
or conclusions of law other than those stated herein shall be deemed to be implicit in this
Stipulation.
STIPULATION (PAC-E- I 5-09) - Page 7
Idrho
Inc.
24. The obligations of tho Parties under this Stiprlation aro subjoot to tho
Commission's appoval hereof in aocordancs with its tarus and conditions an( ifjudicial rwiew
is sougfit, upon such approval beingupheld on appeal bya court of competo,ntjurisdiction.
Respectflrlly sub,mitted this 156 day of October, 2015.
Idaho Publtc Udlldee Commlsslon Strff
Monrento Company
Irrlgrtion Pumperr Amoclaffon
RoclryMounteln Power
STIPLJLATION (PAC-E-15-09) - Page 8
?A. Tbo oUtgrdor of ts Mc rdc eir Sdpldm all mt{oot b tho
ffim'! lnpu\nl hcufin aooqdnoo xri6 ftt tcmr od mdthr a4 tfiddd twiGw
ir rougfg qo Ee ryutnl ffig ryr.dil o rycl ty a omt doory@flACo.
ncpooelly mhitbd {dr lf dey of Ocibc, 20t5.
IrrlgrdoD ftnpo Arro&don
By.
Ideho
Irc"
noclryMmntdnltorror
Monrub Coryuy
STIPULATION (PAC-815-09) -PqF 8
ByJ
Ideho
Inc.
24. The obligations of the Parties undcr this Stipulation arc su-bjcct to thc
Commission's approval hcrcof in accordanco with its tcrms and conditions urd, ifjudicial review
is sought, upon zuc,h approval being uphcld on appeal by a coun of oompeteirt jurisdiction.
Rcspcctfully eubmitted this I 5s day of October, 20 t 5.
Idrho Pubfic U{lldec Comnfurlon Stelf
By
Monnnto Comprny
Irrlgrdon hrmperr Arroclrdon
Rocky Mountrln Power
[^/;rt/;
STIPULATION (PAC-E-15-09) - Page 8
24. thc obligptions of tho Prtiog rmdcr ftis $tipulation rro rubjcct to ths
Commission's apprcval h€r€ofin aocordancewith iaftrms and oonditions md, ifjudicialrwicw
is sught upon mch appoval bcinguphold o appoal bya court of oonpffitjuriediction
Repcctfrrlly rubmittod this 156 day of Octobcr, 20t5.
Idrho hrbllc UflIldc Conmlrdon Strfi
Moumb Conpny
Rocky Mountrln.Power
STIPLJIATION (PAC-el 5-(D) - Pqgo 8