20151027notice_of_proposed_settlement_order_no_33403.pdf

Office of the Secretary
Service Date
October 27,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF PACIFICORP DBA )
ROCKY MOUNTAIN POWER’S )CASE NO.PAC-E-15-09
APPLICATION TO MODIFY THE ENERGY )
COST ADJUSTMENT MECHANISM AND )NOTICE OF PROPOSED
INCREASE RATES )SETTLEMENT STIPULATION
)
)NOTICE OF
)MODIFIED PROCEDURE
)
)NOTICE OF SCHEDULE
)
_____________________________
)ORDER NO.33403
On May 27,2015,PacifiCorp dba Rocky Mountain Power submitted an Application
seeking a Commission Order authorizing the Company to:(1)increase rates by $10.2 million,or
3.9%on average,effective January 1,2016,as summarized in the electric service schedules
attached to the Company’s Application;and (2)modify the Energy Cost Adjustment Mechanism
(“ECAM”).Rocky Mountain requests that the Commission process its Application through
Modified Procedure.
On June 11,2015,the Commission issued an Order granting Petitions to Intervene
filed by Monsanto Company (“Monsanto”)and PacifiCorp Idaho Industrial Customers (“PIIC”).
See Order No.33321.On July 1,2015,the Commission issued an Order granting the Petition to
Intervene filed by Idaho Irrigation Pumpers Association,Inc.(“IIPA”).See Order No.33333.
On July 15,2015,the Commission issued a Notice of Modified Procedure,Notice of
Schedule and Settlement Conference.See Order No.33339.
On August 11,2015,a settlement conference,attended by representatives of the
Company,Commission Staff (“Staff’),Monsanto and PIIC,hereafter collectively referred to as
“the Parties,”was held at the Commission.Subsequently,the Parties agreed to an outline for a
proposed settlement agreement.The Parties continued their negotiations and they ultimately
resulted in a Stipulated Settlement Agreement (“Stipulation”),purporting to resolve all of the
outstanding issues in this case,signed by the Parties.
NOTICE OF PROPOSED
SETTLEMENT STIPULATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SCHEDULE
ORDER NO.33403
NOTICE OF PROPOSED SETTLEMENT STIPULATION
YOU ARE HEREBY NOTIFIED that the following is a summary of the relevant
terms of the Parties’Stipulation:
1.The Parties agree that Idaho retail revenues should increase by $10.2
million (3.9%)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 Company’s Application and as set forth in the tariff sheets provided in
Exhibit 7 and attached to the Stipulation.
2.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 the Idaho allocated base NPC to $94.8 million
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
(“REC5”)which establishes Idaho’s allocated RECs base at $0.3 million,
(c)a $0.2 million change in tax affected production tax credits (“PTCs”),
establishing an 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 prior to January 1,2018.
3.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.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.
4.With the exception of the application to change base rates and base NPC
as set forth in the previous paragraph,Rocky Mountain Power agrees that
it will not file another application to increase base rates prior to June 1,
2017,with rates effective on or after January 1,2018.The Parties agree
that the base rates established by this Stipulation will,in conjunction with
the 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
NOTICE OF PROPOSED
SETTLEMENT STIPULATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SCHEDULE
ORDER NO.33403 2
Commission,except under unique or unforeseen circumstances.
Unforeseen circumstances include natural disasters or emergencies.
5.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.
6.The Parties agree that 100%of 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.Starting January 1,2015,the ECAM will separate
the $1.385 billion ($87,555,188 Idaho Jurisdiction)base NPC into two
separate amounts:(1)base system NPC of $1,374,697,487 ($86,901,906
Idaho jurisdiction),and (2)base system Deer Creek depreciationldepletion
expense of $10,302,513 ($653,282 Idaho 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.
7.The Parties agree that PTCs will be tracked and trued-up in the ECAM,
without application of the sharing band,beginning January 1,2016.The
base PTCs are set at a tax affected total Company level of $115.7 million,
$6.9 million Idaho allocated.
8.The Parties agree that the Customer/Company sharing band in the ECAM
will remain at 90/10%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.
9.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 in the following table:
NOTICE OF PROPOSED
SETTLEMENT STIPULATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SCHEDULE
ORDER NO.33403 3
LOAD CHANGE ADJUSTMENT RATE CALCULATION
PAC-E-10-07 PAC-E-15-09
Description Current Amount Update Amount
1.Production -Return on Investment 833,083,414 833,083,414
2.Production -Expense 2,173,162,370 2,173,162,370
3.Production -NPC Expenses
Production Revenue (1,748,001,871)(1,748,001,871)
4.Requirement (Excluding NPC)1,258,243,913 1,258,243,913
5.System Load 57,460,901 57,460,901
6.Production $per MWH 21.90 20.89
7,Energy %(Demand &Energy)25%25%
8.5.47 5.22
9.
10.Idaho Energy @ Input 3,691,675 3,786,584
1 1.Idaho Production RR 20,193,462 19,776,001
12.Idaho Energy Meter 3,328,058 3,483,480
13.LCAR Meter 6.07 5.68
10.The Parties agree that effective January 1,2016,S02 revenues and
demand side management costs will no longer be tracked in the ECAM.
11.The Parties agree that the 2016 ECAM Deferral Period will include 13
months (December 1,2015 to December 31,2016),and that all subsequent
ECAM filings will be based on calendar year deferrals.
12.The Parties agree that the Company’s ECAM applications will be filed
annually on April 1,with a rate effective date of June 1,beginning April 1,
2017.
13.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.
YOU ARE FURTHER NOTIFIED that the Stipulation acknowledges that the
obligations of the Parties are subject to the Commission’s approval of the terms and conditions
of the Stipulation and,if any judicial review is sought,upon such approval being upheld on
appeal by a court of competent jurisdiction.
NOTICE OF PROPOSED
SETTLEMENT STIPULATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SCHEDULE
ORDER NO.33403 4
YOU ARE FURTHER NOTIFIED that the Stipulation and the Company’s
Application,Case No.PAC-E-15-09,have been filed with the Commission and are available for
public inspection during regular business hours at the Commission offices,472 W.Washington
Street,Boise,Idaho.The Stipulation and the Company’s Application may also be viewed on the
Commission’s web site at www.puc.idaho.ov.Click on the “File Room”tab at the top of the
page,scroll down to “Open Electric Cases,”and then click on the case number as shown on the
front of this document.
YOU ARE FURTHER NOTIFIED that the Commission is not bound by any
settlement reached by the Parties.The Commission will independently review any proposed
settlement to determine whether the settlement is just,fair and reasonable,and in the public
interest,or otherwise in accordance with law or regulatory policy.The Commission may accept
the settlement,reject the settlement,or state additional conditions under which the settlement
will be accepted.IDAPA 31.0l.01.274-.276.
NOTICE OF MODIFIED PROCEDURE
YOU ARE HEREBY NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission’s Rules
of Procedure,IDAPA 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission no later
than November 6,2015.The comment must contain a statement of reasons supporting the
comment.Persons desiring a hearing must specifically request a hearing in their written
comments.Written comments concerning this Application shall be mailed to the Commission
and Rocky Mountain at the addresses reflected below:
NOTICE OF PROPOSED
SETTLEMENT STIPULATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SCHEDULE
ORDER NO.33403 5
Commission Secretary Ted Weston
Idaho Public Utilities Commission Rocky Mountain Power
P0 Box 83720 1407 West North Temple.Suite 330
Boise,ID 83720-0074 Salt Lake City,UT 84116
E-Mail:
Street Address for Express Mail:
Yvonne R.Hogle
472 W.Washington St.Assistant General Counsel
Boise.ID 83702-5918 1407 West North Temple,Suite 330
Salt Lake City,UT 84116
E-Mail:
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission’s home page located at pçjçjho1gov,Click the “Case Comment or Question
Form”under the Consumers”tab,and complete the form using the case number as it appears on
the front of this document.These comments must also be sent to the Company at the e-mail
addresses listed above.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set.the Commission will consider this matter on its merits and
enter its Order without a formal hearing.If written comments are received within the time limit
set,the Commission will consider them and,in its discretion,may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission’s jurisdiction under Title 61 of the Idaho Code.The Commission
may enter any final Order consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission’s Rules of Procedure,IDAPA 31.01.01.000 et seq.
NOTICE OF SCHEDULE
YOU ARE FURTHER NOTIFIED that the following schedule for the filing of
testimony or comments,pursuant to Rules 231,266 and 267 of the Commission’s Rules of
Procedure (IDAP.A 31.01.01.231 and .266-267),regarding the proposed Stipulation is
established:
NOTICE OF PROPOSED
SETTLEMENT STIPULATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SChEDULE
ORDER NO.33403 6
1.Deadline for filing testimony/comments in support of/opposition to the
Proposed Settlement —November 6,2015
2.Deadline for the Company to file rebuttal testimony (if necessary)—
November 13,2015
ORDER
IT IS HEREBY ORDERED that the Parties’Stipulation will be processed under
Modified Procedure.Persons interested in submitting written testimony or comments regarding
this case or protesting the use of Modified Procedure should do so no later than November 6,
2015.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of October 2015.
ATTEST:
O:PAC-E-I 5-09np3
NOTICE OF PROPOSED
SETTLEMENT STIPULATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF SCHEDULE
ORDER NO.33403
/
PAUL 1.JELLi\’ll)II.PRFSI1)LNT
MARSHA H.SMITH,COMMISSIONER
4;£PA
KR INE RAPER,CO MISSIONER
7