20160901Application.pdf

September 1, 2016
VIA OVERNIGHT DELIVERY
Jean D. Jewell
Commission Secretary
Idaho Public Utilities Commission
4 72 W. Washington
Boise, ID 83702
Re: CASE NO. PAC-E-16-12
REC J VED
2016 .. I P -I AM 10: 0 I
[' i.-s •· in • IC I .' ! '' I ·' t" l t) L ·.:111rnr:~; COMM ISS ION
1407 West North Temple, Suite 310
Salt Lake City, Utah 84116
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
TO UPDATE BASE NET POWER COSTS AND IMPLEMENT A RATE
ST ABILITY PLAN
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 the direct testimony and exhibit of Mr. Weston and Mr.
Wilding. Attachment A contains clean and legislative formatted copies of the rate schedules,
Attachment B contains the supporting work papers for the tariffs. Enclosed are two CDs. One
non-confidential CD containing the Application, direct testimony, exhibit, and tariff sheets, and
one confidential CD containing Mr. Wilding's confidential work papers. The Company has
designated these work papers confidential and respectfully requests that they are treated as such.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Vil~
Jeffrey K. Larsen
Vice President, Regulation
Enclosures
Daniel E. So lander (ISB No. 8931)
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone No. [phone]
Facsimile No. [phone]
E-mail: [e-mail]
Attorney for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER TO
UPDATE BASE NET POWER COSTS AND
IMPLEMENT A RATE STABILITY PLAN
CASE NO. PAC-E-16-12
APPLICATION
PacifiCorp, d.b.a. Rocky Mountain Power ("Rocky Mountain Power" or the "Company")
respectfully makes this compliance filing application ("Application") with the Idaho Public
Utilities Commission ("Commission") to reflect an update in rates for base net power costs
("NPC"), as required by Order No. 33440, Case No. PAC-E-15-09. Specifically, the Company
requests authorization to decrease NPC in base rates, effective January 1, 2017, to $91.6 million
or $26.90 per megawatt hour ("MWh") and establish the $26.90 per MWh as the new level of base
NPC to be tracked in the Energy Cost Adjustment Mechanism ("ECAM"). The NPC update
reduces Idaho's annual revenue requirement approximately $1.1 million, or $0.32 per MWh, and
if implemented as an adjustment to base rates, it represents a reduction of approximately four
tenths of one percent.
Page 1
In accordance with the Stipulation filed in Case No. PAC-E-15-09, and approved by the
Commission in Order No. 33440:
"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 proforma 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".
Updated clean and legislative tariff sheets reflecting the rate impact to each electric service
schedule are provided as Attachment A to this Application. Attachment B contains the proposed
impacts by rate schedule.
Alternatively, and for further discussion among interested parties, this Application
proposes a Rate Stability Plan, under which there would be no change to rates at this time, but
instead the Company would utilize the incremental revenue collection to net against the
Commission approved depreciation deferral.' Furthermore, discussions with parties on the Rate
Stability Plan would address the timing of the next rate case and depreciation study, and elements
in the current ECAM that need to transition to base rates. In support of its Application, Rocky
Mountain Power represents as follows:
INTRODUCTION
1. Rocky Mountain Power does business in the state of Idaho providing retail electric
service to approximately 75,435 customers and is subject to the jurisdiction of the Commission.
1 Order No. 32910.
Page 2
COMMUNICATION
2. Communications regarding this Application should be addressed to:
Ted Weston
1407 West North Temple, Suite 330
Salt Lake City, Utah 84116
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
Daniel Solander
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone: [phone]
Fax: [phone]
Additionally, the Company respectfully requests that all data requests regarding this matter
be addressed to one or more of the following:
By email (preferred)
By regular mail
[e-mail]
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OR 97232
BACKGROUND
3. On May 27, 2015, the Company filed an application2 and supporting testimony to
increase retail rates by $10.2 million effective January 1, 2016, increase the level ofNPC recovered
in base rates thereby reducing future ECAM deferrals, along with other modifications to the
ECAM.
2 Case No. PAC-E-15-09.
Page 3
4. A Stipulation was reached and later approved by the Commission.3 Paragraph 8 in
the Stipulation specified that base rates and the NPC in base rates ("Base NPC") that are compared
to actual NPC in the ECAM would also be updated effective January 1, 2017. The update would
be based on the amount of NPC reported in the 2015 annual Results of Operations report. The
Stipulation specified that the rate spread and rate design would be on an equal cents per kWh basis,
consistent with the treatment in Case No. PAC-E-15-09.
RELIEF
5. Pursuant to Order No. 33440, the Company respectfully seeks authorization to
update the level of NPC included in rates and reset Base NPC, base retail load, the Load Change
Adjustment Rate ("LCAR"), Production Tax Credit ("PTC"), and Renewable Energy Credit
("REC") rates effective January 1, 2017.
6. This Application is supported by testimony of Mr. Ted Weston and Mr. Michael
Wilding. Mr. Weston 's testimony provides a summary of the Application and explains the
Company's proposal for an alternative Rate Stability Plan. Mr. Wilding's testimony explains how
the NPC update was calculated and the main drivers causing the changes to NPC.
7. For further discussion among the parties and consideration by the Commission, the
Company is proposing an alternative to implement a new Rate Stability Plan, as described in Mr.
Weston's testimony. The alternative Rate Stability Plan would keep rates at the current level and
utilize the incremental revenue collected to offset other regulatory assets mitigating customers'
3 Order No. 33440.
Page 4
future rate impact. For purposes of the ECAM calculation, the updated Base NPC reflected in this
filing would be used.
8. In the 2015 Annual Results of Operations report, total Company NPC were
$1,485,447,775 of which Idaho's allocation is $91 ,646,156 or $26.90 per MWh based on retail
load of 3,407,488 MWh. The Company requests that Base NPC be updated to this level and that
the Load Change Adjustment Rate ("LCAR"), Production Tax Credit ("PTC"), and Renewable
Energy Certificate ("REC") rates all be updated utilizing the 2015 retail load.
9. NPC currently in rates are $1,529,427,580 on a total Company basis, Idaho's
allocation was $94,801,644 or $27.21 per MWh based on Idaho retail load of 3,483,480 MWh.
Approximately $2.1 million of the $3 .2 million reduction to Idaho's allocated NPC is associated
with Idaho's retail load reduction of 75,992 MWh.
10. Idaho's 2015 retail load was 3,407,488 MWh and Base NPC were $27.21 per MWh,
therefore the Company collected $92,733,539 associated with NPC. When compared to the
updated Base NPC of $91 ,646,156 a net reduction of $1 ,087,383 to Idaho's annual revenue
requirement or approximately $0.32 per MWh would be justified as summarized in the following
table:
Rate Stabili~ Proposal Total Idaho MWH $/MWH
Base NPC $ 1,529,427,580 $ 94,801 ,644 3,483,480 $ 27.215
NPC Collected $ 92,733,539 3,407,488 $ 27.215
December2015 Normalued NPC $ 1,485,447,775 $ 91,646,156 3,407,488 $ 26.896
Impact ofNPC Update $ (1,087,383) 3,407,488 $ (0.319)
11. For the alternative Rate Stability Plan, the Company would not change rates
January 1, 2017, associated with this update, and instead, would apply the incremental revenues
Page 5
of $1.1 million that result from the reduction in Base NPC against the depreciation deferral from
the 2013 depreciation study. 4
12. Furthermore, the Company intends to engage parties in a discussion as part of the
Rate Stability Plan alternative on the potential to treat any rate reduction associated with the 2017
ECAM filing, on April 1, 2017, in the same manner. Currently in Electric Service Schedule 94,
Energy Cost Adjustment, rates are designed to collect approximately $14.5 million. The
Company's current forecast for the 2016 ECAM deferral is approximately $9.0 million. The
Company anticipates that the ECAM collection rate could be reduced June 1, 2017, in the range
of $4.5 to $5.5 million depending on the actual deferral and collection amounts. Rather than
reducing the ECAM rates, the Rate Stability Plan could alternatively hold the ECAM rates constant
and apply the incremental revenue collection to also offset the 2013 depreciation deferral.
13. The Rate Stability Plan could benefit customers by keeping rates stable and using
the incremental revenue collected from the NPC and ECAM updates to offset future rate impacts
from amortization of the depreciation deferral or other deferrals. In light of these benefits, the
Company intends to meet with parties to discuss this alternative to the January 1, 2017 compliance
rate decrease.
MODIFIED PROCEDURE
14. Rocky Mountain Power believes that a hearing is not necessary to consider the
issues presented herein and respectfully requests that this Application be processed under Modified
Procedure, i.e., by written submissions rather than by hearing. RP 201 et. seq.
4 Order No. 32910. The forecast balance for the depreciation deferral through December 31 , 2017 is a regulatory
asset of approximately $6.9 million.
Page 6
REQUEST FOR RELIEF
For the reasons set forth above and described in the testimony of Mr. Weston and Mr.
Wilding, Rocky Mountain Power respectfully requests that the Commission approve the
Company's filing by: (1) issuing an order authorizing that this matter be processed by Modified
Procedure; (2) approve Idaho's new Base NPC of$91,646,156 or $26.90 per MWh and Idaho base
retail load of 3,407,488 MWh; (3) approve the new LCAR, PTC, and REC rates summarized in
Mr. Wilding's testimony. In the event parties cannot reach agreement on the alternative Rate
Stability Plan, the Company requests approval of the tariff revisions included in Attachment A, to
be effective January 1, 2017.
Rocky Mountain Power respectfully requests that the Commission issue an order
approving the Application no later than December 15, 2016, with a January 1, 2017 effective date.
DATED this 1st day of September, 2016.
Page 7
RESPECTFULLY SUBMITTED,
ROCKY MOUNTAIN POWER
~~
Daniel E. Solander
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone No. (801 ) 220-4014
Facsimile No. (801 ) 220-4615
E-mail: [e-mail]
Attorney for Rocky Mountain Power