20170414Decision Memo.pdf

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DECISION MEMORANDUM
TO:COMMISSIONER ISELLAI\DER
COMMISSIONER RAPER
COMMISSIONER AI\DERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:BRAI\DON KARPEN
DEPUTY ATTOR}TEY GENERAL
DATE: APRIL 12,2017
SI]BJECT: ROCKY MOUNTAIN POWER,S ECAM APPLICATION
CASE NO. PAC-E-17-02
On March 31, 2017, PacifiCorp dba Rocky Mountain Power applied to the
Commission for an Order authorizing the Company to adjust its rates under the Energy Cost
Adjustment Mechanism (ECAM). If approved, the Company's ECAM adjustment would
decrease rates in all customer classes, with an average residential customer's bill decreasing by
about $1.65 per month.
The Commission approved the ECAM in 2009, and the mechanism has been
modified several times since then. See Order Nos. 30904, 32432, 32910, 33008, 33440, and
33492. The ECAM allows the Company to increase or decrease its rates each year to reflect
changes in the Company's power supply costs. These costs vary by year with changes in the
Company's fuel (gas and coal) costs, surplus power sales, power purchases, and the market price
of power. The ECAM adjusts the Company's rates up or down to ensure the rates capture the
difference between the Company's actual power supply costs and the base (or embedded) power
supply costs the Company collected from customers through previously approved base rates.
With this Application, the Company seeks an Order approving the Company's 2016
energy related costs of $7.5 million, and decrease by $7.0 million the revenues collected through
the energy cost adjustment mechanism. The Company states that if its proposal is approved,
prices for customer classes would decrease as follows:
. Residential Customers - 1.8%o Residential Schedule 35, Optional Time-of-Day Service -2.1%
DECISTON MEMORANDUM
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. General Service Schedule 5 -2.5%o General Service schedule 9 -2.9%o lrrigation customers -2.2%. Commercial or Industrial Heating Schedule 19 -2.3%o General Service Schedule 23 -2.0%. General Service Schedule 35 -3.0%o Public Street Lighting - 0.9%o Industrial Customer, Schedule 400 - 3.0%. Industrial customer, Schedule 401-3.1%
Source: Application, Exhibit No. 3 to Direct Testimony of Robert M. Meredith; See also,
News Release and Customer Notice filed with Application.
The Company also includes an altemative rate proposal for consideration by the
Commission. That alternative proposal would provide customers a decrease of approximately
l0lo now, but also mitigate a possible future rate increase attributable to power costs. The
Company characterizes this option as addressing "the growing depreciation regulatory asset
rather than reducing rates by the full $7 million." Id. at 5. The Company requests that the new
rates take effect on June 1,2017, ardthat the case be processed by Modified Procedure.
STAFF RECOMMENDATION
Staff concurs with the use of Modified Procedure. Staff recommends that the
Commission issue a Notice of Application and Notice of Modified Procedure setting a May 4,
2017 comment deadline, and a May ll,20l7 reply deadline.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and Notice of Modified
Procedure setting a May 4,2017 comment deadline, and a May ll,2017 reply deadline?
Attorney General
M:PAC-E-17-02_bk
DECISION MEMORANDUM 2