20180911Application.pdf

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ROCKY MOUNTAIN
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1407 West North Temple, Suite 330
Salt Lake City, Utah 84116
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September I l, 2018
VIA OVERNIGHT DELIVERY
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise,ID 83702
Re:CASE NO. PAC-E-18.08
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
FOR AUTHORIZATION TO CHANGE DERECIATION RATES APPLICABLE
TO ELECTRIC PROPERTY
Attention: Ms. Hanian
Please find enclosed an original and nine (9) copies of Rocky Mountain Power's application, direct
testimony, and exhibits in the above referenced matter. The enclosed CD contains the application,
direct testimony, exhibits, and work papers.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
Vice President, Regulation
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CERTIFICATE OF SERVICE
I hereby certify that on this 1 lth of September,2018, I caused to be served, via electronic
mail and/or overnight delivery a true and correct copy of Rocky Mountain Power's Application
for Authorization to Change Depreciation Rates Applicable to Electric Property in Case No.
PAC-E-18-08 to the following:
Service List
Dated this I lth day of September,2018.
Ve,.
Katie Savarin
Coordinator, Regulatory Operations
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IDAHO IRRIGATION PUMPERS ASSOCIATION, INC.
Eric L. Olsen
ECHO HAWK & OLSEN, PLLC
505 Pershing Ave., Ste. 100
P.O. Box 6119
Pocatello, Idaho 83205
E-mail: [e-mail]
MONSANTO COMPANY
Randall C. Budge
Racine, Olson, Nye & Budge, Chartered
P.O. Box 1391;201 E. Center
Pocatello, Idaho 83204-1391
E-mail : [e-mail]
PIIC
Ronald L. Williams
Williams Bradbury, P.C.
P.O. Box 388
Boise ID, 83701
E-mail : [e-mail]
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Yvonne R. Hogle (#8930)
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Telephone No. [phone]
Facsimile No. [phone]
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D. Matthew Moscon (#6947)
Lauren A. Shurman (#11243)
Stoel Rives LLP
201 South Main Street, Suite 1100
Salt Lake City, Utah 84111
Telephone. [phone]
Facsimile: [phone]
Email : matt. m osi:onrlr'i st*r:l . r:cm
Email : laum:1 shurqanGdig.e!, cgt13
Attorneys for Rocky Mountain Power
BEFORE THE IDAIIO PUBLIC UTILITIES COMMISSIONo
IN THE MATTER OF THE
APPLICATION OF ROCI(Y
MOUNTAIN POWER FOR
AUTHORIZATION TO CHANGE
DERECIATION RATES APPLICABLE
TO ELECTRIC PROPERTY
) CASE NO. PAC-E-18-08
)
) APPLICATION
)
)
)
APPLICATION FOR CHANGE TO DEPRECIATION RATES
APPLICABLE TO ELECTRIC PROPERTY
Rocky Mountain Power, a division of PacifiCorp ("Rocky Mountain Power" or the
"Company"), pursuant to Section 6l-525 of the Idaho Code and Rule 52 of the Idaho Public
Utilities Commission Rules of Procedure, respectfully submits this application ("Application")
with the Idaho Public Utilities Commission ("Commission") for approval of proposed changes
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to depreciation rates applicable to Rocky Mountain Power's depreciable electric plant. The
Company requests that the proposed depreciation rates be made effective January 1,2021, as
described in more detail in testimony and exhibits supporting this Application and generally
referenced below ("Depreciation Study"). In support of this Application, Rocky Mountain
Power states as follows:
1. Rocky Mountain Power is an electrical corporation and public utility operating
in the state of Idaho and is subject to the jurisdiction of the Commission with regard to its
public utility operations. PacifiCorp has two retail electric service divisions, Rocky Mountain
Power and Pacific Power. Rocky Mountain Power provides retail electric service in Idaho,
Utah and Wyoming, and Pacific Power provides retail electric service in California, Oregon,
and Washington.
2. Communications regarding this Application should be addressed to:
Yvonne R. Hogle
Ted Weston
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
E -m ai I : H or r n r:. b_q.gJ o(2[t ac i {.i i: rlB .q; crrp
E_mail : ted.r,iqstan(O,pacifi corp. corn
D. Matthew Moscon (#6947)
Lauren Shurman (#11243)
Stoel Rives, LLP
201 South State Street, Suite 1100
SaltLake City, Utah 84111
Telephone. [phone]
Facsimile. [phone]
Email:g.lpfi ,r$.*$.*.q,U.(A,i,ti',:9.1,.{.i::1].t
Email. iauren. shr.rrmanrZistoel. com
In addition, Rocky Mountain Power requests that all data requests regarding this
Application be addressed to:
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By email (preferred)d aJ #..e qg.e,i.!.,.4I:.as.i fi.qs#lp,?n:.
By regular mail Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Portland, OF.97232
Informal inquiries related to this Application may be directed to Ted Weston, at
(801) 220-2e63.
3. The Commission is authorized to determine the proper and adequate rates of
depreciation of the Company's property used in providing retail electric service under Section
61-525 of the Idaho Code. Each utility under the Commission's jurisdiction is required to
conform its depreciation expense to the rates determined by the Commission. The Commission
may make changes in such rates of depreciation from time to time.
4. The Company's last depreciation caser was filed by the Company on
January 22, 2013, and approved by the Commission2 on November 18, 2013, with rates
effective January l, 2014.
5. The Company is submitting this Depreciation Study, attached to Company
witness Mr. John J. Spanos' direct testimony as Exhibit No. 2, and requests authorization to
implement the depreciation rates set forth therein. The Depreciation Study identifies changes
that have occurred since the 2013 depreciation study, measures the effect of the changes on the
recovery of presently surviving capital, and revises the capital recovery rate. The application
of the depreciation rates in the Depreciation Study would increase annual depreciation expense
by approximately $14.1 million on an Idaho basis, based on projected plant balances as of
December 31,2020, and the inter-jurisdictional allocation methodology currently in effect (the
1 Case No. PAC-E-13-02
2 Order No. 32926.
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2017 Protocol3). In addition, ending the excess reserve amortizations increases the depreciation
expense by approximately $3.2 million and the incremental rate increase from the 2013
depreciation study increases the depreciation expense by approximately $2.0 million on an
Idaho basis. Combined, these proposed changes increase Idaho's jurisdictional depreciation
expense by approximately $19.3 million. The Company proposes to record the Depreciation
Study recommendations on its books and records beginning with calendar year 2021. Rocky
Mountain Power is not requesting, as part of this filing, that new depreciation rates approved
in this case be reflected in tariffprices at this time. Rather, the Company intends to include the
impacts of the Depreciation Study in Idaho rates as part of a future regulatory proceeding.
6. In support of this Application, the Company presents the direct testimony of
Ms. Nikki L. Kobliha, Vice President, Chief Financial Ofiicer and Treasurer of the Company.
Ms. Kobliha supports and describes the development of the Depreciation Study, and describes
significant depreciation-related issues related to steam generating facilities that were
considered in the Depreciation Study.
7 . The Company presents the direct testimony of Mr. John J. Spanos, Senior Vice
President of Gannett Fleming, Inc. Mr. Spanos presents the Depreciation Study, describes how
the Depreciation Study was prepared, presents the depreciation rates for which the Company
is seeking Commission approval, and discusses the basis for the recommended changes in
depreciation rates.
8. The Company presents the direct testimony of Mr. Steve R. McDougal, Director
of Revenue Requirements. Mr. McDougal calculates the effect on annual depreciation expense
allocated to Idaho from applying the proposed depreciation rates to depreciable plant balances.
3 Approved in Case Nos. PAC-E-15-16 and PAC-E-17-01
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He also describes the Company's recommendations on certain state specific issues, and
responds to the reporting requirements from the2013 depreciation study.
9. The Company presents the direct testimony of Mr. Chad A. Teply, Senior Vice
President of Strategy and Development for Rocky Mountain Power. Mr. Teply describes the
process used to evaluate the approved plant depreciable lives for steam and gas generating
stations. He also demonstrates that the estimated retirement dates proposed for the Company's
generation plants are reasonable and appropriate for use in the Depreciation Study. Mr. Teply
also explains why the rates proposed as terminal net salvage, or "decommissioning costs," in
the calculation of depreciation rates for generating plants are reasonable and prudent.
10. Finally, the Company presents the direct testimony of Mr. Timothy J.
Hemstreet, Director of Renewable Development for the Company. Mr. Hemstreet describes
the repowering of the Company's wind facilities and the process of determining an appropriate
life for the repowered wind facilities. He also describes the methodology used to estimate the
retirement date for the Company wind and hydroelectric generating resources.
1 1. For administrative and economic effrciencies, the Company strives to maintain
uniform utility accounts, including depreciation rates, across its six state service territories. To
maintain consistent depreciation rates across all states, the Company is also filing the
Depreciation Study in Oregon, Utah, Washington, and Wyoming. Maintaining consistent
depreciation rates across all states avoids multiple sets of depreciation accounts and records
that would impose a costly administrative burden on the Company and unnecessary expense
for the Company's customers.
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REQUEST FOR RELIEF
12. For the reasons described above and in the testimony and exhibits supporting
this Application, Rocky Mountain Power respectfully requests that the Commission issue an
order finding.
a. The Depreciation Study recommendations regarding depreciation rates are
proper and adequate depreciation rates for the Company;
b. Adoption of the Depreciation Study's recommendations into Idaho electric
rates will result in fair and reasonable rates and accurately impose costs on
those customers for whom such costs are incurred; and
c. The Depreciation Study's recommended depreciation rates should be
reflected in the Company's accounts and records beginning on January 1,
2021.
DATED this l1t1'day of September, 2018.
Respectful ly submitted,
ROCKY MOI.]NTAIN POWER
R. Hogle
West North Temple, Suite 320
Lake City, Utah 84111
Telephone No. [phone]
Facsimile No. [phone]
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Attorney for Rocky Mountain Power
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