20201008Stipulation Phase II Decommissioning Costs.pdf

Y ROCKY MOUNTAIN
POWER
1407 West North Temple, Suite 330
Salt Lake City, Utah 84116LLr'l i:t'Jtft.iLr,._rrLLj
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: . i:I -:i'idinfl$U{Ci{October 8,2020
VA ELECTRONIC DELIWRY
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
11331W. ChindenBlvd.
Building 8 Suite 201A
Boise,lD 83714
Re CASE NO. PAC.E.18-08
IN THE MATTER OF'THE APPLICATION OF ROCKY MOUNTAIN POWER
X'OR AUTHORIZATION TO CHANGE DERECIATION RATES APPLICABLE
TO ELECTRIC PROPERTY
Attention: Ms. Noriyuki
Please find enclosed for filing a stipulation between the parties resolving all issues in Phase II of
the above-referenced matter addressing decommissioning costs.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
Vice President, Regulation
CC:
Teni Carlock
Dayne Hardie
Ben Otto
Eric Olsen
Randy Budge
Ron Williams
"^..D
Emily Wegener
Rocky Mountain Power
1407 West North Temple #320
Salt Lake City, UT 841l6
Telephone : [phone]
Email: Emilv.Wesener@pacifi corp.com
Attorneyfor Roclcy Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OX'THE APPLICATION
OF ROCKY MOUNTAIN POWER FOR
AUTHORIZATION TO CHANGE
DEPRECIATION RATES APPLICABLE
TO ELECTRIC PROPERTY
CASE NO. PAC-E-18.08
STIPULATION. PHASE II
DECOMMISSIONING COSTS
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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'), the Idaho Conservation League ("ICL"),
the Idaho Irrigation Pumper Association ("IIPA"), Monsanto Company ("Monsantoo'), ond
PacifiCorp Idaho Industrial Customers ("PIIC"), (the "Stipulating Parties"), who submit
this Stipulation on decommissioning costs in resolution of issues addressed as part of
Phase II in this proceeding and respectfully request that the Commission approve the
treatment of the incremental decommissioning costs for Rocky Mountain Power as
stipulated herein effective January 1,2021.
I. PROCEDURAL BACKGROUNI)
1. On September 11, 2018, Rocky Mountain Power, filed an application
requesting the Commission approve the Company's proposed changes to its depreciation
rates for electric plant. Included in those depreciation rates was an estimate of
decommissioning costs.
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2. Pursuant to Section 4.3.1.1 - Decommissioning Studies, of the 2020
PacifiCorp Inter-Jurisdictional Allocation Protocol, the Company committed to complete
a contractor-assisted engineering study of decommissioning costs for its coal plants.
3. On January 17,2020 and March 16,2020, Rocky Mountain Power filed
supplemental information relating to the 2020 Confrdential Decommissioning Studies,
(*2020 Decommissioning Studies"). These studies were provided as supplemental filings
in this and all of PacifiCorp's other applicable depreciation dockets.
4. On June 15, 2020, the Company filed a proposed Settlement Stipulation
("Settlement Stipulation") for Phase I. In the Settlement Stipulation, the parties agreed: 1)
the incremental change in depreciation expense from current rates should be $13,940,303
annually; 2) the incremental increase would be deferred for one year beginning January 1,
2021through December 31, 2021; and 3) the Commission should establish Phase II in this
proceeding to facilitate further review of the regulatory treatment of the 2020
Decommissioning Studies.
5. On August 18,2020, the Commission issued Order No. 34754 approving
the Settlement Stipulation and authorizing Phase II to evaluate incremental
decommissioning costs and ratemaking treafinent alternatives.
6. On September 15, 2020, a technical conference call was held where parties
were able to ask questions about the 2020 Decommissioning Studies and express their
positions. The technical conference was followed by a settlement conference call on
September 22, 2020 where the Stipulating Parties reached agreement on treatrnent of the
incremental decommissioning cost identified in the 2020Decommissioning Studies.
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II. TERMS AND CONDITIONS
7. The Stipulating Parties agree that Idaho's incremental decommissioning
costs based on the 2020 Decommissioning Studies is $2,291,178 per year, as summarized
in Table 1.
Table I - Incremental Costs
8. The Stipulating Parties agree that the Company will defer Idaho's
incremental change in decommissioning expense of $2,291,178, for one year beginning
January l, 2021 through December 31, 2021. The Company will defer $190,931.50
($2,291,178 I 12) each month in a regulatory asset account for recovery in the Company's
next general rate case. No carrying charge will be applied to the regulatory asset during the
deferral period.
g. The Stipulating Parties agree the$2,291,178 defenal will be amortized over
fifteen years beginning with the rate effective date of the Company's next general rate case.
A carrying charge or rate base treatment will be determined in the Company's next general
rate case.
10. The Stipulating Parties agree that the Company will provide quarterly updates
on the 2020 Decommissioning Studies beginning after the quarter ending December 31,2020,
until the Company files its next general rate case. The quarterly updates will report on any
actions in other states related to the 2020 Decommissioning Studies. In addition to the quarterly
J
Ptant
Plant
Closure
Date
Remalnlng
Lih
(Yea]13l
2018 Baso
Decommlsdonlng
Costs
mm
Decommisionlng
Studies
lncremontal
Decommisdoning
Costs
Total Company
Annual Amount
ldaho Allocatsd
Annual Amount
Hunter 20/,2 22 50,022,000 109,400,262 59,378,262 2,699,012 159,542
Huntington 2036 16 40,256,000 1 1 1,919,004 71,563,004 4,474,938 zil,756
Dalt Johnston 2027 7 26,095,000 101,989,356 75,894,356 10,842,051 640,887
Jim Bridger 2037 17 52,662,000 156,984,308 'tu,322,308 6,136,606 362,742
Naughton 2029 9 62,267,000 '158,991,849 !fi,724,U9 't0,747,205 635,281
Wyodak 2039 19 7,138,000 30,690,185 23,552,185 1,239,589 73,274
Hayden 2030 10 352,000 14,093,486 13,741,486 1,374,149 81,228
Colstrip 2027 7 12,685,000 21,385,311 8,700,31 1 't,242,902 73,469
Total 251,177,000 705,453.76{453,976.751 38,760.451 2,291,178
updates the Stipulating Parties will convene to discuss altemative rate treatment options before
the next general rates case.
11. The Stipulating Parties agree that any Party may propose any ratemaking
treatment for Idaho's allocation of decommissioning costs in the Company's next general
rate case.
12. The Stipulating Parties agree that, by entering into the Stipulation, no
Stipulating Party is waiving any right to take any position in any other docket; provided
that the Parties agree to support the Stipulation in this docket.
General Terms and Conditions
13. Section 248 of IDAPA 31.01.01 authorizes the Commission to approve a
settlement so long as the settlement is just and reasonable in result IDAPA 31.01.01.276.
While the Stipulating Parties may not agree that each specific component ofthis Stipulation
is just and reasonable in isolation, all of the Stipulating Parties agree that this Stipulation
as a whole is just and reasonable in result and in the public interest.
14. All negotiations related to this Stipulation are confidential, and no
Stipulating Party shall be bound by any position asserted in negotiations. Except as
expressly provided in this Stipulation, neither the execution of this Stipulation nor the order
adopting it shall be deemed to constitute an admission or acknowledgment by any
Stipulating Party of the validity or invalidity of any principle or practice of regulatory
accounting or ratemaking; nor shall they be construed to constitute the basis of an estoppel
or waiver by any Stipulating Putty; nor shall they be introduced or used as evidence for
any other purpose in a future proceeding by any Stipulating Party except in a proceeding
to enforce this Stipulation.
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15. The Stipulating Parties agree that no part of this Stipulation or the formulae
and methodologies used in developing the same or a Commission order approving the same
shall in any manner be argued or considered as precedential in any future case except with
regard to issues expressly called-out and resolved by this Stipulation. This Stipulation does
not resolve and does not provide any inferences regarding, and the Stipulating Parties are
free to take any position with respect to any issues not specifically called-out and settled
herein. Nothing in this Stipulation shall be construed to modiff or supersede existing
settlement agreements entered into by or among parties to this Stipulation.
16. The Stipulating Parties agree that a hearing is not necessary and respectfully
request that the Commission authorize processing this case under Modified Procedure
pursuant to the schedule already established by Order No.34773. Rocky Mountain Power,
and Staff will, and other parties may, file testimony or comments to explain and offer
further support for this Stipulation.
17 . The Stipulating Parties agree that if any person challenges the approval of
this Stipulation or requests rehearing or reconsideration of any order of the Commission
approving this Stipulation, each Stipulating Party will use its best efforts to support the
terms and conditions of this Stipulation. In the event any person seeks judicial review of a
Commission order approving this Stipulation, no Stipulating Party shall take a position in
that judicial review proceeding in opposition to the Stipulation.
Respectfully submitted this 8ft day of October,2020.
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Joelle Steward - Roclcy Mountain Power
Stafffor the ldaho Public Utilities
Commission
H
Idaho Cons ervation League
Idaho lrrigation P umper As sociation
w c"
Monsanto, One of the Bayer Group of
Companies
K*w/ l,tn--
P acifiCorp ldaho Industrial Customers
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