20201014Comments.pdf

DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 837 2O-OO1 4
[phone]
IDAHO BAR NO. 9917
;'i ;.:{l t I'rrE i}
Il;;.; i;lT lt+ &H Il: 33
iilr*,,',:, i +j:"jr#
., i ii-i i' r;, ;, i;i:L-d,ir{},S€t#d
Street Address for Express Mail:
11331 W CHINDEN BVLD, BLDG 8, SUITE 2OI-A
BOISE, D 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMIiIISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER FOR
AUTHORIZATION TO CHANGE
DEPRECIATION RATES APPLICABLE TO
ELECTRIC PROPERTY
CASE NO. PAC-E.18.08
COMMENTS OF THE
COMMISSION STAFF IN
SUPPORT OF PHASE II
SETTLEMENT STIPULATION
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Dayn Hardie, Deputy Attorney General, submits the following comments.
BACKGROUND
On September 11, 2018, Rocky Mountain Power, a division of PacifiCorp ("Company")
filed an Application with the Commission seeking approval of its proposed change to
depreciation rates applicable to the Company's electric plant with a requested effective date of
January 1,2021.
On October 5,2018, the Commission issued both a Notice of Application and a Notice of
Intervention Deadline directing Staff and parties to discuss the appropriate scheduling for the
case. The Monsanto Company ("Monsanto"), PacifiCorp Idaho Industrial Customers ("PIIC"),
Idaho Irrigation Pumpers Association,Inc. ("IIPA"), Idaho Conservation League ("ICL"), and
STAI]F COMMENTS IN SUPPORT OF
PHASE II SETTLEMENT STIPULATION
ocToBER 14,2020
)
)
)
)
)
)
)
1
the Sierra Club ("SC") (collectively the "Parties" or individually "Party") all intervened in the
case.
On June 15,2020, the Company filed a proposed Settlement Stipulation ("stipulation")
signed by the Company, Monsanto, PlC, IIPA, and Staff (collectively the "Stipulating
Parties")l. The Stipulating Parties within the Stipulation, agreed among other issues, the
Commission should establish a second phase in the proceeding ("Phase II") to facilitate further
review of the regulatory treatment of updated 202O Coal Plant Decommissioning Cost Studies
("2020 Studies")2.
On January 17,2020, and March 16,2020, the Company filed supplemental information
related to the 2020 Studies.
On August L8,2020, the Commission issued Order No. 34754 approving the Settlement
Stipulation and authorizing Phase II to evaluate incremental decommissioning costs and
ratemaking treatment alternatives.
On September 15, 2020, the Company held a technical conference call where parties
discussed the 2O20 Studies and expressed their positions. On September 22,2020, parties
participated in a settlement conference call where the Stipulating Parties reached agreement for
treatment of the incremental decommissioning costs identified in the 2O2O Studies.
On October 08,2020, the Company filed a proposed second phase Settlement Stipulation
("Stipulation - Phase II") signed by the Company, Monsanto, PIIC, IIPA, ICL, and Staff
(collectively the "Stipulating Parties") to address the incremental decommissioning costs
identified in the 2020 Studies.
STAFF REVIEW
Based on Staff's review, and negotiations with the Parties, Staff believes that the
Stipulation - Phase II represents a fair, just, and reasonable compromise for all issues raised by
the Parties and is in the public interest.
I Idaho Conservation League was not a Stipulating Party but did not oppose the Settlement Stipulation.
2 As part of the2O2O PacifiCorp Inter-Jurisdictional Allocation Protocol, pursuant to Section 4.3.1.1 -
Decommissioning Studies, the Company committed to completing a contractor-assisted engineering study of
decommissioning costs for its coal plants. These studies were provided as supplemental filings to this case and other
Company depreciation dockets.
STAI]F COMMENTS IN SUPPORT OF 2 OCTOBER I4,2O2O
PHASE II SETTLEMENT STIPULATION
Staff reviewed the 2020 Studies filed as a supplement to the Company's Application.
The 2020 Studies represent the most current estimates for decommissioning costs based on a
third-party evaluation of coal plant decommissioning costs using the most up-to-date information
available from the Company. The decommissioning costs included in the 2020 Studies provide
estimates of what the decommissioning costs would be if all coal plants were decommissioned in
the fourth quarter of 20L9, even though forecasted coal plant closures and decommissioning
activities are projected to occur between 2027 and2042based on the lives assumed in the
Company's 201 8 Depreciation study.
The Company's2020 Studies provide a reasonable estimate of coal plant
decommissioning costs, but there are still significant uncertainties that remain. These
uncertainties include estimate accuracy, actual coal plant closure dates, other jurisdiction exit
dates, and escalation of decommissioning costs over time.
The Stipulating Parties agreed to the following:
1. Idaho's incremental decommissioning costs based on the 2020Decommissioning
Studies is $2,291,178 per year, as detailed in Table No. I below.
Table No. 1 - Coal Plant Decommissioning Costs ($)
Plant
Plant
Closrre
Date
Remaining
Liie
(Years)
2018 Bas
Decommisdoning
Co6ts
2020
Oecommisdoning
Studies
lncremental
Decommisdoning
Costs
Total Company
Annual Amount
ldaho Allocated
Annual Amount
Hunter 2042 22 50,022,000 1 09,400,262 59,378,262 2,699,012 159,542
Huntington 2036 16 40,256,000 1 1 1,919,004 71,663,004 4,478,99 264,756
Da\,e Johnston 2027 7 26,095,000 101,989,356 75,894,356 1 0,842,051 640,887
Jim Bridger 2037 17 52,662,000 156,984,308 104,322,308 6, 1 36,606 3152,742
Naughton 2029 9 62,267,N0 158,991,849 96,724,U9 10,747,205 635,281
Wyodak 2039 19 7,1 38,000 30,690,18s 23,552,185 1,239,589 73,274
Hayden 2030 10 352,000 '14,093,rl8o 13,741,86 1,374,149 81,2?8
Colstrip 2027 7 12,685,000 21,385,31 1 8,700,3'11 1,242,902 73,469
Total 25'l,4T7,NO 705,453.761 4s3,975,761 38,760,tt51 2,2s1,178
2. The Company will defer Idaho's incremental change in decommissioning expense
for one year beginning January l, 202I through December 31, 2021.
3. The Company will defer $190,931.50 each month (one-twelfth of the $2,291,178
deferral amount) 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
account during the deferral period.
STAFF COMMENTS IN SUPPORT OF
PHASE II SETTLEMENT STIPULATION
ocToBER t4,2020aJ
4. The$2,291,178 deferral amount will be amortized over 15 years beginning with
the rate effective date of the Company's next general rate case. Rate base
treatment and whether a carrying charge will be included will be determined in
the Company's next general rate case.
5. The Company will provide periodic quarterly updates to the 2020
Decommissioning Studies beginning with the quarter ending December 31,2020,
until the Company files its next general rate case. The quarterly updates will
report on any actions occurring in other states related to the 2020
Decommissioning Studies. In addition to the quarterly updates, the Stipulating
Parties will convene to discuss alternative rate treatment options before the next
general rate case.
6. Any Party may propose any ratemaking treatment for Idaho's allocation of
decommissioning costs in the Company's next general rate case.
7. No Party waives the right to take any position in any other docket, provided that
the Party agrees to support the Stipulation.
The Stipulation - Phase II provides the means to recognize and implement the start of
recovery for incremental decommissioning costs above those amounts currently recovered
through depreciation expense. In recognizing the increased amounts identified inthe2020
Studies, the Stipulation - Phase II allows ratepayers to transition one-year of incremental
decommissioning costs over a l5-year amortization period. Although the deferral recognizes the
incremental costs for recovery, the Company will not start recovery through rates until
completion of the Company's next general rate case. The delay will allow Parties additional
time to: 1) understand how the Company and other state jurisdictions are addressing coal plant
decommissioning costs; and2) evaluate alternative ratemaking treatment for Idaho's allocation
of decommissioning costs.
PT]BLIC COMMENTS
As of October 13,2020, the Commission has not received any comments from customers.
STAFF COMMENTS IN SUPPORT OF
PHASE II SETTLEMENT STIPULATION
ocroBER t4,20204
STAFF RECOMMENDATION
Staff believes the Stipulation - Phase II represents a fair, just, and reasonable compromise
of the issues raised by the parties in the second phase of the case, and therefore recommends the
Commission approve the Stipulation - Phase II with its terms and conditions.
Respectfully submitted this A\u, of October 2020.
Dayn
Deputy Attorney General
Technical Staff: Rick Keller
Joseph Terry
Bentley Erdwurm
Travis Culbertson
i: umisdcommentVpacel8.8dhrkjtbetnc comments phase II
STAITF COMMENTS IN SUPPORT OF
PHASE II SETTLEMENT STIPI.]LATION
5 OCTOBER I4,2O2O
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 14th DAY OF OCTOBER 2020,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF IN
suppoRT oF PHASE II SETTLEMBNT STIPULATION, rN CASE NO. PAC-E-18-08,
BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
YVONNE R HOGLE
TED WESTON
ROCKY MOUNTAIN POWER
I4O7 WEST NORTH TEMPLE STE 330
SALT LAKE CITY UT 84116
E-MAIL: yvonne.hogle @pacificorp.com
ted. we ston @ pacificorP. com
DATA REQUEST RESPONSE CENTER
E.MAIL ONLY:
datarequest @ pacificorp.com
RANDALL C BUDGE
THOMAS J BUDGE
RACINE OLSON PLLP
PO BOX 1391
POCATELLO ID 83204
E-MAIL: randy @racineolson.com
tj @racineolson.com
ELECTRONIC ONLY
Jim.smithl @bayer.com
ERIC L OLSEN
ECHO HAWK & OLSEN
PO BOX 6119
POCATELLO ID 83205
E-MAIL: [e-mail]
RONALD L WILLIAMS
WILLIAMS BRADBURY PC
PO BOX 388
BOISE ID 83701
E-MAIL: [e-mail]
ELECTRONIC ONLY
KYLE WILLIAMS
BYU IDAHO
E-MAIL: [e-mail]
D MATTHEW MOSCON
LAUREN SHURMAN
STOEL RIVES LLP
201 S MAIN ST STE lIOO
SALT LAKE CITY UT 841I I
E-MAIL: matt.moscon @ stoel.com
lauren. shurman @ stoel.com
BRUBAKER & ASSOCIATES
T6690 SWINGLEY RIDGE RD
#140
CHESTERFIELD MO 63017
E-MAIL: [e-mail]
kiverson @ consultbai.com
b.collings @ consultbai.com
DR LANCE D KAUFMAN
4801 W YALE AVE
DENVER CO 80219
E-MAIL: lance @ aegisinsight.com
ELECTRONIC ONLY
JIM DUKE
IDAHOAN FOODS
E-MAIL: [e-mail]
ELECTRONIC ONLY
VAL STEINER
NU-WEST INDUSTRIES INC
E-MAIL: val.steiner@ itafos.com
CERTIFICATE OF SERVICE
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
710 N 6rH STREET
BOISE D 83702
E-MAIL: botto @ idahoconservation.org
MATTHEW GERHART
SIERRA CLUB
1536 WYNKOOP ST STE 2OO
DENVER CO 80202
E-MAIL: [e-mail]
ANA BOYD
SIERRA CLUB
2101 WEBSTER ST STE 13OO
OAKLAND CA946I2
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE