20190521Reply Comments.pdf

Y ROCKY MOUNTAIN
Bgly,E^"B-.,
RECEIVED
;Cl9l,liY 2 I PH 3: 0lr
IDAI.IO PUBLICITILITITS COHT{ISSION
1407 West North Temple, Suite 330
Salt Lake City, Utah 84116
May 21,2019
VA OWRNIGHT DELIWRY
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472W. Washington
Boise,ID 83702
Re: CASE NO. PAC-E-19-04
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
REQUESTTNG APPROVAL OF $r5 MTLLON NET POWER COST DEFERRAL
Dear Ms. Hanian:
Please find enclosed an original and seven (7) copies of Rocky Mountain Power's reply comments
in the above referenced matter.
Informal inquiries may be directed to Ted Weston, ldaho Regulatory Manager, at [phone].
Very truly yours,
J
Vice
Enclosures
Yvonne R. Hogle (ISB# 8930)
1407 West North Temple, Suite 320
Salt Lake City, Utah 841l6
Telephone No. [phone]
Facsimile No. [phone]
E-mail: [e-mail]
Attorneyfor Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER
REQUESTTNG APPROVAL OF $1s.1
MILLON NET POWER COST DEFERRAL
) CASE NO. PAC-E-19-04
)) REPLY COMMENTS OF
) ROCKY MOUNTATN POWER
COMES NOW Rocky Mountain Power a division of PacifiCorp, ("RMP" or the
o'Company"), and, pursuant to Rules 56 and 256 of the rules of Procedure of the Idaho Public
Utilities Commission (the 'oCommission"), hereby submits Reply Comments to the Idaho
Public Utilities Commission ("Commission") in the above referenced case.
BACKGROUND
On March 29, 2019, the Company filed an application ("Application") with the
Commission pursuant to the Company's approved energy cost adjustment mechanism
("ECAM") for authority to adjust Electric Service Schedule No. 94, Energy Cost Adjustment,
("Schedule 94"), rute to recover approximately $15.1 million deferred net power costs from
thedeferralperiodbeginningJanuary l,20l8throughDecember3l,20l8("DeferralPeriod").
On April 3,2019, the Company filed a replacement of the originally filed Application with the
Commission to update the Load Change Adjustment Rate to reflect changes from the Tax Cuts
and Jobs Act.
Page I
The Company calculated the ECAM balance at the end of the Deferral Period of
$l7.3million, by including $15.1 million from the Deferral Period, added the$.2.2 million
remaining balance from prior ECAM filings, and reduced it by $0.1 million credit balance in
the depreciation regulatory asset. The Company estimates the $17.3 million will be reduced by
approximately $3.3 million from the Schedule 94 revenue collections less interest accrued
from January 1 through May 31, 2019 resulting in an ECAM balance to collect of
approximately $l 3.8 million.
On May 14, 2019, the Commission Staff ("Staff') and PacifiCorp Idaho Industrial
Customers ("PIIC") filed comments responding to the Application. Staff supported the
Application, stating "[s]taff believes the Company prudently dispatched its resources,
purchased power from the wholesale market, and sold generation into the market to minimize
[net power costs] to customers.l Staff recommends that the Commission approve the ECAM
without modifi cation."2
PIIC proposed that the costs associated with the United Mine Workers Association
("UMWA") 1974 Pension Withdrawal Liability be removed from coal costs at the Hunter and
Huntington power plants. Additionally, PIIC proposed that the Company be required to include
as part of the ECAM, filing requirements similar to those provided in the Company's Energy
Balancing Account filing in Utah ("EBA").
REPLY COMMENTS
Filing Requirements
PIIC recommends the Commission require the Company and Staffto collaborate on a
list of filing requirements similar to those filed by the Company in the EBA. The EBA is a
I Case No. PAC-E-19-04, Comments of the Commission Staff, May 14, 2019,page 6
2 Id. Page 8.
Page 2
deferral mechanism filed by the Company in Utah similar to the ECAM in ldaho. The filing
requirements would be submitted with the Company's annual tdaho ECAM application. The
Company opposes this proposal.
PIIC states that the Company did not provide the requested filing requirements and
additional filing requirement information as submitted in Docket No. l9-035-01 filed with the
Public Service Commission of Utah.3 The Company cannot legally disclose the confidential
filing requirements pursuant to applicable Utah laws including Utah Administrative Code
Pt746-1-602 and R746-l-603 which prohibits the use or disclosure of confidential information
other than for the purpose of the Utah proceeding. Although the Company was unable to
provide the requested confidential information, the Company would have willingly provided
the requested information if it was separately requested as its own data request. Notably, the
Company provided a majority of the items provided in the Utah EBA filing requirements and
additional filing requirements to Staff in discovery.
PIIC states its review of the ECAM was limited due to a short comment window.a As
PIIC is aware, the Company files quarterly reports with PIIC and other parties, as part of the
Idaho ECAM agreement, which provides ample time to review the ECAM data before the
Application is filed. For example, Staff submitted a first round of data requests on January 9,
2019 and the Company responded on January 31,2019. Subsequent data requests from Staff
were received and the last response was provided by the Company on April 10, 2019. The
Company filed its Application on March 29,2019, and subsequently updated it on April 3,
2019. PIIC did not petition to intervene until April 15,2019 and did not submit a data request
until April 30,2019. The Company had six working days to respond. Notably, the Company
3 PIIC Comments, Case No. PAC-E-19-04, Page 3.
4 PIIC Comments, Case No. PAC-E-19-04,Page 2.
Page 3
responded on May 7,2019, five working days after the request was received. PIIC's statement
that it was only provided a few weeks to review the ECAM fails to mention that the Company
provided a non-confidential copy of the filing when it was filed with the Commission and PIIC
could have petitioned to intervene and sought discovery over a month before the date it served
the Company with discovery.5
UMWA 1974 Pension ll/ithdrawal Costs
PIIC recommends the Commission decrease the Company's proposed deferral by
approximately $0.2 million to remove costs associated with the Company's withdrawal from
the UMWA 1974 Pension Trust (*1974 Pension Trust") included in fuel expense at the Hunter
and Huntington plants. For the reasons set forth below, the Company opposes this adjustment.
Before the closure of the Deer Creek Mine, Energy West, a subsidiary of the Company,
was contributing $5.50 per union hour worked to the 1974 Pension Trust. These contributions
of approximately $3 million annually were included in the Company's fuel expense which is
included in NPC. These pension contribution costs were included in fuel costs and were part
of Base NPC in Case No. PAC-E-16-12. Therefore, the Base NPC to which actual NPC are
compared to in the ECAM include these pension contribution costs.
The Deer Creek mine closure and the treatment of the 1974 Pension Trust were
addressed in Case No. PAC-E-14-10. At the time of the Deer Creek mine closure, Energy West
had the option to either make a lump-sum payment to satisfy its withdrawal obligation or make
annual installment payments. As of the date of Order No. 33304, issued May 27 ,2015, Energy
West intended to negotiate with the 1974 Pension Trust to elect the most economical choice.6
s PIIC Comments, Case No. PAC-E-19-04, Page 3.
6 See In re Application if RoclE Mountain Power for Approval of a Transaction to Close Deer Creek Mine and
for Deferred Accounting Order, PAC-E-14-10, Final Order No. 33304 atpage 4.
Page 4
The Company proposed the continuation of the on-going estimated $3 million annual payment
already reflected in rates, which represented the interest accrued on the withdrawal liability,
and deferral of the loss associated with the withdrawal liability until its next general rate case.
In accordance with Order No. 33304, the withdrawal liability is being deferred until the next
general rate case; however, the estimated $3 million in annual costs has continued to flow
through fuel costs.
Actual withdrawal obligation payments, which is the interest accrued on the withdrawal
liability, started in November 2016 and the Company has included these costs in fuel expense
similar to their treatment before the Deer Creek Mine closure. The withdrawal liability has
been deferred in accordance with Order No. 33304 and the Company will seek recovery of
those costs in the next general rate case.
It is appropriate to include the withdrawal payments in fuel costs at the Hunter and
Huntington plant because I ) this was the treatment intended in Case No. PAC-E- I 4- I 0 and is
consistent with Base NPC set in PAC-E-I6-12; 2) the withdrawal payments are an ongoing
cost and deferring these costs for a number of years to be amortized in the next general rate
case will result in future customers paying the amortization of today's costs and the future
withdrawal payments; and, 3) Base NPC includes the pension contributions or the withdrawal
payments. Removing these costs from the ECAM now would result in and intergenerational
inequity by refunding these costs to customers today and asking future customers to pay them.
Thus, it is appropriate to continue including the withdrawal payments in fuel costs.
Page 5
Calculation of Net Power Cost
PIIC notes that the Company has changed its source of computing NPC.7 The Company
previously used a database called TORIS as a source for NPC, which provided a condensed,
high level summary of the Company's energy trading system, Endur. The Company upgraded
Endur eliminating the need for the TORIS database. Before this upgrade, TORIS was used as
a source of financial statement preparation and an interface between Endur and SAP, the
Company's accounting system. TORIS is no longer needed and the Company has discontinued
its use. Endur has replaced TORIS as a source of financial statement preparation, which
includes the preparation of the Company's Federal Energy Regulatory Commission ("FERC")
Form l. Staffperformed a comprehensive audit of the Company's NPC, was able to reconcile
the NPC back to the Company's accounting records and found no issues with the change from
TORIS to Endur.
CONCLUSION
The ECAM allows the Company to collect or credit the difference between the Actual
NPC incurred to serve customers in Idaho customers and the Base NPC collected through base
rates assuring customers pay the actualNPC after sharing.
The Company opposes the adjustments to the ECAM and the additional reporting
requirements proposed by PIIC for the reasons set forth above. Thus, the Company respectfully
requests that the Commission approve the deferred balance as filed, and supported by Staff,
and approve Electric Service Schedule No. 94 - Energy Cost Adjustment rates effective June
l,20lg.
7 PIIC Comments, Case No. PAC-E-19-04,Pa5e2.
Page 6
REOUEST FOR RELIEF
WHEREFORE, Rocky Mountain Power respectfully requests that the Commission
issue an order approving approximately $15.1 million ECAM deferral for the Deferral Period
and approve a 0.4 percent increase to Electric Service Schedule No. 94, Energy Cost
Adjustment.
DATED this 2l't day of May 2019.
Respectfully submitted,
ROCKY MOUNTAIN POWER
R. Hogle
West North Temple, Suite 320
Lake City, Utah 841l6
Telephone No. [phone]
Facsimile No. [phone]
E-mail: [e-mail]
Attorneyfor RoclE Mountain Power
Page 7
CERTIFICATE OF SERVICE
I hereby certify that on this 21 't of May, 2019, I caused to be served, via electronic mail
and/or ovemight delivery a true and correct copy of Rocky Mountain Power's Reply Comments
in Case No. PAC-E-19-04 to the following:
Service List
MONSANTO COMPANY
Randall C. Budge
Racine, Olson, Nye & Budge, Chartered
P.O. Box 1391
201E. Center
Pocatello, Idaho 83204-1391
[e-mail]
Thomas J. Budge
Racine, Olson, Nye & Budge, Chartered
P.O. Box 1391
201E. Center
Pocatello, Idaho 8320 4-1391
[e-mail]
BAI Maurice Brubaker
16690 Swingley Ridge Rd. #140
Chesterfield, MO 63017
[e-mail]
Brian Collins
16690 Swingley Ridge Rd. #140
Chesterfield, MO 63017
[e-mail]
PIIC
Ronald L. Williams
Williams Bradbury, P.C.
P.O. Box 388
Boise ID,83701
ron@will iamsbradburv. com
Bradley Mullins
333 SW Taylor, Suite 400
Portland, OR97204
brmul [e-mail]
Kyle Williams
BYU Idaho
williamsk(Ebvui.edu
Val Steiner
Nu-West Industries, Inc.
[e-mail]
Jim Duke
Idahoan Foods
[e-mail]
ROCKY MOUNTAIN POWER
Ted Weston
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 841l6
ted.weston@oacifi com.com
Yvonne R. Hogle
Rocky Mountain Power
1407 WestNorth Temple, Suite 320
Salt Lake City, Utah 841l6
wonne.ho gle@pacifi corp.com
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 2000
Page I of2
Portland, OR97232
datareouest@.oacifi com.com
Dated this 2l't day of May ,2019.
Kaley McNay
Coordinator Operations
Page2 of2