20191203Application.pdf

}Y
t
RECEIVED
istgDtC -3 PH 2: lr?
',,''i r. itlioti,i*ilSsroN
1407 West North Temple, Suit€ 330
Salt Lake City, Utah 841'16
Re:
December 3, 2019
VA OVERNIGHT DELIVERY
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
I 133 I W Chinden Blvd
Building 8 Suite 201A
Boise, Idaho, 83714
CASE NO. PAC.E-19-20
IN TIIE MATTER OF THE APPLICATION FOR APPROVAL OF THE 2O2O
PACIFICORP II{TER-JT]RISDICTIONAL ALLOCATION PROTOCOL
Dear Ms. Hanian:
Please find enclosed an original and nine (9) copies ofRocky Mountain Power's application in
the above referenced matter, along with direct testimony and exhibits. Enclosed is a CD
containing the application, direct testimony, and exhibits.
Informal inquiries may be directed to Ted Weslon, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
S
Vice Presiden! Regulation
t
ROCKY MOUNTAIN
POA'ER
A DIVISION OF FACIFI@RP
a
o
Daniel E. Solander (ISB# 8931)
1407 West North Temple, Suite 320
Salt Lake Ciry, Utah 84 I l6
Telephone No [phone]
E-mail : -d..A.lriel.Sel?urieliO]rsc,iii,:crp.coin
A I t on t e y .for Ro c x 1,\ l.4a u r t u i n P ol' e r
IN TIIE MATTER OF THE APPLICATION
FOR APPROVAL OF THE 2O2O
PACIFICORP INTtrR-JURISDICTIONAL
ALLOCATION PROTOCOL
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
)
)
)
)
CASE NO. PAC-E-19-20
APPLICATION OF
ROCKY MOUNTAIN POWER
o
Rocky Mountain Power, (the "Company" or "Rocky Mountain PoweC'), a division of
PacifiCorp, hereby respectfully submits this application ("Application") in accordance with Idaho
Code 961-502, 96l-503, and RP 052, to the Idaho Public Utilities Commission ("Commission")
and requests approval of the 2020 PacifiCorp Inter-Jurisdictional Allocation Protocol (the "2020
Protocol"). In support of this Application, Rocky Mountain Power states as follows:
1. Rocky Mountain Power is a division of PacifiCorp. PacifiCorp is an Oregon
corporation, which provides electric service to retail customers through its Rocky Mountain Power
division in the states of Idaho, Utah, and Wyoming, and through its Pacific Power division in the
states of Califomia, Oregon, and Washington.
2. Rocky Mountain Power is a public utility authorized to do business in the state of
Idaho. The Company is subject to the Commission's jurisdiction with respect to its prices and
terms of electric service to retail customers in Idaho. Rocky Mountain Power provides retail
electric service to approximately 82,000 customers in the state.
APPLICATION IIOR APPROVAL OF TI]E 2O2O INTER-JURISDICTIONAL ALLOCATION PROTOCOL I
o I. BACKGROUND
3. On October 14,2016, the Commission issued Order No. 33623r adopting the
2017 Protocol. Section II of the 2017 Protocol provided the effective period through
December3l,20l8 for the 2Ol7 Protocol, with the option for a one-year extension. On
February 1,2017, the Company filed lor the one-year extension of the 2017 Protocol through
December 3 l, 2019. Commission Order No. 337262 authoized the one-year extension ofthe 2017
Protocol, resulting in the 2017 Protocol terminating on December 31, 2019,
4. PacifiCorp provides retail electric service to more than 1.8 million customers in the
western states of California, Idaho, Oregon, Utah, Washington, and Wyoming. PacifiCorp owns
substantial generation and transmission facilities. Augmented with wholesale power purchases and
long-term transmission contracts, these facilities operate as a single system on an integrated basis
to provide service to customers in a cost-effective manner. PacifiCorp recovers costs of owning
and operating its generation and transmission system in retail prices established from time to time
in state regulatory proceedings.
5. In such state regulatory proceedings, it is customary to first determine what assets
are used and useful in providing service to customers and the prudence of associated costs to be
included in the Company's revenue requirement in the state conducting the proceeding. Because
all of the Company's generation and transmission resources and other common or general
functions are deemed to be used to serve the Company's customers in all of its state j urisdictions,
it is necessary to determine what portion of these costs should be allocated to customers in the
state for which prices are being established. Ifdifferent state commissions make different decisions
regarding what resources should be included in PacifiCorp's rates or if different state commissions
I Case No. PAC-E-I5-16
2 Case No. PAC-E-I7-01
APPLICATION FOR APPROVAL OF THE 2O2O INTER-JURISDICTIONAL ALLOCATION PROTOCOL 2
o
o
o adopt different policies for allocating the costs of resources among states, the Company may not
be afforded a reasonable opportunity to recover its full cost ofproviding electric service.
6. Each ofPacifiCorp's state regulatory commissions has the ability to pursue policies
that it believes are in the public interest in its state- It is also important, however, for PacifiCorp to
be able to make business decisions in an environment where differing state policies do not result
in preemptively denying the Company a reasonable opportunity to recover its prudently incurred
costs. This would create a disincentive for PacifiCorp to invest in its system.
7. The Multi-State Process ("MSP") began in 2002, with PacifiCorp filing
applications in each of its six juri sdictions to create a process to consider issues related to its status
as a multi-j urisdictional utiliry. After years of discussions, PacifiCorp sought ratification of an
inter-jurisdictional allocation protocol in Idaho, Oregon, Utah, and Wyoming. Following
negotiations, the participants agreed to certain revisions to the protocol filed with the commissions
(the "Revised Protocol"), which was approved by the commissions in ldaho, Oregon, Utah, and
Wyoming. The Revised Protocol allocated costs among PacifiCorp's jurisdictional states and
ensured that the Company operated its generation and transmission system on an integrated basis
to achieve a least costleast risk resource portfolio, while allowing each state to independently
establish its ratemaking policies. Section XIII.B of the Revised Protocol established a "Standing
Committee" for facilitating continued dialogue among the states related to inter-jurisdictional
allocation issues-
8. Thereaftel subsequent and substantial discussions occurred to address various
concerns rai sed by stakeholders in different states that resulted in the amendments to the Revised
Protocol (the "2010 Protocol"). The 2010 Protocol was agreed to by the parties on
September I 5, 2010, and was designed to allocate PacifiCorp's costs among itsjurisdictional states
o
o
APPLICATION FOR APPROVAL OF THE 2O2O INTER-JURISDICTIONAL ALLOCATION PROTOCOL :]
a
a
o
in an equitable manner, ensure PacifiCorp plans and operates its generation and transmrssron
system on a six-state integrated basis that achieved a least costJeast risk resource portfolio lor
customers, allow each state to independently establish its ratemaking policies, and provide
PacifiCorp with the opportunity to recover 100 percent of its prudently-incurred costs. The 2010
Protocol was approved by the commissions in Idaho, Oregon, Utah, and Wyoming.
9. One of the terms of 2010 Protocol was a specified termination date. Parties to the
Stipulation agreed that it would only be utilized for regulatory filings made prior to
January l, 2017. Knowing that it would take some time to develop a new allocation methodology,
the Standing Committee and Broad Review Work Group ("BRWG"), a workgroup of interested
stakeholders, started collaborating in November 2012 to develop potential solutions acceptable to
all parties in the context of an allocation methodology, including the performance of various
studies by the Company at the request of the Standing Committee.
10. Discussions of the BRWG resulted in the development of the 201 7 Protocol inter-
jurisdictional allocation method (the "20l7 Protocol"). The 2017 Protocol was a general agreement
reached between representatives of PacifiCorp and certain Commission staff members, consumer
advocates and other interested parties from Idaho, Oregon, Utah, and Wyoming, who were
signatories to the 2017 Protocol,r regarding issues arising with regards to the 2010 Protocol,
PacifiCorp's status as a multi-jurisdictional utility and future i nter-j uri sdi ctional allocation
procedures. The 2017 Protocol was subsequently extended for an additional year, as provided by
r Signatories to the 2017 Protocol include: PacifiCorp. Public Ulility Cornmission of Oregon Staff, the Citizens'
Utililv Board of Orcgo( tlrc Idalo Public Utilities Commission Slar. Utah Division of Public utilities. Utah Office
of Consurncr Scn iccs, Wl oming Otficc of Consumcr Advocate. \Vl oming Indusrial Energl Consutncrs, and thc
Wvoming Public Scnicc Conu ission Sta[L Washington representatiYes pafiicipated in the BRWG proccss and
ncgotialiorE. but chose not to sign the 2017 Prolocol because is current appmach is a di\isiorurl allocation. Califomia
reprcscnlatiYes did not particrpate in negotiations. but it implements thc urulti-jurisdictional allocation as pafi of
general rate case proceedings.
APPLICATION FOR APPROVAL OF THE 2020 INI'ERLURISDICTIONAL ALLOCATION PROTOCOL ,l
o the terms of the 2017 Protocol and approved by the Commission, terminating on
December 31,2019.1
11, After approximately three years of discussions and negotiations, in November
2019, interested parties reached an agreement-in-principle that led to the 2020 Protocol agreement
that is being presented in this docket.
I REQUEST FORAPPROVAL OF 2O2O PROTOCOL
12. The 2020 Protocol is intended to supersede the 2017 Protocol for California, Idaho,
Oregon, Utah, and Wyoming, and the West Control Area Inter-jurisdictional Allocation
Methodology C'WCA') for Washington, while continuing to use both allocation methodologies,
with modifications during an [nterim Period, as explained below. Subj ect to the provisions ofthe
2020 Protocol, and with the acknowledgment that only the appropriate state body charged with
issuing orders to establish rates can actually do so, the Parties have agreed that the 2020 Protocol
can be used to setjust and reasonable rates and agree to support its use in rate filings in California,
Idaho, Oregon, Utah, Washinglon, and Wyoming through the Interim Period.
13. The 2020 Protocol includes:
. An effective period ofthe 2020 Protocol, as defined in Section 2 ofthe agreement;
. An agreement on certain issues that are intended to be implemented during the
Interim Period, "lmplemented Issues";
. An agreement on certain issues intended to be implemented following the Interim
Period, subject to final resolution of all outstanding issues identified in the 2020 Protocol, which
are referred to as "Resolved Issues";
i Casc No. PAC-E-I7-01.
APPLICAIION FOR APPROVAL OF THE 2()20 INTER-JURISDICTIONAL ALLOCATION PROTOCOL
o
o
)
o . A process and timeframe to address and attempt to resolve all outstanding issues
that the Parties intend to resolve if the 2020 Protocol is approved by the Commissions and during
the Interim Period, including the implementation of a Nodal Pricing Model, Resource Planning.
New Resource Assignment, Limited Realignment, Special Contracts, post-lnterim Period capital
additions on coal plants, and other items, which are collectively referred to in the 2020 Protocol
as "Framework Issues". The resolution of the Framework Issues combined with the Implemented
Issues and the Resolved Issues are all intended to result in a new allocation methodology for
PacifiCorp's six States referred to in the 2020 Protocol as the "Post-Interim Period Method";
. A description of inter-j urisdictional allocation policies, procedures, or methods
which, if applied by each State as agreed to in the 2020 Protocol for rate proceedings filed during
the Interim Period, will provide PacifiCorp a reasonable oppomrniry to recover its prudently
incurred cost of service, and
. A description of the way costs and revenues associated with all components of
PacifiCorp's regulated service, including costs and revenues associated with generation,
transmission, distribution, and wholesale transactions, should be assigned or allocated among the
six states.
14. The proposed allocation of a particular expense or investment to a state under the
2020 Protocol is not intended to and will not prejudge the prudence ofthose costs or the extent to
which any particular cost may be reflected in rates.
15. Nothing in the 2020 Protocol is intended to abrogate either or both of a
Commission's right and its obligation to: first, determine fair,just, and reasonable rates based upon
applicable laws and the record established in rate proceedings conducted by that Commission;
second, consider the impact of changes in laws, regulations, or circumstances on inter-
o
o
APPLICATION FOR APPROVAL OF TI.IE 2O2O INTER-JURISDICTIONAL ALLOCATION PROTOCOL 6
o
o
jurisdictional allocation policies and procedures when determining fair, just, and reasonable rates;
or third, establish different allocation policies and procedures lor purposes of allocating costs and
revenues within that state to different customers or customer classes.
16. Parties support the 2020 Protocol, but their support will not, in any manner, negate
regulatory authority to address changed or unforeseen circumstances, including changes in laws
or regulations. A party's support of the 2020 Protocol will not bind or be used against that party if
a party concludes that the 2020 Protocol no longer produces results that are just, reasonable or in
the public interest, or provides the Company with a reasonable opportunity to recover its prudently
incurred cost of service.
17. The parties have made no effort to address or consider intra-state cost allocation
issues and agree that using the 2020 Protocol for inter-jurisdictional cost allocation purposes does
not suggest or require similar treatment to be applied to intra-jurisdictional cost allocations for
class cost of service purposes within any state.
18. The 2020 Protocol also includes the following appendices:
. Terms that are capitalized in the 2020 Protocol are defined in Appendix A.
. Tables identifying the allocation factors to be applied to each component of
PacifiCorp's revenue yequirement calculation are included as Appendix B.
. The definition and algebraic derivation of each allocation factor, along with
associated FERC accounts, are contained in Appendix C.
. A Memorandum of Understanding among the Parties supporting the Company's
pursuit of the implementation of a Nodal Pricing Model is included as Appendix D.
o
APPLICAIION FOR APPROVAL OF THE 2020 INTER.JURISDICTIONAL ALLOCAIION PROTOCOL 7
o . Atable reflecting currently approved depreciation lives and proposed depreciation
lives in pending depreciation dockets for coal-fueled Existing Resources for reference is attached
as Appendix E.
. A Memorandum of Understanding between the Company and the Washington
Parties is attached as Appendix F.
. An explanation of the treatment of special contracts for allocation purposes is
attached as Appendix G.
19. In support of this Application the Company provides the testimony of witnesses
Joelle Steward, Vice President of Regulation, Steven R. McDougal, Director of Revenue
Requirement, and Michael Wilding, Director of Net Power Costs and Regulatory Policy. The 2020
Protocol agreement and appendices are presented as Exhibit No. I to Ms. Steward's testimony.
III, COMMUNICAITONS
20. Communications regarding this filing should be addressed to:
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
1407 West North Temple, Suite 330
salt Lake City, urah 841l6
Tel ephone : (80 l) 220 -29 63
Email : ted. rveston(Dpacifi corp.cenr
Daniel E. Solander
Senior Counsel
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake Ciry, Utah 841 l6
Telephone: [phone]
Email: i:lirlirr'l soirrit e r-itl lr a c iii i: (! i ll. c oril
In addition, Rocky Mountain Power requests that all data requests regarding this
Application be sent in Microsoft Word to the following:
APPLICATION FOR APPROVAL OF THE 2020 INTER.JURISDICTIONAL ALLOCATION PROTOCOL 8
o
o
t By email (preferred)datarequestiiipaci fi corp conr
By regular mail
Data Request Response Center
PacifiCorp
825 Multnomah, Suite 2000
Portland, Oregon 97232
Informal questions may be directed to Ted Weston, Idaho Regulatory Affairs Manager at (801)
220-2963.
Iv. PROPOSEDCOMMISSIONPROCESS
21,. The 2020 Protocol has been developed and negotiated by the parties as an
integrated, interdependent whole. Support by any party of the 2020 Protocol is expressly
conditioned upon approval without material alteration ofthe 2020 Protocol by all Commissions in
the states that PacifiCorp has sought approval.5 The parties recommend that the Commission
approve the 2020 Protocol and that the approval be conditioned on the other Commissions
approving the 2020 Protocol without change.
22. PacifiCorp respectfully requests that the Commission approve the use ofthe 2020
Protocol for interjurisdictional cost allocation purposes effective January l, 2020. The Company
also proposes that within 30 days of receipt of the Application, the Commission establish a
schedule for further proceedings.
V, CONCLUSION
WHEREFORE, by this Application, PacifiCorp respectfully requests that the Commission
issue an order approving the 2020 Protocol as described in the direct testimony of Ms. Steward,
Mr Wlding, and Mr, McDougal.
5 Califomia hrs historically rcr icl cd allocation l)cthodologics in coniunction $ ith a general rate case. PacifiCorp s
nert rcgulaton -rnandllcd gcncral ratc casc \\ ill not bc lilcd until 2021 at thc carlicst.
APPLICATION FOR APPROVAL OF THE 2O2O INTER-JURISDICTIONAL ALLOCATION PROTOCOL 9
a
I
o DATED this 3'd day of December, 2019
Respectfulli, submitted,
PACIFICORP
tld *Nfirl*
Daniel E. Solander
1407 W. North Temple, Suite 320
Salt Lake City, Utah 84t l6
Telephone: [phone]
dani+l. solander(rl)rir c i l'i crirp. corr
a
APPLICATION FOR APPROVAL OF THE 2O2O INTER.JURISDICTIONAL ALLOCATION PROTOCOL
o
10