20191224Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KIELLANDER
COMMISSIONER RAPER
COMMISSIONE,R ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
I,EGAI,
FROM:DAYN HARDIE
DEPUTY ATTORNEY GENERAL
DATE: DECEMBER23,2019
SUB.IECT:IN THE IIIATTF]R OF ROCKY MOUNTAIN POWER'S APPLICATION FOR
APPROVAL OF THE 2O2O PACIT'ICORP INTI.]R-JURISDICTIONAL
ALLocATIoN PRoToCoL; CASE NO. PAC-E-19-20.
On December 3,2019, Rocky Mountain Power ("Company"), a division of PacifiCorp,
applied to the Commission for approval of the 2020 PacifiCorp lnter-Jurisdictional Allocation
Protocol ("2020 Protocol"). PacifiCorp provides electric service in six states. PacifiCorp operates
as Rocky Mountain Power in ldaho, Utah, and Wyoming, and as Pacific Power in Oregon,
Washington, and California. The Company requests the Commission approve its use of the 2020
Protocol with an effective date of January l, 2020.
THE APPLICATION
The 2020 Protocol would supersede the 2017 Protocol for California, Idaho, Oregon, Utah,
and Wyoming, and the West Control Area lnter-Jurisdictional Allocation Methodology for
Washington, while continuing to use both allocation methodologies, with modification, during an
interim period (defined below). The Company proposes four modifications to the 2017 Protocol:
l) elimination of the Equalization Adjustment, 2) changes to the Embedded Cost Differential
Adjustments; 3) changes to treatment of qualifying facilities; and 4) changes to the general
governance sections of the 201? Protocol. Parties have agreed that the 2020 Protocol can be used
to set just and reasonable rates and agree to support its use in rate filings in all states PacifiCorp
provides electric service.
DECISION MEMORANDUM
'lhe 2020 Protocol would be effective from January I, 2020 through December 31, 2023
("Interim Period"). Besides the above modifications to the 2017 Protocol, the 2020 Protocol
includes these provisions:
. Agreement on issues to be implemented during the Interim Period, "lmplemented
Issues";
. Agreement on certain issues to be implemented following the Interim Period, subject
to final resolution of all outstanding issues identified in the 202O Protocol, "Resolved
Issues";
. 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 Commission and during
the Interim Period, including the implementation of a Nodal Pricing Model, Resource
Planning, New Resource Assignment, Limited Realignment, Special Contracts, post-
Interim Period capital additions on coal plants. Collectively these are refened to as
"Framework Issuesl";
o A description of inter-jurisdictional allocation policies, procedures, or methods which,
ifapplied during the Interim Period, will provide the Company a reasonable opportunity to
recover its prudently incurred cost of service; and
r A description of how costs and revenues associated with all components of the
Company's regulated service-including costs and revenues associated with generation,
transmission, distribution, and wholesale transactions-should be assigned or allocated
among the six states in which PacifiCorp provides electric services.2
Before the end of the lnterim Period, assuming resolution of all Framework Issues, a new
Post-lnterim Period Method of cost allocation, incorporating the Implemented Issues, Resolved
Issues, and final resolution of Framework Issues, will be presented to the Commission for approval
before the end of 2023.
I The resolution ofFramework lssues combined with the Implemented Issues and the Resol!ed lssues are all intended to result in
a new allocation methodology referred to as the "Post-lnterim Period Method."
2DECISION MEMORANDUM
STAFF RECOMMENDATION
Staff recommends the Commission issue a Notice of Application and Notice of
Intervention setting a 2l-day deadline for interested persons to file to intervene. After the
intervention deadline runs, another order can be issued setting further procedure as necessary.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and set a 2 l -day deadline for
interested persons to intervene as paflies in the case?
Dayn Hardie
Deputy Attorney General
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3DECISION MEMORANDUM