20210527Application.pdf

A DIVISJON OF PAClFICOpp 1407 W North Temple,Suite 330
Salt Lake City,Utah 84116
May 27,2021
VIA ELECTRONIC FILING
AND OVERNIGHT DELIVERY
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
11331 W Chinden Blvd.
Building 8 Suite 201A
Boise,ID 83714
Re:CASE NO.PAC-E-21-07
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
FOR AUTHORITY TO INCREASE ITS RATES AND CHARGES IN IDAHO
AND APPROVAL OF PROPOSED ELECTRIC SERVICE SCHEDULES AND
REGULATIONS
Dear Ms.Noriyuki:
Rocky Mountain Power hereby submits for filing with the Idaho Public Utilities Commission
its Application,direct testimony,and exhibits in the above-referenced matter.An original and
nine paper copies of confidential and non-confidential versions of the Application,direct
testimony,and exhibits will be provided separately,as well as flash drives containing all of the
documents and work papers.The filingalso includes a paper copy of all documents along with
a flash drive containing all testimony and exhibits in their original formats for the court
reporter.
All formal correspondence and regarding this Application should be addressed to:
Ted Weston Emily L.Wegener
Rocky Mountain Power Matthew D.McVee
1407 W.North Temple,Suite 330 Rocky Mountain Power
Salt Lake City,Utah 84116 1407 W.North Temple,Suite 320
Telephone:[phone] Salt Lake City,Utah 84116
Email:ted.weston pacificorp.com Telephone:[phone]
Email:[e-mail]
matthew.mcvee@p_acinc_oyc_om
Idaho Public Utilities Commission
May 27,2021
Page 2
Communications regarding discovery matters,includingdata requests issued to RockyMountainPower,should be addressed to the following:
By E-mail (preferred):[e-mail]
By regular mail:Data Request Response Center
PacifiCorp
825 NE Multnomah St.,Suite 2000
Portland,OR 97232
Informal inquiries may be directed to Ted Weston,Idaho Regulatory Manager at (801)220-
2963.
ery truly yours,
oelle Stewar
Vice President,Regulation
Enclosures
Emily L.Wegener (ISB #11614)
Matthew D.McVee
Rocky Mountain Power
1407 W.North Temple,Suite 320
Salt Lake City,Utah 84116
Tel.[phone]
emily.wegener pacificorp.com
matthew.mcvee pacificorp.com
Attorneysfor Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )OF ROCKY MOUNTAIN POWER FOR )CASE NO.PAC-E-21-07
AUTHORITY TO INCREASE ITS RATES )AND CHARGES IN IDAHO AND )APPLICATION OF
APPROVAL OF PROPOSED ELECTRIC )ROCKY MOUNTAIN POWER
SERVICE SCHEDULES AND )REGULATIONS
PacifiCorp d/b/a Rocky Mountain Power ("Rocky Mountain Power"or the
"Company")hereby applies to the Idaho Public Utilities Commission ("Commission")for
authorityto increase its retail rates and approval of proposed changes to the Company's electric
service schedules.In accordance with Commission Rule of Procedure ("Rule")122.01,Rocky
Mountain Power filed its Notice of Intent to File a General Rate Case on March 12,2021.In
support of this Application,Rocky Mountain Power states as follows:
1.The Company is an Oregon corporation providing electric service to retail
customers as Rocky Mountain Power in the states of Wyoming,Utah,and Idaho,and as Pacific
Power in the states of Oregon,California,and Washington.
2.Rocky Mountain Power is authorized to do and is doing business in the state of
Idaho.The Company provides retail electric service to approximately 85,600 customers in the
state of Idaho and is subject to the jurisdiction of the Commission.
3.Communications regarding this Application should be addressed to:
APPLICATION OF ROCKY MOUNTAIN POWER PAGE 1
Ted Weston
1407 W.North Temple,Suite 330
Salt Lake City,Utah 84116
Telephone:[phone]
Fax:[phone]
Email:ted.weston pacificorp.com
Emily L.Wegener
Matthew D.McVee*
1407 W.North Temple,Suite 320
Salt Lake City,Utah 84116
Tel.[phone]
Fax [phone]
Email:emily.wegener pacificorp.com
Email:matthew.mevee pacificorp.com
*Rocky Mountain Power requests that the Commission allow for additional representatives to
be identified for service under Rule 41(2).The Company agrees to accept electronic service
under Rule 63(3).
In addition,the Company respectfully requests that all data requests regarding this
matter be addressed to one or more of the following:
By e-mail (preferred)datarequest pacificorp.com
By regular mail Data Request Response Center
PacifiCorp
825 NE Multnomah,Suite 2000
Portland,OR 97232
4.Rocky Mountain Power is requesting a revenue requirement increase of
$19.0 million,or approximately 7.0 percent.The requested increase is based on a 10.20 return
on equity ("ROE"),as recommended by Ms.Ann E.Bulkley,producing an overall Idaho
revenue requirement of approximately $290.5 million.
APPLICATION OF ROCKY MOUNTAIN POWER PAGE 2
5.The request reflects rate mitigation adopted by the Commission in Case No.
PAC-E-20-03,where the Commission approvedusing a portion of the 2017 Tax Cuts and Jobs
Act ("TCJA")deferred tax benefits to buy down the Cholla Unit 4 plant balance followingthe
closure of the facility at the end of 2020.This reduced the requested increase by approximately
$5.5 million.
6.In this filing,the Company requests approval of further rate mitigation through
the use of $3.3 million of the remaining TCJA deferred tax benefits to offset five regulatory
assets,which together,reduce the requested increase by $1.1 million.The Company proposes
to refund the remaining $8.5 million in deferred TCJA savings to customers over two years
through Electric Service Schedule No.197 -Federal Tax Act Adjustment,if an increase in the
corporate tax rate,as proposed by the U.S.Treasury,is not passed this year by the U.S.
Congress.
7.The Company requests a July 1,2021,effective date.Anticipating suspension
of the proposed tariffs based on Idaho Code §61-622(4),the revised tariff schedules included
with this application reflect a rate effective date of January 1,2022.
8.The proposed increase is based upon historical twelve-month period ending
December 31,2020,adjusted for known and measurable changes through December 31,2021,
("Test Period").The Test Period incorporates the Company's updated depreciation study,
which went into effect January 1,2021,and the costs and benefits associated with the wind
repowering and new wind projects,all of which will be in service by the end of 2021.
APPLICATION OF ROCKY MOUNTAIN POWER PAGE 3
9.Rocky Mountain Power's system-wide costs are allocated to Idaho based on the
approved 2020 PacifiCorp Inter-Jurisdictional Allocation Protocol ("2020 Protocol").I The
Company estimates that under existing rates the Company would earn an overall ROE of
approximately 7.48 percent during the Test Period,which is significantlybelow the Company's
currentlyauthorized ROE of 9.9 percent and the requested ROE of 10.2 percent.
10.Net power costs for the Test Period are $1,365.1 million on a total-Company
basis,$86.4 million on an Idaho-allocated basis.This represents a $120 million,or 8.1 percent
decrease on a total-Company basis in net power costs compared to the 2016 net power cost
update.The decrease is driven by lower coal and natural gas fuel expense,increased wholesale
sales,and increased zero-fuel-cost renewable generation.The decrease is partially offset by
increased purchase power expense and a small increase in wheeling expense.
11.Without the requested increase in revenues,it will be increasingly difficult for
the Company to maintain its utility infrastructure and continue to provide adequate,efficient,
just,and reasonable service to its Idaho customers.The Company is in the midst of a multi-
year program of investing in renewable energy and transmission facilities to serve its customers
in Idaho and across its six-state system.At a total-Company level,the Test Period includes
over $4 billion of new plant investment partiallyoffset by $120 million in decreased net power
costs.This Application includes in rates the investments,costs,and benefits of the Company's
activities during the Test Period.
2 In the Matter ofRocky MountainPower s Application forApprovalofthe 2020 PacilìCorpInter-JurisdictionalAllocationProtocol,Case No.PAC-E-19-20,Order No.34640 (Apr.22,2020).
APPLICATION OF ROCKY MOUNTAIN POWER PAGE 4
12.Rocky Mountain Power also seeks approval of costs associated with its Energy
Vision 2020 projects above the estimates approved by the Commission in Case No.PAC-E-
17-07.2 The additional costs are the result of changed circumstances due to factors beyond
Rocky Mountain Power's control,and of such a unique nature that they could not reasonably
have been anticipated or mitigated by the Company.These include the imposition of significant
foreign import tariffs,market labor shortages due to massive construction initiatives by Pacific
Gas &Electric,and the COVID-19 public health emergency.These factors go well beyond the
normal allocation of risk anticipated in 2017 and 2018 when Rocky Mountain Power sought
Commission approval and the Commission imposed a cost cap condition on the projects.
13.Rocky Mountain Power's direct case consists of the testimony and exhibits of
fourteen witnesses.Below is a brief summary of their testimony.
(a)Gary W.Hoogeveen,President and Chief Executive Officer,Rocky Mountain
Power,presents an overview of Rocky Mountain Power,its Idaho service area,
and the strategies the Company is pursuing to provide its Idaho customers with
safe,reliable,and affordable electricity to power their homes,businesses,and
communities.
(b)Joelle R.Steward,Vice President,Regulation,Rocky Mountain Power,
describes the policy decisions behind the Company's request in this proceeding.
3 In the Matter oftheApplication ofRocky Mountain Powerfora Certificate ofPublic Convenience and Necessity
and Binding Ratemaking Treatment for New Wind and Transmission Facilities,Case No.PAC-E-l7-07,Order
No.34104 (July 20,2018);Order No.34139,order on reconsideration (Sept.6,2018).
APPLICATION OF ROCKY MOUNTAIN POWER PAGE 5
(c)Nikki L.Kobliha,Vice President,Chief Financial Officer and Treasurer,
provides the Company's overall cost of capital recommendation,including a
capital structure to maximize customer value and minimize risk.
(d)Ann E.Bulkley,economist and principal at Concentric Energy Advisors,
provides a comparison of the Company's business and financial risk compared
to peer utilities,recommends a cost of equity,and provides supporting analyses.
(e)Rick T.Link,Vice President of Resource Planning and Acquisition,provides
the economic analyses ofrepowering the Foote Creek I wind facility,the Energy
Vision 2020 -new wind and transmission project,the Pryor Mountain Wind
Project,and the conversion of Naughton Unit 3 to natural gas.
(f)TimothyJ.Hemstreet,Managing Director of Renewable Energy Development,
provides an update on the implementation and costs of the new wind and
repowering projects included in Energy Vision 2020 and an overview of the
Foote Creek I repowering project.
(g)Richard A.Vail,Vice President of Transmission Services,discusses important
transmission system upgrades completed to serve customers and provides an
update on the implementation and costs of the transmission projects included in
Energy Vision 2020.
(h)Robert Van Engelenhoven,Director of Resource Development,provides details
on the development of the Pryor Mountain Wind Project,an overview of the
APPLICATION OF ROCKY MOUNTAIN POWER PAGE 6
conversion of Naughton Unit 3 to natural gas,and details on the development
of Lake Side 2 natural gas generating plant.He also sponsors the Company's
updated decommissioning studies.
(i)James C.Owen,Director -Environmental,supports the installation of selective
catalytic reduction retrofit projects at three of the Company's joint owned coal
plants:Craig Unit 2,Hayden Unit 2,and Jim Bridger Units 3 and 4.
(j)Craig Eller,Vice President of Business Policy and Development,provides an
updated analysis for the economic valuation of the interruptible products
provided by Bayer.
(1)Michael G.Wilding,Vice President of Energy Supply Management,presents
the Company's proposed net power costs for the test period.
(m)Melissa S.Nottingham,Manager of Customer Advocacy,proposes updates to
certain customer service fees to reflect prices that are reasonable,fair,and cost-
based.
(n)Steven R.McDougal,Director of Revenue Requirements,summarizes the
overall test year revenue requirement,normalizing adjustments,and the rate
base calculation methodology.
(o)Robert M.Meredith,Director of Pricing and Cost of Service,provides the
Company's allocation and rate design,and discusses how the proposed tariff
changes recover the proposed revenue requirement to achieve fair,just,and
APPLICATION OF ROCKY MOUNTAIN POWER PAGE 7
reasonable prices for customers.Mr.Meredith also provides an exhibit with the
proposed changes to existing tariffs in compliance with Rule 121.01(a).
14.Rocky Mountain Power is notifying its customers of this Application by means
of a press release sent to local media organizations,bill inserts included in customer bills over
the course of a billing cycle,and,in some cases,personal contact with customers or their
representatives.In addition,copies of this Application will be made available for review on the
Company's website or at local offices in its Idaho service territory.
15.This filing,specifically portions of the accompanying testimony and exhibits,
includes confidential information exempt from public review under Idaho Code §§74-104-
109 and Rule 67.The information includes trade secret and other Company,or third-party,
confidential information and is protected from public inspection,examination or copying.
16.The Company respectfully submits that the Commission's approval of Rocky
Mountain Power's Application,including the approval and implementation of the proposed
electric service schedules as filed,is in the public interest.In accordance with Commission
Rule 121.01(d),Rocky Mountain Power represents that it stands ready for immediate
consideration of this Application.
WHEREFORE,Rocky Mountain Power respectfullyrequests that the Commission
issue a final order approving the Company's revenue requirement increase of $19.0 million,or
approximately 7.0 percent and the proposed electric service schedules effective,after
suspension,January 1,2022.
APPLICATION OF ROCKY MOUNTAIN POWER PAGE 8
DATED this 27th day of May,2021.
Respectfully submitted,
Emily L.Wegener
Matthew D.McVee
Attorneys for Rocky Mountain Power
APPLICATION OF ROCKY MOUNTAIN POWER PAGE 9