20220330Application.pdf

ROCKY MOUNTAIN
PotAIER
A TXVISION OF PACIECORP
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March 30,2022
VU ELECTNONIC DELIVERY
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
I l33l W Chinden Blvd.
Building 8 Suite 20lA
Boise,lD 83714
Re:CASE NO. PAC.E-22.05
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
REQUESTTNG APPROVAL OF $28.4 MTLLON NET POWER COST
DEr.ERRAL
Dear Ms. Noriyuki
Please find Rocky Mountain Power's Application in the above referenced matter, along with the
direct testimony and exhibits of Company witnesses Messers. Jack Painter, Robert M. Meredith,
and Justin B. Fan. The witnesses' workpapers are confidential and will be provided through Box.
You will receive a separate email with a link to access these files.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at(801)220-
2963.
ery truly yours,
Vice President, Regulation
Enclosures
CC: Ron Williams
Eric Olsen
TJ Budge
"^-D
Emily Wegener (/SB# 11614)
1407 West North Temple, Suite 320
Salt Lake City, Utah 841l6
Telephone No. [phone]
Mobile No. [phone]
Email: [e-mail]
Attorneyfor Rocly Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
rN THE MATTER OF THE APPLICATION ) CASE NO. PAC-E-22-05
oF ROCKY MOUNTATN POWER )
REQUESTTNG APPROVAL OF $28.4 ) APPLICATION OF
MILLON ECAM DEFERRAL ) ROCKY MOUNTAIN POWER
Rocky Mountain Power, a division of PacifiCorp ("Company" or "Rocky Mountain
Power"), in accordance with Idaho Code $61-502, $61-503, and RP 052, hereby respectfully
submits this application ("Application") to the ldaho Public Utilities Commission ("Commission")
pursuant to the Company's approved energy cost adjustment mechanism ("ECAM"). The
Company is requesting approval of approximately $28.4 million of deferred costs from the deferral
period beginning January 7, 2021, through December 31, 2021, ("Deferral Period") with a
4.5 percent overall increase to Electric Service Schedule No. 94, Energy Cost Adjustment
("Schedule 94").ln support of its Application, Rocky Mountain Power states as follows:
l. Rocky Mountain Power is a division of PacifiCorp, an Oregon corporation, which
provides electric service to retail customers through its Rocky Mountain Power division in the
states of Idaho, Wyoming, and Utah. Rocky Mountain Power is a public utility in the state of Idaho
and is subject to the Commission's jurisdiction with respect to its prices and terms of electric
service to retail customers in Idaho pursuant to Idaho Code $61-129. Rocky Mountain Power is
authorized to do business in the state of Idaho providing retail electric service to approximately
85,700 customers in the state.
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BACKGROUND
2. The ECAM became effective July I , 2009, pursuant to an agreement among
parties.l The ECAM allows the Company to collect or uedit the difference between the actual net
power costs ("Actual NPC") incurred to serve customers in Idaho and the NPC collected from
Idaho customers through rates set in general rate cases ("Base NPC").
3. Included in the ECAM are NPC as defined in the Company's general rate cases and
modeled by the Company's Generation and Regulation Initiative Decision ("GRID") production
dispatch model.2 Specifically, NPC includes amounts booked to the following FERC accounts:
. Account 447 (sales for resale, excluding on-system wholesale sales and other
revenues not modeled in GRID),
. Account 501 (fuel, steam generation, excluding fuel handling, start-up fuel/gas,
diesel fuel, residual disposal and other costs not modeled in GRID),
. Account 503 (steam from other sources),
. Account 547 (fuel, other generation),
. Account 555 (purchased power, excluding BPA residential exchange credit pass-
through if applicable), and
. Account 565 (transmission of electricity by others).
4. On a monthly basis, the Company compares the Actual NPC to the Base NPC and
defers the difference into the ECAM balancing account. This comparison is on a system-wide,
dollar per megawatt-hour basis.3
I In the Matter of the Application of Roclcy Mountain Powerfor Approval of an Energt Cost Adjustuent Mechanism
(ECAM, Case No. PAC-E-08-08, Order No. 30904 (September 29,2009) ('ECAM Order").
2 Id. at2-3.
3 Id. at3.
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5. In addition to the difference between Actual NPC and Base NPC, the ECAM
includes seven additional components: the Load Change Adjustment Revenues ("LCAR"),4 an
adjustment for the treatment of coal stripping costs under Emerging Issues Task Force ("EITF")
04-6,a true-up of 100 percent of the incremental Renewable Energy Credit ("REC") revenues,
Production Tax Credits ("PTC"),5 the Lake Side 2 generation resource addet6 a resource tracking
mechanism ("RTM"),7 and the reasonable energy price ("REP"), as defined in the 2020 Protocol,s
qualified facility ("QF") and energy imbalance market ("EIM") body of state regulators ("BOSR")
costs. These components are described in more detail below.
6. The ECAM includes a symmetrical sharing band of 90 percent (customers) / l0
percent (Company) that shares the differential between Actual NPC and Base NPC, LCAR, and
the EITF 04-06 coal stripping costs. The components of the ECAM subject to the sharing band are
described in more detail below.
7. The ECAM deferral also includes a resource adder for the Lake Side 2 generation
facility that is not subject to the sharing band.e This resource adder is to be recovered through the
ECAM for the period that the investment in the facility is not reflected in rates as a component of
rate base. Inclusion of the Lake Side 2 resource adder in the ECAM began January 1,2015. It is
calculated by multiplying the actual megawaff-hours of generation from the Lake Side 2 generation
4 Id. at 4.
s In the Matter of Paci/iCorp DBA Roclcy Mountain Power's Application to Modify the Energt Cost Adjustment
Mechanism and Increase Rates,Case No. PAC-E-15-09, Order No 33440 at 5 (December23,2015) (2015 ECAM
Order).
6 In the Matter of the Application of PacifiCorp DBA RoclE Mounlain Power to Initiate Discussions with Interested
Parties on Alternative Rate Plan Proposals, Case No. PAC-E-13-04, Order 32910, at 2 (October 24,2013) ("2013
Order").
7 In the Mqtter of the Application of Rocly Mountain Powerfor Binding Ratemaking Treatmentfor Wind
Repowering, Case No. PAC-E-17-06, Order No. 33954 (December 28, 2018).
8 In the Matter of the Applicationfor Approval of the 2020 PaciJiCorp Inter-Jurisdicttonal Allocation Protocol,Case
No. PAC-E- I 9-20, Order N o. 3 4640 (Apil 22, 2020).
e In the Mqtter of the Application of PacifiCorp DBA Rocley Mountain Power to Initiate Discussiow with Interested
Parties on Alternative Rate Plan Proposals, Case No. PAC-E-13-04, Order No. 32910.
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facility by $ 1.99 per megawatt-hour and is capped at $5.4 million dollars or 2,729,500 megawatt-
hours for the calendar year.lo The investment in Lakeside 2 was included in base rates in the
Company's general rate case,ll filed on May 27,zozl,with rates effective January l,2ozz,this is
the last Deferral Period Lakeside 2 will be tracked in the ECAM.
8. PTCs are tracked in the ECAM without applying the sharing band.r2 Under the
Internal Revenue Code ("lRC"), a wind facility generates a PTC equal to an inflation-adjusted 1.5
cents per kilowatt hour of electricity produced and sold to a third-party.13 The PTC is in place for
a period of l0 years beginning on the date the facility is placed in-service for income tax
purposes. t4 ln2OZl,the inflation-adjusted PTC rate for electricity generated from qualifring wind
facilities was 2.5 cents perkilowatt hour.ls PTCs are reflected as a reduction to current income
tax expense on the financial statements and for ratemaking purposes. A forecasted level of PTCs
at the then current IRC value was included in base rates benefiting customers; however, the
quantity and value of PTCs received is dependent on the inflation-adjusted rate effective when
they are produced and the amount of generation at eligible facilities. Generation from these
facilities is highly dependent on weather, varying from year to year as weather patterns fluctuate.
To the extent that actual generation from these facilities varies from the level in base rates, the
value of the energy is reflected in Actual NPC and a coresponding adjustment is made to the PTC
that customers receive through the ECAM. Facilities that meet IRC qualifications are eligible for
to Id.tt In the Matter of the Application of Rocky Mountain Power for Authority to Increase ils Rates and Charges in
Idaho and Approval of Proposed Electric Service Schedules and Regulations, Case No. PAC-E-2l-07, Order No
35277, (December 30, 2021).
t2 2015 ECAM Order at 5.
t3 IRC section 45(a).
ta IRC section 45(a).
ts Creditfor Renewable Electricity Production, Refined Coal Production, and Indian Coal Production, and
Publication oflnflationAdjustment Factors and Reference Pricesfor Calendar Year 2021,86 Fed. Reg. 22300
(Apil 27,2021).
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PTCs for the first ten years after becoming commercially operational. While many of the
Company's wind facilities have reached their ten-year anniversary and would no longer be eligible
for PTCs, the repowering program undertaken by the Company has extended this benefit for an
additional ten years.
PROPOSED ECAM RATE
9. In support of this Application, Rocky Mountain Power has filed the testimony and
exhibits of Company witnesses Messiers. Jack Painter, Robert M. Meredith, and Justin B. Farr.
Mr. Painter's testimony describes the Actual NPC incurred by the Company to serve retail load for
the Deferral Period and explains the differences between Actual NPC and Base NPC. Mr.
Meredith's testimony describes how the Company's proposed rates were set to recover the 2021
ECAM deferral balances through Electric Service Schedule No. 94 -Energy Cost Adjustment,
("Schedule 94'). Mr. Farr's testimony describes the calculation and deferral of the costs and
benefits of the Wind Repowering, 8Y2020, Pryor Mountain, and Foote Creek I projects through
the RTM and ECAM.
10. ExhibitNo. I to Mr. Painter's testimony illustrates the detailed calculation of the
ECAM deferral. The deferral is calculated monthly by comparing Idaho-allocated Actual NPC to
the Base NPC collected in rates. For the Deferral Period the NPC differential was approximately
$13.0 million before the 90/10 percent sharing band.
I l. Mr. Painter's testimony specifically addresses the LCAR, EITF 04-6 treatment of
coal stripping costs, a true-up of 100 percent of the incremental REC revenues, PTCs, the Lake
Side 2 generation resource adder, and the REP QF charge.
12. The LCAR is a symmetrical adjustment to offset over- or under-collection of the
Company's energy-related production revenue requirement, excluding NPC, due to variances in
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Idaho load. The LCAR decreased the deferral balance by approximately $1.0 million before
applying the sharing band due to higher usage during the Deferral Period.
13. The difference between including coal stripping costs recorded on the Company's
books under the guidance of the accounting pronouncement EITF 04-6, and expensing coal
stripping costs when the coal was excavated decreased the ECAM deferral by $144,329 before
applying the sharing band.
14. The total NPC deferral adjusted for LCAR and EITF 04-6 was approximately $l 1.9
million for which customers are responsible 90 percent, and the Company is responsible for the
remaining l0 percent. After accounting for the sharing band, the NPC deferral is approximately
$10.7 million.
15. The total Lake Side 2 resource adder, described in paragraphT and included on line
27 of Exhibit No. I for the Deferral Period, was $5.4 million based on 3,292,396 MWh of
generation, but limited to 2,729,500 MWh due to the cap.
16. During the Deferral Period the PTC differential, as desuibed in paragraph 8,
decreased the deferral approximately $6.1 million.
17. The ECAM calculation also includes the RTM deferral described in Mr. Farr's
testimony. For the Deferral Period the RTM increased the deferral by approximately $17.7 million
on an Idaho basis, without application of the sharing band. Since the investment for the wind
projects tracked in the RTM is included in base rates, effective January 1,2022, the RTM will not
be included as part of the ECAM after this Deferral Period.
18. The ECAM also tracks the difference between actual REC revenues during the
Deferral Period and the amount of REC revenues credited to customers in base rates. The REC
revenue true-up included in the ECAM is symmetrical, but no sharing band is applied. During the
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Deferral Period actual REC revenue was approximately $ 101,687 higher than the amount credited
to customers in base rates on an Idaho-allocated basis.
19. Interest is accrued on the uncollected balance at the Commission-approved interest
rate for customer deposits. During the Deferral Period the interest rate was 1.0 percent. Interest of
$225,928 was added to the ECAM balance.
20. The ECAM balance at the end of the Deferral Period was $29.9 million, including
$28.2 million from the202l ECAM deferral, plus $1.5 million remaining balance from prior
ECAM filings, and $0.2 million interest. The Company estimates the ECAM balance will be
reduced by $4.6 million from Schedule 94 revenue collections less interest accrued from January
I through May 31,2022, resulting in an estimated ECAM balance of $25.3 million to be collected.
21. Mr. Meredith's testimony describes how Schedule 94 rates were designed to
recover the May 31,2022, estimated ECAM balance of $25.3 million. Based on this rate design,
the Company proposes Schedule 94 rates of 0.733, 0.720,0.696 and 0.700 cents per kWh for
secondary primary transmission delivery service voltages and Schedule 400, respectively.
COMMUNICATIONS
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, Utah 841l6
Telephone : (80 l) 220 -29 63
Email : ted.weston@paci fi corp.com
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Emily L. Wegener
Senior Attorney
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, Utah 841l6
Telephone : [phone]
Email : Emily.wesener@pacifi corp.com
In addition, Rocky Mountain Power requests that all data requests regarding this
Application be sent in Microsoft Word to the following:
By email (preferred) : datarequest@Fac i fi com.com
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)220-2e63.
REOUEST FOR RELTEF
The ECAM allows the Company to collect or credit the difference between the Actual NPC
incurred to serve customers in Idaho and the Base NPC collected through base rates assuring
customers pay the actual NPC after sharing. To the best of the Company's knowledge the ECAM
deferral has been accurately calculated incorporating all associated Commission Orders in this
Application.
WHEREFORE, Rocky Mountain Power respectfully requests that the Commission issue
an order: (l) authorizing that this matter be processed by Modified Procedure; (2) approving
approximately $28.4 million ECAM deferral; and (3) approving a 4.5 percent increase to Electric
Service Schedule No. 94, Energy CostAdjustment effective June 1,2022.
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DAXED this 30e day of March 2022.
Respectfu lly submittod,
ROCKYMOI'NTAIN POWER
Emily L.1r614)
1407 SlestNorth Temple, Suite 320
SaltLake City, Utah 84115
Telephone No. (801) 2204526
Mobile No. (385) 227 -247 6
Email: Emilv.wesener{@oacificom.oom
Attorneltfor Raehy Mowtatn Pwer
a
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