20220519Reply Comments.pdf

Y ROCKY MOUNTAIN
PolAIER
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1407 West North Temple, Suite 330
Salt Lake City, Utah 84116
May 19,2022
VU ELECTRONIC DELIVERY
Jan Noriyuki
Commission Secretary
Idaho Public Utilities Commission
I l33l W Chinden Blvd.
Building 8 Suite 20lA
Boise,ID 83714
Re:cAsE NO. PAC-E-22-05
IN TIIE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
REQUESTING APPROVAL OF $28.4 n/flLLON NET POWER COST
DEr.ERRAL
Dear Ms. Noriyuki:
Pursuant to Commission Order No. 35376 providing public notice of the Company's Application,
authorizing the processing of the Application by Modified Procedure, and establishing the
procedural schedule please find Rocky Mountain Power's Reply Comments in the above
referenced matter.
lnformal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
truly yours,
SVP, Regulation & Customer/Community Solutions
Enclosures
CC: Ron Williams
TJ Budge
"^"D
Emily Wegener (ISB# I 1614)
1407 West North Temple, Suite 320
Salt Lake city, ut8h 84116
Telephone No. [phone]
Mobile No. (385) 227 -247 6
Email : Em ily.weeener@pacifi corp.com
Attorneyfor Roclcy Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMIVtrSSION
IN THE MATTER OF TIIE APPLICATION
OF ROCKY MOUNTAIN POWER
REQUESTTNG APPROVAL OF $28.4
MILLON ECAM DEFERRAL
) cAsE NO. PAC-E-22-05
)) REPLY COMMENTS OF
) ROCTffMOUNTATN POWER
Pursuant to Rule 202.01(d) of the Rules of Procedure of the Idaho Public Utilities
Commission ("Commission") and the Commission's April 20,2022,Notice ofApplication and of
Modified Procedure, Rocky Mountain Power a division of PacifiCorp (the "Company") hereby
submits reply comments in the above-referenced case.
BACKGROUND
l. On March 30,2022, the Company applied for Commission authorization to adjust
its rates under the Energy Cost Adjustnent Mechanism ("ECAM") and requested approval of
approximately $28.4 million in deferred costs from the deferral period beginning January 1,2021,
through December 31,2021, with a 4.5 percent overall increase to Electric Service Schedule No.
94, Energy Cost Adjustment ("Schedule 94").
2. On April 20,2022, Commission Order No. 35376 provided public notice of the
Company's Application, authorized processing of the Application by Modified Procedure, and
established the procedural schedule allowing persons who would like to file written comments to
have until May 13, 2022, and the Company having until May 19,2022,to file reply comments.
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3. In addition to the Commission Staff two additional parties filed petitions to
intervene and were granted intervener stafus in the case: P4 Production, L.L.C. ("P4") and
Pacifi Corp Idaho lndustrial Customers ("PIIC").
4. On May 13,2022, Commission Staff and PIIC filed comments. P4 reviewed the
Application and received responses to all discovery requests but did not file comments.
REPLY COMMENTS
PIIC's Comments:
5. PIIC commented on three items in the Application: l) a Utah customer's load
adjustment; 2) Navajo Tribal Utility Authority ("NTUA") partial requirements load; and 3) Lake
Side II Outages.
6. Utah customer load adiustment - PIIC claims that removing a Utah customer's
load increases costs allocated to Idaho and that the load adjustment is a new adjustment that was
not considered in the Company's most recent rate case. The Company disagrees with PIIC's
assertions and their proposed adjustment because the contract arises out of a state-specific
initiative. The Company entered into a contract where a Utah Customer brought new load and new
offsetting renewable resources. The customer at issue entered into a contract under a Utah-specific
tariff that allowed the customer to offset their load with renewable resources. Under the 2020
PacifiCorp Inter-Jurisdictional Allocation Protocol ("2020 Protocol"), the "[c]osts and benefits
resulting from a state-specific initiative" are o'allocated and assigned on a situs basis to the State
adopting the initiative."I
I In the Matter of the Applicationfor Approval of the 2020 PacifiCorp Inter-Jurisdictional Allocation Protocol,Case
No. PAC-E-19-20,Direcl Testimony of Joelle Steward, Exhibit A,at37, g 5.8 (December3,20l9) (*2020
Protocol").
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7. The customer contract was entered into pursuant to Utah Electric Service Schedule
No. 34 ("schedule 34"), a tariff implementing Utah Code section 54-17-806.2 This customer
energy generation program has been in place since 2016,3 and would not be considered a "new
issue" under the 2020 Protocol.
8. For purposes of allocations, the renewable resource and load at the facility are
treated on a net basis. Due to this net basis treatment included in allocation factors, Idaho customers
are not impacted by this contract. Absent this treatment, the Utah customer would not have entered
into a contract with the Company and would not have built their facility in Utah.
9. The test period for the Idaho rate case was calendar year 2020. Due to timing of the
new load and the timing of their new renewable resources coming online this adjustment was not
fully reflected in the Idaho rate case.
10. The adjustment in the ECAM to reduce system load is appropriate under the2020
Protocol and makes sense because renewable resources add no additional net power costs ("NPC").
The Utah customer's renewable resource costs are situs assigned to Utah along with the benefits
of zero-fuel cost energy and production tax credits, matching the costs and benefits. If the Utah
customer's load were not removed from the system load in the ECAM for calendar year 2021, it
would not match the resource costs with the benefits and would understate system NPC on a dollar
per megawatt-hour basis, which is how the ECAM tracks base NPC against actual NPC.
I l. PIIC recommends that the Utah customer's load should be included in the ECAM
and that the associated renewable resource should be situs assigned with a market-to-market
2 Rocky Mountain Power Electric Service Schedule No. 34, State of Utah, available at
https://www.rockymountainpower.net/content/dam/pcorp/documents/en/rockymountainpower/rates-
regulatiorVutah/rates/034_Renewable_Energ5r_Purchases_for_Qualified_Customers_5000kW_and_Over.pdf
3 In the Matter of Rocly Mountain Power's Proposed Eleclric Service Schedule No. 34, Renewable Energt Tarffi
Docket No. l6-035-T09, Order Memorializing Bench Ruling Approving Settlement Stipulation (August 18, 2016).
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adjustment to Utah. Including the customer's load as system load creates a mismatch where all
costs are situs assigned to Utah and system load is increased reducing the overall dollar-per-
megawatt-hour cost in the Idaho ECAM. PIIC's proposal is at odds with the 2020 Protocol, is not
symmetrical, and does not match costs with benefits.
12. NTUA Partial Requirement load - PIIC recommends that total Company loads
be increasedby 258,726 megawatts to account for the NTUA partial requirements load based on
its understanding that the contract has been included as an adjustment to Utah's allocation factors
in the past. The Company disputes PIIC's understanding and recommends the Commission reject
this proposal.
13. For purposes of calculating jurisdictional allocation factors, the Company begins
with total metered load for each state. Utah's metered load is inclusive of all customers, Federal
Energy Regulatory Commission ("FERC") and NTUA included, located in the state. No
adjustment is necessary to Utah load to include NTUA s metered load, as this load is already
included in Utah's metered load. Making PIIC's proposed adjustment would incorrectly double
count NTUA's load, erroneously increasing Utah's allocation factors and decreasing Idaho's
allocation factors.
14. For the ECAM adding NTUA s load again to system load as noted would
incorrectly double count NTUA's load, erroneously overstating system load thereby decreasing
NPC on a dollar-per-megawatt-hour, understanding actual NPC.
15. Lake Side II Outaees - Without pointing to any specific outages, PIIC states its
understanding that Lake Side II is not performing due to unspecified construction defects and urges
the Commission to investigate further. Because PIIC provides no factual basis for this conclusion,
the Commission should disregard it.
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Commission Staff's Comments:
16. After Staffs thorough review and audit of the 2021 ECAM they proposed
Commission approval of the ECAM deferral with two adjustments to the deferred balance. Staff
recommended that the costs associated with the Energy Imbalance Market ("EIM") Body of State
Regulators ("BOSR") and the Western Power Pool ("WPP") Western ResourceAdequacy Program
(*WRAP") be excluded from the ECAM. The Company included these fees in the ECAM because
they are directly related to NPC and are necessary to participate in programs that ultimately reduce
NPC.
17. The EIM BOSR fee is necessary to participate in the EIM.4 The BOSR's activities
support the goal of consistent and informed regulator engagement on regional market operations
and developments, which is crucial to efficient and sustainable markets that deliver public benefits
in the form of lower net power costs.s The funding anangement is veffed by the BOSR and Westem
Interstate Energy Board and reviewed by the EIM Governance Review Committee, which
demonstrates that the fee is prudently incurred and should be recoverable through the ECAM.
18. Staffalso recommended that costs associated with the WRAP be excluded from the
ECAM. As noted by Staff, WRAP is responsible for ensuring there will be sufficient generation
capacity to meet forecasted peak energy demand in the West. The Company included WRAP costs
in the ECAM because they are NPC related and this work is necessary to fulfil this essential need.6
Ultimately, the program will be critical to ensuring generation capacity during times of peak
5 See WEIM BOSR Energt Imbalance Market Body of State Regulators, WssrsRN INTERSTATE ENERGv BoARD,
https://www.westernenersyboard.orgiwestern-enerq-v-imbalance-market-body-of-state-regulators/ (last accessed May
19,2022).
s Direct Testimony of Jack Painter ("Painter Direct") at 12, lines 3-17 (March 30,2022).
6 Painter Direct at 8:9-9:4.
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demand and therefore lower overall NPC by limiting the Company's exposure to market purchases
during higher priced peak energy demand hours.
19. Staffalso proposed the Commission order the Company to revise rates for Electric
Service Schedule No. 94, Energy Cost Adjustment ("Schedule 94"). As noted, the Company
believes the BOSR and WRAP fees are directly associated with NPC and should be included in
NPC. However, if the Commission decides to remove those expenses the Company does not
believe it is necessary to revise rates or update Schedule 94. The ECAM deferral is a balancing
account. The difference in the load used to develop Schedule 94 rates and actual energy consumed
during the collection period will have a much larger impact on the balance than the $14,646
associated with these two adjustments.
CONCLUSION
For the reasons outlined above the Company recommends that the Commission reject the
Utah customer load adjustment and the NTUA adjustment proposed by PIIC and the adjustment
to the EIM BOSR and WPP WRAP fees proposed by Commission staff. The Company continues
to support the BOSR and WRAP fees as NPC appropriate to include in the ECAM. If the
Commission accepts either of staff's proposed adjustments, due to the ECAM balancing account
and level of materiality, the Company does not believe it is necessary to update Schedule 94 rates.
REOUEST FOR RELIEF
The ECAM deferral of $28.4 million, including interest, for calendar year 2021, was
accurately calculated in compliance with previous Commission orders. Therefore, the Company
respectfully request that the Commission approve this application as filed with rates effective
June l, 2022.
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DAXED this 196 day of May 2022.
Respectfu lly sutmitted,
ROCKYMOI'NTAIN POWER
t
EmrlyWegener
1407 WestNorthTemple, Suite 320
Salt Lal<e City, Utatr 84116
Telephone No. (801) 2204526
Mobile No. (385) 227 A47 6
Email : Emilv.weeener(Epacifi com.com
Attorrvyfrr Rochy Moantain Power
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CERTINCATE OF SERVICE
I hereby certifr that on this day, I caused to be served, via email, a true and correct copy
of Reply Comments in Docket PAC-E-22-05 to the following:
Seruice List
Dated this 19ft day of May,2022.
Mary Penfield
Adviser, Regulation
Bayer
Thomas J. Budge
Racine Olson, PLLP
P.O. Box l39l
201E. Center Street
Pocatello, lD 8320 4- | 39 I
[e-mail]
Brubaker & Associates
Brian C. Collins
Greg Meyer
16690 Swingley Ridge Rd., #140
Chesterfield, MO 63017
[e-mail]
[e-mail]
PIIC
Ronald L. Williams
Hawley Troxell Ennis & Hawley LLP
877 West Main Supet
Boise,ID 83701
rwi I I iam s@hawlevtroxel l.com
Bradley Mullins
MW Analytics, Energy & Utilities
brmul lin [e-mail]
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