20231214Reply Comments.pdf

1407 W. North Temple, Suite 330 Salt Lake City, UT 84116

December 14, 2023

VIA ELECTRONIC DELIVERY Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd Building 8 Suite 201A Boise, ID 83714
RE: CASE NO. PAC-E-23-21 IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER’S PROPOSED CHANGES TO ELECTRIC SERVICE REGULATION NO. 12 Attention: Commission Secretary

Pursuant to Commission Order No. 35994 providing Notice of Modified Procedure and establishing the procedural schedule please find Rocky Mountain Power’s Reply Comments in the above referenced matter. Informal inquiries may be directed to Mark Alder, Idaho Regulatory Manager at [phone].
Very truly yours,
Joelle Steward Senior Vice President, Regulation and Customer & Community Solutions Cc: Dayn Hardie/IPUC
RECEIVED
Thursday, December 14, 2023 12:33:56 PM
IDAHO PUBLIC
UTILITIES COMMISSION

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Joe Dallas (ISB# 10330) PacifiCorp, Senior Attorney 825 NE Multnomah Street, Suite 2000
Portland, OR 97232 Email: [e-mail] Attorney for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER’S PROPOSED CHANGES TO ELECTRIC SERVICE REGULATION NO. 12
) ) REPLY COMMENTS OF ) ROCKY MOUNTAIN POWER

Pursuant to Rule 202.01(d) of the Rules of Procedure of the Idaho Public Utilities
Commission (“Commission”) and the Commission’s November 14, 2023, Notice of Application
and of Modified Procedure, Rocky Mountain Power a division of PacifiCorp (the “Company”)
hereby submits reply comments in the above-referenced case.
I. BACKGROUND
1. On October 3, 2023, the Company filed Tariff Advice, PAC-TAE-23-01, proposing
changes to Rocky Mountain Power Electric Service Regulation No. 12—Line Extensions
(“Regulation No. 12”), effective January 1, 2024. In its filing, the Company recommended the
Commission approve a proposal to limit line extension allowances for applicants with total load
requests of 25,000 kilovolt-Amperes (kVA) or greater to the cost of metering necessary to measure
the applicant’s usage.
2. On October 23, 2023, the Commission issued Order No. 35967 and converted the
Tariff Advice filing into Case No. PAC-E-23-21.
3. On December 7, 2023, Commission Staff filed comments in response to the
Company’s Tariff Advice filing recommending the Commission deny the Company’s proposed

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changes to Regulation No. 12 and recommended the Company suggest another method to mitigate
stranded cost risks caused by serving very large customers.
II. REPLY COMMENTS
A. Large Customer Line Extension Background
4. The Company filed Tariff Advice after receiving many requests from Customers in
its six-state service territory over a short period of time to serve large loads under distribution-
voltage rates. The Company has never experienced load requests of this size in this volume. It is
also unprecedented that customers of this size are requesting distribution-voltage service and are
therefore eligible for line extension allowances equal to a multiple of their anticipated monthly
revenue, which would amount to approximately $400,000 to $630,000 per megawatt under Idaho
rates, as customers of this size have historically sought service from the Company under
transmission-voltage rate schedules.1 Serving very large customers under distribution-voltage
tariff provisions introduces large risks to rate stability for all PacifiCorp customers in the event
that line extension assets become stranded if a few very large customers reduce their loads or cease
taking service. Under these circumstances, all other customers would then bear the cost of assets
that are no longer used and useful in rates.
B. Staff Recommendation
5. In its Comments, Staff did not contest that customers with load requests greater
than 25,000 kVA present large stranded asset risks to other customers. Staff, however, did disagree
with the Company’s proposed approach to addressing this risk by limiting allowances to the cost
of metering for all very large customers, regardless of service voltage. Staff expressed concern
regarding the impacts of the Company’s recommendation on affected customers that do not take

1 Allowance Range Equal to 9/12ths Estimated Annual Revenue for Idaho Schedule 6 and Schedule 23 Customers with Load Factors between 85% and 100%.

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service from the Company under transmission-level rates (“Schedule 9”), and therefore pay for
distribution-voltage facilities as a component of rates. Staff recommended the Company should
consider alternatives that prevent customers from paying for distribution-voltage facilities twice –
upfront in line extension costs and again in rates.
6. The alternative proposed by Staff is for Rocky Mountain Power to implement a new
rate schedule similar to Schedule 19 (“Schedule 19”) offered by Idaho Power Company (“IPC”),
or another method that, “mitigates stranded asset risk while ensuring that customers are not
overcharged for their line extensions.”
C. Idaho Power Company’s Schedule 19
7. IPC’s Schedule 19 tariff requires customers with loads between 1,000 kilowatts
(kW) and 20,000 kW to pay construction costs for transmission and substation facilities prior to
construction. Under Schedule 19, customers are then eligible to receive an allowance of up to
$80,000 per megawatt for five years to reimburse them for a portion of substation costs.
8. There are a few reasons that, in the opinion of the Company, implementing a
method like Schedule 19 to mitigate stranded-cost risk for customers with loads greater than
25,000 kVA is less appropriate to address the concerns raised in Tariff Advice for Rocky Mountain
Power customers than the Company’s proposal. First, there are unique challenges to serving
customers with load sizes over 25,000 kVA, and Schedule 19 was not designed to address these
challenges. Second, IPC’s substation credit is significantly less generous than the Company’s
allowance, and the corresponding service rates for Schedule 19 customers are designed to account
for this smaller allowance.
9. IPC’s Schedule 19 was designed for an entirely different customer load class than
the Company’s Tariff Advice filing is intended to address. Schedule 19 states, “(i)f the aggregate

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power requirement of a Customer who receives service at one or more Points of Delivery on the
same Premises exceeds 20,000 kW, the Customer is ineligible for service under this schedule and
is required to make special contract arrangements with the Company.” IPC appears to attempt to
mitigate risk by capping the total load of customers for which it will provide a set line extension
allowance under Schedule 19. Notably, the cap of 20,000 kW in Idaho Power’s Schedule 19 is
below the customer load threshold the Company is proposing for limiting line extension
allowances in its rules.2
10. There are unique challenges to serving customers with loads greater than 25,000
kVA. Customers with very large load requests require large investments to receive service. These
customers typically require service from radial facilities required to interconnect an individual
customer to the existing transmission grid which are, by function, high-voltage distribution
facilities. While the engineering design required to interconnect a customer to the grid will vary
depending on the applicant’s location within PacifiCorp’s system, dedicated substations are
typically identified at load levels greater than 25,000 kVA due to the Company’s standard
substation design. A customer whose load size is greater than 25,000 kW will almost always be
served by a dedicated substation. Due to their smaller load size, IPC’s Schedule 19 customers may
or may not require upgrades to substation and transmission facilities and so they may or may not
be eligible for a substation allowance. The stranded cost risk of Schedule 19 is therefore bounded
significantly by customer load size. There are also, generally, many industries and business types
that can utilize facilities left behind by Schedule 19 customers if they stop taking service and
provide revenue to continue offsetting the Company’s line extension investment. On the other
hand, when very large customers cease taking service, they leave behind investments capable of
2 At unity power factor, a 25,000 kVA load is equivalent to 25,000 kW.

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serving a much smaller group of potential customers and so the odds are greater that these facilities
will remain unused. The impacts of this tariff would be very different if Schedule 19 served
customers with load requests over 25,000 kVA that consistently require more expensive and
extensive transmission-voltage upgrades.
11. In addition to the unique challenges IPC’s Schedule 19 presents for customers over
25,000 kVA, the Schedule 19 substation allowance is considerably smaller than the allowance the
Company currently provides to distribution-voltage customers. IPC’s rates for Schedule 19
customers are designed accordingly to account for the limited allowance and the service
requirements of customers within this load-class. Meanwhile, Rocky Mountain Power’s
distribution-voltage rates and allowance structure are not designed for customers with loads over
25,000 kVA. If the Company reduced its allowance to $80,000 per megawatt to reimburse
customers for a portion of substation upgrade costs, the issue raised by Staff of customers paying
for distribution-voltage facilities twice would persist, as providing a credit of $80,000 for a portion
of substation upgrades may only pay for a part of the full cost.
12. In conclusion, large customers require unique and expensive line extension
investments to receive service, most of which are for high-voltage facilities. The Company
carefully allocates only the costs of facilities or portions of facilities that will serve very large
customers to those customers, and the surest way to ensure that customers with extremely large
costs are not subsidized by other customers or are overcharged is to require them to pay this
allocation. Building facilities of this scale to serve single customers is not contemplated or
accounted for in distribution-voltage rates which are generically designed for a broad range of
customer sizes. Applying small sections of IPC’s tariff to Rocky Mountain Power’s tariff without
consideration of other elements of tariff structure, and for an entirely different size of customer

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with a different risk profile than IPC’s Schedule 19 tariff was designed to serve, would not result
in more fair treatment of very large customers than the Company’s proposal. Given Rocky
Mountain Power’s rate structure, a credit like Idaho Power’s would not be more defensible than
providing no allowance. Just like Rocky Mountain Power, Idaho Power has structured this tariff
to limit risk within the structure of its overall line extension tariff and provisions, and Schedule 19
should not be considered a one-size-fits-all solution.
D. Potential Implications of Line Extension Policy for Pacific Power’s Six-State System and Inter-State Allocations
13. In accordance with the 2020 Protocol, transmission-voltage facilities are allocated
to customers across the Company’s six-state system. To ensure that the cost of facilities built to
serve a large single load in one jurisdiction are not shifted onto the customers of another
jurisdiction, the Company believes it is important to incorporate the same changes for very large
customers in its line extension tariffs in all states.
14. In addition to the Company’s application to make this tariff change in Idaho, the
Company has filed similar applications in three other states. Notably, the change has already been
approved in Utah, Wyoming, and Oregon. The Company plans to file in California and Washington
before the end of the year. PacifiCorp hopes to maintain uniformity in its tariffs and similar
treatment of customers across its six-state system.
E. Rocky Mountain Power’s Tariff Advice Recommendation
15. The Company continues to believe that its Tariff Advice is an appropriate solution
to mitigate the risk of connecting very large customers to its system, while still allowing customers
to receive service under the Company’s existing rate structure without owning and operating
substations. Customers would still maintain the option to receive service under transmission-level
rates as well. However, understanding the concerns expressed by Staff of large customers over-

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paying for distribution-voltage facilities, the Company proposes requiring customers with load
requests greater than 25,000 kVA to take transmission-voltage service as an alternative to the
Company’s filed proposal.
16. The Company proposes to require customers with loads greater than 25,000 kVA to
take transmission-voltage service under Rocky Mountain Power Schedule 9. Due to their grid
connection from radial transmission-voltage facilities, very large customers are natural
transmission customers. The Company designed transmission-voltage rate schedules to serve large
customers and, historically, large customers of this size requested service from the Company under
transmission-voltage rates. Transmission-voltage customers receive a line extension allowance
equal to the cost of metering necessary to measure their usage and pay lower rates designed for
large customers in exchange for owning and operating some of their own facilities. In this way,
the Company can effectively serve large, unique customers without the risk of shifting the large
cost of plugging into the system onto other customers when a customer’s load does not materialize.
The downside to this requirement is that very large customers will no longer have the option to let
the Company own and operate their substation.
III. REQUEST FOR RELIEF
17. Very large distribution-voltage new load requests are a new phenomenon for the
Company that present significant and outsized risk. Historically, customers of this size requested
transmission-voltage service and were precluded from receiving a line extension allowance greater
than the cost of metering necessary to measure the customer’s usage. The Company’s proposed
change to Regulation No. 12 closes the loophole that existed where a very large load applicant
could request distribution-voltage service and receive an allowance equal to nine-twelfths of its
projected annual revenue to be applied to both distribution and transmission facilities. Treating all

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very large customers the same regardless of service voltage ensures that the large and unique costs
resulting from a new very large load request are properly borne by the applicant requesting this
service and not by other customers.
18. There are no existing customers in the Company’s Idaho service territory with loads
greater than 25,000 kVA that are currently being served under distribution-voltage rates, and the
Company has no pending load requests for Idaho customers that would be affected by this
proposal. It is very unlikely for customers of this size to request distribution-voltage service. Of
the 35 pending load requests greater than 25,000 kW before Rocky Mountain Power, only two are
for distribution-voltage service. The others are requesting transmission-voltage service.
19. The Company respectfully requests the Commission approve the Company’s
proposed Regulation No. 12 changes. However, should the Commission have similar concerns to
Staff regarding very large customers being double-charged for distribution-voltage facilities,
requiring very large customers to take transmission-voltage service is a reasonable alternative that
would still ensure that the risk is adequately addressed.
DATED this 14th day of December 2023.
Respectfully submitted,
ROCKY MOUNTAIN POWER

__________________________
Joe Dallas (ISB# 10330) PacifiCorp, Senior Attorney 825 NE Multnomah Street, Suite 2000 Portland, OR 97232
Email: [e-mail]

Attorney for Rocky Mountain Power