20231227Final_Order_No_36039.pdf

ORDER NO. 36039 1

Office of the Secretary
Service Date
December 27, 2023

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF ROCKY MOUNTAIN
POWER’S PROPOSED CHANGES TO
ELECTRIC SERVICE REGULATION NO. 12
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CASE NO. PAC-E-23-21

ORDER NO. 36039

On October 3, 2023, PacifiCorp dba Rocky Mountain Power (“Company”), filed a Tariff
Advice (PAC-TAE-23-01) proposing changes to its Electric Service Regulation No. 12—Line
Extensions (“Regulation No. 12”), effective January 1, 2024.
At the Commission’s October 17, 2023, Decision Meeting, Staff recommended the
Commission process the Tariff Advice as a formal case to allow for formal participation by
interested parties.
On October 23, 2023, the Commission converted the Tariff Advice to a formal case,
issued a Notice of Application, and set a deadline for interested parties to intervene. Order No.
35967. No one petitioned to intervene.
On November 14, 2023, the Commission issued a Notice of Modified Procedure
establishing public comment and Company reply deadlines. Order No. 35994. Staff filed
comments to which the Company replied. No other comments were filed.
The Commission now issues this Final Order directing the Company to require those
customers whose loads would exceed 25,000 kilovolt-amperes (“kVA”) to take service at
transmission-voltage.
THE APPLICATION
The Company cited concerns with service requests from prospective large customers with
loads that may never fully materialize or be abandoned. As it stands, prospective large customers
are eligible for an allowance up to nine times the estimated monthly revenue generated from the
customer under Regulation No. 12. The Company is concerned that large projects eligible for the
allowance necessitate upfront investment, but the projects may never be fully built out leaving the
Company with stranded, expensive infrastructure investments that would not be offset from
revenue generated from the customer, as anticipated. This situation would leave other customers
to pay for the investments.
ORDER NO. 36039 2

To avoid the type of harm described above, the Company proposes to add part 3(b) to
Regulation No. 12 to limit allowances for customers whose service requirements exceed 25,000
kVAs. The Company’s proposal would limit the allowance to the “cost of metering equipment
necessary to measure the Customer’s usage.” Tariff Advice at 2.
For customers who entered a master electric service agreement (“MESA”) with the
Company prior to October 3, 2023, the Company proposes to provide the allowance according to
the terms of the MESA.
For those customers who have received a written estimate of the line extension allowance
prior to October 3, 2023, but have not yet executed a MESA with the Company, the Company
proposes to give those customers six months from the filing date to execute a MESA to receive
the allowances included in the estimate.
Any requests made after October 3, 2023, would be subject to the updated Regulation No.
12.
THE COMMENTS
1. Staff Comments
Staff believed the Company’s proposal to change Regulation No. 12 for customers whose
loads will exceed 25,000 kVAs did not adequately fit the situation the Company described as
prompting the request. Despite agreeing that requiring these large customers to pay for the full
cost of the line extension upfront would remove the threat of stranded assets, Staff argued that
eliminating the line extension allowance as proposed by the Company would instead cause the
Company to over recover the costs associated with line extensions.
The root of Staff’s over-recovery concern is that an action to solve one potential problem
should not create another problem. Staff argued that eliminating the line extension allowance for
customers who would require more than 25,000 kVAs and are not served under Schedule No. 9
(i.e. have distribution costs embedded in rates) would be impacted by the change. According to
Staff, under the proposed changes to Regulation No. 12, some customers could end up paying for
distribution-voltage facilities twice—before taking service through the line extension costs as
proposed by the Company and later through rates with distribution costs embedded. Staff
ultimately suggested an alternative to the Company’s proposal. Staff recommended the Company
adopt a method like Idaho Power’s charge for Large Power Service customers where the customer
must pay for full substation costs before taking service with an allowance to refund those charges
ORDER NO. 36039 3

over five years with continued use of capacity (see Idaho Power’s Schedule No. 19). Staff felt this
better protected the Company and customers from stranded asset risk and provided affected
customers the appropriate allowance.
2. Company Reply Comments
The Company requested the Commission approve its proposed modifications to Regulation
No. 12.1 Alternatively, the Company offered that if the Commission chooses not to approve its
proposed modifications, then requiring customers who need more than 25,000 kVAs for service to
take service as transmission-voltage customers is reasonable.2 The Company explained that service
requests for distribution-voltage load is new to the Company and it presents significant risks. The
Company stated that of the 35 pending load requests exceeding 25,000 kVAs system-wide, only
two are requesting distribution voltage with the remaining requesting transmission-voltage.3 The
Company stated that if unchanged, large customers receiving service under distribution-voltage
service would be eligible for line extension allowances of about $400,000 to $630,000 per
megawatt (“MW”).
Regarding Staff’s recommendation to adopt a method like Idaho Power’s Schedule No. 9
charge for Large Power Service customers where customers must pay for the full substation costs
before taking service, the Company cited several reasons why this would not be implemented as
proposed by Staff to address the concerns raised. The Company cited the challenges to serve
customers whose loads exceed 25,000 kVA which Idaho Power’s Schedule No. 19 was not
designed for and the substation credit offered by Idaho Power being less generous than the
Company’s which Idaho Power’s Schedule No. 19 rates account for. The Company noted that
Idaho Power mitigates the risk of stranded assets under Schedule No. 19 by capping eligibility at
20 MW.4
The Company distinguished its request from Staff’s suggestion citing the investment
required to service customers with loads larger than 25,000 kVAs. The Company stated that

1 The proposed change has been approved in Utah, Wyoming, and Oregon.
2 The Company stated “[t]ransmission-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.” Reply comments at 7.
3 The requests encompass the six-state service area served by PacifiCorp. The Company has no pending large load
requests for Idaho. The Company noted that pursuant to the 2020 Protocol, transmission-voltage facility costs are
allocated across the system which ensures costs incurred in one jurisdiction to serve a single load are not shifted to
customers in other jurisdictions.
4 The Company stated that the 20 MW cap established for Idaho Power’s Schedule No. 19 is below the threshold it
proposes to limit line extension allowances to.
ORDER NO. 36039 4

customers with loads exceeding 25,000 kVAs almost always require a dedicated substation
whereas customers served under Idaho Power’s Schedule No. 19 might—or might not—be served
by dedicated substations. Because of this difference in investment required to serve large
customers, the Company argued the risk of stranded assets is different. Additionally, because the
facilities that require loads exceeding 25,000 kVAs are generally unique, if the customer abandons
the facility, it is less likely that it will be repurposed and therefore the investment will be stranded.
The Company explained that if it adopted a method for line extension allowances like Idaho
Power’s, the allowance for distribution-voltage customers might be smaller than the cost of
upgrades required. The Company emphasized that serving large customers requires costly
investments which are made specifically for the large customers’ facility. The Company stated that
its distribution-voltage rates are not designed to account for this type of investment, and it seeks
to protect customers from subsidizing large customers or being stuck with stranded assets that
cannot be used by other customers.
The Company requested Commission approval of its original proposal to limit allowances
for large customers. Alternatively, the Company would request to serve all customers with loads
exceeding 25,000 kVAs under the transmission-voltage.
COMMISSION DISCUSSION AND FINDINGS
The Company is an electric corporation and public utility, and the Commission has
jurisdiction over it and the issues in this case under Title 61 of the Idaho Code. The Commission
has express statutory authority to investigate rates, charges, rules, regulations, practices, and
contracts of public utilities and to determine whether they are just, reasonable, preferential, or
discriminatory, or in violation of any provision of law, and may fix the same by Order. Idaho Code
§§ 61-502 and 61-503.
After reviewing the record in this case, including Staff’s comments and the Company’s
reply, we feel the best option to avoid the risk of stranded assets from large customers whose
prospective loads exceeding 25,000 kVAs never fully materialize, or are abandoned before the
Company can recover costs it expended, is to require these large customers to take service at
transmission-voltage. While this is not the only possible solution, it addresses the potential issue
described by the Company. This will prevent the situation the Company cited as prompting its
Application where transmission-voltage level customers could take service at distribution-voltage
and receive an allowance even though the customer could abandon the facility leaving the
ORDER NO. 36039 5

Company and its customers to pay for stranded cost of assets. It also prevents the concern Staff
cited in its comments where the Company could avoid paying allowances to distribution-voltage
customers and still recover distribution costs from those customers through the costs embedded in
rates.
ORDER
IT IS HEREBY ORDERED that the Company shall require all customers who request
service exceeding 25,000 kVAs to take service at transmission-voltage and under the appropriate
schedule(s).
IT IS FURTHER ORDERED that the Company shall file updated tariffs as a compliance
filing within 21 days of this Final Order.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon this Order regarding any
matter decided in this Order. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. Idaho Code § 61-626.
ORDER NO. 36039 6

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 27th day of
December 2023.

ERIC ANDERSON, PRESIDENT

JOHN R. HAMMOND JR., COMMISSIONER

EDWARD LODGE, COMMISSIONER
ATTEST:

Monica Barrios-Sanchez
Interim Commission Secretary

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