20231207Comments of the Commission Staff.pdf

DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE,IDAHO 83720-0074 SION
[phone]
IDAHO BAR NO.9917
Street Address for Express Mail:
11331 W CHINDEN BLVD,BLDG 8,SUITE 201-A
BOISE,ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN )POWER'S PROPOSED CHANGES TO )CASE NO.PAC-E-23-21ELECTRICSERVICEREGULATIONNO.12 )
)COMMENTS OF THE
)COMMISSION STAFF
COMMISSION STAFF ("STAFF")OF the Idaho Public Utilities Commission,by and
through its Attorneyof record,Dayn Hardie,Deputy AttorneyGeneral,submits the following
comments.
BACKGROUND
On October 3,2023,PacifiCorp dba Rocky Mountain Power ("Company"),filed a
Tariff Advice,PAC-TAE-23-01 ("Tariff Advice"),proposing changes to its Electric Service
Regulation No.12-Line Extensions ("Regulation No.12"),effective January 1,2024.
On October 23,2023,the Commission converted the Tariff Advice into this case and
issued a Notice of Application and set an intervention deadline for interested parties to petition
for intervention.Order No.35967.
The Company cited concerns with service requests from prospective large customers with
loads that may never fully materialize.Currently,prospective large customers are eligible for an
STAFF COMMENTS 1 DECEMBER 7,2023
allowance up to nine times the estimated monthly revenue generated from the customer under
Regulation No.12.The Company is concerned of the risk that it may not receive the revenue
anticipated necessary to recover the upfrontcost of a line extension needed by new large
customers,leaving stranded assets that would need to be recovered from the Company's other
customers.
To avoid this type of harm,the Company proposes to add part 3(b)to Regulation No.12
that limits the allowance for customers whose service requirements exceed 25,000 kilovolt-
amperes ("kVA").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.
The Company proposes to honor any master electric service agreements ("MESA")
executed by a prospective customer before October 3,2023,according to its terms.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.
STAFF ANALYSIS
Staff reviewed the proposed changes to Regulation No.12 and believes the Company's
solution to mitigate stranded asset risk of a new line extension for customers who require over
25,000 kVA is improper.The Company has proposed to eliminate the line extensionallowance
for these customers,except for an allowance in the form of providing the metering necessary to
measure the customers'usage and require these customers to pay the full cost of the remaining
cost of the line extension,upfront.Staff agrees with requiring these customers to pay the full
cost of the line extensionupfrontto mitigate stranded asset risk;however,Staff believes that
simply eliminating the allowance (minus the meter)will cause the Company to over recover the
cost of the line extension.
The Company's justification for eliminating the allowance (except for the meter)is to
eliminate the potential for stranded asset risk by requiring the customer to pay the full cost of the
line extension (minus the meter).A stranded asset could occur if a customer's load does not
materialize,and the Company does not receive the necessary revenue through base rates to cover
STAFF COMMENTS 2 DECEMBER 7,2023
the amount of the allowance.Recovery for the cost of the line extension would then fall on the
Company or other customers.However,the Company's solution to solve the stranded asset
problem causes another problem,which is overcharging the customer who brought load to the
Company's system by ignoring the purpose of the allowance.
The purpose of the allowance is to offset the customers'cost of a line extensionthat will
be recovered throughthe Company's base rates.By eliminating the allowance (except for the
meter),Staff believes the Company would over-recover the cost of the line extension and
customers would be overcharged.
Staff believes that the Company was aware that eliminating the allowance could cause
over-recovery of line extension cost for customers subject to Regulation No.12 by justifyingthe
changes based on how Schedule No.9 customer line extensions are handled.Schedule No.9
customers are transmission level customers and are not allocated any distribution cost in their
base rates and are covered by a separate section of Regulation No.12 that is n_g being updated
where the only allowance received is the meter.I The Company stated:
[Schedule No.9]customers are then not eligible to receive the standard allowancefornon-residential customers as Schedule No.9 rates do not include any costs fordistributionfacilitiesotherthanmeteringequipment.Under Schedule No.9,large
customers are charged lower rates in exchange for paying upfront Line Extension
costs,and existing customers do not subsidize investments to serve large new loads.Tariff Advice at 4.
Staff believes customers who require over 25,000 kVA but are not a Schedule No.9
customer and have embedded distribution cost in their base rates would be affected by the
Company's update to Regulation No.12.Staff believes it is improper to eliminate the allowance
for these customers to solve a stranded-asset problem but create the additional problem of
overcharging these customers.
Staff believes there are alternative solutions to mitigate stranded-asset risk of a line
extension without overcharging customers.For example,Idaho Power charges Large Power
Service customers the full cost of a substation prior to construction but the allowance is refunded
over a five-yearperiod upon subsequent sustained usage of capacity by the customer.See Idaho
'Schedule No.9 customers are subject to the line extension allowance defined by paragraph 3(a)of Regulation No.
12.
STAFF COMMENTS 3 DECEMBER 7,2023
Power Company,Schedule 19 Tariff.Staff recommends the Company employ a method similar
to Idaho Power's or a method that does not cause customers to be overcharged.
STAFF RECOMMENDATION
Staff recommends the Commission deny the Company's proposed changes to Regulation
No.12 and the Company develop a method similar to Idaho Powers method or another method
that mitigates stranded asset risk while ensuring customers are not overcharged for their line
extensions.Staff recommends the Company should file the revised method in a supplemental
filing in this case and the Commission direct additional process allowingpublic participation
after the filingis made.
Respectfully submitted this 7th day of December 2023.
Dayrrfl~ardie *
Deputy AttorneyGeneral
Technical Staff:Michael Eldred
i:umisc/comments/PAC-E-23-21 Comments
STAFF COMMENTS 4 DECEMBER 7,2023
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 7th DAY OF DECEMBER 2023,SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF TOROCKYMOUNTAINPOWER,IN CASE NO.PAC-E-23-21,BY E-MAILING ACOPYTHEREOF,TO THE FOLLOWING:
MARK ALDER JOE DALLASROCKYMOUNTAINPOWERROCKYMOUNTAIN POWER
1407 WEST NORTH TEMPLE STE 330 825 NE MULTNOMAH STSALTLAKECITYUT84116STE2000E-MAIL:[e-mail] PORTLAND OR 97232
E-MAIL:[e-mail]
DATA REQUEST RESPONSE CENTER
E-MAIL ONLY:
[e-mail]
Ida Elmasian
CERTIFICATE OF SERVICE