20020510Comments of IIPA.pdf

Eric L. Olsen ISB# 4811
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
O. Box 1391; 201 E. Center
Pocatello, Idaho 83204-1391
Telephone: [phone]
Fax: [phone]
Attorneys for Intervenor
Idaho Irrigation Pumpers Association, Inc.
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF PACIFICORP, DBA UTAH POWER &
LIGHT COMPANY FOR APPROV AL OF ITS
PROPOSED ELECTRIC SERVICE SCHEDULES)
Case No. PAC-O2-
COMMENTS OF THE IDAHO IRRIGATION PUMPERS ASSOCIATION, INC.
COMES NOW the Idaho Irrigation Pumpers Association, Inc. ("Irrigators ), by and through
counsel of record, and hereby respectfully submits these comments in further support of the
Stipulation entered into by and between PacifiCorp d/b/a Utah Power & Light Company
PacifiCorp ), the Idaho Public Utilities Commission Staff ("Staff'
),
Monsanto Company
Monsanto ) and the Irrigators.
As the second largest class of consumers of electricity on the PacifiCorp' s Idaho system, the
Irrigators have a fundamental interest in the outcome of these proceedings. The Irrigators have
actively participated in the settlement negotiations that have led up to the presentation of the
Stipulation and also have had one of its representatives testify in support of the Stipulation at the
public hearing in Rigby, Idaho. As signatories, the Irrigators support the Stipulatior ~ L
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present circumstances as a fair, just, and reasonable resolution of various disputed matt
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COMMENTS OF THE IDAHO IRRIGATION PUMPERS ASSOCIATION, INc.-
in this case and further believe its implementation to be in the public interest.
PacifiCorp s recovery of its excess power supply costs appears to have received the most
attention at the recent hearings. The Irrigators identified at the pre-hearing conference various
defenses that could be asserted against PacifiCorp to bar or reduce its recovery of its claimed excess
power supply costs as generally set forth in paragraph 5 of the Stipulation. In determining the extent
of the excess power cost recovery, the Irrigators worked closely with Staff and Monsanto in
evaluating the risks involved in presenting defenses to such recovery at a contested hearing and in
determining an appropriate recovery in any settlement.The agreed upon net recovery of
approximately 22.7 million in excess power costs is reasonable and appropriate given the risks of
a less favorable result, the Irrigators' limited resources , and in light of other settlements reached in
other jurisdictions on this issue. This aspect of the Stipulation was generally reinforced by the
Commission s Order No. 28998 clarifying thatPacifiCorp was not generally prohibited from seeking
recovery of the excess power costs at issue.
The rate spread and rate design aspects of the Stipulation were crucial points to the Irrigators
and were subject to extensive discussions with Staff and PacifiCorp. Specifically, PacifiCorp
proposed to restructure the Irrigators' current tariff schedules from the traditional ABC rate structure
to a firm rate. The Irrigators agreed to this change in light of the general consensus that if a firm rate
could be provided for a rate very close to the current C rate, the Irrigators generally would find it
beneficial and avoid various increased labor costs associated with the interruptible Crate.
Notwithstanding, the Irrigators still believe that there are load control benefits to be had from an
interruptibility and/or curtailment prospective. As consequence, the Stipulation provides that
PacifiCorp will work with the Irrigators to develop a load control program as one means to help
COMMENTS OF THE IDAHO IRRIGATION PUMPERS ASSOCIATION, INc. - 2
those irrigators whose consumption is in excess of the applicable BP A exchange credit.
Staff also proposed a modified Rate Mitigation Adjustment ("RMA") that would increase
the energy revenue requirement for the Irrigators as a class and then (1) redistribute the same among
the other customer classes to mitigate the effect ofPacifiCorp s excess power cost recovery and (2)
also make a substantial move for the Irrigators to perceived cost of service. Although PacifiCorp' s
cost of services studies and methodologies were not accepted by Staff, the Irrigators or Monsanto
the Irrigators agreed to the RMA in light of (1) the historical perception that the class as a whole was
under cost of service and (2) the practical realization that the Commission would make such a shift
if the matter was resolved through a contested hearing. The Irrigators want to stress the ability to
make such an adjustment was only made possible in the aggregate by the extraordinary BP
exchange credit available to this class. Given almost certain rate shock that will occur to the
irrigation class as a whole upon the expiration ofthe current BP A exchange Credit, the Irrigators and
Staff required that the RMA would terminate upon the earlier of the expiration of (1) the current
BP A exchange credit or (2) the adoption and implementation by the Commission of a cost of service
study for PacifiCorp.
To the extent that the Commission determines that Nu- West is a tariff customer, the Irrigators
believe that Nu- West should bear its fair share of the excess power costs that are ultimately
recoverable by PacifiCorp. The Irrigators know all to well the vagaries ofthe present economy. To
the extent that Commission finds that Nu- West is a special contract customer and not immediately
subject to any excess power cost recovery, the Irrigators would not be opposed to PacifiCorp
proposed alternative that Nu-West's share of the excess power costs be dealt within the true-up
period.
COMMENTS OF THE IDAHO IRRIGATION PUMPERS ASSOCIATION, INc. - 3
Having participated in the recent public and technical hearings, the Irrigators still continue
to support the Stipulation based upon all the known facts and circumstances and urges the
Commission to approve the same.
Respectfully submitted this 10th day of May, 2002.
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
ERIC L. OLSEN
Attorney for lIP A
COMMENTS OF THE IDAHO IRRIGATION PUMPERS ASSOCIATION, INC. - 4
CERTIFICATE OF MAILING
I hereby certify that on the day of May, 2002, a true and correct copy of the foregoing
was served on the following via U.S. Mail:
Scott Woodbury, Deputy Attorney General
Idaho Public Utilities Commission
O. Box 83720
Boise, ID 83720-0074
Anthony J. Yankel
29814 Lake Road
Bay Village, OH 44140
Randall C Budge
Racine, Olson, Nye, Budge & Bailey, Chtd.
O. Box 1391
Pocatello, ID 83204
James R. Smith, Senior Accounting Specialist
Monsanto Company
O. Box 816
Soda Springs, ID 83276
Tim Shurtz
411 South Main
Firth, ID 83236
Doug Larson
Vice President Regulation
PacifiCorp
201 S. Main, Suite 2300
Salt Lake City, UT 84140
James F. Fell
Erinn Kelley-Siel
John M. Eriksson
Stoel Rives LLP
201 S. Main Street, Suite 1100
Salt Lake City, UT 84110
Conley Ward
Givens Pursley
O. Box 2720
Boise, ID 83701
COMMENTS OF THE IDAHO IRRIGATION PUMPERS ASSOCIATION, INc. - 5