20101130Statement of Witness Positions.pdf

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Case No. PAC-E-IO-07
The PacifiCorp Idaho Industrial Customers ("PIlC") submits the following Statement of
Positions pursuant to the Idaho Public Utilty Commission's Rule of Procedure 255 in Rocky
Mountain Power's ("RMP") 2010 general rate case. This Statement of Positions sumarizes
PIlC's positions on the issues that PIlC's expert witnesses addresses. PILC also supports the
non-duplicative revenue requirement adjustments proposed by the IPUC Staff and Monsanto,
including but not limited to the Monsanto cost of capital recommendations, and the Monsanto
and Staff adjustments related to administrative and general, operations and maintenance, and net
power costs, and transmission and other infrastructure investments.
Greg Meyer
PIlC witness Greg Meyer proposes approximately $7.6 milion in revenue requirement
adjustments related to: 1) post-test year plant additions (including rate base changes and
depreciation expense) (totaling about $4.4 milion); 2) cash working capital ($364,248); 3)
normalization of residential revenues ($1.2 millon); 4) amortization of sulfu dioxide emission
allowances ($256,767); 5) disallowance ofthe avian settlement expense ($26,961); 6) reductions
in incentive compensation ($653,785); 7) disallowance of a portion of management fees
($111,601); 8) normalization of outside services expense ($327,080); 9) elimination of the
proposed escalation of historic costs and a more accurate level of generation overhaul expense
($134,918); and 10) normalization ofuncollectibles expense ($68,807). RMP has agreed to
accept in whole or in par the revenue requirement impact related to Mr. Meyer's generation
overhaul expense adjustment and the change in the sulfu dioxide emission allowance
amortizations from 15 years to 5 years. Upon review ofRMP's rebuttal testimony, Mr. Meyer is
withdrawing his proposed correctIon to injuries and damages expense (which was a $75,456
adjustment).
Randall Falkenberg
PIlC witness Randall Falkenberg proposes a number of net power cost-related revenue
requirement adjustments which (in total) would reduce RMP's requested rate increase by about
$1.5 milion. Mr. Falkenberg did not conduct a complete analysis ofRMP's net power costs in
this case, but instead focused on a limited number of issues which impact the Energy Cost
Adjustment Mechanism true-up or are not subject to the true-up. Mr. Falkenberg proposed
adjustments related to: 1) the commitment logic that results in incorrect star up and shut down
decisions for gas-fired resources ($34,912); 2) RMP's failure to include the energy generated in
the generation resource start up process ($99,465); 3) the incorrect modeling of the Sacramento
PacifiCorp Idao Industrial Customers' Statement of Witness Positions
Case No. PAC-E-I0-07 - Page 1
Municipal Utilty District sales contract ($92,957); 4) the inappropriate inclusion of wind
integration costs related to the integration of wind resources not owned by RMP ($377,457); 5)
three separate adjustments related to RMP's overstating of transmission costs and the inclusion
of transmission costs that will not occur durng the test period ($400,766); and 6) five separate
outage modeling adjustments related to capping extremely long outages at Lake Side and
Colstrip 4 at 28 days ($205,551), removal of the high cost and low quality Bridger fuel supply
($145,954), removal of the costs of a negligent outage at the Naughton plant ($41,547), and
correcting a heat rate bias in the power cost model ($108,661). In addition, Mr. Falkenberg
proposes that RMP be required to fie specific workpapers in future proceedings similar to what
PacifiCorp has agreed to fie in other states. As explained in Mr. Falkenberg's testimony, many
of his adjustments have been agreed to by PacifiCorp, or required by commission orders, in other
states in which PacifiCorp operates. In rebuttal testimony, RMP agreed in full or in par to Mr.
Falkenberg's adjustments related to the commitment logic error and one of Mr. Falkenberg's two
wind integration adjustments. Finally, Mr. Falkenberg originally proposed a non-fuel star up
operations and maintenance adjustment, but Mr. Falkenberg is withdrawing that proposal in light
of the Company's rebuttal testimony ($29,072).
Donald Schoenbeck
PILC witness Donald Schoenbeck submitted testimony on rate spread and rate design issues. Mr.
Schoenbeck reviewed RMP's cost-of-service study and recommends that the class demand
allocation factor be based on the comparable jursdictional peak hour demand. This would
replace RMP's twelve month coincident peak factor for assigning generation and transmission-
related demand costs with a winter/sumer peak factor that uses the peak load months of July
and December. In addition, Mr. Schoenbeck recommends that the RMP weighted twelve month
peak factor used by RMP for distribution-related demand costs should be replaced with the class
maximum peak demands. Mr. Schoenbeck's rate spread recommendations would more
accurately assign generation, transmission and distribution cost responsibilty. The final
approved rate spread should be based on Mr. Schoenbeck's cost-based rate spread approach
using the PILC cost-of-service study. Finally, Mr. Schoenbeck supports RMP's rate design
proposal for Schedules 6, 6a and 9, which appropriately applies a slightly greater increase to the
demand charges as compared to the energy charges.
PacifiCorp Idaho Industrial Customers' Statement of Witness Positions
Case No. PAC-E-I0-07 - Page 2