20130925Petition for Funding.pdf

Brad M. Purdy
Attomey at Law
2019 N. 17ft St.
Boise,Idaho 83702
(208) 384-12e9
Cell: [phone]
Fax: [phone] I
September25,2013
Jean Jewell
Secretary, Idaho Public Utilities Commission
472W. Washington St.
Boise,lD 83702
e*t'- C{]F1!' 1t .)1...i 35 Pii 3: 16
Re: Case PAC-E-13-04 - Community Action Partnership Association of Idaho's Petition for
Intervenor Funding.
Dear Ms. Jewell:
Enclosed are an original and seven (7) copies of Community Action Parhrership Association of
Idatro's Petition for Intervenor Funding in the above-captioned proceeding.
Sincerely,
Brad M. Purdy
Attorney at Law
Bar No. 3472
2019 N. 17s St.
Boise,lD. 83702
(208) 384-t2ee
FAX: [phone]
[e-mail]
Attorney for Intervenor
Community Action Partnership
Association of Idatro
! ; a:
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
ox'PACIFICORP DBA ROCKY MOUNTAIN )
POWER TO TNITTATE DISCUSSTONS WrTH )
INTERESTED PARTIES ON ALTERNATIVE )
RATE PLAI\I PROPOSALS
I. INTRODUCTION
COMES NOW, the Community Action Parurership Association of Idaho (CAPAI) and,
pursuant to Idaho Code $ 6l-617A and Rules 161-165 of the Commission's Rules of Procedure,
IDAPA 31.01.01.161-165, petitions this Commission for an award of intervenor funding in the
above-captioned proceeding.
III. PROCEDURAL REQUIREMENTS
Rule 161 Requirements:
Rocky Mountain Power (Rocky Mountain; Company) is a regulated, electric public
utility with gross Idatro intrastate annual revenues exceeding three million, frve hundred
thousand dollars ($3,5 00,000.00).
Rule 162 Requirements:
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)
)
)
CASE NO. PAC-E.13.04
COMMUNITY ACTION
PARTITERSHIP ASSOCIATION
OF IDAHO'S PETITION T'OR
INTERVENOR FTINDING
CAPAI APPLICATION FOR INTERVENOR FUNDING
(01) Itemized list of Expenses
Consistent with Rule 162(01) of the Commission's Rules of Procedure, an itemized list of
all expenses incurred by CAPAI in this proceeding is attached hereto as Exhibit "A."
(02) Statement of Proposed Findings
CAPAI opposes the settlement stipulation pending approval before the Commission in
this case. CAPAI's position, set forth in the testimony of its Executive Director, Christina
Zamor4 and through pre-hearing briefing, is largely based on: l) Rocky Mountain's refusal to
timely respond to CAPAI's discovery requests seeking low-income consumption data and
calculations under alternative rate design scenarios pertinent to residentialrate design, and; 2) the
settlement stipulation is the result of a procedure that is unlawful and seriously flawed in
numerous respects, establishes dangerous precedent if approved, is exclusionary with respect to
CAPAI, and not in the best interests of ratepayers on the whole as discussed below.
A. Rate Design
As it did in Avista's 2012 general rate case (Case No. AVU-E-12-08), CAPAI continued
its quest in this proceeding to obtain low-income consumption data to determine whether the
Company's existing residential rate design is fair, just and reasonable to low-income customers.
CAPAI notes that rate design is automatically at issue in general rate cases pursuant to the
Commission's procedural Rule No. 124(2). This case resulted in a general rate increase. It is a
general rate case regardless ofany labels or characterizations to the contrary.
For years, CAPAI, Stafi Idaho's electric public utilities and the Commission have either
rested on assumptions regarding residential rate design that, based upon the data obtained in the
Avista case and this proceeding, appear to have been erroneous or have simply not fully
examined the nature of low-income consumption and how varying residential rate design
CAPAI APPLICATION FOR INTERVENOR FUNDING
alternatives impact the poor. These assumptions have existed as a result of the lack of the very
data and analysis pursued by CAPAI in this case. It is conceivable that the flawed assumptions
have resulted in Commission rulings that were not fair, just and reasonable to low-income
ratepayers. CAPAI is not suggesting that the Commission has issued any rulings that were
inherently unlawful, but that the absence of the data in question creates that possibility and,
therefore, is of considerable value to not just CAPAI and Staff, but the Commission as well.
Among others, these assumptions include the general belief that wealthier people with
larger homes and energy-consuming amenities consume more kilowatt hours per month than a
low-income family living in a modest dwelling. There are a number of reasons why this might
not be true, including: 1) low-income customers live in poorly insulated housing stock; 2) the
poor cannot afford weatherization or they rent rather than own their housing and have no right or
ability to install weatheization; 2) the poor often use electric heaters; 3) wealthier customers can
afford and install modern weatherization measures, and; 4) wealthier customers typically live in
newer housing stock already built with modem weatherizationtechnology. In fact, based on
results obtained from Avista, it is conceivable that Rocky Mountain's highest residential users
consist of a significant percentage of low-income customers.
Another assumption proving questionable is that higher monthly customer charges are
detrimental to low-income customers because those ratepayers have liule to no discretionary
consumption ando combined with the first assumption that they are lower users, higher fixed
monthly charges result in higher monthly bills for the poor. If low-income customers are
actually higher users on the whole, then this assumption is false and higher monthly customer
charges will actually reduce low-income bills because the revenue recovered from those
CAPAI APPLICATION FOR INTERVENOR FUNDING
customers will be shifted from their relatively higher usage, billed through an energy rate, to a
flat monthly amount paid by all residential customers.
Because the poor are largely price-inelastic, it is not fair, just or reasonable to allow a
residential rate design that disproportionately impacts them for something they have no control
over. CAPAI notes that Rocky Mountain has routinely sought substantial increases to its
monthly customer charge. The data sought by CAPAI might actually lend some justification to
the Company's desire in that regard, just one of many ironies resulting from Rocky Mountain's
refusal to respond to CAPAI's discovery requests in this case.
Similar considerations should also be applied to other aspects of residentialrate design
including the pricing, consumption levels and number of residential rate tiers. If low-income
customers consume more electricity and that consumption is non-discretionary, then the existing
rate design structure of Rocky Mountain's tiered rates might also be discriminatory to the poor.
The legal implications of these considerations have not yet been ruled upon by the Commission
because CAPAI is still endeavoring to obtain the necessary data and analyses necessary for the
Commission to make such rulings. This is why Rocky Mountain's refusal to timely provide this
information in this case was so costly.
CAPAI acknowledges that whatever changes to residential rate design might be needed to
eliminate discrimination against the poor must be balanced with the overall objective of energy
conservation. Based on the foregoing, CAPAI proposes that the Commission not accept the
procedure adopted in this case.
B. Rate Case Procedure
Though the Company's Application purports to "discuss" "altematives" to a general rate
case, the outcome is nothing more than the settlement of a general rate increase with no
CAPAI APPLICATION FOR INTERVENOR FUNDING
discussion of any particular procedure. The highly informal procedure followed was created in a
haphazard fashion as the case progressed is more the result of default rather than any agreed
upon and well-thought plan. As a result, it sets a dangerous precedent and will likely be copied
by other utilities in future general rate cases. The settlement stipulation does not weigh the
positive aspects of the procedure employed against the negative. CAPAI has pointed out the
negative consequences in the testimony of Ms. Zamorawhich include the fact that when arate
case is processed through confidential settlement negotiations and created on the fly, it allows for
gamesmanship which, in this case, is amply illustrated by the discovery dispute resulting in a
considerable waste of time and effort on the part of CAPAI to compel the Company to comply
with the law. [t was not CAPAI's obligation to ensure such compliance but had it not souglrt to
enforce the Commission's rules, the late data provided by Rocky Mountain would never have
been produced at all.
The truth is that Rocky Mountain effectively initiated this case well before it was filed by
contacting select parties and engaging in "meetings" in which the desired outcome of this case
was discussed, as well as an understanding that formal rate case procedure would be suspended.
CAPAI did not become aware of these meetings until well after they were conducted. Those
parties invited to participate in these private meetings were given a substantial advantage in the
form of having early input and additional time to prepare to respond to Rocky Mountain's filing.
Once the case was filed, therefore, it was already on a fast track and CAPAI could only
do its best to catch up. For its part, Staffhad seemed predetermined that so long as it could
obtain a lower overall rate increase through settlement with little regard for procedure, than if the
matter proceeded to hearing under a formal process, ratepayers would all be better off. Issues
that were of no interest to the favored class of parties, including residential rate design, were
CAPAI APPLICATION FOR INTERVENOR FLTNDING
brushed aside or ignored by those determined to speed up the settlement process. The clear quid
pro quo of the process leading to the settlement was that the Company would only agree to a
lesser amount if it obtained the signatures of enough of the parties it felt a need to satisfu and in a
very compressed timeframe, with relatively little effort.
The Company responded to CAPAI's insistence that its discovery requests be fully
answered only after the other parties had signed the stipulation and even then did so by
proposing that residential rate design be spun offinto a vague "collaborative" proceeding which,
to CAPAI, has become somewhat of a death knell and was eflectively meaningless because the
other parties had already agreed to a stay-out provision that prohibited any changes in the
Company's residential rate design for a number of years. Furthermore, Rocky Mountain
attempted to coerce CAPAI to join the settlement by conditioning a response to discovery and its
willingness to engage in a collaborative proceeding on CAPAI's joinder in the settlement and
waiver of any right to challenge the stipulation. This exemplifies the heavy-handed nature of the
procedure employed and is why CAPAI submits that it should not be countenanced.
StafPs philosophy that the procedure was acceptable so long as the settlement resulted in
a lesser rate increase than would have resulted had the matter proceeded to hearing under
existing rules, law and policy is no doubt well-intended, but is based on substantial assumptions
as to how the Commission would rule on a myriad of issues. It also ignores the costs that come
with the abbreviated procedure adopted by the other parties in this case. There is no explanation
as to why the outcome proposed in the stipulation could not have been achieved through
adherence to general rate case procedure. Finally, it also assumes that low-income ratepayers are
better offwith a smaller general rate increase regardless of whether the existing residential rate
design might discriminate against them. The data obtained, albeit late, suggests that Staff s
CAPAI APPLICATION FOR INTERVENOR FUNDING
assumptions are very possibly not true for low-income customers. CAPAI submits that Staffdid
not consider the issues raised by CAPAI regarding rate design and is not adequately informed to
determine whether low-income ratepayers are truly better offas a result of the settlement. Either
way, Procedural rule l24Q) specifically places rate design at issue in any general rate case.
Again, the settlement constitutes a general rate case regardless of labels or characterizations.
In summary, CAPAI proposes that, regardless of whether the Commission grants the
proposed rate increase sought in the settlement stipulation, it should reject the procedure adopted
and notift the parties to this case and all others who are undoubtedly awaiting the outcome of
this matter that the confusing, contradictory and unnecessarily abbreviated procedure leading to
the settlement is unacceptable and that should any utility, Staffor any other interested person still
desire a radically altered general rate case procedure, such undertaking should be undertaken
through a stand-alone proceeding initiated exclusively for that purpose followed by any
administrative rulemaking that might be required by law.
(03) Statement Showing Costs
Although CAPAI was unaware of and not invited to participate in the pre-filing meetings
conducted between the Company, Staff and indushial or special contract customers, it did timely
intervene following the Commission's issuance of notice and has fully and vigorously
participated in every aspect of this proceeding, including the two settlement conferences that
were conducted, engaged in extensive pre-hearing briefing and motion practice, and participated
fully in the hearing through the testimony of its witness Christina Zanroraas the only party to
contest the settlement.
Despite its initial concerns regarding the manner in which the case was being settled so
quickly and because it had not had the same amount of time to prepare for settlement discussions
CAPAI APPLICATION FOR INTERVENOR FUNDING
and an expedited procedure as those parties invited to join the pre-filing meetings, CAPAI
endeavored in good faith to work with the other parties, engage in discovery in an informal
maruler as suggested by the Company, and take the Company at its word that it would timely
respond to CAPAI's clearly articulated desire for low-income data and analysis.
As a result of Rocky Mountain's actions, however, CAPAI invested considerable
resources solely to compel the Company to lawfully respond to legitimate discovery requests.
The Company waited to provide the data sought by CAPAI just days prior to the hearing on
CAPAI's Motion to Compel. By that point, however, CAPAI had already fully briefed the
matter and was prepared for oral argument. The Company accused CAPAI of waiting to late to
compel the Company to comply with the law. This reasoning is seriously flawed. CAPAI
submitted its discovery requests to Rocky Mountain in April for a case that went to hearing in
August. In the interim, CAPAI accepted repeated promises by Rocky Mountain to respond to
the discovery that were ultimately broken. Thus, the entire process leading to the settlement was
based on a considerable level of trust. Had the Company simply fulfilled its promises and
adhered to the law, this money would not have been wasted but, rather, invested in the process of
examining the discovery response and its impact on residential rate design considerations
resulting in valuable information for the Commission.
The Company's Motion to Strike CAPAI's Brief in Support of Motion to Compel from
the record resulted in yet further waste of time and money for CAPAI. The brief that the
Company sought to strike set forth specifically how the Company had not acted in good faith in
terms of the procedure followed this case. The only logical reason for the Company's Motion to
Strike was that CAPAI's brief revealed the flaws inherent in such a lax procedure and the failure
to specifu the procedure from the outset.
CAPAI APPLICATION FOR INTERVENOR FUNDING
Regarding the reasonableness of CAPAI'S costs, CAPAI notes that it has no choice but to
minimize its expenses and maximize the effect that its involvement has in proceedings before the
Commission in light of its limited financial resources for this type of effort and especially in light
of recent federal budget cuts. CAPAI usually must forgo retaining expert witnesses and
consultants in highly technical areas and, instead, adopt a resourceful approach using what
limited resources that are at its disposal.
Thus, in light of the foregoing, CAPAI respectfully submits that the costs incurred, and
requested in Exhibit "A," are reasonable in amount.
(04) Explanation of Cost Statement
CAPAI is a non-profit corporation overseeing a number of agencies who fight the causes
and conditions of poverty throughout Idaho. Many of CAPAI's funding sources are
unpredictable and impose conditions or limitations on the scope and nature of work eligible for
funding. CAPAI, therefore, has relatively little "discretionary" firnds available for all projects.
CAPAI's sole source of funding to cover the costs of intervention before this
Commission is the LIHEAP program. CAPAI's LIHEAP budget is severely limited and
inflexible and, if recent years serve as any indication, uncertain as to its future levels.
Thus, were it not for the availability of intervenor funds and past awards by this
Commission, CAPAI would not be able to participate in cases before this Commission
representing an important and otherwise unrepresented segment of regulated public utility
customers. Even with intervenor funding, participation in Commission cases constitutes a
significant financial hardship because CAPAI must pay its expenses as they are incurred, not if
and when intervenor funding becomes available.
(05) Statement of Difference
9CAPAI APPLICATION FOR INTERVENOR FUNDING
There is an obvious abundance of differences between the respective positions of CAPAI
and the Commission Staffincluding the fact that CAPAI opposes the stipulation which Staff
proposes, CAPAI addressed issues Statrdid not and CAPAI objects to the procedure adopted by
Staffand other parties in this case. CAPAI was the only party to fully analyzerate design as it
affects residential, low-income customers.
(06) Statement of Recommendation
CAPAI's efforts to assess the impacts of Rocky Mountain's current rate design was not
limited to low-income customers but was relevant all residential customers. CAPAI is the only
party to this case whose constituents are exclusively residential customers. The analysis
performed by CAPAI produced useful information to the entire residential class and, CAPAI
respectfully submits, valuable to the Commission. Because Rocky Mountain's residential class
pays for the majority of the Company's overall revenue requirement, anything affecting that
class involves issues ofconcern to the general body ofratepayers.
(07) Statement Showing Class of Customer
To the extent that CAPAI represents a specific customer class of Rocky Mountain, it is
the residential class.
RESPECTFULLY SUBMITTED, this 25thday of September,20l3.
..\/'./ /
,/ --.--.'l
CAPAI APPLICATION FOR INTERVENOR FUNDING l0
CERTIX'ICATE OT SERVICE
I, the undersigned, hereby certifu that on the 25th day of September, 2013, served a copy
of the foregoing document on the following by hand delivery, electonic mail and/or U.S. mail,
fust class postage.
Ted Weston
Rocky Mountain Power
201 South Main, Suite 2300
SaltLakeCity,UT 84111
ted.weston@pacifi corp.com
Daniel E. Solander
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City, UT 84111
daniel.solander@pacifi corp.com
Neil Price
Deputy Attorney General
Idaho Public Utilities Commission
47 2 W, Washington (837 02)
P0 Box 83720
Boise, lD 83720-0074
neil.price@puc. idaho. sov
Randall C. Budge
Racine, Olson, Nyc, Budge & Bailey
201E. Center
P0 Box l39l
Pocatello, lD 83204-1391
E-Mail: [e-mail]
Brubaker & Associates
16690 Swingley Ridge Rd., #140
Chesterfield, MO 63017
[e-mail]
James R. Smith
Monsanto Company
P.O. Box 816
Soda Springs,lD 83276
Jim.r. [e-mail]
Eric L. Olsen
ASSOCLATION, INC: Racine, Olson, Nye, Budge & Bailey
(Exhibit Nos. 30 1-400) 201 E. Center
1lCAPAI APPLICATION FOR INTERVENOR FUNDING
P0 Box 1391
Pocatello, ID 83204-1391
[e-mail]
Anthony Yankel
29814 Lake Road
Bay Village, OH 44140
tony@.yankel.net
Benjamin J. Otto
Idaho Conservation League
710 N. 66 St.
Boise,lD 83702
botto@idahoconservation. org
Ronald Williams
Williams Bradbury, P.C.
1015 W. Hays St.
Boise,ID 83702
ron@wi I I iamsbradbury.com
Don Schoenbeck
RCS,Inc.
900 Washington St., Suite 780
Vancouver, WA 98660
[e-mail]
Tim Buller
Agrium,lnc.
3010 Conda Rd.
Soda Springs,ID 83276
[e-mail]
Ken Miller
Snake River Alliance
Box 1731
Boise,ID 83701
E-Mail : kmiller@,snalteriveralliance.org
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
CAPAI APPLICATION FOR INTERVENOR FUNDING 12
EXHIBIT "A'ITEMIZED EXPENSES
PhotocopieVpostage:
$7s0.00
Total Costs
X'ees:
Legal (Brad M. Purdy - 102.00 hours @ $150.00/hr.):
$15,300.00)
Total Fees
Total Expenses
$15"300.00
$16,050.00
13CAPAI APPLICATION FOR INTERVENOR FUNDING