20161117Comments.pdf

November 14, 2016
RANDALL C. BUDGE
[e-mail]
Jean D. Jewell, Secretary Sent Via Email & U.S. Mail
Idaho Public Utilities Commission
PO Box 83720
Boise, Idaho 83720-007 4
[e-mail]
Re: IPUC Case No. PAC-E-16-12
Dear Ms. Jewell:
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Enclosed you will find the original and seven (7) copies of Comments of
Monsanto Company. Please file the same with the Commission's records. If you
have any questions, please don't hesitate to call.
Thank you.
Sincerely,
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201 E. Center St. I P.O Box 1391 I Pocatello, ID 83204
P: [phone] I F : [phone] I racinelaw.net Offices in Boise, Pocatello, and Idaho Falls
Randall C. Budge, ISB No. 1949
Thomas J. Budge, ISB No. 7465
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
P.O. Box 1391; 201 E. Center
Pocatello, Idaho 83204-1391
Telephone: [phone]
Fax: [phone]
[e-mail]
Attorneys for Intervenor Monsanto Company
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ROCKY MOUNTAIN POWER TO
UPDATE BASE NET POWER COSTS AND
IMPLEMENT A RA TE STABILITY PLAN
INTRODUCTION
CASE NO. PAC-E-16-12
COMMENTS OF MONSANTO
COMPANY
COMES NOW Intervenor Monsanto Company ("Monsanto"), through counsel, and hereby
provides comments on the September 1, 2016 Application of PacifiCorp d/b/a Rocky Mountain
Power ("Company") to the Commission for an Order (I) authorizing the Company to adjust the
base level of net power costs ("NPC") and set a new base NPC to be tracked in· the Energy Cost
Adjustment Mechanism ("ECAM"), and (2) approving a new level of base retail load and
authorizing the Company to adjust the Load Change Adjustment Rate (LCAR), Production Tax
Credit (PTC) and Renewable Energy Credit (REC) rates. Pursuant to Order No. 33613, this case
is being processed under Modified Procedure with comments from parties and interested person
due by November 17, 2016.
BACKROUND
On May 27, 2015 the Company filed an Application in Case No. PAC-E-15-09 requesting
(a) a $10.2 million, or 3 .9% on average, increase to base rates effective January 1, 2016, to manage
the level of NPC recovered through the ECAM surcharge, and (b) modifications to the ECAM.
Based upon settlement discussions among the Parties and as a compromise of the positions, a
Stipulation was entered into between the Company, Staff, Monsanto, PacifiCorp Idaho Industrial
COMMENTS OF MONSANTO COMPANY - 1
Customers ("PIIC") and the Idaho Irrigation Pumpers Association, Inc. ("IIP A"). The
Commission approved the terms and conditions of the Parties' Settlement Stipulation by Order
No. 33440, dated December 23, 2015. Among other things discussed in greater detail in the
Order and pursuant to the Stipulation, Idaho Retail Revenues increased by $10.2 million (3 .9%)
effective January 1, 2016 in exchange for the Company agreeing to not to file a general rate case
with rates effective prior to January I, 2018. Further, base rates and base NPC would be updated
effective January I, 2017. Additionally, the Company and Monsanto agreed to extend the current
terms of Monsanto's existing Electric Service Agreement governing curtailment products and
payments through December 31, 2017.
In finding the Stipulation's rate increase and modification to certain provisions of the
annual ECAM to be fair, just and reasonable, the Commission stated:
"The Stipulation includes necessary updates in the Company's base NPC and
helpful revisions to the current ECAM process ... the hallmark of reasonable
compromise is a mutually beneficial resolution for both sides of the transaction.
Accordingly, the Commission finds that the Stipulation offers substantive benefits
to both rate payers and the Company.
The Commission believes that the monthly increase in rates, 2.9% for residential
customers and 3.9% average increase for all customers1, allows the company a fair
and reasonable recovery of its established annual energy costs. Moreover, the
"stay-out" provision of the Stipulation provides rate stability by mitigating the
potential for more significant increases through the end of the 2017 calendar year.
More importantly, the increase in base rates for 2016 will later be accompanied by a
roughly commensurate decrease in the annual ECAM paid by customers in
2017 ... " OrderNo. 33440p. 11-12.
The Company's Application in this case is a compliance filing to update the level ofNPC
included in base rates as required by Order No. 33440, Case No. PAC-E-15-09. The update
reduces Idaho's annual revenue requirement by approximately $1.1 million, or $0.32 per MWh
and represents a reduction of approximately 0.4%2•
As an alternative to the rate decrease effective January 1, 2017 associated with updating the
level ofNPC included in base rates and an anticipated $4.5 million to $5.5 million reduction in the
ECAM collection rate effective June 1, 2017, the Company's Application also proposed as an
alternative a Rates Stability Plan. Under the Rate Stability Plan rates would not change, instead
1 The percentage increase for Monsanto's special contract was 5.1 % and for Agrium's 5.3%.
2 Application page 1.
COMMENTS OF MONSANTO COMPANY -2
the Company would utilize the incremental revenue collection to net against the Commission
approved depreciation deferral under Order No. 32910.3
On October 18, 2016, the Company, Staff, Monsanto, PIIC and IIP A representatives met at
the Commission's offices in Boise to discuss the compliance filing, the Company's proposed
Rates Stability Plan and negotiated solutions. The Company's stated position was that it was
"indifferent" to the proposed Rates Stability Plan and up to the customers to decide. The Staff
presented alternative scenarios which were discussed. Monsanto and PIIC each expressed a
desire to receive the rate reduction benefits effective January 1, 2017 associated with the decrease
in base rates and base NPC required by Order No. 33440, Case No. PAC-E-15-09, together with
the projected June 1, 2017 decrease in ECAM rates. Accordingly, with no consensus supporting
the Rate Stability Plan this case continues to be processed under Modified Procedure based on
written comments.
MONSANTO COMMENTS
Monsanto gave careful review of the Company's compliance filing Application and
proposed Rate Stability Plan. Monsanto commends the Company for communicating effectively
with the Parties by providing advanced notice and information concerning the anticipated rate
reductions associated with the decrease in base rates and base NPC effective January 1, 2017 and
anticipated ECAM decrease effective June 1, 2017, together with the proposed Rate Stability Plan.
The additional one-year "stay-out" envisioned under the Rate Stability Plan could provide
additional rate stability and certainty which is attractive to Monsanto. While a reduction in
ECAM rates effective June 1, 2017 was anticipated when the Stipulation and Order were entered
in Case No. PAC-E-15-09, the small additional reduction in base rates January 1, 2017 was not.
Receiving an actual base rate reduction from the Company is unprecedented, something customers
have long hoped for but never received previously.
After carefully evaluating the alternatives presented and as a prudent business decision
Monsanto choses not to accept the Company's proposed Rate Stability Plan and instead receive the
anticipated benefit of the NPC reduction January 1, 2017 and the anticipated ECAM rate reduction
June 1, 2017. In so doing Monsanto recognizes that the Company's 2013 deprecation deferral
balance will remain one of the many issues to be addressed in the next general rate case.
3 Application page 2.
COMMENTS OF MONSANTO COMPANY -3
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RESPECTUFLLY SUBMITTED this .t/ctay of November, 2016.
COMMENTS OF MONSANTO COMPANY - 4
RACINE, OLSON, NYE, BUDGE &
BAILEY, CHARTERED
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on this \l\~ofNovember, 2016, I served a true, correct and
complete copy of the foregoing document, to each of the following, via the method so indicated:
Jean D. Jewell, Secretary (original and 7)
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
E-mail: [e-mail]
Daniel E. Selander
1407 West North Temple, Suite 320
Salt Lake City, Utah 84116
Facsimile No. [phone]
E-mail: [e-mail]
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
1407 West North Temple, Suite 330
Salt Lake City, Utah 84116
E-mail: [e-mail]
COMMENTS OF MONSANTO COMPANY - 5
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