20170503Comments.pdf

R RACINE OLSON RANDALL C. BUDGE
[e-mail]
May 3, 2017
Diane Hanian, Secretary
!daho Public Utilities Commission
PO Box 83720
Boise, ldaho 83720-007 4
diane. holt@puc. idaho.gov
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mRe: IPUC Gase No. PAC-E-17-02
Dear Ms. Hanian
Enclosed you willfind the original and seven (7) copies of Comments of
Monsanto Company. Please file the same with the Commission's records. !f you
have any questions, please don't hesitate to call.
Thank you
Sincerely,w c.
RANDALL C. BU
RCB:tscc: Service List
2O1 E. Center St. I P.O Box 139't I Pocatello, lD 83204
P: (208) 232-A101 I F: (2O8) 232-e10g I racinelaw.net Ofllces ln Boise, Pocatello, and ldaho Falls
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l.l j l,: :' -3 Pil 3t 0BRandall C. Budge, ISB No. 1949
Thomas J. Budge, ISB No. 7465
RACINE OLSON NYE & BUDGE, CHARTERED
P.O. Box I39l I 201E. Center St.
Pocatello, Idaho 83204-1391
[phone] -phone
[phone] - fax
[e-mail]
[e-mail]
Attorneys for Mons anto Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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IN THE MATTER OF TIIE
APPLICATION OF ROCI(Y MOUNTAIN
POWER REQUESTING APPROVAL OF
THE $7.5 MILLION I\ET POWER COST
DEFERRAL AND AUTHORITY TO
DECREASE RATES BY $6.9 MILLION
CASE NO. PAC.E.I7-02
COMMENTS OF MONSAI\TO
COMPAIYY
INTRODUCTION
lntervenor Monsanto Company ("Monsanto"), through counsel, submits these comments
with respect to the March 31,2017, Application of Rocky Mountain Power (the "Company'')
which seeks Commission approval to adjust and reduce rates under the Energy Cost Adjustment
Mechanism (ECAM). These comments are submitted in accordance with the Commission's
Order No. 33750 dated April 25,2017, giving notice of the Application, providing that this
matter will proceed under modified procedure, authorizing interested persons to file written
cornments in support or opposition, and providing the right to participate by filing a petition to
intervene. Monsanto petitioned to intervene and was granted intervention by the Commission's
Order No. 33753, dated April 27,2017.
As discussed below, Monsanto supports approval of the altemative rate plan proposed in
the Application to provide for rate stability and mitigate future rate shock.
BACKGROT]hID
Monsanto owns and operates phosphate mines in Caribou County, Idaho, together with a
plant in Soda Springs which utilizes three electric furnaces to produce elemental phosphorus.
COMMENTS OT' MONSAIITO COMPANY - I
Elemental phosphorus is the primary building block for the active ingredient glyphosate in
Roundup herbicide, the foremost weed-control agent in the world. Monsanto's Soda Springs
plant is the largest single user of electricity on the PacifiCorp system, with a load of
approximately 180 megawatts (MW) using 1.4 million MW-hours per year. Monsanto has
continuously been a contract customer of the Company and its predecessors since plant
operations began in l95l .
The Company currently provides electric service to Monsanto pursuant to an Electric
Service Agreement effective January 1,2016, for a2-year term ("Agreement") and Idaho
Electric Service Schedule 400. Under the Agreement, Monsanto receives both firm and
intemrptible power. Monsanto's intemrptible products provide the Company with up to 188
hours of operating reserve intemrptions at 95 MW, up to 12 hours of system integrity
intemrptions at 162 MW, and up to 800 hours of economic curtailments at 67 MW. Monsanto
receives a credit for these intemrptions. While Monsanto's rates are fixed pursuant to the
Agreement, they remain subject to annual ECAM adjustments like all other Idaho customers.
MONSANTO COMMENTS
As a preliminary matter, Monsanto wishes to express its concem with the very limited
l0-day timeframe provided to obtain and review the voluminous and complex data supporting
the Application and to prepare and submit comments concerning the Application. Rule 202 of
the Rules of Procedure of the Idaho Public Utilities Commission provides: "Unless otherwise
provided by the notice of modified procedure, all interested persons will have at least twenty-one
(21) days from the date of the notice to file a written protest or comment." IDAPA
31.01.01 .202.02 (emphasis added). [t is Monsanto's position that a minimum of 21 days should
be provided absent emergency circumstances that necessitate a shorter response time.
Turning to the Application, it seeks an Order approving the Company's 2016 energy
related costs of $7.5 million and decreasing the current revenues collected through the ECAM by
$7.0 million. If approved, rates for customer classes would decrease an average of 2.4%.
Monsanto's rates under Schedule 400 would decrease 3.0%.
However, rather than flow back to customers the entire $7.0 million ECAM decrease, the
Application and testimony of Mr. Ted Weston propose a rate stability alternative ("Rate Plan")
to address the growing depreciation regulatory asset. Under this alternative, ECAM rates would
be reduced by $3 million rather than the full 57 million. The remaining incremental revenue of
COMMENTS OF'MONSANTO COMPANY - 2
approximately $4 million collected from customers would be used to offset the deferred
regulatory asset owed from customers for the 2013 depreciation regulatory asset.l
The balance of the depreciation regulatory asset is projected to be $5.7 million by the
beginning of the June 1, z}l7-.the date effective for the current ECAM.2 The Company
proposes to retain approximately $4 million of the revenue that otherwise would be reflected in
the ECAM decrease to offset a significant portion of the depreciation deferral balance of $5.7
million. The Company explains that this will mitigate both the need to increase rates in the future
for the amortization of the regulatory asset and the double impact from the 2013 depreciation
schedule.3 As Monsanto understands the proposed Rate Plan, the ECAM credit would be
applied on a "dollar for dollar" basis to reduce the depreciation accrual in aggregate balance.
Monsanto has carefully considered the benefits of receiving the larger rate reduction that
would result from the full ECAM decrease (decreasing rates by the full $7 million or
approximately $2.4% for all customers) as compared with the benefit of the Company retaining
approximately $4 million of revenue to offset dollar for dollar a significant portion of the
depreciation regulatory asset balance of $5.7 million. Monsanto supports approval of the
alternative Rate Plan as the more prudent rate making policy under the circumstances to provide
for rate stability and mitigate future rate shock.
RESPECTFULLY SUBMITTED this 3rd day of May 2017.
RACINE, OLSON, NYE &
BUDGE, CHARTERED
77^&
THOMAS J. BUDGE/
l Application of Rocky Mountain Power, paragraph l0 (page 5).
2 Weston, Di-4, lines 10-13.
3 Weston, Di-4, lines 15-18.
COMMENTS OF MONSANTO COMPANY -3
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on this 3rd day of May,2017, I served a true, correct and
complete copy of the foregoing document, to each of the following, via the method so indicated:
Diane Hanian, Secretary (original and 7)
Idaho Public Utilities Commission
P.O. Box 83720
Boise, D 83720-0074
E-mail: [e-mail]. eov E-Mail and Hand Delivery
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake city, utah 84111
E-mail: [e-mail]
Yvonne R. Hogle
Senior Counsel
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake city, Utah 84111
E-mail: [e-mail]
E-Mail
E-Mail
77*,L
THOMAS J. BUDGE (J
COMMENTS OF MONSAI\ITO COMPAITY.4