HomeMy WebLinkAbout20180516Comments.pdfR RACINE OLSON
ATTORNEYS
Re: IPUC Case No. PAC-E-I8-01
Dear Ms. Hanian
Enclosed please find the original and seven (7) copies of Commenffiof
fitlonsanto Company. Please file the same with the Commission's records.ff you
have any questions, please don't hesitate to call.
Thank you.
Sincerely,
Diane Hanian, Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ldaho 83720-007 4
diane.holt@puc.idaho.qov
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May 16,2018
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RANDALL C. BU
RANDALL C. BUDGE
rcb@racinelaw.net
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2O1 E. Center St. I P.O Box 1391 I Pocatello, lD 83204
P: (208) 232-61O1 I F: (2O8) 232-6109 I racinelaw.net Offices in Boise, Pocatello, and ldaho Falls
Randall C. Budge, ISB No. 1949
Thomas J. Budge, ISB No. 7465
RACINE, OLSON, NYE &
BUDGE, CHARTERED
P.O. Box l39l;201 E. Center
Pocatello, Idaho 83204-1391
Telephone: (208) 232-6101
Fax: (208) 232-6109
rcb@racinelaw.net
tib(Dracinelaw.net
IN THE MATTER OF THE APPLICATION
OF ROCI(Y MOUNTAIN POWER
REQUESTTNG APPROVAL OF $7.8
MILLION NET POWER COST DEFERRAL
WITH NO CHANGE TO RATES
RECEIVED
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CASE NO. PAC.E.18.O1
COMMENTS OF
MONSAIITO COMPAIYY
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Attorneys for Intervenor Monsanto Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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INTRODUCTION
COMES NOW Intervenor Monsanto Company ("Monsanto") through counsel and
submits these Comments regarding the March 30,2018 Application of Rocky Mountain Power
("Company") seeking approval of a $7.8 million net power cost deferral and the continuation of
its 2017 alternative rate plan. The Company is requesting that Schedule No. 94 rates remain at
current levels which collect approximately $11.5 million annually from Idaho customers, split as
follows: $7.5 million (or 65 percent) for the energy cost adjustment mechanism ("ECAM")
deferred balance, and $4.0 million (or 35 percent) for the amortization of the 2013 incremental
depreciation expense.
Monsanto's Comments are in response to the Commission's Order No. 34038 dated
April 19, 2018, giving notice of the Application, that this matter will proceed under Modified
Procedure with comments due May 16, 2108, authoizinginterested persons to file written
comments in support or opposition, and providing rights or participation by filing a Petition to
Intervene. Monsanto's Petition to Intervene was granted by Order No. 34045, April 30, 2018.
COMMENTS OF MONSANTO COMPANY.l
As discussed below, Monsanto supports lowering ECAM rates from that proposed in the
Application as a result of the Stipulation in Case No. GNR-U-18-01.
BACKGROUND
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.
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 and the largest single user on the PacifiCorp system,
with a load of exceeding 180 megawatts (MW) using 1.4 million MW-hours per year. Monsanto
has continuously been a contract customer of PacifiCorp since plant operations began in 1951.
The Company 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 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
The Company's Application seeks an Order approving the Company's2017 energy
related costs of $7.8 million. The Company is proposing to make no change to current Schedule
No. 94 rates, thereby collecting approximately $1 1.5 million annually from Idaho customers. Of
this total, $4.0 million is proposed to be collected from customers through the ECAM for the
amortization of the 2013 incremental depreciation expense. Without the proposed $4 million
collection for the deferral balance, rates for customer classes would decrease an average of 1.4%.
Monsanto's rates under Schedule 400 would decrease l.8o/o.r
The concept of using the ECAM tariff as a collection device to address the growing
depreciation regulatory asset was first introduced in the previous ECAM proceeding (Case No.
COMMENTS OF MONSANTO COMPANIY - 2
| ,See Response to Monsanto Data Request 1.2, Attachment Monsanto 1.2.
PAC-E-I7-02). In that docket, the Company sought approval to decrease ECAM revenues by
$7.0 million. However, rather than flow back to customers the entire $7.0 million ECAM
decrease, the Application and testimony proposed a rate stability alternative to address the
growing depreciation regulatory asset. Under last year's alternative plan, ECAM rates were
reduced by $3 million rather than the full $7 million. The remaining $4 million collected from
customers was used to offset the defened regulatory asset owed from customers for the 2013
depreciation regulatory asset.
In Case No. PAC-E-17-02, Monsanto carefully considered the benefits of receiving a
larger rate reduction that would result from the full $7 million decrease, as compared to the
benefit of the Company retaining $4 million of revenues to offset dollar for dollar a significant
portion of the June 1, 2017 depreciation regulatory asset balance of $5.7 million. Monsanto
ultimately supported approval of the concept as the more prudent rate making policy under the
circumstances to provide for rate stability and mitigate future rate shock.
Monsanto's support of the concept of using the ECAM tariff to collect revenues to pay
other, non-power-related costs is by no means a blanket approval for the alternative to continue
until a deferral balance reaches zero. Each ECAM case presents its own unique set of
circumstances. Unlike last year's ECAM filing, the Company's Application made no offer for
an "alternative" rate plan, but rather, simply assumed the concept of recovering another $4.0
million through the ECAM "should be used to amortize the depreciation balance until that
balance is recovered." 2
Monsanto believes proposed ECAM rates should first be designed for their intended
purpose, that is, to allow the Company to collect or credit the balance of deferred net power
costs. While other items have been added over the years,3 these items have been approved
through specific Commission order to be included as a part of the ECAM rate on a formal, on-
going basis. The use of the ECAM as a means to collect for other deferrals should be considered
the exception, and not the rule. Therefore, Monsanto does not agree the $4 million collection
should automatically continue this year without question.
2 See Response to Monsanto Data Request 1.3.
3These items include costs associated with Lake Side 2 resource adder, renewable energy production tax
credits, Deer Creek mine amortization expense allocated to Idaho, and revenues from the sale of
renewable energy credits.
COMMENTS OF MONSANTO COMPANY - 3
Our concem, however, has been mitigated in part with the results of a Stipulation reached
by the parties in the Tax Reform case, Case No. GNR-U-I8-01. The Tax Reform parties agreed
that approximately $3.5 million of Idaho's allocation of tax savings deferred from Januaryl,
2018 through May 31, 2018, will be used to offset the ending balance of the depreciation
regulatory asset as of May 31,2018.4 Since the deferred depreciation balance will be zero
effective June l, 2018, the Company's proposed $4 million recovery is no longer necessary.
Instead, an additional $1.8 million above the approved20lT ECAM deferral will continue to be
collected in this year's ECAM rate, in order to offset the incremental2013 depreciation deferral.
This effectively reduces the ECAM recovery by $2.2 million. Under this proposal, rates for
customer classes would decrease an average of 0.8%. Monsanto's rates under Schedule 400
would decrease 1.0%.
Monsanto supports approval of an ECAM rate which includes $1.8 million for the
incremental depreciation deferral, rather than the Company's proposed continuation of collecting
$4 million. Specifically, Monsanto supports this additional collection for the 2018 ECAM
during the next twelve-month collection period June l, 2018 through May 31, 2019. The
collection of incremental deferral after June 1,2019 should be considered in the next ECAM
filing and only upon a showing it is the more prudent rate making policy.
RESPECTFULLY SUBMITTED this l6th day of May 2018.
RACINE, OLSON, NYE &
BUDGE, CHARTERED
B
RANDA C. BUDGE
a At page 5 of his testimony, RMP witness Michael G. Wilding stated, "The depreciation balance is
projected to be $4.9 million by June I , 20 18, with $ I .9 million additional deferral during the next twelve-
month collection period (June l, 2018 to May 31, 2019).* In discovery, however, the balance at the end
of May 2018 is projected to be much lower at $3.5 million. See RMP Response to Monsanto Data
Request 1.4, Attachment Monsanto 1.4.
COMMENTS OF MONSANTO COMPANY - 4
CERTIFICATE OF MAILING
I HEREBY CERTIFY that on this l6th day of May, 2018, 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,ID 83720-0074
E-mail : diane.holt@puc. idaho. sov
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake city, utah 84111
E-mail : ted. weston(ri pac ificom. com
Yvonne R. Hogle
Senior Counsel
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake city, Utah 841I I
E-mail: Yvonne.hoge[@pacificorp.com
Ronald L. Williams
Williams Bradbury, P.C.
1015 W. Hays St.
Boise,Idaho 83702
Email: ron@williamsbradbury.com
Attorneyfor PICC
Eric L. Olsen
Echo Hawk & Olsen PLLC
505 Pershing Ave., Suite 100
P.O. Box 6119
Pocatello, Idaho 83205
Email: elo@echohawk.com
Attorneyfor IIPA
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RANDALL C. BUDGE
COMMENTS OF MONSANTO COMPAITIY - 5