20190514PIIC Comments.pdf

Ronald L. Williams, ISB No. 3034
Williams Bradbury, P.C.
P.O. Box 388, Boise ID, 83701
Telephone : [phone]
ron@wi ll iamsbradbury.com
Attorneys for PIIC
RECEIVEO
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF PACIFICORP DBA ROCKY
MOUNTAIN POWER FOR APPROVAL OF
A $I5.I MILLION DEFERRAL OF NET
POWER COSTS, AND AUTHORITY TO
INCREASE BY 0.4 PERCENT ELECTRIC
SERVICE SCHEDULE NO. 94 (ENERGY
Case No. PAC-E-19-04
COST
COMES NOW the PacifiCorp Idaho Industrial Customers ("PIIC") regarding the
Application of Rocky Mountain Power ("PacifiCorp" or the "Company") to increase rates
through the 2019 Energy Cost Adjustment Mechanism ("ECAM") to recover deferred costs from
the deferral period of January 1,2018 through December 31,2018 ("Deferral Period"). PIIC
represents large volume electricity consumers of PacifiCorp in ldaho, and appreciates the
opportunity to submit comments.
In its filing PacifiCorp requests Commission authorization to collect $15.1 million in
deferred Net Power Costs from ratepayers through its Schedule 94. The $15.1 million amount
is to be offset by approximately $3.8 million in tax savings that the Company stipulated to in
Case No. GNR-U-18-1. Considering the approximate $9.3 million currently approved for
recovery through the ECAM, the net ECAM rate increase will be about $1.3 million or 0.4Yo.
That amount is further offset by a $1.4 million increase to the Schedule 197 sur-credit, meaning
the June 1,2019 rate impact is expected to be less than one percent.
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PACIFICORP IDAHO INDUSTRIAL
CUSTOMERS COMMENTS
PIIC COMMENTS PAGE I
PIIC's review of PacifiCorp's 2019 ECAM filing was limited in scope and not
comprehensive. Given the short comment window, PIIC perfonned just one round of discovery
and appreciated the Company's short turn-around off PIIC discovery requests. PIIC also
appreciates that Staff also conducted more comprehensive discovery and PIIC has reviewed
PacifiCorp's responses to Staff s discovery requests, as well. Based on PIIC's review of all
discovery, PIIC provides the following comments.
COMMENTS
a. Adopt Filing Requirements Similar to the Energy Balancing Account in Utah
As a preliminary issue, it is necessary to note that PacifiCorp has made a change in the
source data used to calculate Net Power Costs. In previous filings, the Net Power Cost
information used to establish the ECAM deferral was extracted from a database model that was
directly tied to PacifiCorp's financial accounting system. In this filing, PacifiCorp is now
relying on its energy trading system as the record source for calculating net power costs.
PIIC does not necessarily oppose using the energy trading system as the source for
calculating net power costs, provided that the energy transaction data can be reconciled with
PacifiCorp's financial accounts. Entries in an energy trading system will not always align
perfectly with a utility's financial accounting system because the ultimate payments often differ
slightly from the parameters entered into the trading system when a trade was executed. Thus, it
is important for a reconciliation take place to ensure that the energy trading system aligns with
the financial accounting system, where PacifiCorp's actual costs are recorded.
In Utah, PacifiCorp has a number of filing requirements with respect to Energy Balancing
Account ("EBA"), including a requirement to reconcile trade data in the energy trading system
with PacifiCorp's financial accounting system. Accordingly, in PllC Data Request 08, PIIC
requested that PacifiCorp provide copies of the filing requirements submitted in Utah Docket No
PIIC COMMENTS PAGE 2
l9-035-01, including the reconciliation between the energy trading system and the financial
accounting system. Utah Docket No l9-035-01 encompasses the same deferral period at issue
in this proceeding, and the filing requirements from that docket are readily available.
Accordingly, PIIC thought the request would be non-controversial. Notwithstanding, PacifiCorp
objected to PIIC's request and did not provide the requested filing requirement information that
is routinely provided to parties to the Utah EBA.
PIIC recommends that Staff work with PacifiCorp to develop filing requirements for the
ECAM that are substantially similar to those submitted along with the Utah EBA. Given the
relatively short review period used for the ECAM, it is appropriate for PacifiCorp to submit the
same level of information that is submitted in Utah, particularly since parties in Utah are
typically provided a review period of several months, in contrast to the few weeks provided in
the ECAM.
Further, PacifiCorp needs to demonstrate that its calculations using the new source data
remain consistent with the prior calculation. For example, in the new system the costs and
revenues attributed to a transaction are stated net of bookouts. This approach is different from
how the amounts are reported on FERC Form 1, and from the methodology used in the prior
accounting system. In FERC Form l, for example, transactions are stated on a gross basis, with
a separate line item for bookouts. Once again, PIIC does not necessarily object to this treatment.
However, PacifiCorp needs to demonstrate that the two approaches produce the same results by
reconciling back to its FERC Form l. Absent these reconciliations, PIIC is not able to confirm
the accuracy of PacifiCorp's net power cost calculations.
b. Exclude 1974 Pension Withdrawal Liability
In response to Staff Data Request 17, PacifiCorp provided its fuel supply cost
calculations for the Deferral Period. In PacifiCorp's response, it was apparent that the fuel
PIIC COMMENTS PAGE 3
supply cost calculations for Hunter and Huntington include approximately $3 million of cost
related to the settlement of the United Mine Workers Association (UMW A) 1974 Pension
Withdrawal Liability.
Treatment of the costs associated with the UMWA 1974 Pension Withdrawal Liability
was addressed in Case No PAC-E-14-10, and it was PIIC's understanding that these amounts
were being deferred for consideration in PacifiCorp's next general rate case. I PacifiCorp has
made no request for Commission author\zation to change the treatment of 1974 Pension
Withdrawal Liability to be recovered through the ECAM.
PIIC requests that the Commission require PacifiCorp to exclude all amounts associated
with 1974 Pension Withdrawal Liability in the ECAM, consistent with Order No 33304, and
require that those amounts instead be considered in PacifiCorp's next general rate case. The
impact of this change on the deferal balance is approximately $0.2 million.
In the alternate, if the Commission finds it reasonable for PacifiCorp to include the
amortization of the 1974 UMWA Pension Withdrawal Liability in the ECAM, PIIC requests
other beneficial aspects of the Deer Creek Mine closure also be considered in the ECAM. For
example, in response to PIIC Data Request 07, PacifiCorp confirmed that it is currently deferring
FAS 106 savings resulting from the settlement of the UMWA Retiree Medical Plan, another
component of the Deer Creek Mine closure subject to deferral.
The settlement of UMWA Retiree Medical Plan was expected to produce material
ongoing savings associated with reduced FAS 106 expense. The savings was originally
See In re Application d Roclry Mountain Power for Approval of a Transaction to Close Deer Creek Mine
and for Deferred Accounting Order, PAC-E-14-10, Final Order No.33304 at 3-4.
PIIC COMMENTS PAGE 4
I
calculated by Towers Watson to be $9.7 million per year on a total Company-basis.2 The ldaho-
allocated amounts were provided in response to PIIC Data Request 07.
In Wyoming and Utah, PacifiCorp is already returning the $9.7 million in annual FAS
106 savings as a component of its annual power cost mechanism filings. In Idaho, this annual
FAS 106 savings is being deferred for consideration in PacifiCorp's next general rate case. To
the extent that the UMWA 1974 Pension Withdrawal Liability is to be considered in the ECAM,
the larger savings associated with settlement of the UMWA Retiree Medical Plan are also
appropriately included in the ECAM.
CONCLUSION
PIIC appreciates this opportunity to provide comments on PacifiCorp's 2019 ECAM
filing. In summary, PIIC requests that PacifiCorp and Staff collaborate to develop filing
requirements substantially similar to those provided to Utah parties, to assist Staff and
Intervenors in their review of annual ECAM filings. Further, PIIC requests that an adjustment be
made to remove losses associated with the UMWA 1974 Pension Withdrawal Liability from the
cost of coal for the Hunter and Huntington power plants.
Dated this l4th day of May ,2019.
Respectfully submitted,
tst Ro*Ll L. W;ll;@*t
Ronald L. Williams
Williams Bradbury, P.C.
Attorneys for PIIC
See In re the Application of Rocky Mountain Powerfor Approval of the 2016 Energt Balancing Account,
Utah PSC Docket no l6-035-01, Direct Testimony of Bradley G. Mullins, at7:122-133.
PIIC COMMENTS PAGE 5
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CERTIFICATE OF MAILING
I HEREBY CERTIFY that on this 14ft day otlv[ay, ZOlg,I caused to be served a true and
correct copy of the foregoing document upon the following individuals in the manner indicated
below:
Diane M. Hanian, Secretary
Idaho Public Utilities Commission
P.O. Box 83702
472 W . Washington Street
Boise, ID 83702-0074
E-Mail: [e-mail]
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
1407 West North Temple, Suite 330
Salt Lake city, uT 84116
E-Mail: [e-mail]
Yvonne R. Hogle
Assistant General Counsel
Rocky Mountain Power
1407 WestNorth Temple, Suite 320
Salt Lake city, uT 84116
E-Mail : [e-mail]
Data Request Response Center
PacificCorp
825 NE Multnomah, Suite 2000
Portland, OR97232
E-Mail : datarequest@pacifi corp.com
Karl Kline
Deputy Attorney General
Idaho Public Utilities Commission
472 W . Washington (837 02)
PO Box 83720
Boise, lD 83720
Email: [e-mail]
Randall C. Budge
Racine, Olson, Nye & Budge, Chtd.
201E. Center
PO Box 1391
Pocatello, ID 83204-1391
E-Mail: [e-mail]
Attorney for Bayer
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Jim Duke
Idahoan Foods
357 Constitution Way
Idaho Falls, ID 83742
E-Mail : [e-mail]
PIIC
Kyle Williams
BYU Idaho
Email: [e-mail]
PIIC
Val Steiner
Nu-West Industries, Inc.
Email: [e-mail]
PIIC
Bradley G. Mullins
333 S.W. Taylor, St 400
Portland, OR97204
Email: [e-mail]
PIIC
Brian Collins
Maurice Brubaker
Brubaker & Associates
16690 Swingley Ridge Rd, #140
Chesterfild, MO 63017
[e-mail]
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tsr Ro,*ll L. W;ll;a*t
Ronald L. Williams
Williams Bradbury, P.C.
Attorney for PIIC
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