20200518Comments.pdf

WILLIAMS BRADB
ATTORNEYSATLAW
TCEIVED
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May 14,2020
Ms. Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
P. O. Box 83720
Boise, D 83720-0074
Re: PAC-E-20-02
Dear Ms. Hanian:
Please find enclosed for filing the original and seven copies PacifiCorp Idaho
lndustial Customers Comments filed today in the above referenced case.
Thank you for your assistance in this matter. Please feel free to give me a call should
you have any questions.
Sincerely,
H RnVlrll;.*4
Ronald L. Williams
Williams Bradbury, P.C.
Attorneys for PtrC
RLW
Enclosures
P.O. Box 388 - Boise, ID 83701
Phone: 208-U4-6633 - wvm.williamsbradbury.com
Ronald L. Williams,ISB No. 3034
Williams Bradbury, P.C.
P.O. Box 388
Boise ID, 83701
Telephone : [phone]
ron@williamsbradbury. com
Attomeys for PIIC
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ROCKY MOUNTAIN ) Case No. PAC-E-20-02
POWER REQUESTING APPROVAL OF
$21.2 MILLION NET POWER COST
DEFERRAL
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COMMENTS OF PACIFICORP
IDAHO INDUSTRIAL CUSTOMERS
COMES NOW the PacifiCorp Idaho Industrial Customers ("PIIC")
regarding the Application of Rocky Mountain Power ("PacifiCorp" or the "Company") to
increase rates through the 2020Energy Cost Adjustment Mechanism ("ECAM") to
recover deferred costs from the deferral period of January l, 2019 through December 3 1 ,
2019 ("Deferral Period"). PIIC represents large volume electricity consumers of
PacifiCorp in Idaho and appreciates the opportunity to submit comments.
In its filing PacifiCorp requests Commission authorization to collect $22,315,565
in deferred Net Power Costs from ratepayers through its Schedule 94, which will result in
an ECAM balance of $27,209,505. Relative to current rates, the proposed net ECAM
rate increase is $8,615,359 millionor 3.lYo.
PIIC's review of PacifiCorp's 2019 ECAM filing was limited in scope and not
comprehensive. Given the very short 16 day period of time between the date of Notice of
the case (April28, IPUC Order No. 34648) and the date for comments (May 14), PIIC
PIIC COMMENTS Case No. PAC-E-20-20, Page 1
was limited in its ability to analyze the filing and perform adequate discovery. PIIC was
able to submit one round of discovery and appreciated the Company's short turn-around
off PIIC discovery requests.
Based on PIIC's review of its discovery, PIIC provides the following comments.
COMMENTS
A. Repowering Lost Energt
In Data Request No. 06 PIIC asked PacifiCorp for its best estimate of the
cost of acquiring replacement power associated with each wind plant taken out of service
for repowering. The Company's response was o'The requested information is not
available. The Company does not track megawatt-hours (MWh) not produced by its wind
generation resources." The Company's answer did not speak to whether it could have
"estimated" this value, as was the intent of the request.
The lost energy from repowering is a key cause of the difference between
PacifiCorp's actual net power costs and the ECAM base. Yet, the Company claims it is
unable to estimate this value. Nor did the Company mention the cost of lost energy
associated with repowering as a recoverable component of the Resource Tracking
Mechanism (RTM) in its initial filing in Case No. IPC-E-PAC-E-17-06.
PIIC was disappointed by PacifiCorp's response to Data Request No. 6.
PacifiCorp is requesting a significant rate increase through the ECAM as a result of its
actual net power costs being higher than the ECAM base. However, PacifiCorp suggests
that it has not tracked the lost value of energy from repowering, which is a material
component of this ECAM cost increase. This implies that PacifiCorp is not concerned
with this material cost driver, nor with passing a material rate increase onto customers.
PacifiCorp was not able to identiff any place in testimony, or in the
economic models used in PAC-E-17-06, where the lost energy associated with repower
was discussed. ln response to PIIC Data Request 8, PacifiCorp states that reduced
generation was included in the models in the repowering proceeding. Notwithstanding,
PIIC has no record of the reduced generation being considered in the repowering
proceeding. Since the Stipulation in Case No. PAC-E-17-06 did not address this issue,
PIIC COMMENTS Case No. PAC-E-20-20, Page2
PIIC requests the Commission consider whether it is appropriate to include costs of
repowering lost energy in the ECAM.
B. Repowering Test Enerw
In PIIC Data Request 07 PacifiCorp identified $4,906,847 of test energy
costs included in the deferral period. This test energy is associated with PacifiCorp's
repowering activities and represents energy from a facility that is delivered before it
reaches its commercial operation date. Any electricity produced while a facility has been
taken out of service for repowering was considered test energy by the Company.
Test energy is an additional amount added to net power costs as an
expense (or as a contra-revenue), with no associated cost. The expense amount for the
test energy is based the market value of the energy less the cost of fuel. For repowering
there are no fuel costs, so the test energy expense is just the value of the energy produced
while a facility was assumed to be removed from service. Thus, even though PacifiCorp
incurred no actual variable cost associated with the production of wind test energy during
repowering, PacifiCorp includes the additional test energy costs in actual NPC. In that
regard, the value assigned to test energy by the Company is an estimate by the Company
of that energy's value.
PIIC's understanding is that the ordinary treatment for test energy is that
test energy generation is considered an offset to the plant balances ofnew generation.
During the start-up period a power plant may dispatch in an inefficient way, so it may be
appropriate for the fuel costs and the value of energy during the startup period to be
capitalized.
This case is different, however. In contrast to the ordinary situation of
constructing a new combined cycle power plant, the underlying assets already exist, and
the repowering facilities have no fuel costs.
PacifiCorp did not undertake the effort of tracking or estimating the value
of lost energy during the periods that wind facilities were taken out of service for
repowering. PacifiCorp did, however, track and estimate the value of the actual energy
produced during the periods that the wind facilities were taken out of service for
PIIC COMMENTS Case No. PAC-E-20-20, Page 3
repowering, and then removed that value from actual NPC. Viewed in this context, test
energy is an imputed replacement power cost during the repowering period.
Customers are already faced with a significant amount of replacement
power costs in the periods of time that wind facilities were taken out of service for
repowering. Accordingly, it is not reasonable to include additional test energy expense to
remove the value of the energy that was actually produced in the same period of time. As
PacifiCorp noted in response to Data Request 05, there is not necessarily a clear
demarcation for when a facility is in or out of service, so the test energy values are
somewhat arbitrary. Further, in PIIC Data Request 02, PacifiCorp noted that it has no
record of hourly electric market prices in the deferral period. Absent hourly prices,
PacifiCorp would have no way to calculate the value of lost energy associated with
repowering, so PIIC also has unresolved concerns over how the test energy amounts were
calculated.
PIIC recommends removing the repowering test energy from the ECAM.
Requiring customers to pay for the cost of lost energy, and the cost of test energy as
estimated by PacifiCorp is unreasonable.
C. CA Greenhouse Gas Allowonce Purchases and UT Retail Net Metering
Expense
In its FERC Form 1, page 321.I9, PacifiCorp detailed purchased power
expense of $4,420,402 associated with CA Greenhouse Gas Allowance Purchases. On
page 327.18, PacifiCorp also details $2,390,583 in purchased power expenses associated
with the Utah Retail Solar Customers, the retail net metering program in Utah.
PIIC recommends that the cost associated with both of these programs be
situs assigned to the respective states and excluded from net power costs. Idaho
customers should not have to pay $88.86/MWH to pay for the output from Utah retail net
metering customers. The Utah Net Metering Program is more appropriately recovered
from Utah customers under the terms of the MSP agreement. Further, the cost of
PIIC COMMENTS Case No. PAC-E-20-20, Page 4
purchasing greenhouse gas allowances is a cost of Californians to pay, not Idaho
customers.
D. Grant Meaningful PrioriY Assignment
In the footnotes to Page 300 of PacifiCorp's 2019 FERC Form 1,
PacifiCorp detailed $533,333 of revenues for assigned power purchase agreements.
PacifiCorp has accounted for these revenues in FERC Account 461.1 Other Electric
Revenues but has not included the same revenues in acfual NPC. The revenues are
proceeds from PacifiCorp's reassignment of its interest in the Grant Meaningful Priority
contract. Sine the cost of the contract would otherwise be included in NPC, it would be
unreasonable to exclude the assignment revenues from the ECAM
E. Outages
PIIC did not conduct discovery of the outages in the deferral period. There
was, however, a major Lakeside 2 otttage in the Deferral Period, and PIIC requests that
PacifiCorp justiff the prudence of that outage in reply comments.
PIIC appreciates the opportunity to provide these comments and looks
forward to working with the Commission, Commission Staff, PacifiCorp and other
Intervenors in this case to resolve the above issues.
Dated this 14th day of May,2020.
Respectfully submitted,
Rr*r't /UrM
Ronald L. Williams
Williams Bradbury, P.C.
Attomeys for PIIC
PIIC COMMENTS Case No. PAC-E-20-20, Page 5
CERTIFICATE OF' MAILING
I HEREBY CERTIFY that on this 14th day of Mav 2020,1caused 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,lD 83702-0074
E-Mail: [e-mail]. gov
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Idaho Deputy Attorney General
Idaho Public Utilities Commission
47 2 W . Washington (837 02)
PO Box 83720
Boise, ID 83720
Email: Karl.Kline@,puc.idaho. gov
Ted Weston
Idaho Regulatory Affairs Manager
Rocky Mountain Power
1407 West North Temple, Suite 330
Salt Lake city, uT 84116
E-Mail: ted.weston@pacifi corp.com
Emily L. Wegener
Assistant General Counsel
Rocky Mountain Power
1407 West North Temple, Suite 320
Salt Lake City, UT 84116
E-Mail: Emilv.wegener@pacifi corp.com
Data Request Response Center
PacificCorp
825 NE Multnomah, Suite 2000
Portland, OR97232
E-Mail: datarequestf@pacifi corp.com
Adam Lowney
McDowell Rackner Gibson PC
419 SW 11ft Ave., Suite 400
Portland, OR 97205
Email: [e-mail]
Attorney for RMP
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Randall C. Budge
Racine, Olson, Nye & Budge, Chtd.
201 E. Center
PO Box 1391
Pocatello, ID 83204-1391
E-Mail: rcb@racinela*.n"t
Attomey for Bayer
Jim Duke
Idahoan Foods
357 Constitution Way
Idaho Falls,lD 83742
E-Mail: [e-mail]
PtrC
Kyle Williams
BYU Idaho
Email: [e-mail]
PIIC
Val Steiner
Nu-West Industries, Inc.
EmailVal. [e-mail]
PtrC
Bradley G. Mullins
333 S.W. Taylor, St 400
Portland, OR97204
Email: [e-mail]
PtrC
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tst Roc*ll L lflall;ta
Ronald L. Williams
Williams Bradbury, P.C.
Attorney for PIIC
PIIC CERTIFICATE OF MAILING Page2