20200521PacifiCorp Reply Commments.pdf

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May 21,2020
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VIA ELECTRONIC DELIVERY
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
I l33l W Chinden Blvd.
Building 8 Suite 20lA
Boise,lD 83714
Re:CASE NO. GNR-U.20.03
IN THE MATTER OF DEFERRED ACCOUNTING OF INCREMENTAL COSTS
ASSOCIATED WITH THE COVID.19 PUBLIC IIEALTH EMERGENCY
Dear Ms. Hanian:
Please find Rocky Mountain Power's electronic filing of these Comments in the above referenced
matter.
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Manager at (801) 220-
2963.
Very truly yours,
Vice President, Regulation
"^-D
Adam Lowney (158#10456)
McDowell Rackner Gibson PC
419 SW 1lth Avenue, Suite 400
Portland, OR 97205
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
BEFORE THE IDAIIO PUBLIC SERVICE COMI\ISSION
IN TIIE MATTER OF DEFERREI)
ACCOTINTING OF INCREMENTAL
COSTS ASSOCIATED WITH TIIE
COVID-l9 PUBLIC IIEALTH
EMERGENCY
CASE NO. GNR.U.2O.O3
COMMENTS
I. INTRODUCTION
Rocky Mountain Power, a division of PacifiCorp, ("Rocky Mountain Power"), submits
these reply comments to the comments submitted by the Staff of the ldaho Public Utilities
Commission ("Staff') and the ldaho Conservation League ("ICL") on the consolidated
Applications for a deferred accounting order for incremental costs associated with the COVID-I9
public health emergency.
II. BACKGROUND
l. On March 13,2020,Idaho Governor Brad Little issued a Proclamation declaring a
state of emergency and providing directives to combat the spread of SARS-CoV-2 ("COVID-19"),
to provide essential services and limit public exposure (the "Emergency").
2. On April 3,2020, Rocky Mountain Power submitted its application to the Idaho
Public Utilities Commission ("Commission") requesting an accounting order, allowing Rocky
Mountain Power to defer, for future amortization, certain costs incured related to the Company's
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response to the COVID-19 public health emergency.l Several other Idaho public utilities including
Avista Corporation, Falls Water Company ("Falls Water"), Gem State Water Company ("Gem
State"), and Idaho Power Company ("Idaho Power") applied to the Commission for orders
authorizing similar treatment for COVID-I9 related costs (collectively and including Rocky
Mountain Power, the "Idaho Utilities"). None of the Idaho Utilities sought rate increases or
decisions on rate recovery in their applications.2
3. Given similar requests of the Idaho Utilities, Staff recommended the Commission
consolidate the various applications into a general docket to address whether creation of a
regulatory asset and deferral would be appropriate in light of the public health emergency. The
Commission subsequently accepted the StafPs recommendation, and opened this generic
proceeding which consolidates the applications of the Idaho Utilities.
IIL COMMENTS
4. Rocky Mountain Power appreciates this opportunity to respond to the ICL and Staff
Comments. This consolidated proceeding is an efficient approach to addressing the very similar
requests of the Idaho Utilities'applications for approval of deferred accounting for COVID-I9
related costs.
5. Rocky Mountain Power has requested that 2019 be used as a baseline from which
to calculate the impact of the COVID-19 public health emergency.20l9 was selected not only due
to it being the year immediately prior to the public health emergency, but also because its
uncollectible rates for that year are reasonable when compared to its average uncollectible rates
over time. Staff supports Rocky Mountain Power's use of a 2019 baseline in its comments.
1 See, CaseNo.PAC-E-20-04 (Rocky Mountain Power's application).
2 See,Case Nos. AVU-E-20-03 and AW-G-20-03 (Avista electric and gas expenses); FLS-W-20-02 (Falls Water);
GSW-W-20-01 (Gem State); IPC-E-20-19 (Idaho Power).
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6. Rocky Mountain Power also did not seek deferral of any decline in revenues
associated with lower customer usage as a result of the public health emergency. While Rocky
Mountain Power anticipates there could be an appreciable impact, it takes no position on whether
a deferral of lost revenues related to the public health emergency proposed by other utilities is
appropriate. Should the Commission approve deferral of lost revenues as a general matter, Rocky
Mountain Power would like the opportunity to include qualiffing lost revenues in its COVID-I9
related regulatory asset. StafPs comments indicated that it does not support any deferral of costs
related to load declines resulting from COVID-I9 impacts.
7. Rocky Mountain Power seeks approval of a carrying charge for the deferred costs.
The proposed carrying charge is not intended to provide the Company a return on these defened
amounts, but rather to account for the otherwise lost time value of money that it is deferring
recovery of. [n order to conservatively account for this, Rocky Mountain Power elected not to
propose using its weighted average cost of capital, but instead proposed to use the more
conservative customer deposit rate. When coupled with the Rocky Mountain Power's conservative
baseline, and the limited request for which costs to defer, Rocky Mountain Power's proposal is a
balanced approach that will allow it to reasonably recovery specifically identifiable costs related
to its response to this unprecedented public health emergency. Staffs comments oppose the
application of a carrying charge, which Idaho Power also requested. Staff s comments state that
the deferred costs would not, absent a deferral, be recoverable and that a carrying charge is
therefore inappropriate. Rocky Mountain Power, again, notes that its application is limited in
scope, and that the COVID-I9 public health emergency is truly unprecedented. It will have definite
negative impacts to the Company beyond those that it seeks to create a regulatory asset for in this
proceeding, and the conservative carrying charge it proposes is therefore just and reasonable.
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8. Staffalso commented that additional expense categories deferred should be offset
by savings that may be realized due to COVID-l9 responses. Staff cites as examples reduced
employee training and travel and fuel expense for fleet vehicles. Rocky Mountain Power
anticipates that such reductions are likely to be small, but recognizes that any reductions must be
reasonably examined when it seeks rate recovery for any COVID-19 related deferrals approved by
the Commission at a later time.
9. The ICL's comments largely supports the Idaho Utilities deferral applications, and
recommends streamlining access to customer assistance and conservation programs. As always,
and especially in light of the ongoing impacts of the COVID-I9 pandemic on vulnerable
customers, Rocky Mountain Power is interested in continuing to work with ICL and others to
ensure reasonable access to customer assistance and conservations programs. Rocky Mountain
Power recognizes that such programs become more critical when, as now, more of its customers
are facing tough economic circumstances.
10. The ICL's comments also recommended the use of energy cost recovery bonds and
a long amortization period to recover COVID- l 9 related costs. Rocky Mountain Power appreciates
ICL's creative thinking in this regard, but is not convinced that such instruments are an appropriate
tool for the costs the Company seeks to defer here. At this time, Rocky Mountain Power is
primarily seeking deferral of bad debt related expenses, whereas energy cost recovery bonds
appear to be aimed at recovery of commodity related expenses. In any case, Rocky Mountain
Power is currently seeking approval only of the creation of a regulatory asset to defer COVID-19
related costs, and not approval of future recovery. Accordingly, proposals for specific recovery
mechanisms are premature and need not be addressed in the Commission's decision in this
proceeding.
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IV. CONCLUSION
Rocky Mountain Power appreciates the Commission's attention to its deferral request and
the efficiency of pulling the similar requests of the various Idaho Utilities into a single proceeding
to address them more generally through modified procedures. The Company also appreciates the
thoughtful comments of the ICL and Staff. Rocky Mountain Power believes that the requests in its
April 3, 2020 application remain a just and reasonable approach to accounting for unanticipated
costs in light of the ongoing COVID-19 public health emergency. Therefore, it reiterates its request
for approval of the creation of a regulatory asset to track and defer COVID-I9 related costs based
on a 2019 baseline, and to apply the conservative customer deposit rate of 2 percent to such
deferred amounts as a carrying charge to account for the otherwise lost time value of money.
DATED this 2l't day of May,2020.
Respectfu lly submitted,
Adam Lowney (158#10456)
McDowell Rackner Gibson PC
419 SW I ln Avenue, Suite 400
Portland, OR 97205
Telephone: [phone]
Fax: [phone]
Email: [e-mail]
Attorneyfor Roclry Mountain Power
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CERTIFICATE OF SERVICE
I hereby certiff that on this 2l't of May, 2020,Lcaused to be served via email a true and
correct copy of the foregoing to the following:
Service List
GNR-U-20-03
Avista Utitities
David J. Meyer
P.O.Box3727
l4l I E. Mission Ave., MSC 13
Spokane, WA99220-3727
Dav i d. nr ey er(g)av i stac orp. com
Patrick Ehrbar
P.O.Box3727
l4l I E. Mission Ave., MSC 27
Spokane, WA99220-3727
patrick.ehrbar@avistacorp. com
Falls Water Company
Preston N. Carter
601 W. Bannock St.
Boise, lD 83702
prestoncarter(E givenspursle-v.com
[e-mail]
Eric W. Nelson
NW Natural 220 NW 2nd Ave.
Portland, OR97209
[e-mail]
Gem State Water Company
Preston N. Carter
601 W. Bannock St.
Boise, lD 83702
prestoncarter@ givenspurs ley.conr
[e-mail]
Eric W. Nelson
NW Natural 220 NW 2nd Ave.
Portland, OR 97209
[e-mail]
Idaho Power Company
Lisa D. Nordstrom
Matt Larkin
l22l West Idaho St (83702)
P.O. Box 70
Boise, ID 83707
[e-mail]
mIarkinGDidahopower.com
[e-mail]
Rocky Mountain Power
Ted Weston
1407 W. North Temple, Suite 330
Salt Lake City, UT 84116
ted.weston@paci fi corp.com
[e-mail]
i acob.mcdermott@pac iflcorp.com
em i ly.wes,ener@pacifi corp.com
Data Request Response Center
Rocky Mountain Power
825 NE Multnomah St. Suite 2000
Portland, OR97232
datarequest@paci fi corp.com
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Industrial Customers of Idaho Power
Peter J. Richardson
Richardson Adams, PLLC
515 N.27th St.
P.O. Box 7218
Boise, lD 83702
[e-mail]
Dr. Don Reading
6070 Hill Road
Boise, Idaho 8373
dreadins@mindsnrin s.com
Monsanto Comoanv
Randall C. Budge
Thomas J. Budge
Racine Olson, PLLP
P.O. Box l39l
Pocatello, ID 83204-1391
[e-mail]
[e-mail]
Brian C. Collins
Maurice Brubaker
Brubaker & Associates
16690 Swingley Ridge Rd., #140
Chesterfield, MO 63017
bcoll [e-mail]
[e-mail]
Idaho Conserryation League
Benjamin J. Otto
710 N 6th Street
Boise, Idaho 83702
botto@idahoconservation. org
Dated this 2l't day of May,2020
Ver.
Katie Savarin
Coordinator, Regulatory Operations
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