20200728Comments.pdf

Beniamin l. Otto (ISB No. 8292)
710'N 6th Street
Boise, ID 83701
Ph: [phone]x12
Fax: [phone]
[e-mail]
Attomey for the Idaho Conservation League
IN THE MATTER OF DEFERRED
ACCOT'NTING OF INCREMENTAL
COSTS ASSOCIATED WITH THE
COVID-Tg PUBLIC HEALTH
EMERGENCY.
GNR-U-20-03
ICL'S COMMENTS
iiECEIVEG
?.3:0 JUL 28 At{ l0: 5l
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BBFORT THE IDAHO PUBLIC UTILITIES COMMISSION
The Idaho Conservation League (lCL) submits the following comments regarding
accounting methods and policy considerations for the Commission to consider. Like many ldaho
businesses, ICL has experienced unexpected economic and workplace impacts in order to
comply with the Govemor Little's Stay Home and subsequent Stay Healthy orders. We strongly
support the Idaho Govemment's efforts to protect public health during this pandemic. And we
appreciate the Idaho utilities who have taken proactive measures to help their customers maintain
access to affordable, teliable utility services. In these comments, ICL recommends the
Commission:
o Provide clear guidance to utilities to continue suspending disconnections and fees
for a time-period aligned to the public health and economic conditions, rather than
any specific date.
o Encourage utilities to streamline access to customer assistance and conservation
programs, and work with stakeholders to leverage non-utility dollars to support
these programs.
cAsE NO. GNR-U-20-03
IDAHO CONSERVATION LEAGUE
COMMENTS
May 14,2020
a
a
Distinguish between costs incurred due to maintain customer access to service
and potential impacts to overall revenues due to changed sales.
Begin developing methods to enable utilities to recoup prudently incurred
expenses through low cost financing options, such as the Energy Cost Recovery
Bonds in Idaho Code $61-1501 - 56l-1508.
Continue No-Disconnect and No-Fee Policies
Govemor Little's Stay Safe order is attempting to reopen business activity in the state.
ICL's assessment ofthe public health situation, in particular the lack of adequate testing capacity
and an effective vaccine, is that Idahoans should expect this process to extend for several more
months. For example, the Idaho Press published an article May l3s where officials with St.
Luke's and St Alphonsus comment on the likely continual increase of COVID-19 cases in Idahc,
the severity ofthe illness, the ongoing risk of overwhelming Idaho's medical resources, and the
expectation that vaccine development is a long way off.l Further, many ldahoans face tough
financial situations, a fact recognized by the utilities here. Boise State Public Radio reports that
a Fitch Ratings poll concluded 14% of Idaho workers filed for unemployment during the last
week of April.2 Out of work Idahoans continue to experience sigrrificant delays accessing
assistance from the Idaho Department ofLabor.s The need for utilities to continue to suspend
I Nampa health care olficiql an$ler commonCOVID-19 questions, Erin Bamer, ldaho Press, published May 13,
2020. Available here: hftps;,ltrvurl. idahopress.conr,/coronav irus,/nanrpa-heallh-care-ollic ials-ansrrer-contnron-cor id-
I 9-qucstions,/drticlc l5,1cf45f-a9i l-5c I b-8479-bc46c5-18 763 LhtmI2 Fit"h Rotingt, 11.1% of ldaho Workforce is Llnemployed, Troy Oppie, Boise State Public Radio. published May 8,
2020. Available at:le or llitch-rarin - l4l-idaho-work
unemploved#strearrr,/0
1 Unemplol's4 in 14.tho and wondering: tllhol's next? ScofiLogan, Idaho News CBS2. published on May 13, 2020.
Available here: https:r',/idahoneus.com/ncws/coronavirus/114.enrplo1,ed"in-id1rfrq3!d:!vondqing-\ahats-ncxt
GNR-U-20-03
ICL'S COMMENTS 2 May 14,2020
disconnections, waive fees, and incur direct expenses to ensur€ the protecticn of essential utility
workers will persist for months as we all navigate the ongoing public health crisis.
We recommend the Commission Order in this case set forth clear guidelines for utilities
to continue the current practice ofsuspending disconnections and waiving fees for a time period
that is tied to the public health and economic situation faced by ldahoans, and not choose some
arbitrary date to end these compassionate practices.
Streamline Eligibility and Increase Bill Assistance and Conserration Programs Funding
To account for the impacts Idahoans face during the public health and economic crisis,
ICL also urges the Commission to use this order to direct utilities to facilitate greater customer
access to bill assistance and conservation programs. ICL supports additional accounting
treatment to track any expenses related to these activities. As customers continue to stay home to
stay healthy and continue to experience their own economic impacts, it is more important than
ever to ensure Idahoans can keep the lights on and the water flowing while being able to feed
their families. For example, the Commission could direct utilities to streamline qualifications for
assistance programs so that Idahoans who get public assistance ofany kind are automatically
eligible for utility sponsored programs. Another example is the Commission could encourage
utilities to partner with the Community Action Partnership Association oflldaho, and use the
utilities' considerable lobbying power to address continued delays in the state's distribution of
federal funding for energy assistance programs. ICL recognizes that accessing homes and
business to provide conservation programs is problematic. We encourage the utilities to continue
efforts to provide low cost tips by partnering with media channels and community partners, and
increase distributions of energy saving devices by mail to help Idahoans keep energy bills
affordable.
GNR-U-20-03
ICL'S COMMENTS 3 May 14,2020
Distinguish Between Costs Incurred to Continue Customer Access and Revenue Impacts
Related to Changed Sales
Another issue of equity between utilities and customers is whether the Commission
should include accounting for potential impacts from reduced sales, as requested by Avista and
Idaho Power. The financial impacts to utilities from suspending disconnections and fees that
arise from ensuring customers can maintain access to essential services is distinct from any
potential impact ofreduced sales. Fluctuations in sales is a normal business risk faced by the
utilities every day as weather, economic activity, and commodity prices diverge from forecasts
used to set rates. While revenues may not match forecasts used to set rates, expenses may also
diverge from rate case assumptions due to very low wholesale energy process, natural gas prices,
and potentially lower costs of service due to flatter load profiles associated with changed use
profiles. At the very least, if the Commission does allow for tracking ofreduced revenue sales,
the Commission should require accounting for differences in the cost ofservice. ln the
altemative to tracking costs and revenues through a special accounting order. the Commission
could rely on establish rate mechanisms, such as the power cost and fixed cost adjustments
mechanisms, in place at some utilities, designed to account for deviations from lbrecasts.
It is in the public interest for the Commission to carefully balance the equities between
utilities and customers. No Idaho family or business has the ability to recoup forgone revenue
from reduced sales or wages, even those deemed essential by Govemor Little's recent orders.
Further, it is not at all clear what the scale of impact to overall utility revenues will be due to
changed sales. ICL notes that Idaho Power reported on April 30,2020 that despite the
"headwinds" related to COvID-19 *IDACORP still recorded its second-highest first quarter
GNR-U-20-03
ICL'S COMMENTS 4 May 14,2020
earnings per share in nearly 20 years" and affirmed the full year eamings guidance.a While this is
just one utility example, ICL notes that impacts ofchanged sales, changed costs, and various rate
tracking mechanisms means this issue is unique to each utility and therefore is not appropriate to
resolve in the generic docket.
To appropriately balance equity between utility and customers, ICL recommends the
Commission carefully distinguish between costs incurred to maintain customer access to services
and the overall revenue impacts ofchanged utility sales. For those utilities that do not have
commodity or fixed cost tracking mechanisms, we urge the Commission to begin working with
these utilities to develop them.
Begin Ileveloping Low-Cost Financing for Recovery of Prudent Expenses
ICL acknowledges the costs incuned by Idaho utilities to maintain service while some
customers are unable to pay can become significant. We recommend the Commission begin
considering novel methods to allow utilities to recoup these costs while mitigating impacts to
utility customers. For example, Avista proposes to track expenses for uncollectable accounts and
not accrue interest on the unamortized balances.5 Because publicly traded companies have access
to historically large amounts of low-cost capital as part ofthe Federal Reserve's recent actions,
ICL urges the Commission to apply Avista's proposal to all utilities and not charge customers
interest on these accounts. This treatment appropriately balances the equity between utilities and
customers by signaling to utilities and shareholders these expenses will eventually be recouped,
but not compounding the problem by charging customers interest. Also, when it comes time to
recover these prudently incurred expenses, ICL urges the Commission to consider long
4 IDACoRP First Quarter 2020 Results press release, available at
) r.lltlddE! !!!IIDA .s1-r cle4q 20 200-l.i 0 e11! thttos, wu \\ irlacor)inc.conI Avista Application at 4.
GNR-U-20-03
ICL'S COMMENTS 5 May 14,2020
amortization periods and using low-cost capital products to mitigate the rate impact to Idahoans.
To achieve this, ICL recommends the Commission and Idaho utilities consider using the Energy
Cost Recovery Bond process in ldaho Code 61-1501 - 6l -1508.
Conclusion
ICL reiterates our appreciation to the Commission and Idaho utilities for ensuring
Idahoans' continued access to reliable utility services. We recommend the Commission:
e Provide clear guidance to utilities to continue suspending disconnections and fees
for a time-period aligned to the public health and economic conditions, rather than
any specific date.
. Encourage utilities to streamline access to customer assistance and conservation
programs, and work with stakeholders to leverage non-utility dollars to supporr
these programs.
o Distinguish between costs incurred due to maintain customer access to service
and potential impacts to overall revenues due to changed sales.
o Begin developing methods to enable utilities to recoup prudently incurred
expenses through low cost financing options, such as the Energy Cost Recovery
Bonds in Idaho Code $61-1501 - $61-1508.
Respectfully submitted this l4rh day of May 2020
/s/ Beniamin L Otto
Benjamin I. Otto
Idaho Conservation League
GNR-U-20-03
ICL'S COMMENTS 6 May 14,2020
CERTIFICATE OF SERVICE
I hereby certifo that on this l4th day ofMay,2020, I delivered true and correct copies of
the foregoing COMMENTS to the following persons via the method of service noted:
/s/ Beniamin l. Otto
Electronic mail onlv (See Order 34602):
Idaho Public Utilities Commission
Diane Hanian, Secretary
[e-mail]
Avista Urtlities
David J. Meyer
Patrick Ehrbar
David. meyer@avistacorp,com
Patrick. [e-mail]
Idaho Power
Lisa D. Nordstrom
Matt Larkin
[e-mail]
[e-mail]
[e-mail]
Rocky Mountain Power
Ted Weston
Ted.weston@pacifi corp,com
[e-mail]
lacob.mcdermott@pacificorp. com
Emily.wegener@pacifi corp.com
datarequests@pacifi corp.com
Falls Water Company/Geffi State Water
Company
Preston N, Carter
Givens Pursley, LLP
[e-mail]
kendrah@givenspursley,com
Eric W. Nelson, NW Natural
Eric.nelson@nwnatural
lndustrial Customers of Idaho Power
Peter I. Richardson, Richardson Adams
PLLC
[e-mail]
Dr. Don Reading
[e-mail]
GNR-U-20-03
ICL'S COMMENTS
Monsanto Company
James R. Smith, Monsanto
Jim.smith [e-mail]
Randle C. Budge, Racine Olson PLLP
[e-mail]
Thomas J. Budge, Racine Olson, PLLP
[e-mail]
Brian C. Collins, Brubaker & Associates
[e-mail]
Maurice Brubaker, Brubaker & Associates
mbrubaker@consultbai. com
Suez ll/ater ldaho, Inc
Michael C. Creamer
Preston N. Carter
Givens Pursley, LLP
mcc lZl s i vensDursl ev.com
prc ston c arterag-r g i v en sp urs ley. co m
kendrahlOeivensDursley.com
Marshall Thompson
SUEZ Water Idaho Inc.
marshal [e-mail]
Int ermo unt ain G a s C ompany
Preston N. Carter
Givens Pursley, LLP
prc ston c- art crliji e i v c n so u rs lc.v". c o nr
kendrahlrt)e i vensourslev.co nr
Lori Blattner
Intermountain Gas
[e-mail]
May 14,20207