20150831final_order_no_33370.pdf

Office of the Secretary
Service Date
August 3l,2Ol5
BBFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF CAPITOL WATER CORPORATION FOR
AUTHORITY TO DECREASE ITS
SCHEDULE NO.3 PURCHASE POWER
ADJUSTMENT RATE
cAsB NO. CAP-W-15-01
ORDER NO. 33370
On June 22,20L5, Capitol Water Corporation ("Capitol Water" or "Company") filed
an Application to decrease its Schedule No. 3 Purchased Power Adjustment Rate to "recover the
Company's cost of electricity related to Idaho Power Company's ("Idaho Power") electric rate
schedules that have been approved by the Idaho Public Utilities Commission ('IPUC' or
'Commission')." Application at I. Capitol Water proposed an effective date of September 1,
2015.
On July 21, 2OI5, the Commission issued a Notice of Application and Modified
Procedure, establishing a comment deadline of August 14,2015. Commission Staff was the only
party to submit comments.
THE APPLICATION
In its Application, Capitol Water stated that the proposed change is necessitated by
"changes in [Idaho Power's] rates and charges that affect Applicant's cost of electric power." Id.
The Company requested that "the Commission take official notice of Idaho Power Company
rates and charges currently in effect and on file with the Commission." Id.
Capitol Water stated that its "current base rates were established by Order No. 30762
in Case No. CAP-W-08-02." Id. Capitol Water remarked that the Commission approved a
"three (3) year average of 1,454,401 KWh of electricity consumption at an average cost of 5.19a
to establish rates for Applicant." Id. The total cost of electric power for Capitol Water is
estimated to be $75,483.41. Id. Capitol Water claimed that its average cost per kWh at Idaho
Power's current rates is 7.02A per kWh, which produces an annual cost for electric power of
$102,108 (I,454,401 x7.02). Id. at l-2. Capitol Water stated that this represents "an increase in
annual electric power cost of $26,625, or 35.3Vo more than included in Applicants base water
rates. Id. at2.
ORDER NO. 33370
Capitol Water estimated its costs associated with the preparation and filing of this
Application to be $1,100. Id. Capitol Water is seeking to recover these costs together with the
electric power costs by increasing the Company's currently approved Schedule No. 3 Purchased
Power Cost Adjustment of 4.46Yo with a new Purchased Power Cost Adjustment of 4.25%. Id.
Capitol Water also included Exhibit No. 1 that presents Capitol Water's calculations
at Idaho Power's currently approved rates. Id. Also attached to the Application was Exhibit No.
2, a copy of the Company's current Schedule No. 3 in legislative format that shows the proposed
change to the Purchased Power Cost Adjustment. Id.
Capitol Water included a new Schedule No. 3, with the proposed Power Cost
Adjustment rate, with an effective date of September l, 2015. Id. The Company provided
workpapers showing its calculations for Staff review. 1d.
The Company stated that it informed its customers of its Application to the
Commission through a customer notice included in customer bills mailed on July 1,2015, and
via a news release to the Idaho Statesman and the Idaho Business Review newspapers
contemporaneous with this filing. Id.,Exh. Nos. 3 and 4.
STAFF COMMENTS
Staff noted that Capitol Water requested a decrease in the current PPCA rate
approved in Commission Order No. 33128 (Case No. CAP-W-14-01), allowing the Company to
recover its purchased power costs arising from recently approved changes to Idaho Power's
electric rate schedules. The Company currently collects $29,059 from the 4.46% PPCA. See
Order No. 33128. The Company proposes a PPCA decrease to 4.25o/o to generate a revised
PPCA of $27,725.
Staff agreed with the Company's assertion that a change in the PPCA rate is
appropriate. Staff carefully reviewed the Company's calculations and found them to be correct
and based on the Commission-approved methodology.
Idaho Power Rate Adjustments
Staff remarked that, beginning with Case No. CAP-W-09-01, Capitol Water has
submitted an annual filing requesting Commission approval to implement a new tariff rate
enabling the Company to recover its purchased power costs directly related to Idaho Power's
PCA from Case No. IPC-E-09-11. Staff believes that Capitol Water's Application is in
accordance with the Commission's directive to "file for an adjustment of its total revenue to
ORDER NO. 33370
recognize changes in power costs," to include changes in Idaho Power's PCA costs and all other
miscellaneous Idaho Power rate changes. Order No. 30881 at 3.
Capitol Water's proposed rate adjustment includes the Idaho Power rate changes due
to the following:
. an increase to the Fixed Cost Adjustment (FCA) rates of 0.32% for small
general service customers (IPC-E- l5-06, Order No. 33302); and
. a decrease to the PCA rates of 0.07% for small general service customers
and l.l3o/o for large general service customers (IPC-E-l5-14, Order No.
33306).
The increase to the Idaho Power FCA and the decrease to the PCA resulted in overall
lower power costs for Capitol Water as of June 1,2015, as compared to last year's power costs
for the Company.
Commission-Approved Methodology in Calculating PPCA
The methodology used to calculate the incremental power cost change in Capitol
Water's previous PPCA cases started with actual 2005 energy consumption and actual 2008
energy cost to determine cost per kwh.
Because actual energy consumption in 2005 was determined to be significantly above
normal (1,940,746 kwh), a three-year average was used to calculate normalized annual energy
and cost per kWh ($0.0519 per kWh from Order No. 30762). Normalized base rate power
supply costs of $75,483 were then determined by multiplying normalized energy and the average
rate per kwh (1 ,454,401x $0.0519). The average cost per kWh for Capitol Water under Idaho
Power's new rates was then calculated using the 2005 actual energy consumption model.
Using the same methodology used in the previous cases, and applying the new Idaho
Power rates effective June l, 2015, the Company calculated the average rate of $0.0702 per
kwh. This is the restated average cost per kwh. With this new rate, Capitol Water's expected
power cost is $102,108 (1,454,401 X $0.0702). According to Staff, $75,483 in electric power
cost is currently embedded in the Company's base rates. Thus, the revised incremental power
cost to Capitol Water due to Idaho Power's rate changes since Capitol Water's last PPCA
Application is $26,625 ($102,108-$75,483). ,See Staff Comments, Atch. A.
The Company's Application requested $1,100 to cover its costs to have a consultant
review Idaho Power's rate changes, determine the effect on Company power costs, and prepare
ORDER NO. 33370
and file the Application. Staff believes that $1,100 is a reasonable consultant fee and
recommended the Commission allow the Company to recover this expense.
The Company currently collects $29,059 from the 4.46Vo PPCA. See Order No.
33128. Therefore, the PPCA must decrease to 4.25Vo to generate the revised PPCA of $21,725.
This proposed decrease should be reflected in the Company's Schedule 3, Other Recurring and
Non-Recurring Charges, resulting in an overall percentage decrease to annual non-metered
customer bills of -0.20Vo. Metered commercial customers will experience the same incremental
percentage decrease, although the annual dollar impact will vary based on usage. See Staff
Comments, Atch. B. The new rate includes $1,100 in consulting fees.
COMMISSION FINDINGS
The Commission has jurisdiction over Capitol Water, a water corporation operating a
water system in the State of Idaho, and the issues presented in this case pursuant to the Idaho
code, including but not limited to ldaho code E* 6l-124,61-125,61-129 and 61-307.
The Commission has reviewed Capitol Water's Application, including attachments,
and Staff comments. The Commission finds that Capitol Water's Application to decrease its
Schedule 3 surcharge by O.ZLVo is reasonable and appropriate given the decrease in the
Company's annual power costs.
Finally, the Commission approves Capitol Water's request to recover $1,100 for
consultant fees incurred in the preparation and filing of its Application in this case. Therefore,
the Commission authorizes Capitol Water to recover a total revised incremental power cost of
$27,125. The Company's revised Schedule No. 3 tariff, filed in conjunction with its Application,
is approved.
ORDER
IT IS HEREBY ORDERED that Capitol Water Corporation's Application for a
decrease in its Schedule No. 3 Purchased Power Cost Adjustment rate is approved. The
Schedule No. 3 Purchased Power Cost Adjustment rate shall be decreased from 4.467o to 4.25Vo,
for a total revised incremental power cost of $27,725, in order to recover the Company's annual
cost of electricity.
IT IS FURTHER ORDERED that Capital Water Corporation's request to recover
$1,100 as a reasonable and necessary expense associated with the preparation and filing of the
Company' s Application is approved.
ORDER NO. 33370
IT IS FURTHER ORDERED that the approved decrease to Capital Water
Corporation's Schedule No. 3 Purchased Power Cost Adjustment rate shall be effective on
September 1,2015.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See ldaho Code $ 6l-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 3lt
day of August 2015.
ATTEST:
O:CAP-W-15-01_np2
PRESIDENT
MARSHA H. SMITH, COMMISSIONER
MISSIONER
ORDER NO. 33370