20150814Comments.pdf

NEIL PRICE
DEPTJTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 6864
Street Address for Express Mail:
472 W , WASHINGTON
BOISE, IDAHO 83702.5918
Attorney for the Commission Staff
IN THE MATTER OF THE APPLICATION OF
CAPITOL WATER CORPORATION FOR
AUTHORITY TO DECREASE ITS SCHEDULE
NO.3 PURCHASE POWER ADJUSTMENT
RATE.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. CAP-W.Is-OI
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Neil Price, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued in Order No. 33347, submits the following
comments.
BACKGROUND
On June 22,2015, Capitol Water Corp. ("Capitol Water," the "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 l. Capitol Water proposes an effective date of September 1,
20ts.
Capitol Water states that the proposed rate change is necessitated by changes to Idaho
Power's rates and charges that have a coresponding effect on the Company's costs for electric
STAFF COMMENTS AUGUST 14,2OI5
power. The Company requests that the Commission take official notice of Idaho Power's rates
and charges currently in effect and on file with the Commission.
Capitol Water estimates its costs associated with the preparation and filing of this
Application to be $1,100. Capitol Water is seeking the Commission's authorization to recover
the preparation and filing costs, along with the electric power costs described above, by
decreasing its current Schedule No. 3 Purchased Power Cost Adjustment Rate from 4.46Yo to a
revised rate of 4.25%o.
Capitol Water attached Exhibit No. I - the Company's calculations at Idaho Power's
currently approved electric rates - to its Application. Also attached to the Application is Exhibit
No. 2, a copy of the Company's current approved Schedule No. 3 in legislative format that
shows the proposed change to the Purchased Power Cost Adjustment (PPCA). Capitol Water
included a revised Schedule No. 3, the proposed power cost adjustment rate, with an effective
date of September 1,2015. Capitol Water provided work papers to Commission Staff
demonstrating its calculations.
Capitol Water states that it notified customers of its Application through a customer
notice included in customer bills mailed on July 7,2015, and via a news release to the Idaho
Statesman and the Idaho Business Review newspapers. Copies of these notices were included
with the Company's filing (See Application Exhibit Nos. 3 and 4).
STAFF ANALYSIS
Capitol Water requests a decrease in the PPCA rate that the Commission most recently
approved in Order No. 33128 (Case No. CAP-W-14-01). The proposed decrease will allow the
Company to recover its purchased power costs arising from recently approved changes to Idaho
Power's electric rate schedules. The Company is currently collecting $29,059 from the 4A6%
PPCA (see Order No. 33128 in Case No. CAP-W-14-01). The Company proposes a PPCA
decrease to 4 .25o/o to generate the revised PPCA of $27 ,725 .
The Company calculates the PPCA using the same methodology as used in previous
PPCA rate adjustments.r Staff agrees that a change in the PPCA rate is appropriate. Staff has
I Previous PPCA rate adjustments include: Order No. 30881, Case No. CAP-W-09-01 ; Order No. 32056, Case No.
CAP-W- l0-01; Order No. 32325, Case No. CAP-W- I I -01; Order No. 32607, Case No. CAP-W-12-01; Order No.
32858, Case No. CAP-W-13-01; and Order No. 33128, Case No. CAP-W-14-01.
STAFF COMMENTS AUGUST 14,2OI5
carefully reviewed the Company's calculations and has found them to be correct and based on
the Commission-approved methodology.
Idaho Power Rate Adjustments
When the Company filed Case No. CAP-W-09-01, it asked the Commission to approve a
new tariff rate that would enable the Company to recover purchased power costs directly related
to Idaho Power's PCA from Case No. IPC-E-09-1 1. Staff interprets Commission Order No.
30881, specifically the directive to "file for an adjustment of its total revenue to recognize
changes in power costs," to include changes in Idaho Power's PCA costs and all other
miscellaneous Idaho Power rate changes. This interpretation is also incorporated in Commission
decisions in Order Nos. 32056, 32325, 32607, 32858, and 33 128.
In the current case, the rate adjustment includes the Idaho Power rate changes due to the
following:
. an increase to the Fixed Cost Adjustment (FCA) rates of 0.32oh for Small General
Service customers (IPC-E-15-06, Order No. 33302); and,
. a decrease to the PCA rates of 0.07% for Small General Service customers and l.13Yo
for Large General Service customers (IPC-E-15-14, Order No. 33306).
The increase to the Idaho Power FCA and the decrease to the Idaho Power PCA resulted
in overall lower power costs for Capitol Water Corporation as of June 1,2015 when 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 (l ,940,7 46 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 (l ,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.
STAFF COMMENTS AUGUST 14,2OI5
Using the same methodology used in the previous cases, and applying the new Idaho
Power rates effective June 1,2015, the Company calculated the average rate of $0.0702 per
kWh. This is the restated average cost per kWh. With this new rate, the expected power cost is
$102,108 (1,454,401 X $0.0702). Given that $75,483 in electric power cost are currently
embedded in the base rates, the revised incremental power cost to Capitol Water due to Idaho
Power's rate changes is $26,625 ($102,108-$75,483). See Attachment A for the summary of
PPCA calculations.
Case Preparation Costs
The Company's Application requests $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
and file the Application.
In the last case, the Commission allowed the Company to recover $ 1,100 for consultant
expenses (Case No. CAP-W- 14-01 , Order No. 33 128). In previous cases the consultant
anticipated that the Application would require l0 hours of work, at the rate of $ I l0 per hour, for
a total charge of $ 1,100. Staff notes that both the time and the hourly rate are the same for the
current case. Staff believes that $ 1,100 is a reasonable consultant fee and recommends the
Commission allow the Company to recover this expense.
SUMMARY
The Company is currently collecting $29,059 from the 4.46% PPCA (see Order No.
33128 in Case No. CAP-W-14-01). Therefore, the PPCA must decrease to 4.25% to generate the
revised PPCA of $27,725. This decrease as proposed will be reflected in the Company's
Schedule 3, Other Recurring and Non-Recurring Charges, resulting in an overall percent impact
to annual non-metered customer bills of -0.20%. Metered commercial customers will experience
the same incremental percentage decrease, although the annual dollar impact will vary based on
usage. See Attachment B for the overall percent impact to annual customer bills.
RECOMMENDATIONS
Staff recommends a decrease in the Company's PPCA from 4.46Yo to 4.25yo to generate
a total of $27,725 to cover the incremental power costs. The new rate includes recovery of
STAFF COMMENTS AUGUST 14,2015
$1,100 for consultant fees. The 4.25% PPCA should be reflected in the Company's Schedule 3,
Other Recurring and Non-Recurring Charges.
Respecttully submitted this t 4b
Technical Staff: Kathy Stockton
Johanna Bell
i:umisc/comments/capwl 5. I npklsjb comments
day ofAugust 2015.
STAFF COMMENTS AUGUST I4,2OI5
Attachment A: Company and Staff Rate Component Comparison
Line Rate Component Calculations Notes
1 Base Revenue $ 651,738
Per Order #30762in
CAP-W-o8-02
2
Normalized 3 Yr Average
Power Consumption (KWh)$ 1,454,401
Per Order #30762in
cAP-W-o8-02
3 Averaoe Cost per KWh $ 0.0519
Per Order #30762in
cAP-W-o8-02
4
Power Cost Embedded in
Basic Rates $ 75,483 Line3XLine2
5
Restated Average Cost
Per KWh @ New IPC
Rates $ 0.0702
Calculated in Work
Paoers
6
Power Cost with New IPC
Rates $ 102.108 Line5XLine2
7
Power Cost above
Embedded Base Power
Supplv Costs $ 26,625 Line6-Line4
8 Rate Case Costs $ 1,100 Preoaration Cost
I
Revised Total Expenses
above Embedded Base
Exoenses $ 27,725 LineT+Line8
10
Total Revenue Required
with new IPC Rates $ 679,463 Line9+Line1
11
Existing Expenses above
Embedded Base Rates $ 29,068
Line 1 at current PPCA
rate of 4.46%; See
Order 33128
12 Total Current Revenue $ 680,806 Line 1 +Line 11
13
lncrease or (Decrease) in
Power Costs $ (1,342\Line9-Line11
14
% lncrease or (Decrease)
in Total Revenue -0.197%
(Line 10 - Line 12) I Line
12
15
Purchases Power Cost
Adjustment (PPCA)
Reouired 4.25o/o Line9/Line1
Attachment A
Case No. CAP-W-15-01
Staff Comments
08/14/ts
Attachment B: Overall Percent Impact to Annual Customer Bills a/
a/ The incremental percent decreases illustrated here are for non-metered customers. All
residential customers are non-metered. Metered commercial customers will experience the same
incremental percentage decrease, although the annual dollar impact will vary based on usage.
b/ Total summer bill (Rates in Effect - Sch. I t Summer Rate,) x No. of Months.
c/ Majority of Capitol Water's residential customers have t/r-inch service lines.
Size of
Service Line
No. of
Months
Rates
in
Etfect-
Sch 1
Total Bill Per
Cust. per Sch 1
Current
Cust. Bill
@ 4.46%
PPCA
Company
Proposed
@4.25Yo
PPCA
Diff. in
Customer
Bill per Yr
o/o
Decrease
of
Customer
Bill per Yr,
3/4-inch
Non-Summer 7 $12.65
Summer 5 $16.05
$ 88.55 $ 92.50
$ 143.50 bt $ 149.90
$ 92.31 $ (0,19) -o.2oo/o
$ 149.60 $ (0.30) -0.200/o
Total per Year cl $ 232.05 $ 241.80 $241.91 $ (0.49) -0.200/o
1-inch
Non-Summer 7 $15.10
Summer 5 $16,05
$ 105.70 $110.41
$ 155.75 bt $ 162.69
$ 1 10.41 $ (0.22) -0.20o/o
$ 162.69 $ (0.33) -0.200/o
Total oer Year $ 261.45 $272.43 $ 273.11 $ (0.55) -0.20o/o
1 1|4-inch
Non-Summer 7 $16.90
Summer 5 $16.90
$ 118.30 $ 123.57
$ 169.00 bt $ 176.54
$ 123.57 $ (0.25) -0.20o/o
$ 176.54 $ (0.35) -0.200/o
Total per Year $ 287.30 $ 299.37 $ 300,1 1 $ (0.60) -0.200/o
Attachment B
Case No. CAP-W-15-01
Staff Comments
081r4115
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 14TH DAY oF AUGUST 2015,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. CAP-W.Is-OI, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
ROBERT PzuCE
PRESIDENT
CAPITOL WATER CORP
2626ELDORADO
BOISE ID 83704
E-MAIL : [e-mail]
ROBERT E SMITH
2209 N BRYSON RD
BOISE ID 83713
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE