20180814final_order_no_34124.pdf

Office of the Secretary
Service Date
August 14,2018
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CAPITOL WATER CORPORATION'S )APPLICATION TO INCREASE ITS )CASE NO.CAP-W-18-01
SCHEDULE NO.3 PURCHASE POWER )ADJUSTMENT RATE )ORDER NO.34124
On May 30,2018,Capitol Water Corporation filed an Application to adjust its
Schedule No.3 Purchased Power Adjustment Rate to "recover the Company's cost of electricity
related to Idaho Power Company's electric rate schedules that have been approved by the Idaho
Public Utilities Commission."Application at 1.Capitol Water proposed an effective date of
July 15,2018.See Order No.34088 at fn.1.
On June 19,2018,the Commission issued a Notice of Application,Notice of
Modified Procedure,and Order suspending the requested implementation date for 30 days.Order
No.33812.On July 12,2018,Commission Staff provided written comments summarizing its
review and findings and recommendations about the application.The Company did not file a
reply,and no other comments were filed with the Commission.
BACKGROUND
In 2009,the Commission approved Capitol Water's request to implement a purchased
power cost adjustment (PPCA)mechanism.Order No.30881.The PPCA allows the Company to
adjust billing for increased or decreased purchased power costs.In 2017,the Commission
approved a change that simplified the Company's PPCA methodology.Order No.33876.Per
that Order,the Company calculates the difference between the actual electricity costs the
Company paid during the previous calendar year,and the cost of electricity embedded in the
Company's Schedule No.3 rates that are recovered through customer billing.Id.at 3.The
Company's Schedule 3 takes in the difference between power costs in base rates and actual
projected power costs to be paid by the Company.Id.
THE APPLICATION
With this Application,Capitol Water asked to decrease the Schedule 3 PPCA rate
from 3.1%to 2.61%to reflect the Company's lower power costs.Application at 1.The
Company explained that its current base rates assumed the Company would have $75,483.41 in
electric power costs.Id.(citing Order No.30762,Case No.CAP-W-08-02),The Company
ORDER NO.34124 1
reported that its actual electric power cost for 2017 exceeded the costs in base rates by $17,034.
Id.The Company also reported,however,that after factoring in the Company's current PPCA,
actual costs are $3,170 lower than what is currentlybeing charged to customers.Ïd.at 2-4.The
Company thus asked to decrease its Schedule 3 rates.
STAFF COMMENTS
Staff reviewed the Application and attachments and reported that the Company
accurately described its power costs and requested change to the Schedule 3 PPCA rates.Staff
also reported that the Company's case preparation costs were reasonable.Staff thus
recommended that the Commission approve of those requests.Staff also made other
recommendations as described below.
1.PPCA Methodology
Staff continued to support the Company's simplified PPCA methodology.Staff
Comments at 2.Staff reported that the simplified methodology has lowered costs by eliminating
the Company's need to retain a consultant for PPCA applications.Id.Staff stated that the
simplified methodology is accurate without a true-up as long as the number of customers remains
stable.Id.at 3.Staff noted that the number of customers should remain stable because the
Company has little room for customer growth.Staff thus recommended no change to the PPCA
methodology.
2.Other Issues
Staff evaluatedthe Company's production and energy consumption at each well.Staff
commented the Company's energy consumption has decreased by 15.5%since 2008,and by
4.9%since the Company's last PPCA case,Case No CAP-W-17-01.
Finally,Staff reported that the Company complied with all customer notification
requirements.Id.(citing Rule 125,IDAPA 34.01.01).
DISCUSSION AND FINDINGS
The PPCA allows the Company to adjust its rates to reflect changes in power supply
costs.See Order No.30881.The Company's power costs are determined by two factors:the
amount of power used,and the rate paid for the power.This year,the Company's power costs
decreased as reported by the Company and verified by Commission Staff.Accordingly,we find
it reasonable to approve the Company's request to decrease the Schedule No.3 PPCA rates from
3 1%to 2.61%.The Company's revised Schedule No.3 rates are cost-based and appropriate.
ORDER NO.34124 2
The new PPCA rates will decrease a monthly bill for an unmetered customer with 3/4 inch
service by $0.14,May through September,and $0.06,October through April.The customer's
annual bill will decrease by approximately $1.12 (a 0.47%decrease).Metered customer bills will
vary with water usage,but the PPCA portion of the bill will decrease by 0.49%.
ORDER
IT IS HEREBY ORDERED that Capitol Water's Application is approved.The
Company shall decrease its PPCA from 3.1%to 2.61%,and Schedule No.3 Purchased Power
Cost Adjustment is approved as filed.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within 21 days of the service date of this Order.Within seven days after any
person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §614-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of August 2018.
PAUL K ANDER,PRESIDENT
KRI TINE RA ,CO MISSIONER
ERIC ANDERSON,COMMISSIONER
Diane M.Hanian
Commission Secretary
CAPW1801 final bk2
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