20180712Comments.pdf

BRANDON KARPEN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-007 4
(208) 334-03s7
IDAHO BAR NO. 7956
l-r'Fl.r ,/ ED
?*1$ iUL I 2 PH l: 50
| :l l.'\,I l--;
.,t:,:!iSlci.l
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF CAPITOL WATER
CORPORATION'S APPLICATION TO
INCREASE ITS SCHEDULE NO.3
PURCHASE POWER ADJUSTMENT RATE
CASE NO. CAP.W.18.O1
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission, submits the following comments
regarding the above referenced case.
BACKGROUND
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 requests a decrease in its Schedule 3 rates. It states that the proposed
decrease is driven by a drop in electric power expenses. Id. The Company claims that its current
3.1% Purchased Power Cost Adjustment (PPCA) rate is too high when factoring in the lower
power rates. Id. The Company requests a new PPCA rate of 2.61%. Id-
)
)
)
)
)
)
)
1STAFF COMMENTS JULY I2,2OI8
Capitol Water states that its current base rates were established by Order No. 30762 in
Case No. CAP-W-08-02. Id. Capitol Water summarizes the order stating the Commission
adopted a three (3) year average of 1,454,401 kwh of electricity consumption at an average cost
of 5.19(,, to establish rates for Applicant. Id. This results in a total electric power cost of
$75,483.41. Id.
The Company claims that its actual cost in 2017 was $17,034 more than what is embedded
in base rates, but $3,170 lower than what is currently being charged after factoring in the current
PPCA mechanism. Id. at2-4. In sum, Capitol Water is seeking the Commission's authorization
to decrease its current Schedule No. 3 Purchased Power Cost Adjustment Rate from 3.lo/o to a
revised rate of 2.610/o.
STAFF REVIEW AND ANALYSIS
PPCA Adiustment
Staff reviewed the Company's Application and supporting documents, and recommends
the Commission authorize the proposed 2.61% PPCA rate, decreasing the Company's current
adjustment from $20,204 to $17,034. See Exhibit No 1 - Application. Staff verified that the
proposed rates based on the calculations made in the Application and the workpapers are correct.
Staff represents that the power costs in calendar year 2017 of $92,5 17, which were $ 17,034
higher than the $75,483 embedded in base rates are appropriate. Based on Staff s review, the
revision to the Company's Schedule No. 3 to reflect the proposed2.6l% PPCA rate is cost-based
and appropriate.
PPCA Methodolosy
In Case No. CAP-W-L7-01, the Company proposed simplifying the PPCA methodology.
The Company now uses actual charges directly from Idaho Power's bills and compares it to the
energy cost embedded in base rates to calculate the PPCA. Staff notes that by using this simpler
approach, PPCA filings are completed in-house without the need for a consultant, which
decreases costs. Only the costs related to the supply of metered energy are used in the calculation
of the PPCA. Costs related to late payment fees or services beyond the delivery of metered
energy are excluded from the calculation. Staff continues to believe that this methodology is
appropriate.
2STAFF COMMENTS JULY 12,2018
Due to the current customer charge rate structure, the current methodology can maintain
its simplicity and remain accurate without a true-up as long as the number of customers remains
stable over time. Staff notes that the number of customers for 2016 and2017 arc the same and
that Capitol Water's service territory has little room for growth.
System Efficienc),
Staff analyzed production and energy consumption at each of the Company's wells. The
Company's energy consumption has decreased by 15.5% since the PPCA mechanism was
established in Case No. CAP-W-08-02, and by 4.9oh since the Company's last PPCA case (CAP-
W-17-01). The Company's average pumping efficiency (72%) and production per kWh of energy
consumed (1,407 gallons per kWh) compare favorably with efficiencies of other similarly sized
and situated water companies.
Rate Design
With the proposed change in the PPCA, the monthly bill for an unmetered customer with
% inch service would decrease by $0. l4 - from 529.59 to $29.45 - in the months of May through
September and $0.06 - from $13.04 to $12.98 - in all other months. The annual bill for this
customer will decrease by $l .12, from$239.23 to $238.1 I (a0.47% decrease). The bill for a
metered customer will vary with water usage and the PPCA portion of the bill will decrease by
0.49%. These bill calculations exclude franchise fees.
CUSTOMER NOTIFICATION
The Company filed its Customer Notice and Press Release with the Company's
Application. Staff reviewed the documents and determined that both met the requirements of
Rule 125 of the Commission's Rules of Procedure. (IDAPA 31.01.01) The notice was included
with customers' June 1,2078, billing statements. The Company sent a Press Release to the Idaho
Statesman and the Idaho Business Review at the time of the Application's filing. As of Thursday,
July 12,2078, no customer comments have been received.
aJSTAFF COMMENTS JULY I2,2OI8
STAFF RECOMMENDATION
Staff recommends that the Commission authorize an overall 2.61% PPCA rate, and
approve the Company's proposed Schedule No. 3.
Respectfully submitted this ',?b day of July 2018.
Technical Staff: Kathy Stockton
Bentley Erdwurm
Chris Hecht
Mike Morrison
i:umisc:comments/capwl 8. lbkklsmmbecwh comments
4STAFF COMMENTS JULY I2,2OI8
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 12TH DAY OF JULY 2018,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. CAP-W-I8-01, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
ROBERT PRICE
PRESIDENT
CAPITOL WATER CORP
2626 ELDORADO
BOISE ID 83704
E-MAIL: capitolwatercorp@)rahoo.com
ARY
CERTIFICATE OF SERVICE