20190703Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:JOHN R. HAMMOND JR.
DEPUTY ATTORNEY GENERAL
DATE: JULY 2,2019
SUBJECT: CAPITOL WATER CORPORATION,S APPLICATION TO INCREASE
ITS SCHEDULE NO. 3 PURCHASED POWER ADJUSTMENT RATE;
CASE NO. CAP-W-19-01
On June 20,2019, Capitol Water Corporation ("Capitol Water" or the "Company")
filed an Application to increase its Schedule No. 3 Purchased Power Cost Adjustment rate
("PPCA") 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
I . Capitol Water proposes an effective date of August | 5 , 2019 . Id. at 2 .
THE APPLICATION
Capitol Water requests an increase in its PPCA rate. Id. at l. In 2009, the Commission
approved Capitol Water's request to implement a PPCA mechanism. See Order No. 30881. The
intent of the PPCA is to provide the Company with an annual means to adjust for increased or
decreased purchased power costs it incurs as a result of receiving electric power service from Idaho
Power Company. Id. The Company's PPCA rate takes in or offsets the difference between power
costs in base rates and actual projected power costs to be paid by the Company. Capitol Water's
current Schedule No. 3 PPCA rate approved by Commission Order No. 34124 is 2.610/o. The
Company alleges this rate is too low when factoring in the increase in power rates that the
Company has incurred for electric service in 2018. Id. Capitol Water states its power costs of the
2018 calendar year was $94,571.00 which is $19,088.00 more than the Company's current base
rates allow recovery for. Id. The Company requests that a new PPCA rate be set at2.93Yo. Id.
DECISION MEMORANDUM I
Capitol Water has also included a worksheet detailing its calculations with the
Application (Exhibit No. l), a copy of the proposed Schedule No. 3 in legislative format (Exhibit
No. 2) and a copy of a direct customer notice and a news release that will be printed in the Idaho
Statesman and Idaho Business Review. 1d. (Exhibit Nos. 3-4).
Capitol Water requests the Commission process its Application pursuant to Modified
Procedure and approve the rates effective August 15,2019. Id. at2.
STAFF RECOMMENDATION
Staff concurs with the use of Modified Procedure. However, Staff is concerned that
implementation by August 15,2019 may rush its review of the Company's request. Staff therefore
recommends that the Commission suspend the Company's requested effective date until August
31,2019 or until the Commission issues an earlier final order accepting, rejecting, or modifuing
Capitol Water's Application. Further, Staff recommends a twenty-one (21) day written comment
period with a seven (7) day reply comment period for the Company to follow.
COMMISSION DECISION
Does the Commission wish to suspend the Company's proposed effective date as
described above, and process the PPCA Application by Modified Procedure with a twenty-one
(21) day written comment period followed by a seven (7) day reply comment period for the
Company?
R. Hammond Jr
Attorney General
I:\Legal\WATER\CAP-W- I 9-0 l\memos\CAPW I 90 I jhl.docx
2DECISION MEMORANDUM