Rocky Mountain Power

By Norma Ray,2014-01-20 03:23
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Rocky Mountain Power

    Rocky Mountain Power

    Utah General Rate Case (Docket 09-035-23)

    Cost of Service and Rate Spread Joint Issues List

    Issue RMP DPU OCS UAE UIEC Wal-Mart Farm Bureau Kroger

    Rate Spread


    1. Rate Spread Reflect cost of Given suspect class OCS general At RMP rebuttal When there Revenue Rates should

    Principles service results demands and generally principles relating to $55M increase, are issues should be reflect COS as

    while minimizing increasing PacifiCorp rate spread under banded by +/- 0.5% about data allocated in closely as

    customer impacts. average costs: different revenue on either side of accuracy, the accordance possible. Kroger

    requirement levels average retail solution is to with the believes that

    ? Rates should for Schs. 1, 10, 23 increase. maintain the approved cost RMP’s proposed

    remain unchanged and 25: existing rate of service rate spread does

     for classes with relationships, model in this a reasonably

    --The rate increase indicated rate which have docket. good job in Use Revenue for the Residential decreases (based previously reflecting costs. Apportionment Schs. (1-3) should be on COS) been found to approach if PSC capped at 1.0%. If ? $16,673,181 rate be just and orders a lower the revenue increase should be reasonable. revenue change. requirement increase prorated among

    in the case is below the remaining

    $10 million, then the classes with an

    Residential Schs. indicated rate

    should not receive increase

    any rate increase.

    --At any rev. req.

    increase level, RS 23

    should receive an

    increase at or near the



    --RS 25 should

    receive the same

    level of rate increase


    Issue RMP DPU OCS UAE UIEC Wal-Mart Farm Bureau Kroger

    as Schedule 23.

    --At any rev. req.

    level, RS 10 should

    receive the jur. avg.

    rate change.

    2. Rate Spread Residential 3.9% Residential 0.00% Residential (2.0%) @ RMP Rebuttal Equal percent Any rate Farm Bureau Kroger supports

    Proposal Increase: to all mitigation will generally RMP’s rate

    Schedule 23 3.9% Schedule 23 1.02% Schedule 23 (0.66%) schedules. mechanism put support RMP spread proposal

    Residential 4.1% in place should and UAE as reflected in its Schedule 6 3.9% Schedule 6 0.57% Schedule 6 (0.66%) attempt to requesting an Application and Schedule 23 4.1% move each equal rate testimony Schedule 8 3.9% Schedule 8 2.25% Schedule 8 0% customer class spread or Schedule 6 3.5% closer to rates alternatively Schedule 9 4.8% Schedule 9 5.85% Schedule 9 2.5% based on cost plus or Schedule 8 4.1% of service. minus .5%. Irrigation 4.8% Irrigation Irrigation (0.79%) Additionally, 11.91% Schedule 9 4.5% the mechanism Lighting 2.9% Lighting No Pos. should ensure Lighting 0.00% Irrigation 4.5% that if a cost-

    based increase Schedule 12TS 3.98% Other 3.6%

     for a customer

    Schedule 12OL 0.00% Total 4.0% class falls within the Schedule 25 0.00% banded range

    of percentage Customer A 0.00% Illustrative increases Example of approved by Customer B 0.00% Revenue the Apportionment Commission, Customer C Method @ DPU’s


    Issue RMP DPU OCS UAE UIEC Wal-Mart Farm Bureau Kroger

    0.00% $16.7M Increase: the increase

    for that Residential 1.4% customer class

    is set no higher Schedule 23 1.4% than the cost-

    based increase. Schedule 6 0.7%

    Schedule 8 1.4%

    Schedule 9 1.7%

    Irrigation 1.7%

    Other 0.8%

    Total 1.2%

Cost of Service


    3. Cost of Allocation based on The ? Underlying

    Service Study cost causation results jurisdictional functionalization,

    Principles in an equitable classification/ classification of

    sharing of embedded allocation costs in the JAM

    costs. methodology should align with the

    need not, and RMP COS. RMP should not, be COS allocation

    extended to factors can vary Gradualism is a the class within the confines principle applied to COS. of cost rate changes not COS classification. If the Study changes. JAM and RMP COS

    are out of alignment

    then one or the other

    must be adjusted to


    Issue RMP DPU OCS UAE UIEC Wal-Mart Farm Bureau Kroger

    improve alignment.

    Given that the JAM

    is fixed in this case,

    the RMP COS must

    be adjusted to align

    with JAM. 4. Classification Supports 75-25 Supports classifying Supports current 100% ? Wind should be

    of Generation demand-energy at least 50% of non-75-25 demand-demand-classified as 100%

    Plant classification seasonal plant as energy related, energy.

    split. energy related based classification split unless ? 75%-25% demand-on application of the (including wind). operational or energy classification

    Peaker Method. the issues should not be

    otherwise uniformly applied to

    justify. all generation assets.

    Classification of

    generation resources

    should reflect

    planning and


    considerations. 5. Allocation of Weighted 12 CP. The weighted 12 CP Does not oppose 3-CP or ? Seasonal weightings

    Demand Monthly method is the most current method in annual AED. reflected in the JAM

    Related weighting factors appropriate method combination with should also be

    Generation are calculated by presented in this case. 75/25 classification reflected in the RMP

    Costs dividing each of generation plant. COS.

    month’s system ? Demand allocation

    coincident retail methods should

    peak by the reflect planning and

    annual system operational

    retail peak. considerations

    consistent with cost

    classification. 6. Allocation of Monthly fuel Allocating monthly Does not oppose Allocate ? N/A Fuel Costs costs are allocated fuel costs based on current method in consistent

    on class monthly class monthly energy combination with with

    energy usage. usage is the most 75/25 classification generations.


    Issue RMP DPU OCS UAE UIEC Wal-Mart Farm Bureau Kroger

    appropriate method of generation plant.

    presented in this case. 7. Allocation of The classification The non-seasonal Supports Company Demand ? Wind integration

    Firm Non-and allocation of contracts fill the same position. component charges included in

    Seasonal wholesale functions as on 3-CP. Account 555 should Purchases purchases and PacifiCorp-owned be classified as

    wholesale sales generation. The 100% demand-

    should be classification of total related and allocated

    consistent costs of wholesale on F12 CP.

    purchases and the

     total costs of

    PacifiCorp generation Company (inc./fuel) should be classifies firm consistent. At least non-seasonal 50% of non-seasonal purchases as 75% purchases should be demand-related classified as energy-and 25% energy-related. related and

    allocates each

    month’s cost

    separately based

    on class

    coincident peak

    and kWh.

    8. Allocation of The allocation of The OCS did not take Supports Company Demand ? N/A

    firm sales wholesale sales a position. position. component

    revenue revenue credits on 3-CP.

    should be

    consistent with

    the allocation of

    the cost

    underlying those



    Issue RMP DPU OCS UAE UIEC Wal-Mart Farm Bureau Kroger

    The classification

    and allocation of


    purchases and

    wholesale sales

    should be



    classifies firm

    sales as 75%


    and 25% energy-


    9. Classification Classifies 75% of OCS did not take a Supports retention 100% ? Should mirror the

    of Transmission transmission costs position. of PSC-approved demand-aggregated

    Plant as demand-related 75%/25% demand related, classification of

    and 25% as and energy split as unless generation plant as

    energy-related. part of current operation or determined in Issue

    “total package,” other No, 8.

    consistent with consideration

    jurisdictional s dictate

    allocation approach otherwise.

    10. Distribution Substations and Absent a more Does not advocate ? N/A

    Classification primary lines are detailed shared for change from and Allocation based on demand-services study by the current method at Factors related allocation Company, the this time. If PSC is

    factors weighted allocation of shared disposed to modify

    by monthly services to residential RMP’s distribution

    coincident customers should be methodology, then

    distribution peaks. a more


    Issue RMP DPU OCS UAE UIEC Wal-Mart Farm Bureau Kroger

    Transformers and reduced by 20%. comprehensive secondary lines examination of are demand-distribution cost

    related, allocated causation should be The allocation of based on weighted undertaken, distribution should non-coincident including recognize that peak. Remaining consideration of a duration of high distribution plant, customer-related loads, not just a few services, and distribution single hourly peaks, meters are component drive distribution allocated on a investment. customer-related


    The monthly

    weighting factors

    applied in the

    allocation of

    substations and

    primary lines should

    recognize the size of

    individual substations

    and the effect of

    multiple peaks and

    the duration of peaks

    on substation sizing.

    11. The Company Class peak load data Recommends Current class ? Class coincident

    continues to should not be further analysis to load data is demands should Reconciliation support it’s calibrated to tie with examine class and not NOT be calibrated of Class Load current load the Utah jurisdictional load sufficiently to Utah jurisdiction Research with research jurisdictional peak relationships, accurate for peak demands. System Peak methodology loads. including use in

    Data which does not reexamination of allocating

     calibrate the decision not to costs. hourly class loads calibrate the hourly Despite errors


    Issue RMP DPU OCS UAE UIEC Wal-Mart Farm Bureau Kroger

    to tie with the class loads to the acknowledge

    Utah Utah jurisdictional d by RMP, jurisdictional loads. and changes

    loads. This is made, there

    consistent with remain

    the consensus significant

    decision of the unexplained

    2002 Load differences

    Research Working between the

    Group. jurisdictional

    peaks and the

    sum of class

    loads. The


    conclusion is

    not relevant

    in light of the


    increase in


    12. Load The sample data Given the very large Recommends Either the ? Significant evidence

    Research are providing load disparity between further analysis to sample data is exists to suggest that

    Samples estimates estimated and actual examine class and unrepresentatithe load estimates

    consistent with usage for the jurisdictional load ve or there for non-demand

    what we are irrigation class, the relationships. are other metered classes are

    seeing in the load data for the problems, or not sufficiently

    billing system. irrigation class both. accurate.

    While the sample should not be relied

    designs were to support a rate

    prepared a change above the

    number of years jurisdictional

    ago, the sample average.

    data are current.

    13. Treatment The Company’s The OCS did not take MSP rate Agree with ? The rate mitigation

    of MSP Rate cost of service mitigation cap cap adjustment is


    Issue RMP DPU OCS UAE UIEC Wal-Mart Farm Bureau Kroger

    Mitigation Cap study reflects the entirely related to a position. should be entirely UAE.

    impact of the Rate the production applied to

    Mitigation Cap by function and should production function

    incorporating the be functionalized since it is directly

    lower “effective” accordingly. and only related to

    return on rate base generation. The

    it produces. mitigation cap

    should be

    implemented as a

    production expense

    adjustment to avoid


    jurisdictional and

    class rate of return


Other Issues

14. Class coincident The accuracy of class The new class peak Class coincident Current class

    Reasonableness demands used in demands is impacted load data presented in demands used in load data is of Class the Company’s by the following: RMP’s Rebuttal Case the Company’s not Coincident rebuttal properly do not provide a rebuttal more sufficiently

    ? Estimated class Peak Demands reflect the reliable basis for cost accurately reflect accurate for

    demands should be used in RMP’s contributions to allocation. the contributions to use in

    normalized to the rebuttal peak from the peak from the allocating

    Difficulties in peak weather customer classes. customer classes, costs.

    determining the dates conditions assumed although questions Former class

    and times of the in the forecast of still remain. load data is

    single monthly peak Utah jurisdiction also not

    hours under normal peaks. sufficiently conditions and of ? Significant evidence accurate for estimating class exists that load use in monthly peaks for samples are not allocating


    Issue RMP DPU OCS UAE UIEC Wal-Mart Farm Bureau Kroger

    sufficiently accurate. the test year makes it costs.

     important to Current rate

    recognize the full relationship

    portion of generation should be

    costs that are energy-maintained

    related. until reliable

    information is


    15. The introduction The late introduction Better late than Revised data ? Results have not

    of this of new class load never. There were load may still been vetted to the Late information was data at the Rebuttal serious problems have satisfaction of DPU. Introduction of in response to Phase of the case did with the load data problems, but Therefore, it is NOT Revised Class discovery requests not allow parties in RMP’s direct is superior to clear that these class Demand Data from intervenors sufficient time to filing. The Revised prior load demands are an

    in the direct case determine the Class demand data data filed in improvement over

    accuracy of the new used in the this case or in those used in direct.

    class load data. Company’s rebuttal earlier cases. In addition, the

    Further, there may be corrects an Nonetheless, revised class

    additional effects on estimation error in in the face of demands remain

    allocation factors that RMP’s direct filing doubt, current subject to the issues

    were not fully and more rate discussed in #14

    explained in the accurately reflects relationships above.

    Company’s Rebuttal the demand loads should be

    Case. The OCS of the customer maintained. recommends that the classes.

    Commission reject

    the use of the new

    class load data in the

    COS Study.

    16. The OCS did not take Should be ? Consistent with the

    a position. consistent with the classification and Classification classification and allocation of wind and allocation allocation of the generation these


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