McDowell Rackner & Gibson pc
WENDY MCINDOO Direct (503) 595-3922 [email protected]
June 21, 2010
VIA ELECTRONIC FILING AND U.S. MAIL
PUC Filing Center Public Utility Commission of Oregon PO Box 2148 Salem, OR 97308-2148
Re: Docket No. DR/UM
Enclosed for filing are the original and one copy of Idaho Power Company's Petition for Declaratory Ruling or in the Alternative Application for Deferred Accounting. A copy of this filing has been served on all parties to AR 538 as indicated on the attached Certificate of Service.
The enclosed Notice of Application has been served on the parties to Idaho Power's previous rate case, UE 213, as indicated on the attached Certificate of Service.
Very truly yours,
Wendy Mc 1OO Legal Ass tant
Phone: 503.595.3922 . Fax: 503.595.3928 . www.mcd-law.com 520 SW Sixth Avenue, Suite 830 . Portland, Oregon 97204 CERTIFICATE OF SERVICE
I hereby certify that I served a true and correct copy of Idaho Power's Petition for Declaratory
Ruling or in the Alternative Application for Deferred Accounting on the Parties to Docket AR 538 on the date indicated below by email and/or first-class mail addressed to said person(s) at his or her last-known address(es) indicated below.
ROBERT FRISBEE OREGON DEPARTMENT OF ENERGY [email protected] ROBERT DEL MAR [email protected] JOLENE GOODNIGHT [email protected] VIJAY A SATYAL [email protected] RUSSELL HIRSCH [email protected] ABUNDANT SOLAR JAMES REISMILLER DAVID JOHNSON [email protected] [email protected] ADVANCED ENERGY SYSTEMS TEDDY KEIZER ERIC NILL [email protected] ; [email protected] [email protected] AF LEGAL & CONSULTING SERVICES RAYMOND P NEFF ANN L FISHER [email protected] [email protected]
SEAN MICKEN ALBINA COMMUNITY BANK [email protected] SCOTT BOSSOM [email protected] CLIFF TAYLOR [email protected] ATLAS MARKETS STEVE SOULE DANIEL WELDON 4203 MONTROSE BLVD STE 650 [email protected] HOUSTON TX 77006 [email protected] RAINER HUMMEL 5041 SW ILLINOIS ST BACGEN SOLAR GROUP PORTLAND OR 97221 MARTIN SHAIN [email protected] ONE WORLD TRADE CENTER 121 SW SALMON ST, 11TH FLR JOHN VARELDZIS PORTLAND OR 97204 [email protected] martin@bacgensolarcom
OREGON DEPARTMENT OF ENERGY BEF RENEWABLE INC KIP PHEIL ALICE BRAY [email protected] abray@b-e-forg CITIZENS' UTILITY BOARD OF OREGON DEPARTMENT OF JUSTICE JEFF BISSONNETTE STEPHANIE S ANDRUS, AAG Jeffa,oreponcub.orp 1162 COURT ST NE SALEM OR 97301-4096 GORDON FEIGHNER [email protected] [email protected] PAUL GRAHAM, AAG CATRIONA MCCRACKEN 1162 COURT ST NE [email protected] SALEM OR 97301-4096 [email protected] BOB JENKS [email protected] EC RENEWABLE SOLUTIONS LAURIE HUTCHINSON CITY OF PORTLAND — [email protected] PLANNING & SUSTAINABILITY LEE RAHR ECUMENICAL MINISTRIES OF OREGON 721 NW 9TH AVE STE 350 KATHLEEN NEWMAN PORTLAND OR 97209 OREGON INTERFAITH POWER [email protected] & LIGHT [email protected] ; DAVID TOOZE [email protected] SENIOR ENERGY SPECIALIST 1900 SW 4TH STE 7100 ENERGY TRUST OF OREGON PORTLAND OR 97201 DOUG BOLEYN [email protected] [email protected]
COLUMBIA ENERGY PARTNERS LLC KACIA BROCKMAN PETER P BLOOD [email protected] VP-ORIGINATION & PORTFOLIO MGMT JED JORGENSEN 317 COLUMBIA ST RENEWABLE ENERGY VANCOUVER WA 98660 [email protected] [email protected] BETSY KAUFFMAN COMMERCIAL SOLAR VENTURES [email protected] SANDRA WALDEN [email protected] DAVE MCCLELLAND [email protected] DAVISON VAN CLEVE JESSE E COWELL KEITH ROSSMAN 333 SW TAYLOR ST., SUITE 400 [email protected] PORTLAND OR 97204 [email protected] LIZZIE RUBADO [email protected] FIVE STARS INTERNATIONAL LTD LYNN FRANK PETER WEST kmn.frankafivestarsinthcom [email protected] ENVIRONMENT OREGON IDAHO POWER COMPANY BROCK HOWELL JOHN GALE ADVOCATE [email protected] 1536 SE 11TH AVE STE B PORTLAND OR 97214 Rex Blackburn [email protected] rblackburn@idahopowercom
ENVIRONMENTAL LAW JEFF MALMEN ALLIANCE WORLDWIDE jrnalnien@idahopowercom JENNIFER GLEASON [email protected] LISA D NORDSTROM [email protected] ENXCO CHRISTOPHER DYMOND GREGORY W SAID 1440 NEBRASKA AVE NE gsaid@idahopowercorn SALEM OR 97301 [email protected] MARK STOKES [email protected] ESLER STEPHENS & BUCKLEY JOHN W. STEPHENS LANE POWELL PC [email protected] CAROLYN VOGT [email protected] [email protected]
IBEW LIUNA JOSEPH ESMONDE BEN NELSON 15937 NE AIRPORT WAY [email protected] PORTLAND OR 97230-4958 [email protected] LIVELIGHT ENERGY JEFF FRIEDMAN IBEW LOCAL 659 [email protected] RONALD W JONES 4480 ROGUE VALLEY HWY #3 KEITH KNOWLES CENTRAL POINT OR 97502-1695 [email protected] [email protected] MCDOWELL & RACKNER PC IDAHO POWER COMPANY WENDY MCINDOO RANDY ALLPHIN [email protected] rallphin@idahopowercom LISA F RACKNER DAVE ANGELL [email protected] [email protected] MILLER NASH ET AL CHRISTA BEARRY BRIAN B DOHERTY cbearry@idahopowercom 111 SW 5TH STE 3400 PORTLAND OR 97204-3699 KARL BOKENKAMP [email protected] kbokenkamp@idahopowercom NORTHWEST ENVIRONMENTAL JEANNETTE C BOWMAN BUSINESS COUNCIL jbowman@idahopowercom ROBERT GROTT [email protected] NORTHWEST NATURAL OREGONIANS FOR RENEWABLE BILL EDMONDS ENERGY PAYMENTS DIRECTOR — ENVIRONMENTAL POLICY JUDY BARNES wre@nwnaturaLcom [email protected]
NORTHWEST STRATEGIES INC. MARK PETE PENGILLY LEN BERGSTEIN [email protected] lbergstein@ aol.com PACIFIC ENERGY VENTURES LLC ANNIE LEINEWEBER JUSTIN KLURE [email protected] [email protected]
OBSIDIAN FINANCE GROUP LLC OSEIA J FRANKLIN CABLE SETH PRICKETT [email protected] DIRECTOR, PUBLIC POLICY GOVT AFFAIRS JEREMY W HULL 3548 NE SIXTH AVE [email protected] PORTLAND OR 97212 sethprickett@gmaiLcom OREGON AFL-CIO DUKE SHEPARD PACIFIC POWER & LIGHT [email protected] ERIK ANDERSON [email protected] [email protected]
OREGON DISTRICT COUNCIL OF JOELLE STEWARD LABORERS' REGULATORY MANAGER MELODY GUY [email protected] [email protected] PACIFICORP OREGON MUNICIPAL ELECTRIC KYLE L DAVIS UTILITIES ASSOC [email protected] TOM O'CONNOR EXECUTIVE DIRECTOR RYAN FLYNN PO BOX 928 [email protected] SALEM OR 97308-0928 [email protected] PETER ROBERTS LLC PETER ROBERTS OREGON RURAL ELECTRIC 3731 PINE CANYON DR COOPERATIVE ASSN EUGENE OR 97405 SANDRA FLICKER [email protected] 1750 LIBERTY ST SE SALEM OR 97302-5159 PORTLAND GENERAL ELECTRIC [email protected] DOUG KUNS [email protected] OREGON SOLAR ENERGY INDUSTRIES ASSOCIATION BRENDAN MCCARTHY DESARI STRADER [email protected] EXECUTIVE DIRECTOR 3855 SW 153RD DR BEAVERTON OR 97006 [email protected] PORTLAND GENERAL ELECTRIC CO. SOLARCITY J RICHARD GEORGE ROB LAVIGNE 121 SW SALMON ST 1WTC1301 rlavigne@solarcity.com PORTLAND OR 97204 [email protected] MEGHAN NUTTING [email protected] PUBLIC UTILITY COMMISSION OF OREGON SOLARWORLD CALIFORNIA THERESA GIBNEY JANET GAGNON [email protected] GOVERNMENT RELATIONS MANAGER [email protected] MAURY GALBRAITH PO BOX 2148 STATE CAPITOL SALEM, OR 97308 REPRESENTATIVE TOBIAS READ [email protected] [email protected]
RATES & REGULATORY STOEL RIVES LLP AFFAIRS - NW NATURAL DINA M DUBSON JENNIFER GROSS [email protected] jennifer. g ross@nwnatural. com STEPHEN C HALL REC SOLAR schall@stoeLcom ANDREW NOEL anoel@recsolarcom SUNEDISON JOE HENRI RENEWABLE ENERGY SYSTEMS jhenri@sunedison.com KIRPAL KHALSA soIarworks@gmaiLcom NICOLE MARANDINO [email protected] RENEWABLE NORTHWEST PROJECT MEGAN WALSETH DECKER RUSS WRIGHT [email protected] [email protected]
RESEARCH 13 SUNLIGHT SOLAR ENERGY INC BOB BEAULAURIER CHANCE CURRINGTON 2597 KILHENNY CT PROJECT MANAGER WEST LINN OR 97068 chance.currington@sunIightsoIarcom [email protected] SUSTAINABLE SOLUTIONS RS ENERGY LLC UNLIMITED LLC DAVID RICHARDS STEVEN MCGRATH [email protected] [email protected]
SOLAR CITY TANGERINE SOLAR COLIN MURCHIE STANLEY FLOREK [email protected] stanIey.fIorek@tangerinesoIarcom
SOLAR ENERGY SOLUTIONS, INC. ANDREW KOYAANISQATS, PRESIDENT [email protected] TANNER CREEK ENERGY UNIVERSITY OF OREGON ALAN HICKENBOTTOM FRANK E. VIGNOLA PRESIDENT DEPARTMENT OF PHYSICS [email protected] [email protected]
CRAIG STEWART VOTE SOLAR [email protected] CLAUDIA EYZAGU I RRE Claudia@votesolarorg THREE PHASE ELECTRIC ROBERT LANE JESSE HUNTER [email protected] jesse@sunpathsolarnet
TONKON TORP LLP WALMART JACK ISSELMANN STEVE W. CHRISS 888 SW FIFTH AVE STE. 1600 2001 SE 10TH STREET PORTLAND OR 97204 BENTONVILLE AR 72716-0550 [email protected] [email protected]
CLACKAMAS COUNTY OREGON SUNWIZE TECHNOLOGIES SCOTT CIECKO STEVEN HOROWITZ [email protected] [email protected]
ED HOLT & ASSOCIATES INC. ATTORNEY AT LAW ED HOLT DIANE HENKELS [email protected] [email protected]
SOLAR KI LLC ELLEN TAPPON [email protected]
VOLTAIR WIND POWER INC. ROBERT MIGLIORI 24745 NE MOUNTAIN TOP ROAD NEWBURG OR 97132 [email protected]
DATED: June 21, 2010
Wendy Mcl o Legal Ass. CERTIFICATE OF SERVICE
I hereby certify that I served a true and correct copy of Idaho Power's Notice of Application on
the Parties to Docket UE 213 on the date indicated below by email and/or first-class mail
addressed to said person(s) at his or her last-known address(es) indicated below.
EP MINERALS LLC JIM TAIPALE DEPARTMENT OF JUSTICE jim.taipale@eaglepichercom MICHAEL T. WEIRICH REGULATED UTILITY & BUSINESS LAURA A PATRUNO SECTION laura.patruno@eaglepichercom 1162 COURT ST. NE SALEM, OR 97301-4096 PORTLAND GENERAL ELECTRIC Michael.weirichdoj.state.or.us RANDALL DAHLGREN RATES & REGULATORY AFFAIRS RICHARDSON & O'LEARY PLLC 121 SW SALMON ST. -1WTC0702 PETER J. RICHARDSON PORTLAND OR 97204 [email protected] [email protected] GREGORY M. ADAMS DOUGLAS C. TINGEY greg richardsonandoleary.com 121 SW SALMON ST. 1WTC13 PORTLAND OR 97204 CITIZENS' UTILITY BOARD OF OREGON [email protected] GORDON FEIGHNER [email protected] DON READING 6070 HILL ROAD CATRIONA MCCRACKEN BOISE ID 93703 [email protected] [email protected] BOB JENKS PUBLIC UTILITY COMMISSION [email protected] JUDY JOHNSON PO BOX 2148 SALEM OR 97308-2148 judy.johnson@state. or. us
DATED: June 21, 2010
- Wendy McIndp. Legal Assist ft 1 THE PUBLIC UTILITY COMMISSION OF OREGON 2 DR/UM 3
4 In the Matter of the Petition of Petition for Declaratory Ruling or in the Alternative 5 Idaho Power Company Application for Deferred Accounting
6 for a Declaratory Ruling or in the Alternative an Application for Deferred Accounting. 7
8 Pursuant to ORS 756.450 and OAR 860-013-0020, Idaho Power Company ("Idaho
9 Power" or the "Company") hereby petitions the Public Utility Commission of Oregon
10 ("Commission") for a declaratory ruling establishing that the Company's proposed tariff rider
11 and balancing account for recovery of all costs associated with the Photovoltaic Volumetric
12 Incentive Rate Pilot ("PV VIR Pilot"), implemented in compliance with ORS 757.365, does
13 not constitute retroactive ratemaking and is therefore not subject to statutes governing
14 deferred accounting. In the alternative, if the Commission finds that the Company's
15 proposed recovery mechanism constitutes retroactive ratemaking, the Company requests
16 that the Commission approve that mechanism for deferred accounting under ORS 757.365.
17 If the Commission determines that the Company's proposed recovery mechanism
18 constitutes retroactive ratemaking and that ORS 757.365 does not grant it authority to
19 approve deferred accounting, Idaho Power requests that the Commission grant its request
20 for deferred accounting under ORS 757.259, subject to a declaration that those elements of
21 ORS 757.259 preventing recovery of all prudently-incurred costs associated with
22 implementing the PV VIR Pilot are inapplicable.
23 Idaho Power files this Petition concurrently with tariff sheets implementing
24 Schedule 88, which sets forth the rules governing participation in the PV VIR Pilot, and
25 Schedule 93, through which the Company will recover costs associated with the PV VIR
26 Pilot. Both schedules will be effective July 1, 2010. Page 1 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204
1 I. INTRODUCTION
2 In Order No. 10-198, 1 the Commission approved the Company's request to be
3 allowed to recover 100 percent of its PV VIR Pilot costs through a rider mechanism similar to
4 the Company's Energy Efficiency Rider. 2 As discussed below, the Company believes that it
5 is not required to file an application for deferred accounting to implement Schedule 93
6 because the proposed prospective cost recovery mechanism does not constitute retroactive
7 ratemaking. However, because Schedule 93 includes a balancing account, which has in
8 some cases implicated deferred accounting, the Company is filing this Petition out of an
9 abundance of caution.
10 In the event the Commission finds that an application for deferred accounting is
11 necessary for the Company to maintain the balancing account in Schedule 93, Idaho Power
12 requests deferral under ORS 757.365(10) or, in the alternative ORS 757.259. As discussed
13 below, authority to defer the requested costs may be necessary to allow the Company to
14 recover costs incurred to comply with ORS 757.365, as required by ORS 757.365(10).
15 Therefore, ORS 757.365(10) provides the Commission with the implicit authority to authorize
16 deferral of the requested costs. Alternatively, if the Commission finds that ORS 757.365(10)
17 does not provide authority to authorize the deferral, the Commission should authorize
18 deferral under ORS 757.259 in order to match the benefits provided to customers with the
19 costs of providing those benefits. If the Commission approves deferral under ORS 757.259,
20 however, Idaho Power requests that the Commission clarify that provisions in the statute
21 that prevent recovery of all prudently incurred costs are inapplicable.
22
23
24 1 Re Public Utility Commission of Oregon Investigation into Pilot Programs to Demonstrate the Use and Effectiveness of Volumetric Incentive Rates for Solar Photovoltaic Energy Systems, Docket UM 25 1452, Order No. 10-198 (May 28, 2010) [hereinafter "Order No. 10-1981 26 2 Id. at 21.
Page 2 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204
1 Notwithstanding the Company's alternative requests for deferral, the Company's
2 primary argument is that authorization for deferred accounting is not necessary to implement
3 the balancing account included in Schedule 93. The Company therefore requests the
4 Commission issue a declaratory ruling finding that the proposed balancing account does not
5 constitute retroactive ratemaking and that authorization for deferred accounting is not
6 necessary to implement Schedule 93. 7 II. NOTICE AND WAIVER OF PAPER SERVICE 8 Idaho Power wishes to waive paper service in this docket. Communications
9 regarding this Petition should be addressed to: 10 Lisa Rackner Wendy Mclndoo McDowell Rackner & Gibson PC McDowell Rackner & Gibson PC 11 520 SW Sixth Avenue, Suite 830 520 SW Sixth Avenue, Suite 830 Portland, Oregon 97204 Portland, Oregon 97204 12 [email protected] [email protected] 13 Lisa Nordstrom Mike Youngblood Idaho Power Company Idaho Power Company 14 P.O. Box 70 P.O. Box 70 Boise, Idaho 83707 Boise, Idaho 83707 15 Inordstrom@idahopowercorn rnyoungblood@idahopowercorn 16 Greg Said Courtney Waites Idaho Power Company Idaho Power Company 17 P.O. Box 70 P.O. Box 70 Boise, Idaho 83707 Boise, Idaho 83707 18 gsaid@idahopowercom [email protected] 19 Christa Bearry Idaho Power Company 20 P.O. Box 70 Boise, Idaho 83707 21 [email protected]
22 23 BACKGROUND 24 ORS 757.365(1), as amended by House Bill 3690 ("HB 3690") states, "the Public
25 Utility Commission shall establish a pilot program for each electric company to demonstrate
26 the use and effectiveness of volumetric incentive rates and payments for electricity delivered
Page 3 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204 1 from solar photovoltaic energy systems that are permanently installed in this state by retail
2 electricity consumers and that first become operational after the program begins." HB 3690
3 requires that the PV VIR Pilot be available to customers by July 1, 2010. In Order
4 No. 10-198 issued in UM 1452, the Commission decided policy issues related to the
5 development and implementation of the programs, and in Order No. 10-200, 3 issued in
6 AR 538, adopted rules necessary to implement the pilot programs. Notably, the
7 Commission ordered that the utilities file all tariffs and applications necessary to implement
8 their respective pilot programs to be effective July 1, 2010. 4 To achieve this goal, Idaho
9 Power has expended and is currently expending considerable resources for both training
10 and program process development.
11 ORS 757.365(10) provides that "all prudently-incurred costs" associated with the pilot
12 programs are recoverable in rates by the utilities. In Order No. 10-198, the Commission
13 granted the Company's request that it be allowed to recover 100 percent of its program
14 costs through a rider mechanism, similar to its currently-approved Energy Efficiency Rider. 5
15 Idaho Power's proposed rider mechanism for the PV VIR Pilot is set forth in Schedule 93,
16 filed concurrently with this Application, effective July 1, 2010. Like the Energy Efficiency
17 Rider, Schedule 93 includes a balancing account to track the difference between actual PV
18 VIR Pilot costs incurred and costs recovered through this schedule. Positive and negative
19 variances are rolled over from month to month. Schedule 93 does not, however, include a
20 true-up mechanism.
21
22
23
3 Re Rulemaking Regarding Solar Photovoltaic Energy Systems, Docket AR 538, Order No. 10-200 24 (May 28, 2010).
25 4 Order No. 10-198 at 22.
26 5 - Id, at 21.
Page 4 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204 1 IV. DISCUSSION
2 A. The Balancing Account in Schedule 93 Does Not Constitute Retroactive Ratemaking and Therefore Does Not Require Authorization for Deferred 3 Accounting. 4 Although the Oregon courts have not adopted a rule prohibiting retroactive
5 ratemaking, 6 the Commission and the Oregon Attorney General have argued that such a
6 rule applies in Oregon.' The rule against retroactive ratemaking prohibits utilities from
7 including past profits or losses in future rates. 9 The legislature has established exceptions
8 to the general rule against retroactive ratemaking, including the general deferral statute
9 ORS 757.259. 9 Pursuant to that statute, the Commission may authorize certain amounts for
10 later incorporation in rates. 19 11 The balancing account included in Schedule 93 does not constitute retroactive
12 ratemaking and therefore does not require the application of an exception to the rule against
13 retroactive ratemaking for approval. Under Schedule 93, the amount of the rider that will
14 appear on customer bills is set prospectively, to cover amounts the Company anticipates it
15 will incur in the future to run its PV VIR Pilot. While negative and positive variances do roll
16 forward from month-to-month, there is no point at which the Company will request that the
17 rider amount be "trued up" to include past profits or losses in rates. Thus, the balancing
18 account does not implicate the general rule against retroactive ratemaking.
19
20
21 8 Dryerv. Portland Gen. Elec. Co., 341 Or. 262, 271 n.10 (2006). 22 7 See, e.g., Re Portland Gen. Elec. Co., Docket UE 165, Order No. 05-1261 (Dec. 21, 2005); Or. Op. Atty. Gen. OP-6076, 1987 WL 278316 (Mar. 18, 1987) [hereinafter "AG Opinion"]. 23
8 AG Opinion, 1987 WL 278316 at *1. 24
9 Re Open Investigation Related to Deferred Accounting, Docket UM 1147, Order No. 05-1070 (Oct. 25 5, 2005).
26 io ORS 757.259(2),
Page 5 PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204
1 This view is supported by the Commission's recent decision regarding Idaho Power's
2 Power Cost Adjustment Mechanism ("PCAM"). In UE 195, Idaho Power argued that it need
3 not file a deferral application to implement its PCAM because the earnings band limitations
4 prevented it from directly and fully recovering its past losses and profits and therefore did
5 not constitute retroactive ratemaking. 11 In Order No. 08-491 the Commission rejected the
6 Company's arguments and declared that the PCAM constituted retroactive ratemaking and
7 therefore necessitated authorization for deferred accounting because "the true-up
8 mechanism contained in the PCAM, notwithstanding the earnings band limitations, has, at
9 its core, a recovery of expenses for the provision of service in the past . . . from future
10 ratepayers . .. As a direct consequence, we conclude that ORS 757.259(8) does indeed
11 apply to the PCAM." 12 In this case, Schedule 93 contains no true-up mechanism or other
12 mechanism for recovery of expenses for providing service in the past from future ratepayers.
13 Schedule 93 therefore does not necessitate the Commission's approval as deferred
14 accounting.
15 Similarly, the Commission's deferred accounting statute and rules support a finding
16 that authorization for deferred accounting is not necessary to implement Schedule 93. First,
17 ORS 757.259, the general deferral statute, allows the Commission to authorize deferral of
18 certain amounts "for later incorporation in rates." ORS 757.259(2). The balancing account
19 implemented in Schedule 93 does not include a true-up mechanism and therefore does not
20 provide for later incorporation of amounts in rates. As a result, the balancing account will
21
22
23 Re Idaho Power Co. Application for Authority to Implement a Power Cost Adjustment Mechanism for Electric Setvice to Customers in the State of Oregon, Docket UE 195, Idaho Power's Motion for 24 Clarification (July 18, 2008).
25 12 Re Idaho Power Co. Application for Authority to Implement a Power Cost Adjustment Mechanism for Electric Service to Customers in the State of Oregon, Docket UE 195, Order No. 08-491 at 7 (Oct. 26 6, 2008) (emphasis added).
Page 6 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204 1 not cause amounts to be included in rates in the future and does not constitute deferred
2 accounting.
3 Second, the Commission's deferred accounting rules support the conclusion that the
4 Schedule 93 balancing account does not constitute deferred accounting. The Commission's
5 rules parallel the deferral statute and define "deferred accounting" as recording certain
6 expenses or revenues in a balance sheet account "for later incorporation in rates."
7 OAR 860-027-0300(1)(b)—which, under the rules is achieved through "amortization." OAR
8 860-027-0300(1)(a). Significantly, the Commission's rules define "amortization" to exclude
9 "the normal positive and negative fluctuations in a balancing account." OAR 860-027-
10 0300(1)(a). These rules indicate that recording positive and negative fluctuations of
11 expenses in a balancing account, as is provided for in Schedule 93, is not considered
12 deferred accounting unless such expenses will be later incorporated in rates.
13 If Authorization for Deferred Accounting is Required, Deferral Should Be B. 14 Authorized Under ORS 757.365.
15 ORS 757.365(10) provides that "all prudently-incurred costs" associated with the pilot
16 programs are recoverable in rates by the utilities. In Order No. 10-198, the Commission
17 granted the Company's request that it be allowed to recover 100 percent of its program
18 costs through a rider mechanism. 13 If the Commission finds that the balancing account in
19 Schedule 93 constitutes deferred accounting, the Commission should approve the
20 Company's request for deferred accounting to allow for recovery of all prudently incurred
21 costs associated with the PV VIR Pilot, as required by ORS 757.365(10). Because the
22 proposed rider mechanism is not effective until July 1, 2010, Idaho Power will be unable to
23 recover costs incurred prior to that date unless it has the opportunity to defer such costs. In
24 order to allow recovery of all prudently incurred costs of compliance as required by
25
26 13 Order 10 - 198 at 21.
Page 7 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204 1 ORS 757.365(10), it follows that the Commission must have the authority to allow for
2 deferral of costs described in this Application. Idaho Power therefore requests authorization
3 to defer the requested costs, including those incurred prior to the date of this Application,
4 under ORS 757.365(10).
5 Although the costs are also appropriate for deferral under the general deferral
6 statute, ORS 757.259(2)(e), in order to match appropriately the costs borne by and benefits
7 received by customers, the general deferral statute contains elements that would thwart the
8 legislature's mandate that prudently incurred costs associated with the PV VIR Pilot be
9 recovered in rates. First, because the general deferral statute requires an earnings test,
10 authorizing the deferral under this statute could result in the Company failing to recover all
11 prudently incurred costs associated with compliance of ORS 757.365. See
12 ORS 757.259(5). Second, because of the annual cap on amortization of deferrals in
13 ORS 757.259(8), Idaho Power estimates the Company could not begin amortizing the
14 deferred amounts until December of 2017 at the earliest. Amortization of the amounts
15 would therefore occur after the PV VIR Pilot is completed, inappropriately shifting costs of
16 the PV VIR Pilot to future ratepayers. Third, the requirement in ORS 757.259(4) that the
17 Commission may authorize deferrals beginning with the date of the deferral application
18 would preclude Idaho Power from recovering its prudently incurred PV VIR Pilot costs
19 incurred prior to the date of this Application, contrary to ORS 757.365(10). Deferral under
20 ORS 757.365, as proposed by the Company in this Application, would avoid these limits and
21 would therefore be consistent with ORS 757.365(10).
22 C. If the Commission Authorizes Deferred Accounting Under ORS 757.259, It Should Find that Any Sections of that Statute Preventing Recovery of All 23 Prudently-Incurred Costs Associated with Implementing ORS 757.365 Are Inapplicable. 24
25 If the Commission determines that the requested deferral is not authorized under
26 ORS 757.365(10), Idaho Power requests authority to implement the deferral under
Page 8 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204 1 ORS 757.259(2)(e). If the Commission authorizes deferral under this statute, however,
2 Idaho Power requests that the Commission find that any sections of ORS 757.259 that
3 prevent the Company from recovering "all prudently-incurred costs," as set forth in
4 ORS 757.365(10) are inapplicable.
5 As discussed in the previous section, the application of ORS 757.259 to the
6 Company's cost recovery under ORS 757.365 would prevent the Company from recovering
7 all prudently-incurred costs associated with implementing the PV VIR Pilot. These limits
8 conflict with the requirement in ORS 757.365 that a utility be allowed recovery of all
9 prudently-incurred costs associated with implementing the PV VIR Pilot. The Oregon
10 Supreme Court has recognized that "if the legislature enacts a statutory requirement that
11 conflicts with another earlier-enacted statutory requirement, and the conflict is irreconcilable,
12 the earlier statute must yield to the later statute." Carlson v. Myers, 327 Or. 213, 237
13 (1998). Moreover, when a more general statute conflicts with a particular statute, the more
14 specific statute will control. ORS 174.020(2); Powers v. Quigley, 345 Or. 432, 438 (2008).
15 Because ORS 757.365 was enacted later than the general deferral statute, and addresses
16 recovery of specific costs rather than general costs, any conflicts between ORS 757.365
17 and ORS 757.269 must be resolved in favor of ORS 757.365.
18 The provisions limiting recovery of prudently-incurred PV VIR Pilot costs in
19 ORS 757.259 are therefore inapplicable to any authorization of deferral under ORS 757.259.
20 Specifically, ORS 757.259(4), which states that deferral is authorized beginning with the
21 date of application, ORS 757.259(5), which requires an earnings test prior to amortization,
22 and ORS 757.259 (6) and (8), which contain caps on amortized amounts, are inapplicable
23 as a result of the operation of ORS 757.365.
24 As the Company explained above, however, the Commission should not reach this
25 issue because the requested cost recovery under Schedule 93 does not constitute
26 retroactive ratemaking and therefore does not require authorization for deferred accounting.
Page 9 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204
1 V. APPLICATION
2 To the extent the Commission finds that an application for deferred accounting is
3 necessary, the Company states as follows:
4 A. Description of Utility Expense
5 Idaho Power requests deferral of costs associated with implementing the PV VIR
6 Pilot, as is required by ORS 757.365. These costs include, but are not be limited to the
7 following:
8 (1) Volumetric incentive payments and/or retail bill offsets to participants;
9 (2) administrative costs associated with PV VI R Pilot operations
10 (applicant/participant support and informational services; application
11 processing agreements, and billing/payment management; distribution system
12 impact reviews and installation inspections; regulatory and development costs);
13 (3) data collection;
14 (4) development costs for billing and website (including reporting available
15 capacity);
16 (5) customer surveys; and
17 (6) regulatory reporting requirements.
18 Idaho Power requests authority to defer all costs associated with the PV VIR Pilot
19 incurred prior to June 30, 2010, after which rates set forth in Schedule 93, filed concurrently
20 with the Application, go into effect. The Company also requests authority to track the
21 difference between costs recovered through Schedule 93 and the actual costs associated
22 with the PV VIR Pilot. Deferred balances will accrue interest at the Commission-authorized
23 rate of return for Idaho Power's deferred accounts.
24 B. Reasons for Deferral
25 As described above, ORS 757.365 requires the implementation and administration of
26 the PV VIR Pilot and provides that prudently incurred costs associated with the program are
Page 10 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204 1 recoverable in rates. Costs associated with the PV VIR Pilot are not currently included in
2 Idaho Power's rates. Accordingly, the deferral application is necessary to allow for recovery
3 of the costs as contemplated by ORS 757.365(10). Deferred accounting will allow the
4 Company to match the benefits that customers will be receiving with the costs to the
5 Company of providing those benefits.
6 C. Proposed Accounting
7 Idaho Power proposes to record the receipt of funds received from customers as a
8 regulatory liability (balancing account) in FERC account 254, Other Regulatory Liabilities,
9 with a debit to FERC account 131, Cash and the reverse of this entry when funds are
10 disbursed. In the absence of a deferred accounting order from the Commission, Idaho
11 Power would record costs associated with the PV VIR Pilot to other FERC accounts.
12 D. Estimate of Amounts
13 Costs of the PV VIR consist of two types: (1) VIR payments to participants including
14 any retail electricity service bill offset amounts, and (2) the program costs incurred to carry-
15 out and administer (including system development) the requirements for a PV VIR Pilot.
16 Total payments to PV VIR Pilot participants depend on the (1) rate paid to participants, (2)
17 the output from the Qualifying Systems, and (3) the number of Qualifying Systems in
18 operation. As such, Idaho Power cannot effectively estimate the payment amount. Further,
19 the Commission may modify the VIR for small sized systems during the first four years of the
20 pilot affecting the level of customer participation. Idaho Power's share of the 25 MW
21 statewide pilot capacity may also be adjusted by the Commission. Deferred costs are
22 therefore difficult to estimate. Until more information is available, Idaho Power's rough
23 estimate of the incremental costs may range from approximately $500,000 to $600,000
24 annually for the first four years.
25 The PV VIR program is a pilot; therefore, Idaho Power does not anticipate
26 undertaking extensive or permanent system or staffing changes until the Company can
Page 11 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC 520 SW Sixth Avenue, Suite 830 OR IN THE ALTERNATIVE APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204 1 reasonably expect the PV VIR Pilot as currently proposed to continue for an extended time.
2 Idaho Power will adjust staffing as necessary based on participation levels in as cost
3 efficient manner as possible.
4 E. Notice
5 A copy of the notice of application for deferred accounting treatment and a list of
6 persons served with the notice are attached to the Application as Attachment A.
7 VI. CONCLUSION
8 For the reasons stated above, Idaho Power requests that the Commission issue a
9 declaratory ruling finding that maintaining the balancing account proposed in Schedule 93
10 does not constitute retroactive ratemaking and that therefore authorization for deferred
11 accounting is not necessary to implement Schedule 93. In the alternative, if the
12 Commission finds that an application for deferred accounting is necessary, the Company
13 requests permission to defer all expenses associated with the Photovoltaic Volumetric
14 Incentive Rate Pilot incurred by the Company prior to July 1, 2010 under ORS 757.365, or in
15 the alternative ORS 757.259, as described herein.
16 DATED: June 21, 2010 McDo ELL RACKNER & GIBSON PC 17
18 Lisa F. Rackner 19 Of Attorneys for Idaho Power 20 Company
21 IDAHO POWER COMPANY
22 Lisa Nordstrom Lead Counsel 23 PO Box 70 Boise, ID 83707 24
25
26
Page 12 - PETITION FOR A DECLARATORY RULING McDowell Rackner & Gibson PC OR IN THE ALTERNATIVE 520 SW Sixth Avenue, Suite 830 APPLICATION FOR DEFERRED ACCOUNTING Portland, OR 97204 EXHIBIT A
NOTICE OF APPLICATION FOR DEFERRED ACCOUNTING
June 21, 2010 1 BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON 2 DR/UM 3
4 In the Matter of the Petition of 5 Notice of Application for Idaho Power Company Deferred Accounting 6 for a Declaratory Ruling or in the 7 Alternative an Application for Deferred Accounting. 8
9
10 On June 21, 2010, Idaho Power Company ("Idaho Power" or the "Company") applied
11 to the Public Utility Commission of Oregon (the "Commission") for authorization to use
12 deferred accounting for expenses associated with the Photovoltaic Volumetric Incentive
13 Rate Pilot ("PV VIR Pilot"), implemented in compliance with ORS 757.365. In the Petition
14 for Declaratory Ruling or in the Alternative Application for Deferred Accounting, Idaho
15 Power requests that the Commission issue a declaratory ruling establishing that the
16 Company's proposed tariff rider and balancing account for recovery of all costs associated
17 with the PV VIR Pilot does not constitute retroactive ratemaking and is therefore not
18 subject to statutes governing deferred accounting. In the alternative, if the Commission
19 finds that the Company's proposed recovery mechanism constitutes retroactive
20 ratemaking, the Company requests that the Commission approve that mechanism for
21 deferred accounting under ORS 757.365 or, subject to a declaration that those elements
22 of ORS 757.259 preventing recovery of all prudently-incurred costs associated with
23 implementing the PV VIR Pilot are inapplicable, ORS 757.259.
24 The granting of this Application will not authorize a change in rates, but will permit
25 the Commission to consider allowing such deferred amounts in rates in a subsequent
26 proceeding.
Page 1 - NOTICE OF APPLICATION McDowell Rackner & Gibson PC 520 SW Sixth Avenue, Suite 830 Portland, OR 97204 1 Interested persons can obtain a copy of the Application by contacting:
2 Lisa Rackner McDowell Rackner & Gibson PC 3 520 SW Sixth Avenue, Suite 830 Portland, Oregon 97204 4 S [email protected]
5 Any person may submit to the Commission written comments on the Application within
6 25 days from the date of the Application, in accordance with procedures prescribed by the
7 Commission.
8
9 DATED: June 21, 2010 MCDOWELL RACKNE IBSON PC
10
11 ds/;1-F. Rackner 12
13 Of Attorneys for Idaho Power Company
14 IDAHO POWER COMPANY
15 Lisa Nordstrom Lead Counsel 16 PO Box 70 Boise, ID 83707 17
18
19
20
21
22
23
24
25
26
Page 2 NOTICE OF APPLICATION McDowell Rackner & Gibson PC 520 SW Sixth Avenue, Suite 830 Portland, OR 97204