In late December 2020, the Utah Public Service Commission (Utah Commission) and the Oregon Public Utility Commission (Oregon Commission) issued separate orders on PacifiCorp’s Utah and Oregon general rate cases. On December 30, the Utah Commission granted an increase to PacifiCorp, dba Rocky Mountain Power’s (PacifiCorp) annual revenue requirement of $31.41 million. In its initial Utah filing, PacifiCorp sought to increase its retail rates by $95.78 million, or 4.8%. On December 18, 2020, the Oregon Commission ordered a decrease to PacifiCorp’s revenue requirement of approximately $20.9 million, representing a 1.6% decrease from the its previous rates. PacifiCorp’s initial Oregon filing sought an increase of $78 million, or approximately 6%.
The Utah Commission resolved a number of contested revenue requirement issues, including but not limited to finding that:
• A cost of capital with a long-term debt ratio of 47.5%, a common equity ratio of 52.5%, a weighted average cost of long-term debt of 4.79%, an allowed return on equity (ROE) of 9.65%, and an overall rate of return on capital (ROR) of 7.34% were just and reasonable.
• Costs associated with reasonable participation in civic goodwill-related organizations are prudently incurred because participation in these organizations supports timely and efficient planning and open dialogue with business and community leaders, to the benefit of customers.
• Expenses related to leadership training and business travel are reasonable and provide training and opportunities to build skills and relationships that support safe and reliable electric service to customers, and also finding that expenses related to employee appreciation are reasonable and that these expenses contribute to retaining skilled employees, which benefits customers.
• PacifiCorp acted prudently in acquiring and developing the 240-megawatt Pryor Mountain Wind project.
• PacifiCorp’s incentive goal categories predominantly benefit customers and are prudent, acted prudently in relation to a Lakeside gas plant outage, and should recover its costs associated with the Cholla Unit 4 and Craig Unit 2 coal plant closure and pension settlement losses.
• PacifiCorp should not be allowed to buy down Utah’s share of costs associated with the Deer Creek Mine Closure Regulatory Asset; and
• PacifiCorp should not include the costs of the Advanced Meter Infrastructure Project in the rate base because they were not used and useful during the test period.
The Utah Commission also addressed several regulatory and balancing accounts related to pensions, energy, production tax credits, and renewable energy certificates, including approval of a wildland fire mitigation balancing account.
The Oregon Commission resolved several contested revenue requirement issues, including but not limited to finding that:
• A cost of capital for PacifiCorp that with a long-term debt ratio of 49.99%, a common equity ratio of 50%, a preferred stock ratio of 0.1%, a weighted average cost of long-term debt of 4.774%, an allowed ROE of 9.5%, and overall ROR of 7.137% were just and reasonable.
• Most of PacifiCorp’s transmission investments were prudently incurred, with the exception of certain cost overruns related to the Wallula-to-McNary and Threemile Canyon Farms projects.
• It would decline to open an investigation into the transmission functionalization classification of PacifiCorp’s facilities.
• PacifiCorp’s capital investments in the Energy Vision 2020 wind projects, the D.2 transmission line, and the Pryor Mountain wind project are prudent and in the public interest.
• Certain environmental emissions control investments at the Hunter and Jim Bridger coal plants and Deer Creek Mine closure costs were imprudent,
• PacifiCorp should be able to recover the costs of the Advanced Meter Infrastructure Project in rates.
• Portions of PacifiCorp’s incentive compensation benefit shareholders and should not be paid by ratepayers.
The Oregon Commission also addressed issues related to whether it should open investigations related to PacifiCorp’s renewable energy certificate bulk purchase option and transmission classification. It also considered whether to revise or adopt several regulatory and balancing accounts to power costs, generation plant removal, wildland fire mitigation costs, resolved disputes related coal-fueled resource exit orders, exit dates, decommissioning costs, pension settlement losses, insurance, depreciation expense, property and corporate tax expense, and other expenses.
Sanger Law represented two Facebook subsidiaries in the proceedings (Vitesse in the Oregon Commission proceeding and Stadion in the Utah Commission proceeding).
Disclaimer
These materials are intended to as informational and are not to be considered legal advice or legal opinion, nor do they create a lawyer-client relationship. Information included about previous case results does not assure a similar future result.
