Agenda Date:   March 28, 2001    
Item No.:  
 
Docket:   UE-010350
Company Name:  PacifiCorp, dba Pacific Power and Light

Staff:   Thomas Schooley, Policy Research Specialist
Joelle Steward, Policy Research Specialist
   

Recommendation:

Grant the tariff filed in UE-010350 to become effective with Less Than 
Statutory Notice on 
April 1, 2001, as filed.

Background

On December 13, 2000, the Commission permitted a voluntary buy-back programs 
for PacifiCorp to become effective with less than statutory notice.  The 
program was approved on an expedited basis due to the volatile market 
conditions and severe weather forecasts at the time.  The buy-back program 
provided billing credits to large customers for voluntary load curtailment at 
times specified by the company.  

Docket UE-010350 extends this opportunity to irrigation customers.  Market 
prices are expected to remain high through the summer because of  the present 
drought conditions and the supply imbalance across the region.  This program 
gives PacifiCorp another tool to use to manage its energy portfolio.

PacifiCorp’s irrigation curtailment program contains the following features:
 1. The program is available to irrigation customers with demands of 16 or more 
kilowatts.
 2. The Company will pay 12.5 cents per kWh for qualifying reductions.  The 
reduction is calculated from   the customer’s historic average monthly energy 
use.
 3. Irrigation pumps must be disconnected from PacifiCorp’s electrical 
distribution system throughout the   season (May through November 2001).  The 
customer may not reconnect the pump at another    Pacific Power connection.  
The Company will physically disconnect the irrigation pumps.
 4. Energy consumed by a program participant in violation of the program 
requirements will be billed at   25.0 cents per kWh.
 5. Reconnection fees are waived for reconnecting the load next year.
 6. Customer must execute an Irrigation Curtailment Program Agreement prior to 
May 1, 2001.     Customers who have decided not to use irrigation service prior 
to the effective date of this program   are not eligible for the program. 
 7. The Schedule terminates on November 30, 2001.

PacifiCorp has about 1,800 customers with demands of 16 and higher kW who are 
eligible for the program.  Potential qualifying load could approach 117,000 
MWh, or 22.8 aMW.  If all eligible customers participated, the total buy-back 
payments would be about $14.6 million, or an average of $8,100 per customer.

PacifiCorp requests approval of this new schedule on less than statutory notice 
in order to allow irrigation customers to include this program in planting 
decisions which must be made before May 1, 2001.

Discussion 

The PacifiCorp program differs from the Avista Pumping buy-back in a few 
important ways.  
 1. PacifiCorp requires physical disconnection from its system.  This allows 
Pacific to plan on the    curtailment as if it were a firm resource.  
 2. PacifiCorp offers 12.5 cents per kWh compared to Avista’s ten cents/kwh.  
This premium reflects the   firm nature of the complete disconnect from the 
electric system.
 3. PacifiCorp imposes a penalty of 25 cents/kwh.  If a participant breaks the 
agreement for even a short   duration, they will pay for that power at a price 
in the range of spot market purchases.  

PacifiCorp consulted with several of the eligible customers on the programs 
features, including the penalty clause, and received positive feedback from the 
customers.

These buyback programs are a reaction to the potential of a power crisis in our 
state.  If the crisis unfolds as feared the investor-owned power companies 
should not be allowed to unduly profit from the crisis.  The buy-back programs 
do contain the potential for general rate changes, therefore the deferral of 
revenues or power cost savings may be appropriate.

Recommendation

Staff recommends the Commission grant the tariff filed in Docket UE-010350 to 
become effective with less than statutory notice on March 29, 2001.