Oregon Bulletin
Rule Caption: In
the Matter of Amending Division 38 Rules to Include New Utility-Owned Resources
in Revenue Requirement at Cost and to Clarify Language.
Adm. Order No.: PUC 3-2011
Filed with Sec. of State: 6-17-2011
Certified to be Effective: 6-17-11
Notice Publication Date: 5-1-2011
Rules Amended: 860-038-0080, 860-038-0480
Subject: The revision to OAR 860-038-0080(1) requires that
new utility-owned resources be included in revenue requirement at cost. In its
Order No. 11-007, the Commission ordered this change be made as a result of its
investigation (docket UM 1066) to re-examine and update resource planning
acquisition policies. The revision to OAR 860-038-0480(2) was necessary to
clarify that self-directing customer credits are applied to specific accounts.
Rules Coordinator: Diane Davis—(503) 378-4372
860-038-0080
Resource
Policies and Plans
(1) The
Commission adopts the following policies with respect to the Oregon share of
generating resources (generating assets and power purchase contracts with a
duration of at least one year) of each electric company:
(a) At such
time as the Resource Plan is implemented and fully executed, each electric
company will retain in its Oregon revenue requirement costs associated with a
level of generating resources that is not greater than that necessary to meet
the current and reasonably expected future loads of its Oregon cost-of-service
consumers. In determining whether an electric company has excess generating
resources, the Commission will consider the projected useful lives and mix of
fuels of the electric company’s generating resources. To encourage the
development of a competitive retail energy market, it is the policy of the Commission
to release to the competitive market generating resources in excess of such
reasonably expected future loads. It is also the policy of the Commission to
determine a one-time valuation for the share of an electric company’s
generating resources attributable to Oregon consumers who are not
cost-of-service consumers;
(b) The
Commission will not require an electric company to acquire new generating
resources except as provided in ORS 757.663.
(c) Major
capital improvements to existing generating resources will continue to be, and
new generating resources will be, subject to least cost planning processes and
analyses and the Oregon share of their prudently-incurred costs will be
included in an electric company’s Oregon revenue requirement, which for a multi-state
electric company shall be consistent with Commission decisions pursuant to
subsection (3)(a)(G) of this rule.
(d) The
Oregon share of the costs of each generating resource may be either completely
in, completely out, or “mixed” with respect to inclusion in an electric
company’s Oregon revenue requirement. The Commission will permit mixed status
unless it finds that mixed status will:
(A) Reduce
the generating resource’s operating efficiency;
(B) Harm
the development of a competitive market; and
(C) Prevent
the owners from making economic decisions about the operation of the generating
resource.
(e) For a
multi-state electric company for which the Commission adopts a fixed-allocated
Oregon share amount, and a Resource Plan is implemented, such generating
allocation amount will be used for developing cost-of-service rates, transition
charges and credits, and Operations and Maintenance allocations as well as
other allocations that use generation-based factors.
(2) For
purposes of this rule and OARs 860-038-0100 and 860-038-0140, a class’s share
of the total Oregon share of a generating resource will equal the ratio of the
class’s total Oregon retail load measured in weather-normalized kilowatt-hour
sales to total Oregon retail load measured in weather-normalized kilowatt-hour
sales for a 12 month period as determined by the Commission. Loads will be
adjusted to remove the effects of demand exchange programs that were in effect
during the 12 month period. To the extent such shares are not known as of the
time period established by the Commission, the electric company will use
estimates until relevant data are available.
(3) By a
date to be determined by the Commission, each electric company must file with
the Commission a resource plan that meets the following requirements:
(a)
Information. The resource plan must include the following information:
(A)
Consistent with paragraph subsection (3)(a)(G) of this rule, the amount of
capacity and energy and the availability of each generating resource that is
attributable to the share of the electric company’s load from cost-of-service
consumers, and the amount that is attributable to the share of the electric
company’s load from consumers not eligible for a cost-of-service rate;
(B) A
forecast of the revenue requirements associated with each generating resource
over both its projected remaining useful life and economic life, with
sensitivities for major assumptions, and identification of deferred taxes,
excess deferred taxes, FASB 109 assets, and any investment tax credits
associated with each generating resource;
(C) The
other characteristics of the generating resource that could affect its value
including but not limited to its capability to provide or support ancillary
services, the value of its site and environmental or operating permits, and any
environmental issues associated with it;
(D) A
forecast of future market prices for electricity, including forecasts of major
fuel inputs and sensitivity analyses;
(E) A
forecast of loads of the electric company’s Oregon cost-of-service consumers
covering at least the period of the longest-lived generating resource;
(F) The
estimated fair market value of the Oregon share of each generating resource;
and
(G) For a
multi-state electric company, how the electric company proposes to allocate a
share of its generating resources to Oregon. The multi-state electric company
must also propose a fixed Oregon-allocated generating resource share based on
the following factors:
(i) A
forecasted allocation of each generating resource for a 12 month period as
determined by the Commission, using traditional allocation methods recognized
by the Commission;
(ii) The
projected potential changes in Oregon share, due to alternative
inter-jurisdictional allocation methods, over the life of each resource absent
implementation of these rules; and
(iii) The
change in risk borne by parties by fixing the Oregon share of generating
resource.
(b)
Recommended Valuation Methodology. The resource plan must identify, for each
generating resource, or portion thereof if the resource meets the criteria for
mixed status, whether the Oregon share of each generating resource should be:
(A)
Retained in the electric company’s Oregon revenue requirement for the purpose
of serving Oregon cost-of-service consumers and administratively valued through
a process to be specified by rule;
(B) Sold
through the auction process specified in OAR 860-038-0100, and if so:
(i) The
general terms and conditions that should apply to the sale, including but not
limited to, a prototype purchase and sale agreement; and
(ii) Any
sales incentives that the electric company proposes to apply to Oregon
nonresidential consumers for the Oregon nonresidential consumers’ share of the
generating resource. Such incentives may be structured to encourage the
electric company to follow the recommended timeline provided under subsection
(3)(d) of this rule; or
(C) Removed
from the electric company’s Oregon revenue requirement and administratively
valued through a process to be specified by rule, and if so, any incentive to
apply to Oregon nonresidential consumers for removing the nonresidential
consumers’ share of the generating resource from revenue requirement. Such
incentives may be structured to encourage the electric company to follow the
recommended timeline provided under subsection (3)(d) of this rule.
(c) Results
of the Resource Plan. The resource plan must identify the impacts of
implementing it, including the following:
(A) The
approximate load/resource balance, and the availability of each generating
resource based on the electric company’s current and forecasted load for Oregon
cost-of-service consumers;
(B) The
estimated rates to each Oregon customer class that will result from
implementation of the resource plan, including:
(i) The
amount of estimated transition charges and credits;
(ii) A
comparison to the current effective rates of the electric company as of the
date of filing; and
(iii) An
estimate of the cost-of-service rates for cost-of-service consumers 10 years
after implementation of the resource plan.
(C) How the
resource plan is consistent with the purposes of SB 1149 in that the plan:
(i)
Facilitates a fully competitive market;
(ii)
Provides consumers fair, non-discriminatory access to competitive markets; and
(iii)
Retains the benefits of low-cost resources for consumers.
(D) Any
other implications of the resource plan that could help inform the
Commissioners in their decision.
(d)
Process. The electric company must develop the resource plan in a public
process designed to inform and solicit input from Commission staff,
representatives of Oregon residential, small nonresidential and large
nonresidential consumers, and other interested parties.
(4) The
Commission must consider the electric company’s recommended resource plan in a
contested case proceeding. The Commission’s order must identify those resources
that, at the option of the electric company, may be auctioned immediately,
before any Commission decision to waive the requirements for a cost-of-service
rate for any consumers under ORS 757.603(1)(b) and before final administrative
valuation of other resources and potential modification of the electric
company’s Resource Plan. The Commission’s order must also approve, modify, or
reject the resource plan.
(a) If the
Commission modifies the resource plan, the electric company will have 30 days
from the date of the Commission’s order to accept or reject the modifications.
If the electric company rejects the Commission’s modifications, the electric
company must file a second recommended resource plan within 60 days of the date
of rejection;
(b) If the
Commission rejects the resource plan, the order rejecting the plan must
specifically describe the deficiencies in the resource plan. In that event, the
electric company must file a second recommended resource plan within 60 days of
the order rejecting the original plan;
(c) If the
Commission modifies the second recommended resource plan, the electric company
will have 30 days from the date of the order to accept or reject the modifications.
If the electric company rejects the Commission’s modifications, future attempts
at reaching a resource plan may be initiated by either the electric company or
the Commission. The timelines outlined in subsection (4)(a) of this rule shall
apply once a new resource plan is submitted or modifications to a former plan
are suggested.
(5) A
resource plan that has been recommended by the electric company and approved by
the Commission, or modified by the Commission and accepted by the electric
company, is referred to in these rules as a “Resource Plan.” The Resource Plan
may encompass one plan or a set of plan options corresponding to different
assumptions about consumer eligibility for cost-of-service rates. The electric
company must implement the Resource Plan consistent with OAR 860-038-0100 and a
process for administrative valuation to be specified by rule. The ongoing
valuation method, as described in OAR 860-038-0140, will be used to establish
transition charges and credits for resources that have not been sold or
administratively valued.
(6) For a
multi-state electric company, pending the implementation of a Resource Plan and
establishing final values for generating resources in accordance with these
rules, the following will guide developing rates for Oregon consumers of the
electric company for the period March 1, 2002, through December 31, 2003:
(a)
Cost-of-service rates will be based upon traditional allocation methods;
(b)
Transition charges or credits shall not include assumed costs and revenues of
the portion of generating resources not needed to serve Oregon loads associated
with residential and small nonresidential consumers choosing portfolio access,
small nonresidential consumers choosing direct access or standard offer rate
options, and large nonresidential consumers when, and to the extent, the costs
and revenues of the generating resources that are not needed are recognized and
included in the electric company’s revenue requirement in another state, less
the costs and revenues of such generating resources which have been included in
the electric company’s revenue requirement by another state prior to October 1,
2001; and
(c)
Beginning January 1, 2004, transition charges and transition credits will be
calculated without regard to subsection (7)(b) of this rule.
Stat.
Auth.: ORS 183, 756 & 757
Stats.
Implemented: ORS 756.040 & 757.600 - 757.667
Hist.: PUC
17-2000, f. & cert. ef. 9-29-00; PUC 5-2001(Temp), f. & cert. ef.
2-6-01 thru 8-4-01; PUC 6-2001(Temp), f. & cert. ef. 3-1-01 thru 8-27-01; PUC
12-2001(Temp), f. & cert. ef. 5-4-01 thru 10-30-01; PUC 14-2001, f. &
cert. ef. 5-25-01; PUC 20-2001, f. 8-1-01, cert. ef. 8-4-01; PUC 24-2001, f.
10-25-01, cert. ef. 10-31-01; PUC 18-2002, f. & cert. ef. 10-17-02; PUC
3-2011, f. & cert. ef. 6-17-11
860-038-0480
Public
Purposes
(1) Each
electric company that offers direct access to its retail electricity consumers
and each electricity service supplier that provides electricity services to
direct access consumers in the electric company’s service territory will
collect a public purpose charge from its retail electricity consumers until
January 1, 2026.
(2) Except
as provided in section (6) of this rule, electric companies and electricity
service suppliers will bill and collect from each of their retail electricity
consumers a public purpose charge equal to 3 percent of the total revenues
billed to those consumers for electricity services, distribution, ancillary
services, metering and billing, transition charges, and other types of costs
that were included in electric rates on July 23, 1999.
(3) The
electricity service suppliers will remit monthly to each electric company the
public purpose charges they collect from the customers of each electric
company.
(4) The
electricity service suppliers will remit monthly the public purpose charges
collected from direct service industrial consumers they serve to the electric
company in whose service territory the direct service industrial site is
located.
(5) The
electric company whose territory abuts the greatest percentage of the site of
an aluminum plant that averages more than 100 average megawatts of electricity
use per year will collect monthly from the aluminum company a public purpose
charge. The aluminum company will remit to the appropriate electric company a
public purpose charge equal to 1 percent of the total revenue from the sale of
electricity services to the aluminum plant from any source. Annually, the
aluminum company will submit to the electric company an affidavit from a
certified public accountant verifying that the costs for electricity services
at the site of the aluminum plant and the remittance of the public purpose
charges are accurate for the previous calendar year
(6) A
retail electricity consumer, including an aluminum plant as described in
section (5) of this rule, may receive credits against its public purpose
charges for qualifying expenditures incurred for new energy conservation and
the above-market costs of new renewable energy resources at any site if the
following qualifications for becoming a self-directing consumer are met:
(a) The
consumer has used more than one average megawatt of electricity at any such
site in the prior calendar year; and
(b) The
consumer has received final certification from the Oregon Department of Energy
for expenditures for new energy conservation and/or new renewable energy
resources.
(7)
Self-directing consumers may not claim a public purpose credit for energy
conservation measures that were started prior to July 23, 1999. For energy
conservation measures that were started on or after July 23, 1999, but prior to
the implementation of direct access, a self-directing consumer may claim a
public purpose credit if either of the following conditions is met:
(a) The
energy conservation measure did not receive funding from an electric company
conservation program and was certified by the Oregon Department of Energy after
July 23, 1999; or
(b) The
energy conservation measure did receive funding from an electric company
conservation program and was certified by the Oregon Department of Energy after
July 23, 1999, but the self-directing consumer repaid the amount of such
funding (cost of audit and incentives plus interest) no later than 90 days
following the implementation of direct access; provided that, a self-directing
consumer shall not be required to repay the amount of any energy conservation
audit related to a conservation measure if the audit was completed prior to
January 1, 2000. The cost of an audit that identifies multiple energy
conservation measures shall be prorated among such measures.
(c) For
purposes of this subsection, “started” means that a contract has been executed
to install or implement an energy conservation measure.
(8) The
Oregon Department of Energy will establish specific rules and procedures that
are consistent with these rules for qualifying a self-directing consumer’s
expenditures.
(9) The
electric company will apply the self-direction credit, determined by the Oregon
Department of Energy, toward the consumer’s public purpose obligation.
(10) Each
electric company will establish five separate accounts for the public purpose
charges to be funded from its collections of public purpose charges as follows:
(a) Energy
conservation in schools;
(b) New
cost-effective local energy conservation and new market transformation;
(c)
Above-market costs of new renewable energy resources;
(d) New
low-income weatherization; and
(e)
Construction and rehabilitation of low-income housing.
(11) Each
electric company will allocate the public purpose funds it collects (billed
less uncollectible amounts) from electricity service suppliers and consumers to
the five public purpose accounts as follows:
(a) Energy
conservation in schools — 10.0 percent;
(b) Local
and market transformation conservation — 56.7 percent;
(c) Above
market costs of new renewable energy resources — 17.1 percent;
(d)
Low-income weatherization — 11.7 percent; and
(e)
Low-income housing — 4.5 percent.
(12) Each
electric company will adjust the local and market transformation conservation
and above market costs of new renewable energy resources accounts specified in
subsections 11(b) and (c) of this rule for the credits returned to
self-directing customers for conservation or renewable resource expenditures
certified by the Oregon Department of Energy.
(13) Each
electric company will distribute funds from the public purpose accounts at
least monthly as follows:
(a) The
funds for conservation in schools to the education service districts located in
its service territory;
(b) The
funds for local and market transformation conservation as directed by the
Commission;
(c) The
funds for renewable energy resources as directed by the Commission;
(d) The
funds for low-income weatherization to the Housing and Community Services
Department; and
(e) The
funds for low-income housing to the Housing and Community Services Department
Revolving Account.
(14) Each
electric company will determine by January 1 of each year the allocation of
public purpose funds for schools to the Education Service Districts according
to the following methodology:
(a) From
the Department of Education, collect current total weighted average daily
membership (ADMw) as defined in ORS 327.013 and average daily membership (ADM)
for each Education Service District that contains schools served by the
electric company;
(b) For
each of the Education Service Districts, compute the ratio of ADM in schools
served by the electric company to total ADM;
(c) For
each Education Service District, multiply its total ADMw by the ratio of ADM in
schools served by the electric company to total ADM. The result is an estimate
of ADMw in schools served by the electric company;
(d) Add the
estimates of ADMw for each Education Service District; and
(e) Compute
the percentage of the total ADMw represented by each Education Service
District. These are the percentages that will be used to allocate the public
purpose funds for schools to Education Service Districts for the 12-month
period with the exception of 2002 where the funds will be allocated for a
10-month period beginning March 1, 2002. After 2002, the 12-month period will
begin on January 1 of each year.
(15) The
electric company may be reimbursed for the reasonable administrative costs it
incurs to collect and distribute the public purpose funds. Those administrative
costs will be deducted from the total amount of public purpose funds collected
by the electric company before the funds are allocated to the five public
purpose accounts. The electric company will also pay from the total public
purpose funds collected or from a specific fund any other administrative costs
the Commission directs to be paid for implementation of the public purpose
requirements. The entities responsible for administering the public purpose
funds will pay for their costs of implementing the public purpose requirements
from the public purpose funds they receive from the electric company.
(16) The
electric companies and the administrators of the public purpose funds will
collect sufficient information so that biennial reports can be made to the
Legislature on what has been accomplished with the public purpose funds and how
those funds have benefited the consumers of each electric company.
Specifically, information must be collected so that the reporting requirements
of ORS 757.617 can be fulfilled.
(a) Each
electric company must report the total funds collected by source (that is,
electric company customers, electricity service suppliers and self-directing
consumers) for public purposes, the amounts distributed to the administrators
of each public purpose fund, and its administrative costs;
(b) Each
administrator of public purpose funds must report, at a minimum:
(A) The
amount of funds received;
(B) The
amount of funds spent;
(C) Its
administrative costs; and
(D) Its
results, for example, measures installed, projects funded, energy saved, homes
weatherized, and low-income homes built/rehabilitated.
Stat.
Authority: ORS 183, 756 & 757
Stats.
Implemented: ORS 756.040 & 757.600 - 757.667
Hist.: PUC
1-2001, f. & cert. ef. 1-5-01; PUC 2-2001, f. & cert. ef. 1-5-01; PUC
11-2002, f. & cert. ef. 3-8-02; PUC 13-2004, f. & cert. ef. 8-31-04;
PUC 7-2007, f. & cert. ef. 5-15-07; PUC 13-2007, f. & cert. ef.
12-31-07; PUC 3-2011, f. & cert. ef. 6-17-11
Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2010.
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