BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON

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1 ORDER NO. ENTERED DEC U 2011 BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON UE 227 In the Matter of PACIFICORP, dba PACIFIC POWER ORDER 2012 Transition Adjustment Mechanism. DISPOSITION: SUFFICIENCY OF NOTICE OF DISCOVERY DISPUTE ADDRESSED; STAFF'S RECOMMENDATION ADOPTED At our Public Meeting on December 20, 2011, we deferred for resolution issues related to PacifiCorp, dba Pacific Power's tariff schedules related to its 2012 Transition Adjustment Mechanism (TAM). For reasons that follow, we conclude that Pacific Power's tariff schedules should be allowed to go into effect January 1, Background During the December 20, 2011 Public Meeting, Staff recommended that Pacific Power's tariff sheets be allowed to go into effect on January 1, Staff's recommendation is attached as Appendix A and incorporated by reference. The Industrial Customers of Northwest Utilities (ICNU) opposed Staff's motion, arguing that ICNU had a pending discovery dispute with Pacific Power. ICNU asked the Commission to send the discovery dispute to the Administrative Hearings Division (AHD) for resolution and order the tariffs to go into effect subject to refund. Pacific Power and Staff opposed ICNU's request, arguing that ICNU failed to provide timely notice of its discovery dispute. The stipulation in docket UE 216, Pacific Power's 2011 TAM filing, establishes procedures the parties must follow with respect to any challenges to Pacific Power's final update of its power costs. That stipulation allows parties the right to raise issues challenging the final update at the Commission's last December public meeting. The stipulation further provides, however, that parties must follow specific steps as part of the process leading up to that public meeting. Specifically, an objecting party must provide notice of its potential challenges to Pacific Power's fmal update at least ten business days before the public meeting. Moreover, that notice must identify specific elements of the update that are relevant to the potential challenge. Order No , Appendix A at 6. If the matter is not resolved prior to the public meeting, the parties may ask the Commission for relief.

2 ORDER NO. Resolution We conclude that rcnu's notice of its discovery dispute was inadequate. Although parties to the stipulation broadly retain the right to raise issues at the Commission's public meeting, they also agreed to follow specific steps as part of the process leading up to that public meeting. The purpose of the ten-day notice and dispute-resolution process prior to the public meeting seems to be reasonably clear: to identify disputes over specific elements of the update and to resolve those disputes before the public meeting. Accordingly, we read this notice requirement to be compulsory. To interpret the stipulation otherwise would render the specific notice and resolution process meaningless. Although rcnu provided the parties with timely notice of certain concerns on December 6, 2011, that notice did not serve to identify with specificity issues related to rcnu's outstanding discovery dispute. Rather, the December 6 notice simply stated that rcnu had pending discovery requests, and that rcnu might raise additional concerns later in the proceeding. This notice was insufficient. The stipulation requires rcnu to identify the specific elements of Pacific Power's update that are relevant to its challenge and provide an explanation of its concern. rcnu's notice did neither.! We therefore adopt Staff's recommendation that the tariff sheets filed in Pacific Power's replacement pages to Advice No. 1l-018 be allowed to go into effect on January 1, Made, entered, and effective O_E_C_j_l _20 _ 1_1 John Savag Commissioner lotll ({. /J-.cap Susan K. Ackerman Co S ephen M. Bloom Commissioner A party may request or reconsideration of this order under ORS A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order. The request must comply with the requirements in OAR A copy of the request must also be served on each party to the proceedings as provided in OAR (2). A party may appeal this order by filing a petition for review with the Court of Appeals in compliance with ORS through To the extent that ICNU's discovery requests seek infonnation that ICNU could not have requested in a timely manner under the stipulation, we fmd that the requests were outside the scope of these proceedings. 2

3 ORDER. NO. ITEM NO.4 PUBLIC UTILITY COMMISSION OF OREGON STAFF REPORT PUBLIC MEETING DATE: December 20,2011 REGULAR X CONSENT EFFECTIVE DATE January 1, 2012 DATE: December 14, 2011 TO: Public Utility Commission Steve Schue A..d. i FROM: r.,... f'c1 '-'t THROUGH: Bryan Conway and Maury Galbraith SUBJECT: PACIFIC POWER: (Docket No. 227/Advice No ) Revises Tariff Schedules for the annual power cost update reflecting the final 2012 Net Power Costs (NPC). STAFF RECOMMENDATION: Staff recommends that the tariff sheets filed in Pacific Power's (PacifiCorp or Company) Replacement Pages to Advice No be allowed into effect on January 1, DISCUSSION: March 2011 Filing: On March 17, 2011, PacifiCorp filed Advice No to revise customers' cost-based supply service in accordance with the Company's annual Transition Cost Adjustment Mechanism (TAM). The filing was consistent with Order No , and included a Revision to Tariff Schedule 201, Net Power Costs, Cost-Based Supply Service, and an Original Tariff Schedule 205, TAM Adjustment for Other Revenues. The Company also submitted direct testimony in support of an increase of $61.6 million to its Oregon-allocated Net Power Costs (NPC). This NPC increase would have resulted in an overall rate increase of approximately 5.2 percent. The largest single factor in the NPC increase was increased coal costs. Another important factor was an increase in loads, given that forecasted 2012 market prices are significantly higher than PacifiCorp's overall system costs. Together, these two factors accounted for approximately two thirds of the requested rate increase. APPENDIX A PAGE -L OF.:L

4 Docket No. UE 227 December 14, 2011 Page 2 UE 227 Proceeding: PacifiCorp's filing was assigned the docket number UE 227. After the Company's direct testimony, the proceeding included four additional rounds of testimony and a hearing, which took place on September 8, Subsequent to the hearing, PacifiCorp, Oregon Public Utility Commission (Commission) Staff (Staff), the Citizens' Utility Board of Oregon, and Noble Americas Energy Solutions, LLC agreed to a Stipulation, which was filed on September 20, On November 4, 2011, the Commission issued Order No , which adopted the Stipulation. Results of Order No : The Order resulted in an increase of $50.7 million in Oregon-allocated NPC (based on forward curves and contracts at that time). This was $10.9 million less than PacifiCorp requested in its March 17, 2011, filing, and resulted in a projected overall rate increase of approximately 4.4 percent. Advice No and Final Rate Impacts: PacifiCorp filed Advice No on November 15, 2011, requesting an increase of $51.3 million in NPC. This figure was slightly different from that projected in Order No because it was based on more recent forward price curves, and included contracts entered into or finalized subsequent to the Order. The overall rate increase remained approximately 4.4 percent. Consistent with Order No , Advice No included Revisions to four Tariff Schedules. These include: Schedule 201: Schedule 220: Schedule 294: Schedule 295: Net Power Costs, Cost-Based Supply Service Standard Offer Supply Service Transition Adjustment Transition Adjustment, One-Time Multi-Year Cost of Service Opt-Out Consistent with Order Nos and , Advice No also included an Original Tariff Schedule 205, TAM Adjustment for Other Revenues (directly related to NPC). On December 6, 2011, the Industrial Customers of Northwest Utilities (ICNU) filed a Notice of Concerns Regarding Final Update (Notice). In the Notice, ICNU expressed APPENDIX A A PAGE..OF

5 ORDER NO. H H Docket No. UE 227 December 14, 2011 Page 3 concerns about five contracts which had not yet received regulatory approval and what ICNU considered to be substantive changes to PacifiCorp's forward price curve calculations in the final November 15, 2011, filing. These issues have now been resolved in three ways. First, PacifiCorp has received regulatory approval for four of the contracts. Second, the remaining contract, with Monsanto Company, is the subject of an uncontested Stipulation that the Idaho Public Utilities Commission will review on December 19, Approval for an effective date of January 1, 2012, is therefore expected. However, if there is a delay in regulatory approval, the Company has agreed in a letter dated December 13, 2011, not to oppose ICNU filing a deferral tracking the costs of the contract for the period from January 1, 2012, until the approved contract commencement date. Staff considers PacifiCorp's actions with respect to the five contracts discussed in ICNU's Notice to be in compliance with Section 13 of the Stipulation attached to and approved by Order No Finally, PacifiCorp agreed to reverse the changes to its forward price curve calculations. On December 14, 2011, the Company filed Replacement Sheets to Advice No ,. incorporating this reversal in calculation methodology. The calculation methodology reversal decreases Oregon-allocated NPC by $308,000, resulting in an overall NPC increase of $51.0 million. Attachment A provides detail for the overall rate increase, which remains approximately 4.4 percent. The increase for residential customers on Schedule 4 is approximately 3.8 percent. Monthly bills increase by $3.46 for a residential customer using 950 kwh (per month). The increase for large general service customers on Schedule 48 will be approximately 6.1 percent. PROPOSED COMMISSION MOTION: The replacement tariff sheets filed in PacifiCorp Advice No be allowed into effect on January 1, Pacific Power Advice APPENQiX A: Dt PAGE.il.. OF

6 TAM Ptf ChnnRo -FIN A.L Dcmb8r PACIFlCPOWER ESTIMATED EFFECT OF PROPOSED PRlCECHANGE ON REVENUES FROM ELEcnuC SALES TO ULTIMATE CONSUMERS DISTRIBUTED BY RATE SCBEIllJLES IN OREGON Fotealllt 12 Montla Eodtd Deo:tnlber5J,10U Une No. De>:; p l;on (I) - ResidOlllinl 2. Tnlnl R.ld..,llal,,, '''' No_ ),,. Presotd ReYM_II (S<lOO) S<h No. ur BILl/! Net B. 1'11Ilfned Rn. (SHOO) Cbnngt N Dale btu Net Rales LluB..l:!!!... MWb RAtes... Atl<len-I fcji (3) (4) (!i) (6) (7) (8) (') (10) (Il) (12) (U) (14) (U) 41S.51S 478,578 S,iSS,UIJ $S0,344 $S60,l $511,855 (6)+{7) (9) +(lo) (9). (6) (11)/(6) (II) (S) (14)/(8) $58];.073 Sll.511 sm,84 3.8% Sll,SIl $71,SSS S581,073 su,.su SS93,'84 :/.l, % $2.1,n9' Comm.njnl & rndlltlrln! Orn.Sve.<31 kw (kn. Svc kw Gen. sw. 10] 999 kw Largo Oonoml SeM ><0 1,000 low 7 Partial R<t. SVOl. _ 1,000 kw 8 Ayricul\uml Pumping Service Atpii!Ulhmll Pumping. Oilier 10 Toiol Commerclol & TndurtrloJ II - Outdoor Al'o,.Liah!ingSelYle 12 Stn&ILlghl!ngServ!ce 11 SlteetLlghting ServicBHPS 14 SI!'e.tLightinIlSm,ice 15 SllIlot Lighting Servie. 16 Rl5C:r.aO%lnll'ietd LlBhting 11 TotnJPubUStl1.'l'-tLI!,lhHn 1<1 TOIIll SnI.,.. 10 Olilmlli. C011lum Emp/n1.. Dbeounl 20 TQiHIS! with EQ1Ploy Dl5count 21 AGAR=u 'I 15 II TolRI!bl. willo Employee DJ,coUld Qlld AGA 'Z3 14,9ni 1,053,146 Sill,SiI-<! (.il,14s) $110,239 SU6,Osa ($1,145) SJl4,341 lh 10,000 2,0n.210 S159.S21 S7,G4 $167,385 SI67.an $7,364 $175, ,326,B]\ $94,782 $1.911 $%,693 S9.lIS4 $1,911- $11J1, ,8B6,nO SlBl,6B4 ($ ) $i7j,436 SI (SlO,14S) na4,oo )67 :m,090 ($\110) SI,180 $IS,91 ($9\0) S15,OM 41 n,m 12.3,011 S ($1,954) $12,127 - SI4,543 ( 1,91>4) \(14,951 S6,34a $66 $M14 $GJ411 $ ,199,238 $585,800 ($,326) $580,474 S614,878 ($,326} 5609,5.1'2 15 'I SO 7,020 24' 7 ' 8,411 9,991 9,314-11,1l ,1J ,912 $1,291 $1.047 Sl.1l6 $11J S5n $U7 $6,245 $261 ' m, m $1,554 $1,275 SJ,194 SUS $706 :):105 $],330 $1,015 $J.201J SIJ4 586 ' $261,no '''' ' S134 no SI,591.Ill.31J3 $3,818 $l2 $720 $108,76Z S4,i04 Sg,052 SS,1J72 S10,559. $29,1178 m ), %,1.4% 5.J% 5.7;; 3.:10/. o.w. $4-,104 Sg,05.2 $5.071 SIO,559 SO $ % 4.8% s.:m 6,1% 5.1'% J.g% SO.O% -m;o:n 2.9% '. M% 1.4% 2.2% ' ' 'I' ',w. 3.3% U 584' SH 2.2% 1.1% !L,,_ $17Q 2.7% S!'10 2.2% $1, $1 20).366 a,ui _.,SO,,-) ls9) (!4S9) 1$468) (S;) (34-17) --ill!l illl. 13A3;'i';70 $1, $7.S2 $ S1.202 S9S S1.S2.3 SI S81,1J48 U, Sl,BB5 51,341 $1.532 $ $ ,592 S2,BB5 $\,16 3, ,415 S2,B86 SI,347 $7, :'B4 S7.S23 S , 10 IB $2,886 $0 S(l 21 Sl.?13307 S U U 14 I' 17 ;g G)<l mm ei O X fi: I Thlclude$ ffeels cfth6 Lowtoccme-lIUi Paymmt AssImnceChlU'se (SdI. 91), BPA QWlt(Sth. 98), 'KlnmnthDIIJnRemowl SCR:lInrges (Seh PubtiPurpu!l<l Chllrlla (Sth. ZW)m1d lierg)' Crms-rvntiCl'l CharsG (Seh.297)., Pmerl1agt!!l shown for Schodulas 4B lnd 47,.noc/tile combined rat. chouge Ibrbolhchedule.s e () ::T 3 (]) :::J»,,=,,> ='?= '] Qi;p'

BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON

BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON UE 216 ORDER NO 10-363 Entered 09/16/2010 In the Matter of PACIFICORP, dba PACIFIC POWER, ORDER 2011 Transition Adjustment Mechanism DISPOSITION: STIPULATION