COPUC Decision - DORA

C10-0286Decision No. C10-0286 BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO 09AL-299EDOCKET NO. 09AL-299E IN THE MATTER OF ADVICE LETTER NO. 1535 BY PUBLIC SERVICE COMPANY OF
COLORADO TO REVISE ITS COLORADO PUC NO. 7 ELECTRIC TARIFF TO REFLECT
REVISED RATES AND RATE SCHEDULES TO BE EFFECTIVE ON JUNE 5, 2009. ORDER ADDRESSING PHASE II Mailed Date: March 29, 2010
Adopted Date: March 10, 2010
TABLE OF CONTENTS
I. BY THE COMMISSION 4 A. Procedural History 4 B. The Rate Setting Process 7 C. Class Cost of Service Study 7 D. Elasticity Adjustment 14 E. Residential and Commercial Service and Facilities Charges 16 F. Demand Ratchet 17 G. Secondary General Rate (SG) Issues 21 H. Optional Time-of-Use Rates For Large C&I Customers 22 I. Shifting of Cost from Demand Charge to Energy Charge for Time-of-Use
(TOU) Rates 24 J. Residential Inverted Block Rates 26 1. Background 26 2. Analysis 31 K. Residential Demand Rates 34 L. Standby Service Tariff Revisions 34 M. Low Income Program 36 N. Technical Conference and General Rate Schedule Adjustment 37 O. Power Factors 38 P. Glustrom Issues 39 Q. Pomerance Issues 40 R. Street Lighting and Traffic Signaling Tariffs 41 1. Motion For a Determination of a Question of Law 41 a. Background 41 b. Positions of the Parties 42 (1) The Local Governments 42 (2) Public Service 44 c. Other Pleadings 46 d. Analysis 47 2. Conversion Costs 50 a. Positions of the Parties 50 (1) The Local Governments 50 (2) Public Service 51 b. Analysis 52 3. Valuation of Street Lights 53 a. Positions of the Parties 53 b. Discussion 54 4. Minimum Number of Street Lights 55 5. Maintenance 56 6. Types of Lighting Facilities 57 7. Traffic Signaling Tariffs 58 S. Environmental Liability Proposal 59 1. The Environmental Tariff and Agreement 60 2. Intervenor Challenges to the Proposal 61 3. Preliminary Legal Rulings 62 a. The Provision May Be Evaluated as Part of a Rate Setting
Proceeding 62 b. A Commission-Approved Tariff is More Akin to a Contract
than a Statute 63 c. Conflict with § 13-21-111.5(6)(b), C.R.S. 65 d. Preemption by CERCLA 67 e. Preemption by RCRA 68 f. Preemption by Art. XI of the Colorado Constitution 69 (1) Art. XI, § 1 69 (2) Art. XI, § 2 70 g. Commission's Jurisdiction 70 4. Changes to the Proposal 71 5. Outstanding Motions 72 a. Wal-Mart Motion for Administrative Notice 72 b. Wal-Mart Offer of Proof 73 c. NAIOP Administrative Notice 74 d. Public Service Leave to File Statement of Position in
Excess of Thirty Pages and Seeking Consideration of Addendum
to Environmental Statement of Position 75 e. Public Service Leave to File Response 76 6. Positions of the Parties 77 a. Public Service 77 b. NAIOP 79 c. Wal-Mart 81 d. Ski Resorts 82 e. City and County of Denver 84 f. City of Boulder 84 g. Colorado Department of Public Health and Environment 87 h. Colorado Department of Transportation 87 7. Analysis 88 a. Public Service Did Not Meet Its Burden of Proof 88 b. Additional Guidance to Parties 93 (1) Excessive Discretion and Lack of Specific Standards 94 (a) Hazardous Materials Definition 94 (b) Environmental Agreement Requirement 95 (c) Clean Corridor Provision 97 (d) Cessation of All Work 98 (e) Financial Assurances 98 (f) Adjacent Property 100 (2) Conflict with Existing Agreements 100 (3) Indemnification Provision 101 (a) Applicability to Government Entities 102 (b) New Negligence Language 103 (4) Incorporation of Environmental Agreement into Tariff
104 II. ORDER 104 A. The Commission Orders That: 104 B. ADOPTED IN COMMISSIONERS' DELIBERATIONS MEETING March 10, 2010.
108
BY THE COMMISSION
1 Procedural History On May 1, 2009, Public Service Company of Colorado (Public Service or
Company) filed Advice Letter No. 1535-Electric. Public Service requested
that the tariff pages accompanying Advice Letter No. 1535-Electric become
effective on June 5, 2009. Public Service filed direct testimony in
support of the rate increases and rate design changes proposed in the
advice letter.
The Commission issued several orders dealing with variety of procedural
issues in the course of this docket, prior to the start of the scheduled
hearing. It is not necessary to reiterate each of these orders here, but
we below review important milestones in this docket.
The Commission set proposed tariff pages for a hearing pursuant to § 40-6-
111(1), C.R.S., and suspended their effective date for 120 days from the
proposed effective date, through October 3, 2009. See Decision No. C09-
0512, mailed May 13, 2009. The proposed effective date was further
suspended until April 1, 2010. See Decision No. C09-1427, mailed December
18, 2009. Memorializing that further suspension, Public Service filed an
amended advice letter on August 19, 2009.
The Commission held a prehearing conference in this docket on June 18,
2009, as scheduled. See Decision No. C09-0709, mailed July 1, 2009. At
the prehearing conference, the Commission noted interventions by right and
found good cause to grant petitions to intervene by permission filed by the
following entities:
? Staff of the Colorado Public Utilities Commission (Staff);
? The Colorado Office of Consumer Counsel (OCC);
? Colorado Governor's Energy Office (GEO);
? The Colorado Department of Transportation (CDOT);
? Colorado Harvesting Energy Network;
? Western Resource Advocates;
? Black Hills/Colorado Electric Utility Company, L.P.;
? Interwest Energy Alliance;
? The City of Boulder;
? Boulder County Board of Commissioners;
? Energy Outreach Colorado;
? Dr. Robert A. Bardwell;
? Ms. Nancy LaPlaca;[1]
? The City of Grand Junction;
? Kroger Company (Kroger);
? Wal-Mart Stores, Inc., and Sam's West, Inc. (collectively, Wal-
Mart);
? Ms. Leslie Glustrom;
? Southwestern Energy Efficiency Project (SWEEP);
? Mr. Stephen Pomerance;
? The City and County of Denver (Denver);
? Ms. Alison Burchell;
? Colorado Energy Consumers (CEC);
? NAIOP, the Commercial Real Estate Development Association,
Colorado Association of Home Builders, Denver Metro Building
Owners and Managers Association, Forest City Stapleton, Inc.,
and Fitzsimons Developer, LLC; LUI Denver Broadway Office, LLC,
and LUI Denver Broadway LLC (collectively, NAIOP);
? Cities of Arvada, Aurora, Centennial, Golden, Greeley, Greenwood
Village, Lakewood, Littleton, Louisville, Thornton, Westminster,
Wheat Ridge, and the Towns of Breckenridge, Frisco, Superior,
Poncha Springs and the City and County of Broomfield
(collectively, local government intervenors or LGI);
? POWDR-Copper Mountain, LLC,[2] Vail Summit Resorts, Inc.,[3] and
Intrawest/Winter Park Operations Corporation (collectively, Ski
Resorts);
? The Energy and Environmental Committee of the Arapahope
Community Team;
? Climax Molybdenum Company, CF&I Steel, LP, doing business as
Rocky Mountain Steel Mills (CF&I/Climax);
? Colorado Solar Energy Industries Association and Solar Alliance
(CoSEIA);
? Fitzsimmons Redevelopment Authority;
? Federal Executive Agencies (FEA);
? Colorado Independent Energy Association;
? Mr. Gregg S. Eells, P.E.; and
? Mr. Paul Longrigg.[4] During the prehearing conference, the Commission bifurcated the hearing in
this docket into two sessions, the first one to hear Phase I revenue
requirement and ECA issues and the second to hear Phase II rate design
issues. The Commission also adopted a procedural schedule, scheduled a
public comment hearing, and ruled on matters related to discovery. See
Decision No. C09-0709, mailed July 1, 2009.
By Decision No. C09-1446 the Commission ruled on the various disputed
issues in the Phase I and ECA portion of this docket. Among other things,
the Commission approved a $128.3M increase in Public Service's revenue
requirement.
A pre-hearing conference on Phase II issues was held on January 7, 2010.
The evidentiary hearing on Phase II issues was held on January 11, 2010,
through January 14, 2010, January 19, 2010, through January 22, 2010, and
January 25, 2010.
Pursuant to Decision No. C09-1284