Opinion ID: 2632596
Heading Depth: 1
Heading Rank: 2

Heading: facts

Text: [¶ 6] The background facts are not contested. PacifiCorp is a public utility operating in Wyoming. PacifiCorp supplies power to its retail customers through means of its own power generation facilities as well as purchasing power on the wholesale market. During the timeframe in issue, PacifiCorp also engaged in wholesale power market trading activities. During 2000-2001, PacifiCorp's generation capacity diminished, in part for reasons determined to be beyond its control. Most significantly for this appeal, one of PacifiCorp's electric generation plants, known as the Hunter No. 1 (hereinafter referred to simply as Hunter), suffered a catastrophic failure. The Hunter plant was offline for repairs between November 2000 and May 2001. In addition, because of an ongoing drought, power generated from PacifiCorp's hydroelectric plants also was below normal. [¶ 7] During the same timeframe, between the spring of 2000 and the spring of 2001, wholesale prices in the western power markets increased dramatically. [1] In order to meet its supply commitments, PacifiCorp was forced to purchase increased amounts of power from the volatile wholesale power market at unforeseeably high prices. The wholesale price PacifiCorp paid for power far exceeded the costs PacifiCorp would have incurred producing the same power from its Hunter plant. The wholesale price also far exceeded Wyoming retail rates. PacifiCorp covered these excess purchased power costs from May 2000 until the end of October 2000. [¶ 8] On November 1, 2000, PacifiCorp filed an application, which the Commission granted, to begin a deferred account. The deferred account allowed PacifiCorp to track costs that PacifiCorp wanted to preserve for later recovery. The costs PacifiCorp listed in the deferred account were the general net excess wholesale power costs PacifiCorp alleged it incurred in supplying Wyoming ratepayers. In granting PacifiCorp's application, the Commission expressly noted that the costs PacifiCorp would be allowed to list in the deferred account were for accounting purposes only. The determination of whether those costs would be recoverable would be determined at a later proceeding. [¶ 9] On October 3, 2001, the Commission denied an application filed by PacifiCorp seeking permission to immediately begin to pass the deferred increased power costs on to its Wyoming retail ratepayers. PacifiCorp also attempted to include in the deferred account net excess power costs it alleged it incurred in purchasing power on the wholesale market to replace the power lost when the Hunter plant failed. The Commission determined that PacifiCorp had not given sufficient notice of its intent to include costs incurred as a result of the Hunter failure and denied PacifiCorp's attempt to include the Hunter costs in the deferred account. The Commission also determined that there was no present need justifying an immediate pass-on of the excess power costs in the deferred account to PacifiCorp Wyoming's retail customers. The Commission ordered a full hearing regarding PacifiCorp's requested rate increase to cover its excess power costs. Because the Commission did not allow the inclusion of the Hunter costs, PacifiCorp, wanting all issues to be brought before the Commission together, dismissed its then pending application. [¶ 10] On May 7, 2002, PacifiCorp filed the application for a rate increase that gives rise to the instant appeal. PacifiCorp sought a rate increase totaling approximately $122 million. PacifiCorp broke the application down into three interrelated parts: 1) an increase of $30.7 million in base rates; 2) an energy surcharge to recover $60.3 million in net power costs that were listed in the deferred account (excess power costs); and 3) an energy surcharge to recover $30.705 million in net power costs triggered by the outage of the Hunter generation plant (Hunter costs). PacifiCorp structured its application as an application for a general rate increase and two distinct riders, one for the general excess power costs and one for the Hunter costs. Ultimately, after a full hearing on all issues, the Commission granted PacifiCorp a general rate increase of approximately $8.8 million. The Commission did not allow any surcharge for the recovery of past extraordinary costs. [¶ 11] PacifiCorp appealed to the district court. The district court certified this appeal to this Court pursuant to W.R.A.P. 12.09(b). PacifiCorp specifically is not appealing the amount of the general rate increase approved by the Commission. PacifiCorp is only appealing the Commission's decision to deny relief on the requested surcharges.