Terri Carlock Accounting and Audit Supervisor Terri'Carlockpuc'idaho'gov

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Terri CarlockAccounting and Audit
SupervisorTerri.Carlock_at_puc.idaho.gov

• Risk Management
• Establishing
• Risk Limits and Thresholds

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History

• Energy Markets
• Trading Practices
• Idaho Power Marketing Affiliate
• Affiliate Agreement
• Power Cost Results
• Planning Processes

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System Concerns

• Hydro Conditions
• Impact of drought on power generation
• Power Purchase Requirements
• Potential Transmission Restrictions

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Affiliate Transaction Concerns

• Tracking source of transactions
• Assignment of costs and benefits

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Risk Management Plan

• Reflects system concerns
• Loads
• Generation
• Market Prices

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Documentation

• Proper documentation
• remained a key component and concern
• Need
• Authority
• Transaction Details
• Stakeholders review and input

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Stakeholder Involvement

• Utility
• Regulator
• Customers

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Importance

• Greater input related to the costs the customers
  will pay
• Ability to monitor costs recovered in the Power
  Cost Adjustment (PCA) mechanism
• Allows the utility to better control volatility
  of power supply costs

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End Result

• More predictable power supply costs over the
  planning period
• Better documentation of actions and
• non-actions related to power supply
• Fewer cost disallowances
• When the policy is followed
• When customers understand the policy
• When customers participate in setting the
  guidelines

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• Reduction in Regulatory Risks
• Reduction in Price Risk
• Therefore a reduction in overall risk

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Next Steps

• Continue to improve and refine the Risk
  Management Policy and Procedures
• Tier 1 improvements to better measure volatility
  and establish target levels

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• Integrate the planning processes to link the
  long-term Integrated Resource Plan with the
  short-term planning period of up to 18 months
  under the Risk Management Policy

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• Expand the scope of the plan
• Include gas purchases for electric generation
• Expand Use of Financial Derivatives

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Risk Management Policy

• Actual results are beneficial
• Advance purchase of power needs
• Meet load requirements are reasonable cost
• Greater stability of power costs and customer
  rates even though not always least cost
• Have seen lower costs with advance purchases vs
  spot purchases

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Risk Management Policies Interactive

• Collaborative process that turned out to be
  cooperative
• Appropriate for all utilities
• Appropriate for any regulatory structure
• Traditional
• Modified
• Future test periods
• Historical test periods

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Feel Free to Contact me directly.

• Terri Carlock
• Idaho Public Utilities Commission
• [phone]
• Terri.Carlock_at_puc.idaho.gov