20060925_1668.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
WORKING FILE
FROM:MICHAEL DARRINGTON
DATE:SEPTEMBER 21 2006
RE:IDAHO POWER COMPANY TARIFF ADVICE NO. 06-05 TO ALLOW
THE CONTINUED PASS THROUGH OF BENEFITS FROM SCHEDULE
98, RESIDENTIAL AND SMALL FARM ENERGY CREDIT, UNTIL
SEPTEMBER 30 2011.
BACKGROUND:
On August 29, 2006, Idaho Power Company (IPC) submitted a tariff advice to revise
Schedule 98 , Residential and Small Farm Energy Credit, to become effective October 1 , 2006.
The change is to allow for the continued pass through of benefits to qualified customers during
the contract term ending September 30 2011. Currently, Schedule 98 is set to expire no later
than December 31 , 2006.
The Settlement Agreement between IPC and the Bonneville Power Administration (BP
on October 31 , 2000 established the Residential and Small Farm Energy Credit. Under the
Settlement Agreement (Agreement) the benefits from the Federal Columbia River Power System
IPC receives will increase from 120 to 224 aMWs beginning October 1 , 2006. The benefits
provided for under this Agreement are to be passed through and shared by the residential and
small farm customers of IPc. The Agreement between IPC and BP A settles the parties ' rights
and obligations for the Residential Exchange Program provided for by the Northwest Regional
Power Act that was designed to benefit the residential and small farm customers of the Pacific
Northwest investor-owned utilities (IOUs).
DECISION MEMORANDUM - 1 -SEPTEMBER 21 , 2006
STAFF ANALYSIS:
Staff has reviewed the proposed changes for IPC Schedule 98 , Residential and Small
Farm Energy Credit. The proposed change will allow the continuance ofIPC to pass through
benefits to qualified customers allocated under the Settlement Agreement between IPC and BP
If approved, Schedule 98 will expire when the benefits allocated to IPC customers through
September 30, 2011 have been credited.
The increased aMWs to IPC will result in a significant rise in credits benefiting IPC
residential and small farm customers. Staff has reviewed IPC forecasts for FY2007 and has
determined that residential customers will see a non-adjusted credit increase of nearly 76%
going from a yearly average of approximately $0.0029/kWh to $0.0051/kWh. Additionally, the
non-adjusted benefits to irrigation customers will more than double.
TOTAL RESIDENTIAL TOTAL RESIDENTIAL TOTAL TOTAL
YEARLY SALES BILLING CREDIT RESIDENTIAL IRRIGATION
BENEFIT RATIO***kWh $/kWh BENEFIT BENEFIT
FY2006*$15 686 623 87.10%635 670 000 $0.0029 $13,484 187 023 304
FY2007**$29 358,851 85.68%921 673 000 $0.0051 $25 155 350 203 501
Notes: *FY2006 includes non-adjusted forecast data for September.
**FY2007 is a non-adjusted forecast.
***Residential Sales Ratio: the ratio of annual residential kWh to total system.
IPC will continue to provide the calculation of credit adjustments and the allocated
benefits for IPC customers to the Commission through the remainder of the Settlement
Agreement.
The residential exchange credit provided by IPC Schedule 98 will increase benefits to
customers through September 30 2011. Staff recommends that the Commission approve IPC
Tariff Advice No. 06-05 as filed.
COMMISSION DECISION:
Does the Commission wish to approve Idaho Power Company Tariff Advice No. 06-05?
~j
Michael Darrington
MD:udmemos/IPC Tariff Advice 06-
DECISION MEMORANDUM - 2 -SEPTEMBER 21 , 2006