20090928_2718.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:BRYAN LANSPERY
DATE:SEPTEMBER 25, 2009
RE:IDAHO POWER COMPANY TARIFF ADVICE NO. 09-09;
MODIFICATIONS TO SCHEDULE 9 AND SCHEDULE 19
On September 18 2009, Idaho Power Company ("Company ) filed modifications to
Schedules 9 and 19, Large General Service and Large Power Service, respectively. The
Company contends that tariff language regarding the calculation of non-salvable costs requires
modification to align the tariff with Company practices. The current tariff language defines non-
salvable costs as costs "comprised ofthe total original costs of materials, labor, and overheads of
the facilities, less the difference between the salvable cost of material removed and removal
labor cost including appropriate overhead costs." (Emphasis added) Customers are required to
pay non-salvable costs if it requests to remove, reinstall, or change what are considered
Company-owned Facilities Beyond the Point of Delivery as set forth by the Distribution
Facilities Investment Report provided to the Customer. The Company requests to replace the
word "original" with "depreciated" for both schedules.
Staff has reviewed the Company s filings and agrees that the modification in language is
warranted. Given that Schedule 9 and 19 customers taking service at either the transmission or
primary level pay a facilities charge for the Company s investment in Company-owned Facilities
Beyond the Point of Delivery, a portion of the original equipment cost is paid on a monthly
basis. Using the original equipment and associated costs as a basis for calculating non-salvable
cost would result in an overpayment to the Company by the customer. It is proper therefore to
use the depreciated expense as the basis for non-salvable cost. The Company states in its filing
that it currently follows the appropriate methodology for cost calculation, and simply wishes to
reflect that in its tariffs.
DECISION MEMORANDUM - 1 -SEPTEMBER 25 , 2009
Staff notes that for consistency, all schedules that may have Company-owned Facilities
Beyond the Point of Delivery should be modified as the Company currently proposes.
Specifically, Schedule 24 (Agricultural Irrigation Service) contains the same language and also
affects customers taking service at the transmission level. Currently the Company has no
irrigation customers taking service at the transmission level, though that may change and
modifying the language proactively could prevent confusion in the future. Also, similar
language occurs in the Uniform Alternate Distribution Service Agreement found in Schedule 46
(Sheet 3). In this case, the description reads as above without the word "original" included.
Staff would suggest the Company insert "depreciated" into its definition of non-salvable cost in
order to read consistently with the Company s currently proposed language. Staff recommends
the Company file a separate tariff advice to modify the language in Schedules 24 and 46 so all
schedules that may face these costs are treated equitably.
ST AFF RECOMMENDATION
Staff recommends that the Commission accept the Company s revisions to Schedule 9
and 19. The revision reflects the appropriate methodology for calculating non-salvable cost.
COMMISSION DECISION
Does the Commission wish to accept the Company s revision in wording for Schedules 9
and 19 as it relates to calculation of non-salvable cost?
i: udmemos/non-salvable. doc
DECISION MEMORANDUM - 2 -SEPTEMBER 25 , 2009