20130325_4003.pdf

DECISION MEMORANDUM- 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: NEIL PRICE
DEPUTY ATTORNEY GENERAL

DATE: MARCH 21, 2013

SUBJECT: ROCKY MOUNTAIN POWER’S APPLICATION TO CHANGE THE
DEPRECIATION RATES APPLICABLE TO ITS ELECTRIC
PROPERTY, CASE NO. PAC-E-13-02

On January 22, 2013, PacifiCorp dba Rocky Mountain Power (“RMP” or
“Company”) submitted an Application seeking a Commission Order, pursuant to Idaho Code §
61-525 and Commission Rule 52, for approval of proposed changes to depreciation rates
applicable to RMP’s depreciable electric plant. The Company proposes January 1, 2014, as an
effective date for the proposed changes.
APPLICATION
In its Application, RMP states that as a public utility operating under the
Commission’s jurisdiction its depreciation accounts must comply with the rates previously
determined by the Commission. The Company mentions that its last depreciation application,
Case No. PAC-E-07-14, was filed on August 31, 2007, see Order No. 30499, with rates effective
January 1, 2008.
The Company has performed an updated depreciation study (“Depreciation Study”)
and requests authorization to implement the depreciation rates set forth in the Exhibit No. 3 to its
Application. The Depreciation Study has identified changes that have occurred since the
Company’s last depreciation study, measured the effect of the changes on the prudent recovery
of presently surviving capital, and is proposing revisions to the depreciation rates. The results of
the Depreciation Study suggest an increase in annual depreciation expense of approximately
$83.9 million ($160.8 million including the accelerated depreciation associated with early
DECISION MEMORANDUM- 2
retirement of the Carbon plant) on a total Company basis, based on projected plant balances as of
December 31, 2013.
RMP states that its proposed changes would result in an estimated increase to the
Idaho jurisdictional depreciation expense of approximately $4.5 million ($8.9 million including
the early retirement of the Carbon plant) beginning January 1, 2014.
RMP remarked that in order to maintain consistent depreciation rates across its six
jurisdiction/service territories; the Company filed the Depreciation Study in Oregon, Utah,
Wyoming, and Washington. In support of its Application, the Company attached the direct
testimony of Henry E. Lay, Corporate Controller of PacifiCorp; John J. Spanos, Senior Vice
President of Gannett Fleming, Inc.; and K. Ian Andrews, Manager of Resource Development for
PacifiCorp.
STAFF RECOMMENDATION
Staff has conducted an initial review of the Application and has been in
communication with the Company regarding a collaborative process to include all interested
stakeholders potentially affected by the Application. Staff recommends that the Commission
issue a Notice of Application and Intervention Deadline. Thereafter, Staff will issue a Notice of
Public Workshop to include all interested parties.
COMMISSION DECISION
Does the Commission wish to process RMP’s Application through Modified
Procedure with a Notice of Application and Intervention Deadline?

M:PAC-E-13-02_np