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DECISION MEMORANDUM TO: COMMISSIONER KJELLANDER COMMISSIONER SMITH COMMISSIONER HANSEN JEAN JEWELL RON LAW BILL EASTLAKE LOU ANN WESTERFIELD TONYA CLARK DON HOWELL LISA NORDSTROM RANDY LOBB KEITH HESSING TERRI CARLOCK ALDEN HOLM BEV BARKER GENE FADNESS WORKING FILE FROM: JOHN R. HAMMOND DATE: MAY 24, 2002 RE: IDAHO POWER COMPANY'S PETITION FOR RECONSIDERATION OF THE COMMISSION'S DECISION TO DENY THE RECOVERY OF REDUCED/LOST REVENUES ASSOCIATED WITH THE IRRIGATION LOAD REDUCTION PROGRAM. CASE NO. IPC-E-01-34. On May 2, 2002 Idaho Power Company filed a Petition for Reconsideration requesting that the Commission reconsider its denial of the Company's request for the recovery of reduced/lost revenue impacts that resulted from the operation of the Irrigation Load Reduction Program. No party has responded to the Company's Petition. Pursuant to Idaho Code § 61-626(2) the Commission shall determine whether or not it will grant such reconsideration within twenty-eight (28) days after the filing of a petition for reconsideration. Accordingly, the Commission must issue its Order on this matter on or before May 30, 2002. BACKGROUND On October 18, 2001 Idaho Power Company filed an Application requesting that the Commission issue an Order that would authorize the Company to include the costs that it incurred from the Irrigation Load Reduction Program and the Astaris Load Reduction Program in the 2002/2003 PCA year. These costs were made up of direct costs and reduced/lost revenue impacts that resulted from the operation of these programs. In its Application Idaho Power requested that the Commission authorize it to include and recover $9,783,625 of reduced/lost revenues resulting from the Irrigation Load Reduction Program in the 2002/2003 PCA year. On March 1, 2002, Idaho Power made a supplemental filing seeking to recover the total amount of reduced/lost revenues it alleged were incurred. The total amount is $12,015,187.25. On April 15, 2002 the Commission issued Order No. 28992 that granted Idaho Power's Application in part and denied it in part. The Commission specifically rejected Idaho Power's request for the recovery of reduced/lost revenues. On May 2, 2002 Idaho Power filed a timely Petition for Reconsideration pursuant to Commission Rule 331 and Idaho Code § 61-626 requesting that the Commission reconsider this decision. PETITION FOR RECONSIDERATION Idaho Power contends that the Commission's reduced/lost revenues decision in this case is unreasonable, unlawful, erroneous, unduly discriminatory, and not in conformity with the facts of record or applicable law. Idaho Power contends that the Commission's decision on this issue results in confiscation, and ultimately rates that are confiscatory. Idaho Power also argues that the Commission's decision in Order No. 28992 is not in conformity with the facts of the record in Case No. IPC-E-01-3 or Order No. 28699 in that proceeding that the Company claims authorized it to recover reduced/lost revenues. The Company also alleges that Commission Order No. 28992 is an unlawful collateral attack on Order No. 28699, Case No. IPC-E-01-3, that Idaho Power claims authorized it to the recover reduced/lost revenues. Finally, Idaho Power alleges that Order No. 28992 requires the implementation of demand-side management programs without recovery of all costs, including revenues that are lost or reduced as a result of the implementation of a particular program, is unreasonable, unlawful and confiscatory. Based on the foregoing, Idaho Power requests that the Commission reconsider Order No. 28992 and allow the Company to include the total amount of reduced/lost revenues resulting from the Irrigation Load Reduction Program in the 2002/2003 PCA year. The Company also requests that the Commission modify Order No. 28992 to provide that in determining the cost effectiveness of any demand-side management program, the Company is entitled to recover all costs that it would incur as a result of the implementation of a particular program. Idaho Power contends that the evidentiary record in Case No. IPC-E-01-3 and in this proceeding, IPC-E-01-34 is sufficient for the Commission to make a determination on its Petition. However, the Company states that it stands ready to proceed to hearing on this matter should the Commission decide to take additional evidence. COMMISSION DECISION Does the Commission wish to rule on Idaho Power's Petition for Reconsideration based on the record currently before it or does it wish grant the petition for the purpose of establishing a procedure to process this matter? ___________________ John R. Hammond ipce0134_jh3