20040218Stipulation.pdf

BARTON L. KLINE ISB #1526
MONICA B. MOEN ISB #5734
Idaho Power Company
O. Box 70
1221 West Idaho Street (83702)
Boise, Idaho 83707
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Attorney for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S INTERIM AND
PROSPECTIVE HEDGING , RESOURCE
PLANNING , TRANSACTION PRICING
AND IDACORP ENERGY SOLUTIONS
(IES) AGREEMENT.
) CASE NO. IPC-01-
(PHASE II)
STIPULATION
This Stipulation is entered into among Idaho Power Company ("Idaho
Power"), Staff of the Idaho Public Utilities Commission ("Staff"), the Industrial
Customers of Idaho Power Company ("ICIP"), and the other Parties in this proceeding
as their signatures appear at the end of this Stipulation. Idaho Power and the other
signing Parties are hereinafter together referred to as the "Parties.
This Stipulation is the result of approximately 12 settlement meetings that
took place between September 2001 and September 2003. During that two- year
period, numerous parties participated in the negotiations with Idaho Power Company
and included Staff , ICIP , AARP, the Idaho Retailers Association, the Idaho Irrigation
Pumpers Association, J.R. Simplot Company, Micron Technology Inc., and Advanced
Energy Strategies Inc.
Exhibit 1 to JOINT MOTION
STIPULATION , Page
The purpose of this Stipulation is to settle all of the outstanding
compensation issues relating to and arising out of any transactions between Idaho
Power and IDACORP Energy Solutions LP or IDACORP Energy. (IDACORP Energy
Solutions LP was the entity initially engaged in "non-operating" wholesale marketing and
trading activities. IDACORP Energy Solutions LP subsequently changed its name to
IDACORP Energy. Both entities are hereinafter collectively referred to as "IE"). The
settlement agreement between the Parties is more particularly described below.
Agreements
In settlement the Parties agree as follows:
The procedural history of this proceeding is long and complex. To
avoid unnecessary duplication , the procedural history of this case is set out in full in the
Company s Motion for Acceptance of Settlement filed simultaneously with this
Stipulation. The Parties have reviewed the Motion for Acceptance of Settlement and
agree that the facts included in the Motion needed to support this Stipulation are
incorporated by reference in this Stipulation.
Because the transactions between Idaho Power and IE span
multiple years, involve thousands of transactions , and because the issues involve
multiple contested claims , the Parties have agreed on a single global settlement amount
as a compromise of the Parties' respective contested claims. The settlement is
intended to resolve all outstanding compensation issues including, but not limited to, the
following:
STIPULATION , Page 2
(a)All issues related to or arising out of the Federal Energy Regulatory
Commission (FERC) informal , non-public investigation which was resolved by the FERC
Order approving the Stipulation and Consent Agreement dated May 16, 2000 issued in
Docket No. IN03-000.
(b)All issues related to or arising out of transactions under the
Electricity Supply and Management Agreement between Idaho Power and IE which was
approved by the Commission in Order No. 28596 issued on December 19 , 2000.
(c)All compensation issues relating to or arising out of transactions
involving IE's use of the Idaho Power transmission system, and any ancillary services or
scheduling services or other services received by IE from Idaho Power from March
2001 through December 2002. These services specifically included but are not limited
to transmission, wheeling, flips, arbitrage transactions , parking and lending, operating
reserves , spinning reserves and load following requirements.
(d)All issues relating to or arising out of IE's operations which utilized
former Idaho Power employees, Idaho Power "good will " Idaho Power credit and other
Idaho Power assets , either tangible or intangible through 2002 when IE wound down
operations.
(e)Idaho Power s trading practices (including hedging, use of Mid-C or
Palo Verde pricing indexes , and use of the weighted average pricing methodology for
real-time transactions) from March 1 2001 until IE ceased operating on August 1 2002.
(f)Pricing of real-time transactions for the month of July 2002 using
the weighted average methodology or the high-low methodology between Idaho Power
and IE. This issue was transferred to this case from IPC-03-
STIPULATION , Page 3
(g)
Recovery of IE-Tri State transmission costs paid while servicing the
contract. This issue was transferred to this case from IPC-03-
(h)Sharing of FERC Settlement amounts associated with contract
transactions between Idaho Power and I E that were not properly filed with FERC. This
issue was transferred to this case from IPC-03-
(i)Any additional settlement amounts associated with services
provided by Idaho Power to IE with the Truckee-Donner contract, the Montana Power
load following agreement and the Tri-State contract for periods not included in the
FERC settlement.
Continuance of the $2 000 000 annual revenue credit for IE
management contract benefits approved in Case No. I PC-00-, Order No. 28596.
This issue was transferred to this case from IPC-03-
The parties agree there currently is not and there will be no
customer responsibility for IE contract buyouts and litigation of contracts associated with
any non-operating transactions, including but not limited to Grays Harbor and Overton.
The Parties acknowledge that there are several proceedings
currently pending before the FERC and in the courts in which certain California and
Pacific Northwest entities have alleged that IE and Idaho Power dba IE , together with
numerous other entities, engaged in wholesale market activities that increased the cost
of wholesale energy in California and the Pacific Northwest and violated the anti-trust
laws. Idaho Power and IE have denied wrongdoing and are vigorously defending these
cases. Nevertheless , the Parties agree that if, in these proceedings, the FERC or a
court of competent jurisdiction ultimately issues a final unappealable ruling that Idaho
STIPULATION , Page 4
Power or IE should receive any payment(s) or are directed to pay Idaho retail
jurisdictional customers some amount, payment of those amounts to customers are
neither precluded nor required by this settlement.
The Parties further agree that this agreement is not intended to
settle any inter-affiliate expense allocation issues in Idaho Power s pending general rate
case , docket No. IPC-03-13. For example , this agreement would not bar a party from
asserting in the rate case that some portion of the expenses Idaho Power is seeking to
recover through Idaho Power s rates should instead be allocated to IE.
The settlement amount consists of $5 826 186.02 benefits on a
system basis that are currently being passed through to Idaho Power s customers in the
2003-2004 PCA. Idaho customers are currently receiving benefits of $4,457 032.30 in
the 2003-2004 PCA. An additional $5.5 million will be flowed through to Idaho
customers by continuing the $167 000 per month credit in the PCA from April 1 , 2003
through December, 2005. This credit will continue to be a separate line item in the PCA
calculation with 100% of the benefit going to Idaho customers. Idaho customers have
already received or will receive a total of $9 957 032.31 from the total system settlement
amount of $12 296,774.26.
The Parties agree that this Stipulation is in the public interest with
respect to the issues covered by it and that all of the terms of the Stipulation are fair
just and reasonable.
This Stipulation will be entered into the record as evidence in this
proceeding. The Parties shall support adoption of the Stipulation and acceptance of the
Stipulation as a reasonable resolution to the issues identified previously. If the Idaho
STIPULATION , Page 5
Commission rejects all or any part of this Stipulation , any Party disadvantaged by such
action , including Idaho Power, shall have the right , upon written notice to the
Commission and all Parties to the proceeding, within seven (7) days of the
Commission s Order, to withdraw from the Stipulation. No withdrawing Party shall be
bound by the terms of this Stipulation and any withdrawing Party may seek
reconsideration of the Commission s Order. Withdrawal from the Stipulation would not
prevent the withdrawing Party from subsequently requesting that the Commission hold a
hearing in this case to resolve the issues identified above.
The Parties have negotiated this Stipulation as an integrated
settlement document. The Parties recommend that the Commission accept this
Stipulation without material change or condition.
10.This Stipulation may be executed in counterparts, and each signed
counterpart shall constitute an original document.
(J 2 - 0 5- 0 '-I
Date BARTON L. KLINE
Attorney for Idaho Power Company
0.2. 05
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Date
STIPULATION , Page 6
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Date
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PETER J. RICHARDSON
Attorney for Industrial Customers of
Idaho Power Company
STIPULATION
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ate R. SCO ASLEY
Attorney for J.R. Simplot Co
STIPULATION
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STIPULATION