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Home My WebLink About200306232nd Response of Idaho Power to Staff.pdfBARTON L. KLINE ISB # 1526 MONICA MOEN ISB # 5734 Idaho Power Company P. O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-2682 FAX Telephone: (208) 388-6936 RECEIVED '-- If r.ntk!:L ;.- 2GO3JUN20 PM 4:49 ,;, U~;1-IC UTILITIES COhMISSION Attorneys for Idaho Power Company Street Address for Express Mail 1221 West Idaho Street Boise, Idaho 83702 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AN ACCOUNTING ORDER AUTHORIZING THE INCLUSION OF POWER SUPPLY EXPENSES ASSOCIATED WITH THE PURCHASE OF CAPACITY AND ENERGY FROM PPL MONTANA LLC IN THE POWER COST ADJUSTMENT. CASE NO. IPC-03- RESPONSE OF IDAHO POWER COMPANY TO SECOND PRODUCTION REQUEST OF THE COMMISSION STAFF COMES NOW, Idaho Power Company ("Idaho Power" or "the Company and in response to the Second Production Request of the Commission Staff to Idaho Power Company dated June 12, 2003, herewith submits the following information: REQUEST NO.5: It has been reported in newspapers and trade publications that NorthWestern Corp., parent of NorthWestern Energy, may be considering a Chapter 11/Bankruptcy filing. Please provide a written explanation and any analysis made related to contract risks and reliability associated with the transmission contracts required for the proposed PPL Montana purchase agreement. RESPONSE OF IDAHO POWER COMPANY TO SECOND PRODUCTION REQUEST OF COMMISSION STAFF, Page RESPONSE TO REQUEST NO.5: Idaho Power Company s contract for transmission services to bring the energy from the PPL Montana LLC purchase to Idaho Power s system is with NorthWestern Energy, LLC ("NorthWestern Energy" or NorthWestern ), a subsidiary of NorthWestern Corp. NorthWestern Energy s sale of wholesale transmission services is subject to the jurisdiction and regulation of the Federal Energy Regulatory Commission ("FERC"). Idaho Power s purchase of transmission services from NorthWestern Energy will be made under NorthWestern FERC-approved and regulated Open Access Transmission Tariff ("OATT"). Thus NorthWestern s performance of its obligations under the OATT is subject to the jurisdiction and regulation of the FERC. If the parent company, NorthWestern Corp., files bankruptcy, it is almost certain to be under Chapter 11 (Reorganization) of the bankruptcy code. Under Chapter 11 , NorthWestern Corp., through its subsidiary, NorthWestern Energy, would likely be a debtor-in-possession and NorthWestern Energy would continue to operate the Montana transmission system during the pendency of any parent company bankruptcy proceedings. Because Idaho Power s transmission purchases are made under NorthWestern Energy s OATT, NorthWestern Energy, a bankruptcy trustee or an entity succeeding to NorthWestern Energy s assets could not change the rates , terms or conditions of Idaho Power s transmission purchase from NorthWestern Energy without prior FERC approval. In addition , any assignment, sale or transfer of FERC jurisdictional assets, including NorthWestern s transmission system , requires prior FERC approval under 9 203 of the Federal Power Act. RESPONSE OF IDAHO POWER COMPANY TO SECOND PRODUCTION REQUEST OF COMMISSION STAFF, Page 2 Idaho Power recognizes that it will need to closely monitor this situation but the Company does not believe that the potential risk of bankruptcy poses an unreasonable risk on the Company s ability to obtain the energy purchased under the PPL Montana, LLC Agreement. The response to this request was prepared by Barton L. Kline , Senior Attorney, Idaho Power Company. DATED at Boise, Idaho, this 4 It- day of June, 2003. , ~.)/ 'd- LY------ BARTON L. KLINE Attorney for Idaho Power Company RESPONSE OF IDAHO POWER COMPANY TO SECOND PRODUCTION REQUEST OF COMMISSION STAFF, Page 3 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the d.-D "*' day of June , 2003, I served a true and correct copy of the within and foregoing RESPONSE OF IDAHO POWER COMPANY TO SECOND PRODUCTION REQUEST OF COMMISSION STAFF upon the following named parties by the method indicated below , and addressed to the following: Scott Woodbury Deputy Attorney General Idaho Public Utilities Commission 472 W. Washington Street O. Box 83720 Boise, Idaho 83720-0074 Hand Delivered S. Mail Overnight Mail FAX ;-, \ =)---/ \: cf- BARTON L. KLINE CERTIFICATE OF SERVICE