20060214IPC response NWEC 1st request.pdf

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IDAHO POWER COMPANY
O, BOX 70
BOISE, IDAHO 83707
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BARTON L. KLINE
Senior Attorney
An IDACORP Company
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February 13 , 2006
HAND DELIVERED
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise, Idaho 83720-0074
Re:Case No. IPC-05-
Idaho Power Company s Response to the
First Production Request of NW Energy Coalition
Dear Ms. Jewell:
Please find enclosed for filing an original and two (2) copies of the
Company s Response to the First Production Request of the NW Energy Coalition
regarding the above-described case.
I would appreciate it if you would return a stamped copy of this transmittal
letter to me in the enclosed self-addressed stamped envelope.
Barton L. Kline
BLK:jb
Enclosures
Telephone [phone] Fax [phone] E-mail BKlinefiYidahopower.com
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BARTON L. KLINE ISB #1526
MONICA B. MOEN ISB #5734
Idaho Power Company
O. Box 70
Boise , Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
BKline ~ idahopower.com
MMoen ~ idahopower.com
Attorneys for Idaho Power Company
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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
AUTHORITY TO INCREASE ITS BASE
RATES AND CHARGES FOR ELECTRIC
SERVICE IN THE STATE OF IDAHO
CASE NO. IPC-05-
IDAHO POWER COMPANY'
RESPONSE TO THE FIRST
PRODUCTION REQUEST OF
NW ENERGY COALITION
COMES NOW , Idaho Power Company ("Idaho Power" or "the Company
and in response to the First Production Request of the NW Energy Coalition to Idaho
Power Company dated January 27 2006, herewith submits the following information:
REQUEST NO.1: Please provide any work papers, memos, studies, or
similar documents supporting the Company s request to increase fixed customer
charges for customers taking service under Schedules 1 and 7 from $3.30 to $6.00.
RESPONSE TO REQUEST NO.1: Support for the Company s request to
increase the fixed customer charges for Schedules 1 and 7 from $3.30 to $6.00 for
Schedules 1 and 7 can be found on Ms. Brilz s Exhibit No. 40, pages 1 and 2 , column I
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF NW ENERGY COALITION Page
which show the customer-related unit costs associated with the service charge as
determined by the "traditional" Cost-of-Service Study. As shown on line 60 , page 1
column I of Exhibit No. 40 , the total customer-related distribution investments and
customer-related O&M costs support a service charge of $16.71 for residential
customers. Line 120 , column I on page 2 of Exhibit No. 40 supports a service charge of
$19.57 for small general service customers.
Mr. Pengilly s direct testimony at page 3, lines 17-, further supports the
Company s request to increase the fixed service charges. He states "My first objective
is to move the individual rate components closer to the costs of providing electric
service by emphasizing increases in the demand and customer components and the
inclusion of fewer non-energy-related costs in the energy charges. This movement
toward more emphasis on the fixed billing components is supported by the results of
the Company s class cost-of-service study.
The spreadsheet provided with this response shows the current base
rates, the proposed base rates, the percent increase, the cost-of-service unit cost , the
current base rate percent of cost-of-service unit cost, and the proposed base rate
percent of cost-of-service unit cost for Schedules 1 and Schedule 7.
The response to this request was prepared by Peter Pengilly, Senior
Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline , Senior
Attorney, Idaho Power Company.
REQUEST NO.2: What components of the Company s costs of service
does the Company intend to recover through the proposed $6 customer charge for
customers taking service under Schedules 1 and 7?
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF NW ENERGY COALITION Page 2
RESPONSE TO REQUEST NO.2: As detailed on Ms. Brilz s Exhibit No.
40 pages 1 and 2, column I , the service charge is intended to recover the customer-
related component of distribution plant, such as primary lines, secondary lines , line
transformers , service drops , and meters and an allocated portion of customer-related
O&M expenses including meter reading, customer accounts (billing, etc.), and
uncollectible expenses. On page 3, line 23 through page 4, line 6 of Ms. Brilz s direct
testimony, she describes and gives examples of costs identified as customer-related.
As provided in response to Request No., the results from the cost-of-
service study support a service charge for residential customers of $16.70 per month
and a service charge of $19.57 per month for small general service customers. The
Company has requested service charges for both of these customer classes equal to
approximately 30 percent of cost.
The response to this request was prepared by Peter Pengilly, Senior
Pricing Analyst, Idaho Power Company, in consultation with Barton L. Kline, Senior
Attorney, Idaho Power Company.
REQUEST NO.3: Exhibit 42 in the Company s last general rate case
IPC-E03-, stated that the unit costs for "Meters
" "
Install on Cust. Premises
" "
Meter
Reading," and "Customer Accounts" (Schedule 1 and Schedule 7 customers) were less
costly than the amounts stated in Exhibit 45 in the above-captioned case. For example
the function "Customer Accounts" (Schedule 1) had a stated unit cost of
$2.68819/cust/month in the IPC-03-13 filing; while "Customer Accounts" have a
stated unit cost of $3.43765/cust/month in Exhibit 45 for the above-captioned case.
Please explain why the stated unit costs for the "Meters
" "
Install on Cust. Premises
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF NW ENERGY COALITION Page 3
Meter Reading," and "Customer Accounts" functions in Schedules 1 and 7 have
increased between the IPC-03-13 case and the above-captioned matter; and please
provide any workpapers or other documents that explain these differences.
RESPONSE TO REQUEST NO.3: The unit costs for "Meters" and "Meter
Reading" for Schedules 1 and 7 as shown on Exhibit No. 42 (IPC-03-13) and Exhibit
No. 45 (IPC-05-28) have decreased between the last general rate case and the
current case , as indicated below:
Unit Cost
Exhibit No. 42
IPC-03-
Exhibit No. 45
I PC-05-
METERS
Schedule $2.36250 $1.9344
Schedule 7 $6.32915 $4.67671
METER READING
Schedule $1.64237 $1.61737
Schedule 7 $1.82121 $1.74781
The unit cost for Installation on Customers' Premises increased from
$0.20761 in Case No. IPC-03-13 to $0.27815 in Case No. IPC-05-28 for residential
customers and from $0.20742 to $0.27791 for small commercial customers. These
increases can be attributed to two main factors. First, as a result of Case No. IPC-
03-, the depreciation rate for investments associated with installations on customers
premises increased from 7.89 percent to 11.85 percent effective December 1 2003.
This change accounts for approximately 40 percent of the increase in the Installation on
Customers' Premises unit costs since the last general rate case. Second , the
Company s labor costs associated with customer installations expenses, such as
assisting customers with service , voltage , or billing issues, have increased since Case
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF NW ENERGY COALITION Page 4
No. IPC-03-13. This change also accounts for approximately 40 percent of the
increase in the Installation on Customers' Premises unit costs since the last general
rate case. The remaining difference in the Installation on Customers' Premises unit
costs since the last general rate case can generally be attributed to an increase in the
administrative and general salaries allocated to Installations on Customers' Premises
and to a reduction in rate base due to the increased depreciation rate.
The increase in unit costs for Customer Accounts expense can be
attributed to higher labor costs associated with past due account collection activity and
the corresponding increase in administrative and general salaries allocated to Customer
Accounts.
The response to this request was prepared by Maggie Brilz , Director of
Pricing, Pricing and Regulatory Services, Idaho Power Company, in consultation with
Barton L. Kline, Senior Attorney, Idaho Power Company.
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DATED this day of February, 2006.
BARTON L. KLINE
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST
PRODUCTION REQUEST OF NW ENERGY COALITION Page 5
IDAHO POWER COMPANY
CASE NO. IPC-OS-
FIRST PRODUCTION REQUEST
OF NW ENERGY COALITION
TT A CHMENT TO
RESPONSE TO
REQUEST NO.
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1
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this ~day of February, 2006, I served a true and
correct copy of the within and foregoing IDAHO POWER COMPANY'S RESPONSE TO THE
FIRST PRODUCTION REQUEST OF NW ENERGY COALITION upon the following named
parties by the method indicated below, and addressed to the following:
Donald L. Howell , II
Cecelia A. Gassner
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, Idaho 83720-0074
don.howell ~ QtJc.iQc:tho.Qov
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Overnight Mail
FAX [phone]
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Randall C. Budge
Eric L. Olsen
Racine, Olson, Nye , Budge & Bailey
O. Box 1391; 201 E. Center
Pocatello, 10 83204-1391
rcb~racinelaw.net
elo ~ racinelaw.net
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Anthony Yankel
29814 Lake Road
Bay Village , OH 44140
yankel~attbi.com
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Peter J. Richardson
Richardson & O'Leary
515 N. 27th Street
O. Box 7218
Boise ID 83702
peter~ richardsonandoleary.com
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Dr. Don Reading
Ben Johnson Associates
6070 Hill Road
Boise, 1083703
dreadinQ ~ mindsprinQ.com
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Lawrence A. Gollomp
Assistant General Counsel
United States Dept. of Energy
1000 Independence Avenue, SW
Washington , D.C. 20585
Lawrence.Goliomp ~ hq.doe.qov
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CERTIFICATE OF SERVICE, Page
Dennis Goins
Potomac Management Group
5801 Westchester Street
O. Box 30225
Alexandria, VA 2231 0-1149
dqoinsPMG ~ aol.com
Conley E. Ward
Givens, Pursley LLP
601 W. Bannock Street
O. Box 2720
Boise, ID 83701-2720
cew(fp qivenspursley.com
Dennis E. Peseau , Ph.
Utility Resources , Inc.
1500 Liberty Street S., Suite 250
Salem, OR 97302
dpeseau (fp excite .com
William M. Eddie
Advocates for the West
1320 W. Franklin Street
O. Box 1612
Boise, ID 83701
billeddie (fp rmci.net
Ken Miller
NW Energy Coalition
5400 W. Franklin, Suite G
Boise , ID 83705
kenmiller1 (fpcableone.net
Michael L. Kurtz
Kurt J. Boehm
Boehm , Kurtz & Lowry
36 East Seventh Street, Suite 1510
Cincinnati , Ohio 45202
mkurtz(fp bkllawfirm.com
kboehm (fp bkllawfirm.com
Neal Townsend
Energy Strategies
215 S. State Street, Suite 200
Salt Lake City, UT 84111
ntownsend (fp enerqystrat.com
CERTIFICATE OF SERVICE, Page 2
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0J~
BARTON L. KLINE