20070919IPC to Kroger 1-15.pdf

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IDAHO~POWER(ID
An IDACORP Company
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BARTON L. KLINE
Senior Attorney
September 19, 2007
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise , Idaho 83720-0074
Re:Case No. I PC-07-
General Rate Case Filing
Dear Ms. Jewell:
Please find enclosed an original and two (2) copies of Idaho Power s Response to
the First Production Request from Kroger in the above-referenced matter.
I would appreciate it if you would return a stamped copy of this transmittal letter
in the enclosed self-addressed , stamped envelope.
Very truly yours~6L-
Barton L. Kline
BLK:sh
Enclosure
O. Box 70 (83707)
1221 W. Idaho St.
Boise. ID 83702
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BARTON L. KLINE ISB #1526
LISA D. NORDSTROM ISB #5733
Idaho Power Company
O. Box 70
Boise, Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
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Attorney 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
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC
SERVICE TO ELECTRIC CUSTOMERS
IN THE STATE OF IDAHO
) CASE NO. IPC-07-
RESPONSE OF IDAHO POWER TO
THE FIRST SET OF DATA REQUESTS
FROM KROGER
COMES NOW , Idaho Power Company ("Idaho Power" or "the Company ) and, in
response to Kroger s First Set of Data Requests to Idaho Power Company dated August
2007, herewith submits the following information:
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page
REQUEST FOR PRODUCTION NO.: Federal Income Tax - Please identify
the actual amount of domestic Production Activities ("DPA") deduction introduced as
part of the American Jobs Creation Act of 2004 and effective for taxable years
beginning in 2005, attributable to Idaho power in 2006 for both the Total Electric System
and Idaho jurisdiction , and the amount by which this deduction reduced IPC's actual
federal income tax liability of Idaho Power for that year.
RESPONSE TO REQUEST FOR PRODUCTION NO.
Idaho Power Company s 2006 domestic production activities deduction (Internal
Revenue Code ~199) was $1 348 574 and reduced the federal income tax liability by
$472 001.This value was not included in the informational column showing 2006
comparison data.
The response to this request was prepared by Gene W. Marchioro , Corporate
Tax Director, Idaho Power Company, in consultation with Barton L. Kline, Senior
Attorney and/or Lisa D. Nordstrom , Attorney II, Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 2
REQUEST FOR PRODUCTION NO.2: Federal Income Tax - Does the 2006
Actual Federal Income Tax entry of $36 271,487 shown in Column 1 , Line 12 on page 2
of 2 of Exhibit No. 20 include the effects of the DPA deduction? If not, please explain
why not. If so, please provide a workpaper detailing the derivation and incorporation of
this deduction in the determination of the federal income tax expense a shown on
Exhibit 28.
RESPONSE TO REQUEST FOR PRODUCTION NO.
It has come to our attention that some of the 2006 federal income tax
adjustments , including the DPA deduction , were not included in column 1 , the 2006
Federal Income Tax column of Exhibit 20 and Exhibit 28. While the DPA is not reflected
in the 2006 actual data column within the exhibit, the Company did have a DPA
deduction for 2006 in the amount of $1 348,574 (see response to Request No.1).
To avoid confusion, the Company has filed replacement data set information
including pages 2-, of Exhibit 28, with the 2006 columns in the tax tables removed, and
Exhibit 20, page 2 , with the Income Tax information and resulting totals removed.
Because the Company is using a 2007 forecast test year, removal of the 2006 income
tax data within the data set, has no impact on the Company s requested revenue
requirement.It is important to note that 2006 data set was presented for comparison
purposes only and therefore , no adjustment to the filing other than the corrected pages
as noted above, is necessary.
The response to this request was prepared by Gene W. Marchioro, Corporate
Tax Director, Idaho Power Company, in consultation with Barton L. Kline, Senior
Attorney and/or Lisa D. Nordstrom , Attorney II , Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 3
REQUEST FOR PRODUCTION NO.3: Federal Income Tax - Does the
2007 Forecast Federal Income Tax entry of $31 386 045 shown in Column 2 , Line 12
on page 2 of 2 of Exhibit No. 20 include the effects of the DPA deduction? If not , please
explain why not.If so, please provide a workpaper detailing the derivation and
incorporation of this deduction in the determination of the federal income tax expense
as shown on Exhibit 28.
RESPONSE TO REQUEST FOR PRODUCTION NO.
Yes.The 2007 forecasted/test year DPA deduction is $2 000 000.The
deduction can be found on page 123 of the C. Schwendiman workpapers. The DPA
deduction is included with all other federal income tax adjustments in Exhibit 28, page 3
line 23 (columns 2 and 6). The adjustment of $2 000 000 is included in the Total
Schedule M Differences (workpaper 123 last line on the page). This row, column by
column, is displayed in the tax table in the jurisdictional separation study, Exhibit 28
page 3, line 23 Federal Income Tax Adjustments. No workpaper was created to show
the net impact of any single tax deduction. However, it has been determined that the
DPA deduction reduces the net federal income tax adjustments on line 23, thus
reducing test year federal taxable income , and thereby decreasing the federal income
tax liability by $700 000. This was calculated by multiplying $2 000,000 by the Federal
Tax rate of 35%.
The response to this request was prepared by Gene W. Marchioro, Corporate
Tax Director, Idaho Power Company, in consultation with Barton L. Kline, Senior
Attorney and/or Lisa D. Nordstrom , Attorney Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 4
REQUEST FOR PRODUCTION NO.4: Federal Income Tax - Does the 2007
Forecast Federal Income Tax entry of $46 055 852 shown in Column 6, Line 13 on
page 2 of 2 of Exhibit No. 20 include the effects of the DPA deduction? If not, please
explain why not.If so, please provide a workpaper detailing the derivation and
incorporation of this deduction in the determination of the federal income tax expense
as shown on Exhibit 28.
RESPONSE TO REQUEST FOR PRODUCTION NO.
Yes. See response to Request No.
The response to this request was prepared by Gene W. Marchioro, Corporate
Tax Director, Idaho Power Company, in consultation with Barton L. Kline, Senior
Attorney and/or Lisa D. Nordstrom, Attorney II , Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 5
REQUEST FOR PRODUCTION NO.5: Federal Income Tax - Does the 2007
Forecast Federal Income Tax entry of $46 753 611 shown in Line 21 on page 1 of 36 of
Exhibit No. 29 include the effects of the DPA deduction? If not, please explain why not.
If so, please provide a workpaper detailing the derivation and incorporation of this
deduction in the determination of the federal income tax expense as shown in Table 10
on page 21 of Exhibit 29.
RESPONSE TO REQUEST FOR PRODUCTION NO.
Yes. See response to Request No.
The response to this request was prepared by Gene W. Marchioro, Corporate
Tax Director, Idaho Power Company, in consultation with Barton L. Kline, Senior
Attorney and/or Lisa D. Nordstrom, Attorney II , Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 6
REQUEST FOR PRODUCTION NO.6: Federal Income Tax - Does the 2007
Idaho Test Year Net-to-Gross tax Multiplier of 1.642 shown in Line 35 on page 1 of 36
of Exhibit No. 29 include the effects of the DPA deduction? If not, please explain why
not. If so, please provide a workpaper detailing the derivation and incorporation of this
deduction in the determination of the net-to-gross tax multiplier.
RESPONSE TO REQUEST FOR PRODUCTION NO.
No. The net-to-gross tax multiplier (see C. Schwendiman workpapers page 126)
is based upon the federal and state statutory income tax rates that Idaho Power is
subject to (note that the state statutory rates are adjusted for state apportionment
factors). The DPA deduction does not change the statutory income tax rates , but does
change the amount of income taxes due. The DPA deduction is included in the
calculation of federal and state income taxes (see Exhibit 28 pages 3-5 and C.
Schwendiman workpapers page 123) and thus lowers taxable income (the base to
which the statutory income tax rates are applied) which results in less current income
tax expense.
The response to this request was prepared by Gene W. Marchioro , Corporate
Tax Director, Idaho Power Company, in consultation with Barton L. Kline , Senior
Attorney and/or Lisa D. Nordstrom , Attorney II , Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 7
REQUEST FOR PRODUCTION NO.7: Federal Income Tax - Has Idaho Power
reflected the effects of the DPA deduction anywhere in its Idaho jurisdictional revenue
requirement calculation? If not , please explain why not. If so , please identify the
exhibit(s) including this deduction and its supporting derivation.
RESPONSE TO REQUEST FOR PRODUCTION NO.
Yes it has. See response to Request No.
The response to this request was prepared by Gene W. Marchioro, Corporate
Tax Director, Idaho Power Company, in consultation with Barton L. Kline, Senior
Attorney and/or Lisa Nordstrom, Attorney II , Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 8
REQUEST FOR PRODUCTION NO.8: Federal Income Tax - If not included in
Idaho Power direct filing, please estimate the amount of Domestic Production
Activities ("DPA") deduction attributable to Idaho Power s Idaho jurisdiction for the 2006
Actual, 2007 Forecast, and 2007 Test year periods (including the test year revenue
deficiency determination), and the amount by which this deduction would reduce the
Federal income tax liability determined by Idaho Power for each period. Please provide
workpapers with formulas intact supporting the derivation of these amounts.
RESPONSE TO REQUEST FOR PRODUCTION NO.
A DPA deduction has been included in the 2007 test year. See response to
Request No.
The response to this request was prepared by Gene W. Marchioro, Corporate
Tax Director, Idaho Power Company, in consultation with Barton L. Kline, Senior
Attorney and/or Lisa Nordstrom , Attorney II , Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 9
REQUEST FOR PRODUCTION NO.: Federal Income Tax - For ratemaking
purposes , please confirm that in its revenue requirement calculation Idaho Power
determines its Federal Income Tax expense ($46,753 611 shown on page 1 of 36, Line
21 of Exhibit 29 and the 1.642 Net-to-Gross tax Multiplier on page 1 of 36 , Line 35 of
Exhibit 29) using a hypothetical 35% federal tax rate for the Idaho jurisdiction on a
stand-alone basis.
RESPONSE TO REQUEST FOR PRODUCTION NO.
For ratemaking purposes, Idaho Power determines its federal income tax
expense using the current statutory federal corporate income tax rate of 35%, not a
hypothetical tax rate.
The response to this request was prepared by Gene W. Marchioro , Corporate
Tax Director, Idaho Power Company, in consultation with Barton L. Kline , Senior
Attorney and/or Lisa D. Nordstrom, Attorney II , Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 10
REQUEST FOR PRODUCTION NO.1 0: Please provide the class average load
factor for Schedules 9-, 9-, 19-, 19-, and 19-T for the 2007 test year period.
RESPONSE TO REQUEST FOR PRODUCTION NO. 10:
The class average annual load factors for the requested service schedules based
on the group coincident demands included on page 39 of Mr. Tatum s workpapers and
on the energy consumption values included on page 163 of Ms. Schwendiman
workpapers are:
Schedule 9S:60.
Schedule 9P:59.
Schedule 19S:65.
Schedule 19P:74.
Schedule 19T:78.
The response to this request was prepared by Maggie Brilz , Pricing Director
Idaho Power Company, in consultation with Barton L. Kline , Senior Attorney and/or Lisa
D. Nordstrom, Attorney II , Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page
REQUEST FOR PRODUCTION NO. Rate Design - Assume Idaho
Power s proposed rate design for Rates 9-P/T and 19-P/T were adopted and further
assume that multiple account customers with total load on Rate 9-P/T in excess of
MW were given the option to change their individual 9-P/T accounts to Rate 19-P/T (to
enable them to participate in TOU rates):
(a)What is Idaho Power s estimate of the number of accounts that would
migrate?
(b)What is Idaho Power s estimate of the kWh and KW billing demand (by
season and TOU) that would migrate;
(c)What is Idaho Power s estimate of the revenue impact from the migration?
RESPONSE TO REQUEST FOR PRODUCTION NO. 11:
Idaho Power has not performed any analyses nor has it conducted any surveys
to assess potential customer behavior in response to the assumptions presented by
Kroger Co. Consequently, Idaho Power objects to this request pursuant to Rule of
Procedure 225.01 (a) as it calls for a statement of opinion that has not been previously
written or published.
The response to this request was prepared by Barton L. Kline, Senior Attorney
and/or Lisa D. Nordstrom , Attorney II , Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 12
REQUEST FOR PRODUCTION NO. 12 Rate Design - Assume Idaho Power
proposed rate design for Rates 9-P/T and 19-P/T were adopted and further assume that
multiple account customers with total load on Rate 9-P/T in excess of 5 MW were given
the option to change their individual 9-P/T accounts to Rate 19-P/T (to enable them to
participate in TOU rates):
(a)What is Idaho Power s estimate of the number of accounts that would
migrate?
(b)What is Idaho Power s estimate of the kWh and kW billing demand (by
season and TOU) that would migrate?
(c)What is Idaho Power s estimate of the revenue impact from the migration?
RESPONSE TO REQUEST FOR PRODUCTION NO. 12:
Idaho Power has not performed any analyses nor has it conducted any surveys
to assess potential customer behavior in response to the assumptions presented by
Kroger Co. Consequently, Idaho Power objects to this request pursuant to Rule of
Procedure 225.01 (a) as it calls for a statement of opinion that has not been previously
written or published.
The response to this request was prepared by Barton L. Kline, Senior Attorney
and/or Lisa D. Nordstrom, Attorney Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 13
REQUEST FOR PRODUCTION NO. 13 Rate Design - Assume Idaho Power
proposed overall revenue requirement for Rates 9-P/T and 19-P/T were adopted and
Rates 9-P/T and 19-P/T were merged using Rate 19-P/T's TOU rate design. What is
Idaho Power s estimate of the kWh and kW billing demand (by season and TOU) that
would result from the new merged rate?
RESPONSE TO REQUEST FOR PRODUCTION NO. 13:
The Company does not have test year data for Schedule 9 Primary and
Transmission service levels available by comparable Schedule 19 time-of-use blocks.
Consequently, the requested information is unavailable.
The response to this request was prepared by Maggie Brilz, Pricing Director
Idaho Power Company, in consultation with Barton L. Kline , Senior Attorney and/or Lisa
D. Nordstrom , Attorney Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 14
REQUEST FOR PRODUCTION NO. 14 : Rate Design - Assume Idaho Power
proposed overall revenue requirement for Rates 9-P/T and 19-P/T were adopted and
Rates 9-P/T and 19-P/T were merged using 19-P/T's TOUR rate design for Rate 9-P/T
customers with billings demands greater than 500 kW.
(a)What is Idaho Power s estimate of the number of Rate 9-P/tt accounts that
would move to Rate 19-P/T?
(b)What is Idaho Power s estimate of the kWh and kW billing demand (by
season and TOU) that would move from Rate 9-P/T to Rate 19-P/T?
RESPONSE TO REQUEST FOR PRODUCTION NO. 14:
Idaho Power has not performed any analyses nor has it conducted any surveys
to assess potential customer behavior in response to the assumptions presented by
Kroger Co. Consequently, Idaho Power objects to this request pursuant to Rule of
Procedure 225.01 (a) as it calls for a statement of opinion that has not been previously
written or published.
The response to this request was prepared by Barton L. Kline , Senior Attorney
and/or Lisa D. Nordstrom , Attorney II , Idaho Power Company.
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 15
REQUEST FOR PRODUCTION NO. 15: Rate Design - What is Idaho Power
opinion of the reasonableness of each of the rate design options presented in 2.
through 2., if the Idaho Power Company was held harmless from the revenue impact
from migration.
RESPONSE TO REQUEST FOR PRODUCTION NO. 15:
Pursuant to Rule of Procedure 225.01 (a), Idaho Power objects to this request as
it calls for a statement of opinion that has not been previously written or published.
The response to this request was prepared by Barton L. Kline, Senior Attorney
and/or Lisa D. Nordstrom , Attorney II , Idaho Power Company.
DATED at Boise , Idaho, this /~ay of September, 2007.
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BARTON L. KLINE
Attorney for Idaho Power Company
LISA D. NORDSTROM
Attorney for Idaho Power Company
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 16
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this )f!!day of August, 2007, I served a true and
correct copy of the within and foregoing document upon the following named parties by
the method indicated below, and addressed to the following:
Commission Staff
Weldon Stutzman
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington (83702)
O. Box 83720
Boise, Idaho 83720-0074
Donovan Walker
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington (83702)
O. Box 83720
Boise, Idaho 83720-0074
Industrial Customers of Idaho Power
Peter J. Richardson, Esq.
Richardson & O'Leary
515 N. 2ih Street
O. Box 7218
Boise, Idaho 83702
Don Reading
Ben Johnson Associates
6070 Hill Road
Boise, Idaho 83702
Idaho Irrigation Pumpers
Association , Inc.
Eric L. Olsen
Racine , Olson, Nye , Budge & Bailey
O. Box 1391
201 E. Center
Pocatello, Idaho 83204
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RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 17
Anthony Yankel
29814 Lake Road
Bay Village , OH 444140
Kroger Co.! Fred Meyer and Smiths
Michael L. Kurtz
Kurt J. Boehm
Boehm , Kurtz & Lowry
36 East Seventh Street, Suite 1510
Cincinnati, Ohio 45202
The Kroger Co.
Attn: Corporate Energy Manager (G09)
1014 Vine Street
Cincinnati, Ohio 45202
Micron Technology
Conley Ward
Michael C. Creamer
Givens Pursley
601 W. Bannock Street
O. Box 2720
Boise, Idaho 83701
Dennis E. Peseau , Ph.
Utility Resources , Inc.
1500 Liberty Street SE , Suite 250
Salem, OR 97302
Department of Energy
Lot Cooke
Arthur Perry Bruder
Office of the Attorney General
United States Department of Energy
1000 Independence Ave., SW
Washington , DC 20585
Routing Symbol GC- 76
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RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 18
Dennis Goins
Potomac Management Group
5801 Westchester Street
O. Box 30225
Alexandria , VA 22310-8225
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Dale Swan
Ammar Ansari
Exeter Associates
5565 Sterrett Place, Suite 310
Columbia, MD 20904
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Rt~Barton L. Kline
RESPONSE OF IDAHO POWER TO THE FIRST SET OF DATA REQUESTS
FROM KROGER - Page 19