20071219IPC to Staff 1-55.pdf

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I DA~POR~
An 10ACORP Company
BARTON L. KLINE
Senior Attorney
December 18, 2007
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-07-8
General Rate Case Filing
Dear Ms. Jewell:
Please find enclosed an original and two (2) copies of Idaho Power Company's First
Production Request to the Idaho Public Utilities' Commission Staff 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.
..
Barton L. Kline
BLK:sh
Enclosure
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, 10 83702
BARTON L. KLINE ISB #1526
LISA D. NORDSTROM ISB #5733
Idaho Power Company
P. O. Box 70
Boise, Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
2807 DEC" /8 P~l 4: 47
UTI' ~!r)¡/~1 0 Pu..... d e.:L. ¡t.'"L.i ...s t".~ it v..u vUr;¡MiSSIO/";
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 ) CASE NO. IPC-E-07-08
OF IDAHO POWER COMPANY FOR )
AUTHORITY TO INCREASE ITS RATES ) IDAHO POWER COMPANY'S FIRST
AND CHARGES FOR ELECTRIC ) PRODUCTION REQUEST TO THE
SERVICE TO ELECTRIC CUSTOMERS IN ) IDAHO PUBLIC UTILITIES'
THE STATE OF IDAHO ) COMMISSION STAFF
)
)
COMES NOW, Idaho Power Company ("Idaho Powet' or "the Company"), by and
through their attorneys, and hereby requests that the Staff of the Idaho Public Utilities
Commission answer the following interrogatories and provide the following information and
documents in accordance with the Commission's Rules of Procedure and applicable
scheduling orders and notices issued by the Commission in this proceeding.
To allow the Company to utilize these responses in preparing its rebuttal
testimony, it is necessary that the responses to these production requests be provided
as soon as possible, but no later than December 31,2007.
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 1
This production request is to be deemed continuing in nature and the Staff of the
Idaho Public Utilties Commission is requested to provide, through supplementation,
additional documents or information that is responsive to this request that it, or any person
acting on its behalf, may later come into possession or become aware of.
REQUEST NO.1: Please identify the Staff witness responsible for addressing the
impact of the load growth adjustment rate on the rate of return on equity.
REQUEST NO.2: Please describe how the Staff reflected its proposed load
growth adjustment rate in its recommendations for the rate of return on equity.
REQUEST NO.3: Please provide Staff's definition of "Regulatory Lag" and the
witness who can respond to questions concerning this definition.
REQUEST NO.4: Do all Staff witnesses agree with the definition of "Regulatory
Lag" that has been provided. If not, now would they that Staff witness define "Regulatory
Lag"?
REQUEST NO.5: Please explain why Staff has not made the traditional
annualizing adjustments for depreciation and reserve for existing Electric Plant in
Service as of June 30, 2007.
REQUEST NO.6: In Kathy Stockton's testimony on page 16, lines 19 through
25, she refers to "a corresponding increase in revenues of $370,387". Please indicate
where the imputed revenues of $370,387 on annualized plant are located in Mr.
English's Exhibit Nos. 112 and 113.
REQUEST NO.7: Please explain and provide the detailed references in the
workpapers or other source documents that supports the Amortization of Other Plant of
$39,555,756 in Exhibit 113, Column 1, Line 8.
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 2
REQUEST NO.8: Please explain why a 13 month average of $13,155,568 is
used for Conservation-Other Deferred programs in Mr. English's Exhibit No. 113,
Column 1, Line 14 when traditionally year-end balances have been used for these
accounts.
REQUEST NO.9: Please explain and provide the detailed references in the
workpapers or other source document showing how Other Operating Revenues of
$44,677,792 in Exhibit 113, Column 1, Line 18 was determined.
REQUEST NO. 10: Please explain and provide the detailed references in the
workpapers or other source documents showing how the Operation and Maintenance
Expense of $558,975,639 reported in Exhibit 113, Column 1, Line 20 was determined.
REQUEST NO. 11: Pease explain and provide the detailed references in the
workpapers or other source documents showing how the Operation and Maintenance
Expense reduction of $22,234,882 in Exhibit 113, Column 2, Line 20 was determined.
REQUEST NO. 12: How much of the $22,234,882 amount referenced in
Request No. 10 was included in Staff's test year revenues?
REQUEST NO. 13: Please explain and provide detailed references in the
supporting workpapers or other source documents showing how the Accumulated
Deferred Income Taxes in Exhibit 113, Column 1, Line 10 was determined.
REQUEST NO. 14: Please explain and provide detailed references in the
supporting workpapers or other source documents showing how the Amortization of
Limited Term Plant on Exhibit 113, Column 1, Line 22 was determined.
REQUEST NO. 15: What was the test year in the Avista Utilties case Mr.
English refers to on lines 2 through 4 of page 24 of his testimony. Please provide a
copy of the Washington Commission Order he refers to.
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 3
REQUEST NO. 16: Please provide a copy of Staff's testimony in PAC-E-07-5
recommending a 10.25% return on equity that Mr. English refers to in his testimony at
page 24.
REQUEST NO. 17: Referring to page 4 of Mr. Sterling's testimony, please
provide all data relied upon to substantiate the statement that "High gas prices actually
benefit Idaho Power and its rate payers in most years..."
REQUEST NO. 18: Referring to page 7 of Mr. Sterling's testimony, please
provide all data used in the regression analysis used to support the conclusion ''that gas
prices and Northwest hydro conditions are not related".
REQUEST NO. 19: Referring to page 7 of Mr. Sterling's testimony, are the hydro
shaping factors used in the regression analysis those supplied by Idaho Power in its
input file? If the answer is no, please provide the hydro shaping factors used.
REQUEST NO. 20: Referring to Exhibit No. 107, why was Sumas historical gas
price data limited to May 2001 - December 2006?
REQUEST NO. 21: Referring to Exhibit No. 107, why was Henry Hub historical
gas price data limited to April 2001 - December 2006?
REQUEST NO. 22: Referring to pages 8 and 9 of Mr. Sterling's testimony,
please provide all gas forecasts and NYMEX prices used or considered in reaching the
proposed single price for 2007.
REQUEST NO. 23: If the gas prices used or considered were not in 2007 dollars,
please provide the conversion factors and spreadsheets used to accomplish the
conversion to 2007 dollars.
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 4
REQUEST NO. 24: Does Mr. Hessing agree that the terms "Marginal Costs" and
"Incremental Costs" as used in his testimony concerning the PCA are synonymous? If
they are not synonymous, please describe how the terms are different.
REQUEST NO. 25: Does Mr. Hessing recommend that power supply costs the
Company incurs to serve load growth be recovered in the power cost adjustment? If yes,
why? If no, why?
REQUEST NO. 26: Does Mr. Hessing address the impact of his expense
adjustment rate for growth on the Staff recommended return on equity? If the answer is
yes, where is this found in his testimony? If no, where is this issue addressed in Staff's
testimony?
REQUEST NO. 27: Are Idaho Power's low retail rates, compared to national
averages, a benefit to Idaho Power Company when determining risk in setting Idaho
Powets return on equity? If so, why?
REQUEST NO. 28: Is Idaho Power's power cost adjustment a benefit to Idaho
Power Company when determining risk in setting Idaho Power's return on equity? If so,
why?
REQUEST NO. 29: Is Idaho Powets fixed cost adjustment a benefit to Idaho
Power Company when determining risk in setting Idaho Power's return on equity? If so,
why?
REQUEST NO. 30: On page 8 of Ms. Carlock's testimony, she states "Low
demand risk is partially due to the low-cost power and customer mix of power users."
Please explain how Ms. Carlock comes to this conclusion and provide any studies or
analyses that she relies on to support her conclusion.
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 5
REQUEST NO. 31: Please provide an explanation, including any workpapers or
other source documents showing how Ms. Carlock arrived at a Comparable Earnings
estimate between 10%-11 % for Idaho Power.
REQUEST NO. 32: Please provide an explanation, including any work papers or
other source documents showing how Ms. Carlock arrived at the 2% direct flotation factor
she used in the Discounted Cash Flow formula.
REQUEST NO. 33: Please provide the workpapers or other source documents
that Ms. Carlock used in her DCF analysis which identify the comparable companies that
were used and explain how the dividend yield and growth rate assumption for the
comparable companies was estimated.
REQUEST NO. 34: Please provide an explanation for the disallowance for out-of-
area meals for training activities in Exhibit 102.
REQUEST NO. 35: On Page 13 of her testimony, Ms. Vaughn discusses Staff's
exclusion of in-area meals. Please provide an explanation of the standard applied to
make that determination.
REQUEST NO. 36: Please provide any documents that Ms. Vaughn used to
support her testimony that the Company suggests taking a cash advance or cash draws
for airfare. (Vaughn Testimony p. 12).
REQUEST NO. 37: Provide any documentation Ms. Vaughn used to support her
testimony on page 12 indicating that a cash advance was taken for lodging or airfare
expenses outside of defined policy.
REQUEST NO. 38: On page 13 of her testimony, Ms. Vaughn used the term
"luxury items". Please describe how Ms. Vaughn determines what a "luxury item" is.
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 6
Please provide specific detail for each luxury item identified in Ms. Vaughn's review and
referenced in her testimony.
REQUEST NO. 39: Referring to Ms. Vaughn's testimony on page 14, provide
specific information supplementing her assertion that items of a personal nature were not
deducted from the employee's paycheck.
REQUEST NO. 40: referring to Ms. Vaughn's testimony on page 17, please
provide specific information supporting her assertion that cash draws were taken for
mileage without supporting documentation, specifically the "2007 Cash Advance
Worksheet - Private Vehicle Mileage" form.
REQUEST NO. 41: Referring to Ms. Vaughn's testimony on page 17, please
provide specific information supporting her assertion that mileage was "saved" for several
months prior to being reimbursed where the "Cash Advance Worksheet - Private Vehicle
Mileage" form was not completed.
REQUEST NO. 42: Referring to Ms. Vaughn's testimony on page 17, please
provide specific detail supporting her assertion that personal vehicle mileage was
reimbursed for travel to parties and other social events.
REQUEST NO. 43: Referring to Ms. Vaughn's testimony on page 17, in which she
comments that "no vehicle mileage / odometer logs were included as supporting
documentation for actual mileage driven", please provide specific itemization by employee
supporting her assertion that the "Cash Advance Worksheet - Private Mileage" form was
missing.
REQUEST NO. 44: Provide a reconciliation between the $88,958 total P-Card
Amount for January on the "Summary of Disallowed %" worksheet and the $17,276 Total
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 7
for January noted on the "Staff Witness Stockton Disallow" worksheet. (Vaughn
Testimony p. 15).
REQUEST NO. 45: Provide an explanation and reconcilation of how Ms. Vaughn's
"50%" exclusion of mileage was reached. Itemize each expense report without the "Cash
Advance Worksheet- Private Vehicle Mileage". (Vaughn Testimony p. 17).
REQUEST NO. 46: Provide documentation to support Ms. Vaughn's testimony that
mileage was inappropriately rounded up and an explanation of how the conclusion of
inappropriate rounding was reached. (Vaughn Testimony p. 17).
REQUEST NO. 47: Idaho Power requires that the Cash Advance Worksheet -
Private Vehicle Mileage form be completed for any mileage reimbursements. As this form
complies with the recommendations and requirements of the IRS, why is this not
acceptable documentation of the expense? (Vaughn Testimony p. 18).
The following questions refer to the JSS Total System amounts from Staff's test
year period of 6-30-06 to 6-30-07, contained in the workpapers provided by Witness
English.
REQUEST NO. 48: The Taxes Other Than Income amount (Line 17 and Table 7)
did not change from Idaho Power's test year. Please describe in detail the analysis or
decision model Staff prepared to determine how Idaho Power's fied amount
appropriately matched Staff's test year.
REQUEST NO. 49: The Investment Tax Credit Adjustment amount (Line 20) did
not change from Idaho Power's test year. Please describe in detail the analysis or
decision model Staff prepared to determine how Idaho Powets filed amount
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 8
appropriately matched Staff's test year. Did Staff consider compliance with the
normalization requirements of Treasury Regulation § 1.46-6 when determining the
amount of investment tax credit to include in Staff's revenue requirement? If so, please
describe how Staff's amount is consistent with the federal government's normalization
rules.
REQUEST NO. 50: The IERCO Operating Income amount (Line 25) did not
change from Idaho Power's filng. Please describe in detail the analysis or decision
model Staff prepared to determine how Idaho Power's filed amount appropriately
matched Staff's test year. Did Staff make any adjustments to IERCO's income tax
expense? If so, explain what the adjustments were and in what amounts.
REQUEST NO. 51: Did Staff make adjustments to the accumulated deferred
income taxes included in IERCO's rate base (Line 59)? If so, explain what the
adjustments were and in what amounts.
REQUEST NO. 52: In the calculation of federal and state income tax expense
(Tables 10 through 12) the following items did not change from Idaho Power's fiscal
2007 test year. Please describe in detail the analysis or decision model Staff prepared
to determine how Idaho Power's fied amounts appropriately matched Staff's test year.
a. Line 698 - total interest charges
b. Line 703, 721, 746 - federal income tax adjustments
c. Line 722 - mfg deduction not allowed
d. Line 728, 750, 756 - IERCO taxable income
e. Line 751,767 - bonus depreciation adjustment
f. Line 755 - investment tax credit
g. Line 713, 737, 759, 772 - prior years' tax adjustment
REQUEST NO. 53: In Ms. Stockton's testimony (pages 14 through 17) she
indicates that Staff made adjustments to deferred income taxes to compensate for the
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 9
effect to deferred taxes of Staff's changes to Idaho Power's rate base. The following
questions deal with Accumulated Deferred Income Taxes (Line 55) and Provision for
Deferred Income Taxes (Line19).
a. Staff increased Idaho Power's test year accumulated deferred income tax
balance by $7,556,864. Staff did not change the provision for deferred
income taxes from the Company's filed amount. Please explain how Staff
determined the appropriateness of increasing accumulated deferred income
taxes for purposes of rate base (a credit) without a corresponding change to
deferred income tax expense (a debit) for cost of service. Describe in detail
all technical information and consultation Staff used in making this
determination.
b. In witness Stockton's accumulated deferred income tax workpaper Staff
included deferred income tax accounts that Idaho Power has not included in
an Idaho case. For example, Staff included account 282101 (which is
deferred taxes related to CWIP) and accounts 283201 and 202 (which are
related to non-utility operations). Please explain why Staff believes it is
appropriate to include these items in the calculation of deferred income taxes.
c. It appears from Stockton's accumulated deferred tax workpaper that Staff
calculated the percentage of Idaho Power's test year deferred income tax
balances in accounts 190, 282, and 283 as of 12-31-06 (Idaho Power Exhibit
23) to the total balance of those accounts as of 12-31-06. The percentages
were then applied to the monthly deferred tax account balances in Staff's
average monthly balance calculation. Please explain how Staff determined
that their percentage method based upon a calendar year-end (December
2006) is appropriate compared to Idaho Power's specific identification method
(the method used in the 2007 test year as well as prior rate cases). Describe
in detail all technical information and consultation Staff used in making this
determination.
d. In Stockton's accumulated deferred income tax workpaper and Stockton
Exhibit No. 103, Staff has calculated a 13-month rollng average to determine
the ending accumulated deferred income tax balance before Staff
adjustments to rate base. Please explain how Staff determined that their 13-
month rollng average is appropriate compared to Idaho Power's beginning-
of-year / end-of-year average (the method used in the 2007 test year as well
as prior rate cases). Describe in detail all technical information and
consultation Staff used in making this determination.
e. Please provide the workpaper(s) that details the calculation of the $2,492,675
rate base adjustment Staff recorded to accumulated deferred income taxes in
Stockton Exhibit No. 104. Provide electronic version with all formulas intact.
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 10
REQUEST NO. 54: In Stockton's. testimony she states that Staff made
adjustments to plant in-service, depreciation expense, and accumulated depreciation.
Did Staff consider correlative adjustments to tax depreciation? Did Staff consider
adjustments to the book/tax depreciation difference included in the federal income tax
adjustments (see page 123 of Idaho Power's test year workpapers)? Based upon
question #5 above, it appears Staff made no adjustments to Idaho Power's test year
amounts for either of these items. Please describe in detail the analysis or decision
model Staff prepared to determine how Idaho Power's filed amount appropriately
matched Staff's test year. Describe in detail all technical information and consultation
Staff used in making this determination.
REQUEST NO. 55: Referencing questions #5, 6, and 7 above, did Staff consider
if or how their test year adjustments to the income tax provision and accumulated
deferred income taxes met the normalization rules of Internal Revenue Code §168(i)(9)
and Treasury Regulations § 1.167(1)-1? Please describe in detail how Staff's test year
income tax provision complies with these rules and reference all technical information
and consultation Staff used in making this determination.
~
DATED at Boise, Idaho, this K day of December, 2007.
~J~
BARTON L. KLINE
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 11
CERTIFICATE OF SERVICE
i¿I HEREBY CERTIFY that on this ~ day of December, 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 Utilties Commission
472 W. Washington (83702)
P.O. Box 83720
Boise, Idaho 83720-0074
Industrial Customers of Idaho Power
Peter J. Richardson, Esq.
Richardson & O'Leary
515 N. 2ih Street
P.O. Box 7218
Boise, Idaho 83702
Don Reading
Ben Johnson Associates
6070 Hil Road
Boise, Idaho 83702
Idaho Irrigation Pumpers
Association, Inc.
Eric L. Olsen
Racine, Olson, Nye, Budge & Bailey
P.O. Box 1391
201 E. Center
Pocatello, Idaho 83204
Anthony Yankel
29814 Lake Road
Bay Vilage, OH 444140
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IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 12
Kroger Co. I Fred Meyer and Smiths
Michael L. Kurtz
Kurt J. Boehm
Boehm, Kurtz & Lowry
36 East Seventh Street, Suite 1510
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The Kroger Co.
Attn: Corporate Energy Manager (G09)
1014 Vine Street
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P.O. Box 2720
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Dennis E. Peseau, Ph.D.
Utilty Resources, Inc.
1500 Liberty Street SE, Suite 250
Salem, OR 97302
Department of Energy
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Office of the Attorney General
United States Department of Energy
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IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 13
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Exeter Associates
5565 Sterrett Place, Suite 310
Columbia, MD 20904
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IDAHO POWER COMPANY'S FIRST PRODUCTION REQUEST
TO IDAHO PUBLIC UTILITIES' COMMISSION STAFF - Page 14