20101129Staff 21-33 to IPC.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
472 WEST WASHINGTON STREET
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 3283
f,E(::EI
zorn NOV 29 PM 3: 21
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR )
ACCEPTANCE OF ITS 2011 RETIREMENT )BENEFITS PACKAGE. )
)
)
)
)
CASE NO. IPC-E-10-25
SECOND PRODUCTION
REQUEST OF THE
COMMISSION STAFF TO
IDAHO POWER COMPANY
The Staff of the Idaho Public Utilties Commission, by and through its attorney of record,
Weldon B. Stutzman, Deputy Attorney General, requests that Idaho Power Company (Company;
IPC) provide the following documents and information as soon as possible, but no later than
TUESDAY, DECEMBER 7, 2010.
This Production Request is to be considered as continuing, and Idaho Power Company is
requested to provide, by way of supplementary responses, additional documents that it or any
person acting on its behalf may later obtain that will augment the documents produced.
For each item, please indicate the name of the person(s) preparing the answers, along with
the job title of such person(s) and the witness who can sponsor the anwer at hearing.
SECOND PRODUCTION REQUEST TO
IDAHO POWER COMPANY 1 NOVEMBER 29,2010
REQUEST NO. 21: In response to Staff Production Request NO.3 (b & c), the Company
states that "at this time, Idaho Power's employee retention is approximately equivalent to that of
industry peers." Please provide all analyses; including the retention level or turnover ratios of
Idaho Power and the industry peers, to support this statement.
REQUEST NO. 22: In response to Staff Production Request No.5, the Company states
that "It should be noted that the level of risk borne by customers between 2004 and 2010 resulted
in significant customer benefits during those years in that no customer costs related to the defined
benefit plan occured until the spring of201O. It is also importt to recognize that the avoidance
of risk may also mean avoidance of any associated reward." Please identify any incremental
benefit customers received between 2004-2010 from the defined benefit pension plan. Please also
provide what is meant by "avoidance of any associated reward" as it pertains to customers and the
defined benefit pension plan.
REQUEST NO. 23: Please provide the amounts of pension expense included in rates for
each year between 1990-2010. Please separate the amounts by O&M Expense and Capitaized
Overhead in rate base. Please also provide the amounts the Company contributed to the pension
plan for the same time period.
REQUEST NO. 24: The analysis provided to Staff in response to Production Request
No. 12 uses an assumed 401(k) contribution rate of7% and a discount rate of6.6%. Please
provide the rationale for each of those two assumptions. Please also provide copies of the
ADP/ACP non-discrimination test for 2009.
REQUEST NO. 25: Please provide the complete report from Miliman entitled
"Retirement Plan of Idaho Power Company Revised Actuar Report" using data as of
Januar 1,2010.
REQUEST NO. 26: Please explain how the Company wil experience savings in 2011
with the new pension plan formula, when the formula only applies to employees who are hired
SECOND PRODUCTION REQUEST TO
IDAHO POWER COMPANY 2 NOVEMBER 29,2010
after Januar 1, 2011, and the plan requires 12 consecutive months of service before those
employees will be eligible to enter the plan:
REQUEST NO. 27: In response to Production Request No. 17, the Company states that
other defined contribution plan formulas were evaluated. Please provide a complete list of all
defined contribution plan formulas that were evaluated during the annual review and provide
copies of that analysis.
REQUEST NO. 28: In response to Production Request No. 20, the Company states that
the executive management team reviewed the "Annual Retirement Benefits Review Sumar"
provided on the enclosed CD. The enclosed CD did not include this summar. Please provide a
copy of the summar.
REQUEST NO. 29: In Idaho Power's response to the Industrial Customers ofIdaho
Power (lCIP) Production Request NO.1 (c & d), the Company states that "Of the 92 energy
services companies in the Towers Watson database, 66 companies, or 72 percent, have defined
benefit pension programs available to new salaried employees. Thirty-six percent of these are
traditional defined benefit plans similar to. Idaho Power's. Twenty-six of the 92 energy service
companies, or 28 percent, have defined contributions plans as the sole source for retirement
savings." Please provide the underlying information that supports these statistics.
REQUEST NO. 30: In Idaho Power's response to the Industrial Customers ofIdaho
Power (lCIP) Production Request NO.2 (c & d),'thëCompany states that "of the 12 peer
companies selected for a custom analysis, 8 companies, or 67 percent have defined benefit pension
programs available to new salaried employees. Fift percent of these are traditional defined plans
similar to Idaho Power's. Four of the 12 energy service companies, or 33 percent, have defined
contribution plans as the sole source for retirement savings." Please provide the underlying
information that supports these statistics.
REQUEST NO. 31: In Idaho Power's response to the Industrial Customers ofIdaho
Power (lCIP) Production Request NO.9 (a), the Company states that "Mr. Anderson's instructions
SECOND PRODUCTION REQUEST TO
IDAHO POWER COMPANY 3 NOVEMBER 29, 2010
to Ms. Gerschultz detailed on page 5, lines 14 through 22, of his Direct Testimony and Ms.
Gerschultz's execution of those instructions demonstrates that shareowner liabilties are an
important consideration in the anual review process and ultimately helped to shape the modified
package structure." The referenced lines in Mr. Anderson's Direct Testimony reads "I asked her
to make recommendations for changes to the Company's retirement benefits package based upon
the Company's desire to remain competitive to the representative employment market, but with an
eye toward perpetuating a package which encourages employee retention. I encouraged her to
recognize that retirement benefit portabilty is not in alignment with the Company's employee
retention goals and may not be in the best interests of customers." Please explain how Mr.
Anderson's instructions and Ms. Gerschultz's execution of those instrctions demonstrate how
shareholder liabilties are an important consideration in the anual review process. In responding
to this question, please note that the Company's response to Commission Staffs Production
Request NO.5 where the Company acknowledges that all market risk associated by the defined
benefit plan is ultimately borne by customers.
REQUEST NO. 32: Please identify any of the 92 energy services companies that serve
under the jurisdiction of the Idaho Public Utilties Commission. Please provide the percentage of
a new salaried employee's base pay that is attributable to retirement benefits for these companies.
REQUEST NO. 33: Please provide the dates of all changes made to the retirement
package since inception and explain those changes.
DATED at Boise, Idaho, this i~day of November 2010.
n~Weldon B. Stutzman
Deputy. Attorney General
Technical Staff: Terri Carlock
Donn English
i:umisc:prodreqlìpcelO.25wstc prod req2
SECOND PRODUCTION REQUEST TO
IDAHO POWER COMPANY 4 NOVEMBER 29,2010
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 29TH DAY OF NOVEMBER 2010,
SERVED THE FOREGOING SECOND PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY, IN CASE NO. IPC-E-10-25,
BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE FOLLOWING:
LISA D NORDSTROM
DONOV AN E WALKER
IDAHO POWER COMPANY
POBOX 70
BOISE ID 83707-0070
E-MAIL: lnordstrom(iidahopower.com
dwalker(iidahopower .com
GREG W SAID
TIMETATUM
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: gsaid(iidahopower.com
ttatu(iidahopower .com
PETER J RICHARDSON
GREGORY MADAMS
RICHARDSON & O'LEARY
PO BOX 7218
BOISE ID 83702
E-MAIL: peter(irichardsonandoleary.com
greg(irichardsonandoleary.com
DR DON READING
6070HILLRD
BOISE ID 83703
E-MAIL: dreadingcqindspring.com
,b~
SECRETAR.
CERTIFICATE OF SERVICE