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Home My WebLink About20110408IPC to Staff 1-2.pdfesIDA~POR~ RECEIV An IDACORP Company LISA D. NORDSTROM Lead Counsel Inordstromcmidahopower.com April 7, 2011 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilties Commission 472 West Washington Street P.O. Box 83720 Boise, Idaho 83720-0074 Re: Case No. IPC-E-11-04 IN THE MA TTER OF THE APPLICA TlON OF IDAHO POWER COMPANY TO INCREASE ITS RATES FOR ELECTRIC SERVICE TO RECOVER ITS 2010 PENSION CASH CONTRIBUTION Dear Ms. Jewell: Enclosed for filng please find an original and three (3) copies of Idaho Power Company's Response to the First Production Request of the Commission Staff to Idaho Power Company in the above matter. Also enclosed are four (4) copies of a non- confidential disk containing documents being produced in response to Staffs Request No. 1. In addition, included in a separate envelope are an original and three (3) copies of a confidential document that is being produced in response to Staff's Request No.2. Idaho Power Company requests the confidential information be handled in accordance with the Protective Agreement executed in this matter. Very truly yours, cJ~l)Lt~ Lisa D. Nordstrom LDN:csb Enclosures 1221 W. Idaho St. (83702) P.O. Box 70 Boise, ID 83707 LISA D. NORDSTROM (ISB No. 5733) DONOVAN E. WALKER (ISB No. 5921) Idaho Power Company P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-5825 Facsimile: (208) 388-6936 Inordstromcæidahopower.com dwalkercæidahopower.com RECEIVED 20" APR - 7 PM~: 5~ 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 TO ) INCREASE ITS RATES FOR ELECTRIC ) SERVICE TO RECOVER ITS 2010 ) PENSION CASH CONTRIBUTION. ) ) ) ) ) CASE NO. IPC-E-11-04 IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY COMES NOW, Idaho Power Company ("Idaho Powet' or "Company"), and in response to the First Production Request of the Commission Staff to Idaho Power Company dated March 17, 2011, herewith submits the following information: IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 1 REQUEST NO.1: Please provide electronic copies of all exhibits and attachments in Excel format with all formulas intact. RESPONSE TO REQUEST NO.1: Please see the enclosed CD containing the electronic copies of all exhibits and attachments. The response to this Request was prepared by Kelley K. Noe, Regulatory Analyst, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 2 REQUEST NO.2: Mr. Anderson's direct testimony states that "The Company assessed the appropriate amount to contribute in 2010 by modeling alternative funding scenarios and projecting their impacts on expected funding levels, short and medium- term funding requirements, and PBGC premiums." Please provide copies of all models and analysis used to determine the appropriate amount to contribute. RESPONSE TO REQUEST NO.2: Attached to this response are three separate analyses provided by the Company's actuary, Miliman, on September 1, September 2, and September 7 of 2010. These analyses modeled various funding scenarios based on different 2010 return assumptions and alternative funding objectives (as described below) and projected the impacts of the 2010 returns and funding decisions on future required contributions, funding percentages, PBGC premiums and SFAS 87 expense. The three funding alternatives for the contribution to be made on September 15, 2010, were to (1) fund the minimum contribution due on that date, (2) fund an amount sufficient to reduce the projected minimum contributions required during calendar year 2011 to zero, and (3) fund an amount sufficient to reduce the projected minimum contributions required during calendar years 2011 and 2012 to zero. The September 1 analysis only included funding alternatives one and two along with several return scenarios. The September 2 analysis reduced the 2010 return scenarios to an 8 percent and a 0 percent scenario but expanded the analysis to include funding alternative three listed above. The September 7 analysis expanded the September 2 analysis to present ten total years. The September 7 analysis included one schedule with the 0 percent scenarios excluded and another version presenting IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 3 both the 8 percent and the 0 percent scenarios. Further information regarding the assumptions used can be found within the analyses. Also included on the enclosed confidential CD is an e-mail sent by Robert Schmidt from Miliman to Steve Keen providing Millman's estimate of the minimum amount Idaho Power would need to contribute on September 15, 2010, to avoid fallng below a funding percentage of 80 percent (deemed a critical funding level), assuming the return for 2010 would be 8 percent and that interest rates would increase to 6 percent. Ultimately, the Company decided to address 2011 funding obligations by contributing $60 millon, which was close to the amount necessary to reduce any required funding during 2011 to zero. Because the attached analyses are confidential and contain material non-public information, Idaho Power is providing this information only to parties that have executed the Protective Agreement. The response to this Request was prepared by Darrel Anderson, Executive Vice President of Administrative Services and Chief Financial Offcer, Idaho Power Company, in consultation with Lisa D. Nordstrom, Lead Counsel, Idaho Power Company. DATED at Boise, Idaho, this th day of April 2011. ~&¡~ LISA D. NORDST M Attorney for Idaho Power Company IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 4 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this th day of April 2011 I served a true and correct copy of IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Weldon B. Stutzman Deputy Attorney General Idaho Public Utilties Commission 472 West Washington P.O. Box 83720 Boise, Idaho 83720-0074 .. Hand Delivered U.S. Mail _ Overnight Mail FAX .. Email Weldon.Stutzmancæpuc.idaho.gov Industrial Customers of Idaho Power Peter J. Richardson Gregory M. Adams RICHARDSON & O'LEARY, PLLC 515 North 27th Street P.O. Box 7218 Boise, Idaho 83702 Hand Delivered .. U.S. Mail _ Overnight Mail FAX .. Email petercærichardsonandoleary.com gregcærichardsonandoleary.com Dr. Don Reading Ben Johnson Associates 6070 Hil Road Boise, Idaho 83703 Hand Delivered .. U.S. Mail _ Overnight Mail FAX .. Email dreadingcæmindspring.com ut~ Iltfrh Lisa D. Nordstfv IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF TO IDAHO POWER COMPANY - 5 BEFORE THE IDAHO PUBLIC UTiliTIES COMMISSION CASE NO. IPC-E-11-04 IDAHO POWER COMPANY RESPONSE TO STAFF'S PRODUCTION REQUEST NO.2 . THE DOCUMENT BEING PROVIDED IN RESPONSE TO STAFF'S PRODUCTION REQUEST NO.2 IS CONFIDENTIAL AND IS BEING PROVIDED TO THOSE PARTIES THAT HAVE SIGNED THE PROTECTIVE AGREEMENT