HomeMy WebLinkAboutON28988.pdf
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARINGS
ORDER NO. 28988 -1-
Office of the Secretary
Service Date
March 27, 2002
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AN ENERGY
COST FINANCING ORDER AND AUTHORITY
TO INSTITUTE AN ENERGY COST BOND
CHARGE.
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AUTHORITY
TO IMPLEMENT A POWER COST
ADJUSTMENT (PCA) RATE FOR ELECTRIC
SERVICE FROM MAY 16, 2002 THROUGH MAY
15, 2003.
)
)
)
)
)
)
)
)
)
)
)
)
)
)
)
CASE NOS. IPC-E-02-2
IPC-E-02-3
NOTICE OF APPLICATION
NOTICE OF INTERVENTION
DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARING
ORDER NO. 28988
On March 11, 2002, Idaho Power Company filed an Application for an energy cost
financing order authorizing the issuance and sale of up to $172 million in Energy Cost Recovery
Bonds (Bonds). The Application requested that the Commission allow Idaho Power to impose a
usage-based Energy Cost Bond Charge (Bond Charge) ranging between 0.50 cents per kilowatt hour
(kWh) and 0.65 cents/kWh. Application at 18. Idaho Power provides electric service to
approximately 370,000 customers in southern Idaho. In this Order, the Commission establishes an
intervention deadline, and schedules public workshops and hearings, and sets a technical hearing.
BACKGROUND
Last year the Idaho Legislature passed Senate Bill 1255 (codified at Idaho Code §§ 61-
1501 et seq.), which allows energy utilities to recover increases in their short-term costs through the
issuance of moderate-term (1 to 5 years) bonds. By doing so, the Legislature sought to moderate rate
impacts caused by Power Cost Adjustments (PCA) and other cost recovery mechanisms by issuing
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARINGS
ORDER NO. 28988 -2-
bonds. Idaho Code § 61-1501. Thus, the legislation provides the Commission and public utilities
with a mechanism to recover increased costs while “leveling” the rate impact on customers. Id.
Idaho Code § 61-1503(2) states that the Commission shall not issue an energy cost
financing order unless the sum of: (1) any PCA then in effect, (2) any Bond Charge then in effect, and
(3) the amount identified in the utility’s PCA Application would exceed a minimum threshold amount
previously approved by the Commission. In June 2001, the Commission established this minimum
threshold amount as one cent per kWh (approximately $128 million) in Case No. IPC-E-01-19.
Order No. 28761. Because the Company alleges the amount recoverable through this year’s PCA
will exceed this threshold, Idaho Power filed this Application for authorization to spread recovery of
this large amount over three years by issuing Bonds rather than collecting it through the standard one-
year adjustment. As of the date of this Order, the Company has not yet filed its 2002 PCA
Application in Case No. IPC-E-02-3.
NOTICE OF BOND APPLICATION
YOU ARE HEREBY NOTIFIED that Idaho Power seeks an energy cost financing order
authorizing the issuance and sale of up to $172 million in Energy Cost Recovery Bonds (Bonds). The
Company proposes to issue the bonds for a three-year period.
YOU ARE FURTHER NOTIFIED that the Company’s Application stated approximately
$262 million may be included for recovery through the PCA mechanism. Application at 4. This
amount allegedly includes: (1) approximately $82 million in excess power supply costs beyond the
2000-2001 forecast, (2) approximately $15 million in forecasted power supply costs for the 2002-
2003 PCA year, (3) approximately $147 million of voluntary load reduction payments to irrigators
and Astaris for the prior PCA year, and (4) the unamortized balance of the previously authorized PCA
charge for the period of October 1, 2001 through September 30, 2002, which is approximately $18
million as of May 16, 2002. Id. Because the recoverable PCA amounts total approximately $262
million, Idaho Power asserted that the amount by which the PCA would need to be increased absent
an issuance of Bonds exceeds the one cent per kWh minimum threshold amount previously approved
by the Commission. Id.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARINGS
ORDER NO. 28988 -3-
YOU ARE FURTHER NOTIFIED that the Company alleged that the proposed sale and
issuance of Bonds will serve the public interest. Instead of collecting the recoverable PCA amounts
over a one-year period, the issuance of Energy Bonds will spread the recovery over three years. Id.
at 5. Idaho Power stated that issuing the Bonds in lieu of a conventional one-year financing will
significantly reduce its cost of financing the recoverable PCA amounts and will spread the impact of
those costs over a longer period of time. Id.
YOU ARE FURTHER NOTIFIED that according to the Application, the net proceeds
from the Bonds will be used for general corporate purposes. Id. The Company further alleged that
the proposed issuance and sale of the Bonds is for a lawful object within Idaho Power’s corporate
purposes, is consistent with its proper performance as a public utility, and is compatible with the
public interest. Id. at 5-6.
YOU ARE FURTHER NOTIFIED that Idaho Power stated that the Bonds are to be
issued in the form of notes of the Special Purpose Financing Entity (SPE). Id. at 9. These notes
would be obligations of the SPE and will not constitute a debt, liability or other legal obligation of
Idaho Power or the State of Idaho. Id. Idaho Power requested authority to issue the Bonds at any
time during the period that begins on the date the Commission renders an Order approving the Bond
issuance and ends on the first anniversary of the date when that Order became non-appealable. Id.
The amortization schedule for each series of Bonds should provide for their retirement in full within
approximately three years after issuance. Id. at 10.
YOU ARE FURTHER NOTIFIED that according to its Application, the Bonds are
expected to be in the highest long-term rating category of one or more nationally recognized rating
agencies. Id. at 16. These Bonds would not result in gross income to Idaho Power and will be
recorded as debt of Idaho Power for financial and tax reporting purposes. Id.
YOU ARE FURTHER NOTIFIED that the Bond Charge (on a cents/kWh basis) over the
life of the Bonds would generally be based on the amount of collections required and the projected
electricity usage for a specific period. Id. at 17. Assuming the issuance of $172 million in Bonds and
current electricity usage estimates, Idaho Power calculated that the Bond Charge would be
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARINGS
ORDER NO. 28988 -4-
approximately 0.54 cents/kWh at the time of issuance. Id. If the electricity used by Idaho Power
customers remains constant or increases, the Bond Charge may decrease in the second and/or third
years due to reduced interest costs as principal is repaid and increased electricity usage forecasts. Id.
Because interest rates and electricity usage projections may change prior to issuance of the Bonds,
Idaho Power requested that the Commission authorize a Bond Charge between 0.50 cents/kWh and
0.65 cents/kWh. Id. at 17-18. The Company also sought authorization to recover the actual costs of
issuing and servicing the Bonds through the Bond Charge, even though these costs would not be
known until the Bonds are issued. Id. at 19.
YOU ARE FURTHER NOTIFIED that Idaho Power sent a notice of the Bond
Application to all of its customers. According to its Customer Notice, Idaho Power suggested that
existing rates could decrease by an average of 10 percent if the Application is approved. More
specifically, the Customer Notice indicates that the following rate decreases could occur: Residential,
7.8%; Irrigation, 9.8%; Small General Service, 6.7%; Large General Service, 10%; and Industrial,
11.9%. The Application did not explore other recovery alternatives.
YOU ARE FURTHER NOTIFIED that Idaho Power proposed that the Bond Charge go
into effect on the date the Bonds are issued. Id. at 20. According to its Application, the Company
intends to collect the Bond Charge from all of Idaho Power’s existing and future retail customers
located within its service area. As of July 21, 2002, Idaho Power also intends to collect the Bond
Charge from its then-existing and future retail customers located within the Prairie Service Area. Id.
at 22. The Bond Charge would be separately identified on customer bills. Id. at 23.
YOU ARE FURTHER NOTIFIED that pursuant to Idaho Code § 61-1503(7), Idaho
Power will apply to the Commission annually for Bond Charge adjustments to correct any under- or
over-collections during the period since the last adjustment. Id. at 21. The annual adjustments will
ensure that the Bond Charge billing will timely collect sufficient amounts to make all principal and
interest payments during the period the adjusted Bond Charge is to be in effect. Id. This Bond
Charge “true-up” will be based on the most recent electricity sales forecast, estimates of debt service
and other transaction-related expenses, and a projection of uncollectable Bond Charge amounts. Id.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARINGS
ORDER NO. 28988 -5-
YOU ARE FURTHER NOTIFIED that the Company’s Bond Application and its
supporting workpapers have been filed with the Commission and are available for public inspection
during regular business hours at the Commission offices.
NOTICE OF JOINT HEARING
YOU ARE FURTHER NOTIFIED that the Commission intends to review the Bond
Application and the yet to be filed 2002/2003 PCA Application together at the public and technical
hearings set out in greater detail below. The Commission anticipates that the Company’s PCA
Application will be filed on or about April 15, 2002. Given the expedited nature of the PCA, the
Commission anticipates that it will take up issues in the Bond Application and the PCA Application at
the hearings set out below.
NOTICE OF PCA ISSUES AND DSM FUNDING
YOU ARE FURTHER NOTIFIED that Idaho Power’s monthly recurring rates and
charges for all of its southern Idaho retail customers including special contract customers are at issue
in the Bond and PCA Applications. The Commission may approve, reject or modify the rates and
charges proposed in either the Bond Application or the PCA Application and may implement rates
and charges different from those proposed by any party.
YOU ARE FURTHER NOTIFIED that the Commission specifically invites public
testimony regarding the PCA’s tiered rate structure for residential customers. The Commission may
approve, reject or modify the three-tiered block rate structure or the relationship between and among
rates and charges within, between or among customer classes. The Commission may also abolish,
reduce or create rate groups and may modify the relative difference among and between existing rate
groups of customers.
YOU ARE FURTHER NOTIFIED that in Case No. IPC-E-01-13 the Commission
indicated its intent to revisit funding a comprehensive, long-term demand-side management (DSM)
program when Idaho Power submits its 2002-2003 PCA filing this spring. Order No. 28894 at 7. In
the interim, the Commission ordered Idaho Power to form the Energy Efficiency Advisory Group and
establish a plan for implementing long-term DSM programs. Id.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARINGS
ORDER NO. 28988 -6-
YOU ARE FURTHER NOTIFIED that the Commission may grant, deny, or modify
portions of the Bond Application. The Commission may consider other PCA recovery alternatives,
may change the amount proposed for bonding, or may modify the duration of the bonding period
from those proposed by any party.
NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in these matters
for the purpose of presenting evidence or cross-examining witnesses at hearing must file a Petition
to Intervene with the Commission pursuant to this Commission's Rules of Procedure 72 and 73,
IDAPA 31.01.01.072 and -.073. Persons intending to participate at the hearings must file a Petition
to Intervene on or before April 5, 2002. Persons seeking Intervenor status shall also provide the
Commission Secretary with their electronic mail address to facilitate future communication in these
matters.
YOU ARE FURTHER NOTIFIFIED that persons desiring to present their views without
parties’ rights of participation and cross-examination are not required to intervene and may present
their comments without prior notification to the Commission or the parties.
NOTICE OF COMMENT DEADLINE
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission on or before
Friday, April 26, 2002. The comment must contain a statement of reasons supporting the comment.
Written comments concerning this Application shall be mailed to the Commission and the Application
at the addresses reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
E-mail: jjewell@puc.state.id.us
Street Address for Express Mail:
472 W. Washington Street
Boise, ID 83702-5983
Larry Ripley
John R. Gale
Idaho Power Company
P.O. Box 70
Boise, ID 83707-0070
Email: lripley@idahopower.com
rgale@idahopower.com
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARINGS
ORDER NO. 28988 -7-
These comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the Commission's
homepage located at www.puc.state.id.us under the "Comments and Questions" icon. Once at the
"Comments and Questions" icon, fill in the case number as it appears on the front of this document,
and enter your comments. These comments must also be sent to the Applicant at the e-mail addresses
listed above.
NOTICE OF PUBLIC WORKSHOPS AND HEARINGS
YOU ARE HEREBY NOTIFIED that the Commission has scheduled three public
workshops and hearings regarding the Bond and PCA Applications in:
??Twin Falls on Wednesday, April 10, 2002 at the West Coast Twin Falls
Hotel (formerly the Best Western Cavanaugh’s Hotel) located at 1357 Blue
Lakes Boulevard North. The public workshop will begin at 6 p.m. and the
public hearing will begin at 7:00 p.m.
??Pocatello on Monday, April 15, 2002 at the West Coast Hotel (formerly
Cavanaugh’s Hotel and the Quality Inn) located at 1555 Pocatello Creek
Road. The public workshop will begin at 6 p.m. and the public hearing will
begin at 7:00 p.m.
??Boise on Thursday, April 25, 2002 at the Idaho Public Utilities Commission
Hearing Room located at 472 West Washington Street. The public workshop
will begin at 6 p.m. and the public hearing will begin at 7:00 p.m.
The public workshops will offer the public an opportunity to meet with the Idaho Power
Company, Commission Staff, and other parties to ask questions and receive information. Following
each workshop, the Commission will hold a public hearing to receive public testimony regarding the
Company’s proposed energy cost financing Application and the PCA Application. Customers, local
government leaders, and other interested persons are encouraged to testify.
YOU ARE FURTHER NOTIFIED that all hearings and public workshops in this matter
will be held in facilities meeting the accessibility requirements of the Americans with Disabilities Act
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARINGS
ORDER NO. 28988 -8-
(ADA). Persons needing the help of a sign language interpreter or other assistance in order to
participate in or to understand testimony and argument at a public hearing may ask the Commission to
provide a sign language interpreter or other assistance at the hearing. The request for assistance must
be received at least five (5) working days before the hearing by contacting the Commission Secretary
at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-0338 (Telephone)
(208) 334-3762 (FAX)
E-Mail: jjewell@puc.state.id.us
NOTICE OF SCHEDULE AND TECHNICAL HEARING
YOU ARE HEREBY NOTIFIED that the Commission adopts the following procedural
schedule:
April 5, 2002
April 15, 2002
April 22, 2002
April 26, 2002
Deadline for filing intervention.
Deadline for Idaho Power to file its PCA case
and testimony. The Company must also
prefile testimony to support its Bond
Application.
Deadline for Staff and Intervenors to prefile
direct testimony in the PCA and Bond
Applications.
Technical hearing at 9:30 A.M. in the
Commission Hearing Room. Idaho Power
may offer “live” rebuttal testimony, if
necessary.
The prepared testimony and exhibits must conform to the requirements of Rules 266 and 267 of the
Commission’s Rules of Procedure. IDAPA 31.01.01.266-.267.
YOU ARE FURTHER NOTIFIED that the Commission Secretary shall issue a Notice of
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARINGS
ORDER NO. 28988 -9-
Parties after the deadline for intervention has passed. The Notice of Parties shall assign exhibit
numbers to each party in this joint proceeding. Depending on the number of intervenors, the
Commission may direct that testimony be filed electronically with the other parties.
YOU ARE FURTHER NOTIFIED that all proceedings in these cases will be held
pursuant to the Commission’s jurisdiction under Title 61 of the Idaho Code and that the Commission
may enter any final Order consistent with its authority under Title 61 and specifically Idaho Code §§
61-129, 61-301, 61-305, 61-501, 61-1503 and 61-1504.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
O R D E R
IT IS HEREBY ORDERED that the Commission adopts the scheduling and hearing
dates set out above. Parties shall adhere to the schedule set out above.
IT IS FURTHER ORDERED that persons desiring to intervene in these cases for the
purpose of presenting evidence or cross-examination at hearing shall file a Petition to Intervene with
the Commission no later than April 5, 2002.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF JOINT PUBLIC
WORKSHOPS AND HEARINGS
NOTICE OF SCHEDULE AND
TECHNICAL HEARINGS
ORDER NO. 28988 -10-
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this 27th
day of March 2002.
PAUL KJELLANDER, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
DENNIS S. HANSEN, COMMISSIONER
ATTEST:
Jean D. Jewell
Commission Secretary
O:IPCE0202_ln