20040513Stipulation.pdf

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\TTORNEYS I\T LAW
JAMES C. PAINE
Direct [phone]
jcpaine~stoe1.com
May 12, 2004
HAND DELIVERED
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington
Boise, ill 83702-5983
Re:Stipulations in Case Nos. P AC-O3-05 and P AC-O4-
Dear Ms. Jewell:
Enclosed please fmd an original and 7 copies of: (a) a Stipulation in Case No. P AC-O3-05 and
(b) a Supplemental Stipulation in the consolidated cases of Case No. PAC-O3-05 and Case
No. P AC-04-02. Each Stipulation has been executed by PacifiCorp, Commission Staff, the
Idaho Irrigation Pumpers Association and the City of Firth, all of the active parties in each
proceeding known at the time of the submittal of these agreements.
PacifiCorp respectfully submits these Stipulations for the Commission s consideration.
PacifiCorp asserts that Commission approval of both of these Stipulations in their entirety is in
the public interest because, taken together, the Stipulations mitigate rate impacts experienced by
customers while resolving the outstanding issues in Case No. P AC-O3-05 and P AC-04-02.
The April 30, 2004 Comments of Commission Staff in Case No. PAC-03-05 indicated that a
number of possible customer rate changes in PacifiCorp s Idaho retail rates could occur on
June 8, 2004. These changes include:
A proposed surcharge to recover tax audit assessment payments made by PacifiCorp in
2002 and 2003;
A proposed reduction in Idaho s Bonneville Power Administration exchange credit; and
Other rate changes scheduled to occur on June 8 , 2004 include the expiration of the
Power Cost Surcharge (PCS), a small change in the Rate Mitigation Adjustment (RMA),
and a PCS true-up increment. These changes were approved by the Commission in Case
No. P AC- E-02-1 (Order No. 29034).
Oregon
Washington
California
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Portlnd3-1480841.l 0020017-00055
ORIGINAL
Jean Jewell, Secretary
May 12, 2004
Page 2
Staff further stated that they believed that a comprehensive settlement could be reached that
would resolve all of these issues and result in a single rate change in 2004.
PacifiCorp submits that the two submitted Stipulations reflect that comprehensive settlement and
respectfully asks that the Commission consider and adopt both submitted agreements to be
reflected in the Company s Idaho retail rates, effective June 8, 2004.
Should you or any Commission representative have questions or concerns about PacifiCorp
filing or positions in these two consolidated dockets, please do not hesitate to contact James C.
Paine, attorney of record for the Company in this matter at [phone], or Bob Lively,
Regulatory Manager at [phone].
Very truly yours
, /
James C. Paine
JCP:jlf
Enclosures
Portlnd3-148084L1 0020017-00055
James F. Fell
James C. Paine
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204-1268
Telephone: [phone]
Facsimile: [phone]
Attorneys for PacifiCorp
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF P ACIFICORP dba UTAH POWER &
LIGHT COMPANY FOR A DEFERRED
ACCOUNTING ORDER AND APPROV AL
OF A SURCHARGE
IN THE MATTER OF THE APPLICATION
OF P ACIFICORP dba UTAH POWER &
UGHT COMP ANY FOR APPROVAL
OF REDUCTIONS IN BONNEVILLE
POWER ADMINISTRATION REGIONAL
EXCHANGE CREDITS
CASE NO. P AC-03-
CASE NO. PAC-04-
SUPPLEMENTAL STIPULATION
This Supplemental Stipulation ("Stipulation ) is entered into by and among PacifiCorp,
doing business as Utah Power & Light Company ("PacifiCorp" or the "Company ), the Idaho
Public Utilities Commission Staff ("Staff'), the Idaho Irrigation Pumpers Association ("lIP A~'
and the City of Firth, Idaho ("Firth") (collectively referred to as the "Parties
INTRODUCTION
The terms and conditions of this Stipulation are set forth herein. The Parties
agree that this Stipulation represents a fair, just and reasonable resolution of the issues raised in
Case No. P AC-03-05 and Case No. P AC-04-02 and that this Stipulation is in the public
interest. The Parties, therefore, recommend that the Public Utilities Comnlission (the
SUPPLEMENTAL STIPULATION - Page Portlnd3-1479538.1 0020017-00055
GR'G1NAL
Commission ) approve the Stipulation and all of its terms and conditions. Reference
IDAP A 31.01.01.272-276.
II.BACKGRO UND
On April 21 , 2004, PacifiCorp filed its Application in Case No. PAC-04-
seeking approval of a revised Electric Service Schedule No. 34. The proposed revisions would
reduce the Bonneville Power Administration regional exchange credits ("BP A exchange credit"
in Idaho. The Company s Application seeks changes to Schedule 34 to revise the Kilowatt-Hour
Credit Adjustment for all qualifying kilowatt-hours of residential and/or farm use.
Accompanying the Company s Application was a Motion to ConsoliQate consideration of the
BP A exchange credit docket with PacifiCorp s previously-filed tax audit proceeding, Case
No. P AC-03-05. The Commission granted the Company s Motion to Consolidate on May 5
2004. Order No. 29489.
PacifiCorp asserts that as of September 2003, the Idaho balancing account showed
a BP A exchange credit deficit of $5.7 million. Following discussions with the Staff, the TIP A
irrigation customers and Firth, PacifiCorp proposes to reduce the BP A exchange credit by 1/3 of
the $5.7 million, on an annual basis, thereby recovering the negative balance over a three-year
period.
In addition, PacifiCorp s Application proposes to reduce the BP A exchange credit to
match the level of the annual credit received from the BP A with the annual credit passed on to
Idaho residential and small fann customers. This reduces the credit by an additional $597 000
per year.
The annual reduction in the BP A credit would therefore total $2,496 000 ($1 899 000 +
$597 000) under PacifiCorp s proposal.
SUPPLEMENTAL STIPULATION - Page 2 Portlnd3-1479538.10020017-00055
On March 31 , 2003, as amended on December 23 2003, the Company filed its
Application (Case No. P AC-03-05) seeking, among other things, a surcharge to recover
federal and state tax audit assessment payments resulting from Internal Revenue Service tax
audits. A Stipulation (the "Tax Audit Assessment Stipulation ) entered into by and among
PacifiCorp, Staff, IIP A and Firth was executed and addressed, among other things
implementation of a new 16-month surcharge of approximately $3.5 million annually to recover
a total of$4.2 million of tax audit assessments. Staff executed the Tax Audit Assessment
Stipulation on May 6 2004.
The Company s April 21 , 2004 Application to reduce the BP A exchange credit
(Case No. P AC-04-02) was anticipated and addressed by the Parties executing the Tax Audit
Assessment Stipulation in Case No. PAC-03-05. Table A of the Tax Audit Assessment
Stipulation incorporates the proposed BP A exchange credit reduction of $2.496 million/year
from the proposed effective date of June 8, 2004. For this reason, this Stipulation addressing
BP A regional credit reduction issues is designated a "Supplemental" Stipulation. It is the
Parties' intent in this Supplemental Stipulation to further describe the proposed manner in which
PacifiCorp will attempt to reduce the balancing account deficit.
III.TERMS OF THE STIPULATION
The Parties have considered the proposed BP A exchange credit treatment set forth
in PacifiCorp s April 21 , 2004 Application and find the Company s proposal to be just and
reasonable. The Parties agree that PacifiCorp shall be allowed to reduce the BP A exchange
credit reflected in the Company s proposed Schedule 34, commencing June 8, 2004. As noted
above, the Tax Audit Assessment Stipulation already reflects the initial BP A exchange credit
reduction proposed in PacifiCorp s April 21 , 2004 filing of Case No. PAC-04-02.
SUPPLEMENTAL STIPULATION -Page 3 Portlnd3-1479538.10020017-00055
The Parties recognize that the level of the BP A credits is subj~ct to the actions of the
BP A and to other circumstances largely beyond the control of the Company. The Company will
continue to work to mitigate the impacts of future changes to the BP A credit. The Parties
recognize that, among other factors, qualifying customer loads actually experienced may not
reduce the balancing account deficit as anticipated. In order to realize a zero (or as near zero as
practical) balancing account by September 30 2006, the Parties recognize that PacifiCorp may
have to propose further modifications to Schedule 34 based on its actual experience in attempting
to reduce the deficit balance, or due to BP A actions that may influence the BP A exchange credit
for Idaho s qualifying customers. The Parties therefore agree that PacifiCorp shall propose, and
implement as approved by the Commission adjustments to Schedule 34, as necessary, in order to
achieve the targeted zero balancing account by September 30 2006.
PacifiCorp will convene informational meetings with Idaho irrigators in the
November/December time fi-ame of 2004 and 2005 in an effort to inform interested stakeholders
of the state of the balancing account, the anticipated magnitude of the BP A exchange credit for
the next irrigation season, of any other relevant factors that the Company anticipates may
influence Idaho s BP A exchange credit, the status of any anticipated or pending rate case and the
status and/or report on the Irrigation Load Control Credit Rider Program. The informational
meetings will provide irrigators with electric power cost information enabling the irrigators to
plan for the next irrigation season with a more informed position on their potential electricity
costs.
PacifiCorp will work with Staff and other interested stakeholders prior to filing proposed
adjustments to Schedule 34, filing any anticipated rate case or filing proposed adjustments to
Schedule 72.
SUPPLEMENTAL STIPULATION - Page 4 Portlnd3-1479538.1 0020017-00055
With Commission approval, PacifiCorp should implement the proposed BPA
exchange credit reduction on June 8, 2004 as this date coincides with other rate changes viz.the
expiration ofPacifiCorp s power cost surcharge authorized in Case No. P AC-02-01 and the
proposed initiation of a surcharge for tax audit assessments addressed in Case No. P AC-03-05.
The Parties agree that this Stipulation represents a just and reasonable resolution
of the issues generated by the Company s BP A exchange credit Application of April 21, 2004.
Other than the above referenced positions and any testimony or comments filed in support of the
approval of this Stipulation, and except to the extent necessary for a Party to explain before the
Commission its own statements and positions with respect to the Stipulation, all negotiations
relating to this Stipulation shall be treated as confidential.
The Parties submit this Stipulation to the Commission and recommend approval
in its entirety pursuant to IDAP A 31.01.01.274. Parties shall support this Stipulation before the
Commission, and no Party shall appeal any portion of this Stipulation or Order approving the
same. If this Stipulation is challenged by any person not a party to the Stipulation, the Parties to
this Stipulation reserve the right to cross-examine witnesses and put on such case as they deem
appropriate to respond fully to the issues presented, including the right to raise issues that are
incorporated in the settlements embodied in this Stipulation. Notwithstanding this reservation of
rights, the Parties to this Stipulation agree that they will continue to support the Commission
adoption of the teTITIS of this Stipulation.
10.In the event the Commission rejects any part or all of this Stipulation, or imposes
any additional material conditions on approval of this Stipulation, each Party reserves the right
upon written notice to the Commission and the other Parties to this proceeding, within 15 days of
the date of such action by the Commission, to withdraw from this Stipulation. In such case, no
SUPPLEMENTAL STIPULATION -Page 5 Portlnd3-1479538.1 0020017-00055
Party shall be bound or prejudiced by the terms of this Stipulation, and each Party shall be
entitled to seek reconsideration of the Commission s order, file testimony as it chooses, cross-
examine witnesses, and do all other things necessary to put on such case as it deems appropriate.
11.The Parties agree that this Stipulation is in the public interest and that all of its
terms and conditions are fair, just and reasonable.
12.No Party shall be bound, benefited or prejudiced by any position asserted in the
negotiation of this Stipulation, except to the extent expressly stated herein, nor shall this
Stipulation be construed as a waiver of the rights of any Party unless such rights are expressly
waived herein. Execution of this Stipulation shall not be deemed to constitute an
acknowledgment by any Party of the validity or invalidity of any particular method, theory or
principle of regulation or cost recovery, and no Party shall be deemed to have agreed that any
method, theory or principle of regulation or cost recovery employed in arriving at this Stipulation
is appropriate for resolving any issues in any other proceeding in the future. No findings of fact
or conclusions of law other than those stated herein shall be deemed to be implicit in this
Stipulation.
13.The obligations of the Parties under this Stipulation are subject to the
Commission s approval of this Stipulation in accordance with its terms and conditions and upon
such approval, if challenged, being upheld on appeal by a court of cOlnpetent jurisdiction.
Respectfully submitted this day of May, 2004.
PacifiCorp
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James CtYarne
Attorney for PacifiCorp
SUPPLEMENTAL STIPULATION - Page 6 Portlnd3-1479538.1 0020017-00055
Idaho Public Utilities Commission Staff
By Q/
Scott D. Woodbury
Attorney for Idaho Public Utilities
Commission Staff
. n umpers A:.-:sociation
Eric L. Olsen
Attorney for Idaho Irrigation Pumpers Association
City of Firth
By L,.",J-
Mike Kress
Mayor
SUPPLEMENTAL STIPULATION - Page 7 Portlnd3-1479538.10020017-00055
CERTIFICATE OF SERVICE
I hereby certify that on this 1ih day of May, 2004, I served the foregoing
SUPPLEMENT AL STIPULATION as follows:
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington
O. Box 83720
Boise, ID 83702
LXJ Hand Delivery
J U. S. Mail
Overnight Delivery
Facsimile
J Email
Scott Woodbury
Deputy Attorney General
Idaho Public Utilities Commission
472 West Washington
O. Box 83720
Boise, ill 83702
LXJ Hand Delivery
J U. S. Mail
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Overnight Delivery
Facsimile
J Email
Eric Olsen
Racine, Olson, Nye, Budge & Bailey
O. Box 1391
201 East Center
Pocatello, ill 83204-1391
J Hand Delivery
LXJ U. S. Mail
Overnight Delivery
(~
Facsimile
J Email
Mike Kress
Mayor
City of Firth
O. Box 37
Firth, ID 83236
J Hand Delivery
L-KJ U. S. Mail
Overnight Delivery
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Facsimile
Email
Timothy J. Shurtz
City Councilman
City of Firth
O. Box 37
Firth, ID 83236
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Overnight Delivery
Facsimile
J Email
Brandl L. Gearhart, PLS
Legal Assistant to Mary S. Hobson
Stoel Rives LLP