20050912_1319.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:BEVERL Y BARKER
DATE:SEPTEMBER 8, 2005
RE:IDAHO POWER TARIFF ADVICE NO. 05-08 - PROPOSED
MODIFICATIONS TO DEPOSIT POLICY FOR IRRIGATION
CUSTOMERS (SCHEDULES 24 & 25).
BACKGROUND
Idaho Power is currently authorized to collect deposits from irrigation customers under
certain circumstances. A customer who owes $1 000 or less on December 31 but who has
received two or more reminder notices of more than $100 during a 12-month period will be
required to pay a Tier 1 deposit. A customer whose service is disconnected during the out-of-
season period due to non-payment or who was required to pay a Tier 2 deposit during the
previous year is also required to pay a Tier 1 deposit. A Tier 1 deposit amount is 1.5 times the
customer s estimated monthly in-season bill, and is applied to the account at the end of the
irrigation season.
A customer who owes more than $1000 on December 31 is required to pay a Tier 2
deposit for the following irrigation season. A customer who has been discharged from
bankruptcy or who has had receivership proceedings terminated will also be required to pay a
Tier 2 deposit. A Tier 2 deposit amount is 4 times the customer s estimated monthly in-season
bill. The deposit is applied to each monthly bill as it becomes due throughout the season.
COMPANY PROPOSAL
Idaho Power is seeking to close a loophole that allows a customer who has a large
outstanding balance owing but chooses not to farm for one or more seasons to avoid paying a
Tier 2 deposit. For example, an irrigation customer with an accumulated unpaid balance of
DECISION MEMORANDUM - 1 -SEPTEMBER 8, 2005
$50 000 on December 31 2003, does not farm in 2004 or 2005. On December 15 2005 , the
customer pays in full the balance still owing from 2003. The following spring, the customer
requests service for the 2006 irrigation season. Since the bill was paid prior to December 31 , the
customer is required to pay a Tier 1 deposit, even though a Tier 2 deposit would more closely
match the degree of credit risk to which Idaho Power is exposed given the customer s payment
history.
STAFF RECOMMENDATION
The revisions to Schedules 24 and 25 proposed by Idaho Power will close a loophole in
the existing tariff and are consistent with the original intent of the Company s deposit policy as
previously approved by the Commission. Staff recommends approval.
COMMISSION DECISION
Does the Commission wish to approve Idaho Power s proposed revisions to Schedules
24 & 25?
Beverly Barke
i:udmemos/ipc irrigation
DECISION MEMORANDUM - 2 -SEPTEMBER 8, 2005