20060227_1481.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:DONOV AN E. WALKER
DATE:FEBRUARY 27, 2006
SUBJECT:INVESTIGATION OF THE APPROPRIATE RA TEMAKING
TREATMENT OF IDAHO POWER COMPANY'S S02 ALLOWANCE
SALE PROCEEDS - CASE NO. IPC-05-
BACKGROUND
On June 9, 2005, Idaho Power Company (Idaho Power, Company) filed an
Application requesting: (1) blanket authority to sell surplus sulfur dioxide (S02) allowances;
and (2) an accounting order to provide for recording any sale(s) of such allowances. Case No.
IPC-05-20. The Company s Application also suggested that a determination of ratemaking
treatment for the proceeds be made at a later date.
On August 22 2005, the Idaho Public Utilities Commission (Commission) approved
the Company s Application. Order No. 29852. The Commission, while reserving the review of
the reasonableness of each sale, granted Idaho Power s request for blanket authority to sell S02
emissions allowances and approved the accounting treatment proposed by the Company, on an
interim basis, until such time as the Commission determines the appropriate ratemaking
treatment of the proceeds from the sale of the S02 allowances. Id. The Company was ordered
to file a report with the Commission within 60 days of the receipt of any S02 proceeds. Id.
Additionally, the Commission ordered that a separate docket be opened for Staff to conduct
workshops and make a recommendation to the Commission regarding the appropriate
ratemaking treatment of S02 proceeds. Id.
This docket, IPC-05-, was opened and two workshops were held on November 7
and November 23, 2005 , respectively. During the workshops the parties were unable to reach
agreement upon the ratemaking treatment of the proceeds. On January 12, 2006, the
DECISION MEMORANDUM
Commission issued Order No. 29953 establishing an intervention deadline of January 31 , 2006
and setting an informal case scheduling conference for February 23 , 2006. The only party to
petition for intervention was the Industrial Customers of Idaho Power. Their petition was
granted. Order No. 29978.
The Company has thus far reported to the Commission that they have sold a total of
500 S02 allowances and received total net pre-tax proceeds of $76 932 625 from those sales.
THE SCHEDULING CONFERENCE
All parties met at the February 23 , 2006, scheduling conference and agreed that no
party desired a formal hearing. The following schedule was also agreed to:
Comment Deadline March 31 , 2006
Company s Brief and Company s Reply Comments April 14, 2006
Staff and Intervenor Briefs April 28, 2006
Company s Reply Brief May 12, 2006
Staff recommends that the Commission authorize the use of Modified Procedure for this matter
and that the above schedule be adopted.
CO MMISSI ON D ECISI 0 N
Does the Commission find that the public interest may not require a hearing to
consider the issues presented in this case, and that issues raised by the Company s filing may be
processed under Modified Procedure pursuant to IDAPA 31.01.01.201-2047
DONOV AN E. WALKER
DECISION MEMORANDUM