20061106_1730.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:CECELIA GASSNER
DATE:NOVEMBER 2, 2006
SUBJECT:ROCKY MOUNTAIN POWER'S APPLICATION FOR A DEFERRED
ACCOUNTING ORDER TO DEFER THE COSTS RELATED TO THE
MIDAMERICAN ENERGY HOLDINGS COMPANY TRANSITION, CASE
NO. PAC-06-
On October 10, 2006, PacifiCorp dba Rocky Mountain Power filed an Application
seeking an order authorizing the Company to defer and amortize over a three-year period the costs
related to the MidAmerican Energy Holdings Company transition (the "MEHC Transition ). The
Commission has jurisdiction over the Company s request pursuant to Idaho Code ~61-524.
THE APPLICATION
According to the Application, the Company is incurring costs related to the MEHC
Transition for employee severance and conversion of software to an accounting calendar year. The
Company seeks an order authorizing the capitalization of these costs through March 2007 and then
amortization of the capitalized balance over a three-year period to begin at the implementation of
new rates from a general rate case filed after December 2006. The Application does not include any
request or recommendation for how the Company would like it to be processed.
The Company anticipates that its costs related to employee severance will exceed $25
million on a total Company basis. It also estimates that the cost of adapting the software will fall
between $500 000 and $1 000 000. The Company proposes that the Transition costs be charged to
Account 182.3 Other Regulatory Assets and that they be amortized to Account 930.2 Miscellaneous
General Expenses. It proposes to include the unamortized amounts in its rate base where they
would earn a return at the Company s authorized rate of return. If the Application is not granted
these costs would be charged to the Company s operations and maintenance accounts.The
DECISION MEMORANDUM
Company does not request a determination of ratemaking treatment of the MEHC Transition costs
in this Application; rather, it proposes to address the recovery of these costs in its next rate case.
ST AFF RECOMMENDATION
Staff recommends that the Company s Application be processed by Modified Procedure
with a forty-five (45) day comment period. This should allow sufficient time for interested parties
to review the Company s Application and file their comments with the Commission. Reference
Commission Rules of Procedure, IDAPA 31.01.01.201-.204.
COMMISSION DECISION
Does the Commission preliminarily find that the public interest may not require a
hearing to consider the issues presented in this case, and that this case is appropriate for Modified
Procedure pursuant to Commission Rules of Procedure 201 through 204?
Does the Commission approve of the recommended comment period?
/ ,
LA......
Cecelia G~ner
M:PAC-O6-
DECISION MEMORANDUM