20080331_2197.pdf

DONOVAN E. WALKER, ISB No. 5921
BARTON L. KLINE, ISB No. 1526
Idaho Power Company
O. Box 70
Boise, Idaho 83707
Tel: [phone]
Fax: [phone]
dwalkerCWidahopower.com
bkl inelCl2 ida hopower. com
Attorneys for Idaho Power Company
Street Address for Express Mail
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
APPROVAL OF A PROPOSED
STATEMENT OF POLICY AND CODE OF
CONDUCT COVERING TRANSACTIONS
BETWEEN IDAHO POWER AND
SUBSIDIARIES OF IDACORP, INC.
) CASE NO. IPC-01-
REVISED CODE OF CONDUCT
) REPLACEMENT A TT ACHMENT A
) TO THE PARTIES' STIPULATION
Idaho Power Company ("Idaho Power" or the "Company ), the Staff of
the Idaho Public Utilities Commission ("Staff") , and the Industrial Customers of
Idaho Power ("ICIP") hereby submit the attached Revised Code of Conduct as a
replacement to the Code of Conduct submitted as Attachment A to the Parties
Stipulation previously filed in this matter.
Pursuant to the Commission s request, the parties have modified the
originally proposed Code of Conduct by: 1) removing the word "reasonable" from
Revised Code of Conduct
Replacement Attachment A Page 1
paragraph Nos. 2 , 14, and 15; and 2) removing the words "upon request" from
paragraph Nos. 13 and 19. All Parties agree to the above changes.
REQUEST FOR RELIEF
The Parties respectfully request that the attached Revised Code of
Conduct be substituted for, and be considered a replacement of, Attachement A
submitted with the Parties Settlement Stipulation previously filed on February 19
2008. The Parties also request that, pursuant to the Motion for Approval of the
Stipulation, also filed on February 19, 2008, the Commission issue its Order: 1)
granting said Motion to accept the Settlement Stipulation in its entirety without
material change or condition; and 2) approving and accepting the accompanying
Revised Code of Conduct agreed to by the Parties in the Stipulation.
Respectfully submitted this 2ih day of March 2008 at Boise, Idaho.
Attorney for Idaho Power Company
Revised Code of Conduct
Replacement Attachment A Page 2
REVISED CODE OF CONDUCT
IDAHO POWER COMPANY
IDACORP
COMMISSION STAFF
Idaho Power Company will Comply with the following Code of Conduct:
1.)Idaho Power Company will maintain its own books and records, separate from
IDACORP's books and records. Idaho Power Company s financial books and
records and state and federal utility regulatory filings and documents will
continue to be available to the Commission, upon request.
Subject to appropriate confidentiality agreements IDACORP and Idaho Power
Company will provide the Commission access to all books of account as well
as all documents, data, and records of their affiliated interests, which pertain
to transactions between Idaho Power Company and its affiliated interests or
transactions which could have an adverse affect on the business of Idaho
Power Company.
IDACORP, Idaho Power Company and all affiliates will make their
employees, officers, directors and agents available to testify before the
Commission to provide information relevant to matters within the jurisdiction
of the Commission.
IDACORP and Idaho Power Company agree that one of its independent
directors on each Board of Directors will have had prior expelience with
respect to the operation, financial analysis or regulation of the regulated gas or
electric utility industry.
Upon request, Idaho Power Company will provide the Commission with a
copy of any affiliated interest report filed in other jurisdictions.
IDACORP and Idaho Power Company will comply with all applicable statutes
and any regulations promulgated pursuant to the statutes regarding affiliated
interest transactions, including timely filing of applications and reports.
Idaho Power Company will not subsidize any affiliated interest and shall
comply with the Commission s applicable orders and rules with respect to
such matters.
Any proposed cost allocation methodology for the allocation of corporate and
affiliate investments, expenses, and overheads, required by law, rule or order
to be submitted to the Commission for approval, will comply with the
following principles:
REVISED CODE OF CONDUCT
IDAHO POWER AND IDA CORP
a. For services rendered to Idaho Power Company or each cost category
subject to allocation to Idaho Power Company by IDACORP or any of
Idaho Power s affiliates, Idaho Power must be able to demonstrate that
such service or cost category is necessary to Idaho Power Company for the
performance of its regulated operations, is not duplicative of services
already being performed within Idaho Power Company, and is reasonable
and prudent. (Affiliates and IDACORP do not charge to Idaho Power)
b. Cost allocations to Idaho Power Company from IDACORP will be based
on generally accepted accounting standards; that is, in general, direct costs
will be charged to specific subsidiaries whenever possible and shared or
indirect costs will be allocated based upon the primary cost-driving
factors. (See above note)
c. IDACORP and its subsidiaries will have in place accounting systems
adequate to support the allocation and assignment of costs of IDACORP
executives and other relevant personnel to Idaho Power Company. (See
above note)
d. An audit trail will be maintained such that all costs subject to allocation
can be specifically identified, particularly with respect to their origin. In
addition, the audit trail must be adequately supported. Failure to
adequately support any allocated cost may result in denial of its recovery
in rates.
e. Costs which would have been denied recovery in rates had they been
directly incurred by Idaho Power Company regulated operations will
likewise be denied recovery whether they are allocated directly or
indirectly through subsidiaries in the IDACORP group to Idaho Power
Company. (see above note)
f. For services provided by Idaho Power to IDACORP or any affiliated
interest, Idaho Power current Service Level Agreements (SLA'
provide a reasonable method of allocating costs for rate-setting. Any
changes to the SLA methodology will be submitted to the Commission
upon request.
g.
IDACORP and Idaho Power Company commit to use asymmetrical
pricing (i., lower of cost or market for transactions to Idaho Power
Company and higher of cost or market for transactions from Idaho Power
Company) for affiliate charges or costs not covered by the provisions of
any cost sharing agreement or Service Level Agreements (SLA), if a
readily identifiable market for the goods, services or assets exists, and if
the transaction involves a cost of more than $100 000. (See above note)
REVISED CODE OF CONDUCT
IDAHO POWER AND lDACORP
10.
11.)
Idaho Power Company will maintain separate debt and, if outstanding,
preferred stock ratings. Idaho Power Company will maintain its own
corporate credit rating, as well as ratings for each long-term debt and
preferred stock (if any) issuance.
Neither Idaho Power Company nor its subsidiaries will, on a prospective
basis, without prior notification to the Commission, make loans or transfer
funds (other than dividends and payments for inter-company services
provided as part of the normal course of business) to IDACORP or its
affiliates, or assume any obligation or liability as guarantor, endorser, surety
or otherwise for IDACORP or its affiliates; provided that this condition will
not prevent Idaho Power Company from assuming any obligation or liability
on behalf of a subsidiary of Idaho Power Company. Any changes to current
arrangements will require Commission approval. IDACORP will not pledge
any of the assets of the business of Idaho Power Company as backing for any
securities which IDACORP or its affiliates (but excluding Idaho Power
Company and its subsidiaries) may issue.
Nothing in these commitments shall be interpreted as a waiver ofIdaho Power
Company ' or IDACORP'rights to request confidential treatment for
information that is the subject of any commitments.
12.Idaho Power Company commits that it will not make any dividends to
IDACORP that will reduce Idaho Power Company' common equity capital
below 35% of its Total Adjusted Capital without Commission approval. This
percentage will be adjusted, as necessary, to account for any changes to
Generally Accepted Accounting Principles (GAAP) after approval of this
transaction. For purposes of calculating the numerator of the percentage
common equity will include equity-like securities a.a. hybrid securities but
will not include any portion of Idaho Power Company preferred stock issued
and outstanding. Idaho Power Company' Total Adjusted Capital is defined as
common equity, equity-like securities, preferred equity, capitalized lease
obligations and long-term debt.
13.Idaho Power Company will provide to the Commission a report covering the
preceding calendar year, in which it describes its compliance with the
provision of item 12, concerning the equity levels and payment of dividends.
14.Upon request, and subject to appropriate confidentiality agreements
IDACORP and Idaho Power Company will provide the Commission access to
corporate minutes including Board of Director s minutes and all committee
minutes, along with any related source documents that are relevant to the
business and risk analysis of Idaho Power Company. Idaho Power Company
and the Commission Staff currently have established a reasonable and
mutually acceptable procedure to review these confidential documents.
REVISED CODE OF CONDUCT
IDAHO POWER AND IDACORP
15.
16.
17.
Upon request, and subject to appropriate confidentiality agreements
IDACORP and Idaho Power Company will provide the Commission
reasonable access to operational, internal and risk audit reports and
documentation. Idaho Power Company and the Commission Staff currently
have established a reasonable and mutually acceptable procedure to review
these confidential documents.
Idaho Power Company will provide the Commission and Staff with
notification of all publicly announced proposals for divestiture, spin-off, or
sale of any integral Idaho Power Company function. Idaho Power Company
will also file for Commission approval of divestiture, spin-off, or sale of any
integral Idaho Power Company function, which is subject to IPUC
jurisdiction. This condition does not limit any jurisdiction the Commission
may have.
Subject to appropriate confidentiality agreements, Idaho Power Company will
notify the Commission prior to implementation of plans by Idaho Power
Company or IDACORP: (I) to form an affiliate for the purpose of transacting
business with Idaho Power Company' regulated operations; (2) to commence
new business transactions between an existing affiliate and Idaho Power
Company; or (3) to dissolve an affiliate which has transacted substantial
business with Idaho Power Company.
18.Idaho Power Company will notify the Commission as soon as practicable
following any public announcement of: (I) any acquisition of a regulated or
unregulated business representing 5 percent or more of the capitalization of
IDACORP; or (2) the change in effective control or acquisition of any
material part or all of Idaho Power Company by any other firm, whether by
merger, combination, transfer of stock or assets.
19.Idaho Power Company will provide to the Commission, on an informational
basis, credit rating agency news releases and final reports regarding Idaho
Power Company when such reports are known to Idaho Power Company and
are available to the public.
20.Idaho Power Company commits that in the event that Idaho Power Company
obtains a loan from its parent company or any affiliated company, Idaho
Power Company will, in any subsequent rate proceeding demonstrate that the
debt obligation interest, terms, and conditions are comparable to or less than
what Idaho Power Company could have obtained in the market at the time the
debt was obtained by Idaho Power Company, that the loan is on reasonable
terms and without markup to the holding company s cost of funds, and that
the debt procurement will not interfere with any mechanisms that secure the
utility.
REVISED CODE OF CONDUCT
IDAHO POWER AND lDACORP
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21.)IDACORP and Idaho Power Company commit that no amendments, revisions
or modifications will be made to the agreements and commitments set out in
their settlement stipulation without prior Commission approval.
REVISED CODE OF CONDUCT
IDAHO POWER AND IDA CORP