20090323_2511.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF

FROM: DON HOWELL
DEPUTY ATTORNEY GENERAL

DATE: MARCH 19, 2009

SUBJECT: IDAHO POWER’S REPORT CONCERNING THE SALE OF SO2
EMISSION ALLOWANCES IN 2009, CASE NO. IPC-E-09-08

On March 18, 2009, Idaho Power Company filed a report disclosing that the
Company had recently recorded the sale of surplus sulfur dioxide (SO2) emission allowances
during this calendar year. The Company reports that it has either sold or entered into contracts
for the sale of 16,500 SO2 allowances. The Company anticipates booking the proceeds (after
deducting brokerage fees of $4,125) of $2,341,375.
The Company’s report also notes that during calendar year 2008 the Company sold
10,000 SO2 allowances resulting in net revenues (after deducting brokerage fees) of $2,958,500.
See Case No. IPC-E-08-14 (Report filed July 24, 2008).
PROPOSED ACCOUNTING TREATMENT
Idaho Power proposes that the “same 90/10 percent sharing of benefits” be utilized to
allocate the proceeds from the sale of SO2 allowances transferred in January 2009. Application
at ¶ 7. The Company also recognizes that subsequent SO2 sales will be subject to the new 95/5
percent sharing methodology consistent with the parties’ stipulation approved by the
Commission in Order No. 30715 (Case No. IPC-E-08-19). In addition to the change in sharing
methodology, Idaho Power also asserts that the jurisdictional allocations were changed in the
Company’s recent rate case Order No. 30722. In particular, Idaho’s jurisdictional percentage
would increase from 94.7% to 94.79%. Id.

DECISION MEMORANDUM 2
Idaho Power’s report merely notes the Company has accrued SO2 credits but does not
recommend a particular ratemaking treatment.
STAFF RECOMMENDATION
Staff recommends that the Commission initiate a docket to determine whether it is
appropriate to include the 2008 and 2009 SO2 proceeds in this year’s Power Cost Adjustment
(PCA) case. Staff further recommends that the case be processed by processed by Modified
Procedure. Staff believes that the case can be completed prior to the Company’s PCA filing later
this year.
The Company does not object to Staff’s recommendations.
COMMISSION DECISION
Does the Commission find that determining the appropriate disposition of the 2008
and 2009 (thus far) SO2 proceeds may appropriately be processed under Modified Procedure?

bls/M:IPC-E-09-08_dh