HomeMy WebLinkAbout20090420_2537.pdfDECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: WELDON STUTZMAN
DEPUTY ATTORNEY GENERAL
DATE: APRIL 15, 2009
SUBJECT: CASE NO. IPC-E-09-11
IDAHO POWER COMPANY’S APPLICATION TO IMPLEMENT NEW
POWER COST ADJUSTMENT RATES
On April 15, 2009, Idaho Power Company filed an Application for an Order
approving an increase in the Company’s Power Cost Adjustment (PCA) rates to be effective
from June 1, 2009 through May 31, 2010. The Company’s Application provides the
computation for a PCA rate that increases the existing rate of 0.7864¢ per kWh to 1.4717¢ per
kWh.
The PCA consists of three different rate components: (1) the projected power cost
component, (2) the true-up of power cost component where the balance of the power cost
deferral from the prior year’s projected power cost is credited or collected, and (3) the true-up, or
reconciliation, of the true-up component under which any over-recovered or under-collected
balance of the true-up deferral from the prior year is collected or credited. The projected power
cost is a computation that includes as components a projection of PCA expenses from the
Company’s Operating Plan, the difference between PURPA related expenses quantified in the
Operating Plan and those established in the Company’s last general rate case, and the Company’s
normalized system firm sales. Idaho Power has determined that the rate for the projected power
cost component is 0.5662¢ per kWh, including a reduction of 0.0789¢ for PURPA related
expenses.
DECISION MEMORANDUM 2
Idaho Power’s Application states that the PCA true-up balance at the end of March
2009 is $103,300,137, including a reduction of approximately $4.6 million to reflect SO2 sales,
resulting in a true-up component rate in the PCA of 0.7465¢ per kWh.
The third component, the true-up or reconciliation of the true-up, is 0.1590¢ per kWh
as calculated by the Company. Idaho Power states that this rate is necessary to recover $22
million that was slated for recovery but was not recovered through the PCA during April 1, 2008
through March 31, 2009.
According to the Company’s Application, the combination of the three PCA
components results in a new PCA rate for the 2009/2010 PCA year of 1.4717¢ per kWh. This
equates to an increase of $93.8 million, or 11.4%, in the Company’s Idaho jurisdiction revenue.
Idaho Power requests that its Application to implement a new PCA rate effective June
1, 2009 through May 31, 2010, be processed by Modified Procedure. The Commission typically
processes the Company’s annual PCA review by Modified Procedure, and Staff recommends
that the Company’s Application in this case be processed by Modified Procedure, with written
comments due by May 14, 2009.
COMMISSION DECISION
Should Idaho Power’s Application to implement a new PCA rate to be effective June
1, 2009 through May 31, 2009 be processed by Modified Procedure?
Weldon B. Stutzman
Deputy Attorney General
bls/M:IPC-E-09-11_ws