20100222_2866.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
LEG AL
WORKING FILE
FROM:TJ GOLO
DATE:FEBRUARY 18,2010
RE:IDAHO POWER'S ANNUAL COMPLIANCE FILING TO UPDATE RULE H
CHARGES AND CREDITS; TARIFF ADVICE NO. 09-
BACKGROUND
On December 30, 2009, Idaho Power ("Company ) filed a tariff advice with the
Commission proposing to update costs in its Rule H tariff, New Service Attachments and
Distribution Line Installations or Alterations. The Company is required to make an annual
compliance filing to update Rule H charges and credits as required by Commission Order Nos.
30853 and 30955. The Company used the same cost estimation methodology in Case
No. IPC-08-22 to update all charges and credits.
STAFF ANALYSIS
The Company proposes to update its Rule H costs including Base and Distance Charges for
Underground Service Cable, Engineering Charges, Overhead Temporary Service Attachment
Charge, Single-phase Allowance and Three-phase Allowance. Some Rule H line extension costs
slightly increased, others slightly decreased. Labor rate increases and material cost decreases are
the two main factors that caused line extension costs to change. Staff believes that price changes
are a reflection ofthe market and the general inflation rate. By keeping the line extension costs
current, new customers bear more of their fair share of the costs, rather than burdening existing
ratepayers with the costs of new growth.
Allowances
Staff discovered that the AMI meter code the Company used in its filing to calculate the
meter cost in the allowance is the incorrect code. The Company sent the correct meter cost amount
DECISION MEMORANDUM - 1 -FEBRUARY 18 2010
to Staff on February 10 2010, which is consistent with all the other costs in the calculation at the
time the filing was made.
In this filing, the Company is proposing to increase its single-phase allowance from
780 to $1 816, about a two percent increase. Significant changes in this allowance include:
(1) transformer cost, (2) hot line clamp, (3) labor cost, and (4) AMI meter.
The transformer cost included in the allowance has decreased since the Company s previous
filing. The demand for transformers has gone down; therefore the prices the Company pays for
transformers have also decreased.
The hot line clamp that is used to connect to the main line is being replaced with a new
welded hot line clamp. The new clamp is a new Company standard. Additional labor is required to
install the new welded hot line clamps, which also cause labor costs to increase. The overall labor
cost increased from $210 to $364 since the last Rule H update in Case No. IPC-08-22.
In Case No. IPC-08-, non-AMI meter cost was used as part of the allowance
calculation. Since then, the Company has been installing AMI meters throughout its service
territory. New AMI meters are approximately $60 more expensive per residential installation than
non-AMI meters. Staff believes it is appropriate to use the AMI meter cost in the allowance
calculation in order to be consistent with the Commission s decision in Order No. 30853 to base
allowance amounts on "standard" single and three-phase terminal facilities.
For the three-phase allowance, the Company is proposing about a four percent decrease
from $3 803 to $3 658. Significant changes in this allowance include: (1) travel cost, (2) hot line
clamp, (3) transformer arrester, and (4) AMI meter. The travel cost amount of$269 included in
Case No. IPC-08-22 was for a 5-man line crew with one hour of travel time. The travel cost
should have been $134.50 for a 5-man line crew with one half hour of travel time. Staff believes
that updating the travel cost amount to $134.50 for the three-phase allowance will be consistent
with the single-phase allowance travel cost which uses the same 5-man line crew and one half hour
travel time. This is one of the reasons for the decrease in the three-phase allowance.
As with the single-phase allowance, the hot line clamp in the three-phase allowance is also
being replaced with a new welded hot line clamp. In Case No. IPC-08-, an arrester is included
in the three-phase allowance for transformer protection. In this filing, however, the arrester now
comes with the transformer purchase. A separate purchase for an arrester and the additional labor
required to put it in place are no longer necessary. As with the single-phase allowance, the meter
cost in the three-phase allowance is also being updated to reflect AMI meter cost.
DECISION MEMORANDUM - 2 -FEBRUARY 18 2010
STAFF RECOMMENDATION
Staff recommends that the Commission approve Idaho Power s proposed cost updates to the
charges and credits in Rule H, with an effective date of March 15 2010.
COMMISSION DECISION
Does the Commission wish to approve Idaho Power s Tariff Advice No. 09-13 proposing to
update charges and credits for the Company s line extension costs in Rule H, with an effective date
of March 15, 2010?
--g
i:udmemos/ipc tariff advice no. 09-13 rev to rule h
DECISION MEMORANDUM - 3 -FEBRUARY 18 2010