20100412_2913.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

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

FROM: WELDON STUTZMAN
DEPUTY ATTORNEY GENERAL

DATE: APRIL 8, 2010

SUBJECT: IDAHO POWER’S APPLICATION FOR AUTHORITY TO IMPLEMENT
FIXED COST ADJUSTMENT RATES EFFECTIVE JUNE 1, 2010, CASE
NO. IPC-E-10-07

On March 15, 2010, Idaho Power Company filed an Application for an order
authorizing the Company to implement Fixed Cost Adjustment (FCA) rates for electric service
from June 1, 2010, through May 31, 2011. In March 2007, the Commission approved a
Stipulation implementing a three-year Fixed Cost Adjustment pilot program applicable to
residential service and small general service customers. This is the third year of the three-year
pilot program.
The FCA mechanism separates the collection of Idaho Power’s fixed costs from its
volumetric energy sales and provides a surcharge or credit when fixed-cost recovery per
customer varies above or below a Commission-established base. The FCA allows the Company
to recover the difference between the fixed costs recovered through rates and the fixed costs
authorized for recovery in the Company’s most recent rate case. To determine the actual fixed-
cost recovered amount, the Company takes weather-normalized sales for each class and
multiplies that sales figure by the fixed-cost per energy rate as established in the Company’s
general rate case. The Company’s Application states that the FCA for the residential class
amounts to an increase of $5,173,650. If collected individually from the residential class, these
customers would receive a 1.5% increase in residential rates to collect additional fixed costs
through the FCA.
The FCA for the small general service class is also an increase, but in the lesser
amount of $1,165,110. The additional revenue to be recovered from the small general service
DECISION MEMORANDUM 2
class would amount to an 8.49% rate increase. The Company is proposing to combine the rate
increase for the residential and small general service customers, resulting in an increase through
the FCA of 1.85% for both customer classes. Idaho Power requests that the new FCA rate
become effective June 1, 2010.
The Company requests that its Application be processed by Modified Procedure.
Staff recommends that the Commission issue a Notice of Application and Notice of Modified
Procedure establishing a comment period of 21 days.
COMMISSION DECISION
Should the Commission issue a Notice of Application and Notice of Modified
Procedure to process Idaho Power’s Application, establishing a comment period of 21 days?

Weldon B. Stutzman
Deputy Attorney General

bls/M:IPC-E-10-07_ws