HomeMy WebLinkAbout20120103_3555.pdfDECISION MEMORANDUM 1
DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
FROM: KRISTINE SASSER
DEPUTY ATTORNEY GENERAL
DATE: DECEMBER 29, 2011
SUBJECT: IDAHO POWER’S APPLICATION TO MODIFY ITS RULE H (LINE
EXTENSION) TARIFF RELATED TO THE GENERAL OVERHEAD
RATE, CASE NO. IPC-E-11-24
On November 18, 2011, Idaho Power Company filed an Application with the
Commission seeking authority to modify the general overhead rate it charges in the Company’s
Rule H tariff relating to new service attachments and distribution line installations and
alterations. The Company requests that the Application be processed by Modified Procedure and
that the proposed changes become effective on March 15, 2012.
THE APPLICATION
The Company proposes to remove the 1.5% limitation for recovery of general
overhead costs in the “Work Order Cost” definition of Rule H in an effort to shift more of the
cost burden for new service attachments and distribution line installations or alterations from
general ratepayers to customers requesting construction for these services. Application at 3. The
Company states that, by removing the 1.5% limitation for recovery of general overhead costs and
allowing the Company to recover the full construction overheads under Rule H, the Company
will receive larger contributions in aid of construction (CIAC) to offset the costs of providing
these construction services. The Company maintains that this will ultimately reduce the revenue
requirement for general ratepayers and reduce additional upward pressure on rates. Id.
Specifically, the Company is proposing to recover all actual general overhead costs
related to construction under Rule H from the party requesting the construction service. Idaho
Power proposes to update this general overhead rate each time accounting adjustments (increases
or decreases) are made to balance the Company’s general overhead account. These updates
DECISION MEMORANDUM 2
would be automatically reflected in the Company’s work order processing and accounting
systems. In addition, the Company proposes to file its effective general overhead rates in all
future annual Rule H updates of charges and credits to allow the Commission the opportunity to
scrutinize the effective rate charged on Rule H work orders.
The Company requests that the removal of the general overhead cap be approved by
March 1, 2012, and become effective on March 15, 2012, to coincide with the effective date of
the Company’s annual update of its Rule H charges and credits.
STAFF RECOMMENDATION
Staff has reviewed the Application and recommends that the case proceed by
Modified Procedure with a comment deadline of February 2, 2012.
COMMISSION DECISION
Does the Commission find that the public interest may not require a hearing to
consider the issues presented, and that this proceeding may be processed under Modified
Procedure with a comment deadline of February 2, 2012?
M:IPC-E-11-24_ks