20140630_4401.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

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

FROM: KARL T. KLEIN
DEPUTY ATTORNEY GENERAL

DATE: JUNE 27, 2014

SUBJECT: COMMISSION INQUIRY INTO IDAHO POWER’S PCA TRUE-UP
COMPONENT AND DEFERRAL BALANCE, CASE NO. IPC-E-14-16

On May 30, 2014, the Idaho Public Utilities Commission issued Order No. 33049 in
Idaho Power Company’s Power Cost Adjustment (PCA) Case, IPC-E-14-05. In the Order, the
Commission approved the Company’s determination of the PCA’s forecast and reconciliation
components. See Order No. 33049 at 9. But the Commission acknowledged Staff’s concerns
about how the Company calculates the PCA’s true-up component. The Commission stated:
Staff’s concern about the true-up is well-taken. The PCA methodology—
including the true-up—is designed to “ensure the amount recovered is no
more or less than the actual power costs paid by the Company.” Order No.
30828, Case No. IPC-E-09-11. Staff raises serious doubts about whether the
Company applies the true-up in a way that achieves this result. Staff believes
the Company’s application of the true-up introduces a line-loss bias that leads
the Company to inflate the [Net Power Supply Expense] true-up revenue it
must collect by $14.2 million. If Staff is correct, then the Company’s deferral
balance should be decreased by $14.2 million (or $5.9 million, if the
Company is correct that Staff miscalculated its adjustment). However, we
believe the abbreviated time allotted for the consideration of a PCA case
constrains the parties’ ability to more thoroughly vet this issue and Staff’s
proposed adjustment. Accordingly, we find it is reasonable to defer our
decision on Staff’s proposed adjustment so a new docket can be opened in
which the parties can hold a workshop to evaluate the Company’s application
of the true-up and whether a deferral balance adjustment is appropriate. The
parties would then report their findings to the Commission, and the
Commission would adjust the PCA deferral balance as warranted for inclusion
in next year’s PCA.
DECISION MEMORANDUM 2
Id. The Commission thus ordered: “that a separate docket be opened to allow Commission Staff,
the Company, and other interested persons to hold a workshop to further evaluate the Company’s
application of the true-up and whether a deferral balance adjustment is appropriate.” Id. at 13.
STAFF RECOMMENDATION
Staff recommends the Commission issue a Notice of Intervention Deadline that initiates
this case, sets a 14-day intervention deadline, and directs that a workshop occur on July 30, 2014.
After the workshop occurs, another Order can be issued setting further procedure as necessary.
COMMISSION DECISION
1. Would the Commission like to issue a Notice of Intervention Deadline that initiates
this case, sets a 14-day intervention deadline, and orders a July 30, 2014 workshop?

M:IPC-E-14-16_kk