20160222_4900.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:MICHAEL W.MORRISON
DATE:FEBRUARY 11,2016
RE:IDAHO POWER’S ANNUAL COMPLIANCE FILING TO UPDATE
CHARGES,CREDITS,AND GENERAL OVERHEADS UNDER RULE H,
NEW SERVICE ATTACHMENTS AND DISTRIBUTION LINE
INSTALLATIONS OR ALTERATIONS,TARIFF ADVICE NO.15-14
BACKGROUND
On December 29,2015,Idaho Power (“Company”)filed a tariff advice with the
Commission proposing updates to the charges,credits,and general overhead rate outlined in
Rule H,New Service Attachments and Distribution Installations or Alterations.This is the
seventh annual compliance filing to update Rule H charges and credits as required by Idaho
Public Utilities Commission Order Nos.30853 and 30955.Commission Order No.30853
requires the Company to submit its updated Rule I-I charges and credits no later than January 1 of
each year.The Company also requests to update its general overhead rate as required by Order
No.32472.The Company proposes that the updates be approved by March 1,2016 with an
effective date of March 15,2016.
STAFF ANALYSIS
Staff reviewed the Company’s cost estimation methodology,and found it to conform to
that adopted in IPC-E-08-22 (Rule H Modification and Reconsideration),Idaho Power’s most
recent major line extension case.
Staff notes 6 percent and 4 percent increases,respectively,in charges for 2-inch and 3-
inch pole risers.These increases were driven by a 3%increase in labor rates,and by a 12 minute
increase in the estimated time to attach the compatible unit.Staff agrees that these charges are
appropriate.
DECISION MEMORANDUM -1 -FEBRUARY 11,2016
Decreases in conductor costs were responsible for reductions of between 2 and 8 percent
across all distance charges.
A 3 percent increase in labor rates and 6.2 percent increase in benefits costs drove a $3.00
increase in hourly engineering charges.
Staff notes a 1 percent increase in the line installation and service attachment allowances
for residential (Schedules 1,3,4,and 5)and non-residential (Schedules 7,9,and 24)single
phase service,and a 2 percent increase in the non-residential three phase allowance.About half
of these increases are attributable to increased labor rates,and the remainder to increases in
material costs.
There was a small decrease,from 17.60 percent to 16.79 percent,in the general overhead
rate.Staff determined that the method used to compute the new rate conforms lo the
methodology used in IPC-E-1 1-24 and approved in Order No.32472.
The Company has indicated that it will requires two weeks to modify its computer
systems.prepared documentation,and train personnel,and requests an effective date of March
15,2016.
STAFF RECOMMENDATIONS
The Company’s methodology for computing charges and allowances for new service
attachments and distribution line installations is consistent with that approved by the
Commission in Order Nos.30853,30955,and 32472.Staff also believes the Company’s
proposal to compute the general overhead rates applied to engineering charges is reasonable.
Staff therefore recommends that the Company’s proposed Rule H updates be approved with an
effective date of March 15,2016.
COMMISSION DECISION
Does the Commission wish to approve the Company’s proposed Rule H updates to with
an effective date of March 15,2016?
Udmemos/Idaho Power Tariff Advice 15—14 dec memo
DECISION MEMORANDUM -2-FEBRUARY 11,2016