20070803Application.pdf

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ATLANTA. POWER COMPANY
11140 Chicken Dbmer Road ZOD; AUG - I PI~1 3: \8
CaldweD, lulm 13607 11)/\110 PUBLlC
[phone] UTILI'rIES COMMISSiOl.
July 30, 2007
Idaho Public Utilities C.ommission
Attn: Secretary
P~O.Box83120
Bo~ Idaho. 83120-0014
Subject: Application for an Accounting Order
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Case No. ATL-O1-
DearSecretmy:
Enclosed are an original and seven copies of an Application requesting an Older from the
Idaho Public Utilities Commission appro'\Ving specjaJ accounting procedures.
Also enclosed is an extra copy of the Application. Please da1e stamp and return this extra
copy to the Company for our records.
Thank you for your attention to this matter.
Sincerely,
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IsraeLRay,Ptesident
Atlanta Power Co.
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BDORE.'IIIE, IDAIIO PmILIC.1J!TILITIES. COMMISSION
INTBEMATIDt tWTHE'APPLICATIONOF ).
ATLANTA POWER. .cOMPANY .INc.
. )
FOR AN ACCOUNTING ORDER AUTHORJZING ).
THE DEFERAL OF EXTRAORDINARY .
EXPENSES ASSOCIATED WITH THE FAILURE )
OF APPLICANTS HYDRO-ELECTRIC TURBINE )
CASE NtL ATL-&87~l'
APPUCA TION
COMES NOW At1anta Power Company (Applicant, Company) and pursuant to Idaho
Code'i61,-S24' requests an order from the Idaho Public Utilities Commission
(Commission) authorizing the Company to defer on its Jinancial accoWiting records
certain: expenses. The Company has incurred a significant increase in operating costs
associated with the failure of its hydro-electric turbine. These expenses are extraordinary
in natme and well beyond the Company s ability to pay ftom internally generated
revenues. Owners of the Company are paying these costs from personal funds but cannot
and should not be expected to absorb these costs personally.
GENERAL
Applicant is a public utility electric corporation within the meaning of the Idaho
Public Utility Law, is duly organized and existing under the laws of the State of Idaho
and is engaged in conducting a general electric utility service business in and around the
Community of Atlanta in Elmore County, Idaho, having its principal office and place of
business at 11140 Chicken Dinner Road, Caldwell, Idaho. A copy of Applicants Articles
of Incorporation together with all amendments to date is on file with the Commission.
Applicants current Certificate of Convenience and Necessity is Certificate No. 300.
Currently the Company provides electric service to approximately 74 residential and
commercial customeIS.
APPLICATION OF ATLANTA POWER-
COMMUNICATIONS
Correspondence regarding this Application should be addressed to:
Israel Ray
President
Atlanta Power Co.
11140 Chicken Dinner Road
Caldwell, Idaho 83601
[phone]
Robert-Smith
Utility Consultant
2209N. Bryson Rd.
Boise, Idaho 83713
[phone]
mail utilitygro~oo.com
HYDRO TURBINE FAILURE
In early June of2oo7 the Company s tmbine at the Kirby Dam on the Middle
Fork of the Boise River failed. The Company, in order to provide continued service to
custom~ arranged for the rental of a diesel generator. The diesel generator was
installed and has been providing service since June 16, 2007. Due to the excessive cost
of providing service .in this manner; the generator is currently only operating for twelve
(12) hours per day. Six (6) hours each morning and six (6) hours each evening.
Customers on the system. would prefer continuous service but have been understanding
regarding the excessive costs the Company is experiencing and have indicated they prefer
the twelve (12) hour per day service rather than the alternative of no service.
The Company bas taken the turbine to Yanke Machine Shop in Boise for repair.
Yanke Machine Shop bas estimated the cost to repair the turbine will be approximately
$60 000 and has infonned the Company it cannot complete the repairs to the tmbine
before the last week in August of2007. Therefore, the Company will continue to
experience the extraordinary expenses associated with operation of the diesel generator.
EXTRAORDINARY COSTS
As of July 26, 2007 the Company bas experienced the following extraordinary
costs associated with the operation of the diesel generator.
Rent 400 Hours ~ $12.50 !Hr
Diesel Fuel (2,,200 gallons)
Electric Panel (connect to grid)
Gen Set repair (water pump)
Battery, Oil &. Coolant
Total To Date
000.
180.
741.00
168.
168.
$12 257.
The Company currently has on hand an inventory of approximately 700 gallons of
diesel:fuel. Therefore, the average hourly fuel consumption appears to be approximately
75 gallons per hour (2,200 gallons- 700 gallons = 1 500 gallons/400 Hrs =3.
gallons per Hr). With at least forty (40) days of additional diesel generation expected
before the hydro turbine can resume operation, the Company anticipates additional fuel .
cost to exceed $3 080.00 (40 days x 12 hrs = 480 hours X 3.75 gallons =1 800 gallons
less 700 gallon inventory = 1 100 gallons ~ $2.80 per gallon = $3 080.00). Additional
Rent Expense is expected to be in excess of $6,000 ($12.50 X 480 Hrs) The exact costs
will be unknown. until such time as the hydro turbine is restored to service. The
APPliCATION OF ATLANTA POWER-
Company does expect on occasion to exceed the twelve (J 2) hours per day of operation
to meet the needs of the Atlanta community for special occasions.
ORDER AUTHORIZING DEFERRAL OF EXPENSES
Applicant is not seeking any recovery of its costs at this time. Applicant is
requesting an Order from the Commission authorizing the Company to establish a
deferred expense account on its books of financial record. The Company proposes to
record all of its extraordinary costs associated with the operation of the diesel generator
in this deferred account. The Company will make application to the Commission in the
future and propose a method of recovery of these costs, once they are knoWIl; together
with the final costs to repair of the hydro turbine. Deferred accounting treatment for
regulatory purposes is an appropriate just and reasonable means of providing the
Company an opportunity to seek recovery of the extraordinary costs it is experiencing
due to the unexpected failure of the Company s hydro turbine.
WHEREFORE, Atlanta Power Co. respectfully requests that the Commission
consider this matter under Modified Procedure pursuant to IPUCRP 201-204 and enter its
Order authorizing the deferral of the Company s extraordinary costs,
DATED this 30th day of July 2007
Respectfully Submitted,
Israel, Ray, President
Atlanta Power Co.
APPliCATION OF ATLANTA POWER-