20070810notice_of_application.pdf

Office ofthe Secretary
Service Date
August 10, 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF ATLANTA POWER COMPANY, INc.
FOR AN ACCOUNTING ORDER
AUTHORIZING THE DEFERRAL OF
EXTRAORDINARY EXPENSES
ASSOCIATED WITH THE FAILURE OF
APPLICANT'S HYDROELECTRIC
TURBINE
CASE NO. ATL-O7-
NOTICE OF APPLICATION
NOTICE OF
MODIFIED PROCEDURE
NOTICE OF
COMMENT/PROTEST DEADLINE
YOU ARE HEREBY NOTIFIED that on August 1 2007, Atlanta Power Company
(Atlanta Power; Company) filed an Application with the Idaho Public Utilities Commission
(Commission) requesting an Order authorizing the Company to defer on its financial accounting
records increased operating costs associated with the failure of its hydroelectric turbine. The
Company contends that the expenses are extraordinary in nature and well beyond its ability to
pay from internally generated revenues. These expenses are presently being paid from personal
funds of the owners of the Company.
Hydro Turbine Failure
In early June 2007 the Company reports that its turbine at the Kirby Dam on the
Middle Fork of the Boise River failed. The Company, in order to provide continued service to
customers, 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 12 hours per day - six hours in the
morning and six hours in the evening.
The Company reports that it has taken the turbine to Yanke Machine Shop in Boise
for repair. Yanke Machine Shop has estimated the cost to repair the turbine will be
approximately $60 000 and has informed the Company it cannot complete the repairs to the
turbine before the last week in August 2007. Therefore, the Company will continue to
experience the extraordinary expenses associated with operation ofthe diesel generator.
NOTICE OF APPLICATION
NOTICE OF NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
Extraordinary Costs
As of July 26, 2007, the Company states that it has experienced the following
extraordinary costs associated with the operation of the diesel generator.
Rent - 400 Hours c?y $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 states that it currently has on hand an inventory of approximately 700
gallons of diesel fuel. Therefore, the Company calculates the average hourly fuel consumption
to be approximately 3.75 gallons per hour (2 200 gallons minus 700 gallons = 1 500
gallons/$400 = 3.75 gallons per hour). With at least 40 days of additional diesel generation
expected before the hydro turbine can resume operation, the Company anticipates additional fuel
costs to exceed $3 080 (40 days x 12 hours = 480 hours x 3.75 gallons = 1 800 gallons less 700
gallon inventory = 1 100 gallons c?y $2.80 per gallon = $3 080). Additional Rent Expense
expected to be in excess of $6 000 ($12.50 x 480 hours). The exact costs will be unknown until
such time as the hydro turbine is restored to service. The Company expects on occasion to
exceed the 12 hours per day of operation to meet the needs of the Atlanta community for special
occasIOns.
Order Authorizing Deferral of Expenses
Atlanta Power is not seeking any recovery of its costs at this time. The Company 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 deferral account.
The Company will make application to the Commission in the future and propose a method of
recovery of these costs, once they are known, together with the final costs on repair of the hydro
turbine. The Company contends that 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.
NOTICE OF APPLICATION
NOTICE OF NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
Atlanta Power requests that the Commission consider the matter under Modified
Procedure and enter its Order authorizing the deferral of the Company s extraordinary costs.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed and
considered Atlanta Power s Application in Case No. ATL-07-01 and has preliminarily found
that the public interest regarding the Company s request for an accounting Order may not require
a hearing to consider the issues presented and that the Application may be processed under
Modified Procedure, i.e., by written submission rather than by hearing. Reference Commission
Rules of Procedure, IDAPA 31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments
or protests with respect to Atlanta Power s Application in Case No. ATL-07-01 and the
Commission s use of Modified Procedure is Friday, August 24, 2007. Persons desiring a
hearing must specifically request a hearing in their written protests or comments.
YOU ARE FURTHER NOTIFIED that the Commission will not hold a hearing in
this proceeding unless it receives written protests or comments opposing the use of Modified
Procedure and stating why Modified Procedure should not be used. Reference IDAP A
31.01.01.203.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the deadline , the Commission may consider the matter on its merits and may
enter its Order without a formal hearing. If comments or protests are filed within the deadline
the Commission will consider them and in its discretion may set the matter for hearing or may
decide the matter and issue its Order based on the written positions before it. Reference IDAP
31.01.01.204.
YOU ARE FURTHER NOTIFIED that the Application in Case No. A TL-07-
may be viewed at the Commission s website www.puc.idaho.gov by clicking on "File Room
and "Electric Cases " or by contacting Atlanta Power Company at its business address, 11140
Chicken Dinner Road, Caldwell, Idaho, 83607; [phone].
YOU ARE FURTHER NOTIFIED that written comments concernIng Atlanta
Power s Application in Case No. A TL-07-01 should be mailed to the Commission and the
Company at the addresses reflected below.
NOTICE OF APPLICATION
NOTICE OF NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Israel Ray, President
Atlanta Power Company
11140 Chicken Dinner Road
Caldwell, ID 83607
Street Address for Express Mail:Robert Smith
Utility Consultant
2209 N. Bryson Rd.
Boise, ID 83713
Mail: utilitygroup~yahoo.com
472 W. Washington Street
Boise, ID 83702-5983
All comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.idaho.gov. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document.
DATED at Boise, Idaho this f4-day of August 2007
if/C).
ttu,JljJe D. JewellCo ission Secretary
N:ATL-07-
NOTICE OF APPLICATION
NOTICE OF NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE