20060626Decision memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:WELDON STUTZMAN
DATE:JUNE 22, 2006
SUBJECT:CASE NOS. A VU-06-3, P AC-06-3 AND IPC-06-
APPLICA TIONS BY A VISTA CORPORATION, P ACIFICORP AND
IDAHO POWER COMP ANY FOR ORDERS AUTHORIZING THE
DEFERRAL OF COSTS RELATED TO GRID WEST, A REGIONAL
TRANSMISSION ORGANIZATION
The Commission received separate Applications from A vista Corporation
PacifiCorp and Idaho Power Company, requesting Orders from the Commission authorizing the
deferral of costs the three companies incurred relating to the development of a regional
transmission organization (RTO). Each Company alleges it participated in efforts to develop an
RTO, now called Grid West, pursuant to orders issued by the Federal Energy Regulatory
Commission (FERC). The Applications state that pacific northwest electric utilities have been
involved in the RTO development process since 2000 and that the costs incurred by the utilities
were to be repaid through surcharges on customers after the R TO became operational. It now
appears the development of an RTO is unlikely, and Avista, PacifiCorp and Idaho Power
Company each request authorization to defer the costs they incurred in the RTO development
process. The cost information provided by each Company is as follows:
1. Avista Corporation, Case No. A VU-06-. Avista s Petition states it provided
startup costs to the RTO to retain experts and facilitators, and that the current balance of Avista
loan to Grid West is $1 217 499., which includes interest of $188 187.34. Avista estimates
that the total amount of the deferred amount would be $421 620 for the Idaho jurisdiction portion
of Avista s loan amount to Grid West.
DECISION MEMORANDUM
2. PacifiCorp, Case No. P AC-06-. PacifiCorp s Application states it provided
initial funding for the development of the RTO since June 2000 and since that date PacifiCorp
has loaned a total of $2.7 million to Grid West. PacifiCorp estimates that the Idaho jurisdiction
portion of the total deferred amount is approximately $174 000.
3. Idaho Power Company, Case No. IPC-06-. Idaho Power s Application states
its expenditures relating to the development of Grid West fall into two categories. The first
category is costs incurred in the form of loans to Grid West under a series of funding agreements.
The second category of Idaho Power s development costs are internal incremental costs, which
consist of the disbursement of cash and a payment of costs in addition to amounts loaned to Grid
West. Idaho Power states it has loaned a total of $1 274 158 to Grid West and expended a total
of $2 594 318 in incremental internal costs. Idaho Power states the Idaho jurisdiction of the total
amount loaned and expended is 350 874.
Each Company requests an accounting order authorizing deferral of the amounts
identified in its Application. Each Company also asks that its Application be processed by
Modified Procedure.
Staff recommends that the Commission issue separate notices in each of the three
cases and that each case be processed by Modified Procedure.
CO MMISSI ON D ECISI
Should the Commission issue a Notice of Application and Notice of Modified
Procedure in Case No. A VU-06-, Case No. P AC-06-3 and Case No. IPC-06-6 and
process each application by Modified Procedure?
f~ ~-
Weldon B. Stutzman
M:A VU-O6-03 _P AC-O6-03 _IPC-O6-- ws
DECISION MEMORANDUM