2000418_cc.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
RON LAW
DON HOWELL
STEPHANIE MILLER
DAVE SCHUNKE
TONYA CLARK
BILL EASTLAKE
KEITH HESSING
TERRI CARLOCK
NANCY HARMON
WORKING FILE

FROM: CHERI C. COPSEY

DATE: APRIL 18, 2000

RE: IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AUTHORITY TO IMPLEMENT THE POWER COST ADJUSTMENT RATE FOR ELECTRIC SERVICE TO CUSTOMERS IN THE STATE OF IDAHO FOR THE PERIOD MAY 16, 2000, THROUGH MAY 15, 2000; CASE NO. IPC-E-00-6

On April 14, 2000, the Idaho Power Company filed an Application for approval of Tariff Schedule 55 implementing a power cost adjustment (PCA) of 0.1371 cents per kWh and related tariffs incorporating the PCA adjustment for the period May 16, 2000 through May 15, 2001.
Idaho Power states that, in compliance with Commission Order No. 24806, approving a PCA mechanism for Idaho Power in Case No. IPCE-92-25, Idaho Power's PCA for the period May 16, 2000 through May 15, 2001 consists of: 1) ninety-percent (90%) of the difference between the projected power cost and the Commission’s approved base power cost and 2) the true-up of the 1999/2000 power costs. Idaho Power maintains that the projected power cost was computed in compliance with Commission Order No. 24806 by inserting the National Weather Service Northwest River Forecast Center’s projection of 3.93 million acre feet of April through July Brownlee streamflow run off into the Commission adopted equation for projecting PCA expenses. According to Idaho Power, the resulting projected power cost of $101,488,260 equates to a cost of 0.7274 cents per kWh. This 0.7274 cents per kWh is 0.2036 cents per kWh higher than the Commission’s approved base of 0.5238 cents per kWh. Idaho Power contends that, by virtue of Order No. 25880, Idaho Power is authorized to adjust rates by ninety-percent (90%) of the 0.2036 cents per kWh difference or 0.1832 cents per kWh.
Idaho Power states that the true-up component of the PCA is -0.0461 cents per kWh. The difference between the projected power cost and the base power cost (0.1832) and the true-up (-0.0461) combine to produce a PCA for the period of May 16, 2000 through May 15, 2001 of 0.1371 cents per kWh. Idaho Power concludes that he change in the PCA from the existing -0.2143 cents per kWh currently in effect results in an increase of 0.3514 cents per kWh to existing rates.
Idaho Power further contends that this Application is not subject to Rule 122 of the Commission’s Rules of Procedure (IDAPA 31.01.01.122) because this filing does not constitute a general rate increase and is only a change in rates related to PCA expenses. Finally, pursuant to Rule 123 (IDAPA 31.01.01.123) and Idaho Code §  61-307, Idaho Power requests that the tariff filing implementing the PCA rate of 0.1371 cents per kWh become effective May 16, 2000.
Consumer Division Staff
Consumer Division Staff notes that Idaho Power did not include the customer notice or press release with the Application. Consumer Division Staff obtained a copy of the notices actually sent and found that the notice did not clearly indicate that the Application had been filed with the Commission or that it was available for review at the Commission offices. Consumer Division Staff called this to Idaho Power’s attention and Idaho Power indicated it was going to redo its customer notice to include items identified by Consumer Division Staff as necessary to the notice. Idaho Power’s representative also indicated Idaho Power would re-send its notices to the customers who had already received the old notices with the additional information identified by Consumer Division Staff.
Utilities Division Staff
In March 1993, the Commission authorized Idaho Power to file power cost adjustment surcharges or rebates to take effect on a day of its choosing in May or June each year. Order No. 24806. While Utilities Division Staff proposes that a review of Idaho Power's Application can be processed by Modified Procedure and generally agrees comments can be due on May 4, 2000, it is concerned that this may not be sufficient time for it to adequately audit Idaho Power's calculations. Therefore, it reserves the right to request additional time if Idaho Power's calculations cannot be adequately verified.
Commission Decision
Should approval of Idaho Power Company’s Application for approval of Tariff Schedule 55, implementing a power cost adjustment of 0.1371 cents per kWh, and related tariffs incorporating the PCA adjustment for the period May 16, 2000 through May 15, 2000, be processed by Modified Procedure with comments due May 4, 2000?

Cheri C. Copsey
Staff: Keith Hessing
Nancy Harman

M:ipce00006_cc

DECISION MEMORANDUM 3