28753.amd.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE IDAHO POWER
COMPANY APPLICATION FOR A
REFUNDABLE EMERGENCY ENERGY
CHARGE FOR THE RECOVERY OF
EXTRAORDINARY POWER SUPPLY
EXPENSES.
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CASE NO. IPC-E-01-7

IN THE MATTER OF THE IDAHO POWER
COMPANY APPLICATION FOR AUTHORITY
TO IMPLEMENT A POWER COST
ADJUSTMENT (PCA) RATE FOR ELECTRIC
SERVICE FROM MAY 1, 2001 THROUGH MAY
15, 2002.

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CASE NO. IPC-E-01-11

AMENDMENT TO THE POWER COST ADJUSTMENT

ORDER NO. 28753

After the Commission issued Order No. 28722 authorizing a rate increase, the Commission became aware of an inequity created by implementing residential tiered-block rates. Master Metering Rule 101.02 requires master-metered mobile home and R.V. park owners to bill their sub-metered tenants at the same rate Idaho Power would charge the customer if the tenant were billed directly by Idaho Power. By complying with this Rule, a substantial shortfall will exist between the amount the park owners (i.e., the master-metered customers) will be able to collect from their tenants and the amount the owners will pay to Idaho Power. The majority of the owners’ bills from Idaho Power will be for usage at the highest rate, whereas the majority of the tenants’ usage will be under the two lower tiers. Except for the park owners’ private accommodations or common areas, the park owner has little ability to affect aggregate usage under the master meter because the owner cannot control a sub-metered tenant’s individual usage.
To address this inequity, the Commission ordered Idaho Power Company to file tariffs for a temporary subclass of Schedule 1 master-metered mobile home or R.V. park owners to be billed at a flat energy rate of 6.2718 cents per kWh plus the $2.51 customer charge. Order No. 28738. Idaho Power was further directed to transfer Schedule 1 master-metered customers to the temporary subclass and adjust their billing back to May 1, 2001 to reflect this flat rate. The Commission noted that creation of this subclass was an interim solution that applied only to the current Power Cost Adjustment (PCA), which expires in May 2002, or until such time as the Commission has another opportunity to adjust rates.
In compliance with the Commission's Order, Idaho Power Company filed a tariff entitled, “Schedule 3 – Master Metered Mobile Home Park – Residential Service” on June 5, 2001. This tariff was subsequently approved on June 8, 2001 with an effective date of May 1, 2001.
In addition to filing the tariff, Idaho Power Company requested that it be allowed to recover the projected Schedule 3 revenue shortfall in the 2002-2003 PCA true up. The Company estimated the shortfall from the 2001-2002 PCA period will be in the range of $250,000 to $500,000. Although this issue was not addressed in the Commission’s Order, the Company requests that the shortfall be passed through the PCA. Should this amount prove to be de minimus, Idaho Power stated in its request that it will remove the deferred balance prior to filing the PCA next April 15.
STAFF COMMENTS
The Commission Staff agrees that a revenue shortfall will likely occur once the flat energy rate is applied to master-metered residential customers who would otherwise have large amounts of usage in the expensive third block of Residential Schedule 1. The revenue shortfall can be quantified by calculating the difference between revenue generated from master-metered energy consumption in the Residential Schedule 1 class under the tiered rate and revenue generated under the new single block rate authorized by Schedule 3. Staff further notes that if the revenue shortfall resulting from Schedule 3 were passed through the PCA mechanism, 90 percent would pass through to customers and the remaining 10 percent would be borne by the Company’s shareholders. Staff believes the Company's proposed PCA treatment of this shortfall is reasonable and recommends that it be implemented.
DISCUSSION
Given the issuance of Order No. 28738 and the implementation of the new Schedule 3, we find it is reasonable to recover a revenue shortfall, if any, through the PCA. The exact amount of revenue shortfall, if any, will be reviewed as part of the 2002-2003 PCA mechanism.
O R D E R
IT IS HEREBY ORDERED that a revenue shortfall, if any, resulting from the implementation of the Idaho Power “Schedule 3 – Master-Metered Mobile Home Park – Residential Service” tariff may be included in the Company’s 2002-2003 Power Cost Adjustment true up.
THIS IS A FINAL ORDER as to the amendment of the PCA mechanism. Any person interested in this Order may petition for reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of June 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

O:IPCE017_IPCE0111_mstrmtr_ln

AMENDMENT TO THE
POWER COST ADMUSTMENT
ORDER NO. 28753 3

Office of the Secretary
Service Date
June 19, 2001