20010514Order No 28731.pdf

Office of the Secretary
Service Date
May 14 2001
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE IDAHO POWER
COMPANY APPLICATION FOR A CASE NO. IPC-Ol- 7REFUNDABLE EMERGENCY ENERGY
CHARGE FOR THE RECOVERY OF
EXTRAORDINARY POWER SUPPLY
EXPENSES.
IN THE MATTER OF THE IDAHO POWER
COMPANY APPLICATION FOR AUTHORITY CASE NO. IPC-Ol-TO IMPLEMENT A POWER COST
ADJUSTMENT (PCA) RATE FOR ELECTRIC
SERVICE FROM MAY 1, 2001 THROUGH MAY NOTICE OF SECOND2002.PREHEARING CONFERENCE
ORDER NO. 28731
In February and March 2001 , Idaho Power Company filed two Applications seeking
to increase its rates under the annual Power Cost Adjustment (PCA) mechanism first approved
by the Commission in 1993. In the two applications, the Company requested recovery of a total
of $227.4 million by imposing a unifonn 1.8889~ per kilowatt-hour charge for all its customers
over a one-year period.
In Order No. 28722 issued May 1 , 2001 , the Commission partially granted the
Applications and allowed Idaho Power to immediately recover approximately $168.3 million
through the PCA mechanism. The Commission deferred recovery of approximately $59 million
pending further investigation of several issues. In its Order the Commission detennined that it is
appropriate to initiate an investigation regarding several of the trading practices used to purchase
power for the regulated company; whether the purchasing entity failed to execute a timely
purchase of power when requested to do so; whether the Company appropriately hedged against
market volatility; whether the pricing mechanism used to purchase power should be amended on
a prospective basis; and whether the Company s resource plans are adequate to prospectively
address current drought and market conditions. The Commission scheduled a prehearing
conference for May 10, 2001. To facilitate this investigation and create an evidentiary record
the Commission adopts this initial procedural schedule.
NOTICE OF SECOND
PREHEARING CONFERENCE
ORDER NO. 28731
THE PREHEARING CONFERENCE
At the prehearing conference, the parties discussed how to proceed on the contested
issues identified above. The following parties entered appearances: Idaho Power Company.
Commission Staff, Industrial Customers of Idaho Power, Irrigation Pumpers Association, Astaris
LLC, U.S. Department of Energy, and Land and Water Fund of the Rockies for Mary McGown
Idaho Rivers United, and Idaho Rural Council.
The participants agreed that this case should be henceforth split into two separate
dockets. The first docket will focus on the prudency of Idaho Power s transactions during the
months of April 2000 through February 2001 , including its past pricing mechanisms
transmission and wheeling charges, the November trading event and hedging activities. Because
this first docket is confIDed to the Company s transactions during the last PCA period, it will
continue under Case Nos. IPC-01-7 and IPC-01-11. The second docket will address interim
and prospective issues regarding Idaho Power s future trading practices (to include hedging,
transmission and wheeling charges, use of the Mid-C and Palo Verde pricing indexes, and use of
weighted-average pricing), the tenns of the IES Agreement and Order No. 28596, and the
flexibility of the Company s short-tenn resource planning. Because this second docket examines
future issues rather than the 2000-2001 PCA transactions, it will proceed under separate Case
No. IPC-01-16.
In Case Nos. IPC-01-7 and IPC-01-, Idaho Power will submit prefiled
testimony and exhibits. Other parties will then respond followed by Idaho Power s reply. The
Commission anticipates issuing an Order prior to a second prehearing conference that will
address disputed issues from the 2000-2001 PCA that may be resolved without an evidentiary
hearing. For any remaining issues, a supplemental hearing schedule will be established at the
second prehearing conference.
To facilitate the expedited proceedings desired by the Company and the Commission
the parties have indicated they will conduct a conference call after reviewing the Company
initial filing to detennine if the deadlines set at the May 10 Prehearing Conference can be
expedited. This conference call shall take place May 31 , 2001 at 10 a.m. The Staff shall advise
the parties of the telephone number for the conference call. Idaho Power is also encouraged to
provide the other parties with the infonnation they request in a timely manner and use a
protective agreement, if necessary.
NOTICE OF SECOND
PREHEARIN G CONFERENCE
ORDER NO. 28731
PROCEDURAL SCHEDULE AND
NOTICE OF SECOND PREHEARING CONFERENCE
Based upon the agreement of the parties, the Commission adopts the tentative
proceeding schedule outlined below.
IPC-01-7 and IPC-Ol-11 (2000-2001 PCA Transactions)
Date Action
May 24, 2001 Deadline for Idaho Power to submit prefiled testimony and
exhibits regarding the prudency of its 2000-2001 PCA pricing
mechanisms, transmission and wheeling charges, weighted-
average pricing for real-time purchases, the November trading
event and hedging activities.
May 31 , 2001 After reviewing the Company s filing, the parties shall conduct
a conference call to detennine if the remaining schedule can be
expedited to accommodate a second prehearing conference on
June 27, 2001 at 1 :30 p.m. If expediting the schedule is not
feasible, the following schedule will apply.
June 14 2001 Deadline for Staff and Intervenors to submit prefiled direct
testimony and exhibits.
June 21 2001 Deadline for Idaho Power to submit prefiled reply testimony to
the parties' filings.
July 5 , 2001 Second prehearing conference to take place in the Commission
Hearing Room at 1 :30 p.
Date
IPC-01-16 (Prospective Issues)
Action
May 24 2001 Deadline for Idaho Power to submit prefiled testimony
regarding the reasonableness of its trading practices (to include
hedging, transmission and wheeling charges, Mid-C and Palo
Verde pricing indexes, and use of weighted-average pricing);
the pricing, hedging and transmission tenns of the IES
Agreement and Order No. 28596; and the flexibility of the
Company s short-tenn resource planning. This filing shall
also include the short-tenn resource planning report for the
summer and winter of 2001 that was mandated by Order No.
28722 at page 17.
NOTICE OF SECOND
PREHEARIN G CONFERENCE
ORDER NO. 28731
May 31 , 2001 After reviewing the Company s filing in IPC-01-7 and IPC-
O 1-, the parties shall conduct a conference call at 10 a.
that will determine if a second prehearing conference for both
dockets will take place on June 27, 2001 at 1 :30 p.m. If
expediting the schedule is not feasible, the following schedule
will apply.
July 5, 2001 Second prehearing conference to take place in the Commission
Hearing Room at 1 :30 p.
To facilitate the filing of exhibits, the Commission assigns the parties the following
exhibit numbers: Idaho Power Company (1-100); Commission Staff (101-200); Astaris LLC
(201-300); Irrigation Pumpers Association, Inc. (301-400); U.S. Department of Energy (401-
500); Land and Water Fund of the Rockies for Mary McGown, Idaho Rivers United and Idaho
Rural Council (501-600); and Industrial Customers ofIdaho Power (601-700).
The Commission finds that the schedules set out above are appropriate. The parties
shall file their comments in the fonn of prefiled testimony and exhibits to avoid redundant filings
in the event that an evidentiary hearing is later required. The Commission directs that all
pleadings and prefiled testimony and exhibits be served via overnight mail no later than the close
of business on the deadlines outlined above. Any discovery motions, answers to discovery
motions and the prefiled testimony will also be served on the parties by overnight delivery.
YOU ARE FURTHER NOTIFIED that the prepared testimony and exhibits must be
served upon the Commission and all other parties as set out in the schedule above. The prepared
testimony and exhibits must confonn to the requirements of Rules 266 and 267 of the
Commission s Rules of Procedure, IDAPA 31.01.01.266-.267.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction under Titles 61 and 62 of the Idaho Code and that the
Commission may enter any final Order consistent with its authority. The Commission has
jurisdiction over these matters pursuant to Idaho Code ~~ 61-307, 61-622, 61-623 , and 61-624.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAP A 31.01.01.000 et seq.
NOTICE OF SECOND
PREHEARING CONFERENCE
ORDER NO. 28731
ORDER
IT IS THEREFORE ORDERED that the prudency of Idaho Power s transactions
during the months of April 2000 through February 2001 , including its past pricing mechanisms
weighted-average pricing for real-time purchases, transmission and wheeling charges; the
November trading event; and hedging activities will continue under Case Nos. IPC-01-7 and
IPC-01-11.
IT IS FURTHER ORDERED that interim and prospective issues regarding Idaho
Power s trading practices (to include hedging, transmission and wheeling charges, Mid-C or Palo
Verde pricing indexes, and use of weight average pricing for real-time purchases); the pricing,
hedging and transmission tenns of the IES Agreement and Order No. 28596; and the flexibility
of the Company s short-tenn resource planning will proceed separately under Case No. IPC-
01-16.
IT IS FURTHER ORDERED that the parties comply with the schedules outlined
above.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this 1L/-0
day of May 2001.
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MARSHA H. SMITH, COMMISSIONER
ATTEST:
Out of the Office on this Date
DENNIS S. HANSEN, COMMISSIONER
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D. Jew n
Co~ission Secretary
O:IPCEOI7 IPCEOIII 1n3
NOTICE OF SECOND
PREHEARING CONFERENCE
ORDER NO. 28731