29085.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AN ACCOUNTING ORDER AUTHORIZING THE INCLUSION OF POWER SUPPLY EXPENSES ASSOCIATED WITH THE PURCHASE OF CAPACITY AND ENERGY FROM GARNET ENERGY, LLC IN THE COMPANY’S POWER COST ADJUSTMENT (PCA). )
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CASE NO. IPC-E-01-42

ORDER NO. 29085
On December 14, 2001, Idaho Power Company (Idaho Power; Company) filed an Application with the Idaho Public Utilities Commission (Commission) in Case No. IPC-E-01-42. The Company requested a Commission Order approving as prudent its power purchase arrangements with Garnet Energy LLC, an unregulated affiliate of Idaho Power. The Company also sought an accounting order authorizing Idaho Power to include the prudently incurred expenses associated with the purchase of capacity and energy from Garnet Energy LLC in the Company’s Power Cost Adjustment (PCA) mechanism.
Pursuant to Notice issued May 13, 2002, public hearing in Case No. IPC-E-01-42 was scheduled for July 23, 24, and 26, 2002.
On July 22, 2002, the day before the scheduled hearing, Idaho Power Company filed a Motion with the Commission requesting that the hearing be vacated and continued for an indefinite period but not less than 120 days. As the principal reason for the requested continuance, Idaho Power stated that the Company was just advised the prior week by Garnet Energy LLC and Garnet’s corporate parent IDACORP Inc. that in today’s financial markets, based on the current Power Purchase Agreement (PPA) between Idaho Power and Garnet, there was a substantial likelihood that Garnet and IDACORP would be unable to obtain the financing necessary to construct the Garnet generating facility. Finding the Company’s Motion to constitute good cause, the Commission on July 22, 2002 issued Order No. 29081 vacating the hearing scheduled to begin July 23, 2002.
CFRLU/IRC MOTION TO DISMISS
At the Commission’s public decision meeting on July 22, 2002, the Citizens for Responsible Land Use/Idaho Rural Council (CFRLU/IRC), joint parties in this action, in response to Idaho Power’s Motion for Continuance, made an oral Motion to Dismiss, without prejudice, the Company’s Application in Case No. IPC-E-01-42. The Commission scheduled CFRLU/IRC’s Motion for oral argument for Wednesday, July 24, 2002. The following parties appeared at oral argument by and through their respective counsel:
Idaho Power Company Bart Kline
CFRLU/IRC Brad Purdy
Commission Staff Scott Woodbury
Industrial Customers of Idaho Power Peter Richardson
Southwest Idaho/Southeast Oregon
Building Trades Council Alan Herzfeld
Garnet Energy LLC (No Appearance)
Arguments in favor of the Motion to Dismiss were made by the CFRLU/IRC, Industrial Customers of Idaho Power and the Southwest Idaho/Southeast Oregon Building Trades Council. Arguments opposing the Motion to Dismiss were made by Idaho Power Company and Commission Staff.
Commission Findings
The Commission has reviewed and considered the filings of record in Case No. IPC-E-01-42 including the Motion to Dismiss filed by CFRLU/IRC and Idaho Power’s July 22 Motion for Continuance. As we indicated in our Bench decision on July 22, 2002, and reconfirm with this Order, we find that a persuasive case has been made for dismissal of Idaho Power’s Application in Case No. IPC-E-01-42. We note that the record in this case extends back to December 2001 and appears to be cobbled together in a somewhat piecemeal fashion. We close the record in this case for administrative efficiency and convenience. We find that it will be most efficient to receive a new filing by the Company with testimony that is directly relevant at that future time should Garnet be successful in providing Idaho Power with assurances of ability to perform. Such a procedure is preferable to any attempt to rehabilitate the present record and prefiled testimony. Our decision to close this docket should not be perceived by the public or parties as reflecting how the Commission reviews the Garnet project. This matter did not go to hearing and an evidentiary record was not established. This is not a ruling on the merits of the Company’s Application or the Idaho Power/Garnet Power Purchase Agreement. It is merely a procedural decision. Our dismissal is without prejudice.
Closing this case, however, does not alleviate Commission concerns regarding the Company’s ability to satisfy future load requirements. Accordingly, we find it reasonable to require Idaho Power to present to the Commission on or prior to October 23, 2002 a report or plan for satisfying future requirements. Noting that the Company’s 2002 IRP assumes the Garnet project as a resource, should the Garnet project prove to be no longer viable, we require the Company to present the Commission with alternative options available to it for satisfying identified energy and peak load deficits or a suggested procedure to identify such options.
PETITION FOR INTERVENOR FUNDING
At the conclusion of the oral argument hearing on July 24, 2002 and following its Bench ruling dismissing the Company’s Application, the Commission established an August 1, 2002 deadline for Petitions for Intervenor Funding. Reference IDAPA 31.01.01.161-165.
A timely Petition for Intervenor Funding was filed by the Idaho Rural Council/Citizens for Responsible Land use (IRC/CFRLU) on August 1, 2002. The funding request detailed expenses of $27,501.69, more particularly itemized as $526.69 for costs, $16,500 for legal fees, and $10,475 for expert fees.
Commission Findings
The Commission finds that the funding request of IRC/CFRLU complies with the statutory requirements of Idaho Code § 61-617A and the Commission’s procedural requirements, IDAPA 31.01.01.161-165. A review of the record in this case discloses one procedural hearing, three motion hearings, the prefile of testimony by parties, and an evidentiary hearing vacated at the utility’s request the day before the hearing was scheduled to begin. The prefiled testimony of IRC/CFRLU consisted of four witnesses including two consultants. As represented in its Petition, we find a marked and material difference in the respective positions and recommendations of IRC/CFRLU and Commission Staff. Staff recommended approval of the Garnet agreement; IRC/CFRLU recommended dismissal of the Application. Of significance it is noted that this case was dismissed on the motion of IRC/CFRLU. Staff supported the Company’s motion to defer the hearing and opposed IRC/CFRLU’s Motion to Dismiss. The Commission finds that the participation of IRC/CFRLU contributed materially to our decision, and the ultimate closing of this case.
The Commission finds the costs incurred by IRC/CFRLU to be reasonable and we find that an adequate showing has been made that these costs constitute a significant financial hardship for IRC/CFRLU. Noting that the itemized expenses total more than $25,000, the statutory limit of Idaho Code § 61-617A(2), we find it reasonable to award $25,000 in intervenor funding to IRC/CFRLU. We find the participation of groups such as IRC/CFRLU and others like it to be of benefit to all customers of Idaho Power. Accordingly, we find it reasonable that the intervenor funding award be spread across all classes of ratepayers and recovered in a single year through the Company’s Power Cost Adjustment (PCA) mechanism.
O R D E R
In consideration of the foregoing and as more particularly described above, IT IS HEREBY ORDERED and the Commission does hereby grant the Motion to Dismiss (without prejudice) filed by the Citizens for Responsible Land Use/Idaho Rural Council.
IT IS FURTHER ORDERED and Idaho Power Company is directed to file the planning report detailed above with the Commission on or prior to October 23, 2002.
IT IS FURTHER ORDERED and the Commission does hereby grant intervenor funding in the amount of $25,000 to the Idaho Rural Council/Citizens for Responsible Land Use. Idaho Power is directed to pay this amount within 28 days of the date of this Order.
THIS IS A FINAL ORDER. 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 August 2002.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

bls/O:IPCE0142_sw6
ORDER NO. 29085 1

Office of the Secretary
Service Date
August 30, 2002