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Home My WebLink About20020603Application.pdfLARRY D.RIPLEY ISB #965 Idaho Power Company 2002 JUN -3 01 8 28P.O.Box 70 Boise,Idaho 83707 Telephone:(208)388-2674 UTILI b CûNN!SSION FAX TelephoneNo.(208)388-6936 Attorney for Idaho Power Company NE W CASE Street Address for Express Mail: 1221 West Idaho Street Boise,Idaho 83702 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION ) OF IDAHO POWER COMPANY FOR AN )CASE NO.IPC-E-02-Ô ACCOUNTING ORDER AUTHORIZING )IDAHO POWER TO DEFER FACILITY )APPLICATION CHARGES RELATING TO THE MOUNTAIN )HOME NATURAL GAS FACILITY.) COMES NOW Idaho Power Company ("Idaho Power"or "the Company") and herewith applies to the Idaho Public Utilities Commission ("Commission")for an accounting order authorizing Idaho Power to defer facility charges relating to the Mountain Home natural gas facility. I. INTRODUCTION On May 13,2002,the Commission issued Order No.29026 in Case Nos. IPC-E-02-2/3.In that Order the Commission disallowed for recovery,as a PCA expense,what has been characterized as the Williams Facility Charge Adjustment.At Page 12 of that Order the Commission stated: APPLICATION,Page 1 4.Williams Facility Charqe Adiustment.Williams Gas Pipeline West (Williams)charged Idaho power the first annual billing for paymentof $419,054 to install a meter station,control equipment,and a 4,200 foot pipeline from the mainline to Idaho Power's Mountain Home natural gas facility.A fluctuating annual facility charge will pay for these items over the next 30 years.Staff argued that this charge is more like a capital cost than an annual gas delivery expense.Thus,it would be more appropriate to seek recovery of this amount as a capital asset cost in ratebase than to be recovered through the PCA.Tr.at 427-28.The Company indicated that because it is booked to a PCA-appropriate account,is fuel-related, and varies year to year,the facilities charge is appropriate for inclusion in the PCA.Tr.at 561. Commission Findings.The Commission finds that althoughthe facilities charge is not a capital expense per se,it has many of the characteristics of a capital expense normally recovered as an asset in rate base.The charge pays for plantinvestment over time and includes expenses related to depreciation,interest,a return and maintenance on the plant investment.Althoughthis charge enables Idaho Power to buy fuel from Williams,the repayment structure over 30 years is typical of a capital investment.Thus,the facilities charge should be considered for recovery in Idaho Power's next rate case --not in this PCA case.The $419,054 shall not be recovered through the PCA. II. PROPOSED PROCEDURE Since the Commission has determined that the facilities charge should be treated for revenue requirement purposes in a manner similar to that afforded capital investments,the Company requests that the facilities charge expendituresbe treated in the same manner as other expenditureswhich have been deferred by the Commission until the Company's next revenue requirementcase. APPLICATION,Page 2 III. ACCOUNTING AND RATEMAKING TREATMENT Idaho Power proposes the followingaccounting and ratemakingtreatment for annual billings for facility charges associated with the Company'sDanskin generation facility: The Companywould defer to Account 182.3,RegulatoryAssets,with interest,the Williams facility charges incurred during the years 2001 and 2002 associated with the cost to install equipmentand pipeline to the Mountain Home natural gas facility.This amount would be amortized as a non-PCA related cost over a ten (10) year period commencing January 2003.The facility charges incurred by the Company for the year 2003 would be amortized over a ten (10)year period commencingJanuary 2004.At the next general rate case the Company's facilities charge incurred in the future would be treated in the same manner as depreciation,i.e.,the average annual amount of the facilities charge would be a non-PCA expense during the operating life of the Danskin generation facility. IV. SERVICE LIST Service of pleadings,exhibits,orders and other documents relating to this proceeding should be served on the following: Larry D.Ripley John R.Gale Senior Attorney Vice President -RegulatoryAffairs Idaho Power Company Idaho Power Company P.O.Box 70 P.O.Box 70 Boise,Idaho 83707 Boise,Idaho 83707 APPLICATION,Page 3 V. MODIFIED PROCEDURE The Company requests that this Application be processed under RP 201, et al,allowingfor consideration of issues to be processed under Modified Procedure, i.e.,by written submissions rather than by an evidentiary hearing,and process this application on an expeditedbasis. WHEREFORE,it is respectfully requested that the Commission enter its accounting order authorizing Idaho Power to defer as set forth above the facility charges relating to the Mountain Home natural gas facility. DATED at Boise,Idaho,this 31st day of May,2002. LARRY RIPLEY / Attorney for Idaho Power Company APPLICATION,Page 4 CERTIFICATE OF MAILING For informational purposes a copy of the above and foregoing APPLICATION was mailed to the followingindividuals on the 31st day of May,2002: Lisa D.Nordstrom Hand Delivered Deputy Attorney General x U.S.Mail Idaho Public Utilities Commission OvernightMail 472 W.WashingtonStreet _FAX P.O.Box 83720 Boise,Idaho 83720-0074 John Hammond _Hand Delivered Deputy Attorney General x U.S.Mail Idaho Public Utilities Commission OvernightMail 472 W.WashingtonStreet FAX P.O.Box 83720 Boise,Idaho 83720-0074 R.Scott Pasley _Hand Delivered Assistant General Counsel x U.S.Mail J.R.Simplot Company Overnight Mail P.O.Box 27 FAX Boise,Idaho 83707 David Hawk Hand Delivered Director,Energy Natural Resources x U.S.Mail J.R.Simplot Company Overnight Mail P.O.Box 27 FAX Boise,Idaho 83707 Peter J.Richardson _Hand Delivered Richardson &O'Leary,PLLC x U.S.Mail 99 East State Street,Suite 200 _Overnight Mail P.O.Box 1849 _FAX Eagle,Idaho 83616 William M.Eddie _Hand Delivered Land and Water Fund of the Rockies _x_U.S.Mail P.O.Box 1612 _Overnight Mail Boise,Idaho 83701 FAX Randall C.Budge Hand Delivered Racine,Olson,Nye,Budge &Bailey U.S.Mail Center Plaza-Corner First &Center Overnight Mail P.O.Box 1391 FAX Pocatello,Idaho 83204-1391 ARRY .RI EY CERTIFICATE OF MAILING