29060_mod.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AN
ACCOUNTING ORDER AUTHORIZING
DEFERRAL OF FACILITY CHARGES
RELATING TO THE MOUNTAIN HOME
NATURAL GAS FACILITY.

)
)
)
)
)
)
)
)
)
)
)
)
)
CASE NO. IPC-E-02-7

NOTICE OF APPLICATION

NOTICE OF MODIFIED PROCEDURE

NOTICE OF COMMENT DEADLINE

ORDER NO.  29060

On June 3, 2002, Idaho Power Company filed an Application requesting an accounting order authorizing Idaho Power to defer facility charges relating to the Mountain Home natural gas facility. On May 13, 2002, the Commission disallowed recovery of the Williams Facility Charge Adjustment as a Purchase Cost Adjustment (PCA) expense in Case Nos. IPC-E-02-2 and –3. Order No. 29026. Idaho Power provides electric service to approximately 370,000 customers in southern Idaho. In this Order the Commission processes this filing under Modified Procedure and establishes a written comment deadline.
THE APPLICATION
YOU ARE HEREBY NOTIFIED that Idaho Power applied for an accounting order on June 2, 2002 that would authorize Idaho Power to defer facility charges relating to the Mountain Home natural gas facility. The Commission had previously disallowed recovery of these amounts (also known as the Williams Facility Charge Adjustment) as a PCA expense in Case Nos. IPC-E-02-2 and –3. Order No. 29026. In relevant part, the Commission stated:
4. Williams Facility Charge Adjustment. Williams Gas Pipeline West (Williams) charged Idaho Power the first annual billing for payment of $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 although the 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 plant investment over time and includes expenses related to depreciation, interest, a return and maintenance on the plant investment. Although this 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.

Order No.29026 at 12.
YOU ARE FURTHER NOTIFIED that because the Commission determined in Order No. 29026 that the facilities charge should be treated for revenue requirement purposes in a manner similar to that afforded capital investments, Idaho Power now requests that the facilities charge expenditures be treated in the same manner as other expenditures which have been deferred by the Commission until the Company’s next revenue requirement case. Application at 2.
YOU ARE FURTHER NOTIFIED that Idaho Power proposes accounting and ratemaking treatment for annual billings of facility charges associated with the Company’s Danskin generation facility. Specifically, the Company would defer with interest the Williams facility charges incurred during the years 2001 and 2002 to install equipment and pipeline to the Mountain Home natural gas facility to Account 182.3 (Regulatory Assets). This amount would be amortized as a non-PCA related cost over a 10-year period commencing January 2003. The facility charges incurred by the Company for the year 2003 would be amortized over a 10-year period commencing January 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. Id. at 3.
YOU ARE FURTHER NOTIFIED that the Commission has jurisdiction over this matter and Idaho Power Company, an electric utility, pursuant to the authority and power granted under Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Company requests this Application be processed under Modified Procedure, i.e., by written submissions rather than by an evidentiary hearing. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204. The Company has requested this Application be processed on an expedited basis. Id. at 4.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of record in Case No. IPC-E-02-7. The Commission has preliminarily determined that the public interest may not require a hearing to consider the issues presented in this case, and that the issues raised by the Company’s filing may be processed under Modified Procedure. In so doing, the Commission notes that Modified Procedure and written comment has proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that the Commission will not hold a hearing in this proceeding unless it receives written protests or comments opposing the use of Modified Procedure and stating why Modified Procedure should not be used. Reference IDAPA 31.01.01.203.
YOU ARE FURTHER NOTIFIED that if no protests or comments are received within the deadline, the Commission may consider the matter and enter its Order without a hearing. If protests or comments are filed within the deadline, the Commission will consider them and may set the matter for hearing or may decide the matter and issue its Order on the basis of the written positions before it. Reference IDAPA 31.01.01.204.
NOTICE OF COMMENT DEADLINE
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or protests with respect to the Application and the use of Modified Procedure in Case No. IPCE02-7 is Friday, July 12, 2002. Reference IDAPA 31.01.01.202.02. Persons desiring a hearing must specifically request a hearing in their written protests or comments.
YOU ARE FURTHER NOTIFIED that written comments concerning this Application must be mailed to the Idaho Public Utilities Commission and Idaho Power Company at the following addresses:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074

Street Address for Express Mail:

472 W. Washington Street
Boise, ID 83702-5983 Larry Ripley
John R. Gale
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
Email: [e-mail]
[e-mail]

These comments should contain the case caption and case number shown on the first page of this document. Persons desiring to submit comments via e-mail may do so by accessing the Commission's home page located at www.puc.state.id.us under the “File Room” icon. Once at the “File Room” page, select “File a Comment,” fill in the case number as it appears on the front of this document, and enter your comments. These comments must also be sent to the Applicant at the e-mail addresses listed above.
YOU ARE FURTHER NOTIFIED that the Application in Case No. IPC-E-02-7 together with accompanying exhibits and workpapers can be reviewed at the Commission’s office and at the principal office of Idaho Power Company during regular business hours. Idaho Power Company is located at 1221 West Idaho Street in Boise, Idaho. In addition, the Application and testimonies (excluding exhibits) are available on the Commission’s Website at www.puc.state.id.us under the “File Room” icon.
O R D E R
In consideration of the foregoing and as more particularly described above, IT IS HEREBY ORDERED that the foregoing scheduling be adopted.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of June 2002.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

O:IPCE0207_ln

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
ORDER NO. 29060 1

Office of the Secretary
Service Date
June 21, 2002