20031203Notice of Application.pdf

Office of the Secretary
Service Date
December 3 , 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR AN
ACCOUNTING ORDER REGARDING
TREATMENT OF CERTAIN ASSET
RETIREMENT OBLIGATIONS.
CASE NO. IPC-O3-
NOTICE OF APPLICATION
NOTICE OF
MODIFIED PROCEDURE
YOU ARE HEREBY NOTIFIED that on September 26, 2003, Idaho Power
Company (Idaho Power, Company) filed an Application seeking an accounting order authorizing
the Company to record regulatory assets or liabilities associated with implementation of
Statement of Financial Accounting Standards (SFAS) 143. According to the Application, SFAS
143 requires utilities to recognize and account for certain asset retirement obligations in a
manner different from the way Idaho Power has traditionally recognized and accounted for such
costs. Specifically, if a legally enforceable asset retirement obligation (ARO) is deemed to exist
an entity must measure and record the liability for the ARO on its books. The liability must be
recorded at fair market value in the period in which the liability is incurred. SF AS 143 also
provides that if market prices are not available, estimates of fair value can be calculated by
discounting the estimated cash flows associated with the ARO to their present value at the date
the liability is recorded. Idaho Power s Application asks for an accounting order authorizing the
Company to (1) record, as a regulatory asset or a regulatory liability, the cumulative financial
statement impact resulting from the Company s implementation of SF AS 143, and (2) record on
an ongoing basis, as a regulatory asset or a regulatory liability, an amount equal to the difference
between the annual SFAS 143 accretion and depreciation expenses and the annual depreciation
expenses based on Commission approved depreciation rates and coal mine reclamation accruals.
Idaho Power also requests confirmation by the Commission that (1) asset removal costs, in the
form of negative net salvage, are currently accrued through annual depreciation expense which is
recoverable in rates; (2) these costs are based on estimates of the final removal costs; and (3)
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
such costs are trued-up for ratemaking purposes at the time the related assets are retired and the
actual removal costs are determined.
YOU ARE FURTHER NOTIFIED that Idaho Power is required to implement SFAS
143 in order to comply with generally accepted accounting principles. Due to the lack of an
active market for settling AROs, Idaho Power intends to use the expected present value method
to determine its ARO liabilities and offsetting assets. The accounting changes proposed by
Idaho Power are supported by a series of exhibits identifying the proposed journal entries the
Company believes are needed to comply with SF AS 143.
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission s Rules
of Procedure, IDAPA 31.01.01.201 through .204.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission by
December 31 2003. The comment must contain a statement of reasons supporting the comment.
Persons desiring a hearing must specifically request a hearing in their written comments.
Written comments concerning this Application shall be mailed to the Commission and the
Applicant at the addresses reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
Barton L. Kline
Monica Moen
Attorneys for Idaho Power
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: bkline~idahopower.com
mmoen~idahopower.com472 W. Washington Street
Boise, ID 83702-5983
John R. Gale
Vice President, Regulatory Affairs
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: rgale~idahopower.com
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
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.. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document. These comments must also be sent to the Applicant at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the Application together with supporting
workpapers, testimonies and exhibits, have been filed with the Commission and are available for
public inspection during regular business hours at the Commission offices or on the
Commission s Website at www.puc.state.id.under the "File Room" icon.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction under Title 61 of the Idaho Code and that the
Commission may enter any final order consistent with its authority under Title 61.
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.
DATED at Boise, Idaho this 3
,.J. day of December 2003.
~jO.~Je D. Jewell
Commission Secretary
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NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE