20031021Application.pdf

BARTON L. KLINE 158 #1526MONICA B. MOEN ISB #5734Idaho Power CompanyO. Box 70Boise, Idaho 83707Telephone: [phone]FAX Telephone: [phone]Attorney for Idaho Power CompanyStreet Address for ExQress Mail:1221 West Idaho StreetBoise, Idaho 83702BEFORE THE IDAHO PUBLIC UTiliTIES COMMISSIONIN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC SERVICE
TO ELECTRIC CUSTOMERS IN THE STATE OF IDAHO,
ADDITIONALLY , IF THE COMMISSION
SUSPENDS THE EFFECTIVE DATE OF
RATES AND CHARGES, THE COMPANY
REQUESTS
AN INTERIM UNIFORM PERCENTAGE
INCREASE OF 4.160/0 IN RATES AND
CHARGES TO RECOVER INCREASED
COSTS TO THE COMPANY AS A RESULT
OF THE COMPLETION OF THE DANSKIN
POWER PLAN-, HYDRO RELICENSING,
INCREASED DEPRECIATION EXPENSE
AND THE REALLOCATION OF
JURISDICTIONAL NET POWER SUPPLY
COSTS , PENDING A DETERMINATION
OF IDAHO POWER COMPANY'S NEW
RATES AND CHARGES IN
CASE NO. IPC-E-O3-13.
APPLICATION , Page
APPLICA TION
CASE NO. IPC-O3-
CASE NO. IPC-O3-13-
COMES NOW Idaho Power CompanY1 hereinafter referred to asApplicant" and hereby makes application to the Idaho Public Utilities CommissionCommission) for an Order approving revisions to the Applicant's schedules of ratesand charges for electric service in the State of Idaho to become effective with serviceprovided on and after November 15 , 2003. In support of this Application , Idaho PowerCompany represents as follows:Applicant is an Idaho Corporation, whose principal place of business is 1221West Idaho Street , Boise , Idaho 83702.Applicant is a public utility supplying general electric service in SouthernIdaho and Eastern Oregon. Applicant is subject to the jurisdiction of this Commissionthe Oregon Public Utility Commission , and the Federal Energy Regulatory Commission
FERC"
).
I n conducting its utility business , Applicant operates an interconnected and
integrated system. Applicant , in addition to supplying general retail electric service to
the public , also supplies retail electricity to certain special contract customers in Idaho
and wholesale requirements services to FERC jurisdictional customers.
III
Attachment 1 , included herewith and made a part hereof , is a copy of
Applicant's IPUC No. 26 , Tariff No.1 01 , containing the present Electric Rate Schedules
and Electric Service Regulations under which electric service is currently rendered and
charges made to Applicant's customers in the State of Idaho.
APPLICATION , Page 2
Attachment 2 , included herewith and made a part hereof , is a copy ofApplicant's proposed new Electric Rate Schedules and Electric Service Regulations,IPUG No. 27 , Tariff No.1 01 , covering the rendering of electric service and charges tobe made to Applicant's customers in the State of Idaho.Attachment 3 , included herewith and made a part hereof , shows acomparison of revenues from the various rate schedules in Applicant's IPUC No. 26,Tariff No.1 01 , and special contract rates (Attachment 1), with the correspondingproposed new rate schedules and proposed special contract rates (Attachment 2)~Applicant proposes to increase the Service Charge (currently called the CustomerCharge) for residential and small commercial customers to $1 0 per month and toimplement seasonal energy charges for these customers. For residential customers
during the summer months of June , July~ and August , the Applicant proposes an Energy
Charge of 6.1375~ per ki1owatt-hour. For all other months the Applicant proposes an
Energy Charge of 4.9101 rt per kilowatt-hour. For small commercial customers , the
Applicant proposes an Energy Charge of 2868ct per kilowatt-hour for summer months
and 5.8283(t per kHowatt-hour for all other months. For large commercial and industrial
customers, the Applicant proposes to increase the Service Charge and the Basic
Charge and to implement seasonal energy and demand charges as shown on
Attachment 2. In addition , for industrial customers only, the Applicant is proposing
mandatory time-at-use energy and demand charges. The Applicant proposes to
increase the in-season Service Charge and Demand Charge and both the in-season
APPLICATION , Page 3
and out-at-season Energy Charges for irrigation customers as shown on Attachment 2.No changes to the definition of "season" are proposed for irrigation service. TheApplicant proposes to increase the rates of its three special contract customers - J. R.Simplet Company, The Department of Energy (INEEL), and Micron Technology, Inc. by the respective overall percentage increase shown on Attachment 2.This Application , together with Attachments 1 , 2 and 3, is filed with thisCommission to be kept open for public inspection as required by law~ and the same fullystates the changes to be made in the schedules , regulations and contract rates now inforce. The new Electric Rate Schedules and Electric Service Regulations Attachment 2 will become effective as Applicant's IPUG No. 27 , Tariff No.1 01 , forservice rendered on and after November 15 , 2003 , unless otherwise ordered by thisCommission, and when effective , will supersede and cancel the Electric Rate Schedules
in Attachment 1 now in effect.
VII
On January 31 , 1995 , this Commission issued Order No. 25880 in Case
No. I PC-94-, in which the Commission found a 9.1990/0 return on rate base and a
110/0 return on common equity to be reasonable for Applicant and a rate base of
221 624 208 was determined to be appropriate. On November 14 , 1995, the
Commission issued Order No. 26236 in Case No. I PC-95-5 increasing Applicant's
revenue requirement by an additional $3,759,695 to recognize the inclusion of the Twin
Falls Project investment and the additional Swan Falls Project investment.
APPLICATION , Page 4
VIIIThe overall rate of return and return on equity heretofore allowedApplicant are no longer reasonable and adequate and Applicant has and will continue toexperience increased costs ! all of which now require immediate adjustment by way ofincreased revenues if Applicant is to maintain a stable financial condition and continueto render reliable and adequate electric service to its customers.In this Application the Applicant requests that 2003 be used as the testyear. Applicant also requests that the Commission grant it a return on rate base of3340/0 (utilizing an 11 % return on common equity) on a $1 547 443 530 rate base.This results in an additional revenue requirement of $85!561 ,910 for the Idahojurisdiction.
Simultaneously with the filing of this Application , Applicant has filed its
direct case consisting of the testimony of witnesses LaMont Keen , William Avera
Dennis Gribble , Lori Smith , Phil Obenchain , Gregory W. Said , Maggie Brilz, Theresa
Drake , Sue Fullen and John R. Gale , and Exhibits 1 through 61 which more tufty
describe the relief requested by the Company
It is in the public interest that this Commission allow Applicant to increase
its revenues by approving the rates set out in Attachment 2 and that said rates be
allowed to go into effect as filed for electric service rendered on and after November 15
2003, and that the effective date of said rates not be suspended~
APPLICATION , Page 5
XIIComputer models have been used to represent or simulate processesfrom which the revenue requirement of Applicant has been derived and upon whichApplicant's allocations have been derived. The documentation of the models used byApplicant in this proceeding are on file in the Applicant's office. This documentationfully describes the models.XIIIThis Application has been and will be brought to the attention ofApplicant's affected customers by means of news releases in the newspapers ofgeneral circulation in the area served by Applicant , by bill stutters , and in someinstances, by means of personal contact with some customers. In addition , the presentElectric Rate Schedules, Electric Service Regulations, including rate schedules for thespecial contracts , together with the proposed Electric Rate Schedules , Electric Service
Regulations , including rate schedules for the special contract customers , will be kept
open for public inspection at all of Applicant's offices in the State of Idaho. The above-
described procedures are deemed by Applicant to satisfy the Rules of Practice and
Procedure of this Commission , and Applicant will , in the alternative , bring said
Application to the attention of Applicant's affected customers through any other means
directed by this Commission.
IF THE COMMISSION DETERMINES THA IT SHOULD SUSPEND THE
EFFECTIVE DA TE AND SET FOR HEARING APPLICANT'S PROPOSED RA TES
APPLICATION , Page 6
AND CHARGES SET FORTH IN ATTACHMENT THEN APPLICANT REQUESTSTHA THE COMMISSION PROCEED IN CASE NO. IPC-E-O3-13-A AS FOLLOWS:XIVIf the Commission decides to suspend the rates and charges proposed byApplicant in IPUC No. 27 , Tariff No.1 01 , the Commission should authorize a uniformpercentage increase of 4.160/0 on all existing rates contained in IPUC No. 26 , Tariff No.101 , effective November 15, 2003, pending a determination of Applicant's new ratesand charges in Case No. IPC-E-O3-13. This is based on the following:First, in 2001 , in order to meet demonstrated capacity and energy needsand mitigate the potential exposure to high purchase power costs demonstrated by the2000-2001 energy crisis Applicant constructed the Danskin Power Plant at a cost of
approximately $49 million. The Danskin Power Plant investment has not been
previously included in rate base. The annual revenue requirement associated with the
construction of this peaking generating resource is $7 727 782.
Second , the Applicant is in the process of relicensing its hydro projects.
The final steps for relicensing the Mid-Snake projects (Upper Salmon, Lower Salmon
and Bliss), the Shoshone Falls Project and the C.J. Strike Project are substantially
complete and new licenses for these projects will be issued shortly. The annual
revenue requirement associated with tho studies and the relicensing process required
by the FERC to obtain new licenses for these hydroelectric generating resources is
573 440.
APPLICATION , Page 7
Third, Applicant filed with this Commission an application to revise itsdepreciation rates for electric plant in service (Case No. I PC-03- 7). The parties to the03- 7 case have agreed as to the resulting additional expenses that will be associatedwith the new revised depreciation rates. For purposes of interim rate relief , Applicantrequests that additional depreciation in the amount of $3 816 971 be recognized foradditional revenue requirementSince the last general rate case , several firm wholesale power supplycontracts have expired. These wholesale firm sales were undertaken at a time whenApplicant had surplus generating capacity and were timed to expire as Applicant's retailcustomer loads increased. As a result of the expiration of these contracts , the share ofannual revenue requirement attributable to the FERC jurisdiction has declined and theIdaho jurisdictional share has increased~ The Idaho jurisdictional share of total systemenergy grew from 85.5 percent in 1993 to 94.1 percent in 2003. The current annual
revenue requirement associated with the reallocation of 1993 power supply costs is
024 145.
XVI
Based upon the test year 2003, holding all other financial and accounting
items constant. including the Commission s currently-allowed rate of return on equity of
110 , Applicant has a revenue requirement of $20 124,165 as a direct result of (1) the
construction and operation of the Danskin Power Plant , (2) the costs associated with
relicensing Applicanfs Mid-Snake hydro projects that are known and measurable and
eligible for inclusion in rates , (3) the agreed-upon increase in depreciation expenses in
APPLICATION , Page 8
Case No. IPC-O3-, and (4) the increase in Idaho s share of net power supply costsdue to reallocation between wholesale and retail jurisdictions.XVIIIt is not in the public interest for Applicant to continue to absorb theadditional costs attributable to the completion of the Danskin Power Plant , therelicensing of Applicant's Mid-Snake hydroelectric projects, the revision of theApplicant's depreciation rates for electric plant in service and the jurisdictional impactson net power supply costs while the Commission completes the rather lengthy processof considering Applicant's Application for general rate relief. To require Applicant toabsorb these financial costs during a regulatory suspension would put the financialviability of Applicant in jeopardy.XVIIITo reduce the impact on Applicant while the Commission deliberates t the
Applicant proposes that the Commission authorize an interim , uniform percentage
increase of 4.160/0 to all tariff schedules. Attachment A , included herewith and made a
part hereof , is a copy of the Applicant's proposed electric rate schedules and special
contract rates which would revise the current tariff, I PUG No. 26 , Tariff 101
(Attachment 1) to reflect the requested uniform percentage increase. The descriptions
on the various pages of Attachment A indicating the page revision would be dependent
upon current tariff nomenclature , Le., whether the tariff page was being changed from
first revised to second revised , etc.
APPLICATION , Page 9
XIXAttachment B , included herewith and made a part hereof , shows acomparison of revenues from the various rate schedules in Applicant's current IPUGNo. 26, Tariff No.1 01 , with the corresponding proposed new rate schedules whichutilize the 4.16 percent uniform increase. The schedules in Attachment A are proposedto remain in existence until the Commission issues its determination of Applicant's newrates and charges in Case No. IPC-O3-13, Applicanfs general rate application. ThisApplication, together with Attachments A and 8, is filed with this Commission to be keptopen for public inspection as required by law , and the same fully state the changes tobe made in the schedules , regulations and contract rates now in force.Simultaneously with the filing of this Application , Applicant has filed itsdirect case in Case No. I PC-O3-13-, consisting of the testimony of witnesses LaMont
Keen and John R. Gale and Exhibits 1-A through 7-, which more specifically describe
the request of the Company to authorize interim rates and charges in IPC-O3-13-A if
the Commission suspends and sets for hearing Applicant's proposed rates and charges
in IPC-O3-13, Applicanfs General Rate Application.
XXI
This Application for an interim uniform percentage increase of 4.160/0 in
rates and charges (to be implemented only in the event of suspension of the proposed
rates and charges in Case No. IPC-O3-13) has been and will be brought to the
attention of Applicant's affected customers by means of news releases in the
newspapers of general circulation in the area served by Applicant , by bill stutters and in
APPLICATION , Page 10
some instances , by means of personal communications with some customers. addition , the present Electric Rate Schedules and Electric Service Regulations , togetherwith the proposed Electric Rate Schedules and Electric SelVice Regulations , will be keptopen for public inspection at all of Applicant's offices in the State of Idaho~ The aboveprocedures are deemed by Applicant to satisfy the Rules of Practice and Procedure ofthis Commission and Applicant will , in the alternative , bring said Application to theattention of Applicant's affected customers through any other means directed by thisCommission.XXIICommunications with reference to this Application should be sent to thefoitowing:John R. GaleVice President , Regulatory AffairsIdaho Power Company
P. O. Box 70
Boise , Idaho 83707
male (fj) idahopoweLcom
Barton L. Kline
Monica B. Moen
Idaho Power Company
p~ O. Box 70
Boise , Idaho 83707
bkline \?Y idahop ow~_L--Q--
mmoen (fY idahopower .com
WHEREFORE , Applicant respectfully requests that the Commission issue
its Order (1) determining a fair and reasonable return for Applicant , (2) confirming the
accuracy of Applicant's increased costs and revenue requirements, and (3) approving
the new Electric Rate Schedules , Electric Service Regulations and special contract
rates set out in Attachment 2 to become effective for electric service rendered on and
APPLICATION , Page
after November 15 , 2003 , and that the effective date for Applicant's proposed rates notbe suspended but if the Commission suspends Applicant's proposed IPUC No. 27Tariff No.1 01 ) then Applicant requests that the Commission authorize in Case No. IPC-O3-13-A a uniform percentage increase of 4.160/0 on all existing rates and charges tobecome effective November 15 , 2003, pending a determination of new rates andcharges in Case No. I PC-03-13.DATED at Boise , Idaho , this day of October , 2003.BARTON L. KLINEAttorney for Idaho Power Company
APPLICATION , Page 12
APPLICANT'S STATEMENT OF READINESS FOR HEARINGBARTON L. KLINE , one of the attorneys of record for Applicant , hereby states that theApplicant is prepared to immediately present its case in support of either its general rateapplication (Case No. IPC-O3-13), or, if the proposed effective date of the rates insaid generar rate application is suspended, is prepared for an immediate hearing on itsapplication for interim rates as outlined in Case No. IPC-O3-13--QctBARTON L. KLINE
APPLICANT'S STATEMENT OF READINESS FOR HEARING