20031021Interim Application.pdf

BARTON L. KLINE ISB #1526
MONICA B. MOEN ISB #5734
Idaho Power Company
P.O. Bux 70
Boise, Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
Attorney for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE M/\TTER OF THE APPLICATION OF ) /\PPLIC/\TION IDAHO POWER COMPANY FOR )
AUTHORITY TO INCREASE ITS RATES ) CASE NO IPC E 03 13 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 4.16% IN RATES AND ) CASF NO. IPC-E-O::l-1::l-A CHARGES TO RECOVER INCREASED ) COSTS TO THE COMPANY AS A RESULT ) OF THE COMPLETION OF THE DANSKIN )
POWt:R PLANT, 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-03-13. ) ���������������)
APPLICATION, rage 1
COMES NOW Idaho Power Company, hereinafter referred to as
"Applicant," and hereby makes application to the Idaho Public Utilities Commission
("Commission") for an Order approving revisions to the Applicant's schedules of rates
and charges for electric service in the State of Idaho to become effective with service
provided on and after November 15, 2003. In support of this Application, Idaho Power
Company represents as follows:
Applicant is an Idaho Corporation. whose principal place of business is 1221
West Idaho Street, Boise, Idaho 83702.
II
Applicant is a public utility supplying general electric service in Southern
Idaho and Eastern Oregon. Applicant is subject to the jurisdiction of this Commission,
the Oregon Public Utility Commission, and the Federal Energy Regulatory Commission
("FERC''). In 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.
111
Attachment 1, included herewith and made a part hereof, is a copy of
Applicant's IPUC No. 26, Tariff No. 101, 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
IV
Attachment 2, included herewith and made a part hereof, is a copy of
Applicant's proposed new Electric Rate Schedules and Electric Service Regulations,
IPUC No. 27, Tariff No. 101, covering the rendering of electric service and charges to
be made to Applicant's customers in the State of Idaho.
v
Attachment 3, included herewith and made a part hereof, shows a
comparison of revenues from the various rate schedules in Applicant's IPUC No. 26.
Tariff No. 101, and special contract rates (Attachment 1 ), with the corresponding
proposed new rate schedules and proposed special contract rates (Attachment 2).
Applicant proposes to increase the Service Charge (currently called the Customer
Charge) for residential and small commercial customers to $10 per month and to
implement 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 kilowatt-hour. For all other months the Applicant proposes an
Energy Charge of 4.9101 ¢ per kilowatt-hour. For small commercial customers, the
Applicant proposes an Energy Charge of 7.2868¢ per kilowatt-hour for summer months
and 5.8283¢ per kilowatt-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-of-use energy and demand charges. The Applicant proposes to
increase the in-season Service Charge and Demand Charge and both the in-season
ArPLICATION, Page 3
and out-of-season Energy Charges for irrigation customers as shown on Attachment 2.
No changes to the definition of "season" are proposed for irrigation service. The
Applicant proposes to increase the rates of its three special contract customers - J. R.
Simplot Company, The Department of Energy (INEEL), and Micron Technology, Inc. -
by the respective overall percentage increase shown on Attachment 2.
VI
This Application, together with Attachments 1, 2 and 3, is filed with this
Commission to be kept open for public inspection as required by law. and the same fully
states the changes to be made in the schedules, regulations and contract rates now in
force. The new Electric Rate Schedules and Electric Service Regulations in
Attachment 2 will become effective as Applicant's IPUC No. 27, Tariff No. 101, for
service rendered on and after November 15, 2003, unless otherwise ordered by this
Commission, 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. IPC-E-94-5, in which the Commission found a 9.199% return on rate base and a
11 % return on common equity to be reasonable for Applicant. and a rate base of
$1 ,221 ,624,208 was determined to be appropriate. On November 14, 1995, the
Commission issued Order No. 26236 in Case No. IPC-E-95-5 increasing Applicant's
revenue requiromont 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
VIII
The overall rate of return and return on equity heretofore allowed
Applicant are no longer reasonable and adequate and Applicant has and will continue to
experience increased costs, all of which now require immediate adjustment by way of
increased revenues if Applicant is to maintain a stable financial condition and continue
to render reliable and adequate electric service to its customers.
IX
In this Application the Applicant requests that 2003 be used as the test
year. Applicant also requests that the Commission grant it a return on rate base of
8.334% (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 Idaho
jurisdiction.
x
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 fully
describe the relief requested by the Company.
XI
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
XII
Computer models have been used to represent or simulate processes
from which the revenue requirement of Applicant has been derived and upon which
Applicant's allocations have been derived. The documentation of the models used by
Applicant in this proceeding are on file in the Applicant's office. This documentation
fully describes the models.
XIII
This Application 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 some
instances, by means of personal contact with some customers. In addition, the present
Electric Rate Schedules, Electric Service Regulations, including rate schedules for the
special 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 THAT 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 2, THEN APPLICANT REQUESTS
THAT THE COMMISSION PROCEED IN CASE NO. IPC-E-03-13-A AS FOLLOWS:
XIV
If the Commission decides to suspend the rates and charges proposed by
Applicant in IPUC No. 27, Tariff No. 101, the Commission should authorize a uniform
percentage increase of 4.16% on all existing rates contained in IPUC No. 26, Tariff No.
101. effective November 15. 2003. pending a determination of Applicant's new rates
and charges in Case No. I PC-E-03-13. This is based on the following:
xv
First, in 2001, in order to meet demonstrated capacity and energy needs
and mitigate the potential exposure to high purchase power costs demonstrated by the
2000-2001 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
$1,573,440.
AP PUCA TION, Pago 7
Third, Applicant filed with this Commission an application to revise its
depreciation rates for electric plant in service (Case No. IPC-E-03-7). The parties to the
03- 7 case have agreed as to the resulting additional expenses that will be associated
with the new revised depreciation rates. For purposes of interim rate relief, Applicant
requests that additional depreciation in the amount of $3,816,971 be recognized for
additional revenue requirement.
Since the last general rate case, several firm wholesale power supply
contracts have expired. These wholesale firm sales were undertaken at a time when
Applicant had surplus generating capacity and were timed to expire as Applicant's retail
customer loads increased. As a result of the expiration of these contracts, the share of
annual revenue requirement attributable to the FERG jurisdiction has declined and the
Idaho jurisdictional share has increased. The Idaho jurisdictional share of total system
energy 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
$7 ,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
11 %, 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 Applicant's 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-E-03-7, and (4) the increase in Idaho's share of net power supply costs
due to reallocation between wholesale and retail jurisdictions.
XVII
It is not in the public interest for Applicant to continue to absorb the
additional costs attributable to the completion of the Danskin Power Plant, the
relicensing of Applicant's Mid-Snake hydroelectric projects, the revision of the
Applicant's depreciation rates for electric plant in service, and the jurisdictional impacts
on net power supply costs while the Commission completes the rather lengthy process
of considering Applicant's Application for general rate relief. To require Applicant to
absorb these financial costs during a regulatory suspension would put the financial
viability of Applicant in jeopardy.
XVIII
To reduce the impact on Applicant while the Commission deliberates, the
Applicant proposes that the Commission authorize an interim, uniform percentage
increase of 4.16% 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, !PUC 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, i.e., whether the tariff page was being changed from
first revised to second revised, etc.
APPLICATION, Page 9
XIX
Attachment B, included herewith and made a part hereof, shows a
comparison of revenues from the various rate schedules in Applicant's current IPUC
No. 26, Tariff No. 101, with the corresponding proposed new rate schedules which
utilize the 4.16 percent uniform increase. The schedules in Attachment A are proposed
to remain in existence until the Commission issues its determination of Applicant's new
rates and charges in Case No. IPC-E-03-13, Applicant's general rate application. This
Application. together with Attachments A and B. is filed with this Commission to be kept
open for public inspection as required by law, and the same fully state the changes to
be made in the schedules, regulations and contract rates now in force.
xx
Simultaneously with the filing of this Application, Applicant has filed its
direct case in Case No. IPC-E-03-13-A, consisting of the testimony of witnesses LaMont
Keen and John R. Gale and Exhibits 1-A through 7-A, which more specifically describe
the request of the Company to authorize interim rates and charges in IPC-E-03-13-A if
the Commission suspends and sets for hearing Applicant's proposed rates and charges
in IPC-E-03-13, Applicant's General Rate Application.
XXI
This Application for an interim uniform percentage increase of 4.16% in
rates and charges (to be implemented only in the event of suspension of the proposed
rates and charges in Caso No. IPC-E-03-13) 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. In
addition, the present Electric Rate Schedules and Electric Service Regulations, together
with the proposed Electric Rate Schedules and Electric Service Regulations, will be kept
open for public inspection at all of Applicant's offices in the State of Idaho. The above
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.
XXII
Communications with reference to this Application should be sent to the
following:
John R. Gale
Vice President, negulatory Affairs
Idaho Power Company
P. 0. Box 70
Boise, Idaho 83707
rgale@ idahopower .com
Barton L. Kline
Monica B. Moen
Idaho Power Company
P. 0. Box 70
Boise, Idaho 83707
[e-mail]
[e-mail]
WHERFFORE, Applicant raspactfully 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, [lectric Service Regulations and special contract
rates set out in Attachment 2 to become effective for electric service rendered on and
APPLICATION, Page 11
after November 15, 2003, and that the effective date for Applicant's proposed rates not
be suspended, but, if the Commission suspends Applicant's proposed IPUC No. 27,
Tariff No. 101, then Applicant requests that the Commission authorize in Case No. IPC-
E-03-13-A a uniform percentage increase of 4.16% on all existing rates and charges to
become effective November 15, 2003, pending a determination of new rates and
charges in Case No. IPC-E-03-13.
tk DATED at Boise, Idaho, this /(o- day of October, 2003.
RARTON I Kl INF
Attorney for Idaho Power Company
APPLICATION, Page 12
APPLICANT'S STATEMENT OF READINESS FOR HEARING
BARTON L. KLINE, one of the attorneys of record for Applicant, hereby states that the
Applicant is prepared to immediately present its case in support of either its general rate
application (Case No. I PC-E-03-13), or, if the proposed effective date of the rates in
said general rate application is suspended, is prepared for an immediate hearing on its
application for interim rates as outlined in Case No. IPC-E-03-13-A.
BARTON L. KLINE
APPLICANT'S STATEMENT OF READINESS FOR HEARING