20031021Interim Attachment B.pdf

BARTON L. KLINE 158 #1526MONICA B. MOEN 158 #5734Idaho Po\ver CompanyO. Box 70Boise, Idaho 83707Tetephone: [phone]FAX Telephone: [phone]Attorney for Idaho PO\Ner CompanyStreet Address for Express Mail:1221 West Idaho StreetBoise, Idaho 83702BEFORE THE IDAHO PUBLtC UTiliTIES COMMISSiONIN THE ~JJ;\TTER OF THE APPLICATIOf\l OF )IDAHO POWER COMPANY FOR AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC SERVICE
TO ELECTRIC CUSTOMERS IN THE
STATE OF IDAHO
AU()ITIONALL Y , IF THE COMMISSION
SUSPENDS THE EFFECTIVE DATE OF
RATES AND CHARGES , THE COMPANY
REOU ESTS
AN lNTERIM UNiFORM PERCENTAGE
INCREASE OF 4.16~o IN RATES AND
CHARGES TO RECOVER INCREASED
COSTS TO THE COIV1PANY AS A RESULT
OF THE COMPLETION OF THE DANSKIN
POWeR PLAN r , HYURO RELlCENSING,
INCREASED DEPRECIATION EXPENSE
AND THE REALLOCATION OF
JURI8DICTIO~~AL NET rOVVER 8UPPL Y
COSTS. PENDING A DETERMINATION
OF IDAHO POWER COMPANY:S NEW
RATES AND CHARGES IN
CASE NO. IPC-O3-13.
APPLICATION , rage
APPLICJ\ TION
CASE NO. IPC-O3-
CASE NO. IPC-O3-13-
COMES NOW Idaho Power Company, hereinafter referred to asAppricant)) and hereby makGs application to ttle Idaho Public Utilities CommissionConllnissjon) for an Order approving revisions to the Applicant's schedules of ratesand charges for electric service in the State of tdaho 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 genera! electric service in SouthernIdaho and Eastern Oregon. Applicant is subject to tile jurisdiction of this Corrullissjonthe Oregon Public Utility Commission and the Federal Energy Regulatory Commission
FERCH
).
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
Attachlllent 1 , included herewith and made a part hereof. is a copy of
Applicant's IPue No. 26 , Tariff No.1 01 . containing the present Electric Rate Schedules
and Electric Service Regulations under vvhich electric servIce is currently rendered and
charges made to Applicant's customers in Hie State of idaho.
J\PPLICATIOf\J ) Page 2
Attactlrnent 2 ; included herewith and Illade a part hereof , is a copy ofApplicant's proposed new Electric Rate Schedules and Electric Setvice 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 herevvith and made a part hereof , shows acompArison of revenues from the various rate schedules in Applicant's ,pue No. 26.Tariff No.1 01 , and special contract rates (Attachment 1), with the correspondingproposed ne\iV rate schedules and proposed special contract rates (Attachment 2).Applicant proposes to increase the Service Charge (currently called the CustomerCharge) for residential and smaU comrnercial custorners to S 1 0 per month and toimplement seasonal energy charges for these customers. For residential custolners
during the summer months of June ; July, and August. the AppHcant proposes an Energy
Charge of 1375tt per kilowatt-hoUL For all other rnonths the Applicant proposes an
Energy Charge of 4.9101 fI; per kilowatt-hour. For smatl commercial customers , the
Applicant proposes an Energy Charge of 7.2868c per kilowatt-hour for summer months
and 8283ct per kilowatt-hour for all other lTIonths. 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 indu3trtal CUGtOJTIcrc only~ the Applicant is proposing
mandatory time-ot-use energy and demand charges. The Applicant proposes to
increase the in-season Service Charge and Demand Charge and both the in-season
ArrLICATION rage 3
and out...of-season Energy Charges for irrigation customers as shown on Attachment 2.No changes to the clefinition of "season !! are proposed for irrigation service. TheApplicant proposes to increase the rates of its three spec~al contract customers - J. Simplot Company: The Department of Energy (INEEL)1 and Micron Technology) Inc. by the respective overall percentage increase shown on Attachment This Application . together with Attachments 1. 2 and 3 ~ is filed with thisCornmission to be kept open for public inspection as required by taw, and the same fullystates the changes to be made in the schedules , regulations and contract rates now force. The new Electric Rate Schedules and Electric Service Regulations Attachment 2 will become effective as Applicant's tPUe No, 27 , Tariff No.1 01 , forservice rendered on and after Novonlber 15 , 2003 , unless otherwise ordered by thisCornmission) 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-94-, in which the Commission found a 9.199~/o return on rate base and a
1 ~/~ return on common equity to be reasonable for Applicant and a rate base
2211 624,208 was determined to be appropriate. On Novernber 14 , 1995, the
Commission issued Order No. 26236 in Case No. I PC-95-5 increasing Applicant's
revenue roquironlcnt by an additional S3~ 759 695 to recognize tho inclusion of tho Twin
Falls Project investnlent and the additional Swan Falls Project investrnent.
I\PPLICA TIOf\J I 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 retiable 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 Comrnjssion grant it a return on rate base of334~/o (utilizing an 11010 return on common equity) on a $1 ~547.443 530 rate base.This resu1ts in an additionat revenue requirement of $85 561 ,910 for the Idahoju risdiction.
Simultaneously with the filing of this Application , AppHcant 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 futly
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 Attachrnent 2 and that said rates be
allowed to go into effect as f"ed for electric service rendered on and after November 15,
2003, and that the effective date of said rates not be suspended,
PPL!CA TrO~J Page 5
XIIComputer models have been used to represent or simulate processesfrom Wllich the revenue requirernent of Applicant has been derived and upon whichApplicanfs allocations have been derived. The documentation of the models used byApp1icant in this proceeding are on file in the Applicant's office. This documentationfully describes the nlodels.XIIIThis Application has been and will be brought to the attention ofApphcant's affected custonlers 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. 1n 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 , wilt be kept
open for public inspect~on at all of Applicant's officos 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 \vill , in the alternative , bring said
Application to the attention of AppUcanfs affected customers through any other means
directed by this Con1rnission.
IF THE COMMISSION DETERMINES THA T IT SHOULD SUSPEND THE
EFFECTIVE DA TE AND SET FOR HEARING APPLICANT'S PROPOSED RA TES
ArrLICA TIO~J , Page 6
AND CHARGES SET FORTH IN ATTACHMENT , THEN APPLICANT REQUESTSTHA T THE COMMISSION PROCEED IN CASE NO. fPC-O3-13-AS FOLLOWS:XIVIf the Corllrnission decides to suspend the rates and charges proposed byApplicant in IPUG No. 27 , Tariff No.1 01 the Commission should authorize a uniformpercentage increase of 4.16O/~ on all existing rates contained in (PUG No. 26 ) Tariff No.101 , effective November 15, 2003 , pending a determination of Applicant's new ratesand charges in Case No. I PC-O3-13. This is based on the foUowing:First in 2001 , in order to meet demonstrated capacity and energy needsand nlitigate the potential exposure to high purchase power costs dernonstrated by the2000..2001 energy crisis. Applicant constructed the Danskin Power Plant at a cost of
approximately $49 mi1lion. The Danskin Power Plant investment has not been
previously included In rate base. The annua' 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.
T118 final steps for reJicensing 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 annuaf
revenue requirement aG~ociQ.tcd with tho 8tudio8 and the roliconsing process requirgd
by the FERC to obtain new licenses for these Ilydroelectric generating resources is
$1 ~573 440.
APPLICA TIOf'J ; Page 7
Third, Applicant filed with this Commission an application to revise itsdepreciation rates for e1ectric plant in service (Case No. IPC-O3-7). 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 recognizee! foradditional revenue requirement.Since the last general rate case ) several firm whotesale power supplycontr8cts have expired. These wholesale finll sales were undertaken at a time whenApplicant had surplus generating capacity and were timed to expire as Appljcant's retailcustomer loads increased. As a resu't 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 vvith the reallocation of 1993 power supply costs is
024 145.
XVI
Based upon the test year 2003 , holding all other financial and accounting
itenlS constant. including the Cornmission s currently-allowed rate of return on equity of
11 ~'o , Applicant has a revenue requirenlent of $20~ 124, 165 as a direct result of (1) the
construction and operation of the Danskin Power Plant ! (2) the costs associated with
reljcensing Applicant'3 Mid Snake hydro projcctc that are known and I11Gasurable and
eligible for inctusion in rates (3) the agreed-upon increase in depreciation expenses in
Af1fJLICA TJON , Page 8
Case No. IPC-O3- 7 and (4) the increase in Idaho s share of net power supply costsdue to rea.!1ocation between \vholesafe and retail ju risdictions.XVII't is not in the public interest for Applicant to continue to absorb theadditional costs attributable to the completion of the Danskin PO\Ner Plant ; thereJicensing of AppHcant'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 genera! 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 the
Applicant proposes that the Commission authorize an interim , uniform percentage
increase of 16~i~ to aU tariff schedules. Attachment A , included herewith and made a
part hereof , is a copy of the Appticanfs proposed electric rate schedules and special
contract rates which would revise the current tariff. pue No. 26, Tariff 101
(Attactlment 1) to reflect the requested uniform percentage increase. The descriptions
on the various pages of Attachment A indicabng the page revision would be dependent
upon current tariff nomenclature , Le., \lvhether the tariff page \l\laS being changed from
first revised to second revised ; etc.
APPLfCATI0N , Page 9
XIXAttachment 8 , included herewith and made a pari her-eat , sho\vs acomparison of revenues from the various rate schedules in Applicant's current IPueNo. 26 , Tariff No.1 01 : with the corresponding proposed nevv rate schedules whichutilize tl18 4.16 percent uniform increasE). The schedufes in Attachment A are proposedto reillain in existence untd the Commission issues its determination of Applicant's newrates and charges in Case No. 1PC-O3-13. Applicants general rate application. ThisApplication, together with Attachments A and B . is filed with this Commission to be keptopen for public inspection as required by law , and the sanle fully state the changes tobe made in the schedules. regulations and contract rates now in force.Simultaneously with tile filing of this AppltcaUon, Applicant has filed lisdirect case in Case No. IPC-O3-13-: consisting of the testirnony 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 tPC-O3-13-A if
the Commission suspends and sets for hearing Applicant's proposed rates and charges
in IPC-O3-; Applicanfs General Rate Application.
XXI
This Application for an interim uniform percentage increase of 4.16~/o in
rates and charges (to be implemented only in the event of suspension of the proposed
ro.tc8 Clnd chargc$ in C3.8C i'Jo. IPC--E--O3--13) has boon and \'vi!1 be brought to tho
attention of Applicant's affected customers by means of news releases in the
nevI/sparers of general circulation in the area served by Applicant. by bill stutters and in
APPLIC/\TION , Page
some instances ! by means of personal communications with some customers. addition , the present Efectric Rate Schedules and Electric Service Regulations , togetherwith the proposed Electric Rate Schedules and Electric Service Regulations , will be keptopen for public inspection at all of Apphcanfs offices in the State of Idaho. The aboveprocedures are deemed by Applicant to satisfy the Rules of Practice and Procedure ofthis Commission and Applicant wilt , in the alternative , bring said Application to theattention of Applicant's affected customers through any other means directed by thisCommission.XXIICornmunications with reference to this Application should be sent to thefoUowing:John R. GaloVice President , negulatory AffairsIdaho Power Cofnpany
P. O. Box 70
Boise Idaho 83707
male (fjJ idahopo'Ner-conl
Barton L~ Kline
Monica B. Moen
Idaho Power Company
P. O. Box 70
Borse ) Idaho 83707
bkIine (0' idatlop o\N~L_9Qt1J
mmoen (f1idahopo'vver.com
W H FRF FORF ; Arrlic;;1 nt n:.\~rArJfl J Uv rAfll jP5~t~ thAt thp, (';()mmi~~i()n i!=;~UA
its Order (1) determining a fair and reasonable return for Applicant , (2) confirming the
accuracy of Applicants 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 effectrve for electric service rendered on and
/\PPLIC/\ TIOf\J ; 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 IPue No. 27Tariff No.1 0') then Applicant requests that the Comrnission authorize in Case No. IPC-O3-13-A a uniform percentage increase of 4.16~6 on all existing rates and charges tobecome effective Noverllber 15 , 2003) pending a determination of new rates andcharges in Case No. I PC-O3-13.t-?i.., ".DATED at Boise , Idaho : this "", I"_(~",, ,""", day of October 2003.! ,-,d """" 1 (-,'/ -' r";:_, -----" /' , ~- ~"""'--"'-c. .,-,~,,". -~'-.l . -"" '0BARTON L. KLINEAttorney for Idaho Power Company
APPLtCATIOf\J ) Page 12
APPLICANT'S STATEMENT OF READINESS FOR HEARINGBARTON L. KLINE one of the attorneys of record for AppBcant hereby states that theApplicant IS prepared to immediatelY present its case in support of either its general rateapplication (Case No. IPC-O3-13), Of , if the proposed effective date of the rates insaid general rate application is suspended , is prepared for an immediate hearing on itsapplica1ion for interim rates as outlined in Case No. IPC-O3-13-/1 b #I " , ""...-1 -l Y'\ f t.... \r- f' " i "'\ "" ,/' ....,. '- -- -' --- '",- ------~---,...--- -- , -----BARTON L. KLINE
APPLICANT'S STATEMENT OF READI~.JESS FOR HEARING