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Home My WebLink About20040611Notification of Computational Errors.pdf() F f' ~:: \1 C" ! " .,. , V h- .~ I... LJ l2J BARTON L. KLINE ISB #1526 MONICA B. MOEN ISB #5734 Idaho Power Company P. O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-2682 FAX Telephone: (208) 388-6936 Fi!...i-,.".... f1 t'i ra H P,J . M'" L ~ ~ Luu't JUf~ i.i - ... 1., , .""'" "'; (' ULL.. -"-' .'.,...."""'~' lJtIL.I!tJ .ur'lt"i\~~ . Attorneys for Idaho Power Company Street Address for Express Mail 1221 West Idaho Street Boise, Idaho 83702 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AUTHORITY TO INCREASE ITS INTERIM AND BASE RATES AND CHARGES FORELECTRIC SERVICE CASE NO. IPC-03- IDAHO POWER COMPANY' NOTI FICA TION COMPUTATIONAL ERRORS IN ESTABLISHING THE COMPANY' REVENUE REQUIREMENT COMES NOW Idaho Power Company (hereinafter referred to as "Idaho Power" or the "Company ) and herewith respectfully notifies the Idaho Public Utilities Commission (hereinafter referred to as the "IPUC" or the "Commission ) of certain computational errors contained in IPUC Order No. 29505, issued on May 25,2004, as set forth below. The Company respectfully requests that those computational errors be corrected accordingly. IDAHO POWER COMPANY'S NOTFICATION OF COMPUTATIONAL ERRORS, Page THE COMMISSION'S CALCULATIONS OF IDAHO POWER' REVENUE REQUIREMENT AS SET FORTH IN IPUC ORDER NO. 29505 CONTAIN COMPUTATIONAL ERRORS IN THE AMOUNT OF $2 668,367. IPUC Order No. 29505 contains computational errors that understate Idaho Power s Idaho jurisdictional revenue requirement by $2 668 367. Although the Company contends that the Commission s determination of Idaho Power s revenue requirement is based upon certain findings and conclusions that are erroneous, the purpose of this filing is not to discuss the merits of the Company s contentions - the Company will address its contentions in the Petition for Reconsideration of Order No. 29505 it will file next week. The errors contained in the Commission s findings and conclusions in Order No. 29505 notwithstanding, application of those findings and conclusions resulted in computational errors in Order No. 29505 that understate Idaho Power Idaho jurisdictional revenue requirement by $2 668 367. The Idaho jurisdictional revenue requirement should be increased to $27 997 805 when the Commission computational errors are corrected ($25,329 438 + $2 668 367 = $27 997 805). Thus the Company respectfully requests that the Commission issue its order on one day notice adding $2 668,367 to Idaho Power s revenue requirement authorized in Order No. 29505. The Company also requests that the Commission allow the Company to defer, with interest at the rate of 7.8520 , this additional revenue for inclusion in customer rates when any increase in revenue requirement resulting from the Company s Petition For Reconsideration in this case is authorized or when the 2005- 2006 Power Cost Adjustment is implemented , whichever may occur first. Deferral of IDAHO POWER COMPANY'S NOTFICATION OF COMPUTATIONAL ERRORS, Page 2 the $2 668 367 at this time will minimize customer confusion and eliminate the need to prepare prorated customer bills so soon after the initial implementation of the increased revenue requirement resulting from this order. In particular, the Company requests that the Commission correct the following computational errors Idaho Power has identified in Order No. 29505: (1) the Company s depreciation adjustment to Rate Base; (2) the Company s budget to actual expense adjustment and (3) the Company s pension expense adjustment, all as described below and as illustrated in Exhibit 1 hereto. The Company s Revenue Requirement Should Be Increased By $522.228 to Adiust For the Commission Computational Errors To The Company s Depreciation AQjustment To Rate Base With regard to the Company s depreciation , the Commission Staff incorrectly deducted $2 205,647 from the Company s Electric Plant in Service Accounts 310-398. Instead , $2 205 647 should have been deducted from the Company s Accumulated Depreciation Reserve. Correcting this error increases the Company s Rate Base by $4 411 294 as illustrated on Exhibit Applying the Return on Rate Base of 7.8520/0 to this figure in conformance with Order No. 29505 results in an increase to the Company s revenue requirement of $346 375 before application of the net-to-gross multiplier of 1.642. Application of the multiplier results in a total system increase in revenue requirement of $568 747 and an Idaho jurisdictional revenue requirement impact of $522 228 as illustrated in Exhibit IDAHO POWER COMPANY'S NOTFICATION OF COMPUTATIONAL ERRORS, Page 3 The Company s Revenue Requirement Should Be Increased By $371.853 To Ad~ust For The Commission Computational Errors To The Company s Budget To Actual Expense Ad ustment The Commission inadvertently omitted $379 967 from the Company budgeted to actual expense adjustment. In particular, this correction must be made to the Company s General Plant Maintenance Account, Account 935. The impact on the Idaho jurisdictional revenue requirement is $371 ,853 as shown on Exhibit 1. The Company s revenue requirement should be increased by this amount to adjust for the Commission s computational errors to the Company s budget to actual expense adjustment. The Company s Revenue Requirement Should Be Increased By $1.774.286 To Adiust For the Commission s Computational Errors To The Company Pension Expense Adjustment. The Commission Staff made an adjustment of $9 188,163 to the Company s Pension Expense, Account No. 926, based on the Commission determinations in Order No. 29505. Only $7 053 492 should have been deducted from this Account since part of the test year expense should have been capitalized. The difference between the Staff adjustment and the correct expense adjustment is 134 671 as illustrated on Exhibit 1. The capitalized amount is a deduction to Rate Base in the amount of $2 014 489 , also illustrated on Exhibit Applying the Return on Rate Base of 7.8520/0 to the capitalized deduction to Rate Base as provided by Order No. 29505 results in a deduction of $158 178. Application of the net-to-gross multiplier to this figure produces a total system return deduction of $259,728. Deducting this amount from the $2 134 671 increase to IDAHO POWER COMPANY'S NOTFICATION OF COMPUTATIONAL ERRORS, Page 4 expense identified above, results in a pension expense correction of $1 874 943 to the Company s total system. The resulting impact on the Idaho jurisdictional revenue requirement is $1 774 286, the amount by which the Company s revenue requirement should be increased to adjust for the Commission s computational errors to the Company s pension expense adjustment. As a result of these computational corrections , the Company s revenue requirement for the Idaho jurisdiction should be increased by a total of $2 668,367. ($522 228 from the stipulated depreciation adjustment + $371 853 for the adjustment to budgeted to actual expenses + $1 774 286 for the correction to the Company pension expenses). II. CONCLUSION Idaho Power Company hereby respectfully requests that the Commission issue its order on one day s notice increasing the Company s Idaho jurisdictional revenue requirement by $2 668 367. Until the Commission issues this order, the Company is not recovering the revenue requirement authorized by Order No. 29505. The Company further requests that the Commission allow the Company to defer this additional revenue for inclusion in customer rates either at the time any increase in revenue requirement resulting from the Company s Petition for Reconsideration in this case is authorized or at the time the 2005-2006 Power Cost Adjustment is implemented. IDAHO POWER COMPANY'S NOTFICATION OF COMPUTATIONAL ERRORS, Page 5 DATED at Boise , Idaho, this 11 th day of June 2004. tr-- BARTON L. KLINE Attorney for Idaho Power Company IDAHO POWER COMPANY'S NOTFICATION OF COMPUTATIONAL ERRORS, Page 6 EXHIBIT 1 CASE NO. IPC-03- CORRECTION OF COMPUTATIONAL ERRORS AND THE RESULTING REVENUE REQUIREMENT IMPACTS 1) Stipulated Depreciation: Electric Plant In Service - Accounts 310-398 Less: Accumulated Depreciation Reserve Total Plant Staff Adjustment Correction Difference 205,647)205,647 205,647)205,647) (2,205,647)205,647 411,294 Return on Rate Base of 7.852% per Order No. 29505 Net-to-Gross-Multiplier Total System Return Idaho Jurisdictional Revenue Requirement Impact = 2) Update to Actuals: General Plant Maintenance - Account 935 Idaho Jurisdictional Revenue Requirement Impact = 3) Pension Expense: Electric Plant In Service - Accounts 310-398 Return on Rate Base of 7.852% per Order No. 29505 Net-to-Gross-Multiplier Total System Return Pension Expense - Account 926 Total System Impact of Pension Expense Correction = Idaho Jurisdictional Revenue Requirement Impact = EXHIBIT 379 967 014 489) (9,188,163)053,492) 346,375 642 568,747 522,228 379 967 371 ,853 (2,014 489) (158 178) 642 (259 728) 134 671 1 ,874,943 774,286 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 11th day of June 2004, I served a true and correct copy of the within and foregoing IDAHO POWER COMPANY' NOTIFICATION OF COMPUTATIONAL ERRORS upon the following named parties by e-mail and by the method indicated below, and addressed to the following: Lisa D. Nordstrom Weldon B. Stutzman Deputy Attorneys General Idaho Public Utilities Commission 472 W. Washington Street O. Box 83720 Boise, Idaho 83720-0074 Hand Delivered S. Mail Overnight Mail FAX (208) 334-3762 Randall C. Budge Eric L. Olsen Racine , Olson , Nye , Budge & Bailey O. Box 1391; 201 E. Center Pocatello, ID 83204-1391 Hand Delivered S. Mail Overnight Mail FAX (208) 232-6109 Anthony Yankel 29814 Lake Road Bay Village, OH 44140 Hand Delivered S. Mail Overnight Mail FAX (440) 808-1450 Peter J. Richardson Richardson & O'Leary 99 East State Street , Suite 200 O. Box 1849 Eagle, ID 83616 Hand Delivered S. Mail Overnight Mail FAX (208) 938-7904 Don Reading Ben Johnson Associates 6070 Hill Road Boise , I D 83703 Hand Delivered S. Mail Overnight Mail FAX (208) 384-1511 Lawrence A. Gollomp Assistant General Counsel U. S. Department of Energy 1000 Independence Avenue , SW Washington, D.C. 20585 Hand Delivered S. Mail Overnight Mail FAX (202) 586-7479 CERTIFICATE OF SERVICE, Page Dennis Goins Potomac Management Group 5801 Westchester Street Alexandria, VA 2231 0-1149 Conley E. Ward Givens, Pursley LLP 601 W. Bannock Street O. Box 2720 Boise, I D 83701-2720 Dennis E. Peseau, Ph. Utility Resources, Inc. 1500 Liberty Street S., Suite 250 Salem , OR 97302 Dean J. Miller McDevitt & Miller LLP O. Box 2564 Boise , ID 83701 Jeremiah Healy United Water Idaho, Inc. O. Box 190420 Boise, ID 83719-0420 William M. Eddie Advocates for the West O. Box 1612 Boise , ID 83701 Nancy Hirsh NW Energy Coalition 219 First Ave. South, Suite 100 Seattle, WA 98104 Brad M. Purdy Attorney at Law 2019 N. 17th Street Boise, ID 83702 Michael Karp 147 Appaloosa Lane Bellingham , W A 98229 CERTI FICA TE OF SERVICE, Page 2 Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX (208) 388-1300 Hand Delivered S. Mail Overnight Mail FAX (503) 370-9566 Hand Delivered S. Mail Overnight Mail FAX (208) 336-6912 Hand Delivered S. Mail Overnight Mail FAX (208) 362-7069 Hand Delivered S. Mail Overnight Mail FAX (208) 342-8286 Hand Delivered S. Mail Overnight Mail FAX (206) 621-0097 Hand Delivered S. Mail Overnight Mail FAX (208) 384-8511 Hand Delivered S. Mail Overnight Mail FAX (360) 724-5272 Michael L. Kurtz, Esq. Kurt J. Boehm , Esq. Boehm , Kurtz & Lowry 36 East Seventh Street, Suite 2110 Cincinnati, OH 45202 Kevin Higgins 39 Market Street , Suite 200 Salt Lake City, UT 84101 Thomas M. Power Economics Department, LA 407 University of Montana 32 Campus Drive Missoula, MT 59812 CERTIFICATE OF SERVICE , Page 3 Hand Delivered S. Mail Overnight Mail FAX (513) 421-2764 Hand Delivered S. Mail Overnight Mail FAX Hand Delivered S. Mail Overnight Mail FAX OtcJ~BARTON L. KLINE