20031028Notice of Application Order No 29369.pdf

Office of the Secretary
Service Date
October 28, 2003
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 FOR ELECTRIC SERVICE.
CASE NO. IPC-O3-
NOTICE OF APPLICATION
NOTICE OF INTERVENTION
DEADLINE
NOTICE OF ORAL ARGUMENT
NOTICE OF PREHEARING
CONFERENCE
ORDER NO. 29369
On October 16, 2003 , Idaho Power Company (Idaho Power; Company) filed an
Application with the Commission for authority to increase the Company s general rates an average of
17.7%. Ifapproved, Company revenues would increase by nearly $86 million annually. In the event
the Commission suspends Idaho Power s proposed permanent rates and charges for further
proceedings, the Company s filing also included a request for $20 million in interim rate relief.
Idaho Power provides electric service to approximately 405 000 residential, commercial, industrial
and irrigation customers in southern Idaho. In this Order, the Commission suspends the effective
date of the proposed permanent and interim rates, sets an intervention deadline, establishes a
procedure to examine the interim rate request, and schedules a prehearing conference.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that on October 16 2003, Idaho Power Company filed an
Application for authority to increase its rates and charges for electric service in the State of Idaho by
$85 561 910 effective November 15, 2003.
YOU ARE FURTHER NOTIFIED that the Company s Application states that the overall
rate of return and return on equity allowed in its last rate case (Case No. IPC-94-5) are no longer
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF ORAL ARGUMENT
NOTICE OF PREHEARING CONFERENCE
ORDER NO. 29369
reasonable and adequate given the Company s increased costs. In Idaho Power s last rate case, the
Commission authorized a 9.199% return on rate base of $1 221 624 208 and an 11% return on
common equity. Order No. 25880. According to Idaho Power, the number of customers it serves
has grown by 30% since the 1993 test year used in its last rate case. 1 The Company states it has
spent $156 million for new generating facilities, $198 million for new transmission facilities, and
$366 million toward the construction of new distribution facilities since 1993. Id.
YOU ARE FURTHER NOTIFIED that Idaho Power proposes using a 2003 test year
adjusted for known and measurable changes, an 11.2% return on common equity, and an overall rate
of return of 8.334% on a $1 547,443 530 rate base. This would result in an additional revenue
requirement of$85 561 910 attributable to the Idaho jurisdiction. The Company s Application is
based on six months of actual test year data with the remaining six months projected using Company
estimates.
YOU ARE FURTHER NOTIFIED that Idaho Power s request for an additional revenue
requirement of $85 561 910 in Idaho is generally composed of the following: 1) significant
investments in transmission and distribution facilities; 2) new production facilities including the
Danskin Power Plant; 3) hydro facility relicensing costs; 4) increases in power supply costs due to
drought and market conditions; 5) increased operations and maintenance expenses; 6) an increase in
depreciation expense; and 7) a change in the jurisdictional allocation formula.
YOU ARE FURTHER NOTIFIED that because the cost of providing power to various
customer groups differs, the Company proposed varying percentage increases for different customer
classes or groups. As a result, the proposed increases for some classes are lower than the proposed
average rate increase of 17.7% while others are higher. The chart below shows an average of all rate
components by kilowatt-hour (kWh) for certain customer groups.
1 Idaho Power press release dated October 17, 2003.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF ORAL ARGUMENT
NOTICE OF PREHEARING CONFERENCE
ORDER NO. 29369
I Customer Group
schedul
l Cu
rrent Average Proposed AVerage
r Overall PercentageBase Rate Base Rate of Increase
Residential 17 cents 16 cents 19 percent
Small Commercial I 1---
--------
33 cents 66 cents 21 percent
Large Commercial 57 cents 11 cents 15 percent
Industrial 78 cents 17 cents 13.9 percent
Irrigation 72 cents 65 cents 25 percent
YOU ARE FURTHER NOTIFIED that Idaho Power also proposed increasing the rates of
its three special contract customers - J.R. Simplot Company by 3.12%, the Department of Energy
(INEEL) by 14.16%, and Micron Technology by 8%.
YOU ARE FURTHER NOTIFIED that the rates proposed in the Company s Application
do not include the Power Cost Adjustment (PCA), a mechanism that adjusts for fluctuating power
supply costs resulting from variable market price and streamflow conditions. Idaho Power also
requested that the annual PCA effective date be moved from May 16 to June 1 to coincide with the
Company s proposal to establish a seasonal rate schedule.
YOU ARE FURTHER NOTIFIED that the Company requested these rates go into effect
as filed for electric service rendered on and after November 15 2003 , and that the effective date not
be suspended.
Seasonal Rates
YOU ARE FURTHER NOTIFIED that Idaho Power requested a change in how the time
of year impacts the rates charged for electricity. If approved, the price Idaho Power charges its
customers during the summer months would reflect the Company s seasonably higher costs of
producing or purchasing power. The change would result in summer and non-summer base rates.
The proposed energy rate for residential and small commercial customers would be 25% greater
during the three summer months of June - August than non-summer months. The proposed rate
during the non-summer months would be slightly lower than the current base rates.
Service and Demand Chan!es
YOU ARE FURTHER NOTIFIED that the customer service charge is designed to
recover a portion ofthe costs associated with providing electrical service such as meters, distribution
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF ORAL ARGUMENT
NOTICE OF PREHEARING CONFERENCE
ORDER NO. 29369
facilities, and billing services. Idaho Power proposed to increase the monthly Service Charge
(currently called the Customer Charge) from: $2.51 to $10.00 per month for residential and small
commercial customers; $10.07 to $25.00 per in-season month for irrigators; and $5.54 to $21.00 for
large commercial customers.
Under the Company s Application, demand charges for irrigation customers would
increase from $3.58 to $5.40 per in-season month. Large commercial demand charges would also
increase from $2.73 to $4.00perkW in the summer months and to $3.35 perkW during non-summer
months. Idaho Power also proposed increasing service charges, implementing summer and non-
summer demand charges, and billing mandatory time-of-use2 energy charges for industrial
customers.
Interim Rate Relief
YOU ARE FURTHER NOTIFIED that if the Commission determined that it should
suspend the effective date of the Company-proposed rates beyond November 15, Idaho Power
requested the Commission authorize a uniform 4.16% increase on all existing tariffs pending a
determination ofIdaho Power s rates and charges in this case. The interim rate increase requested
part of, and not in addition to, the general rate increase proposed by the Company.
YOU ARE FURTHER NOTIFIED that based on a 2003 test year and holding all other
financial and accounting items constant (including the currently-allowed 11 % return on equity),
Idaho Power s interim revenue requirement of$20 124 165 is based on four components:
1. The construction and operation of the Danskin Power Plant ($7 727 782).
2. The costs associated with relicensing the Company s Middle-Snake (Upper
Salmon, Lower Salmon, and Bliss), Shoshone, and C.J. Strike hydro facilities
($1 573,440).
3. The change in depreciation expenses approved in Order No. 29363 , Case No.
IPC-03-5 ($3 816 971).
2 Time-of-Use (TOU) rates refer to the pricing of electricity based on the estimated cost of electricity during a particular
period of the day or "time block." Idaho Power proposes mandatory seasonal rates under which Schedule 19 customers
would pay on-peak, mid-peak, and off-peak energy prices during the three summer months from June 1 through August
31. During all other months mid-peak and off-peak energy prices would be in effect.
3 The new depreciation rates contained in Order No. 29363 are effective December 1 2003.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF ORAL ARGUMENT
NOTICE OF PREHEARING CONFERENCE
ORDER NO. 29369
4. The increase in Idaho s share of net power supply costs from 85.5% in 1993
to 94.1 % in 2003 due to reallocation between wholesale and retail
jurisdictions ($7 024 125).
Idaho Power maintains that requiring the Company to absorb these financial costs during a regulatory
suspension would jeopardize the Company s financial viability.
YOU ARE FURTHER NOTIFIED that the Company has filed the direct testimony of its
witnesses along with their exhibits and workpapers. These documents are on file with the Commission
Secretary at the Commission s office where they may be reviewed as a matter of public record during
regular business hours. The Company s proposed schedules of rates and charges will also be kept open
for public inspection at its offices in the State of Idaho. Interested persons may also view Idaho
Power s Application at the web sites of the Commission (www.puc.state.id.) and the Company
www.idahopower.com
YOU ARE FURTHER NOTIFIED that the following persons are designated as Idaho
Power s representatives in this matter:
BARTON L. KLINE
MONICA B. MOEN
IDAHO POWER COMPANY
PO BOX 70
BOISE, ID 83707
E-mail: bkline(g1idahopower.com
mmoen(g1idahopower. com
JOHN R. GALE
VICE PRESIDENT REGULATORY AFFAIRS
IDAHO POWER COMPANY
PO BOX 70
BOISE, ID 83707
E-mail: rgale(g1idahopower.com
YOU ARE FURTHER NOTIFIED that Idaho Power s intrastate revenue requirement
and every component of it, both rate base and expense, are at issue. The Commission may grant
deny, or modify the revenue requirement requested and may find a revenue requirement different
from that proposed by any party is just, fair and reasonable. IDAP A 31.01.01.124.01.
YOU ARE FURTHER NOTIFIED that the rates and charges of all Idaho retail customers
both recurring and non-recurring, including those of special contract customers, are at issue, and
every component of every existing and proposed rate and charge is at issue. The Commission may
approve, reject or modify the rates and charges proposed and may find that rates and charges
different from those proposed by any party are just, fair and reasonable. IDAP A 31.01.01.124.02.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF ORAL ARGUMENT
NOTICE OF PREHEARING CONFERENCE
ORDER NO. 29369
YOU ARE FURTHER NOTIFIED that the Commission may approve, reject or modify
existing or proposed relationships between and among rates and charges within, between or among
customer classes or rate groupings and may approve, reject or modify existing or proposed
relationships among and between customer classes or rate groupings. IDAP A 31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that the Commission may abolish, reduce or create
rate blocks or categories of rates and charges, abolish, create or reduce components of rates and
charges, abolish, reduce or create customer classes or rate groupings, and abolish, reduce or create
absolute or relative differences among and between existing classes or rate groupings of customers.
IDAPA 31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that the tariffs, practices, rules and regulations
service, instrumentalities, equipment, facilities, classifications, and customer relations of the utility
are at issue, and the Commission may address any of them in its order. IDAPA 31.01.01.124.02.
NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this proceeding
for the purpose of presenting evidence or cross-examining witnesses at hearing must file a Petition
to Intervene with the Commission pursuant to this Commission s Rules of Procedure 72 and 73
IDAP A 31.01.01.072 and -073. Persons intending to participate at the hearings must file a Petition
to Intervene on or before November 12, 2003. Persons seeking intervenor status shall also provide
the Commission Secretary with their electronic mail addresses to facilitate future communication in
this matter.
YOU ARE FURTHER NOTIFIED that persons desiring to present their views without
parties ' rights of participation and cross-examination are not required to intervene and may present
their comments without prior notification to the Commission or the parties.
YOU ARE FURTHER NOTIFIED that the Commission Secretary shall issue a Notice of
Parties after the deadline for intervention has passed. The Notice of Parties shall assign exhibit
numbers to each party in this joint proceeding. Depending on the number of intervenors, the
Commission may direct that testimony be filed electronically with the other parties.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF ORAL ARGUMENT
NOTICE OF PREHEARING CONFERENCE
ORDER NO. 29369
NOTICE OF ORAL ARGUMENT ON INTERIM RATE
YOU ARE FURTHER NOTIFIED that parties and intervenors desiring to state a position
on the interim rate request in this Application may file legal memoranda no later than November
2003 at 3:00 p.m. addressing the legal standard that the Commission should use in considering
the request for interim rate relief and explaining why the Company should or should not be granted
the interim rate relief requested in its Application.
YOU ARE FURTHER NOTIFIED that the Commission will hold oral argument on the
Company s request for an interim rate increase on THURSDAY. NOVEMBER 13. 2003.
BEGINNING AT 9:30 A.M. IN THE COMMISSION HEARING ROOM. 472 WEST
WASHINGTON STREET. BOISE. IDAHO Aside from the Company s prefiled direct testimony
and the legal memoranda described above, the parties and intervenors shall not be required to prefile
testimony and exhibits prior to the oral argument on the proposed interim rates.
YOU ARE FURTHER NOTIFIED that in the event that the submission of legal
memoranda and oral argument currently scheduled do not adequately address the interim rate issue, the
Commission reserves the dates of December 15-, 2003 for further proceedings.
YOU ARE FURTHER NOTIFIED that all further hearings and prehearing conferences in
this matter will be held in facilities meeting the accessibility requirements of the Americans with
Disabilities Act. In order to participate, understand testimony and argument at a public hearing,
persons needing the help of a sign language interpreter or other assistance may ask the Commission
to provide a sign language interpreter or other assistance as required under the Americans with
Disabilities Act. The request for assistance must be received at least five (5) working days before the
hearing by contacting the Commission Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, ID 83720-0074
[phone] (TELEPHONE)
[phone] (FAX)
E-mail: secretary~puc.state.id.
NOTICE OF PREHEARING CONFERENCE
YOU ARE HEREBY NOTIFIED that the Commission will conduct a prehearing
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF ORAL ARGUMENT
NOTICE OF PREHEARING CONFERENCE
ORDER NO. 29369
conference in this proceeding on THURSDAY. NOVEMBER 13. 2003. IMMEDIATELY
FOLLOWING THE CONCLUSION OF THE ORAL ARGUMENT ON THE INTERIM RATE
INCREASE.One purpose of the prehearing conference is to discuss a hearing schedule, discovery,
and other preliminary or procedural matters.
YOU ARE FURTHER NOTIFIED that persons intending to participate in this proceeding
as parties are advised to begin discovery. One of the purposes of the prehearing conference will be to
discuss if there should be a deadline or cutoff for discovery.
YOU ARE FURTHER NOTIFIED that parties participating in the prehearing conference
will be expected to be familiar with the Application and be prepared to discuss both substantive and
procedural issues that may arise at the prehearing conference. Parties may offer to settle or limit
discussion of issues presented by the Application at the prehearing conference. Persons desiring to
participate in this matter as parties must intervene before and participate in the prehearing conference
to preserve their rights with regard to issues discussed during the conference. All issues in the
Application, including but not limited to revenue requirement and rate design, may be the subject of
discussion and settlement offer at the prehearing conference.
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 and specifically Idaho Code g g 61-
129 61-301 61-302 61-303 61-307 61-501 61-502, 61-503 , 61-507 , 61-622, and 61-623.
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.
SUSPENSION OF PROPOSED EFFECTIVE DATE
Due to the complexities of this case and other constraints on the Commission s time, the
Commission finds that it cannot resolve Idaho Power s requested interim or permanent rate increase
before the proposed effective date ofN ovember 15 , 2003. Pursuant to Idaho Code g g 61-622 and 61-
623, the Commission hereby suspends the proposed interim and permanent rates for a period 000 days
plus five months from November 15 2003, or until such time as the Commission enters an Order
accepting, rejecting or modifying the request in this matter.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF ORAL ARGUMENT
NOTICE OF PREHEARING CONFERENCE
ORDER NO. 29369
ORDER
IT IS HEREBY ORDERED that the proposed schedules of rates and charges
submitted by Idaho Power in this matter, both for interim and permanent increases, are suspended for
a period 000 days plus five months from November 15, 2003 , or until such time as the Commission
enters an Order accepting, rejecting or modifying the request in this matter.
IT IS FURTHER ORDERED that persons desiring to intervene in this case for the
purpose of presenting evidence or cross-examination at hearing shall file a Petition to Intervene with
the Commission no later than November 12 2003.
IT IS FURTHER ORDERED that the Commission adopts the forgoing scheduling and
deadlines. Parties shall adhere to the schedule set out above.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this c:lgfl'-.
day of October 2003.
~i:~PAUL KJEL .' P SIDENT
DENNIS S. HANSE , COMMISSIONER
ATTEST:
Commission Secretary
O:IPCE0313 In
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF ORAL ARGUMENT
NOTICE OF PREHEARING CONFERENCE
ORDER NO. 29369