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Home My WebLink About20040227Notice of Public Hearings Order No 29436.pdfOffice of the Secretary Service Date February 27 2004 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 PUBLIC HEARIN GS NOTICE OF PUBLIC COMMENT DEADLINE ORDER NO. 29436 On October 16 2003, Idaho Power Company (Idaho Power, Company) filed an Application for authority to increase its rates and charges for electric service in Idaho an average of 17.7% effective November 15 , 2003. If approved, Company revenues would increase by nearly $86 million annually. Idaho Power provides electric service to approximately 405 000 residential, commercial, industrial and irrigation customers in southern Idaho. To allow for additional evidence to be taken before making a fmal decision, the Commission suspended the Company s proposed effective date pursuant to Idaho Code ~~ 61-622 and 61-623. Order No. 29369. On December 22, 2003, the Commission issued Order No. 29403 denying the Company s request for an interim rate increase and established a formal hearing schedule. In January 2004, the Commission Staff held public workshops in Boise, Caldwell Twin Falls, and Pocatello to answer customer questions regarding the Company s Application. The Commission now wishes to take public testimony in anticipation of the formal evidentiary hearing scheduled for March 29-ApriI9, 2004. In this Order, the Commission establishes public hearings in five cities to receive customer input on the Company s Application and sets a deadline for public comment. THE APPLICATION 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 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 NOTICE OF PUBLIC HEARINGS NOTICE OF PUBLIC COMMENT DEADLINEORDER NO. 29436 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. 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 547,443 530 rate base. This would result in an additional revenue requirement of$85 561 910 attributable to the Idaho jurisdiction that 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. 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 or higher than the proposed average rate increase of 17.7%. The chart below shows an average of all rate components by kilowatt-hour (kWh) for certain customer groups. Customer Group Schedule Current Average Company- Proposed Company-Proposed Base Rate Average Base Rate Overall Percentage of Increase Residential 17 cents 16 cents 19 percent Small Commercial 33 cents 66 cents 21 percent Large Commercial 57 cents 11 cents 15 percent Industrial 78 cents 17 cents 13.9 percent Irrigation 24 3. 72 cent~1 65 cents 25 percent Idaho Power also proposed increasing the rates of its three special contract customers - R. Simplot Company by 3.12%, the Department of Energy (INEEL) by 14.16%, and Micron Technology by 8%. 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. However, the Company-proposed rate increases 1 Idaho Power press release dated October 17, 2003. NOTICE OF PUBLIC HEARINGS NOTICE OF PUBLIC COMMENT DEADLINEORDER NO. 29436 listed above do include proposed increases to fixed (customer and minimum) charges, demand charges, and energy charges for applicable customer classes. For example, Idaho Power s request to increase its customer service charge from $2.51 to $10.00 is included in the proposed 19% overall residential rate increase. Idaho Power also requested a change in how the time of year impacts the electric rates charged to the residential, commercial and industrial customer classes. 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. POSITIONS OF OTHER PARTIES In response to Idaho Power s Application and supporting testimony, the Commission Staff and seven (7) intervenors filed testimony last week. These parties oppose many ofthe positions taken by Idaho Power. For example, the Commission Staff recommended the Commission approve an Idaho jurisdictional revenue requirement of$498 758 249 rather than the $569 523 279 proposed by Idaho Power. According to Staff's testimony, approximately $15 million in additional customer revenue is needed - not the nearly $86 million requested by the Company. If approved by the Commission, Staff's proposed revenue requirement would require an average 3.06% rate increase for Idaho Power customers. The chart below shows an average of all rate components by kilowatt-hour (kWh) for certain customer groups under Staff's proposal. Customer Group Schedule Current Average Staff- Proposed Staff- Proposed Base Rate Average Base Rate Overall Percentage of Increase Residential 5.1 7 cents 30 cents 5 percent ISmail Commercial 33 cents 1-- 6.60 cents 4.2 percent ILarge Commercial 57 cents 61 cents 1.2 percent Industrial 78 cents 78 cents 0 percent Irrigation 72 cents 4.29 cents 15.0 percent NOTICE OF PUBLIC HEARINGS NOTICE OF PUBLIC COMMENT DEADLINEORDER NO. 29436 For more detailed information, interested persons are encouraged to read the testimony and exhibits of all parties online at: http://www.puc.state.id.us/fileroom/electric/ipce0313.htm or in person at the Commission s offices during business hours. NOTICE OF PUBLIC HEARINGS YOU ARE HEREBY NOTIFIED that the Commission has scheduled five hearings regarding Idaho Power s Application to gather public input on the proposed rate increase. Customers, local government leaders, and other interested persons are encouraged to attend and testify at the public hearings. YOU ARE FURTHER NOTIFIED that public hearings will be held in: Pocatello on Monday, March 15,2004 at City Hall, located at 911 North The public hearing will begin at 1 :00 p. Jerome on Monday, March 15, 2004 at the Sawtooth Inn Best Western located at 2653 South Lincoln. The public hearing will begin at 6:30 p. McCall on Wednesday, March 17,2004 at the Best Western, located at 415 North 3rd. The public hearing will begin at 6:30 p. Payette on Thursday, March 18, 2004 at the Payette High School Auditorium, located at 1500 6th Avenue South. The public hearing will begin at 2:30 pm. Boise on Wednesday, March 31, 2004 at the Idaho Public Utilities Commission Hearing Room, located at 472 West Washington Street. The public hearing will begin at 6:30 p. YOU ARE FURTHER NOTIFIED that all public hearings in this matter will be held in facilities meeting the accessibility requirements ofthe Americans with Disabilities Act. In order to participate in the public hearings, 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: NOTICE OF PUBLIC HEARINGS NOTICE OF PUBLIC COMMENT DEADLINEORDER NO. 29436 IDAHO PUBLIC UTILITIES COMMISSION PO BOX 83720 BOISE, ID 83720-0074 (208) 334-0338 (TELEPHONE) (208) 334-3762 (FAX) E-mail: secretary~puc.state.id. 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 and the testimony of other parties filed thus far at the Commission s web site: www.puc.state.id.us. YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq. NOTICE OF COMMENT DEADLINE YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this Application may file a written comment in support or opposition with the Commission on or before Friday, April 30 2004. The comment must contain a statement of reasons supporting the comment. Written comments concerning this Application shall be mailed to the Commission and the Company at the addresses reflected below: Commission Secretary Idaho Public Utilities Commission PO Box 83720 Boise, ID 83720-0074 Street Address for Express Mail: Barton L. Kline John R. Gale Idaho Power Company O. Box 70 Boise, ID 83707-0070 Email: bkline~idahopower.com rgale~idahopower.com 472 W. Washington Street Boise, ID 83702-5983 These comments should contain the case caption and case number shown on the first page of this document.Persons desiring to submit comments via e-mail may do so by accessing the Commission s home page located at www.puc.state.id.. Click the "Comments and Questions NOTICE OF PUBLIC HEARINGS NOTICE OF PUBLIC COMMENT DEADLINEORDER NO. 29436 icon, and complete the comment form, using the case number as it appears on the front of this document. These comments must also be sent to the Applicant at the e-mail addresses listed above. ORDER IT IS HEREBY ORDERED that the Commission adopts the foregoing public hearing schedule and comment deadline as set forth above. DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this d-.1f1-- day of February 2004. MARSHA H. SMITH, COMMISSIONER ATTEST: *(j J a D. Jewell Commission Secretary O:IPCE0313 In3 NOTICE OF PUBLIC HEARINGS NOTICE OF PUBLIC COMMENT DEADLINEORDER NO. 29436