20040427Final Order No. 29482.pdf

Office of the Secretary
Service Date
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
April 27, 2004
IN THE MATTER OF THE PETITION FILED
BY IDAHO POWER COMPANY FOR
APPROVAL OF MODIFICATIONS TO THE
SECURITY PROVISIONS REQUIRED TO BE
INCLUDED IN POWER PURCHASE
AGREEMENTS BETWEEN ELECTRIC
UTILITIES (IDAHO POWER, A VISTA
CORPORATION DBA A VISTA UTILITIES, AND
PACIFICORP DBA UTAH POWER & LIGHT
COMPANY) AND PURP A QUALIFYING
FACILITIES (QFs)
) CASE NOS. IPC-O3-
VU-O3-) PAC-O3-
) ORDER NO. 29482
On November 5, 2003, Idaho Power Company (Idaho Power; Company) filed a
Petition with the Idaho Public Utilities Commission (Commission) for authority to accept
modified insurance and lien rights as satisfactory risk mitigation measures in PURP Al Power
Purchase Agreements that contain levelized avoided cost rates. Without risk mitigation, PURP A
Qualifying Facilities (QFs or CSPPs) desiring levelized rates must post liquid funds as security
for the overpayment that results from the front-end loading that occurs with a levelized rate
structure. Two of the mitigation methods authorized by the Commission in Case No. U-I006-
292 (-292 Case), Order No. 21690 are (1) the purchase of certain basic insurance policies and (2)
the establishment of certain lien rights. Petition Exhibit I lists the type of insurance and levels of
coverages and deductibles deemed acceptable in Order No.21690, as amended by Order
No. 25240, Case No. IPC-93-22. Petition Exhibit 2 describes the lien rights ofIdaho Power on
QF projects that receive levelized purchase rates.
Idaho Power reports that in its most recent audit of QF projects to assess whether
those projects continue to conform with the risk mitigation requirements of their specific Power
Purchase Agreements with the Company, the Company identified numerous projects that were in
non-compliance. Some projects carried no insurance while numerous others had insurance that
were products standard in the insurance industry but which, in many circumstances, did not
conform with the insurance requirements of the projects' agreements. Idaho Power states that
1 Public Utility Regulatory Policies Act of 1978, Section 292.
ORDER NO. 29482
notices were sent to the various projects which were non-compliant with respect to the insurance
requirements and three common responses were received by Idaho Power from those projects:
(1) the specific insurance required within the Power Purchase Agreement is not currently
available from the insurance industry; (2) because the insurance is not available, as a matter of
law (the Doctrine of Impossibility), Idaho Power cannot enforce these requirements or require
alternative security; and (3) the financing structures of existing projects do not allow Idaho
Power to place a second lien on the project as required in the -292 case.
Regarding insurance, Idaho Power states it has contacted various insurance providers
and verified the unavailability of the specified insurance. Idaho Power states that it has also
reviewed the potential application of the - Doctrine of Impossibility - and recognizes that it may
be a legitimate claim that may be upheld in legal proceedings.
Regarding liens, the Company reports that the financing arrangements of some
projects preclude a subsequent lien position by Idaho Power or any other party without the
consent of the primary lender. Where such restrictions do not exist, the Company either places a
second lien on the project at the time a levelized rate agreement is executed or at the time a
project is amended to conform to the risk mitigation requirements of Order No. 21690, as
amended. Realistically, however, the Company contends that the value of security obtained by
placement of a second lien on a project is tenuous. Either the value of equipment, particularly on
less sophisticated projects, is negligible since used or rebuilt equipment is utilized (often non-
standard utility equipment, pump motors running in reverse, etc.) or the value of that equipment
is highly financed and the financial institution has the first lien on those assets making the value
of the second lien marginal. As the project ages and the financing is either paid or at least
reduced, the value of the assets depreciate over the same time frame. Thus, the Company
contends, were a project to default, the value of the assets remaining for the second lien would be
minor due to removal and other costs. Furthermore, the Company states that the value of a
project is generally not the actual value of the physical equipment; instead, the marketable and
bankable value of a project is the value of the projected revenues of the energy delivered to
Idaho Power under the levelized rate agreement.
In response to the requirements of the insurance industry and either the negligible
value of second liens on QF projects or the Company s inability to obtain a second lien on a QF
project, Idaho Power proposes to conform its QF contract requirements to contemporary
ORDER NO. 29482
insurance industry standards and realistic lien rights. Due to what the Company contends is the
marginal value of the secondary lien position and the inability of the Company, in some
circumstances, to obtain security in the form of a second lien, Idaho Power proposes to delete the
secondary lien rights as a risk mitigation measure in levelized rate arrangements with QFs.
The Company s proposed changes to the basic business insurance requirements that
are now deemed by the insurance industry to be reasonably available to QFs are shown below in
legislative format:
INSURANCE
TYPE LIMITS MAXIMUM
DEDUCTIBLE
Commercial General The greater of 15% of plant 5% of Plant Cost
Liability cost or $1 Million/incident Consistent with current
Insurance Industry Utility
practices for a similar property
All Risk Property Not less than W%-80%5% of Plant Cost or $25 000
Plant Cost v/hichever greater
Consistent with current
Insurance Industry Utility
practices for similar
property.
Catastrophic Perils Not less than 6G%--- 8 0 %5% of Plant Cost Consistent
(Earthquake and Flood)equipment cost with current Insurance
Industry Utility practices for a
similar property.
Boiler/Machinery Not less than W%-80%equipment cost
equipment cost $25 000 \vhichever is greater
Consistent with current
Insurance Utility practices for
a similar property.
Loss Income (Business Not less than 75%30 days of income Consistent
Interruption)estimated daily Income;not with current Insurance
less than 20%of estimated Industry Utility practices for a
annual income similar property.
All of the above insurance coverages shall be placed with insurance companies with an A.M Best
rating of A- or better. Idaho Power contends that changes to the required basic business
insurance coverages can be made by a QF without imposing substantial additional risk in the
ORDER NO. 29482
event of a default. In addition, the Company contends that by better aligning these requirements
with current insurance industry standards and business practices, enforcement and compliance
with these requirements will be reasonably attainable.
The Company proposes that the modified insurance requirements be accepted as basic
business insurance coverages for purposes of risk mitigation as established in Order No. 21690
as amended, for future QF agreements and for pre-existing QF projects as their current insurance
is renewed. The Company also proposes that the requirement for the establishment of secondary
lien rights in favor ofIdaho Power as established in Order No. 21690, as amended, for future QF
agreements and for pre-existing QF projects as their agreements are amended be rescinded.
On December 5, 2003, the Commission issued Notices of Application and Modified
Procedure in Case Nos. IPC-03-, AVU-03-9 and PAC-03-13. The deadline for filing
written comments was January 15 , 2004. Timely and out-of-time comments were filed by
Commission Staff, PacifiCorp, Avista and Vern Ravenscroft, a QF developer. On February 13
2004, Idaho Power filed Reply Comments. The filed comments can be summarized as followed:
Commission Staff
Insurance Requirements
Staff in its comments states that it has contacted insurance providers for many Idaho
QFs and confirms the unavailability or extreme high cost of insurance products specified under
the current security requirements for levelized rates.
Staff notes that in its -292 security case the Commission in Order No. 21446 made
the following statement regarding insurance:
The feasibility of insurance as security against overpayment liability is
dependent upon the willingness of the industry to ensure against economic
abandonment for a 35-year period with limited rights of cancellation
(nonpayment of premium). It was the expressed concern of some that
insurance companies rarely make an unconditional commitment to cover all
amounts of risk; that a residual risk, the risk above policy limits, remains with
the policyholder.
Order No. 21446
Staff recognizes that Idaho Power s proposed changes to the required basic business
insurance coverage will provide slightly less security in the event of a default. However, Staff
believes that a slightly lower security requirement is better than having numerous QF projects
ORDER NO. 29482
with no insurance at all because of changing insurance industry standards that make current
insurance requirements unobtainable or economically impracticable.Current security
requirements, Staff contends , are ineffective if enforcement and compliance are not reasonably
possible.
Staff has reviewed Idaho Power s proposed changes to the insurance requirements
and suggests adding some clarifying language. Idaho Power has verbally concurred with Staffs
proposed modifications. Staffs proposed insurance requirements are attached.
Second Lien
Idaho Power recommends that the second lien requirement for QF projects be
eliminated.Staff objects to this proposed modification.In providing background for its
objection, Staff cites the following Commission findings in the -292 security requirements case:
1. That levelized rates are an incentive to the development of the CSPP
industry;
2. That CSPPs receiving levelized avoided cost payments will be overpaid if
they substantially reduce generation or if they discontinue generation (i.
default) prior to the end oftheir contract term. .
4. That the burden of said overpayment falls on the ratepayers unless they are
reimbursed by the defaulting CSPP;...
7. That CSPPs may be unable to provide said reimbursement unless they are
required to establish and maintain some form of liquid security; ...
10. That it is just and reasonable to require CSPPs to maintain a form of liquid
security equal to 100% of the estimated cumulative overpayment
(estimate) throughout the life of each QF Power Purchase Agreement;
11. That it is just and reasonable to reduce the amount of the required liquid
security (required amount) by 25% of the estimate for each QF protected
by adequate basic business insurance as described herein;
12. That it is just and reasonable to reduce the required amount by an
additional 20% of the estimate for each QF meeting the requirements of
subparagraph above, and also providing full engineering certification
as described herein;
13. That it is just and reasonable to reduce the required amount by an
additional 10% of the estimate for each QF meeting the requirements of
ORDER NO. 29482
subparagraph 11 , above, and also maintaining a maintenance escrow as
described herein;
14. That it is just and reasonable to reduce the required amount by an
additional 35% of the estimate for each QF meeting the requirements of
subparagraphs 11, 12, and 13 , above, and also providing the energy
purchasing utility with adequate lien rights as described herein. ...
In Order No. 21446 in the -292 case the Commission made the following findings
regarding lien rights:
We believe that some form of security and/or risk mitigation is necessary to
achieve an optimum level of ratepayer indifference. ...
The lien rights available to secure ratepayer interests in CSPP projects are
usually subordinate to the first lien of the project financier. The value of a
second lien position in all the QF property and facilities is the measure or
degree of control over the project that it imparts with respect to its continued
financing, operations and maintenance. Although it provides no liquid fund
for satisfaction of overpayment obligation, we nevertheless recognize it as a
valuable tool in safeguarding the interests of the ratepayer. To be acceptable
a lien should be subordinate only to the first lien of the project financier and
the FERC license, as evidenced by an appropriate policy of title insurance.
In Commission Order No. 21690 the Commission stated:
The value to the utility and the ratepayer of a lien is directly related to the
quality of the underlying QF. Hence, the 35% reduction in liquid security
requirement for this risk mitigation item shall remain in effect only so long as
the QF fulfills all requirements of Sections G. (Basic Insurance), H.
(Engineering Certification), 1. (Maintenance Escrow) and J. (Lien Rights).
Failure to maintain these terms and conditions at any time during the life of
the power sales agreement shall result in the 35% reduction being revoked.
Failure to establish and maintain the appropriate new level of liquid
overpayment security shall constitute breach 01 contract.
The risk to Idaho Power if a QF defaults is non-recovery of overpayment liability and
replacement of QF power. Overpayment liability is the difference between the levelized rate
paid to the QF and the non-levelized rate that would have otherwise been paid. However
because the majority of QF contracts were signed in the 1980s and have levelized rates still far
above today s prices, the value to Idaho Power of being relieved by purchasing at high levelized
rates may outweigh any accumulated overpayment liability. Ideally in the event of a contract
ORDER NO. 29482
default, Idaho Power would be able to recover the QF's overpayment liability and be relieved of
further purchases under the contract. Unfortunately, Staff sees no good alternative to second
liens as a security measure. Because elimination of the second lien requirement lessens Idaho
Power s security position, Staff opposes the Company s request to eliminate it. Staff notes that
without a lien, a QF with a levelized contract is required to post as liquid security 35% of the
estimated overpayment liability amount. It is the Company s obligation to monitor and maintain
appropriate security requirements for its QF contract portfolio in accordance with Commission
Orders.
Pa cifi Corp
PacifiCorp in its comments states that it is under contract with some 13 separate co-
generators and small power producers (CSPPs) in Idaho. Although only one of the contracts is
subject to the Commission s -292 security Order No. 21690, the Company states that as its
contracts expire it will be faced with many of the same issues addressed by Idaho Power in its
Petition.
PacifiCorp notes that the focus of Idaho Power s Petition is narrow. As such it does
not address all of the myriad issues that must be dealt with in the context of analyzing whether a
contract with a particular CSPP adequately protects the interests of the utility and of its
ratepayers. PacifiCorp expresses its general support for the position taken by Idaho Power in its
Petition. The utility feels, however, that in order to adequately protect PacifiCorp s interest and
those of its shareholders without unduly burdening QFs desiring to enter into contracts for the
sale of power, it is important to add the following classes of insurance coverage to those set out
in Idaho Power s Petition and exhibits: (1) automotive liability coverage with limits of
million/incident; and (2) worker s compensation coverage with limits of $1 million/incident.
Vernon Ravenscroft
Mr. Ravenscroft compliments Idaho Power for recognizing and initiating corrective
action in regard to the current insurance problems. Mr. Ravenscroft offers the final points for
clarification and/or strengthening of the pending Petition:
No.1. Commercial General Liability: No comment.
No.2. All Risk Property - recommends that the Commission s final Order more
specifically define "80% of cost." Does this category include the "soft costs" such as
ORDER NO. 29482
engineering, federal licensing, legal expense, contract negotiations, financing expense, finders
fee, etc.? Also, does it include land purchases, long-term land rental contracts and rental rights?
No.3. Catastrophic Perils (Earthquake and Flood)
- "
80% of equipment costs.
Questions whether this is intended to be original cost, current replacement cost or current
depreciated value?
No.4. Boiler Machinery - Same questions as outlined in No.
No.5. Loss of Income (Business Interruption)
a. "75% of estimated daily income" - suggests that this is meaningless
when it is combined with "20% of estimated annual income." E., for the
Ravenscroft project 75% of the estimated daily income would be $482 and 20% of
the estimated average annual income would be $46 955. Mr. Ravenscroft does not
understand the need for the daily figure.
b. Mr. Ravenscroft contends that there is an extreme difference when
you compare the "business interruption" risk between the various independent
projects now operating in Idaho. There are some who have only one generation unit
served by only one penstock and one control valve. Any major breakdown can
cause a total loss of income for several weeks or even months. In comparison, the
Ravenscroft project will soon have four generation units all under computer control
and each with its own penstock and control valve. Interruption loss for the
Ravenscroft project is confined to the 20% of the time (Idaho Department of Water
Resource Flow Duration Data) when we have a flow that exceeds our plant capacity.
Recommends that in the final Order there be some procedures and/or defined basis
whereby this requirement can be adjusted to reflect the differing degrees of risk
from one proj ect to the other.
Secondly, on the same subject, the Ravenscroft project has induction generators
which can be quickly repaired in at least two shops in Twin Falls and vertical shaft
turbines which can be quickly repaired at Yankee Machine Shop in Boise. The
Ravenscroft project does not have a significant business interruption risk.
No.6. Other than the identification of low-risk projects explained above, Mr.
Ravenscroft agrees with the generalized deductible language which reads "consistent with
current insurance industry utility practice for a similar property.
Avista
Avista in its comments notes that in PacifiCorp s comments, PacifiCorp recommends
that classes of liability insurance coverage be added to those listed in Idaho Power s Petition and
exhibits to wit: (1) automobile liability coverage and (2) worker s compensation coverage.
While not disputing the prudence of coverage related to automobile liability and worker
ORDER NO. 29482
compensation, A vista notes that the insurance requirements to which Idaho Power s Petition
relate are those that secure the financial capacity of a PURP A project to discharge its contract
obligations to the purchasing utility purchase contract, when the purchase contract provides for a
levelized rate. A vista submits that it would be prudent for each utility to individually develop its
requirements for personal injury and property damage, and individually negotiate such
requirements with PURP A projects. The Commission has not, heretofore, required uniform and
standardized liability insurance requirements for PURP A developers. A vista contends that it
would not be appropriate to deal with personal injury and property damage liability insurance in
the docket, which only addresses the security requirements for PURP A projects that receive
payments at levelized avoided cost rates.
Other than the foregoing comments with respect to property and personal injury
liability insurance requirements, Avista states that it has no objection to the comments of Staff
or PacifiCorp in this matter.
Idaho Power Reply Comments
Insurance Requirements
Idaho Power agrees with A vista s characterization of the limited purpose of Idaho
Power s Petition and supports the comments set forth by A vista. Idaho Power only seeks to
revise certain security components of its agreements with QFs who have levelized avoided cost
contracts with the Company. Except to the extent that certain insurance is required by the QF to
conform with Commission required risk mitigation provisions, Idaho Power is not seeking
direction with respect to general insurance requirements for QF projects in this docket. Idaho
Power concurs with the Commission Staff s recommended clarifications and modifications to
the insurance requirements as proposed by the Company and respectfully requests that proposed
Insurance requirements as illustrated in Commission Staff Comments, Attachment 4, be
approved.
Second Lien Rights
Future QF Agreements:
Idaho Power admits to mixed feelings on the subject of second liens. On the one
hand, the Company s experience in enforcing second liens has not been good. On the other
hand, the prospect of "loaning" CSPP developers millions of dollars by levelized rates without
any security is not consistent with good business practice.
ORDER NO. 29482
Should the Commission accept Staff s recommendation and continue to reqmre
second lien security rights, Idaho Power informs the Commission that it will retain outside
counsel to complete the paperwork required to establish those lien rights. The estimated legal
fee for establishing a second lien on a QF project is $1 000 to $1 500. Idaho Power requests that
the Commission permit the Company to collect its cost of establishing a second lien directly
from QFs electing to be paid levelized rates. Alternatively, the Company requests that it be
authorized to include those legal expenses as part of the cost of qualifying facility purchases in
the Company s annual PCA.
Pre-existing QF Projects:
Should the Commission accept Staff s recommendation, the Company expects that
pre-existing QF projects with levelized contracts that are currently required to meet the -292 case
security requirement will continue to conform to those requirements. The only change in these
requirements will be any Commission approved modifications to the -292 case "basic insurance
provisions. QF's with a levelized avoided cost rate contract who have not been able to obtain
Commission-required valued loss of income insurance at commercially reasonable rates would
be expected to comply with the -292 case "basic insurance" component as requested by the
Company in its Petition and as adjusted by Staff but would not be obligated to either continue to
seek valued loss of income insurance or to grant a second lien in favor of Idaho Power on their
projects.
In conclusion, the Company requests that the Commission issue an Order:
1. Finding that the modified insurance requirement shown in the Attachment
4 to the Commission Staff Comments be accepted as the "basic business
insurance" coverages for purposes of risk mitigation as established in
Order No. 21690, as amended, for future CSPP agreements for pre-existing
CSPP projects as their current insurance is renewed;
2. Finding, for pre-existing CSPP projects with levelized contracts who have
not been able to obtain Co~ission-required valued loss of income
insurance and who have not granted a second lien in favor of Idaho
Power, that those projects be required to comply with the -292 case "basic
. insurance" component as shown in Attachment 4 to the Commission Staff
comments but that those projects now be obligated to either continue to
seek valued loss of income insurance or to grant a second lien in favor of
the Company; and
ORDER NO. 29482
3. Finding that, if the Commission determines if Idaho Power shall obtain a
second lien on all new CSPP projects with whom it enters into levelized
rate agreement, then the Company is authorized to collect the reasonable
attorney s fees and cost of establishing the second lien directly from the
CSPPs or, in the alternative, that the Company be authorized to include
those legal expenses as a part of the cost of Qualifying Facility purchases
in the Company s PCA.
COMMISSION FINDINGS
The Commission has reviewed the filings of record in Case Nos. IPC-03-
AVU-03-9 and PAC-03-13 including the comments and recommendations of PacifiCorp,
Avista, Commission Staff and Vern Ravenscroft. Based on our review, we continue to find it
reasonable to process this case pursuant to Modified Procedure. IDAPA 31.01.01.204.
Idaho Power in this case proposes modifications to the PURP A security provisions
for contracts with levelized rates. The Company proposes changes to the insurance requirements
to comport with what is presently available in the insurance industry. The Company also
proposes to eliminate the second lien requirement. The Commission notes that PURP A QFs can
request either levelized or non-levelized rates.With levelized rates there is a risk of
overpayment should the contract terminate prior to its scheduled end. To mitigate that risk, the
Commission has required both insurance and lien rights. Reference Case No. U-I006-292 (-292
Case), Order No. 21690, as amended.
Regarding insurance, Idaho Power in Reply Comments recommends that Staffs
proposed modifications to the insurance requirements be accepted and that PacifiCorp
proposed expansion of insurance requirements to include automobile and workers ' compensation
coverage be denied. The Commission finds the proposed modifications to security provisions as
recommended by Staff and agreed to by Idaho Power, PacifiCorp and A vista to be reasonable.
We also find it reasonable to deny PacifiCorp s proposed expansion of the -292 insurance
requirements. The -292 insurance requirements deal only with security requirements for
PURP A QF projects that receive payments at levelized avoided cost rates.
The Commission finds that most of the clarification requested by Mr. Ravenscroft is
addressed in the insurance modifications we are approving. Not specifically addressed is Mr.
Ravenscroft's question as to whether in All Risk Property Insurance
, "
80% of cost" includes
soft costs" such as engineering, federal licensing, legal expense, contract negotiations
ORDER NO. 29482
financing expense, finders fees, etc. Based on Staffs investigation, the Commission believes
that such "soft costs" are not included in All Risk Property Insurance.
Regarding lien rights, Idaho Power recommends that the second lien requirement be
eliminated. Staff objects to this proposed modification and notes that without a second lien the
methodology for QFs requesting levelized rates requires the posting of liquid security, 35% of
the estimated overpayment liability amount. Idaho Power admits mixed feelings and informs the
Commission that should the second lien continue to be a security requirement, it is the
Company s intention to outsource this legal work. Idaho Power requests Commission authority
to collect the Company-estimated $1 000 to $1 500 cost of securing a lien from the QF or
alternatively recover the lien expense as part of its annual Power Cost Adjustment (PCA) filing.
Commission Staff contends that this is a contract administration cost and has never been a cost
directly billed to QFs. It is also, Staff contends, not the type of power cost that is appropriate for
recovery through a PCA.
The Commission continues to find value for ratepayers in the presence of a second
lien to secure overpayment liability. We recognize that securing a lien may entail some expense.
We assume the Company s decision to outsource is based on a determination that the utility has
no in-house expertise or that the cost of outsourcing the task is less than performing the task
itself. The Commission finds that it is inappropriate to recover this type of expense as part of the
Company s PCA. We find it reasonable, however, for the Company to assess this cost to QFs.
Alternatively, we find it reasonable that the QF be permitted to prepare the lien documentation
and to file the lien itself. The procedure that we approve for recovery of lien expense is for new
levelized PURP A contracts only. For existing levelized PURP A contracts, the Company is
expected to administer its contracts in a responsible fashion and to require QF compliance with
Commission -292 security requirements. For those levelized QF contracts without a second lien
the QF should be brought into compliance or the Company should require a posting of liquid
security. The Commission expects the Company to follow Commission Orders. Reference
Idaho Code ~ 61-706. Ifliquid security is required but not enforced, it is the Company and not
its customers that are at risk for the foregone security.
ORDER NO. 29482
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Idaho Power Company,
A vista Corporation, and PacifiCorp dba Utah Power & Light Company, electric utilities
pursuant to the authority granted it under Title 61 of the Idaho Code and the Public Utility
Regulatory Policies Act of 1978 (PURP A).
The Commission has the authority under PURP A and implementing regulations of
the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric
utilities to enter into fixed term obligations for the purchase of energy from Qualified Facilities
and to implement FERC rules.
ORDER
In consideration of the foregoing, IT IS HEREBY ORDERED and the Commission
does hereby approve those modifications to insurance requirements for PURP A power purchase
agreements containing levelized avoided cost rates as set forth in the schedule attached to this
Order.
IT IS FURTHER ORDERED and the Commission does hereby deny Idaho Power
Company s request to eliminate the second lien requirement as a risk mitigation measure for
PURP A power purchase agreements that contain levelized avoided cost rates. The Company is
authorized for new levelized contracts to recover lien expense from the contracting QF; or
alternatively, we permit the QF to prepare the lien documentation and file the lien itself.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) may petition for reconsideration within twenty-one (21) days of the
service date of this Order with regard to any matter decided in this Order. Within seven (7) days
after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 29482
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ~ '7 f1o.
day of April 2004.
AUL KJEL DER, PRESIDENT'
ARSHA H. SMITH, COMMISSIONER
ATTEST:
t;;!Je
Commission Secretary
vld/O:IPCE0316 AVUE0309 PACE0313 sw
ORDER NO. 29482
. ,..,.. ,
.Ii'
.,.
INSURA.~ CE
TYPE LIMITS MAXIMUM
DEDUCTIBLE
Commercial General Liability The grcatcr of 15% of plant 5% ofPlQIJ,t CO3t
CO3t or $1 Million per Consistent with current
occurrence Insurance Industry utili
practices for a similar property
. ~
All Risk Property Not less than 94-%-80%5% of Plant Cost or $25 000
Plant CO3t the current whichever is greater
replacement cost of plant Consistent with current
buildings and/or equipment*insurance Industry utility
practices for a similar
property .
Catastrophic Perils Not less th?ll W%-80%5% of Plant Cost Consistent
(Earthquake and Flood)equipment cost the CUITent with current Insurance
replacement cost of plant Industry utility practices for a
buildings. and/or equipment*similar property.
Boiler/Machinery Not less than ~80%0% of equipment cost or
equipmcpt cost the current $25 000, whichever is greater
replacement cost of plant Consistent with current
buildings and/or equipment*Insurance utility practices for
a simi-lar property.
Loss of Income (Business Not less than 20% of 30 da)'s of income Consistent
Interruption)estimated annual income with current Insurance
IndUstry utility practices for a
similar property.
. * Replacement shall ?e with property of like kind, age and q.uali~
. . .. ., '. ,. .. .
All of the above insUrance coverages shall be placed with insurance companies with an AM Best
rating of A- or better.
' .. .
ATTACHMENT
ORDER NO. 29482
CASE NOS. IPC-O3-
A VU-O3-
PAC-O3-