20060306notice_of_application_ipc.pdf

Office of the Secretary
Service Date
March 6, 2006
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE INVESTIGATION
OF FINANCIAL DISINCENTIVES TO
INVESTMENT IN ENERGY EFFICIENCY BY
IDAHO POWER COMPANY.
NOTICE OF APPLICATION
CASE NO. IPC-O4-
NOTICE OF
INTERVENTION DEADLINE
BACKGROUND
On August 10 , 2004, the Idaho Public Utilities Commission (Commission) in Order
No. 29558 established Case No. IPC-04-15 for an investigation of financial disincentives to
investment in energy efficiency by Idaho Power Company (Idaho Power; Company). In its
Order the Commission approved a series of workshops and directed the participating parties to
provide a written report to the Commission no later than December 15 , 2004 to update the
Commission on the status of the workshops.
On December 15 2004, workshop participants in Case No. IPC-04-15 filed a status
report with the Commission. A final report on workshop proceedings was filed on February 14
2005. The final report called for two action items: (1) the development of a true-up simulation
to track what might have occurred if a decoupling or true-up mechanism had been implemented
for Idaho Power at the time of the last general rate case, and (2) advocacy for filing a pilot
energy efficiency program that would incorporate both performance incentives and "lost
revenue" adjustments.
APPLICATION
YOU ARE HEREBY NOTIFIED that on January 27, 2006, Idaho Power filed an
Application in Case No. IPC-04-15 requesting authority to implement a rate adjustment
mechanism that would adjust the Company s rates upward or downward to recover the
Company s fixed costs independent from the volume of the Company s energy sales. This type
of ratemaking mechanism is commonly referred to as a "decoupling mechanism." However
Idaho Power in its Application believes that a more accurate description of what the Company is
proposing is a "true-up mechanism." The true-up mechanism, entitled "Fixed-Cost Adjustment"
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
(FCA) would be applicable only to Residential Service (Schedule 1 , Schedule 4 and Schedule 5)
and Small General Service (Schedule 7) customers.
As reflected in the Company s decoupling proposal, the fixed-cost recovery portion
of the Company s revenue requirement allowed for recovery in rates would be established for
these two customer classes at the time of a general rate case. Thereafter, the FCA would provide
the mechanism to true-up the collection of fixed costs to recover the difference between the fixed
costs actually recovered through rates and the fixed rates that were allowed to be recovered.
Accounting for the FCA would be effective as of January 1 , 2006, and the first FCA rate change
would occur on June 1, 2007.
F or both the residential and small commercial classes, the FCA would work
identically. For each class, the actual number of customers would be multiplied by the fixed cost
per customer rate (established as a part of determining the Company s allowed revenue
requirement in a general rate case). This product would represent the "allowed fixed-cost
recovery" amount. This amount would be compared with the amount of fixed costs actually
recovered by the Company. To determine this "actual fixed-cost recovered amount " the
Company would take weather-normalized sales for each class and multiply that by the fixed-cost
per kilowatt-hour rate (again, established in the Company s general rate case). The difference
between these two numbers (the "allowed fixed-cost recovery" amount minus the "actual fixed-
cost recovered" amount) would be the fixed-cost adjustment for each class. The FCA could be
either positive or negative.
The FCA is proposed to change rates coincidentally with Idaho Power s Power Cost
Adjustment (PCA) and Idaho Power s seasonal rates. Although the FCA would be timed to
adjust on the same schedule as the PCA, the accounting for the FCA will be completely separate
from the PCA. Additionally, the Company proposes to include a discretionary cap of 3% as a
potential rate mitigation tool for the Commission s use.
The purpose of the FCA, the Company contends, is to remove the financial
disincentive to the Company s investing fully in energy efficiency activities embedded in current
rate design. Limiting implementation to only residential and small general service customers
the Company states, allows for an incremental approach for evaluating a new type of mechanism
for the Company and its customers.
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NOTICE OF INTERVENTION DEADLINE
The Company in its Application details proposed FCA accounting entries for monthly
deferrals plus interest. The Company in its Application has filed the supporting testimony and
exhibits of Ralph Cavanagh, Michael J. Youngblood, and John R. Gale.
The Company believes that consideration of the proposed FCA mechanism would be
facilitated by resuming the workshop process that was conducted earlier in this case. This, the
Company contends, will allow the parties to discuss both the merits and the specific
implementation issues associated with the FCA based on the progress already made in this case.
The Company believes that such a workshop process could culminate in a settlement stipulation
that would provide a consensus agreement on the technical details necessary to the operation of a
tracking adjustment, such as the specifics of deferral methodology, the weather normalization
process, and specific provisions to be included in implementing the FCA.
Idaho Power requests that the Commission issue an Order re-initiating the workshop
process and ultimately authorizing the Company to implement the fixed-cost adjustment
mechanism for residential and small general service customers with an initial rate change to
occur on June 1 2007.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the Company
decoupling proposal and acknowledges the intention of the Company and Commission Staff
(together with other parties of record) to initiate and engage in settlement discussions. Reference
Commission Settlement Rules of Procedure, IDAP A 31.01.01.272-276.
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this case
for the purpose of becoming a party, i., to present evidence, to acquire rights of cross-
examination, to participate in settlement or negotiation conferences, and to make and argue
motions must file a Petition to Intervene with the Commission pursuant to Rules 72 and 73 of
the Commission s Rules of Procedure, ID AP A 31. 01. 01. 072 and -073. Persons desiring to
acquire intervenor rights of participation must file a Petition to Intervene on or before Friday,
March 17, 2006. Persons seeking intervenor status shall also provide the Commission Secretary
with their electronic mail addresses to facilitate future communications 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 to other parties.
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NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that discovery is available pursuant to the
Commission s Rules of Procedure, IDAPA 31.01.01.221-234.
YOU ARE FURTHER NOTIFIED that the Company s Application in Case No. IPC-
04-15 (together with supporting testimony) can be reviewed during regular business hours at
the Commission s office in Boise, Idaho and at the principal office of Idaho Power, 1221 West
Idaho Street, Boise, Idaho. The Application is also available for public inspection on the
Commission s homepage at www.puc.idaho.gov under the "File Room" icon and "Electric
Cases.
YOU ARE FURTHER NOTIFIED that all filings concerning Case No. IPC-04-
should be mailed to the Commission and the Company at the addresses reflected below and to all
parties granted intervenor status. (Please contact the Commission Secretary for a list of
intervenors. )
Commission Secretary
Idaho Public Utilities Commission
POBox 83720
Boise, ID 83720-0074
Street Address for Express Mail:
Barton L. Kline, Senior Attorney
Monica B. Moen, Attorney II
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: bkline(~jdahopower.com
mmoen~idahopower .com
472 W. Washington Street
Boise, ID 83702-5983
All filings 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.idaho.gov. Click the "Comments and Questions
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 Idaho Power at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that the Commission has jurisdiction over Idaho
Power Company, an electric utility, pursuant to the authority and power granted it under Title 61
of the Idaho Code and the Commission s Rules of Procedure, ID AP A 31. 01. 01. 000 et seq.
YOU ARE FURTHER NOTIFIED that all hearings, prehearing and settlement
conferences in this matter will be held in facilities meeting the accessibility requirements of the
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Americans with Disabilities Act (ADA). Persons needing the help of a sign language interpreter
or other assistance in order to participate in or to understand testimony and argument at a public
hearing may ask the Commission to provide a sign language interpreter or other assistance at the
hearing. 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, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
Mail: secretary~puc.idaho.gov
DATED at Boise, Idaho this ;-d day of March 2006.
~JfJea D. Jewell
Commission Secretary
bls!N:IPC-O4-15 sw
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE