20050323Said Supplemental Testimony.pdf

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U Tll i n E it CQM"if S tON
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-05-
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC SERVICE
DUE TO THE INCLUSION OF THE
BENNETT MOUNTAIN PROJECT INVEST-
MENT IN REVENUE REQUIREMENT
IDAHO POWER COMPANY
SUPPLEMENTAL TESTIMONY
GREGORY W. SAID
March 22, 2005
Please state your name and business address.
My name is Gregory W. Said and my business
address is 1221 West Idaho Street, Boise, Idaho.
Are you the same Gregory W. Said tha t
previously submitted direct testimony and exhibits in this
proceeding?
Yes.
What is the purpose of your supplemental
tes timony?
The purpose of my supplemental testimony
to support the Amended Application for increased rates filed
by Idaho Power on March 22, 2005.My supplemental testimony
provides a detailed explanation of why the Company filed the
Amended Application and also provides updated revenue
requirement information that reflects not only Commission
Orders Nos. 29505 and 29547, but also Order No. 29601.
Please elaborate.
Exhibi t 3, described in my original testimony
In this case, provided detail of the incremental Idaho
jurisdictional revenue requirement associated wi th the
addition of the Bennett Mountain Project measured from the
base revenue requirement established in Order Nos. 29505 and
29547.That base revenue requirement computation included
an historic five-year average combined federal and state
income tax rate of 30.9 percent, which had been approved at
SAID , Supp Di
Idaho Power Company
the time of the above-mentioned orders.Subsequently, in
Order No. 29601; the Commission accepted a settlement
stipulation which readopted use of the statutory federal and
state income tax rates resulting in a combined rate of 39.
percent.Al though retail electric rates have not yet been
adjusted to reflect the statutory income tax rates (the
Company was ordered to reflect the change to the statutory
income tax rates in the Company s rates and charges to
customers concurrently wi th its annual PCA rate change on
June 1, 2005), it is appropriate to compute rate impacts
resul ting from the addi tion of the Bennet t Mountain proj ect
utilizing the combined
percent this time.
Are you
statutory income tax rate of 39.
presenting an exhibi t that shows the
changes to your previously-filed Exhibi t 3 that reflects the
settled lncome tax rate of 39.1 percent?
Yes, Exhibit 7 is the equivalent of Exhibit
wi th the change in the combined federal and state income tax
rate from the 30.9 percent rate approved in Order Nos. 29505
and 29547 to 39.1 percent approved in Order No. 29601.
What is the impact to the Company s stated
revenue requirement deficiency of $13,482,146 as a result of
updating the combined federal and state income tax rates
from 30.9 percent to 39.1 percent consistent with Order No.
29601 ?
SAID, Supp Di
Idaho Power Company
The additional revenue requirement associated
wi th the Bennett Mountain proj ect measured using the 39.
percent combined income tax rate is $9,402,996 rather than
the $13,482,146 that was originally filed.
Have you supervised the preparation of an
exhibi t to depict the differences in revenue requirement
components as a result of utilizing differing income tax
ra tes in Exhibi t 3 and Exhibi t 7?
Yes, Exhibi t 8 depicts the incremental
revenue requirement components associated wi th the addi tion
of the Bennett Mountain proj ect based upon the 3 0 ~ 9 percent
combined income tax rate used in Exhibi t 3 and the
subsequent incremental revenue requirement components
associated with the addition of the Bennett Mountain project
based upon the 39.1 percent combined income tax rate used in
Exhibi t 7.
Are you presenting an exhibi t that includes
an updated set of proposed tariff schedules to reflect the
$9,402,966 incremental change from the Company s base
revenue requirement as a result of the addition of the
Bennett Mountain project?
Yes, I requested and supervised the
preparation of Exhibit 9, which provides the proposed tariff
rates reflecting the incremental increase in the Company
revenue requirement due to the addition of the Bennett
SAID, Supp Di
Idaho Power Company
Mountain project reflecting the settled 39.1 percent income
tax rate.Pages 1 through 22 of Exhibi t 9 are the proposed
tariffs in legislative format to show the changes in tariff
components from current levels.The changes in rate
components represent a uniform percentage adjustment to the
energy and demand charges.
Wha t percentage lncrease In revenue
requirement will each of the customer classes see as a
resul t of the incremental change in revenue requirement due
to the addition of the Bennett Mountain project once the
settled income tax rate is reflected?
Exhibi t 10 was prepared under my superVlSlon
to show the percentage change in the revenue requirement of
each class.Because of the uniform nature of the Company
proposal, the revenue requirement for each customer class
will increase by approximately 84 percent due to the
addition of the Bennett Mountain project once the 39.
percent combined income tax rate is reflected in the revenue
requirement computations.
Does this conclude your supplemental
testimony?
Yes, it does.
SAID, Supp Di
Idaho Power Company