20050715Order No 29824_notice of petition.pdf

Office of the Secretary
Service Date
July 15 2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
IDAHO POWER COMPANY FOR AN CASE NO. IPC-O5-
ACCOUNTING ORDER MODIFYING THE
ACCOUNTING PROCEDURES FOR NOTICE OF PETITION
PRELIMINARY SURVEY AND
INVESTIGATION CHARGES NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 29824
On June 14, 2005, Idaho Power Company filed a Petition seeking a modification of a
prIor accounting order concerning the accounting procedures for preliminary survey and
investigation (PS&I) costs. Idaho Power incurs costs or charges when it conducts preliminary
surveys or investigations during the evaluation of future generation or transmission projects. The
Company proposed a different accounting treatment for its PS&I costs. The Company requested
and we find that the Petition should be processed under Modified Procedure.
NOTICE OF PETITION
A. The Current Accounting Procedures
YOU ARE HEREBY NOTIFIED that the Company s Petition recites its current
accounting procedures for preliminary survey and investigation (PS&I) charges. The current
accounting procedures are addressed in Order No. 17499, two Company letters and a
Commission letter dated December 21 , 1983.1 Generally, the Company separates all PS&I costs
in two areas: in-house and external costs. PS&I costs for new projects which are "'internal in
nature' (that is incurred in-house) will be directly expensed in the period incurred." Petition at 2
(emphasis original). Conversely, PS&I costs incurred in connection with any future projects
which are "external in nature (that is incurred other than in-house) (are J
accumulated in Account 107 (CWIP) and transferred to Account 183
(preliminary survey and investigation charges) on a monthly basis.
AFUDC will be accrued on these charges. At the end of each year, the
applicable costs collected in Account 183 during the year will be transferred
to Account 186 and amortization of these "external" costs will commence the
following year over an appropriate time period. The specific amortization
1 The pertinent portion of Order No. 17499 (Case No. U-1006-185) and the three letters are attached to the Petition.
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29824
period for the current year expenditures will be determined by the
Company and reviewed by Staff annually.
Petition at 3 (emphasis original).
YOU ARE FURTHER NOTIFIED that the current accounting procedures provide
that the expensing of PS&I costs are discontinued when either the Federal Energy Regulatory
Commission (FERC) issues a hydro license, or when this Commission issues a Certificate of
Public Convenience and Necessity to construct generation or transmission facilities. The
Petition states that any
internal or external charges incurred after receipt and acceptance of the
(FERCJ final construction license will be accumulated in construction work
in progress (Account 107), and the Company will commence accruing an
allowance for funds used during construction (AFUDC) on such charges.
Thus, all costs incurred after receipt and approval of (a Commission issued
Certificate or J a final (FERCJ license to construct until commercial operation
will be capitalized in the traditional manner.
Petition at 3.
YOU ARE FURTHER NOTIFIED that Idaho Power asserts that the present
accounting protocols for PS&I charges are incompatible with the Commission ordered Integrated
Resource Plan (IRP) process. The IRP is a planning document that generally describes how
Idaho Power intends to meet the load demands of its customers over the next 10 years. The
Company further insists that the current accounting procedures are also out of step with the
FERC relicensing process for hydroelectric facilities.
B. The Proposed Accounting Procedures
YOU ARE FURTHER NOTIFIED that Idaho Power proposes that it will collect both
internal and external PS&I costs in Account 183 as long as the project is considered "viable.
Viability of a project will be determined based upon whether the project is included in the
Company s IRP. If the project is determined viable (i., included in the IRP), the Company
proposes that PS&I costs remain in Account 183 "without any accumulation of AFUDC, until
appropriate licenses and/or Certificates of Public Convenience and Necessity are obtained.
Petition at 5. Once licenses or Certificates are obtained, the Company would then transfer those
costs to Account 107 (CWIP), and AFUDC will begin to accumulate. Id.
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29824
YOU ARE FURTHER NOTIFIED that if the project is determined not viable (i.
not included in the Company s IRP), then Idaho Power proposes that the PS&I costs
accumulated in Account 183 be transferred to Account 182.(Other Regulatory Assets).
Expenses in Account 182.3 will be amortized over a defined period of time. If the total amount
of the project does not exceed $250 000, that amount will be fully amortized in one year. If the
accumulated project costs range from $250 000 but less than $1 million, the costs will be
amortized over three years. If the project amount exceeds $1 million, the amount will be
amortized over five years.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission s Rules
of Procedure IDAP A 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Petition may file a written comment in support or opposition with the Commission within
twenty-one (21) days from the service date of this Notice. The comment must contain a
statement of reasons supporting the comment. Persons desiring a hearing must specifically
request a hearing in their written comments. Written comments concerning this Petition shall be
mailed to the Commission and the Applicant at the addresses reflected below:
Commission Secretary Barton L. Kline, Senior Attorney
Idaho Public Utilities Commission John R. Gale, VP, Regulatory AffairsPO Box 83720 Idaho Power Company
Boise, ID 83720-0074 PO Box 70
Boise, ID 83707-0070
Mail: bkline~idahopower.com
rgale~idahopower. com
Street Address for Express Mail:
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.idaho.gov. Click the "Comments and Questions
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29824
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 if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the Petition together with supporting
attachments have been filed with the Commission and are available for public inspection during
regular business hours at the Commission offices. The Petition and attachments are also
available on the Commission s Website at www.puc.idaho.gov under the "File Room" icon and
then "Electric Cases.
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 specifically
Idaho Code ~ 61-524. The Commission may enter any final Order consistent with its authority
under Title 61.
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.
ORDER
IT IS HEREBY ORDERED that persons desiring to submit written comments
regarding Idaho Power Company s Petition may do so within twenty-one (21) days of the service
date of this Order.
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29824
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of July 2005.
(f~
MARSHA H. SMITH, COMMISSIONER
DENNIS S. HA S N, COMMISSIONER
ATTEST:
Je D. Jewell
Commission Secretary
bls/O:IPCE0521 dh
NOTICE OF PETITION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29824