20060407Motion for approval of stipulation.pdf

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BARTON L. KLINE ISB #1526
Idaho Power Company
O. Box 70
Boise, Idaho 83707
Phone: [phone]
FAX: [phone]
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Attorney for Idaho Power Company
Express Mail Address
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
INVESTIGATION OF APPROPRIATE
RATEMAKING TREATMENT OF
IDAHO POWER COMPANY'S S02
AllOW ANCE SALE PROCEEDS.
CASE NO. IPC-05-
MOTION FOR APPROVAL
OF STIPULATION
COMES NOW Idaho Power Company ("Idaho Power" or "Company ), the
Commission Staff, Micron Technology, Inc. and the Industrial Customers of Idaho
Power (collectively the "Parties ), and hereby move the Commission for an Order
accepting the Settlement Stipulation filed herewith. This Motion is based on the
following:
The terms and conditions of this Stipulation are set forth herein.
The Parties agree that this Stipulation represents a fair, just and reasonable
compromise of the issues raised in this proceeding and that this Stipulation is in the
public interest. The Parties maintain that the Stipulation and its acceptance by the
MOTION FOR APPROVAL OF STIPULATION , Page
Idaho Public Utilities Commission ("IPUC" or "Commission ) represent a reasonable
resolution of legal and other issues identified in this matter. The Parties , therefore
recommend that the Commission , in accordance with RP 274 , approve the Stipulation
and all of its terms and conditions without material change or condition.
On August 22 2005, in Order No. 29852 issued in Case No. IPC-
05-, the Commission approved Idaho Power s Application for (1) blanket authority to
sell surplus sulfur dioxide ("S02") emission allowances and (2) an accounting order to
provide for recording the sales of such surplus allowances pending a determination of
appropriate ratemaking treatment for the proceeds of such sales. The Company was
ordered to file a report with the Commission within sixty (60) days of the receipt of the
proceeds of any surplus S02 allowance sales. The Commission also ordered that this
docket be opened and directed the Staff to conduct workshops and make a
recommendation to the Commission regarding the appropriate ratemaking treatment of
any surplus S02 allowance proceeds.
Petitions to intervene in this proceeding were filed by ICIP and
Micron. The Commission granted the intervention of the ICIP in IPUC Order No. 29978
and Micron s petition in Order No. 30005.
Pursuant to Order No. 29852 , the Company has filed three Status
Reports concerning its sales of S02 allowances. The reports were filed on
December 9 2005, February 3 2006 and March 23, 2006. Because the three Status
Reports are on file with the Commission , Idaho Power requests that the Commission
take administrative notice of the three Status Reports.
MOTION FOR APPROVAL OF STIPULATION , Page 2
As of the date of application , Idaho Power has sold 78 000 S02
emission allowances for a total emissions allowance sales amount of approximately
$81.6 million. After subtracting transaction fees and income taxes, the total amount of
sales proceeds to be allocated to the state of Idaho is approximately $46.8 million. This
$46.8 million amount assumes an income tax rate of approximately 39% and a
jurisdictional allocation to Idaho of 94.1 %. Attachment 1 to the Stipulation provides a
detailed computation of the approximately $46.8 million proceeds amount.
Pursuant to notice and in accordance with RP 272 , the Parties held
workshops and settlement discussions on November 7 2005, November 23 2005
February 7 2006 and March 23, 2006.
Based on the settlement discussions , the Parties whose signatures
appear on the Stipulation have agreed to resolve and settle all of the issues in the case.
A copy of the signed Stipulation evidencing that settlement is enclosed as
Attachment A. In summary, the Stipulation provides that if the Commission approves
the Stipulation , the Company will retain 10% of the approximately $46.8 million in total
emission allowance net proceeds, which is currently approximately $4.7 million, as a
shareholder benefit. The remaining 90% of the approximately $46.8 million in total
emission allowance net proceeds , which is currently approximately $42.1 million , will be
recorded as a customer benefit and included as a line-item in the PCA true-up. At the
date of the Order approving this Stipulation, the customer benefit of approximately
$42.1 million, with interest computed at the PCA interest rate, will be reflected in the
Company s PCA as a credit to the PCA true-up balance for amortization in PCA rates
during the June 1 , 2007 through May 31 , 2008 PCA rate period.
MOTION FOR APPROVAL OF STIPULATION , Page 3
The Parties recommend that the Commission grant this Motion and
approve Attachment A, the Stipulation , in its entirety, without material change or
condition , pursuant to RP 274.
The Commission Staff will file comments supporting this Motion and
recommending approval of the Stipulation. Other Parties may choose to file supporting
comments as well. As noted in Paragraph 12 of the Stipulation , all of the Parties agree
that the Stipulation is in the public interest and that all of its terms and conditions are
fair, just and reasonable. The Parties stand ready to support the Stipulation, either
through written comments or in accordance with such other procedure as the
Commission may prescribe.
NOW , THEREFORE , the Parties respectfully request that the Commission
issue its Order:
Granting this Motion and accepting Attachment A, the Stipulation , in
its entirety without material change or condition;
Authorizing the Company to transfer the Idaho jurisdictional portion
of the excess emission allowance sales to customers and shareholders in accordance
with Attachment 2 to the Stipulation , thereby including a customer benefit of
approximately $42.1 million , with interest computed at the PCA interest rate, in the
Company s PCA as a credit to the PCA true-up balance for amortization at PCA rates
during the June 1 2007 through May 31 2008 PCA rate period; and
Confirming that Idaho Power may, in accordance with the authority
granted in Order No. 29582 , sell additional surplus S02 emission allowances in a
manner similar to the sales that generated the above-described approximately $81.
MOTION FOR APPROVAL OF STIPULATION , Page 4
million proceeds, and further authorizing Idaho Power to record any proceeds of future
sales of surplus S02 allowances , net of taxes and fees , received after June 1 , 2006, in
the PCA. Within future PCA true-ups the recorded amount will be jurisdictionalized and
shared.
tlARespectfully submitted this
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day of April, 2006.
~m~
BA TON L. KLINE
Attorney for Idaho Power Company
MOTION FOR APPROVAL OF STIPULATION , Page 5
CERTIFICATE OF SERVICE
J.!6-I HEREBY CERTIFY thaton this day of April, 2006, I served a true
and correct copy of the within and foregoing MOTION FOR APPROVAL OF
STIPULATION upon the following named parties by the method indicated below , and
addressed to the following:
Donovan Walker
Cecelia A. Gassner
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise , ID 83720-0074
Donovan.walkercg) puc.idaho.qov
Cece.qassnercg) puc.idaho.qov
Peter J. Richardson
Richardson & O'Leary
515 N. 27th Street
O. Box 7218
Boise , ID 83702
petercg) richardsonandolearv.com
Don Reading
Ben Johnson Associates
6070 Hill Road
Boise , ID 83703
dreadinq cg) mindsprinq.com
Conley E. Ward
Givens Pursley LLP
601 W. Bannock Street
O. Box 2720
Boise, ID 83701-2720
cewcg) qivenspursleV.com
Dennis E. Peseau , Ph.D.
Utility Resources, Inc.
1500 Liberty Street SE , Suite 250
Salem, OR 97302
dpeseau cg) excite.com
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ARTON L. KLINE