20060106Decision memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEG AL
FROM:DONOVAN E. WALKER
DATE:JANUARY 6, 2006
SUBJECT:THE INVESTIGATION OF THE APPROPRIATE RATEMAKING
TREATMENT OF IDAHO POWER COMPANY'S S02 ALLOWANCE
SALE PROCEEDS, CASE NO. IPC-05-
On June 9, 2005 , Idaho Power Company (Idaho Power, Company) filed an
Application requesting: (1) blanket authority to sell surplus sulfur dioxide (S02) allowances;
and (2) an accounting order to provide for recording any sale(s) of such allowances. Case No.
IPC-05-20. The Company s Application also suggested that a determination of ratemaking
treatment for the proceeds be made at a later date.
On August 22 2005, the Idaho Public Utilities Commission (Commission) approved
the Company s Application. Order No. 29852. The Commission, while reserving the review of
the reasonableness of each sale, granted Idaho Power s request for blanket authority to sell S02
emission allowances and approved the accounting treatment proposed by the Company, on an
interim basis, until such time as the Commission determines the appropriate ratemaking
treatment of the proceeds from the sale of the S02 allowances. Id. The Company was ordered
to file a report with the Commission within 60 days of the receipt of any S02 proceeds. !d.
Additionally, the Commission ordered that a separate docket be opened for Staff to conduct
workshops and make a recommendation to the Commission regarding the appropriate
ratemaking treatment of S02 proceeds. Id.
The Commission noticed two workshops, which were held on November 7 and
November 23, 2005, respectively. In addition to Commission Staff and the Company, a
representative of the Industrial Customers of Idaho Power and a representative of the Northwest
DECISION MEMORANDUM
Energy Coalition attended the two workshops. The parties were unable to reach agreement upon
the ratemaking treatment of the proceeds.
On December 9 , 2005, Idaho Power filed its Initial Report of Proceeds from the sale
of S02 allowances. The Company reported having received proceeds from the sale of 60 000
S02 emission allowances, with total net proceeds of $57 055 000.
ST AFF RECOMMENDATION
Staff recommends that an intervention deadline of January 31 , 2006 be established to
determine who will be participating in this case as parties. Additionally, Staff recommends that
a scheduling conference be set for February 23 , 2006. After the Notice of Parties is issued the
parties will meet informally to establish a recommended schedule for processing this case, and in
any event will submit such schedule at or before the February 23 2006 scheduling conference.
COMMISSION DECISION
Does the Commission wish to set an intervention deadline and a scheduling
conference for this matter?
Does the Commission wish to employ any other procedure and/or schedule for
considering this matter?
DONOV AN E. WALKER
M:IPC-QS-26 dw
DECISION MEMORANDUM