20051122notice of application order no 29919.pdf

Office of the Secretary
Service Date
November 22, 2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO INCREASE ITS BASE
RATES AND CHARGES FOR ELECTRIC
SERVICE IN THE STATE OF IDAHO
CASE NO. IPC-O5-
NOTICE OF APPLICATION
NOTICE OF
INTERVENTION DEADLINE
ORDER NO. 29919
On October 28, 2005 , Idaho Power Company filed a general rate case Application
seeking authority to increase its electric rates an average of 7.8%. If approved, the Company
revenues would increase $43 947 847 annually. The Company s Application includes the
proposed tariffs and requests an effective date of November 28 2005.
NOTICE OF APPLICATION
A. Revenue
YOU ARE HEREBY NOTIFIED that Idaho Power s Application states that its
overall rate of return and return on equity established in its last general rate case (No. IPC-03-
13) are no longer reasonable given the Company s increased operating costs. Idaho Power
asserts that additional revenue is necessary if it is to maintain a stable financial condition and
continue to render reliable and adequate electric service to its customers. Application at 5.
Idaho Power seeks a return on rate base of 8.42%, utilizing a return on common equity in the
range of 11 to 12%. Exh. 11; Avera Prefile at 4. The Company proposes using a 2005 calendar
test year with an adjusted total rate base of$1 790 150 058. Gale Prefile at 6; Exh. 11 at 2.
YOU ARE FURTHER NOTIFIED that Company witness John Gale notes that the
tax settlement from the Company s last general rate case resulted in a one-year base rate increase
of 2.2%. See Order No. 29793 at 2-3. The one-year tax adjustment to base rates will expire on
May 31 , 2006 and will offset the rate increase requested by the Company in this proceeding.
B. Rate Design
YOU ARE FURTHER NOTIFIED that in its Application, Idaho Power proposes to
increase the rates for each rate schedule (except for dusk-to-dawn lighting (Schedule 15) and
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 29919
unmetered service (Schedule 40)) by a uniform percentage increase of 7.84%. The rates for the
three special contract customers (lR. Simplot, Micron and the INEEL) would also increase by
84%. The Company acknowledges that a uniform increase is contrary to its cost-based
approach to rate design but suggests that cost of service be examined in the next rate case to
verify if its 2005 cost-of-service results are replicated. Gale at 15-16. The chart below shows
how the proposed increase would impact the average of all rate components for certain customer
groups.
CURRENT AVERAGE PROPOSED AVERAGE
CUSTOMER GROUP BASE RA TE BASE RATE
Residential 74~6.19~
Small Commercial 7.16~72~
Large Commercial 91~4.22~
Industrial 99~23~
Irrigation 4.42~76~
*The PCA rate component is not reflected in the base rates above.
YOU ARE FURTHER NOTIFIED that the Company proposes to maintain its
seasonally adjusted rate design (to dampen demand in June, July and August) and maintain the
300 kWh initial usage threshold for residential and small commercial customers.
YOU ARE FURTHER NOTIFIED that the Company is proposing several other rate
design changes for other customer classes. For large commercial customers taking secondary
service (Schedule 9), the Company proposes a declining-block two-tier energy charge, and
blocked demand and basic charges with no charge for the first 20 kW of billing demand and
basic load capacity. For industrial customers (Schedule 19), the Company proposes to increase
the service charge, basic charge, and the seasonal time-of-use demand charges and energy
charges. For irrigation customers (Schedule 24), Idaho Power proposes to eliminate the out-of-
season demand charge and reinstate the differentiated in-season and out-of-season energy
charges.
YOU ARE FURTHER NOTIFIED that the Company also proposes to adjust its
Schedule 89 rates for energy purchases under qualifying facilities (QF) contracts. The Company
notes that a portion of the price it pays for energy purchased under several long-term QF
contracts is based upon changes in fuel and other costs at Idaho Power s Valmy plant. The
Company proposes to increase its Schedule 89 rates from 1.719~ per kWh to 2.012~ per kWh.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 29919
YOU ARE FURTHER NOTIFIED that the Company proposes to increase the
monthly service charge for residential, small commercial, large commercial and industrial
customers. The Company proposes to increase the residential and small commercial service
charge from $3.30 to $6.00 per month. For large commercial and industrial (secondary service)
customers, the proposed increase in the service charge is from $5.60 to $12.00 per month. For
industrial (primary service) customers the increase would be from $125 to $200 per month. App.
Atch. 3.
YOU ARE FURTHER NOTIFIED that the Application together with supporting
workpapers, testimonies and exhibits, have been filed with the Commission and are available for
public inspection during regular business hours at the Commission offices. The Application and
its supporting documents are also available on the Commission s website at www.puc.idaho.gov
under the "File Room" icon and then "Electric Cases.Interested persons may also view the
Application at the Company s website www.idahopower.com The Company s proposed
schedule of rates and charges will be kept open for public inspection.
YOU ARE FURTHER NOTIFIED that the following persons are designated as
Idaho Power s representatives in this matter:
Barton L. Kline
Monica B. Moen
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: bklineCfYidahopower.com
mmoenCfYidahopower .com
John R. Gale
Vice President, Regulatory Affairs
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: rgaleCfYidahopower.com
YOU ARE FURTHER NOTIFIED that Idaho Power intrastate revenue
requirement, and every component of it, both rate base and expense, are at issue. The
Commission may grant, deny, or modify the revenue requirement requested and may find a
revenue requirement different from that proposed by any party is just, fair and reasonable.
IDAP A 31.01.01.124.01.
YOU ARE FURTHER NOTIFIED that the rates and charges of all Idaho retail
customers, both recurring and non-recurring, including those of special contract customers, are at
issue, and every component of every existing and proposed rate and charge is at issue. The
Commission may approve, reject or modify the rates and charges proposed and may find that
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 29919
rates and charges different from those proposed by any party are just, fair and reasonable.
IDAP A 31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that the Commission may approve, reject or
modify existing or proposed relationships between and among rates and charges within, between
or among customer classes or rate groupings and may approve, rej ect or modify existing or
proposed relationships among and between customer classes or rate groupings. IDAP A
31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that the Commission may abolish, reduce or
create rate blocks or categories of rates and charges, abolish, create or reduce components of
rates and charges, abolish, reduce or create customer classes or rate groupings, and abolish
reduce or create absolute or relative differences among and between existing classes or rate
groupings of customers. IDAP A 31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that the tariffs, practices , rules and regulations
servIce, instrumentalities, equipment, facilities, classifications, and customer relations of the
utility are at issue, and the Commission may address any of them in its Order.
31.01.01.124.02.
IDAPA
DEADLINE FOR INTERVENTION
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this matter
for the purpose of presenting evidence or cross-examining witnesses at hearing must file a
Petition to Intervene with the Commission pursuant to this Commission s Rules of Procedure
72 and 73 , IDAPA 31.01.01.072 and -073. Persons intending to participate at the hearing must
file a Petition to Intervene on or before December 6, 2005. 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 the parties.
YOU ARE FURTHER NOTIFIED that on November 14 , 2005, the Idaho Irrigation
Pumpers Association, Inc. filed a Petition to Intervene in this matter. Given the lack of any
objection, the Commission grants intervention to the Irrigators in this Order.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 29919
YOU ARE FURTHER NOTIFIED that the Commission Secretary shall issue a
Notice of Parties after the deadline for intervention has passed. The Notice of Parties shall
assign exhibit numbers to each party in this proceeding. Depending on the number of
intervenors, the Commission may direct that pleadings and testimony be filed electronically with
the other parties.
YOU ARE FURTHER NOTIFED that after the Notice of Parties is issued the
Commission anticipates that the parties will informally convene to devise a recommended
schedule to process this case. Once a schedule is developed, the Commission will subsequently
issue a Notice of Hearing. The Commission intends to convene public hearings in this matter.
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 99 61-302, 61-307, 61-502, 61-503, 61-507 , 61-622, and 61-623. 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, IDAPA 31.01.01.000 et seq.
SUSPENSION OF PROPOSED RATES
Due to the complexity ofthis case and other constraints upon the Commission s time
the Commission finds that it cannot adequately review Idaho Power s request for a permanent
rate increase before the proposed effective date of November 28 2005. Pursuant to Idaho Code
9 61-622, the Commission hereby suspends the proposed base rates for a period of 30 days plus 5
months from November 28, 2005, or until such time the Commission enters its Order accepting,
rejecting or modifying the proposed rates in this matter.
ORDER
IT IS HEREBY ORDERED that the proposed schedules of rates and charges
submitted by Idaho Power are suspended for a period of 30 days plus 5 months from November
, 2005 , or until such time the Commission enters an Order accepting, rejecting or modifying
the request in this matter.
IT IS FURTHER ORDERED that the Irrigation Pumpers Association s Petition to
Intervene is granted.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 29919
IT IS FURTHER ORDERED that persons desiring to intervene in this case for the
purpose of presenting evidence or cross-examination at hearing shall file a Petition to Intervene
with the Commission no later than December 6, 2005.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ;2:1 A-i/..
day of November 2005.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
~fJ
Je Fl D. Jewell
Commission Secretary
bls/IPC-O5-28 dh
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 29919