20060414Application.pdf

IDAHO POWER COMPANY
O, BOX 70
BOISE, IDAHO 83707
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:" BARTON LKLINE
Senior Attorney
An IDACORP Company
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April 13, 2006
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HAND DELIVERED
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise, Idaho 83720-0074
Re:Case No. IPC-06-
Petition For Modification of Load Growth Adjustment
Rate Within the Power Cost Adjustment Methodology
Dear Ms. Jewell:
Please find enclosed for filing an original and seven (7) copies of the
Company s Petition for modification of the load growth adjustment rate within the Power
Cost Adjustment methodology. Also enclosed are nine (9) copies of the testimony of
Idaho Power witness Gregory W. Said , with one copy designated as the Reporter
Copy. A computer disk containing Mr. Said's testimony is also enclosed.
I would appreciate it if you would return a stamped copy of this transmittal
letter for our files in the enclosed self-addressed stamped envelope.
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Barton L. Kline
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Enclosures
Telephone [phone] Fax [phone], E-mail BKlinerwidahopower.com
BARTON L. KLINE ISB #1526
MONICA B. MOEN ISB #5734
Idaho Power Company
O. Box 70
Boise, Idaho 83707
Phone: [phone]
FAX: [phone]
bkline (g) idahopower.com
mmoen
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idahopower.com
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Attorneys 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 PETITION OF
IDAHO POWER COMPANY FOR
MODIFICATION OFTHE LOAD GROWTH
ADJUSTMENT RATE WITHIN THE POWER
COST ADJUSTMENT METHODOLOGY
CASE NO. IPC-06-
PETITION
In accordance with RP 053 , Idaho Power Company ("Idaho Power" or
Company ) hereby requests that the Idaho Public Utilities Commission ("Commission
issue its Order modifying the method for determining the load growth adjustment rate
which is one of the components used to determine Idaho Power's Power Cost Adjustment
rate.
This Petition is based on the following:
PETITION , Page
The load growth adjustment rate is one of the components that is
used to compute Idaho Power s Power Cost Adjustment ("PCA") rates. The load growth
adjustment rate is typically a reduction to power supply expenses within the PCA intended
to compensate for additional revenues attributable to load growth that occurs between
rate cases. The load growth adjustment rate is a credit during load growth and a debit
during load decline that is included in the true-up computations within the PCA.
The determination of the load growth adjustment rate has been the
subject of discussion in prior Commission rate proceedings. In Order No. 29600 in Case
No. IPC-04-, the Company s 2004/2005 PCA case, the Commission accepted the
parties' agreement to defer a decision as to whether or not to change the load growth
adjustment rate until a subsequent rate case. Consequently, the load growth adjustment
rate was raised as an issue during the negotiations leading to the Settlement Stipulation
among the parties in Case No. IPC-05-28. (See Direct Testimony of Staff Witness
Randy Lobb, page 8 , line 15.) In Section 6(d) of that Stipulation, the parties agreed that
The PCA load growth rate issue will be addressed contemporaneously with the
Company s upcoming PCA proceeding, which will be filed on or about April 15, 2006.
This Petition is filed in accordance with the agreement of the parties in the Settlement
Stipulation.
The current approved load adjustment rate uses predicted marginal
costs of serving load rather than embedded costs of serving load. The current approved
load growth adjustment rate is $16.84 per MWh.
Idaho Power believes that the currently-approved practice of the
predicted marginal costs of serving load to determine the load growth adjustment rate is
PETITION , Page 2
unfair and should be changed. It is Idaho Power s position that it is more appropriate to
use current embedded PCA-related costs of serving load to determine the load growth
adjustment rate. The current embedded PCA-related cost of serving load is $6.81 per
MWh.
The use of predicted marginal costs to serve load as the load growth
adjustment rate in the PCA credits customers with the higher, marginal PCA-related cost
of serving new customer loads, even though Idaho Power is only allowed to recover the
lower, embedded PCA-related costs of serving new customer loads. This mismatch
automatically penalizes the Company when new customers are added. Because of this
built-in penalty, Idaho Power is not afforded a reasonable opportunity to recover its PCA-
related expenses associated with serving new customer loads in a timely manner. The
optimal way to match the load growth adjustment rate to the Company s actual ability to
recover its costs is to use the Company s embedded costs of serving PCA loads in setting
the load growth adjustment rate.
In support of this Petition , Idaho Power has filed the testimony and
exhibits of Witness Gregory W. Said. Mr. Said's testimony explains in detail why the
currently-approved method for setting the load growth adjustment rate should be
changed.
Idaho Power stands ready for immediate consideration of this
Petition, if it is the Commission s determination that a hearing should be held.
Communications with reference to this Petition should be sent to the
following:
PETITION , Page 3
Barton L. Kline
Monica B. Moen
Idaho Power Company
O. Box 70
Boise , ID 83707
bkline (g) idahopower.com
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idahopower.com
Gregory W. Said
Director, Revenue Requirement
Idaho Power Company
O. Box 70
Boise , ID 83707
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idahopower.com
WHEREFORE, Idaho Power Company respectfully requests that the
Commission issue its Order changing the computation of the load growth adjustment rate
from the currently-approved predicted marginal cost of serving load to the embedded
PCA-related cost of serving new customer loads.
DATED this 13th day of April, 2006, at Boise, Idaho.
rltt BARTON L. KLINE
Attorney for Idaho Power Company
PETITION , Page 4