20060914Hessing direct.pdf

RECEIVED
BEFORE THE 2006 SEP 14 AM II:
IDAHO PUbliC
IDAHO PUBLIC UTILITIES COMM~~'B~ COMMISSION
IN THE MATTER OF THE PETITION OF IDAHO
POWER COMPANY FOR MODIFICATION OF
THE LOAD GROWTH ADJUSTMENT FACTOR
WITHIN THE POWER COST ADJUSTMENT
(PAC) METHODOLOGY.
) CASE NO. IPC-O6-
DIRECT TESTIMONY OF KEITH HESSING
IDAHO PUBLIC UTILITIES COMMISSION
SEPTEMBER 14, 2006
Please state your name and business address
for the record.
My name is Keith D. Hessing and my business
address is 472 West Washington Street, Boise, Idaho.
By whom are you employed and in what capacity?
I am employed by the Idaho Public Utilities
Commission as a Public Utilities Engineer.
What is your educational and experience
background?
I am a Registered Professional Engineer in the
State of Idaho.I received a Bachelor of Science Degree in
Civil Engineering from the University of Idaho in 1974.
Since then , I worked six years for the Idaho Department of
Water Resources, and two years for Morrison-Knudsen.
have been continuously employed at the Commission since
August 1983.
As a member of the Commission Staff , my
prlmary areas of responsibility have been electric utility
power supply, revenue allocation and rate design.
What is the purpose of your testimony in this
proceeding?
I will address the Company s filing to reduce
the load growth adjustment multiplier , sometimes called the
Expense Adjustment Rate for Growth (EARG) , which is used in
the Power Cost Adjustment (PCA) true up calculation.
CASE NO. IPC-E- 06 - 89/14/06 HESSING, K (Di)
STAFF
As a member of the Commission Staff have you
worked on Idaho Power Company s annual PCA mechanism since
its inception in 1992?
Yes I have.
What is the purpose of the Company s PCA?
The PCA was created to address the problem of
fluctuating water conditions that caused widely varying
power supply costs.
What does the load growth adjustment
multiplier do in the PCA true up calculation?
When the Company s load grows between general
rate cases the power supply costs of serving that load
growth are captured in the PCA true up mechanism.All
part of those costs are removed from the mechanism by
applying the multiplier to the amount of load growth and
removing the resulting cost from actual power supply costs
incurred.Any costs removed in this manner are not
available for deferral as part of the PCA true up and,
therefore, will not be recovered in PCA rates.
Please provide an example of this calculation
and the associated adjustment.
Staff Exhibit No. 101 , pages 1 and 2, shows
the PCA true up calculations from the Company s last PCA
case, Case No. IPC-06-The expense adj ustment
associated with load growth for the month of April 2005 is
CASE NO. IPC-06-9/14/06 HESSING, K (Di)
STAFF
calculated on lines 9 through 12.Lines 9 and 10 show the
actual load and the normalized load.Line 11 calculates
the load growth and line 12 is the product of the load
growth and the load growth adjustment multiplier.
, 002 , 528 MWh - 974, 066 MWh = 28, 462 MWh)(28 , 462 MWh x
16.84 $/MWh = $479,300)Line 12 shows the calculated
expense adj ustment for April to be $479 300.This amount
is carried to line 23 where it is shown as a reduction to
actual power supply expense.Page 2, lines 12 and 23,
shows the total adj ustment for the PCA year to be
$10,291,160.
What does the Commission need to decide in
this proceeding?
There are two parts to the decision that the
Commission is being asked to make in this case.The first
part is a matter of policy.Should Idaho Power Company be
allowed to recover the variable costs of power supply
associated with load growth that occur between general rate
cases through the PCA mechanism?The second question
follows.What is the appropriate load growth adj ustment
multiplier that accomplishes the policy decision?
Please provide some history and background
information on Idaho Power s PCA mechanism.
Prior to PCA implementation, if the Company
load grew , the Company sold the additional energy at
CASE NO. IPC-06-9/14/06 HESSING, K (Di)
STAFF
approved retail rates and the Company incurred costs in
serving the new load.The revenues and costs associated
wi th serving load growth were not necessarily balanced.
costs exceeded revenues, the Company could file a general
rate case to increase rates to cover the costs on a
prospective basis.If the cost of serving load growth did
not exceed the costs embedded in rates, no rate increase
would be justified.
Please discuss Idaho Power Company s initial
PCA filing.
Idaho Power Company filed for a PCA in 1992
and it was approved and implemented in 1993 with some
modification.Idaho Power s 1992 PCA filing was made to
address the problem of fluctuating water conditions that
caused widely varying power supply costs.When water
conditions were poor, power supply costs were higher than
what was authorized for recovery in rates.A general rate
case provided no relief from high power supply costs
associated with below normal water conditions since water
conditions and power supply costs are normalized in a
general rate case.
Staff observed that in the Company s original
PCA proposal , variations from the normalized costs of power
supply were due to water conditions and power supply cost
increases caused by load growth.Staff believed that load
CASE NO. IPC-E- 06 - 8
9/14/06
HESSING , K (Di)
STAFF
growth costs could be significant and that load growth
costs were not the kind of costs that the PCA should
recover.Staff proposed a load growth adjustment mechanism
in the PCA that removed actual power supply costs
associated with load growth by multiplying the amount of
load growth by the marginal cost of power supply and
subtracting the result from actual power supply costs.
Staff approximated the marginal cost of power supply as
16.84 $/MWh which was the average of the variable costs of
Valmy and Boardman , the Company s two highest operating
cost resources at that time.In that case Staff also
argued that without the adjustment the Company would double
recover the normalized cost of power supply because it was
included in base rates and in actual booked power supply
costs that accumulated in the PCA true up mechanism.
The Commission accepted Staff's load growth
adjustment to the PCA in its final Order.
We find that the net power supply costs
associated with serving differences in load
between no~al and actual should be removed
from the PCA. We adopt the method proposed by
Staff for making this adj ustment; it was the
only method proposed. We agree with Staff that
Idaho Power s proposal unduly broadens the scope
of this proceeding, which is simply to devise a
mechanism for the recovery of power supply costs
that include the sum of fuel costs , non-firm
energy purchases and CSPP costs less revenues
from non-firm energy sales and FMC secondary
sales. Idaho Power s proposed PCA allows it to
double recover fuel costs associated with load
growth which, essentially, offsets the cost
of constructing additional plant. We recognize
CASE NO. IPC-06-9/14/06
HESSING, K (Di)
STAFF
and support the Company s right to recover
costs associated with prudent plant additions.
Our decision to not allow a PCA mechanism to
recover costs to offset legitimate plant costs
caused by load growth in no way prevents the
Company from recovering these costs in traditional
ratemaking proceedings. A PCA is not intended
to replace the prudency review process inherent
in a general rate case. (Order No. 24806, pg. 20,
Emphasis added) .
The load growth adj ustment has been made in
every PCA true up calculation since the PCA was
established.Staff's intent from the initial PCA case was
to update the load growth adjustment multiplier to reflect
the average marginal cost of power supply as part of each
general rate case.So doing would continue to remove the
variable power supply costs associated with load growth
that accumulate in the PCA at the marginal cost of
supplying power.
Please discuss Staff's review of the power
supply cost load growth issue the next time it came up.
The Company s next general rate case was Case
No. IPC-94-In that case Staff used the difference in
power supply costs from two different power supply model
runs to determine the marginal cost of power supply.The
only difference in the two power supply model runs was that
the second run was designed to meet an incrementally larger
load.From those results a marginal cost of power supply
of 16.22 $/MWh was calculated.(Case No. IPC-03-13,
Hessing Direct, pg. 21 , line 7) .This result was
CASE NO. I PC - E - 06- 8
9/14/06
HESSING , K (Di)
STAFF
sufficiently close to the 16.84 $/MWh already in use that
Staff proposed no change in the marginal cost multiplier by
entering no testimony concerning this issue.No other
party proposed that the multiplier change.The case
contained no testimony concerning the multiplier.
The power supply cost associated with load
growth was an issue in the Company s next general rate
case.please discuss the case in that context.
The Company s next general rate case was the
IPC-03 -13 Case filed nearly 10 years later.In that case
the Company proposed to reduce the multiplier, that
called the Expense Adjustment Rate for Growth or EARG, to
13.98 or 7.30 $/MWh based on two different interpretations
of the purpose of the adj ustment .In that case Staff did
not use its own calculation of the marginal cost of power
supply but used the ~Marginal Cost of Energy" from Idaho
Power s response to Request No.3 0 of the Idaho Irrigation
Pumpers Association.The amount from the study was 27.
$/MWh which became 29.41 $/MWh when 8.9% losses were
included.Based on those results Staff proposed a 29.
$/MWh marginal cost multiplier.(Case No. IPC-03-13,
Hessing Direct , pg. 20, line 16)
The Commission did not decide the magnitude of
the multiplier in that case but set the issue aside along
with several other issues to be settled by the parties.
CASE NO. IPC-E- 06 - 8
9/14/06
HESSING, K (Di)
STAFF
the give and take of settlement negotiations the multiplier
stayed at 16.84 $/MWh but was, by specific settlement
language, to be reevaluated in the next general rate case.
The settlement was accepted by the Commission.
Please discuss the power supply cost of load
growth issue that was part of the Company s most recent
general rate case.
The Company s next general rate case was Case
No. IPC-05-28.This entire case was settled and the
settlement was accepted by the Commission.During
settlement discussions the Staff and Company differed
substantially on the magnitude of the PCA load growth
adjustment multiplier.The settlement called for a
separate proceeding to decide the issue.This is that
proceeding.
Are Idaho s other regulated electric utilities
allowed to track and defer differences between normal and
actual power supply costs associated with load growth that
occur between general rate cases for later recovery?
Rocky Mountain Power has no PCA and no
tracking mechanism that allows it to track and recover
these costs between rate cases.Avista Utilities has a PCA
that is very similar to Idaho Power Its purpose is to
track hydro conditions as they affect power supply costs.
By Commission, Order Avista removes power supply costs
CASE NO. IPC-E- 06 - 8
9/14/06
HESSING, K (Di)
STAFF
associated with load growth that occur between rate cases
by multiplying load growth by the marginal cost of power
supply and subtracting that amount from actual power supply
costs.In Case No. AVU-E- 04 -1 the Commission established
the load growth adjustment multiplier as 36.38 $/MWh.
(Order No. 29602, pg. 46)
Do you believe that Idaho Power Company should
be allowed to recover the power supply costs of load growth
through the PCA mechanism between rate cases?
No, I do not.Staff's position is the same as
it was in the initial PCA case previously discussed in this
testimony.It is also clear that the Commission ordered
PCA that went into effect in 1993 was very specifically
designed to remove the power supply costs of load growth.
Was the Company required to absorb the power
supply costs of load growth between rate cases prior to PCA
approval?
The Commission s decision to remove loadYes.
growth costs leaves the Company in the same position that
it was in prior to the PCA.The Company receives revenue
from sales of the growing load and has costs associated
wi th serving the new load.If costs are more than revenues
the Company can do what it has always done, make a rate
filing to recover the difference prospectively.
Do any other costs, established during a rate
CASE NO. IPC-06-
9/14/06
HESSING, K (Di)
STAFF
case uslng a historic test year, vary in between rate
cases?
Cost differences occur in virtuallyYes.
hundreds of utility accounts and must be trued up in a
general rate case unless special treatment is approved by
the Commission.
Is there another reason that you oppose
recovering the costs of load growth between rate cases?
It does not always follow that the costsYes.
of serving new load exceed the revenues derived from
supplying new load.Generation and transmission
investments are made in large increments.A single
generation or transmission proj ect may supply tens of
thousands of new customers.Thi s means that some of the
costs that may be included in base rates are not incurred
when load grows yet the Company receives revenue from the
application of existing rates that may more than cover
these embedded costs.
Is there a long-standing reason why the actual
costs associated with individual accounts or groups of
accounts are not simply tracked through with annual rate
adjustments between general rate cases?
In any given year the costs associatedYes.
with some accounts may increase while the costs associated
wi th other accounts may decrease.It is not fair or
CASE NO. IPC-06-
9/14/06
HESSING, K (Di)
STAFF
reasonable to exclusively select one group of costs or the
other.The only fair way to establish rates is to look at
all the utilities costs together as is done in a general
rate case.
Is there another difference between the
variable power supply costs associated with load growth and
the variable power supply cost associated with fluctuating
water conditions?
Load growth related power supply costsYes.
are addressed in a general rate case but power supply costs
associated with abnormal water conditions are not.In a
general rate case abnormal water conditions and their
associted costs are normalized out.
Do you have another concern with allowing the
Company to recover the variable cost of power supply
associated with load growth between rate cases?
This concern pits demand side managementYes.
(DSM) programs against the two very different revenue
streams that the Company could realize depending on the
Commission s decision in this case.I would submit that
the Company s incentive to grow load, or the disincentive
for effective demand side management, is greatly increased
when the Company receives the retail revenue from increased
load and PCA reimbursement for power supply costs on the
margin as opposed to just the retail revenue.In the first
CASE NO. IPC-E- 06 - 89/14/06
HESSING, K (Di)
STAFF
case, for example , the Company could receive 84 $/MWh (8.
9/kWh) for growing load.This could occur if retail
revenue were 55 $/MWh and the marginal cost of power supply
were 41 $/MWh which becomes 29 $/MWh when it is
jurisdictionally allocated and shared before becoming a PCA
rate ((41-81) *941*90=29) .This scenario assumes that
the Commission s decision in this case allows the Company
to recover load growth power supply costs on the margin
between rate cases.If the Commission does not allow this
recovery then the Company receives only the retail revenue
of 55 $/MWh.The incentive for growing load, not
implementing effective DSM , is substantial if the Company
receives 84 $/MWh in revenues from load growth.
Does the Company currently have another filing
before the Commission that is intended to remove the DSM
disincentive that you have just described?
The Company does currently have another filing
before the Commission, Case No. IPC-E- 04 -15, aimed at
removing DSM disincentives , but it does not address the DSM
disincentive that would be created in this case by the
Company s proposal.In fact, because this other filing
looks at use per customer, it is quite possible for PCA
load to grow and use per customer to decline in which case
the Company would receive additional revenues between rate
cases from both adjustment mechanisms.
CASE NO. IPC-06-
9/14/06
HESSING, K (Di)
STAFF
What are the rate choices that the Commission
could make for the load growth multiplier?
If the Commission decides to allow the Company
to recover the variable cost of power supply associated
wi th load growth between rate cases, then only the embedded
variable cost of power supply should be subtracted from
actual power supply costs in the PCA mechanism.This is
what the Company proposes to do with its 6.81 $/MWh
mul tiplier.The application of this multiplier prevents
the double counting of embedded power supply costs.
If it is the Commission s decision to not
allow the Company to recover the variable power supply
costs associated with load growth through the PCA between
general rate cases, then the adj ustment should be made
using the variable cost of power supply on the margin.
Staff's most recent calculation of this amount is 40.
$/MWh.The application of this multiplier prevents the
double counting of embedded power supply costs and also
prevents the PCA recovery of the power supply costs
associated with load growth between rate cases.The
calculation of this number is shown on Staff Exhibit No.
102.The number comes from two power supply model runs
that differ by an increment of load.The base run is the
model run presented by the Company in its most recent
general rate case, Case No. IPC-05-28.
CASE NO. IPC-06-9/14/06
HESSING, K (Di)
STAFF
Do the Company s proposed number and the
Staff's proposed number come from the same power supply
mode 1 ?
Yes.Both numbers come from the Company
Aurora power supply model.
Have you prepared an Exhibit that estimates
the impacts of the various load growth adjustment
mul tipliers?
Yes I have.Staff Exhibit No. 103 shows
estimated annual load growth adjustments assuming a 40 MWa
growth in load.Column (3) shows the annual adjustment at
the current load growth adjustment rate of 16.84 $/MWh to
be $5.9 million per year, Column (4) shows the adjustment
at the Company proposed rate of 6.81 $/MWh to be $2.
million per year and Column (5) shows the amount of the
adjustment at the Staff proposed rate of 40.87 $/MWh to be
$14.3 million per year.This load growth adjustment amount
is cumulative between general rate cases until the base
load is reestablished.For example, under Staff'
proposal , the adjustment is estimated to be $28.6 million
if the Company goes two years between general rate cases.
Because these amounts can get quite large in a very few
years, especially if Staff's load growth adj ustment rate is
accepted, this could be a significant factor affecting the
frequency of Company rate case filings.
CASE NO. IPC-06-9/14/06
HESSING, K (Di)
STAFF
A portion of the PCA rate that the Commission
puts in place each year comes from the PCA forecast.How
is the PCA forecast affected by the Company s proposal?
The Company is not proposing to change the
forecast.Therefore, stream flow runoff forecasts would
continue to be used to predict variations from normal power
supply costs that would be expected under the normalized
load.The problem is that under the Company s proposal the
true up portion of the PCA is not tracking power supply
costs under normalized load conditions but power supply
costs under actual load conditions which includes the power
supply costs associated with load growth that accumulate at
the marginal cost of power supply.The result is that when
load grows normal water conditions produce an increase in
PCA rates and , good water conditions that should produce
PCA rate reductions, could actually produce rate increases.
This occurs because the true up mechanism is capturing
costs associated with load growth rather than water
conditions.The problem grows with time between general
rate cases because load growth costs accumulate from year
to year as previously discussed.Under the Company
proposal the PCA forecast based on water conditions would
never be accurate and the customer price signal value of
the forecast is significantly reduced if not completely
lost.
CASE NO. IPC-E- 06 - 89/14/06
HESSING, K (Di)
STAFF
Does the Staff's position establish a bright
line that identifies the purpose of the PCA?
Yes it does.It establishes the primary
purpose of the PCA as a mechanism that tracks abnormal
power supply costs primarily associated with variations in
water conditions and market prices for a Commission
approved normal i zed fixed load.
What is the situation if the Company
position is accepted by the Commission?
Acceptance of the Company s position
establishes a precedent for the recovery of costs between
rate cases that could otherwise be captured in a general
rate case and addressed with all other costs.
Does this conclude your direct testimony in
this proceeding?
Yes, it does.
CASE NO. IPC-E- 06 - 89/14/06
HESSING, K (Di)
STAFF
DESCRIPTION
3 PCA Revenue
4 Normalized Idaho Jurisd. Sales
5 Forecast Rate
6 Revenue
8 Load Change Adjustment
9 Actual System Firm Load - Adjusted
10 Normalized Firm Load
11 Load Chan
12 ExpenseAdjustment(~16.84)
14 Non-QF PCA
15 ACTUAL:
16 BPA Water Option Agreement
17 Cloud Seeding Program
18 Fuel Expense - Coal
19 Fuel Expense - Dansk!n
20 Fuel Expense - Bennett Mountain
21 Non-Firm Purchases
22 Surplus Sales
23 Ex ense Ad ustment ((11)16.24 Sub-Total
26 BASE:
27 Fuel Expense - Coal
28 Fuel Expense - Danskin
29 Fuel Expense - Bennett Mountain
30 Non-Firm Purchases
31 Surplus Sales
32 Sur lus Sales Adder33 Sub-Total
35 Change From Base
36 Deferral (Shared and Allocated)
38 QF Deferral
39 Actual (includes Net Metering)
40 Base
42 Change From Base
43 Deferral (Allocated)
45 Intervenor Funding
46 Credit From IDACORP Energy
47 Settlement Agreement (ON 29600)
48 Bennett Mtn. Credit (ON 29790)
49 Total Deferral (-6+36+43+45+46+47+48:
51 Principal Balances
52 Beginning Balance
53 Amount Deferred
54 Ending Balance
56 Interest Balances
57 Accrual thru Prior Month
58 Interest ~ 2% per Year
59 Prior Month's Interest Ad
60 Total Current Month Interest
61 Interest Accrued to Date
62 Balance (True-Up & Interest)
64 True-Up of the True-
65 True-Up Revenues66 True Up Rates67 Actual Idaho Sales68 Total
70 Beginning Balance
71 Adjustments per ON 2979372 Fuel Expense Adjustment73 Intervenor Funding
74 Irri ation Lost Revenues ON 2966975 Sub-Total
76 Interest ~ 2% per Year
77 Revenue Applied to Interest
78 Revenue Applied to Balance
79 True-Up ofthe True-Up Balance
MWh
rnIKWh
TRUE-UP CALCULATIONS FOR 2005 - 2006
FOR
IDAHO POWER COMPANY PCA
CASE NO. IPC-06-
Commission Decision
Units
2005
APR
862 931
2.499
156,465
MWh
MWh
MWh
002 528
974 066
28,462
(479,300)
788
527 289
333 725
098 341
(5,434 762)
479 300
103 080
108 200
264 800
000
(9,187 500)
786 500)
889 580
528 585
131,025
815 766
(684 741)
(644 341)
(166 667)
(804 167)
756 946
756 946
756 946
757 003
2005
MAY
881 064
2.499
201 779
020 216
142 316
122 100
056 164
256 201
516 168
114 958
169 001
500 338
(18 370 968)
056 164
(758 138)
800 600
278 500
664 100
566 900)
176 300
(1,934,438)
638 276)
605 364
160 399
(555 035)
(522 288)
(166 667)
(804 167)
333 176)
756 946
333 176
576 230)
262
231
287
569 943)
2005
JUN
002 040
288
296 748
272 295
258 858
13,437
(226 279)
878 317
114 108
654 700
234,832
(14 206 066)
226 279
6,449 612
344 900
275 700
931 000
558,900)
992 700
1,456 912
233 859
359 151
508 847
(149 696)
(140 864)
(166 667)
(804 167)
986)
178 571 )
576 230)
178 571
754 801)
287
627)
(2,627)
660
751 141)
2005
JUL
185 074
288
081 597
641 692
491 793
149 899
524 299)
168 717
191,888
1,480 609
198 870
(11 376 337)
524 299
139,448
714,800
279 600
335 100
385 400)
944 100
195 348
9,481,340
810 850
702 897
107 953
101 584
(166 667)
(804 167)
986)
526 508
754 801)
526 508
228 293)
660
591)
595)
935
234 228)
2005
AUG
303,702
288
590 274
538 801
1,424 633
114 168
922 589)
963,765
274
450 682
146 513
360 602)
922,589
368 042
721 300
280 000
842 900
371 000)
8,473 200
894,842
767 542
6,490 347
6,422 258
089
071
(166 667)
(804 167)
986)
266 520
(2,228 293)
266 520
038 227
935)
714)
145
569)
504
028 722
2005
SEPT
164 116
288
991 729
190 787
179 173
614
(195 580)
093 240
(639 672)
(875 540)
710,413
(12538,689)
195 580
554 171
8,446 500
264 800
480 800
702 300)
3,489 800
064,371
135 916
038 841
081 395
(42 554)
(40 043)
(166 667)
(804 167)
986)
(870 676)
038 227
870 676
167 551
504)
064
105
959
545
163 005
~/kWh
kWh
3707 0.3707 0.4024 0.4024 0.4024 0.4024
840 704 656 939 127 871 1 054 848 703 1 325 929 728 1 309 551,663 1 137 579 165
164 039 3,002,187 2 701 380 2,176 780 2,406 699 2 173,844
921 564
(250 506)
36,671 058
118
118
102 921
568 138
Note: Negative amounts indicate benefit to ratepayers
U,lkh.,,;,"pceO607IComp,"y eoo.ITRUE UPS & RATES 9112/2006 KDH
568 138
(45 675)
482 882
005 345
342
342
923 845
081 500
081 500
081 500
73,469
73,469
627 910
453 589
41,453 589
41,453 589
089
089
107 691
345 898
345 898
345 898
576
576
341 123
004 775
004,775
004,775
675
675
112 169
892 606
2005
OCT
925 105
288
966 850
051 573
055 943
370
591
374 911
285 872
783
7,477 280
(13 902,800)
591
315 636
727 700
272 300
700
982 500)
053 200
737 564)
(1,471 543)
068 572
792 830
(724 258)
(681 526)
(166 667)
(804,167)
(3,986)
094 739)
167,551
094 739
927 189)
545)
613
603
943
928 131)
0.4024
975 839 218
723 273
892 606
892 606
154
154
665,118
227 488
Exhibit No.1 0 1
Case No. IPC-O6-
K. Hessing, Staff
9/14/06 Page 1 of2
DESCRIPTION
3 PCA Revenue
4 Normalized Idaho Jurisd. Sales
5 Forecast Rate
6 Revenue
8 Load Change Adjustment
9 Actual System Firm Load - Adjusted
10 Normalized Firm Load
11 Load Chan
12 Expense Adjustment (~16.84)
14 Non-QF PCA
15 ACTUAL:
16 BPA Water Option Agreement
17 Cloud Seeding Program
18 Fuel Expense - Coal
19 Fuel Expense - Danskin
20 Fuel Expense - Bennett Mountain
21 Non-Firm Purchases
22 Surplus Sales
23 Ex ense Ad ustment ((11)16.
24 Sub-Total
26 BASE:
27 Fuel Expense - Coal
28 Fuel Expense - Danskin
29 Fuel Expense - Bennett Mountain
30 Non-Firm Purchases
31 Surplus Sales
32 Sur lus Sales Adder
33 Sub-Total
35 Change From Base
36 Deferral (Shared and Allocated)
38 QF Deferral
39 Actual (includes Net Metering)
40 Base
42 Change From Base
43 Deferral (Allocated)
45 Intervenor Funding
46 Credit From IDACORP Energy
47 Settlement Agreement (ON 29600)
48 Bennett Mtn. Creda (ON 29790)
49 Total Deferral (-6+36+43+45+46+47+48)
51 Principal Balances
52 Beginning Balance
53 Amount Deferred
54 Ending Balance
56 Interest Balances
57 Accrual thru Prior Month
58 Interest ~ 2% per Year
59 Prior Month's Interest Ad
60 Total Current Month Interest
61 Interest Accrued to Date
62 Balance (True-Up & Interest)
64 True-Up ofthe True-
65 True-Up Revenues66 True Up Rates67 Actual Idaho Sales68 Total
70 Beginning Balance
71 Adjustments per ON 2979372 Fuel Expense Adjustment73 Intervenor Funding
74 Irri ation Lost Revenues ON 29669
75 Sub-Total
76 Interest ~ 2% per Year
77 Revenue Applied to Interest
78 Revenue Applied to Balance
79 True-Up of the True-Up Balance
TRUE.UP CALCULATIONS FOR 2005.2006
FOR
IDAHO POWER COMPANY PCA
CASE NO. IPC-06-
Commission Decision
Units
MWh
rnIKWh
MWh
MWh
MWh
2005
NOV
885 609
288
797,491
137 344
079 817
527
(968 755)
798 142
377 898
759
196 111
728 267)
968 755
11,675 887
8,445 200
264 700
610 900
414 700)
906 100
769 787
192 633
095 280
204,739
(109,459)
(103 001)
(166,667)
(804,167)
(3,986)
682 679)
927 189)
682 679
609 867)
(943)
212)
212)
155
619 022)
2005
DEC
965 920
288
141 865
354 735
220,489
134 246
260 703)
414 022
902 700
314 726
523 632
754 148
(15 037 170)
260 703
611 354
727 000
272 800
884 100
357 300)
526 600
084 754
315 978
315,598
193 531
122 067
114,865
(166 666)
(804 167)
986)
314 159
609 867)
314 159
704 291
155)
(11 016)
(11,036)
191
684 100
2006
JAN
043 993
288
4,476 642
244 146
207 127
019
(623 400)
140 182
9,468 720
885
790
190 694
(33 421,590)
623,400
(2,175 719)
8,460,000
272 500
397 900
811 600)
318 800
(5,494,519)
653,308)
792 655
164 012
628 643
591 553
(804 167)
986)
346 550)
704 291
346 550
642,258)
(20 191)
174
175
016
656,274)
2006
FEB
968 236
288
151,796
124 755
032 883
91,872
547 124)
137 597
178 162
089
480
292 649
(32 412 950)
547 124
(12 263 097)
371 000
257 500
700
681 800)
35,400
(12 298,497)
(10 415 597)
707 472
073 610
633,862
596,464
(804 167)
986)
(14 779,081)
642,258)
779 081
(20,421,340)
(14 016)
(9,404)
(9,403)
23,419
(20,444,758)
~/kWh
kWh
0.4024 0.4024 0.4024 0.4024
890,496,444 1 005,408 010 1 078,920 738 1 016 643 093
568,690 1 889 864 1 988 372 1 739 243
227,488
33,227,488
379
55,379
513,310
714 178
Note: Negative amounts indicate benefit to ratepayers
U'lkh.";'"pce0607IComp,"y eoo.ITRUE UPS & RATES 9112/2006 KDH
714 178
714 178
857
857
837 007
877,170
877 170
877 170
795
795
938 577
938,593
938,593
938 593
564
564
692 679
245 915
2006
MAR
909,Q48
288
897 998
139 815
040 475
340
672,886)
102 305
762 059
016
205 921
12,443 565
(37,458,046)
672 886
(17 588 065)
282 200
273,400
700
074 900)
(441 600)
(17 146,465)
(14 521,342)
497 723
292 773
204,950
192,858
(804 167)
986)
(19 034 634)
(20,421 340)
19,034 634
(39,455 973)
(23,419)
(34 036)
276
(34,312)
57,730
(39 513 704)
TOTALS
12,096 838
751 234
718 687
107 573
611 114
(10,291 160)
108 094
100 632 189
992 041
995 540
188 243 754
(211 248 247)
291 160
72,432 211
149,400
256 600
376 900
(63 094 800)
47,688 100
24,744 111
20,955 787
912,878
46,413 057
(500 179)
(470 669)
500,000)
650,000)
(39,858)
(39 455 973)
39,455 973
(57,488)
242
(57 730)
(39 513 704)
4024
954 795 701 12 529 844 990
776 360 26 310 731
245 915
245,915
43,743
743
732 617
513 298
416 271,416
(250 506)
(45 675)
13,482 882
429,458 117
715 764
594,967
513 298
Exhibit No. 101
Case No. IPC-06-
K. Hessing, Staff
9/14/06 Page 2 of2
IDAHO POWER COMPANY
CASE NO. IPC-06-
STAFF MARGINAL COST CALCULATION
IPC-05-28 AURORA POWER SUPPLY BASE
Units Annual
IPC-05-28 Energy MWh 866 817.
IPC-05-28 Cost 975.
IPC-05-28 +10 MWa Energy MWh 954 391.
IPC-05-28 +10 MWa Cost 554.
Energy Difference MWh 573.
Cost Diffeence 578.
Marginal Cost $/MWh 40.
Exhibit No. 102
Case No. IPC-06-
K. Hessing, Staff
9/14/06
IDAHO POWER COMPANY
CASE NO. IPC-06-
STAFF LOAD GROWTH ADJUSTMENT CALCULATIONS
(1)(2)(3)(4)(5)
Description Units Load Load Load
Growth Growth Growth
Adjustment Adjustment Adjustment
(g) 16.(g) 6.(g) 40.
Load Growth Adjustment Rate $/MWh 16.40.
Load Growth Energy (40 MWa)MWh 350,400 350,400 350,400
Load Growth Adjustment 900 736 2 386 224 320 848
Exhibit No. 103
Case No. IPC-06-
K. Hessing, Staff
9/14/06
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 14TH DAY OF SEPTEMBER 2006
SERVED THE FOREGOING DIRECT TESTIMONY OF KEITH HESSING IN CASE
NO. IPC-06-, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
BARTON L KLINE
MONICA MOEN
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
GREGORY W SAID
DIRECTOR, REVENUE REQUIREMENT
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
PETER J RICHARDSON
RICHARDSON & O'LEARY
515 N 27TH ST
PO BOX 7218
BOISE ID 83702
DR DON READING
6070 HILL ROAD
BOISE ID 83703
WILLIAM M EDDIE
ADVOCATES FOR THE WEST
610 SW ALDER ST SUITE 910
PORTLAND OR 97205
FEDEX OVERNIGHT
NANCY HIRSH
NW ENERGY COALITION
219 FIRST AVENUE SOUTH
SUITE 100
SEATTLE WA 98104
FEDEX OVERNIGHT
LAWRENCE A GOLLOMP
ASSISTANT GENERAL COUNSEL
u.S. DEPARTMENT OF ENERGY
1000 INDEPENDENCE AVE SW
WASHINGTON DC 20585
FEDEX OVERNIGHT
DALE SWAN
EXETER ASSOCIATES INC
5565 STERRET PLACE
SUITE 310
COLUMBIA MD 21044
FEDEX OVERNIGHT
CERTIFICATE OF SERVICE