20060912Application.pdf

IDAHO POWER COMPANY
O. BOX 70
BOISE, IDAHO 83707
RECE.\\jfJ)Lisa D. Nordstrom
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An IDACORP Company
September 11 , 2006
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- :;;to
In the Matter of the Application of Idaho Power Company for an Accounting
Order Regarding Treatment of the Demand-Side Application Management
Programs
Dear Ms. Jewell:
Please find enclosed for filing an original and seven (7) copies of Idaho Power
Company s Application for the above-referenced matter.
I would appreciate it if you would return a stamped copy of this transmittal letter in
the enclosed self-addressed , stamped envelope.
Very truly yours
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LDN:sh
Enclosures
Telephone [phone] Fax [phone] E-maillnordstrom(gjidahopower.com
LISA D. NORDSTROM , ISB # 5733
BARTON L. KLINE ISB #1526
Idaho Power Company
1221 West Idaho Street
O. Box 70
Boise , Idaho 83707
Telephone: [phone]
FAX Telephone: [phone]
Email: Lnordstrom
(g)
idahopower.com
RECEIVED
2000 SEP 1 1 PM 4: 31
IDAHO ?UUUC
UTILITIES COMM1SSI0(~
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
IDAHO POWER COMPANY FOR AN
ACCOUNTING ORDER REGARDING
TREATMENT OF THE DEMAND-SIDE MANAGEMENT PROGRAMS
CASE NO. IPC-06-
APPLICATION
COMES NOW , Idaho Power Company ("Idaho Power" or the "Company ), and In
accordance with the provisions of Idaho Code ~ 61-524 , RP 052 and RP 201 et. seq.
hereby applies to the Idaho Public Utilities Commission ("Commission ) for an
accounting order authorizing the Company to track its transactions for Demand-Side
Management (DSM) Programs as set forth herein. In support of this Application Idaho
Power represents as follows:
BACKGROUND
Since the adoption of the Energy Efficiency Rider ("Rider ) in Order No. 29026 in
2002, DSM programs have been an integral part of the Company s operations. On May
, 2005 , in Order No. 29784, the Commission approved an increase in the funding and
program expenditures associated with the Rider by authorizing the collection of 1.
APPLICATION , Page
percent of customers' base revenues. As a result, DSM programs are becoming an
even larger portion of the Company s operating business.
According to Generally Accepted Accounting Principles (GAAP), Statement of
Financial Accounting Concept (SFAC) No. 6, ~ 70 78-215, money collected and
expended as part of a company s standard business needs to be reflected on the
company s income statement. Therefore , to be consistent with GAAP standards and to
reduce potential auditing complications , the Company is proposing supplemental
accounting treatment for its Energy Efficiency Rider.
II.CURRENT ACCOUNTING PROCEDURES
Idaho Power has not requested , nor has the Idaho Public Utilities Commission
yet required, a specific method of accounting for these regulatory liabilities. Since the
inception of the Energy Efficiency Rider in 2002 , the Company has been utilizing the
following accounting entries to track the funds:
As funding is received from customers, the following transaction is made
to record cash received and set up the obligation to spend the money in the future on
specific programs funded through the Energy Efficiency Rider:
Dr.131 000 - CashCr. 254201 - Regulatory Liability
As DSM program expenditures are made, the following transaction
made to record cash paid and reduces the liability account:
Dr.254201 - Regulatory LiabilityCr. 131000 - Cash
These accounting entries accurately track DSM-related regulatory liabilities by recording
all transaction activity exclusively through the Company s balance sheet accounts.
APPLICATION , Page 2
III.REQUESTED ACCOUNTING PROCEDURES
The Company proposes to continue the above-mentioned balance sheet
accounting entries. However, to be consistent with GAAP standards , the Company also
proposes an automatic "monthly voucher" be created to parallel the balance sheet
activity in the Company s income statement. At the end of each month , the Company
would make a set of accounting entries to recognize the expenditures made in serving
the regulatory obligation along with an equal , offsetting entry to recognize the proceeds
from Energy Efficiency Rider funds.To accomplish this objective, the proposed
accounting entries are:
Dr.Account #908.XXX - Customer Service Operating ExpenseCr. Account #456.XXX - Other Operating Revenue
Because the incoming and outgoing dollars recognized in the income statement
subaccounts will be of equal amounts , the net result to the Company s net income will
be zero. Therefore, there are no current income tax liability changes or any other net
financial effects from the inclusion of these income statement accounting entries.
However, for external reporting purposes , the accounting trail of specific DSM-related
funding and expenditures will be much easier to track through income statement detail
rather than relying solely on cumulative balance sheet activity.
IV.CONCLUSION
In summary, the Company does not propose to change its current balance sheet
accounting procedures regarding Energy Efficiency Rider funding. The Company seeks
only to make parallel accounting entries to the income statement in an attempt to more
closely comply with GAAP standards and auditing efficiencies.If the Company
proposed accounting entries are approved, there will be no effect on the Company s net
APPLICATION , Page 3
income. Importantly, there will be no rate making implications associated with the
Company s proposal.
Adoption of the Company s accounting proposals will not diminish its capability to
provide complete DSM reporting. All the details concerning Energy Efficiency Rider
activity will continue to be easily and readily available for audit and review.
MODIFIED PROCEDURE
The Company requests that this Application be processed under RP 201 et seq.
allowing for consideration of issues to be processed under Modified Procedure , i.e., by
written submissions rather than by an evidentiary hearing.
VI.SERVICE OF PROCESS
Communications with respect to this Application should be sent to the following:
Lisa D. Nordstrom
Barton L. Kline
Idaho Power Company
O. Box 70
Boise, Idaho 83707-0070
[phone]
Inordstrom (g) idahopower.com
Jeannette C. Bowman , Sr. Analyst
Idaho Power Company
O. Box 70
Boise, Idaho 83707-0070
[phone]
ibowman
(g)
idahopower.com
NOW , THEREFORE, Idaho Power respectfully requests that the Commission
issue its order authorizing Idaho Power to implement the accounting procedures
described above.
DATED at Boise, Idaho, this day of September, 2006.
APPLICATION , Page 4