20080519Comments.pdf

KRISTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 6618
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
IDAHO POWER COMPANY FOR AUTHORITY )
TO MODIFY ITS RULE H CHARGES AND )
CREDITS RELATED TO DISTRIBUTION LINE )
INSTALLATIONS AND UNDERGROUND )SERVICE ATTACHMENTS. )
)
CASE NO. IPC-E-08-2
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilties Commission, by and through its
Attorney of record, Kristine A. Sasser, Deputy Attorney General, and in response to the Notice of
Modified Procedure issued in Order No. 30541 on April 28, 2008 in Case No. IPC-E-08-2,
submits the following comments.
BACKGROUND
On March 10, 2008, Idaho Power Company fied an Application requesting modification
of hs Rule H tariff charges and credits for installng distribution lines and underground service to
customers' premises. Specifically, the Company proposes to update Section 4(b) concerning
Underground Service Attachment Charges.
In its Application, the Company notes that the last major change to its charges and credits
(specific to this section of its Rule H tariff) occurred in Februar 1997. Since that time, the
Company has experienced increased costs for labor and materials, and has observed an increase in
STAFF COMMENTS 1 MAY 19,2008
the construction of larger-sized residential properties within hs service terrtory that require a
larger-sized conductor than that currently used as a cost basis in determining costs and credits.
Idaho Power curently installs three sizes of service wire to provide electric service to residences
but can only bil customers for the least expensive wire. Approximately 70 percent of customers
are currently being biled for the correct wire size.
For customers who tae service under Schedules 1,4,5, or 7,1 the Company's curent
Rule H tarff assesses additional charges for customers who choose underground, rather than
overhead, service. Charges in Section 4(b) are divided into two types: a "Base" Charge and a
"Distance" Charge (priced per foot based on the length of the installation).
The curent method used to calculate the Distace Charge compares the cost difference
between installing overhead and underground service based on a single service-size. Customers
receive standard overhead service from the Company at no charge, but are charged an added cost
when installng underground service. The Company proposes a Distance Charge calculation
using the same method (overhead vs. underground), but with an additional assessment dependent
on the size of the wire ($6.90 per foot with 1/0 cable, $7.50 per foot with 4/0 cable, and $9.60 per
foot with 350 cable).
The Company also requests a change to the discount in Distance Charges for customers
who provide their own trenching and conduit. The curent charge for wire in customer-provided
trenching is $1.05 per foot. The existing taiff does not distinguish between types of wire. The
proposed charges are $2.15 per foot with 1/0 cable, $3.60 per foot with 4/0 cable, and $4.65 per
foot whh 350 cable.
Finally, the Company's Base Charge is curently $30 for service from existing
underground facilities, and $255 for service from overhead facilities that require the addition of a
2-inch riser. The Company proposes to increase the Base Charge to $40 for service for existing
underground facilities and $395 for service requiring a 2-inch riser. The Company also proposes
to add a charge for a 3-inch riser option to address the larger-sized services not previously
envisioned when the tariff was created.
i Schedules: 1 - Residential Service; 4 - Residential Energy Watch (optional); 5 - Residential Time-of-Day
(optional); 7 - Small General Service.
STAFF COMMENTS 2 MAY 19,2008
STAFF ANALYSIS
It has been eleven years since Idaho Power last updated charges listed in section 4(b) of its
Rule H taiff. The Company has experienced increased costs for labor and materials over that
period, and Staff agrees with Idaho Power that those increased costs should be reflected in the
tariff. By keeping line extension costs curent, new customers pay more of their share of the costs
for new service. When line extension costs are allowed to become stale, the higher costs of
providing service to new customers is generally shifted onto existing customers for recovery in
general rate cases. Although small, charging new customers the full cost of new service is one
step closer toward an objective of making growth pay for itself. In the future, Staff would like to
see Idaho Power make more frequent filings (perhaps anually like Avista does) to keep line
extension costs curent.
With regard to the specific amounts of the revised charges proposed by Idaho Power, Staff
reviewed in detail the Company's assumptions and cost estimates. Staff also met with Company
personnel to review the Company's computerized cost estimation system. Staff is satisfied that
the revised charges proposed by Idaho Power are reasonable.
Staff also supports the Company's proposal to fuher refine its line extension charges
based on conductor size. By offering the proposed pricing for multiple service sizes instead of a
single service size, the Company can more accurately match the charges a customer must pay to
the actual costs incurred to install service. Maintaining different charges for different service
sizes helps ensure that some customers do not pay more than they should and other customers pay
less.
Customer Notification and Opportunity for Comment
Idaho Power reported that on April 4, 2008, it sent 481 letters to building contractors in its
service territory notifying them of the proposed rule changes. The Company also issued a press
release on April 1, 2008, and a news aricle appeared in the Idaho Business Review on April 14,
2008. In noticing the Company's Application, the Commission established an intervention
deadline of April 22, 2008. No petitions to intervene were received; therefore, the Commission
issued a Notice of Modified Procedure and set a 21-day comment period.
STAFF COMMENTS 3 MAY 19,2008
Staff believes that Idaho Power has made reasonable efforts to notify affected customers
of the proposed change. Furher, Staff believes that customers have been provided ample
opportunity to comment.
RECOMMENDATIONS
Staff recommends approval of the Company's Application to amend line extension charges
and credits in its Rule H taiff. Staff recommends an effective date of June 1, 2008.
Respectfully submitted this \ q'l day of May 2008.
ifiJe 2 a . ~.Kri me A. Sasser
Deputy Attorney General
Technical Staff: Rick Sterling
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STAFF COMMENTS 4 MAY 19,2008
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 19TH DAY OF MAY 2008,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC-E-08-2, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
LISA D NORDSTROM
BARTON L KLINE
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: lnordstrom(iidahopower.com
bkline(iidahopower .com
CELESTE SCHWENDIMAN
JOHNRGALE
IDAHO POWER COMPANY
POBOX 70
BOISE ID 83707-0070
E-MAIL: cschwendiman(iidahopower.com
rgale(iidahopower .com
CERTIFICATE OF SERVICE