20080402notice_of_application_order_no_30521.pdf

Office of the Secretary
Service Date
April 2, 2008
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO IMPLEMENT FIXED-
COST ADJUSTMENT (FCA) RATES FOR
ELECTRIC SERVICE FROM JUNE 1, 2008
THROUGH MAY 31, 2009
CASE NO. IPC-08-
NOTICE OF APPLICATION
NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 30521
YOU ARE HEREBY NOTIFIED that on March 14 2008, Idaho Power Company
filed an Application requesting authority to implement fixed cost adjustment (FCA) rates for
electric service from June 1 2008 through May 31 , 2009. In Case No. IPC-04-, Order No.
30267 issued March 12, 2007, the Commission approved a stipulation to implement a three-year
FCA pilot program for residential and small general service customers. The Company is nearing
the end of the first year of the pilot program approved by the Commission.
BACKGROUND
YOU ARE FURTHER NOTIFIED that the FCA is a mechanism to separate Idaho
Power s fixed costs from its energy sales, and establish a rate to allow the Company to recover
its fixed costs separate from energy sales. The rationale for an FCA is that traditional rate design
discourages energy conservation programs; that is, utilities that recover fixed costs through
energy sales have no incentive to reduce their sales volume by encouraging energy efficiency
and demand-side management programs.
YOU ARE FURTHER NOTIFIED that the FCA implemented last year for the pilot
program works the same for residential and small general service customers. For each class, the
number of customers is multiplied by a fixed-cost-per-customer rate that is determined through
the Company s revenue requirement in a general rate case. This produces an authorized fixed-
cost recovery amount, which is then compared to the amount of fixed costs actually recovered by
the Company. The difference between the authorized fixed-cost recovery amount and the actual
amount collected by the Company is the fixed-cost adjustment for each customer class.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30521
THE APPLICATION
YOU ARE FURTHER NOTIFIED that for the residential customer class during
2007, the rate of growth in energy sales exceeded the rate of growth and number of residential
customers; that is, the average energy use per residential customer increased. Accordingly, the
Company collected more for its fixed costs (approximately $3.5 million more) than as
established in the residential FCA formula. The FCA thus results in a credit balance for
residential customers for the additional fixed costs recovered during the year. If the credit is
incorporated into residential rates, it represents a 1.17% decrease.
YOU ARE FURTHER NOTIFIED that the small general service class, however, saw
a decrease in per-customer energy use during 2007, which means the Company under-collected
its fixed costs. For the small general service class, Idaho Power proposes an FCA to recover a
portion of the $1,187 033 the Company under-collected for its fixed costs. Recovery of the full
amount would result in a 7.3% increase in the FCA for the small general service customers.
Because the stipulation approved by the Commission to implement the pilot program calls for a
3% cap on any increase in the FCA, the Company proposes a 3% increase in the FCA for the
small general service class.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of
record in Case No. IPC-08-04. The Commission has preliminarily found that the public
interest in this matter may not require a hearing to consider the issues presented and that issues
raised by the Company s filing may be processed under Modified Procedure pursuant to
Commission Rules of Procedure, IDAP A 31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or
protests with respect to Idaho Power s Application and the use of Modified Procedure in Case
No. IPC-08-04 is Friday, May 9, 2008.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the deadline, the Commission may consider the matter on its merits and may
enter its Order without a formal hearing. If comments or protests are filed within the deadline
the Commission will consider them and in its discretion may set the matter for hearing or may
decide the matter and issue its Order based on the written positions before it. IDAP A
31.01.01.204.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30521
YOU ARE FURTHER NOTIFIED that written comments concerning Case No. IPC-
08-04 should be mailed to the Commission and Idaho Power at the addresses reflected below.
Street Address for Express Mail:
Lisa D. Nordstrom
Barton L. Kline
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: lnordstrom(?f)jdahopower.com
bkl ine(illidahopower .com
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
472 W. Washington Street
Boise, ID 83702-5918 Michael 1. Youngblood
John R. Gale
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: myoungblood(illidahopower.com
rgale(illidahopower. com
All comments should contain the case caption and case number shown on the first page of this
document. Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.idaho.gov. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document. These comments must also be sent to Idaho Power at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that the Application and supporting testimony
have been filed with the Commission and are available for public inspection during regular
business hours at the Commission offices or on the Commission Website at
www.puc.idaho.gov under the "File Room" and then "Electric Cases.
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 that 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.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30521
ORDER
IT IS HEREBY ORDERED that the Application of Idaho Power for approval to
implement fixed-cost adjustment rates for electric service from June 1 , 2008 through May 31
2009 be processed by Modified Procedure, IDAPA 31.01.01.201-204. Persons interested in
submitting written comments in this matter must do so no later than May 9 2008.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this :2
day of April 2008.
ATTEST:
~L\)
a D. Jewel
Commission Secretary
bls/O:IPC-08-04 ws
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30521