20080411Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:WELDON STUTZMAN
DEPUTY ATTORNEY GENERAL
DATE:APRIL 10,2008
SUBJECT:IDAHO POWER'S APPLICATION TO REVISE DEPRECIATION RATES
CASE NO. IPC-08-
On April 1 , 2008, Idaho Power Company filed an Application for an accounting order
authorizing the Company to revise its depreciation rates for electric plant in service effective
August 1 , 2008. The last significant changes to the Company s depreciation rates was in
October 2003. The depreciation rates proposed by the Company in this case are based on a study
completed by Gannett Fleming, Inc. and relate to Idaho Power s electric plant in service as of
December 31, 2006. The proposed depreciation rates are based on a straight line, remaining life
method, average service life procedure for all electric plant.
Based on depreciable electric plant in service at December 31 , 2006 of
467 925 739, the proposed changes in depreciation rates would result in a decrease of
713 451 in the Company s total annual depreciation expense. Approximately $6.2 million of
the decrease would be allocated to Idaho Power s Idaho operations.
The Company requests that its Application be processed by Modified Procedure.
Staff believes that processing the case by Modified Procedure may be appropriate, but
also believes the comment period should come after Staff and other interested parties have an
opportunity to review the Company s Application and discuss specific depreciation rates with the
Company. Accordingly, Staff recommends the Commission issue a Notice of Application and
Notice of Intervention Deadline. After the intervention period, Staff will convene workshops
with the Company and other parties, and attempt to reach an agreement on depreciation rates for
DECISION MEMORANDUM
Idaho Power. After conclusion of the workshops, a Notice of Modified Procedure can be issued
to establish a comment period.
COMMISSION DECISION
Should the Commission issue a Notice of Application and Notice of Intervention
Deadline, and then later issue a Notice of Modified Procedure after Staff and the Company have
discussed depreciation rates in workshops?
Weldon B. Stutzman
Deputy Attorney General
bls/M:IPC-O8-06 ws
DECISION MEMORANDUM