20081216Leckie Revised Direct.pdf

1 the deferred fees paid to them. While the fees are deferred
2 under the provision of the plan, the fees earn interest at a
3 rate that is 3% over Moody's long-term corporate bond yield
4 average rate.
5 In 2007, the directors of Idaho Power earned
6 $336,676 in interest on deferred fees. Also in 2007, the
7 directors of IDACORP earned $186,721 in interest on deferred
8 fees. For the director fees for IDACORP, over 90% are
9 allocated back to Idaho Power. Therefore, the Company has
10 included at least $504,724 of interest expense that it paid
11 to its directors for the deferred directors' fees. The
12 interest rate paid in 2007 for the deferred amounts ranged
13 between 8.83% and 9.34%.
14 Customers should not be responsible for paying a
15 premium of 3% over Moody's long-term corporate bond yield
16 average rate to the directors. The directors should not
17 recei ve an interest rate greater than the average rate the
18 Company would pay to any independent third party for a
19 similar amount. Any interest above the market rate for
20 funds should be a below-the-line expense and not included in
21 the revenue requirement. Staff therefore recommends that
22 the Company's expenses for the Board of Directors be reduced
23 by 3% of the interest earned on the deferred fees. This
24 would equal $15,142 ($504,724 x 3 %) .
25 Q.Do you have any other concerns about the
CASE NO. IPC-E-08-1012/16/08 LECKIE, J. (Rev) 14
STAFF