20080903Comments.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
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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 IDAHO POWER )
COMPANY'S APPLICATION FOR APPROVAL) CASE NO. IPC-E-08-15
OF AN AMENDMENT TO AN AGREEMENT )
BETWEEN A VIMOR, LLC, AND IDAHO )
POWER COMPANY AND FOR AUTHORITY ) COMMENTS OF THE
TO IMPLEMENT A LINE CAPACITY CHARGE) COMMISSION STAFF
)
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of
Record, Weldon B. Stutzman, Deputy Attorney General, submits the following comments in
response to Order No. 30623 issued on August 13,2008.
BACKGROUND
On July 29, 2008, Idaho Power Company fied an Application for approval of an
amendment to an Agreement the Company has with A vimor LLC. A vimor is the developer of a
subdivision north of Boise and agreed to pay Idaho Power $4.3 milion to construct facilties
specified in the Agreement required to serve the development. The Company requested
Commission approval of the Agreement in an earlier case, and the Commission approved the
Agreement with modifications. Case No. IPC-E-06-23, Order No. 30322.
STAFF COMMENTS 1 SEPTEMBER 3, 2008
The amendments to the contract for which the Company now requests approval include
refunds for connections within the A vimor development at $110 per k W of estimated demand for
residential service connections, assuming that each connection is 10 kW; refuds for non-
residential loads are calculated by multiplying $110 times the kVA rating of the distribution
transformers serving each non-residential account. Additionally, this amendment would allow
contributions from customers connecting in a geographic area outside of the A vimor project.
These line capacity charges would be assessed at $1,100 per customer receiving service under
Schedule 1, and non-residential service schedules would pay $110 times the kV A rating of the
distribution transformer service of each non-residential account. In subdivisions where Rule H
applies, line capacity charges would be collected in addition to regular Rule H charges. Refunds,
including refuds of line capacity charges, would be paid to A vimor for no more than 10 years,
or until A vimor has received the full $4.3 millon amount it contributed for the constrction of
facilties.
STAFF ANALYSIS
The Amendment uses the most recent test year values to determine the refund amount
A vimor wil receive for each residential and non-residential customer taking service within the
Avimor project from Idaho Power. Residential electric service is supplied under Idaho Power's
Rate Schedule 1 and non-residential electric service is supplied under Rate Schedules 7, 9, 19,
and 24. The two most recent test year values used to calculate the refund amount are from 2005
and 2007. These values are from the IPC-E-05-28 and IPC-E-07-08 general rate case filings of
the Company.
The base year values are shown in Exhibit No.1 of Company witness Timothy Tatum's
testimony. In this exhibit, there are four different input values for each base year. These input
values are the Total Residential Transmission Rate Base with Transmission Station Equipment
Removed, Average Number of Customers, and Distribution Substation Rate Base. The
computed values in this exhibit are Transmission Lines and Transmission & Distribution per
Customer which is the sum of Transmission Rate Base per Customer and Distribution Rate Base
per Customer. The input values and computed values under the heading IPC-E-05-28 in the
Company's exhibit are the same values under the same heading from Staffs Attachment A in
Case No. IPC-E-06-23. Under the heading IPC-E-07-08 in this exhibit, the Total Residential
STAFF COMMENTS 2 SEPTEMBER 3, 2008
Transmission Rate Base and Distribution Substation Rate Base came from Exhibit No. 52, page
1, Column (B), lines 18 and 23, respectively in the same case. The Transmission Station
Equipment is a ratio of Account 353 amount, Exhibit No. 49, page 1, Colum (B), line 40 and
Transmission Plant, Exhibit No. 49, page 6, Column (B), line 63, multiplied by the Residential
Transmission Rate Base. The project required the construction of a 3.4 mile transmission line.
Therefore, only transmission lines and no other transmission equipment should be par of the
cost. The Transmission Lines amount was determined by deducting the Transmission Station
Equipment from the Total Residential Transmission Rate Base.
The rounded maximum refund amount of$I,100 in Company Exhibit NO.1 for each
permanent residential connection is the sum of the average incremental cost of Transmission
Rate Base per Customer and Distribution Rate Base per Customer between the two test years.
The average incremental cost for the Transmission Rate Base per Customer is the incremental
change of Transmission Lines divided by the incremental growth of customers between the two
test years. In the same manner, the Distribution Rate Base per Customer is the quotient of the
incremental change of Distribution Substation Rate Base and the incremental growth of
customers during the same period. Using the same methodology as the previous case, the
Amendment updates the refund amount from $1,000 to $1,100 and allows for refunds, suggested
by the Commission, for connections outside of the A vimor project that use the same facilities
paid for by Avimor.
Each permanent residence is set to have an estimated demand of 10 kW. As a result, the
refund amount would be $110 per k W for residential service. Unlike the residential service, non-
residential service has different demands based on their needs. Therefore, the refud amount for
a non-residential load is $110 times the kVA rating of the distribution transformer serving each
non-residential account.
STAFF RECOMMENDATION
Staff believes that the Company reasonably calculated the refud amounts of $1,100 for
each permanent residential connection and $110 times the k V A rating of the distribution
transformer for each non-residential connection within the A vimor project. The Company used
the same methodology that the Staff used to calculate the refund amount in the original
Agreement, in Case No. IPC-E-06-23, Order No. 30322. Staff also agrees that a line capacity
STAFF COMMENTS 3 SEPTEMBER 3, 2008
charge, which is the same as the refund amounts within the A vimor project, should be
implemented for those customers requiring electric service connection outside the project
boundaries who will use the transmission and substation facilties paid for by A vimor.
Therefore, the Staff recommends that the Commission approve the terms of this Amendment
between A vimor LLC and Idaho Power Company and authorize implementation of a Line
Capacity Charge.
Respectfully submitted this ~~ day of September 2008.
J~~
Weldon B:uzman
Deputy Attorney General
Technical Staff: TJ Golo
i:umisc/comments/ipce08. i 5wstj
STAFF COMMENTS 4 SEPTEMBER 3, 2008
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 3RD DAY OF SEPTEMBER 2008,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. IPC-E-08-15, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
BARTON L KLINE
LISA D NORDSTROM
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: bkline(ßidahopower.com
Inordstrom(ßidahopower .com
JOHNRGALE
TIMOTHY E TATUM
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: rgale(ßidahopower.com
ttatum(ßidahopower .com
Jo~SECRETARY -=
CERTIFICATE OF SERVICE