20090415Application.pdf

esIDA~POCI
An IDACORP Company
DONOVAN E. WALKER
Corporate Counsel
April 15, 2009
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commissiòn
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. IPC-E-09-11
IN THE MATTER OF THE APPLICA TlON OF IDAHO POWER COMPANY
FOR AUTHORITY TO IMPLEMENT POWER COST ADJUSTMENT ("PCA')
RATES FOR ELECTRIC SERVICE FROM JUNE 1, 2009, THROUGH MA Y 31,
2010
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of the Company's
Application in the above matter.
In addition, enclosed are nine (9) copies of the testimony of Scott Wright filed in
support of the Application. One of the copies of Mr. Wright's testimony has been
designated as the "Reporter's Copy." Also enclosed is a disk containing the Word version
of the aforementioned testimony.
In addition, three (3) copies of the Company's press release have been enclosed.
Finally, I would appreciate it if you would return a stamped copy of this letter for my
file in the enclosed stamped, self-addressed envelope.
C¿~
onovan E. Walker
DEW:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise. ID 83702
DONOVAN E. WALKER (ISB No. 5921)
BARTON L. KLINE (ISB No. 1526)
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Tel: [phone]
Fax: [phone]
dwalker~idahopower.com
bkline~idahopower.com
RECEI i
iung APR 15 Pi; 12: 04
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MA TIER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO.IPC-E-09-11
AUTHORITY TO IMPLEMENT POWER )
COST ADJUSTMENT ("PCA") RATES ) APPLICATION
FOR ELECTRIC SERVICE FROM JUNE 1, )
2009, THROUGH MAY 31,2010. )
Idaho Power Company ("Idaho Power" or the "Company"), in accordance with
Idaho Code §61-502, §61-503, and RP 052, hereby respectfully makes application to
the Idaho Public Utilities Commission ("IPUC" or the "Commission") for an Order
approving a revised Schedule 55 containing an increase in the Company's Power Cost
Adjustment ("PCA") rate currently in effect and authorizing the Company to incorporate
the proposed PCA rate in its rates and charges for all customer classes and special
contracts during the period of June 1,2009, through May 31,2010 ("2009-2010 PCA
yeat'.
APPLICATION - 1
In support of this Application, Idaho Power represents as follows:
i. BACKGROUND
1. Idaho Power is an Idaho corporation whose principal place of business is
1221 West Idaho Street, Boise, Idaho, 83702.
2. Idaho Power operates a public utility supplying retail electric service in
southern Idaho and eastern Oregon. Idaho Power is subject to the jurisdiction of this
Commission in Idaho and to the jurisdiction of the Public Utility Commission of Oregon.
Idaho Power is also subject to the jurisdiction of the Federal Energy Regulatory
Commission (the "FERC").
3. On March 29,1993, by Order No. 24806 issued in Case No. IPC-E-92-25,
the Commission approved the implementation of an annual Power Cost Adjustment
procedure.
4. On January 9,2009, by Order No. 30715 issued in Case No. IPC-E-08-19,
the Commission approved certain changes to the PCA mechanism. Changes were
approved for the PCA sharing ratio, the Load Growth Adjustment Rate ("LGAR"), third-
party transmission expense, the PCA forecast, and the power supply expense
distribution.
II. PROPOSED PCA RATE CHANGE
5. In support of this Application, Idaho Power has filed the testimony and
exhibits of witness Scott Wright. Mr. Wright's testimony describes and provides the
computation of a PCA rate to be effective June 1, 2009, for the 2009-2010 PCA year
that would increase the PCA rate to 1.4717 cents per kWh.
APPLICATION - 2
6. The PCA consists of three components: (1) the projected power cost
component; (2) the true-up of power cost component where the balance of the power
cost deferral from the prior year projected power cost is credited or collected; and (3)
the true-up of the true-up component under which any over-recovered or undercollected
balance of the true-up deferral from the prior year is credited or collected.
7. As described in Mr. Wright's testimony, the first component, projected
power cost, was computed in compliance with Order No. 30715, which provides for the
Company to utilize the results of its most recent Operating Plan as the basis for the April
projection of PCA expenses. This method replaces the previous method which was
based upon inserting a Brownlee runoff forecast into a regression formula derived from
rate case data. The rate for the projection portion of the PCA is equal to the sum of: (1)
95 percent of the difference between the non-PURPA expenses quantifed in the
Operating Plan and those quantified in the Company's last general rate case, including
the new component of third-part transmission expense, and (2) 100 percent of the
difference between PURPA related expenses quantified in the Operating Plan and
those quantified in the Company's last general rate case divided by (3) the Company's
normalized system firm sales.
8. The projection of net PCA expense for which deviations from base are
tracked at 95 percent is $208,377,734. Order No. 30748 provides that the first block
revenues from the Hoku special contract are to be reflected in PCA computation as if
they were surplus sales. The March 26, 2009, Operating Plan reflects Hoku loads that
would generate $18,539,291 of first block revenues. Subtracting this amount from the
$208,377,734 results in an adjusted net of $189,838,443. This amount is $99,057,941
APPLICATION - 3
above the base established by Order No. 30722 from the Company's most recent
general rate case, Case No. IPC-E-08-10. The rate for the non-PURPA expenses
(tracked at 95 percent) is 0.6451 cents per kWh.
9. The Operating Plan projection of PURPA expenses, for which deviations
from base are tracked at 100 percent is $51,767,620. This amount is $11,502,269
below the base amount established by Order No. 30722 from the Company's most
recent general rate case, Case No. IPC-E-08-10. This reflects the Company's
expectation that a number of PURPA projects wil not come on line when previously
expected. The rate for PURPA expenses (tracked at 100 percent) is negative 0.0789
cents per kWh.
10. As described in Mr. Wright's testimony, the true-up balance at the end of
March 2009, with interest applied, is $107,891,769. A reduction of $4,591,632 is made
to reflect S02 sales, to arrive at the true-up balance of $103,300,137. The rate for the
true-up component of the PCA is 0.7465 cents per kWh reflecting actual net PCA costs
above last year's forecast.
11. The third component is the true-up of the true-up. During the April 1,
2008, to March 31, 2009, period, the Company recovered $22,003,335 less than was
necessary to satisfy the 2008/2009 PCA true-up. This results in a true-up of the true-up
rate of 0.1590 cents per kWh.
12. The combination of the three PCA components - the adjustment for the
2009/2010 projected power cost of serving firm loads, the 2008/2009 true-up, and the
true-up of the 2008/2009 true-up results in a new PCA rate for the 2009/2010 PCA year
APPLICATION - 4
of 1.4717 cents per kWh. This equates to a required $93.8 millon, or 11.4 percent
increase in revenue. The existing PCA rate is 0.7864 cents per kWh.
13. Attachment No. 1 to this Application is a revised Electric Rate Schedule,
IPUC No. 29, Tariff No. 101, Schedule 55, specifying the proposed PCA rates and
changes for providing electric service to customers in the state of Idaho for which the
Company seeks approval.
14. Attachment NO.2 shows each proposed change to the existing Schedule
55 by striking over proposed deletions and highlighting or underlining proposed
additions or amendments.
15. Attachment No. 3 to this Application is a summary of revenue impact
showing the effect of applying the proposed Schedule 55 PCA rate to each customer
class and special contract.
II. MODIFIED PROCEDURE
16. Idaho Power believes that a technical hearing is not necessary to
consider the issues presented herein, and respectfully requests that this Application be
processed under Modified Procedure; Le., by written submissions rather than by
hearing. RP 201, et seq. If, however, the Commission determines that a technical
hearing is required, the Company stands ready to present its testimony and support the
Application in such hearing.
IV. COMMUNCIATIONS AND SERVICE OF PLEADINGS
17. This Application is not subject to RP 122 because it qualifies for the
exception for power cost adjustments described in RP 122.02. As noted in 122.02,
power cost adjustment filings are not subject to requirements of RP 122. Pursuant to
APPLICATION - 5
RP 123 and Idaho Code § 61-307, the tariff filing implementing the new PCA rates
shown in Attachment NO.3 would become effective June 1, 2009.
18. This Application has been and wil be brought to the attention of Idaho
Power's affected customers by means of press releases to the news media in the area
served by Idaho Power, and by an insert included in customers' bils. In addition, the
proposed electric rate schedules, together with this Application and the testimony and
exhibit of witness Mr. Wright wil be open for public inspection at Idaho Power's offces
in the state of Idaho. The above procedures are deemed by Idaho Power to satisfy the
Rules of Practice and Procedure of this Commission. Idaho Power wil, in the
alternative, bring said Application to the attention of Idaho Power's affected customers
through any other means directed by the Commission.
19. Communications and service of pleadings with reference to this
Application should be sent to the following:
Donovan E. Walker
Barton L. Kline
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
dwalker~idahopower.com
bkline~idahopower.com
Scott Wright
Gregory W. Said
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
swright~idahopower.com
gsaid~idahopower.com
V. REQUEST FOR RELIEF
20. Idaho Power respectfully requests that the Commission issue an Order:
(1) authorizing that this matter may be processed by Modified Procedure and (2)
implementing the Power Cost Adjustment rates as shown in Attachments Nos.1 and 3
effective June 1, 2009, through May 31, 2010.
APPLICATION - 6
DATED at Boise, Idaho, this 15th day of April 200
OVAN E. W KER
Attorney for Idaho Power Company
APPLICATION - 7
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-09-11
IDAHO POWER COMPANY
PROPOSED TARIFF
ATTACHMENT NO.1
Idaho Power Company Third Revised Sheet No. 55-1
Cancels
Second Revised Sheet No. 55-1l.P.U.C. No. 29. Tarif No. 101
SCHEDULE 55
POWER COST ADJUSTMENT
APPLICABILITY
This schedule is applicable to the electric energy delivered to all Idaho retail Customers served
under the Company's schedules and Special Contracts. These loads are referred to as "firm" load for
purposes of this schedule.
BASE POWER COST
The Base Power Cost of the Company's rates is computed by dividing the sum of the
Company's power cost components by firm kWh sales. The power cost components are segmented
into two categories; Category 1 and Category 2. Category 1 power costs include the sum of fuel
expense and purchased power expense (excluding purchases from cogeneration and small power
producers), less the sum of off-system surplus sales revenue and revenue from market-based special
contract pricing. Category 2 power costs include purchase power expense from cogeneration and
small power producers. The Base Power Cost is 1.0251 cents per kWh, which is comprised of
Category 1 power costs of 0.5913 cents per kWh and Category 2 power costs of 0.4338 cents per kWh.
PROJECTED POWER COST
The Projected Power Cost is the Company estimate, expressed in cents per kWh, of the
Category 1 and Category 2 power cost components for the forecasted time period beginning April 1
each year and ending the following March 31. The Projected Power Cost is 1.5913 cents per kWh,
which is comprised of Category 1 power costs of 1.2364 cents per kWh and Category 2 power costs of
0.3549 cents per kWh.
TRUE-UP AND TRUE-UP OF THE TRUE-UP
The True-up is based upon the diference between the previous Projected Power Cost and the
power costs actually incurred. The True-up of the True-up is the diference between the previous
yeats approved True-Up revenues and actual revenues collected. The total True-up is 0.9055 cents
per kWh.
POWER COST ADJUSTMENT
The Power Cost Adjustent is the sum of 1) 95 percent of the diference betwn the Projected
Power Costs in Category 1 and the Base Power Costs in Category 1, 2) 100 percent of the diference
betwen the Projected Power Costs in Category 2 and the Base Power Costs in Category 2 and 3) the
True-ups.
The monthly Power Cost Adjustment applied to the Energy rate of all metered schedules and
Special Contracts is 1.4717 cents per kWh. The monthly Power Cost Adjustment applied to the per unit
charges of the nonmetered schedules is the monthly estimated usage times 1.4717 cents per kWh.
EXPIRATION
The Power Cost Adjustment included on this schedule wil expire May 31, 2010.
IDAHO
Issued - April 15. 2009
Effective - June 1, 2009
Issued by IDAHO POWER COMPANY
John R. Gale, Vice President, Regulatory Affairs
1221 West Idaho Street, Boise, 10
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-09-11
IDAHO POWER COMPANY
TARIFF IN LEGISLATIVE FORMAT
ATTACHMENT NO.2
Idaho Power Company Second Revised Sheet No. 55-1
Cancels
First Revised Sheet No. 55-1I.P.U.C. No. 29. Tariff No. 101
SCHEDULE 55
POWER COST ADJUSTMENT
APPLICABI L1TY
This schedule is applicable to the electric energy delivered to all Idaho retail Customers served
under the Company's schedules and Special Contracts. These loads are referred to as "firm" load for
purposes of this schedule.
BASE POWER COST
The Base Power Cost of the Company's rates is computed by dividing the sum of the
Company's power cost components by firm kWh sales. The power cost components are segmented
into two categories; Category 1 and Category 2. Category 1 power costs include the sum of fuel
expense and purchased power expense (includingexcluding purchases from cogeneration and small
power producers), less the sum of off-system surplus sales revenue and revenue from market-based
special contract pricing. Category 2 power costs include purchased power expense from cogeneration
and small power producers. The Base Power Cost is 1.02510.9921 cents per kWh, which is comprised
of Category 1 power costs of 0.59130 cents per kWh and Category 2 power costs of 0.43380cents per kWh. .
PROJECTED POWER COST
The Projected Power Cost is the Company estimate. expressed in cents per kWh, of the
Category 1 and Category 2 power cost components for the forecasted time period beginning April 1
each year and ending the following March 31. The Projected Power Cost is 1.5913Q cents per kWhi
which is comprised of Category 1 power costs of 1.23640.0000 cents per kWh and Category 2 power
costs of 0.354MO cents per kWh.
TRU&UP AND TRU&UP OF THE TRU&UP
The True-up is based upon the difference between the previous Projected Power Cost and the
power costs actually incurred. The True-up of the True-up is the difference between the previous years
approved True-Up revenues and actual revenues collected. The total True-up is 0.905~ cents per
kWh.
POWER COST ADJUSTMENT
The Power Cost Adjustment is the sum of 1) 9§0 percent of the diference between the
Projected Power Cost§ in Category 1 and the Base Power Costs in Category 1 i 2) 100 percent of the
difference between the Projected Power Costs in Category 2 and the Base Power Costs in Category 2
and 3) ~ the True-ups.
The monthly Power Cost Adjustment applied to the Energy rate of all metered schedules and
Special Contracts is 1.47170.78ê4 cents per kWh. The monthly Power Cost Adjustment applied to the
per unit charges of the nonmetered schedules is the monthly estimated usage times 1.47170.78ê4
cents per kWh.
EXPIRATION'
The Power Cost Adjustment included on this schedule wil expire May 31, ~201 O.
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-09-11
IDAHO POWER COMPANY
REVENUE IMPACTMENT
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6
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11
.
0
4
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e
c
i
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C
o
n
t
r
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t
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:
14

M
i
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n
26
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.
4
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1
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7
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2
6
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9
1
8
$4
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.
0
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0
17
.
6
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%
15

J

R

S
i
m
p
l
o
t
29
1
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9
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9
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9
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$8
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2
4
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0
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7
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16

D
O
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30
1
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5
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0
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1
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2
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4
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3
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3
9
5
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4
9
6
.
5
3
8
18
.
3
6
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17

T
o
t
a
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S
p
e
c
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C
o
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s
3
1.
1
0
7
.
9
7
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1
8
$3
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.
7
0
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,
4
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2
.
2
3
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.
1
0
0
$7
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5
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2
.
9
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8
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9
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%
18

T
o
t
a
l

I
d
a
h
o

R
e
t
a
i
l

S
a
l
e
s
46
7
,
3
5
7
13
,
6
8
9
,
1
4
4
,
8
6
3
$7
0
0
,
1
8
6
,
2
8
$8
2
2
,
9
4
0
,
5
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3
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3
,
8
1
1
,
7
1
0
$9
1
6
.
7
5
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,
2
4
2
11
.
4
0
%
("
)

A
s

F
i
l
e
d

i
n

C
a
s
e

N
o
.

I
P
C
-
E
-
0
8
-

1
0