20090710notice_of_application_order_no_30859.pdf

Office of the Secretary
Service Date
July 10, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION CASE NO. IPC-09-
OF IDAHO POWER COMPANY FOR AN
ACCOUNTING ORDER AUTHORIZING NOTICE OF APPLICATION
THE DEFERRAL OF COSTS RELATED
TO REORGANIZATION AND NOTICE OF MODIFIED
SEVERANCE.PROCEDURE
ORDER NO. 30859
On May 21 , 2009, Idaho Power Company filed an Application for an accounting
order authorizing the deferral of costs related to the Company s plan to reorganize parts of its
operations and institute a severance program. The Company requests that the case proceed by
Modified Procedure.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the Company asserts that, due to the economic
downturn and slower customer growth, it is planning a reorganization of certain Delivery
Business and Corporate Services positions. As part of the reorganization, voluntary severance
has been offered to all of the 200 employees within identified positions. However, the Company
maintains that it does not plan to accept more than 40 requests for voluntary severance.
YOU ARE FURTHER NOTIFIED that Idaho Power states that the voluntary
severance payment would be equal to one week of pay per year of service with a minimum of 8
weeks and a maximum of 40 weeks. Following the voluntary severance process, the Company
intends to reassess workforce needs in the affected job positions. If necessary, involuntary
severance will be offered to any remaining employees holding "excess positions.The
Company expects its involuntary severance packages to be less than its voluntary severance
payments.
YOU ARE FURTHER NOTIFIED that the Company anticipates that the cost of the
severance associated with the elimination of 40 positions will not exceed $2 million. Payments
for severance would require the Company to expense 100% of severance costs in the period that
they are incurred. Because there would also be a reduction in salary costs, the Company claims
1 Excess positions are those that are no longer needed due to a decline in new business.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDUREORDER NO. 30859
that a sustained reduction in its workforce will ultimately benefit its customers when labor costs
are reduced.
YOU ARE FURTHER NOTIFIED that Idaho Power requests authorization to
capitalize the severance costs associated with the Delivery Business reorganization, and any
subsequent 2009 reorganizations, in accordance with paragraph 9 of Statement of Financial
Accounting Standards (SF AS) No. 71. The costs of the severance package would then be
amortized on a straight-line basis over a five-year period. The Company believes that such an
amortization is appropriate because reorganization activities will occur during 2009 but the
associated benefits will be realized over time. Recovering all reorganization costs in the period
that they are incurred would unfairly burden existing customers or shareholders for a benefit that
future customers would also experience. For this reason, the Company contends that the
matching principle supports capitalizing reorganization costs and amortizing them over a
reasonable period during which the benefits of the reorganization will be realized. Therefore, the
Company seeks an accounting order authorizing the deferral of costs associated with the
severances through December 2009 and amortization of these costs over a period of five (5)
years, beginning upon their inclusion in rates.
YOU ARE FURTHER NOTIFIED that the Company proposes to account for the
severance costs by charging them to Account 182.3 (Other Regulatory Assets) and amortizing
these amounts to Account 930.2 (Miscellaneous General Expense) upon their inclusion in rates.
Prior to their inclusion in rates, Idaho Power proposes to accrue a carrying charge using the
Company s most recent return on rate base.
YOU ARE FURTHER NOTIFIED that Idaho Power does not request a
determination of ratemaking treatment of the severance costs in this Application and emphasizes
that nothing in this Application will impact customer rates at this time. The Company proposes
to address the ratemaking treatment and recovery of these costs in its next general rate case.
YOU ARE FURTHER NOTIFIED that the Application and supporting workpapers
testimonies and exhibits have been filed with the Commission and are available for public
inspection during regular business hours at the Commission offices.The Application and
testimonies are also available on the Commission s web site at www.puc.idaho.gov by clicking
on "File Room" and then "Electric Cases.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30859
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission s Rules
of Procedure IDAPA 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission within
twenty-one (21) days from the service date of this Notice. The comment must contain a
statement of reasons supporting the comment. Persons desiring a hearing must specifically
request a hearing in their written comments. Written comments concerning this Application
shall be mailed to the Commission and the Applicant at the addresses reflected below:
Commission Secretary Donovan E. Walker
Idaho Public Utilities Commission Barton L. KlinePO Box 83720 Idaho Power Company
Boise, ID 83720-0074 PO Box 70
Boise, Idaho 83707
Mail: dwalker(g?idahopower.com
bkl ine(g?idahopower. com
Street Address for Express Mail:
472 W. Washington Street
Boise, ID 83702-5918
Courtney Waites
Greg Said
Idaho Power Company
PO Box 70
Boise, Idaho 83707
E- Mail: cwaites(g?idahopower.com
gsai d(g?idahopower. com
These 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 the Applicant at the e-mail addressees) listed
above.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30859
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
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 specifically
Idaho Code ~~ 61-119, 61-129, and 61-524. 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, IDAP A 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons may file written comments no later than 21 days from the service date of this
Order.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of July 2009.
JI KEMPTON, P SIDENT
;J~
MARSHA H. SMITH, COMMISSIONER
ATTEST:
ri2~Je I D. Jewell
ission Secretary
O:IPC-09-15 ks
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30859