20091020Petersen Direct.pdf

RECtl\li:n. 'ii. .'!.c $ ""~"
L009 OCT 20 PM 3: 14
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO IMPLEMENT A
TRACKING MECHANISM TO RECOVER
ITS DEFINED BENEFIT PENSION
EXPENSE.
CASE NO. IPC-E-09-29
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
KEN W. PETERSEN
1 Q.Please state your name and business address.
2 A.My name is Ken W. Petersen and my business
3 address is 1221 West Idaho Street, Boise, Idaho.
4 Q.By whom are you employed and in what
5 capacity?
6 A.I am employed by Idaho Power Company (" Idaho
7 Power" or "Company") as the Corporate Controller.
8 Q.Please describe your educational background.
9 A.I graduated in 1987 from Boise State
10 University, Boise, Idaho, receiving a Bachelor of Science
11 degree with a double maj or in Accounting and Computer
12 Information Systems. I also received a Masters in Business
13 Administration from Boise State University in 1995. I have
14 attended numerous accounting and regulatory courses,
15 including the Uni versi ty of Idaho's Public Utility
16 Executive Course in June 2006. I am currently licensed in
17 Idaho as a Certified Public Accountant.
18 Q.Please outline your business experience.
19 A.Before joining Idaho Power, I spent eleven
20 years in various accounting and finance leadership roles
21 with both private and publicly traded companies. In 1998,
22 I joined Idaho Power as Finance Team Leader and was
23 promoted to Delivery Business Unit Controller in 1999.In
24 2005, I was promoted to General Manager of Delivery
PETERSEN, DI 1
Idaho Power Company
1 Services & Delivery Controller. In 2007, I was promoted to
2 Corporate Controller.
3 Q.What are your duties as Corporate
4 Controller?
5 A.I am responsible for the Company's
6 accounting and external financial reporting processes.
7 Additionally, I oversee the corporate budgeting and
8 internal reporting process, including financial support for
9 the business units.
10 Q.What is the purpose of your testimony in
11 this proceeding?
12 A.The purpose of my testimony is to describe
13 Idaho Power's proposal to establish a pension expense
14 tracking mechanism for the recovery of costs associated
15 with the Company's obligations to provide pension benefits
16 to its employees. I will also discuss the related
17 accounting issues associated with pension expense,
18 including consequences to the Company of certain actions,
19 and describe why the absence of a tracking mechanism could
20 result in a substantial impact on the Company's income
21 statement and equity position.
22 DESCRIPTION OF PENSION PLA
23 Q.Please briefly describe Idaho Power's
24 pension plan.
PETERSEN, DI 2
Idaho Power Company
1 A.The plan was established in 1943 and
2 continues as part of the Company's total compensation
3 package for employees. The plan is a defined benefit
4 pension plan covering all eligible employees of Idaho Power
5 Company. Idaho Power's Fiduciary Committee controls and
6 manages the operation and administration of the plan. The
7 Bank of New York (the Trustee) serves as the trustee of the
8 plan and, together with several investment managers,
9 manages the plan's investments under the oversight of the
10 Fiduciary Committee. The plan is subj ect to the provisions
11 of the Employee Retirement Income Security Act of 1974
12 ("ERISA"), as amended.
13 As part of the Company's total compensation package,
14 employees receive pension benefits, payable at normal
15 retirement age, after accumulating five years of vested
16 service, as defined by the plan. There is no partial
17 vesting of benefits. The plan provides for normal
18 retirement upon reaching age 65, early retirement with
19 reduced monthly benefits as early as age 55 with 10 years
20 of service, or retirement at any age with reduced monthly
21 benefits (if before age 65) with 30 years of service. As
22 of January 1, 2009, Idaho Power had 2,085 active employees
23 in the plan and a total of 3,533 plan participants.
PETERSEN, DI 3
Idaho Power Company
1 PENSION ACCOUNTING RULES
2 Q.Please generally describe the traditional
3 accounting treatment prescribed by the Financial Accounting
4 Standards Board ("FASB") to account for pension costs.
5 A.Before discussing the accounting rules for
6 pension, I should note that the FASB recently adopted a
7 change to the authori tati ve source of accounting guidance.
8 Formerly, authori tati ve accounting literature was scattered
9 throughout various pronouncements. The FASB recently
10 consolidated all of the current authori tati ve accounting
11 literature into one source, the Accounting Standards
12 Codification ("ASC"). The prior technical accounting
13 requirements were not affected by this change; however,
14 references to Statements of Financial Accounting Standards
15 ("SFAS") to which I will continue to refer in this
1 6 testimony are, strictly speaking, no longer authori tati ve.
17 The provisions of SFAS 71 are now primarily incorporated in
18 ASC 980 and those of SFAS 87 are primarily incorporated in
19 ASC 715. The ASC is now the authoritative source.
20 However, for the sake of simplicity, and in order to avoid
21 confusion, I will be referring to the accounting literature
22 by the more familiar pronouncement references rather than
23 by the location of the guidance in the ASC.
PETERSEN, DI 4
Idaho Power Company
1 Prior to the issuance of SFAS 87, accounting for
2 pension plans varied greatly among companies. As a result,
3 pension cost was not easily comparable from company to
4 company or even from year to year. If a company currently
5 funded a pension plan, there was pension expense. If it
6 did not currently fund a pension plan, there was no pension
7 expense. The FASB issued SFAS 87 in order to better match
8 the compensation cost of an employee's pension benefits
9 with the time period over which the employee earns those
10 benefits, and also to provide for greater comparability
11 between companies and consistency for the same company in
12 its reporting from year to year. Instead of being based on
13 current cash payments, SFAS 87 net periodic pension expense
14 (or accrual) methodology is generally based on three
15 primary components:(1) benefits earned by employees
16 during the year (the service cost), (2) increases in the
17 present value of future benefits already earned as those
18 benefits become one year closer to being paid (interest
19 cost), and (3) returns on assets set aside for funding
20 future benefits (expected return on assets) .
21 Q.Does Idaho Power account for pension costs
22 based on net periodic pension expense methodology per SFAS
23 87?
PETERSEN, DI 5
Idaho Power Company
1 A.Yes. As required by generally accepted
2 accounting principles ("GAAP"), Idaho Power began
3 accounting for pension cost per SFAS 87 in 1986 and has
4 continued to apply SFAS 87 methodology.
5 Q.What is unique about Idaho Power's pension
6 cost treatment that makes its situation different from
7 other utili ties with defined benefit pension plans?
8 A.The Company has continued to account for
9 pension cost based on SFAS 87; however, following
10 Commission Order No. 30333 issued on June 1, 2007, the
11 Company began deferring the SFAS 87 pension expense to a
12 regulatory asset as required by the Order rather than
13 expensing it for GAAP purposes. This accounting treatment
14 effectively creates a cash-based accounting for pension
15 costs.
16 Q.Because the Company records expense on a
17 cash basis, is net periodic pension cost from SFAS 87
18 ignored?
19 A.No. The Commission's Order No. 30333 does
20 not invalidate SFAS 87. The Order confirms that SFAS 71
21 provides for a deferral of the SFAS 87 expense until Idaho
22 Power recovers those costs in rates. The entry to record
23 SFAS 87 expense is still recorded; however, rather than
24 debiting other operations and maintenance expense for
PETERSEN, DI 6
Idaho Power Company
1 pension expense, Idaho Power records a regulatory asset.
2 The credit side of the entry is the pension liability
3 account, the same as it was prior to the Commission's
4 Order.
5 Q.Is this treatment consistent with GAAP?
6 A.Yes, SFAS 87 provides guidance for regulated
7 utilities when a method for pension expense other than SFAS
8 87 is used for ratemaking purposes (e. g., recovery on a
9 cash basis). The guidance indicates that an asset (or a
10 liabili ty, potentially) would be created for the difference
11 between the pension expense recorded under SFAS 87 and used
12 for ratemaking if the conditions in SFAS 71 for recording a
13 regulatory asset have been met (SFAS 71, Appendix E,
14 paragraph E4). In other words, a utility recovering
15 pension costs on a cash basis would defer the excess (or
16 accrue the deficiency) of SFAS 87 expense over the amount
17 included in rates for pension costs if the SFAS 71
18 conditions are met.
19 Q.What are the SFAS 71 requirements for
20 recording a regulatory asset?
21 A.Two conditions must be met in order to
22 record a regulatory asset for" . . an incurred cost that
23 would otherwise be charged to expense "First, it
2 4 must be "probable that future revenue in an amount at least
PETERSEN, DI 7
Idaho Power Company
1 equal to the capitalized cost will result from inclusion of
2 that cost in allowable costs for rate-making purposes."
3 The second condition is that available evidence must
4 indicate "future revenues will be provided to pe~it
5 recovery of the previously incurred cost rather than to
6 provide for expected levels of s~ilar future costs. ."
7 (SFAS 71, paragraph 9, emphasis added.)
8 Q.What is meant in the second criterion, when
9 SFAS 71 states that "future revenues .. permit recovery
10 of the previously incurred cost rather than to provide for
11 expected levels of similar future costs?"
12 A.I understand this criterion to mean that, if
13 the Company included cash pension contributions as test
14 year expenses in a general rate case without there being a
15 true-up mechanism, the deferral of SFAS 87 pension costs
16 prescribed by Order No. 30333 would no longer be permitted
17 under SFAS 71 and SFAS 87.
18 Q.Why is this distinction important?
19 A.There are two principal reasons. First,
20 recovering similar future costs does nothing to recover the
21 amounts previously deferred. Second, inclusion of test
22 year costs in future rates creates the possibility that the
23 actual future costs will exceed the amount provided for in
24 rates to cover those costs. This situation does not
PETERSEN, DI 8
Idaho Power Company
1 provide adequate assurance to meet the first condition for
2 recording a regulatory asset - i. e., that it is "probable
3 that future revenue in an amount at least equal to the
4 capitalized cost will result from inclusion of that cost in
5 allowable costs for rate-making purposes."
6 Q.Would the inclusion of a known and
7 measurable estimated future amount overcome this defect?
8 A.No, it would not, unless an annual or other
9 periodic update is provided for. Even then, there is no
10 guarantee that the amount calculated by the Company's
11 actuary as the minimum required contribution will not
12 change after it has been included in the test year. It is
13 possible, for instance, that changes in laws or regulations
14 could cause the Company to be required to fund more or less
15 than originally calculated.
16 Q.How must the recovery be structured then to
17 enable the Company to meet this condition?
18 A.Again, the Standard requires that "future
19 revenues will be provided to permit recovery of the
20 previously incurred cost." In order to meet the conditions
21 for deferring pension costs under SFAS 71, some form of a
22 mechanism must be in place that assesses whether actual
23 costs during the recovery period exceeded the amounts
24 included in rates, tracks any shortfall, and adjusts rates
PETERSEN, DI 9
Idaho Power Company
1 accordingly. The tracking mechanism Idaho Power is
2 proposing would meet that requirement.
3 Q.Do customers benefit from the Company's
4 proposed pension tracker?
5 A.Yes. A tracker assures that the Company
6 does not over-collect from its customers. A tracking
7 mechanism provides protection to customers in years when
8 plan contributions are less than what would have otherwise
9 been included in rates. Volatili ty of both the net
10 periodic pension cost and required contributions creates
11 the risk that the customers will either over or under pay
12 for pension costs. The Company's proposed tracker ensures
13 that customers pay no more and no less than the amounts
14 actually needed to fund the pension plan. Also, by
15 including carrying costs, neither the Company nor customers
16 unj ustifiably benefits from over- or under-collection of
17 costs through rates during the course of the year.
18 IMPACTS OF DERECOGNITION
19 Q.What is the impact or potential impact of
20 simply including cash contributions in Idaho Power's
21 revenue requirement during its next rate case absent a
22 tracking mechanism?
23 A.As described above, that strategy creates a
24 strong likelihood that the Company will no longer be able
PETERSEN, DI 10
Idaho Power Company
1 to apply SFAS 71 methodology to the deferral of SFAS 87
2 pension expense. If SFAS 71 methodology did not apply,
3 Idaho Power would be required to derecognize its regulatory
4 asset for deferred pension expense through a reduction in
5 income. At September 30, 2009, the balance in this account
6 is $33 million. The Company would no longer meet the
7 accounting criteria for deferring pension expense pursuant
8 to Order 30333. I believe the result would be a strong
9 negati ve reaction from the already volatile financial
10 markets, potentially impacting the Company's ability to
11 access those markets to meet its financing needs.
12 Q.Are there other potential impacts in
13 addition to a $33 million dollar write off if cash
14 contributions were simply part of a revenue requirement in
15 a rate case rather than as part of the proposed pension
16 tracking mechanism?
17 A.Yes. Idaho Power has two pension-related
18 regulatory assets. I previously discussed the regulatory
19 asset for the deferral of pension expense. The second
20 regulatory asset, authorized by Order No. 30256, defers the
21 equity impacts of the Company's adoption of SFAS 158. This
22 regulatory asset would also be jeopardized.
23 Q.Please explain SFAS 158 and what was
24 provided for in Order No. 30256.
PETERSEN, DI 11
Idaho Power Company
1 A.SFAS 158 requires the Company to record a
2 liabili ty for its unfunded proj ected benefit obligation.
3 The unfunded proj ected benefit obligation is defined by
4 SFAS 158 as the difference between the market value of the
5 plan's assets and the actuarially determined proj ected
6 benefit obligation. The accounting standard requires that
7 in the entry to record the unfunded proj ected benefit
8 obligation, a corresponding decrease is to be recorded (net
9 of deferred taxes) in accumulated other comprehensive
10 income ("AOCI") in the equity section of the balance sheet.
11 Order No. 30256 permits Idaho Power to defer the AOCI
12 impact of SFAS 158 because, at the time of the Order, the
13 Company expected recovery of future pension costs.
14 Q.If rather than adopting the pension tracking
15 mechanism, how would including cash contributions in test
16 year expenses impact the regulatory asset created by Order
17 No. 30256?
18 A.If Idaho Power determines that its pension
19 costs no longer meet the deferral criteria discussed above,
20 it is likely that the AOCI impact of SFAS 158 for the
21 pension plan would also cease to qualify for deferral,
22 resulting in the derecogni tion of the SFAS 158 regulatory
23 asset and a decrease in AOCI. As argued in the Company's
24 Application in Case No. IPC-E-06-33, this change would
PETERSEN, DI 12
Idaho Power Company
1 affect the calculation of the Company's revenue requirement
2 in future rate cases and affect capitalization ratios used
3 by regulatory bodies, credit rating agencies, and covenants
4 of debt financings. Further, it would cause the Company's
S equity and capitalization ratios to be subject to greater
6 volatility due to changing market prices of plan assets and
7 discount rates used to measure the plan obligation.
8 Q.Please quantify the impact of derecogni tion
9 to the Company.
10 A.As of September 30, 2009, the deferred AOCI
11 (which is an amount net of deferred taxes) related to the
12 pension plan is approximately $ 92 million. If the
13 regulatory asset was derecognized, equity would decrease by
14 $ 92 million. This decrease would be in addition to the
1S retained earnings impact of derecognizing the regulatory
16 asset for deferred pension expense.
17 Q.Are there any serious impacts if equity is
18 decreased in this manner?
19 A.Yes. One significant impact would be on the
20 Company's capitalization ratio. The Company has
21 traditionally maintained a debt-to-equi ty capitalization
22 ratio of roughly SO percent debt, SO percent equity. The
23 current ratio, as reflected in the Statement of
24 Capitalization on the Company's financial statements, is
PETERSEN, DI 13
Idaho Power Company
1 50.3 percent debt and 49. 7 percent equity for Idaho Power.
2 Ratings agencies look at the debt-to-equi ty ratio as one
3 important factor in considering the appropriate credit
4 rating for the Company. A higher equity ratio is generally
5 more supportive of a more favorable credit rating than a
6 lower ratio. Removing $125 million dollars ($33 million of
7 deferred SFAS 87 costs and $92 million of deferred AOCI
8 under SFAS 158) of equity from the Company's current
9 capitalization would lower the equity percentage by roughly
10 2.5 percent. Because the equity ratio is one item
11 considered out of many in determining a credit rating for
12 the Company, it is difficult to say with certainty if that
13 percentage change would result in a downgrade; however, it
14 would certainly be a negative influence on the Company's
15 credit rating.
16 Q.Are there other concerns you have about the
17 potential derecogni tion of both regulatory assets created
18 by Order Nos. 30333 and 30256 if a pension expense tracking
19 mechanism is not adopted?
20 A.I am concerned that the financial markets
21 and the credit rating agencies may view derecognition of
22 significant regulatory assets negatively. The impacts of
23 such a change are not currently anticipated by them and it
PETERSEN, DI 14
Idaho Power Company
1 could call into question the Company's ability to rely on
2 regulatory assurances in the future.
3 Q.What other financial impacts would
4 derecognition create?
5 A.Assuming the Company would try to maintain
6 its current credit rating, additional capital would need to
7 be raised through the issuance of additional shares,
8 creating lower earnings per share for the Company's
9 shareowners. This dilutive effect would result in downward
10 pressure on the Company's stock price and make financing
11 the infrastructure needs of the Company more difficult.If
12 its credit rating was not maintained, the Company would
13 incur additional debt costs. Ultimately, both of these
14 scenarios would drive the Company's revenue requirement
15 higher.
16 DESCRIPTION OF TRACKING MECHAISM
17 Q.Generally, how would the tracker work?
18 A.Similar to the Company's current Power Cost
19 Adjustment ("PCA") process, the Company would determine the
20 estimated cash payments for March 1 through February 28
21 (February 29 in a leap year). Those estimated or
22 forecasted payments would be effective in rates beginning
23 June 1 each year. This schedule allows for an evaluation
24 of actual payments in the period as well as actual
PETERSEN, DI 15
Idaho Power Company
1 collections through rates, which would generate a true-up,
2 including carrying costs that would be applied along with
3 the next year's forecast. Company witness Timothy Tatum's
4 testimony describes the mechanics of the tracker in greater
5 detail.
6 ACCOUNTING ENTRIES
7 Q.Please describe the accounting entries
8 associated with the Company's proposal.
9 A. I have included the accounting entries in
10 Exhibit No.2. I will describe each of these entries
11 below.
12 Q.What is the entry to record a cash
13 contribution?
14 A.The initial entry to record a cash
15 contribution to the pension plan is the same as it would
16 have been absent Commission Order No. 30333. Cash is
17 reduced (credited) and the Company's pension liability,
18 established through the SFAS 87 accrual, is also reduced
19 (debi ted). This is similar accounting to the payment of
20 any liability. The entry is detailed in Exhibit No. 2 as
21 Entry 1.
22 Q.What entries do you propose to use with a
23 tracking mechanism?
PETERSEN, DI 16
Idaho Power Company
1 A.When a contribution is made, the amount of
2 the contribution would be moved from the SFAS 87 expense
3 deferral account into a new pension tracker regulatory
4 asset subaccount as presented in Entry 2.
S When Idaho Power begins collecting pension costs in
6 rates, it will record the associated revenue as presented
7 in Entry 3.
8 Pension costs in an equivalent amount would also be
9 amortized to expense over the amortization period, reducing
10 the pension tracker regulatory asset as presented in Entry
11 4.
12 The carrying charge would be accrued each month
13 based on the balance in the regulatory account. If that
14 balance is in an asset position, the Company will accrue
1S income as presented in Entry Sa.
16 If the balance is in a liability position instead of
17 an asset, the Company will accrue expense as presented in
18 Entry Sb.
19 The amount remaining in the pension tracker
20 regulatory asset at the end of the year (including carrying
21 costs) would be the true-up amount for the following year.
22 FUING REQUIRENTS
23 Q.What is the plan's minimum required
24 contribution?
PETERSEN, DI 17
Idaho Power Company
1 A.It is the minimum amount Idaho Power is
2 required to contribute to its defined benefit pension
3 plan's trust fund as required under the ERISA as amended by
4 the Pension Protection Act of 2006 ("PPA"). The Company is
5 required to meet the funding requirements under ERISA in
6 order for the plan to maintain its tax exempt status as a
7 qualified plan.
8 Q.How is the minimum required contribution
9 determined?
10 A.The minimum required contribution is
11 determined by the Company's actuary, Milliman, Inc., based
12 on the calculations prescribed by the PPA. The calculation
13 is based on two primary measures defined by the PPA:(1)
14 the current year's benefit accruals ("normal cost") and (2)
15 the funded status of the plan at the beginning of the year.
16 Generally speaking, the required amount to be funded is the
1 7 normal cost increase by amortization of the underfunded
18 amount or decreased by the amount by which the plan exceeds
19 full funding (up to the normal cost).
20 Q.When are the contributions required to be
21 paid?
22 A.If the plan is fully funded as defined by
23 the PPA, the required contribution for a plan year is due
24 by September 15 of the following year. If the plan drops
PETERSEN, DI 18
Idaho Power Company
1 below full funding, the Company will be required to begin
2 making quarterly payments. Those quarterly payments will
3 be due April 15, July 15, and October 15 of the plan year
4 and January 15 of the following year.
5 Q.Does the Company intend to contribute only
6 the minimum contribution to its pension plan required by
7 ERISA?
8 A.Though the mechanism being proposed in this
9 Application primarily contemplates recovery based on
10 minimum funding amounts, it is difficult to state
11 categorically that the Company will only contribute minimum
12 amounts under ERISA. There could be limited situations in
13 which factors other than ERISA requirements - compliance
14 with debt covenants, for instance - could impose on Idaho
15 Power a need to fund the pension plan beyond what is
16 required by ERISA. Additionally, it is possible that
17 circumstances may arise in which it is simply prudent to
18 fund in excess of the current minimum required
19 contribution. However, the Company expects this to be the
20 exception rather than the rule.
21 The Company recommends that pension contributions
22 based on the minimum funding requirements under ERISA be
23 included as a standard practice in the forecast. Because
24 excess contributions will act to reduce required
PETERSEN, DI 19
Idaho Power Company
1 contributions in future years, the Company recognizes that
2 the Commission may desire to address discretionary payments
3 made either in excess of the minimum amount or in advance
4 of the final due date on a case-by-case basis to determine
5 whether those amounts should be included in the current
6 forecast or deferred for recovery in future years. If the
7 excess amounts are deferred to future years, the Company
8 requests that those amounts earn a carrying charge.
9 Q.When does Idaho Power receive the
10 calculation of the minimum contribution from its actuary?
11 A.Historically the Company receives this
12 calculation in Mayor June. However, in order to
13 accommodate making any required quarterly filing due on
14 April 7 and in order to make the forecast filing under this
15 proposed mechanism, the Company's actuary has indicated
16 that he will provide the calculation for each year in
17 March.
18 Q.Will the amount provided by Idaho Power's
19 actuary and included in the April filing constitute a final
20 number?
21 A.Generally speaking, Idaho Power expects that
22 the actuarial value included in the April filing will be
23 the actual required payment in the subsequent year.
24 However, it is possible that adj ustments will be identified
PETERSEN, DI 20
Idaho Power Company
1 after the Company has made its annual pension tracker
2 filing. Such adj ustments will be addressed in the true-up
3 portion of the next year's filing. Inclusion of a carrying
4 charge will help to ensure that the Company will not
5 inappropriately benefit from after-the-fact adj ustments to
6 the calculation.
7 Q.Has the Company's actuary informed you that
8 Idaho Power is required by ERISA to make a minimum required
9 contribution?
10 A.Yes. Idaho Power's actuary has informed the
11 Company that a contribution is required for the tax year
12 beginning January 1, 2009.
13 Q.When is this contribution required to be
14 made?
15 A.The contribution for 2009 is due by the
16 extended due date for the federal income tax return of the
17 plan's sponsor (Idaho Power), or September 15,2010.
18 Q.How much is the 2009 required contribution?
19 A.As of January 1, 2009, the required
20 contribution is $5,092,774. However, this amount accrues
21 interest from that date at 8.15 percent. If not paid by
22 October 15, 2009, the required amount increases to
23 $5,418,662. If delayed until the final due date of
24 September 15, 2010, the Company is required to contribute
PETERSEN, DI 21
Idaho Power Company
1 $5,822,145. The Company did not make an October 15, 2009,
2 payment.
3 Q.To whom is the interest on the minimum
4 required contribution paid?
5 A.The interest that is added to the required
6 amount is not a penalty. It simply increases the required
7 payment due to the timing of the contribution. All of the
8 funds contributed by the Company, including interest,
9 become plan assets and are invested for the purpose of
10 being used to pay future benefits.
11 Q.Do you have any other comments?
12 A.Yes. Based on my analysis and familiarity
13 with Idaho Power's pension plan, I believe the Company's
14 proposal is in the best interests of its customers and the
15 Company.
16 Q.Does that conclude your testimony?
17 A.Yes, it does.
PETERSEN, DI 22
Idaho Power Company
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-09-29
IDAHO POWER COMPANY
PETERSEN, 01
TESTIMONY
EXHIBIT NO.2
PROPOSED ACCOUNTING ENTRIES
Debit Credit
Entry 1
228321 Accumulated provision P&B - accrued pension liability aaa.aa
131XXX Cash aaa.aa
(To record a contribution to Idaho Power Company's pension plan)
Entry 2
1823XX Other regulatory assets - pension tracker aaa.aa
182321 Other regulatory assets - SFAS 87 deferral aaa.aa
(To record a regulatory asset for the pension plan contribution)
Entry 3
142XXX Customer accounts receivable bbb.bb
44XXXX General Business Revenue bbb.bb
(To record revenues attributable to the pension tracking mechanism)
Entry 4
926200 Employee pensions & benefits - pension expense bbb.bb
1823XX Other regulatory assets - pension tracker bbb.bb
(To record amortization of the pension contributions to match revenues)
Entry 5a
1823XX Other regulatory assets - pension tracker ccc.cc
421XXX Miscellaneous nonoperating income ccc.cc
(To record the carrying charge on the pension tracker regulatory asset)
Entry 5b
431 XXX Other interest expense ddd.dd
254XXX Other regulatory liabilties - pension tracker ddd.dd
(To record the carrying charge on the pension tracker regulatory liabilty)
Exhibit NO.2
Case No. IPC-E-09-29
K. Petersen, IPC
Page 1 of 1