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Home My WebLink About20100120Application.pdf::IDA~PO~ LISA D. NORDSTROM Senior Counsel Inordstromlfidahopower.com An IDACORP Company January 19, 2010 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilities Commission 472 West Washington Street P.O. Box 83720 Boise, Idaho 83720-0074 Re: Case No. IPC-E-10-01 IN THE MA ITER OF THE APPLICATION OF IDAHO POWER COMPANY TO ESTABLISH ITS BASE LEVEL FOR NET POWER SUPPL Y EXPENSES FOR 2010 Dear Ms. Jewell: Enclosed please find for filing an original and seven (7) copies of Idaho Power Company's Application in the above matter. In addition, enclosed are an original and eight (8) copies of the testimony of Scott L. Wright that is being submitted in support of Idaho Power Company's enclosed filing. One copy of Mr.Wrights testimony has been designated as the "Reporter's Copy." In addition, a disk containing a Word version of the above testimony has been provided for the Reporter and has been marked accordingly. Very truly yours,t1~£2.~ Lisa D. Nordstrom LDN:csb Enclosures BARTON L. KLINE (ISB No. 1526) LISA D. NORDSTROM (ISB No. 5733) Idaho Power Company P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-2682 Facsimile: (208) 388-6936 bklinecæidahopower.com Inordstromcæidahopower.com RECE t~ 2010 JM~ 19 PM 4: 46 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 MATTER OF THE APPLICATION OF IDAHO POWER COMPANY TO ESTABLISH ITS BASE LEVEL FOR NET POWER SUPPLY EXPENSES FOR 2010. ) ) CASE NO. IPC-E-10-01 ) ) APPLICATION ) Idaho Power Company ("Idaho Powet' or the "Company") hereby requests that the Commission issue an Order approving an increase in the Company's base level of net power supply expense ("NPSE"). This base level NPSE amount would be used prospectively to set both base rates and establish the base level of net power supply expense for the 2010-11 PCA calculations. This Application is based on the following: I. BACKGROUND 1. On January 13, 2010, in Order No. 30978 issued in Case No. IPC-E-09- 30, the Commission approved a settlement stipulation ("Stipulation") which included a moratorium on rate case filngs by Idaho Power and certain other ratemaking provisions. APPLICATION -1 The Stipulation included a provision which addresses setting the base level for net power supply expenses. Paragraph 7.1 of the Stipulation reads as follows: 7.1 . Setting the Base Level for Net Power Supply Expense. Prior to implementing the June 1, 2010, PCA and effective with the coincident PCA rate change, the Company wil file with the Commission a request to change the base level for net power supply expenses to be used prospectively for both base rates and PCA calculations. The Parties will thereafter make a good-faith effort to reach agreement on the maximum change of the base level for net power supply expenses and submit any agreement to the Commission for approval. ,. 2. This Application is filed in compliance with Section 7.1 of the Stipulation. As indicated in paragraph 7.1 of the Stipulation, the purpose of this filng is to obtain an order from the Commission approving an increased base level net power supply expense to be used prospectively for both base rates and the 2010-11 PCA calculation. II. REASONS TO INCREASE BASE NET POWER SUPPLY EXPENSE 3. Net power supply expense includes a number of categories of variable power supply expenses. Modeled variable power supply expenses include fuel expenses (FERC Accounts 501 and 547) and purchase power expenses (FERC Account 555), not including purchases from qualifying facilities qualifying under the Public Regulatory Policy Act of 1978 ("PURPA"). To determine net power supply expense, surplus sales revenues (FERC Account 447) are deducted. In addition to the modeled variable power supply expenses categories, the base net power supply expense used for PCA computations also includes PURPA expenses (FERC Account 555), third-party transmission expense (FERC Account 565), water leasing expense (FERC Account 536), and revenue from marginal cost-based special contract pricing (FERC Account 442). The Company's base net power supply expenses are established APPLICATION - 2 in general rate cases. The last time that base net power supply expenses were reviewed and approved by the Commission was in the 2008 general rate case, IPC-E- 08-10. In each annual PCA, the Company's forecast of variable power supply expenses is compared to a normalized, approved variable power supply expense level and the difference is the principal driver of the PCA. 4. Idaho Power has computed a 2010 test year NPSE and compared it to the normalized variable power supply expenses that were approved in the 2008 general rate case. Based on that comparison, the Company has determined that the difference between the 2008 and 2010 base level NPSE on a system basis would be $78.4 milion, while on an Idaho jurisdictional basis, the difference would be $74.8 milion. This difference reflects the maximum adjustment to base level NPSE that would be the subject of negotiations pursuant to paragraph 7.1 of the Stipulation. The computations of these amounts are shown on Exhibit No. 4 to Mr. Scott Wright's testimony, which is filed concurrently with this Application. 5. The difference between the two above-described NPSE numbers is driven principally by increases in the payments the Company expects to make to PURPA facilties, increased coal costs for the Company's three coal-fired power plants, and reduced revenues from surplus sales due to decreased gas prices. Net power supply expenses also are affected by changes in the Company's loads. The Company's annual normalized system load used in its last general rate case was 15.9 milion megawatt-hours ("MWhs"). The Company's 2010 annual normalized system load based on the 2010 test year is 15.7 millon MWhs, a decrease of 200,000 MWhs. APPLICATION - 3 II. TESTIMONY IN SUPPORT 6. Simultaneous with the filng of this Application, Idaho Power has filed the direct testimony and exhibits of Mr. Scott Wright, which support the increased net power supply expense described in paragraph 4 above. IV. COMMUNICATIONS 7. Communications with reference to this Application should be sent to the following: Barton L. Kline Lisa D. Nordstrom Idaho Power Company P.O. Box 70 Boise, Idaho 83707 bklinecæidahopower.com Inordstromcæidahopower.com Gregory W. Said Director of State Regulation Idaho Power Company P.O. Box 70 Boise, Idaho 83707 gsaidcæidahopower.com V. PROCESSING BY MODIFIED PROCEDURE 8. Idaho Power believes that it would be appropriate to process this case by means of modified procedure in accordance with the provisions of RP 201-210. However, if the Commission determines that another procedure for processing this case is preferable, Idaho Power is prepared to immediately present its case in support of the relief requested in this Application. VI. REQUEST FOR RELIEF WHEREFORE, Idaho Power respectfully requests the Commission issue its Order approving an increase in base net power supply expense in the amount of $74.8 million and (2) authorizing this proceeding to be processed expeditiously under modified procedure in accordance with RP 201-210. APPLICATION - 4 Respectfully submitted this 19th day of January 2010. ~l).i¡~-k BARTON L. KLI~. Attorney for Idaho Power Company APPLICATION - 5 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 19th day of January 2010 I served a true and correct copy of the foregoing APPLICATION upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Weldon B. Stutzman Deputy Attorney General Idaho Public Utilties Commission 472 West Washington P.O. Box 83720 Boise, Idaho 83720-0074 Industrial Customers of Idaho Power Peter J. Richardson, Esq. RICHARDSON & O'LEARY PLLC 515 North 27th Street P.O. Box 7218 Boise, Idaho 83702 Idaho Irrigation Pumpers Association, Inc. Eric L. Olsen RACINE, OLSON, NYE, BUDGE & BAILEY, CHARTERED P.O. Box 1391 201 East Center Pocatello, Idaho 83204-1391 Kroger Co. I Fred Meyer and Smiths Michael L. Kurt Kurt J. Boehm BOEHM, KURTZ & LOWRY 36 East Seventh Street, Suite 1510 Cincinnati, Ohio 45202 Micron Technology Conley Ward Michael C. Creamer GIVENS PURSLEY, LLP 601 West Bannock Street P.O. Box 2720 Boise, Idaho 83701-2720 APPLICATION - 6 -X Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email Weldon.stutzmancæpuc.idaho.gov Hand Delivered -X U.S. Mail _ Overnight Mail FAX -X Email petercærichardsonandoleary.com Hand Delivered -X U.S. Mail _ Overnight Mail FAX -X Email elocæracinelaw.net Hand Delivered -X U.S. Mail _ Overnight Mail FAX -X Email mkurtcæBKLlawfirm.com kboehmcæBKLlawfrm .com Hand Delivered -X U.S. Mail _ Overnight Mail FAX -X Email cewcægivenspursley.com mcccægivenspursley.com Department of Energy Lot R. Cooke Arthur Perry Bruder Office of the General Counsel United States Department of Energy 1000 Independence Avenue SW Washington, DC 20585 Routing Symbol GC-76 Community Action Partnership Association Of Idaho Brad M. Purdy Attorney at Law 2019 North 17th Street Boise, Idaho 83702 Snake River Allance Ken Miler Snake River Allance P.O. Box 1731 Boise, Idaho 83701 Idaho Conservation League Betsy Bridge Idaho Conservation League 710 North Sixth Street P.O. Box 844 Boise, Idaho 83701 APPLICATION - 7 Hand Delivered U.S. Mail -X Overnight Mail FAX -X Email Lot.Cookecæhq.doe.gov Arthur.Brudercæhq.doe.gov Hand Delivered -X U.S. Mail _ Overnight Mail FAX -X Email bmpurdycæhotmail.com Hand Delivered -X U.S. Mail _ Overnight Mail FAX -X Email kmilercæsnakeriveralliance.org Hand Delivered -X U.S. Mail _ Overnight Mail FAX -X Email bbridgecæidahoconservation.org bKl1'fL~£v