20100128notice_of_application_ipc.pdf

Office of the Secretary
Service Date
January 28 2010
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-I0-
) NOTICE OF APPLICATION
) NOTICE OF
) MODIFIED PROCEDURE
) NOTICE OF
) COMMENT/PROTEST DEADLINE
YOU ARE HEREBY NOTIFIED that Idaho Power Company (Idaho Power;
Company) filed an Application on January 19 2010, with the Idaho Public Utilities Commission
(Commission) requesting an Order approving an increase in the Company s base level of net
power supply expense (NPSE). The 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 Company
2010-2011 Power Cost Adjustment (PCA) calculations.
BACKGROUND
On January 13 , 2010, in Order No. 30978 issued in Case No. IPC-09-, the
Commission approved a Settlement Stipulation (Stipulation) which included a moratorium on
rate case filings by Idaho Power and certain other ratemaking provisions. 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:
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 will 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.
The Company s Application in this case is filed in compliance with Section 7.1 of the
Stipulation.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
Proposed Increase in Base Net Power Supply Expense
As reflected in the Company s Application, net power supply expense includes a
number of categories of variable power supply expenses. Modeled variable power supply
expenses include fuel expenses (FERC Accounts 50 I and 547) and purchase power expenses
(FERC Account 555), not including purchases from qualifying facilities (QFs) under the Public
Utility Regulatory Policies Act of 1978 ("PURP A"). 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 PURP A 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 in general rate cases. The last time the base net power
supply expenses were reviewed and approved by the Commission was in the Company s 2008
general rate case, IPC-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.
Idaho Power has computed a 20 I 0 test year NPSE and compared it to the normalized
variable power supply expenses that were approved in the Company s 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 million, while on an Idaho
jurisdictional basis, the difference would be $74.8 million. This difference reflects the maximum
adjustment to base level NPSE that would be the subject of negotiations pursuant to paragraph
1 of the Stipulation. Reference Application supporting testimony Exhibit 4.
The difference between the two above-described NPSE numbers, the Company
contends, is driven principally by increases in the payments the Company expects to make to
PURP A facilities, 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 million megawatt-hours (MWhs). The
Company s 2010 annual normalized system load based on the 2010 test year is 15.7 million
MWhs, a decrease of 200 000 MWhs.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of
record in Case No. IPC-IO-O1. The Commission has preliminarily found that the public
interest in this matter may not require a hearing to consider the issues presented and that issues
raised by the Company s filing may be processed under Modified Procedure , by written
submission rather than by hearing. Reference Commission Rules of Procedure, IDAP
31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or
protests with respect to Idaho Power s Application and the use of Modified Procedure in Case
No. IPC-IO-Ol is Thursday, March 11,2010.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the deadline, the Commission may consider the matter on its merits and may
enter its Order without a formal hearing. If comments or protests are filed within the deadline
the Commission will consider them and in its discretion may set the matter for hearing or may
decide the matter and issue its Order based on the written positions before it. Reference IDAP
31.01.01.204.
YOU ARE FURTHER NOTIFIED that written comments concerning Case No. IPC-
l 0-0 1 should be mailed to the Commission and Idaho Power at the addresses reflected below.
Street Address for Express Mail:
Barton L. Kline
Lisa D. Nordstrom
Idaho Power Company
1221 West Idaho Street (83702)
PO Box 70
Boise, ID 83707-0070
E-mail: bklineCfYidahopower .com
lnordstromCfYi dahopo wer. com
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
472 W. Washington Street
Boise, ID 83702-5918
Greg W. Said
Director of State Regulation
Idaho Power Company
1221 West Idaho Street (83702)
PO Box 70
Boise, ID 83707-0070
E-mail: gsaidCfYidahopower.com
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE
All 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 Idaho Power at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that the Application in Case No. IPC-I0-
may be viewed at www.puc.idaho.gov by clicking on "File Room" and "Electric Cases " or can
be viewed during regular business hours at the Idaho Public Utilities Commission, 472 West
Washington Street, Boise, Idaho and at the principal business office ofIdaho Power, 1221 West
Idaho Street, Boise, Idaho.
DA TED at Boise, Idaho this
).
gJr' day of January 2010.
~/.~
D. KEMP SIDENT
,/~
MARSHA H. SMITH, COMMISSIONER
MACK A. REDFORD, COMMISSIONER
ATTEST:
~i\J.Je D. Jewell
Commission Secretary
bls/O:lPC-lO-Ol sw
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT/PROTEST DEADLINE