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Home My WebLink About20080521Micron Comments.pdf/ GIVE SLEY LLP LAW OFFICES 601 W. Bannock Street PO Box 2720, Boise, Idaho 83701 TELEPHONE: 208 388-1200 FACSIMILE: 208 388-1300 WEBSITE: ww.givenspursley.com Via Hand Delivery Jean Jewell Idaho Public Utilities Commission 472 W. Washington P.O. Box 83720 Boise, ID 83720-0074 Gary G. Allen Peter G. Barton Christopher J. Beeson Clint R. Bolinder Erik J. Bolindèr Jeremy C. Chou Wiiliam C. Cole Michael C. Creamer Amber N. Dina Kristin Bjorkman Dunn Thomas E. Dvorak Jeffrey C. Fereday Justin M. Fredin Martin C. Hendrickson Steven J. Hippler May 20,2008 Debora K. Kristensen Anne C. Kunkel Jeremy G. Ladle Michael P. Lawrence Franklin G. Lee David R. Lombardi John M. Marshail Kenneth R. McClure Keily Greene McConneil Cynthia A. Melilo Christopher H. Meyer L. Edward Miler Patrick J. Miiler Judson B. Montgomery Deborah E. Nelson Kelsey J. Nunez W. Hugh O'Riordan, LL.M. G. Andrew Page Angela M. Reed Scott A. Tschirgi, LL.M. J. WiilVarin Conley E. Ward Robert B. White Terr R.Yost In the Matter of the Application of Idaho Power Company for Authority to Increase Power Cost Adjustment (PCA) Rates for Electric Service from June 1,2008 through May 31, 2009 Case Number: IPC-E-08-07 4489-32 Re: Our File: Dear Jean: Enclosed for filing please find an original and nine (9) copies of Micron's Comments to Notice of Modified Procedure in the above entitled matter. Than you for your assistance in this matter. :ITfJ~Q CEW/tma cc: Service List (w/enclosures) S:\CLIENTS\4489\32\CEW to Jewell re Comments. DOC RETIRED Kenneth L. Pursley Raymo~. Givens James gcClure:i~Nc: "'::ç,. ,.""*"1,_.1 ç'- '.-. ;i-!...., .,~.., Conley E. Ward (ISB No. 1683) GIVENS PURSLEY LLP 601 W. Banock Street P.O. Box 2720 Boise, ID 83701-2720 Telephone No. (208) 388-1200 Fax No. (208) 388-1300 cew(fgivenspursley.com ZOOUiAY 20 lri q:41 Attorneys for Micron Technology, Inc. S:\CLIENTS\4489\32\Mcron Comments. doc BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY FOR AUTHORITY TO IMPLEMENT POWER COST ADJUSTMENT (PCA) RATES FOR ELECTRIC SERVICE FROM JUNE 1,2008 THROUGH MAY 31, 2009 Case No. IPC-E-08-07 MICRON TECHNOLOGY, INC.'S COMMENTS TO NOTICE OF MODIFIED PROCEDURE Micron Technology, Inc. ("Micron"), by and through its attorney of record, Conley E. Ward, Givens Pursley LLP, respectfully submits the following comments in response to Order No. 30540, dated April 25, 2008. Micron is opposed to Idaho Power Company's request for a one time 100% tracking of power supply and PURP A expenses for the following reasons: ARGUMENT 1. Idaho Power offers three reasons for its proposal. To quote the Commission's Notice of Application, Idaho Power argues that a one time abrogation of the existing PCA rules is justified because of "persistent drought conditions (in recent years), the lack of inclusion of prescriptive hedging activities in PCA forecast methodology, and the failure of a number of PURPA projects to come on-line as envisioned in the last approved test year." Notice of Application at 4. MICRON TECHNOLOGY'S COMMENTS - 1 2. Idaho Power's first argument, that persistent drought conditions have resulted in losses for the utility, is basically nonsensicaL. Of course, Idaho Power lost money on the PCA during the drought, but it is equally true that ratepayer PCA losses during the same period were nine times those of Idaho Power, amounting to hundreds of milions of dollars. If Idaho Power is arguing that it should have a one time chance to make up some of these losses, then the ratepayers have a nine times more powerful argument for the same outcome. 3. The fact that Idaho Power has adopted prescriptive hedging rules is irrelevant. At bottom, these rules are designed to optimize the risk/reward potential of trading activities. Ths is nothing less than Idaho Power's obligation as a regulated utilty; it is required by law to adopt such rules and regulations as shall be 'just and reasonable." See Idaho Code Section 61-303. To offer a utilty an extra reward for doing what is sensible and prudent is offensive to the whole scheme of regulation. 4. If, in fact, PURPA projects are coming on line more slowly than Idaho Power envisioned, it is diffcult to say what impact this would have on the PCA. Some projects, whether utility owned or otherwse, are always behind schedule. Moreover, Idaho Power has argued for 30 years that PURP A projects are overpriced. Without stirrng up this old arguent, it is reasonable to ask Idaho Power how the delay of supposedly overpriced projects in what looks to be a good water year could somehow be detrimental? And, if so, why should that be chargeable 100% to the ratepayers, rather than 90%? 5. Having dealt with Idaho Power's three arguments for a one time suspension of the PCA rules, there are two other reasons to deny the request. First, the original rationale for the 90/10 split remains as valid as ever. The fact that Idaho Power "has some skin in the game" MICRON TECHNOLOGY'S COMMENTS - 2 provides a crucial assurance that the Company is properly motivated to minimize power supply costs. Second, allowing the utility to pick and choose 100% recovery on a case by case basis is the worst of all possible outcomes from the ratepayers' point of view. If such a precedent is established, Idaho Power will be motivated to seek full recovery when conditions appear bleak, while accepting the benefits of a 90/10 split when power costs are projected to be lower than PCA base costs. This makes absolutely no sense as a matter of regulatory policy. For these reasons Micron opposes Idaho Power's request for a 100% tracking of power supply and PURP A costs in this case. Respectfully submitted this 20th day of May, 2008. Q Co ey E. d, Givens Pursley LLP Attorneys for Micron Technology, Inc. MICRON TECHNOLOGY'S COMMENTS - 3 .. CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 20th day of May, 2008, I caused to be served a tre and correct copy of the foregoing by the method indicated below, and addressed to the following: U.S. Mail X Hand Delivered Overnight Mail Facsimile E-Mail -LU.S.MailHand Delivered Overnight Mail Facsimile E-Mail x U.S. Mail; Hand Delivered Overnight Mail Facsimile E-Mail Jean Jewell Idaho Public Utilties Commission 472 W. Washington Street Boise, rD 83720-0074 Baron L. Kline Lisa D. Nordstrom Idaho Power Company 1221 W. Idaho Street (83702) P.O. Box 70 Boise,ID 83707 email: bkline(fidahopower.com Inordstrom(fidahopower .com Timothy E. Tatum John R. Gale Idaho Power Company P.O. Box 70 Boise, ID 83707-0070 email: ttatum(fidahopower.com rgale(fidahopower .com Peter J. Richardson Richardson & O'Lear 515 N. 2ih Street P.O. Box 7218 Boise, ID 83702 email: peter(frichardsonandoleary.com J-U.S.MailHand Delivered Overnght Mail Facsimile E-Mail MICRON TECHNOLOGY'S COMMENTS - 4 o