20101015notice_of_application_order_no_32092.pdf

Office of the Secretary
Service Date
October 15 , 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
ACCEPTANCE OF ITS 2011 RETIREMENT
BENEFITS PACKAGE NOTICE OF APPLICATION
CASE NO. IPC-10-
NOTICE OF
MODImED PROCEDURE
ORDER NO. 32092
YOU ARE HEREBY NOTIFIED that on October 1 2010, Idaho Power Company
filed an Application with the Commission requesting the Commission accept the Company
2011 retirement benefits package. The Company does not request recovery of additional pension
plan contributions in this Application.
YOU ARE FURTHER NOTIFIED that earlier this year the Company requested
authorization to recover in customer rates its 2010 cash contributions to its defined benefits plan.
The Commission approved the request in Order No. 31091 , but directed the Company to review
appropriate changes to its pension plan. Specifically, noting that Company pension payments
may total nearly $157 million during 2014-2018, the Commission stated that "it is umeasonable
for Idaho Power s customers to be solely responsible for large contributions to the Company
defined benefit pension plan." Order No. 31091 , p. 3. The Commission directed the Company
to "consider changes to its retirement plan and address shareholder and employee liabilities in
assignment of pension plan investment risk." Id. Finally, the Commission stated that it "will not
approve recovery of additional pension plan contributions from customers without evidence that
Idaho Power has carefully reviewed alternatives to reduce the burden placed on customers.Id.
YOU ARE FURTHER NOTIFIED that the Company s Application states that its
filing "is intended to provide the Commission with evidence that the Company has evaluated the
costs of its retirement benefits package, has considered and implemented changes, and has a
prudent retirement benefits package with a reasonable cost burden for Idaho Power customers.
Application, p. 2. The Company s retirement benefits package includes three components: (1) a
defined contribution or 401(k) benefit plan, (2) a defined benefit pension plan, and (3) a retiree
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32092
medical benefit plan. The 401 (k) benefit plan and retiree medical benefits components place all
market and inflationary risk on retirees. The defined benefit portion of the package does place
market risk on the Company, although the Company removed inflationary risk by not including a
cost of living adjustment feature in the defined benefit portion. Application, p. 4.
YOU ARE FURTHER NOTIFIED that the Application states that the Company
board of directors voted to reduce the cost of the retirement benefits package for new employees
hired after January 1 2011 , from approximately 9.1 % of a new salaried employee s base pay to
approximately 7.9%. As a result, approximately 38% of new costs will be associated with the
defined contribution 401(k) benefit plan, approximately 59% will be associated with the defined
benefit plan, and the remaining 3% will be associated with the retiree medical benefit plan.
Application, p. 5. Because the changes to the retirement benefits package applies only to new
employees, the cost savings associated with the modification will be minimal initially but will
grow over time as a larger proportion of the Company s workforce is included in the new
benefits calculation. The Company expects the changes to result in approximately $1.97 million
annual savings once the Company s workforce is fully transitioned to the modified benefit plan.
YOU ARE FURTHER NOTIFIED that the Company requests that its Application be
processed by Modified Procedure. Staff recommends that the Company s Application be
processed by Modified Procedure with a 60-day period for written comments, followed by a 14-
day period for the filing of reply comments.
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 31.01.01.201-204. 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 in opposition with the Commission within
sixty (60) days from the service date of this Notice. The comment must contain a statement of
reasons supporting the comment.
YOU ARE FURTHER NOTIFIED that the Company and other interested parties
have fourteen (14) days after the initial comment period to file reply comments.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32092
YOU ARE FURTHER NOTIFIED that persons desiring a hearing must specifically
request a hearing in their written comments. Written comments concerning this Application may
be mailed to the Commission and Idaho Power at the addresses reflected below:
Street Address for Express Mail:
Lisa D. Nordstrom
Donovan E. Walker
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
Mail: Inordstrom(qJ,idahopower.com
dwalker(qJ,idahopower. com
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, Idaho 83720-0074
472 W. Washington Street
Boise, ID 83702-5918 Greg W. Said
Tim E. Tatum
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
E-mail: gsaid~idahopower.com
ttatum~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 Idaho Power at the e-mail addresses listed
above.
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 the Application and supporting workpapers
have been filed with the Commission and are available for public inspection during regular
business hours at the Commission offices or 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. 32092
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 that 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, IDAPA 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that Idaho Power Company s Application for acceptance
of its 2011 retirement benefits package be processed by Modified Procedure IDAPA
31.01.01.201-.204. Persons interested in submitting written comments in this matter must do so
within 60 days from the service date of this Notice, and may file reply comments within 14 days
after the initial comment period.
day of October 2010.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
cJ2~
/5'f1\
JIM D. KEMPTON, PRESIDENT
(J a~
MARSHA H. SMITH, COMMISSIONER
~"".
ATTEST:
D. Jewell
Commission Secretary
bls/O:IPC-I0-25 ws
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32092