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Home My WebLink About20120120Petition for Clarification.pdfJASON B. WILLIAMS Corporate Counsel jwilliamstiidahopower.com esIDA~POR~ An 10ACORP Company January 20,2012 VIA HAND DELIVERY Jean D. Jewell, Secretary Idaho Public Utilties Commission 472 West Washington Street Boise, Idaho 83702 Re: Case No. IPC-E-11-08 General Rate Case Dear Ms. Jewell: Enclosed for filng are an original and seven (7) copies of Idaho Power Company's Petition for Clarification in the above matter. Very truly yours,~uI.dz~ Jason B. Willams JBW:csb Enclosures 1221 W. Idaho St. (83702) P.O. Box 70 Boise, 10 83707 LISA D. NORDSTROM (ISB No. 5733) JASON B. WILLIAMS (ISB No. 8718) Idaho Power Company 1221 West Idaho Street (83702) P.O. Box 70 Boise, Idaho 83707 Telephone: (208) 388-5825 Facsimile: (208) 388-6936 Inordstromcæidahopower.com jwilliams((idahopower.com ?n P~i'! 3: I, l,i:,~"" l . v Attorneys for Idaho Power Company BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE APPLICATION ) OF IDAHO POWER COMPANY FOR ) AUTHORITY TO INCREASE ITS RATES ) AND CHARGES FOR ELECTRIC )SERVICE IN IDAHO. ) ) CASE NO. IPC-E-11-08 IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION COMES NOW, Idaho Power Company ("Idaho Powet' or "Company"), by and through its undersigned counsel, and hereby petitions the Idaho Public Utilties Commission ("Commission") to clarify, pursuant to RP 325, certain issues related to facilties charges as set forth in Order No. 32426. This Petition is based on the following: i. BACKGROUND 1 . On June 1, 2011, Idaho Power filed an Application in this case seeking authonty to increase the Company's base rates an average of 9.9 percent or by approximately $83 millon annually. On June 22, 2011, the Commission suspended the proposed effective date and issued a Notice of Application. Order No. 32272. IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION - 1 Numerous parties petitioned for intervention, all of which were granted by the Commission. On August 5, 2011, the Commission issued a Scheduling Order and set a technical hearing for early December 2011. Order No. 32316. The Scheduling Order also set dates for settlement conferences on August 31, 2011, and September 8, 2011. 2. All parties attended the settlement conferences. Based upon discussions at the settlement conferences, all parties (except one) entered into a settlement stipulation ("Stipulation") that proposed to settle most, but not all issues. Specifically, the settling parties could not reach agreement on three issues: (1) the amount of funding for the Company's low-income weatherization program; (2) the surcharge level for the Energy Efficiency Rider; and (3) the methodology used to assess facilties charges. The Commission conducted a technical hearing on December 5 and 6, 2011, to take evidence on the Stipulation and unresolved issues. 3. On December 30, 2011, the Commission issued an Order approving the Stipulation as well as issued findings and conclusions related to the three unresolved issues identified above. Order No. 32426. 4. With regard to the facilties charge methodology, which is the subject of this Petition, the Commission made the following findings: a. The rate of return component used in the Company's facilties charge calculation was to be updated to reflect the overall rate of return of 7.86 percent that was approved in the Stipulation; b. The Company must temove the rate of return, depreciation expense, and income tax components for facilties subject to the facilties charge that IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION - 2 are more than 31 years old, thus creating two rate categones for facilities charges-Le., one for facilties 31 years old or less and another for facilties more than 31 years old; c. Any impacts to the Company's overall revenue requirement as a result of the Commission's ordered changes to the facilties charge methodology are to be allocated to those specific customer classes in which the change to the facilties charge methodology is made; and d. Directed the Company to update all cost components that comprise the facilties charge each time the Company files a general rate case. 5. In addition, the Commission ordered the Company to submit a compliance filing reflecting these new facilties charge provisions no later than January 13, 2012. The Company timely submitted that filng and included in that a number of assumptions. Idaho Power seeks clarification of those assumptions as well as some additional issues identified herein and descnbed below. II. PETITION FOR CLARIFICATION 6. As ordered by the Commission, the Company removed the rate of return, depreciation, and income tax components for the facilties charge rate that wil be applied to facilties more than 31 years old. The resultant rate is 0.59 percent. The Company hereby asks that the Commission confirm that this is the appropriate rate for facilties that are more than 31 years in age. 7. Idaho Power only tracks facilties based upon the year in which those facilties were installed; the Company does not track the specific date or month when facilties are installed. For the purposes of determining whether the 31-year or less facilties charge rate applies versus the more than 31-year rate, the Company wil make IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION - 3 this reconcilation once a year based upon year-end facilities investment records and adjust customers' monthly facilties charge rates accordingly at the beginning of each calendar year. In addition, because Idaho Power only tracks facilties based upon the year those facilties are installed, the Company assumes that all facilties are installed for a full year regardless of the actual month or date such facilties were installed. The Company hereby asks that the Commission confirm this approach as appropriate. 8. The Company's general rate case filing included adjusted actual 2010 facilties charge revenue based upon the Company's proposed reduction to the monthly facilties charge rate. As part of the compliance filng submitted on January 13, 2012, including the adjustments impacting base rate revenues of specific customer classes as a result of the Commission's ordered change to the facilties charge methodology, the Company used year-end 2011 facilities charge investment records to determine the appropriate ratios to apply to the 2010 facilties charge investments in order to incorporate the two rate categories (Le., the 31 years or less category or the more than 31 years category) based on the age of the facilities at the end of 2011. The Company hereby asks the Commission to confirm this approach as appropriate. 9. The Company does not individually track facilties subject to the facilties charge for Schedules 15 and 41. In addition, the Company no longer offers the facilties charge service to new customers under Schedules 15 and 41. Accordingly, the Company wil continue to only apply a single rate (one which includes the rate of return, depreciation, and income tax components) to facilties subject to the facilties charge for Schedules 15 and 41 customers. The Company hereby asks the Commission to confirm this approach as appropnate. IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION - 4 10. The Company submitted its compliance filng on January 13, 2012, including updated tariff pages with a proposed effective date of February 1, 2012. Importantly, because facilties charge customers are biled on a calendar month basis, if the Commission does not approve the tariffs to be effective on February 1, 2012, the Company respectfully requests the Commission set the effective date for the first day of the month immediately following the Commission's Order on this Petition. The Company is currently assessing only a single facilties charge rate (one which includes the rate of return, depreciation, and income tax components) for the month of January 2012 and wil continue to do so until the Commission approves the Company's tariffs that were submitted on January 13, 2012. The Company hereby asks the Commission to confirm this approach. II. CONCLUSION NOW, THEREFORE, Idaho Power respectfully requests the Commission issue an Order clarifying the following: 1. That 0.59 percent is the correct rate to be assessed on facilties that are more than 31 years in age; 2. That the Company shall make only annual adjustments to facilties for purposes of determining which rate (Le., the 31 years or less rate or the more than 31 years rate) applies to facilties subject to the facilties charge; 3. That the Commission accept the Company's use of 2011 facilties charge investments and the age of facilties at year-end 2011 for purposes of implementing the compliance filng; IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION - 5 4. That the Company only assess a single facilties charge rate (Le., one that includes rate of return, depreciation, and income tax components) for facilties charges for Schedules 15 and 41 customers; and 5. That the effective date of any tariffs associated with the compliance filng be effective on the first day of the month immediately following the Commission's Order on this Petition. Respectfully submitted this 20th day of January 2012. \ IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION - 6 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on this 20th day of January 2012 I served a true and correct copy of the within and foregoing IDAHO POWER COMPANY'S PETITION FOR CLARIFICAITON upon the following named parties by the method indicated below, and addressed to the following: Commission Staff Donald L. Howell, II Karl T. Klein Deputy Attorneys General Idaho Public Utilties Commission 472 West Washington (83702) P.O. Box 83720 Boise, Idaho 83720-0074 -X Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email Don.Howell((puc.idaho.gov Karl. Klein((puc. idaho.gov Industrial Customers of Idaho Power Peter J. Richardson Gregory M. Adams RICHARDSON & O'LEARY, PLLC 515 North 2ih Street (83702) P.O. Box 7218 Boise, Idaho 83707 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email peter((richardsonandoleary.com greg((richardsonandoleary.com Dr. Don Reading Ben Johnson Associates, Inc. 6070 Hil Road Boise, Idaho 83703 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email dr((benjohnsonassociates.com Idaho Irrigation Pumpers Association, Inc. Eric L. Olsen RACINE, OLSON, NYE, BUDGE & BAILEY, CHARTERED 201 East Center P.O. Box 1391 Pocatello, Idaho 83204-1391 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email elo((racinelaw.net Anthony Yankel 29814 Lake Road Bay Vilage, Ohio 44140 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email tony((yankel.net IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION - 7 The Kroger Co. Kurt J. Boehm BOEHM, KURTZ & LOWRY 36 East Seventh Street, Suite 1510 Cincinnati, Ohio 45202 Kevin Higgins Energy Strategies, LLC 215 South State Street, Suite 200 Salt Lake City, Utah 84111 Micron Technology, Inc. MaryV. York HOLLAND & HART, LLP 101 South Capital Boulevard, Suite 1400 Boise, Idaho 83702 Richard E. Malmgren Senior Assistant General Counsel Micron Technology, Inc. 800 South Federal Way Boise, Idaho 83716 The United States Department of Energy Arthur Perry Bruder, Attorney-Advisor United States Department of Energy 1000 Independence Avenue SW Washington, DC 20585 Dwight D. Ethendge Exeter Associates, Inc. 10480 Little Patuxent Parkway, Suite 300 Columbia, Maryland 21044 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email kboehm((BKLlawfirm.com jrh((battisher.com Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email khiggins((energystrat.com Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email myork((hollandhart.com tnelson((hollandhart.com madavidson((hollandhart.com fschmidt((hollandhart.com Inbuchanan((hollandhart.com Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email remalmgren((micron.com Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email Arthur.bruder((hq.doe.gov Steven .porter((hq.doe.gov Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email detheridge((exeterassociates.com IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION - 8 Community Action Partnership Association of Idaho Brad M. Purdy Attorney at Law 2019 North 1 ih Street Boise, Idaho 83702 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email bmpurdy((hotmail.com Idaho Conservation League Benjamin J. Otto Idaho Conservation League 710 North Sixth Street (83702) P.O. Box 844 Boise, Idaho 83701 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email botto((idahoconservation.org Snake River Allance Ken Miler Snake River Allance P.O. Box 1731 Boise, Idaho 83701 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email kmiler((snakeriverallance.org NW Energy Coalition Nancy Hirsh, Policy Director NW Energy Coalition 811 First Avenue, Suite 305 Seattle, Washington 98104 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email nancy((nwenergy.org Hoku Materials, Inc. Dean J. Miler McDEVITT & MILLER LLP 420 East Bannock (83702) P.O. Box 2564 Boise, Idaho 83701 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email joe((mcdevitt-miler.com heather((mcdevitt-miller.com Scott Paul, CEO Hoku Materials, Inc. One Hoku Way Pocatello, Idaho 83204 Hand Delivered U.S. Mail _ Overnight Mail FAX -X Email spaul((hokucorp.com .. IDAHO POWER COMPANY'S PETITION FOR CLARIFICATION - 9