20120210Answer.pdf

DONALD L. HOWELL, II
KARL T. KLEIN
DEPUTY ATTORNEYS GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
472 WEST WASHINGTON STREET
POBOX 83720
BOISE, il 83720-0074
Idaho Bar Nos. 3366 and 5156
Tele: [phone]
[phone]
Fax: [phone]
E-mail: don.howell(fpuc.idaho.gov
karl.klein(fpuc. idaho.gov
RECEIVED
2012 FEB l 0 PH a: 45
Attorney for Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC SERVICE
IN IDAHO
)
) CASE NO. IPC-E-ll-08
)
) STAFF ANSWER TO IDAHO
) POWER'S PETITION FOR
) CLARIFICATION
COMES NOW the Commission Staff by and through its attorneys of record and
submits Staffs Answer to Idaho Power's Petition for Clarification filed Januar 20,2012. Staff
submits this Answer in accordance with Rule 57, IDAPA 31.01.01.057.
BACKGROUND
On December 30, 2011, the Commission issued final Order No. 32426 authorizing
Idaho Power to increase its rates and charges for electric service. As par of its Order, the
Commission directed Idaho Power to modify the methodology for calculating the charges for
certain distribution facilities and fie new tariffs in conformance with the Commission's Order no
later than Januar 13, 2012. Order No. 32426 at 31.1 The Commission also found that any
revenue shortfall caused by a reduction in the facilty charges should be recovered from the
J In paricular, the Commission directed Idaho Power to use the rate of retu adopted in this case (7.86%); adjust
the "booked depreciation" component and adjust the income tax component for pooled assets with more than 3 i
years of depreciation. Order No. 32426 at 30-3 i.
STAFF ANSWER TO
IDAHO POWER'S PETITION FORCLARIFICATION 1
applicable customer class. ¡d. at 32. No pary requested reconsideration of the Commission's
final Order.
The Company fied new facilty charges and proposed rate schedules on Januar 13,
2012. After the Company filed its proposed tariffs to comply with the Commission's final
Order, Staff conducted its review of the proposed tariffs pursuant to Rule 134, IDAPA
31.01.01.134. In its decision memo dated Januar 27, 2012, Staff reported that the revised taiffs
were in compliance with Order No. 32426. In addition to the ordered adjustments in the facility
charges, the Company submitted revised Schedules 9, 15, 19, 29 and 66, which contained
relatively small increases to offset the reduction in facilty charge revenues as ordered by the
Commission.
In its tariff fiings, Idaho Power reported that it was unable to identify the age of the
installed facilities for Schedules 15 and 41 because it does not keep that information. For
puroses of implementing the Commission's Order, Idaho Power proposed that the facilties
subject to facility charges in Schedules 15 and 41 be assumed to be 31 years or less in age. Staff
determined that 93% of the facilties for these two schedules were 31 years or less in age.
Consequently, Staff concured with Idaho Power's proposal that all Schedules 15 and 41 facility
charge investment be treated as being 31 years or less in age. Decision Memo at 2.
Staff also confirmed that the Company properly adjusted the base rates for Schedules
9, 15, 19, and 29 to offset the reduction in the facilty charges. Staff served its decision
memorandum analyzing the revised tariff schedules to the paries in the rate case.
CLARIFICATION ISSUES
On Januar 20, 2012, Idaho Power fied a Petition for Clarification of the
Commission's final Order No. 32426. More specifically, Idaho Power requested that the
Commission "clarfy" or approve several issues related to Idaho Power's calculation of the
facility charges. The Company's issues and Staffs response are set out below.
1. That 0.59 percent is the correct rate to be assessed on facilties that are more than
31 years in age: Staff has reviewed Idaho Power's calculation of the rate and believes that it is
correctly calculated and recommends that it be accepted by the Commission. In addition, the
Commission approved the .59 percent as a par of Schedule 66 on Januar 30, 2012.
STAFF ANSWER TO
IDAHO POWER'S PETITION FORCLARIFICATION 2
2. The Company shall make only anual adjustments to facility charges for puroses
of determining which rate (i.e., the 31 years or less rate or the more than 31 years rate) applies to
facilties subject to the facilties charge: Staff believes that the proposal is a reasonable approach
to implementing the Commission's facilties charge order and recommends that the Commission
approve the procedure.
3. The Commission accept the Company's use of 201lfacilties charge investments
and the age of facilties at year-end 2011 for purposes of implementing the compliance fiing:
Staff believes that the Company's implementation proposal is reasonable and recommends
Commission approvaL. In addition, the Commission implicitly approved this approach when it
approved the new tariff schedules on January 30,2012.
4. The Company only assess a single facilties charge rate (i.e., one that includes rate
of retur, depreciation, and income ta components) for facilties charges for Schedules 15 and
41 customers: Staff again believes that this is a reasonable implementation of the Commission's
Order. The Company has stated that the information is not available to separate the components
by age. Staffs analysis of other facilties that can be separated by age shows that 93 percent are
less than or equal to 31 years in age. Staff believes that it is appropriate to use the rate that
applies to the lower aged facilities which is the rate that includes rate of retur, depreciation and
income tax components. In addition, the Commission approved this approach when it approved
the new taiff schedules on Januar 30, 2012.
5. The effective date of any taiffs associated with the compliance filing be effective
on the first day of the month immediately following the Commission's Order on this Petition:
The Commission approved the tariffs revised for facilities charge changes effective February 1,
2012. No fuher clarification is necessar.
Respectfully submitted this 10TH day of Februar 2012.
~d~~
Deputy Attorney General
bls:N:IPC-E-II-08_dh_StaffReply
STAFF ANSWER TO
IDAHO POWER'S PETITION FOR
CLARIFICATION 3
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 10TH DAY OF FEBRUARY 2012,
SERVED THE FOREGOING STAFF'S ANSWER TO IDAHO POWER'S PETITION
FOR CLARIFICATION, IN CASE NO. IPC-E-ll-08, BY E-MAILING AND MAILING
A COpy THEREOF, POSTAGE PREPAID, TO THE FOLLOWING:
LISA D NORDSTROM
DONOV AN E WALKER
JASON B WILLIAMS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: lnordstrom(iidahopower.com
dwalker(iidahopower .com
j wiliams(iidahopower .com
PETER J RICHARDSON
GREGORY MADAMS
RICHARDSON & O'LEARY
PO BOX 7218
BOISE ID 83702
E-MAIL: peter(irichardsonandolear.com
greg(irichardsonandolear.com
ERIC LOLSEN
RACINE OLSON NYE ET AL
PO BOX 1391
POCATELLO ID 83204
E-MAIL: elo(iracinelaw.net
ARTHUR PERRY BRUDER
ATTORNEY -ADVISOR
US DEPT OF ENERGY
1000 INDEPENDENCE AVE SW
WASHINGTON DC 20585
E-MAIL: Arhur.bruder(ihq.doe.gov
GREGORY W SAID
VP REGULATORY AFFAIRS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-MAIL: gsaid(iidahopower.com
DR DON READING
6070 HILL ROAD
BOISE ID 83703
E-MAIL: dreading(imindspring.com
ANTHONY Y ANKEL
29814 LAKE ROAD
BAY VILLAGE OH 44140
E-MAIL: tony(iyanel.net
DWIGHT ETHERIDGE
EXETER ASSOCIATES
10480 LITTLE PATUZENT PKWY
STE 300
COLUMBIA MD 21044
E-MAIL: detheridge(iexeterassociates.com
CERTIFICATE OF SERVICE
E-MAIL ONLY:
STEVE A PORTER
US DEPT OF ENERGY
E-MAIL: steven.porter(ihq.doe.gov
KURT JBOEHM
BOEHM KURTZ & LOWERY
36 E SEVENTH ST STE 1510
CINCINATI OH 45202
E-MAIL: kboehm(ibkllawfirm.com
E-MAIL ONLY:
RICHARD E MALMGREN
SR ASST GENERAL COUNSEL
MICRON TECHNOLOGY INC
E-MAIL: remalmgren(imicron.com
E-MAIL ONLY:
THORV ALD A NELSON
MARK A DAVIDSON
FRED SCHMIDT
HOLLAND & HART LLP
E-MAIL: tnelson(ihollandhar.com
madavidson(ihollandhar.com
fschmidt(ihollandhart.com
lnbuchanan(ihollandhar.com
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
710 N 6TH ST
BOISE ID 83702
E-MAIL: botto(iidahoconservation.org
E-MAIL ONLY:
JOHN R HAMMOND JR
BATT FISHER PUSCH
& ALDERMAN LLP
E-MAIL: jrh(ibattfisher.com
KEVIN HIGGINS
ENERGY STRATEGIES
215 S. STATE ST SUITE 200
SALT LAKE CITY UT 84111
E-MAIL: khiggins(ienergystrat.com
ELECTRONIC/ CD/ PAPER SERVICE
MARY V YORK
HOLLAND & HART LLP
101 S. CAPITAL BLVD., SUITE 1400
BOISE,ID 83702
E-MAIL: myork(ihollandhar.com
BRAD M PURDY
ATTORNEY AT LAW
2019 N 17TH STREET
BOISE ID 83702
E-MAIL: bmpurdy(ihotmail.com
KEN MILLER
SNAKE RIVER ALLIANCE
BOX 1731
BOISE ID 83701
E-MAIL: kmiler(isnakeri veralliance.org
I
CERTIFICATE OF SERVICE
NANCY HIRSH
POLICY DIRECTOR
NW ENERGY COALITION
811 1ST AVE., SUITE 305
SEATTLE WA 98104
E-MAIL: nancy(ßnwenergy.org
SCOTT PAUL CEO
HOKU MATERIALS INC
ONE HOKU WAY
POCATELLO ID 83204
E-MAIL: spaul(ihokucorp.com
DEAN J MILLER
McDEVITT & MILLER LLP
PO BOX 2564
BOISE ID 83701
E-MAIL: joe(ßmcdevitt-miler.com
heather(imcdevitt -miler .com
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SECRETARY
CERTIFICATE OF SERVICE