20111212Motion for Approval, Stipulation Attached.pdf

JASON B. WILLIAMS
Corporate Counsel
jwilliams(âidahopower.com
etlDA~POR~
An IDACORP Company
December 12,2011
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Re: Case No. IPC-E-11-22
IN THE MATTER OF THE APPLICATION OF IDAHO POWER COMPANY
FOR AN EXTENDED AND MODIFIED ACCOUNTING ORDER TO
AMORTIZE ADDITIONAL ACCUMULATED DEFERRED INCOME TAX
CREDITS
Dear Ms. Jewell:
Enclosed for filng please find an original and seven (7) copies of Idaho Power
Company's Motion for Approval of Stipulation in the above matter.
Very truly yours,,c7p~
Jason B. Wiliams
JBW:kkt
Enclosures
Q r. r 1: Pi~ \. i. \.;,l ~..,_ ¡ ,;'
LISA D. NORDSTROM (ISB No. 5733)
JASON B. WILLIAMS (ISB No. 8718) 23 II DEC 12 Atill: 36
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
Inordstrom(ãidahopower.com
jwilliams(ãidahopower.com
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY TO )
EXTEND AND MODIFY ACCOUNTING )
ORDER TO AMORTIZE ADDITIONAL )
ACCUMULATED DEFERRED INCOME )
TAX CREDITS (ADITC). )
)
CASE NO. IPC-E-11-22
MOTION FOR APPROVAL OF
STIPULATION
COMES NOW, Idaho Power Company ("Idaho Power" or "Company") and
hereby moves the Idaho Public Utilities Commission ("Commission") for an Order
accepting the settlement stipulation ("Stipulation") filed herewith. This Motion is based
on the following:
1. On November 2, 2011, Idaho Power filed an Application in this case
requesting the Commission issue an Order modifying Order No. 30978 to (1) authorize
the Company to extend its abilty to amortize additional accumulated deferred
investment tax credits ("ADITC") through December 31, 2013; (2) extend the revenue
sharing agreement established by Order No. 30978 with modifications; and (3) approve
MOTION FOR APPROVAL OF STIPULATION - 1
a one-time adjustment applied in 2011 to the sharing provision of the stipulation
approved in Order No. 30978 to allow one-half of the Company's share of the Idaho
jurisdictional return on equity ("ROE") in excess of 10.5 percent to be provided as a
customer benefi in the form of a reduction in rates or an offset to amounts that would
otherwise be collected from rates. The Company served a copy of its Application on all
parties that intervened in the Company's 2011 general rate case proceeding, Case No.
IPC-E-11-08.
2. On November 8, 2011, the Commission issued a Notice of Application,
Notice of Intervention Deadline, and Notice of Workshop in Order No. 32394. The
Notice scheduled a workshop on November 30, 2011, to discuss the Company's
Application. Pursuant to the Notice of Intervention Deadline, the Industrial Customers of
Idaho Power, and Micron Technology, Inc. ("Micron"), timely filed Petitions to Intervene
and the Commission granted those petitions in Order No. 32405.
3. Following the discussions held at the November 30, 2011, workshop, the
Company, the Commission Staff, and Micron ("Parties") have agreed to resolve and
settle all of the issues in the case. A copy of the signed Stipulation evidencing that
settlement is enclosed as Attachment No.1.
4. Revenue Sharing. As described in Section 5 of the Stipulation, the Parties
agree to make a one-time adjustment to the sharing portion of the mechanism approved
by the Commission by Order No. 30978 that wil set aside 75 percent of the Company's
share of the Idaho jurisdictional, 2011 year-end ROE in excess of 10.5 percent to be
provided as a customer benefit in the form of an offset to amounts in the Company's
MOTION FOR APPROVAL OF STIPULATION - 2
pension balancing account. to reduce the amount that would otherwise need to be
collected in rates.
5. In the period 2012-2014, if the Idaho jurisdictional annual ROE exceeds
10 percent, all amounts in excess of a 10 percent ROE and up to and including a 10.5
percent ROE would be shared equally between the Company and its Idaho customers.
The customers' share of the' Company's Idaho jurisdictional earnings between a 10
percent ROE and up through a 10.5 percent ROE wil be provided as a rate reduction to
become effective at the time of the subsequent yeats power cost adjustment. If the
Company's actual earned, year-end ROE for the Idaho jurisdiction during 2012, 2013, or
2014 exceeds 10.5 percent, all amounts in excess of the 10.5 percent ROE wil be
shared 75 percent with customers in the form of an offset to amounts in the Company's
pension balancing account to reduce the amount that would otherwise need to be
collected in rates and 25 percent with the Company.
6. ADITC Amortization. As further detailed in Section 6 of the Stipulation, the
Parties agree that the Company may extend its abilty to amortize a total of $45 milion
of additional ADITC through December 31, 2014, to allow the Company to achieve a
maximum actual ROE oL9.5 percent for the Idaho jurisdiction provided that the amount
of additional ADITC used in a single year does not exceed $25 milion.
7. In the event the Commission issues an Order authorizing a change to the
Company's allowed ROE as part of a general rate case proceeding in which the
Company seeks a rate change to become effective prior to January 1, 2015, the ROE
thresholds wil be automatically adjusted proportionately on a prospective basis from the
date that the newly authorized rates become effective as set forth in Section 6.4 of the
MOTION FOR APPROVAL OF STIPULATION - 3
Stipulation. The Parties agree that the provisions of Section 6.4 shall not be applicable
to single issue rate cases, such as the Langley Gulch Power Plant case anticipated to
be filed in the first quarter of 2012.
8. The Parties recommend that the Commission grant this Motion and
approve the Stipulation in its entirety, without material change or condition, pursuant to
RP 274. As noted in Section 1 of the Stipulation, all of the Parties agree that the
Stipulation is in the public interest and that all of its terms and conditions are fair, just,
and reasonable.
9. The Parties respectfully request that the Commission issue an order on or
before December 31, 2011, to faciltate the timely recording of the Company's 2011
earnings for financial reporting purposes.
NOW, THEREFORE, the Parties respectfully request that the Commission issue
a final Order granting this Motion and accepting Attachment NO.1, the Stipulation, in its
entirety, without material change or condition.
Respectfully submitted this 12th day of December 2011.
~~
MOTION FOR APPROVAL OF STIPULATION - 4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 12th day of December 2011 I served a true and
correct copy of the within and foregoing MOTION FOR APPROVAL OF STIPULATION
upon the following named parties by the method indicated below, and addressed to the
following:
Commission Staff
Weldon Stutzman
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 Weldon.Stutzman(ãpuc.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
~ Email peter(ãrichardsonandolearv.com
greg(ãrichardsonandolearv.com
Dr. Don Reading
Ben Johnson Associates, Inc.
6070 Hil Road
Boise, Idaho 83703
Hand Delivered~U.S.Mail
_ Overnight Mail
FAX
~ Email dreading(ãmindspring.com
Micron Technology, Inc.
Thorvald A. Nelson
Frederick J. Schmidt
Brian T. Hansen
MaryV. York
HOLLAND & HART, LLP
6380 South Fiddlers Green Circle, Suite 500
Greenwood Village, Colorado 80111
Hand Delivered
~U.S. Mail
_ Overnight Mail
FAX
~ Email tnelson(ãhollandhart.com
fschmidt(ãhollandhart.com
bhansen(ãhollandhart.com
myork(ãhollandhart.com
In buchana n(ãholland hart. com
Hand Delivered~U.S.Mail
_ Overnight Mail
FAX
~ Email remalmgren(ãmicron.com
Richard E. Malmgren
Senior Assistant General Counsel
Micron Technology, Inc.
800 South Federal Way
Boise, Idaho 83716
~ø~aso B. Williams
MOTION FOR APPROVAL OF STIPULATION - 5
BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
CASE NO. IPC-E-11-22
IDAHO POWER COMPANY
ATTACHMENT NO.1
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: [phone]
Facsimile: [phone]
Inordstrom(ãidahopower.com
jwilliams(ãidahopower.com
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY TO
EXTEND AND MODIFY ACCOUNTING
ORDER TO AMORTIZE ADDITIONAL
ACCUMULATED DEFERRED INCOME
TAX CREDITS (ADITC).
)
) CASE NO. IPC-E-11-22
)
) STIPULATION
)
)
)
This stipulation ("Stipulation") is entered into by and among Idaho Power Company
("Idaho Powet' or "Company"), the Staff of the Idaho Public Utilties Commission ("Staff),
and Micron Technology, Inc. ("Micron"). These entities are collectively referred to as the
"Parties," and individually as "Party."
I. INTRODUCTION
1 . The Parties agree that this Stipulation represents a fair, just, and reasonable
compromise of contested issues and that acceptance of the Stipulation by the Idaho Public
Utilities Commission ("Commission") would be in the public interest. Therefore, the Parties
recommend that the Commission approve the Stipulation and all of its terms and conditions
without material change or condition.
STIPULATION - 1
II. BACKGROUND
2. On November 2, 2011, Idaho Power filed an Application asking the
Commission to issue an Order modifying Order No. 30978 that would (1) authorize the
Company to extend its abilty to amortize additional accumulated deferred investment tax
credits ("ADITC") through December 31, 2013; (2) extend the revenue sharing agreement
established by Order No. 30978 with modifications; and (3) approve a one-time adjustment
applied in 2011 to the sharing provision of the stipulation approved in Order No. 30978 to
allow one-half of the Company's share of the Idaho jurisdictional return on equity ("ROE")
in excess of 10.5 percent to be provided as a customer benefit in the form of a reduction in
rates or an offset to amounts that would otherwise be collected from rates.
3. On November 8, 2011, the Commission issued a Notice of Application, Notice
of Intervention Deadline, and Notice of Workshop in Order No. 32394. The Notice
scheduled a workshop on November 30, 2011, to discuss the Company's Application.
Pursuant to the Notice of Intervention Deadline, the Industrial Customers of Idaho Power
and Micron timely filed Petitions to Intervene. The Commission granted those interventions
in Order NO.32405.
4. Following the discussions held at the November 30, 2011, workshop, the
Parties agreed to the following settlement agreement in this matter.
II. TERMS OF THE STIPULATION
5. Revenue Sharing.
5.1. The Company shall make a one-time adjustment to the sharing portion
of the mechanism approved by the Commission by Order No. 30978 that wil set aside 75
percent of the Company's share of the Idaho jurisdictional, 2011 year-end ROE in excess
STIPULATION - 2
of 10.5 percent to be provided as a customer benefit in the form of an offset to amounts in
the Company's pension balancing account to reduce the amount that would otherwise
need to be collected in rates.
5.2. If the Company's actual year-end, earned ROE for the Idaho
jurisdiction during 2012,2013, or2014 exceeds 10 percent, all amounts in excess of a 10
percent ROE and up to and including a 10.5 percent ROE wil be shared equally between
the Company's Idaho customers and the Company. The customers' share of the
Company's Idaho jurisdictional earnings between a 10 percent ROE and up through a 10.5
percent ROE wil be provided as a rate reduction to become effective at the time of the
subsequent yeats power cost adjustment. If the Company's actual earned, year-end ROE
for the Idaho jurisdiction during 2012, 2013, or 2014 exceeds 10.5 percent, all amounts in
excess of the 10.5 percent ROE wil be shared 75 percent with customers in the form of an
offset to amounts in the Company's pension balancing account to reduce the amount that
would otherwise need to be collected in rates and 25 percent with the Company.
5.3. Forthe years 2012,2013, and 2014, there can be no additionalADITC
amortization as provided in Section 6 if the Company has shared earnings pursuant to
Section 5.2.
6. Accounting: ADITC Amortization.
6.1. For the years 2012,2013, and 2014, if Idaho Power's actual Idaho
jurisdictional year-end, earned ROE falls below 9.5 percent, the Company wil be permitted
to amortize an additional amount of state and federal ADITC by debiting Account 255
(ADITC) and crediting Account 420 (investment tax credits, a non-utilty income account),
in an amount, up to $45 millon over the above-referenced three year period, that would
STIPULATION - 3
allow the Company to achieve a maximum actual ROE of 9.5 percent for the Idaho
jurisdiction. The dollar amount that could be used to increase the actual 2012 ROE to no
more than 9.5 percent is $25 millon.
6.2. Idaho Power may use up to $25 milion of additional amortization of
ADITC in each of 2012, 2013, and 2014 so long as the total, cumulative amount of ADITC
used during the three-year period does not exceed $45 millon. For example, if the
Company uses $20 milion of additional ADITC in 2012 and $25 millon of additional ADITC
in 2013, the Company would not have any additional ADITC available to use in 2014.
6.3. Except for the permitted use of additional ADITC described herein, for
the years 2012,2013, and 2014, Idaho Power wil continue to amortize ADITC using the
same method employed immediately prior to the issuance of a Commission Order in this
matter.
6.4. In the event the Commission issues an Order authorizing a change to
the Company's allowed ROE as part of a general rate case proceeding in which the
Company seeks a rate change to become effective prior to January 1, 2015, the ROE
thresholds set forth herein will be adjusted on a prospective basis from the date that the
newly authorized rates become effective.1 The ROE thresholds wil be automatically
adjusted as follows:
1 In the event that the effective date of a newly established ROE occurs in a month other than
January, the ROE thresholds applied for the calendar year in which the ROE change occurred wil be prorated
based on the number of months that each respective ROE was effective. For example, if the Commission
authorizes a change in ROE to become effective on June 1, the Company would adjust the annual ROE
thresholds applied in that calendar year to levels equal to 5/12 of the prior annual ROE thresholds and 7/12 of
the newly established annual ROE thresholds.
STIPULATION - 4
(a) The Idaho jurisdictional ROE level under which the Company
will be permitted to amortize an additional amount of state and federal ADITC (currently set
at 9.5 percent) wil be set at 95 percent of the newly authorized ROE;
(b) The Idaho jurisdictional ROE level above which the Company
wil share amounts with customers on a 50 percent basis up to the ROE level established
in subsection 6.4(c) (currently set at 10 percent) wil be set equal to the newly authorized
ROE; and
(c) The Idaho jurisdictional ROE level above which the Company
wil provide an offset to the pension balancing account on a 75 percent basis (currently set
at 10.5 percent) will be set at 105 percent of the newly authorized ROE.
6.5 The Parties agree that the provisions of this Section 6.4 shall not be
applicable to single issue rate cases, such as the Langley Gulch Power Plant case
anticipated to be filed in the first quarter of 2012.
6.6 Except as otherwise provided for herein or ordered by the
Commission, in no event shall any additional amounts of amortized ADTIC be reflected in
the utility operating results of the Company for ratemaking purposes, financial statement
purposes, and for purposes of the Company's regulated books of account.
iv. ADDITIONAL PROVISIONS
7. The Parties agree that this Stipulation represents a compromise of the
positions of the Parties. Therefore, other than any testimony fied in support of the
approval of this Stipulation, and except to the extent necessary for a Party to explain before
the Commission its own statements and positions with respect to the Stipulation, all
STIPULATION - 5
statements made and positions taken in negotiations relating to this Stipulation shall be
confidential and will not be admissible in evidence in this or any other proceeding.
8. The Parties submit this Stipulation to the Commission and recommend
approval in its entirety. Parties shall support this Stipulation before the Commission, and
no Party shall appeal a Commission Order approving the Stipulation or an issue resolved
by the Stipulation. If this Stipulation is challenged by any person not a party to the
Stipulation, the Parties to this Stipulation reserve the right to file testimony, cross-examine
witnesses, and put on such case as they deem appropriate to respond fully to the issues
presented, including the right to raise issues that are incorporated in the settlements
embodied in this Stipulation. Notwithstanding this reservation of rights, the Parties to this
Stipulation agree that they wil continue to support the Commission's adoption of the terms
of this Stipulation.
9. If the Commission rejects any part or all of this Stipulation, or imposes any
additional material conditions on approval of this Stipulation, each Party reserves the right,
upon written notice to the Commission and the other Parties to this proceeding, within 14
days of the date of such action by the Commission, to withdraw from this Stipulation. In
such case, no Party shall be bound or prejudiced by the terms of this Stipulation, and each
Party shall be entitled to seek reconsideration of the Commission's Order, file testimony as
it chooses, cross-examine witnesses, and do all other things necessary to put on such
case as it deems appropriate.
10. No Party shall be bound, benefited or prejudiced by any position asserted in
the negotiation of this Stipulation, except to the extent expressly stated herein, nor shall
this Stipulation be construed as a waiver of the rights of any Party unless such rights are
STIPULATION - 6
expressly waived herein. Execution of this Stipulation shall not be deemed to constitute an
acknowledgment by any Party of the validity or invalidity of any particular method, theory,
or principle of regulation or cost recovery. No Party shall be deemed to have agreed that
any method, theory, or principle of regulation or cost recovery employed in arriving at this
Stipulation is appropriate for resolving any issues in any other proceeding in the future. No
findings of fact or conclusions of law other than those stated herein shall be deemed to be
implicit in this Stipulation.
11 . The obligations of the Parties under this Stipulation are subject to the
Commission's approval of this Stipulation in accordance with its terms and conditions and
upon such approval being upheld on appeal by a court of competent jurisdiction.
12. This Stipulation may be executed in counterparts and each signed
counterpart shall constitute an original document.
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STIPULATION - 7
DATED this øy of Dember 2011.
Idaho Power Company Idaho Public Utilties Commission Staff
\.
\
By
Weldon B. Stutzman
Attorney for Idaho Public Utilties
Commission Staff
Micron Technology, Inc.
By
Thorvald Nelson
Attorney for Micron Technology, Inc.
STIPULATION - 8
12/12/2011 10: 36 2083344045 IPUC PAGE 01/01
DATED this day of December 2011.
Idaho Powr Company Idaho Public Utilties Commission Staff
B V~~...,YWeldonB~
Attomey for Idaho Public Utilties
Commission Staff
By
Jason B. Wiliams
Attomey for Idaho Power Company
Micron Technology, Inc.
By
Thorvald Nelson
Attorney for Micron Technologyi Inc.
STIPULATION - 8
Idaho Powr Company
By
Jaso B. Willams
Attorny for Idaho Powr Company
Micn Tecno, Inc.
BoØ~
Thorald Nelso
Atorny for Mic Tecnoloy, Inc.
STIPULATION - 8
Idaho Public Utilit Commision Staff
By
Weldon B. Stutzman
Atorney fo Idaho Public Utlit
Commison Staff