20120320notice_of_application_order_no_32489.pdf

Office of the Secretary
Service Date
March 20,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR )CASE NO.IPC-E-12-06
AUTHORITY TO INCREASE ITS RATES TO )
RECOVER CERTAIN TRANSMISSION )NOTICE OF APPLICATION
COSTS ASSOCIATED WITH FERC )
DOCKET NO.ERO6-787 )NOTICE OF
)MODIFIED PROCEDURE
)
_____________
)ORDER NO.32489
On February 15.2012,Idaho Power Company filed an Application for authority to
increase its rates to recover certain transmission costs associated with the Company’s Federal
Energy Regulatory Commission (FERC)rate case.FERC Docket No.ERO6-787.In addition to
this Application,the Company concurrently filed three other applications.See Case Nos.IPC-E
12-07,IPC-E-12-08,and IPC-E-12-09.The Company states these four applications
cumulatively will result in a rate decrease for most customers.To be more precise.the
cumulative rate affects of the four cases is set out in the footnote below.’
In this Application,the Company seeks authority to amortize approximately $2064
million in the existing deferral account over three years.The Company calculates that recovery
of this deferral account will increase its annual revenue requirement by-$688,156 for each year of
the three-year period.The Company asks that the amortization and rate changes for this case and
the other three contemporary filings take effect on June 1,2012.The Company also asks that
this Application be processed using Modified Procedure.Rules 201-204.IDAPA 3 1.01.01.201-
.204.
BACKGRO UND
The historical background of the Company’s FERC rate case and the establishment of
the deferral account are set out in Order Nos.30940 and 32177,but the pertinent parts are
The proposed cumulative rate decrease by customer class is asserted to be:Residential,Sch.I (0.80%):SmallBusiness.Sch.7 (0.55%)Large Business.Sch.9 (1.07%):and Irrigation.Sch.24 (1.09%).The Companycalculatesthattheproposedcumulativeimpactwillincreaseratesforthefollowingcustomerclasses:Industrial,Scli.19,.65%;Micron,Sch.16,.66%;Simplot,Sch.29,.68%;INL,Sch.30,.68/o;and Hoku (Block 2),.67%.SeeApplication,Atch.3.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32489 1
summarized here.In March 2006,Idaho Power filed an application with FERC requesting an
increase in its transmission rates subject to FERC’s jurisdiction.The Company proposed to
revise its Open Access Transmission Tariffs (OATTs)from “stated”rates to “formula”based
rates.Formula rates would be updated annually based upon Idaho Power’s cost to own,operate
and maintain its transmission facilities as reported annually in the Company’s FERC Form 1.
In the FERC proceeding,the parties were able to settle most of the issues but they
were unable to resolve the proper ratemaking treatment of three “Legacy Agreements.”Order
on Initial Decision,126 FERC ¶16,044 at ¶11 (January 15,2009).Starting in the 1960s,Idaho
Power entered into three long-term transmission service contracts commonly referred to as the
“Legacy Agreements”with PacifiCorp regarding transmission service from the Jim Bridger
power plant in western Wyoming.2 Both utilities built and now operate transmission lines from
Bridger to their respective service territories.Under the terms of the Legacy Agreements,Idaho
Power charges PacifiCorp “facility fees”to use Idaho Power’s transmission facilities until 2025.
Id.at ¶J 3-9;Order No.30940 at 2.
The federal Administrative Law Judge (AU)initially determined and FERC
subsequently affirmed that Idaho Power’s fees charged to PacifiCorp under the Legacy
Agreements were significantly lower than the OATTs rates Idaho Power proposed to charge
other customers for similar transmission services.The AU and FERC found that it was
unreasonable for Idaho Power to recover its transmission costs from other third-party
transmission customers while the Legacy Agreements contained rates that were considered
below cost.FERC found that Idaho Power must bear the under-recovery of transmission costs
on its own.Id.at ¶129;Order No.30940 at 2.
In response to FERC’s 2009 Order,Idaho Power took three actions.First,the
Company filed a Petition for Rehearing with FERC.3 Second,Idaho Power moved to amend
portions of the two Legacy Agreements which resulted in a reduction of about $5.728 million of
unrecovered transmission costs.See Order No.32177 at 3-4;FERC Docket No.ERO9-1335.
Third,in July 2009,Idaho Power filed an application for an accounting order requesting that this
2 Idaho Power and PacifiCorp jointly own the Bridger facility.
On December 27,2011,FERC denied rehearing and affirmed its Initial Decision.See Application Atch.1,Order
Denying Rehearing,137 FERC ¶61,235 (Dec.27,2011).
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32489 2
Commission authorize the deferral of unrecovered transmission costs that were denied by FERC.
In Order No.30940,the Commission authorized the deferral of the unrecovered transmission-
related revenues over a three-year amortization period with several conditions.The Commission
found that no carrying charges should be authorized and that the Commission specifically
reserves the right to determine in a future proceeding whether Idaho Power may appropriately
recover the deferred amounts from Idaho customers.”Order No.30940 at 6 (Case No.IPC-E
09-21).
In Case No.IPC-E-l0-28,the Commission updated the deferral balance as
$2,064,469 to reflect the modification of the two Legacy Agreements (discussed above)and
other approved adjustments.Order No.32177 at 4.7-8.The Commission further directed Idaho
Power to advise the Commission when FERC issued its Order on Rehearing so that the
Commission could consider a starting date for the three-year amortization of the deferral balance.
id.at 94
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that consistent with Order No.32177.the Company
requests that it he allowed to begin amortization of the deferral account ($2,064,469)over three
years effective June 1,2012.Application at ¶J 5.7.Consequently,the Company requests that
its annual revenue requirement be increased by $688.1 56 per year for three years effective June
1.2012.Id.at 8.Because the proposed increase in the annual revenue requirement from this
case is relatively modest,the Company is proposing to increase only the energy charge portion of
customer rate base.Id.at ¶8,17;Atch.4.pp.3,6.However,as indicated in the Application at
Attachments 2 and 4.the proposed increases caused by this Application are not “uniform”to all
customer classes.We find the more accurate description would he that the ‘overall average”
base rate increase of this Application alone is 0.08%.
YOU ARE FURTHER NOTIFIED that the Company asserts that when the proposed
rate increase from this Application is combined with the rates requested in the other three cases
the cumulative effect will result in a base rate decrease for most but not all customers .Atch.3,
4•5
‘See note 3.
See footnote 1.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32489
YOU ARE FURTHER NOTIFIED that because the rate effects of this Application
are being combined with three other applications,the Company filed a single-set of proposed
tariff schedules in Case No.IPC-E-12-09 specifying the proposed cumulative effect of all the
applications.Id.at ¶9.Commission Rule 121.01 generally requires that each application be
accompanied by rate schedules showing the proposed changes in the tariff schedules.Because
Idaho Power asserts that the proposed cumulative effects of the four applications result in a base
rate decrease for most customer classes (see note I),we find that it is reasonable for us to waive
the requirement of Rule 121.01 that proposed rates are to be filed with each case.See Rule 13,
IDAPA 31.01.01.013 (the Commission may deviate from its Rules when it finds compliance
impracticable).
NOTICE OF MODIFIED PROCEDURE
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 through .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 opposition with the Commission
no later than April 19,2012.The Company may file a reply no later than April 27,2012.
The comment must contain a statement of reasons supporting the comment.Persons desiring a
hearing must specifically request a hearing in their written comments.Written comments
concerning this Application shall be mailed to the Commission and Idaho Power at the addresses
reflected below:
Commission Secretary Jason B.Williams
Idaho Public Utilities Commission Lisa D.Nordstrom
P0 Box 83720 Idaho Power Company
Boise,ID 83720-0074 P0 Box 70
Boise,ID 83707-0070
Street Address for Express Mail:E-Mail:jUliarnsidajçycçpm
472 W.Washington Street
Boise,ID 83702-59 18
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32489 4
Courtney Waites
Greg Said
Tim Tatum
Idaho Power Company
P0 Box 70
Boise,ID 83707-0070
E-mail:[e-mail]
gsaididahopower.com
[e-mail]
All 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 the Applicant 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 exhibits have
been filed with the Commission and are available for public inspection during regular business
hours at the Commission offices.The Application and exhibits are also available on the
Commission’s web site at www.puc.idaho.gov by clicking on “File Room”and then “Electric
Cases.”Tariff schedules showing the proposed cumulative rate effects for all four cases are set
out in Case No.IPC-E-12-09,Attachments 2-3.
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 specifically
Idaho Code §61-501.61-502,and 61-503.The Commission may enter any final Order
consistent with its authority under Title 61.
YOU ARE FURTHER NOTIF1ED that all proceedings in this matter will be
conducted pursuant to the Commission’s Rules of Procedure,IDAPA 31.01.01.000 et seq.
NOTICE OF APPLICAT1ON
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32489 5
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons may file written comments in this matter no later than April 19.2012.Idaho
Power may file a reply to the written comments no later than April 27,2012.
IT IS FURTHER ORDERED that the requirement to file proposed tariff schedules
with this Application per Rule 121.01 is waived as set out above.
IT IS FURTHER ORDERED that the Commission Secretary serve this Order on all
parties to the last Idaho Power rate case (IPC-E-l 1-08).
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this cO
day of March 2012.
MACK A.REDFORD,COMMISSIONER
O7 d&
MARSHA H.SMITH,COMMISSIONER
ATTEST:
Jean D Jeell
Ci5mmission Scretary
bls/O:IPC-E-I 2-O6dh
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32489 6