HomeMy WebLinkAbout20120531final_order_no_32559.pdfOffice of the Secretary
Service Date
May31,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY’S APPLICATION TO INCREASE )CASE NO.IPC-E-12-08
ITS RATES DUE TO REVISED )
DEPRECIATION RATES FOR ELECTRIC )
PLANT-IN-SERVICE )ORDER NO.32559
__________________________________________________________________________________
)
On May 18,2012,Idaho Power Company (“Idaho Power,”or the “Company”),
Micron Technology,Inc.(“Micron”)and Commission Staff (collectively,the “Parties”)moved
the Commission for an Order accepting the Parties’Settlement Stipulation (“Stipulation”).See
Joint Motion for Approval of Stipulation (the “Motion”).If accepted,the Stipulation will
decrease the Company’s non-service charge rates by 0.1664%,and average rates by 0.16%.
After reviewing the Stipulation and the record,the Commission accepts the Stipulation in the
public interest as a fair,just,and reasonable resolution in this case.
BACKGROUND
On February 15,2012,Idaho Power Company applied to the Commission to (1)
revise the Company’s depreciation rates for electric plant-in-service,and (2)increase
corresponding base rates.The Company sought a total Idaho jurisdictional depreciation expense
of $111,137,369,which would increase base rates overall by $2,656,213,or 0.31%,for all
customer classes.’The Company requested that the rate change take effect June 1,2012.
The Company did not file an individual tariff sheet in the proceeding but instead filed
one set of proposed tariff sheets in the concurrently-filed Boardman proceeding (IPC-E-12-09).
The Company intended that set of tariff sheets to state the cumulative impact of all four cases.
The Company proposed to make an appropriate,final compliance filing after it receives final
Orders in all four cases.
The Company concurrently filed three other applications.See Case Nos.IPC-E-12-06,OATT Deferral;IPC-E-12-
07,Removal of Accelerated Depreciation;and TPC-E-l2-09,Boardman Balancing Account.The Company claims
its four filings will cumulatively decrease rates for most customers.The Company describes the cumulative rate
impact for the major customer classes as:Residential Schedule 1,(0.80%);Small General Schedule 7,(0.55%);
Large General Schedule 9,(1.07%);Large Power Schedule 19,0.65%;and Agricultural Irrigation Schedule 24,
(1.09%).The Company says the rates for its Special Contract customers will cumulatively change as follows:
Micron,0.66%;Simplot.0.68%;Department of Energy (INL),0.68%;and Hoku Block 1,0.67%.See Application,
Atch.4.
ORDER NO.32559 1
The Commission subsequently issued a Notice of Application,set a 14-day
intervention deadline,and scheduled a public workshop.See Order No.32478.Micron
intervened,and the workshop occurred.Following the workshop,the Parties recommended that
the matter be processed under Modified Procedure,that settlement conferences occur on April 23
and May 10,2012;that comments be due May 25,2012;and that the Company’s reply
comments (if any)be due June 8,2012.The Parties also recommended that if the initial
comments supported a settlement stipulation,the Parties would anticipate an Order with a June 1,
2012 effective date;however,if there is no settlement stipulation,then the proposed June 1
effective date should be suspended until July 1,2012,or when the Company’s Langley Gulch
power plant is used to provide electric service to customers,whichever is later.On April 25,
2012,the Commission issued a Notice of Modified Procedure soliciting written comments on the
Application and adopting the Parties’recommended schedule.See Order No.32538.The
Parties met,stipulated to a settlement,and filed the Stipulation with the Commission.
Staff and the Company subsequently filed comments supporting the Stipulation.
These comments identified areas of disagreement in the case (e.g.,depreciation expenses for
certain components associated with Hydraulic Production Plant,Steam Production Plant,
Transmission Production Plant and Langley Gulch)and explained how the stipulated
adjustments resolved them.The comments also explained that the Parties accepted the
Company’s depreciation rates and accruals for its other plant categories as originally proposed.
See Staff Comments and Idaho Power Comments.
On May 29,2012,the Company submitted its Compliance Filing —Revised Tariff
Schedules for this case and its three other concurrently-filed cases (Case Nos.IPC-E-12-06,
OATT Deferral;IPC-E-12-07,Removal of Accelerated Depreciation;and IPC-E-12-09,
Boardman Balancing Account).
PROPOSED SETTLEMENT
In sum,the Parties proposed to settle the case on the following terms:
1.Depreciation Expense Decrease.Idaho Power shall change its requested,
$2,778,148 depreciation expense increase to a $1 ,3 87,959 depreciation expense decrease.This
change reduces the Company’s current Idaho jurisdictional revenue requirement by $1,326,799,
which is a 0.16%overall decrease in the Company’s annual Idaho jurisdictional base rate
revenues.The Parties agreed that the settlement amount represents a compromise of the
ORDER NO.32559 2
differing depreciation methodologies,theories and opinions in this case,and that the agreed upon
settlement amount should be approved by the Commission in its entirety without further
adjustment.
2.Depreciation Study Changes.In determining the settlement amount,the Parties
agreed on certain changes to the depreciation study submitted by the Company in its Application.
These are as follows:
(a)Hydro-Electric Production Life.Expected life for the Company’s Hells
Canyon,Brownlee,and Oxbow production facilities shall be 120 years rather than
105 years,as proposed in the Application.
(b)Steam Production Net Salvage.The Company shall retain the steam
production net salvage values at the same levels that the Commission approved in
final Order No.30639 of Case No.IPC-E-08-06.
(c)Hydro Production Net Salvage.The Company shall retain the hydro
production net salvage values at the same levels that the Commission approved in
final Order No.30639.
(d)Transmission Life.The Company shall use a 50-Ri .5 estimated life
curve for its transmission facilities (Account 353),instead of the 48-Ri .5 estimated
life curve that was proposed in the Application.
(e)Transmission Net Salvage.The Company shall retain the current
transmission net salvage (Account 355)levels that the Commission approved in
Order No.30639.
(f)Langley Gulch.The Company shall use a 35-year estimated depreciable
life for the Langley Gulch power plant rather than the 30-year life proposed in the
Application.Any corresponding adjustments to depreciation expense associated
with this adjustment to the expected life of Langley Gulch shall be determined in
Case No.IPC-E-i2-14.
3.Effective Date.The Parties requested that the Commission adopt the depreciation
rates as set forth in Attachment No.1 to the Stipulation.
4.Accrual Rates.The Parties’Stipulation included an Attachment No.2,which
details the Company’s current accrual rates,filed accrual rates,and stipulated accrual rates.
ORDER NO.32559 3
5.Stipulation as Compromise.The Stipulation is a compromise of different
depreciation methodologies.It should not be construed as any party having accepted or rejected
a particular depreciation methodology or principle,it shall not bind the Parties in future
depreciation case proceedings,and it does not imply agreement on the merits of the methodology
used to arrive at the results.Further,other than testimony or comments filed in support of the
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 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.
See Stipulation at 2-5.
All Parties to this proceeding signed the Stipulation.They agree that the Stipulation
is a fair,just and reasonable compromise of the remaining issues in this case,that no hearing is
needed,and that the Commission should accept the Stipulation in the public interest without
material change or condition.Id.at 1;Motion at 2-3.
DISCUSSION AND FINDINGS
Pursuant to Commission Rule 274,we shall decide whether to accept the Stipulation
based on the record currently before us.IDAPA 31.01.01.274.This Stipulation is the result of
substantial negotiations and all Parties that participated in those negotiations have signed it.
Accordingly,we find further proceedings are not necessary.
After reviewing the Stipulation and the Motion,the Commission adopts and approves
the Stipulation as presented.We find that this Stipulation appropriately resolves issues regarding
the proper depreciation accruals to be booked in Idaho Power’s accounts going forward.We
further find that this Stipulation has been made to compromise contested claims and is entered
largely for the purpose of fairly resolving contested issues,avoiding expense,inconvenience,and
uncertainty of further litigation.Finally,pursuant to Commission Rules 275 and 276,we find
that the Parties have carried their burden of showing that the Stipulation is just,fair and
reasonable,in the public interest,and in accordance with the law and regulatory policy of this
State.IDAPA 31.01.01.275 and .276.Accordingly,we accept the Stipulation and depreciation
rates proposed by the Parties without modification.The depreciation rates and accruals adopted
by the Parties’Stipulation and the Commission are detailed in Attachment Nos.1 and 2 to the
Stipulation.Copies of those attachments are attached to and made part of this Order.
ORDER NO.32559 4
Lastly,the Commission notes that this is the last of Idaho Power’s four concurrently-
filed cases (i.e.,Case Nos.IPC-E-12-06,IPC-E-l2-07,IPC-E-12-08,and TPC-E-12-09)to be
decided by the Commission.Accordingly,consistent with the Company’s Applications and the
Commission’s final orders in those cases,the Company is required to immediately file
conforming tariffs reflecting the cumulative impact of the Commission’s decisions in those
cases.We find that the Company’s revised tariff schedules filed May 29,2012 comply with the
four final Orders issued in these cases.We further find that the rates contained in the combined
tariff schedules are fair,just and reasonable,and will allow the Company to recover its
authorized revenues in these cases.
ORDER
IT IS HEREBY ORDERED that the Parties’Joint Motion for Approval of Stipulation
is granted.The Commission adopts the depreciation rates contained in the Stipulation.
IT IS FURTHER ORDERED that the depreciation rates approved by this Order shall
become effective on June 1,2012.
IT IS FURTHER ORDERED that the revised tariff schedules submitted with the
Company’s May 29,2012 Compliance Filing for this case and Case Nos.IPC-E-12-06,OATT
Deferral;IPC-E-12-07,Removal of Accelerated Depreciation;and IPC-E-12-09 Boardman
Balancing Account are approved effective June 1,2012.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §61-626.
ORDER NO.32559 5
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this 3 1
day of May 2012.
ATTEST:
4L.Ei
ieanD Jewell’
Cmmission Scretary
RSHA H.SMITH,
7
COMMISSIONER
O:JPC-E-I 2-08kk3
ORDER NO.32559 6
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59
6
ID
A
H
O
PO
W
E
R
CO
M
P
A
N
Y
CO
M
P
A
R
S
I
O
N
OF
AN
N
U
A
L
DE
P
R
E
C
I
A
T
I
O
N
EX
P
E
N
S
E
20
0
6
ST
U
D
Y
RA
T
E
S
vs
.
20
1
1
ST
U
D
Y
RA
T
E
S
vs
.
20
1
1
SE
T
T
L
E
M
E
N
T
PR
O
P
O
S
A
L
20
0
6
PR
O
FO
R
M
A
20
1
1
SE
T
T
L
E
M
E
N
T
PR
O
P
O
S
A
L
IN
C
R
E
A
S
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I
(
D
S
C
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A
S
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)
O.
o
a
m
b
.
r
31
20
1
1
CA
L
C
U
L
A
T
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D
AN
N
U
A
L
CA
L
C
U
L
A
T
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D
AN
N
U
A
L
IN
C
R
E
A
S
E
I
(
D
E
C
R
E
A
S
E
(
CA
L
C
U
L
A
T
E
D
AN
N
U
A
L
IN
AC
C
R
U
A
L
AM
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U
N
T
OR
I
G
I
N
A
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AC
C
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U
A
L
AC
C
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U
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C
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C
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A
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L
AM
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AC
C
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A
L
AC
C
R
U
A
L
20
0
6
vs
.
20
1
1
AC
C
O
U
N
T
CO
S
T
AM
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U
N
T
RA
T
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N
T
RA
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20
0
6
vs
.
20
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1
AM
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Pr
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p
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S.
W
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m
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l
(1
)
Bm
w
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28
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4
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0
7
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2
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4
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9
5
2
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4
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9
2
,
7
7
1
)
41
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.
6
2
4
1.3
7
(3
1
7
,
1
0
0
)
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m
m
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n
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8
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.
6
5
28
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2.
7
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16
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6
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0
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4
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6
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)
Sh
o
s
l
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m
n
e
F
a
f
l
s
51
2
,
4
0
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