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Home My WebLink About20140929Comments.pdf3fffi*. An IDACORP CompanyRECr; ili !: i] ?0lrr StP A9 pH ll: Z0 LISAD. NORDSTROM i[.Aiig l:r,_ii:,i.i..Lead Gounsel Uf Utf l[S COijgiti;iOfl I nordstrom@idahopower.com Septembe r 29,2014 VIA HAND DELIVERY Jean D. Jewell, Secretary !daho Public Utilities Commission 472 West Washington Street Boise, Idaho 83702 Re: Case No. IPC-E-14-14 Extension of Accumulated Deferred lnvestment Tax Credits/Revenue Sharing Mechanism - ldaho Power Company's Comments Dear Ms. Jewell: Enclosed for filing please find an original and seven (7) copies of Idaho Power Company's Comments in the above matter. Very truly yours, K;ail^t-r."* Lisa D. Nordstromu LDN:evp Enclosures 1221 W ldaho St. (83702) P.O. Box 70 Boise, lD 83707 LISA D. NORDSTROM (lSB No. 5733) ldaho Power Company 1221 West ldaho Street (83702) P.O. Box 70 Boise, ldaho 83707 Telephone: (208) 388-61 17 Facsimile: (208) 388-6936 lnordstrom@ idahopower. com Attorney for ldaho Power Company IN THE MATTER OF IDAHO POWER COMPANY'S APPLICATION TO EXTEND ITS ACCUMULATED DEFERRED INVESTMENT TAX CREDITS/REVEN U E SHARING MECHANISM BEYOND 2014 D rfl F l\'l:':'i\L-\-/Ll r,-,' 20lri StP 29 Pll 12: 20 tl-'+Ur-;:,1,-;,IU..\-..\./ i' '-"' i-i -' u1 I LlTl is C cr l{iil iS$ I Cjii BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION CASE NO. IPC-E-14-14 IDAHO POWER COMPANY'S COMMENTS ldaho Power Company ("ldaho Powe/' or "Comp3[y"), by and through its undersigned attorney, hereby submits to the Idaho Public Utilities Commission ("Commission") these Comments in the above-captioned proceeding. ldaho Power urges the Commission to adopt the settlement stipulation submitted in this proceeding ("Stipulation") as filed, without modification, and to issue an accounting order authorizing the terms of the agreement on or before December 31,2014. I. BACKGROUND On May 30,2014, ldaho Power submitted an Application in this proceeding to extend the terms set forth in the settlement stipulation approved by Order No. 32424 under which ldaho Power is authorized to either: (1) amortize additional accumulated deferred investment tax credits ("AD|TC") or (2) share a portion of revenues with its IDAHO POWER COMPANY'S COMMENTS - 1 Idaho customers. The Company's Application sought to extend the terms of the mechanism, as it was approved in Order No.32424, until the Company had accelerated the amortization of up to a total of $45 million in additional ADITC (including any ADITC applied toward 2014\ or until the terms were otherwise modified or terminated by a Commission order. On August 11, 2014, discussions were held at a workshop/settlement conference between the Company, Commission Staff, lndustrial Customers of ldaho Power (lClP), and ldaho lrrigation Pumpers Association, lnc. (llPA), collectively referred to as the "Parties." These discussions resulted in a settlement of all the issues in the case. II. COMMENTS Idaho Power urges the Commission to adopt the proposed Stipulation without modification. ldaho Power believes the Stipulation is a reasonable compromise between the Parties and acceptance of the Stipulation is in the public interest. The terms of the agreement as set forth in the proposed Stipulation, and discussed below, represent a reasonable compromise among differing points of view. Concessions were made by all Parties to strike an appropriate balance between the interests of the Company and its customers. The proposed Settlement modifies the Company's original request, as detailed in the May 30 Application, in three ways. First, the revenue sharing benefit for customers under the first earnings tier (ldaho jurisdictional Return on Equity ('ROE") between 10 and 10.5 percent) would increasefrom 50 percentto 75 percent, which would continue to be applied as an offset to customer rates through the Power Cost Adjustment ("PCA") mechanism. Second, the revenue sharing benefit for customers under the second IDAHO POWER COMPANY'S COMMENTS.2 earnings tier (ldaho jurisdictional ROE above 10.5 percent) would be modified to allow 50 percent of the earnings above a 10.5 percent ROE to be applied as an offset to rates through the PCA and 25 percent as an offset to the pension balancing account. Under the current mechanism, the entire customer share of earnings above a 10.5 percent ROE (75 percent) is applied as an offset to the pension balancing account. Third, the "evergreen" term requested in the Application was modified to limit the effective period of the stipulated terms to five years (2015-2019) or until the entire $45 million of ADITC has been fully amortized. When viewed in its entirety, the agreement strikes an appropriate balance between customer and shareowner interests. The modifications to the sharing provisions agreed to in the Stipulation will extend the opportunity for customers realize future benefits from the mechanism while increasing the customer proportion of earnings sharing potential. The agreement also allows for the continuation of the current provisions for the use of accelerated ADITC. By not changing the ADITC amortization provisions, the agreement preserves the components of the mechanism that have been viewed favorably by investors and credit rating agencies alike. Finally, the implementation of a five-year effective period for the agreement will provide the Commission with an opportunity to review the effectiveness of the mechanism, should a portion of the original $45 million in ADITC remain unamortized at the end of that five- year term. ilt. coNcLUStoN To date, the ADITC/Revenue sharing mechanism has provided customers with more than $93 million in benefits as either a direct offset to rates or as an offset to IDAHO POWER COMPANY'S COMMENTS - 3 amounts that would otherwise be collected in future rates. The proposed Stipulation will extend the opportunity for customers realize future benefits from the mechanism. Further, the terms of the Stipulation will allow the qualitative benefits recognized by the Company to continue as well as provide the Company the opportunity to achieve earnings near the Commission-authorized rate of return in years when revenue from rates alone would not have otherwise provided that same opportunity. The continuation of the mechanism affords customers the opportunity for future rate relief and increases the potentialfor rate stability. The Company would like to acknowledge its appreciation for the willingness by the Commission Staff and the other Parties to consider and discuss the merits of the Company's Application in this case in a thoughtful and productive manner. The proposed Stipulation is a direct result of the collaborative nature of those settlement discussions. For all the reasons presented in these Comments, ldaho Power urges the Commission to adopt the settlement Stipulation submitted in this proceeding as filed, without modification, and to issue an accounting order authorizing the terms of the agreement on or before December 31,2014. DATED at Boise, ldaho, this 29th day of September 2014. LISA D. NORDST Attorney for ldaho Power Company IDAHO POWER COMPANY'S COMMENTS - 4 CERTIFICATE OF SERVICE I HEREBY CERTIFY that on the 29th day of September 20141 served a true and correct copy of IDAHO POWER COMPANY'S COMMENTS upon the following named parties by the method indicated below, and addressed to the following: Commission Staff KarlT. Klein Deputy Attorney General Idaho Public Utilities Commission 472 West Washington (83702) P.O. Box 83720 Boise, ldaho 83720-0074 lndustrial Gustomerc of ldaho Power Peter J. Richardson RICHARDSON ADAMS, PLLC 515 North 27th Street (S3702) P.O. Box 7218 Boise, ldaho 83707 Dr. Don Reading 6070 Hill Road Boise, ldaho 83703 ldaho lrrigation Pumpers Association Eric L. Olsen RACINE, OLSON, NYE, BUDGE, & BAILEY, CHARTERED 201 East Center P.O. Box 1391 Pocatello, ldaho 83204-1391 Anthony Yankel 29814 Lake Road Bay Village, Ohio 44140 Hand Delivered U.S. Mail _Overnight Mail _FA)(X Email karl.klein@puc.idaho.qov Hand Delivered U.S. Mail _Overnight Mail -FAxX Email peter@richardsonadams.com _Hand Delivered _U.S. Mail _Overnight Mail FAXX Email d read ino@m i ndsp rinq. com _Hand Delivered _U.S. Mail Overnight Mail FAXX Email elo@racinelaw.net Hand Delivered U.S. Mail Overnight Mai! FAXX Email tony@yankel.net IDAHO POWER COMPANY'S COMMENTS - 5