20140903Motion and Stipulation .pdf

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An IDACORP Companyp,ECrl\/i' r]
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LISA D. NORDSTROM
Lead Counsel
[e-mail]
September 3,2O14
VIA HAND DELIVERY
Jean D. Jewe!!, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re: Case No. IPC-E-14-14
Extension of Accumulated Deferred Investment Tax Credits/Revenue
Sharing Mechanism - ldaho Power Company's Motion for Approval of
Stipulation
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of ldaho Power
Company's Motion for Approval of Stipulation in the above matter.
Very truly yours,
X"", a-rQ-a,"*.
Lisa D. Nordstrom
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: [phone]
Facsimile: [phone]
I nord stro m @ idahopower. co m
Attorney for ldaho Power Company
!N THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION TO
EXTEND ITS ACCUMULATED
DEFERRED I NVESTMENT TAX
CREDITS/REVEN U E SHAR! NG
MECHANISM BEYOND 2014
RECII\ii"-U
20lE SEP -3 Pll 3: 0l
IDi.l-i'j r;.i1,[ , ,
UT ILITiES COP,i i,I ; ::IJ .,
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. rPC-E-14-14
MOTION FOR APPROVAL OF
STIPULATION
COMES NOW, ldaho Power Company ("ldaho Powe/' or "Company'') and
hereby moves the ldaho Public Utilities Commission ("Commission") for an order
accepting the settlement stipulation ("2014 Stipulation") filed herewith. This Motion is
based on the following:
1. On May 30, 2014, Idaho Power filed an application requesting the
Commission issue an order extending the terms set forth in the settlement stipulation
approved by Order No. 32424 ("2011 Stipulation") under which ldaho Power is
authorized to either: (1) amortize additiona! Accumulated Deferred lnvestment Tax
Credits ("ADITC'), or (2) share a portion of revenues with its ldaho customers. lnstead
of allowing the terms of the 2011 Stipulation to expire at the end of 2014,ldaho Power
MOTION FORAPPROVAL OF STIPULATION - 1
requested that the Commission allow the terms of the 2011 Stipulation to remain in
effect until the Company has accelerated the amortization of a total of $45 million in
ADITC or until the terms of the 2011 Stipulation are otherwise modified or terminated by
a Commission order.
2. On June 12, 2014, the Commission issued a Notice of Application and
Notice of lntervention Deadline in Order No. 33057. Pursuant to the Notice of
lntervention Deadline, the lndustrial Customers of ldaho Power ("lClP") and the
lnigation Pumpers Association, Inc., ('llPA') timely filed Petitions to lntervene and the
Commission granted those petitions in Order Nos. 33066 and 33069.
3. Following the discussions held at the August 11, 2014,
workshop/settlement conference the Company, Commission Staff, ICIP, and IIPA
("Parties") have agreed to resolve and settle all of the issues in the case. A copy of the
signed 2014 Stipulation evidencing that settlement is enclosed as Attachment 1.
4. Revenue Sharino. As described in Section 5 of the 2014 Stipulation, if the
Company's actual ldaho jurisdictional annual Return on Equity ("ROE') exceeds 10
percentduring the 2015-2019 period, all amounts in excess of a 10 percent ROE and
up to and including a 10.5 percent ROE would be shared between the Company's ldaho
customers and the Company on a 75 percent and 25 percent basis, respectively. The
customers' share of the Company's ldaho jurisdictional earnings between a 10 percent
ROE and up through a 10.5 percent ROE will be provided as a rate reduction to become
effective at the time of the subsequent year's power cost adjustment. lf the Company's
actual earned, year-end ROE for the Idaho jurisdiction in any year between 2015-2019
exceeds 10.5 percent, all amounts in excess of the 10.5 percent ROE will be shared 50
MOTION FOR APPROVAL OF STIPULATION - 2
percent with ldaho customers as a rate reduction to become effective at the time of the
subsequent year's power cost adjustment, 25 percent with ldaho 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. ADITC Amortization. As further detailed in Section 6 of the 2014
Stipulation, the Parties agree that the Company may extend its ability to amortize a total
of $45 million of additional ADITC through December 31,2019, to allow the Company to
achieve a maximum actual ROE of 9.5 percent for the ldaho jurisdiction. ldaho Power
mayuseupto$25millionof additional amortizationof AD|TCineach ol 2015-2019so
long as the total, cumulative amount of ADITC used during the five-year period does not
exceed $45 million. !n the event ldaho Power amortizes in 2014 a portion of the $45
million previously authorized by Order No. 32424, the amount of ADITC available for
amortization in the 2015-2019 period will be reduced by a corresponding amount. Once
the Company has fully amortized the $45 million of ADITC, revenue sharing as provided
in Section 5 of the 2014 Stipulation will cease during the remainderof the 2015-2019
period.
6. ln 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, 2020, the ROE
thresholds will be automatically adjusted proportionately on a prospective basis from the
date that the newly authorized rates become effective as set forth in Section 6.3 of the
2O14 Stipulation.
MOTION FOR APPROVAL OF STIPULATION - 3
7. ldaho Power agrees to continue to make its year-end earnings results
available for audit by the Commission Staff following the filing of ldaho Power's and
IDACORP, lnc.'s, annua! report on Form 10-K with the U.S. Securities and Exchange
Commission, which is required to be filed within 60 days after the end of each fiscal
year. The Commission Staff agrees to audit ldaho Power's earnings and prepare a
write-up of its findings for review by the Parties during the pendency of the annual
power cost adjustment docket.
8. The Parties recommend that the Commission grant this Motion and
approve the 2014 Stipulation in its entirety, without material change or condition,
pursuant lo RP 274. As noted in Section 1 of the Stipulation, all of the Parties agree
that the 2014 Stipulation is in the public interest and that all of its terms and conditions
are fair, just, and reasonable.
L The Parties respectfully request that the Commission issue an order on or
before December 31, 2014, to facilitate the timely recording of the Company's 2014
earnings for financia! reporting purposes.
NOW, THEREFORE, the Parties respectfully request that the Commission issue
a final order granting this Motion and accepting Attachment 1, the 2014 Stipulation, in its
entirety, without material change or condition.
Respectfully submitted this 3'd day of September 2014.
Attomey for ldaho
MOTION FOR APPROVAL OF STIPULATION - 4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 3'd day of September 2014 ! 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
Karl T. Klein
Deputy Attomey General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-007 4
Industrial Gustomers of ldaho Power
Peter J. Richardson
RICHARDSON ADAMS, PLLC
515 North 27th Street (83702)
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, Idaho 83204-1391
Anthony Yanke!
29814 Lake Road
Bay Village, Ohio 44140
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MOTION FOR APPROVAL OF STIPULATION - 5
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
GASE NO. IPC-E-14-14
IDAHO POWER GOMPANY
ATTAGHMENT 1
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West Idaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
I nord stro m @ id aho power. com
Attomey for ldaho Power Company
IN THE MATTER OF IDAHO POWER
COM PANY'S APPLICAT! ON TO
EXTEND ITS ACCUMULATED
DEFERRED INVESTMENT TAX
CREDITS/REVENUE SHARI NG
MECHANISM BEYOND 2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. !PC-E-14-14
STIPULATION
This stipulation ("2014 Stipulation") is entered into by and among Idaho Power
Company ("ldaho Powef or "Company''), the Staff of the ldaho Public Utilities Commission
("Staff'), the lndustria! Customers of Idaho Power ("lClP"), and the lnigation Pumpers
Association, Inc. ('llPA'). These entities are collectively referred to as the "Parties," and
individually as "Party."
I. INTRODUCTION
1. The Parties agree that this 2014 Stipulation represents a fair, just, and
reasonable compromise of contested issues and that acceptance of the 2014 Stipulation by
the Idaho Public Utilities Commission ("Commission") would be in the public interest.
STIPULATION - 1
Therefore, the Parties recommend that the Commission approve the 2014 Stipulation and
all of its terms and conditions without material change or condition.
II. BACKGROUND
2. On May 30, 2014, ldaho Power filed an application requesting the
Commission issue an order extending the terms set forth in the settlement stipulation
approved by Order No.32424 ("2011 Stipulation") under which Idaho Power is authorized
to either: (1) amortize additionalAccumulated Deferred lnvestmentTax Credits ("AD|TC"),
or (2) share a portion of revenues with its ldaho customers. lnstead of allowing the terms
of the 2011 Stipulation to expire at the end of 2014, ldaho Power requested that the
Commission allow the terms of the 2011 Stipulation to remain in effect until the Company
has accelerated the amortization of a total of $45 million in ADITC or untilthe terms of the
2011 Stipulation are otherwise modified or terminated by a Commission order.
3. On June 12,2014, the Commission issued a Notice of Application and Notice
of lntervention Deadline in Order No. 33057. Pursuant to the Notice of lntervention
Deadline, ICIP, and IIPA timely filed Petitions to lntervene and the Commission granted
those petitions in Order Nos. 33066 and 33069.
4. Following the discussions held at theAugust11,2014, workshop/settlement
conference, the Parties agreed to the following settlement agreement in this matter.
III. TERMS OF THE 2014 STIPULATION
5. Revenue Sharino.
5.1. lfthe Company'sactual year-end, eamed Retum on Equity("ROE")for
the ldaho jurisdiction in any year during the 20'15-2019 period exceeds 10 percent, all
amounts in excess of a 10 percent ROE and up to and including a 10.5 percent ROE will
STIPULATION.2
be shared between the Company's ldaho customers and the Company on a 75 percent
and 25 percent basis, respectively. The customers' share of the Company's ldaho
jurisdictional earnings between a 10 percent ROE and up through a 10.5 percent ROE will
be provided as a rate reduction to become effective at the time of the subsequent year's
power cost adjustment. !f the Company's actual earned, year-end ROE for the ldaho
jurisdiction in any year between 201 5-2019 exceeds 10.5 percent, all amounts in excess of
the 10.5 percent ROE wi!! be shared 50 percent with ldaho customers as a rate reduction
to become effective at the time of the subsequent year's power cost adjustment, 25
percent with ldaho customers in the form of an offset to amounts in the Company's pension
balancing account to reduce the amount that would othenryise need to be collected in rates,
and 25 percent with the Company.
5.2. For the 2015-2019 period, there can be no additional ADITC
amortization as provided in Section 6 if the Company has shared earnings pursuant to
Section 5.1.
6. Accountino: ADITC Amortization.
6.1. lf ldaho Power's actual ldaho jurisdictionalyear-end, earned ROE falls
below 9.5 percent for any year between 2015-2019, the Company will be permitted to
amortize an additional amount of state and federalAD|TC by debiting Account 255 (ADITC)
and crediting Account 420 (investment tax credits, a non-utility income account), in an
amount, up to $45 million over the above-referenced 2015-2019 period, that would allow
the Company to achieve a maximum actual ROE of 9.5 percent for the ldaho jurisdiction.
ldaho Power may use up to $25 million of additional amortization of ADITC in each of
2015-2019 so long as the total, cumulative amount of ADITC used during the five-year
STIPULATION - 3
period does not exceed $45 million. !n the event ldaho Poweramortizes in2014 a portion
of the $45 million previously authorized by Order No. 32424, the amount of ADITC
available for amortization in the 2015-2019 period will be reduced by a corresponding
amount. Once the Company has fully amortized the $45 million ofADlTC, revenue sharing
as provided in Section 5.1 will cease during the remainder of the 2015-2019 period.
6.2. Except for the permitted use of additionalADITC described herein, for
the years 2015-2019 ldaho Powerwillcontinue to amortizeADITC using the same method
employed immediately priorto the issuance of a Commission Order in this matter using the
Company's actual ldaho jurisdictional earnings results.
6.3. In the event the Commission issues an Orderauthorizing 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 1,2020, the ROE
thresholds set forth herein will be adjusted on a prospective basis from the date that the
newly authorized rates become effective.l The ROE thresholds wil! be automatically
adjusted as follows:
(a) The ldaho jurisdictional ROE level under which the Company
will be permitted to amortize an additiona! amount of state and federalAD|TC (cunently set
at 9.5 percent) will be set at 95 percent of the newly authorized ROE;
(b) The ldaho jurisdictional ROE level (currently set at 10 percent)
above which the Company will begin to share amounts with customers on a 75 percent
' ln 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 will 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 5/1 2 of the prior annual ROE thresholds and 7112 of
the newly established annual ROE thresholds.
STIPULATION - 4
basis up to the ROE level established in subsection 6.3(c) will be set equal to the newly
authorized ROE; and
(c) The ldaho jurisdictional ROE level (cunently set at 10.5 percent)
above which the Company will provide an offset to the power cost adjustment on a 50
percent basis and to the pension balancing account on a 25 percent basis will be set at
105 percent of the newly authorized ROE.
6.4 ldaho Power agrees to continue to make its year-end earnings results
available for audit by the Commission Staff following the filing of ldaho Power's and
IDACORP, Inc.'s, annual report on Form 10-Kwith the U.S. Securities and Exchange
Commission, which is required to be filed within 60 days after the end of each fisca! year.
The Commission Staff agrees to audit Idaho Power's earnings and prepare a write-up of its
findings for review by the Parties during the pendency of the annual power cost adjustment
docket.
6.5 Except as otherwise provided for herein or ordered by the
Commission, in no event shall any additional amounts of amortized ADITC 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 the 2014 Stipulation represents a compromise of the
positions of the Parties. Therefore, other than any testimony filed in support of the
approval of the 2014 Stipulation, and except to the extent necessary for a Party to explain
before the Commission its own statements and positions with respect to lhe 2014
Stipulation, all statements made and positions taken in negotiations relating to this
STIPULATION - 5
Stipulation shall be confidentia! and will not be admissible in evidence in this or any other
proceeding.
8. The Parties submit this 2014 Stipulation to the Commission and recommend
approval in its entirety. Parties shall support the 2014 Stipulation before the Commission,
and no Party shall appeal a Commission order approving the 2014 Stipulation or an issue
resolved by the 2014 Stipulation. lf the 2014 Stipulation is challenged by any person not a
party to the Stipulation, the Parties to the 2014 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 the 2014 Stipulation. Notwithstanding this reservation of rights,
the Parties to this Stipulation agree that they will continue to support the Commission's
adoption of the terms of the 2014 Stipulation.
9. lf the Commission rejects any part or all of the 2014 Stipulation, or imposes
any additional material conditions on approval of the 2O14 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 the 2014
Stipulation. ln such case, no Party shall be bound or prejudiced by the terms of the 2014
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 the
2014 Stipulation be construed as a waiver of the rights of any Party unless such rights are
STIPULATION - 6
expressly waived herein. Execution of the 2014 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 the 2014 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 the 2014 Stipulation.
11. The obligations of the Parties under this Stipulation are subject to the
Commission's approvalof the 2014 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.
DATED this ZStday of August 2014.
ldaho Power Company ldaho Public Utilities Commission Staff
*(/)zL
KarlT. Klein
By
lndustrial Customers of ldaho Power
Peter J. Richardson
Attorney for the lndustrial Customers of
ldaho Power
Attorney for ldaho Public Utilities
Commission Staff
!daho lrrigation PumpersAssociation, lnc.
By
Eric L. Olsen
Attorney for the ldaho lrrigation
Pumpers Association, lnc.
. Nordstrom
Attorney for ldaho
STIPULATION - 7
expressly waived herein. Execution of the 2014 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 the 2014 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 the 2014 Stipulation.
11. The obligations of the Parties under this Stipulation are subject to the
Commission's approvalof the 2014 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
ldaho Public Utilities Commission Staff
By
KarlT. Klein
Attorney for ldaho Public Utilities
Commission Staff
ldaho lrrigation Pumpers Association, lnc.
By
Eric L. Olsen
Attorney for the ldaho lrrigation
Pumpers Association, lnc.
counterpart shall constitute an original document.
DArED tni"?4^r*'fffihA
)
ldaho Power Company
By
Lisa D. Nordstrom
Attorney for ldaho Power Company
lndustrial Customers of ldaho Power
Attorney for the lndustrial Customers of
Idaho Power
STIPULATION - 7
expressly waived herein. Execution of the 2014 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 the 2014 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 the 2014 Stipulation.
11. The obligations of the Parties under this Stipulation are subject to the
Commission's approvalof the 2014 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.
DATED tnis ZSlUaay of August 2014.
ldaho Power Company
By
Lisa D. Nordstrom
Attorney for ldaho Power Company
lndustrial Customers of ldaho Power
By
Peter J. Richardson
Attorney for the lndustrial Customers
ldaho Power
ldaho Public Utilities Commission Staff
By
KarlT. Klein
Attorney for ldaho Public Utilities
Commission Staff
Attorney for the ldaho lrrigation
Pumpers Association, lnc.
STIPULATION - 7
of