20150113notice_of_application_order_no_33212.pdf

Oftlce of the Secretary
Service Date
January 13,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF PACIFICORP DBA ROCKY MOUiTAIN )CASE NOS.IPC-E4441
POWER AND IDAHO POWER COMPANY )PAC-E-14-11
FOR AN ORDER AUTHORIZING THE )
EXCHANGE OF CERTAIN TRANSMISSION )NOTICE OF APPLICATION
ASSETS )
)NOTICE OF
)INTERVENTION DEADLINE
)
______________________________
)ORDER NO.33212
On December 19.2014,PacifiCorp dba Rocky Mountain Power and Pacific Power
(collectively ‘PacifiCorp”)and Idaho Power Company filed a joint Application asking the
Commission to approve the exchange of certain transmission assets.Over the past 40 years,the
parties have entered into a number of agreements (generally referred to as •‘Legacy
Agreements”)through which they jointly own and operate the Jim Bridger power plant and
associated transmission assets.On October 24.2014,the parties entered into a Joint Purchase
and Sale Agreement (JPSA)and Joint Ownership and Operating Agreement (JOOA)to largely
replace or amend three prior Legacy Transmission Agreements.In the three Legacy
Transmission Agreements,PacifiCorp owns two of the three 345 kilovolt (kV)transmission
lines,and Idaho Power owns one.’The purpose of the new agreements is to address
inefficiencies caused by changes in “the regulatory landscape,the Parties’respective load
growth.and investments in system upgrades.”Application at 2-3.The new agreements would
exchange the parties’assets,and re-allocate ownership interests and operational responsibilities.
Id.
The parties ask the Commission for an Order approving these new agreements,and
finding that the asset transfer is consistent with the public interest.Id.at 11.The parties
acknowledge that the Commission has authority over this matter pursuant to Idaho Code §61-
328 (transfer of utility assets).Id.at 1.
The Jim Bridger Plant is connected to Idaho Power and PacifiCorp’s transmission system by three 345 kV
transmission lines:(1)the Jim Bridger —Three Mile Knoll —Goshen line;(2)the Jim Bridger —Populus Borah
line;and (3)the Jim Bridger—Populus —Kinport line.Application at 3.
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BACKGROUND
In 1969,the parties entered into “a series of agreements for the construction,
ownership,and operation of the Jim Bridger power plant.”Grow Direct at 4.These Legacy
Agreements include the Restated Transmission Service Agreement (RTSA),the Restated and
Amended Transmission Facilities Agreement (RATFA),and the Interconnection and
Transmission Service Agreement (ITSA).Application at 2-3.Among other purposes,these
three Legacy Transmission Agreements were intended to move energy from the Jim Bridger
plant in Wyoming to PacifiCorp’s “West Balancing Area”in Oregon,Washington,and
California.Id.Since those agreements were signed,the allocation of the parties’ownership and
operational responsibilities has been rendered inefficient “with regard to each Party’s modern
day load-service and regulatory obligations.”Id.at 2.To address this inefficiency,the parties
entered into the JPSA and JOOA,dated October 24,2014,which will —if the Commission
approves the parties’Application -eliminate or amend all prior Legacy Agreements.Id.at 3.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED THAT the parties ask the Commission to approve
their asset exchange according to the provisions of the JPSA and JOOA,which they say will
simplify and modernize their relationship and be more consistent with current regulatory
requirements.Application at 4.According to the parties,the new agreements will improve their
relationship by better allocating asset ownership with load service needs.Id.at 7.Under the
three Legacy Transmission Agreements,PacifiCorp owns two of the three transmission lines
connecting the parties’transmission system to the Jim Bridger Plant;Idaho Power owns one.Id.
at 3-4.The parties’new agreements would allocate ownership in each of the three transmission
lines to both Idaho Power and PacifiCorp.Id.at 4.This re-allocation would better align the
parties’ownership interests with their current operational requirements.Id.at 4-5.
YOU ARE FURTHER NOTIFIED that,under the JPSA,PacifiCorp would receive
ownership in the following substations and transmission lines to meet capacity needs:
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Substations Transmission Lines
Kinport Jim Bridger —Three Mile Knoll —Goshen
Borah Goshen —Jefferson —Big Grassy
Adelaide Midpoint —Kinport
Midpoint Midpoint —Adelaide —Borah #1
Midpoint —Adelaide —Borah #2
Id.at6.
YOU ARE FURTHER NOTIFIED that,under the Legacy Agreements,PacifiCorp
owns two-thirds of the transmission lines’total capacity;Idaho Power owns one-third of the total
capacity.Id.at 3-4.Under the new agreements,PacifiCorp would be provided about 1,600
megawatts (MW)of capacity across Idaho Power’s transmission system,“consistent with the
capacity PacifiCorp is provided under the Legacy Agreements and existing Open Access
Transmission Tariff (OATT)service.”Id.Idaho Power would be provided with capacity “on
various portions of the existing PacifiCorp transmission system.”Id.The new agreements
would “not create any new available transmission capacity.”Id.at 5.
YOU ARE FURTHER NOTIFIED that,under the JPSA,Idaho Power would receive
ownership in the following PacifiCorp substations and transmission lines to facilitate its service
obligations:
Substations Transmission Lines
Goshen Kinport —Goshen
Burns Antelope —Goshen
Summer Lake Antelope —Scoville
Jefferson American Falls —Malad
Big Grassy Midpoint —Hemingway —Summer Lake
Walla Walla Walla Walla —Hurricane
Hurricane Jim Bridger —Populus —Borah
Antelope Jim Bridger —Populus —Kinport
Id.
YOU ARE FURTHER NOTIFIED that the parties assert the two new agreements will
be more consistent with current regulatory requirements than the Legacy Agreements which use
antiquated language and practices regarding transmission service.Id.at 4-5.Under the new
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agreements,purchases of transmission service will be OATLbased,using current reliability
standards and industry practices,and providing more transparency.Id.at 5,8.
YOU ARE FURTHER NOTIFIED that the parties state the two new agreements will
“[c]onsolidate and modernize the ownership and operational provisions of the Legacy
Agreements into a single agreement,the JOOA.”Id.at 8.If approved,“the new arrangement
will replace approximately 14 Legacy Agreements and amend and consolidate 3 other Legacy
Agreements with current OATT service and ownership.”Id.Under the JOOA,the parties (1)
would have more operational flexibility,thus improving reliability;(2)could “more efficiently
operate the transmission system consistent with current regulatory requirements”;and (3)could
“more effectively manage required system upgrades and serve expected load growth.”Id.
YOU ARE FURTHER NOTIFIED that the parties state the transaction would be
worth about $43 million to each party “based on the net book value of the assets as of December
31,2014.”Id at 9.The parties summarized the cost of the assets and the applicable
depreciation reserve in the following chart:
PacifiCorp Idaho Power
Electric Plant in Service $74,148,876 $63,787,598
Accumulated Depreciation ($3053 0,978)($20,522,563)
Net Plant $43,617,898 $43,265,036
Id.at 9.The parties believe the asset exchange “benefits both Parties and is in the best interest of
both Parties’customers.”Id The parties request a finding by the Commission that “the costs of
and rates of existing electric service in the state of Idaho will not be increased by reason of”the
asset exchange.Id.at 1 1.
YOU ARE FURTHER NOTIFIED that,in support of their Application,the parties
submitted prefiled testimony,the JPSA,the JOOA,and supporting exhibits.The parties request
that their Application be processed under Modified Procedure.Id at 10.
NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this matter
must file a Petition to Intervene with the Commission pursuant to this Commission’s Rules of
Procedure 72 and 73,IAPA 3 1.01.01.072 and -.073.All Petitions to Intervene must be filed
within 14 days of the service date of this Order.Persons desiring to present their views
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without parties rights of participation and cross-examination are not required to intervene and
may present their comments without prior notification to the Commission or the parties.
YOU ARE FURTHER NOTIFIED that the following persons are designated as the
parties’representatives in this matter:
Julia A.Hilton Daniel Solander
Idaho Power Company Ted Weston
P.O.Box 70 Rocky Mountain Power
Boise,ID 83707 201 S.Main St.,Suite 2300
E-Mail:jhilton(iidahopower.corn Salt Lake City,UT 84111
E-Mail:jisolarjerpacificorp.com
ted.weston(iipacificorp.com
YOU ARE FURTHER NOTIFIED that once the deadline for intervention has passed,
the Commission Secretary shall prepare a Notice of Parties.Staff counsel will then convene an
informal scheduling conference.
YOU ARE FURTHER NOTIFIED that the Application,exhibits,and testimonies
have been filed with the Commission and are available for public inspection during regular
business hours at the Commission offices.The Application,exhibits,and testimonies are also
available on the Commission’s website at y puç.idaho.’o.Click on the “File Room”tab at
the top of the page,scroll down to “Open Electric Cases,”then click on either case number as
shown on the front of this document.
YOU ARE FURTHER NOTIFIED that the proposed asset exchange requires this
Commission’s approval under Idaho Code §61-328.This section provides in pertinent part that
no electric utility may sell or transfer any property located in this state “which is used in the
generation,transmission,distribution or supply of electric power and energy to the public or any
portion thereof...except when authorized to do so by order of the public utilities commission.”
Id.Before authorizing such a transaction,the Commission must find that:(1)the transaction is
consistent with the public interest;(2)the costs of and rates for supplying service will not be
increased by reason of such transaction;and (3)the applicants for such transaction have a bona
fide intent and financial ability to operate and maintain said property in the public service.Idaho
Code §6 1-328(3).The Commission may condition its authorization with such terms and
conditions as in its judgment the public convenience and necessity may require.Idaho Code §
61-328(4).
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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 §61-503 and 61-328.The Commission may enter any final Order consistent with
its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all hearings will be conducted pursuant to the
Commission’s Rules of Procedure,IDAPA 31.01.01.000 ci seq.
YOU ARE FURTHER NOTIFIED that the Industrial Customers of Idaho Power
(ICIP)filed a Petition to Intervene on January 6,2015.
ORDER
IT IS HEREBY ORDERED that persons desiring to intervene in this matter shall file
a Petition to Intervene no later than 14 days from the service date of this Order.Once the
deadline for Petitions to Intervene has passed,the Commission Secretary shall prepare and issue
a Notice of Parties.
IT IS FURTHER ORDERED that Staff counsel shall convene an informal scheduling
conference so the parties may discuss how this case will be processed,and other case
management issues.
IT IS FURTHER ORDERED that ICIP’s Petition to Intervene is granted.
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DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /3 ‘‘
day of January 2015.
MAC A.REDFOOMMISSIONER
ATTEST:
an D.Jewell(J
Commission Secretary
MARSHA H.SMITH,COMMISSIONER
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