20160819Tatum Direct.pdf

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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER
COMPANY'S APPLICATION FOR
DEFERRAL AND RECOVERY OF COSTS
ASSOCIATED WITH PARTICIPATION
IN THE ENERGY IMBALANCE MARKET.
CASE NO. IPC-E-16-19
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
TIMOTHY E. TATUM
1 Q. Please state your name, business address, and
2 present position with Idaho Power Company ("Idaho Power" or
3 "Company")
A. My name is Timothy E. Tatum. My business 4
5 address is 1221 West Idaho Street, Boise, Idaho 83702.
6 am employed by Idaho Power as the Vice President of
7 Regulatory Affairs in the Regulatory Affairs Department.
I
Q. Please describe your educational background. 8
9 A. I earned a Bachelor of Business Administration
10 degree in Economics and a Master of Business Administration
11 degree from Boise State University. I have also attended
12 electric utility ratemaking courses, including "Practical
13 Skills for The Changing Electrical Industry," a course
14 offered through New Mexico State University's Center for
15 Public Utilities, "Introduction to Rate Design and Cost of
16 Service Concepts and Techniques" presented by Electric
17 Utilities Consultants, Inc., and Edison Electric
18 Institute's "Electric Rates Advanced Course." In 2012, I
19 attended the Utility Executive Course at the University of
20 Idaho.
21 Q. Please describe your work experience with
22 Idaho Power.
23 A. I began my employment with Idaho Power in 1996
24 as a Customer Service Representative in the Company's
25 Customer Service Center where I handled customer phone
TATUM, DI 1
Idaho Power Company
1 calls and other customer-related transactions. In 1999, I
2 began working in the Customer Account Management Center
3 where I was responsible for customer account maintenance in
4 the areas of billing and metering.
5 In June of 2003 , I began working as an Economic
6 Analyst on the Energy Efficiency Team. As an Economic
7 Analyst, I was responsible for ensuring that the demand­
s side management ("DSM") expenses were accounted for
9 properly, preparing and reporting DSM program costs and
10 activities to management and various external stakeholders,
11 conducting cost-benefit analyses of DSM programs, and
12 providing DSM analysis support for the Company's Integrated
13 Resource Plan.
14 In August of 2004 , I accepted a position as a
15 Regulatory Analyst in the Regulatory Affairs Department .
16 As a Regulatory Analyst, I provided support for the
17 Company's various regulatory activities, including tariff
18 administration, regulatory ratemaking and compliance
19 filings, and the development of various pricing strategies
20 and policies.
21 In August of 2006 , I was promoted to Senior
22 Regulatory Analyst. As a Senior Regulatory Analyst, my
23 responsibilities expanded to include the development of
24 complex financial studies to determine revenue recovery and
25
TATUM, DI 2
Idaho Power Company
1 pricing strategies, including the preparation of the
2 Company's cost-of-service studies.
3 In September of 2008, I was promoted to Manager of
4 Cost of Service and, in April of 2011, I was promoted to
5 Senior Manager of Cost of Service and oversaw the Company's
6 cost-of-service activities, such as power supply modeling,
7 jurisdictional separation studies, class cost-of-service
8 studies, and marginal cost studies. In March 2016, I was
9 promoted to Vice President of Regulatory Affairs. As Vice
10 President of Regulatory Affairs, I am responsible for the
11 overall coordination and direction of the Regulatory
12 Affairs Department, including development of jurisdictional
13 revenue requirements and class cost-of-service studies,
14 preparation of rate design analyses, and administration of
15 tariffs and customer contracts.
16
17
Q.
A.
What is the Company requesting in this case?
The Company is requesting that the Idaho
18 Public Utilities Commission ("Commission") ( 1) acknowledge
19 the potential for long-term operational and net cost
20 savings benefits related to Idaho Power's proposed
21 participation in the western Energy Imbalance Market
22 ( "EIM") , ( 2) authorize the establishment of a regulatory
23 deferral account to track necessary incremental costs
24 associated with EIM participation, and (3) authorize the
25
TATUM, DI 3
Idaho Power Company
1 Company to recover, in a future rate proceeding, the
2 estimated incremental costs of joining the EIM.
3
4
Q.
A.
How is the Company's case organized?
My testimony in this case will present a
5 quantification of the long-term cost savings benefits that
6 could be obtained by Idaho Power on behalf of its customers
7 through participation in the western EIM. Further, I will
8 describe Idaho Power's proposed accounting treatment for
9 incremental costs associated with participation in the
10 western EIM, and the Company's request for authorization of
11 future recovery of these costs. The testimony of Company
12 witness Kathleen Anderson will describe in detail the
13 operational aspects of joining the EIM, as well as the
14 estimated costs and benefits of EIM participation.
15
16
Q.
A.
What is an EIM?
An EIM is a real-time market to dispatch
17 economic bids voluntarily offered by participating
18 resources in order to efficiently balance supply, transfers
19 between balancing authority areas, and load across the EIM
20 footprint, including Idaho Power's service area.
21 Q. Why is Idaho Power considering becoming a
22 member of an EIM?
23 A. Participation in an EIM is likely to result in
24 real, sustainable cost savings that will benefit customers
25 over the long term. Moving from the current hourly market
TATUM, DI 4
Idaho Power Company
1 structure to a sub-hourly, five-minute imbalance market is
2 expected to lead to increased surplus sales opportunities,
3 as well as net cost savings from increased access to
4 others' lower-cost generation, translating into reduced
5 annual Net Power Supply Expenses ("NPSE"). Under currently
6 approved regulatory accounting practices, the majority of
7 the benefits of reduced NPSE (95 percent of the Idaho
8 jurisdictional share) will automatically flow directly to
9 customers through the Company's annual Power Cost
10 Adjustment ("PCA") mechanism. In addition, the Company
11 anticipates that participation in the western EIM may
12 result in improved transmission congestion, enhanced
13 reliability, and more efficient integration of intermittent
14 resources, further reducing power supply costs. Ms.
15 Anderson addresses these benefits in greater detail in her
16 testimony.
17 Q. Has Idaho Power quantified the potential cost
18 savings benefits that could be derived from participation
19 in an EIM?
20 A. Yes, as described in greater detail in the
21 testimony of Ms. Anderson, Idaho Power contracted with
22 Energy and Environmental Economics, Inc. ("E3") to perform
23 a comprehensive study that estimates the potential for
24 reduced NPSE that may exist with the Company's
25 participation in the western EIM. The E3 study indicates
TATUM, DI 5
Idaho Power Company
1 sub-hourly dispatch cost savings for Idaho Power's
2 participation in the western EIM could range from $4.1
3 million to $5.1 million per year beginning upon entrance
4 into the market based on four different scenarios analyzed.
5 Q. Aside from the resulting impacts to NPSE, does
6 Idaho Power expect to incur other incremental costs to
7 prepare for and participate in the western EIM?
8 A. Yes. As detailed in the testimony of Ms.
9 Anderson, Idaho Power's participation in the western EIM
10 will require total estimated upfront costs of $11.09
11 million, which includes start-up expenses of approximately
12 $1.73 million, software integration costs of an estimated
13 $7.88 million, and metering investments anticipated to be
14 $1.48 million.
15 Q. Are there any ongoing incremental costs in
16 addition to the upfront costs described above?
17 A. Yes. In addition to these upfront costs, the
18 Company also anticipates incremental annual ongoing labor
19 expenses of approximately $836,000 associated with the
20 addition of six full-time employees required to perform the
21 needed operations for the Company's participation in the
22 western EIM. There will also be ongoing market and hosted
23 software fees of approximately $786,000 per year beginning
24 in April 2018 upon entrance into the western EIM.
25
TATUM, DI 6
Idaho Power Company
1 Q. Idaho Power's participation in the western EIM
2 will require total estimated upfront costs of $11.09
3 million as well as incremental annual ongoing labor,
4 market, and hosted software expenses of approximately $1.62
5 million. Have you prepared a schedule of the costs and the
6 date they are expected to be incurred?
7 A. Yes, to provide the Commission with a clear
8 indication of both expected and ongoing costs, the
9 following Table 1 details the costs Idaho Power anticipates
10 incurring over the next five years as a result of
11 participation in the western EIM.
12 Table 1
Costs
(in millions)
Start-up
Software
Metering
O&M
Total
13
14 Q.
15 benefits may
16 EIM?
17 A.
18 presents the
2016 2017 2018 2019 2020 Total
$0.39 $1. 22 $0.12 $0.00 $0.00 $1. 73
$0.54 $5.06 $2.28 $0.00 $0.00 $7.88
$0.05 $1. 23 $0.20 $0.00 $0.00 $1. 48
$0.00 $0.00 $1. 39 $1.62 $1. 67 $4.68
$0.98 $7.51 $3.99 $1. 62 $1. 67 $15.77
Has the Company determined what, if any, net
be derived from participation in the western
Yes. Idaho Power completed an analysis that
potential net benefits of western EIM
TATUM, DI 7
Idaho Power Company
1 participation in the form of a present value revenue
2 requirement impact study over a 10-year period.
3 Q. What are the results of the present value
4 revenue requirement analysis?
5 A. By participating in the western EIM, the
6 Company estimates that its Idaho jurisdictional revenue
7 requirement would be reduced by approximately $2.9-$7.1
8 million on a present value basis over a 10-year period
9 (2016-2025)
10 Q. Have you prepared an exhibit demonstrating the
11 estimated revenue requirement impact?
12 A. Yes. Exhibit No. 1 provides a summary of the
13 estimated annual revenue requirement impact under the E3
14 study "base scenario" described in Ms. Anderson's
15 testimony. Because Idaho Power views the E3 base scenario
16 as an expected case , Exhibit No. 1 only models the base
17 scenario results. The three alternate scenarios modeled by
1 8 E3 are discussed in detail in the testimony of Ms.
19 Anderson.
20 It should be noted that the annual revenue
21 requirement impacts shown on Exhibit No. 1 simply reflect
22 the incremental costs and NPSE benefits of western EIM
23 participation and do not account for how those costs and
24 benefits would be assigned to customers or the Company
25 under current rate mechanisms and regulatory accounting
TATUM, DI 8
Idaho Power Company
1 practices. Exhibit No. 1 is only intended to demonstrate
2 that there is a potential for net positive benefits to be
3 derived from Idaho Power's participation in the western
4 EIM.
5
6 No. 1?
7
Q. What can be concluded by a review of Exhibit
A. Exhibit No . 1 presents a reasonable estimate
8 of the potential present value revenue requirement
9 reductions that could result under western EIM
10 participation. Although the Company anticipates incurring
11 approximately $11.09 million in upfront costs, the net
12 decrease in power supply costs is expected to more than
13 offset the revenue requirement associated with those
14 amounts . However , as can be seen in years 2016 and 2017,
15 Idaho Power would incur upfront start -up expenses in
16 preparation for participation in the western EIM, and once
17 participation begins in 201 8 , the majority of the resulting
18 cost savings benefits will automatically flow directly to
19 customers through the PCA . Absent an ability to recover
20 these start-up and subsequent ongoing expenses, Idaho Power
21 would suffer significant negative financial impacts .
22 Q. Has the Company quantified the potential
23 financial impact of western EIM participation absent the
24 ability to recover the upfront and ongoing costs detailed
25 in this filing?
TATUM, DI 9
Idaho Power Company
1 A. Yes. Exhibit No. 2 details the financial
2 impact Idaho Power would experience absent the ability to
3 recover the upfront and ongoing costs, with 95 percent of
4 the expected NPSE benefits flowing to customers through the
5 PCA. As detailed on line 27 of Exhibit No. 2, the negative
6 financial impact would total $9.1 million on a net present
7 value basis for the 2016-2025 forecast period. Over the
8 same time period, customers would receive a total estimated
9 $19.3 million on a net present value basis in reduced NPSE
10 benefits through the annual PCA, as shown on line 29.
11 Q. How does Idaho Power propose to address the
12 proper matching of costs and benefits from a ratemaking
13 perspective?
14 A. Because the incremental start-up expenses will
15 be incurred to attain both future and ongoing benefits for
16 customers, Idaho Power proposes to defer the Idaho
17 jurisdictional share of these expenses and associated
18 incremental labor to a regulatory asset until they can be
19 amortized into customer rates after participation in the
20 western EIM commences. The deferral and subsequent
21 amortization of these incremental start-up expenses will
22 more closely match the expense recognition with the period
23 when benefits are achieved.
24 Q. What is Idaho Power's estimate of the amounts
25 the Company would defer prior to joining the western EIM?
TATUM, DI 10
Idaho Power Company
1 A. Idaho Power anticipates deferring start-up
2 expenses of approximately $1.73 million prior to an April
3 2018 western EIM entrance date, as well as incremental
4 annual ongoing labor, market, and hosted software expenses
5 that will be incurred upon commencement of participation.
6
7
Q. You indicated the start-up expenses include
amounts associated with incremental labor. Is the Company
8 seeking authorization to continue to defer the incremental
9 labor expense to a regulatory asset once participation in
10 the western EIM begins?
11 A. Yes , Idaho Power is proposing to defer the
12 Idaho jurisdictional share of incremental labor associated
13 with employees dedicated entirely to EIM activities until
14 customer rates are adjusted to reflect the annual
15 amortization of the requested deferral balance and related
16 ongoing incremental costs . While the Company's preference
17 is that a rate adjustment would coincide with the
18 commencement of EIM participation, it is possible that the
19 Company would seek a rate adjustment sometime after April
20 2018 and, therefore, authority t o defer costs beyond that
21 date is necessary.
22 Q. Does Idaho Power have a proposed amortization
23 period for the deferred costs?
24 A. Yes. Idaho Power proposes an amortization
25 period of 10 years that would not begin until rates are
TATUM, DI 11
Idaho Power Company
1 adjusted to reflect such amortization and no earlier than
2 April 2018 when western EIM participation is expected to
3 commence.
4 Q. Why does the Company believe a 10-year
5 amortization period is appropriate?
6 A. Once the Company has made the initial
7 investments in start-up costs, software integration, and
8 metering upgrades, Idaho Power's participation in the
9 western EIM is indefinite, providing opportunities for
10 potential benefits for years to come. Using a 10-year
11 amortization period will result in a proper matching of
12 expenses and benefits and is projected to ensure that
13 annual revenue requirements in 2018 and beyond reflect only
14 net positive benefits for customers.
15 Q. Does the Company have a proposed rate
16 mechanism under which it would ultimately collect these
17 deferred upfront costs and the software and metering
18 investments?
19 A. No. Idaho Power is not proposing the method
20 under which the upfront and ongoing incremental costs would
21 be collected from customers at this time. Over the long
22 term, the Company envisions that 100 percent of both the
23 costs and benefits associated with EIM participation would
24 be reflected in base rates as addressed in a general rate
25 case. However, because the timing of the Company's next
TATUM, DI 12
Idaho Power Company
1 general rate case is not known, it may be necessary to
2 implement an interim rate mechanism for cost recovery to
3 provide for proper matching of costs and benefits in
4 customer rates.
5 Q. You mentioned that 95 percent of the Idaho
6 jurisdictional share of NPSE benefits will automatically
7 flow to customers through the PCA. Why then is the Company
8 proposing to defer 100 percent of the Idaho jurisdictional
9 share of the incremental costs?
10 A. As discussed previously, the Company's
11 preference is to reflect 100 percent of both costs and
12 benefits of participation in the western EIM in base rates
13 over the long run. However, because the timing of the next
14 general rate case is not known, an interim recovery method
15 may be necessary. The Company fully anticipates that any
16 such interim recovery solution would appropriately match
17 the level of cost recovery with the provision of benefits.
18 That is, if customers are to receive 95 percent of benefits
19 through the PCA, the Company believes it would onl y be
20 entitled to recovery of 95 percent of the associated annual
21 expense from customers in the event that interim rate
22 recovery is necessary because benefits are flowing to
23 customers prior to the inclusion of all associated costs of
24 participation in a general rate case.
25
TATUM, DI 13
Idaho Power Company
1 Q. What is Idaho Power's proposed accounting for
2 the deferral and amortization of the incremental costs in a
3 regulatory asset?
4 A. Idaho Power proposes to record the deferred
5 costs to Federal Energy Regulatory Commission ("FERC")
6 Account 182.3, Other Regulatory Assets. The Company will
7 record amortization of the deferred amounts to FERC Account
8 407.3, Regulatory Debits. The Company is proposing to
9 apply a carrying charge to the regulatory asset at the
10 Commission-authorized deposit rate until amortization of
11 deferred amounts begins, at which time the unamortized
12 balance would earn the Company's current Idaho authorized
13 rate of return, similar to the treatment of Idaho Power's
14 other rate base items.
15 Q. Why is Idaho Power seeking authorization to
16 recover in a future rate proceeding the estimated costs of
17 joining the western EIM?
18 A. As noted above, the Company will incur
19 approximately $11.09 million in upfront costs required for
20 participation in the western EIM. Of the $11.09 million,
21 the Company anticipates deferring start-up expenses and
22 ongoing incremental labor under its proposed methodology,
23 with the remainder of the expected incremental costs
24 reflecting capital expenditures that will close to plant
25 upon completion of the project in April 2018. As a result
TATUM, DI 14
Idaho Power Company
1 of this investment, the Company expects to achieve the
2 benefits detailed in the E3 study presented in the
3 testimony of Ms. Anderson, notable as an expected reduction
4 in annual NPSE ranging from $4.1 million to $5.1 million.
5 Under the Company's existing PCA mechanism, 95 percent of
6 the NPSE benefits resulting from EIM participation will
7 automatically flow to customers through the PCA, resulting
8 in costs initially borne by shareowners and creating
9 benefits that automatically flow to customers. While the
10 Company envisions that ultimately a general rate case is
11 the recovery mechanism that will properly match 100 percent
12 of both the costs and benefits associated with EIM
13 participation, that recovery mechanism will be decided in a
14 future proceeding. Consequently, Idaho Power is seeking
15 assurance that the upfront and ongoing costs will be
16 eligible for recovery when requested and that the proper
17 matching of costs and benefits occur to prevent
18 generational inequities. Without this assurance,
19 shareowners would unfairly bear the risk of cost recovery,
20 while 95 percent of the benefits resulting from these
21 investments would automatically be passed through to
22 customers. The Company's requested authorization for
23 future cost recovery appropriately assigns the risk
24 associated with investment in the western EIM to those who
25 stand to receive the majority of the benefits.
TATUM, DI 15
Idaho Power Company
1 Q. Does Idaho Power believe that the amounts
2 listed in Table 1 include the total upfront project costs
3 for which the Company anticipates it will seek recovery in
4 a future rate proceeding?
5 A. Yes . As shown in Table 1, Idaho Power
6 estimates the total costs of participation in the western
7 EIM by 2020 to be $15 .77 million. Given the anticipated
8 operational and financial benefits of EIM participation
9 that will ultimately serve to reduce costs for customers,
10 the Company requests the Commission's assurance that Idaho
11 Power's prudently incurred expenses related to its
12 participation in the western EIM will be recoverable in
13 rates at a future date .
14 Q. Will approval of Idaho Power's request in this
15 case change customer rates at this time?
16 A. No, the Company is not requesting to change
17 customer rates at this time. The intent of the deferral is
18 to better match the costs of participation in the western
19 EIM with the benefits when they are achieved upon
20 participation beginning in April 2018. Therefore , the
21 Company will not propose to change rates until a time when
22 those benefits begin flowing to customers.
23 Q. Why should the Commission approve the
24 Company 's request in this case?
25
TATUM, DI 16
Idaho Power Company
1 A. Approval of the ability to defer the start-up
2 expenses to a regulatory asset and the requested assurance
3 of cost recovery of both the upfront and ongoing
4 incremental costs will position the Company to pursue long­
s term net cost savings for customers while keeping Idaho
6 Power's earnings neutral.
7 Q. Do you believe that approval of the Company's
8 request in this case will serve the public interest and
9 provide Idaho Power a reasonable opportunity to recover its
10 prudently incurred costs related to participation in the
11 western EIM?
12
13
14
15
16
17
18
19
20
21
22
23
24
25
A.
Q.
A.
Yes, I do.
Does this complete your testimony?
Yes, it does.
TATUM, DI 17
Idaho Power Company
1 ATTESTATION OF TESTIMONY
2
3 STATE OF IDAHO
4 ss.
5
6
7
8
9
10
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13
14
15
16
17
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County of Ada
I, Timothy E. Tatum, having been duly sworn to
testify truthfully, and based upon my personal knowledge,
state the following:
I am employed by Idaho Power Company as the Vice
President of Regulatory Affairs in the Regulatory Affairs
Department and am competent to be a witness in this
proceeding.
I declare under penalty of perjury of the laws of
the state of Idaho that the foregoing pre-filed testimony
and exhibits are true and correct to the best of my
information and belief.
DATED this 19th day of August 2016.
SUBSCRIBED AND SWORN to before me this 19th day of
August 2016.
Notary Public for Idaho '
Residing at: Boise, Idaho
My commission expires: 02/04/202
TATUM, DI 18
Idaho Power Company
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E~16-19
IDAHO POWER COMPANY
TATUM, DI
TESTIMONY
EXHIBIT NO. 1
()
Q)
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CD z
:--19
-u-1=om ~ !!!. () ~ cocmc' _. 3 I ;:;: o -_;:;; z
-"U I Q ...... () ~:.....
RATE BASE
Electric Plant in Service
2 Intangible Plant
3 Production Plant
4 Total Electric Plant in Service
5 Less: Accumulated Depreciation
6 Less: Amortization of Other Plant
7 Net Electric Plant in Service
8 Less: Accumulated Deferred Income Taxes
9 Add: Conservation -Other Deferred Prag
10 TOTAL COMBINED RATE BASE
NET INCOME
11 Operating Revenues
12 Sales Revenues
13 Operating Expenses
14 Operation and Maintenance Expenses
15 Depreciation Expenses
16 Amortization of Limited Term Plant
17 Taxes Other Than Income
18 Provision for Deferred Income Taxes
19 Federal Income Taxes
20 State Income Taxes
21 Total Operating Expenses
22 Operating Income
23 Add: IERCO Operating Income
24 Consolidated Operating Income
25 Authorized Rate of Return
26 Earnings Impact
27 Net-to-Gross Tax Multiplier
28 Revenue Requirement
29 !NPV OF REV REQ IMPACT -10 YRS
2016
0
0
0
0
0
0
0
0
0
0
373,099
0
0
0
0
(122,358)
(23,505)
227,236
(227,236)
0
(227,236)
7.86%
227,236
1.642
373,122
$ (4,375,102)
Idaho Power Company
EIM Participation
Idaho Jurisdictional Revenue Requirement
2017 2018 2019 2020
0 5,220,884
0 979,649
0 6,200,533
0 31,074
0 745,841
0 5,423,619
0 634,133
0 0
0 4,789,486
0
1,165,391
0
0
0
0
(382,190)
(73,420)
709,781
(709,781)
0
(709,781)
7.86%
4,134,737
2,379,389
31,074
745,841
30,684
1,268,267
(988,956)
2,563
3,468,859
665,878
0
665,878
7.86%
7,541,278
1,415,048
8,956,326
75,958
1,823,166
7,057,202
1,347,521
0
5,709,681
5,512,983
2,800,211
44,884
1,077,325
44,542
158,509
297,090
(8,886)
4,413,675
1,099,308
0
1,099,308
7.86%
7,541,278
1,415,048
8,956,326
120,841
2,900,491
5,934,993
1,505,159
0
4,429,834
5,512,983
2,846,783
44,884
1,077,325
44,765
156,768
283,294
(11,329)
4,442,490
1,070,493
0
1,070,493
7.86%
2021
7,541,278
1,415,048
8,956,326
165,725
3,977,817
4,812,784
1,528,077
0
3,284,706
5,512,983
2,894,751
44,884
1,077,325
44,989
(110,931)
505,753
63,240
4,520,011
992,972
0
992,972
7.86%
2022
7,541,278
1,415,048
8,956,326
210,609
5,055,142
3,690,574
1,283,277
0
2,407,297
5,512,983
2,944,158
44,884
1,077,325
45,214
(378,670)
727,775
137,730
4,598,416
914,567
0
914,567
7.86%
2023
7,541,278
1,415,048
8,956,326
255,493
6,132,467
2,568,365
903,926
0
1,664,438
5,512,983
2,995,046
44,884
1,077,325
45,440
(380,031)
712,226
134,904
4,629,794
883,189
0
883,189
7.86%
2024
7,541,278
1,415,048
8,956,326
300,377
7,209,793
1,446,155
523,310
0
922,845
5,512,983
3,047,460
44,884
1,077,325
45,667
(381,201)
696,010
131,929
4,662,073
850,909
0
850,909
7.86%
2025
7,541,278
1,415,048
8,956,326
345,261
7,541,278
1,069,787
273,253
0
796,533
5,512,983
3,101,445
44,884
331,485
45,895
(118,912)
679,116
128,801
4,212,714
1,300,269
0
1,300,269
7.86%
709,781
1.642
1,165,461
(289,424) (650,527) (722,308) (734,794) (725,354) (752,364) (778,374) (1,237,661)
1.642 1.642 1.642 1.642 1.642 1.642 1.642 1.642
(47S,235) (1,068,165) (1,186,030) (1,206,532) (1,191,030) (1,235,381) (1,278,090) (2,032,240)
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-16-19
IDAHO POWER COMPANY
TATUM, DI
TESTIMONY
EXHIBIT NO. 2
(')
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0 -9> 0 ..... "tJ ..... _. (') (() N
RATE BASE
Electric Plant in Service
2 Intangible Plant
3 Production Plant
4 Total Electric Plant in Service
5 Less: Accumulated Depreciation
6 Less: Amortization of Other Plant
7 Net Electric Plant in Service
8 Less: Accumulated Deferred Income Taxes
9 Add: Conservation -Other Deferred Prag
10 TOTAL COMBINED RATE BASE
NET INCOME
11 Operating Revenues
12 Sales Revenues
13 Operating Expenses
14 Operation and Maintenance Expenses
15 Depreciation Expenses
16 Amortization of Limited Term Plant
17 Taxes Other Than Income
18 Provision for Deferred Income Taxes
19 Federal Income Taxes
20 State Income Taxes
21 Total Operating Expenses
22 Operating Income
23 Add: IERCO Operating Income
24 Consolidated Operating Income
25 Authorized Rate of Return
26 Earnings Impact
27 !NPV OF EARNINGS IMPACT· 10 YRS
28 CUSTOMER BENEFIT THROUGH PCA@95%
29 !NPV OF CUSTOMER BENEFIT -10 YRS
2016
0
0
0
0
0
0
0
0
0
0
373,099
0
0
0
0
(122,358)
(23,505)
227,236
(227,236)
0
(227,236)
7.86%
Idaho Power Company
EIM Participation -Earnings Impact
2017 2018 2019 2020
0
0
0
0
0
0
0
0
0
0
1,165,391
0
0
0
0
(382,190)
(73,420)
5,220,884
979,649
6,200,533
31,074
745,841
5,423,619
634,133
0
4,789,486
206,737
1,492,090
31,074
745,841
30,684
7,541,278
1,415,048
8,956,326
75,958
1,823,166
7,057,202
1,347,521
0
5,709,681
275,649
1,617,145
44,884
1,077,325
44,542
7,541,278
1,415,048
8,956,326
120,841
2,900,491
5,934,993
1,505,159
0
4,429,834
275,649
1,663,717
44,884
1,077,325
44,765
1,268,267 158,509 156,768
(1,986,154) (1,032,507) (1,046,303)
(189,001) (264,305) (266,748)
2021
7,541,278
1,415,048
8,956,326
165,725
3,977,817
4,812,784
1,528,077
0
3,284,706
275,649
1,711,686
44,884
1,077,325
44,989
(110,931)
(823,844)
(192,179)
2022
7,541,278
1,415,048
8,956,326
210,609
5,055,142
3,690,574
1,283,277
0
2,407,297
275,649
1,761,092
44,884
1,077,325
45,214
(378,670)
(601,822)
(117,689)
2023
7,541,278
1,415,048
8,956,326
255,493
6,132,467
2,568,365
903,926
0
1,664,438
275,649
1,811,980
44,884
1,077,325
45,440
(380,031)
(617,372)
(120,515)
2024
7,541,278
1,415,048
8,956,326
300,377
7,209,793
1,446,155
523,310
0
922,845
275,649
1,864,394
44,884
1,077,325
45,667
(381,201)
(633,587)
(123,490)
2025
7,541,278
1,415,048
8,956,326
345,261
7,541,278
1,069,787
273,253
0
796,533
275,649
1,918,380
44,884
331,485
45,895
(118,912)
(650,482)
(126,618)
709,781 1,392,798 1,645,594 1,674,408 1,751,929 1,830,334 1,861,713 1,893,992 1,444,632
(709,781) (1,186,062) (1,369,945) (1,398,759) (1,476,280) (1,554,685) (1,586,064) (1,618,343) (1,168,983)
0 0 0 0 0 0 0 0 0
(709,781) (1,186,062) (1,369,945) (1,398,759) (1,476,280) (1,554,685) (1,586,064) (1,618,343) (1,168,983)
7.86% 7.86% 7.86% 7.86% 7.86% 7.86% 7.86% 7.86% 7.86%
(227,236) (709,781) (1,562,515) (1,818,726) (1,746,944) (1,734,458) (1,743,899) (1,716,888) (1,690,878) (1,231,591)
$ (9,105,775)
0
$ 19,325,623
0 3,040,702 4,054,268 4,054,268 4,054,268 4,054,268 4,054,268 4,054,268 4,054,268
I