20170106Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: CAMILLE CHRISTEN
DAPHNE HUANG
DEPUTY ATTORNEYS GENERAL
DATE: JANUARY 6, 2017
SUBJECT: IDAHO POWER COMPANY'S REQUEST FOR AUTHORITY TO
INCREASE ITS RATES FOR ELECTRIC SERVICE DUE TO REVISED
DEPRECIATION RATES FOR ELECTRIC PLANT-IN-SERVICE, AND
TO RECOVER COSTS ASSOCIATED WITH THE NORTH VALMY
PLANT, CASE NOS. IPC-E-16-23 AND IPC-E-16-24
On October 21, 2016, Idaho Power Company filed an Application asking the
Commission to adopt revised depreciation rates for its electric plant-in-service and
correspondingly adjust Idaho jurisdictional base rates. Application (Case No. IPC-E-23) at 1.
The Company concurrently filed an Application requesting Commission authorization
to "(I) accelerate the depreciation schedule for the North Valmy power plant ("Valmy") to allow
the plant to be fully depreciated by December 31, 2025; (2) establish a balancing account to track
the incremental costs and benefits associated with the accelerated Valmy end-of-life date, and (3)
adjust customer rates to recover the associated incremental annual levelized revenue requirement
of $28.50 million with an effective date of June 1, 2017." Application (Case No. IPC-E-16-24)
at 1. The result of this Application is an overall increase of 2.51 percent. Errata to Application
(Nov. 8, 2016).
With the filings, the Company intends to facilitate a single rate change for customers,
and asks the Commission to enter final Orders in both matters by April 1, 2017, to allow it to
incorporate any associated rate impacts in its April 14, 2017 Power Cost Adjustment filing.
The Commission issued Orders providing notice of the Applications and setting a
deadline for interventions. Order Nos. 33650, 33652. The Commission granted timely-filed
DECISION MEMORANDUM
motions to intervene in both cases from the Idaho Irrigation Pumpers Association, Inc.; Micron
Technology, Inc.; and the U.S. Department of Energy and the Federal Executive Agencies.
Order Nos. 33659, 33660, 33670, 33671 , 33673 and 33674. The Commission also granted
intervention to Idaho Conservation League and Sierra Club in the North Valmy case, and to the
Industrial Customers of Idaho Power (ICIP) in the depreciation rates case. Order Nos. 33672
and 33676.
The parties conferred informally and agreed that the Company's Application be
processed by Modified Procedure, with the following schedule:
February 2, 2017 Parties' meeting to discuss negotiated solutions (specific
time for discussion in each case to be determined by the
parties)
April 20, 2017
May 4, 2017
May 18,2017
May 31 , 2017
Deadline for parties' comments
Deadline for parties' cross-answering comments
Deadline for Company reply comments
Parties' requested Order date, to be effective June 1, 2017
The proposed comment dates are after the Order date of April 1, 2017, requested by the
Company in the Application. Staff indicated that more time would be needed to review the
Application than would be allowed for by an April 1 Order date. Thus, the parties agreed to the
above schedule.
Staff also intends to hold a public workshop regarding the North Valmy case for the
Company's customers at a date and time to be determined later. Staff proposes that the
Commission's Secretary issue a notice of the public workshop once the date and time have been
determined.
STAFF RECOMMENDATION
Staff recommends that the Commission issue an Order directing that this Application
be processed by Modified Procedure, with comments due on April 20, 2017, cross-answering
comments due May 4, 2017, and Company reply comments, if any, due May 18, 2017. Staff
further recommends that the Commission issue a notice of a public workshop at a later date once
the date and time for the workshop have been determined.
DECISION MEMORANDUM 2
COMMISSION DECISION
Does the Commission wish to issue an Order directing that these Applications be
processed by Modified Procedure, with comments due on April 20, 2017, cross-answering
comments due May 4, 2017, and Company reply comments, if any, due May 18, 2017? Does the
Commission wish to direct its Secretary to issue a notice of a public workshop in the North
Valmy case (Case No. IPC-E-16-24) at a later date once the date and time for the workshop have
been determined?
M:IPC-E-16-23_IPCE1624_cc_djh
DECISION MEMORANDUM 3
~~~V1-
Camille Christen
Daphne Huang
Deputy Attorneys General