20171208Motion for Approval of Stipulation.pdf

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An TDACORP Company
LISA D. NORDSTROM
Lead Counsel
[e-mail]
December 8,2017
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Diane Hanian, Secretary
ldaho Public Utilities Commission
472 West Washington Street
Boise, ldaho 83702
Re Case No. IPC-E-16-32
Hells Canyon Complex Relicensing Costs Through 2015
Settlement Stipulation and Motion to Approve Settlement Stipulation
Dear Ms. Hanian:
Enclosed for filing in the above matter are an original and seven (7) copies of a
Settlement Stipulation and Motion to Approve Settlement Stipulation. Attachment 1 to the
Stipulation is confidential. Please handle the confidential information in accordance with
the Protective Agreement executed in this matter.
Very truly yours,
,4.
Lisa D. N
LDN/KKI
Enclosures
LISA D. NORDSTROM (lSB No. 5733)
ldaho Power Company
1221West ldaho Street (83702)
P.O. Box 70
Boise, ldaho 83707
Telephone: [phone]
Facsimile: [phone]
lnordstrom@ hopower.com
Attorney for ldaho Power Company
BEFORE THE !DAHO PUBLIC UTILITIES COMMISSION
FJ
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IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A
DETERMINATION OF HELLS CANYON
COMPLEX RELICENSING COSTS
THROUGH 2015 AS PRUDENTLY
INCURRED.
CASE NO. IPC-E-16-32
SETTLEMENT STIPULATION AND
MOTION TO APPROVE
SETTLEM ENT STI PU LATI ON
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ldaho Power Company ("!daho Power" or "Company") requests that the ldaho
Public Utilities Commission ("Commission") approve the settlement stipulation
("Settlement Stipulation") contained in this filing. The Company's Application requested
an order designating ldaho Power's expenditures of $220,845,830 through December
31,2015, in Hells Canyon Complex ("HCC') relicensing costs as prudently incurred and
eligible for inclusion in customer rates at a later date. The Settlement Stipulation
recognizes that a total of $216,504,145 in expenditures were reasonably incurred and
therefore should be eligible for inclusion in customer rates at a later date. This
Settlement Stipulation consists of $213,606,878 of HCC relicensing costs and
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION . 1
$2,897,267 related to Baker County settlement agreement expenditures that are more
appropriately classified as expense and will be deferred in a separate regulatory
account for amortization to be determined in a future rate proceeding.
The Settlement Stipulation is entered into between ldaho Power, Commission
Staff ("Staff'), and the ldaho lrrigation Pumpers Association, lnc. ("llPA'), hereafter
jointly referred to as "Signing Parties."
I. INTRODUCTION AND MOTION
1. The terms and conditions of this Settlement Stipulation are set forth
herein. The Signing Parties agree that this Settlement Stipulation represents a fair, just,
and reasonable compromise of the dispute(s) between the Signing Parties, and that this
Settlement Stipulation is in the public interest. The Signing Parties maintain that the
Settlement Stipulation as a whole and its acceptance by the Commission, if it is
accepted, represent a reasonable resolution of all issues between the Signing Parties
identified herein. Therefore, the Signing Parties hereby respectfully move the
Commission, in accordance with RP 56 and RP 274-76, for an order approving the
Settlement Stipulation executed between the Signing Parties and all of its terms and
conditions without material change or condition, and closing the current proceeding.
II. BACKGROUND
2. On December 14,2016, ldaho Power Company filed an Application in this
case requesting an order designating ldaho Power's expenditures of $220,845,830
through December 31,2015, in HCC relicensing costs as prudently incurred and eligible
for inclusion in customer rates at a later date.
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 2
3. In January 2017, the Commission issued an order providing notice of the
Application and setting a deadline for interventions. Order No. 33686. Subsequently,
the Commission granted Petitions to lntervene from llPA, the ldaho Conservation
League ("lCL'), and the lndustrial Customers of ldaho Power ("lClP') ("Parties"). Order
Nos. 33701,33707, and 33716. On June 19,2017, ICL filed a Notice of Withdrawal
from the case.
4. ln the months leading up to settlement discussions, Staff conducted an
extensive audit of the transactions at issue in this case. Staff issued and the Company
responded to 35 production requests and 45 audit requests and conducted multiple on-
site audits at the Company's corporate headquarters.
5. Settlement discussions regarding the issues related to the Company's
request were held on October 11,2017, and October 26,2017. Based upon these
settlement discussions, as a compromise of the respective positions of the Signing Parties
and for other considerations as set forth below, the Signing Parties agree to the following
terms:
III. TERMS OF THE SETTLEMENT STIPULATION
6. Prudence Determination. The Signing Parties agree that $213,606,878 in
HCC relicensing expenditures and $2,897,267 related to Baker County settlement
agreement expenditures, for a total of $216,504,145 in expenditures incurred through
December 31, 2015, be accepted as reasonably incurred and eligible for inclusion in
customer rates at a later date. The adjustments to the Company's filed $220,845,830
prudence request agreed upon by the Signing Parties include amounts Staff believes lack
sufficient documentation, amounts Staff could not confirm to be related to HCC relicensing,
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 3
amounts Staff characterized as standard Commission adjustments, amounts Staff
believes to be more appropriately categorized as operations and maintenance ('O&M")
expense, Allowance for Funds Used During Construction ('AFUDC") associated with the
adjustments, and other adjustments in support of settlement. Confidential Attachment 1
provides the detail of the specific adjustments.
The Signing Parties further agree that the $213,606,878 in HCC relicensing
expenditures incurred through December 31, 2015, and the deferral of the $2,897 ,267 in
Baker County settlement agreement expenditures, represent a reasonable compromise of
the positions in the case for the purpose of settlement and that the agreed upon amounts
should be approved by the Commission in their entirety without further adjustment.
7. Accountinq Order. Prior to the filing of the new license application with the
Federal Energy Regulatory Commission ("FERC"), Baker County, Oregon expressed
detailed concerns over the economic impact the operations of the HCC were having on its
communities surrounding the complex that were not addressed by FERC in ldaho Power's
original license application. ln an effort to manage future HCC license costs, protect ldaho
Power's operational flexibility of the HCC, and address Baker County's concerns, the
Company entered into a settlement agreement in October 2003 with Baker County that
narrowed the scope of the issues and gained the County's support of ldaho Power's
relicensing efforts. As part of the agreement with Baker County, ldaho Power provides
fund in g for recreationa I construction and maintenance projects.
The Signing Parties agree that ldaho Power's expenditures associated with the
Baker County settlement agreement included in the Company's request in this case
should be classified as a reasonably incurred O&M expense and should be deferred for
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 4
amortization at a later time. Therefore, the Signing Parties support the establishment of a
regulatory asset for $2,897,267 in Baker County settlement agreement expenditures
incurred through December 31,2015, and reviewed in this proceeding. An additional
$295,338 incurred between January 1,2016, and September 30,2017, and expenditures
incurred between October 1, 2017 , through December 31, 2017, should also be included
in the regulatory asset and will be reviewed for prudence in a future proceeding. The
commencement of the amortization period, length of the amortization period, and timing
for inclusion of the amortization in customer rates will also be determined in that future rate
proceeding. The regulatory account will not accrue AFUDC or a carrying charge of any
type.
Similar Baker County settlement related expenditures incurred in 2018 and beyond
will be considered O&M expense at the time in which they are incurred. The Signing
Parties agree that the Company's activities associated with the Baker County seftlement
agreement were unique in nature and were part of a broader settlement compromise.
Therefore, the accounting treatment agreed to by Idaho Power shall not be indicative of
the accounting treatment of costs associated with any future settlement agreement the
Company may enter into with other parties, if any.
8. AFUDC Currentlv Recovered in Rates. ln Order Nos. 30722 and 32426,
the Commission authorized ldaho Power to collect $6,520,122 annually from the
Company's ldaho jurisdictional customers for partial recovery of AFUDC associated with
the HCC relicensing project. The Signing Parties agree that ldaho Power will continue to
collect this AFUDC from customers, will continue to separately track the AFUDC collected
from customers, and wil! net the AFUDC recovered against the total HCC relicensing
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 5
AFUDC included in the Construction Work in Progress balance in future rate proceedings.
Because customers will have already contributed to HCC relicensing costs, ldaho Power's
future request for recovery will be net of previously collected amounts.
9. Annua! Reoortins of HCC Relicensinq Expenditures. ln Order No. 30722
(Case No. IPC-E-08-10), the Commission ordered Idaho Power to file a status report for
the relicensing of the HCC along with an update on the accumulation of AFUDC. ldaho
Power filed annual updates beginning on November 16, 2009, and continuing through
November 13, 2015. ln 2016, ldaho Power provided an even greater detail of relicensing
activity and AFUDC accumulation than required by Order No. 30722 through testimony
filed in this case. Signing Parties agree that upon Commission approval of this Settlement
Stipulation, the Company will cease filing a status report of AFUDC accumulation update
in the current format. lnstead Parties will collaborate on a process for filing future annual
reports, including the content of the report, by July 1,2018, with the first annual report due
by February 28,2019, and annually each February thereafter until HCC relicensing costs
have been included in customer rates or the Commission otherwise removes or modifies
the reporting requirement. The intent of the report should be to keep the Commission up-
to-date on the details related to activities carried out to obtain a new license for the HCC
and provide a more real-time review of the activities and associated costs.
10. HCC Relicensinq Expenditures Reportinq bv Work Order Project. As part of
the collaboration on a process for filing future annual reports by July 1,2018, ldaho Power
will work with Staff and interested Parties to identify the detail requested to be contained
within a work order description to allow for the reporting of work orders by project specific
to HCC relicensing wok.
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 6
11. lnformation Retention Policy. The Company's information retention policy
has been the current tax year plus five years for certain invoices and receipts. The
Signing Parties agree that, upon Commission approval of this Stipulation, ldaho Power will
retain records currently in the Company's possession associated with HCC relicensing,
evidencing actual expenditures and HCC relicensing purpose, and will continue to
maintain evidence of future such expenditures for the HCC relicensing project until the
expenditures are included in customer rates. In addition, the Company will modify its
information retention policy to provide for the retention (from and after the date of
implementation of such modified information retention policy) of evidence of actual
expenditures and purpose, either in physica! or electronic (e.9. imaged record) format, for
future capital projects that are expected to span more than five years, until such time as a
prudence determination of the expenditures has been made and the expenditures are
included in customer rates. The Company will notifo Commission Staff when a modified
information retention policy is completed and make those documents, like all Company
policies, available for on-site audits.
12. Future Prude Reouests ldaho Power shall fib with the Commission a
request for a prudence determination on HCC relicensing expenditures incurred after
December 31,2015, through a time period specified by the Company in its filing, but not to
exceed five years from the Commission's approval of this Settlement Stipulation.
13. Future HCC Relicensinq Activities. ln the event ldaho Power engages in
settlement discussions or activities with any party as part of the relicensing of the HCC
with FERC, Staff acknowledges their willingness to stay apprised of the discussions and
work with the Company through any potential issues. The Company agrees to involve
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 7
Staff where appropriate, which may include participation in the Company's efforts to
resolve any outstanding issues associated with the relicensing of the HCC and/or to
review and provide feedback on ldaho Power's proposed accounting of any potential costs
that may be incurred as a result of the settlement activities and would be subject to future
prudence review.
14. The Signing Parties submit this Settlement Stipulation to the Commission
and recommend approval in its entirety pursuant to RP 274-76. The Signing Parties
shall support this Settlement Stipulation before the Commission and shall not appeal a
Commission order approving the Settlement Stipulation or an issue resolved by the
Settlement Stipulation. lf this Settlement Stipulation is challenged by anyone who is not
a party to the Stipulation, then each Signing Party reserves the right to file responsive
comments or 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 this Settlement Stipulation.
Notwithstanding this reservation of rights, the Signing Parties agree that they will
continue to support the Commission's adoption of the terms of this Settlement
Stipulation.
15. lf the Commission or any reviewing body on appeal rejects any part or all
of this Settlement Stipulation or imposes any additional material conditions on approval
of this Settlement Stipulation, then each Signing Party reserves the right, upon written
notice to the Commission and the other Signing Parties to this proceeding within 14
days of the date of such action by the Commission or any reviewing body, to withdraw
from this Settlement Stipulation. ln such case, no Signing Party shall be bound or
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 8
prejudiced by the terms of this Settlement Stipulation and each Signing 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. ln such case, the Signing Parties immediately will request the
prompt reconvening of a prehearing conference for purposes of establishing a
procedural schedule for the completion of Case No. IPC-E-16-32, and the Signing
Parties agree to cooperate in development of a schedule that concludes the proceeding
on the earliest possible date, taking into account the needs of the Signing Parties in
participating in hearings and preparing briefs.
16. The Signing Parties agree that this Settlement Stipulation is in the public
interest and that all of its terms and conditions are fair, just, and reasonable.
17. No Signing Party shall be bound, benefited, or prejudiced by any position
asserted in the negotiation of this Settlement Stipulation, except to the extent expressly
stated herein, nor shall this Settlement Stipulation be construed as a waiver of rights
unless such rights are expressly waived herein. Except as otherwise expressly
provided for herein, execution of this Settlement Stipulation shall not be deemed to
constitute an acknowledgment by any Signing Party of the validity or invalidity of any
particular method, theory, or principle of regulation or cost recovery. No Signing Party
shall be deemed to have agreed that any method, theory, or principle of regulation or
cost recovery employed in arriving at this Settlement 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 this
Settlement Stipulation. This Settlement Stipulation sets forth the complete
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION .9
understanding of the Signing Parties, and this Settlement Stipulation includes no other
promises, understandings, representations, arrangements, or agreements pertaining to
the subject matter of this Settlement Stipulation, or any other subject matter, not
expressly contained herein.
18. The obligations of the Signing Parties are subject to the Commission's
approval of this Settlement Stipulation in accordance with its terms and conditions and
upon such approval being upheld on appeal, if any, by a court of competent jurisdiction.
All terms and conditions of this Settlement Stipulation are subject to approval by the
Commission, and only after such approval, without material change or modification, has
been received shall the Settlement Stipulation be valid.
19. This Settlement Stipulation may be executed in counterparts and each
signed counterpart shall constitute an original document.
IV. PROCEDURE
20. Pursuant to RP 274, lhe Commission has discretion to determine the
manner with which it considers a proposed settlement. ln this matter, the Signing
Parties have reached agreement on a final resolution to this case. This Settlement
Stipulation is reasonable and in the public interest. Pursuant to RP 201 and 202, the
Signing Parties believe the public interest does not require a hearing to consider the
issues presented by this Motion and request it be processed by Modified Procedure
without waiving the right to a hearing on the previously disputed matters in this
proceeding should the Commission reject the settlement.
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 1O
21. All Parties, even those that have not signed the Stipulation, have agreed to
suspend the existing case schedule and recommend the following schedule to process
review of the Settlement Stipulation by Modified Procedure:
o January 5,2018: Comments in Support of or Opposition to the Settlement
Stipulation
o January 31,2018: Reply Comments
V. REQUESTED RELIEF
NOW, THEREFORE, the Parties respectfully request that the Commission
suspend the existing procedural schedule and process review of this Settlement
Stipulation using Modified Procedure with a January 5,2018, deadline for Comments in
support of or opposition to the Settlement Stipulation, a January 31, 2018, deadline for
Reply Comments, and then enter its order approving the Settlement Stipulation without
material change or condition.
DATED this 8th day of December 2017.
ldaho Power Company ldaho Public Utilities Commission Staff
By
Lisa D. No Daphne Huang
Attorney for Commission StaffAttorney for ldaho Power Company
ldaho lrrigation Pumpers Association, lnc
By
Eric L. Olsen
Attorney for ldaho lrrigation Pumpers
Association, lnc.
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 11
V. REQUESTED RELIEF.
NOW, THEREFORE, the Parties respectfully request that the Commission
suspend the exiting procedural schedule and process review of this Settlement Stipulation
using Modified Procedure with a January 5,2A18, deadline for Comments in support of
or opposition to the Settlement Stipulation, a January 31,2018, deadline for Reply
Comments, and then enter its order approving the Settlement Stipulation without material
change or condition. *,
DATED thisfray of December Z}fi.
ldaho Power Company Commission Staff
Lisa D. Nordstrom
Attorney for ldaho Power Company IP Staff
ldaho lrrigation Pumpers Association, lnc.
By
Eric L. Olsen
Attorney for ldaho lrrigation Pumpers
Association, lnc.
SETTLEMENT STIPULATION AND MOTION TO APPROVE SEfiLEMENT STIPUISTION. 11
21. All Parties, even those that have not signed the Stipulation, have agreed to
suspend the existing case schedule and recommend the following schedule to process
review of the Settlement Stipulation by Modified Procedure:
. JanuaU 5,2018: Comments in Support of or Opposition to the Settlement
Stipulation
o JanuaU 31,2018: Reply Comments
V. REQUESTED RELIEF
NOW, THEREFORE, the Parties respectfully request that the Commission
suspend the existing procedural schedule and process review of this Settlement
Stipulation using Modified Procedure with a January 5, 2018, deadline for Comments in
support of or opposition to the Settlement Stipulation, a January 31, 2018, deadline for
Reply Comments, and then enter its order approving the Settlement Stipulation without
material change or condition.
DATED this 8th day of December 2017.
ldaho Power Company ldaho Public Utilities Commission Staff
Lisa D. Nordstrom
Attorney for ldaho Power Company
Daphne Huang
Attorney for Commission Staff
lda lrrig rs Association, lnc.
L.O
Attorney for ldaho lrrigation Pumpers
Association, lnc.
SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION . 11
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 8th day of December 2017 I served a true and
correct copy of the SETTLEMENT STIPULATION AND MOTION TO APPROVE
SETTLEMENT STIPULATION upon the following named parties by the method
indicated below, and addressed to the following:
Gommission Staff
Camille Christen
Brandon Karpen
Deputy Attorneys General
ldaho Public Utilities Commission
472 West Washington (83702)
P.O. Box 83720
Boise, ldaho 83720-0074
lndustrial Customers 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 Irrigation Pumpers Association, lnc.
Eric L. Olsen
ECHO HAWK & OLSEN, PLLC
505 Pershing Avenue, Suite 100
P.O. Box 6119
Pocatello, ldaho 83205
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bra ndon. ka rpen@p uc. id aho. qov
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Anthony Yankel
12700 Lake Avenue, Unit 2505
Lakewood, Ohio 44107
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SETTLEMENT STIPULATION AND MOTION TO APPROVE SETTLEMENT STIPULATION - 12
nt
BEFORE THE
IDAHO PUBLIG UTILITIES COMMISSION
GASE NO. IPC-E-16-32
IDAHO POWER COMPANY
ATTACHMENT 1
THE ATTAGHMENT
IS CONFIDENTIAL AND
WILL BE PROVI DED TO
THOSE PARTIES THAT
HAVE EXECUTED THE
PROTECTIVE AGREEMENT
IN THIS MATTER