20180105Comments.pdf

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Peter J. Richardson
Richardson Adams,
515 N. 27th Street
Boise, Idaho 83702
(208) 938-7e01
REC E IVED
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR A
DETERMINATION OF HELLS CANYON
RELICENSTNG COSTS THROUGH 2OI5 AS
PRUDENTLY INCURRED,
Case No.: IPC-E-I6-3+ ?-
COMMENTS IN OPPOSITION OF THE
INDUSTRIAL CUSTOMERS OF IDAHO
POWER
COME NOW, the Industrial Customers of Idaho Power ("ICIP") and pursuant to Idaho
Public Utilities Commission ("Commission") Order No. 33948 issued in the above captioned
matter respectfully lodges its comments regarding Idaho Power Company's ("ldaho Power" or
the "Power Company") Application for an order designating the Power
Company's expenditures of $220,845,830 as prudently incurred and eligible for inclusion in
customer rates at an unspecified future date. Subsequent to f,rling its Application Idaho Power,
the Idaho PUC Staff and the Idaho Irrigation Pumper's Association jointly filed a Joint Motion
for approval of a settlement agreement ("Settlement Stipulation") in lieu of the Power
Company's initial Application seeking a prudence determination of $213,606,878 in HCC
relicensing costs
ICIP'S COMMENTS IN OPPOSITION IPC-E-I6-32
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COMMENTS
The Power Company is applying for a prudence determination of almost a quarter of a
billion dollars for a project that is still a work in progress, has no concrete timetable, has no
Commission approved or vetted budget and for which it has no idea what the end result will look
like. Consequently, the Commission has, and Idaho Power has offered, no assurance that the end
product of the relicensing process will be use and useful, or if so at what cost. While an
accounting order allowing for the continued deferral of relicensing costs may be appropriate, it is
premature to make any determination as to the prudence of those costs until this work in progress
(new license application) either has a concrete assured conclusion with known and measurable
benefits/costs or is otherwise proven to be used and useful in the provision of electric service to
the Company's ratepayers.
For these reasons, as more fully explained below, the ICIP respectfully requests the
Commission not approve Idaho Power's Application or the Settlement Stipulation jointly filed in
this matter by Idaho Power, the PUC Staff and the Idaho Irrigation Pumper's Association.
THERE IS NO LEGAL BASIS
FOR IDAHO POWER' APPLICATION
Idaho Power's application is filedooin accordance with Idaho Code $ 6l-524." This Code
Section provides no foundation upon which the Commission may make a prudence finding.
Idaho Code Section6l-524 addresses the sole issue of the establishment of a uniform system of
ICIP'S COMMENTS IN OPPOSITION IPC-E-I6-32
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accounting, "to be kept by the public utilities subject to [the Commission's]jurisdiction." There
is no other reference, either in the Company's Application or in the Settlement Agreement, to
this Commission's alleged legal authority to issue its order declaring the prudence of expenses
for a speculative investment in a new license that has yet to provide service to Idaho Power's
ratepayers. Indeed, there is nothing in the Idaho Code permitting, or even addressing, the
question of a prudence review for future assets.l For this reason alone, the Commission should
deny Idaho Power's Application and not approve the proffered Settlement Agreement. There is
simply no legal basis for the Commission to take action.
The Commission does have ample authority to approve ratemaking treatment for
investments made by the Company in assets prior to those assets being placed into service
pursuant to two specific Idaho Code Sections -- $$ 61-541 or 61-5024. It is significant,
however, that Idaho Power did not file its application pursuant to either of those sections which
do allow for binding future ratemaking treatment or inclusion of construction work in progress in
current rates, respectfully.
Neither of the two relevant code sections, however, provide any basis for Commission
action on HCC costs at this time. In order to implement binding future ratemaking treatment
pursuant to Idaho Code Section 6l-5024 for its HCC expenses the Commission would have to,
in addition to holding a public hearing, make specific findings that the proposed facility is
I The word "prudence" is never used in the ldaho Public Utilities Code
ICIP'S COMMENTS IN OPPOSITION IPC-E-16-32
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"reasonable when compared to energy efficiency, demand-side management and other feasible
alternative sources of supply." Of course, not only has Idaho Power not requested a hearing, it
has not (and likely cannot at this stage of the HCC licensing process) made a showing that the
HCC when fully relicensed will be reasonable "when compared to energy efficiency, demand-
side management and other feasible sources of supply." Idaho Code Section 6l-502 is likewise
inapplicable in that it only applies to property that is not currently used and useful in providing
utility service. Here, Idaho Power's application asserts that the HCC is, in fact, used and useful
in providing utility service. According to the Company, the HCC is "currently providing
reliable generating service."2
Thus, being fully aware of the content of the Idaho PUC Code, Idaho Power has chosen
to go down a legally untenable road by asking for only a "prudence" determination of its costs
with no immediate rate change and no binding future rate treatment. Thus, absent Idaho
Power's, and this Commission's, compliance with the specific provisions of Idaho Code Section
6l-502A regarding binding future ratemaking treatment, any order concerning the "prudence" of
HCC costs incurred to date must be merely contingent and subject to future commission revision,]
adoption or rejection.
Although the ICIP objects to the issuance of any order regarding prudence at this time,
should the Commission issue any such order in this matter, it should be explicit in that order that
2 Idaho Power Application at p. 3
ICIP'S COMMENTS IN OPPOSITION IPC-E-I6-32
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its prudence determination is based only on assumptions that appear to be reasonable today, and
that should those assumptions prove to be false, inaccurate or misplaced (for whatever reason
and regardless of fault) then today's prudence determination will be subject to appropriate
revision. Failure to explicitly declare that a prudence order by this Commission today -- in light
of Idaho Power's failure to utilize the code sections available to it that are specifically designed
to allow it to either bind future commissions or to include investments in property held for future
use in current rates -- will certainly cause confusion and potentially foster needless litigation
down the road. Further, such an ill-advised order would also be beyond the legal authority
granted to this Commission by the Idaho Code.
The ICIP is, however, sympathetic to the Company's dilemma of having a quarter of a
billion dollars (and growing) of accumulated costs and expenses with no assurance of future rate
recovery. To that end, the IPIC does not oppose the concept of a prudence finding that is
EXPLICITLY contingent upon a future commission's finding that the end product (e.g. fully
relicensed HCC) is a prudent investment that is used and useful in the provision of service to the
then-current ratepayers on Idaho Power's system.
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J. Richardson ISB 3195
ICIP'S COMMENTS IN OPPOSITION TPC-E-I6-32
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT ON THIS 5TH DAY OF JANUARY 2018, I HAVE
SERVED THE FOREGOING COMMENTS OF THE TNDUSTRIAL CUSTOMERS OF
IDAHO POWER IN OPPOSITION IN DOCKET NO. IPC- I6-3 I AS TNDICATED BELOW
Lisa D Nordstrom
Idaho Power Company
1221 West Idaho Street
Boise, Idaho
Hand Delivery and Email
Benjamin J. Otto
Idaho Conservation League
710 North 6s Street
Boise, Idaho
Hand Delivery and Email
Anthony Yankel
Idaho Irrigation Pumper's Assoc
12700 Blake Avenue, Unit 2505
Lakewood, Ohio 44107
US Mail and Email
Tim Tatum
Idaho Power Company
1221 West Idaho Street
Boise, Idaho
Hand Delivery and Email
Eric L. Olsen
Idaho Irrigation Pumper's Assoc
505 Pershing Ave., Ste. 100
Pocatello, Idaho 83205
U.S. Mail and Email
Diane Hanain
Commission Secretary
Idaho Public Utilities Commission
472West Idaho Street
Boise, Idaho
Hand Delivery and Email
Richardson
ICIP'S COMMENTS IN OPPOSITION IPC-E.I6-32
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