19900418order_no_23000.pdf

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APR 18 1990
BEFORE .ltHE IDAHO PUBLIC UT COMMSSION
IN TH MA1*lER OF TH APCATION )
OF IDAHO POWER COMPAN FOR )AUTORI TO RATE BASE TH )IN REQUID FOR TH )
REBun OF TH SWAN FAL HYRO- )ELCTC FACI~ )
)
CAS NO. IPE-902
ORDER NO. 230
On March 6, 1990, Afon Energy, Inc., petitioned to interene in this
proceeding in which Idaho Power Company applied for authority to rate base its
investment in the rebuild of the Swan Falls hydroelectric facility. Idaho Power
timely opposed Afon's Petition to Intervene. For the reasons stated in this Order
we grant the Petition to Intervene.
Afon sells electricity to Idaho Power under the Public Utility Regulatory
Policies Act of 1978 (PURPA). It has one of the oldest agreements with Idaho
Power, and its output under the agreement qualifies for sales rates that are more
favorable than current rates. However, according to Aftn's Petition, it is now
delivering 50% more dispatchable capacity to Idaho Power than required under its
agreement, and these additional sales are priced at subsequent, lower rates. Afton
contends that there is a relationship between Idaho Power's cost of the Swan Falls
rebuild and the Company's current or future avoided costs upon which the rates for
sale of Afton's additional output are based.
Idaho Power opposes Afon's Petition to Intervene, contending that the
issues Afon has identified are irrelevant and immaterial to this proceeding and
would unduly broaden the issues in the Application. Idaho Power contends that
Afon, which is not a customer, has no standing to request disallowance of any of
Idaho Power's expenditures as legitimate ratemaking items. Idaho Power further
ORDER NO. 23000 -1-
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argues that there is another proceeding--Case No. IPC-E-89-11--in which the
setting of avoided cost is at issue and that Afn should properly be channeled into
that proceeding.
Idaho Power and Afon have been at loggerheads in regulatory and
judicial forums for a number of years. See, e.g., Afton Energy, Inc. v. Idaho Power
Company, 114 Idaho 852, 761 P.2d 1204 (1988); Afton Energy, Inc. v. Idaho Power
Company, 111 Idaho 925, 729 P.2d 400 (1986); Afton Energy, Inc. v. Idaho Power
Company, 107 Idaho 781, 693 P.2d 427 (1984). Idaho Power successfully opppos
Afon's intervention in its drought surcharge rate proceeding. See Order Nos.
21869 and 21913, Case No. IPC-E-88-2 (1988). Much of the history of their
disagreements is set forth in those decisions.
In Case No. IPC-E-88-2, in which Idaho Power sought a temporary
surcharge unrelated to capital investment or expected long-term operating costs,
we denied Afon's Petition to Intervene because we found that the issues related to
the temporary surcharge did not affect Afon's relationship to Idaho Power as a
qualifying seller of electricity under PURPA. It is not certain that the same can be
said of this proceeding.
Ordinarily, there is a relationship between avoided costs and the rate
basing of new generation. And, when there is such a relationship, any qualifyng
producer under PURPA would ordinarily have standing to participate in a
proceeding considering the rate basing of the project. However, Idaho Power may
well show in this proceeding that there is no connection between the expense of the
Swan Falls rebuild and its avoided costs. If that will be the case, then the
substance of Afn's arguments will fail. And, Idaho Power will not be prejudiced
by Afton's status as a party in this case if Idaho Power's substantive arguents
prevail.
ORDER NO. 23000 -2-
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On the other hand, if Afn's arguments should prevail, Afon would be
prejudiced by denying its Petition to Intervene. The parties' rights can best be
accommodated in this instance by allowing Afon to intervene. We do, however,
agree with Idaho Power that Afton's intervention, if not properly limted, has the
potential for unduly broadening the issues in this proceeding. Accordingly, we will
not permit the interpretation of the rights and obligations of the parties under the
Afon contract to become an issue in this case. This is not the appropriate forum or
proceeding for relitigating the disagreements associated with that agreement. The
intervention of Afon is strictly limited to the question of whether and to what
extent the investment in the rebuild of the Swan Falls facility should be included in
the rate base of the of the Company.
OR DE R
IT IS THEREFORE ORDERED that the Petition to Intervene fied by
Afon Energy, Inc. is hereby granted, limited in scope as set forth in the text of this
Order.
IT IS FURTHER ORDERED that all parties in this proceeding serve all
papers hereaftr fied in this matter on all other parties of record. This Intervenor
is represented by the following for purposes of service:
Afn Energy, Inc.
c/o Owen H. Orndorff
Orndorff & Peterson
Suite 230
1087 West River Street
Boise,ID 83702
ORDER NO. 23000 -3-
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DONE by Order of the Idaho Public Utilities Commssion at Boise, Idaho,
this/7-' day of April 1990.
~u~~ PRESIDENT
~ ?)==.../.~PÉ ~~ER, COMMISSIONER
£e~u:~
RA ~SON, COMMISSIONER
ATTEST:~¿~ARY
MG:dc/O-919
ORDER NO. 23000 -4-