19901015order_no_23380.pdf

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OCT 15 1990
BEFRE THE IDAHO PUBLIC UT COMMSSION
IN TH MATI'ER OF TH APCATION )
OF IDAHO POWE COMPAN FORAtr- )ORI TO RATEAS TH IN )REQUI FOR TH REUI OF TH )SWANFALHYROELCPROJCT )
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IN TH MATlER OF TH APCATION
OF IDAHO POWE COMPAN FOR ACECATE OF PULIC CONVCE.A NECESSIT FOR TH RATEASGOF TH MI HYROELCTCPROJECT OR IN TH ALTERNTIA DETATION OF EX
STATUS FOR TH MI HYRO-ELCTC PROJ
CAS NO.IPE-902
CAS NO. 1PE-90
ORDER NO. 2380
This order directs the parties to address legal issues common to Idaho
Power's two applications regardig construction of hydroelectric generation
facilities at Swan Falls and Miner through briefs and oral argument at hearig
and further directs that an evidentiary hearing be held in the Swan Falls Case,
IPC-E-90-2.
BACKGROUN
On August 22, 1990, a prehearing conference was held on these two
cases. At that conference, the parties requested an opportunity to submit written
statements of position regarding legal or jursdictional issues. They have done
so, and we have reviewed them. We now desire further briefig on three issues
that we set forth below and alert the parties to be prepared for oral arguent on
those issues at the hearing scheduled for November 27-28, 1990 in the Milner
case, IPC-E-90-8.
ORDER NO. 23380 -1-
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Before defining the issues for briefmg, we review the dierent postures
of these two cases. Swan Falls (Case No. IPC-E-90-2) is an existing hydroelectric
generating facility of Idaho Power Company. Thus, under I. C. § 61-526, Idaho
Power may, without acquirig a certifcate for the Swan Falls rebuild, increase
its existing capacity at that generating plant. However, Order N~. 19ß23 issued
in Case No. U-1006-240 on Apri 24, 1985, said the following to Idaho Power:
We put Idaho Power on explicit notice, however, that before it
undertakes any substantial reconstruction or replacement of
the Swan Falls facilty, other than improvement or
reconstruction of the existing spillway, it must first
demonstrate to this Commssion in a formal proceeding thatthe project is the least-cost method of acquiring a new
resource for its system.
This language was recently quoted in Order No. 22412, issued on March 30,
1989, in Case No. IPC-E-89-8. Thus, this Commssion has required Idaho Power
to bring any rebuild of the Swan Falls project and increase in its capacity to the
Commssion's attention in much the same manner that it would file a certificate
for new project. We therefore schedule a hearing in the Swan Falls case to
address this question put at issue in the past. We also note that the Swan Falls
water right is the most pivotal water right on the Snake River and that water
flowing through Swan Falls normally also flows through the Company's
three-dam Hell's Canyon complex.
The application for the Milner project (Case No. IPC-E-90-8), by
contrast, has been filed under the certificate statute, but with a novel twist:
Idaho Power asks for a certificate of convenience and necessity to build the
project and to ratebase it for inclusion in retail rates, or to be exempt from the
statutory certificate requirement and to sell the output of the project to wholesale
customers separate from retail ratemaking.
ORDER NO. 23380 -2-
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Tl IS FOR BRI EFIG
The Swan Falls and Milner projects lie before us with different legal
backgrounds as well as the different factual backgrounds always associated with
different plants. Nevertheless, these projects are closely tied in time and may
present overlapping legal or jurisdictional issues. For that reason, we ask the
parties to brief the following legal issues in light of the facts of each project and
be prepared to address them in oral arguent at hearing:
1. What is the legal authority for the Commssion to approve
ratebasing of the Swan Falls rebuild before the rebuild is in service? What is the
legal authority for the Comnssion to approve ratebasing for the Milner project
before the project is in service?
2. What is the legal authority or propriety as a matter of policy of using
avoided costs as a cap for ratebasing the Swan Falls rebuild? What is the legal
authority or propriety as a matter of policy of using avoided costs as a cap for
rate basing the Milner project?
3. Does the Commssion have authority to declare in the abstract that
a certified plant or a plant by statute exempt from certifcation may be ratebased
without yet knowing the cost of ratebasing the plant in retail rates? Does the
Commssion have authority to declare in the abstract that a certifed plant or a
plant by statute exempt from certification may be excluded from rate basing for a
fied period in the future without yet knowing the cost of ratebasing in retail
rates? How are the rights of utility investors affected in the implied interval
created by such a decision?
ORDER NO. 23380 -3-
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These three legal issues are overlapping. Because of the different legal
and factual backgrounds for Swan Falls and Mier, there may be different
answers to the questions posed for Swan Falls and for Miler. The parties to the
Swan Falls and Milner cases are nearly identical, so we ask parties to either case
to submit a common brief in the two cases, contrasting the two cases when the
parties believe they should be treated dierently and urgig the sàme treatment
in the two cases when the parties believe the two cases are legally similar.
The deadline for parties' submission of briefs is WEDNESDAY.
NOVEER 21. 1990. the deadle for fiing of rebuttal testimony in both cases.
The parties should be prepared to argue the legal issues common to both cases in
the hearing for the Milner proceedig. There will not be a separate oral
argument with regard to Swan Falls in the hearing set for that proceeding.
OR D E R
IT is THEREFORE ORDERED that the parties address by brief the
issues set forth in this order.
IT is FURTHER ORDERED that an evidentiary hearing be held in
Case No. IPC-E-90-2 as scheduled by notice of the Commssion Secretary.
ORDER NO. 23380 -4- .
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DONE by Order of the Idaho Public Utilities Commssion at Boise,
Idaho, this /,. U day of October 1990.
cy~ç, '~PERReHER, COM~RÆ-~--~RA ~ON, CÓMMISSIONER
ATTEST:~~~éf-ü.L~A J. ~TËs, SECRETARY
MG:nh/O-1167
ORDER NO. 23380 -5-