20001220Order No 28593 mod.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF
PACIFICORP dba UTAH POWER & LIGHT COMPANY FOR A DEFERRED ACCOUNTING ORDER. )
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) CASE NO. PAC-E-00-5

NOTICE OF APPLICATION

NOTICE OF MODIFIED
PROCEDURE

ORDER NO. 28593

YOU ARE HEREBY NOTIFIED that on November 1, 2000, PacifiCorp filed its Application for a deferred accounting order. Commission authorization of this request would allow PacifiCorp, starting on November 1, 2000, to defer excess net power costs. The Company alleges that deferred accounting treatment is the appropriate, just and reasonable means of providing it an opportunity to seek recovery of the extraordinary excess purchased power costs which it may incur in the future.
PacifiCorp states that as a normal and integral part of its operation as a public utility it purchases electricity from independent suppliers in the wholesale market. The Company contends that these purchases, as well as sales in the wholesale market, are taken into account in setting its retail rates through the inclusion of net power costs in its jurisdictional revenue requirement. PacifiCorp alleges that since May of this year it has incurred extremely high wholesale purchased power costs which are substantially above the wholesale market prices upon which its net power costs in rates are based. The Company claims that to this date it has absorbed these costs. PacifiCorp also expects that the annual average market price of power during 2001 will be approximately three times higher than what is currently reflected in rates. PacifiCorp claims that it will continue to experience these high costs until the following underlying circumstances have been addressed: high gas prices; significant growth in the demand for electricity; and the lack of new generation capacity coming on line. For example, the Company estimates that for the period from January 1 through December 31, 2001 its actual costs will exceed Idaho’s allocated share of costs by $8 million. Accordingly, PacifiCorp requests authority to defer excess net power costs incurred during the period from November 1, 2000 to October 31, 2001 or until such date as new rates are implemented which provide for their recovery.
PacifiCorp proposes to calculate its deferred excess net power costs by using data from an Oregon rate case. See, In the Matter of the Revised Tariff Schedules Applicable to Electric Service Filed by PacifiCorp, Docket UE-111, (Oregon Public Utilities Commission; filed November 5, 1999). The Company claims that the net power costs from this case are a reasonable surrogate for the “in-rates” net power costs in Idaho because there has been no post-merger Utah Power/PacifiCorp rate case where its net power costs were addressed. Specifically, PacifiCorp states:
The [deferred] excess net power costs . . .will be calculated as the product of (a) the difference between the net power costs implicit in the stipulation approved by the Oregon Public Utility Commission in Docket UE-111, on a per MWh basis, and the Company’s actual net power costs during the deferral period, on a per MWh bases, and (b) the retail load included in rates. Such excess net power costs will be calculated on a monthly basis.

Application at p. 5, ¶ 8 (footnote omitted). In addition PacifiCorp also proposes to use the 1998 normalized Idaho retail load which conforms to the load included in the power costs study used in the Oregon rate case.
PacifiCorp proposes to account for these costs in the following manner:
Excess net power costs will be credited to Account 557, thereby decreasing the recorded power supply expenses, and debiting Account 182.3. Deferred income taxes would be recorded by debiting Account 410.10, and crediting Account 283. The amortization of the balance in Account 182.3 would be accomplished by crediting Account 182.3 and debiting Account 557. Deferred income taxes would be amortized by debiting Account 283 and crediting Account 411.10.

Application at pp.5-6, ¶ 9

PacifiCorp also requests that it be allowed to accrue a carrying charge on the unamortized balance at a rate equal to the weighted average costs of capital most recently recommended by Commission Staff in its audit of PacifiCorp’s results of operations.
Finally, PacifiCorp proposes that it will initiate discussions with the Commission Staff to develop a mechanism by the end of March 2001 for the recovery of the deferred amount and when such mechanism will be employed. Accordingly, PacifiCorp does not request a determination of ratemaking treatment at this time and that any such determination will be made in a later case.
The Company requests that this Application be processed under Modified Procedure. Staff agrees that Modified Procedure would be appropriate for this case.
YOU ARE FURTHER NOTIFIED that the Application together with supporting workpapers, testimonies and exhibits, have been filed with the Commission and are available for public inspection during regular business hours at the Commission offices.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code and that the Commission may enter any final Order consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted pursuant to the Commission's Rules of Procedure, IDAPA 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of record in Case No. PAC-E-00-5. The Commission has preliminarily determined that the public interest may not require a hearing to consider the issues presented and that the issues raised by the Application may be processed under Modified Procedure, i.e., by written submission rather than by hearing. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-.204.

YOU ARE FURTHER NOTIFIED that the Commission may not hold a hearing in this proceeding unless it receives written protests or comments opposing the use of Modified Procedure and stating why Modified Procedure should not be used. Reference IDAPA 31.01.01.203.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this Application may file a written comment in support or opposition with the Commission within twenty-one (21) days from the date of this Notice. The comment must contain a statement of reasons supporting the comment. Persons desiring a hearing must specifically request a hearing in their written comments.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received within the deadline, the Commission will consider the matter on its merits and enter its Order without a formal hearing. If comments or protests are filed within the deadline, the Commission will consider them and in its discretion may set the matter for hearing or may decide the matter and issue its Order on the basis of the written positions before it. Reference IDAPA 31.01.01.204.
YOU ARE FURTHER NOTIFIED that written comments concerning Case No. PAC-E-00-5 should be mailed to the Commission and the Company at the addresses reflected below:

COMMISSION SECRETARY JOHN M. ERIKSSON
IDAHO PUBLIC UTILITIES COMMISSION STOEL RIVES LLP
PO BOX 83720 201 S. MAIN STREET, SUITE 1100
BOISE, IDAHO 83720-0074 SALT LAKE CITY, UT 84111

STREET ADDRESS FOR EXPRESS MAIL: ATTORNEY FOR PACIFICORP

472 W WASHINGTON ST
BOISE, IDAHO 83702-5983

All comments should contain the case caption and case number shown on the first page of this document.
YOU ARE FURTHER NOTIFIED that the Application in Case No. PAC-E-00-5 can be reviewed at the Commission’s office and at the Idaho offices of Idaho Power Company during regular business hours.
O R D E R
IT IS HEREBY ORDERED that this case shall be processed by Modified Procedure in accordance with the Commission Rules. See, IDAPA 31.01.01.201-.204.
IT IS FURTHER ORDERED that any person desiring to state a position on PacifiCorp’s Application may file a written comment in support of or in opposition to the Company’s request. These comments must be filed on or before January 2, 2001. The written comment must contain a statement of reasons supporting the comment. Persons desiring a hearing must specifically request a hearing in their written comments.
IT IS FURTHER ORDERED that all reply comments may be filed on or before January 9, 2001.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of December 2000.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

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ORDER NO. 28593 1

Office of the Secretary
Service Date
December 20, 2000