20020329Decision memo.pdf

TO:
FROM:
DATE:
RE:
DECISION MEMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
JEAN JEWELL
RON LAW
BILL EASTLAKE
LOU ANN WESTERFIELD
RANDY LOBB
DON HOWELL
DAVE SCHUNKE
TERRI CARLOCK
LYNN ANDERSON
TONY A CLARK
BE V BARKER
GENE FADNESS
WORKING FILE
SCOTT WOODBURY
MARCH 29, 2002
CASE NO. PAC-02-1 (PacifiCorp)
COMP ANY PROPOSAL TO RECOVER DEFERRED POWER COSTS
INTERVENOR PETITION FOR CLARIFICATION
On November 15 , 1999, the Commission issued final Order No. 28213 in
PacifiCorplScottishPower merger Case No. P AC- E-99-1. The Commission approved the merger
transaction subject to terms and conditions. The Commission s Order contained the following
language:
Merger Approval Condition No.
At a minimum, ScottishPower shall not seek a general rate increase for its
Idaho service territory effective prior to January 1 , 2002." Case No. PAC-
99-, Order No. 28213 p. 8.
Commission Findings
As a final and irrefutable measure to ensure that rates will not increase as a
result of the merger, we hereby impose the additional condition (Merger
Approval Condition No.2) that following the merger, PacifiCorp shall not
DECISION MEMORANDUM
seek a general rate increase effective prior to January 1 , 2002. This literally
guarantees that PacifiCorp s customers will see an immediate rate reduction
lasting at least two years through the combination of the merger rate credit
and the moratorium on general rate increases imposed herein.Order No.
28213 p. 31.
Intervenor Timothy Shurtz petitions and requests the Commission to clarify, explain
and enunciate the meaning of the foregoing Merger Condition No.2. Intervenor requests that
the Commission clarify how the proposed retroactive or "deferred excess net power costs
recovery sought now are not in reality an attempt to avoid the "moratorium" agreed to in
inducing this Commission to accept the merger then being considered. In other words, he
queries why is a collection now, and in the immediate future, of the past two years deferred
excess net power costs, not in reality a violation of the Commission s Order of a "moratorium on
general rate increases
Included in his Petition for Clarification, the Petitioner also cites the following Order
language "PacifiCorplScottishPower shall not subsidize its non-regulated businesses with its
regulated businesses." Order No. 28213 p. 14.
Commission Decision
As the Commission is aware, the parties in this case are engaging in settlement
discussions. The general terms of a proposed settlement have been agreed to. The Intervenor
and Petitioner, Timothy Shurtz, has indicated his intention not to sign the proposed settlement
agreement and pursuant to IDAP A 31.01.01.275 would intend to examine supporting witnesses
offer his own witnesses, or argue against the settlement. Mr. Shurtz would like a Commission
ruling on his Petition for Clarification prior to the Commission s consideration of any stipulation
submitted. Is PacifiCorp under Merger Condition No.2 prevented from requesting recovery of
excess power costs that accrued during the moratorium period? How does the Commission wish
to handle the Petition for Clarification?
Scott D. Woodbury
bls!M:PACEO201 sw4
DECISION MEMORANDUM