20030822Notice of Application.pdf

Office of the Secretary
Service Date
August 22, 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
ACIFICORP FOR AN ACCOUNTING ORDER
REGARDING TREATMENT OF CERTAIN
ASSET RETIREMENT OBLIGATIONS.
CASE NO. P AC-O3-
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NOTICE OF
MODIFIED PROCEDURE
YOU ARE HEREBY NOTIFIED that on May 27, 2003 , PacifiCorp dba Utah Power
& Light Company (PacifiCorp) filed an Application seeking an accounting order authorizing the
Company to record regulatory assets or liabilities associated with implementation of Statement
of Financial Accounting Standards (SFAS) 143. According to the Application SFAS 143
requires utilities to recognize and account for certain asset retirement obligations in a manner
different from the way PacifiCorp has traditionally recognized and accounted for such costs.
Specifically, if a legally enforceable asset retirement obligation (ARO) is deemed to exist
entity must measure and record the liability for the ARO on its books. The liability must be
recorded at fair market value in the period in which the liability is incurred. SF AS 143 also
provides that if market prices are not available, estimates of fair value can be calculated by
discounting the estimated cash flows associated with the ARO to their present value at the date
the liability is recorded. PacifiCorp s Application asks for an accounting order authorizing the
Company to (1) record, as a regulatory asset or a regulatory liability, the cumulative financial
statement impact resulting from the Company s implementation of SF AS 143 , and (2) record on
an ongoing basis, as a regulatory asset or a regulatory liability, an amount equal to the difference
between the annual SF AS 143 accretion and depreciation expenses and the annual depreciation
expenses based on Commission approved depreciation rates and coal mine reclamation accruals.
PacifiCorp also requests confirmation by the Commission that (1) asset removal costs, in the
form of negative net salvage, are currently accrued through annual depreciation expense which is
recoverable in rates; (2) these costs are based on estimates of the final removal costs; and (3)
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NOTICE OF MODIFIED PROCEDURE
such costs are trued-up for ratemaking purposes at the time the related assets are retired and the
actual removal costs are determined.
YOU ARE FURTHER NOTIFIED that PacifiCorp is required to implement SF
143 in order to comply with generally accepted accounting principles. Due to the lack of an
active market for settling AROs, PacifiCorp intends to use the expected present value method to
determine its ARO liabilities and offsetting assets. The accounting changes proposed by
PacifiCorp are supported by a series of exhibits identifying the proposed journal entries the
Company believes are needed to comply with SF AS 143.
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission s Rules
of Procedure, IDAPA 31.01.01.201 through .204.
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 by
September 22, 2003.The comment must contain.a statement of reasons supporting the
comment.Persons desiring a hearing must specifically request a hearing in their written
comments. Written comments concerning this Application shall be mailed to the Commission
and the Applicant at the addresses reflected below:
Commission Secretary John M. Eriksson
Idaho Public Utilities Commission Stoel Rives LLPPO Box 83720 One Utah Center
Boise, ID 83720-0074 201 South Main Street, Suite 1100
Salt Lake City, UT 84111-4904
Mail: imeriksson~stoeLcomStreet Address for Express Mail:
472 W. Washington Street
Boise, ID 83702-5983
Dan Peterson
PacifiCorp
One Utah Center
201 South Main Street, Suite 2300
Salt Lake City, UT 84111-2269
E-mail: dan.peterson~pacificorp.com
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.state.id.. Click the "Comments and Questions
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icon, and complete the comment form, using the case number as it appears on the front of this
document. These comments must also be sent to the Applicant at the e-mail addresses listed
above.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
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 or on the
Commission s Website at www.puc.state.id.under the "File Room" icon.
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, IDAP A 31.01.01.000 et seq.
DATED at Boise, Idaho this J.J-,.J day of August 2003.
~!E
Commission Secretary
Vld/N:PACEO308
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE