20050118Application.pdf

James M. Van Nostrand
STOEL RIVES LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204
Telephone: [phone]
Fax: [phone]
Email: imvannostrand~stoel.com
Idaho pulinc Utilities Commission
Office of the SecretaryRECEIVED
JAN 1 4 2005
Boise, Idaho
Curtis D. McKenzie
STOEL RIVES LLP
101 S. Capitol Blvd.
Boise, ill 83702
Telephone: [phone]
Fax: [phone]
Email: cdmckenzie~stoel. com
Attorneys for PacifiCorp dba Utah
Power & Light Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
APPLICATION OF P ACIFICORP DBA
UT AH POWER & LIGHT COMPANY
FOR APPROVAL OF CHANGES TO ITS ELECTRIC SERVICE SCHEDULES
CASE NO. PAC-O5-
APPLICATION OF PACIFICORP
PacifiCorp, doing business as Utah Power & Light Company ("PacifiCorp" or "the
Company ) hereby applies to the Commission for approval of proposed changes to the
Company s electric service schedules submitted herewith. In support of this Application
PacifiCorp states as follows:
PacifiCorp is authorized to do and is doing business in the state of Idaho.
PacifiCorp provides retail electric service to approximately 61 000 customers in the state of
Idaho and, as to such service, is subject to the jurisdiction of the Commission.
APPLICATION OF P ACIFICORP - Page
Communications regarding this Application should be addressed to:
John Stewart
ACIFICORP
201 South Main, Suite 2300
Salt Lake City, Utah 84140-0023
Telephone: [phone]
Fax: [phone]
Email: i 000. stewart2~pacificorp. com
and to:
James M. Van Nostrand
STOEL RIVES LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204
Telephone: [phone]
Fax: [phone]
Email: imvannostrand~stoel.com
Communications regarding discovery matters, including data requests issued to PacifiCorp,
should be addressed to:
Data Request Response Center
Pacifi Corp
825 NE Multnomah, Suite 800
Portland, OR 97232
Email: datarequest~pacificorp.com
PacifiCorp s proposed revised tariff schedules, which are filed with this
Application, would result in a net increase of$ll.4 million, or 9.2%, in prices for the
Company s Idaho retail customers. The net increase reflects a proposed increase of$15.
million in base rates which is offset in part by the expiration of the Power Cost / Tax
Surcharge in September 2005. The revised tariff schedules reflect a proposed effective date
of September 16 2005 , concurrent with the expiration of the Surcharge.
This proposed increase is based upon normalized results of operations for the
test period ending March 31 , 2004, with known and measurable changes. These normalized
test period results show that PacifiCorp is currently earning a normalized return on equity
(ROE) of 5.8 percent. This is far below the returns recently authorized for other Idaho
APPLICATION OF P ACIFICORP - Page 2
investor-owned utilities and the 11.125 percent ROE supported by PacifiCorp s testimony
filed with this Application. Without the requested increase in revenues, it will be
increasingly difficult for PacifiCorp to access capital markets to obtain the funds necessary to
maintain its utility infrastructure and continue to provide safe, reliable power to its Idaho
customers.
witnesses:
(a)
(b)
(c)
(d)
PacifiCorp s direct case consists of the testimony and exhibits of nine
John W. Stewart, Managing Director, Regulation, will present an overview of
the Company s case and provides the context for the testimony of the other
witnesses.
Samuel C. Hadaway, FINANCO, Inc., will testify concerning the Company
ROE. Mr. Hadaway s analysis suggests a cost of equity for PacifiCorp of
11.125 percent.
Bruce N. Williams, Treasurer, will present a financing overview of the
Company and address the Company s capital structure, and cost of debt and
preferred stock.
Ted Weston, Regulation Manager, will present the Company s results of
operations for the test period ending March 31 , 2004, with known and
measurable adjustments. Mr. Weston will also discuss the normalizing
(e)
adjustments to those results.
Mark T. Widmer, Director Net Power Costs, will describe the results of the
production cost model study for the twelve-month period ending March 31
2004. Mr. Widmer also explains hydro modeling associated with the VISTA
(f)
hydro model and inclusion of the Aquila Hydro hedge in rates.
Stan K. Watters, Senior Vice President, Commercial & Trading, will provide
information regarding the Company s acquisition of three long-term
APPLICATION OF P ACIFICORP - Page 3
resources: the West Valley lease agreement, the installation of three
generation units at the Gadsby plant site, and the 525 MW combined-cycle
combustion turbine at Currant Creek. Mr. Watters will also demonstrate that
these resources were prudently acquired and discuss the system-wide benefits
of these resources.
(g)
Daniel J. Rosborough, Director of Employee Benefits, will testify to the
Company s increased pension and employee benefit costs. Mr. Rosborough'
testimony will describe how this affects PacifiCorp and how PacifiCorp
proposes to recover these increased pension and employee benefit-related
costs.
(h)David L. Taylor, Principal Regulatory Consultant, will present the Company
cost of service study, which was used in developing the proposed allocation of
the revenue increase in this filing to the various customer classes. Mr. Taylor
also explains how the Multi-State Process Revised Protocol allocation
methodology and the stipulated Rate Mitigation Mechanism filed in Case
No. PAC-02-03 affect the Company s application.
(i)William Griffith, Director of Pricing, presents the Company s proposal for
allocating the revenue increase among customer classes and testifies regarding
the development of price design and the rate schedule changes.
The Company respectfully submits that it is in the public interest that the
Commission allow PacifiCorp to implement the proposed electric service schedules as filed.
In accordance with Commission Rule 121(d), PacifiCorp represents that it
stands ready for immediate consideration of this Application.
APPLICATION OF P ACIFICORP - Page 4
WHEREFORE, PacifiCorp respectfully requests that a final order be issued
approving PacifiCorp s proposed electric service schedules.
DATED this 14th day of January, 2005.
Respectfully submitted
APPLICATION OF P ACIFICORP - Page 5