20060331Application.pdf

825 E. Mu/tnomah St.
Portland OR 97232
1+ PACIFICORP
" ,' ., ~
, . 'o
PACIFIC POWER UTAH POWER
, -,
000 "'
March 30, 2006
Idaho Public Utilities Commission
472 West Washington
Boise, ill 83702-5983
fAc--O6-o3
Attention:Jean D. Jewell
Commission Secretary
Re:In the Matter of the Application of PacifiCorp for a Deferred Accounting Order
to Defer the Cost of Loans Made to Grid West, the Regional Transmission
Organization
PacifiCorp (d.a. Utah Power & Light Company) hereby submits for filing an original and eight
copies of its Application of PacifiCorp d/b/a Utah Power & Light Company for Deferred
Accounting Order to Defer the Cost of Loans Made to Grid West, the Regional Transmission
Organization.
Service of pleadings, exhibits, orders and other documents relating to this proceeding should be
served on the following:
Brian Dickman
Manager, Idaho Regulatory Affairs
PacifiCorp
One Utah Center, Suite 2300
201 South Main
Salt Lake City, UT 84111
brian.d ickman~pacificorp.com
It is respectfully requested that all formal correspondence and Staff requests regarding this
material be addressed to:
Bye-mail (preferred):da tareq uest~pacifi corp. com
By regular mail:Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 300
Portland, Oregon, 97232
By fax:[phone]
-D~
D. Douglas Larson
Vice President, Regulation
Enclosures
,'o
. ' ' ,, ," "
l' .
, ,; i
;' ..
0 \ U
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION,! '
'::
, CC
:;:::.
:C::
' , ,c-, , ,c_
IN THE MATTER OF THE APPLICATION)
OF P ACIFICORP FOR A DEFERRED
ACCOUNTING ORDER TO DEFER THE
COST OF LOANS MADE TO GRID WEST
, )
THE REGIONAL TRANSMISSION ORGANIZATION
CASE NO. PAC-O6-
APPLICATION
Pursuant to Idaho Code 961-524 and Procedural Rule 52 , PacifiCorp d/b/a Utah Power
& Light Company ("PacifiCorp" or the "Company ) applies to the Idaho Public Utilities
Commission ("IPUC" or the "Commission ) for an order to defer the costs of loans made to
Grid West, a regional transmission organization ("RTO") which now appears unlikely to be
able to repay PacifiCorp. Concurrent with its decision to establish a reserve for these loans as
non-recoverable, PacifiCorp is requesting deferred accounting treatment for these costs
commencing as of the date of this filing, for later amortization in rates.
In support of this Application, PacifiCorp states as follows:
PacifiCorp is an electrical corporation and public utility in the state ofldaho and
is subject to the jurisdiction ofthe Commission with regard to its public utility operations.
PacifiCorp also provides retail electricity service in the states of California, Utah, Oregon
Washington and Wyoming.
This Application is filed pursuant to Idaho Code 961-524, which authorizes the
Commission to prescribe the accounting to be used by any public utility subject to its
jurisdiction.
APPLICA nON OF P ACIFICORP
Communications regarding this Application should be addressed to:
Brian Dickman
Manager, Idaho Regulatory Affairs
PacifiCorp
One Utah Center, Suite 2300
201 South Main
Salt Lake City, UT 84111
B rian. Dickman~Pacifi Corp. com
In addition, it is respectfully requested that all formal correspondence and Staff requests
regarding this material be addressed to:
datarequest(Wpacificoro. com
Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 300
Portland, OR 97232
PacifiCorp has been involved in the development of an RTO for over five years.
This activity has been aimed at meeting FERC requirements to develop regional transmission
entities competitive electric markets.
In conjunction with other western utilities , PacifiCorp has been seeking to
develop an independent regional electric transmission entity that would manage certain
operational functions of the transmission grid and plan for necessary expansion. Grid West has
been established as a non-profit corporation to serve the public interest.
PacifiCorp provided initial funding for the development of RTO West, the
predecessor to Grid West, in June of 2000. From that date to the present, PacifiCorp has
loaned a total of $2.7 million to Grid West. All other regional utilities involved in the
formation of Grid West have made similar loans to the organization. Grid West planned to
repay the loans through surcharges to customers once it became operational. Unfortunately,
APPLICATION OF P ACIFICORP
Grid West now appears unlikely to function in a manner that would permit it to repay
PacifiCorp s loan. As a result, PacifiCorp has concluded that it cannot continue to carry the
Grid West receivable on its books without a reserve for non-recovery. The change in
PacifiCorp s accounting treatment of this loan is being made concurrently with the filing of this
request for deferred accounting.
Pursuant to Idaho Code 961-524 , PacifiCorp proposes to defer these loan costs
as of the date of this filing for later recovery in rates. Deferral of utility expenses or revenues
is a regulatory and accounting mechanism to minimize the frequency of rate changes or the
fluctuation of rate levels or to appropriately match the costs borne by and benefits received by
ratepayers
PacifiCorp estimates that the total amount of the deferred account would be
approximately $174 000 , Idaho s portion of PacifiCorp s $2.7 million loan. PacifiCorp
proposes to account for these costs in the following manner: Amounts currently recorded as a
loan to Grid West will be transferred from Account 124 , Other Investments, to Account 182.
Other Regulatory Assets. The amortization of the balance would be accomplished by crediting
Account 182.3 and debiting Account 560, Transmission Operation Supervision and
Engineering, coincident with inclusion of the amortization expense in rates. PacifiCorp
requests that it be allowed to accrue interest on the unamortized balance at a rate equal to its
weighted average cost of capital most recently approved by the Commission.
PacifiCorp does not request a determination of ratemaking treatment of the Grid
West loan costs at this time and instead proposes to address amortization and recovery of these
costs in PacifiCorp s next general rate case application.
WHEREFORE, PacifiCorp respectfully requests that, in accordance with Idaho Code
APPLICATION OF P ACIFICORP
961-527, the Commission issue an order authorizing the Company to defer, commencing as of
the date of this filing, the Grid West loan costs incurred by the Company as described in this
Application.
Respectfully submitted this 30th day of March, 2006.
By ~!~o~l~
Vice President, Regulation
APPLICA nON OF P ACIFICORP