HomeMy WebLinkAbout20080414Application.pdfJohn R. Hamond, Jr. ISB # 5470
FISHER PUSCH & ALDERMAN LLP
101 So. Capitol Blvd., 5th Floor
PO Box 1308
Boise il 83701
Telephone: (208) 331-1000
FAX: (208) 331-2400
Email: jrh(ffpa-Iaw.com
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Mark C. Moench
Sr. VP and General Counsel
201 South Main, Suite 2400
Salt Lake City UT 84111
Telephone: (801) 220-4459
FAX: (801) 220-3299
Email: mark.moench~pacificorp.com
Danel E. Solander
Senior Counsel
201 South Main, Suite 2400
Salt Lake City UT 84111
Telephone: (801) 220-4014
FAX: (801) 220-3299
Email: daniei.solander~pacificorp.com
Attorneys for Rocky Mountain Power
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
ROCKY MOUNTAIN POWER FOR AN )
ACCOUNTING ORDER TO ESTABLISH A )REGULATORY ASSET )
CASE NO. PAC-E-08- Oa.
APPLICATION
COMES NOW, Rocky Mountain Power, a division of PacifiCorp (the
"Company"), and in accordance with RP 052 and RP 201, et. seq., hereby applies to the
Idaho Public Utilities Commission (the "Commission") for an accounting order
authorizing the Company to establish a regulatory asset for costs associated with an
exclusivity payment made to Seller to acquire 100% of the outstanding equity interests in
APPLICATION 1
the Company that holds tangible and intangible assets, real and personal properties,
contracts, permits and other rights associated with a generation facility ("Proposed
Transaction"). In support of its Application the Company will be filing testimony,
documentation and other materials regarding the Proposed Transaction under a separate
pleading. The Company asserts that these supporting materials and all information
concerning the Proposed Transaction wil contain information that constitutes trade
secrets, is confidential and is otherwise exempt from public disclosure. Due to time
constraints and the commercially sensitive nature of the Proposed Transaction the
Company anticipates submitting the supporting materials to the Commission pursuant to
Commission Rule of Procedure 67 next week.
PacifiCorp requests this accounting treatment In the event the Proposed
Transaction is not completed.
The Company also asserts that a hearng is not necessar on this matter and
respectfully requests that the Commission process this case by Modified Procedure under
the Commission's Rules of Procedure 201-204.
In support ofthe Petition, PacifiCorp states:
1. PacifiCorp is an electrcal company and public service company in the
state of Idaho, subject to the jursdiction of the Commission with regard to its rates,
service and accounting practices. PacifiCorp also provides retail electricity service in the
states of Oregon, Californa, Idaho, Utah, Washington and Wyoming. PacifiCorp's
address is 201 S. Main St., Salt Lake City, Utah 84111.
2. This Application is fied pursuant Idaho Code §§ 61-301, -307, -622, and-
623. In paricular, Idaho Code § 61-623 empowers the Commission to determine the
APPLICATION 2
propriety of proposed rate schedules, §§ 61-307 and -622 require Commission approval
prior to any increase in rates, and
3. Communications regarding this Application should be addressed to:
John R. Hamond, Jr. ISB # 5470
FISHER PUSCH & ALDERMAN LLP
101 So. Capitol Blvd., 5th Floor
PO Box 1308
Boise ID 83701
Telephone: (208) 331-1000
FAX: (208) 331-2400
Email:jrhßYfpa-Iaw.com
Ted Weston
Manager, Idaho Regulatory Affairs
Rocky Mountain Power
201 South Main Street, Suite 2300
Salt Lake City, UT 84140
Telephone: (801) 220-2963
. Facsimile: (801) 220- 2798
E-mail: Ted.\Veston(gWacifiCom.coin
~i
Danel Solander
Senior Counsel
Rocky Mountain Power
201 South Main, Suite 2300
Salt Lake City UT 84111
Telephone: (801) 220-4014
Facsimile: (801) 220-3299
E-mail: Daniel.SolanderßYPacifiCom.com
In addition, PacifiCorp respectfully requests that all data requests regarding this
matter be addressed to:
Bye-mail (preferred):datarcquest(Çacificom.com
By regular mail:Data Request Response Center
PacifiCorp
825 NE Multnomah, Suite 800
Portland, OR 97232
By facsimile:(503) 813-6060
APPLICATION 3
Informal inquiries may be directed to Ted Weston, Idaho Regulatory Affairs Manager
at (801) 220-2963.
4. On April 11,2008, PacifiCorp entered into a definitive Purchase and Sale
Agreement ("PSA"), pursuant to which PacifiCorp agree to purchase the Plant subject to
regulatory approval and other typical conditions to closing. The PSA provides that
PacifiCorp shall make an exclusivity payment in the amount of $8.7 milion ("Exclusivity
Payment") to the seller of the Plant ("Seller"). The Exclusivity Payment provides
PacifiCorp the exclusive right to negotiate with Seller concerng the Proposed
Transaction durng the exclusivity period (from Februar 27, 2008 until the earlier of
termination of the Purchase and Sale Agreement or the Closing) ("Exclusivity Period").
During the Exclusivity Period, Seller is prohibited from negotiating with, soliciting new
bids, or accepting any bids from any person or entity associated with the sale, lease or
other disposition of the Plant (and other associated output, rights .and assets). The
Exclusivity Payment of $8.7 inilion represents a deposit towards the total purchase price
under the PSA. Upon closing of the sale, the remainder of the purchase price will be
paid.
5. The Proposed Transaction provides that at the closing, Seller shall transfer
100% of the equity interests of Company to PacifiCorp, and the Company wil become a
direct, wholly owned subsidiar of PacifiCorp. One day after closing, the subsidiar
Company wil be dissolved and merged into PacifiCorp.
6. In order to match the benefits and costs of the Proposed Transaction,
PacifiCorp wil record the Exclusivity Payment within Account l82.3 (Other Regulatory
Assets). It will remain in Account l82.3 until the closing date of the Proposed
APPLICATION 4
Transaction. At the closing date, the Exclusivity Payment amount wil be credited to
Account 182.3 and debited to Account 123.1 (Investment in Subsidiar Companies), in
accordance with 18 C.F.R. Ch. I, Pt. 101. Additionally, the remainder of the purchase
price and expenses incidental to the acquisition wil be included in Account 123.1 as par
of the total costs of the acquisition. When the subsidiar Company is dissolved and
merged into PacifiCorp, the amount in Account 123.1 (Investment in Subsidiary
Companies) wil be transferred to the appropriate accounts in PacifiCorp. The plant asset
balances wil be transferred to Account 102 (Electrc Plant Purchase or Sold) until
approvals are received from the Federal Energy Regulatory Commission to transfer from
Account 102 to Account 101 (Electrc Plant in Service).
7. Accounting for the Exclusivity Payment costs related to this Proposed
Transaction as a regulatory asset wil encourage utility investment and wil serve to more
fairly balance the risks and benefits. between shareholders and customers, especially in a
situation where a time-limited commercial opportity exists. Expensing the costs of a
failed acquisition and not recovering those costs in rates significantly discourages the
utility from investing in resources for the benefit of ratepayers. In the event that the
Proposed Transaction does not close, the Company requests that these costs continue to
be treated as a regulatory asset as requested in Account 182.3. Rate treatment of the
Exclusivity Payment wil be determined in a future rate proceeding.
WHEREFORE, Rocky Mountain Power respectfully requests of the Commission
the following:
1. That the Commission find that a hearng is not required herein and process
the Application by Modified Procedure under its Rules of Procedure 201-204;
APPLICATION 5
2. An accounting order authorizing it to record the Exclusivity Payment costs
in Account 182.3 (Other Regulatory Assets). The rate treatment for the Exclusivity
Payment costs will be determined in a future rate proceeding; and,
3. That the Commission grant such other and further relief as the
Commission may determine proper herein.
DATED: April 11,2008.
. Hamond, Jr. ISB # 5470
eys for Rocky Mountain
o er
Mark C. Moench
Sr. VP and General Counsel
201 South Main, Suite 2400
Salt Lake City UT 84111
Telephone: (801) 220-4459
FAX: (801) 220-3299
Email:
mark.moench~pacificorp.com
Danel E. Solander
Senior Counsel
201 South Main, Suite 2400
Salt Lake City UT 84111
Telephone: (801) 220-4014
FAX: (801) 220-3299
Email:
daniel.solander~pacificorp.com
Attorneys for Rocky Mountain Power
APPLICATION 6
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this -' day of April, 2008, a true and correct
copy ofthe foregoing document was served as indicated below:
Jean Jewell, Commission Secretary
Idaho Public Utilities Commission
472 W. Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Email: jean.jewellGJ,puc.idaho.gov
( ) U.S. Mail
( ) Facsimile
( ) Overnight Delivery
(Yi Hand Delivery
()- Email
APPLICATION 7