20080626final_order_no_30583.pdf

Office of the Secretary
Service Date
June 26, 2008
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF PACIFICORP DBA ROCKY MOUNTAIN
POWER FOR AN ACCOUNTING ORDER TO
ESTABLISH A REGULATORY ASSET
CASE NO. P AC-08-
ORDER NO. 30583
On April 11 , 2008 , Rocky Mountain Power, a division of PacifiCorp, filed an
Application for an accounting order authorizing the Company to establish a regulatory asset for a
payment made to the owner of a generation facility. The $8.7 million payment gives PacifiCorp
an exclusive opportunity to negotiate for the purchase of all tangible and intangible assets
contracts, permits and other rights associated with the generation facility. The payment also is a
deposit toward the total purchase price.
On May 1 , 2008, the Commission issued a Notice of Application and Notice of
Modified Procedure to establish a period for interested parties to file comments. Written
comments were filed only by Commission Staff.
The Company s request in this filing is limited to the exclusivity payment. The
Company did not ask for approval of any term or condition relating to the transaction, or for
recognition that the acquisition of the plant is reasonable and prudent. The Company will record
the exclusivity payment in Account 182.3 (Other Regulatory Assets). The total purchase price
will ultimately be credited to "Electric Plant in Service" and will be included in rates only after
all approvals are completed and the proper rate treatment has been determined by the
Commission. Until the amount is included in the "Electric Plant in Service" account it will
remain on the Company s books as a regulatory asset.The Commission has previously
determined that an account similar to this should not accrue any interest. (See Case No. A VU-
07-, Order No. 30492.
The Company maintains that acquiring the facility is consistent with its current
generating portfolio, its IRP and the industry s general direction of new generation. The
prudency of the acquisition will be part of a more extensive review of the generating facility
acquisition prior to the investment being included in rate base in a future rate case. Allowing the
ORDER NO. 30583
Company to defer the exclusivity payment permits the total cost of the facility and the prudency
of all the costs to be reviewed by the Commission in a future rate proceeding.
Based on the record in this case, the Commission approves Rocky Mountain Power
Application for an accounting order authorizing the Company to establish a regulatory asset for a
payment made for the right to an exclusive period to negotiate with a third party for the purchase
of a generating facility. The cost of the exclusivity payment must be booked to a regulatory asset
account and remain separate from the Electric Plant in Service account until the facility is owned
by the Company, and the regulatory asset will not accrue any interest or carrying charges. The
exclusivity payment will not be considered in a ratemaking proceeding until such time as the
total cost of the facility is considered in a future rate case. The Commission will review the
prudency and proper ratemaking treatment for the total cost of the facility when the Company
proposes these costs be included in rates.
ORDER
IT IS HEREBY ORDERED that Rocky Mountain Power Application for
authorization to establish a regulatory asset for an $8.7 million payment toward acquisition of a
generating facility is approved. The payment must be booked to a regulatory asset account and
remain separate from the Electric Plant in Service account until the facility is owned by the
Company, and the regulatory asset will not accrue interest or carrying charges.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 9 61-626.
ORDER NO. 30583
DONE by Order of the Idaho Public Utilities Commission at Boise Idaho this
-rI-
day of June 2008.
~ -!.
MACK A. REDFORD, PRESIDENT
~d~p.
RSHA H. SMITH, COMMISSIONER
ATTEST:
~(J.
J a D. Jewel
Commission Secretary
bls/O:PAC-08-02 ws2
ORDER NO. 30583