20121205final_order_no_32691.pdf

Office of the Secretary
Service Date
December 5,2012
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF PACIFICORP DBA )ROCKY MOUNTAIN POWER’S )CASE NO.PAC-E-12-07
APPLICATION FOR AN ACCOUNTING )
ORDER REGARDING COSTS INCURRED )
FOR NAUGHTON UNIT 3 )ORDER NO.32691
________________________________________________________________________________________
)
On May 3,2012,PacifiCorp dba Rocky Mountain Power applied to the Commission
for an Order authorizing it to record a regulatory asset associated with its costs to meet emission
requirements at Naughton Unit 3.The Commission issued a Notice of Application on May 23,
2012.On September 21,2012,the Commission issued a Notice of Modified Procedure setting a
November 20,2012 comment deadline.Staff filed the only comments in the case,and supported
the Company’s Application.With this Order,we approve the Application.
APPLICATION
Naughton Unit 3 is a 330 MW thermal steam generation unit that began commercial
operation in 1971.It is one of three coal-fired generation units wholly owned by the Company at
the facility located near Keinmerer,Wyoming.
The Company says it has prudently incurred $7,914,547.69 in necessary costs related
to Naughton Unit 3 environmental compliance project permitting,development,engineering,and
site-assessment activities.The Company now seeks to transfer this amount out of FERC
Account 107 (Construction Work in Progress)and record a regulatory asset in FERC Account
182.3 (other Regulatory Assets).The Company says Idaho’s share of the regulatory asset will be
about $479,000.The Company does not seek to recover that amount in this proceeding.Rather,
it will seek recovery in its next general rate case,and it proposes that amortization begin in that
test period.
STAFF COMMENTS
Staff reviewed the Company’s Application,discovery responses,and also Company
filings in a related case before the Wyoming Commission.Based on this review,Staff confirmed
that the expenditures the Company wants to transfer were associated with the Naughton 3
environmental compliance project.Staff also determined that each expense was reasonable
compared to the scope of work completed by the project contractor.Staff believes the dollar
ORDER NO.32691 1
amounts incurred by the Company accurately represent the contract payments and work
performed.Lastly,Staff believes there is sufficient evidence to allow the deferral of incurred
costs as a regulatory asset.Staff emphasized that prudence of the expenditures will be evaluated
when the Company seeks rate recovery.
In light of the above,Staff recommended the Commission approve the Company’s
request for an accounting order authorizing it to transfer $7,914,547 from FERC Account 107 to
FERC Account 182.3 as a regulatory asset.Staff also recommended the Commission not
determine prudency in this proceeding,but instead direct the Company to submit information
documenting prudency in support of rate recovery in the Company’s next general rate case.
FINDINGS
The Commission has jurisdiction over the Company,an electric utility,and the issues
in this case under Title 61 of the Idaho Code and the Commission Rules of Procedure,IDAPA
31.01.01.000 e.seq.The Commission has reviewed the filings in this case,including the
Company’s Application and Staffs comments.Based on that review,and pursuant to Idaho
Code §61-524,’the Commission finds that the Company’s Application should be granted to
allow the Company to transfer $7,914,547 from FERC Account 107 to FERC Account 182.3 as a
regulatory asset.In issuing this accounting order,we are not determining the prudency of any
expenses.The Company may request and litigate the recovery of these costs in the future,and it
should submit evidence of prudency in support of rate recovery in the Company’s next general
rate case.
Idaho Code §61-524,entitled “System of Accounts,”provides in part:
The commission shall have power to establish a system of accounts to be kept by the public
utilities .and to prescribe the manner in which such accounts shall be kept....It may also .
prescribe the forms of accounts,records and memoranda to be kept by such public utilities,
including the accounts,records and memoranda of the ...receipts and expenditures of moneys,
and any other forms,records and memoranda which in the judgment of the commission may be
necessary to carry out any of the provisions of this act....Where the commission has prescribed
the forms of accounts,records or memoranda it shall thereafter be unlawful for such public
utility to keep any accounts,records or memoranda for such business other than those so
prescribed,or those prescribed by or under the authority of any other state or of the United States,
excepting such accounts,records or memoranda as shall be explanatory of and supplemental to the
accounts,records or memoranda prescribed by the commission.
ORDER NO.32691 2
ORDER
IT IS HEREBY ORDERED that PacifiCorp dba Rocky Mountain Power’s
Application is approved.The Company may transfer $7,914,547 from FERC Account 107 to
FERC Account 182.3 as a regulatory asset.
THIS IS A FINAL ORDER.Any person interested in this Order (or in issues finally
decided by this Order)or in interlocutory Orders previously issued in this case may petition for
reconsideration within twenty-one (21)days of the service date of this Order with regard to any
matter decided in this Order or in interlocutory Orders previously issued in this case.Within
seven (7)days after any person has petitioned for reconsideration,any other person may cross-
petition for reconsideration.See Idaho Code §61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this b
day of December 2012.
PAUL KJLAd,PRESIDENT
MACK A.REDFORD,COMMISSIONER
LaL z[SLL
MARSHA H.SMITH,COMMISSIONER
ATTEST:
Jn D.Jewell /
C6mmission S&retary
O:PAC-E-1 2-07kk3
ORDER NO.32691 3