Order No. 23117.pdf

. • Office Of vie$ecretmy
SvIce Daf
MAY 8- 1990
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MArr1K OF THE APPLICATION )
OF UTAH POWER & LIGHT COMPANY, A ) CASE NO UP1-E-90-1
DWISION OF PACJF1CORP, FOR )
APPROVAL OF A PRICE REDUCTION ) ORDER NO. 23117
On May 1, 1990, Utah Power & Light Company, a division of
PacifiCorp, applied to this Commission for approval to decrease its rates effective
May 10, 1990, on an interim basis pending the Commission's consideration of an
issuance of an order addressing its permanent rate proposal. The interim
proposal, which was identical to the permanent proposal, asked the Commission
to approve a decrease of the rates to be paid for electric service for all of Utah
Power's Idaho customers (excluding the special contract customer Nu-West and
interruptible usage by the special contract customer Monsanto) in the amount of
$2,551,043 annually. This figure is the net of four rate decreases resulting from
the expiration of the amortization of expenses of refinancing some of Utah
Power's high-cost securities, two increases resulting from the expiration of
certain coal royalty refund credits, and one reduction resulting from Utah
Power's promised benefits of its merger with PacifiCorp. In addition, Utah
Power asked that its customers receive one-time credit on their bills representing
a buy-out of the remaining rate reduction associated with the "Simonelli" case, to
be followed by the expiration of the rate reduction associated with this program.
See Order Nos. 21152, 21173, 21229, 21255 and 21313, Case No. U-1009-177
(1987); Order No. 21895, Case No. U-1009-187 (1988).
Utah Power's proposal would not result in a uniform percentage
decrease in the rates actually paid by all customers, however. That is
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because Utah Power has entered into an exchange agreement with the Bonneville
Power Administration (BPA) pursuant to the Pacific Northwest Electric Power
Planning and Conservation Act under which qualifying residential and farm
customers receive a credit on their bill representing the difference between the
rate that this Commission has fixed for those customers and the benefits
Congress has provided for those customers under the Act. Thus, even though
Utah Power proposed to reduce the billing components for these customers by
uniform percentage decrease, nevertheless some of these qualifying customers
would face slight increases in the bills they pay because their credits under the
Act will be reduced by more than the amount of reduction in Utah Power's rates.
For reasons to be more fully explained in a subsequent order, we accept
Utah Power's proposal as filed, except we fmd that Nu-West should also fully
share in the decrease. Accordingly, the revenue base for the one percent decrease
resulting from the merger should be increased by Nu-West's annualized revenues
of $3,577,174 to reflect a one percent reduction in Nu-West's revenue as well.
See Ex. 10.
In particular, we find:
1.The annual decrease in rates of $2,551,043 proposed by Utah Power
should be increased by $35,772 (one percent of Nu-West's annualized revenues)
to $2,586,815 to recognize Nu-West's participation in the decrease.
2.It is fair, just and reasonable to allow the remaining portion of the
so-called "Simonelli" reduction to be returned to customers by a one-time credit
and to rescind the current "Simonelli" refund credit. Nu-West never participated
in this revenue reduction, its rates were not affected by it, and its rates will not
be increased as a result of the expiration of the "Simonelli" refund
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3.It is fair, just and reasonable to reduce the billing components of all
of Utah Power's tariff customers and firm Monsanto service by the uniform
percentage decrease as a means of implementing the $2,586,815 annual refund.
These uniform reductions will not be further altered for the purpose of offsetting
the effects of changes in the BPA credit for the residential or irrigation classes.
4.It is fair, just and reasonable that Nu-West's current rates and its
"target" rate set in Case No. UPL-E-89-7 be reduced by the same uniform
percentage that applies to tariff customers and Monsanto firm service. Orders in
Case No. UPL-E-89-7 are hereby modified by the terms of this paragraph.
Further, we anticipate that the proceedings in the permanent phase of this case
will finally set the Nu-West rates in proper relationship to Utah Power's other
rates.
IT IS THEREFORE ORDERED that the Application of Utah Power &
Light Company, a division of PacifiCorp, to decrease its rates and charges on an
interim basis effective May 10, 1990, be granted, as modified by this Order.
DONE by Order of the Idaho Public Utilities Commission at Boise,
Idaho, this 8 ''- day of May 1990. c C .L f ESIDENT
PERRY SWISIER, COMMISSIUNER
RALPH NELSON, COMMISSIONER
ATTEST:
MYRN'A J. ERS, SECRETARY
MG:nhI0-995
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