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HomeMy WebLinkAbout20151125Decision Memo.pdfDECISION MEMORANDUM TO:COMMISSIONER KJELLANDER COMMISSIONER SMITH COMMISSIONER R4PER COMMISSION SECRETARY LEGAL WORKING FILE FROM:TERRI CARLOCK DATE:NOVEMBER 25,2015 RE:ANNUAL DETERMINATION OF THE INTEREST RATES ON DEPOSITS COLLECTED FROM CUSTOMERS FOR THE CALENDAR YEAR 2016.CASE NO.GNR-U-15-O1. Every year the Commission sets the interest rate to be paid on customer deposits for the next calendar year.Rule 106 of the of the Customer Relations Rules for Gas,Electric and Water Utilities provides:“the Commission will determine the twelve-month average interest rate for one-year Treasury Bills for the previous November 1 through October 31,round that rate to the nearest whole percent...”.(IDAPA 31.21.01.106 and IDAPA 31.41.01.104).This average interest rate is 0.26%as shown on Attachment A.Similar to the last several years,Staff believes zero is not a “whole percent”interest rate,therefore Staff recommends the rate be set at 1%,as is currently the 2015 rate. Rule 9 of the Customer Relations Rules for Gas,Electric and Water Utilities allows the Commission on its own motion to approve a deviation of the rule in unusual circumstances (Exemption from Rules,IDAPA 31.21.01.009).Staff believes as low interest rates continue, fairness supports the belief that payment of zero interest is not the intent behind the rule stating “interest will be payable on all deposited amounts.”Id.The chart on Attachment B shows the interest rates since 1990 and the Order numbers approving those rates. COMMISSION DECISION Should the interest rate paid on deposits collected from customers for the calendar year 2016 be set at 1%? ( Tern Carlock u/tcnrloc/AnnDctlntRaies 11-25-2015 TC APPENDIX ONE-YEAR TREASURY RATES Week Ended Rate %Week Ended Rate % 11/7/2014 0.12 5/8/2015 0.23 11/14/2014 0.15 5/15/2015 0.23 11/21/2014 0.14 5/22/2015 0.23 11/28/2014 0.13 5/29/2015 0.26 12/5/2014 0.18 6/5/2015 0.29 12/12/2014 0.19 6/12/2015 0.28 12/19/2014 0.26 6/19/2015 0.25 12/26/2014 0.26 6/26/2015 0.29 1/2/2015 0.25 7/2/2015 0.26 1/9/2015 0.22 7/10/2015 0.28 1/16/2015 0.17 7/17/2015 0.29 1/23/2015 0.17 7/24/2015 0.32 1/30/2015 0.18 7/31/2015 0.33 2/6/2015 0.26 8/7/2015 0.38 2/13/2015 0.23 8/14/2015 0.41 2/20/2015 0.23 8/21/2015 0.36 2/27/2015 0.22 8/28/2015 0.38 3/6/2015 0.27 9/4/2015 0.36 3/13/2015 0.24 9/11/2015 0.40 3/20/2015 0.24 9/18/2015 0.35 3/27/2015 0.27 9/25/2015 0.35 4/3/2015 0.21 10/2/2015 0.25 4/10/2015 0.24 10/9/2015 0.28 4/17/2015 0.23 10/16/2015 0.23 4/24/2015 0.24 10/23/2015 0.24 5/1/2015 0.25 10/30/2015 0.34 AVERAGE 0.26 Source:Federal Reserve Treasury Rates One-Year Constant Maturities Attachment A Interest Rates on Deposits Calendar Year Interest Rate Order No. 1990 9%22836 1991 8%23425 1992 6%23971 1993 4%24578 1994 3%25242 1995 5%25788 1996 6%26233 1997 6%26681 1998 6%27248 1999 5%27828 2000 5%28234 2001 6%28575 2002 4%28896 2003 2%29158 2004 1%29386 2005 2%29653 2006 3%29932 2007 5%30200 2008 5%30469 2009 2%30692 2010 1%30965 2011 1%32109 2012 1%32403 2013 1%32684 2014 1%32922 2015 1%33187 ATFACTIMENT B