20180423notice_of_settlement_order_no_34039_ipc.pdf

Office of the Secretary
Service Date
April 23,2018
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE INVESTIGATION )CASE NO.GNR-U-18-01
INTO THE IMPACT OF FEDERAL TAX )CODE REVISIONS ON UTILITY COSTS AND )NOTICE OF SETTLEMENT
RATEMAKING )STIPULATION (IDAHO POWER
)COMPANY)
)NOTICE OF MODIFIED
)PROCEDURE
)ORDER NO.34039
On April 12,2018,Idaho Power Company filed a Settlement Stipulation and Motion
to Approve Settlement Stipulation.The Company,Commission Staff,and the Industrial
Customers of Idaho Power signed the Settlement Stipulation to enable Idaho Power to provide its
customers with approximately $33.9 million in benefits under a new tax law that decreased the
Company's corporate tax rate and expenses.
With this Order,the Commission provides notice of the Settlement Stipulation and
notice that the matter will be processed by Modified Procedure,with deadlines to submit comments
about the Settlement Stipulation as set below.
BACKGROUND
The federal Tax Cuts and Jobs Act of 2017 decreased the federal corporate tax rate
from 35%to 21%,effective January 1,2018.In response,the Commission opened this multi-
utility case to investigate whether to adjust the rates of certain utilities that benefit from the reduced
tax rate can flow through to customers.See Order No.33965.The Commission directed all
affected utilities-including Idaho Power Company-toimmediately account for the tax benefits
as a regulatory liability,and to report on how the tax changes affected them,and how resulting
benefits could be passed on to customers.See id at 1-2.Idaho Power filed its report on March
30,2018.
With this Order,the Commission provides notice of the Settlement Stipulation and
notice that the matter will be processed by Modified Procedure,with deadlines to submit comments
about the Settlement Stipulation as set below.
ORDER NO.34039 1
NOTICE OF SETTLEMENT STIPULATION
YOU ARE HEREBY NOTIFIED that the Settlement Stipulation,including
attachments,is 72 pages long.It is available for public review as described below.Major
components are summarized in the followingparagraphs.
YOU ARE FURTHER NOTIFIED that the Settlement Stipulation,if approved,would
directlydecrease customer rates by about $26.5 million from June 1,2018 through May 31,2019.
This direct rate reduction consists of:(1)an $18.7 million base-rate decrease passed to customers
through a uniform percentage decrease to all base-rate components except the service charge;and
(2)a $7.8 million decrease through a rate credit from the Revenue Sharing component of the
Company's Power Cost Adjustment (PCA)mechanism.'The $18.7 million base-rate decrease
would continue until the Company's base rates change through a future general rate case or other
proceeding.The initial,$7.8 million PCA credit would continue from June 1,2018 through May
31,2019.The credit would then decrease to about $2.7 million on June 1,2019,and reach $0 on
June 1,2020.See Settlement Stipulation at 6-8.
YOU ARE FURTHER NOTIFIED that,besides directly decreasing customers'rates,
the Settlement Stipulation also would provide a non-cash annual benefit of about $7.4 million that
would offset certain deferred costs that customers would otherwise have to pay through rates.See
Settlement Stipulation at 8-9.
YOU ARE FURTHER NOTIFIED that the Settlement Stipulation would also modify
the Company's ADITC/Revenue Sharing mechanism and extend it beyond the current termination
date of December 31,2019,with the modified terms to take effect starting January 1,2020.See
Settlement Stipulation at 10-13.
YOU ARE FURTHER NOTIFIED that,because some of the stipulated benefits would
pass to customers through the PCA,which is proposed to take effect on June 1,2018,the Parties
have requested that the Commission process the Settlement Stipulation by Modified Procedure in
time for an approving Order to issue by that date.
9 Order Nos.30978,32424,and 33149 established the Accumulated Deferred Income Tax Credit
(ADITC)/RevenueSharing component that enables Idaho Power to either (1)amortize additional ADITC,or (2)share
a portion of its revenues with customers through a credit on their bills when the Company's return on equity exceeds
a certain level.The current ADITC/Revenuesharing mechanism would expire on December 31,2019,absent this
Settlement Stipulation as noted below.
ORDER NO.34039 2
YOU ARE FURTHER NOTIFIED that this docket,the Settlement Stipulation,and
any supporting workpapers,testirnony,and exhibits are available for public inspection during
regular business hours at the Commission offices.They also may be viewed on the Commission's
website at www.puc.idaho.gov by clicking on "File Room"and then "Multi-Utility Cases"and
going to the case number referenced in the above caption.
YOU ARE FURTHER NOTIFIED that the Commission is not bound by the Parties'
agreement as reflected in the Settlement Stipulation.The Commission will independently review
the Settlement Stipulation consistent with Commission Rules 271-280,IDAPA 31.01.01.271-280,
to decide whether to approve or reject it,or state conditions under which to accept it.The proposed
settlement's proponents ultimately bear the burden to prove that it is just,fair,and reasonable,in
the public interest,or otherwise in accordance with law or regulatory policy.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and will proceed under Modified Procedure
pursuant to Rules 201 through 204 ofthe Idaho Public Utilities Commission's Rules of Procedure,
IDAPA 31.01.01.201-204.The Commission notes that Modified Procedure and written comments
have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that the Parties,and any person desiring to state a
position on this Settlement Stipulation,may file a written comment about the Settlement
Stipulation with the Commission no later than May 14,2018.The comment must contain a
statement of reasons supporting the comment.Persons desiring a hearing must specifically request
a hearing in their written comments.Written comments concerning this Settlement Stipulation
may be mailed to the Commission and Idaho Power at the followingaddresses reflected below:
Commission Secretary Lisa Nordstrom
Idaho Public Utilities Commission Tim Tatum
PO Box 83720 Idaho Power Company
Boise,ID 83720-0074 1221 West Idaho St.(83702)
PO Box 70
Street Address for Express Mail:Boise,ID 83707-0070
E-mail:[e-mail]
472 W.Washington Street [e-mail]
Boise,ID 83702-5918 [e-mail]
ORDER NO.34039 3
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Cornmission's home page at www.puc.idahomov.Click the "Case Comment or Question Form"
under the "Consumers"tab,and complete the form using the case number on the front of this
document.These comments must also be sent to the Companyat the e-mail addresses listed above.
YOU ARE FURTHER NOTIFIED that the Parties may file reply comments no later
than May 21,2018.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set,the Commission will consider this matter on its merits and enter its Order
without a formal hearing.If written comments are received within the time limit set,the
Commission will consider them and,in its discretion,may set the same for formal hearing.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be conducted
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code,and the Commission
may enter any final Order consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure,IDAPA 31.01.01.000,et seq.
ORDER
IT IS HEREBY ORDERED that the Settlement Stipulation be processed under
Modified Procedure,Rules 201-204 (IDAPA 31.01.01.201-.204).The Parties and any interested
persons shall have until May 14,2018 to file written comments.The Parties shall have until May
21,2018 to file reply comments,if any.
ORDER NO.34039 4
DONE by Order of the Idaho Public Utilities Comrnission at Boise,Idaho this
day of April 2018.
PAUL KJ LA PRESIDENT
KRIS'liÑER ER,C MISS NER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
GNRUl801 Ntc Settlement Mod kk
ORDER NO.34039 5