20211129Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:TERRI CARLOCK
DATE:NOVEMBER 24,2021
RE:ANNUAL DETERMINATION OF THE INTEREST RATES ON
DEPOSITS COLLECTED FROM CUSTOMERS FOR THE CALENDAR
YEAR 2022;CASE NO.GNR-U-21-02.
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 October31,round that rate to the
nearest whole percent...”.(IDAPA 31.21.01.106 and IDAPA 31.41.01.104).This average
interest rate is 0.08%as shown on Attachment A.Commission Order No.32109 determined
zero is not a whole interest rate and paying some level of interest on deposits is fair.Staff
recommends the rate be rounded to the nearest whole percent and be set at 1%for the calendar
year 2022.a 1%decrease from the prior year.
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 the current low interest rates
represent an unusual situation.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.
DECISION MEMORANDUM -1 -NOVEMBER 24,2021
COMMISSION DECISION
Should the interest rate paid on deposits collected from customers for the calendar year
2022 be set at 1%?
TecH Carlock
&IcafiodAnnflellnlRajesI)-23-2021 TC
DECISION MEMORANDUM -2-NOVEMBER 24,2021
AUACHMENT
ONE-YEAR TREASURY RATES
Week Ended Rate %Week Ended Rate %
11/6/2020 0.12 5/7/2021 0.05
11/13/2020 0.12 5/14/2021 0.06
11/20/2020 0.11 5/21/2021 0.04
11/27/2020 0.11 5/28/2021 0.05
12/4/2020 0.11 6/4/2021 0.05
12/11/2020 0.10 6/11/2021 0.05
12/18/2020 0.09 6/18/2021 0.09
12/24/2020 0.10 6/25/2021 0.09
12/31/2020 0.10 7/2/2021 0.08
1/8/2021 0.10 7/9/2021 0.08
1/15/2021 0.10 7/16/2021 0.08
1/22/2021 0.10 7/23/2021 0.07
1/29/2021 0.10 7/30/2021 0.07
2/5/2021 0.06 8/6/2021 0.09
2/12/2021 0.06 8/13/2021 0.08
2/19/2021 0.07 8/20/2021 0.06
2/26/2021 0.08 8/27/2021 0.07
3/5/2021 0.08 9/3/2021 0.08
3/12/2021 0.09 9/10/2021 0.08
3/19/2021 0.07 9/17/2021 0.07
3/26/2021 0.06 9/24/2021 0.08
4/2/2021 0.07 10/1/2021 0.09
4/9/2021 0.06 10/8/2021 0.09
4/16/2021 0.06 10/15/2021 0.12
4/23/2021 0.07 10/22/2021 0.13
4/30/2021 0.05 10/29/2021 0.15
AVERAGE 0.08
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
2016 1%33426
2017 1%33664
2018 1%33936
2019 2%34204
2020 2%34482
2021 1%34866
ATTACHMENT B