20050222_1095.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:WELDON STUTZMAN
DATE:FEBURARY 17, 2005
SUBJECT:IDAHO POWER'S APPLICATION FOR AN ACCOUNTING ORDER
REGARDING RIGHT..OF-WAY EASEMENT GRANT, CASE NO. IPC-E..
04..
On December 27, 2004, Idaho Power Company filed an Application for an
accounting order authorizing the Company to amortize the cost of the Shoshone-Bannock Tribe
Transmission Right-of. W ay Easement Grant. The accounting order would allow the Company
to amortize the cost of a newly negotiated easement across tribal property.
The new Easement Grant results from negotiations that began in 1996 to renew four
right-of-way easements for five transmission lines that cross the Fort Hall reservation near
Pocatello , Idaho. The total amount of the Easement Grant payments is $7,490 000, representing
145 000 in total cash payments and $345,000 in college scholarship payments over the 23-
year life of the ea$ements. Idaho Power requests confiffi1ation froln the Commission that the net
amount of the Easement Grant may be booked and amortized through 2027 with the expenses
recoverable in future rates.
The Commission issued a Notice of Application and Notice of Modified Procedure to
process Idaho Power s Application. Staff reviewed the filing and filed written comments on
February 9, 2005. No other comments were filed.
Staff noted the Company is proposing to book this particular easement to a unique
sub account in FERC Plant Account #302 - Franchises and Consents. Although transmission
right-or-ways are usually booked to FERC Plant Account #350 - Transmission Plant, Land &
Land Rights, the Company states it currently has another right-of-way agreement with the Tribe
DECISION MEMORANDlTM
that is being accounted for in a similar fashion.Staff supported the proposed accounting
treatment where the Company capitalizes the easement grant to a unique sub account in FERC
Plant Account #302.
The Company made several offers and counter-offers to the Tribe. For example, in
April of 2001 the Company made an offer for $4.2 million for a 25-year easement. Another
offer was made for $6.1 million for a 20-year right of way, and yet another offer of $7.1 million
for a 25-year right of way. The Tribe ultimately accepted the negotiated offer in October of2004
that would pay $7.1 million over 3 years for a 23-year right-of-way.
Staff recommends that the Company be authorized to account for and amortize the
expenses associated with the Shoshone-Bannock Easement Grant as requested.
COMMISSION DECISION
Should the Application of Idaho Power for an accounting order regarding the right-
of-way easement over Shoshone-Bannock Tribe property by approved?
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Weldon Stutzman
bls/M:IPCEO430 ws2
DECISION MEMORANDUM