20140725Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: NEIL PRICE
DEPUTY ATTORNEY GENERAL

DATE: JULY 25, 2014

SUBJECT: APPLICATION OF CAPITOL WATER CORPORATION FOR
AUTHORITY TO INCREASE ITS SCHEDULE NO. 3, PURCHASED
POWER ADJUSTMENT RATE, CASE NO. CAP-W-14-01

On July 11, 2014, Capitol Water Corporation (“Capitol Water” or “Company”) filed
an Application to increase its Schedule No. 3 Purchased Power Adjustment Rate to “recover the
Company’s cost of electricity related to Idaho Power Company’s (“Idaho Power”) electric rate
schedules that have been approved by the Idaho Public Utilities Commission (‘IPUC’ or
‘Commission’).” Application at 1. Capitol Water proposes an effective date of September 1,
2014.
THE APPLICATION
In its Application, Capitol Water states that the proposed change is necessitated by
“changes in [Idaho Power’s] rates and charges that affect Applicant’s cost of electric power.” Id.
The Company requests that “the Commission take official notice of Idaho Power Company rates
and charges currently in effect and on file with the Commission.” Id.
Capitol Water states that its “current base rates were established by Order No. 30762
in Case No. CAP-W-08-02.” Id. According to the Company, the Commission approved a “three
(3) year average of 1,454,401 KWh of electricity consumption at an average cost of 5.19¢ to
establish rates for Applicant.” Id. The total cost of electric power for Capitol Water is estimated
to be $75,483.41. Id. Capitol Water claims that its average cost per kWh at Idaho Power’s
current rates is 7.15¢ per kWh which produces an annual cost for electric power of $103,937. Id.
DECISION MEMORANDUM 2
at 1-2. Capitol Water states that this represents “an increase in annual electric power cost of
$28,454 or 37.7% more than included in Applicants base water rates.” Id. at 2.
Capitol Water estimates that its costs associated with the preparation and filing of this
Application to be $1,100. Id. Capitol Water is seeking to recover these costs together with the
electric power costs by increasing the Company’s currently approved Schedule No. 3 Purchased
Power Cost Adjustment of 4.2% with a new Purchased Power Cost Adjustment of 4.53%. Id.
Capitol Water also included a one page Exhibit No. 1 that presents Capitol Water’s
calculations at Idaho Power’s currently approved rates. Id. Also attached to the Application is
Exhibit No. 2, a copy of the Company’s current approved Schedule No. 3 in legislative format
that shows the proposed change to the Purchased Power Cost Adjustment. Id.
Capitol Water included a new Schedule No. 3, with the proposed power cost
adjustment rate, with an effective date of September 1, 2014. Id. The Company provided work
papers showing its calculations for Staff review. Id.
The Company states that it has informed its customers of its Application to the
Commission through a customer notice included in customer bills mailed on August 1, 2014, and
via a news release to the Idaho Statesman and the Idaho Business Review newspapers
contemporaneous with this filing. Id., Exhibit Nos. 3 and 4.
Capitol Water requests that the Commission process its Application pursuant to
Modified Procedure. Id.
COMMISSION DECISION
Does the Commission wish to process Capitol Water’s Application for an increase in
its Schedule No. 3, Purchased Power Adjustment Rate, through Modified Procedure with a 21-
day comment period?

M:CAP-W-14-01_np