20160617Decision Memo.pdf

DECISION MEMORANDUM 1

DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: BRANDON KARPEN
DEPUTY ATTORNEY GENERAL

DATE: JUNE 16, 2016

SUBJECT: CAPITOL WATER CORPORATION’S APPLICATION TO INCREASE
ITS SCHEDULE NO. 3 PURCHASED POWER ADJUSTMENT RATE;
CASE NO. CAP-W-16-01

On June 14, 2016, Capitol Water Corporation filed an Application to adjust its
Schedule No. 3 Purchased Power Adjustment Rate to “recover the Company’s cost of electricity
related to Idaho Power Company’s electric rate schedules that have been approved by the Idaho
Public Utilities Commission.” Application at 1. Capitol Water proposes an effective date of
August 15, 2016.
THE APPLICATION
Capitol Water requests an increase in Schedule 3 rates. It states that the proposed
increase is driven by a rise in annual electric power expenses from Idaho Power. Id. at 2. The
Company notes that the electricity rates affecting its power costs were approved by the
Commission, and also request that “the Commission take official notice of Idaho Power
Company rates and charges currently in effect and on file.” Id. at 1.
Capitol Water states that its “current base rates were established by Order No. 30762
in Case No. CAP-W-08-02.” Id. Capitol Water summarizes the Order: “the Commission
adopted a three (3) year average of 1,454,401KWh of electricity consumption at an average cost
of 5.19¢, to establish rates for Applicant.” Id. This results in a total electric power cost rate of
$75,483.41. Id. However, the Company claims that its actual average cost per kWh at Idaho
Power’s current rates of 7.15¢ per kWh produces an annual cost for electric power of $103,972.
DECISION MEMORANDUM 2

Id. at 1-2. Capitol Water states that this represents a deficiency “of $26,625 or 35.3% 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 4.25% with a new Purchased Power Cost Adjustment of 4.54%. Id.
Capitol Water also includes with the Application a worksheet detailing its
calculations (Exhibit No. 1), a copy of the proposed Schedule No. 3 in legislative format (Exhibit
No. 2), a sample customer notice that will be included in the July billing (Exhibit No. 3), and a
news release that will be printed in the Idaho Statesman and Idaho Business Review. Id. (Exhibit
No 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-16-01_bk