Re: UM Idaho Power Company's Application for Deferred Accounting of Revenue Requirement Variances Associated with the Langley Gulch Power Plant

Transcription

1 McDowell Rackner & Gibson PC WENDY MCINDOO Direct (503) 55-3 May 4, VIA ELECTRONIC AND U.S. MAIL PUC Filing Center Public Utility Commission of Oregon PO Box 2 Salem, OR Re: UM Idaho Power Company's Application for Deferred Accounting of Revenue Requirement Variances Associated with the Langley Gulch Power Plant Attention Filing Center: Enclosed in the above-referenced docket is an original and 5 copies of Idaho Power Company's Application for Deferred Accounting of Revenue Requirement Variances Associated with the Langley Gulch Power Plant. A copy of the Notice of Application has been served on the parties to the UE 3 service list as indicated on the attached Certificate of Service. Please contact me with any questions. Very truly yours, Wendy Mcl Heo Office Manager tidev- Enclosures cc: Service List Phone: Fax: Southwest th Avenue, Suite 400 Portland, Oregon 75-05

2 1 2 3 BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON UM In the Matter of Idaho Power Company's Application for Deferred Accounting of Revenue Requirement Variances Associated with the Langley Gulch Power Plant. I. INTRODUCTION APPLICATION Pursuant to ORS 757.2, ORS 757.(2)(e), and OAR , Idaho Power Company ("Idaho Power" or "Company") hereby requests that the Public Utility Commission of Oregon ("Commission") issue an accounting order authorizing Idaho Power to defer for later ratemaking treatment the variance between revenues from rates that include the Langley Gulch Power Plant ("Langley") revenue requirement and revenues from rates without the inclusion of the Langley revenue requirement. Idaho Power seeks authorization for this deferral effective as of July 1,. In support of this Application, Idaho Power states: Communications regarding this Application should be addressed to: Lisa Rackner Lisa Nordstrom McDowell Rackner & Gibson Idaho Power Company 4 SW th Avenue, Suite 400 P.O. Box 70 Portland, OR Boise, ID 3707 dockets@mcd-law.com Inordstrom@idahopowercom Page 1 - APPLICATION Portland, OR 75-05

3 Christa Bearry Idaho Power Company P.O. Box 70 Boise, Idaho 3707 cbearry@idahopower.com H. BACKGROUND On March,, Idaho Power filed an application requesting authority to increase rates due to the inclusion of the Langley investment in rate base (Docket UE ). Langley is a 300 megawatt ("MW") natural gas-fired combined cycle combustion turbine. The Company acquired Langley to meet the need for 0 MW to 00 MW of dispatchable, physically delivered firm or unit contingent energy deliverable in that was identified in the Company's Integrated Resource Plans dating back to 04. Langley is expected to be in commercial operation on or before July 1, and will be used and useful at that time. Coincident with the application in UE, Idaho Power filed Advice No. -0 which included tariff sheets that reflect the inclusion in rate base of the new Langley plant effective July 1,. On March,, the Commission issued Order No. -1 suspending Idaho Power's Advice No. -0 for a period not to exceed nine months from the Company's proposed effective date. Subsequently, all parties agreed to a schedule in UE that anticipates a Commission order related to the inclusion of Langley in rate base, and the corresponding tariff sheets filed in Advice No. -0, in early in. This application addresses the mismatch of revenues and costs associated with Langley due to the suspension of Idaho Power's tariff sheets. Given that Oregon customers' rates will likely not include the return on the Langley investment, and depreciation or operation and maintenance expenses related to Langley, until after the time Langley is on-line and providing benefits to customers, the Company is proposing to defer the variance between revenues from rates that include the Langley revenue requirement and revenues from rates without the inclusion of the Page 2 - APPLICATION Portland, OR 75-05

4 1 Langley revenue requirement until the time the Commission issues an order in UE. 2 If the Commission order issued in UE has a different Langley revenue requirement 3 then the one the Company has requested, the deferral amount will be adjusted 4 accordingly. 5 The addition of Langley as a resource impacts net power costs. On October,, Idaho Power filed its Annual Power Cost Update ("APCU") which included Langley 7 with an expected on-line date of July (Docket UE 2). The APCU test period identified in UE 2 is April through March, with the associated customer rates effective June 1,, through May 31,. Likewise, on March,, the Company updated net power costs as part of the March Forecast in UE 2 and included the generation from Langley beginning in July. However, based on discussions with parties, the Company now expects to adjust the APCU filing to reflect net power costs without Langley generation. Any differences between APCU revenues (that will not reflect Langley) and actual net power costs (that will reflect Langley) will be handled through the Company's Power Cost Adjustment Mechanism ("PCAM"). If the Langley revenue requirement has not been resolved prior to the Company's filing of the PCAM in February, the Company will adjust its actual net power costs included in the PCAM to reflect the level of net power supply expenses that would have existed without Langley generation. III. REQUIREMENTS OF OAR (3) A. Description of the Utility Expense for which Deferred Accounting is Requested Idaho Power requests authorization from the Commission to accrue the variance between revenues from rates that include the Langley revenue requirement and revenues from rates without the inclusion of the Langley revenue requirement. Page 3 - APPLICATION Portland, OR 75-05

5 1 B. Reason for Deferral 2 As described above, the Company requests this deferral pursuant to ORS (2)(e). This deferral will minimize the frequency of rate changes or the 4 fluctuation of rate levels or match appropriately the costs borne by and benefits received 5 by customers. C. Proposed Accounting 7 Idaho Power proposes to record the deferred amount in FERC Accounts 2.3 (Regulatory Assets); crediting FERC Account 557 (Other Expenses) if there is an amount to collect from customers. D. Estimate of Amounts Idaho Power cannot at this time estimate the amounts of the deferral because the amount will vary depending on the Commission's decision in UE. However, if the Langley revenue requirement is approved as filed in UE, the annual revenue requirement would increase $3.05 million, or approximately $4,000 per month. If, for example, an order in UE is issued by February with a March 1,, effective date for rates, the deferral would have tracked variances for eight months, amounting in approximately $2.03 million. E. Notice A copy of the Notice of Application for Deferred Accounting of Revenue Requirement Variances Associated with the Langley Gulch Power Plant and a list of persons served with the Notice are attached to the Application as Attachment A. ///// ///// ///// ///// ///// Page 4 - APPLICATION Portland, OR 75-05

6 1 IV. CONCLUSION 2 The Commission should grant Idaho Power's application for deferred accounting 3 because deferred accounting is an appropriate, just, and reasonable means of 4 implementing the request by Commission Staff following the suspension of Advice No DATED: May 4, MCDO ELL & ACKNER PC isa F. Adam L là r ner ney IDAHO POWER COMPANY Lisa D. Nordstrom Lead Counsel PO Box 70 Boise, ID 3707 Of Attorneys for Idaho Power Company Page 5 - APPLICATION Portland, OR 75-05

7 Attachment A Notice of Application for Deferred Accounting of Revenue Requirement Variances Associated with the Langley Gulch Power Plant

8 In the Matter of Idaho Power Company's BEFORE THE PUBLIC UTILITY COMMISSION OF OREGON UM Application for Deferred Accounting of Revenue Requirement Variances Associated with the Langley Gulch Power Plant. NOTICE OF APPLICATION FOR DEFERRED ACCOUNTING OF REVENUE REQUIREMENT VARIANCES ASSOCIATED WITH THE LANGLEY GULCH POWER PLANT On May 4,, Idaho Power Company ("Idaho Power" or "Company"), filed an application with the Public Utility Commission of Oregon ("Commission") for an Order authorizing deferral of the revenue requirement variances associated with the Langley Gulch Power Plant. Approval of Idaho Power's Application will not authorize a change in Idaho Power's rates, but will permit the Commission to consider allowing such deferred amounts in rates in a subsequent proceeding. Idaho Power's application will be posted on the Commission website for persons who wish to obtain a copy or they may contact the following: Mil Mil Mil Mil Mil Lisa Rackner 4 SW th Avenue, Suite 400 Portland, OR Phone: Facsimile: dockets@mcd-law.com Page 1 NOTICE OF APPLICATION FOR DEFERRED ACCOUNTING 4 SW th Avenue, Suite 400 Portland, OR 75

9 1 Any person who wishes to submit written comments to the Commission on Idaho 2 Power's application must do so no later than June 4,. 3 4 DATED: May 4,. MCDOWELL RACKNER & GIBSON PC 5 7 isa dr- /kner Adam Li ney IDAHO POWER COMPANY Lisa Nordstrom Lead Counsel PO Box 70 Boise, ID 3707 Of Attorneys for Idaho Power Company Page 2 NOTICE OF APPLICATION FOR DEFERRED ACCOUNTING 4 SW th Avenue, Suite 400 Portland, OR 75

10 1 CERTIFICATE OF SERVICE 2 I hereby certify that I served a true and correct copy of Idaho Power Company's 3 Application for Deferred Accounting of Revenue Requirement Variances Associated with 4 the Langley Gulch Power Plant on the parties in Docket UE 3 on the date indicated 5 below by addressed to said person(s) at his or her last-known address(es) indicated below. 7 Gordon Feighner Robert Jenks Citizens' Utility Board of Oregon Citizens' Utility Board of Oregon gordon@oregoncub.org bob@oregoncub.org Catriona McCracken Stephanie Andrus Citizens' Utility Board of Oregon Assistant Attorney General catriona@oregoncub.org stephanie.andrus@state.orus Don Reading Judy Johnson dreading@mindspring.com Public Utility Commission of Oregon judy.johnson@state.orus Erik Colville Gregory M. Adarns Public Utility Commission of Oregon Richardson & O'Leary Erik.colville@state.orus greg@richardsonandoleary.corn Peter J. Richardson Joshua D. Johnson Richardson & O'Leary Attorney at Law peter@richardsonandoleary.com jdj@racinelaw.net Eric L. Olsen Anthony J. Yankel Attorney at Law Utility Net.Inc. elo@racinelaw.corn tony@yankel.net Randy Dahlgren Douglas C. Tingey Portland General Electric Portland General Electric pge.opuc.filings@pgn.com doug.tingey@pgn.corn Ilion Sanger Melinda J. Davison Davison Van Cleve Davison Van Cleve mail@dvclaw.corn mail@dyclaw.corn R. Bryce Dailey Sarah Wallace Pacific Power Pacific Power Bryce.dalley@pacificorp.com sarah.wallace@pacificorp.corn Page 1 - CERTIFICATE OF SERVICE Portland, OR 75

11 1 2 Oregon Dockets Donald Schoenbeck PacifiCorp Regulatory & Cogeneration Services 3 oregondockets@pacificorp.com dws@r-c-s-inc.com 4 DATED: May 4, 5 Wendy Mclnd 7 Office Mana Page 2 - CERTIFICATE OF SERVICE Portland, OR 75