ORDER NO. 95-1262

ENTERED NOV 30 1995

THIS IS AN ELECTRONIC COPY

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UM 769

DISPOSITION: AUTHORIZATION OF DEFERRAL APPROVED

On August 23, 1995, Idaho Power Company (Idaho) filed an application pursuant to ORS 757.259 and OAR 860-27-300 requesting deferred accounting treatment for extraordinary cost related to its corporate reorganization plan. These costs are primarily related to Idaho’s intentions to reduce and reorganize its work force over a three-year period commencing with the date of this filing.

The Commission can authorize deferrals for twelve months or less. See

ORS 757.259 and OAR 860-37-300. Idaho plans to apply to the Commission to reauthorize the process some time before July 1996, coordinating it with other reauthorization applications.

The proposed deferrals include costs incurred by the company for payments to consultants assisting in developing the reorganization plan and counseling employees, lump sum compensation payments for voluntary separation, costs incurred by the company for benefit payments and other charges related to employee separations. Idaho is proposing to defer only out-of-pocket expenses, consultant’s fees, and severance costs; not the costs of Idaho Power employees who are administering the program.

Idaho’s request is consistent with the principle of matching costs with associated benefits. The benefits in this case consist of reduced costs attributable to the corporate reorganization. The reorganization will occur over a number of years. The company’s request to defer and amortize those costs over a 10-year period that appears to be concurrent with the benefits is reasonable. Therefore, future customers not only receive the benefits as they would absent deferral, but they will also share in the cost.

The 10-year amortization proposal is for accounting purposes only. The unamortized balance of the reorganization plan deferred account will not be charged to customers unless the company files a general rate application. Future amortization within the general rate application would also be subject to an earnings review under ORS 757.259.

Idaho proposes to defer the reorganization costs in FERC Account 182.3, Regulatory Assets, and estimates the Oregon portion of the first year’s deferral to be $500,000. The Idaho Public Utilities Commission approved the company’s filing in that state by Order

No. 26216, dated October 20, 1995.

At its November 21, 1995, public meeting, the Commission adopted staff’s recommendation to approve deferral for a 12-month period beginning August 23, 1995.

OPINION

The application complies with the requirements of ORS 757.259 and OAR

860-27-300. Approval under the deferred accounting statute is necessary for Idaho Power to defer its extraordinary reorganization plan costs and to begin amortizing the balance as requested.

ORDER

IT IS ORDERED that the application of Idaho Power Company for authorization to defer its extraordinary reorganization plan costs, for a 12-month period beginning August 23, 1995, and to begin amortizing the balance is granted. This approval is for accounting purposes only; rate-making treatment of any unamortized balance is reserved for a subsequent rate-making proceeding.

Made, entered, and effective ________________________.

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of this order. The request must comply with the requirements of OAR 860-14-095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-13-070(2)(a). A party may appeal this order to a court pursuant to ORS 756.580.