X. Assignment of Proceeding

Geoffrey F. Brown is the Assigned Commissioner and Michael J. Galvin is the assigned ALJ in this proceeding.

Findings of Fact

1. Rule 12.1(d) of the Commission's Rules of Practice and Procedure holds that the Commission will not approve settlements, whether contested or uncontested, unless they are reasonable in light of the whole record, consistent with law, and in the public interest.

2. The Klamath River water used to generate electricity by PacifiCorp is surplus water to those with higher priority than PacifiCorp.

3. The revenue requirement settlement adopts a revenue requirement increase that is approximately 57% of PacifiCorp's $12.8 million request.

4. The revenue requirement settlement is a reasonable compromise between ratepayer and shareholder interests, and grants PacificCorp needed rate relief while mitigating the impact on ratepayers.

5. The parties sponsoring the revenue requirement settlement fairly represent the affected interests.

6. No term of the revenue requirement settlement contravenes statutory provisions or prior Commission decisions.

7. The revenue requirement settlement conveys to the Commission sufficient information to permit it to discharge its future regulatory obligations with respect to the parties and their interests.

8. The revenue allocation and rate design settlement adopts DRA's recommendation that the revenue requirement allocation to any customer class be limited to 2.5% above the system average increase in rates.

9. The revenue allocation and rate design settlement is a reasonable compromise between ratepayer and shareholder interests.

10. The revenue allocation and rate design settlement commands the sponsorship of active parties to the proceeding and is not opposed.

11. The parties sponsoring the revenue allocation and rate design settlement are fairly representative of the affected interests.

12. No term of the revenue allocation and rate design settlement contravenes statutory provisions or prior Commission decisions.

13. The revenue allocation and rate design settlement conveys to the Commission sufficient information to permit it to discharge its future regulatory obligations with respect to the parties and their interests.

Conclusions of Law

1. Project customers have no rights or interest in the surplus water that flows to PacifiCorp's downstream hydro facilities.

2. The settlement agreement on revenue requirements issues is reasonable in light of the whole record, consistent with law, and in the public interest.

3. The settlement agreement on revenue allocation and rate design issues, service fees and tariff rules is reasonable in light of the whole record, consistent with law, and in the public interest.

4. The uncontested rule changes proposed by PacifiCorp in its testimony should be adopted.

5. The decision should be effective immediately so that the rates adopted herein can be put into effect as soon as possible.

FINAL ORDER

IT IS ORDERED that:

1. The joint motion by PacifiCorp and the Division of Ratepayer Advocates (DRA) to adopt a settlement agreement on revenue requirement issues, filed on July 7, 2006, is approved to the extent specified therein. The revenue requirement settlement is included as Attachment A to this decision and supporting exhibits to the settlement are included in the joint motion.

2. PacifiCorp is authorized to earn a 10.6% return on a 50.0% common equity ratio based on an authorized capital structure of 50.0% common equity, 1.0% preferred stock and 49.0% long term debt for the 2007 test year.

3. The joint motion by PacifiCorp, DRA and California Farm Bureau Federation to adopt a settlement agreement on revenue allocation and rate design issues, service fees and tariff rules, filed on July 21, 2006 is approved to the extent specified therein. The revenue allocation and rate design, service fees and tariff rules settlement is included as Attachment B to this decision and supporting exhibits to the settlement is included in the joint motion.

4. The request for a rate credit is denied.

5. Except to the extent specified in the settlements adopted above, the application is denied.

6. Within 10 days of today's date, PacifiCorp shall file an advice letter with tariffs to implement the new rates and tariff changes approved by this Order. These tariffs shall become effective on the first day of the month following the date the advice letter is filed subject to Energy Division determining that they are in compliance with this Order.

7. Application 05-11-022 and Investigation 06-03-002 are closed.

This order is effective today.

Dated December 14, 2006, at San Francisco, California.

BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF CALIFORNIA

In the Matter of Application of PacifiCorp (U-901-E) for an Order Authorizing a General Rate Increase and Implementation of an Energy Cost Adjustment Clause and a Post Test-Year Adjustment Mechanism.

Application 05-11-022

(Filed November 29, 2005)

Order Instituting Investigation on the Commission's Own Motion into the Rates, Operations, Practices, Service, and Facilities of PacifiCorp (U-901-E).


Investigation 06-03-002

(Filed March 2, 2006)

SETTLEMENT AGREEMENT BETWEEN PACIFICORP AND DIVISION OF RATEPAYER ADVOCATES ON REVENUE REQUIREMENT ISSUES

1. General

2. Settlement Terms

3. Miscellaneous

IN WITNESS WHEREOF, the Settling Parties have executed this Settlement Agreement as of July 7, 2006.

(END OF ATTACHMENT A)

BEFORE THE PUBLIC UTILITIES COMMISSION
OF THE STATE OF CALIFORNIA

In the Matter of Application of PacifiCorp (U-901-E) for an Order Authorizing a General Rate Increase and Implementation of an Energy Cost Adjustment Clause and a Post Test-Year Adjustment Mechanism.

Application 05-11-022

(Filed November 29, 2005)

Order Instituting Investigation on the Commission's Own Motion into the Rates, Operations, Practices, Service, and Facilities of PacifiCorp (U-901-E).


Investigation 06-03-002

(Filed March 2, 2006)

SETTLEMENT AGREEMENT BETWEEN PACIFICORP, THE DIVISION OF RATEPAYER ADVOCATES, AND THE CALIFORNIA FARM BUREAU FEDERATION ON REVENUE ALLOCATION AND RATE DESIGN ISSUES AND SERVICE FEES AND TARIFF RULES

4. General

5. Settlement Terms

3. Miscellaneous

(END OF ATTACHMENT B)

24 Although CFBF is a Settling Party and a signatory to this settlement, CFBF limits its participation to the appropriate rates under the PA-20 tariff, and expresses no opinion on the rates of other customer classes.

25 . An exception to this requirement is the transition rte paid by the Klamath Irrigators pursuant to D.06-04-034.

Previous PageTop Of PageGo To First Page