The Public Interest and Proposed Accounting Treatment

The underlying assertions¹⁴ behind the sale are (1) that the Yakima River Basin would benefit from the closure and transfer of Naches to Reclamation, and (2) that a lower cost option, purchasing energy at market prices, is preferable to the ongoing need for investment and the operating costs of the facilities. PacifiCorp also asserted (3) that the facility could have been subject to an expensive licensing proceeding at FERC. The testimony of PacifiCorp's Managing Director of Hydro Resources¹⁵ showed that under most scenarios the cost of continued operations of Naches was not economic for ratepayers. If the company were compelled to litigate a FERC license, the costs would only increase. Only by reducing capital and operating expenses can PacifiCorp show one slightly profitable scenario. Given these forecasts it is reasonable to expect ratepayers to benefit at market prices for replacement energy compared to the continued operations of this small plant. Therefore, we find that it is in the public interest to authorize PacifiCorp to transfer the Naches facility to Reclamation.

PacifiCorp's proposed accounting treatment was not protested.¹⁶ A slight after-tax gain on the sale ($74,000) is expected and California's share would be about $1,000. PacifiCorp proposed that the gain be dealt with in its next general rate proceeding. The current proceeding, A.01-03-026 has already been submitted. This next case may not occur because PacifiCorp has a proposed sale of its California Operations (not yet pending before this Commission). We find the outcome de minimus, regardless of the outcome of the proposed sale, and we will adopt the accounting proposal.