COST REDUCTION ORDER.

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61-1603. COST REDUCTION ORDER. (1) A public utility may apply to the commission for a cost reduction order authorizing the recovery of approved costs through the imposition and collection of a cost reduction rate.

(2) A public utility may apply to the commission from time to time for a cost reduction order in a manner prescribed by the commission, in separate proceedings for this purpose or in connection with a general rate case. Such application may also include a request for authority to issue and sell cost reduction instruments to be secured by or payable from the cost reduction rate that results from such cost reduction order or the cost reduction property created by this chapter and the cost reduction order related to such cost reduction rate. Upon such an application, if the commission finds that the public interest would be served if the approved costs were recovered through a cost reduction rate, the commission shall issue a cost reduction order to allow the public utility to recover the approved costs through a cost reduction rate and may also provide authority to issue and sell cost reduction instruments.

(3) A cost reduction order shall detail the approved costs to be recovered and the period of time in which recovery of the approved costs is to occur. A cost reduction order shall specify the amount of the cost reduction rate and the method for determining the amount of the cost reduction rate that from time to time will be sufficient to recover all approved costs. Cost reduction rates shall remain in effect until all approved costs have been paid in full.

(4) A cost reduction order may be issued only upon the application of a public utility and shall become effective only in accordance with its terms and conditions. A public utility may withdraw its application for a cost reduction order if it disagrees with any of the terms and conditions of the order within fourteen (14) days of service of a final order on the public utility. A public utility shall effect the withdrawal of its application by filing a written notice of withdrawal with the commission within such time period. Nothing in this section shall be construed to limit or preclude other remedies that may be available to the public utility under applicable law.

(5) No public utility shall be treated as having acted unreasonably or imprudently by reason of its failure to apply for a cost reduction order, by reason of its withdrawal of an application for a cost reduction order, or by reason of its failure to arrange for the issuance of cost reduction instruments pursuant to a cost reduction order.

(6) Upon issuance of a cost reduction order, a public utility may sell, assign or otherwise transfer or pledge cost reduction property created by this chapter and the applicable cost reduction order, and if authorized by the particular cost reduction order, a public utility or an assignee may issue or cause to be issued cost reduction instruments.

(7) Any cost reduction order, and the approved costs and the cost reduction rates that have been authorized by the commission in such cost reduction order, shall be irrevocable and binding upon the commission. The commission shall not have authority either by rescinding, altering or amending a cost reduction order or otherwise to, either directly or indirectly, revalue or revise for ratemaking purposes the approved costs or the cost reduction rates. Once the commission authorizes a cost reduction rate, it cannot determine in a later proceeding that the cost reduction rate is unjust or unreasonable, or in any way reduce or impair the value of related cost reduction property, either directly or indirectly, by taking the cost reduction rate into account when setting other rates for the public utility; nor shall the amount of revenues arising with respect thereto be subject to reduction, impairment, postponement or termination. The state of Idaho does hereby pledge to and agree with the owners of cost reduction property and with any cost reduction instrument holders that neither the state nor any of its agencies, including the commission, shall (by administrative or legislative action, ballot initiative or other similar process) limit, alter, restrict or impair the approved costs, the cost reduction rate, the cost reduction property, the cost reduction orders or any rights thereunder or ownership thereof or security interest therein or in any way impair the rights or remedies of any cost reduction instrument holders. The state does hereby acknowledge that any cost reduction instrument holders may and will rely on this pledge and agreement and that they would be irreparably harmed by any such limitation, alteration, restriction or impairment without such adequate provision.

(8) Notwithstanding any other provision of this chapter, the commission will from time to time, and no less frequently than annually, approve adjustments to the cost reduction rates as may be necessary to ensure timely and complete recovery of all approved costs that are the subject of the pertinent cost reduction order.

(9) Subject to the foregoing limitations, the commission has the same authority with respect to a proposed cost reduction rate as it has with regard to any other tariff, schedule or classification the effect of which is to change any rate or charge, including, without limitation, the power granted by chapter 6, title 61, Idaho Code, to conduct a hearing concerning a proposed cost reduction rate and the reasonableness and justness thereof.

(10) The commission shall establish procedures for the expeditious processing of any application for cost reduction orders and adjustments thereto, including the approval or disapproval of any such orders within forty-five (45) days of the application therefor.

History:

[61-1603, added 2005, ch. 372, sec. 1, p. 1188.]


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