BEFORE THE
WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION
 
 
In the Matter of the Application of )
THE WASHINGTON WATER )
POWER COMPANY for an Order )                Authorizing the Sale of Facilities 
)        Consisting of Meyers Falls  )             Hydroelectric Plant   )

Docket UE-981365
ORDER GRANTING APPLICATION 
 
  On October 27 1998, The Washington Water Power Company (WWP) filed an 
Application with the Commission pursuant to the provisions of RCW Chapter 80.12 
RCW and WAC Chapter 480-143, for authority to sell electric generating 
facilities kown as the Meyers Falls Hydroelectric Plant and approve WWP’s 
proposed method of accounting for the transaction.

  The terms and conditions of the transaction are set forth in the Purchase and 
Sale Agreement attached to the Application as Exhibit III.  The purchaser of 
the Meyers Falls Hydroelectric Plant is Hydro Technology Systems, Inc. (HTSI) 
of Chattaroy, Washington, whose primary business is consulting engineers for 
small scale hydroelectric systems.  The purchaser has also elected to sell 
power from the plant to WWP for a period of up to eight years. WWP selected 
HTSI among the six bidders, after review and evaluation of various proposals.

  The property to be sold consists of a concrete dam, powerhouse with two 
generators (installed capability of 1.2MW), penstock, and other facilities, 
plus a transmission line and other improvements including an operator’s house 
and garage. WWP owns the project facilities, while 70 acres surrounding the 
facilities are leased. As of September 30, 1998, the net book value of the 
electric plant with the relicensing cost is $533,300, compared to an original 
cost of $810,752.  The price of the property to be sold on an “as-is” and 
“where-is” basis is $316,000 which would result in a before tax book loss of 
approximately $217,000.  The agreed upon price for the power to be sold from 
the plant is 21.85 mills ($0.02185) per kilowatt-hour for any month of any year 
during the contract term.

  WWP determined that a sale of Meyers Falls is in the best interest of WWP’s 
customers and shareholders.  The hydro facility is small with high operating 
and maintenance costs per kilo-watt hour. In addition, there are no benefits of 

Docket UE-981365        Page 2

coordination with other hydro facilities as the project is the only hydro 
facility on the Colville River.  WWP desired to arrange a favorable purchase of 
the output for a short period of time, in lieu of a long term power purchase 
contract commitment.  WWP states that through the sale of Meyers Falls, it can 
recoup, through the purchase price, a significant amount of the net book value 
of the plant and it can avoid future plant addition costs and 
operation-maintenance costs that would make the energy output uneconomical when 
compared to market rates.  As such, WWP concludes the sale is consistent with 
the public interest.

  WWP’s accounting proposal includes recognition of the loss as a period cost 
(i.e. not deferred for future amortization) by debiting FERC account 421.20 
Loss on disposition of property.  This is proposed because of the de minimus 
amount of the loss on this transaction.

FINDINGS

  THE COMMISSION FINDS:

  1. The Washington Water Power Company, a Washington corporation, is a public 
service company subject to the jurisdiction of this Commission under the 
provisions of RCW Chapter 80.12.

  2.  As to form, the Application herein, meets the requirements of RCW Chapter 
80.12 and the applicable rules and regulations of the Commission.

  3. The proposed sale will not be contrary to the public interest and the 
proposed accounting treatment of the loss from the transaction is reasonable 
and should, therefore, be authorized.

  4. The authorization and approval granted herein shall not be construed as 
precedent to prejudice any action of this Commission in any future proceeding. 
The Commission reserves the right to determine the reasonableness of any 
expense resulting from the transaction set forth in the Application herein in 
any formal proceeding before the Commission dealing with Applicant’s rates and 
cost of service..

O R D E R

  1. The Washington Water Power Company is hereby authorized to sell electric 
generating facilities known as the Meyers Falls Hydroelectric Plant.


Docket UE-981365        Page 3

  2. The proposed accounting treatment of the loss from the transaction is 
approved. 

  3. This order shall in no way affect the authority of this Commission over 
rates, services, accounts, valuations, estimates or determination of costs, or 
any matters whatsoever that may come before it, nor shall anything herein be 
construed as an acquiescence in any estimate or determination of costs, or any 
valuation of property claimed or asserted.

  Dated at Olympia, Washington and effective this         rd day of December, 
1998.

    WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION




        CAROLE J. WASHBURN
        Secretary