Case No. IPC-E-07-08, Stipulation

January 23, 2008

Contact: Gene Fadness (208) 334-0339, 890-2712




Idaho Power, intervenors propose settlement to rate case


Parties to an Idaho Power Company rate case are asking state regulators to approve a settlement that increases rates for residential customers by about 4.7 percent and by about 5.65 percent for all other customers. The annual revenue increase to the company, under the settlement, would be 5.2 percent.


When Idaho Power filed the case last June with the Idaho Public Utilities Commission, it asked for an increase in annual revenue of $63.9 million, or 10.35 percent. The proposed settlement would allow the company an annual revenue increase of $32.1 million or 5.2 percent. Public hearings over the next two weeks will give customers an opportunity to comment on the proposed settlement.


Idaho Power, commission staff and intervenors have been participating in settlement discussions since late October. Idaho Power filed a motion for approval of the stipulation with the commission today and presented it to the commissioners and other intervenors in the case during a technical hearing this morning.


Other intervenors in the case include the Idaho Irrigation Pumpers Association, the Industrial Customers of Idaho Power, Micron Technology, Inc, the U.S. Department of Energy and Kroger Company. All the parties, with the exception of Kroger, signed the settlement. Kroger, which represents the Fred Meyer and Smith’s Food King stores in Idaho, agrees with the majority of the settlement, but wants large commercial customers like itself to be afforded a Time of Use rate similar to that allowed industrial customers.


The proposed increase for residential customers of 4.7 percent is very close to the company’s original 4.5 percent proposal. The company originally proposed a 15 percent increase for small commercial, 13.1 percent for large commercial, 15 percent for industrial and 20 percent for irrigation customers. Instead, the settlement proposes a 5.65 percent increase for all those customer classes. The parties are requesting that if the commission approves the settlement, that new rates become effective no later than March 1.


The settlement proposes that issues that were not resolved in the case be addressed in discussions with commission staff and interested parties before the company files its next rate case.


Those issues include:


n       Deciding on whether to include actual, historical financial information during a 12-month “test year” to determine a future rate or whether to use forecasted data. Historically, the commission has approved only the use of historical data or a blend of historical and forecasted data. Idaho Power favors using forecast data, arguing that continued load growth and infrastructure additions during the pendency of a rate case results in the company being already revenue deficient when a new rate is finally implemented.

n       Devising a mechanism that will either adjust or replace the current Load Growth Adjustment Rate. The load growth rate is intended to compensate for additional revenues attributable to load growth between rate cases. An amount related to load growth is subtracted from the company’s power supply expenses during the Power Cost Adjustment (PCA) process, resulting in a lower PCA for customers.

n       Updating Idaho Power’s “Irrigation Peak Rewards Program,” to encourage more participation from irrigators. Currently, only about 10 percent of Idaho Power irrigation customers participate in the program, which gives irrigators financial credits for agreeing to curtail their use during times of peak demand. Irrigators want a larger credit and want to be able to participate in a dispatchable program as well as scheduled curtailments. Under a dispatchable program, Idaho Power could remotely curtail irrigation systems during peak hours. The ability for the company to remotely curtail irrigation demand makes the program more valuable to the company and, hence, a larger credit for participating irrigators.



The public hearings will permit customers to testify before the commissioners who will decide the case.


The public hearing schedule is as follows:


Tuesday, Jan. 29 at the Chubbuck City Council Chambers, 5160 Yellowstone Ave., Chubbuck.


Thursday, Jan. 31 at the Twin Falls City Council Chambers, 305 Third Avenue East, Twin Falls.


Thursday, Feb. 7, in Boise at the PUC hearing room, 472 W. Washington St., Boise.