Case No. IPC-E-07-10, Order No. 30325

May 31, 2007

Contact: Gene Fadness (208) 334-0339



Power cost surcharge increasing for Idaho Power customers


A dry winter and spring means customers of Idaho Power Co. will be paying more for power supply. The Idaho Public Utilities Commission today approved Idaho Power Co.’s application to implement a one-fourth of one-cent per kWh surcharge to pay for extraordinary power supply costs not already covered in base rates.


The percentage increase varies in size according to customer class because of their different rates. Residential customers would experience an 11 percent increase; small commercial, 8.8 percent; large commercial, 16.6 percent; irrigation, 14.6 percent and industrial, 22.5 percent. The average increase for all customer classes is 14.5 percent.


Due to low water, the company’s hydroelectric dams cannot generate enough electricity to meet customer demand, so the company must acquire power from other sources. The revenues from the one-year surcharge go directly to pay for power supply and do not enhance company earnings.


Last year, customers received an average 19.34 percent reduction in rates due to favorable water conditions. Due to this year’s dry conditions, the company calculates its annual power costs are $77.5 million more than what is collected in current PCA rates.


For an average customer who uses 1,050 kWh per month, the monthly increase will be $6.41, according to the company’s figures. Currently, customers are getting a credit of 0.37 cents per KWh. Thus, the increase from a negative 0.37 cents to a positive 0.24 results in customers paying an additional 0.61 cents per kWh. Adding in the proposed PCA, the non-summer residential rate would increase from the current 5.05 cents per kWh to 5.66 cents.


The forecasted runoff from the mountains upstream of Brownlee Reservoir is 3.3 million acre-feet. Last year, the runoff was 8.4 maf. During an average year, the runoff is 6.3 maf.


The Industrial Customers of Idaho Power (ICIP) filed comments, agreeing with the company’s calculations and supporting approval of the PCA. However, ICIP wanted the PCA to be subject to refund while the commission initiates a proceeding to modify the mechanism that calculates the PCA. ICIP proposed a “balancing account” be left in the PCA that would reduce the volatility of the increases and decreases to the PCA. Last year, industrial customers got a 27 percent reduction, while this year they are getting a 22.5 percent increase.


Commissioners opposed the ICIP proposal. “The existing PCA methodology contains a true-up mechanism so that customers will pay no more or no less than the PCA requires,” the commission said. The true-up mechanism aligns Idaho Power’s year-ahead forecast of power supply costs with the actual costs incurred during the year. If actual costs are higher than forecast, customers get a surcharge. If actual power supply costs are less than forecast, customers get a credit. “We further find that the current PCA methodology with its true-up mechanism provides customers with timely ‘price signals’ so that customers have the opportunity to adjust their usage given higher PCA rates,” the commission said.


A full text of the commission’s order, along with other documents related to this case, are available on the commission’s Web site at Click on “File Room” and then on “Electric Cases” and scroll down to Case No. IPC-E-07-10.


Interested parties may petition the commission for reconsideration by no later than June 21. Petitions for reconsideration must set forth specifically why the petitioner contends that the order is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and quantity of evidence the petitioner will offer if reconsideration is granted.


Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.