Case No. IPC-E-08-01, Order No. 30514

March 20, 2008

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



Idaho Power seeks recovery of natural gas plant expense


The Idaho Public Utilities Commission will take comments through May 13 on an Idaho Power Co. proposal to increase customer rates by 1.39 percent to pay for a new natural gas plant near Mountain Home.


Idaho Power seeks to recover from customers $64.9 million in expense for the 170-megwatt plant, which is scheduled to be in commercial operation by June 1. Of that, $57.65 million is for the plant itself and another $7.33 million is for added transmission and interconnection expense to accommodate the new plant. Total transmission expense is anticipated to be $26.8 million, but due to delays in construction, Idaho Power is asking to recover $7.33 million now and said it will seek to recover the remaining amount in a subsequent application.


To meet the total requested recovery of $64.9 million in addition to the company’s authorized 8.1 percent rate of return, Idaho Power claims it will need to increase its annual revenue by $9 million. To meet that additional revenue requirement, the company proposes to increase customer rates for all customer classes and for Idaho Power’s three large contract customers by 1.39 percent. For a residential customer who uses about 1,050 kWh per month, Idaho Power says the monthly increase during non-summer months would be 87 cents and $1.04 during June, July and August when the higher summer rate is in effect.


The company is seeking an effective date of June 1 so that any increase granted will coincide with the company’s annual Power Cost Adjustment (PCA).


The commission has the authority to accept, deny or modify the company’s proposal. State statute requires that regulated electric utilities be allowed to recover all prudently incurred expenses in addition to a rate of return that must be reasonable for customers, but enough to attract capital investment in new transmission, distribution and generation. When the commission denies cost recovery to a utility, it must be able to legally demonstrate why the utility’s costs were not prudently incurred or in the best interest of customers. All commission decisions can be appealed to the state Supreme Court.


The commission intends to proceed under a modified procedure that allows this case to be handled through written public comments rather than by public hearing. However, comments may request a public hearing.


Comments are accepted via e-mail by accessing the commission’s homepage at and clicking on "Comments & Questions." Fill in the case number (IPC-E-08-01) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.


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 the above case number.