Idaho Public Utilities Commission

Case No. IPC-E-08-10, Notice of Application and Intervention Deadline

July 28, 2008

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

Website: www.puc.idaho.gov

 

Commission sets Aug. 8 intervention deadline in Idaho Power case

The Idaho Public Utilities Commission has set an Aug. 8 deadline for those wanting to file as “intervenors” in the Idaho Power Co. rate case. The commission also suspended the effective date for a proposed rate increase for up to six months from the company’s requested effective date of July 27.

Persons who petition the commission to intervene become parties to the case for the purpose of presenting evidence, cross-examining witnesses and participating in settlement or negotiation conferences. To date, a number of parties have already requested intervention including the Industrial Customers of Idaho Power, the Idaho Irrigation Pumpers Association, the Community Action Partnership of Idaho, the Kroger Company (dba as Fred Meyer and Smith’s Food and Drug) and the Department of Energy, on behalf of the Idaho National Laboratory.

There will also be opportunities for individual ratepayers to submit written comments and participate in workshops and public hearings. Dates for the workshops and hearings and well as comment deadlines will be announced shortly.

Idaho Power is seeking an average 9.9 percent rate increase, although the proposed increases vary for customer class. For residential customers, the proposed increase is 6.3 percent. Small-commercial customers would see an increase of 10.6 percent and the large-commercial, industrial and irrigation classes would see 15 percent increases if Idaho Power’s request were granted in full.

Since Idaho Power filed its application on June 27, the commission’s staff of auditors, engineers and attorneys has initiated a thorough investigation of the company’s application that could take up to six months.

The company claims the increase is needed to pay for $578 million in added investment over the last three years for 13 new substations, 1,157 miles of distribution lines and 190 miles of transmission lines. During the same three years, the company claims it increased the amount of electricity it buys from other utilities from $876 million to more than $2 billion. That includes purchases from renewable sources, including wind and geothermal.

Part of the commission’s job will be to determine if the added investment was necessary to serve customers and if the company was prudent in its financial decision-making.

The commission receives many comments from customers who say the commission should “just say no.” The commission is statutorily required to consider all rate increase requests. During the course of a rate case, commission staff issues production requests, conduct audits and receives evidence. The commissioners conduct hearings, during which it hears testimony and cross-examines witnesses. After a case record is closed, the commission, then fully informed, has the authority, to accept, deny or modify, a company’s rate proposal. It deliberates and renders a decision based on the evidence in the record.

State statute requires that regulated electric utilities – who perform an essential and necessary service and cannot quit serving customers as costs increase – must be allowed to recover all prudently incurred expenses. They also must be allowed a reasonable rate of return, also set by the commission. The rate of return cannot be excessive, so as to be too unreasonable for customers to pay. But it must also be high enough to attract investment from Wall Street in utility transmission, distribution and generation projects. 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. Commission decisions can be appealed to the state Supreme Court.

Idaho Power customers can read all the documents filed in the case thus far, including testimony from Idaho Power executives, by going to www.puc.idaho.gov. Click on the electric icon, then on “Open Electric Cases,” and scroll down to Case No. IPC-E-08-10.