Idaho Public Utilities Commission

Case No. IPC-E-08-10, Notice of Public and Technical Hearings

December 2, 2008

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

Website: www.puc.idaho.gov

 

PUC sets public and technical hearings in Idaho Power rate case

 

The three commissioners who make up the Idaho Public Utilities Commission will be in Pocatello and Twin Falls next week to hear from Idaho Power Company customers regarding the company’s request for an average 9.89 percent rate increase. Technical hearings have also been scheduled for Dec. 16-18 in Boise.

The Pocatello public hearing will be Monday night at 7 in the City Council chambers at 911 N. Seventh Ave. The Twin Falls public hearing will be Tuesday night, Dec. 9, also at 7 in the City Council chambers at 305 Third Ave. East. A public hearing is also scheduled in Boise on Tuesday, Dec. 16, at 7 p.m. in the commission hearing room at 472 W. Washington St.

Idaho Power claims it must increase its annual revenue by $66.6 million. Staff from the Idaho Public Utilities Commission has filed comments in the case, proposing a $9.7 million increase in annual revenue, which would result in average rate increase of 1.44 percent. The company seeks an 11.25 percent return on equity and an 8.55 percent rate of return. Commission staff is proposing a 10.25 percent return on equity and an 8.057 percent rate of return. The commission staff operates separately from the commission. The commission may accept, reject or modify recommendations from the company, commission staff or any other party to the case.

The purpose of the hearings is only to take testimony from Idaho Power customers. There is no presentation by the commission or commission staff. Oral testimony provided by customers at the public hearings will be entered into the official record of the case, which the commission uses when making its decision. A decision is expected early next year.

The size of Idaho Power’s proposed increase varies for customer class. For residential customers, the company seeks an average increase of 6.3 percent, while for industrial and irrigation customers the proposal is for a 15 percent increase.

Idaho Power claims it has invested $578 million for 13 new substations, 1,157 miles of distribution lines and 190 miles of transmission lines over the last three years. During the same time period, 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.

Technical hearings are scheduled to begin Tuesday, Dec. 16, at 9:30 a.m. in the commission hearing room at 472 W. Washington St, and may continue for up to three days. Technical hearings allow the company, commission staff and intervenors to the case to present formal testimony and cross-examine each other. Customer groups who have intervened to present evidence and cross-examine witnesses include the Industrial Customers of Idaho Power, the Idaho Irrigation Pumpers Association, the Community Action Partnership of Idaho, the Snake River Alliance, Micron Technology, Inc., 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.

The technical hearings are open to the public, but public testimony is not taken. Public testimony is reserved for the three public hearings.

State statute requires that regulated electric utilities – who perform an essential and necessary service and cannot quit serving customers as costs increase – be allowed to recover all prudently incurred expenses. Part of the commission’s job is to determine if Idaho Power’s added investment is necessary to serve customers and if the company was prudent in its financial decision-making. The commission also sets a rate of return for regulated utilities. The rate of return cannot be excessive, but it must also be high enough to attract investment from Wall Street for 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 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.