Idaho Public Utilities Commission

February 17, 2009

Case No IPC-E-08-16, Order No. 30726

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

Commission OK's installation of automated meters

Idaho Power will begin this year a three-year project to install automated meters throughout its southern Idaho service territory.

Responding to an urgent directive from the Idaho Public Utilities Commission, the utility will replace its existing meters with advanced metering infrastructure (AMI) that will eventually allow customers to monitor electric prices and adjust their use to take advantage of lower price-periods. Idaho Power submitted a cost estimate of $71 million for the project and will absorb any costs above that. Rates will not immediately increase, but will be included in base rates as the meters are placed in service. The commission also approved the company’s request to accelerate the depreciation time frame on its existing meters down to three years.

The commission is urging Idaho Power to "move forward with all deliberate speed" with installation beginning this year in the Boise area, then in 2010 in the Canyon and Payette regions and, finally, in 2011 in the Magic Valley, Pocatello and Salmon areas.

The advanced meters can be read from a remote location, negating the need for an Idaho Power representative to access customer properties. They can provide the company and individual customers with hourly meter readings and inform customers of current electric prices, potentially allowing them to manage their use and reduce their bills.

Other benefits to customers and the company will include reduced operational costs associated with meter reading and improved meter reading accuracy, outage monitoring and theft detection. Customers can also be disconnected and reconnected from a remote location saving time and labor. There are also billing advantages such as fewer estimated bills, less re-billing and more flexible billing schedules.

After the Western energy crisis of 2000-2001, the commission said advanced metering technology was becoming more necessary. At that time, the commission ordered Idaho Power to evaluate and report on advanced metering technology. In 2002, the commission ordered Idaho Power to complete installation of advanced metering by 2004, but financial and technical problems made it impossible for the company to meet that time frame.

The commission eventually adopted a phased-in implementation and evaluation approach, with advanced meters installed in test areas such as Emmett. In an earlier order, the commission stated … "the potential benefits of advanced metering to ratepayers and the company are too great to delay … implementation indefinitely."

The Idaho Conservation League endorsed adoption of the AMI program, saying it will encourage customers to be more efficient, which will lead to a decrease in overall electrical demand and reduce carbon dioxide emissions. AARP Idaho opposed the plan, saying more information should be obtained through a technical hearing before imposing the additional cost of AMI on customers.

The commission said it is mindful of the large capital expense, but said it expects Idaho Power to "demonstrate its ongoing effort to reduce operating costs and increase efficiencies and reminds the company that in the current economic climate its fiscal responsibility will be reviewed extensively and continually."

Copies of the commission's order are available on the commission's Web site at www.puc.idaho.gov. Click on "Recent Orders and Notices," and scroll down to Case No. IPC-E-08-16. Petitions for reconsideration must be filed by no later than March 5.