Idaho Public Utilities Commission
April 23, 2009
Contact: Gene Fadness (208) 334-0339, 890-2712
PCA workshop is May 5; comments taken through May 14
Staff from the Idaho Public Utilities Commission will conduct a May 5 workshop in Boise regarding Idaho Power Company’s application for an increase to its annual Power Cost Adjustment of about 11.4 percent. The commission is also taking written comment on the proposal through May 14.
On or about April 15 of every year for the last 16 years, Idaho Power files its annual Power Cost Adjustment (PCA), a request to adjust rates up or down to reflect the company’s annual power supply expenses not already included in base rates. In simple terms, the PCA is the mechanism that allows Idaho Power to pay its “power bill” and related expenses to its power suppliers. The annual PCA adjustment does not increase Idaho Power’s earnings. Revenues from the surcharge are kept in a deferred account, audited by the Public Utilities Commission, and must go directly toward paying down the utility’s power supply costs.
Idaho Power’s power supply expense varies from year to year depending on changes in Snake River stream flows and on the market price of power. When Idaho Power has a below-normal water year, it generates less electricity from its lower-cost hydroelectric generators, forcing the utility to either generate or buy from more expensive thermal sources, driving up its power supply expense.
The company’s application states that it anticipates a power supply expense of $189.8 million in the 2009-10. Because a portion of the PCA is a forecast of the next year’s anticipated power supply expenses, there is a true-up at the end of each year to ensure that ratepayers pay Idaho Power’s actual power supply costs – no more or no less. Thus, ratepayers receive a rate credit when power costs are low, but are assessed a surcharge when power costs are high. Last year, the surcharge was a 10.7 percent increase and in 2007, after a wet 2006, customers received an average 16 percent reduction.
The proposed surcharge varies by customer class. If approved, residential customers would pay 9.3 percent more; small commercial, 7.5 percent; large commercial, 12.6 percent; industrial, 15.6 percent and irrigation, 11.1 percent.
The surcharge, if approved, would be effective June 1 and last for one year. Next June 1, a new PCA surcharge or credit will be implemented reflecting this year’s conditions and a forecast of the following year’s conditions.
The workshop, to begin at 7 p.m. in the commission’s hearing room at 472 W. Washington St., will include a presentation from commission staff on the company’s application. Customers will also be able to ask questions of commission staff. Representatives from the company may also be present.
Comments are accepted through May 14 via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on "Comments & Questions." Fill in the case number (IPC-E-09-11) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.