Idaho Public Utilities Commission
Case No. IPC-E-10-25, Notice of Workshop
January 18, 2011
Contact: Gene Fadness (208) 334-0339, 890-2712
Workshop will examine Idaho Power pension issues
The Idaho Public Utilities Commission will conduct a workshop Monday, January 24, regarding Idaho Power Company’s application to the commission to accept the utility’s 2011 retirement benefits package.
Last June, the commission agreed to a 0.77 percent rate increase to allow Idaho Power
to collect $5.4 million over 12 months to replenish its pension plan. However, the commission also directed the company to review appropriate changes to its pension plan, specifically noting that pension payments may total $157 million during 2014-2018.
“It is unreasonable for Idaho Power’s customers to be solely responsible for large contributions to the company’s defined pension plan,” the commission said at the time. The commission said many employers in recent years have replaced their defined benefit plans with pension programs that place greater responsibility and investment risks on employees. “Idaho Power must similarly consider changes to its retirement plan and address shareholder and employee liabilities in the assignment of pension plan investment risk,” the commission said. “The commission will not approve additional pension plan contributions from customers without evidence that Idaho Power has carefully reviewed alternatives to reduce the burden placed on customers.”
In October, Idaho Power filed an application asking that the commission approve its 2011 retirement benefits package. The company said it has evaluated the costs of its retirement benefits package and implemented changes that will save about $1.97 million annually once the company’s entire workforce is transitioned into the modified plan.
Commission staff and the Industrial Customers of Idaho Power filed comments stating that Idaho Power failed to follow the commission’s instructions and recommended that the commission deny the company’s application.
The workshop, which begins at 9:30 a.m. in the commission hearing room at 472 W. Washington St., is intended to allow the company, commission staff and the Industrial Customers of Idaho Power an opportunity to clarify statements made in their written comments and provide the commissioners an opportunity to ask questions. A decision in this case does not immediately impact customer rates.
Idaho Power’s contributions to its pension plan have always been included in base rates. However, since 2003, Idaho Power has not been required to contribute to the pension plan because the market value of the plan’s assets was more than enough to cover future obligations. Recent market conditions and increasing pension obligations required Idaho Power to begin funding the plan again.
Documents related to this case, including comments from interested parties, can be found on the commission Web site at www.puc.idaho.gov. Click on the electric icon, then on “Open Electric Cases,” and scroll down to Case No. IPC-E-10-25.