Case No. PAC-E-06-04, Order No. 30199

Case No. PAC-E-06-08, Order No. 30196

Case No. PAC-E-06-09, Order No. 30197

December 18, 2006

Contact: Gene Fadness (208) 334-0339




Commission approves PacifiCorp rate settlement


The Idaho Public Utilities Commission today approved a settlement agreement between PacifiCorp and major customer groups that will increase revenue to the company by $8.25 million annually, or 5.1 percent. The agreement does not impact residential rates. The only customers to get an increase will be irrigation customers (5 percent) and two industrial customers, Monsanto Company (16.5 percent) and Agrium, also known as Nu-West Industries, (4 percent).


PacifiCorp, which operates in eastern Idaho as Rocky Mountain Power (formerly Utah Power & Light), serves about 64,000 Idaho customers.


The Idaho Irrigation Pumpers Association, Monsanto and Agrium, all agreed to the settlement. Rate increases for irrigators and Monsanto are effective Jan. 1, 2007. Agrium rates, by an earlier commission order, became effective Sept. 1, 2006.


The settlement prevented the need for PacifiCorp to file a full rate case before the commission. The commission commended PacifiCorp and all the parties for reaching the agreement. “We acknowledge that the stipulation … represents a compromise of party positions,” the commission said.


Irrigators will pay 5 percent more, increasing revenue for that class by $1.7 million. However, if irrigators volunteer to participate in the company’s Irrigation Load Control Credit Rider Program, they will receive a refund after the end of the 2007 irrigation season. Counting the refund, which totals $450,000, the net average increase to irrigators is 3.7 percent. The increase to irrigators moves them $1.7 million closer to the approximate $3.7 million in additional revenue the company claims is required for the irrigation class to attain full cost of service.


Rates for Monsanto, PacifiCorp’s largest customer in its six-state area, increase by 16.5 percent, raising $6.8 million. Monsanto, which operates an elemental phosphorous plant near Soda Springs, comprises about 43 percent of PacifiCorp’s electrical requirement in Idaho. Electricity amounts to about one-third of Monsanto’s total production cost.


A significant change in the Monsanto rate is the agreement by Monsanto to move from a contract customer to a tariff customer. That means, as a tariff customer, Monsanto rate changes will take place simultaneously with rate changes for other customer classes. Under the current contract, which expires Dec. 31, rates for Monsanto would change only when a new contract was negotiated.


Monsanto also agreed to an increase in the number of hours PacifiCorp can interrupt or curtail service to Monsanto in order to meet demands on other sectors of PacifiCorp’s six-state service territory. The hours service can be interrupted will be 1,000 annually compared to the previous 800 hours. Monsanto agreed to increase the hours of interruption to offset what would have been a more substantial increase to its rates as a result of a PacifiCorp cost-of-service study that concluded the revenue raised from Monsanto was about $13 million under cost to serve it. The 16.5 percent increase in rates moves Monsanto $6.8 million closer, or more than half way, to full cost of service.


The 4 percent increase for Agrium moves it $150,000 closer to the $428,000 PacifiCorp claims is needed to serve that customer. Agrium produces phosphate fertilizer at facilities also near Soda Springs.


As part of the settlement, the Community Action Partnership of Idaho (CAPAI) agreed not to object to PacifiCorp’s rate application if PacifiCorp also agreed to initiate a proceeding before the commission to significantly increase the company’s contribution to low-income weatherization programs. CAPAI is a non-profit corporation consisting of six community action agencies that fight poverty. The commission is now considering, under a separate docket (PAC-E-06-10), whether the company’s policy of funding only 50 percent of weatherization costs for low-income customers is reasonable.


PacifiCorp also agreed to a one-time $10,000 contribution from shareholder money to two community action agencies in eastern and southeastern Idaho to be used for the Lend-a-Hand program during the 2006-07 heating season. PacifiCorp further agreed to support legislation sponsored by CAPAI that would give the Public Utilities Commission authority to approve utility-proposed low-income assistance programs.


A full text of the commission’s order, along with other documents related to this case, are available on the commission’s Web site at Click on “File Room” and then on “Electric Cases” and scroll down to Case Nos. PAC-E-06-04, PAC-E-06-08 and PAC-E-06-09.


Interested parties may petition the commission for reconsideration by no later than Jan 8. Petitions for reconsideration must set forth specifically why the petitioner contends that the order is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and quantity of evidence the petitioner will offer if reconsideration is granted.


Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.