Case No. PAC-E-07-05, Stipulation

November 8, 2007

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



Parties propose settlement to Rocky Mountain Power case


Parties in the Rocky Mountain Power rate case are proposing a settlement that would increase rates for residential and irrigation customers by 4.89 percent and allow the company an annual revenue increase of $11.5 million or 8.6 percent. That’s down from the 10.3 percent revenue increase, or $18.5 million, originally proposed by the company, which would have resulted in about a 6.7 percent for residential and irrigation customers.


It is now up to the Idaho Public Utilities Commission to determine whether the settlement is in the best interest of customers. Rocky Mountain Power serves about 67,000 customers in eastern Idaho. If the settlement is approved, new rates would be effective on Jan. 1.


The settlement proposes a rate of return of 8.27 percent and a return on equity of 10.25 percent.


Rocky Mountain, a division of PacifiCorp, originally proposed a 24.1 percent increase for its largest customer, Monsanto Corporation, and 14.5 percent increase for Agrium, both based in Soda Springs. Under the proposed settlement, Monsanto would get a 13.5 percent increase on Jan. 1, 2008, another 3 percent on Jan. 1, 2009 and 5 percent on Jan. 1, 2010. Agrium would get a 6.25 percent increase on Jan. 1, 2008, another 3 percent on Jan. 1, 2009 and another 7 percent on Jan. 1, 2010. The settlement proposes a 75.29 percent increase for street and area lighting and no increase for commercial customers.


Rates to serve customer classes are based primarily upon the cost to serve each class. Under the proposed settlement, Rocky Mountain Power agrees to not increase rates for Monsanto and Agrium beyond what is proposed even if the cost to serve those classes increases before Dec. 31, 2010. If there are increases in cost of service to Monsanto and Agrium, Rocky Mountain Power agrees to assume those losses and not propose they be assigned to other customer classes.


Also under the proposed settlement, irrigators who participate in the company’s Dispatchable Irrigation Load Control Program will get nearly twice as large a credit – from the current  $11.19 to $23 – for every kilowatt of peak demand reduced. That can be increased to $26 per kilowatt if total participation reduces more than 150 megawatts of peak demand and $28 if total participation reduces more than 175 MW of peak demand.


The company also agreed to defer consideration of its proposed changes regarding recovery of collection agency costs, reconnection fees and line extension changes. The company had proposed requiring that delinquent customers pay for collection agency fees. Currently the company pays for collection fees and includes the cost in rates.


Parties participating in the case included Rocky Mountain Power, commission staff, Monsanto Company, the Idaho Irrigation Pumpers Association, Agrium, Inc., Community Action Partnership of Idaho and Timothy J. Shurtz, a Firth resident. Monsanto did not sign the settlement, but will not oppose it.


The parties state that the settlement represents a compromise of their positions. The parties agree not to appeal any portion of the settlement if it is approved. If the commission rejects a portion or all of the settlement, the parties reserve the right to withdraw within 15 days and be entitled to seek reconsideration of the commission’s order.


The commission is expected to rule on the proposed settlement within the next two to three weeks.


Rocky Mountain Power’s application, testimony and workpapers as well as comments and exhibits from intervenors, are available on the commission’s Web site at Click on the electric icon, then on “Open Electric Cases” and scroll down to Case No. PAC-E-07-05.