Idaho Public Utilities Commission
Case No. PAC-E-08-07, Notice of Public Workshops
December 29, 2008
Contact: Gene Fadness (208) 334-0339, 890-2712
Rate case workshops scheduled in Rexburg, Preston
Staff members from the Idaho Public Utilities Commission will be in Rexburg and Preston on Jan. 7 and Jan. 8 to present information about PacifiCorp’s (doing business as Rocky Mountain Power in eastern Idaho) application for an average 4 percent rate increase.
Commission staff will also take questions from customers at the two workshops, scheduled for Wednesday, Jan. 7, at the Best Western Mountain View Inn conference center at 450 W. 4th South in Rexburg and Thursday, Jan. 8, at the Robinson Building of the Franklin County Fairgrounds, 186 W. 2nd North in Preston. Both workshops begin at 7 p.m.
Rocky Mountain Power, which is the eastern (Utah, Idaho and Wyoming) portion of PacifiCorp’s six-state territory, serves about 70,000 customers in eastern Idaho. On Sept. 19, PacifiCorp filed an application with the commission to increase base rates by $5.9 million annually or 4 percent.
The size of the increase varies according to customer class. PacifiCorp proposes a 4.73 percent for residential customers, 7.96 percent for large commercial customers, 2.3 percent for irrigation customers and no increase for small commercial or public street lighting customers. The amount of the proposed increase for each customer class is determined largely by studies that determine the cost to the company to serve each customer class. For the residential customer who uses the company average of 850 kilowatt-hours per month, the monthly increase would be $3.55 per month if the increase were granted in full.
The utility claims the increase is needed to pay for load growth, capital investment and operating costs beyond the company’s control. According to Rocky Mountain Power President Richard Walje, PacifiCorp “is in the midst of an unprecedented, unavoidable capital investment cycle.” It plans to spend about $20 billion over the next decade on new generation resources, transmission lines and distribution facilities. That investment is required to meet customer demand, Walje said, which is growing at a higher pace in the Rocky Mountain region than anywhere else in the country, according to the North American Energy Reliability Corporation.
PacifiCorp seeks cost recovery for two new wind projects and a natural gas plant. The wind projects are Goodnoe Hills, a 94-megawatt project in south-central Washington and the 70.2-MW Marengo II project, in southeast Washington. The natural gas plant is the 500-MW Chehalis project near Centralia, Washington. Costs for those projects are shared proportionately by those customers in PacifiCorp’s territory who benefit from the projects.
In addition to new generation, about 30 percent of the company’s proposed new revenue requirement is attributable to the rising costs of fuel, of power purchases from other utilities and wholesale power marketers and of transmission wheeling costs. Even with the addition of more than 2,000 MW of new generation capacity over the last six years, the company does not own sufficient resources to meet customer demands during times of peak use. Therefore, it must buy and sell on the wholesale electric market.
PacifiCorp claims it is attempting to reduce customer demand by implementing demand-side management (DSM) programs that reduced 300 megawatts of demand over the last decade. The company estimates that expanded DSM programs will reduce demand by 750 megawatts over the next 10 years. Those programs are principally incentives to customers to reduce consumption by cutting back on air conditioning and irrigation during peak-use teams.
The company claims it has implemented cost-cutting measures, including reducing administrative and general expenses from $228 million to $188 million since PacifiCorp was purchased by Des Moines-based MidAmerican Energy Holdings Company in 2006.
According to Walje, the proposed rate increase would also give the company an opportunity to earn up to its allowed rate of return, which, in turn, contributes to favorable credit ratings that keep debt costs for customers at reasonable levels.
Customers can read the company’s entire application and the written testimony of company officials on the commission Website at www.puc.idaho.gov. Click on the electric icon, then on “Open Electric Cases,” and scroll down to Case No. PAC-E-08-07. By Jan. 30, commission staff will file its comments along with other intervenors in the case including Agrium, the Community Action Partnership Association of Idaho, the Idaho Irrigation Pumpers Association and Monsanto. Copies of the application are also available in the company’s offices in Rexburg, Preston, Shelley and Montpelier.