Idaho Public Utilities Commission

Case No. PAC-E-08-07, Order No. 30727

February 12, 2009

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



Settlement proposed in Rocky Mountain rate case; hearing in Shelley


Parties in the Rocky Mountain Power rate case are proposing a settlement that would increase overall rates by an average 3.1 percent.


If the settlement is accepted by the Idaho Public Utilities Commission, residential rates would increase by 3.53 percent. Last September, when the utility submitted the case, it asked for a 4 percent overall increase and 4.73 percent for residential customers. Rocky Mountain asked to collect an additional $5.87 million in annual revenue. The settlement proposes $4.38 million.


Parties signing the settlement include PacifiCorp (which does business as Rocky Mountain Power in eastern Idaho), the Idaho Irrigation Pumpers Association, the Community Action Partnership Association of Idaho and Public Utilities Commission staff, which operates separately from the commission. Monsanto, Rocky Mountain Power’s largest customer based in Soda Springs, participated in the discussions and, while not signing the proposed settlement, indicated it would not oppose it.


 The commission has scheduled both a technical hearing and a public hearing before making a decision on whether to accept the settlement. The technical hearing is March 11 at 9:30 a.m. in the commission hearing room at 472 W. Washington St. in Boise.


The public hearing will be March 17 at 7 p.m. in the Shelley City Hall, 101 S. Emerson, Shelley. During the public hearing, the commissioners will take public testimony from customers. Written comment from intervening parties is due Feb. 25 and written comment from customers is accepted through March 20.


Rocky Mountain Power, which serves about 70,000 customers in eastern Idaho, maintains the increase is necessary to pay for growth in its electrical load, capital investment and operating cost increases beyond its control.


The increase, if adopted, would become effective April 18. The proposed increase by major customer classes is 3.53 percent for residential; no increase for small commercial, 5.94 percent for both large commercial and industrial and 1.73 percent for irrigation. Rates for Monsanto and Agrium (Nu-West) are controlled under a separate agreement. Monsanto received a 13.5 percent increase effective Jan. 1, 2008 and another 3 percent on Jan. 1, 2009. It is scheduled for another increase of 5 percent on Jan. 1, 2010.


Other key components of the proposed settlement:


-- This is a “black box” settlement with no party accepting all the methodology or adjustments made to arrive at the $4.38 million in added revenue requirement. However, all parties agreed the overall increase represents a fair, just and reasonable compromise of the issues raised and that the settlement is in the public interest.


-- The parties agreed that Rocky Mountain’s purchase of the Chehalis natural gas plant in Chehalis, Wash., was a prudent decision and in the public interest. Costs relating to buying and operating the plant were included in this case.


-- The parties agreed that the company’s management programs to reduce demand on its system are cost-effective. The parties agreed that $50,000 of demand-side management funds should be made available to community action agencies in eastern Idaho to provide conservation education to participants in the company’s low-income weatherization program.


-- Rocky Mountain agreed that it will include a design for tiered rates for residential customers in its next rate case.


The commission will now determine if the proposed settlement is in the public interest. State statutes require that regulated utilities be allowed to recover their prudently incurred costs of doing business plus a rate of return that it is not unreasonably high, but high enough to attract Wall Street investment in generation, distribution and transmission projects. When the commission denies cost recovery to a utility it must be able to legally demonstrate why the denied costs were not prudently incurred or needed to serve customers. Utilities, as well as other parties in the case, can appeal commission decisions to the state Supreme Court.


Customers who will not be attending the public hearing, but wish to enter written comments can do so by accessing the commission’s Web site at Click on the “Comments and Questions” icon and enter the case number, PAC-E-08-07. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.


A full text of the commission’s order, along with other documents related to this case, is available on the commission’s Web site. Click on “File Room” and then on “Electric Cases” and scroll down to the above case number.