Idaho Public Utilities Commission

Case No. PAC-E-11-07, Order No. 32216

March 31, 2011

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

Website: www.puc.idaho.gov

 

Yearly adjustment results in 5.8 percent surcharge for RMP customers

 

A one-year surcharge on the bills of Rocky Mountain Power customers will be set at an average 5.8 percent, according to an order issued by the Idaho Public Utilities Commission today. The average increase to standard residential customers is 5.2 percent.

 

Rocky Mountain Power originally sought an average 7.4 percent surcharge to pay off a deferral account that had accumulated to $12.8 million. The commission approved a recovery of $10.4 million, electing to postpone recovery of about $2.4 million until next year.

 

The surcharge, which is effective April 1 and expires next March 31, allows Rocky Mountain Power to pay off deferred power supply costs that vary from year to year and are not included in base rates. These include expenses that change from day to day such as those for coal, natural gas and electricity from the wholesale market.  None of the money collected in the surcharge can be used to increase company earnings, but goes directly toward paying off deferred and unanticipated power supply expense.  During years that market prices for power supply are less than what is included in base rates, customers would receive a one-year credit. To encourage the company to be prudent in its power supply purchase decisions, the commission requires that shareholders pay 10 percent of the power supply expenses not already included in rates.

 

The surcharge is called an Energy Cost Adjustment Mechanism, or ECAM. The surcharge or credit will be made April 1 of every year. The commission instituted the mechanism in 2009 as a way to more closely match customer rates with the actual cost of providing service. Doing so reduces the frequency and size of general rate case filings. It also helps to keep financing costs, which are ultimately paid by customers, at lower levels.

 

That $2.4 million the commission elected to postpone to next year is about one-half of a load-growth adjustment rate that makes up part of the ECAM. Because the commission recently modified the portion of the ECAM that accounts for increases or declines in load growth, it anticipates a lower load growth adjustment next year which should contribute to a less of an increase in the overall ECAM next year. Further, the commission said, spreading some of the ECAM deferral over two years helps to mitigate the impact of a rate increase customers received just three months ago.

 

Rocky Mountain Power serves about 70,000 customers in southeastern Idaho.

 

A full text of the commission’s order, along with other documents related to this case, is available on the commission’s Web site at www.puc.idaho.gov. Click on “File Room” and then on “Electric Cases” and scroll down to Case No. PAC-E-11-07.