Website: www.puc.idaho.gov
Settlement
results in restoration of BPA credit
The Idaho
Public Utilities Commission’s active participation in a federal court appeal
has resulted in a settlement that slightly reduces bills for Rocky Mountain
Power customers and restores a Bonneville Power Administration credit after a near
four-year absence.
Restoration
of the credit means a reduction of about 0.2 cents per kWh to the bills of Rocky
Mountain’s residential and small-farm customers effective Dec. 1. After a
deferral account is paid off in two years, the credit should become
higher.
“While the
amount is not large initially, restoring the BPA credit is a step in the right
direction that could lead to larger credits in the future,” said Commissioner
Marsha Smith.
“We want to
praise our legal staff and others here for their ongoing commitment and effort
in this appeal and the resulting settlement,” said Commissioner Mack
Redford.
BPA is a Portland-based
federal agency that markets power from 31 federal dams and a nuclear plant in
the Northwest. The 1980 Northwest Power
Act requires that residential and small-farm electric customers in the Northwest
share in the benefits of the region’s federal hydroelectric projects through
one of two ways. Customers of consumer-owned
utilities, such as rural co-ops and municipalities, benefit with preferential
access to low-cost federal power from BPA. Customers of the region’s investor-owned
utilities (IOUs) – such as Rocky Mountain Power – receive their share of the
benefit through a financial credit on the bills of residential and small-farm
customers. About 85 percent of Idahoans
are customers of IOUs, while the others are customers of consumer-owned
utilities.
In May 2007, the Ninth Circuit Court
of Appeals declared that BPA did not act in accordance with the Northwest Power
Act when it approved a settlement in 2000 regarding credits to customers of the
region’s investor-owned utilities. The court said the 2000 settlement gave customers
of the region’s IOUs too much in credits while customers of public co-ops and
municipalities were overcharged.
Shortly after that decision, BPA suspended
the credit for Idaho’s three major IOUs (Rocky Mountain Power, Idaho Power and
Avista Utilities) until the BPA could re-calculate the rates and credits to
comply with the court’s directive. The
impact was severe for Rocky Mountain Power customers, where the loss of the
credit meant a 28 percent increase for residential customers and a 51 percent
increase for irrigation customers.
The Idaho commission joined with
commissions in Washington and Oregon, Rocky Mountain Power and other
investor-owned utilities to appeal the Ninth Circuit decision, objecting
especially to the “Lookback Adjustment.” That adjustment withheld future
credits to customers of IOUs in order to refund the amount of the credits in the
overturned 2000 settlement to the consumer-owned utilities.
As a result of the states’ appeal, a
settlement was reached among the three state commissions, the regional IOUs and
almost all the consumer-owned utilities. The parties agreed to discontinue the
Lookback Adjustment, resulting in an immediate restoration of the credit,
though not at the same level as the credit before the court’s 2007 ruling. The
settlement also fixed the amount of credits to be paid all Northwest IOUs over
the next 17 years.
“Getting the Lookback Adjustment
removed was a key victory for customers, ensuring them future protection against
any future liability,” said Paul Kjellander, president of the Idaho commission.
Idaho customers of Rocky Mountain
Power currently have a negative balance of $1.67 million which will be applied
against the credit over the next two years.
Once that is paid off, the credit should increase.
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