Website: www.puc.idaho.gov
Commission taking comments on decoupling mechanism
The Idaho Public Utilities Commission is taking comments through March 1
on an Idaho Power Company application to make its pilot Fixed Cost Adjustment
(FCA) program permanent.
The FCA, which allows Idaho Power to recover its fixed costs of
providing service when conservation results in reduced energy sales, has been
in place since 2007 as a pilot program.
When Idaho Power filed to make the program permanent in 2009, the
commission denied the request stating results of the program are “mixed” and
there are still too many unanswered questions. However, the commission allowed
the program to continue for another two years as a pilot program.
With two more years of the pilot completed and after further discussion
between commission staff, the Idaho Conservation League, Micron Technology,
Inc., and Northwest Energy Coalition, the commission is taking comment through
March 1 on an Idaho Power proposal to make the program permanent. Reply comments are due March 15.
Regulated utilities have a built-in disincentive to invest in
energy efficiency and conservation programs because they lose revenue when
electric consumption declines. To remove that disincentive, the Fixed Cost
Adjustment, which can be no higher than 3 percent, is designed to ensure the
company recovers its fixed costs of serving customers regardless of the amount
of energy conservation. Often referred to as “decoupling,” the FCA decouples
the link between energy efficiency and energy sales.
If the actual fixed costs recovered from customers by Idaho Power are
less than the fixed costs authorized in the most recent rate case, residential
and small-commercial customers get a surcharge. If the company collects more in
fixed costs than authorized by the commission, customers get a credit.
With implementation of the FCA, the commission expected Idaho Power to
significantly increase the size and availability of energy efficiency programs,
which the commission said the company has done. Energy efficiency is the least
expensive energy source for utilities. Program that encourage reductions in
energy demand and more efficient use of energy can delay or defer the utility’s
need to build more power plants or buy energy from more expensive
resources.
The following is the average monthly rate impact of the FCA for
residential and small-business customers from 2007 through 2010:
2007 – 48 cent reduction
2008 – 56 cent increase
2009 -- $1.28 increase
2010 -- $1.89 increase
Comments are accepted via e-mail by
accessing the commission’s homepage at www.puc.idaho.gov
and clicking on "Comments & Questions About a Case." Fill in the
case number (IPC-E-11-19) and enter your comments. 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.
###