Idaho Public Utilities Commission

Case No. PAC-E-11-07, Order No. 32187

February 24, 2011

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

PUC conducting workshop, taking comments on utility application

Staff from the Idaho Public Utilities Commission and representatives from Rocky Mountain Power will be in Pocatello on March 8 to review Rocky Mountain Power’s application for its annual Energy Cost Adjustment Mechanism, or ECAM. The commission is also accepting written comment on the application through March 23.

The mechanism, now in its second year, allows Rocky Mountain Power to recover power supply costs that vary from year to year and are not included in base rates. Under the company’s application, rates for residential users would increase by about 6 percent effective April 1, or about $5 per month for a residential user who uses the company’s average monthly consumption of 840 kWh.

The annual ECAM is intended to address the company’s variable costs of providing power to its customers that are not already included in base rates such as changes in the prices of coal or natural gas. The annual adjustment better matches customer rates with the actual cost of providing power and, therefore, can reduce the frequency and size of general rate case filings. Unlike a general rate case, which can increase the utility’s earnings, none of the money collected through the ECAM can be used to increase company earnings. The revenue collected in the ECAM can go only toward paying the company’s power supply expense. Power supply costs are placed in a deferred account audited by the commission.

The ECAM is adjusted up or down every April 1, depending on the previous year’s power supply costs. When net power costs are higher than the base rate established in the most recent general rate case, the company collects the difference through a one-year ECAM surcharge that is listed as a separate item on customer bills. If net power costs are lower than the amount collected in base rates, customers receive a one-year credit. In this year’s filing, Rocky Mountain claims net power costs for 2010 were $12.8 million higher than that collected in base rates.

To encourage the company to be prudent in its power supply purchase decisions, the ECAM requires that shareholders pay 10 percent of the power supply expenses not already included in rates.

The workshop will be in the Newberry Building, 160 N. Main St. in Pocatello on Tuesday, March 8, at 7 p.m. Commission staff will provide an explanation of the Energy Cost Adjustment Mechanism, how the commission will process the application and how customers may participate. Representatives from the company will explain the specifics of this year’s application, including the company’s justification for the amount requested. Customers will be allowed to ask questions of either the company or commission staff. Commission staff may ask questions to representatives of the company.

Customers may also submit written comment through March 23. 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 (PAC-E-11-07) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.

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