Idaho Public Utilities Commission

Case No. PAC-E-12-03, Order No. 32460

March 2, 2012

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

Rocky Mountain annual ECAM is not an increase for most customers

Rocky Mountain Power claims it is not collecting enough from its customers to cover its power supply expenses not already included in base rates, but is not seeking an increase from most customers in this year’s Energy Cost Adjustment Mechanism because it believes power supply costs will decrease significantly next year.

Rocky Mountain, which serves about 70,000 customers in eastern Idaho, recommends that the current rate be held constant to achieve rate stability over the next two years. However, it is seeking commission authority to collect $2.6 million in power supply expense from two large-contract customers, Monsanto and Agrium. The total amount to be collected from Monsanto and Agrium for the ECAM account is $7.7 million, but collection of that amount is being spread over three years according to a settlement agreement in the company’s most recent rate case.

The Idaho Public Utilities Commission is taking comments through March 13 on Rocky Mountain’s proposed ECAM adjustment.

Most power supply expense is included in base rates, but because those costs vary from year to year due to changes in market rates, transportation expense and expiration of contracts with energy suppliers, the ECAM allows the company to make a one-year adjustment every April 1. The adjustment is a one-year increase to customers if power supply costs are higher than the amount already included in base rates and a credit to customers if power supply costs are lower than that included in base rates. The company’s earnings are not impacted by the ECAM because all the money collected when there is a surcharge is kept in a separate account that must go directly to pay power supply expense and cannot be used for any other purpose.

The ECAM appears as a line item on customer bills under the company’s tariff Schedule 94. The current ECAM of just slightly more than half a cent (0.569 cents per kWh) collects $10.4 million for Idaho’s share of the company’s power supply expenses. In the current application, the company proposes to collect an additional $2.4 million from Monsanto and $200,000 from Agrium to increase to the total ECAM collection to $13 million.

Throughout its six-state territory, PacifiCorp, which does business as Rocky Mountain Power in eastern Idaho, Wyoming and Utah, has $1.025 billion included in base rates for power supply costs. During 2011, actually power supply expense was $1.344 billion, or $319 million more than included in base rates. The portion of those costs allocated to Idaho is 6 percent, based on Idaho’s share of PacifiCorp’s total electrical load.

The increase in power supply expense is primarily driven by less revenue coming into the company from its electric sales on the wholesale market when there is surplus electricity. According to the company, there has been a 29 percent drop in wholesale sales prices and a 50 percent reduction in the volume of wholesale sales from what was included in base rates. Net power costs are increasing also because older less-expensive contracts from PacifiCorp’s suppliers are expiring and being replaced by higher-priced contracts. Expenses related to operating the company’s coal plants have also increased, according to the company’s application.

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-12-03) 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.