Idaho Public Utilities Commission

Case No. IPC-E-08-07, Order No. 30540

April 28, 2008

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

PUC conducting workshops, taking comments on Idaho Power PCA

Staff from the Idaho Public Utilities Commission will be conducting public workshops next week to answer customer questions about Idaho Power Company’s proposed Power Cost Adjustment (PCA) surcharge.

Every year on June 1, customer rates are adjusted either up or down to reflect the Idaho Power’s annual power supply costs. Because about 52 percent of the company’s generation is from hydropower facilities, Idaho Power’s actual cost of providing electricity (power supply cost) varies from year to year depending on changes in Snake River stream flows, the market price of power and other factors.

Snow pack and river flows from the winter of 2006-07 were below normal and reservoirs were low. In addition, temperatures broke the 100-degree mark 14 times in July alone. Idaho Power’s record for customer demand was broken five times before setting an all-time high of 3,193 megawatts on July 13. Due to lack of hydroelectric generation, Idaho Power had to go to the wholesale market and buy power. It had to fire up its natural gas peaker plants to meet load during those peak-use days.

Consequently, the company spent about $163 million buying power and natural gas to serve its customers. If the commission approves the PCA in its entirety, customers will see an average 10.3 percent increase to the existing power cost surcharge to be effective June 1.

The commission’s job is to review the company’s power-purchase decisions to ensure Idaho Power found the most reasonably priced power it could to serve customers. If the commission determines the company was efficient in its power supply purchases, state statute requires that it be allowed to recover prudently incurred expenses. None of the money collected from the surcharge goes to increase company profits. The money is kept in a deferred account, audited by the commission, and used only to pay off power supply expenses.

At the workshops, commission staff will explain the company’s application and answer questions. Dates and places for the workshops, all of which will begin at 7 p.m. are as follows:

Tuesday, May 6 – Newberry Building on the corner of Clark and Main Streets in Pocatello. (Parking is available behind the building in the Union Pacific parking lot.)

Wednesday, May 7 – Twin Falls City Council chambers, 305 Third Avenue East, Twin Falls.

Thursday, May 8 – Idaho Public Utilities Commission hearing room, 472 W. Washington St., Boise.

The commission is also taking written comments through May 20. Comments are accepted via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on "Comments & Questions." Fill in the case number (IPC-E-08-07) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.

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 the above case number.