Idaho Public Utilities Commission

Case No. PAC-E-11-12

June 9, 2011

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

Commission begins processing Rocky Mountain rate case

The Idaho Public Utilities Commission has suspended for up to six months an application by PacifiCorp to increase customer rates by an average 15 percent. PacifiCorp does business as Rocky Mountain Power in southeastern Idaho, where it serves about 70,000 customers.

The six-month suspension from PacifiCorp’s requested June 27, 2011, effective date will allow time for the commission’s staff of auditors, engineers and attorneys to thoroughly review the company’s application.

The commission cannot, by state law, arbitrarily refuse to consider utility rate increase requests. State statutes require that all rate requests be considered by the commission to determine whether the expenses the utility seeks to recover through customer rates were needed to serve customers and if they were prudently incurred. The commission may accept, reject or modify the company’s request. When the commission denies expense recovery it must be able to legally demonstrate why the expenses were not needed or prudently incurred. All commission decisions can be appealed to the state Supreme Court by the utility, intervenors or customers.

Rocky Mountain Power is seeking a $32.7 million increase to it annual revenue requirement. It claims that its costs have increased by about $278 million above that now included in customer rates.

More than half the $32.7 million requested increase ($17 million) is for what the utility claims is an increase in power supply costs due to the expiration of long-term wholesale power contracts and increased coal and wind integration costs. The company also claims a decline in revenue from its sales of surplus energy into the wholesale market.

About 31 percent of the requested increase is due to capital additions including investment in transmission, pollution control equipment and hydro generation plants.

In May 2010, Rocky Mountain filed a request for a 13.7 percent average rate increase and a $27.7 million revenue requirement. The commission eventually approved an average 6.8 percent rate increase and a $13.75 million revenue requirement. The company petitioned for reconsideration and in March and was granted another 0.27 percent. Rocky Mountain has appealed some issues in the 2010 case to the Idaho Supreme Court.

Proposed increases for customer classes vary according to the cost the company incurs to serve each customer class. The company’s proposed increase for residential customers is 7.2 percent. For residential customers who are on optional Time of Day Rates, the proposed increase is 15.9 percent. Proposed increase for other customer classes is as follows: commercial, 11.8 percent; industrial, 11.2 percent and irrigation, 19.9 percent. The proposed increases for Rocky Mountain’s large contract customers are 18.7 percent for Monsanto and 19.9 percent for Nu-West.

The commission has set an intervention deadline of June 21 for parties seeking “intervenor” status. Parties, typically representing large customers or groups of customers, intervene to present evidence, cross-examine witnesses, participate in settlement conferences and make and argue motions. Parties seeking intervenor status to date include the Idaho Irrigation Pumpers Association and Monsanto. As the case develops, members of the general public, who do not have intervenor status, will have the opportunity to submit written comments for the case record and participate in public workshops and testify at hearings to be scheduled later.

Customers can track the case on the commission’s Web site where the company’s application, including testimony from 14 company officials, is posted. As the case progresses, testimony from commission staff and intervenors and customer comments will be added. The Web site is www.puc.idaho.gov. Click on the electric icon, then on “Open Electric Cases,” and scroll down to Case No. PAC-E-11-12.

Copies of the application are also available at company offices in Rexburg, Preston, Shelley and Montpelier.