Idaho Public Utilities Commission

Case No. PAC-E-11-12

October 12, 2011

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

PUC schedules rate case workshops in Grace, Rexburg

Staff from the Idaho Public Utilities Commission will conduct customer workshops in eastern Idaho later this month regarding the application of Rocky Mountain Power for a rate increase.

The workshops are scheduled for Wednesday, Oct. 26, at 7 p.m. at the Grace High School auditorium, 704 S. Main St., and Thursday, Oct. 27, at 7 p.m. at the Spring Hills Suites Marriott, 1177 S. Yellowstone Highway in Rexburg.

On June 27, PacifiCorp, which does business as Rocky Mountain Power in eastern Idaho, applied to the commission for an average 15 percent rate increase. Since then, the commission’s staff of auditors, engineers and attorneys has been reviewing the application. All the parties to the case have engaged in settlement negotiations and have reached an agreement in principle that may considerably reduce the original request. Details are expected to be announced later this week.

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’s original request was for a $32.7 million increase to its annual revenue requirement. The utility 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.

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.

Customers can track the case on the commission’s Web site where the company’s application, including testimony from 14 company officials and customer comments, is posted. 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.