Idaho Public Utilities Commission

Case No. PAC-E-11-12

November 22, 2011

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

PUC to hold hearings on proposed rate case settlement

Several parties to the Rocky Mountain Power rate case are proposing a settlement that reduces the company’s original request for an average 15 percent increase to an average 7.8 percent in 2012 and 7.2 percent in 2013 along with a company promise not to seek another rate increase that would become effective before 2014.

For residential customers, the proposed increase would be about 5.9 percent in 2012 and 5.4 percent in 2013. The average bill for a customer who uses the company average of 837 kilowatt-hours per month would increase by $5.47 and $4.20 in summer and winter respectively in 2012 and by $5.36 and $4.10 per month in summer and winter respectively in 2013. For residential time-of-day customers the proposed increases are 7.9 percent in 2012 and 7.4 percent in 2013. For large business customers the proposed increases are 6.7 percent in 2012 and 6.2 percent in 2013. For irrigation customers, the proposed increases are 8.9 percent and 8.25 percent.

The commission is conducting public hearings on the proposed settlement Wednesday, Dec. 7 in Downey and Thursday, Dec. 8 in St. Anthony. A telephonic hearing for those unable to attend the other public hearings is set for Monday, Dec. 19.

Last June, PacifiCorp, which does business as Rocky Mountain Power in eastern Idaho, asked the commission for an annual revenue increase of $32.7 million. The proposed settlement allows a $17 million revenue increase each year in 2012 and 2013. Based on recent filings by the company in both Idaho and Utah, commission staff believes that without this settlement, PacifiCorp would likely have filed for a rate increase in 2012 of at least $30 million. This settlement proposes an increase of less than 50 percent of that level.

“Staff believes that the comprehensive multi-year approach to resolving revenue requirement represents a significantly better deal for customers than could be achieved through either a one-year settlement, litigation of the current rate case or resolution of additional rate filings in 2012,” according to testimony filed by commission staff. Commission staff thoroughly reviewed the filing and conducted an onsite audit of the company’s expenses and investments.

About $11 million of the $17 million added revenue for both years is for power supply expense. Increased costs in power supply are due to declining revenue from surplus electricity sales, expiration of low-cost power purchase agreements and increasing coal costs. The remaining $6 million covers fixed costs not related to power supply. The $6 million allowed in each 2012 and 2013 is about 62 percent less than the amount requested by the company.

The proposed settlement allows the remaining expense for the Populus to Terminal transmission line to be included in rates, but not until Jan. 1, 2014 at the earliest. In return, Rocky Mountain Power agrees to suspend its state Supreme Court appeal of a commission decision in the 2010 rate case to not include about 27 percent of Populus to Terminal expense until the line was fully utilized and benefitting customers.

Other parties signing the settlement include the Monsanto Company, the Idaho Irrigation Pumpers Association and the PacifiCorp Idaho Industrial Customers. The Community Action Partnership Association of Idaho (CAPAI) participated in settlement discussions but did not sign.

CAPAI agrees with portions of the settlement but did not sign because the agreement does not include an increase for the Low Income Weatherization Assistance (LIWA). Rocky Mountain Power has filed a separate case alleging that LIWA is not cost-effective for customers. In the 2010 rate case, the commission ordered Rocky Mountain to double its LIWA funding from $150,000 to $300,000. Rocky Mountain has increased its low-income weatherization funding twice in the last 21 years from $75,000 in 1989 to the current $300,000.

CAPAI also expressed concern over the frequency of Rocky Mountain Power rate increases, a perceived lack of transparency in the settlement negotiations and the impact on residential customers of simultaneous rate increase requests from Idaho Power Company, Avista Utilities and Boise-based United Water Idaho.

Some issues on which the parties were not able to agree have been deferred for further discussion, but will not impact rates during the 2012-13 settlement period. Those issues include how best to calculate what it costs the utility to serve irrigation customers and the Monsanto plant in Soda Springs. The settlement proposes that all customer classes be moved 25 percent closer during each 2012 and 2013, bringing all classes 50 percent closer to what the company considers actual cost of service. Another issue to be discussed further is how much Rocky Mountain should pay Monsanto for agreeing to have its electric service interrupted during peak-use times.

The Downey public hearing on Dec. 7 will be at the Senior Citizens Center on 21 S. Main St. The Dec. 8 St. Anthony hearing is at the Fremont County Annex Room, 125 N. Bridge St. Both hearings begin at 7 p.m.

The telephonic hearing is on Dec. 19 at 7 p.m. and will be conducted from the commission’s public hearing room on 472 W. Washington St. in Boise. Customers can offer testimony and listen to the entire hearing which will be attended by the commissioners who decide the case. The toll-free number is 1-800-920-7487. Customers will be asked to enter a participant code, 76373262 followed by the pound (#) sign. Those wanting to testify can press *1 (star one) at any time during the hearing. They will then be placed in line to testify. When it is your turn to testify, you will hear the prompt “Ask your question” at which time you will be asked your name and address and then be allowed to testify. If you later decide you don’t want to testify, push the # (pound) key. The telephones of all those listening but not testifying are muted so that you can hear without background noises. These instructions will be repeated at the beginning of the hearing and again during the hearing.

Public hearings are strictly for taking customer testimony. There is no presentation by the commissioners, commission staff or any intervening parties.

A technical hearing, during which attorneys for commission staff and intervenors present their testimony and exhibits and cross-examine the company or other parties, is scheduled for Monday, Dec. 19, at 9:30 a.m. in the commission hearing room. The hearing is open to the public but public testimony is not taken at the technical hearing.

Customers can track the case on the commission’s Web site at www.puc.idaho.gov. Click on the electric icon, then on “Open Electric Cases,” and scroll down to Case No. PAC-E-11-12.

###