20250506Staff Comments.pdf

RECEIVED
Tuesday, May 06, 2025
CHRIS BURDIN IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9810
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY'S APPLICATION FOR ) CASE NO. IPC-E-25-11
AUTHORITY TO IMPLEMENT FIXED COST )
ADJUSTMENT ("FCA") RATES FOR )
ELECTRIC SERVICE FROM JUNE 1, 2025 ) COMMENTS OF THE
THROUGH MAY 31, 2026 ) COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"), by and through its Attorney of record, Chris Burdin, Deputy Attorney General,
submits the following comments.
BACKGROUND
On March 14, 2025, Idaho Power Company("Company") applied to the Commission
requesting an order authorizing the Company to implement Fixed Cost Adjustment ("FCA")
rates for electric service from June 1, 2025, through May 31, 2026, and to approve the
Company's corresponding Schedule 54, FCA. Application at 1.
The FCA is a rate adjustment mechanism designed to break the link between the energy a
utility sells and the revenue it collects to recover fixed costsl of providing service, thus
1 "Fixed costs" are a utility's costs to provide service, such as infrastructure and customer service,which do not vary
with energy use,output,or production,and remain relatively stable between rate cases.
STAFF COMMENTS 1 MAY 6, 2025

decoupling the utility's revenues from its customers' energy usage. This decoupling removes a
utility's incentive to increase sales to increase revenue and profits and encourages energy
conservation. It applies to Residential and Small General Service customers.
The Company proposes a$40,657,141, or 5.28% decrease for Residential and Small
General Service customers through Schedule 54. Application at 1. The Company represents that
if the FCA is approved as filed, a typical residential customer using 950 kilowatt-hours ("kWh")
per month will see an approximate $6.35 decrease to their monthly bill. Id. at 1-2.
The Company represents that the proposed FCA is $2,936,820.93 for the Residential
class and $114,953.11 for the Small General Service class, for a total amount of$3,051,774.04,
which is less than the current FCA deferral balance collected in customers' rates. Id. at 7.
The Company proposes a rate adjustment for the Residential and Small General Service
classes to credit the fixed costs that were over-collected through actual billed energy charges
during the year. Id. at 7-8. The Company states that the increase equates to a new FCA credit of
0.0503 cents per kWh for the Residential class and 0.0614 cents per kWh for the Small General
Service class. Id. at 8.
The Company requests that the new FCA rates become effective on June 1, 2025,
coincident with the Company's annual Power Cost Adjustment, and that the FCA rates remain in
effect until May 31, 2026. Id.
STAFF ANALYSIS
Staff reviewed the Company's Application and calculations of its Residential and Small
General Service ("R&SGS") FCA rates, along with the Company's workpapers and supporting
testimony provided by Company witness Grant Anderson. Based on its review, Staff
recommends the Commission approve the Company's proposed Schedule 54 as filed, reflecting a
rebate and accept the FCA deferral balance of$3,051,774. This balance is composed of
$2,936,821 for the Residential class and $114,953 for the Small General Service class.
In this filing the Company proposes to decrease rates based on an FCA rebate deferral
balance of$3,051,774, a significant decrease from the 2023 surcharge deferral balance of
$36,781,811. The Residential and Small General Service classes increased their energy use per
customer causing the Company to over-collect its authorized level of fixed costs as established in
STAFF COMMENTS 2 MAY 6, 2025

Case No. IPC-E-23-11 requiring a rate reduction for each class. The proposed rate reduction
represents a decrease in revenue of$40,657,141, or 5.28%.
Staff audited the components used to calculate the FCA balance and confirmed that they
comply with Commission Orders and were calculated correctly by the Company. Staff verified
the Fixed Cost per Customer("FCC") and Fix Cost per Energy ("FCE") were updated consistent
with Commission Order No. 36042 in Case No. IPC-E-23-11, and the Use per Customer for new
and existing customers for the two affected classes were calculated correctly using the
appropriate annual kWh sales and customer counts.
Modifications to the FCA
In Order No. 35273, Case No. IPC-E-21-39, the Commission authorized the Company to
modify the FCA mechanism and institute separate and reduced fixed cost tracking for R&SGS
customers added to the Company's system after a specific date. In Oder No. 35273, January 1,
2022, was determined to be the date that would separate new and existing customers. In Order
No. 36042, Case No. IPC-E-23-07, January 1, 2024, became the new date that would separate
the new versus the existing customers.
The FCA modification works identically for both the residential and the small general
service classes. Under this modification, the number of customers connected to the system
before the determined date is calculated using the current FCC and FCE. However, the
authorized level of fixed cost recovery for customers added to the system after the date would
exclude generation and transmission-related fixed costs but continue to include distribution and
other customer-related fixed costs. This change would reduce the amount of FCC for new
customers since the Company does not invest in new generation and new transmission when
individual R&SGS customers are added to the system.
In Order No. 36048, Case No. IPC-E-23-14, the Commission authorized a one-time
adjustment to recover the conversion of accumulated kWh credits into a financial credit for
R&SGS customers. The Order decreed that"all accumulated kilowatt-hour credits for non-
legacy systems shall be converted to financial credits using a blended average retail energy rate."
Order No. 36048 at 7. In the Final Comments by the Company in Case No. IPC-E-23-14, the
Company explains how the one-time adjustment will be calculated. "The calculation of the
blended average retail energy rate for each non-legacy customer class is the sum of charges for
STAFF COMMENTS 3 MAY 6, 2025

energy, Fixed Cost Adjustment("FCA"), and Power Cost Adjustment, divided by the total kWh
consumed." Case No. IPC-E-23-14, Company Final Comments at 70.
The total amount of the One-Time Net Billing Adjustment is $74,442. The one-time
adjustment for the Residential classes is $73,461. The one-time adjustment for the Small
General Service classes is $981.
Calculation of the 2023-2024 FCA Rate
In this filing, the Company is proposing to rebate customers based on an FCA rebate
deferral balance of$3,051,774, which is $39,833,585 less than the 2024 FCA surcharge deferral
balance of$36,781,811. The Company proposes to change the Residential Service rate from the
present surcharge rate of 0.6182 cents per kWh to a rebate rate of 0.0503 cents per kWh, which
is a decrease of 5.28% or$39,494,017 for the Residential class. For the Small General Service
class, the Company proposes to change the present surcharge rate of 0.7638 cents per kWh to a
rebate rate of 0.0614 cents per kWh, for a decrease of 5.39% or$1,163,124. The overall total
decrease for both R&SGS classes is 5.28% or$40,657,141.
Both the R&SGS customer classes require a rate rebate for the 2025-2026 FCA collection
period due to the Company over-collecting fixed costs. The over-collection comes from an
increase in customers' energy consumption, compared to the consumption base line established
in Case No. IPC-E-23-11. The Company believes that the 2025-2026 FCA annual sales will be
slightly higher than the 2024-2025 FCA sales and has computed the rate change based on
forecasted sales. Anderson Direct at 18. Staff verified that the FCA forecasted sales are
appropriate and align with the forecast used in the Company's 2023-2024 Power Cost
Adjustment filing.
Using forecasted sales for June 1, 2025, through May 31, 2026, Staff agrees that rebate
rates of 0.0503 cents per kWh for the Residential class and 0.0614 cents per kWh for the Small
General Service class, or a 5.28%total decrease, will provide a sufficient opportunity for the
Company to recover the 2025 FCA deferral balance.
Impact of Company-Sponsored Energy Efficiency
The Commission adopted the FCA in part to remove the Company's disincentive to
invest in energy efficiency that reduces energy sales. However, the Company's energy sales can
STAFF COMMENTS 4 MAY 6, 2025

decrease for many reasons including, but not limited to: weather, economic cycles, better
building codes and standards, improved appliance standards, fuel switching (e.g., increased
electric to gas conversions), energy efficiency programs, or various consumer responses to
higher electric bills (i.e., elasticity measures). The FCA rate adjustment mechanism provides for
fixed cost recovery regardless of the cause of decreased energy sales and revenues.
Since the implementation of the FCA, the Company has stated that the mechanism
reduces its financial disincentive to promote energy-efficiency programs such as Demand Side
Management("DSM"). See Case No. IPC-E-04-15. Cost-effective DSM can defer or eliminate
some capital costs needed by the Company to serve load. The Company continues to effectively
achieve these benefits. According to the Application, in 2024, Idaho Power asserts that it
achieved 143,599 megawatt-hours of savings system-wide. The energy savings claimed are
enough energy to power approximately 12,600 average homes a year in Idaho Power's service
area. The energy savings are described in the 2024 DSM Annual Report filed in Case No. IPC-
E-25-12.
Customer Notice and Press Release
The Company's press release and customer notice were included with its Application.
Staff reviewed the documents and believes that both meet the requirements of Rule 125 of the
Commission's Rules of Procedure (IDAPA 31.01.01.125). The notice was included with bills
mailed to customers beginning March 27 and ending April 25, 2025.
The Commission set a comment deadline of May 6, 2025. Some customers in the last
billing cycle may not have received their notices or had adequate time to submit comments
before the comment deadline. Customers should have the opportunity to file comments and have
those comments considered by the Commission. Staff recommends that the Commission
consider late filed comments by customers. As of May 5, 2025, no customer comments had been
filed.
STAFF COMMENTS 5 MAY 6, 2025

STAFF RECOMMENDATION
Staff recommends the Commission:
1. Approve the Company's FCA filing with a net deferral balance of($3,051,774) for
June 1, 2025, through May 31, 2026; and
2. Approve the Company's proposed Schedule No. 54 as filed.
Respectfully submitted this 6th day of May 2025.
Chris Burdin
Deputy Attorney General
Technical Staff: Laura Conilogue
1:\Utility\UMISC\COMMENTS\IPC-E-25-11 Comments.docx
STAFF COMMENTS 6 MAY 6, 2025

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS DAY OF MAY 2025,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. IPC-E-25-11, BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
MEGAN GOICOECHEA ALLEN CONNIE ASCHENBRENNER
IDAHO POWER COMPANY GRANT T. ANDERSON
IPC DOCKETS IDAHO POWER COMPANY
PO BOX 70 PO BOX 70
BOISE ID 83707 BOISE ID 83707
E-MAIL: E-MAIL: caschenbrenner,vidahopower.com
m�4oicoecheaallenLidahopower.corm gandersonLidahopower.com
docketsLc'tidahopower_com
PA IC
IA JORDA , SECRETARY
CERTIFICATE OF SERVICE