20260522Final_Order_No_37046.pdf

Office of the Secretary
Service Date
May 22,2026
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IDAHO POWER COMPANY'S ) CASE NO. IPC-E-26-06
APPLICATION FOR AUTHORITY TO )
IMPLEMENT FIXED COST ADJUSTMENT )
("FCA") RATES FOR ELECTRIC SERVICE ) ORDER NO. 37046
FROM JUNE 1, 2026 THROUGH MAY 31, )
2027 )
On March 13, 2026, Idaho Power Company ("Company") applied ("Application") to the
Idaho Public Utilities Commission ("Commission") requesting: (1) authorization to implement
Fixed Cost Adjustment ("FCA") rates for the Residential classes and Small General Service
classes, for electric service from June 1, 2026, through May 31, 2027; and (2) approval of the
Company's corresponding Schedule 54, Fixed Cost Adjustment, effective June 1, 2026.
Application at 1. The Company represented that the proposed 2026-2027 FCA rates would
increase annual billed revenue by $5,117,270, or 0.65%, for the Residential and Small General
Service ("R&SGS") classes. Id. at 7.
On April 8,2026,the Commission issued a Notice of Application and a Notice of Modified
Procedure, establishing a May 12, 2026, deadline for public and Commission Staff ("Staff")
comments, and a May 19, 2026, deadline for the Company to file reply comments. Order No.
36995. On April 16, 2026, the Company filed an Errata to the Application and Direct Testimony
of Connor L. Allen revising the originally stated FCA deferral balance amount of$2,025,793.18
to $2,026,190.18. Errata to the Application and Direct Testimony of Connor L. Allen at 3. No
petitions to intervene were filed. Six public comments were received.
Based on our review of the record, we issue this Final Order approving the Company's
FCA filing rates for electric service from June 1, 2026, through May 31, 2027, and the proposed
Schedule 54.
BACKGROUND
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 costs of providing service, thus separating
the utility's revenues from its customers' energy usage. Under traditional rate design, a utility
ORDER NO. 37046 1

recovers much of its fixed costs through volumetric rates. Fixed costs are a utility's cost to provide
service to customers, such as infrastructure and customer service, which do not vary with energy
use, output, or production, and remain relatively stable between a company's rate cases. Variable
costs vary based on the energy generated and consumed.
When a utility's customers demand less energy, the utility's variable costs decline in
proportion to the reduced demand. However, the utility's fixed costs to meet customer demand
stay the same. Therefore, when fixed costs are recovered through volumetric rates, an economic
disincentive exists for the utility to invest in energy efficiency and demand-side management
("DSM")programs, which reduce customer consumption.
The decoupling of the utility's revenues from its customers' energy usage via the FCA rate
adjustment mechanism removes a utility's incentive to increase sales to increase revenue and
profits and encourages energy conservation through DSM programs. Thus, the FCA makes the
utility agnostic to increasing sales and incentivizes it to implement DSM programs. The FCA rate
adjustment applies to R&SGS customers because these customers are more affected by DSM.
THE APPLICATION
The Company represented that in 2024-2025, it under-collected on the fixed costs it was
authorized to recover in the amount of$2,026,190.18("2025 FCA Deferral Balance").Application
at 57. The Company stated it intended to collect the 2025 FCA Deferral Balance by increasing
the FCA rates for the R&SGS classes in 2026 and 2027.Id. at 7.
The Company represented that the 2026-2027 FCA rates would be a charge of 0.0330 cents
per kilowatt-hours ("k)"") for the Residential classes, and 0.0402 cents per kWh for the Small
General Service classes for the June 1, 2026, through May 31, 2027, period. Id. The Company
represented that if the 2026-2027 FCA rates were approved as filed, a residential customer using
900 kWh per month would see an increase of$0.75 on their monthly bill.Id. at 1-2.
STAFF COMMENTS
Staff reviewed the Company's Application, calculations of its R&SGS FCA rates,
Company workpapers, and supporting testimony. Staff Comments at 2. Staff recommended the
Commission approve the Company's proposed Schedule 54 as filed and approve the 2025 FCA
Deferral Balance.Id.
ORDER NO. 37046 2

Staff audited the components used to calculate the FCA balance and confirmed that they
complied with prior Commission Orders and were calculated correctly by the Company. Id.
Specifically, Staff verified that the Fixed Cost per Customer("FCC") and Fixed Cost per Energy
("FCE") were updated in accordance with Order No. 36042. Id. Staff verified that the Use per
Customer for new and existing R&SGS customers were calculated with the proper annual kWh
sales and customer counts from the Company's last general rate case (Case No. IPC-E-23-11).Id.
Staff believed that the proposed increase to the FCA rate for the R&SGS customer classes, 0.0330
cents per kWh for the Residential Class and 0.0402 cents per kWh for the Small General Service
class(or a 0.65%increase),from June 1,2026,through May 31,2027: (1)would help the Company
recover the 2025 FCA Deferral Balance; and(2) were reasonable and coincided with the forecast
the Company used in its 2026-2027 Power Cost Adjustment filing (Case No. IPC-E-26-10).Id. at
4.
Staff reviewed the Company's press release and notice that was sent to impacted
customers.Id. Staff believed the press release and notice met the requirements of Rule 125 of the
Commission's Rules of Procedure, IDAPA 31.01.01.125.Id. at 4-5.
PUBLIC COMMENTS
The Commission received six timely filed customer comments that opposed the
Company's proposed rate adjustment. Customers were concerned that residential customers were
subsidizing large corporations, the Company's infrastructure for large industrial customers, and
rapid regional growth. Customers asked the Commission to consider the cumulative impact of the
Company's concurrent rate increase applications (i.e., the PCA filing in Case No. IPC-E-26-10)
and cost of living increases.
One customer felt that because the rate increase was only affecting one set of customers
(R&SGS), that the Company's increase was discriminatory. Further, one customer felt that the
FCA did not factor in major contributions to the Company's system, such as industrial expansion,
data centers, etc. One customer opposed processing the Application via modified procedure and
wanted the Commission to determine if the Company's shareholders and its internal efficiencies
have been considered. Finally, one customer asked the Commission to permit the Company to
charge heavy power use customers more so that costs are not shouldered by small/household
ratepayers.
ORDER NO. 37046 3

COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company's Filing and the issues in this case
under Title 61 of the Idaho Code including, Idaho Code §§ 61-501, -502, and -503. The
Commission is empowered to investigate rates, charges,rules,regulations,practices, and contracts
of all public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provisions of law, and to fix the same by order.Idaho Code
§§ 61-501, -502, and-503.
The Commission has reviewed the record in this case. Based on our review,we find it fair,
just, and reasonable to approve the Company's requested FCA rates for electric service, effective
June 1, 2026, through May 31, 2027, and the corresponding Schedule 54, FCA.
ORDER
IT IS HEREBY ORDERED that the Company's Application is approved as filed. The
Company shall implement FCA rates for electric service of 0.0330 cents per kWh for the
Residential classes, and 0.0402 cents per kWh for the Small General Service classes, effective
June 1, 2026. The Company's proposed Schedule 54 is approved as filed,with an effective date of
June 1, 2026.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within 21 days of the service date of this Order regarding any matter decided in
this Order.Within seven days after any person has petitioned for reconsideration, any other person
may cross-petition for reconsideration.Idaho Code § 61-626.
ORDER NO. 37046 4

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 22nd day of
May 2026.
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EDWARD LODGE, PR „ DENT
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JO R. HAMMOND JR., COMMISSIONER
DAYN HA DIE, COMMISSIONER
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Commission Secretary
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ORDER NO. 37046 5