20160425_4961.pdf

DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: BRANDON KARPEN
DEPUTY ATTORNEY GENERAL

DATE: APRIL 20, 2016

SUBJECT: IDAHO POWER’S PCA APPLICATION, CASE NO. IPC-E-16-08

On April 15, 2016, Idaho Power Company filed its annual Power Cost Adjustment
(PCA) Application. Since 1993, the PCA mechanism has allowed the Company to adjust its
rates up or down to reflect the Company’s annual “power supply costs.” Because about half of
the Company’s generation is from hydropower facilities, the Company’s actual cost to provide
electricity (its power supply cost) varies from year-to-year depending on changes in Snake River
stream flows, the amount of purchased power, fuel costs, the market price of power, and other
factors.
The Company states that if the Application is approved, its Idaho customers
collectively would pay about $17.3 million (1.57%) more for electricity in the upcoming year
than they do now, and a typical residential customer’s bill would increase by about $1.32 per
month. The Company’s Application would impact major customer classes as follows:
Proposed 2016 Revenue Impact by Class:
Percentage Increase from Current Billed Rates
1.35% 1.16% 1.68% 2.06% 1.58% 1.57%

The Company attributes this year’s PCA forecasted increases to costs associated with
power purchase agreements under PURPA. Application at 6. According to the Company,
“PURPA costs have increased by approximately $10 million over last year primarily because of
the addition of new solar contracts.” Id. Specifically, the Company claims an addition of
approximately 320 megawatts (MW) of PURPA solar projects, and 50 MW of PURPA wind
projects are expected to come on-line in the 2016-2017 PCA year. Larkin Direct at 10-11. The
Company also estimates lower projected hydro generation attributed to decreased flows from the
Upper Snake Basin. Reservoir levels in this region are lower than initially forecasted in 2015.
Id. at 12.
The Company’s proposed PCA adjustments are reflected in an updated Schedule 55,
which is attached to the Application. The Company requests that the new rates take effect on
June 1, 2016, and that the case be processed by Modified Procedure.
STAFF RECOMMENDATION
As in past years, the Company asks the Commission to process its Application under
Modified Procedure. Staff concurs with the use of Modified Procedure. Given the current
demands on Staff, Staff recommends a May 20, 2016 comment deadline and a May 23, 2016
reply deadline.
COMMISSION DECISION
Does the Commission wish to process the PCA Application by Modified Procedure
with a May 20, 2016 comment deadline and a May 23, 2016 reply deadline?

M:IPC-E-16-08_bk