20170424_5247.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

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

FROM: BRANDON KARPEN
DEPUTY ATTORNEY GENERAL

DATE: APRIL 20, 2017

SUBJECT: IDAHO POWER’S ANNUAL POWER COST ADJUSTMENT
CASE NO. IPC-E-17-06

On April 14, 2017, Idaho Power Company applied to the Commission for an Order
authorizing the Company to implement its Power Cost Adjustment (PCA) rates effective June 1,
2017, through May 31, 2018. If approved, the Company’s PCA adjustment would increase rates
in all customer classes, with an average residential customer’s bill increasing by about $0.59 per
month.
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 $10.6 million (0.93%) more for electricity in the upcoming year
than they do now. The Company’s Application would impact major customer classes
Application would impact major customer classes as follows:
DECISION MEMORANDUM 2
Proposed 2017 Revenue Impact by Class:
Percentage Increase from Current Billed Rates
0.58% 0.27% 1.10% 1.75% 0.94% 0.93%

The Company attributes this year’s PCA forecasted increases to costs associated with
power purchase agreements under PURPA and higher coal-fired generation costs. The Company
also claims that last year’s actual power costs exceeded forecast levels due to worse-than-
expected water conditions. Additionally, this year, customers will receive a $13 million refund
of previously-collected but unspent energy efficiency rider funds. 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, 2017, and that the case be
processed by Modified Procedure.
STAFF RECOMMENDATION
Staff concurs with the use of Modified Procedure. Given the current demands on
Staff, Staff recommends a May 12, 2017 comment deadline, and a May 19, 2017 reply deadline.
COMMISSION DECISION
Does the Commission wish to process the PCA Application by Modified Procedure
with a May 12, 2017 comment deadline, and a May 19, 2017 reply deadline?

M:IPC-E-17-06_bk