HomeMy WebLinkAbout2014AnnualReport.pdf1 | P a g e
December 1, 2014
The Honorable C.L. “Butch” Otter
Governor of Idaho
Statehouse
Boise, ID 83720-0034
Dear Governor Otter:
It is my distinct pleasure to submit to you, in accordance with Idaho Code §61-214,
the Idaho Public Utilities Commission 2014 Annual Report. This report is a
detailed description of the most significant cases, decisions and other activities
during 2014. The financial report on Page 8 is a summary of the commission’s
budget through the conclusion of Fiscal Year 2014, which ended June 30, 2014.
It has been a privilege and honor serving the people of Idaho this past year.
Sincerely,
Paul Kjellander
President
Idaho Public Utilities Commission
2 | P a g e
This report and all the links inside can be accessed online from the Commission’s
Website at www.puc.idaho.gov. Click on “File Room,” in the upper-left-hand-
corner and then on “ IPUC 2014 Annual Report.”
3 | P a g e
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
Mailing Address:
P.O. Box 83720
Boise, Idaho 83720‐0074
208/334‐0300
Web site: www.puc.idaho.gov
Commission Secretary 334‐0338
jean.jewell@puc.idaho.gov
Executive Administrator 334‐0330
Joe.leckie@puc.idaho.gov
Executive Assistant 334‐0339
gene.fadness@puc.idaho.gov.
Utilities Division 334‐0367
Legal Division 334‐0324
Rail Section and Pipeline Safety 334‐0330
Consumer Assistance Section 334‐0369
Outside Boise, Toll‐Free Consumer Assistance 1‐800‐432‐0369
Idaho Telephone Relay Service (available statewide)
Voice: 1‐800‐377‐1363
Text Telephone: 1‐800‐377‐3529
TRS Information: 1‐800‐368‐6185
With this report, the Idaho Public Utilities Commission has satisfied Idaho Code 61‐214; this is a “full and complete account” of
the most significant cases to come before the commission during the 2014 calendar year. (The financial report on Page 8 covers
Fiscal Year July 1, 2013 through June 30, 2014.)
Anyone with access to the Internet may also review the commission’s agendas, notices, case information and decisions by
visiting the IPUC’s Web site at: www.puc.idaho.gov. Commission records are also available for public inspection at the
commission’s Boise office, 472 W. Washington St., Monday through Friday, 8 a.m. to 5 p.m.
The Idaho Public Utilities Commission, as outlined in its Strategic Plan, serves the citizens and utilities of Idaho by determining
fair, just and reasonable rates for utility commodities and services that are to be delivered safely, reliably and efficiently. During
the period covered by this report, the commission also had responsibility for ensuring all rail services operating within Idaho do
so in a safe and efficient manner. The commission also has a pipeline safety section that oversees the safe operation of the
intrastate natural gas pipelines and facilities in Idaho.
4 | P a g e
The Commissioners
Paul Kjellander
Commissioner Kjellander rejoined the Idaho Public Utilities Commission
in April 2011 following his service as administrator of the Office of Energy
Resources (OER). Kjellander, who was elected president of the commission
in April 2011, was appointed to his current six‐year term by Idaho Governor
C.L. “Butch” Otter.
Kjellander previously served on the Commission from January 1999 until
October 2007. In 2007, Governor Otter appointed Kjellander to head up the
newly created OER. During his 3 ½ years at OER, Kjellander created an
aggressive energy efficiency program funded through the federal American Recovery and
Reinvestment Act. Kjellander was also elected to serve as a board member on the National
Association of State Energy Officials.
Kjellander, a Republican, was elected to three terms (1994‐1999) in the Idaho House of
Representatives, where he served as a member of the House State Affairs, Judiciary and Rules,
Ways and Means, Local Government and Transportation committees. During his last term in
office, Kjellander was elected House Majority Caucus Chairman. His legislative service includes
membership on the Legislature’s Information Technology Advisory Council and the
House/Senate Joint Committee on Technology. He also served as co‐chairman of the Legislative
Task Force on the Federal Telecommunications Act of 1996 and vice chairman of the Council of
State Governments‐West “Smart States Committee.” His interim legislative committee
assignments included the Optional Forms of County Government Committee, Capital Crimes
Committee and the Private Property Rights Committee.
Kjellander has also served as director of the Distance Learning Program at Boise State
University’s College of Applied Technology and head of broadcast technology. At the BSU Radio
Network he was station manager, director of the Special Projects Unit and director of News and
Public Affairs.
Kjellander’s undergraduate degrees from Muskingum College, Ohio, are in communications,
psychology and art. He has a master’s degree in telecommunications from Ohio University.
As a member of the National Association of Regulatory Commissioners (NARUC), Kjellander is
co vice‐chair of the Committee on Telecommunications and has also served on the Consumer
Affairs and Electricity committees. He was appointed by the chairman of the Federal
Communication Commission to the Federal/State Board of Jurisdictional Separations and
served as chairman. He is currently serving as a NARUC representative to the North American
Numbering Council (NANC) and the 706 Joint Board.
5 | P a g e
Marsha H. Smith
Commissioner Smith is serving her fourth term on the commission. Her
current term expires in January 2015. Smith, a Democrat, served as
commission president from November 1991 to April 1995.
Commissioner Smith represents Idaho on the Western Interconnection
Regional Advisory Body and the State‐Provincial Steering Committee.
Smith is past chair of the Western Electricity Coordinating Council (WECC)
and a past president of the National Association of Regulatory Utility Commissioners (NARUC).
She serves on the NARUC Board and is a member and past chair the association’s Electricity
Committee. She is also a member of the Steering Committee of the Northern Tier Transmission
Group. She chaired the Western Interstate Energy Board’s Committee for Regional Electric
Power Cooperation (CREPC) from October 1999 to October 2005. She is a member of the
National Council on Electricity Policy Steering Committee, the Harvard Electricity Policy Group
and the Idaho State Bar.
Smith received a bachelor of science degree in biology/education from Idaho State University,
a master of library science degree from Brigham Young University and her law degree from the
University of Washington.
Before her appointment to the commission, Commissioner Smith served as deputy attorney
general in the business regulation/consumer affairs division of the Office of the Idaho Attorney
General and as deputy attorney general for the Idaho Public Utilities Commission. She was the
commission's director of Policy and External Affairs and chair of the NARUC Staff Subcommittee
on Telecommunications.
A fourth‐generation Idahoan, Commissioner Smith has two sons.
6 | P a g e
Mack A. Redford
Commissioner Redford was appointed to the commission in February
2007 by Gov. Butch Otter. During 2008 through April 2009, he served as
president of the commission. He was re‐appointed by Gov. Otter in 2013.
His term expires in January 2019.
At the time of his appointment, Commissioner Redford practiced law for
the Boise‐based firm of Elam & Burke PA, specializing in commercial
transactions, construction and engineering law, mediation, real estate and
general business.
Redford grew up in the Weiser and Caldwell areas, graduating from Caldwell High School. He
received both his bachelor’s and law degree from the University of Idaho and in 1967 became a
deputy in the Idaho attorney general’s office. In 1977, he became a deputy attorney general for
the Trust Territory of the Pacific Islands, headquartered in Saipan, Northern Mariana Islands.
The territory included a chain of 2,000 islands stretching from Hawaii to the Philippines.
In 1981, Redford became general counsel for Morrison Knudsen Engineers and Morrison
Knudsen International, a position that took him to Saudi Arabia where MK was building the King
Khalid Military City. In 1991, Redford was retained by TransManche Link, based in Folkestone,
England, where he was legal counsel for the Channel Tunnel Contractors, the builders of the 31‐
mile Channel Tunnel connecting England and France. It is the second‐largest rail tunnel in the
world.
In 1992, Commissioner Redford joined the Boise firm of Park Redford & Burkett. In 1993, he
was retained by the World Bank of the Government of Nepal as contract and claims counsel for
the Arun Ill Hydroelectric Project. In 1996, he became general counsel for Micron Construction,
which was later acquired by Kaiser Engineers. He joined the Boise law firm of Elam & Burke in
2001.
Since his appointment, Commissioner Redford has become active in the National Association
of Regulatory Commissioners (NARUC) where he serves on the International Relations and
Water committees as well as the Subcommittee of Nuclear Issues‐Waste Disposal.
Commissioner Redford and his wife, Nancy, are the parents of two children.
7 | P a g e
IDAHO PUBLIC UTILITIES COMMISSION, 1913‐2012
Commissioner From To
J. A. Blomquist May 8, 1913 Jan. 11, 1915
A. P. Ramstedt May 8, 1913 Feb. 8, 1917
D. W. Standrod May 8, 1913 Dec. 1, 1914
John W. Graham Dec. 1, 1914 Jan. 13, 1919
A. L. Freehafer Jan. 14, 1915 Jan. 31, 1921
George E. Erb Dec. 8, 1917 April 14, 1923
Everett M. Sweeley May 23, 1919 Aug. 20, 1923
J. M. Thompson Feb. 1, 1921 Dec. 20, 1932
Will H. Gibson April 16, 1923 June 29, 1929
F. C. Graves Sept. 7, 1923 Nov. 12, 1924
Frank E. Smith March 6, 1925 Feb. 25, 1931
J. D. Rigney July 2, 1929 Sept. 30, 1935
M. Reese Hattabaugh March 2, 1931 Jan. 26, 1943
Harry Holden March 27, 1933 Jan. 31, 1939
J. W. Cornell Oct. 1, 1935 Jan. 11, 1947
R. H. Young Feb. 1, 1939 March 19, 1944
B. Auger Feb. 1, 1943 March 9, 1951
J. D. Rigney March 30, 1944 April 30, 1945
W. B. Joy May 1, 1945 March 9, 1951
H. N. Beamer Jan. 17, 1947 Dec. 31, 1958
George R. Jones March 12, 1951 Jan. 31, 1957
H. C. Allen March 12, 1951 Feb. 28, 1957
A. O. Sheldon March 1, 1957 June 30, 1967
Frank E. Meek Feb. 1, 1957 Feb. 5, 1964
Ralph H. Wickberg Jan. 14, 1959 Feb. 23, 1981
Harry L. Nock May 1, 1964 Sept. 30, 1974
Ralph L. Paris July 1, 1967 Oct. 5, 1967
J. Burns Beal Dec. 1, 1967 April 1, 1973
Robert Lenaghen April 1, 1973 April 15, 1979
M. Karl Shurtliff Oct. 1, 1974 Dec. 31, 1976
Matthew J. Mullaney Jan. 2, 1977 Feb. 15, 1977
Conley Ward, Jr. March 7, 1977 Feb. 9, 1987
Perry Swisher April 16, 1979 Jan. 21, 1991
Richard S. High Feb. 24, 1981 April 30, 1987
Dean J. Miller March 16, 1987 Jan. 30, 1995
Ralph Nelson May 4, 1987 Feb. 12, 1999
Marsha H. Smith Jan. 21, 1991 Now serving
Dennis S. Hansen Feb. 1, 1995 Feb. 19, 2007
Paul Kjellander Feb. 15, 1999 Oct. 19, 2007
Mack Redford Feb. 19, 2007 Now serving
Jim Kempton Oct. 22, 2007 April 1, 2011
Paul Kjellander April 3, 2011 Now serving
8 | P a g e
Financial Summary – Fund 0229
FISCAL YEARS 2010 ‐ 2014
Description FY2010 FY2011 FY2012 FY2013 FY2014
Personnel Costs $3,369,100 $3,275,500 $3,304,100 $3,491,500 $3,528,900
Communication Costs $30,300 $29,300 $29,500 $31,300 $31,000
Employee Devlop. Costs $44,200 $46,700 $62,500 $55,600 $53,200
Professional Services $12,900 $12,500 $9,800 $9,700 $12,300
Legal Fees $502,400 $522,200 $525,300 $551,600 $519,700
Employee Travel Costs $118,700 $123,300 $115,400 $123,600 $141,100
Fuels & Lubricants $2,700 $2,900 $4,100 $4,700 $2,700
Insurance $3,700 $1,300 $1,000 $3,100 $4,400
Rentals & Oper Leases $252,300 $283,900 $294,200 $276,100 $584,600
Misc. Expenditures $103,600 $102,100 $85,600 $117,000 $104,700
Office Equipment $0 $34,400 $0 $13,000 $11,900
Computer Equipment $0 $0 $24,300 $29,200 $66,400
Motorized/Non‐Motorized
Equipment $0 $0 $52,300 $0 $0
=========================================================================
Total
Expenditures $4,439,900 $4,434,100 $4,508,100 $4,706,400 $5,060,900
Fund 0229‐20
Appropriation $4,963,200 $4,820,700 $4,768,200 $4,916,800 $5,061,700
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Unexpended Balance $523,300 $386,600 $260,100 $210,400 $800
9 | P a g e
Commission Structure and Operations
Under state law, the Idaho Public Utilities Commission supervises and regulates
Idaho’s investor‐owned utilities – electric, gas, telecommunications and water –
assuring adequate service and affixing just, reasonable and sufficient rates.
The commission does not regulate publicly owned, municipal or cooperative
utilities.
The governor appoints the three commissioners with confirmation by the
Idaho Senate. No more than two commissioners may be of the same political
party. The commissioners serve staggered six‐year
terms.
The governor may remove a commissioner
before his/her term has expired for dereliction of
duty, corruption or incompetence.
The three‐member commission was established
by the 12th Session of the Idaho Legislature and
was organized May 8, 1913 as the Public Utilities
Commission of the State of Idaho. In 1951 it was
reorganized as the Idaho Public Utilities
Commission. Statutory authorities for the
commission are established in Idaho Code titles 61 and 62.
The IPUC has quasi‐legislative and quasi‐judicial as well as executive powers
and duties.
In its quasi‐legislative capacity, the commission sets rates and makes rules
governing utility operations. In its quasi‐judicial mode, the commission hears and
decides complaints, issues written orders that are similar to court orders and may
have its decisions appealed to the Idaho Supreme Court. In its executive capacity,
the commission enforces state laws and rules affecting the utilities and rail
industries.
Commission operations are funded by fees assessed on the utilities and
railroads it regulates. Annual assessments are set by the commission each year in
April within limits set by law.
The commission president is its chief executive officer. Commissioners meet on
the first Monday in April in odd‐numbered years to elect one of their own to a
two‐year term as president. The president signs contracts on the commission’s
behalf, is the final authority in personnel matters and handles other
10 | P a g e
administrative tasks. Chairmanship of individual cases is rotated among all three
commissioners.
The commission conducts its business in two types of meetings – hearings and
decision meetings. Decisions meetings are typically held once a week, usually on
Monday.
Formal hearings are held on a case‐by‐case basis, sometimes in the service
area of the impacted utility. These hearings resemble judicial proceedings and are
recorded and transcribed by a court reporter.
There are technical hearings and public hearings. At technical hearings, formal
parties who have been granted “intervenor status” present witness testimony and
evidence, subject to cross‐examination by attorneys from the other parties, staff
and the commissioners. At public hearings, members of the public may testify
before the commission.
In 2009, the commission began conducting telephonic public hearings to save
expense and allow customers to testify from the comfort of their own homes.
Commissioners and other interested parties gather in the Boise hearing room and
are telephonically connected to ratepayers who call in on a toll‐free line to
provide testimony or listen in. A court reporter is present to take testimony by
telephone, which has the same legal weight as if the person testifying were
present in the hearing room. Commissioners and attorneys may also direct
questions to those testifying.
The commission also conducts regular decision meetings to consider issues on
an agenda prepared by the commission secretary and posted in advance of the
meeting. These meetings are usually held Mondays at 1:30 p.m., although by law
the commission is required to meet only once a month. Members of the public
are welcome to attend decision meetings.
Typically, decision meetings consist of the commission’s review of decision
memoranda prepared by commission staff. Minutes of the meetings are taken.
Decisions reached at these meetings may be either final or preliminary, but
subsequently become final when the commission issues a written order signed by
a majority of the commission. Under the Idaho Open Meeting Law,
commissioners may also privately deliberate fully submitted matters.
11 | P a g e
Commission Staff
To help ensure its decisions are fair and workable, the commission employs a staff of
about 50 people – engineers, rate analysts, attorneys, accountants, investigators, economists,
secretaries and other support personnel. The commission staff is organized in three divisions –
administration, legal and utilities.
The staff analyzes each petition, complaint, rate increase request or application for an
operating certificate received by the commission. In formal proceedings before the commission,
the staff acts as a separate party to the case, presenting its own testimony, evidence and expert
witnesses. The commission considers staff recommendations along with those of other
participants in each case ‐ including utilities, public, agricultural, industrial, business and
consumer groups.
Administration
The Administrative Division is responsible for coordinating overall IPUC
activities. The division includes the three commissioners, two policy strategists, a
commission secretary, an executive administrator, an executive assistant and
support personnel.
The policy strategists are executive level positions reporting directly to the
commissioners with policy and technical consultation and research support
regarding major regulatory issues in the areas of electricity, telecommunications,
water and natural gas. Strategists are also charged with developing
comprehensive policy strategy, providing assistance and advice on major litigation
before the commission, public agencies and organizations. (Contact Wayne Hart,
334‐0354, or Gene Fadness, 334‐0339, policy strategists.)
The commission secretary, a post established by Idaho law, keeps a precise
public record of all commission proceedings. The secretary issues notices, orders
and other documents to the proper parties and is the official custodian of
documents issued by and filed with the commission. Most of these documents
are public records. (Contact Jean Jewell, commission secretary, at 334‐0338.)
The executive administrator has primary responsibility for the commission’s
fiscal and administrative operations, preparing the commission budget and
supervising fiscal, administration, public information, personnel, information
systems, rail section operations and pipeline safety. The executive administrator
also serves as a liaison between the commission and other state agencies and the
Legislature. (Contact Joe Leckie, executive administrator, at 334‐0331.)
12 | P a g e
The public information officer is responsible for public communication
between the commission, the general public and interfacing governmental
offices. The responsibility includes news releases, responses to public inquiries,
coordinating and facilitating commission workshops and public hearings and the
preparation and coordination of any IPUC report directed or recommended by the
Idaho Legislature or Governor. (Contact Gene Fadness, public information
officer, at 334‐0339.)
Legal Division
Five deputy attorneys general are assigned to the commission from the
Office of the Attorney General and have permanent offices at IPUC headquarters.
The IPUC attorneys represent the staff in all matters before the commission,
working closely with staff accountants, engineers, investigators and economists as
they develop their recommendations for rate case and policy proceedings.
In the hearing room, IPUC attorneys coordinate the presentation of the
staff’s case and cross‐examine other parties who submit testimony. The attorneys
also represent the commission itself in state and federal courts and before other
state or federal regulatory agencies. (Contact Don Howell, legal division director,
at 334‐0312.)
Utilities Division
The Utilities Division, responsible for technical and policy analysis of utility
matters before the commission, is divided into four sections. (Contact Randy
Lobb, utilities division administrator, at 334‐0350.)
The Accounting Section of seven auditors audits utility books and records
to verify reported revenue, expenses and compliance with commission orders.
Staff auditors present the results of their findings in audit reports as well as in
formal testimony and exhibits. When a utility requests a rate increase, cost‐of‐
capital studies are performed to determine a recommended rate of return.
Revenues, expenses and investments are analyzed to determine the amount
needed for the utility to earn the recommended return on its investment.
(Contact Terri Carlock, accounting section supervisor, at 334‐0356.)
The Engineering Section of three engineers and two utility analysts reviews
the physical operations of utilities. The staff of engineers and analysts develops
computer models of utility operations and compares alternative costs to repair,
replace and acquire facilities to serve utility customers. The group establishes the
13 | P a g e
price of acquiring cogeneration and renewable generation facilities and identifies
the cost of serving various types of customers. They evaluate the adequacy of
utility services and frequently help resolve customer complaints. (Contact Rick
Sterling, engineering section supervisor, at 334‐0351.)
The Technical Analysis Section of three utility analysts and one economist
determines the cost effectiveness of all Demand Side Management (DSM)
programs including energy efficiency and demand response. They identify
potential for new DSM programs and track the impact on utility revenues. They
review utility forecasts of energy, water and natural gas usage with focus on
residential self generation and rate design. (Contact Matt Elam, Technical
Analysis section supervisor, at 334‐0363.)
The Telecommunications Section includes two analysts who oversee tariff
and price list filings, compliance with federal and state telecommunications laws,
area code oversight, Universal Service, Lifeline and Telephone Relay Service. They
assist and advise the commission on technical matters that include advanced
services and other matters as requested. During 2014 and 2015,
telecommunications staff is conducting an analysis of the potential for broadband
expansion. (Contact Carolee Hall, 334‐0634 or Grace Seaman, 334‐0352.)
The Consumer Assistance Section includes five investigators who resolve
conflicts between utilities and their customers. Customers faced with service
disconnections often seek help in negotiating payment arrangements. Consumer
Assistance may mediate disputes over billing, deposits, line extensions and other
service problems.
Consumer Assistance monitors Idaho utilities to verify they are complying
with commission orders and regulations. Investigators participate in general rate
and policy cases when rate design and customer service issues are brought before
the commission. (Contact Beverly Barker, administrator for the Consumer
Assistance section, at 334‐0302.)
Rail Section
The Rail Section oversees the safe operations of railroads that move freight
in and through Idaho and enforces state and federal regulations safeguarding the
transportation of hazardous materials by rail in Idaho. The commission’s rail
safety specialist inspects railroad crossings and rail clearances for safety and
maintenance deficiencies. The Rail Section helps investigate all railroad‐crossing
accidents and makes recommendations for safety improvements to crossings.
14 | P a g e
As part of its regulatory authority, the commission evaluates the
discontinuance and abandonment of railroad service in Idaho by conducting an
independent evaluation of each case to determine whether the abandonment of
a particular railroad line would adversely affect Idaho shippers and whether the
line has any profit potential. Should the commission determine abandonment
would be harmful to Idaho interests, it then represents the state before the
federal Surface Transportation Board, which has authority to grant or deny line
abandonments. (Contact Joe Leckie, rail section supervisor, at 334‐0331.)
Pipeline Safety Program
The pipeline safety section oversees the safe operation of the intrastate oil
and natural gas pipelines as well as interstate gathering lines in Idaho.
The commission’s pipeline safety personnel verify compliance with state
and federal regulations by on‐site inspections of intrastate pipeline distribution
systems. Part of the inspection process includes a review of record‐keeping
practices and compliance with design, construction, operation, maintenance and
drug/alcohol abuse regulations.
Key objectives of the program are to monitor accidents and violations, to
identify their contributing factors and to implement practices to avoid accidents.
All reportable accidents will be investigated and appropriate reports filed with the
U.S. Department of Transportation in a timely manner. (Contact Joe Leckie,
pipeline safety program supervisor, at 334‐0331.)
15 | P a g e
Why can’t you tell them no?
One of the most frequent questions we get after a utility files a rate increase application is, “Why
can’t you just tell them no?” Actually, we can, but not without evidence.
For nearly 100 years, public utility regulation has been based on this regulatory compact between
utilities and regulators: Regulated utilities agree to invest in the generation, transmission and
distribution necessary to adequately and reliably serve all the customers in their assigned territories. In
return for that promise to serve, utilities are guaranteed recovery of their prudently incurred expense
along with an opportunity to earn a reasonable rate of return. The rate of return allowed must be high
enough to attract investors for the utility’s capital‐intensive generation, transmission and distribution
projects, but not so high as to be unreasonable for customers.
In setting rates, the commission must consider the needs of both the utility and its customers. The
commission serves the public interest, not the popular will. It is not in customers’ best interest, nor is it
in the interest of the State of Idaho, to have utilities that do not have the generation, transmission and
distribution infrastructure to be able to provide safe, adequate and reliable electrical, natural gas and
water service. This is a critical, even life‐saving, service for Idaho’s citizens and essential to the state’s
economic development and prosperity.
Unlike unregulated businesses, utilities cannot cut back on service as costs increase. As demand for
electricity, natural gas and water grows, utilities are statutorily required to meet that demand. In Idaho
recently, and across the nation, a continued increase in demand as well as a number of other factors
have contributed to rate increases on a scale we have not witnessed before. It is not unusual now for
Idaho’s three major investor‐owned electric utilities to file annual rate increase requests.
In light of these continued requests for rate increases, the Commission walks a fine line in balancing
the needs of utilities to serve customers and customers’ ability to pay.
When a rate case is filed, our staff of auditors, engineers and attorneys will take up to six months to
examine the request. During that period, other parties, often representing customer groups, will
“intervene” in the case for the purpose of conducting discovery, presenting evidence and cross‐
examining the company and other parties to the case. The Commission staff, which operates
independently of the commission, will also file its own comments that result from its investigation of the
company’s request. The three‐member Commission will also conduct technical and public hearings.
Once testimony from the company, commission staff and intervening parties is presented and
testimony from hearings and written comments is taken, all of that information is included in the official
record for the case. It is only from the evidence contained in this official record that the Commission can
render a decision.
If the utility has met its burden of proof in demonstrating that the additional expense it incurred was
1) necessary to serve customers and 2) prudently incurred, the commission must allow the utility to
recover that expense. The commission can ‐‐ and often does ‐‐ deny recovery of some or all the expense
utilities seek to recover from customers if the commission is confident it has the legal justification to do
so. (See pages 19 and 20.) Utilities and parties to a rate case have the right to petition the Commission
for reconsideration. If reconsideration is not granted, utilities or customer groups can appeal the
Commission’s decision to the state Supreme Court.
In the end, the Commission’s job is to ensure that customers are paying a reasonable rate and are
receiving adequate and reliable service and that utilities are allowed to recover their prudently incurred
expenses and earn a fair rate of return.
16 | P a g e
Electrical Power in Idaho
Idaho Power Company
2013 Average Number of Customers/Avg. Revenue/kwh
(Computed from data available in FERC Form 1 Annual Reports)
405,542 Residential Customers/$0.0957
78,334 Commercial Customers/$0.0718
111 Industrial Customers/$0.0515
Avista Utilities
2013 Average Number of Customers/Avg. Revenue/kwh
(Computed from data available in FERC Form 1 Annual Reports)
107,458 Residential Customers/$0.0884
16,830 Commercial Customers/$0.0842
454 Industrial Customers/$0.0531
2013 Average Number of Customers/Avg. Revenue/kwh
(Computed from data available in FERC Form 1 Annual Reports)
PacifiCorp/Rocky Mountain Power
58,730 Residential Customers/$0.1103
8,360 Commercial Customers/$0.0906
5,571 Industrial Customers/$0.0699
17 | P a g e
Average Residential Retail Price of Electricity by State
The information below is provided by the Energy Information Administration of the U.S.
Department of Energy (www.eia.gov) and reflects the average residential rate by kilowatt‐hour
by state in August 2014. Idaho ranks 44th of 50 states and the District of Columbia. The states
with lower rates than Idaho from the lowest up are Washington, West Virginia, Louisiana,
Arkansas, Kentucky, Oklahoma and Tennessee. States with the highest rates are Hawaii, Alaska,
Connecticut, New York, Rhode Island, Vermont and Massachusetts.
State August 2014 (cents/kWh) August 2013(cents/ kWh)
Alabama 11.79 11.60
Alaska 20.43 18.71
Arkansas 10 9.97
Arizona 12.44 12.33
California 18.12 16.54
Colorado 12.83 12.57
Connecticut 19.67 17.57
D.C. 12.66 12.98
Delaware 14.12 12.67
Florida 11.98 11.32
Georgia 12.52 12.34
Hawaii 37.81 36.79
Iowa 13.42 12.40
Idaho 10.54 10.27
Illinois 11.95 10.31
Indiana 11.56 11.06
Kansas 12.74 12.06
Kentucky 10.08 9.87
Louisiana 9.77 9.72
Massachusetts 17.69 15.90
Maryland 13.71 13.89
Maine 15.35 14.37
Michigan 14.88 14.98
Minnesota 12.85 12.74
Missouri 12.71 12.30
Mississippi 11.62 10.81
Montana 10.89 10.93
North Carolina 11.44 11.33
North Dakota 10.94 10.87
18 | P a g e
State August 2014 (cents/kWh) August 2013(cents/kWh)
Nebraska 12.06 11.93
New Hampshire 17.18 15.93
New Jersey 16.0 16.23
New Mexico 13.57 12.64
Nevada 12.63 11.76
New York 19.49 19.15
Ohio 13.50 12.72
Oklahoma 10.13 9.91
Oregon 10.75 10.20
Pennsylvania 13.91 13.25
Rhode Island 18.38 15.73
South Carolina 12.48 12.01
South Dakota 11.42 11.35
Tennessee 10.47 10.24
Texas 12.01 11.47
Utah 11.56 11.23
Virginia 12.00 11.59
Vermont 17.87 17.08
Washington 8.93 8.93
Wisconsin 14.26 14.41
West Virginia 9.52 9.72
Wyoming 11.13 10.72
19 | P a g e
Recent History of Base Rate Electric Cases
IDAHO POWER
Year Requested Granted
2005 6.3% 6.3% (Not a base rate case, but
increase granted due to tax
settlement and Bennett Mountain
plant)
2006 7.8% 3.2% (net was 14% decrease due to
expiration of tax adjustment.)
March 2008 10.35% 5.2%
June 2008 Though not a base rate case, rates increased an average 10.7% due to a one-year
PCA surcharge and 1.37% added to base rates for Danskin plant.
2009 10% 4% (tiered-rates implemented)
2010 No base rate case. Rates decreased an average 5.2%, due primarily to a Power
Cost Adjustment decrease.
June 2011 Three surcharge adjustments result in average 3% reduction for customers.
2012 10% 4.2% (but net increase was 3.44%
due to reduction in energy efficiency
rider.)
2013 No base rate case. Annual Power Cost Adjustment was an average 15.3%
increase effective June 1, the fourth-highest PCA on record.
2014 No base rate case. The annual PCA is a 1% increase and FCA is a 1.2% increase.
AVISTA UTILITIES
Year Requested Granted
2004 11% 1.9%
2008 16.5% 11.9% (Also, 4% PCA increase)
20 | P a g e
Year Requested Granted
2009 12.8% base rate increase with 5% PCA 5.7% (but with 4.2% PCA reduction,
reduction, for net 7.8% net increase was 1.5 percent)
2010 14% 9.25% (but spread over 3 years)
2011 3.7% 1.1% (but with decreases in PCA and
other rate components, the net is a
decrease of 2.4 percent)
2013 4.6% 1.9% (with stay-out provision for
next rate adjustment no sooner than
Jan. 1, 2015.) On Oct. 1, 2013,
Customers got a 1.3% decrease due
to reduction in Energy Efficiency
Rider.
2014 A rate settlement precludes any base rate increase until Jan. 1, 2016 at earliest.
ROCKY MOUNTAIN POWER (PacifiCorp)
2005 5.1% 5.1% (This increase only applied to
irrigation and industrial customers;
no increase to residential.)
2007 10.3% 6.4%
2009 4% 3.1%
2011 13.7% 6.8% (but net increase to customers
was 5.5% because of 1.3% reduction
to Energy Efficiency Rider)
2013 -- A settlement prior to a formal case
filed increased rates by an
average 0.77% effective Jan. 1,
2014, with stay-out provision
to Jan. 1. 2016.
2014 No base rate case. Annual Energy Cost Adjustment Mechanism (ECAM) is a
2.6% decrease
21 | P a g e
Summary of major cases
Idaho Supreme Court upholds IPUC decisions
in PURPA appeals, while IPUC and FERC settle
In late 2013, the Idaho Supreme Court and
the Federal Energy Regulatory Commission
affirmed the Idaho Commission’s denial of a
number of PURPA wind projects.
Since then, the Commission has significantly
updated the process it uses to determine
pricing and other terms for power purchase
agreements between a utility and a PURPA
developer.
Wind and solar projects (intermittent
resources) must now negotiate with utilities
using a commission‐approved methodology
with the utility’s long‐range planning
document, called an Integrated Resource
Plan (IRP), as a starting point. The IRP
method more precisely values the energy
being delivered. It does this by recognizing
the individual generation characteristics of
each project and assessing when the project
is capable of delivering its resources against
when the utility is most in need of the
energy. The IRP methodology recognizes
that larger projects have a greater effect on
a utility’s ability to balance its total load
and resources.
Idaho Supreme Court building
THE ISSUE
In November 2010, Idaho Power Company,
Avista Utilities and PacifiCorp asked the
commission to investigate the rapidly
expanding number of PURPA wind projects
in Idaho. The utilities said the wind
developers were “gaming” the system by
disaggregating large projects into several
smaller projects a mile apart, each with its
one unique name created under a Limited
Liability Corporation (but the same owner).
FERC rules require a mile separation
between Qualifying Facilities. The projects
were disaggregated so that each one fell
under the 10 aMW limit that qualified them
for the commission’s typically more
attractive published rate.
THE PROBLEM
The utilities claimed the rapid development
of these projects was having a profound
price impact on customers and on the
ability of utilities to integrate the wind
22 | P a g e
projects with their transmission systems.
The utilities said the small‐power projects
PURPA was originally intended to
encourage were instead being developed by
sophisticated large‐scale wind farms.
A problem for the Commission is that
avoided cost rates – the cost the utility
avoids by not having to generate the power
itself or buy it from another source – had
not been updated for new contracts. Fuel
prices, which are a significant component in
determining avoided cost, had dropped
significantly in recent years. The avoided
cost rate for new contracts did not go down
as natural gas prices fell, making the
commission’s published rate considerably
more attractive than wholesale market
prices for power. This, along with a federal
tax credit for wind development,
contributed to a flurry of PURPA wind
development.
ORDERS AND APPEALS
On Feb. 7, 2011, the Commission
temporarily reduced the eligibility cap
under which projects can qualify for
published rates from 10 aMW to 100 kW,
but only for intermittent wind and solar.
The cap remained 10 aMW for other PURPA
projects. The Commission said it would
open a second phase of the original case to
further investigate the disaggregation issues
and determine whether the temporary
changes in the eligibility cap should be
made permanent.
On June 8, 2011, the Commission affirmed
its decision to maintain the 100 kW
eligibility cap for published rates for wind
and solar projects, due to their
intermittency and potential for continued
disaggregation. Utilities were still subject to
the “must‐buy” provisions to purchase QF
power from wind and solar projects, but at
a rate negotiated between the utility and
the QF using a commission‐approved
Integrated Resource Plan (IRP)
methodology. Seventeen wind projects did
not meet the commission’s criteria and
were thus not eligible for published rates
and would need to negotiate a rate with the
utilities based on the IRP methodology if
their projects were to go forward.
On Sept. 7, 2011, the Grouse Creek projects
appealed to the state Supreme Court after
being denied reconsideration by the
commission. Concurrently, another set of
projects, called the Cedar Creek projects,
filed for a Petition for Enforcement at FERC,
challenging the Commission’s decision to
lower the eligibility cap for wind and solar
projects effective Dec. 14, 2010.
On October 4, 2011, FERC declined to
pursue an enforcement action against the
Idaho PUC regarding the Cedar Creek
projects, but issued a Declaratory Order
that said the PUC’s decision not to approve
the Cedar Creek projects was inconsistent
with PURPA. The Cedar Creek and Grouse
Creek projects were remanded to the PUC
for further discussion.
On December 21, 2011, the PUC approved a
settlement of the Cedar Creek projects. The
23 | P a g e
settlement reduced the projects from five
to three and moved them to a location
better suited to transmission access.
Settlement talks with Grouse Creek were
not successful.
On March 2, 2012, Rainbow Ranch
petitioned FERC to bring an enforcement
action against the PUC for disapproving
their projects. FERC declined, but issued a
Declaratory Order stating the IPUC’s
decision to not approve the projects was
inconsistent with PURPA.
On Sept. 7, 2012, the Commission affirmed
its denial of Grouse Creek’s two PPAs. The
Commission clarified that despite FERC’s
statements to the contrary, the Commission
has never made a determination that the
creation of LEO occurs only when a QF and
utility enter into a signed agreement. In this
case, both parties entered into agreements
that unequivocally state an effective date.
Hence, the discussion of a LEO is moot. (LEO
stands for “legally enforceable obligation,”
which signifies that an obligation exists for
the utility to accept power produced by a
qualifying independent power developer.
The LEO provision is included in FERC
regulations to prevent a utility from
circumventing its obligation to purchase
from Qualifying Facilities by refusing or
delaying to enter into a contract with the
QF. Federal PURPA law allows state
commissions to determine when a LEO
exists under state law, often on a case‐by‐
case basis. A LEO may be incurred before a
PURPA contract is reduced to writing.)
On Sept. 25, 2012, the Murphy Flats
projects asked FERC to take enforcement
action. On Nov. 20, 2012, FERC declared it
would bring an enforcement action.
On March 22, 2013, FERC filed a complaint
in the United States Court for the District of
Idaho asking the Court to enter an order
finding that the Idaho Commission violated
PURPA, enjoining the PUC from imposing
conditions on the sales agreements
between Idaho Power and developers of
the Grouse Creek and Murphy Flats projects
and directing the PUC to issue orders
approving the agreements. This was the
first time FERC had taken a state to court
over a PURPA‐related action.
On Dec. 18, 2013, the Idaho Supreme Court
unanimously affirmed the PUC’s decision to
deny approval of the Grouse Creek
contracts. The Court affirmed the PUC’s
requirement that a finding of a LEO requires
a showing that there would have been a
contract but for the actions of the utility.
“Unlike a court of law, IPUC is a regulatory
agency performing judicial and legislative
functions. Therefore, it is not bound by its
prior decisions. In addition, allowing
Grouse Creek to sell power at the rates in
place prior to the eligibility cap adjustment
would not have been in the public interest,”
the court said.
Six days later, FERC and the IPUC signed a
Memorandum of Agreement under which
FERC will dismiss its court claims and the
PUC dismiss any counterclaims. The Idaho
PUC acknowledged that a LEO may be
incurred prior to the signing of a contract.
Both parties acknowledged that PURPA
establishes a program of “cooperative
federalism” under which FERC issues
regulations to implement federal policy
while state regulatory authorities are
responsible for implementing those same
regulations in a manner that accommodates
local conditions and concerns so long as the
implementation is consistent with PURPA.
24 | P a g e
PUC denies Idaho Power solar application,
but says integration charge warranted
Case No. IPC‐E‐14‐09, Order No. 33043
May 28, 2014 – The commission denied an
Idaho Power Company request to
temporarily suspend its obligation under
federal law to sign new contracts to buy
power from qualifying small solar‐power
producers.
However, the commission agreed with
Idaho Power’s contention that the utility
incurs expense when it integrates solar
generation into its system and that future
contracts should include integration costs in
the form of a discount to the amount the
utility pays solar developers, ensuring that
these costs are not passed on to customers.
Idaho Power’s application did not affect net
metering customers who have rooftop solar
projects, but applied only to larger‐sized
(like 10‐ and 20‐megawatt) solar projects
seeking contracts under PURPA, the federal
Public Utilities Regulatory Policies Act.
Idaho Power sought a temporary
suspension from its PURPA obligation
because it claimed that “dozens of solar
projects” are either already under contract
or attempting to obligate Idaho Power to
buy up to 500 megawatts of electric
capacity. The utility is expecting a mid‐June
completion of a study to determine its cost
to integrate solar power. The company
claims it is experiencing a rush of contract
proposals from developers who know solar
integration charges may be coming. If the
commission did not grant the utility’s
request to suspend, it asked the
commission to issue an order stating that all
future solar PURPA contracts include an
integration charge.
The commission said it appreciated Idaho
Power’s concern that the pending
completion of its solar integration study has
resulted in a “run‐on‐the‐bank,” but
suspending Idaho Power’s PURPA obligation
“is not the appropriate remedy.”
Instead, the commission said, Idaho Power
and solar developers should include
consideration of a solar integration charge
when they negotiate their contracts. The
parties might consider a “placeholder”
integration charge and agree to implement
the charge when the study is completed,
the commission said. Another alternative
may be to use the integration assessed
wind developers – $6.50 per MWh – until a
solar charge is approved.
The commission said the company offered
no explanation as to why it did not begin
the study sooner or completed it in a more
timely manner. The commission said it
agreed with several who testified at a public
hearing last week that the “imminent crisis
caused by the lack of a completed study is
of the company’s own making.” The
commission directed Idaho Power to
complete the study “as soon as possible.”
The commission said Idaho Power’s filing
“reinforced our previous view” that
25 | P a g e
integration charges should be part of power
purchase contracts with small‐power
producers. “These charges may vary from
very little to more, based on project
location, project size and other factors,” the
commission said. The commission did not
agree with those who say the benefits and
value of solar are not considered when
determining an integration charge. The
value of solar is reflected in the rates that
are paid developers, the commission said.
Solar development takes
off; 120 MW approved
during 2014, another 281
MW proposed
Case No. IPC‐E‐11‐15, Order No. 32974
Case No. IPC‐E‐14‐19, Order No. 33179;
Case No. IPC‐E‐14‐20, Order No. 33180
In the first case listed above (IPC‐E‐11‐15), the
Commission found that there was no contract
or LEO between Grand View Solar II and Idaho
Power because Grand View had conditioned its
offer to sell power on basis of receiving all the
Renewable Energy Certificates (RECs).
In the subsequent case, approved in November
2014, parties agreed to split the RECs 50‐50, as
the PUC advocated in the initial case.
The Commission approved sales agreements
between Idaho Power Company and the
developers of two solar generation projects
totaling 120 megawatts.
Grand View PV Solar Two LLC, 20 miles
southwest of Mountain Home, is 80 MW and is
scheduled to be online by Sept. 1, 2016. The
project is expected to include about 340,480
polysilicon photovoltaic panels installed on a
single‐axis tracking system. The developer is
Robert Paul of Boise.
Boise City Solar LLC is a 40‐MW project to be
built southeast of Kuna on Sand Creek Road
with a proposed online date of Jan. 16, 2016.
The project is expected to use mono‐crystalline
solar modules and is a dual‐axis tracking
system, which allows the tracker to follow the
sun both vertically and horizontally.
The developer is Mark van Gulik of
Intermountain Energy Partners, headquartered
in Ketchum with development offices in Boise.
IEP will lease the land on which the project will
be built from the City of Boise.
IEP will be paid by Idaho Power for the project’s
output, while the city will receive lease
payments as well as half of the revenue
received from the sale of Renewable Energy
Certificates (green tags) associated with the
project.
Idaho Power will also receive 50 percent of REC
proceeds.
26 | P a g e
The commission received more than 140
written comments from the public, all
encouraging their approval. “While many of the
comments appeared to be based on a form‐
letter campaign, many others were original and
thoughtful comments from citizens who
appeared to be concerned about the
environment and optimistic about the
contribution” the projects would have on the
economy. “We appreciate the public’s
participation in our process. “
The projects are the first of their type since the
Idaho commission adopted an updated pricing
method for intermittent projects (like solar and
wind) that fall under the provisions of PURPA,
or the federal Public Utility Regulatory Policies
Act.
PURPA requires regulated utilities to buy energy
from independent, renewable generation
projects at rates established by state
commissions. The rate to be paid small‐power
producers is called an “avoided‐cost rate,”
because it is based on the incremental cost the
utility avoids by not having to generate the
energy itself or buy it from another source. The
commission must ensure the avoided‐cost rate
is reasonable for customers because all amount
utilities pay to qualifying small‐power producers
is included in customer rates.
The updated pricing method requires the
developer and utility to negotiate a rate based
on a methodology that uses the utility’s long‐
range plan, called an Integrated Resource Plan
(IRP), which considers, among other factors, the
utility’s need for the resource and the times
when the energy is generated. “We intend that
the IRP methodology be a flexible tool, taking
into account many different variables, and
producing a result that accurately values a
project’s capability to deliver resources in
relation to the timing and magnitude of the
utility’s need for such resources,” the
commission said.
Under the agreements, Idaho Power pays the
developers a non‐levelized rate over the 20‐
year term, which means payments increase
over the course of the agreement and vary
according to light‐load and heavy‐load hours of
the day and seasons of the year.
For Grand View, payments would vary from as
low as $31 per megawatt‐hour for light‐load
hours during the early months of the agreement
to as high as $159 per MWh for heavy‐load
hours during the latter years of the agreement.
If the payments were levelized over the 20‐year
term of the agreement, payments would be
about $71.48 per MWh, after adjustments
made by commission staff and Idaho Power.
The estimated 20‐year contractual obligation
based on anticipated generation levels is about
$300 million.
The agreement allows for a 5% deviation in
monthly energy deliveries. If generation
deviates by more than that, a price adjustment
can be imposed against the developer, but the
reduced payment to the developer can be no
more than 10%. If there is a consistent and
material deviation from the hourly energy
estimates, the project will be considered to be
in breach of the sales agreement.
The Grand View agreement also contains a solar
integration charge which the developer pays
Idaho Power to cover the cost of integrating the
solar energy into Idaho Power’s transmission
and distribution system. The negotiated charge
starts at 99 cents per MWh in the first year of
the agreement and escalates to $1.84 per MWh
in 2036.
The agreement with Boise City Solar LLC also
includes non‐levelized payments over 20 years.
Payments would vary from as low as $44 per
megawatt‐hour for light‐load hours during the
early months of the agreement to as high as
$113 per MWh for heavy‐load hours during the
latter years of the agreement. If the payments
were levelized over the 20‐year term of the
agreement, they would be about $71.43 per
27 | P a g e
MWh, after staff and company adjustments.
The 20‐year contractual obligation based on
estimated generation levels is about $160
million. The project is allowed a 2% deviation
from its estimated monthly energy output
before a price adjustment can be imposed, also
capped at no more than 10%. And, as with
Grand View Solar, material deviations from
hourly energy estimates may be considered as a
breach of contract.
The negotiated solar integration charge starts at
$1.34 per MWh in the first year of the
agreement and escalates to $3.11 per MWh in
2036.
Idaho Power submits sales applications
for sales agreements with 11 solar projects
Nov. 14, 2014 – Idaho Power Company is
proposing that the Commission was accept
or reject power sales agreements between
it and 11 solar projects totaling 281
megawatts. All told, the 11 projects have a
20‐year estimated contract value of $973.5
million.
Six of the proposed projects, including the
largest 71 MW facility, are planned for
Elmore County. Three are in Power County,
one in Ada County and one in Owyhee
County. All have scheduled online dates in
December 2016. See the attached table for
a detailed listing of the projects, their size
and contract value.
All the projects are qualifying facilities
under the provisions of the federal Public
Utility Regulatory Policies Act. PURPA
requires regulated utilities to buy energy
from independent, renewable generation
projects at rates established by state
commissions. The rate to be paid small‐
power producers is called an “avoided‐cost
rate,” because it is based on the cost the
utility avoids by not having to generate the
energy itself or buy it from another source.
The commission must ensure the avoided‐
cost rate is reasonable for utility customers
because 100 percent of the price utilities
pay to qualifying small‐power producers is
included in customer rates.
Six of the projects are owned by Ketchum‐
based Intermountain Energy Partners. Mark
van Gulik is the developer. Five of the
projects are owned by First Wind,
headquartered in Boston.
The sales agreements propose that Idaho
Power pay the developers a non‐levelized
avoided‐cost rate over the 20‐year term of
the agreements, which means payments
increase over the course of the agreement
and vary according to light‐load and heavy‐
load hours of the day and seasons of the
year.
The Intermountain Energy projects propose
rates that are as low as $33 per megawatt‐
hour during light‐load hours to as high as
$115 per MWh during heavy‐load hours. If
the payments were levelized over the 20‐
year term of the proposed agreements,
payments would be about $62 per MWh.
The scheduled online date for those
projects is Dec. 31, 2016.
28 | P a g e
The First Wind projects propose rates as
low as $33 per MWh during light‐load hours
to about $143 per MWh during heavy‐load
hours. If levelized, the payments would be
about $64 per MWh. The scheduled online
date for the First Wind projects is Dec. 1,
2016.
Included in each contract is an integration
charge the developer pays Idaho Power to
cover the cost of integrating the energy into
Idaho Power’s transmission and distribution
system.
Revenue from the sales of Renewable
Energy Certificates associated with the
projects would be split 50‐50 between the
developer and Idaho Power.
The proposed agreements allow for a 2
percent deviation in estimated energy
output before the price can be adjusted. A
consistent deviation from the hourly energy
generation estimates would be considered
a material breach of the agreements.
Project Location Size 20-year estimated
contract value
Mountain Home Solar
Case No. IPC-E-14-26
Elmore County 20 MW $81 million
Pocatello Solar 1
Case No. IPC-E-14-27
Power County 20 MW $75.6 million
Clark Solar 1
Case No. IPC-E-14-28
Elmore County 71 MW $250.75 million
Clark Solar 2
Case No. IPC-E-14-29
Elmore County 20 MW $69.85 million
Clark Solar 3
Case No. IPC-E-14-30
Elmore County 30 MW $103.6 million
Clark Solar 4
Case No. IPC-E-14-31
Elmore County 20 MW $68.15 million
Murphy Flat Power
Case No. IPC-E-14-32
Owyhee County 20 MW $68 million
Simco Solar
Case No. IPC-E-14-33
Elmore County 20 MW $68.7 million
American Falls Solar
Case No. IPC-E-14-34
Power County 20 MW $63.8 million
American Falls Solar II
Case No. IPC-E-14-35
Power County 20 MW $60.7 million
Orchard Ranch Solar
Case No. IPC-E-14-36
Ada County 20 MW $63.5 million
29 | P a g e
Parties negotiating solar integration charge
Case No. IPC‐E‐14‐18, Order No. 33173
Nov. 6, 2014 – A technical hearing
regarding Idaho Power Company’s
application to implement a solar integration
charge that had been scheduled for Nov.
13, 2014, was vacated to allow an
opportunity for parties to the case to enter
into settlement negotiations.
Parties include Idaho Public Utilities
Commission staff, the Idaho Conservation
League, the Snake River Alliance and the
Sierra Club.
The integration charge Idaho Power
proposes would be assessed larger solar
developers to compensate Idaho Power for
costs it incurs to integrate solar output into
its transmission and distribution system.
This application does not impact residential
or small‐commercial customers who have
rooftop solar installations.
Solar and wind generation is intermittent,
meaning that that they vary in energy
output depending on sun and wind
conditions. That intermittency requires that
Idaho Power have back‐up generation to
ensure system reliability. Utilities must
provide operating reserves from baseload
(non‐intermittent) generation resources –
such as a natural gas or hydro plant – that
can be quickly ramped up or down to offset
changes in generation from variable
generation. Restricting the use of baseload
resources to provide back‐up for
intermittent generation results in higher
power supply costs that are eventually
passed on to customers, Idaho Power
claims.
To prevent customers from paying those
costs, Idaho Power is proposing a solar
integration charge that would be
discounted from the amount the utility pays
to solar developers.
Idaho Power proposes charges that
gradually increase as solar generation
increases. It proposes that developers pay
about 40 cents per megawatt‐hour when
there is 100 megawatts or fewer of solar
generation on Idaho Power’s system. That
cost increases to $1.50 per MWh when
solar penetration is between 100 and 300
MW; $2.80 per MWh at a solar penetration
of between 300 and 500 MW; and $4.40 per
MWh at a solar penetration of between 500
and 700 MW. Those proposed amounts are
for contracts signed this year and would
gradually change during the length of the
sales agreement.
The rapid growth of wind development and
solar potential “had led to the recognition
that Idaho Power’s finite capability for
integrating variable and intermittent
generation is nearing its limit,” the
company claims in its application. “Even at
the current level of wind generation ...
dispatchable thermal and hydro generators
are not always capable of providing the
balancing reserves necessary to integrate
30 | P a g e
variable generation,” the company claims.
“This situation is expected to worsen as
wind and solar penetration levels increase,
particularly during periods of low customer
demand.”
Commission adopts updated expenses
developers pay to integrate wind into grid
Case No. IPC‐E‐13‐22, Order No. 33150
Oct. 16, 2014 – The commission adopted
updated rates to be charged wind
developers who sell energy to Idaho Power
Company to account for the utility’s
expense of integrating the wind onto its
distribution and transmission system. The
commission also approved a new method
for calculating the wind integration charge.
“We find that the current mechanism for
recovery of integration costs has resulted in
under‐collection of the actual costs
required to integrate wind onto Idaho
Power’s system,” the commission said. That
is not in the best interest of Idaho Power
ratepayers because expense to integrate
wind that is not paid by wind developers is
borne by customers.
In seeking the updated rates, Idaho Power
said its ability to integrate wind into its
system was nearing its limit. The utility has
about 678 megawatts of wind capacity on
its system now, 505 MW of that coming
online since 2010. The integration rate has
not been updated since 2007.
The intermittency of wind forces Idaho
Power to modify its system operations to
ensure transmission grid reliability. The
utility must provide reserves from other
resources ‐‐ such as hydro or natural gas ‐‐
that can increase or decrease generation on
short notice to offset changes in wind
generation. The effect of having to use
other resources as operating reserve
restricts those same resources from being
economically dispatched to their fullest
capability, resulting in higher power supply
costs passed on to customers. The federal
Public Utility Regulatory Policies Act
(PURPA) requires Idaho Power to buy the
wind from qualifying renewable energy
projects.
Under the previous method, the wind
integration charge was calculated by using a
percentage of the avoided‐cost rate set by
the commission. The avoided‐cost rate is
the rate paid to renewable energy
developers based on the cost the utility
avoids by not having to generate the power
itself or buy it from another source.
31 | P a g e
However, Idaho Power claimed that basing
the integration charge on the avoided‐cost
rate has no relation to the actual costs of
the additional reserves needed to integrate
variable resources on its system.
Under the new method approved by the
commission, wind developers will pay a
tariff rate that is not based on a percentage
of avoided‐cost. Instead, the rate is
established in a tariff that increases as the
utility’s overall wind penetration level
increases because costs increase as more
wind is added to the system. However, an
increase to the integration rate when wind
generation hits specific thresholds is applied
only to new projects as they sign on. The
rate each developer pays is determined at
the signing of the contract so that
developers have certainty as to what they
will pay over the term of what is typically a
20‐year contract.
For example, at the utility’s current wind
penetration level of between 600 MW and
700 MW, a developer of a project that signs
in 2014 would pay an integration rate of
$11.99 per megawatt‐hour. For a non‐
levelized contract, that rate increases to
$21.03 per MWh through the contract’s end
at 2033. The integration rate increases for
new projects for every 100 MW of
additional wind penetration up to 1,100
MW.
Intervenors representing the Renewable
Northwest Project and the American Wind
Energy Association said Idaho Power’s
proposal results in rates that are too high
because the method it uses to calculate its
reserve requirement to accommodate wind
results in a reserve three times greater than
necessary. The intervenors said the utility is
not using actual wind integration expense
to calculate the integration rate, but instead
is using costs associated with having to re‐
sell surplus wind energy that PURPA
compels Idaho Power to buy even when the
wind is not needed.
The commission said the intervenors are
not taking into account other costs the
utility incurs because of PURPA’s must‐buy
requirements. “We find that if a utility
incurs additional operational costs as a
result of having to balance intermittent,
must‐take PURPA generation, those costs
are reasonably classified as integration
costs,” the commission said. “It is also in
accord with this commission’s position that
PURPA transactions should not harm
ratepayers.”
32 | P a g e
Electric rate adjustments
Commission OKs 1.7% annual adjustment increases,
but will open cases to further review PCA and FCA
Case No. IPC‐E‐14‐03, Order No. 33047 and Case No. IPC‐E‐14‐05, Order No. 33049
June 2, 2014 – Rates increased slightly
effective June 1 for Idaho Power Company
customers as part of the utility’s Annual
Adjustment Mechanism, which covers
power expense and costs related to energy
savings programs that change from year to
year.
The Annual Adjustment Mechanism is
updated every June 1 and consists of two
primary components, the Power Cost
Adjustment (PCA) and the Fixed Cost
Adjustment (FCA). The adjustments can be
an increase or decrease depending on
circumstances.
For a residential customer who uses the
company’s average of 1,050 kilowatt‐hours
per month, the increase to both
adjustments will total about $1.77 per
month, or about 1.7% above current rates.
Power Cost Adjustment
Since 1993, the PCA allows Idaho Power to
adjust rates up or down to reflect that
portion of costs that change every year due
to factors largely beyond the company’s
control. Because about half of Idaho
Power’s generation is from hydropower
facilities, Idaho Power’s actual cost of
providing electricity varies depending on
changes in Snake River streamflows. Other
costs that change each year are the market
price of power, fuel costs, transmission
costs for purchased power and the revenue
it earns from selling surplus power.
Power supply expenses for this PCA year
(April 1, 2013 to March 31, 2014) were
$27.1 million above the amount already
collected from customers. To offset a larger
increase, Idaho Power proposed to transfer
$16.1 million of surplus funds in the Energy
Efficiency Rider account toward the PCA,
reducing the amount owed by customers to
$11.1 million. The increase was offset
further by $7.6 million allowed customers
from a revenue sharing plan created by the
company and the commission about five
years ago. These steps reduced the overall
PCA increase to 0.56% for residential
customers. The average increase for all
customer classes combined is 1.04%.
The Idaho Conservation League opposed
transferring energy efficiency rider funds to
offset the PCA because it would mask true
power costs and send an incorrect price
signal to customers on the need to
33 | P a g e
conserve. Other parties, such as the
commission staff and the Industrial
Customers of Idaho Power (ICIP), said the
surplus rider funds should be used to offset
the Energy Efficiency Rider on customer
bills rather than the PCA.
The commission said it normally expects
Idaho Power to use rider funds for energy
efficiency purposes, “But, as customers
have noted, this year’s rate increase will
cause a hardship for some customers.”
Further, a reduction in the energy efficiency
rider adds unnecessary complexity to the
case, the commission said. ICIP said the
rider, now 4% of a customer’s billed
amount, should be permanently reduced to
3%. The commission said that issue would
need to be taken up in a separate docket.
Less hydro generation and lower‐than‐
expected surplus sales were the primary
causes of more power supply expense this
year. Idaho Power forecast 6.8 million
megawatt‐hours of hydroelectric
generation in the PCA year, but generated
only 5.7 million MWhs through March.
When there is less hydro generation, the
utility must use more expensive resources
to serve its customers. In a normal year,
Idaho Power gets 50.7% of its electricity
from hydro generation. During the 2013‐14
PCA year, the company claims it generated
only 38.1% from hydro sources.
Even though snowpack levels in the basins
above Brownlee Reservoir have improved
to near normal levels, reservoirs further
upstream from Brownlee are at significantly
lower than normal levels.
Less hydro generation also resulted in
lower‐than‐expected surplus sales. Idaho
Power anticipated $98.5 million in power
sales, but realized only $66.8 million.
Ninety‐five percent of the revenue from off‐
system sales is shared with customers and
applied against the annual PCA.
Commission staff raised concerns about
some of the methods the company uses to
compute the PCA deferral balance that staff
said could have reduced the PCA by $14.2
million. Because the adjustment
calculations are complex and the parties
had little time to review them, the
commission allowed the requested deferral
amount. However, the commission will
open a new case to allow all parties to more
closely examine commission staff claims.
The commission reminded customers
frustrated by the rate increase that the PCA
does not influence the company’s profits
and can be used only to pay down already
incurred power supply expense. The
company’s normal power costs are already
recovered in base rates. The PCA recovers
only above‐normal costs the company
incurs to provide power to its customers. If
those variable expenses are below normal,
customers get a one‐year credit. “The
company is supposed to request only its
actual power costs and the commission and
its staff work to ensure that the company
only recovers those actual power costs,”
the commission said.
The new PCA rate for residential customers
will be, slightly less than a half‐cent per
kilowatt‐hour at 0.485 cents.
Fixed Cost Adjustment
The FCA is designed to ensure Idaho Power
recovers its fixed costs of delivering energy
even when energy sales and revenue
decline due to reduced consumption.
34 | P a g e
Idaho Power PCA Over the Years
2003 – 18.9 percent decrease. $81.3 million.
2004 – No change. $70.8 million.
2005 – No change. $73.1 million.
2006 – 19.4 percent decrease. $‐46.8 million credit.
2007 – 14.5 percent increase. $30.7 million.
2008 – 10.7 percent increase. $106 million.
2009 – 10.2 percent increase. $194 million.
2010 – 6.5 percent decrease. $41.9 million.
2011 – 4.8 percent decrease. $50.4 million.
2012 – 5.1 percent increase, ($43 million) but that is offset from a revenue
sharing agreement for a net increase to customers of 1.7 percent.
2013 – 15.3 percent increase. $140 million.
2014 – 1 percent increase, $27.1 million
Before the FCA, Idaho Power did not have
financial incentive to invest in energy
efficiency because it lost revenue as
consumption declined. Even though
consumption may decline, fixed costs to
serve customers do not. To remove that
disincentive, the FCA was created to allow
the utility to recoup its fixed costs.
The FCA has helped make it possible for
Idaho Power to create about 30 programs
that increase efficiency and reduce demand
on its system, especially during peak
periods when demand is highest and most
expensive to both company and customers.
If the actual fixed costs recovered from
customers by Idaho Power are less than the
fixed costs authorized in the most recent
rate case, residential and small‐commercial
customers get a surcharge. If the company
collects more in fixed costs than authorized,
customers get a credit. Last year’s FCA was
an average 27‐cent per month decrease.
This year, the company proposed an
increase in the FCA rate of about 1.2% for
residential customers to 0.2913 cents per
kWh, up from 0.177 cents. The rate for
small‐business customers increases to
0.3709 cents per kWh, up from 0.226 cents.
As in the PCA case, commission staff and
other parties found what they perceive to
be flaws in the FCA mechanism. As a result,
the commission will open a new case to
investigate the issues raised. Among those
are the way the FCA mechanism is
calculated using averaged instead of actual
weather conditions, using a median rather
than an average number in customer
counts, calculating the increase and the 3%
cap on FCA increases using forecasted sales
and revenues, and concern that residential
and businesses classes may be subsidizing
other customer classes.
35 | P a g e
Commission staff said the FCA may no
longer be serving its intended purpose. The
company’s energy savings did grow rapidly
during a 3‐year pilot phase for the FCA,
peaking in 2010 before dramatically
dropping off in 2013. Idaho Power said it
continues to aggressively pursue savings
programs and that customer participation
was up in 2013. The decline in energy
savings, the company claims, is due to a
change in the way savings are measured.
Idaho Power claims that opening a new
case to examine the FCA mechanism is not
necessary because the program received a
review when the commission converted it
from pilot to permanent status in 2013.
The commission said making the program
permanent did not mean it would not be
subject to review. “When staff, other
parties, or the commission have serious
concerns that the FCA is not working as
intended, or may be allowing the company
to over‐recover its fixed costs to the
detriment of customers ... a timely review is
critical,” the commission said. “We will
continue to monitor the FCA results each
year. If these reviews suggest clearer, more
equitable refinements of the FCA, we will
not hesitate to implement them.”
Idaho Power revenue sharing program extended five years
Case No. IPC‐E‐14‐14, Order No. 33149
(Oct. 10, 2014) – The Commission approved
a proposed settlement to extend for
another five years a program that allows
Idaho Power Company to use its
accumulated investment tax credits to
shore up its rate of return and also share
revenue with customers when that return
exceeds certain levels.
The settlement was proposed by Idaho
Power, commission staff and parties
representing irrigation and industrial
customers.
The revenue sharing program, in place since
2009, ensures the utility will meet at least a
9.5% return on equity while, at the same
time, sharing with customers portions of
revenue earned beyond a 10% ROE. The
commission said the mechanism will
provide customers an opportunity for
future rate relief while also increasing the
potential for rate stability.
The program allows Idaho Power to
accelerate up to $45 million in investment
tax credits over a five‐year period, but no
more than $25 million can be used in a
single year. The tax credits may be used
when the company’s return on equity falls
below 9.5%. If the return exceeds 10%, the
company shares a portion of those
revenues with customers. The program
provides the company an opportunity to
achieve earnings near its authorized rate of
return in years when revenue from rates
alone would not provide that same
opportunity.
Since the revenue sharing program began in
2010, Idaho Power’s return on equity has
not fallen below 9.5% so the tax credits
36 | P a g e
have not been accelerated. However,
customers were provided more than $93
million in benefits under the revenue
sharing provision either as a direct offset to
rates or as an offset against future rates.
Idaho Power receives income tax benefits
based on the level of its capital investment
in generation plant and other facilities.
These accumulated deferred investment tax
credits (ADITC) are typically spread over the
book life of the associated plant investment
– which can sometimes be 30 years or
longer – and used to reduce income tax
expense included in customer rates during
that period. As part of a 2011 moratorium
on base rate increases, Idaho Power and
other parties approved a settlement that
allowed the utility to shore up its earnings
by accelerating up to $45 million of
investment tax credits.
The extension of the mechanism proposes
that if Idaho Power’s ROE is between 10%
and 10.5%, customers will get 75% of the of
the excess amount and the company would
get 25%. The customers’ share would be
provided in the form of a rate credit to the
Power Cost Adjustment (PCA) which
becomes effective every June 1.
If earnings exceed 10.5%, three‐fourths
would again be shared with customers and
one‐fourth with the company. Fifty percent
of the customer share would be applied
against the PCA while the remaining 25%
would be an offset to the amount
customers contribute to the company’s
pension balancing account.
Up until the revenue sharing mechanism
started in 2010, Idaho Power had not been
able to earn its authorized rate of return for
the previous decade in both its Idaho and
Oregon jurisdictions. Customers benefit
even if there is not a revenue sharing, the
company claims, because an ROE of 9.5%
reduces the company’s cost of capital,
which affects the rates customers pay. The
positive ROE also improves the company’s
access to working capital for short‐term
financing needs.
The company agreed to continue to make
its year‐end earnings results available for
audit by the commission staff and the
settlement further provides that a copy of
the audit report may also be made available
to others parties to the settlement during
the annual Power Cost Adjustment review.
Those parties included Idaho Power,
commission staff, the Idaho Irrigation
Pumpers Association and the Industrial
Customers of Idaho Power.
37 | P a g e
Avista annual electric adjustment is an increase
Case No. AVU‐E‐14‐06, Order No. 33140
Oct. 1, 2014 – Electric rates for customers
of Avista Utilities increase 4.2% effective
Oct. 1, 2014.
The variable portion of
electric rates go up or down
every year based on the
previous year’s variable costs
to serve customers.
The annual Power Cost Adjustment (PCA)
changes every year based on: 1)
streamflows, 2) fuel costs, 3) the market
price of power and 4) revenue and
expenses related to contracts with power
suppliers.
During years when variable expenses are
less than what is already included in rates,
customers get a one‐year rate credit or
decrease. During years when variable
expenses are greater than anticipated,
customers get a one‐year surcharge.
Avista’s earnings, dividends to shareholders
or employee salaries are not increased by
the PCA or PGA. Variable electric supply
expense is kept in a deferred account
audited by the commission, to ensure the
expenses were necessary to serve
customers and used only to pay for power
supply expense.
While the PCA recovers variable costs of
serving customers, fixed costs and some
variable expense is included in base rates.
Variable rates plus base rates make up the
vast majority of customers’ overall rate.
Avista’s PCA increase recovers $7.7 million
in power supply expense needed to serve
customers that is not already included in
rates. Further, a $4.6 million
credit that occurred as a result of
last year’s PCA decrease expired
this year. For a residential
customer who uses Avista’s
average of 930 kWhs per month,
an average monthly bill would increase by
$3.76, from $81.88 to $85.64.
More than half of the PCA amount is
attributable to $4.1 million in power Avista
had to provide to replace the power lost as
a result of a forced outage at the Colstrip
coal plant in eastern Montana from July 1,
2013 to Jan. 22, 2014.
Intervenors in the case, including
Clearwater Paper Corporation and Idaho
Forest Group LLC, said that portion of costs
should not be included in the PCA, pointing
to a 2004 commission order that denied
Idaho Power Company recovery of all the
expenses related to an outage at the Valmy
coal plant in Nevada.
However, the commission said the Valmy
outage differed than the Colstrip incident.
The undisputed evidence in that case
showed that the Valmy outage was caused
by an apparent failure to follow established
safety procedures, a lack of proper
supervision and poor communication, the
commission said. In contrast, a third‐party
“Root Cause Analysis,” determined that the
38 | P a g e
Colstrip outage could not have been
avoided.
Environmental groups, including the Snake
River Alliance, Idaho Conservation League
and Sierra Club, said the commission should
take more time to do its own study to
determine if the Root Cause Analysis is
valid. However, the commission said that
the independent study, plus discovery
conducted by Clearwater Paper and the
Idaho Forest Group, all determined that
there is no evidence the company
imprudently incurred the Colstrip
replacement power costs.
The environmental groups noted that this is
the second major outage at the Colstrip unit
in the last five years and questioned the
wisdom of continued reliance on Colstrip
coal. The commission said the extent to
which Avista continues to rely on Colstrip is
beyond the scope of the PCA proceeding.
“The PCA is a cost tracker, and a PCA case
narrowly focuses on whether a utility
should increase or decrease its rates to
reflect its tracked, actual power supply
costs,” the commission said.
Clearwater Paper argued it is paying more
than what it costs Avista to serve it and
proposed that $500,000 of its PCA charge
be allocated to other customer classes. The
commission denied Clearwater’s request,
noting that the cost‐of‐service study to
which Clearwater points is based on a 2012
rate case and that an updated study could
show different results.
Other contributors to the PCA increase
included:
The Palouse Wind project in eastern
Washington came online during
2013, adding $2.17 million to power
supply expense.
A 19% increase in retail electric
demand resulted in an additional
$1.3 million in power supply
expense.
Clearwater Paper in Lewiston chose
to use its own generation, which
reduced anticipated purchases from
Avista by about $2.3 million.
Commission adopts Avista rate settlement
that leaves current base rates in place until 2016
Case No. AVU‐E‐14‐05
AVU‐G‐14‐01, Order No. 33130
Sept. 19, 2014 – The Commission adopted a
settlement of an Avista Utilities’ rate
application that states the utility cannot
increase electricity or natural gas base rates
until Jan. 1, 2016, at the earliest.
Two customer credits that expire on Jan. 1,
2015 would have resulted in increases for
both electric and natural gas customers, but
39 | P a g e
the parties to the settlement proposed
other means to make up for revenue lost
due to the credits’ expiration. A
commission staff investigation said the
settlement, rather than a fully litigated
case, is in customers’ interest because
Avista may have justified increases of about
$3.5 million in increased electric revenue
and $200,000 in natural gas revenue.
A one‐time credit resulting from a previous
agreement between Avista and the
Bonneville Power Administration expires on
Jan. 1, 2015, which would have resulted in a
1.3% increase. A second credit to natural
gas customers also expires on Jan. 1, and
that would have resulted in a 1.7% increase
in natural gas rates.
Those increases were eliminated by using
funds from a revenue sharing program
Avista has with its customers. If the
consolidated earnings from both Avista’s
electric and natural gas sectors exceed
9.8%, half those earnings are deferred to
future credits for customers the following
year. If earnings are below 9.5%, Avista is
allowed to apply previous years’ earnings’
deferral to move its earnings up to 9.5%.
The settlement applies a portion of Avista’s
2013 deferral for earnings above 9.8% ($3.2
million) against the BPA credit expiration.
The remaining $713,000 in customers’
share of 2013 earnings is proposed to be
applied against Avista’s annual Power Cost
Adjustment (PCA) now before the
commission in a separate docket.
The increase that would have occurred
when the natural gas credit expires will be
paid for by $440,000 in revenue sharing and
from a $653,000 balance in the natural gas
Energy Efficiency account.
The settlement provides that 80% of
expenses (up to $3.3 million) related to
Avista’s new customer information system,
Project Compass, be deferred until 2016.
That deferral is due in part to the
uncertainty of the in‐service date for the
new billing and customer information
system. The settlement also defers to 2016
a three‐year amortization of $1.25 million
($418,000 per year) of expenses related to
operations of the Coyote Springs 2 natural
gas plant near Boardman, Oregon and the
Colstrip 3 and 4 coal generating plants in
southeastern Montana.
The settlement does not include increases
that could come from Avista’s yearly PCA or
Purchased Gas Cost Adjustment (PGA). The
settlement includes only base rates that
apply primarily to Avista’s fixed costs.
Parties to the base rate settlement
agreement include Avista, commission staff,
the Clearwater Paper Association, Idaho
Forest Group, the Idaho Conservation
League, Snake River Alliance and the
Community Action Partnership Association
of Idaho (CAPAI), which represents
customers on low‐ and fixed‐incomes.
CAPAI said the settlement was in the best of
low‐income customers and supported a
requirement that interested parties meet
before Oct. 14 to review Avista’s
conservation programs for low‐income
residential customers.
The Snake River Alliance also supported the
settlement but expressed concerns about
opportunities for public participation when
rate cases are settled rather than fully
litigated.
40 | P a g e
Rocky Mountain Power ECAM is a 2.6% decrease
Case No. PAC‐E‐14‐01, Order No. 33008
April 7, 2014 ‐‐ Rates for Rocky Mountain
Power’s eastern Idaho customers decreased
by an average 2.6 percent on April 1 as part
of the utility’s
annual Energy
Cost Adjustment
Mechanism
(ECAM).
The Energy Cost Adjustment appears as a
separate line‐item on customer bills. The
ECAM adjusts actual power supply expense
from forecasted power supply expense. The
ECAM must be adjusted annually because
some of the cost Rocky Mountain Power
incurs to provide energy to its customers
vary from year to year. These include
expenses for fuel and for power purchased
from the wholesale market. Also, the
revenue the utility earns from its power
sales changes annually. Rocky Mountain
forecasts what those amounts may be and
includes that forecast in base rates.
Because the forecast is never precisely
correct, there is an annual true‐up of
forecasted power supply expense to actual
power expense. When the actual expense is
greater than that included in base rates,
customers get a one‐year surcharge. When
actual power supply expense is less than
anticipated, customers get a one‐year
credit.
This year, the Idaho Public Utilities
Commission approved an ECAM deferral
balance of $7 million that represents a
surcharge for all tariff customers. However,
the surcharge is less than last year’s
surcharge meaning customers will be
assessed about 2.6 percent less than the
amount previously collected. Also approved
are deferrals for
large‐contract
customer Monsanto
of $4.9 million and
for Agrium of
$400,000. They will receive 1.6 percent and
2 percent ECAM increases respectively.
None of the money collected in the ECAM
can be used to increase Rocky Mountain
Power’s earnings. The ECAM is kept in a
deferred account audited by the
commission and used only to pay power
supply expense not already included in base
rates.
The total deferral balance approved by the
commission of $12.23 million is less than
the company’s originally proposed $13.2
million, resulting in rates lower than those
proposed by the company. This is the third
consecutive year the ECAM is either no
change or a decrease for tariff customers.
The largest factor driving power supply
costs down was reduced natural gas
expense of 18 percent. That fuel price
decrease moderated increases in other
power supply expense categories including:
A 41 percent decrease in revenue
from wholesale power sales, largely
due to the fact that wholesale
market prices were 12 percent
lower. Ninety‐percent of the
41 | P a g e
revenue from wholesale power
market sales is shared with
customers, while the company
retains 10 percent. The utility can
sell into the wholesale market only
when the company is generating
surplus power after having met
customer demand;
A 9 percent increase in purchased
power expense;
An 11 percent increase in fuel
expense related to servicing the
utility’s coal plants;
A significant decline in revenue from
the utility’s sales of Renewable
Energy Certificates (RECs). The
company fell far short of its
forecasted REC sales of $6.5 million,
realizing only $1.3 million due to
REC market prices being significantly
lower.
The commission also directed Rocky
Mountain Power, commission staff and
Monsanto to participate in workshops to
resolve an issue over how the “wholesale
line loss adjustment” is calculated. As
power is transported over the utility’s
transmission lines, there is always some line
loss. The adjustment determines how much
of the associated cost should be allocated
to the utility’s Idaho customers. The parties
differ over their interpretation of past
commission orders as to how the wholesale
line adjustment is applied.
Energy Cost Adjustment Mechanism 2010-14 for Tariff Customers
Year Approved Power Supply Expense ECAM charge Net change
2010 $2 million 0.10 cents/kWh
2011 $10.4 million 0.57 cents/kWh 5.8% increase
2012 $13 million* 0.57 cents/ kWh No change
2013 $15.8 million* 0.57/cents/kWh No change
2014 $12.2 million 0.32 cents/kWh 2.6% decrease
*While overall power supply expense increased in both 2012 and 2013, the increased costs were
allocated to Rocky Mountain Power’s contract customers, Monsanto and Agrium, and not to
tariff customers.
42 | P a g e
Rocky Mountain customers to get one‐time
credit from efficiency service over‐collection
Case No. PAC‐E‐13‐15, Order No. 32967
January 24, 2014 – The Commission
approved a Rocky Mountain Power
application to issue a one‐time credit to
customers of the eastern Idaho utility due
to an over‐collection in an account that
pays for energy efficiency programs.
Customers pay a “Customer Efficiency
Services” charge of 2.1 percent of their total
billed amount every month. Heavy summer
loads during 2012 and 2013 resulted in
higher than forecasted revenues in that
account. The commission granted the
utility’s request to issue a one‐time refund
to customers that will be about $8.32 for
the average residential customer. The
amount of the credit will vary depending on
the amount of energy use. The credit will be
applied against either the February or
March bill depending on each customer’s
billing cycle.
The money collected in the rider account
can go only toward funding cost‐effective
programs that increase energy efficiency. If
the account collects significantly more than
the company anticipated, it must either
reduce the rider or refund customers. The
rider has already been reduced from a high
of 4.72 percent in 2010 to 2.1 percent
today.
The one‐time credit will not impact Rocky
Mountain’s future expenditures in
efficiency programs. Rocky Mountain
anticipates that efficiency expenses will be
remain constant this year with a forecasted
increase in 2015.
The programs funded by the rider are
designed to delay or eliminate the need for
the utility to build new generation. All of
the programs funded by the Customer
Efficiency Services rider must pass cost‐
effectiveness tests that show customers
would be paying more for electricity if the
programs were not in place.
Rocky Mountain Power is surpassing its
goals for energy efficiency. In 2012, the goal
was to reach 8.5 million kilowatt‐hours of
savings and the company attained 10.54
million kWhs. As of September 30, 2013,
the company had achieved 11.47 million
kWhs of savings, already surpassing 2012
totals.
43 | P a g e
Demand‐Side Resource Issues
2012 DSM: Idaho Power energy efficiency
expense determined ‘prudent’ by commission
But commission concerned about possible “retreat” from DSM
Case No. IPC‐E‐13‐08, Order No. 32953
(January 7, 2014) – The Commission
determined that the vast majority of the
$46.35 million that Idaho Power Company
spent on energy efficiency and demand‐
response programs during 2012 was
prudently incurred, but at the same time,
directed Idaho Power to address
perceptions that the utility is “retreating”
from its commitment to programs that
reduce electric demand.
The Commission
determined that
$46,092,000 of the
$46,356,000 the company spent on the
energy savings programs was prudently
incurred, meaning they can be included as
expense to be recovered through the 4
percent Energy Efficiency Rider or through
the annual Power Cost Adjustment set
every June 1. The commission’s annual
prudency review of these programs does
not immediately impact customer rates.
Idaho Power has 15 energy efficiency
programs, two energy efficiency education
programs and three demand‐response
programs, all of which are reviewed to
determine cost‐effectiveness. The programs
must pass three cost‐effectiveness tests to
ensure that the cost of the programs does
not exceed the benefit. One of the tests,
the Total Resource Cost test, must show
that all customers benefit from the
programs, not just those who directly
participate in them.
While the commission approved nearly all
of the expense as prudently incurred, it
took notice of Idaho Power’s decisions
during 2013 to temporarily curtail the air
conditioner cycling and irrigation load
control programs and the decision to
discontinue participation in regional
energy conservation efforts. “We
are concerned that the company’s
recent actions have fostered a
stakeholder perception that the company is
retreating from its DSM (demand‐side
management) commitments,” the
commission said.
The commission is concerned that some of
these decisions were made without
adequate input from Idaho Power’s Energy
Efficiency Advisory Group, which includes
stakeholders from customer and
environmental sectors. “Based on the
record in this case, we remain concerned
that the company does not fully utilize the
EEAG and proactively and collaboratively
involve the EEAG in DSM‐related decisions,”
the commission said. It directed the
company to file a report before the end of
44 | P a g e
February outlining the company’s
perspective on the EEAG’s purpose and
value, whether or not it is working and how
it could be improved.
The air conditioner cycling and irrigation
load control programs have been resumed
for the 2014 summer season after the
commission, company and interested
parties agreed on revisions to make the
programs more cost effective.
In late 2012, Idaho Power said it was
pulling out of the regional Northwest
Energy Efficiency Alliance (NEEA) after the
contract between the two expires later this
year. Idaho Power also declined to help
fund research efforts at the CAES Energy
Efficiency Research Institute (CEERI). CAES is
the Center for Advanced Energy Studies,
headquartered in Idaho Falls. Idaho Power
said it declined to fund the research
because it could not agree with the
participating universities about publication
rights associated with the research. The
commission said Idaho Power’s decisions
regarding NEEA and CEERI may have merit,
but the company should have consulted
with EEAG in reaching those decisions.
Idaho Power’s 15 energy efficiency
programs are funded primarily through a 4
percent Energy Efficiency Rider on customer
bills. An energy‐efficiency program is one in
which less energy is used to perform the
same function. Idaho Power said it spent
about $31.8 million on energy efficiency
programs and that those programs
provided 170,228 megawatt‐hours in
energy savings during 2012. Some of Idaho
Power’s energy efficiency programs include
offering customer rebates for increased use
of heating and cooling efficiencies and
energy efficient lighting and appliances as
wells as creating efficiencies in commercial
and industrial buildings.
Expenses related to Idaho Power’s three
demand‐response programs are included in
the annual Power Cost Adjustment. A
demand‐response program is one that
shifts energy use to non‐peak times of day,
reducing demand on a utility’s generation
system. Idaho Power incurred nearly $14.5
million in expense for those programs and,
according to Idaho Power, provided about
438 MW of capacity during 2012. One
megawatt is enough power to energize
about 650 average‐sized homes. Demand‐
response programs included one that
credits irrigators for shifting use of their
irrigation systems to non‐peak periods of
the day and an air conditioner cycling
program that offers residential customers a
monthly credit for agreeing to let the utility
remotely cycle their air conditioning during
the summer months.
2013 DSM: Idaho Power expenditures
toward conservation programs are prudent
Case No. IPC‐E‐14‐04, Order No. 33161
(Nov. 13, 2014) – The Commission
determined that Idaho Power’s $26 million
of investment in demand response
programs during 2013 was prudently
incurred. The programs are primarily
45 | P a g e
funded through a 4 percent Energy
Efficiency Rider on customer bills.
Idaho Power’s 18 energy efficiency
programs and educational initiatives
contributed toward an estimated 107,284
megawatt‐hours in energy savings during
2013. One demand‐response program
resulted in a 48‐megawatt reduction in
demand on Idaho Power’s generation
system. (An energy‐efficiency program is
one in which less energy is used to perform
the same function. A demand‐response
program is one that shifts use to non‐peak
times of day, reducing demand on a utility’s
generation system. Combined, all these
programs are called Demand Side
Management programs, or DSM.)
While the commission said the company’s
expenditures were prudently incurred, it
withheld judgment on claims by
commission staff, the Idaho Conservation
League and the Industrial Customers of
Idaho Power that the company’s
commitment to DSM “seems to be waning,”
and it allegedly does not do enough to
market the programs to customers.
The commission chose to rule on the
prudency issue alone, determining that the
other issues raised are significant enough to
warrant a more in‐depth review before
Idaho Power submits its next Integrated
Resource Plan filing. That plan, filed every
two years, lays out how the company will
meet customer demand over the next 10
and 20 years.
The company’s energy savings and demand
reduction are down from the 2012 totals of
170,220 MWh in energy efficiency savings
and 438 MW in demand response. Idaho
Power says part of that reduction is
attributable to third‐party evaluators’ more
stringent methods of measuring the
programs to determine their effectiveness
and due to the one‐year suspension of two
demand‐response programs. Further, the
company notes, customer participation is
up even though actual energy savings are
down.
“The commission is cognizant of the recent
decline in energy savings ... and notes that
Idaho Power issues a strong rebuttal of
these claims, offering several reasons to
explain the recent decline in its DSM
expenditures and a defense of its marketing
efforts,” the commission said. “We are
encouraged that the reply comments seem
to demonstrate the company’s renewed
interest in procuring all cost‐effective
DSM.”
Some of Idaho Power’s energy efficiency
programs include offering rebates to
customers for increased use of heating and
cooling efficiencies, energy efficient lighting
and creating efficiencies in commercial and
industrial buildings. The one demand‐
response program used during 2013, called
Flex Peak, allows large commercial and
industrial customers to reduce their electric
loads for short periods during peak summer
days. The demand‐response programs
suspended were a residential air
conditioner cycling program and an
irrigation control program that allowed
volunteer customers to shift some air
conditioning and irrigation to non‐peak
periods of the day. Both those programs
have been renewed but with changes to
make them more cost‐effective.
46 | P a g e
Avista Utilities’ expense to implement
efficiency programs declared prudent
Case Nos. AVU‐E‐13‐09, Order No. 33009
(April 11, 2014) – The Commission
determined that Avista Utilities’ prudently
incurred $25.17 million in expense related
to its electric and gas efficiency programs
during 2010‐12.
The commission’s finding means those
expenses can be included in the electric
rider of 0.245 cents per kilowatt‐hour on
customer electric bills. The gas rider is
temporarily zeroed out because low natural
gas prices render the expense related to the
gas efficiency programs less prudent. The
prudency finding does not impact customer
rates.
The electric efficiency programs provided
more than 109,100 megawatt‐hours of
savings during 2010‐12. Natural gas
efficiency programs resulted in 950,822
therms not being used.
The commission determined that $25.17
million of the $25.4 million the company
spent on energy and natural gas efficiency
programs was prudently incurred.
The 30 programs funded by the rider must
pass cost‐effectiveness tests that
demonstrate all customers benefit, not just
those who participate in the programs.
One test, the Total Resource Cost test,
measures whether the total costs in Avista’s
north Idaho service territory decrease as a
result of the programs. That test showed
that for
every $1
invested in
the
programs,
the benefit to all customers is $1.91.
Some of the programs for residential
customers include financial incentives for
installation of high‐efficiency equipment,
compact fluorescent lamps, refrigerator
recycling, weatherization, and electric‐to‐
natural gas conversions. Commercial and
industrial customers who participate can
take advantage of customized, site‐specific
programs.
The commission did not include about
$100,000 Avista paid the state Department
of Energy Resources for efficiency projects
at schools because Avista paid the
incentives without verifying that the
efficiency measures had been installed and
without receiving contractor receipts or
invoices to confirm the purchases and labor
associated with the projects. The
commission believes the efficiency
measures were purchased and installed and
will allow those expenses to be included in
the prudency determination once
verification is provided. The commission
also didn’t include $14,120 paid to Lewis
Clark State College for the same reasons.
The commission also said Idaho customers
should not have to pay for more frequent
third‐party evaluation required by
Washington state, also part of Avista’s
service territory. Although the evaluations
47 | P a g e
provide some benefit to Idaho customers,
Avista agreed to shift about $100,000 from
the Idaho rider to the Washington rider.
The commission also encouraged Avista to
abide by the 50 percent cap on site‐specific
efficiency projects’ cost and to more
carefully manage its labor costs related to
all the efficiency programs’
implementation.
Overall, the commission expressed
satisfaction with Avista’s management of
the programs, which provide cost benefits
to customers. “Like commission staff and
the Idaho Conservation League, we applaud
Avista’s longstanding ‘top down’
commitment to demand‐side management
and stakeholder involvement in energy
efficiency issues,” the commission said.
Rocky Mountain prudency application is for
$26 million in demand‐side resource expense
Case No. PAC‐E‐14‐07, Order No. 33122
(Oct. 24, 2014) – Rocky Mountain Power’s
application for a prudency determination
on nearly $26 million of the company’s
investment in demand‐side management
(DSM) programs during 2010‐13 was not
completed when this report was prepared.
DSM generally refers to utility activities and
programs that encourage customers (the
“demand” side as opposed to the
“generation” side) to use less energy or
shift use away from peak hours, thus
reducing demand on Rocky Mountain’s
generation system. Customers pay for the
programs through a rider that appears on
customer bills as “Customer Efficiency
Services.” The rider is currently set at 2.1%
of a customer’s monthly billed amount.
The Commission’s prudency review is to
determine if the funds invested in demand‐
side programs were reasonable and
beneficial to customers.
Rocky Mountain Power claims the programs
saved the utility 11,963 megawatt hours in
2010; 8,688 MWh in 2011; 11,420 MWh in
2012 and 18,324 MWh during 2013. That
reduced consumption reduces power
supply expense for all customers and
eliminates or delays the need to build new
generating facilities.
Three of the programs are available to
residential customers. “Home Energy
Saver” provides products and services such
as attic insulation and floor insulation,
energy efficient windows, CFL lighting and
other services. “Refrigerator Recycling”
offers customers rebates for removal and
recycling of inefficient refrigerators and
freezers. “Low Income Weatherization”
provides energy efficiency services to
residential customers meeting income
guidelines.
Three other programs target commercial,
industrial and agricultural customers. These
include “FinAnswer Express” to help
commercial and industrial customers
48 | P a g e
improve the efficiency of their lighting,
HVAC, electric motors, building envelopes
and other equipment. “Energy FinAnswer”
is available to commercial and industrial
customers in excess of 20,000 square‐feet
and includes incentives for improvements
to HVAC systems, motors, refrigeration,
lighting and other equipment. “Agricultural
Energy Services” is designed to improve
overall efficiency of irrigation systems. A
final program for qualifying volunteer
irrigation customers offers financial
incentives to irrigators if they irrigate during
non‐peak hours.
Rocky Mountain reports that five of the
programs were cost‐effective in all years,
one during two of the three years and
another, Low Income Weatherization was
not cost‐effective during the three‐year
period. The company says it has taken
action to improve the cost‐effectiveness of
that program.
Rocky Mountain Power, a division of
PacifiCorp, serves 73,500 customers in
eastern Idaho.
49 | P a g e
Other electric issues
Commission adopts tariff revisions
to accommodate industrial expansions
Case No. IPC‐E‐14‐01, Order No. 32982
(March 3, 2014) ‐‐ Large industrial
customers of Idaho Power Company who
must pay for new substation or
transmission facilities to serve their
increased electric load may receive upfront
credits for each year up to five years to help
them meet the expense of the expanded
facilities.
The Commission approved a revision to
Idaho Power’s tariff for industrial customers
that will make it more affordable for
industrial customers requiring Idaho Power
to upgrade transmission or substation
facilities needed to serve one customer.
Builders of residential and commercial
developments already receive an allowance
under the “Rule H tariff” to help pay for
distribution‐related line extensions. The
cost of new or expanded facilities is
typically shared between the new customer
and the utility, lowering the cost barrier
customers face when seeking new or
additional line extensions. The allowance
makes it possible for the amount of upfront
charges to be paid by the customer to be
reduced by permitting the utility to collect a
portion of the expense over time.
When Glanbia Foods, Inc., a Gooding
cheese plant, applied for a Rule H allowance
last year, Idaho Power claimed the
allowance applied to only distribution
voltage equipment, not new substations or
high‐voltage transmission lines. Glanbia is
funding $8.3 million in Idaho Power facility
improvements ($4.5 million for a 10‐mile
transmission line and $3.8 million for a
substation) and increasing its annual power
bill to Idaho Power by about $7 million.
Glanbia requested an allowance of $2.3
million and also asked for entitlement to
future potential “vested interest”
payments. Vested interest payments are
provided the party that paid for the initial
expansion as new customers who are using
the same facilities are later added.
In the Glanbia case (IPC‐E‐13‐09), the
commission eventually approved an
allowance of $1.25 million using a formula
allowing it $65,734 per megawatt of the
plant’s projected load of 19 MW. The
commission also allowed vested interest
payments to be directed to Glanbia if new
customers connect to the Glanbia property
substation facilities within the next five
years.
As a result of the Glanbia case, the
commission directed Idaho Power to
propose a substation and transmission
allowance and vested interest provision for
large industrial customers.
50 | P a g e
In this case, the commission adopted Idaho
Power’s proposed allowance of up to
$65,480 per MW multiplied by the
customer’s projected increase in load for
each year up to five years. If the load used
by the new customer decreases, it would
receive less of an allowance. The tariff
revision is effective immediately.
Commission OKs Idaho Power sales agreement
with Bannock County landfill‐to‐gas plant
Case No. IPC‐E‐13‐24, Order No. 32986
(March 3, 2014) ‐‐ The Commission
approved a 20‐year sales agreement
between Idaho Power Company and
Bannock County’s landfill‐to‐gas energy
plant near Pocatello.
Bannock County plans to initially install a
1.6‐megawatt generation unit and then
install another 1.6‐MW unit within five
years. The scheduled operation date for the
first phase is May 1.
The Bannock County facility qualifies under
the provisions of the Public Utility
Regulatory Policies Act of 1978, or PURPA.
The act requires that electric utilities offer
to buy power produced from qualifying
small‐power producers. The rate to be paid
small‐power producers is determined by
the commission and is called an “avoided‐
cost rate” because it is to be equal to the
cost the electric utility avoids if it would
have had to generate the power itself or
purchase it from another source.
The agreement includes “non‐levelized”
payments from Idaho Power to Bannock
County that gradually increase throughout
the life of the contract. Beginning this year,
the avoided‐cost rate for projects of this
type is $42.35 per megawatt‐hour, though
that amount is adjusted slightly downward
during light‐load hours of the day and
season and upward during heavy‐load
hours and seasons. In 2033, at the end of
the contract, the price would be $99.72 per
MWh.
Commission returns contract dispute
back to Idaho Power and Simplot to resolve
Case No. IPC‐E‐13‐23, Order No. 33038
(May 21, 2014) ‐‐ The Commission denied a
proposed contract between Idaho Power
Company and one its largest customers, the
J.R. Simplot Company’s new potato
processing plant in Caldwell, until the two
parties can resolve disputes over liability
and price.
The plant will require enough energy, in
excess of 20,000 kilowatts, to place it in a
51 | P a g e
customer class that requires a special
contract with Idaho Power for power
delivery. Simplot objects to Idaho Power
language that places limits on both parties’
direct liability and waives damages for
indirect or consequential liability. Further,
Simplot maintains the formula Idaho Power
uses to calculate the rate Simplot would pay
Idaho Power is outdated.
Idaho Power argues that limits on liability
are needed to protect customers. “Today,
the electric grid faces a variety of challenges
to maintaining its reliability, from
integrating increasing amounts of
intermittent generation to acts of
sabotage,” the utility claims. “The grid’s
technological complexity results in potential
service failures unrelated to human error. In
light of this complexity, it is very difficult for
a jury to distinguish between human error,
negligence and failures of technology
beyond Idaho Power’s control.” Idaho
Power claims the liability limits protect the
utility and customers from catastrophic
loss.
Simplot argues that previous Idaho
Supreme Court decisions have held that
public utilities should not be immune from
damage claims because customers cannot
choose between competing suppliers of
electric power and are, thus, “compelled to
rely absolutely on the care and diligence of
the company in the transmission of power.
Idaho Power’s proposed exculpatory
language shielding it from virtually all
liability is a violation of the public trust
under which it serves.”
In an order issued this week, the
commission said exempting a public utility
from the consequences of negligent
conduct when the utility is charged with a
public duty is not reasonable. “Idaho Power
cannot abrogate its general duty to exercise
reasonable care in operating its system to
avoid unreasonable risks of harm to its
customers.”
However, while the commission said limits
on “intentional tortious conduct or gross
negligence” are not in the public interest, it
is reasonable to consider limits on liability
to an agreed‐upon amount for a non‐willful
breach of duty.
Regarding the rate Simplot would pay Idaho
Power, the utility proposed about 4.24
cents per kWh. Simplot proposed about
3.94 cents per kWh. Commission staff
proposed using an average of rates charged
all Idaho Power’s special contract
customers.
The commission rejected the staff’s
averaging proposal and said a rate could be
determined by using Idaho Power’s most
recent cost‐of‐service study as a starting
point for negotiation.
The commission directed the parties to
renegotiate those portions of the proposed
contract regarding liability and price based
on the commission’s findings in this week’s
order. The final proposed contract must
still be approved by the commission.
52 | P a g e
Commission approves Avista stock issuance
to allow purchase of Alaska energy company
Case No. AVU‐U‐13‐01, Order No. 32991
(March 12, 2014) ‐‐ The Commission
approved an Avista Utilities application to
issue up to 7,250,000 shares of common
stock to fund Avista’s purchase of Alaska
Energy and Resources Company.
AERC includes Alaska Electric Light and
Power, which serves about 16,000
customers in Juneau and the surrounding
borough. It is the oldest and largest
investor‐owned utility in Alaska. In addition
to the electric utility, AERC also owns AJT
Mining Subsidiary, a mining company that is
currently inactive.
When the transaction closes, expected by
July 1, AERC will become a wholly owned
subsidiary of Avista, headquartered in
Spokane. The transaction will not affect
rates for Avista’s 125,000 customers in
north Idaho.
The commission’s order specifies that Avista
maintain its own operating books, records
and subaccounts separate from AERC
records and that Idaho commission staff
have access to all books and records related
to the transaction. Avista must also exclude
any costs related to the merger from
Avista’s Idaho customers and file status
reports with the commission regarding any
pertinent quarterly financial information.
Avista reports that the purchase price at
closing will be about $170 million, funded
through the issuance of Avista common
stock to the shareholders of AERC.
In 2012, Alaska Electric Light and Power had
annual revenues of $42 million and 60 full‐
time employees. The utility has a firm retail
peak load of 80 megawatts, nearly all of
that generated by hydroelectric plants.
PUC accepts Avista Utilities’ growth plan
Case No. AVU‐E‐13‐07, Order No. 32997
(March 26, 2014) – The Commission
accepted a long‐range growth plan
submitted by Avista Utilities, which serves
about 125,000 electric customers in
northern Idaho.
The Commission requires regulated electric
and gas utilities to file an Integrated
Resource Plan (IRP) every two years
outlining how they anticipate meeting load
growth over the next 20 years in the most
cost‐effective manner.
Avista has reduced its load‐growth
projections, from a forecasted 1.6 percent
growth to 1.1 percent. That reduced growth
will delay the need for a natural‐gas fired
plant by one year and eliminate the need
for one of two natural gas plants that were
projected for 2023.
53 | P a g e
Avista’s plan says its own generation and its
long‐term contracts will provide enough
energy to meet customer needs until 2020.
The company may be short during peak
winter periods in 2014‐15 and 2015‐16 but
plans to meet those needs with market
purchases.
A long‐term capacity deficit does not
happen until 2020. To address that deficit,
Avista’s IRP calls for the addition of an 83‐
MW simple‐cycle combustion turbine
natural gas plant in 2019. To meet growth
beyond 2020, the plan calls for another 83‐
MW simple‐cycle CT in 2023 and a 270‐MW
combined‐cycle CT in 2026. Another 50‐
MW simple‐cycle natural gas plant is
anticipated for 2032.
Costs related to greenhouse gas emissions
have been removed for the first time since
Avista’s 2007 plan. “Based on current
legislative priorities and the President’s
Climate Action Plan, a national greenhouse
gas cap‐and‐trade system or tax is no longer
likely,” the plan’s executive summary
states. Instead, the IRP forecasts some plant
retirements to meet potentially new
environmental regulations. Avista’s current
thermal resources include five natural gas
plants, a wood‐waste biomass facility, and
222 MW from part ownership of two units
of the Colstrip coal plant in eastern
Montana.
Environmental organizations say costs
related to the Environmental Protection
Agency’s potential greenhouse gas
regulations should not be removed.
Further, the Sierra Club and the Montana
Environmental Information Center claim the
plan does not fully address the risks
associated with the Colstrip coal plant and
overestimates the cost of alternative
resources to the Colstrip coal. The groups
contend their appeal of the EPA’s regional
haze decision could cost Colstrip owners
more than $100 million if the appeal is
successful. Avista has 15 percent
ownership of the Colstrip plant. Majority
owner PPL Montana has announced plans
to divest its interest in the plant.
The Snake River Alliance claims Avista is
over‐reliant on natural gas resources,
exposing ratepayers to gas price volatility
and uncertain supply. The SRA claims the
utility’s reliance on increased natural gas
generation and only 19 megawatts from
demand‐reduction programs does not
reflect a serious effort to reduce carbon
emissions. Avista responds by saying its
2013 IRP is the first time that demand
reduction programs pass cost‐effectiveness
tests and that the utility plans to study
expanding its demand‐response programs
as part of its 2015 IRP.
In addition to its demand‐reduction
programs geared primarily to commercial
and industrial customers, Avista’s energy
efficiency programs1 currently decrease the
utility’s energy requirements by about 10
percent, or 125 average megawatts. Absent
energy efficiency programs, Avista would be
resource‐deficient earlier than 2020. The
company expects to achieve another 164
1 Energy efficiency is using the same appliance or
service to use less electricity (CFL lightbulb). Demand
response is altering customer behavior in response
to peak situations such as delaying consumption to
non‐peak periods, thereby reducing demand on an
electric utility’s generation.
54 | P a g e
aMW in energy efficiency over the next 20
years.
Avista said it invited more than 120
representatives from 45 organizations to
meetings seeking input on the IRP and that
the environmental groups who expressed
concerns in this case did not materially
participate or express concerns until filing
their comments.
In its order, the commission encouraged the
environmental and other interested groups
to participate in the 2015 IRP process. The
commission said it expects Avista to,
“monitor federal developments, such as the
promulgation of federal environmental
regulations, and to account for their impact
in its resource planning.”
“As always, our acceptance of the
company’s IRP should not be interpreted as
an endorsement of any particular element
of the plan or any proposed resource
acquisition contained in the plan,” the
commission said. “By accepting the
company’s filing, we acknowledge only the
company’s ongoing planning process, not
the conclusions or results reached through
that process.”
55 | P a g e
Idaho Natural Gas Utilities
Consumption increasing, but prices declining
Natural gas is supplied to Idaho customers by three
utilities (i.e., Intermountain Gas, Avista
Corporation, and Questar Gas) and two large
transmission pipelines (i.e., Williams Northwest
Pipeline in southern Idaho and TransCanada Gas
Transmission Northwest (GTN) System in northern
Idaho). Natural gas supplies in the Northwest are
primarily split between two basins: the Western
Canadian Sedimentary Basin (WCSB) and the U.S.
Rocky Mountain Basin.
Idaho residents and industries continue to benefit from low natural gas prices and ample
supplies. Data compiled by the Energy Information Administration (EIA) shows a continuing
decline in residential and City gate2 prices.
Natural gas is used primarily by residential, commercial and industrial customers and for
electric generation. EIA data shows that natural gas consumption for electric generation
increased significantly in Idaho between 2012 and 2013,3 and is anticipated to continue
2 City gate is defined as a point or measuring station from which a local distribution company (LDC) receives gas
from a natural gas pipeline company or transmission system.
3 http://www.eia.gov/dnav/ng/ng_pri_sum_dcu_SID_a.htm
56 | P a g e
increasing according to the Northwest Gas Association. Residential and commercial is expected
to be characterized by modest but steady growth.4
Idaho Natural Gas Consumption by End Users (million cubic feet)5
2012 2013 % Change
% by End Use
(2013)
Pipeline and Distribution
Use 5730 5940 3.7% 5.7%
Residential 23924 27370 14.4% 26.2%
Commercial 15838 18485 16.7% 17.7%
Industrial 29781 27997 ‐6.0% 26.8%
Vehicle Fuel 132 148 12.1% 0.1%
Electric Power 13599 24594 80.9% 23.5%
Total 89004 104534 17.4% 100%
EIA’s national short‐term energy outlooks for 2014‐2015 on natural gas include:
Consumption ‐ Average 73.2 Bcf/d in 2014 (an increase of 2.2% from 2013); growth in
industrial sector and electric power sector consumption (i.e., from 22.0 Bcf/d to 22.7
Bcf/d) will offset lower residential consumption in 2015.
Production and Trade ‐ Natural gas production is expected to grow 4.8% in 2014 and
2.3% in 2015. Domestic production is expected to continue to increase, causing
downward pressure on natural gas imports from Canada. Low gas prices are also
4 http://www.nwga.org/wp-content/uploads/2014/05/GasOutlook2014REV_WEB-copy.pdf
5 EIA, 2014: http://www.eia.gov/dnav/ng/ng_cons_sum_dcu_SID_a.htm
57 | P a g e
expected to spur exports to Mexico, due to a growing demand from Mexico's electric
power sector and flat production.
Inventories ‐ Working inventories totaled 3,571 Bcf as of Oct. 31, 2014, which was 238
Bcf lower than at the same time last year and 261 Bcf lower than the previous five‐year
(2009‐13) average; end‐of‐March 2015 inventories are projected to total 1,562 Bcf,
which is 94 Bcf below the five‐year (2010‐14) average.
Prices ‐ Spot prices are expected to remain relatively low, but are anticipated to rise
slightly with winter heating demand. Futures prices for February 2015 delivery (for the
five‐day period ending November 6) averaged $4.19/MMBtu, which is higher than last
year’s February 2014 futures year ($3.57/MMBtu).
- by Johanna M. Bell, IPUC Staff Analyst
58 | P a g e
Intermountain Gas Residential Commercial Industrial Transportation6 Total
2013 Customers7 295,639 31,401 17 104 327,161
% of Total 90.36% 9.60% 0.01% 0.03% 100%
2012 Customers8 283,228 30,114 11 110 313,463
2013 Therms Sold (millions)7 230.8 117.85 4.8 278.94 632.39
% of Total 36.50% 18.64% 0.76% 44.11% 100%
2012 Therms Sold (millions)8 202.29 100.97 3.46 277.13 583.85
2013 Revenue ($ millions)7 $174.98 $81.15 $2.30 $9.90 $268.33
% of Total 65.21% 30.24% 0.86% 3.69% 100%
2012 Revenue ($ millions)8 $162.14 $73.33 $1.80 $8.49 $245.76
Avista Corporation Residential Commercial Industrial Transportation Total
2013 Customers7 67,518 8,525 94 8 76,145
% of Total 88.67% 11.20% 0.12% 0.01% 100%
2012 Customers8 66,731 8,489 94 8 75,322
2013 Therms Sold (millions)7 47.31 27.25 2.22 42.70 119.48
% of Total 39.60% 22.81% 1.86% 35.74% 100%
2012 Therms Sold (millions)8 46.17 26.63 2.29 43.47 118.56
2013 Revenue ($ millions)7 $44.86 $21.31 $1.46 $0.44 $68.07
% of Total 65.90% 31.31% 2.14% 0.65% 100%
2012 Revenue ($ millions)8 $45.42 $21.75 $1.54 $0.41 $69.12
Questar Gas Residential Commercial Industrial Transportation Total
2013 Customers7 1,835 233 0 0 2,068
% of Total 88.73% 11.27% 0.00% 0.00% 100%
2012 Customers8 1,773 227 0 0 2,000
2013 Therms Sold (millions)7 1.45 0.96 0 0 2.41
% of Total 60.09% 39.91% 0.00% 0.00% 100%
2012 Therms Sold (millions)8 1.26 0.78 0.00 0.00 2.04
2013 Revenue ($ millions)7 $1.16 $0.65 $0.00 $0.00 $1.82
% of Total 64.04% 35.96% 0.00% 0.00% 100%
2012 Revenue ($ millions)8 $1.02 $0.53 $0.00 $0.00 $1.55
6 Purchased transmission only (natural gas from others).
7 January 1, 2013 – December 31, 2013
8 October 1, 2011 – September 30, 2012
59 | P a g e
Intermountain Gas PGA is up for second year
after five years of consecutive decreases
Case No. INT‐G‐14‐01, Order No. 33139
(Sept.26, 2014) – The Commission
approved an Intermountain Gas Company
application to increase rates 2.64% effective
Oct. 1 as part of its annual Purchase Gas
Cost Adjustment (PGA).
The PGA mechanism is used to adjust rates
up or down to reflect changes in
Intermountain’s costs for buying natural gas
from its suppliers and other related
expenses that vary from year to year.
Money collected in the PGA cannot be used
in increase company earnings, shareholder
dividends or employee salaries.
Each year on Oct. 1, rates for Intermountain
Gas’s 331,000 customers in 74 southern
Idaho communities go up or down
depending on annual changes to wholesale
market gas prices, transportation and
storage costs.
This is the second year the PGA has been an
increase, following five years of decreases.
Residential customers who use natural gas
for both space and water heating will see an
average increase of $1.89 per month while
those who use natural gas only for space
will pay about $1.40 more per month.
The commission’s staff of auditors, analysts
and engineers thoroughly reviewed the
company’s gas purchases and verified that
the PGA increase will not change company
earnings and that the company’s costs were
prudently incurred and necessary to serve
customers.
Despite increased production from shale
reserves in North America, there was an
increase in demand for natural gas
nationwide due to a rebounding economy
and increased use of natural gas for electric
generation. Last year’s cold weather in the
eastern United States put upward pressure
on prices and put a significant dent in
natural gas storage levels. Also, the
company faced increased transportation
costs from Williams Northwest Pipeline, the
company that owns Intermountain’s major
transportation pipeline.
To offset the size of this year’s PGA, the
company passed through to customers a
$3.9 million increase in revenue as a result
of providing its pipeline capacity to other
wholesale gas marketers or natural gas
companies. It also passed along to
customers $405,411 in revenue earned
from selling liquefied natural gas from its
above‐ground LNG plant near Nampa. The
LNG was also used to meet customers’
peak‐day needs.
60 | P a g e
Commission staff’s investigation confirmed
that the company properly hedged against
higher prices by purchasing gas when prices
were lower and storing it for use later when
prices are higher.
The variable portion of gas rates covered by
the PGA increases from 37.3 cents per
therm to 39.5 cents. The PGA represents a
significant portion of the total per therm
price paid by customers, about 72.6 cents in
the winter and 76 cents in the summer for
customers who use natural gas for space
and water heating. The amount above the
PGA portion includes those fixed costs of
serving customers that don’t change from
year to year as does the PGA.
Avista customers getting gas rate decrease
AVU‐G‐14‐04, Order No. 33160
(Oct. 31, 2014) – Natural gas rates for
customers of Avista Utilities decrease by 2.1
percent effective Nov. 1.
The variable portion of electric and gas
rates go up or down every year based on
the previous year’s variable costs to serve
customers. The annual Purchased Gas Cost
Adjustment (PGA) varies according to
changes in wholesale market prices for gas
and transportation and storage expense.
Avista’s decrease in its PGA is a total $1.6
million. The decrease to an average‐sized
residential or small‐commercial customer
will be about $1.16 per month. Rates for
large‐commercial customers decrease by
about 2.5%, though rates for a large
interruptible customer increase by 0.2%.
Avista’s commodity cost for natural gas
actually increased during the last year due
in part to a colder‐than‐normal winter last
year. However, that colder weather led to
more use of natural gas by Avista
customers, resulting in higher natural gas
revenue that offset the higher commodity
cost.
Avista will “hedge” about 35% of its
estimated gas requirements for this PGA
year, which means the company buys
excess natural gas when market prices are
lower and then stores it for use when
market prices are higher.
Company earnings do not increase or
decrease with the yearly electric Power
Cost Adjustment (PCA) or the natural gas
yearly adjustment. The commission
directed Avista to promptly file an
application to amend the PGA should gas
prices materially deviate from the amount
approved in this order.
61 | P a g e
Avista customer demand remains low for natural gas
AVU‐G‐14‐03, Order No. 33129
(Nov. 21, 2014) – The Commission weas still
taking comments at year’s end from Avista
Utilities’ northern Idaho customers
regarding its long‐range plan to meet
customer demand for natural gas over the
next 20 years. The company’s Integrated
Resource Plan (IRP) is updated every two
years.
Customer demand remains low, thus Avista
does not anticipate a need to acquire
additional resources beyond what it already
provides. Demand is down due partly to the
recession, while the availability of natural
gas increases because of the abundant
supply of shale gas. The company
anticipates an annual growth in customer
demand of only 0.7% annually.
However, there are enough uncertainties
regarding future natural gas supply and
price that the company’s plan outlines a
number of scenarios and how it would
respond to each one. The uncertainties that
could impact demand for natural gas
include 1) the amount of liquefied natural
gas (LNG) exports, 2) the market for natural
gas vehicles and 3) the amount of increased
natural gas that may be needed for electric
generation.
Existing and new LNG facilities are looking
to export low‐cost North American gas to
higher‐priced Asian and European markets,
the Avista IRP states. In Canada, 16 LNG
export projects are in various stages of
permitting and there are two proposed
terminals in Oregon. “LNG exporting has the
potential to alter the price, constrain
existing pipeline networks, stimulate
development of new pipeline resources,
and change flows of natural gas across
North America,” the IRP states.
Avista claims it has a diversified portfolio of
gas supply resources, including contracts to
buy gas from several supply basins, stored
gas and firm capacity rights on six pipelines.
The company’s identifies a number of steps
it will take in its “action plan,” to address
future concerns:
Monitor demand for indications of
deviations from expected growth
and provide a report twice yearly to
commission staff on forecasted
customer growth and use per
customer as compared to actual
growth.
Continue to monitor supply‐side
resource trends including the
availability and price of natural gas
to the region, LNG exports, Canadian
natural gas supply and consumption,
and the availability of storage
infrastructure.
Meet regularly with commission
staff to provide information on
market activities and significant
changes in the IRP’s assumptions or
natural gas procurement practices.
62 | P a g e
Idaho Water Utilities
The commission regulates about 30 privately held water systems, or only about 1 percent of the
approximate 2,100 water systems in the state. The regulated systems vary in size from
companies with about 85,000 customers to companies with as few as 22 customers. These
companies provide industrial, commercial and residential customers throughout the state with
drinking water as well as water for irrigation, recreation and manufacturing. Most of the
unregulated systems are operated by homeowner associations, water districts, co‐ops and
cities.
United Water Idaho, Brian subdivision homeowners,
seek commission approval of United Water takeover
Case No. UWI‐W‐14‐01, Order No. 33154
(Nov. 10, 2014) – United Water Idaho and
the Brian Subdivision Water Users
Association are asking the Commission to
approve an application that would allow
United Water to connect to and take over
operation of Brian Water’s domestic water
system.
The Idaho Public Utilities Commission was
still processing the case at year’s end.
Brian Water serves 46 customers along
Warm Springs Avenue near the intersection
of U.S. Highway 21 just east of the Boise city
limits. United Water Idaho provides service
to about 85,000 customers in the Boise
metropolitan area.
The Idaho Department of Environmental
Quality is requiring Brian Water to eliminate
contaminants from its domestic water
system. The most feasible way of doing
that, according to the applicants, is to
connect to
United Water’s system. Brian Water is
currently operated by a not‐for‐profit
association of homeowners, which supports
the proposed application.
Applicants estimate the project, which
includes extending United Water pipelines
and replacing existing meters and service
lines for 46 homes, will cost $1.35 million.
The applicants propose that Brian Water
customers pay for 10 percent of the
pipeline costs and all of the costs for service
line and meter replacement. The Brian
Water portion of the expense would be
paid by a $124.86 surcharge on Brian Water
customer bills every two months for 10
years. Customers may also choose to pay
the surcharge with a one‐time payment.
United Water’s customers’ portion of the
90 percent of the pipeline extension costs ‐‐
$1.2 million – plus Allowance for Funds
Using During Construction (AFUDC) and a
return on investment would be deferred for
proposed recovery in rates after the
company’s next general rate case.
63 | P a g e
Idaho Telecommunications
Increases for rural telcom company phased in over 4 years
Case No. ORE‐T‐14‐01, Order No. 33158
(Nov. 3, 2014) – The Commission approved
an application by Oregon‐Idaho Utilities to
phase‐in a telephone rate increase for the
telecommunications company’s
approximate 81 customers in rural
southwest Idaho.
Customers’ current monthly rate of $15.77
will increase to $20 over four years, with
the first increase, to $16 effective Dec. 1 of
this year. The rate increases to $18 on June
1, 2016, and then to $20 on June 1, 2017.
Oregon‐Idaho Utilities has not increased its
Idaho residential rate since 1990.
The increase is required by the Federal
Communications Commission if Oregon‐
Idaho Utilities wants to continue to receive
federal high‐cost support from the FCC’s
Connect America Fund (CAF). The FCC
created the Connect America Fund to spur
development of cellular broadband in rural
areas. The fund is an update of the federal
Universal Service Fund created in 1988 to
make telephone service available at
reasonable cost in rural areas.
In order to qualify to receive the federal
support, the FCC established a minimum
rate of $20.46 that local companies must
charge their customers. The $20 rate
reached on June 1, 2017, combined with
other state fees, will increase residential
services to beyond the $20.46 “rate floor”
established by the FCC.
The federal support helps rural companies
provide service in areas where greater
distances and fewer customers make
providing service more costly than in urban
areas. The South Mountain Exchange
served by Oregon‐Idaho Utilities covers
2,126 square miles and represents some of
the most difficult to serve customer
locations in southwest Idaho. About one‐
third of the customers have no access to
commercial power and rely on gas lamps,
lanterns and/or low‐grade solar power for
lighting. Some homes are heated by wood
or oil‐burning stoves.
All Idaho telephone customers, including
cellular customers, pay into the Connect
America Fund so that rates in rural, high‐
cost can stay comparable to urban rates.
The monthly assessment for all Idaho
telephone and cellular users is 16 cents per
residential line, 25 cents per commercial
line and $.006 per intrastate long‐distance
billed minute.
64 | P a g e
Telecommunication Utilities Under PUC Jurisdiction
Albion Telephone Corp (ATC) , P.O. Box 98, Albion, Idaho 83311‐0098 208‐673‐5335
Cambridge Telephone Co. P.O.Box 88, Cambridge, Idaho 83610‐0086 208‐257‐3314
*CenturyLink, (formerly Qwest Communications) North and South Idaho, Box 7888 (83723) or
999 Main Street, Boise, Idaho 83702 800‐339‐3929
*CenturyTel of Idaho, Inc., dba CenturyLink, 250 Bell Plaza, Room 1601, Salt Lake City, UT,
84010, 801‐238‐0240.
*CenturyTel of the Gem State, dba CenturyLink, 250 Bell Plaza, Room 1601, Salt Lake City, UT,
84010, 801‐238‐0240.
*Frontier Communications Northwest, Inc. (formerly Verizon Northwest, Inc.), 20575 NW Von
Neuman Dr. Ste. 150, Beaverton, OR, 97006, 503‐629‐2459
Direct Communications Rockland, Inc., Box 269, 150 S. Main St. Rockland, ID 83271
208‐548‐2345
Inland Telephone Co., 103 South Second Street, Box 171, Roslyn, WA 98941
509‐649‐2211
Fremont Telecom, Inc., dba Fremont Communications, 1221 N. Russell St., Missoula, MT,
59808, 406‐541‐5454
Midvale Telephone Company, Box 7, Midvale, Idaho 83645, 208‐355‐2211
*Citizens Telecommunications Company of Idaho, dba as Frontier Communications of Idaho,
20575 NW Von Neuman Dr. Ste. 150, Beaverton, OR, 97006, 503‐629‐2459
Oregon‐Idaho Utilities, Inc., 3645 Grand Ave., Ste. 205A, Oakland, CA 94610 510/338‐4621
Local: 1023 N. Horton St., Nampa, Idaho 83653 208‐461‐7802
Pine Telephone System, Inc., Box 706, Halfway, OR 97834 541‐742‐2201
Potlatch Telephone Company, dba/ TDS Telecom, Box 138, 702 E. Main St.
Kendrick, Idaho 83537, 208‐835‐2211
Rural Telephone Company, 829 W. Madison Avenue, Glenns Ferry, Idaho 83623‐2372
208/366‐2614
Silver Star Communications, Box 226, Freedom, WY 83120 307‐883‐6690
Silver Star Communication, dba Teton Telecom, Box 226, Freedom, WY, 83210, 307‐883‐6690
*These companies, which represent more than 90 percent of Idaho customers, are no longer
rate regulated. However, they are still regulated for customer service.
65 | P a g e
Regulating Idaho’s railroads
More than 900 miles of railroad track in Idaho have been abandoned since 1976.
Federal law governs rail line abandonments. The federal Surface Transportation Board
(formerly the Interstate Commerce Commission) decides the final outcome of abandonment
applications. Under Idaho law, however, after a railroad files its federal notice of intent to
abandon, the IPUC must determine whether the proposed abandonment would adversely
affect the public interest. The commission then reports its findings to the STB.
In reaching a conclusion, the commission considers whether abandonment would
adversely affect the service area, impair market access or access of Idaho communities to vital
goods and services, and whether the line has a potential for profitability.
The Idaho Public Utilities Commission also conducts inspections of Idaho’s railroads to
determine compliance with state and federal laws, rules and regulations concerning the
transportation of hazardous materials, locomotive cab safety and sanitation rules, and
railroad/highway grade crossings.
Hazardous material inspections are conducted in rail yards. In 1994, Idaho was invited to
participate in the Federal Railroad Administration’s State Participation Program. IPUC has a
State Program Manager and two FRA certified hazardous material inspectors.
The IPUC inspects railroad‐highway grade crossings where incidents occur, investigates
citizen complaints of unsafe or rough crossings and conducts railroad‐crossing surveys.
Railroad Activity Summary
2014
Inspections 124
Rail cars inspected 1384
Violations 2
Rail cars with defects 90
Crossing accidents investigated 17
Crossing complaints 1
Locomotives Inspected 5
Defects within locomotives inspected 0
66 | P a g e
Regulating Idaho’s Pipelines
Idaho Code 61‐515 empowers the Idaho Public Utilities Commission to require every
utility to “maintain and operate its line, plant, system, equipment, apparatus, and premises
in such a manner that promote and safeguard the health and safety of its employees,
customers and the public.”
Pursuant to 49 U.S.C Section 60105, chapter 601, the Idaho Public Utilities Commission
is a certified partner with the U.S. Department of Transportation Pipeline Hazardous
Material Safety Administration. The federal/state partnership provides the statutory basis
for the pipeline safety program and establishes a framework for promoting pipeline safety
through federal delegation to the states for all or part of the responsibility for intrastate
natural gas pipeline facilities under annual certification.
Under the certification, Idaho assumes inspection and enforcement responsibility with
respect to more than 8,300 miles of intrastate natural gas pipelines over which it has
jurisdiction under state law. With the certification, Idaho may adopt additional or more
stringent standards for intrastate pipeline facilities provided the standards are compatible
with federal regulations.
The Idaho Public Utilities Commission has a state program manager and two training
and certified pipeline safety inspectors who conduct records audits and field installed
equipment inspections on all intrastate natural gas pipeline operators under jurisdiction.
Pipeline Safety Activity Summary
Standard inspection days 171
Compliance inspection days 6
Damage prevention inspection days 0
Construction inspection days 13
Operator Qualification inspection days 7
Integrity Management Program inspection days 8
Incident/Accident inspection days 0
Operator Training inspection days 0
Compliance Enforcement Actions:
Notice of Probable Violation 4
Notice of Amendment 1
Warning Letters 4
67 | P a g e
Consumer Assistance
The Consumer Assistance staff responded to 1,786 complaints, comments or inquiries in
calendar year 2013, of which 92 percent were from residential customers.
Breakdown by type of utility
Contacts regarding telecommunications companies: 23 percent
Contacts regarding energy (electric, gas) companies: 53 percent
Contacts regarding water companies: 12 percent
Non-utility related contacts: 12 percent
(CenturyLink had 46 percent of telecommunication complaints; Idaho Power had 63 percent and Intermountain Gas
16 percent of energy utility complaints and United Water had 45 percent of water complaints.)
Summary of issues:
Billings 21 percent
Credit and collection issues 33 percent
Miscellaneous 19 percent
Utility rates and policies 16 percent
Telecommunications issues 3 percent
Line extensions and service upgrades 2 percent
Service quality and repair 6 percent
While dispute resolution remains an important task, it is hoped that by working with
consumer groups, social service agencies, and utilities, persistent causes of consumer
difficulties can be identified and addressed.
Consumer complaints present an opportunity for utilities and the commission to learn
the effect of utility practices and policies on people. For example, the unintentional and
perhaps unfair impact of a rule or regulation might be discovered in the course of investigating
a complaint. In such cases an informal, negotiated remedy may not be possible, and formal
action by the commission would be required. The Consumer Assistance Staff’s participation in
formal rate and policy cases before the commission is the primary method used to address
these issues.
While the Consumer Assistance Staff is able to respond to some consumer inquiries
without extensive research, about 77 percent of consumer complaints required investigation by
the staff. About 52 percent of investigations resulted in reversal or modification of the utilities’
original action.
Toll‐Free Complaint Line
The commission has a toll‐free telephone line for receiving utility complaints and inquiries
from consumers outside the Boise area. The toll‐free line (1‐800‐432‐0369) is reserved for
inquiries and complaints concerning utilities. Consumers may also file a complaint electronically
via the commission’s Website at www.puc.idaho.gov.
68 | P a g e
Utilities By City
City Electric Gas Telecom
Aberdeen Idaho Power Intermountain Citizens
Acequia Rural Electric None Project Mutual
Ahsahka Clearwater Power None Frontier
Albion Albion Light None ATC
Almo Raft River Coop None ATC
Alridge Rocky Mountain None CenturyLink
American Falls Idaho Power Intermountain CenturyLink
Ammon Rocky Mountain Intermountain CenturyLink
Arbon Idaho Power None Direct
Arco Rocky Mountain None ATC
Arimo Rocky Mountain None CenturyLink
Ashton RMP/Fall River Coop None Fairpoint
Athol Kootenai Electric/AVISTA AVISTA Frontier
Atlanta Atlanta Power None Rural
Atomic City Idaho Power None CenturyTel
Avery AVISTA None Frontier
Avon Clearwater Power/AVISTA None Frontier
Baker Idaho Power None CenturyTel
Bancroft Rocky Mountain Intermountain CenturyLink
Banida Rocky Mountain None CenturyLink
Banks Idaho Power None Citizens
Basalt Rocky Mountain Intermountain CenturyLink
Basin Idaho Power None Project Mutual
Bayview AVISTA/Kootenai None Frontier
Bellevue Idaho Power Intermountain CenturyLink
Bennington Rocky Mountain none CenturyLink
Berger Idaho Power None CenturyLink
Bern Rocky Mountain None CenturyLink
Blackfoot Idaho Power Intermountain CenturyLink
Blanchard AVISTA None Frontier
Bliss Idaho Power None CenturyLink
Bloomington Rocky Mountain None Direct
Boise Idaho Power Intermountain CenturyLink
Bone Rocky Mountain None CenturyLink
Bonners Ferry Bonners Ferry Light AVISTA Frontier
Bovill AVISTA/Clearwater Power AVISTA Frontier
Bowmont Idaho Power None CenturyLink
Bridge Raft River Coop None ATC
Bruneau Idaho Power Intermountain CenturyTel
Buhl Idaho Power Intermountain CenturyLink
Burke AVISTA None Frontier
Burmah Idaho Power None Project Mutual
Burley Burley Municipal Intermountain CenturyLink
Butte City Lost River Coop None ATC
Cabinet Northern Lights None Frontier
Calder AVISTA None Frontier
69 | P a g e
City Electric Gas Telecom
Caldwell Idaho Power Intermountain CenturyLink
Cambridge Idaho Power None Cambridge
Cape Horn Salmon River Coop None None
Carey Idaho Power None Citizens
Careywood Northern Lights None Frontier
Carmen Idaho Power None CenturyTel
Cascade Idaho Power None Citizens
Castleford Idaho Power None CenturyLink
Cataldo AVISTA/Kootenai AVISTA Frontier
Cavendish Clearwater Power None Frontier
Centerville Idaho Power None CenturyLink
Challis Salmon River Coop None Custer Coop
Chatcolet Plummer Electric None Frontier
Chester RMP/Fall River Coop None Fremont
Chubbuck Idaho Power Intermountain CenturyLink
Clark Fork AVISTA None Frontier
Clarkia Clearwater Power None Frontier
Clayton Salmon River Coop None Custer Coop
Clearwater Idaho Co. Light None CenturyLink
Clifton Rocky Mountain None CenturyLink
Clover Idaho Power None CenturyLink
Cobalt Idaho Power None None
Cocolalla Northern Lights None Frontier
Coeur d’Alene AVISTA/Kootenai AVISTA Frontier
Colburn Northern Lights None Frontier
Conda Rocky Mountain Intermountain CenturyLink
Coolin Northern Lights None Frontier
Copeland Northern Lights None Frontier
Corral Idaho Power None Citizens
Cottonwood AVISTA None CenturyLink
Council Idaho Power None Cambridge
Craigmont Clearwater Power/AVISTA None CenturyLink
Crouch Idaho Power None Citizens
Culdesac Clearwater Power/AVISTA None CenturyLink
Cuprum Idaho Power None Cambridge
Dalton Gardens AVISTA/Kootenai AVISTA Frontier
Darlington Lost River Coop None ATC
Dayton Rocky Mountain None CenturyLink
Deary Clearwater Power/AVISTA AVISTA Frontier
Declo Declo Municipal Intermountain CenturyLink
De Smet Kootenai Electric None Frontier
Dietrich Idaho Power None CenturyLink
Dingle Rocky Mountain None CenturyLink
Dixie Idaho Co. Light None Citizens
Donnelly Idaho Power None Citizens
Dover AVISTA AVISTA Frontier
70 | P a g e
City Electric Gas Telecom
Downey Rocky Mountain None CenturyLink
Driggs Fall River Coop None Silver Star
Drummond Fall River Coop None Fairpoint
Dubois Rocky Mountain None Mud Lake Co-op
Eagle Idaho Power Intermountain CenturyLink
East Hope AVISTA None Frontier
Eastport Northern Lights None Frontier
Eden Idaho Power None CenturyLink
Eddyville AVISTA/Kootenai None Frontier
Edgemere Northern Lights None Frontier
Elba Raft River Coop None ATC
Elk City AVISTA None Citizens
Elk River AVISTA None Frontier
Ellis Salmon River Coop None Midvale
Elmira Northern Lights None Frontier
Emida Clearwater Power None Frontier
Emmett Idaho Power Intermountain CenturyLink
Enaville AVISTA None Frontier
Fairfield Idaho Power None Citizens
Fairview Rocky Mountain None CenturyLink
Felt Fall River Coop None Silver
Fenn AVISTA None CenturyLink
Ferdinand AVISTA None CenturyLink
Fernan Lake AVISTA/Kootenai AVISTA Frontier
Fernwood Clearwater Power None Frontier
Featherville Idaho Power None Rural
Filer Idaho Power Intermountain Filer
Firth Rocky Mountain Intermountain CenturyLink
Fish Haven Rocky Mountain None Direct
Fort Hall Idaho Power Intermountain CenturyLink
Franklin Rocky Mountain Questar CenturyLink
Fruitland Idaho Power Intermountain Farmers
Fruitvale Idaho Power None CenturyLink
Gannett Idaho Power None CenturyLink
Gardena Idaho Power None Citizens
Garden City Idaho Power Intermountain CenturyLink
Garden Valley Idaho Power None Citizens
Gem AVISTA Utilities None Frontier
Genesee Clearwater Power/AVISTA AVISTA Frontier
Geneva Rocky Mountain None CenturyLink
Georgetown Rocky Mountain Intermountain CenturyLink
Gibbonsville Idaho Power None Century Tel
Gifford Clearwater Power/AVISTA None Inland
Gilmore Idaho Power None Century Tel
Glenns Ferry Idaho Power Intermountain CenturyLink
Golden AVISTA None Citizens
Good Grief Northern Lights None Frontier
Gooding Idaho Power Intermountain CenturyLink
Grace Rocky Mountain Intermountain CenturyLink
Grand View Idaho Power None CenturyTel Gem
Grangemont Clearwater Power None Frontier
71 | P a g e
City Electric Gas Telecom
Grangeville AVISTA None CenturyLink
Granite Northern Lights None Frontier
Grasmere Idaho Power None CenturyTel Gem
Greencreek AVISTA None CenturyLink
Greenleaf Idaho Power Intermountain CenturyLink
Greer AVISTA None Frontier
Hagerman Idaho Power None CenturyLink
Hailey Idaho Power Intermountain CenturyLink
Hamer Rocky Mountain None Mud Lake Co
Hammett Idaho Power Intermountain CenturyLink
Hansen Idaho Power Intermountain CenturyLink
Harpster Idaho Co. Light None CenturyLink
Harrison Kootenia Elec/AVISTA None Frontier
Harvard Clearwater Power/AVISTA None Frontier
Hauser AVISTA/Kootenai AVISTA Frontier
Hayden AVISTA/Kootenai AVISTA Frontier
Hayden Lake Kootenai Elec/AVISTA AVISTA Frontier
Hazelton Idaho Power None CenturyLink
Headquarters AVISTA None Frontier
Heise Rocky Mountain None CenturyLink
Helmer Clearwater Power/AVISTA None Frontier
Henry Lower Valley Power None Silver Star
Heyburn Heyburn Electric Intermountain CenturyLink
Hill City Idaho Power None Citizens
Holbrook Rocky Mountain None ATC
Hollister Idaho Power Intermountain Filer Mutual
Homedale Idaho Power Intermountain Citizens
Hope AVISTA None Frontier
Horseshoe Bend Idaho Power None Citizens
Howe Rocky Mountain None ATC
Huetter AVISTA/Kootenai AVISTA Frontier
Humphrey Rocky Mountain None CenturyLink
Huston Idaho Power None CenturyLink
Idaho City Idaho Power None CenturyLink
Idaho Falls Idaho Falls Electric Intermountain CenturyLink
Indian Valley Idaho Power None Cambridge
CambridgeInkom Idaho Power Intermountain CenturyLink
Iona Rocky Mountain Intermountain CenturyLink
Irwin Lower Valley Power None Silver Star
Island Park Fall River Rural None Fairpoint
Jerome Idaho Power Intermountain CenturyLink
Juliaetta Clearwater Power/AVISTA None Potlatch
Juniper Raft River Coop None ATC
Kamiah AVISTA/Clearwater Power None CenturyLink
Kellogg AVISTA AVISTA Frontier
Kendrick Clearwater Power/AVISTA None Potlatch
Ketchum Idaho Power Intermountain CenturyLink
Kilgore Rocky Mountain None Mud Lake
Kimama Idaho Power None Project Mutual
Kimberly Idaho Power Intermountain CenturyLink
King Hill Idaho Power None CenturyLink
Kingston AVISTA AVISTA Frontier
Kooskia AVISTA None CenturyLink
72 | P a g e
City Electric Gas Telecom
Kootenai AVISTA AVISTA Frontier
Kuna Idaho Power Intermountain CenturyLink
Laclede AVISTA/Northern Lights None Frontier
Lake Fork Idaho Power None Citizens
Lakeview Kootenai Electric Co-op None Midvale
Lamb Creek Northern Lights None Frontier
Lane AVISTA/Kootenai None Frontier
Lapwai Clearwater Power/AVISTA None CenturyLink
Lava Hot Springs Rocky Mountain Intermountain CenturyLink
Leadore Idaho Power None CenturyTel
Lemhi Idaho Power None CenturyTel
Lenore Clearwater Power None Inland
Leon Clearwater Power/AVISTA None Inland
Leslie Lost River Coop None ATC
Letha Idaho Power None CenturyLink
Lewiston AVISTA/Clearwater Power AVISTA CenturyLink
Lewisville Rocky Mountain Intermountain CenturyLink
Lincoln Rocky Mountain None CenturyLink
Lorenzo Rocky Mountain None CenturyLink
Lost River Lost River Coop None ATC
Lowman Idaho Power None Cambridge
Lucile Idaho Power None Citizens
Lund Rocky Mountain None CenturyLink
Mackay Lost River Coop None ATC
Malad City Rocky Mountain None ATC
Malta Raft River Coop Intermountain ATC
Marion Idaho Power None Project Mutual
Marsing Idaho Power None Citizens
Marysville Rocky Mountain None Fairpoint
May Salmon River Coop None Custer Coop
McCall Idaho Power None Citizens
McCammon Rocky Mountain Intermountain CenturyLink
Meadows Idaho Power None Citizens
Meadow Creek Northern Lights/ None Frontier
Bonners Ferry Light
Medimont Kootenai Electric/AVISTA None Frontier
Melba Idaho Power None CenturyLink
Menan Rocky Mountain Intermountain CenturyLink
Meridian Idaho Power Intermountain CenturyLink
Mesa Idaho Power None Cambridge
Middleton Idaho Power Intermountain CenturyLink
Midvale Idaho Power None Midvale
Minidoka Minidoka Electric None Project Mutual
Mink Creek Rocky Mountain None CenturyLink
Monteview Rocky Mountain None Mud Lake Co-op
Montour Idaho Power None Citizens
Montpelier Rocky Mountain Intermountain CenturyLink
Moore Lost River Coop None ATC
Moreland Idaho Power Intermountain CenturyLink
Moscow AVISTA/Clearwater Power AVISTA Frontier
Mountain Home Idaho Power Intermountain CenturyLink
Moyie Springs Northern Lights/ AVISTA Frontier
73 | P a g e
City Electric Gas Telecom
Mud Lake Rocky Mountain None Mud Lake Co-op
Mullan AVISTA AVISTA Frontier
Murphy Idaho Power None CenturyLink
Murray AVISTA None Frontier
Murtaugh Idaho Power Intermountain CenturyLink
Myrtle Clearwater Power None Inland
Naf Raft River Coop None ATC
Nampa Idaho Power Intermountain CenturyLink
Naples Northern Lights None Frontier
Neeley Idaho Power None CenturyLink
Newdale RMP/Fall River Coop None Fairpoint
New Meadows Idaho Power None Citizens
New Plymouth Idaho Power Intermountain CenturyLink
Nezperce Clearwater Power/AVISTA None CenturyLink
Norland Idaho Power None Project Mutual
Nordman Northern Lights None Frontier
North Fork Idaho Power None CenturyTel
Notus Idaho Power None CenturyLink
Nounan Rocky Mountain None CenturyLink
Oakley Idaho Power None Project Mutual
Obsidian Salmon River Coop None Midvale
Ola Idaho Power None Citizens
Oldtown AVISTA None Frontier
Onaway AVISTA/Clearwater Power None Frontier
Orchard Idaho Power None CenturyLink
Oreana Idaho Power None CenturyTel Gem
Orofino Clearwater Power/AVISTA None Frontier
Orogrande AVISTA None Citizens
Osburn AVISTA AVISTA Frontier
Ovid Rocky Mountain None CenturyLink
Oxford Rocky Mountain None CenturyLink
Paris Rocky Mountain None Direct
Parker Rocky Mountain Intermountain Fairpoint
Parma Idaho Power Intermountain Citizens
Patterson Salmon River Coop None CenturyTel
Paul Idaho Power/Rural Intermountain Project Mutual
Pauline Idaho Power None Direct
Payette Idaho Power Intermountain CenturyLink
Pearl Idaho Power None CenturyLink
Peck Clearwater Power None Frontier
Picabo Idaho Power None CenturyLink
Pierce AVISTA None Frontier
Pine Idaho Power None Rural
Pinehurst AVISTA AVISTA Frontier
Pingree Idaho Power None CenturyLink
Pioneerville Idaho Power None CenturyLink
Placerville Idaho Power None CenturyLink
Plummer Plummer Electric None Frontier
Pocatello Idaho Power Intermountain CenturyLink
Pollock Idaho Power None Citizens
Ponderay AVISTA AVISTA Frontier
Porthill AVISTA/Northern Lights None Frontier
74 | P a g e
City Electric Gas Telecom
Portneuf Idaho Power None CenturyLink
Post Falls Kootenai Elec/AVISTA AVISTA Frontier
Potlatch Clearwater Power/AVISTA None Frontier
Prairie Idaho Power None Rural
Preston Rocky Mountain Questar CenturyLink
Priest River AVISTA None Frontier
Princeton Clearwater Power/AVISTA None Frontier
Raft River Raft River Coop Intermountain ATC
Rathdrum Kootenai Elec/AVISTA AVISTA Frontier
Reubens Clearwater Power/AVISTA None CenturyLink
Rexburg RMP/Fall River Coop Intermountain CenturyLink
Reynolds Creek Idaho Power None CenturyLink
Richfield Idaho Power None CenturyTel Gem
Riddle Idaho Power None CenturyTel Gem
Rigby Rocky Mountain Intermountain CenturyLink
Riggins Idaho Power None Citizens
Ririe Rocky Mountain Intermountain CenturyLink
Riverside Idaho Power Intermountain CenturyLink
Roberts Rocky Mountain None CenturyLink
Robin Rocky Mountain None CenturyLink
Rock Creek Idaho Power None Frontier
Rockford Idaho Power None CenturyLink
Rockland Idaho Power None Direct
Rogerson Idaho Power None Filer Mutual
Rose Lake AVISTA/Kootenai None Frontier
Roswell Idaho Power None Citizens
Roy Idaho Power None Direct
Rupert Idaho Power Intermountain Project Mutual
Sagle AVISTA None Frontier
St. Anthony RMP/Fall River Coop Intermountain Fairpoint
St. Charles Rocky Mountain None Direct
St. Joe AVISTA None Frontier
St. Maries Clearwater Power/AVISTA None Frontier
Salmon Idaho Power None CenturyTel
Samaria Rocky Mountain None ATC
Samuels Northern Lights None Frontier
Sanders Clearwater Power None Frontier
Sandpoint AVISTA AVISTA Frontier
Santa Clearwater Power None Frontier
Shelley Rocky Mountain Intermountain CenturyLink
Shoshone Idaho Power Intermountain CenturyLink
Shoup None None Rural
Silverton AVISTA AVISTA Frontier
Smelterville AVISTA AVISTA Frontier
Smiths Ferry Idaho Power None Citizens
Soda Springs Soda Springs Muni Intermountain CenturyLink
Southwick Clearwater Power None Potlatch
Spalding AVISTA/Clearwater Power None CenturyLink
Spencer Rocky Mountain None Mud Lake Co-op
Spirit Lake AVISTA/Kootenai None Frontier
Springston AVISTA/Kootenai None Frontier
75 | P a g e
City Electric Gas Telecom
Springfield Idaho Power None Citizens
Stanley Salmon River Coop None Midvale
Star Idaho Power None CenturyLink
Starkey Idaho Power None CenturyLink
State Line AVISTA/Kootenai AVISTA Frontier
Sterling Idaho Power None Citizens
Stibnite Idaho Power None (Radio Phone)
Stites AVISTA None CenturyLink
Stone Rocky Mountain None ATC
Sublett Raft River Coop None ATC
Sugar City RMP/Fall River Coop Intermountain CenturyLink
Sunbeam Salmon River Coop None Custer Co-op
Sun Valley Idaho Power Intermountain CenturyLink
Swanlake Rocky Mountain None CenturyLink
Swan Valley Lower Valley Power None Silver Star
Sweet Idaho Power None Citizens
Tamarack Idaho Power None Citizens
Tendoy Idaho Power None CenturyTel
Tensed Clearwater Power None Frontier
Terreton Rocky Mountain None Mud Lake Co-op
Teton RMP/Fall River Coop None Fairpoint
Tetonia Fall River Coop None Silver Star
Thatcher Rocky Mountain None CenturyLink
Thornton RMP/Fall River Coop Intermountain CenturyLink
Three Creek Idaho Power None Rural
Triangle Idaho Power None Rural
Triumph Idaho Power None None
Troy Clearwater Power/AVISTA AVISTA Potlatch
Tuttle Idaho Power None CenturyLink
Twin Falls Idaho Power Intermountain CenturyLink
Tyhee Idaho Power None CenturyLink
Ucon Rocky Mountain Intermountain CenturyLink
Victor Fall River Coop None Silver Star
Viola Clearwater Power/AVISTA None Frontier
Virginia Rocky Mountain None CenturyLink
Waha Clearwater Power/AVISTA None CenturyLink
Wallace AVISTA AVISTA Frontier
Wapello Idaho Power None CenturyLink
Wardner AVISTA AVISTA Frontier
Warm Lake Idaho Power None Midvale
Warm River Fall River Coop. None Fairpoint
Warren Idaho Power None Midvale
Wayan Lower Valley Power None Silver Star
Weippe Clearwater Power/AVISTA None Frontier
Weiser Weiser Water & Light Dept. Intermountain CenturyLink
Wendell Idaho Power Intermountain CenturyLink
Westmond Northern Lights None Frontier
Weston Rocky Mountain None CenturyLink
White Bird Idaho Co. Light None Citizens
Whitney Rocky Mountain None CenturyLink
Wilder Idaho Power Intermountain Citizens
Winchester AVISTA/Clearwater Power None CenturyLink
76 | P a g e
City Electric Gas Telecom
Woodland AVISTA None CenturyLink
Worley AVISTA/Kootenai None Frontier
Yellow Pine Idaho Power None Midvale
______________________________________________________________________________
Questions regarding this report? Please call Gene Fadness at 334‐0339 or e‐mail to
gene.fadness@puc.idaho.gov.