20040317Press Release.pdf

IDAHO PUBLIC UTILITIES COl\llMISSION
For Immediate Release
Case No. IPC-01-
Order No. 29446
March 16, 2004
Contact: Gene Fadness [phone]
Website: www.Puc.state.id.
Commission, customer groups, Idaho Power reach agreement
Boise - Various customer groups, Idaho Power Company and the Idaho Public Utilities
Commission have reached a settlement regarding past trading activities involving Idaho Power
and its former trading arm, IDACORP Energy, LP.
The settlement includes the payments of credits to Idaho Power customers that began in 2003
and will continue through 2005 totaling nearly $10 million.
Most of the issues in the settlement had to do with Idaho Power and IDACORP Energy (IE)
trading, hedging and risk management practices during the height of the Western energy crisis of
2000-01.
Neither Idaho Power nor IE has been found to be guilty of the same trading practices engaged in
by Enron and other traders in California. However, the Federal Energy Regulatory Commission
in May of 2003 found that IDACORP failed to get IE registered as a trader before engaging in
power trades that should have been pre-approved by FERC. The federal agency ordered IE to
transfer $5.8 million in revenues it earned in wholesale trades to Idaho Power. That ensured
ratepayers, not shareholders, of getting the benefits from the trades. At the same time, the Idaho
Public Utilities Commission launched its own investigation to determine whether more revenues
are due Idaho Power customers from IE, which used Idaho Power transmission and other system
resource benefits in its trades. The conclusion of that investigation resulted in an additional $4
million that will be credited Idaho Power customers. That results in the continuation of a
$167 000 per month credit from Idaho Power customers' electric bills through December of
2005.
The Western energy crisis of 2000-01 led to unprecedented increases in the annual power cost
adjustment for Idaho Power customers over the following two years. "In light of the
manipulative strategies used by Enron energy traders and others in California, we have heard
from many Idaho Power ratepayers who were understandably concerned that these high rates
were attributable to improper transactions between Idaho Power and its energy trading affiliate
ill " the commission said. "Although Idaho Power cannot be held responsible for high rates
resulting from the Northwest's multi-year drought or wholesale energy price volatility, we
believe this stipulation appropriately compensates ratepayers for benefits received by IE.
The stipulation is the result of 12 meetings including representatives from the following
customer groups: AARP, Industrial Customers of Idaho Power, Micron Technology, Idaho
Irrigation Pumpers Association, J.R. Simplot Company, Idaho Retailers Association and
Advanced Energy Strategies, Inc.
The parties acknowledge there are several proceedings pending before FERC and in the courts in
which certain California and Pacific Northwest groups allege that IE and Idaho Power, together
with numerous other entities, engaged in wholesale market activities that increased the cost of
wholesale energy in California and the Pacific Northwest and violated anti-trust laws. The parties
agreed that if FERC or a court ultimately issues a fmal ruling that Idaho Power or IE should
receive any payments or are directed to pay Idaho retail customers some amount, payment of
those amounts to customers are not precluded or required by this settlement.
In June of 2002, IDACORP announced it was discontinuing IE's power trading business.
The order issued by the commission accepts the stipulation as fair, reasonable and in the public
interest and directed all parties to comply with the agreement's terms. Interested parties may
petition the commission for reconsideration by no later than April 5 to P.O. Box 83720, Boise
ill 83720-0074 or fax to [phone].
END