20040420Revised Press Release.pdf

IDAHO PUBLIC UTILITIES COMMISSION
For Immediate Release
Case No. IPC-04-9, Order No. 29478
April 27, 2004
Contact: Gene Fadness [phone]
Website: www.puc.state.id.
Idaho Power PCA proposes no increases for some, decreases for others
Boise - The Idaho Public Utilities Commission will process this year s power cost adjustment
(PCA) for Idaho Power through a modified procedure of written comments rather than formal
workshops and hearings. The deadline for public comment is May 14.
Idaho Power proposes no change in the current PCA for most customer classes and a reduction in
the PCA portion of the rate for three classes, including irrigators. However, the commission
reminds customers that these reductions are only within the PCA portion of rates, a small
part of the overall rate. The biggest part of rates, the base rate, is expected to change for all
customer classes when Idaho Power s general rate case is decided in about a month.
Even though no increase in the PCA portion of rates is proposed, the company is claiming
extraordinary power supply costs of about $80 million, resulting in a PCA that is 0.0167 cents
per kWh more than the existing PCA of 0.6039 cents per kWh. However, the company does not
seek to collect that additional 0.0167 cents at this time. The $80 million is $2 million more than
is collected under the current surcharge. Idaho Power seeks to defer that $2 million for recovery
at a future date. Because the company anticipates that its rate case currently before the
commission will result in an increase to base rates, it is proposing a "unique rate treatment " that
will avoid having increases in both its base rate and PCA rate during the same year.
Unlike the base rate, which can be in place for several years, the power cost adjustment is an
annual update that adjusts rates up or down depending on Snake River streamflow and the
market price of power. During those years when water is plentiful and market conditions are
normal - as in 1996, 1997 and 1999 - customers received a credit from their base rate. During
, those years when water is low and market prices higher than average - every year since 2000
customers get a surcharge added to their base rate.
Projected inflows into Idaho Power s Brownlee Reservoir for April through July is 3.13 million
acre-feet (maf), 50 percent below the 30-year average inflow of 6.3 maf.
When water levels are low, the PCA surcharge covers the costs the company incurs buying
power from other more expensive sources, including coal and gas as well as buying power on the
regional market. The base rate includes primarily fixed costs of the company s everyday
operations as well as anticipated power supply costs for a normal year. The PCA rate reflects
power supply costs that are above or below anticipated costs for a normal year.
The current PCA rate of 0.6039 cents per kWh is added to a base rate of 4.93 cents for an
overall residential rate of 5.778 cents per kWh.
The company proposes no changes in the PCA portion of rates for residential and large-
commercial customers. For irrigation customers, the company proposes a reduction in the PCA
portion of rates from 1.3159 cents per kWh to 0.5228 cents. If approved, that would bring the
overall rate charged irrigators from 5.035 cents per kWh to 4.242 cents, or a 15.75 percent
reduction. Under Idaho Power s proposal, the PCA portion of rates for industrial customers
would be reduced by 6.66 percent and by 3.66 percent for small-commercial customers.
Irrigation and small-commercial customers would receive reductions in the PCA portion of rates
because the extraordinary costs assigned to these classes from the 2000-01 energy crisis were
recovered over a two-year period to avoid rate shock. Costs to the residential and large-
commercial classes resulting from the 2000-01 crisis were recovered in one year. When the
deferral account was paid offlast spring, residential customers received an 18.9 percent
reduction in their PCA and large-commercial, a 24.7 percent reduction. The PCA increase stayed
the same for irrigation and small-commercial customers to allow another of deferred recovery.
The surcharge expires this year resulting in a PCA decrease for irrigation customers and small-
commercial customers.
The commission does not intend to hold a hearing in this matter unless it receives written
protests or comments stating why the matter cannot be processed through written comment. The
commission extended the expiration date for this year s surcharge from May 16 to May 31 to
allow the base rate change and any changes from the PCA to become effective on the same date.
Persons wishing to submit comments through May 14 can do so via e-mail by accessing the
commission s homepage at www.puc.state.id.and clicking on "Comments & Questions." Fill
in the case number (IPC- E-04-9) and enter your comments. Comments can also be mailed to
o. Box 83720, Boise, ID 83720-0074 or faxed to [phone].
A full text of the commission s order, along with other documents related to this case, are
available on the commission s Web site. Click on "File Room" and then on "Electric Cases" and
scroll down to the above case number.
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