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HomeMy WebLinkAbout20050421Direct Mailing Press Release.pdfII:MO POWER IDAHO POWER COMPANY O. BOX 70 BOISE, IDAHO 83707 BARTON L KLINE Senior Attorney An IDACORP Company April 19 2005 """' -i! j'~1C:::;:I " I . , . c;;:;:J ' :::::~: iT!c:::.r~ t; ~~~~ :;t(; "';:.Jean D. Jewell, Secretary Idaho Public Utilities Commission 472 West Washington Street P. O. Box 83720 Boise, Idaho 83720-0074 ._,p'- C.it ;;:,r'0 f1'1 Re:Case No. IPC-05- Power Cost Adjustment Filing (J.,C) ,. 3::;~:. ' -.". ',. ", -::'1"" "':""'1- rJ)' q.p(/) ~ C~J Dear Ms. Jewell: In my letter dated April 15 2005 , regarding the Company s 2005/2006 PCA filing, I informed the Commission that the Company would provide copies of its direct mailing and press release regarding the PCA filing when they were available. Enclosed are three copies of the Company s direct mailing and press release. This direct mailing is scheduled to be mailed to all customers by the middle of next week. Very truly yours (i* t:L- Barton L. Kline BLK:jb Enclosures Ric Gale Celeste Schwendiman ;/FI'C"I\ji- "",- 'jl-I. , '., ! L- E r::" '"" L:J f"'f ZOU5 APR 21 pJiJ (3: April 15 2005 ;L) i.J ;,; 1 C UflLI TIES COHf'Iss'nN For Immediate Release Dennis Lopez 208.388.2464 dlopez ~ idahopower.com Idaho Power Proposes To Keep Power Cost Adjustment Level Defer Cost Recovery One Year BOISE---In its annual Power Cost Adjustment (PCA) filing with the Idaho Public Utilities Commission (IPUC), Idaho Power today proposed keeping the PCA component of the company s Idaho customers' rates at the current level in order to reduce the impacts of drought and other rate actions scheduled to be implemented June 1. If approved by the IPUC today s action would defer $28.6 million in drought- related power supply costs for collection next year, leaving the PCA portion of power bills in Idaho at roughly 6/10 of one cent ($0.006039) per kilowatt-hour. However, other IPUC decisions related to a new power plant and tax expense recovery will , if fully implemented, increase Idaho customers' rates an average of 6.3 percent The PCA allows the company and its customers to share in the benefits of good water years through a downward adjustment in the PCA portion of rates " said Idaho Power Vice President for Regulatory Affairs Ric Gale. "But six years of drought have reduced our ability to optimize our hydroelectric system and we have had to rely more and more on expensive generating resources such as coal or natural gas and upon purchases from the wholesale energy market" Gale said this year the impact of ongoing drought-related costs and other PCA- related adjustments would have required the company to request an increase of $28. million over the current PCA levels which would have represented an additional increase of 4.75 percent in monthly electricity bills. Filing Is Part Of Other Rate Actions The company has asked for this action to take place on June 1 , when other rate changes will or may take place. These include: . A request before the I PUG to include the costs of constructing the new Bennett Mountain Power Plant. This would mean an annual increase of $9.6 million which, if approved by the I PUG would increase rates approximately 1.84 percent. . A prior commission action involving Idaho Power s federal income tax expense related to a general rate increase granted by the IPUC in June2004. This will result in an increase of approximately 4.45 percent. Of this amount almost half or 2.2 percent, will expire in June 2006. The overall impact of the PCA filing and other approved and potential increases on the monthly electricity bill of an average customer who uses 1 200 kilowatt-hours of electricity monthly would be from $77.34 to $81.68 during summer months and from $71 .59 to $75.68 during non-summer months. 30- Th a n k y o u f o r y o u r a t t e n t i o n to th i s im p o r t a n t i n f o r m a t i o n r e g a r d i n g t h e p r i c e s yo u p a y f o r e l e c t r i c i t y . I d a h o P o w e r u r g e s yo u to us e e n e r g y w i s e l y . F o r i n f o r m a t i o n ab o u t u s i n g e l e c t r i c i t y m o r e e f f i c i e n t l y , pl e a s e v i s i t o u r W e b s i t e (w w w . i d a h o p o w e r . co m ) . Yo u m a y c o n t a c t I d a h o P o w e r ( f o r ad d i t i o n a l i n f o r m a t i o n ) : Wr i t e : PO Bo x Bo i s e , I D 8 3 7 0 7 - 00 7 0 Ca l l : 20 8 . 38 8 . 23 2 3 or 80 0 . 4 8 8 . 61 5 1 Ma l l : ww w . i d a h o p o w e r . c o m Yo u m a y c o n t a c t t h e I P U C ( t o c o m m e n t on t h e p r o c e e d i n g s ) : Wr i t e : PO Bo x 8 3 7 2 0 Bo i s e , I D 8 3 7 2 0 - 00 7 4 Ca l l : 20 8 . 33 4 . 03 0 0 or 80 0 . 4 3 2 . 03 6 9 E- Ma l l : ww w . pu c . i d a h o . go v ID A H O PO W E R An I D A C O R P C o m p a n y CC O 2 1 2 / 0 4 - 05 / 4 3 2 k j: I j: l r: . : ; t Ii ! ; C I .. . . C'I ' ) ~~ '" " 4 . E- t E - t .. . . . . ~ 0 f/ ) f / ) r " " " ' I Ii ! ; ~ f "" " " .. E- t . ~: : s 1:1 : 1 f/) en 1 : 1 : 1 ~r : . : ; t f/ ) ~ Qj : I . c rz ' 1 j:Q 1:1 : 1 j:I . c =-- Ii i t- 0 0 ~ ~ CI) 0 . - p. . ; () c . - ' ~ \1 ; \ . L 'i ... . . . . , r - !L t : . L , 't ~ : r1 f " '1 . yj , ~V ; ; J ~j 1 \ ' - L~ J r- - J L. . ; AT ' 1 8 : ' , ; " , .) , ; jU L i L U T IL i T i E S CO f l t ~ l ! S S I O N Im p o r t a n t In f o r m a t i o n ":" ' " \;" " /: ' \; ; .~ ~ " ' : .:. . . ;b ; , j. i ~" " 'i , i : ." , IB i hI - BC I l~ " .. " ,,. ' ' ' " :" " . I. ~ ( t l! . " :~ ' "~ ; , , , " . Th i s b r o c h u r e h a s b e e n p r e p a r e d t o pr o v i d e y o u w i t h i n f o r m a t i o n a b o u t s e v e r a l ra t e p r o c e e d i n g s , o n e t h a t h a s b e e n d e c i d e d pr e v i o u s l y b y t h e I d a h o P u b l i c U t i l i t i e s Co m m i s s i o n ( I P U C ) a n d t w o th a t a r e a w a i t i n g a d e c i s i o n f r o m t h e c o m m i s s i o n . Pe n d i n g a r e d e c i s i o n s r e l a t e d t o t h e a n n u a l Po w e r C o s t A d j u s t m e n t , o r P C A , a n d a r e q u e s t to i n c l u d e t h e n e w B e n n e t t M o u n t a i n P o w e r Pl a n t ' s c o s t s i n r a t e s . P r e v i o u s l y , t h e I P U C au t h o r i z e d t h e c o m p a n y t o b e g i n on J u n e 1 in c l u d i n g i n r a t e s c e r t a i n i n c o m e t a x e x p e n s e s . We w a n t y o u t o b e a w a r e o f t h e s e c h a n g e s a n d th e r e a s o n s f o r t h e m . Th e P o w e r C o s t A d j u s t m e n t o r s i m p l y t h e PC A a l l o w s t h e c o m p a n y a n d i t s c u s t o m e r s to s h a r e t h e b e n e f i t s o f g o o d w a t e r y e a r s th r o u g h a d o w n w a r d a d j u s t m e n t o f t h e P C A po r t i o n o f e l e c t r i c i t y r a t e s . Ho w e v e r , a s t h e No r t h w e s t e n t e r s i n t o i t s s i x t h y e a r o f d r o u g h t Id a h o P o w e r a n d o t h e r u t i l i t i e s t h a t r e l y o n st r e a m f l o w s f o r h y d r o e l e c t r i c g e n e r a t i o n m u s t us e o t h e r m o r e e x p e n s i v e w a y s t o g e n e r a t e el e c t r i c i t y s u c h a s c o a l o r n a t u r a l g a s - fi r e d po w e r p l a n t s o r m a k e p u r c h a s e s f r o m t h e wh o l e s a l e e l e c t r i c i t y m a r k e t . A s a r e s u l t Id a h o P o w e r h a s i n c u r r e d a n d w i l l in c u r , hi g h e r p o w e r s u p p l y c o s t s t h a t n o r m a l l y w o u l d be s h a r e d t h r o u g h t h e P C A . Th i s y e a r t h e c o l l e c t i v e i m p a c t o f t h e on g o i n g d r o u g h t - r e l a t e d c o s t s a n d o t h e r IP U C - or d e r e d P C A r e v e n u e s a n d e x p e n s e s w o u l d no r m a l l y i n c r e a s e t h i s y e a r s P C A b y $ 2 8 . mi l l i o n o v e r t h e pr e s e n t l e v e l s . T h i s w o u l d re p r e s e n t a p e A - r e l a t e d i n c r e a s e o f 4 . 75 p e r c e n t to y o u r c u r r e n t r a t e s . Ho w e v e r , i n r e c o g n i t i o n o f ot h e r r a t e a c t i o n s an t i c i p a t e d t h i s y e a r a n d t h e s u s t a i n e d u p w a r d pr e s s u r e o n p r i c e s c r e a t e d b y t h e p r o l o n g e d dr o u g h t , I d a h o P o w e r h a s a s k e d t h e I P U C f o r pe r m i s s i o n t o p o s t p o n e c o l l e c t i o n o f t h e a d d i t i o n a l $2 8 . 6 m i l l i o n u n t i l n e x t y e a r . T h i s m e a n s th a t w i t h IP U C a p p r o v a l , t h e P C A p o r t i o n o f y o u r r a t e s a s of J u n e 1 w i l l r e m a i n t h e s a m e , s l i g h t l y m o r e t h a n 6/ 1 O t h s o f a c e n t p e r k i l o w a t t - ho u r , o r $ 0 . 00 6 0 3 9 pe r k W h , u n t i l t h e P C A is r e v i s i t e d d u r i n g t h e n e x t an n u a l r a t e a d j u s t m e n t J u n e 1 , 2 0 0 6 . Th e P C A o c c u r s a n n u a l l y a n d i s o n l y o n e co m p o n e n t o f c u s t o m e r s ' r a t e s . T h e m a j o r co m p o n e n t i s t h e b a s e r a t e w h i c h c o v e r s s u c h bu s i n e s s c o s t s a s p o w e r p l a n t s , l a b o r , a n d t h e eq u i p m e n t a n d i n f r a s t r u c t u r e u s e d t o d e l i v e r el e c t r i c i t y t o h o m e s , f a r m s o r b u s i n e s s e s . Ad j u s t m e n t s t o b a s e r a t e s o c c u r l e s s f r e q u e n t l y th a n t h e P C A . T h e f o l l o w i n g i n f o r m a t i o n a b o u t t h e Be n n e t t M o u n t a i n P o w e r P l a n t a n d i n c o m e t a x is s u e s i s s p e c i f i c t o t h e c o m p a n y s b a s e r a t e s . In M a r c h I d a h o P o w e r a p p l i e d t o t h e I P U C to p l a c e t h e c o n s t r u c t i o n c o s t s o f t h e B e n n e t t Mo u n t a i n P o w e r P l a n t i n t o i t s b a s e ra t e s - a n an n u a l i n c r e a s e o f $ 9 . 6 m i l l i o n . T h i s p l a n t i s ne e d e d t o m e e t e x p e c t e d i n c r e a s i n g p e a k l o a d s a s us a g e o n t h e c o m p a n y s s y s t e m c o n t i n u e s t o r i s e . Be n n e t t M o u n t a i n i s c a p a b l e o f p r o d u c i n g 16 4 m e g a w a t t s o f e l e c t r i c i t y a t t i m e s w h e n cu s t o m e r s u s e t h e m o s t p o w e r , n a m e l y h o t s u m m e r af t e r n o o n s w h e n a i r c o n d i t i o n i n g a n d i r r i g a t i o n us e a r e a t t h e i r h i g h e s t . Th i s r e q u e s t i s s t i l l p e n d i n g b e f o r e t h e IP U C an d i f i t i s a p p r o v e d w o u l d i n c r e a s e y o u r ra t e s b y ap p r o x i m a t e l y 1 . 8 4 p e r c e n t . Yo u h a v e un t i l M a y 6 t o s u b m i t w r i t t e n c o m m e n t s t o t h e co m m i s s i o n re g a r d i n g t h i s r e q u e s t . T h e I P U C c o n t a c t in f o r m a t i o n i s l o c a t e d a t t h e e n d o f t h i s br o c h u r e . In 2 0 0 3 , I d a h o P o w e r f i l e d f o r a ge n e r a l r a t e i n c r e a s e t h a t t o o k e f f e c t Ju n e 1 , 2 0 0 4 . A p o r t i o n o f t h a t r a t e ca s e in v o l v e d I d a h o P o w e r s f e d e r a l i n c o m e t a x ex p e n s e . S u b s e q u e n t t o l a s t y e a r s J u n e 1 r a t e c h a n g e , t h e c o m p a n y a s k e d t h e co m m i s s i o n t o r e c o n s i d e r th a t p o r t i o n o f th e c a s e a n d t h e I P U C g r a n t e d a n o n g o i n g in c o m e t a x - r e l a t e d r a t e a d j u s t m e n t an d a o n e - ye a r i n c o m e t a x - r e l a t e d r a t e ad j u s t m e n t t o b e g i n o n J u n e 1 , 2 0 0 5 . To g e t h e r , t h e s e t a x - r e l a t e d a d j u s t m e n t s wi l l i n c r e a s e r a t e s b y 4 . 4 5 p e r c e n t ( 2 . pe r c e n t f o r t h e o n g o i n g p o r t i o n a n d 2 . pe r c e n t f o r t h e o n e - ye a r p o r t i o n ) . T h e 2 p e r c e n t p o r t i o n o f t h i s a d j u s t m e n t i s te m p o r a r y a n d w i l l e x p i r e o n J u n e 1 , 2 0 0 6 . If I d a h o P o w e r s P C A , B e n n e t t M o u n - ta i n , a n d t a x a d j u s t m e n t r e c o m m e n d a t i o n s ar e a p p r o v e d , t h e r e w i l l b e a n a v e r a g e in c r e a s e o f 6 . 3 p e r c e n t o n a n a n n u a l b a s i s be g i n n i n g J u n e 1 , 2 0 0 5 . O f t h i s i n c r e a s e , 2 p e r c e n t i s a o n e - ye a r r a t e a d j u s t m e n t an d 4 . 1 p e r c e n t i s a n o n g o i n g r a t e ad j u s t m e n t . If t h e s e r a t e a c t i o n s a r e a p p r o v e d , t h e el e c t r i c i t y b i l l f o r a n a v e r a g e re s i d e n t i a l cu s t o m e r w h o u s e s 1 20 0 k W h p e r m o n t h wo u l d i n c r e a s e f r o m $ 7 7 . 34 t o $ 8 1 . 6 8 du r i n g s u m m e r m o n t h s a n d f r o m $ 7 1 . 59 t o $7 5 . 68 d u r i n g n o n - s u m m e r m o n t h s .