20060420Press release, corrected customer notice.pdf

An IDACORP Company
IDAHO POWER COMPANY
O, BOX 70
BOISE, IDAHO 83707
BARTON L KLINE
Senior Attorney
. .' ;:. ;, ~ ;~::;
ApriI18 2006
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HAND DELIVERED
Jean D. Jewell , Secretary
Idaho Public Utilities Commission
472 West Washington Street
P. O. Box 83720
Boise , Idaho 83720-0074
Re:Case No. IPC-06-
Power Cost Adjustment Filing
Dear Ms. Jewell:
In accordance with the PCA Application that the Company filed with the
Commission last week, enclosed are three copies of the Company s press release and
bill stutter regarding the 2006 PCA.
Thank you for your assistance in this matter.
, ve
U1is
Barton L. Kline
BLK:jb
Enclosures
c: Don Howell
Telephone [phone] Fax [phone], E-mail BKline(ff)idahopower.com
Idaho Power Files To Reduce Revenues By $123 Million Through Annual Power Cost
Adjustment; Cumulative Rate Actions Could Yield 16 Percent Rate Decrease
BOISE- Idaho Power today submitted its annual Power Cost Adjustment (PCA) filing
to the Idaho Public Utilities Commission (IPUC) that, if approved, will result in a substantial
reduction in the prices the company s Idaho customers will pay for electricity beginning June 1.
This year s filing reduces the company s revenues by more than $123 million, plus it
reduces the PCA component of Idaho customer rates by an average of 19 percent " said Idaho
Power Vice President for Regulatory Affairs Ric Gale. "Today s filing reflects the benefits of
above normal snow pack and stream flows which will result in more low cost energy being
produced at our hydroelectric facilities.
When today s filing is combined with an earlier proposed 3.2 percent general rate
increase, the overall proposed rate decrease is still more than 16 percent. Because rates vary
among customer groups, the percentage of change will be different for each group.
PCA Offsets Small Increase In General Rates
In October 2005 , Idaho Power filed a request with the IPUC for an increase in its base
rates. This is the portion of the company s rates that pay for operating expenses, equipment and
infrastructure. Idaho Power and representatives of various customer groups worked together
develop a stipulation agreement that established a proposed base rate increase of 3.2 percent.
However, overall company rates would drop by an average of slightly more than 16
percent because of the proposed PCA credit. The result would mean a reduction in a typical
residential customer s bill of more than $10 per month.
Below is the typical bill for a residential customer using 1 200 kilowatt-hours (kWh) per
month during both the summer and non-summer seasons under the current rates compared to the
new rates expected to go into effect on June 1.
Current Bill June 1 , 2006 Bill
Summer $82.$71.
Non-Summer $76.$65.
Lower Rates Are A Direct Benefit Of A Good Water Year
The reduction in the PCA rate comes as a direct benefit of an above-average snow pack
in the mountains upstream of Brownlee Reservoir. In years when water is plentiful and Idaho
Power can fully utilize its extensive hydroelectric system, power production costs are lower. The
company then shares those benefits with its customers , as it proposes to do this year.
However, when water is in short supply as it has been in the past six drought years, the
higher costs of supplying power by other means also are shared with the company s customers.
This chart illustrates the overall percentage reduction for each major customer group
when the proposed PCA credit of 0.3689 cents per kWh is combined with the current base
energy rate.
Residential
Small Commercial
Lar e Commercial
Industrial
Irri ation
6045rt:
6039rt:
6039rt:
6039rt:
6052rt:
15.4%
12.
21.
27.
19.4%
The public can review the company s PCA application at the offices ofthe IPUC or
Idaho Power or on the company s "Regulatory Information " Web page at www.idahopower.com.
Other Filing Before The IPUC Could Result In More Future Rate Benefits
An April 7 settlement agreement reached between Idaho Power, the IPUC staff, the
industrial customers of Idaho Power and Micron Technology establishes a formula for the
company to share the proceeds from the sale of surplus emissions allowances with the utility
Idaho customers. These benefits would be applied to customers ' rates beginning June 1.
The agreement, which also still requires IPUC approval, calls for 90percent of the
benefits of those and future sales of surplus emissions allowances to be credited to customers and
10 percent to be allocated to the company.
In late 2005 and early 2006, Idaho Power sold 78 000 surplus sulfur dioxide emission
allowances for approximately $81.6 million. After subtracting transaction fees and income
taxes, the total amount of sales proceeds to be allocated by the IPUC is $46.8 million. With
IPUC approval of the agreement, approximately $42.1 million would benefit the company
nearly 440 000 Idaho customers and the company would retain $4.7 million as a benefit to its
shareholders.
30-
IDAHOPCMB.
An IDACOIIP
Idaho Power
Files For Decrease In PCA Rate
On April 12, 20061daho Power submitted its annual
Power Cost Adjustment (PCA) filing to the Idaho
Public Utilities Commission (IPUC). If the filing
is approved as filed, the PCA portion of all Idaho
customers' rates will be reduced by more than $123
million, or 19.3 percent on average. With IPUC
a pproval, the PCA will show as a monthly credit of
3689 cents per kilowatt-hour (kWh) of electricity
used and would become effective on June 1.
1his year s downward adjustment in the PCA rate
comes as a direct benefit of an above-average
snow pack in the mountains upstream of Brownlee
Reservoir. In years when water is plentiful and our
company can fully utilize its extensive hydroelectric
system, its power production costs are lower
and the company shares those benefits with its
customers, just as it is this year. But when water is
in short supply as it has been in the past six drought
years, the higher costs of supplying power by other
means are offset through increased rates.
Ow company is required to annually file a PCA
request by April 15th with the IPUC that reflects ow
costs of generating electricity including purchasing
fuel for its coal or natural gas fired plants and the
costs of buying power from the wholesale energy
market. 1his total amount is reduced by any sales
of swplus electricity to other utilities.
Our proposal is subject to public review and
approval by the IPUC. A copy of the application is
available at the offices of the IPUC and Idaho Power,
and on the company's "Regulatory Information
Web page at www.idahopower.com.
General Rate Case Information
In October of 2005, Idaho Power filed a request with
the IPUC for an increase in its base rates. As a result
of that filing, the base rate components of your
electricity bill also may change on June I, 2006.
At this time there is a settlement proposal before
the IPUC that, if approved, will increase the non-
PCA or base portion of your rates, by 3.2 percent.
This increase will be offset by the 19.3 percent
reduction in the PCA component of your rates
mentioned above for a combined net reduction
in rates onJune 1 of slightly more than 16 percent.
1his chart illustrates the overall percentage
reduction for each major customer group when
the proposed PCA credit of 0.3689 cents per kWh
is combined with the current base energy rate.
Customer
Group
Residential
Current Proposed Overall %PCA PCA .
. .
PCADecrease
. .
60454 .(036894)15,
large Commercial 0.60394 (036894)21.