20060515AARP comments.pdf

Commission Secretary
Idaho Public Utilities Commission
472 W Washington Sheet
Boise, ID 83702-5983
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY FOR
AUTHORITY TO IMPLEMENT POWER
COST ADJUSTMENT (PCA) RATES FOR
ELECTRIC SERVICE FROM MAY 31, 2006
THROUGH MAY 31, 2007
CASE NO. IPC-06-
Filed: May 12, 2006
INTRODUCTION
AARP Idaho submits these comments in support of Idaho Power Company s proposal to
apply an average 19.4 percent reduction to customer bills to reflect recent positive stream
flows and the market price of power. According to the Commission s Order No. 30022
issued on April 18, 2006, the power cost adjustment (PCA) credit would calculate to a
15.4 percent reduction for residential customers effective June 1. Because Idaho Power
also has a settlement pending in its base rate proceeding, the total reduction to the
customer bill, which consists of both the PCA and the base rate, will be determined by
the Commission s final decisions on the PCA issue and the rate case settlement. The
final result could be an overall rate reduction of about 12.2 percent for residential
customers.
AARP's membership has a vested interest in this matter. AARP is the nation s leading
organization for people age 50 and older. It serves their needs and interests through
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information, education, advocacy, and community services which are provided by a
network of local chapters and experienced volunteers throughout the country. AARP has
over 167 000 members in Idaho, many of whom receive electric service from Idaho
Power. AARP urges the Commission to ensure that energy services are readily available
at prices that are just, reasonable and affordable. We appreciate this opportunity to
present our views.
DISCUSSION
According to research performed by AARP's Public Policy Institute, for an average
household, telephone, energy, water, and sewer services can account for about 5 percent
ofthe monthly household income. For some older Americans, this share can be as much
as 23 percent of monthly income. Incredibly, some low-income households often spend a
greater share of their income on utilities than on certain other necessities such as health
care or property taxes. This is the case for an increasing number of older persons, as the
average expenditures for energy, telephone, water, and sewer services for households
headed by persons age 65 and older can increase at a faster rate than both the level of
income in the households and inflation.
For these reasons, AARP supports Idaho Power s proposed rate reduction. As the
Commission deliberates, we urge you to keep the interests of residential customers in
mind, especially those customers living on fixed and low incomes. Research shows that
older Americans are more susceptible to health problems in extremes of heat and cold.
Accordingly, adequate heating and cooling are essential. While increases in energy rates
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can be devastating for those living on fixed and low-incomes, reductions in energy rates
present a welcome benefit to consumers especially at a time when other daily expenses
are significantly increasing.
According to the April 18 Order, the proposed PCA rate reductions represent the largest
credit for customers since the PCA mechanism was put into place in 1993. This is also
the first time, after six continuous years of drought conditions, that customers may
receive a credit rather than a surcharge. This rate reduction will help a number of
customers to better afford their electricity bills as we begin the summer months.
Given ongoing affordability concerns, AARP also urges the Commission to ensure that
adequate low-income assistance is available to help reduce energy burdens so these
customers can afford reasonable levels of energy usage. As in prior proceedings, AARP
advocates for the adoption of categorical eligibility and automatic enrollment of eligible
low-income customers in energy assistance programs that are designed to reflect the
needs" of these customers. Such an approach will require a review of energy burdens
faced by low-income households for energy services, i., consideration of the interaction
of both household income (ability to pay) and the size of the monthly bill.
AARP recommends that the Commission consider criteria that will enhance the potential
for cost effective enrollment procedures and practices. This should result in the selection
of eligibility criteria that reflects ongoing Idaho financial assistance programs, such as
Food Stamps, Supplemental Security Income (SSI), T ANF and LIHEAP , which are
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already targeted to low-income households. Where possible, the Commission should
select eligibility criteria that will allow for the automatic enrollment of customers in the
applicable energy assistance program when the individual or household applies for the
underlying financial assistance programs that must determine household income.
There is no policy reason to maintain significantly different eligibility criteria for the
specific programs targeted to Idaho s low income households. If properly coordinated
this approach will reduce the administrative costs associated with outreach, education
application, and enrollment procedures. Automatic enrollment should also be combined
with adoption of a meaningful income eligibility criterion based on the Federal Poverty
Guidelines. This will allow individual customers who are not otherwise participating in
financial assistance programs to receive energy assistance. Targeted outreach and
education efforts should be included, and funding for energy assistance programs should
be expanded to meet customer needs.
CONCLUSION
AARP appreciates this opportunity to comment on this critical matter. For the reasons
stated above, AARP urges the Idaho Public Utilities Commission to approve Idaho
Power s proposed PCA rate reduction for the benefit of consumers. AARP also
welcomes the opportunity to work with the Commission to implement low-income
assistance program automatic enrollment and to educate our members on the existence of
available energy assistance programs.
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im Wordelman
AARP Idaho
State Director
AARP Comments
anice Stover
AARP Idaho
State President
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