20070611Residential customer notice.pdf

Tune 8, 2007
Dear Idaho Power Customer:
On June 8, Idaho Power filed a request with the Idaho Public Utilities Commission
to increase base rates by an average of J 0.35 percent. For our residemia 1 customers,
the proposed increase is 4.5 percent. Please allow me to share some of the reasons for
this proposed increase and to suggest some ways you can lessen the impact ofhigher
electricity rates. We anticipate that the rates will become effective January 2008.
Our decision wasn t made lightly and we carefully considered the impacts to
individuals and families, farms and businesses. But to provide you with reliable
responsible electrical service today and tomorrow, our company must continually
invest in our electrical system and then periodically seek rate increases.
Rates And Service Reliability
Between 2006 and the end of this year, Idaho Power will have placed in service
$300 million of additional investment in its system, including improvements and
upgrades to our established power plants, power lines and substations, as well
as building new facilities, or buying new equipment Eke trucks and computers.
Operating and maintenance expenses have increased substantially over the same
two-year period, driven by the increased levels of power purchases, continued rapid
customer growth, and inflation. All of these activities are directly tied to our ability
to continue to provide you reliable energy service today and in the future. I've
included more information on the back of this letter to further exl)lain this issue.
Efficient Use ,Can Help You Manage Your Bill
Idaho Power is committed to promoting energy efficiency as a way to sluw- the
increasing demand for elecuicity and to manage rising energy costs. Whether
s purchasing energy efficient products, participating in one of our efficiency
programs or using a little less electricity whenever possible, there are ways you
can lessen the impact of this proposed increase. We want to help you. We have
included a Summer Tip Card to jump start your efforts. In addition, there
program information and further tips in the "Energy Center" of our Web site-
www.ldahopower.com. Remember, the more of us who practice energy
efficiency, the better it works.
Rates Remain Among Nation s Lowest
Independent annual surveys consistently show that the prices you pay for
electricity are among the country s lowest, a fact in which we have long
taken pride. I again invite you to visit another area on our Web site-
www.idahopower.com/eustomerserviee/rates/ eleeprIcemaps .cfm -
compare Idaho Power s rates with those paid in other areas of the country.
With investor-owned utilities across the nation facing similar issues and
escalating costs, we believe that when this pending price adjustment is settled
your electricity rates will still be among the lowest rates in America.
We understand that you rely on us to provide you with reliable service at a fair
price and are committed to serving you in the most efficient, and responsible
manner possible,
Cordially,
/f2 L-l
Ric Gale
Vice President, Regulatory Affairs
IIJAHO
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An IDACORP company
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An average residential customer
who uses 1,050 kilowatt-hours
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t~jsrproposal.
About This Rate Request
No doubt your firsT question about this proposed rate
increase is "Why?" Not surprisingly, part ofLhe answer is the
issue of growth. Southern ldaho is growing in population
and in economic activity and we have spent millions of
dollars since our last general rate case to keep pace, and we
must spend even more to expand our electrical system to
stay ahead of it.
Even if we didn t add a single new customer, we still would
have to invest in our increasingly complex network of power
lines, transformers and substations to provide continued
reliable service to our existing customers. Parts ofthis
network are aging and require upgrades; others simply must
be replaced. These expenditures are necessary to ensure
that we have a reliable system of power generation, delivery
and service support,
ll1ere also is the simple fact that it costs our company
more to do business today than it did yesterday. Like other
businesses, we are not immune to price increases that
impact our operating costs. Our costs for vehicle fuel and
other products used to provide electrical service to more
than 470 000 customers have grown steadily.
ll1e regulatory framework under which we do business
requires that we make investments in a prudent manner.
Once made, we seek approval from our regulators to
increase prices and begin recovery of these various
investments and expenses. If approved by the Idaho Public
Utilities Commission, this proposal would increase Idaho
Power s revenues $64 million annually so that we. could
begin recovery of our capital investments and higher
operating costs.
How Can i Save?
of the impact of any price increase. l1H') Energy Center at
www.ldahopower.com offers many energy efficiency ideas
and programs to help you manage your electricity use.
How Will The Increase Affect My Bill?
The proposed 4.5 percent increase for Idaho Power s residential
customers would average S2.86 per month. If approved, the
monthly bill for a typical residential customer using 1,050
kilowatt-hours (kV\il1) per month would increase from $64.42 to
$67.22 during non-summer months and from $69.61 to $72.
per month during June, Tuly and AllguSt. Other customer
groups' increases will vary by electricity usage.
When Will This Increase Begin?
This is a proposed change and is subject to public review
and Idaho Public Utilities Commission approvaL We
anticipate a commission decision will be made in January
2008, The filing is accessible at Idaho Power s Web site
-"'Iww.idahopower.com-or at the commission s vVeb
site-w\\'W.puc.state.id.us. Copies will be available for
review at the commissions office, 472 W. -Washington Street
Boise, ID, as well as Idaho Power offices in Boise, Nampa,
Emmett, Payette, McCall, Mountain Home, Gooding,
Hailey, T\vin Falls, Pocatello, Blackfoot or Salmon.
Didn t My Rates Just Go Up?
The price you pay for electricity is made up of two pieces-a
base rate and a Pow-er Cost Adjustment piece. This request
only will affect the base rate portion ofthe price you pay for
electricity which has remained unchanged since 2006,
However, the other portion of your rates, the yearly Power
Cost Adjustment, also affects the total amount you pay.
This adjustment takes place every year on June 1st and
ow ack aI?:d stream flow conditions that dictate
c:JrauHg;G
Overall Percentageof Increase 15.13.15.20.
Current Average Base Rate
Proposed Average Base Rate
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