20070413Press release, customer notice.pdf

For Immediate Release
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An IDACORP company
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April 13 , 2007
For Immediate Release
Dennis Lopez
208-388-2464
d lopez(fYidahopower. com
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Idaho Power Files Annual Power Cost Adjustment;
Poor Hydro Conditions Mean Higher PCA Rate In 2007
BOISE- Idaho Power today submitted an annual Power Cost Adjustment (PCA) filing to
the Idaho Public Utilities Commission (IPUC) that reflects the impact of last winter s poor snow
pack on the company s ability to generate power from its hydroelectric system.
If approved, today s filing will result in a rate increase of slightly more than six-tenths of a
cent per kilowatt hour (0.6108 cents) for the company s Idaho customers. For the average
residential customer using 1 050 kilowatt-hours of electricity each month , the monthly increase
will be approximately $6.41.0verall , this year s filing will increase PCA rates by $77.5 million, or
14.5 percent on average , although the actual percentage of change varies by customer group
based upon the rate they pay for electricity.
Our PCA filing this year reflects just how bad the winter snow pack was for Idaho Power
and ultimately our customers " said Idaho Power Vice President for Regulatory Affairs Ric Gale.
The forecast runoff from the mountains upstream of Brownlee Reservoir is only 3.3 million
acre-feet (maf) during the important April-through-July period. That's the time when we count on
our low-cost hydroelectric system the most to meet our heavy summer loads.
Gale said that by comparison last year s forecast for runoff into Brownlee Reservoir was 8.4
maf. The runoff projections are provided by the US Weather Service s Northwest River Forecast
Center (NRFC) in Portland, are. According to NRFC records, the 3D-year average stream flow
into Brownlee during the April-through-July period is 6.3 maf.
In years when water is plentiful Idaho Power can use its 17-dam hydroelectric system
more fully, the company s power production costs are lower and Idaho Power shares those
benefits with its customers. In 2006, for example , the company s PCA filing decreased Idaho
customers' rates by approximately 19.3 percent on average.
However, when hydro generating conditions are poor, Idaho Power must use more
expensive methods to meet its customers need for electricity. Those options include greater
reliance upon the company s portion of three jointly-owned coal fired plants in Nevada, Oregon
and Wyoming, or upon wholesale power purchases.
The PCA addresses both the strengths and the weaknesses of hydropower " Gale said. "
passes on the benefits of good water years when we can use our hydro system to its fullest, and
in times when hydro generating conditions are poor, the excess costs for power are shared by
the company and its customers when we must use other means to provide electricity.
More-
Idaho Power - Page 2
Customers Benefit From Emission Credit Sales
Idaho Power co-owns three coal generating plants that, due to highly efficient emissions
reduction equipment, earn excess clean air credits from the US Environmental Protection
Agency. Surplus credits can be sold to companies the need them to reach minimum clean air
standards.
Idaho Power sold some of these surplus credits and is sharing 90 percent of the $76.
million benefit of those sales with its customers
Below is the typical monthly amount paid by a typical residential customer using 1 050
kilowatt-hours (kWh) per month. It reflects both summer and non-summer seasons under the
current PCA rates compared to the new rates expected to go into effect on June 1.
Season Current Bill Bill after June 1 , 2007
Summer $63.$69.
Non-Summer $58.$64.42
This chart illustrates the overall percentage increase for each major customer group as a
result of the proposed PCA.
Residential
Small Commercial
Lar e Commercial
Industrial
Irri ation
3689i 2419i
11.
16.
22.
14.
The public can review the company s PCA application at the offices of the IPUC or Idaho
Power or on the company s "Regulatory Information" Web page at www.idahopower.com.
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Apri/13, 2007
Lower Snow Pack Results
In Increase In PCA Rate
On April 13, 2007, Idaho Power submitted its annual
Power Cost Adjustment (PCA) filing to the Idaho
Public Utilities Commission (IPUC). This filing reflects
the companys costs of purchasing fuel for our coal or
natural gas fired generating plants as well as our costs of
buying power from the wholesale energy market. These
total purchase costs are reduced by any sales of surplus
electricity to other utilities.
With IPUC approval, the revised PCA will show as a
monthly charge of twenty-four one-hundredths of a cent
(0.2419!\:) per kilowatt-hour (kWh) of electricity used
and would become effective on June 1. For the average
residential customer using 1 050 kWh of electricity per
month, the monthly increase will be approximately $6.41.
Available Water Determines Costs
The balance between a good supply of water in the
Snake River and your power rates is clearly evident this
year. The upward adjustment in the PCA rate is primarily
caused by a below-average snow pack in the mountains
upstream of Brownlee Reservoir. Just 3.3 million acre-
feet (maf) of water are projected to flow through the
reservoir between April and July, critical months for
hydroelectric generation. Last year 8.4 maf was expected
to flow through Brownlee during the same period. By
comparison, the 30-year average for the period is 6.3 maf.
In years when water is plentiful and our company can
more fully utilize its 17 -dam hydroelectric system, our
power production costs are lower and Idaho Power shares
those benefits with its customers. In 2006, for example,
the companys PCA filing decreased Idaho customers
rates by approximately 19.3 percent on average.
However, in years like the current one, when water is
in short supply due to less than normal spring runoff
Idaho Power must use more costly methods of generating
electricity. In those situations, the higher costs of
supplying power by more expensive means are reflected
through increased PCA rates.
Customers Benefit From Sale
Of Emission Credits
Other factors also can influence the amount of the PCA.
For example, Idaho Power owns part of three coal-fired
power plants located in Nevada, Oregon and Wyoming
that use highly efficient emissions reduction equipment
and therefore earn an excess offederal clean air "credits:'
These credits have a financial value as they can be
sold to other companies needing credits to offset their
environmental impacts. Through the PCA mechanism
Idaho Power is sharing with its customers 90 percent
of the benefits of previous sales of its clear air credits
in the amount of $76.7 million. Without this benefit,
the revised PCA rate would have been considerably higher.
If this filing is approved as submitted, Idaho customers
rates will increase by approximately $77.5 million, or
14.5 percent on average. This chart illustrates the overall
percentage increase for each major customer group as a
result of the proposed PCA. The varying amount of
overall increase reflects the difference that each group
pays for electricity.
Customer
Group
Residential
~~~lj~~!nT~idal
Large Commercial
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Il1dQ~ri~r '
Irrigation
Current Proposed OverallPCA PCA PCA Increase
36894
~Q.3~894-
0.36894
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0.36894
24194
24194 -
24194
24194 "
24194
11.
8%;
16.
~V)%
14.
all inflow data is provided by the independent Northwest River Forecast Center located
inPortIand, ore.
Idaho Powers proposal is subject to public review and approval by the IPUC. Acopy
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.idahopoweccDm