20080418Finalized Customer Notice.pdf

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PCA Filing Reflects
Costs Of Energy Purchases
On April 15, 2008, Idaho Power submitted its annual
Power Cost Adjustment (PCA) filng to the Idaho
Public Utilties Commission (IPUC). This filng
reflects the company's costs of purchasing fuel for
coal and natural gas fired generating plants and
power bought from the wholesale energy market.
These costs are impacted by the availabilty of
lower cost hydroelectric generation. Sales of surplus
electricity to other utilties offset some of these costs.
With IPUC approval, the revised PCA wil show as
a monthly charge of 0.8891 cents per kilowatt-hour
(kWh) of electricity used effective June 1. Residential
customers averaging 1,050 kWh of electricity per
month wil see an increase of approximately $6.80 on
their monthly electricity bils.
Hot Summer Results In Higher 2007
Power Supply Expenses
The PCA captures both forecast and look-back
components. Although the forecast for 2008 reflects
better stream flows than those in 2007, power supply
expenses last year were far greater tha n expected.
This year's adjustment reflects $132 milion of
unrecovered 2007 power supply costs, largely due to
last summer's heat wave.
National Weather Service records show the 2007
summer as the hottest on record in many parts of
our service area, with temperatures breaking the
100 degree mark 14 times in July alone. This meant
unprecedented demand for electricity with our
company exceeding its previous record for customer
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use five times before setting an all time high of3,193
megawatts on July 13.
2008 Flows Improve Over 2007
There is a relationship between stream flow in the
Snake River and your power rates. Stream flow this
year is expected to be 5.4 milion acre-feet (maf) over
the period April- July, substantially better than last
year's 2.8 maf. Under traditional PCA calculations,
customers would receive 90 percent of the benefit
of the increased hydro generation; nearly $42
milion this year. However, this year the company
is proposing to give the entire benefit of the
increased hydro generation to its customers, raising
the hydro benefit to $44 m Hlion. This amount wil
be applied against the $132 milion of unrecovered
expenses from 2007. The recommendation to move to
100 percent from 90 percent also wil affect the look-
back portion of next year's PCA calculation.
Overall Results Of 2007 Filng
If this filng is approved as submitted, Idaho
customers' rates will increase by approximately
$87 milion, or 12.76 percent on average. This chart
ilustrates 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.
Idaho Power's proposal is subject to public review
and approval by the IPUC. Copies of the application
are located on the company's Web site www.
idahopower,comlaboutuslregulatoryinfo!jlings. asp. at
the Idaho Power Corporate Headquarters, and at the
offices of the IPUC.
Where Did Your Electricity Come From
Last Year?
Idaho Power uses a diverse mix of resources to
provide its customers with a reliable, low-cost supply
of electricity. This mix includes hydroelectricity,
power generated by the company's coal or natural
gas-fired plants and from purchases from the
wholesale energy market.
There are times when the company can generate
more power than its customers can use. In these
instances, Idaho Power sells this energy and applies
the proceeds of the sales to its fuel costs to reduce the
amount it needs to collect from its customers.
Generation Sources
These charts show the source of
your electricity in a normal year
and the amount and sources
Idaho Power used to meet
electrical demand in 2007.
Hydro
. Coal
Gas.
Normal
Expectation
PURPA
Purchases
Like all other forms of energy, electricity is becoming
increasingly valuable. Idaho Power encourages its
customers to use it wisely. Information on energy
efficiency programs is avaHable in the "Energy
Center" at www.ìdahopower.com.
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