20100416Customer Notice.pdf

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On April 15, Idaho Power submitted its annual Power
Cost Adjustment (PCA) proposal for approval by the
Idaho Public Utilties Commission (IPUC). The PCA,
an annual filng in place since 1992, is strictly a cost
recovery mechanism that passes on both the benefits
and costs of supplying energy to Idaho .Power customers.
If our filng is approved by the commission, customer
rates wil be reduced by $58 million, or an average of
6.5 percent overall beginning June 1.
The typical residential customer using 1,050 kilowatt-
hours of energy per month wil see a decrease of
approximately $3.05 on their monthly bilL. The actual
percentage of change wil vary by customer group based
upon the rate they pay.
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with previous 201() filings
In March, Idaho Power submitted three rate increase
proposals with the IPUC totaling $11.4 milion, or an
average of 1.3 percent overall. If approved, these changes
wil also go into effect June 1. The three proposals are
the Fixed Cost Adjustment (FCA), funding for continued
installation of Advanced Metering Infrastructure (AMI),
including smart meters and a filing for pension funding.
If the three proposals are approved along with the
proposed PCA reduction, customers wil experience
a $46.6 milion overall rate reduction, or an average of
5.2 percent.
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Idaho Power actively manages its system operations to
help lower power supply costs without jeopardizing its
system reliabilty, service quality or obligation to serve
customers.
A number of factors contribute to this year's proposed
decrease in rates. Although the forecasted power supply
costs are projected to be higher this year, last year's
forecast was far more accurate than in recent years due
to new forecasting methodology. As a result, the true-up
portion of the PCA provides for a significant decrease
in rates.
Earlier this year, the commission approved a settlement
agreement that provides for revenue sharing between
Idaho Power and its customers. The combined impact
of changes in rates from forecast to forecast and true-up
to true-up is a $146.7 milion total rate reduction. Based
upon a predetermined and stipulated revenue sharing
allocation of this amount, customers wil receive $58
milion ofthat benefit. The remaining $88.7 million wil
offset the first year of a permanent rate increase with
$25 millon allocated to address general increases in the
company's cost of service and $63.7 milion allocated to
cover underestimated base power supply expenses.
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If approved, the PCA filng wil result in a rate decrease
of $58 milion, or an average of 6.5 percent for the
company's Idaho customers. The chart below ilustrates
the overall average percentage decrease for each major
customer group as a result of the PCA filng. The varying
percentages of overall decrease for each customer class
reflect the difference in the price each group pays for
electricity.
Residen-
tial
Percentage Change fromCUírent Rates
Small Large
General General
Service Service
Large
Power Irrigation Overall
Change
-3.22%-0.49%.).89%
i
i-14.00% I -6;17% -6.47%
Where Does Idaho Power's
Electricitv Come From?.,
Idaho Power obtains energy from a diverse set of
generation resources. In above average water years,
our base of 17 clean, low-cost hydroelectric plants on
the Snake River is typically our largest source of
electricity. We also utilze our natural gas and coal-
fired plants and a combination of short-term market
purchases and long-term power purchase contracts
from independent producers.
The estimated fuel mix for Idaho Power's resource
portfolio under normal and 2009 actual water
conditions1 is shown below2 (see back panel for
footnotes).
Normal Expectation
Hydroelectric
. Coal
Natural Gas
Wind
Biomass
. Geothermal
. Other
2009 Actual 0.6%0.4%,-0.8%
f'
Hydroelectric
. Coal
Natural Gas
Wind . Other
Biomass
Industrial Waste
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Idaho Power's filng is subject to public review
and approval by the IPUC. Copies of the application
are available to the public at the IPUC offices
(472 W. Washington, Boise ID), Idaho Power offices
or on Idaho Power's Web site, www-idahoDower.com
or the IPUC Web site, www.Duc.idaho.gov.
A press release on the filng is available at
www.idahopower.com/NewsCommunity/News/
mediaCenter/N ewsReleases.
Thank you for taking the time to read this notice.
We appreciate your business.
1 Long-term power purchases with a known fuel source have been identified by
fuel type; market purchases have been assigned the Northwest Power Pool Net
System Mix for 2008.
2 This is an estimate of the fuel mix of Idaho Power's portfolio of generation supply,
including market purchases. Because Idaho Power intends to sell the Renewable
Energy Certificates (RECs) that it owns in the near-term with proceeds benefiting
retail customers, and since Idaho Power does not own the RECs for the other
qualified renewable resources represented in the above Resource Portfolio Fuel
Mix charts, Idaho Power cannot and does not represent that electricity produced
by the above fuel mix was delivered to its retail customers in 2009, For more
information on the energy delivered to retail customers see" Energy Delivered
10 Retail Cuswmers" on our VVeb sí1e a1 www.idahopower.com.
IIiPOR~
* Printed on recycled paper.
CID# 47088/383.9k/04-1 0
~ 2010 idaho Power
An IDACORP Company