161216_RMPNPCupdate.pdf

Case No. PAC-E-16-12, Order No. 33668
Contact: Gene Fadness [phone] or 890-2712
www.puc.idaho.gov

Update to Rocky Mountain Power costs results
in slight decrease for eastern Idaho customers

BOISE (December 16, 2016) – Rates for Rocky Mountain Power’s eastern Idaho customers will
decrease by 0.4 percent as the result of the company updating its net power costs to reflect
reduced customer load and lower prices.

The decrease, approved by the Idaho Public Utilities Commission, becomes effective Jan. 1,
2017.

Because the decrease is small, Rocky Mountain Power proposed a “Rate Mitigation Plan,” that,
instead of reducing rates now, would have taken this reduction along with a slightly larger
reduction the company anticipates next fall and applied both against what could be a sizeable
base rate increase in 2019. Rocky Mountain Power’s plan would have kept rates stable through
2018 and mitigated the size of a future base rate increase. Under the plan, the company said it
would not file a general rate case before June 1, 2018 with new rates effective in early 2019 at
the earliest.

However, customers and parties to the case stated their preference to receive a rate decrease
now rather than implement the plan.

The update adjusted Idaho’s portion of net power costs to $91.6 million, down from $94.8
million now included in base rates. Net power costs are those costs the company pays to
provide generation to customers, whether from its own generation plants, the wholesale
market or power purchase contracts. Net power costs vary because of changing weather and
market conditions. Because they vary each year, customers get either a one-year credit or a
one-year surcharge through the annual Energy Cost Adjustment Mechanism (ECAM). If net
power costs are greater than the $91.6 million included in base rates, customers get a
surcharge; if they are less, customers get a credit. The ECAM becomes effective every Oct. 1.

Rocky Mountain Power anticipated next fall’s ECAM could be a $4.5 million to $5.5 million
reduction and proposed that it also be included in the Rate Stability Plan to offset the
anticipated 2019 increase.

The 2019 base rate case Rocky Mountain Power anticipates will include updated depreciation
expense that is to become effective Jan. 1, 2019. A 2013 depreciation study increased Idaho’s
annual depreciation expense by $1.7 million. That has not yet been included in rates, and the
company projects that balance will increase to $6.9 million by Dec. 31, 2017. Also expected to
be included in that rate case are Idaho’s share of expenses related to the closure and
reclamation of the Carbon coal plant and the Deer Creek mine.

The commission, in supporting staff and other parties’ recommendation to not adopt the Rate
Stability Plan, said not passing on reduced net power expense to customers now would result in
the company over-collecting net power cost.

Rocky Mountain Power stated, “While the company believes the proposed Rate Stability Plan is
in the best interest of all Idaho customers, it acknowledges the viewpoint of the parties who
participated in this proceeding and respects their decision not to pursue the plan at this time.”

Parties to the case included Rocky Mountain Power, Idaho commission staff, Monsanto
Company and PacifiCorp Idaho Industrial Customers.

A copy of the commission’s final order and other documents related to this case are available
on the commission’s website at www.puc.idaho.gov. Under the “Electric” heading, select “Open
Cases,” and scroll down to Case No. PAC-E-16-12.

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