20180412Idaho Power News Release and Customer Notice.pdf

, o,n. roxP' i1! lil,l, ffi '"'on
a'lR I 2 2018
Boise' ldaho
ssrmloPo,l,ER,
An IDACORP Companv
NEWS RELEASE
Tax Reform to Reduce Rates for ldaho Power Customers
April 13,2018
BolSE, ldaho - ldaho Power has filed a settlement agreement with the ldaho Public Utilities
Commission (IPUC) that, if approved, will result in reduced rates for customers within the company's
ldaho service area in 2018 stemming from recent federal and ldaho state tax rate changes.
According to an agreement between ldaho Power, IPUC Staff and the lndustrial Customers of ldaho
Power, customers will see a total benefit associated with reduced tax expense of 533.9 million, provided
through: 1) a base rate reduction of approximate[ Sfg.Z million, 2) an additional S7.8 million decrease
that will be provided through the 2018 Power Cost Adjustment mechanism, and 3) a non-cash annual
benefit of 57 .4 million in the form of an offset to other deferred costs.
lf the proposal is approved by the IPUC as filed, the typical ldaho residential customer using 950
kilowatt-hours (kwh) of energy per month will see a monthly bill decrease of 52.15, beginning June 1.
r lncludes lighting schedules; z lncludes special contracts
The cash-related direct rate reductions result in a customer benefit of about SZO.S million beginning in
June of 2018. The new tax rates also required an adjustment to deferred tax expense, reducing amounts
customers will owe in the future. Non-cash tax benefits of approximately S7.4 million will accumulate to
serve as an offset to other current or future deferred expenses, reducing future amounts that would
othenvise be owed by customers.
ln addition to rate reductions resulting from tax reform, ldaho Power and parties have agreed to extend
the revenue sharing program beyond 2019. The current program, in place since 2009, allows the
company to use its accumulated investment tax credits to shore up its rate of return or share revenue
with customers when that return exceeds certain levels.
ldaho Power has proposed three rate decreases this spring related to the following issues - tax reform
benefits, the annual Power Cost Adjustment (PCA) and the annual Fixed Cost Adjustment (FCA). lf all
three proposals are approved by the IPUC as filed, residential customers will see a total price decrease
of 7 .O4 percent effective June L, 20L8. Other customer classes are impacted as follows:
P.O. Box 70 (83707)
1221 W. ldaho St.
Boise, lD 83702
2018 TAX REFORM REVENUE IMPACT BY CLASS
Percentoge Chonge from Current Billed Revenue
Residential SmallGeneral
Service
Large General
Service r
Large Power 2 lrrigation Overall
Change
-2.75Yo -2.7Oo/o -2.29%-2.25Yo -2.33%-2.22Yo
COMBINED IMPACT OF 2018 RATE FILINGS
Percentoge Chonge from Current Billed Revenue
Residentia I SmallGeneral
Service
Large General
Service r
Large Power 2 lrrigation
Fixed Cost Adjustment (FCA)
-3.60%-3.73%N/A N/A N/A
Power Cost Adjustment (PCA)
-L.29%-0.80%o -2.20%-3.27%-1..9L%
Tax Reform
-2.\5%-210%-2.29%-2.25%-2.33%
COMB!NED IMPACT
Totals may not add up exactly due to rounding
-7.U%-6.63%-4.48%-5.52%4.259l
r lncludes lighting schedules; z lncludes special contracts
Opportunities for Public Review
ldaho Power's filing is a proposal that is subject to public review and approval by the IPUC. Copies of the
application are available to the public at the IPUC offices (472W. Washington St., Boise, ldaho, 837021,
ldaho Power offices or on ldaho Power's website, idahopower.com, or the IPUC website, puc.idaho.gov.
Customers also may subscribe to the IPUC's RSS feed to receive periodic updates via email about the
case. Written comments regarding ldaho Power's application may be filed with the IPUC.
About ldaho Power:
ldaho Power, headquartered in Boise, ldaho, and locally operated since 1915, is an electric utility that
employs approximately 2,000 people who serve roughly 545,000 customers throughout a24,000-
square-mile area in southern ldaho and eastern Oregon. With 17 low-cost hydroelectric projects as the
core of its diverse generation portfolio, ldaho Powe/s residential, business and agricultural customers
pay among the nation's lowest rates for electricity. IDACORP lnc. (NYSE: IDA), ldaho Power's
independent publicly traded parent company, is also headquartered in Boise, ldaho. To learn more, visit
idahopower.com or idacorpinc.com.
Jordan Rodriguez
Communications Specialist
j rod [e-mail]
208-388-2450
What will be the Combined Effect
of these Rate Decreases?
Pending IPUC approval, the proposed 1.29 percent
reduction ofthe PCA and 2.15 percent reduction
resulting from tax reform will be added to the 3.6 percent
reduction proposed earlier this spring by Idaho Power's
annual Fixed CostAdjustment (FCA) mechanism. If
approved as filed, the three filings would result in a
total rate reduction of7.04 percent for Idaho residential
customers starting Iune 1. Other customer classes are
impacted as follows:
Residential
-3.60%
'1.29o/o
'2.15o/o
Small ceneral
Service
FIXED COST
Laroe Latoebenptalrowet')ervrce
ADJUSMENT (FCA)
lrrigation
N/A
-1.910/o
-2.330/o
-7.040/" '6.630/o -4.48o/o '5.52% '4.25o/o
I ltr(ludes lighting lchedules; I lnrludes spe(ial contractr
Opportunities for Public Review
Idaho Power's filing is a proposal that is subject to
public review and approval bythe IPUC. Copies of
the application are available to the public at the IPUC
offices (472 W. Washington St., Boise, Idaho, 83702),
Idaho Power offices or on Idaho Powerb website,
idahopower.com, or the IPUC website, puc.idaho.gov.
Customers also may subscribe to the IPUC's RSS feed
to receive periodic updates via email about the case.
Written comments regarding Idaho Power's application
maybe filedwith the IPUC.
Thank you for reading this notice. We value your business!
@ Printed on recycled paper
O 2018 ldaho Power
-3.73o/o N/A N/A
POWER COST ADJUSMENT (PCA)
-0.80% -2.20o1o -3.27o/o
TAX REFORM FILING
-2.10o/o '2.29Yo '2.25o/o
ldaho Power Files Two
Proposals to Decrease Rates
Idaho Power is proposing rate decreases for its Idaho
customers this spring through the annual Power Cost
Adjustment (PCA) and stemming from recent federal
and Idaho state taxrate changes.
Pending approval from the Idaho PublicUtilities
Commission [PUC), both of these rate decreases will go
into effect on fune l, 2018. The combined rate reduction
resulting from the PCA and tax reform will be added to
the reduction proposed earlier this spring through the
annual Fixed CostAdjustment mechanism * read the
backpanel of this brochure to see the cumulative impact
ofthese reductions.
Annual Power Cost Adjustment
Calls for Rate Decrease
On April 12, Idaho Power filed its annual PCA with
the IPUC. The PCA is a cost recovery tool that passes
on both the benefits and costs of supp$ing energy to
Idaho Power customers. Neither Idaho Power nor its
shareholders receive anyfinancial return on this
filing - money collected from the surcharge can be
used only to pay power supply expenses.3Iffi*.
An I0ACORP Companv
COMBINED IMPACT
Totals may not add up exattly due to rounding
BILL-INSEFIT-PCA+TdFi|ing_04-18-v7.indd 1 -2
EtrE@tr
4112118 1t25PM
Thousand Springs, lD
An lDAcoRP companyI
E!'rd le
',r'!*COMBINED EFFECT OF ALL THREE FILTNGS
How the 2018 PCA will Change Prices
If the PCA proposal is approved by the IPUC as filed,
the typical Idaho residential customer using 950
kilowatt-hours (k\tVh) of energy per month will see a
$1.29 decrease on their monthly bill, beginning Iune l.
The amount all Idaho customer classes pay for electric
service will decrease by $22.6 million; the actual
percentage of change will depend on a customer's class
and the rate they pay.
Small
6eneral
servi(e
How will Tax Reform lmpact Rates?
Accordingto an agreementbetween Idaho Power,
IPUC Staff and the Industrial Customers of Idaho
Power, customers will see a total benefit associated
with reduced tax expense of $33.9 million, provided
through: (1) a base rate reduction of approximately $18.7
million, (2) an additional $7.8 million decrease thatwill
be provided through the 2018 Power CostAdjustment
mechanism, and (3) a non-cash annual benefit of $7.4
million in the form of an offset to other deferred costs.
If the proposal is approved by the IPUC as filed, the
typical Idaho residential customer using 950 kilowatt-
hours (k\{h) of energy per month will see a monthly bill
decrease of $2.15, beginning Iune 1.
Residential
Large
General
Servi(e'
lrrigation
-1.910/o
overall
Change
-1.90%
large
Power':
-1.29o/o '0.80% -2.20o/o -3.27o/o
I lnrludes lighting schedules; I llrludes spe(ial (ontracts
Why is the PCA a Decrease this Year?
The PCA has two main components: the forecast and the
true-up. The forecastreflects Idaho Power's anticipated
fuel costs, purchased power costs and customer
benefits from sales of surplus energy for the coming
April through March. The true-up brings lastyear's
forecasted costs in balance with costs actually incurred
by the company by looking back at what happened the
previous April through March. Prices are established
based on the forecast and the true-up to align actual
collection with actual costs.
There are a few main factors contributing
to this year's PCA decrease:
Last year's actual power supply costs were less than
anticipated, primarily due to better-than-expected water
conditions, which resulted in Idaho Power having more
low-cost hydro generation available to serve customers.
This cost reduction is reflected in the true-up portion
and is partially offset by an increase in the forecast
component of the PCA, as well as the elimination of
a one-time refund of energy efficiency rider funds
provided through lastyear's PCA. For the 2018 PCA,
the combined impact of the change in each of the PCA
components results in a $22.6 million decrease in the
amount all Idaho customer classes pay for electric
service.
BILL"INSERT_PCA+TaxFiling_04-1 8_v7.indd 3-4
Residential Large
Powetz lrrigation 0verall
change
-2.1501o -2.10o/o '2.29o/o -2.25o/o
' lncludes lighting schedules;'1 lndudesspecial contlacts
-2.33o/o -2.220/o
What are the Components
of the Tax Reform Rate Changes?
The cash-related direct rate reductions result in a
customer benefit of about $26.5 million beginning
in June of 2018. The new tax rates also required an
adjustment to deferred tax expense, reducing amounts
customers will owe in the future. Non-cash tax benefits
of approximately $7.4 million will accumulate to serve
as an offset to other current or future deferred expenses,
reducing future amounts that would otherwise be owed
bycustomers.
In addition to rate reductions resulting from tax reform,
Idaho Power and parties have agreed to extend the
revenue sharing program beyond 2019. The current
program, in place since 2009, allows the company to
use its accumulated investment tax credits to shore up
its rate of return or share revenue with customers when
that return exceeds certain levels.
u1a1a 125PM
Small
Genelal
service
Large
Geoeral
Seryirer
PROPOSED 2018 PCA REVENUE IMPACT BY CLASS
PROPOSED 2018 TAX REFORM REVENUE IMPACT BY CLASS
-rt:1ry:,!la9: lryijvr:i BilL{ r:v",, * -l
Percentage Change from Current Billed Revenue
slmloPc,lnIER
An IDACORP Compan,
How the 2018 PCA Will Change Prices
On April 12, Idaho Power filed its annual PCA wiih the IPUC.
ThePCA is a costrecoverytool that passes on both the benefits
and costs ofsupplyintenergyto Idaho Power customers,
Ifthe PCA proposal is approved bythe IPUC as filed, the
typical ldaho residential customer using 950 kilowan-hours
(kWh) ofenergypermonth will see a $1.29 decrease on
their monthly bill, beginning lune l. The amount all ldaho
customer classes pay for electric seryice will decrease by
$22.5 million; the actual percenrage ofchangewill depend
on a customer'sclass and the rate theypay.
llUhy is the PCA a Decrease this Year?
The PCA has two maincomponents: the forecastandlhe
true-up, The forecast refl ects Idaho Powerl anticipated fuel
costs, purchased power costs md customer benefits fiom
sales ofsurplus energyfor the comingApril through March.
Thc true-up brings lastyear! forecasted costs in balance
with costs actually incuned by the company bylooking back
at whar happened the prflious April through March. Prices
arc established bascd ontheforecast andth€ truc-up to
align aoual collection with actual costs.
There are a few main factos contributing to rhis yeil's
PCA detrease: Lastyearb actual powersupply costs
were less than aoticipated, primarily due to better-than-
expected water conditions, which resulted in Idaho Power
having more low-cosr hydro generation available to serve
customers. This cost reduction is refleded in thc true-up
portion and is partially offset by an increase in rhe forecasr
componentofthe PCA, as well asrhe elimination ofa
one-time refund of energy cfficiency rider funds provided
through lastyeart PCA. Forth€ 2018 PCA, the combined
impacr of the chmge in eachof thePCAcomponents results
in a $22.6milliondecrease in the amount all ldahocustomer
classes payfor el€ctric 6ervice.
ldaho Power Files Two Proposals to Decrease Rates
ldaho Power is proposing rate decreases for its ldaho customers this spring through the annual Power Cost
Adjustment (PCA) and stemming from recent federal and ldaho state tax rate changes. Pending approval
from the ldaho Public Utilities Commission (IPUC), both rate decreases will go into effect on June 1, 2018.
How will Federal Tax Reform
lmpact Customer Rates?
Idaho Power customers within the company's ldaho scwice
area will experience arate decreasein 2018d a result
of Federal Tax Refom and ldaho state tu rate chmges.
Customers will see a total benefit assNiated rvith tax reform
ofi33.9 million, provided through: (l) abNe rate rcduction
of approximately $18.7 mitlion, (2) an additional $7.8 million
decrease that will be proyided through the 2018 Porcr Cosr
Adjustment mechanism, and (3) anon-msh annual benefit
of $7.4 million.
If the proposal is approved by the IPUC as filed, rhe rypical
Idaho residential customer using 950 kwh ofenergy per
month will see a $2.15 decrease on their monthlybill,
beginning lune t.
-2.15oh -2.10Yo -2.29o/o -2.25o/o -2.330io -2.220io
'lndrdlrligltringr.h.dollrrhdudlrrp.d.l(dtad
ff46 15il1
tu[n€id.nliil G{...13..i(.
{.29% -0.80Yo -2.20% -3.27"1n -1.91% '1.90%
Indud.t lgfrtng khedul.i- 'ln(ludes rr€!,.1 (onlra(h
PROPOSEO 2018 TAX REFORM FEVENUE IMPACT 8Y CLASS
Per<entage change trom Curtent Billed Revenue
ll
PROPOSED 2Ot8 PCA REVENTJ€ IMPACT BY CLASS
PRE.SORTEO
sTANDARD
U,S, POSTA6E
PAID
gor5E. tD
PERMII NO, 679
What will be the
Combined Effect of
these Rate Reductions?
Pendint IPI,C approval, the proposed
1..29 percent reduction of the PCA md 2.r5
percent reduction resulting from tax reform
willbe added to the 3.6percentreduction
proposed earlier this spring by Idaho
Pwert annual Fixed Cost Adiu$tment
(FCA) mechanism. Ifapproved as filed,
the three filingsreuldresult in atotal
rate reduction of704 percent for Idaho
residential customers startinS lune l. Rate
reductions range from 4.25 ro 6.ti3 percent
lor other customer cla$e$.
sEtmloPo,l,ER"
An tDAcoRP companv
PO Box70(83707)
1221 W. ldaho St.
Boise, lD 81702
!moortant!nformation:
Please Note: We want to ensure all ol our customers
haw sfficimt time to submit comments to the IPUC.
Because your bill is procesed toward the end of the
tPUC's review of our request, you will receive this
notification twice: first in this postcard and then in
an insert in your bill later this month.
@
IIXED COST AD]USMTNI (ICA)
1.60% -l.il% NiA N/A N/A
POWER COST AD]USMENT IP(A)
.1.19il4 '0.80% -1.20rh -3.77.t0 i.91'/,,
IAX RE'ORM FITING
-2.15",; .1.10'/, -7.)9% "1.25a/, -2.31%
Opportunities for
Public Review
Idaho Power's filing is aproposal thar is
subiect to puhlic reviewand approval by
thc IPUC. Copies ofthe application are
available to the public at the IPUC offices
(472lv. Washington St., Boise, tdaho,
83702), Idaho Power offices or on ldaho
Powert website, idahopower.com, or the
tPtrc websire, puc.idaho.gov. Customers
also may subscribe to the IPUC'S RSS
feed to.eceive periodic updates via
email about the case. Written comments
regarding Idaho Power's application may
tre filedwith the IPUC.-7.04% .6.53% -1.1A% -5.52% -1.2s%
' lnduder liqhlinq r(h!dule5; I hclud.r rpc(irl !ontaG
COMBIilED IMPACldrt (il nd da { .r.dh a( ro ,edr.