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PUC Approvals Result in 3.77 Percent Idaho Power Rate Hikes Effective June 1

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Idaho Power electricity customers’ rates rose another 3.77 percent as a result of two annual utility adjustment filings recently approved by the Idaho Public Utilities Commission.

The first increase, of 1.57 percent, came from Idaho Power’s annual “power cost adjustment” (PCA) case filing in which it seeks to adjust for power supply costs that are higher or lower than predicted due to such things as changes in hydropower generation or the prices of fuel such as coal or natural gas. In some years, such as when stronger-than-expected stream flows translate into more abundant and cheaper hydropower, customers receive a benefit. In years such as this one, customers are hit with a surcharge as Idaho Power asked the PUC to approve a $17.3 million increase in rates. For a typical residential customer who uses the average 1,000 kilowatt-hours per month, the PUC said, the increase translates to about $1.32 a month more. Reasons cited for the increase include lower-than-forecasted hydropower generation and lower wholesale prices for excess power that Idaho Power sold to the open market.

The second increase, of 2.2 percent, came from Idaho Power’s annual “fixed cost adjustment” (FCA) case filing in which is seeks to adjust for changes in revenues due in part to changes in electricity sales as a result of energy efficiency and conservation programs. Utilities like Idaho Power must cover “fixed costs” for such things as paying for infrastructure like power plants, transmission lines and company buildings regardless of how much revenue they collect from power sales. The FCA mechanism, sought by clean-energy advocates like the Snake River Alliance, allows utilities to be “made whole” in cases where desired energy-saving measures result in lower-than-expected revenues. This essentially removes some disincentives that utilities would otherwise face if they were being asked to reduce their bottom line by saving energy and reducing revenues as a result. As with the PCA, in some years, customers face a surcharge depending on the FCA case; in other years customers receive a rebate for the coming year. The effect of the PUC-approved FCA adjustment is a residential bill increase of about $2.16 a month.

Information such as the applications and public comments on both of these cases can be found at the PUC’s website at www.puc.idaho.gov and under the “Open Cases” section under “Electric Cases” and by scrolling to IPC-E-16-08 for the PCA case and IPC-E-16-02 for the FCA case.

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