Idaho Energy Update
Jan. 16, 2009

The Idaho Legislature is back at work for its 2009 session, and as usual its first week was a quiet one spent mostly with committees reviewing administrative rules from state agencies – and of course hearing the governor’s gloomy State of the State and budget address. Meanwhile, the Public Utilities Commission is taking comments through Feb. 5 on how to spend $500,000 Idaho Power received by selling surplus pollution credits, and the PUC also approved a new way to calculate Idaho Power’s annual “Power Cost Adjustment” in hopes of reducing some of the annual sticker shock that hits ratepayers because of unpredictable water conditions and other factors. For details on these and other developments, please read on.

Thanks as always, and if you have any calendar items, please send them my way!


Ken Miller
Clean Energy Program Director
Snake River Alliance
(208) 344-9161
[email protected]

I: Idaho Legislature Opens, Governor Presents Dire Economic Outlook

The Idaho Legislature convened its 2009 session Monday, and the subdued atmosphere in the temporary Statehouse at the Annex was made all the more so by Gov. Butch Otter’s grim State of the State speech notable for the deep budget cuts across all agencies. The Legislature’s opening week was devoted mostly to committee reviews of administrative rules that were generated by state agencies since the last session. Committees will gradually begin hearing new legislation next week – including the House Energy, Environment, and Technology Committee, which will hold print hearings to decide whether to introduce two bills that have not been identified. Earlier today, the House Health and Welfare Committee approved new rules from the Department of Health and Welfare to update Idaho’s policies regarding weatherization programs for low-income Idahoans. The rules are designed to bring Idaho’s out-of-date weatherization rules in sync with federal weatherization program guidelines.

Otter’s annual State of the State and budget address featured the predicted deep cuts in state spending, with some agencies such as Parks and Recreation and Commerce, seeing 50 percent-plus hits on their general fund budgets. The Office of Energy Resources, which until its recent transfer to the governor’s office operated in the Department of Water Resources, maintained its 18 full-time employees but saw its overall budget trimmed from $4 million in the fiscal 2009 budget to $3.1 million in the governor’s recommendation for 2010. The governor’s budget for OER contains no state general fund appropriations.

As the session progresses and as legislation is introduced, we’ll include updates here on all energy-related bills in the House and Senate.

II: PUC Taking Comments on Energy Education Projects for Schools

The Idaho Public Utilities Commission is taking comments through Feb. 5 on how to best use $500,000 in Idaho Power Co. funds to promote energy education and clean energy projects in Idaho schools. Commissioners held a second workshop to hear recommendations on the best way to use the funds, which became available as a part of Idaho Power’s collection of $16 million from sales of surplus sulfur dioxide (SO2) pollution allowances it no longer needs.

Central to the case is a request by the Idaho Energy Education Project (IEEP) and its director, Bill Chisholm, who proposed the funds be used to implement new energy efficiency education programs as well as hands-on energy projects to involve students in clean energy efforts at their schools. Bill has been a tireless advocate of energy education at all levels, and has extensive experience in integrating solar energy into the Castleford School, as well as work with other schools in the Magic Valley.

The state Office of Energy Resources and Department of Education presented their ideas for the money at the first workshop, but their proposal included hefty amounts for administrative expenses. In the most recent workshop, Idaho Power presented its ideas on how the funds could be spread over two years, using some of the company’s existing education materials as well as proposing energy audits for Idaho schools to identify how they can become more energy efficient. The Idaho Power proposal is much closer to Bill’s original proposal, but still will need some sort of stakeholder review panel to screen energy project proposals and ensure the funds are being maximized as intended.

To learn more about the case and to comment, go to and then “File Room” and then “Electric Cases” and then IPC-E-08-11. You can also click “Comments and Questions” on the home page to submit comments before Feb. 5.

III: PUC Approves Changes in Idaho Power’s ‘Power Cost Adjustments’

The Public Utilities Commission has signed off on a new methodology to calculate Idaho Power’s annual adjustments in its power costs, and in the process hopes to reduce the big swings in utility bills that have buffeted ratepayers in recent years.

Utility customers generally notice two major influences in their bills. One comes from periodic rate cases, such as the one now under way for Idaho Power, in which utilities come in to seek returns on their investments. The other big factor affecting rates is the “Power Cost Adjustment,” (PCA) in which utilities come into the PUC to settle up if their fuel costs were higher or lower than projected. For Idaho Power, ratepayers received a big credit in their rates through the PCA in 2006 because Idaho had a strong water year, which reduced the costs for Idaho Power. But for the past two years, ratepayers have been socked by hefty PCA adjustments upward because Idaho Power had less water for its hydropower production, and was forced to purchase more expensive power elsewhere to make up the difference.

Furthermore, Idaho Power says the lag in its ability to recoup higher-than-expected costs have battered its credit rating, which was once very strong but is now barely above what’s known as “junk” status in bond markets. The lower credit rating makes borrowing money more expensive, and Idaho Power is about to embark on a billion dollar-plus construction program that could be made more expensive by its declining credit rating.

So the PUC agreed with Idaho Power and a number of stakeholders, including irrigation customers, industrial customers, Micron and the U.S. Department of Energy, to engage in workshops to ways to reduce the PCA volatility that creates big swings in customers’ bills. All parties agreed on the resolution that was approved by the PUC. To review the company’s original filing and the PUC’s order and news release, go to and the “Filing Room” and “Electric Cases” and then IPC-E-08-19.

On The Agenda:

► The Idaho Public Utilities Commission holds its next decision meetings on Jan. 20 and 26 and Feb. 9. Agendas are normally posted the day before on the Commission’s website at

This Monday’s agenda includes an Idaho Power application – which might not be discussed by Commissioners in public – to rework its Electric Service Agreement with Micron Technologies. Idaho Power and Micron say one of the utility’s largest customers asked to amend its existing rate schedule because Micron “is in the process of restructuring” its Boise operations, something that will take another six months. For more information on the Micron case, go to and then to “File Room” and then “Electric Cases” and then to Case No. IPC-E-09-01.

►Idaho Power’s Integrated Resource Plan Advisory Committee’s next meeting, which was originally scheduled for Jan. 22, has been moved to Feb. 3 at the company’s Boise headquarters. The meetings are open to the public and run from 10 a.m. to 3 p.m. The committee is reviewing possible resource portfolios to help guide the utility on how it will meet future energy needs through generation and efficiency resources.