June 28, 2008

Idaho Power Requests Another Increase to Customer Rates

By David Cooper, The Times-News, Twin Falls, Idaho

Jun. 28--In a year filled with skyrocketing gas prices and costly food and grocery bills, Idaho customers may see their third power rate increase in a 12-month span.

On Friday, Idaho Power Co. requested that state utility regulators approve a new general electricity rate increase that would average a 10 percent increase in customer bills. The average is based on averages for residential, irrigation, industrial and commercial users. Residential users would see a 6.3 percent jump under the proposal.

A general rate increase is to recover costs the utility has spent on upgrading its power system, with new substations, and longer distribution lines and transmission lines.

Company officials pointed to the growth of Idaho's population and the demand for more energy as the reason for the request.

"We have invested heavily to ensure we can provide a safe and dependable supply of energy for our current and future customers," said Idaho Power Vice President for Regulatory Affairs Ric Gale, in a release given Friday. "This request seeks to recover those investments."

Last June, the company requested a 10.35 percent general rate increase. The Idaho Public Utilities Commission approved a 5.2 percent base rate increase that went into effect March 1.

"In the last couple of years, utilities all across the country are facing increased demand in a climate of increasing natural gas costs," explained Gene Fadness, public information officer for the PUC. "Building materials are all going up. It's just a bad time nationwide."

The new request was made Friday, just weeks after the PUC approved the company's request for a power cost adjustment (PCA). That 8.54 percent rate increase went into effect June 1 and is to help the company recover power costs incurred while paying for electricity during high usage last summer. Last July, the utility company had five separate record-breaking days for peak demand on the system.

PCA increases do not go into the company's bottom line, but are passed on directly to the cost of purchasing power on the market.

Fadness said commissioners will review the request and likely announce a decision by February. He indicated some kind of increase would likely be approved on the base rate request.

"They wouldn't file if they didn't have a legitimate costs to recover," Fadness said. "But that doesn't mean it's automatic. State statute requires we allow them to recover their prudently incurred expense at a reasonable rate of return."

Fadness said the PCA increase, which expires June 1, 2009, could provide a PCA credit to consumers since snowpack was good this winter and temperatures have so far been mild this summer.


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