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News Release
Commission Reduces Idaho Power General Rate Case Request
 
August 3, 2005 (2005 - 017)
 
Contacts:  Lee Beyer, Chairman, 503-378-6611; John Savage, Commissioner, 503-378-6611; Ray Baum, Commissioner, 503-378-6611; Bob Valdez, Public Information Officer, 503-378-8962
 
Salem, OR – The Oregon Public Utility Commission significantly scaled down a general rate increase request by Idaho Power Company (Idaho Power), which provides energy to about 18,000 customers in eastern Oregon.
 
Commission Chairman Lee Beyer said, "While the cost of generation is increasing, we want to keep customer rates as low as possible while being fair to the company; this increase meets both objectives."
 
On September 21, 2004, the company filed a request with the Commission for an overall increase of 17.52% or $4.4 million a year. However, the decision by the Commission means that instead, customers will see overall rates go up by just 2.37% or $597,000 annually. Irrigation rates will go up by 3.38%. The new rates take effect Monday August 8, 2005.
 
In general rate cases the utility bears the burden of proof. The Commission considers the evidence on the whole to determine whether the utility has proven that its proposed revenue requirement and rates are reasonable.
 
A major dispute in the case relates to net power supply costs. At issue was the value of the company’s hydroelectric facility output that is sold on the market.
 
The Commission found that Idaho Power failed to accurately forecast market electricity prices under normalized conditions and made a downward adjustment to the company's power costs to accurately account for revenues expected from the wholesale sale of surplus hydroelectric output.
 
The company also proposed seasonal pricing with higher residential rates during June, July, and August. The Commission did not approve the proposed changes, citing concerns regarding the effect on residential customers.
 
The Commission order does approve seasonal rates for business customers and time-of-use pricing for large industrial customers. Seasonal and time-of-use rates are seen as a way to encourage customers to make choices that will shift power usage to non-peak hours when costs are lower. The Idaho Commission previously approved seasonal and time-of use rates for customers and Oregon’s decision will provide consistency for businesses that have facilities in both Oregon and Idaho.
 
This is Idaho Power Company’s first general rate change in Oregon in 10 years. However, during the western energy crisis of 2001 the Commission did allow the company to change rates to recover unexpected excess power costs.