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Idaho Power Seeks 15 Percent Increase for Farms by Dave Wilkins Capital Press, October 9, 2008

Regulators approve 12 percent increase for Avista customers

Idaho farmers will pay more to operate irrigation pumps, milking machines and other equipment that uses electricity.

State regulators have approved a settlement with Avista Utilities, resulting in an average 11.98 percent increase in electric base rates effective Oct. 1. Avista's primary service area in Idaho is in the northern part of the state.

Meanwhile, Idaho Power Co., the state's largest utility, has filed an application with the Idaho Public Utilities Commission that, if approved, would increase electricity rates by an average of 6.3 percent for residential customers and 15 percent for irrigation and industrial customers.

Public workshops are scheduled to give ratepayers a chance to comment on the proposal.

Customer groups could challenge the need for the Idaho Power rate hike or the size of the increase. Intervenors in the case include the Idaho Irrigation Pumpers Association.

Idaho Power officials contend the company needs the rate hike to pay for infrastructure improvements. Idaho Power needs to increase annual revenues by $66.6 million, the company said in its application with the IPUC.

In the past three years, the company has invested $578 million for 13 new substations, 1,157 miles of distribution lines and 190 miles of transmission lines, utility officials said in the application.

Part of the commission's job during the review process will be to determine if the added investment was necessary to serve customers and if Idaho Power was prudent in its financial decision-making.

Avista's nearly 12 percent increase in base electricity rates comes on top of increases in its annual cost surcharges of 12.8 percent for electricity and 4 percent for gas.

The IPUC noted the impact that the increases will have on customers, particularly those on fixed and low incomes.

"This commission is not oblivious to the consequences of its rate orders," the IPUC said in a statement. "The volatility in the energy markets, however, shows no signs of abating."

The IPUC has ordered public utilities to participate in workshops designed to identify methods to make energy more affordable for Idaho customers.

An increasing number of customers may soon be unable to pay their energy bills in full or on time, the IPUC said.

"The commission recognizes that there are a variety of factors contributing to significant upward pressure on electric and natural gas rates in Idaho and energy affordability has become a central issue for many Idaho households and businesses," the panel said.

The workshops are scheduled to take place at 10 a.m. on Oct. 14 and Oct. 22 at the commission hearing room at 472 W. Washington St. in Boise.