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Future Rate Hike? by Larry Meyer Argus Observer, April 4, 2008

Idaho Power request could boost many bills by $8

BOISE -- Idaho Power Company has filed its March forecast with the Oregon Public Utility Commission in an effort to seek approval for higher rates associated with an annual power cost adjustment mechanism now being used for the company's 18,000 Oregon customers.

If approved, the power supply request submitted by Idaho Power will result in a $4.8 million or 15.7 percent increase in Oregon revenues, Dennis Lopez, Idaho Power spokesperson said.

Residential users, using 1,200 kilo-watt hours per month, should see their power bills go from $63.84 per month to $71.94 per month, a boost of $8.10, Mike Youngblood, Idaho Power regulatory affairs representative, said. Any rate changes approved by the Oregon PUC are not expected to be effective until June. Last August, Idaho Power asked the PUC to approve a power cost adjustment mechanism to allow the utility to recover excess power supply costs in a more timely fashion. These costs arise when poor water conditions in the Snake River reduce the company's ability to generate power from its hydroelectric system, and the company has to rely more on coal-fire or gas-fired plants for power generation or it has to purchase power from outside suppliers. Alternatively, when water conditions allow the company to optimize its hydroelectric system, "It gives back to the customers," Youngblood said.

In its periodic updates and forecasts, Idaho Power reports its actual expenditures for the previous period and predicts what its costs might be for the next period, based on water conditions, he said.

For example, its March forecast showed expected hydroelectric generating conditions and forward prices for April 2008 through March 2009.

"The expected power supply costs of $150 million represent an increase of approximately $23 million over the October power cost projects," Lopez said. Idaho Power has about 485,000 customers system-wide, Lopez said, adding, besides Malheur County, the company serves parts of Baker County, and in Idaho it covers as far east as Blackfoot.

"It is the largest utility in Idaho," he said.

Idaho Power is still working on its relicensing of its Snake River Hydro projects by the Federal Energy Regulatory Commission, with the main issue still to be addressed being water quality.

"We will be required to do something about water quality," Lopez said. "Our issue is temperature."

These requirements were stipulated in the Snake River-Hells Canyon Total Maximum Daily Load document which gives states the maximum amounts of pollutants allowed in a river that will still meet federal water quality standards.