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Idaho Power Customers Learn about Proposed Rate Hike by Nate Poppino Times-News, October 12, 2008

Ask Idaho Power Co. officials, and they'll probably tell you it's not the easiest time to ask for more money.

The current economic climate was clearly among the issues on the minds of a few south-central Idaho citizens Thursday evening as staff from the Idaho Public Utilities Commission explained a rate request from the electric utility.

The utility is asking for an average increase of 9.89 percent, though that amount varies among residential users, irrigators and other customer classes. The request was prompted by recent investments in new substations, distribution lines and transmission lines, as well as out-of-state energy purchases.

The request includes $89 million more in revenue, as well as adding about $180 million more in generation, transmission and other improvements to the "rate base," said Joe Leckie, a PUC staff auditor. Not all of the totals are addressed in the company's Idaho request - only about 93 percent of its proposed $799 million total revenue is from Idaho customers.

New to this rate case is a request to include some of the cost of borrowing funds related to relicensing Idaho Power's Hells Canyon Dam complex, Leckie said. Though that process will not be finished for some time, the utility is seeking $7.6 million to start paying interest on the money. Customers will have to pay for the project sooner or later, Leckie said.

"There are good arguments that can be made in both directions," he said.

Addressing what he said is the most common question the PUC hears from the public, staff engineer Keith Hessing said the commission can't just deny the rate increase because it is made through a legal process. Idaho Power presents evidence to back up its request, he said.

"Unless people refute that evidence on the record "basically the commissioners have no choice," he said.

That doesn't mean, he said, that the rate increase is a given at this point.

State Rep. Bert Stevenson, R-Rupert, asked whether the utility's predicted growth is still the same given the current situation, and whether the rate increase would charge for more new construction than is actually needed. Though the PUC is still studying the request, Hessing said, it doesn't seem that is the case so far.

"I don't think Idaho Power is proposing to overbuild," he said.

Other questions addressed upgraded power meters the utility plans to install over the next few years, and why irrigators face a larger percentage increase than residential users if residential users make up more of the customer base. Hessing said the increase might cover maintenance and infrastructure costs as well as new growth.

Dan Olmstead, a regional spokesman for Idaho Power, sat in the audience but did not address questions.

Hessing encouraged questions on all topics, acknowledging the complexity of rate case reviews. Public hearings on the matter will be held at a later time, he said.

"There's a lot to learn, and a lot to know, and a lot that I'm sure I don't know," Hessing said.