Idaho Power asks for increase of $58.7 million in recently filed Power Cost Adjustment

Idaho Power has filed the final piece of its annual spring cost adjustments with the Idaho Public Utilities Commission (IPUC), asking for a price increase of $58.7 million across all customer classes after two years of price decreases for most customers.

If approved by the commission, Idaho Power says its prices would still be lower than they were three years ago. Idaho Power’s prices are 20% lower than the U.S. national average for residential customers and 30% lower for business customers. With 17 hydroelectric projects at the core of its energy mix, Idaho Power’s residential, business and agricultural customers pay among the nation’s lowest prices for electricity.

Idaho Power has voluntarily suspended disconnects for residential and small commercial customers and temporarily waived associated late fees to help those in need during the COVID-19 pandemic. Idaho Power considered additional mitigation measures in its Power Cost Adjustment (PCA) filing but determined that recommending postponed collection of known costs could increase the burden on customers in future years, impact Idaho Power operations and create uncertainty for the financial community.

Neither Idaho Power nor its shareholders receive any financial return from this filing – money collected is used to recover costs or credit benefits associated with annual fluctuations in power costs. These typically represent about one-fourth to one-third of the company’s annual cost of serving customers.

The overall impact to customer bills for residential and small general service customers depends on the outcome of the two filings:

The annual PCA passes on the benefits and costs of supplying energy to Idaho Power customers. If the IPUC approves the PCA proposal as filed, the typical Idaho residential customer using 950 kWh of energy per month will see a $4.01 increase on their bill, beginning June 1.

The annual Fixed Cost Adjustment (FCA), filed in March and applicable to residential and small commercial customers, adjusts prices based on changes in energy use per customer during the previous year. If the FCA proposal is approved as filed, a typical residential customer will see an increase of $0.02, beginning June 1.

The PCA has two main components: the forecast and the true-up. The forecast reflects Idaho Power’s anticipated fuel costs, purchased power costs and customer benefits from sales of surplus energy for the coming April through March. The true-up brings last year’s forecasted costs in balance with costs incurred by the company by looking back at what happened the previous April through March.

This year’s PCA increase largely reflects the return to a more normal level of power supply costs as market energy prices have come down from unusually high levels reflected in last year’s PCA, Idaho Power says. Power supply costs for Idaho Power tend to be lower during periods of higher market energy prices due to increased sales of surplus energy. Additionally, last year’s PCA included $7.7 million in one-time customer benefits associated with revenue sharing and tax reform, which will expire at the end of the current PCA year.

Idaho Power has been a locally operated energy company since 1916. It serves a 24,000-square-mile area in Idaho and Oregon. The company has a goal to provide 100% clean energy by 2045.

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