Case No. IPC-E-07-10, Order No. 30302

April 19, 2007

Contact: Gene Fadness (208) 334-0339




Commission taking comments on Idaho Power’s proposed surcharge


Customers of Idaho Power Co. have until May 14 to comment on the utility’s application to increase rates by an average 14.5 percent so the company can meet its power supply expense. For residential customers, the average increase is 11 percent.


A poor snow pack from last winter means Idaho Power’s hydroelectric generation system will produce less power, forcing the company to generate or buy from other sources.


The company is asking for a one-year Power Cost Adjustment (PCA) surcharge that will add about 0.6 cents per kWh for customers. For an average customer who uses 1,050 kWh per month, the monthly increase would be $6.41, according to the company’s figures. Adding in the proposed PCA, the non-summer residential rate would increase from the current 5.05 cents per kWh to 5.66 cents. The summer rate increases from 5.73 cents per kWh to 6.34 cents on use beyond 300 kWh per month. For the first 300 kWh of use, the non-summer rate applies. See the chart below for a summary of how the proposed PCA would affect the major customer classes.


The surcharge does not increase company revenues and is used solely to meet extraordinary power supply expense not already covered in base rates. Last year’s wetter than normal year resulted in an average 19 percent reduction in rates.


Customer bills are divided into two components, the base rate and the PCA. The PCA is shown as a surcharge or a credit on a customer bill and changes every spring to account for Idaho Power’s above-normal or below-normal power supply costs. In Idaho Power's territory, where about half its electricity is generated from hydroelectric dams, streamflow levels largely determine power supply costs. When streamflow levels are above normal the company doesn’t have to generate as much power from more expensive coal or natural gas resources and does not have to buy as much power on the wholesale market. A second factor in determining the PCA is the cost of power on the wholesale market. When streamflows are above normal and market conditions are normal, customers typically get a PCA credit. When streamflows are below normal and Idaho Power must generate power from more expensive thermal sources or buy more power on the wholesale market, customers typically get a PCA surcharge.


The forecasted runoff from the mountains upstream of Brownlee Reservoir is 3.3 million acre-feet. Last year, the runoff was 8.4 maf. During an average year, the runoff is 6.3 maf.


The proposed increase varies in size according to customer class. Residential customers would experience an 11 percent increase; small commercial, 8.8 percent; large commercial, 16.6 percent; irrigation, 14.6 percent and industrial, 22.5 percent.


Comments are accepted through May 14 via e-mail by accessing the commission’s homepage at and clicking on "Comments & Questions." Fill in the case number (IPC-E-07-10) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.



Customer class     Current base rate     2006 overall    Proposed 2007 overall        

                                                                 (-0.37 cent PCA credit)        (0.24 cent PCA surcharge) 



residential                5.42 cents/kWh        5.05 cents/kWh         5.66 cents/kWh  




residential                6.1 cents/kWh*         5.73 cents/kWh         6.34 cents/kWh




Small commercial    6.51 cents/kWh         6.14 cents/kWh         6.74 cents/kWh




small commercial     7.33 cents/kWh         6.96 cents/kWh        7.57 cents/kWh




Large commercial    6.08 cents/kWh          5.71 cents/kWh        6.32 cents/kWh



Summer Large

commercial               6.81 cents/kWh**     6.44 cents/kWh         7.05 cents/kWh





Industrial                 2.22 cents/kWh          1.85 cents/kWh          2.46 cents/kWh





industrial                2.45 cents/kWh          2.08 cents/kWh          2.60 cents/kWh




Irrigation***            3.4 cents/kWh          3.03 cents/kWh          3.64 cents/kWh




irrigation                4.32 cents/kWh          3.95 cents/kWh          4.56 cents/kWh




*The summer residential rate does not kick-in until after the first 300 kWh of use per month.

**The large commercial summer rate of 6.81 cents applies to the first 2,000 kWh of use.  All additional use is 2.92 cents/kWh. The large commercial non-summer rate of 6.08 cents/kWh applies to first 2,000 kWh of use. Add additional use is 2.6 cents per kWh.

***Industrial customers also have rates for On-peak use, which are slightly higher than Mid-peak and Off-peak use, which are slightly lower than Mid-peak use.  Also, industrial and irrigation customers pay significant demand charges in addition to their base rate energy charge.