Case No. PAC-E-05-01, Order No. 29833

July 22, 2005

Contact: Gene Fadness (208) 334-0339




Commission proposes 1.7 percent increase to Utah Power customers


Boise – The Idaho Public Utilities Commission today accepted all but one provision of a settlement agreement signed by parties to a recent rate case filed by PacifiCorp, which does business as Utah Power in southeastern Idaho.


Barring an objection to the commission’s revised settlement, PacifiCorp customers in eastern Idaho will receive a 4.8 percent increase to their base rates effective Sept. 16. However, due to the expiration of another PacifiCorp surcharge on that same date, the net increase to customers would be 1.7 percent.


The commission’s order allows PacifiCorp to recover $5.75 million annually in additional revenue. When the company filed its case on Jan. 15, it asked to recover $15.1 million annually, or a base rate increase of 12.5 percent. With the expiration of the surcharge, the net increase would have been 9.4 percent.


Because the commission’s order modifies the settlement between the parties to the case, the parties have until Aug. 8 to notify the commission if they intend to withdraw from the settlement. If that happens a schedule will be developed to continue the case as it was before the settlement agreement. In that event, the rate increase scheduled for Sept. 16 would not take effect.


Parties to the case include PacifiCorp, Public Utilities Commission staff, Monsanto Company, the Idaho Irrigation Pumpers Association, Agrium, Inc., J.R. Simplot Company, the Community Action Partnership of Idaho and Timothy Shurtz, a Firth resident.


One party in the case, Monsanto, did not sign the proposed settlement.


Monsanto represents about 40 percent of PacifiCorp’s Idaho load and about 25 percent of the company’s Idaho revenues. If PacifiCorp’s cost to serve Monsanto had been updated in a manner consistent with the company’s cost of service study, about $11 million of PacifiCorp’s requested $15.1 million rate increase would have been attributable to Monsanto. However, because Monsanto is a contract customer and its contract does not expire until Dec. 31, 2006, PacifiCorp proposed to allocate those costs to other customers. Commission staff and other parties to the case opposed that proposal.


Monsanto objected to commission staff’s proposal that it be subject to a “tariff standard,” rather than the current “contract standard.” The tariff standard would allow for contract rates to be increased whenever other customer classes receive a base rate increase.


The commission removed the paragraph of the settlement that would subject contract customers to a tariff standard. The commission did so because the company intends to file a rate case by no later than April 29, 2006 and a new contract with Monsanto will need negotiated, also next year. “The commission therefore finds that the contract/tariff standard issue is not an issue that needs to be resolved or addressed by this commission in the context of this rate case,” and will be addressed during the 2006 case, the commission said. The commission’s removal of the paragraph should not be interpreted as a determination on the merits of the underlying issue, the commission said. However, removal of the disputed paragraph lessens the chances of an appeal that would further draw out the case, the commission said.


The proposed settlement also requires commission staff and PacifiCorp to initiate discussions within 30 days to explore alternative rate recovery mechanisms similar to the power cost adjustment (PCA) process other utilities have. PacifiCorp also agrees to meet with the Idaho Irrigation Pumpers Association and other interested parties regarding how credits awarded irrigation customers who participate a load control program are calculated. Parties have until Sept. 30 to propose a solution.


Finally, the proposed settlement requires PacifiCorp to file revisions to its Low Income Weatherization Program tariff that will increase customer participation and incentives for installation of additional cost-effective weatherization measures. The tariff changes will result in an increase to the amount area Community Action agencies can award in incentives from the current $100,000 annually to $150,000. The company will also propose to increase the rebate on weatherization service available for homes with installed electric heat from the current maximum of $1,000 per dwelling to an average annual rebate of $1,500 per dwelling.


A full text of the commission’s order, along with other documents related to this case, are available on the commission’s Web site at Click on “File Room” and then on “Electric Cases” and scroll down to Case No. PAC-E-05-1.