Case No. PAC-E-07-05, Order No. 30356

June 29, 2007

Contact: Gene Fadness (208) 334-0339, 890-2712



Commission to examine Rocky Mountain rate request


The Idaho Public Utilities Commission has begun consideration of a proposal by Rocky Mountain Power to increase rates an average 10.3 percent for its 67,000 customers in eastern Idaho. The average proposed increase for residential and irrigation customers is 6.7 percent. For a residential customer who uses about 1,000 kWh a month, the monthly increase would be about $5.56, according to the company’s figures.


The commission set a July 18 deadline for parties who want to intervene in the case to present evidence, cross examine witnesses and participate in settlement or negotiation conferences. Members of the general public may present comments without having to petition for intervention. Dates of future public workshops and/or hearings will be announced later.


Rocky Mountain, a division of PacifiCorp and formerly Utah Power & Light, is seeking an effective date of Jan. 1, 2008. The commission’s staff of auditors, engineers and attorneys now begins an extensive process of auditing the company’s books and examining the application. The commission has the authority to accept, deny or modify the company’s proposal. State statute requires that regulated electric utilities be allowed to recover all prudently incurred expenses in addition to a rate of return that is reasonable for ratepayers, but enough for the company to attract capital investment in new transmission, distribution and generation. The company is seeking a rate of return of 10.75 percent. It is currently earning an ROE of 5.3 percent, which the company maintains is not enough to attract the capital investment needed to maintain its utility infrastructure.


Rocky Mountain claims it must collect $18.5 million more in annual revenue to meet cost increases for fuel, wholesale market power, new generation, transmission and distribution plant investment and for labor-related cost increases. The company claims it actually needs about $22 million more in annual revenue but is capped from an annual revenue requirement increase of no more than 1.67 percent through March 31, 2009, as the result of a rate mitigation agreement involving all the states in PacifiCorp’s six-state territory.


The size of the proposed increase varies for customer class. In addition to the 6.7 percent proposed for residential and irrigation customers, the company proposes a 24.1 percent increase for its large contract customer, Monsanto Corporation, and 14.5 percent increase for Nu-West (Agrium). Both are based in Soda Springs, with Monsanto as PacifiCorp’s largest customer in its six-state territory. Rates for public street lighting are proposed to increase by 20.7 percent. There is no increase proposed for commercial customers. Rates to serve customer classes are based primarily upon the cost to serve each class.


The company’s application, testimony and workpapers are available on the commission’s Web site at Click on the electric icon, then on “Open Electric Cases” and scroll down to Case No. PAC-E-07-05. Copies are also available for viewing at the company’s offices on 200 N. 170 West, Rexburg; 509 S. 200 East, Preston; 852 E. 1400 North, Shelley; 24852 U.S. Highway 89, Montpelier and at commission headquarters, 472 W. Washington St. Boise.