Website: www.puc.idaho.gov
Ninth Circuit decision temporarily suspends BPA credit
Responding
to a recent federal court decision, state regulators today approved an
application by Rocky Mountain Power to eliminate a credit its residential
customers receive effective June 1 and to its irrigation customers on or about
July 12.
A
panel of three judges on the Ninth Circuit Court of Appeals recently declared
that the Bonneville Power Administration did not act in accordance with the law
when it negotiated a settlement regarding the distribution of wholesale power
and credits to electric utilities and customers in the Northwest. Because of
the court’s decision, BPA suspended the credit to customers of investor-owned
utilities in four Northwest states.
For
Rocky Mountain Power’s southeastern Idaho residential customers, the result is
a 28 percent increase for the average customer who uses 1,000 kWh per month.
For irrigation customers, average bills will increase 51 percent on or after
July 12.
The
Idaho Public Utilities Commission said it recognized that suspension of the
benefit “will result in an immediate and substantial increase in residential
and small-farm irrigation customers’ electric bills. However, we also
acknowledge that this credit is a direct pass-through by the utilities of a
federal benefit, and the actions of the federal court and federal agency with
authority over such benefits are what require our actions in eliminating the
billing credit.”
The
Idaho Public Utilities Commission has joined commissions in Oregon, Washington
and Montana asking the Ninth Circuit for a re-hearing on the issue. Re-hearings
are granted in cases of “exceptional importance.” The commissioners said this
case easily meets that standard. “Indeed, it is difficult to imagine decisions
that would have more direct impact on such a large number of people,” the commissioners
said.
BPA
is joining with the state commissions in seeking re-hearing. “We believe the
court’s decision on the settlements are in error,” said Mark Gendron, BPA vice
president of requirements marketing. “We are exploring all potential viable
avenues for rehearing, including by the full court, if possible.”
The
Idaho commission said the Ninth Circuit’s decision comes at an already
difficult time for Rocky Mountain Power’s Idaho customers. “Dry conditions are
negatively impacting electric bills throughout Idaho. Farmers who have already
completed their business plans for the year and planted crops face higher fuel
and fertilizer costs. The court’s decision exacerbates this problem many times
over,” the commission said. “Customers have our assurance we will do all we can
to reverse or mitigate the impact of this decision.”
The
Northwest Power Act of 1980 requires that residential and small-farm customers
in the Northwest share in the benefits of the region’s federal hydroelectric
projects. Customers of public utility districts, such as rural co-ops and
municipalities, typically benefit from the federal hydroelectric system with
preferential access to low-cost federal power provided by BPA. Customers of the
region’s investor-owned utilities, such as Rocky Mountain Power and Idaho
Power, receive their share of the benefit through a Residential Exchange
Program (REP) that results in financial credits on the electric bills of
residential and small-farm customers.
The
amount of the credit is determined by formulas using various factors, including
a utility’s average system cost for producing power. In 2000, BPA offered the
region’s investor-owned utilities the option of entering into a settlement in
lieu of a more traditional REP calculation. Several public utility districts
challenged the settlement, alleging BPA had overstepped its authority under the
Northwest Power Act and that the result was too small a benefit to publicly
owned utilities and too large a benefit to customers of investor-owned
utilities. The court ruled in favor of the public utility districts,
eliminating the REP for the first time in nearly 30 years until a new
settlement can be reached.
To
soften the blow for irrigation customers, Rocky Mountain Power proposed an
immediate end to the residential credit and to use the remaining amount in the
REP fund balance to carry irrigators through until the balance is zeroed out,
which the company says will happen July 12. The company maintained that
residential credits have received a benefit this year through the winter
heating season, but irrigators have not received any benefit yet with the
irrigation season just under way.
The
Idaho Irrigation Pumpers Association polled its members who said they favor
distributing the remaining credits in the balancing account at pre-termination
levels rather than reducing the credit to make it last longer.