1. What does Idaho Power’s filing request?
2. What are “base rates?”
3. Why are you requesting to raise rates now?
4. What are the proposed increases for each customer group?
5. When will customers actually begin paying more?
6. How do Idaho Power’s rates compare to other utilities?
7. Is Oregon paying for growth in Idaho?
8. Where can customers review a copy of the filing?
9. How do customers share their opinions on the filing?
10. What are you doing to help your customers in this tough economy?

1. What does Idaho Power’s filing request?

On July 31, 2009, our company filed with the Public Utility Commission of Oregon (OPUC) a request to increase the base rates it charges Oregon customers. This is the first such base rate request in approximately five years. If the company’s request is approved, Idaho Power’s revenues to recover costs for electric service in Oregon will increase by approximately $7.3 million per year or an average of 22.6 percent.

2. What are “base rates?”

Base rates are the portion of rates that pay for Idaho Power’s actual cost of conducting business, such as operating and maintenance expenses and capital investments.

3. Why are you requesting to raise rates now?

This rate change will address a long-term, substantial imbalance between the cost of providing service in Oregon and Idaho Power’s ability to recover those costs under current rates. We understand challenging economic conditions make the timing of this particular rate request difficult. Our customers in Idaho experienced a number of base rate increases totaling 21.5 percent over the past five years while the base rates of our Oregon customers remained unchanged.

Under regulation, Idaho Power invests up front to serve customers and recovers the cost of the investment, along with a fair return, later. During the last five years, we invested approximately $800 million in infrastructure, ensuring reliable power on-demand as we serve our communities.

We also need to pay our expenses as they occur. Two major expenses for the company are fuel costs and the cost of power we buy on the open market to serve customers. These costs are so high that the company spent three of the last five years working with the OPUC to create a mechanism that allows for annual rate updates to reflect current fuel and purchased power costs. During that same time, the company did not update its base rates to reflect other increases in expenses and investment. After years of growing demand on our system, we are in the position of trying to catch up while building for the future.

Similar to businesses across the nation, we have taken numerous steps to eliminate and lower costs without jeopardizing our system reliability, service quality and commitment to serve. Although helpful, our cost-cutting measures do not eliminate the need to raise rates to recover expenses.

4. What are the proposed increases for each customer group?

Idaho Power provides reliable, responsible, fair-priced energy service to 19,303 customers in all Oregon rate classes. Our largest Oregon customer group is Residential (13,415). The following is a summary of proposed changes to Oregon rates:

Residential (Schedule 1)

• A new rate design that divides customer’s monthly energy use into two tiers based on how many kilowatt-hours of energy the household uses: 0-800 kilowatt-hours and 800+ kWh.
• Proposed rates vary by summer and non-summer. The summer season is June, July and August and the non-summer season is September through May. Summer rates reflect the higher costs of electricity during these high-demand months.
• A proposed overall average increase for residential customers of 37.34 percent. This would increase today’s average residential customer’s bill, using 1,230 kWh a month, from $75.47 to $110.38 during the summer and to $97.12 during the rest of the year.

Small General Service (Schedule 7)

• A two tier rate design year-round. The proposed rate for the first 300 kWh of monthly usage during the summer and non-summer months is the same.
• A proposed overall increase of 41.16 percent.

Large General Service (Secondary) (Schedule 9)

• No change in the basic rate structure.
• A proposed overall increase of 9.80 percent.

Large General Service (Primary and Transmission) (Schedule 9)

• The implementation of seasonal time-of-use rates.
• A proposed overall increase of 22.19 percent.

Industrial Service (Schedule 19)

• A proposed overall increase of 8.75 percent for Secondary and Primary Service level customers.
• No increase for Transmission Service level customers.

Agricultural Irrigation Service (Schedule 24)

• Implementation of seasonal load-factor pricing during in-season months (June , July, August and September) which encourages irrigators to operate their systems more efficiently during the irrigation season.
• The proposed in-season energy rate is one rate for the first 164 kWh used per kW and a lower rate for all other kWhs used during a billing month.
• Elimination of the out-of-season demand charge.
• A proposed overall increase of 44.69 percent.

5. When will customers actually begin paying more?

The OPUC has up to 10 months to consider Idaho Power’s request for the proposed rate change.

6. How do Idaho Power’s rates compare to other utilities?

Idaho Power’s customer rates are among the lowest in the country, according to a semi-annual survey by the Edison Electric Institute (EEI) of investor-owned utilities across the nation. The survey is conducted in January and July each year (with data reported in approximately May and November), and looks at rates paid by all customer groups, including residential, commercial and industrial customers.

According to survey results using January 1, 2009 data, for a residential customer using 1,000 kWh a month in Oregon, Idaho Power ranked second lowest in the nation and was the lowest among the investor owned utilities in the Pacific Northwest.

The survey shows Idaho Power residential customers in Oregon pay $61.10 for 1,000 kWh of electricity. According to the survey, that same amount of power costs residential consumers in Boise $70.73; Salt Lake City, Utah, $81.49; $102.69 in Portland, Ore; and $98.82 in Missoula, MT.

Idaho Power’s rates are based upon historically low production costs from a finite set of 17 hydroelectric generation facilities and two natural gas-fired plants we own and operate, as well as shared ownership in three coal plants. We face the same high marginal costs as other utilities to serve new loads in the future and meet our commitment to provide reliable, responsible, fair-priced energy services, today and tomorrow.

7. Is Oregon paying for growth in Idaho?

Customer demand on our system comes from all parts of our service area. From 2003 to 2008, exclusive of depreciation, Idaho Power’s electric plant investment increased approximately $800 million. We also experienced escalating costs associated with providing service since the last Oregon rate change in 2005. Oregon is growing as well as Idaho, and all customers in our service area benefit from system improvements.

8. Where can customers review a copy of the filing?

Copies of the filing are available on Idaho Power’s Web site at www.idahopower.com/oregonratefiling, and also will be posted on the OPUC Web site, www.puc.state.or.us. In addition, Idaho Power’s testimony and exhibits are available for customer review at the company’s Payette Operations Center, 1550 S. Main St., Payette, ID, and at its corporate headquarters at 1221 W. Idaho St., Boise, ID.

9. How do customers share their opinions on the filing?

OPUC will begin a comprehensive review of the company’s application and will seek public input on the filing. The public involvement process includes public meetings and other ways for customers to share their opinions on the rate case. Idaho Power supports this process, values customer input and encourages participation.

10. What are you doing to help your customers in this tough economy?

Idaho Power is committed to helping all customers through a variety of ongoing energy assistance initiatives. The most important is helping consumers use energy efficiently and take advantage of programs that can help cut costs by reducing consumption. Go to www.idahopower.com/energyefficiency for information on programs and tools to help make wise energy choices and save energy and money for your home or business.

In addition, Idaho Power has a number of energy assistance programs to help customers:

• In our Project Share program, Idaho Power teams up with The Salvation Army year round to help those who cannot pay energy bills due to illness, disability, age, or unemployment. We provide several Winter Pay programs as well as work with the local and state agencies that provide assistance to lower income residents.
• Through its Weatherization Assistance Program, Idaho Power provides financial assistance to Idaho and Oregon Community Action Partnership (CAP) agencies to help cover the cost for weatherization of electrically heated homes of qualified customers.
• We have a Winter Protection Program, in which customers who are having difficulty paying their winter utility bills, and have children or someone who is elderly or ill in their household, are protected from having their electric service disconnected for non-payment of electric bills during the months of December through February. Also through this program, customers can arrange a Winter Payment Plan to protect themselves from disconnection November through March when they make agreed-upon monthly payments that are less than their monthly bill for electricity use.
• Information on these programs, as well as our other energy assistance programs, is available on our Web site at http://www.idahopower.com/ServiceBilling/Programs/energyAssist.cfm.