Idaho Power Proposes Rate Decrease in Annual Power Cost Adjustment

BOISE, Idaho — Idaho Power has filed its annual Power Cost Adjustment (PCA) with the Idaho Public Utilities Commission (IPUC). The PCA is a cost recovery tool that passes on both the benefits and costs of supplying energy to Idaho Power customers.

If the PCA proposal is approved by the IPUC as filed, the typical Idaho residential customer using 950 kilowatt-hours (kWh) of energy per month will see a $1.29 decrease on their monthly bill, beginning June 1.

The amount all Idaho customer classes pay for electric service will decrease by $22.6 million; the actual percentage of change will depend on a customer’s class and the rate they pay.

2018 PCA REVENUE IMPACT BY CLASS
Residential Small General Service Large General Service 1 Large Power 2 Irrigation Overall Change
Percentage Change from Current Billed Revenue -1.29% -0.80% -2.20% -3.27% -1.91% -1.90%

1 Includes lighting schedules; 2 Includes special contracts

The PCA has two main components: the forecast and the true-up. The forecast reflects Idaho Power’s anticipated fuel costs, purchased power costs and customer benefits from sales of surplus energy for the coming April through March. The true-up brings last year’s forecasted costs in balance with costs actually incurred by the company by looking back at what happened the previous April through March. Prices are established based on the forecast and the true-up to align actual collection with actual costs.

There are a few main factors contributing to this year’s PCA decrease:
Last year’s actual power supply costs were less than anticipated, primarily due to better-than-expected water conditions, which resulted in Idaho Power having more low-cost hydro generation available to serve customers. This cost reduction is reflected in the true-up portion and is partially offset by an increase in the forecast component of the PCA, as well as the elimination of a one-time refund of energy efficiency rider funds provided through last year’s PCA. For the 2018 PCA, the combined impact of change in each of the PCA components results in a $22.6 million decrease in the amount all Idaho customer classes pay for electric service.

Neither Idaho Power nor its shareholders receive any financial return on this filing — money collected from the surcharge can be used only to pay power supply expenses. These typically represent approximately one-fourth to one-third of the company’s annual cost of serving customers.

Idaho Power has proposed three rate decreases this spring — the PCA, the annual Fixed Cost Adjustment (FCA) and direct rate reductions resulting from tax reform. If all three are approved by the IPUC as filed, residential customers will see a total price decrease of 7.04 percent effective June 1, 2018. Other customer classes are impacted as follows:

COMBINED IMPACT OF 2018 RATE FILINGS
Percentage Change from Current Billed Revenue
Residential Small General Service Large General Service 1 Large Power 2 Irrigation
Fixed Cost Adjustment (FCA) -3.60% -3.73% N/A N/A N/A
Power Cost Adjustment (PCA) -1.29% -0.80% -2.20% -3.27% -1.91%
Tax Reform -2.15% -2.10% -2.29% -2.25% -2.33%
Combined Impact 3 -7.04% -6.63% -4.48% -5.52% -4.25%

1 Includes lighting schedules; 2 Includes special contracts; 3 Totals may not add up exactly due to rounding

Opportunities for Public Review
Idaho Power’s filing is a proposal that is subject to public review and approval by the IPUC. Copies of the application are available to the public at the IPUC offices (472 W. Washington St., Boise, Idaho, 83702), Idaho Power offices or on Idaho Power’s website, idahopower.com, or the IPUC website, puc.idaho.gov. Customers also may subscribe to the IPUC’s RSS feed to receive periodic updates via email about the case. Written comments regarding Idaho Power’s application may be filed with the IPUC.

About Idaho Power
Idaho Power, headquartered in Boise, Idaho, and locally operated since 1916, is an electric utility that employs approximately 2,000 people who serve roughly 545,000 customers throughout a 24,000-square-mile area in southern Idaho and eastern Oregon. With 17 low-cost hydroelectric projects as the core of its diverse generation portfolio, Idaho Power’s residential, business and agricultural customers pay among the nation’s lowest rates for electricity. IDACORP Inc. (NYSE: IDA), Idaho Power’s independent publicly traded parent company, is also headquartered in Boise, Idaho. To learn more, visit idahopower.com or idacorpinc.com.

Jordan Rodriguez
Communications Specialist
jrodriguez@idahopower.com
208-388-2460