Tax Reform to Reduce Rates for Idaho Power Customers

BOISE, Idaho — Idaho Power has filed a settlement agreement with the Idaho Public Utilities Commission (IPUC) that, if approved, will result in reduced rates for customers within the company’s Idaho service area in 2018 stemming from recent federal and Idaho state tax rate changes.

According to an agreement between Idaho Power, IPUC Staff and the Industrial Customers of Idaho Power, customers will see a total benefit associated with reduced tax expense of $33.9 million, provided through: 1) a base rate reduction of approximately $18.7 million, 2) an additional $7.8 million decrease that will be provided through the 2018 Power Cost Adjustment mechanism, and 3) a non-cash annual benefit of $7.4 million in the form of an offset to other deferred costs.

If the 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 monthly bill decrease of $2.15, beginning June 1.

2018 TAX REFORM REVENUE IMPACT BY CLASS
Residential Small General Service Large General Service 1 Large Power 2 Irrigation Overall Change
Percentage Change from Current Billed Revenue -2.15% -2.10% -2.29% -2.25% -2.33% -2.22%

1 Includes lighting schedules; 2 Includes special contracts

The cash-related direct rate reductions result in a customer benefit of about $26.5 million beginning in June of 2018. The new tax rates also required an adjustment to deferred tax expense, reducing amounts customers will owe in the future. Non-cash tax benefits of approximately $7.4 million will accumulate to serve as an offset to other current or future deferred expenses, reducing future amounts that would otherwise be owed by customers.

In addition to rate reductions resulting from tax reform, Idaho Power and parties have agreed to extend the revenue sharing program beyond 2019. The current program, in place since 2009, allows the company to use its accumulated investment tax credits to shore up its rate of return or share revenue with customers when that return exceeds certain levels.

Idaho Power has proposed three rate decreases this spring related to the following issues — tax reform benefits, the annual Power Cost Adjustment (PCA) and the annual Fixed Cost Adjustment (FCA). If all three proposals 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