If approved, today’s filing means a rate increase of $93.8 million for the company’s Idaho customers, or 11.40 percent overall. For the typical residential customer using 1,050 kilowatt-hours of electricity each month, the monthly increase will be approximately $7.20. The actual percentage of change varies by customer group based upon the rate they pay for electricity.
A number of factors contribute to this year’s PCA and the resulting increase, said Idaho Power General Manager of Power Supply Operations and Planning Karl Bokenkamp. One factor is the significant increase in last year’s actual energy costs compared to those forecast. We also forecast higher than normal energy costs for the coming year due to expected below-normal stream flows impacting hydroelectric generation. This impact reduces off-system sales benefits, increases power purchases and results in higher fuel costs to produce electricity with our system’s thermal resources.
The company actively manages its system operations to help lower power supply costs without jeopardizing its system reliability, service quality or obligation to serve.
Customers benefit from our system’s surplus energy sales to the wholesale market, added Bokenkamp. Off-system sales revenues are deducted from our power supply costs and reduce the rates our customers pay. However, this coming year, our ability to sell and the revenue generated are projected to be significantly less than the normal benefit derived from these off-system sales.
In years when water is plentiful Idaho Power more fully utilizes its 17-dam hydroelectric system, resulting in lower power production costs and associated benefits passed on to customers. When hydroelectric generating conditions are below average as they have been for nine of the past 10 years, Idaho Power must use more expensive resources to meet customers’ need for electricity. The company expects to generate between 6.5 and 8.5 million megawatt-hours (MWh) from its hydroelectric generation resources this year compared to 6.2 and 6.9 million in 2007 and 2008 respectively. The anticipated range for 2009 is below the median annual hydrological generation of 8.5 million MWh.
Although below-normal hydro generation is anticipated for 2009, recent weather conditions may provide customer benefits through reduced power supply expenses, said Idaho Power’s Vice President of Regulatory Affairs Ric Gale. The Commission will review the company’s application and determine whether any additional changes should be reflected in rates at this time.