Idaho Power has revealed that collaborative negotiations between Idaho Power, its customer groups, and the staff of the Idaho Public Utilities Commission (IPUC) have been reached.
An agreement was reached on rate issues and it now requires approval by the IPUC. If approved, the agreement is expected to enable Idaho Power to avoid the anticipated filing of its 2010 general rate case indicated in the company’s August Notice of Intent filed with IPUC.
A formal settlement stipulation on this agreement was signed by the parties and filed with Idaho Power’s supporting testimony with IPUC on November 6. Besides the general rate moratorium, the settlement provides for sharing an expected 2010 Power Cost Adjustment (PCA) cost reduction between the customers and the company. The settlement also includes a provision to share earnings with customers if the company earns more than its authorized rate of return in any year through 2011.
Ric Gale, vice president of regulatory affairs at Idaho Power, said: “This is truly a win-win-win situation for our customers, our owners and for our company. The settlement is a creative and resourceful response to a complex set of issues. We appreciate the engagement and customer-focused advocacy of the IPUC Staff and customer groups throughout the process. The outcome is a testament to what can be accomplished when people come together and work collectively to find solutions.”
In general terms, the settlement contains three elements: a general rate freeze until January 1, 2012; a specified distribution of the expected 2010 PCA decrease to directly reduce customer rates, providing some general rate relief to the company and resetting base level power supply costs for the PCA going forward; and an equal sharing of any Idaho earnings exceeding the authorized level.
The PCA is an annual filing that balances last year’s forecasted costs of providing energy to customers to actual expenses, including anticipated fuel costs for generating electricity, power purchases and benefits of off-system sales for the coming year. During negotiations, Idaho Power estimated the expected 2010 PCA decrease to be approximately $160m. The 2010 PCA is planned to be filed April 15 with an effective date of June 1.
The next step in this process is public comment on and consideration of the settlement stipulation by IPUC. The parties hope for a commission order in late December or early January 2010.