Idaho Power Asks for 27% Increase for Oregon Customers

Posted on February 22, 2024 by Charlotte Shuff
Tags, Energy, General Interest

This year, Idaho Power is trying to raise rates for the first time in over a decade. The electric utility is asking regulators to approve an increase of nearly 27%. Customers in Eastern Oregon could see an increase of $30 per month for average households. Idaho Power serves customers around the Ontario region and throughout much of Malheur County.

An increase of this size could be incredibly damaging for customers. Eastern Oregon is already one of the most energy-burdened areas in the state. In a region where many people are struggling to afford electricity, an additional $30 per month could cause massive issues for families’ budgets. This increase could be even higher during months when heating or air conditioning is turned on. CUB is concerned about an increase of this size leading to a rise in disconnections.

We will be digging into Idaho Power’s request over the coming weeks and months. CUB will push back on unreasonable requests. In March, customers will have an opportunity to speak out.

What’s in the Proposed Increase?

Idaho Power is asking for Oregon customers to pay more for investments over the last decade. Since this is the first rate increase request since 2011, the investments have added up significantly. Since then, Idaho Power has invested $3.3 billion in its system. Now, the utility is trying to add $10.7 million of that to Oregon households’ bills.

While this is not a complete list, the utility is asking for more money for the following areas:

Wildfire management (tree trimming, vegetation removal)
Growing its system (more customers, more energy needed)
General inflation (more expensive materials)
Shareholder profits

Idaho Power is also asking to increase profit margins to benefit its shareholders.

Investments

Wildfire Management
Utilities in Oregon are required by state law to have wildfire mitigation plans. Idaho Power’s investments in managing wildfire risk have gone up significantly in recent years. Vegetation management (tree trimming, etc.) alone has increased to $25 million per year.

Growing the Energy System
Idaho Power’s system has grown by more than 100,000 customers. This means it has needed to procure more energy to meet customers’ needs. The utility has also worked to improve infrastructure for better reliability, such as investing in battery projects. Most of that growth comes from Idaho. Only 500 new customers have been added in Oregon.

General Inflation
Overall costs have gone up significantly, making the cost of providing energy more expensive. For example, the price of the steel that goes into much of the infrastructure has gone up 203% since 2020 alone.

More Profits

Idaho Power is attempting to increase its profits from Oregon customers. Regulators at the Oregon Public Utility Commission set how much profit utilities are allowed to make. Idaho Power is asking to increase profit margins from 9.9% to 10.4%. In comparison, Oregon’s other for-profit utilities are currently allowed 9.4-9.5% returns.

Oregon Customers are Being Treated Unfairly

While Idaho Power serves a portion of Eastern Oregon, only about 2% of its customers are in Oregon. The vast majority of its customers are in Idaho. Last year, the utility asked Idaho regulators for more money from Idaho customers. The company didn’t get everything it wanted in Idaho, so CUB suspects it is now trying to make that up in Oregon.

A Pattern of Asking for Too Much

In Idaho, last year the utility asked regulators for a 10.8% increase. They were only given a 4.29% increase for Idaho customers. Now, they’re turning to Oregon to make up the difference. Although it has been over a decade since Idaho Power asked Oregon customers to pay for increased expenses, a nearly 27% increase is far too much.

More Profits: In Idaho, regulators approved a 9.4% profit allowance at the end of 2023. This is in line with what other utilities in Oregon are allowed. Idaho Power is now seeking a 10.4% profit margin in Oregon. Not only would this be a major difference in what is allowed in Idaho, but it would also be vastly different than other Oregon utilities.

Creating a Gulf Across a River

Idaho Power’s territory in Oregon centers around Ontario, just a river away from the rest of its customers in Idaho. As of this year, a typical Idaho customer is paying $111.69. With the Oregon increase, customers using the same amount in Oregon would pay $123.27.

Oregon households on Idaho Power’s system use more energy on average, so the actual average is higher for Oregon homes. If this request is approved in Oregon, a typical customer in our state could be paying $135.95.

Growing the Energy System: Most of the additional expenses come from the growth in Idaho. Oregon customers should not be paying more for system upgrades that largely benefit Idaho customers. Because Idaho Power didn’t get the money it wanted in Idaho, it’s trying again in Oregon.

Regulators Must Protect Customers

People in Eastern Oregon make less money and spend more of their income on electricity than in other parts of the state. Adding $30 a month all at once could be catastrophic for many people’s budgets. These increases would go into effect overnight, right before the winter heating season.

Regulators need to protect customers who are already struggling to make ends meet.

Spread the Increase Over Multiple Years

Idaho Power waited 10 years to ask customers to pay for system investments. They cannot expect customers to start making up for a decade of the company’s delay overnight.

Spreading the increase over multiple years would help customers stabilize. This could also prevent a wave of disconnections as people are slammed with significantly higher bills. A slower rollout will also help assistance programs create a plan to better meet the needs of people who cannot afford the increase.

Roll Out Low-Income Discount Programs

In 2021, the Oregon State Legislature passed the Energy Affordability Act. As a result, regulators have been working with for-profit utilities to create discount programs for low-income customers. Because Idaho Power is smaller and made up of lower-income customers than other utilities, it has been given more time.

After completing a low-income customer needs assessment last summer, Idaho Power filed a proposed low-income discount program. Now, we need them to make this program a reality for customers. This program would offer monthly discounts for all income-qualified customers who enroll. Other utilities have 15-75% savings.

We need advocates to be able to be involved and for the process to be public and transparent.

Creating these programs requires a large amount of input from community stakeholders. Idaho Power has conducted several workshops to inform its program design. Unlike the other utilities, there has not been an opportunity for CUB and community members to engage more formally in reviewing this proposal.

This year, Idaho Power is asking that its proposed program be reviewed in its request for a rate increase. CUB and environmental justice advocates are concerned that this process could cut out community input on the program design. By putting this review in an already complicated proceeding, it is harder for a variety of voices to weigh in.

Limit Allowable Profits

Regulators set the allowable profit margins for Idaho Power. This means they can also lower the amount of profits. If Idaho Power is not able to be frugal with customers’ money, regulators can cut profit margins to lower rates. This would also encourage utilities to keep costs in check while saving customers money.

Reduce the Demand for Growth with Energy Efficiency

CUB is concerned that Idaho Power isn’t investing enough in efforts to reduce energy use on its system. By lowering demand for energy, the utility can also lower costs for customers. Energy efficiency helps to avoid expensive investments like new power plants.

Customers and Advocates Can Join the Process

While CUB is hard at work digging into Idaho Power’s request, we cannot do this alone. This March, customers and advocates will have the opportunity to share their stories with regulators. Regulators must hear how an increase this large would impact real people.

Public Hearings

There will be two public hearings:
6 pm (MT) - March 14: Virtual via Zoom
6 pm (MT) - March 20: In person in Ontario

At these hearings, regulators at the Public Utility Commission will hold space for community members to weigh in. For more information on what to expect at these hearings, check out CUB’s blog: Speaking Up on Utility Issues: Public Comment Hearings

If you are interested in receiving updates and more information like testimony guides, you can sign up with CUB.

Written Comments

Whether or not you can make the public hearings, written comments can also go a long way. The Public Utility Commission is accepting public comments via email, phone, or mail now through April 14.

By email – .(JavaScript must be enabled to view this email address)
By Mail - Oregon Public Utility Commission, Attn: Public Comment, PO Box 1088, Salem OR 97308-1088
By Phone - at 503-378-6600 or 800-522-2404 or TTY 800-648-3458 on weekdays from 8 a.m. - 5 p.m.

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