Settlement Reached in Idaho Power Annual Power Cost Case
Posted on June 23, 2021 by Mike Goetz
Tags, Energy
On May 27, 2021, the Oregon Public Utility Commission (PUC) adopted a stipulation between CUB, PUC Staff, and Idaho Power Company that settled all issues raised in the company’s annual variable power cost filing. While the stipulation resulted in an increase to Idaho Power’s Oregon rates of $2.36 million or 4.37 percent, CUB was able to secure several significant victories for the company’s residential customers. The rate increase coming out of this year’s filing was largely due to lower-than-expected output at Idaho Power’s hydroelectric facilities, which caused them to have to purchase additional natural gas to run their gas-powered electricity plants.
In this annual proceeding, Idaho Power — like all investor-owned electric utilities that serve customers in Oregon — forecasts its variable power costs for the following year. This process has been previously detailed on the CUB blog. These variable costs include the fuel necessary to run power plants, energy purchased and sold on the open market, and costs incurred to transport energy along interstate transmission lines. Because the forecast usually ends up going directly into customers’ rates, CUB and other parties scrutinize these filings to ensure that the forecast is as accurate as possible.
In this proceeding, CUB took a hard look at the company’s forecast to ensure it was accurate and that customers were therefore only paying for costs that are reasonable to include in rates. For example, CUB raised questions about the method Idaho Power uses to forecast the expected output at its hydroelectric facilities. Since such a large portion of Idaho Power’s electricity comes from hydro, this portion of the total power cost forecast can have a significant effect on other portions. Idaho Power eventually agreed to hold a workshop later this year to dive deeper into its hydroelectric modeling.
In our testimony, CUB examined the benefits Idaho Power claims from participating in the California Independent System Operator’s Energy Imbalance Market (EIM). This sophisticated trading market allows utilities to gain benefits from, for example, selling excess renewable energy into the market that would otherwise be shut off due to lack of demand. CUB argued that Idaho Power was improperly including costs from third-party load in its service territory in its calculation of EIM benefits. As a result, Idaho Power agreed to remove this from its calculation, which increased the level of benefits that flow to customers.
Although this proceeding results in a modest increase to rates in Idaho Power’s Oregon service territory (which went into effect on June 1, 2021), it would have undoubtedly been higher were it not for CUB’s advocacy. In these complicated filings, it is important for residential customers to have a voice to ensure utilities are not passing on improper costs and that their forecasts are reasonable. CUB is proud to take on that role and will continue to zealously advocate for Oregon customers in a wide variety of settings.
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06/23/21 | 0 Comments | Settlement Reached in Idaho Power Annual Power Cost Case