Due to more accurate power supply forecasting, Idaho Power Co. has reduced residential customers' power rates for the remainder of 2010. However, most of that reduction may be eliminated by rate increases the company is requesting from the Idaho Public Utilities Commission to cover other costs.
The typical Idaho residence, using 1,050 kilowatt hours of electricity a month, will see its Idaho Power energy bill decrease by $2.45 during each summer month and $3.25 during the rest of 2010.
The 3.22 percent price cut is an annual adjustment of rates, and will result in a total saving of $58 million. Power-supply costs change from year to year, usually increasing, and the rate adjustment is done annually so that Idaho Power's costs of supplying electricity are met. A dry year means Idaho Power can't rely as much on cheap hydroelectric power and must use more expensive resources, and hydroelectric conditions have been below average for 10 of the past 11 years.
The reason customers are getting a break this year isn't that power-supply costs are projected to be lower; in fact, they're expected to be higher. Rather, costs forecast for this year were more accurate than previous ones due to a new methodology, and rates don't need to be padded to ensure that Idaho Power can meet its costs.
But residential customers won't actually see their rates drop as much as the new methodology allows if Idaho Power receives approval for rate increases to cover its fixed costs, the installation of new "smart meters" and pension plans.
If the Idaho Public Utilities Commission approves the increases, customers would still see a decrease in their bills. But instead of receiving a 3.22 percent decrease, customers would be paying 1.4 percent less. That means the average residential customer would see a 86-cent decrease during summer months and $1.72 decrease during the rest of 2010.
Trevon Milliard: tmilliard@mtexpress.com