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For the week of May 2 through May 8, 2001

IP customers face 23 percent increase

Sun Valley Co. braces for 42 percent increase

Express Staff Writer

Idaho Power’s residential customers face an average 23 percent increase on their electricity bills.

In a 30-page decision released Tuesday, the Idaho Public Utilities Commission (IPUC) awarded Idaho Power recovery of $168.3 million in losses incurred over the preceding 10 months. The IPUC granted the power provider about 74 percent of the energy surcharge it requested.

Rate increases went into effect Tuesday.

Idaho Power had requested recovery of a total of $227.4 million.

The IPUC deferred approximately $59 million of the company’s request until it can further investigation of Idaho Power’s trading practices. It vowed to "proceed expeditiously" in its investigations, including the activities of Idaho Energy Systems, the company’s non-regulated trading arm.

"The question exists," said Commissioner Dennis Hansen, "whether trading and pricing methodology that had been used for the regulated side of Idaho Power has been properly approved and until we’re sure, I was reluctant to grant the increase of the disputed amount."

Commissioner Marsha Smith said, "further review of the amount in dispute in this case is necessary and should be done with intense scrutiny."

Under the commission’s order, the average residential customer using 1,200 kilowatt hours per month will see a monthly increase from $62.72 to $74.29, or 18.4 percent. Under Idaho Power’s proposal, that average monthly power bill would have been $84.34.

Residential rate increases will be spread over three categories, which vary depending on the amount of electricity used.

The average residential increase boils down to 23 percent.

For residential monthly use of up to 800 kilowatt hours, the increase will be 14.4 percent.

For residential monthly use between 801 and 2000 kilowatt hours, the increase will be 28.8 percent.

For residential monthly use over 2001 kilowatt hours, the increase will be 62 percent.

The commission determined that rates for non-residential customers should be uniformly increased by 1.3415 cents per kilowatt hour over base rates. That translates to 31.3 percent for irrigators, 18.8 percent for small commercial users, 32.9 percent for large commercial users and 42.1 percent for industrial users.

The industrial use increase could hit the Wood River Valley’s largest economic engine hard.

Sun Valley Co. will probably pass increases on to the resort’s customers, company general manager Wally Huffman said last week.

As one of Idaho’s top 30 electricity users, the summer and winter destination resort easily fits in the industrial-use category, which will see a 42.1 percent increase, the largest increase of any category.

Idaho Power had asked the IPUC to raise industrial-use power rates 62.8 percent.

Huffman said that lift tickets, lodging and food could all become more expensive to match rising power bills.

"Electricity’s one of the big expenses other than labor and running the mountain operation," Huffman said. "While we are forever hopeful, we are probably looking at passing on through our rates, whatever the consequence of the electricity bill and the gas bill might be."

Huffman wouldn’t disclose what the company’s bills have been or how much power it uses, but indicated that the snowmaking operation alone costs about $5,000 per day and runs, on average, from Nov. 1 through mid-February.

In a typical year that translates to 106 days or, based on Huffman’s estimate, $530,000 worth of electricity for snowmaking alone. Subjected to the approved 42.1 percent rate increase, the winter-long snowmaking electricity bill will likely jump to close to $1 million.

Obviously, lift tickets won’t jump to twice last season’s hefty $59 all-day price tag, but an increase is inevitable, Huffman said.

Next ski season’s group rates, which are established in March and April each year, are 6 percent to 7 percent higher than the season just ended, Huffman said.

"We just make the best guess we can," he said, in light of not yet knowing how much electricity rates will actually go up.

Asked how he thinks higher rates will affect local tourism, Huffman responded: "Generally increase in rate translates into a decrease in use, and that’s a real consideration, but even in a low snow year we probably have as good a product as anyone in the industry."

If rates go up, Sun Valley will rely heavily on that "good product" to maintain its niche of industry faithfuls.

The ongoing hurdle to local tourism remains lack of direct air access, he said.

"We really need to create an environment where someone can leave Los Angeles early in the morning and get a half day skiing in the afternoon."

That, he said, would help tourism locally in spite of increased costs.


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