Idaho electricity rates to drop

Perhaps legislators had some sort of premonition of this year's electricity rates when they rejected the rebate idea this session. At least, that's what it will feel like when the average resident sees a decrease of about $10 in his or her monthly Idaho Power bill this June.

"We've never had any decrease like this," said Ric Gale, vice president of Idaho Power's regulatory affairs.

Power company officials filed their annual power cost adjustment recently with the Idaho Public Utilities Commission. The company is asking for the largest percentage decrease to consumer rates in Idaho Power's history, Gale said.

The power company's rate is evaluated in two components. The base, or general, rate encompasses everything from personnel to chairs for Idaho Power's conference rooms. The power cost adjustment portion comprises fuel, power purchases and power sales.

In October, the company filed its general rates case, which called for a 3.2 percent increase. Given that all interested parties in the case have agreed, the PUC could concur with the $18.1 million increase later this month.

That increase, however, would be offset by Wednesday's proposed power cost adjustment decrease, Gale said. Each April, company officials estimate their power costs for the next year. The following year, they ask the PUC to approve a rate increase or decrease based on how accurate the previous year's estimate was.

Last year, Idaho Power officials guessed the drought would drag on, meaning lower production at the company's hydroelectric dams. But, Mother Nature surprised everyone with an abundant water year, resulting in a $123.5 million surplus to be used to lower customer rates this year.

"In good water years, we can create more power through the dams," Gale said.

The PUC does still need to evaluate the request, but the process will likely be shorter given the company is asking for a drop rather than a spike in rates, said Gene Fadness, spokesman for the utilities commission.

Additionally, customers could see a rate decrease in June 2007. Idaho Power also sold its excess sulfur dioxide emission credits to other companies with less advanced emissions controls. The company will hold those revenues of $42.1 million in a rainy day account for a year.

Those funds could help make up for a bad water year or flow back to customers in a rate reduction in a good water year.