Your Idaho Power bill will go up, starting now. What just happened
Idaho Power customers can expect their bills to go up this month.
The Boise-based company received approval to raise its base rates by 3.73% beginning Jan. 1, for an annual revenue increase of $50.6 million, just a year after Idaho Power got its last base-rate hike, according to a news release Thursday from the Idaho Public Utilities Commission.
The monthly bill of the average residential customer, using about 950 kilowatt hours a month, should rise by $3.50, a spokesperson for Idaho Power told the Idaho Statesman by email Friday.
Idaho Power had wanted to increase rates by about twice that much. In its initial application to the commission, the state agency that regulates utility companies, Idaho Power asked for an overall increase of 7.31%, or $99.3 million.
But the commission staff and a few intervenors in the case, including Micron, which is Idaho Power’s largest customer, disagreed with the way Idaho Power calculated its proposed rate increase.
How the increase was calculated
When Idaho Power submitted its application in May, it needed to show what its costs were for a specific period, called a “test year,” to help determine how much it should be allowed to charge customers. The company wanted to calculate its costs based on what it estimated it would spend by the end of 2024, according to the commission’s ruling.
Micron recommended a different approach. It said Idaho Power’s rate increase should be based on the company’s average monthly costs throughout a 12-month period, without forecasting.
The commission said it went with the average monthly cost methodology to ensure that the rate hike was based on actual, ongoing costs, rather than future estimates.
“(Average of monthly averages) rate base treatment more accurately matches the company’s recovery of costs with the revenues and operating expenses throughout the year, making sure those costs are aligned with real benefits received,” the order said.
The commission also wrote that it found Idaho Power’s arguments on the impacts of regulatory lag “unpersuasive,” and noted that the delay between when the company files for a rate hike and when it gets it is an ordinary part of the regulatory process.
Why did Idaho Power request the rate hike?
Idaho Power said in its application that the rate hike “focuses on recovering costs associated with infrastructure investments and labor expenses that were not included for collection in the company’s last rate case but will be benefiting customers” by the end of this year.
“Idaho Power is sensitive to the impact rate increases have on customers and believes this limited case will minimize customer impact as compared to a broader general rate review,” the company previously said in a news release.
The utility said last year that it planned to invest nearly $1 billion in the grid in 2024 and an average of nearly $800 million annually over the next five years to maintain the grid and meet growing customer demand.
The commission received 60 public comments on Idaho Power’s application, with the vast majority opposing any increase in rates, citing inflation, fixed incomes, taxes and the economy, according to the order. Many of the comments noted that the company was just recently granted a rate increase.
When was the last increase?
The latest rate hike comes exactly a year after Idaho Power won approval in a separate case to raise its base rates by 4.25%, for a revenue increase of $54.7 million.
The average residential customer saw their monthly bill rise by about $4.44.
The company had initially asked for 8.61%, or $111 million. Idaho Power argued in that case that it needed the increased revenue to recoup money it spent on infrastructure additions over the last decade. The Boise company said it had invested more than $3 billion in the grid while its customer base grew by 23%.
Before last year’s rate hike, the company had not asked for a base rate increase since 2011, according to Adam Rush, a spokesperson for the commission.
Idaho Power serves more than 630,000 customers in Idaho and a portion of eastern Oregon. Its Oregon customers are not affected by the rate increase.
