Idaho Power Requests 15 Percent Rate Hike, Citing Drought’s Effect On Hydro Generation

Idaho Power is asking utility regulators to raise electricity rates by as much as 15 percent, on average, starting in June. That would be the highest cost adjustment to hit customers in more than a decade, as you can see in the chart below.

Low rainfall and snowpack are partly to blame.

About 80 percent of electricity generated in Idaho is hydropower. That sets Idaho’s energy mix apart from the nation’s overall, and it’s one reason why Idaho has lower than average electricity costs. But when water levels are low, says Idaho Power spokeswoman Stephanie McCurdy, that changes things.

“Currently, our hydroelectric generation is forecast to be down 19 percent from last year, so that’s significant,” McCurdy explains. “And as a result, coal and gas production costs are forecast to be higher and surplus sales are forecast to be lower. So it’s really a perfect storm of factors.”

A 2007 increase of 14.5 percent was also to due to low water conditions, according to the Idaho Public Utilities Commission (IPUC). As shown in below, electricity costs for Idaho Power’s residential customers have crept up over the last decade.

The power cost adjustment is an annual process of adjusting electricity rates to account for variable costs. If state utility regulators sign off on the full increase, instead of putting off part of it, residential customers could see their monthly bills go up by more than $11, on average, for a one-year period.

Idaho Power and its shareholders don’t see any return through the adjustment, according to the company and the IPUC.