Despite criticism, Idaho Power looks to raise general rate for first time since 2011
For the first time in over a decade, Idaho’s largest electricity provider is looking to increase its general rate – a proposal that has led to criticism from customers and environmentalists.
In March, the utility company filed a general rate case with the Idaho Public Utilities Commission to increase its rate by $111 million, or 8.61%.
The general rate is used by the utilities commission to determine the costs of operating and maintaining the utility system and how those costs are allocated among customers.
According to a press release about the proposal, Idaho Power President and CEO Lisa Grow said the company understands the impact of a rate increase.
“We are sensitive to the impacts rate increases have on our customers, and our company works hard to keep our expenses low and our prices well below the national average,” Grow said. “This case is largely focused on the infrastructure additions that have been necessary to reliably serve our growing customer base.”
If approved, the average Idaho residential customer using 950 kilowatt hours per month would see a monthly increase of about $11.62, according to the press release. Oregon customers would not be impacted by the filing.
If approved, the percentage change from current billed rates include:
- Residential: 10.8%
- Small general service 11.4%
- Large general service 0.9%
- Large power 5.9%
- Irrigation 11.7%
Idaho Power requested an effective date of January 2024, but the case is ongoing and the decision is at the discretion of the Idaho Public Utilities Commission.
General rate case proposal draws criticism from locals, environmental group
On the utilities commission website, many people who submitted public comments expressed frustration at the proposal, including single parents, senior citizens and people on fixed incomes who urged the utility commission to decide against the increase in the general rate.
Customers can submit written comments about Idaho Power’s proposal on the case comment form on the utilities commission website. The case number is IPC-E-23-11.
“I implore you to take into account the human aspect behind these numbers,” one comment said on the utilities commission website. “The lives of countless families hang in the balance, and it is the responsibility of Idaho Power to support your customers during challenging times, not exacerbate their struggles.”
At least one environmental group, the Sierra Club, has also spoken against the proposal.
Lisa Young, the Idaho Sierra Club chapter director, told the Idaho Capital Sun that the organization’s biggest concern is that the utility company is introducing a fixed rate system.
The company has proposed to remove its tiered rate structure, a system in which the company charges higher prices for customers consuming higher rates of energy. Under the proposal, the company is proposing to charge residential customers the same rate regardless of how much energy they use and collect more from each customer in fixed costs.
“It is unfair and unreasonable to shift so much of its costs into the ‘fixed’ category and make all customers pay the same high fee on every bill, no matter how much energy they use,” she said. “Folks who use more electricity should pay for more of the costs to maintain Idaho Power’s system, not make low-income families who use less electricity bear that burden.”
In an email, Young said the proposal discourages energy efficiency and is “inequitable.”
“If you’re a low-income renter, you could see your bill nearly double while those who are using and wasting the most electricity will have a decrease in their bill,” she said. “It’s a lopsided system that puts even more weight on the working class while discouraging popular affordability solutions like energy efficiency – and even rooftop solar – which lower energy usage.”
But Idaho Power says it hasn’t increased its rates since 2011, and that the increase is meant to fund investments in energy demand and address equity.
This is not the first time the power company has faced backlash for its rate proposals. In May, the company filed a proposal to decrease the amount it credits customers who provide rooftop solar back to the grid, but critics say the proposal disincentivizes home owners from installing solar panels.
That proposal is meant to be more equitable to customers without solar, Jordan Rodriguez, the spokesperson for Idaho Power said – adding that the number of customers with solar generation in the company grid has grown significantly in recent years, the Idaho Capital Sun previously reported.
Idaho Power says rate increase addresses outdated prices, energy demand
Rodriguez said the general rate proposal would not disproportionally impact low-income customers, adding that under the company’s current system “household energy usage is not indicative of household income.”
“Currently, the majority of fixed costs are being collected through energy charges, which results in higher energy users subsidizing lower energy users – even though many of the costs of Idaho Power’s system don’t vary because of energy use,” he said. “Our proposed changes seek to make cost collection among residential customers more equitable by better aligning fixed charges with fixed costs.”
Rodriguez said the proposal also addresses the growing energy demand within the company’s customer base and replace outdated rates.
Since the general rate was filed in 2011, he said, the Idaho Power base has grown by 23%, or approximately 120,000 customers. Today, the utility company provides electric service to more than 600,000 customers in southern Idaho.
The company is making significant investments in the grid to “safely and reliably” serve the region’s growing energy demand, Rodriguez said. The investments have cost the company more than $3 billion in energy infrastructure since 2011, and they are the main driver for the company to file its rate case, he said.
“Establishing new general rates will help ensure Idaho Power collects the level of revenue from customers necessary to cover our costs and allow for a reasonable return for our investors,” Rodriguez said.
Other factors contributing to the increase include higher net power supply expenses, environmental obligations, and investments in aging infrastructure and generation facilities, according to information provided at a utilities commission workshop.
Idaho Power offers financial assistance program, spokesperson says
Rodriguez said the company has energy assistance programs and features like Budget Pay, which allows customers to pay the same amount each month based on their average use throughout the year, to help customers manage their energy bills.
“We understand the impact rate increases have on our customers, and we take seriously our commitment to affordability,” Rodriguez said.
The company, he said, also contributes to Project Share, a year-round energy assistance program administered by the Salvation Army and funded by customer donations and Idaho Power shareholder funds. Grants from the program can help customers pay their electric bills, he said.
Last year, Rodriguez said more than 1,300 households benefited from the project.
“In the last five program years, Idaho Power customers and shareholders combined to contribute more than $1 million to the program,” he said. “In recognition of the continued cost pressures customers may be experiencing, Idaho Power shareholders’ contribution to Project Share will be increased from $25,000 to $100,000 during the 2023 program year.”