Friday, July 24, 2015

Bond payoff saves Idaho Falls Power customer electric bill pain

On the local public power front, there is good news and bad news balancing each other out.

On Wednesdy, The Bonneville Power Administration announced it would be raising power and transmission rates for two years beginning Oct. 1. Idaho Falls Power, 41 percent of whose budget pays for power from BPA, is looking at paying $2 million more each year.

The good news is that with its hydropower project bonds paid off, Idaho Falls Power will be absorbing the BPA rate hikes and still lowering customers' utility bills.

“In 2015, we retired the debt associated with our locally-owned hydropower plants. With those debt payments off the books and in light of other efficiency measures we have implemented, we intend to absorb the rate increase from BPA and pass along a reduction in the consumptive use rate,” said Jackie Flowers, Idaho Falls Power general manager. “Most customers will see a decrease in the electric portion of their utility bill.”

The utility's proposed rate structure will be discussed at the Aug. 10 City Council work session.
Following that, Idaho Falls Power  will host three open houses on Aug. 12, inviting customers to their office to learn how the utility sets rates and hear more details about the proposed changes to rate structure. Open house times will be 10 a.m., 2 p.m., and 8 p.m.

The cost of service model calls for the residential electric consumptive rate to drop from 6.25 cents per kilowatt-hour used to 5.78 cents per kilowatt-hour, less than half the national average of nearly 13 cents per kilowatt hour. The consumptive use rate decrease will be offset by an increase in the monthly customer service charge, from $10 to $15, to better capture “fixed costs” associated with keeping the city’s electric system in readiness. The model actually calls for the monthly customer service charge to be $18.

Idaho Falls Power also plans to implement a power cost adjustment as a component of its rate structure that will fluctuate annually, in order to more transparently pass along power supply costs.

The PCA will be a new line item on the bill and will be adjusted annually to reflect the previous year’s power supply costs. In good water years, the PCA may lead to a reduction in electric bills. In bad water years, the PCA may lead to an increase in electric bills. While the current water year has been mixed, this year the PCA will lead to an additional 0.43 cent per kilowatt-hour reduction in consumptive use rate for residential customers.