Electric utility granted immediate 25 percent rate hike

By BOB FICK The Associated Press 5/1/01 8:25 PM

BOISE, Idaho (AP) -- State regulators on Tuesday approved an immediate 25 percent rate increase for Idaho's largest electric utility and revised the billing structure to reward residential users who conserve power.

The one-year record increase, approved unanimously by the Public Utilities Commission, will allow Idaho Power Co. to generate $168.3 million in extra revenue, primarily to offset higher prices it has paid the past year for open market electricity to meet customer demand.

On average, analysts said residential customers will see monthly bills rise just over 18 percent, about $12. The company has about 360,000 southern Idaho customers.

"We know it will cause a hardship," Idaho Power Chief Executive Jan Packwood said.

But he added, "I hope everyone recognizes by now that we are in the midst of an unprecedented energy crisis and during such times it is essential that rates for customers not be set artificially low."

Packwood said that if the weather and customer demand follow normal patterns the rest of this year, Idaho Power should be able to avoid the kind of high costs it incurred last fall and winter.

Even so, the commission predicted another large rate hike next year, due to the hangover from this year's power shortage.

Packwood expressed concerns about the new billing structure that shifts a larger share of the increase to customers who use more power.

"There's a distinct disadvantage to rural customers who don't have alternative fuel choices," he said.

Under the new residential billing procedure, the price of the first 800 kilowatt hours used each month will go up 14 percent. The next 1,200 kwh will increase 30 percent, and the cost of each kwh over 2,000 will rise 62 percent.

"This structure," the commission maintained, "provides an effective and efficient means of providing customers with incentives to conserve electricity."

http://www.nj.com/newsflash/index.ssf?/cgi-free/getstory_ssf.cgi?a0814_BC_IdahoPower&&news&newsflash-national

-- Martin Thompson (mthom1927@aol.com), May 02, 2001