Idaho Power and Avista have filed an application with the Idaho Public Utilities Commission to raise their prices
By Mia Maldonado, Idaho Capital Sun, May 17, 2023
Brandi Stoker lives in North Idaho and is a stay-at-home mom with six children living at home. For the first time after living in their home for 17 years, Stoker had to pay above the budgeted amount she has ever had to pay for utilities.
“I have only once ever gone over that budgeted amount in 17 years, and that was this year,” she told the Idaho Capital Sun. “I was shocked. To a large one-income household, it is a lot of money.”
In February, Stoker submitted a comment to the Idaho Public Utilities Commission after Avista, an electrical and natural gas provider based in eastern Washington and northern Idaho, submitted an application to increase its prices.
In her comment, she urged the utilities commission to deny Avista’s request to raise its prices.
Stoker homeschools her children, and her husband works remotely from their home in North Idaho. Stoker said she and her children already wear multiple layers to stay warm during the winter months.
“We can’t just lower the thermostat for eight hours,” she said in a phone interview. “I have some pretty tiny, skinny kids, and it’s hard to keep them warm. Lowering the thermostat did lower the bill, but that’s unfortunate. As a mom, that’s hard.”
If the utilities commission approves Avista’s application, rates would increase for residential natural gas and electric customers in 2023 and 2024.
Other commenters expressed frustration at the possible price increase, including senior citizens and people on fixed incomes who urged the utility commission to decide against the increase in Avista rates, according to public comments on the utilities commission’s website.
This year, North Idaho residents paying $85.40 a month for electricity would see the monthly cost rise to $98.58, or approximately a 15.4% increase. In 2024, residential electric customers could expect to see an increase of 4.7%, or a monthly bill increase from $98.58 to $103.24.
Gas prices would also increase at Avista, and this year residential customers using an average of 64 therms per month paying $73.42 would see a 3.5% increase to $76.02. The following year, Avista would increase that amount by 0.2%, or $0.14.
According to the request, the increase in electricity and gas rates would allow the company to recover costs for fixed expenses, operation and maintenance expenses, ongoing investments in infrastructure and technology, and higher administrative and general expenses.
But Avista is far from alone in raising rates. Utilities like Idaho Power and Veolia Water Idaho have also sought increases to handle rising demand.
Idaho energy expert explains load growth, rise in utility costs
University of Idaho professor and Schweitzer Engineering Laboratories endowed chair in power engineering Brian Johnson told the Idaho Capital Sun that Idaho utility companies are seeing a significant load growth, meaning more energy that is being used.
While Idaho’s load growth is partially due to an increase in population, Johnson said the increasing presence of data centers, bitcoin mining and other computer intensive workplaces impact the need for new energy infrastructure.
“You have equipment that has fixed limits, and that is aging,” he said in a phone interview. “There’s a lot of equipment at Avista, Idaho Power and Rocky Mountain Power that they’ve done a marvelous job managing the resources and extending them past their designed life, but eventually that stuff has to be upgraded.”
Johnson said Idaho utility companies seek to increase their rates because they have to borrow money to replace equipment and pay off interest from those loans once the upgraded equipment is in service.
“Utilities have an obligation to serve their customers and give them reliable power at the lowest cost,” he said. “The people I know from utilities definitely take that decision to heart. They’re not trying to make profit, they’re trying to make sure that they serve their customers.”
Johnson said Idaho energy rates are still lower than most of the country.
According to the latest Sunpower Solar Energy Report, electricity costs in Idaho are approximately 46% less than the U.S. national average, making it the state with the lowest cost of residential electricity.
“They could be selling a lot more power to California,” Johnson said. “But Idaho utilities are trying to keep the rates for their customers.”
Idaho Power looks to increase prices, Boise water company implements increase
In addition to Avista, Idaho Power — Idaho’s largest electricity provider based in Boise — announced in April that it had filed its annual spring cost adjustment with the utilities commission to increase its monthly rates by $11.06 for residential customers.
In a news release, the company cited drought conditions, high natural gas prices and fuel supply challenges as reasons behind the need for an increase.
Idaho Power spokesperson Jordan Rodriguez told the Idaho Capital Sun that water conditions are a key factor in the company’s power supply costs because hydroelectricity is Idaho’s most effective resource.
“Within the last five years, when we’ve had good hydro conditions, the PCA (Power Cost Adjustment) has requested a rate decrease,” he said in an email. “The last couple years, because of drought conditions and other related factors, the PCA has resulted in an increase.”
According to the news release, Idaho Power and its shareholders would not receive any financial return from the filing, but instead the money would be used to recover expenses associated with annual fluctuations in power supply costs. If approved by the utilities commission, the increase in rate changes would take effect June 1.
While Idaho Power and Avista are seeking approval to increase their prices, one utility company has already received approval to increase their prices.
On May 1, the utilities commission approved a rate increase of 7.06% in the rate case application submitted by Veolia Water Idaho.
The company serves approximately 105,000 customers in Ada County who will see an increase by an average of $2.21 per month, depending on how much water they use. In its application to raise prices, the company said it needed additional revenue to recover increased operating expenses and costs associated with plant additions.
The water company originally asked for a 24% increase when it filed its application in September 2022.
Idaho Public Utilities Commission spokesperson Adam Rush told the Idaho Capital Sun that the commission can approve, deny or modify requested rate increases.
Before implementing a rate increase, utility companies must receive approval from the utilities commission by submitting an application, which is then reviewed by staff to ensure the expenses a utility company claimed had incurred.
“Utilities are allowed to seek recovery of prudently incurred costs, including the cost of capital, and a reasonable rate of return,” Rush said in an email.
Rush said commission staff reviews applications to ensure the proposed rate increase is fair and reasonable.
“Auditors, engineers and attorneys are involved in the review process, and they make a recommendation to the three-member commission after the review is completed,” he said.
FEATURED IMAGE: In April, Idaho Power filed its annual spring cost adjustment with the Idaho Public Utilities Commission to increase its monthly rates. While energy costs in Idaho remain lower than the national average, Idaho Power is moving away from coal-fired power and increasing its clean energy efforts. This year the company installed battery storage units at the Hemingway Substation near Melba that would provide 80 megawatts of four-hour storage. (Courtesy of Idaho Power)
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