Tag: city of nampa

Idaho businesses that use Idaho Power are likely to a 4.5 percent to 6.6 percent reduction in their power costs starting June 1.

There are three separate components to the rate reduction, explained Jordan Rodriguez, corporate communications specialist for Idaho Power:

1. The fixed cost adjustment (FCA) is associated with infrastructure, and is due for a reduction because usage per customer was greater in 2017 than it was in 2016.
2. The power cost adjustment (PCA) is forecast based on factors such as fuel costs and purchased power costs, and undergoes “true up” the following year based on actual costs.
3. Due to tax cuts, the federal tax rate decreased from 35 to 21 percent, and the company is passing along those savings to its customers.

“The Idaho Power proposed rate decrease is good news for the city of Nampa,” said Vikki Chandler, finance director for the city. “It represents a savings of about $175,000 in expense to various departments.”

The size of the decrease depends on the size of the business. Small general service customers, such as a sole proprietor’s office space that uses less than 2,000 kilowatt hours per month, will see a 6.6 percent decrease per month, Rodriguez said.  Large general service customers, such as a fast food restaurant or retail store that uses more than 2,000 kWh per month, but less than 1,000 kW/month, will see a 4.5 percent decrease per month. Large power customers, such as a food manufacturer that registers a meter demand of more than 1,000 kW but with usage under 20,000 kW per month, will see a 5.5 percent decrease per month, he said.

Technically, these are not considered rate cases, but instead are proposals to change two annual rate adjustment mechanisms because they allow the company to recover costs when they failed to meet revenue over the previous year, or credit customers when revenue exceeded costs over the previous 12 months, said Matt Evans, public information officer for the Idaho Public Utilities Commission, which must approve the change. Similar requests are filed every year in the spring and changes usually take effect June 1.

“They are true-up mechanisms, so unless problems arise when the commission’s analysts and accountants scrutinize the company’s proposal and run the numbers, the commission is likely to approve the proposal,” he said.

In comparison, in 2017, the PCA increased by 0.93 percent and the FCA increased by 1.29 percent; in 2016, the PCA increased by 1.57 percent and the FCA increased by 2.2 percent; and in 2015, the PCA decreased by 1.1 percent and the FCA increased by 0.35 percent for an overall net decrease, Rodriguez said.

That said, the reduction, if passed, isn’t entirely good news for Nampa.

“Ironically, it also means about $75,000 less in electric franchise fees that funds our capital items within city government,” Chandler said. “Obviously, we’ll absorb that.”