Idaho Power Tuesday received the go-ahead from state regulators to immediately start recovering $168.3 million of the $227.4 million requested by the utility in its annual power cost adjustment. But any decision related to the remaining $59.1 million of Idaho Power’s request won’t come until after the Idaho Public Utilities Commission (IPUC) completes an investigation into several areas, including the activities of the utility’s non-regulated trading arm.

Of the $168.3 million approved by the IPUC, $126.2 million is for excess power supply costs Idaho Power incurred over the past year. The remainder is anticipated costs the company expects to incur from purchasing power over the next 12 months. Those estimates are based, in part, on expected Snake River stream flows and storage and on anticipated wholesale power costs over the next year. The rate increase took effect Tuesday, as requested by Idaho Power.

The IPUC will hold off on any further action related to the disputed $59.1 million portion of Idaho Power’s request until it has had time to investigate several issues. In particular, the state commission plans to take a closer look at the activities of Idaho Energy Systems (IES), the utility’s non-regulated trading arm. The commission said that about $51.2 million of the disputed amount involves Idaho Power and IES trading practices and another $7.9 million is associated with a buy order made by the company last November to purchase power for January. According to the IPUC, the buy order was apparently not carried out, and when a purchase was made later to meet the January need, the market price of power had substantially increased. The IPUC will start setting a schedule for hearings on the overall disputed amount on May 10.

The commission said it wants to examine in greater detail whether the company made sufficient use of hedging or entering into long-term contracts for power, rather than relying on more expensive day-ahead purchases of power. The IPUC also intends to investigate whether using the Dow Jones Mid-Columbia electricity price index is an accurate surrogate price for power transactions. Commission staff conducted a review of power transactions for last December, January and February. According to the IPUC’s staff, IES purchased day-ahead power at a cost much lower than it charged Idaho Power in 155 out of 161 cases during the three-month analysis. The IPUC pointed out that its staff has also expressed concern that IES is using the company’s transmission facilities without proper benefit or compensation to the regulated utility and its customers.

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