By SEAN ELLIS
BOISE -- Many farmers in Idaho are bracing for another increase in power costs this season.
Idaho Power is seeking to recover $140.4 million in unexpected power supply expenses over the past year. If the Idaho Public Utilities Commission approves the request in full, it would mean a 15.38 percent increase in power costs for the company's irrigation customers.
While a 15 percent increase in power costs won't break the bank, it will make farming a greater challenge this year, said Rick Shawver, who grows potatoes in Pingree.
"It's definitely a concern when the cost of power goes up like that," he said.
The average power cost to grow potatoes in southern Idaho is about $45-$50 an acre, Shawver said. "That's going to add another 15 percent on top of that. Not good."
Idaho Power's request was made in its annual power cost adjustment, a cost recovery tool that passes on the cost of unanticipated expenses not included in base rates to customers or provides them a credit if expenses are less than anticipated.
IPUC officials are reviewing the case to ensure the power expenses were prudently incurred and will rule later this month. The new PCA rates will be effective June 1.
The overall PCA rate has held steady or decreased in six of the last 10 years and this year's PCA is the highest since 2002.
Low streamflows were the main reason for this year's total, according to Idaho Power officials. Almost half of Idaho Power's generation comes from hydroelectricity. Hydropower generation from April 1, 2012, through March 31, 2013, was 1.8 million megawatt-hours less than forecasted, a 19 percent reduction.
That forced the company to purchase power from more costly sources.
The PCA is a straight true-up to reflect the company's variable power supply costs and Idaho Power's earnings are not affected by it.
Few irrigators attended public hearings on the case. Idaho Power is allowed to recover variable power supply costs by law and those expenses have already been incurred, said Lynn Tominaga, executive director of the Idaho Irrigation Pumpers Association.
"What do you do when they just had bad forecasters?" he said. "We can try to fight it but the vast majority of it has already been purchased."
Because of the magnitude of this year's PCA, the company has given the IPUC the option of spreading the increase over a two-year period. If the IPUC chooses that option, irrigation customers would be hit with a 9.65 percent increase this year and a 5.73 percent increase in 2014.
Greg Said, Idaho Power's vice president of regulatory affairs, said the company will not file a general rate case in 2013.