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Idaho Power says Rates Will Drop If No Recharge by Associated Press The Times-News, March 25, 2006

BOISE -- Officials with Idaho Power Co. say they plan to lower customer rates by 9 percent this summer, but could end up raising rates if Idaho lawmakers approve a plan that would change the company's water rights to the Snake River.

House Speaker Bruce Newcomb, who proposed House Bill 800 to do just that, said Idaho Power's announcement on Thursday was a "political strategy."

"I find it interesting that it is just a few days before the hearing on House Bill 800," Newcomb, R-Burley, told The Idaho Statesman.

Newcomb has introduced two bills that would divert Snake River water from hydroelectric dams to replenish the Eastern Snake Plain Aquifer. The natural underground reservoir, which provides water to cities, farmers and industries in the southeastern third of the state, has been depleted by six consecutive years of drought.

Newcomb is basing the bills on a March 9 opinion from the Idaho attorney general that found the state could take water from the river as long as the state's biggest utility was given enough water to satisfy minimum limits set in a 1984 pact known as the Swan Falls Agreement. In that pact, Idaho Power received the right to a 5,600-cubic-feet-per-second minimum flow during winter months, and 3,900 cubic feet per second in summer.

Above those flows, the company subordinated its hydropower water rights to upstream beneficial use.

In 1994, however, lawmakers said Idaho Power had a right to as much as 17,250 cubic feet per second in winter, and that Idaho Power's water right takes priority over recharging the aquifer.

In his opinion, Attorney General Lawrence Wasden wrote that Idaho lawmakers were wrong in 1994 and that the utility only had a right to water up to the 1984 limit.

Idaho Power officials said they will request a rate reduction of about 12 percent for its 455,000 customers when it files its annual power cost adjustment in April.

The cost adjustment makes up part of the bill Idaho Power customers receive, and rises or falls each spring depending on how much electricity Idaho Power must purchase from other suppliers to meet its customers' needs.

The more water that flows through Idaho Power's hydroelectric facilities on the Snake River, the less power it has to buy on the open market.

Reducing those flows by passing House Bill 800, Idaho Power officials have said, could cost ratepayers up to $120 million.

"The proposed bill threatens such benefits in the future," said Idaho Power President and Chief Executive Officer LaMont Keen. "By taking the higher Snake River flows and diverting them to the desert rather than allowing them to flow through the power turbines, less low-cost electricity will be produced. This stream flow diversion could reverse this year's reduction in future years and drive rates up in all years."

Those in favor of recharging the aquifer say diverting the water would only cost ratepayers about $6 million.

"In my view, (the bill) won't have any effect on the water they use to generate electricity with," Newcomb said.