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Power Rate Relief Unlikely for Irrigators by Dave Wilkins Capital Press, January 11, 2002

BURLEY, Idaho -- Idaho Power Co. irrigation customers aren't likely to see any major rate reduction for another year, farmers were told this week.

While wholesale power prices have come down sharply over the past year, retail prices will take a while longer to return to normal, said Ric Gale, the company's vice president of regulatory affairs.

Last year, irrigation rates for Idaho Power customers shot up from a base of 3.8 cents per kilowatt hour to an average of 5.5 cents, the result of drought, skyrocketing wholesale power costs and the deregulation debacle in California.

Rates could come down modestly this spring, but it will probably be another year before irrigators see rates as low as 4 cents again, company officials said.

"It's the company's desire to get rates back down next spring." Gale told farmers attending the Idaho Irrigation Equipment Show. "I think we could probably get back to a 4 cent base rate."

A year ago, Idaho Power was forced to pay upwards of $350 per megawatt hour for wholesale power that normally runs between $20 to $30 per megawatt hour. In an effort to cut costs, the company agreed to buy back electricity from about 400 irrigators at 15 cents per kilowatt hour.

"This time last year our company was in a complete scramble to meet power demand for the summer," Gale said. "Without the response to our irrigation program, we would have been in serious jeopardy."

Since then, power demand has diminished, more power-generating facilities have come on line and average wholesale electricity prices have dropped to about $23 per megawatt hour.

"That (buy-back program) will not be repeated," Gale said. "It's just not economical anymore."

Unless wholesale power costs keep dropping, the issue of deregulation probably won't rear its head again. Gale said.

"Deregulation in the West is on life support," he said. "It's gotten a black eye, mainly because of California."