Changes proposed to modernize residential rates

BOISE — Rocky Mountain Power has proposed updated rates for residential customers to the Idaho Public Utilities Commission for its review and approval. The changes are designed to balance the needs of all customers while the utility continues building the secure energy grid of the future and implements the transition to a net zero emissions future for electricity production.

Residential rates contain two components, a fixed monthly customer service charge and the energy rate, or price per kilowatt-hour. The utility proposes a gradual transition over five years to increase the customer service charge for the two main residential rate schedules, which will allow energy charges to be reduced. The change is proposed for Electric Service Schedule No. 1 – Residential Service, and Electric Service Schedule No. 36 – Optional Time-of-Day Residential Service.

Importantly, these updates to residential rates will not increase the amount of revenue for Rocky Mountain Power. Rather, the change will ensure fairness for all residential customers, whether they are large or small users of electricity. For most customers, the change to their monthly bill will be less than a dollar in each of the annual price changes. 

The variable cost of energy that customers use is a relatively small part of the cost of serving residential customers, about 23 percent of the total. The remaining 77 percent of costs are fixed and are not driven by energy consumption. Specifically, in its pricing proposal, the company is requesting to increase the fixed customer service charge to better cover some of these costs. These include the costs of installing and maintaining neighborhood equipment, such as poles, wires, transformers and substations, together with billing and other customer services. The costs of maintaining the distribution system and of providing customer service don’t change with the volume of energy used.

By increasing the customer service charge to cover local neighborhood equipment and customer service, and decreasing the per kilowatt-hour energy charge, residential customer rates will better cover the actual costs of providing service, and ensure customers pay a fair price for the energy they use.

Rocky Mountain Power proposes to gradually increase the current $8 per month customer service charge to $29.25 per month over five years. At the same time energy charges will be lowered accordingly, keeping the overall revenue coming to the utility the same. The company proposes the first change, from $8 to $12.25 for Schedule 1, with subsequent changes annually for the next four years. These changes must be approved by the Idaho Public Utilities Commission

The five-year transition to a more accurate customer service charge is in line with what other Idaho electric utilities charge. A survey of fixed monthly charges for residential customers from 11 other utilities shows that the average is about $23 per month, and ranges from $5 to $40.

In testimony filed to support the request, Rocky Mountain power outlined how the transition would proceed, if approved. The table below shows how the customer service charge would increase over the five-year transition for Residential Schedule 1 customers, and how energy charges would be reduced accordingly.

For Schedule 36, Time-of-Use residential customers, the transition is detailed below:

For customers taking service on Time of Day Schedule 36 the rate modernization plan also includes updates in the third year of the transition to shorten the on-peak period, better aligning the on-peak / off-peak periods with today’s costs of providing energy.

For customers taking service on Standard Residential Schedule 1, tiered rates that penalize customers with higher prices for monthly energy usage over 700 kilowatt-hours in the summer season and over 1,000 kilowatt-hours in the winter season, would be phased out over the transition period.

For some smaller energy users, they would pay a little more per month. The most a customer’s monthly bill would increase would be about $4 in any of the annual price changes during the transition. Generally, for customers who use more than average, their bills would decrease. For more details on Rocky Mountain Power’s filing, visit RockyMountainPower.net/Regulation.

The Idaho commission will examine Rocky Mountain Power’s requests and will determine whether the request should be accepted as filed, modified, or rejected. The public will have an opportunity to comment on the proposal as the commission studies the company’s request. A copy of the company’s application is available for public review on the commission’s website, www.puc.idaho.gov, under Case No. PAC-E-22-15. Customers may also subscribe to the commission’s RSS feed to receive periodic updates via email. The request is required to be available at the company’s offices in Rexburg, Preston, Shelley and Montpelier, or on the company’s website above.