Hoku Says Idaho Power Is Being Unfair

Hoku Materials Inc. said Idaho Power Company is charging it for power it does not use.

The utility has threatened to shut off electricity after the Honolulu-based polysilicon maker missed a $1.9 million payment. Hoku filed a complaint with the Idaho Public Utilities Commission asking the commission not to allow Idaho Power to terminate service and instead allow the payment to come out of a $4 million deposit Hoku has provided the utility.

On Monday, Hoku filed an additional complaint to amend the contract.

According to a news release from Hoku, the manufacturer is alleging that Idaho Power is unfairly charging Hoku about $2 million each month for power not being consumed by Hoku’s Pocatello facility, while also demanding that Hoku pay a $5.8 million security deposit.

Hoku said it has paid more than $11 million since April 2011 for power it did not consume, and has also paid a $4 million deposit to Idaho Power. Hoku was not connected to Idaho Power’s grid until November 2011, the manufacturer said, and during its commissioning activities, Hoku only used the equivalent of less than $1,000 of power each day. Instead, Hoku alleges that it is being charged $65,000 per day.

Hoku also claims to have paid more than $18 million to construct the high-voltage power lines and the substation to service its facility.

“We believe that Hoku is being treated unfairly by Idaho Power, and we are asking the Idaho Public Utilities Commission to help us resolve this inequity,” said Scott Paul, CEO of Hoku Corporation. “We feel that it is fair to seek an amendment to the contract based on the dramatic difference between the amounts we are paying for power, the amount of power we are actually consuming, and our understanding of the minimal cost that the utility is incurring to provide service to Hoku.”

Hoku says it is asking the PUC for the following relief:

1. Elimination of the minimum payments that are due each month under the electric service agreement.

2. Monthly bills to be limited to the power actually consumed by Hoku’s facility.

3. Reduction of the deposit to only $4 million, eliminating the additional $1.8 million that is being requested by Idaho Power.

4. Continued electrical service.

5. A refund of some, or all, of the amounts that were previously paid by Hoku to Idaho Power.

Last week, Idaho Power said it had ?gone out of its way to accommodate Hoku,? by modifying its original contract and delaying implementation, but Hoku ?has failed to provide Idaho Power any assurance that such a payment will be forthcoming.?

The utility also said the loss of revenue from such a large customer poses ?imminent financial harm,? to Idaho Power?s other customers, who may not receive their share of a tax benefit the commission just approved.

The PUC will hear oral arguments on the matter Wednesday in Boise.