Hoku Fights Idaho Power To Keep Lights On

It’s a situation the Idaho Public Utilities Commission has never seen before: At a hearing tomorrow in front of the commission and against Idaho Power, Hoku Materials will fight to keep the lights on at its Pocatello plant. The utilities commission will decide whether to renegotiate Hoku’s contract or terminate it as an Idaho Power customer.

Hoku CEO Scott Paul said his company is being unfairly treated by having to pay more for electricity than what it actually uses.

“Paying $2 million each month for power that is not being used is unsustainable for Hoku Materials, as it would be for most businesses. 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,” Paul said in a statement.

The company’s power bill is $65,000 a day, but Hoku used only $1,000 of electricity per day during its commissioning, Paul said. The numbers seem to support Hoku’s complaint, but Idaho Power spokesperson Stephanie McCurdy said that those charges are a part of Hoku’s contract.

The IPUC requires that any customer using more than 25 megawatts of power has a special contract. Hoku uses 82 megawatts, McCurdy said. In Hoku’s special contract, there are two different price blocks. Hoku pays for what it uses above 25 megawatts, but below that, pays a traditional embedded fee, she said.

“Idaho Power has gone out of its way to accommodate Hoku, and that includes modifying the original energy services agreement — the contract, delaying the implementation of an amended version of the energy services agreement and splitting in half the time when Hoku would have to make deposits,” said McCurdy.

Idaho Power is standing its ground because it stands to lose a lot of money. Hoku still owes $1.8 million on its $5.8 million deposit, $1.9 million for power in November and $1.9 million for December, said McCurdy. But Paul said that Hoku has paid more than $11 million dollars for power it hasn’t used, and it wants that money back. Hoku has also paid more than $18 million to help Idaho Power build new substations and construct power lines. Idaho Power could not serve Hoku fully without those improvements, said IPUC spokesperson Gene Fadness.

“I don’t think we’ve had a case quite like this,” Fadness said.

Fadness agreed that a lot hinges on tomorrow’s hearing. Losing Hoku as a customer could cause “imminent financial harm” to Idaho Power and possibly its customers, McCurdy said.