Settlement Proposed In Idaho Power/Hoku Dispute
The Idaho Public Utilities Commission is taking comments on a proposed settlement to a Pocatello manufacturing plant?s request to amend its contract with Idaho Power Company.
Idaho Power threatened to disconnect service to Hoku Materials Inc. in December because production delays caused by market conditions made it difficult for the polysilicon manufacturer to make a minimum monthly payment of about $1.8 million, IPUC said Friday. The minimum monthly payment is not based on electricity consumed ? the plant is not yet in production ? but is required to meet expenses Idaho Power incurs to be ready to meet Hoku?s expected demand up to 82 megawatts.
Both commission staff and Idaho Power maintain the proposed settlement addresses Hoku?s cash flow problems while at the same time protecting the utility and its customers. The proposed agreement reduces Hoku?s monthly minimum payment to about $800,000 for up to 18 months through June 2013. .
To protect customers and the company from the lost revenue due to the lower minimum payment, the agreement also proposes to require Hoku to eventually reimburse the difference between the current and the proposed minimum plus 6 percent interest via monthly payments through November 2014. Hoku agrees to make an initial payment of $3.8 million to Idaho Power, with $2 million of that coming from an existing $4 million deposit already provided by Hoku. The remaining $1.8 million will be paid over the next 18 months at $100,000 per month. If the plant is able to increase production it must give Idaho Power 30 days? notice when it plans to exceed 10 MW and six-months? notice when it plans to exceed 20 MW.
These provisions, the company and commission, ensure Idaho Power and its ratepayers are protected while allowing Hoku time for the polysilicon market to improve. Ratepayers are impacted because Idaho Power included the revenue it was originally contracted to receive from Hoku in both its 2011 rate case filing and its Power Cost Adjustment filings. Without the Hoku revenue, the resulting deficiency would have had to been made up by other Idaho Power customers. The proposed settlement ensures that Idaho Power customers are no worse off than they otherwise would have been had the contract not been amended, according to commission staff.
IPUC is taking comments through March 7. Comments are accepted via e-mail by accessing the commission?s homepage at www.puc.idaho.gov and clicking on “Comments & Questions About a Case.” Fill in the case number (IPC-E-12-02) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.
A full text of the commission?s order, along with other documents related to this case, is available on the commission?s Web site. Click on ?File Room? and then on ?Electric Cases? and scroll down to the above case number.
