Editor’s Note: This is Part I of a two-part series. Part II of this blog, “The Idaho Power Rate Case & the Energy Transition” will be published in the following days.

It’s been busy at the Public Utilities Commission (PUC) and an unusually active regulatory season across the West. With the settlement in Idaho Power’s rate case now filed, we are nearing 12 continuous months of engaging on major rate design changes proposed by all three investor-owned utilities in Idaho. 

Much of ICL’s work is physical. We’ve guaranteed access to hundreds of thousands of acres of public land, monitored and protected clean water in our lakes and rivers, and advocated for wildlife and fish. Go to any corner of Idaho and you can see and touch these things. Our energy program is a bit different. While our work has real, material effects on resource development and carbon emissions, it’s conducted in terse financial and regulatory language. The link between electricity rates and the physical environment can be unintuitive, so before we dive deeper into this year’s dockets, let’s have a short overview of energy regulation. 

Energy Regulation and Rate Cases

It’s difficult to imagine modern society without the services and energy provided by electric utilities. Nearly all business and daily activity relies on energy of some kind, and utilities are obligated by law to deliver power to anyone that requests connection in their service territory. The companies operate as natural and legal monopolies, giving them immense economic and political influence along with capacity to profit. In exchange for these exclusive rights, utilities submit to a complex legal and oversight system called the regulatory compact. To receive their guaranteed revenue and return on equity, investor-owned utilities consent to regulation by the Public Utility Commission (PUC), the rights of intervenors (like Micron, irrigators, and industrial customer associations), and stakeholders, and public scrutiny of expenses and operations. Ideally, the regulatory compact balances customer interests against the Company’s financial needs and profit motive. Affordable energy and healthy companies are both vital to the system.

When a utility grows beyond its allowed revenue or builds new infrastructure, they may request an update of regulatory revenues and expenses in a General Rate Case. There, all the infrastructure, operations, and energy costs prudently incurred over a year’s time can be recovered in customer rates. Outside parties like residential representatives, customer groups, and advocates like ICL may intervene and have their positions heard. Rate cases are hugely complex – determining proper rates and recovery is analytically intensive and takes substantial judgment and negotiation.

This system isn’t perfect, but it’s been instrumental in providing generally affordable power to most. It built the immensely complex grid we rely on. It’s also how we pursue large portions of our energy advocacy. What costs are allowed to be passed to consumers, what they fund, and how they are distributed influences energy savings and resource allocation. Our vision in our energy work is to build a physical and regulatory system that allows for efficiency and rapid introduction of carbon-free energy while maintaining affordability and the good standing of the utilities. I will emphasize: a well run, stable, and professional utility is critical to speedily building the new generation and grid needed for de-carbonization. While we may express differences of perspective, as currently structured, utilities are vital partners and the de facto drivers of climate responsible electrification in Idaho. 

And so we continue our advocacy for Idaho’s climate and environment at the PUC and related administrative arenas. Stay tuned for part two of this blog series, where we’ll walk through Idaho Power’s recent rate case and proposals to upend how customers are charged for energy.

Stay tuned for Part II of this blog series, focusing on the Idaho Power rate case and the energy transition. To stay updated on energy and climate issues in Idaho, sign up for ICL Climate Campaign email updates.