BOISE—Idaho Power irrigators have been hit this month with a slight power rate increase, and company officials warn recently proposed Environmental Protection Agency clean-air guidelines could put upward pressure on U.S. electric rates in the long term.
Effective June 1, Idaho Power increased irrigation customers’ rates by 1.04 percent, due primarily to lower-than-anticipated surplus power sales and hydropower generation, according to officials with the utility.
Idaho Power generated 5.7 million megawatt-hours of hydropower during the production season ending in March, well below its forecast of 6.8 million megawatt-hours, according to the Public Utilities Commission.
The good news for irrigators, PUC spokesman Gene Fadness explained, is that neither Idaho Power nor Rocky Mountain Power will be allowed to pursue base-rate increases this season, having already taken recent base-rate increases for infrastructure projects.
University of Idaho Extension Economist Paul Patterson predicted in January that Idaho Power irrigation costs would increase by 4-8 percent this season.
“So the roughly 1 percent increase in Idaho Power irrigation rates is good news if compared to what I was forecasting, a minimum rate increase of 4 percent,” Patterson said.
Eastern Idaho potato farmer Randy Polatis emphasized he operates more than 100 irrigation pumps, and even a 1 percent power increase can have significant financial impacts. He intends to phase in variable-rate irrigation technology, both to conserve power and water.
For a grower using groundwater and 200 feet of lift and assuming 25 inches of water is applied during a season, Patterson calculated overall irrigation costs on 150 acres would increase by $112.50 with a 1 percent increase in Idaho Power rates.
Affecting the long-term power picture, EPA proposed on June 2 to impose the first carbon restrictions on existing power plants. Idaho Power and Rocky Mountain Power both generate much of their power with hydro-turbines but have stakes in coal-fired power plants in surrounding states such as Wyoming.
The EPA guidelines seek to cut U.S. carbon emissions from power plants by 30 percent below 2005 levels. States would partner with the federal government and draft their own plans to meet the standards.
The guidelines also seek to cut particulates, nitrogen oxides and sulfur dioxide by more than a quarter.
“It has the potential to raise power rates for everyone,” Fadness said, adding that utilities need to consider the guidelines in their planning.
U.S. Sen. Mike Crapo, R-Idaho, said in a press release the guidelines would result in “enormous economic and practical ramifications,” citing a U.S. Chamber of Commerce report estimating they would raise Americans’ energy bills by $200 per year.
According to EPA, the changes should ultimately reduce power bills by 8 percent due to improved energy efficiency and reduced power demand.
EPA will accept public comment for 120 days from its announcement, hoping to finalize the guidelines by next June. States would have until June of 2016 to submit their plans.
“It’s a proposed rule and there’s still a lot of public comment to come,” said Idaho Power spokesman Brad Bowlin. “We’re still evaluating it and looking at how it might impact us down the road.”
Source: www.capitalpress.com