Boise residents can expect rate hikes for water, power and heat. How much might you pay?
Boise residents can expect higher rates for water, electricity and heat in the coming months.
Three utility companies operating in Southern Idaho have requested to raise rates for residential and commercial customers, and the combined increases, if approved, would mean a substantial increase in rate-payers’ monthly bills.
The applications from Veolia, Idaho Power and Intermountain Gas are still being reviewed by the Idaho Public Utilities Commission, a regulatory body comprised of three governor-appointed commissioners, who will decide whether to approve, modify or reject the requests.
The utilities commission is tasked with ensuring the companies provide adequate, safe and reliable service to their customers at just and reasonable rates.
Regulated utilities in Idaho are obligated to serve every customer in the service territory they’re assigned to. What they charge customers is determined by the utilities commission, but the state is required to give them the opportunity to earn a reasonable rate of return and recover prudently incurred expenses.
If the requests from Veolia, Idaho Power and Intermountain Gas are approved as-is, residential customers would see a combined average increase of about $20.84 on their monthly bills. That’s in addition to an $8.58 increase from Intermountain Gas that took effect Feb. 1.
All three of the utility companies cite either increased costs or infrastructure investments as justifications for the rate hikes.
The utilities commission will consider evidence on the record including the companies’ applications, testimony from staff and other stakeholders, customers’ written comments and oral testimony at public hearings before coming to a resolution in each case.
Here’s a breakdown of what the companies have asked for, and why.
Veolia applies for 24.1% rate hike
The water company serving most of the Boise area proposed a general rate increase of 24.1% for its 260,000 Idaho customers in September.
If the request is approved as-is, residential customers would see an average increase of $7.59 on their monthly bills. Rates for commercial customers would increase by an average of $27.92 a month, and $25.46 for public authorities.
Veolia’s revenues would increase by $12.1 million per year. The company, based in France, operates more than 1,300 miles of underground water mains across the Treasure Valley.
In a customer notice, Veolia said it made a slew of expensive investments in the Treasure Valley’s water quality over the past two years, including replacing old pipes, building storage tanks and upgrading treatment plants. The company said the additional revenue the rate increase provides would help recoup $70 million it spent on those improvements.
It listed some of its largest capital projects in a news release about the rate case.
“We can point to, in our rate case filing, everywhere we invested that $70 million,” Madeline Wyatt, a spokesperson for Veolia, previously told the Idaho Statesman by phone. “We spend money where we think it’s necessary. There are things we do that we know are the right thing to do, so we’re investing. It’s a water system, you can’t not maintain it.”
At a public hearing in March, several Boise residents opposed the rate hike and said the increase the company is asking for is too high. In early April, the utilities commission held a technical hearing where several members of the company’s staff provided testimony and evidence.
The city of Boise, Ada County, Micron and former Ada County Commissioner Sharon Ullman have filed petitions to intervene in the rate case, indicating they have a stake in the outcome.
Veolia acquired Suez, previously the Boise area’s largest water supplier, in a $15.4 billion merger in early 2022, the Statesman previously reported. Suez bought the parent company of United Water Idaho in 2000 and formally rebranded it in 2015. United Water Idaho was the successor to Boise Water Works, which began serving Boise in 1890.
This is the first time Veolia has filed for an increase, but its predecessor, Suez, last filed a request in July 2020 to increase rates by 22.3%, according to utilities commission spokesperson Adam Rush.
The request from Suez was approved in April 2021, but at a much lower rate — 8.75% over two years. It raised an additional $3.9 million in revenue, instead of the $10.2 million the company originally sought. By the time the request was approved, Veolia had purchased 30% of Suez shares.
Idaho Power requests 10.3% increase
Boise-based Idaho Power filed its annual spring cost adjustments with the utilities commission to raise rates for services by $11.06 a month for the average residential customer.
Idaho Power serves more than 610,000 customers. The filing is a request for $200.2 million to recover expenses tied to annual fluctuations in power supply costs, according to the news release. The adjustments, if approved, would be effective from June 1 through May 31, 2024.
Idaho Power said neither the company nor its shareholders would “receive any financial return” from the rate hike.
“We understand times are tough for many, and we are sensitive to the impacts price increases have on our customers,” said Ryan Adelman, vice president of power supply at Idaho Power, in the news release. “Unfortunately, our power supply costs were higher this past year because of continued drought conditions, high natural gas prices and fuel supply challenges, and we must recover those costs to maintain the reliable service our customers depend on.”
There are two components of the annual cost adjustments, including a fixed-cost adjustment and a power-cost adjustment.
The fixed-cost adjustment, which Idaho Power filed March 15, proposed a near $10 million, or 1.6%, decrease for residential and small commercial customers, which would lower monthly bills for a typical residential customer by $1.66 a month. The adjustment alters prices based on changes in energy use per customer during the prior year.
In the power-cost adjustment, used to recover costs by passing them onto the customer, Idaho Power requested an increase of 11.9%, or $12.72 a month, for the average residential customer. It was filed in April. If approved, it would increase the company’s revenues by about $200.2 million, or 14.7%.
The combined impact of the adjustments means rates would increase by a total of 10.3% for residential customers, 8.1% for small commercial customers and 16.2% for large commercial customers. Large power customers would see rates go up 20.3% and irrigation users 15%.
Idaho Power said the increase in this year’s power-cost adjustment is the result of higher power costs related to natural gas, market prices and lower than expected hydro generation, as well as a limited supply of coal.
It includes costs incurred the previous year and an estimate of what energy will cost in the coming year, according to the news release.
Several customers have filed written comments on the power-cost adjustment application, asking the utilities commission to deny Idaho Power’s request to raise rates, with some saying they’re already struggling to make ends meet. Others disputed Idaho Power’s claim that natural gas and coal prices have risen over the last year.
Last spring, the company proposed a combined increase in residential rates of 7.8% in its power-cost adjustment and fixed-cost adjustment effective June 1, 2022, through May 31, 2023. It also asked to raise rates by 6.4% for small commercial customers, 11.4% for large commercial customers, 14.3% for large power customers and 10.8% for irrigation users.
In addition to the annual spring cost adjustments, the company filed a notice with the utilities commission March 31 of its intent to file a general rate case on or after June 1, meaning prices will likely increase again later this year.
The last time Idaho Power filed a general rate case was in 2011, when the company proposed a rate increase of 8.8%.
Intermountain Gas asks for 4.4%
Intermountain Gas, headquartered in Boise, filed an application in December for a general rate increase, something it hasn’t asked for since 2016.
If it’s approved as-is, residential customers would see an average increase of $2.19, or 4.4%, on their monthly bills and commercial customers an increase of $3.43, or 1.5%.
The rate change would increase the company’s annual revenues by $11.3 million, or about 3.2%. The city of Boise, Idaho Conservation League and Alliance of Western Energy Consumers have filed petitions to intervene, indicating they have a stake in the outcome of the case.
In March, the utilities commission held public informational workshops regarding the request in Boise, Pocatello and Twin Falls.
According to Intermountain Gas, the request for a base rate increase is not impacted by fluctuations in the cost of natural gas. The company, which has over 400,000 residential, commercial and industrial customers in Southern Idaho, said the main reason it seeks to raise rates this time around is to recoup money it spent on infrastructure investments over the last several years.
The company said in its application that most of the investments were made prior to inflation rising in 2021.
Intermountain Gas already applied for an interim purchased-gas cost adjustment in December to raise its rates for natural gas services by 16.6%, or $8.58 a month, for residential customers and 17.9%, or $43.10 a month, for commercial customers. The utilities commission approved the adjustment and it took effect Feb. 1.
“We believe the infrastructure investments are prudent to ensure safe and reliable natural gas service to our customers,” said Nicole Kivisto, president and CEO of Intermountain Gas, in the application. “Current prices do not reflect the cost of providing service to our customers, which is why we are requesting this increase.”
Intermountain Gas said this is the second time it has requested a general rate hike in 37 years. The last one was a 2.5% increase that the utilities commission approved in 2017.
Spokesperson Laura Lueder previously told the Statesman that the purchased cost of natural gas is only a portion of the monthly bill homeowners and businesses receive. The rest pays for distribution and the cost of maintaining the network. The cost of natural gas makes up about 64% of a customer’s monthly bill, the company has said.
A public hearing for the general rate case has yet not been scheduled by the utilities commission.
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