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IDAHO POWER SEEKS NEW RATE METHODOLOGY TO EASE DROUGHT-RELATED FINANCIAL IMPACTS

 BOISE, Idaho, Nov. 24 ~PRNewswire~ -- Idaho Power Co. (NYSE: IDA) today asked the Idaho Public Utilities Commission to implement a far- reaching change in the way customer rates are set that could help shield the largely hydroelectric utility against the financial impacts of drought.
 The company said it seeks to adopt a power cost adjustment (PCA) mechanism under which customer rates will be adjusted annually to track actual power supply costs more closely. Idaho Power believes a PCA will provide its shareholders greater potential for long-term earnings stability as power supply conditions change.
 The Boise-based utility, which serves portions of southern Idaho, eastern Oregon and northern Nevada, has encountered sustained earnings pressure in recent years as prolonged drought in the area has crippled production at hydroelectric facilities.
 The company normally produces roughly two-thirds of its power from hydro plants, and the regulated general business rates it is allowed to charge customers are based on the assumption that "normal" power supply conditions exist.
 Because of the drought, the company has been experiencing extraordinarily high power supply costs as it has had to rely more heavily on its thermal plants and energy purchases from other utilities to meet customer power demands.
 A PCA is similar in some ways to the fuel cost adjustments familiar among thermal-based utilities.
 Under Idaho Power's proposal, customer rates would be adjusted next May based upon federal government river flow forecasts and anticipated power supply costs that would result. In subsequent years, rates would be adjusted every May based on the flow forecast for the coming year and a "truing up" of actual power supply costs experienced the previous year.
 In years when power supply costs decline because of heavy precipitation and superior hydroelectric conditions, customers' power rates would decrease. In years with poor water conditions when power supply costs rise, rates would increase.
 Idaho Power is hoping the Idaho Commission will rule on the PCA request no later than March 1 so that the mechanism will be in place as the spring runoff in the Snake River watershed begins.
 In the meantime, the company has temporarily shelved a request for a permanent rate increase it had planned to submit this fall. Pending the outcome of the PCA issue, the company now anticipates a filing for permanent rate relief probably will not occur until late 1993 or early 1994.
 -0- 11~24~92
 ~CONTACT: LaMont Keen, VP and chief financial officer, 208-383-2640, or Daniel Bowers, VP and treasurer, 208-383-2263, both of Idaho Power~
 (IDA)


CO: Idaho Power Co.; Idaho Public Utilities Commission ST: Idaho IN: UTI SU:

SW -- SE011 -- 1195 11~24~92 15:40 EST
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Date:Nov 24, 1992
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