Idaho Supreme Court weighs fairness of PacifiCorp rate hike request

(CN) — Attorneys sparred Friday before the Idaho Supreme Court over the state utility commission’s ability to deny PacifiCorp a rate increase.

PacifiCorp, which provides power to six states, sought a rate increase because of neighboring Washington state’s Climate Commitment Act. Those who emit greenhouse gases must buy allowances when emissions reach certain levels, leading PacifiCorp to buy $42 million of them.

It then requested the Idaho Public Utilities Commission’s approval to allocate approximately $2.3 million of that expense to Idaho customers, which the commission denied.

PacifiCorp appealed, arguing the commission exceeded its authority, as its request was fair and reasonable.

“This is simply PacificCorp passing along a cost,” said attorney Dallas DeLuca, representing the company.

An attorney for the commission argued that the dispute centered on whether PacifiCorp could pass along a Washington-based cost to Idaho customers. Pushing those costs onto Idaho customers isn’t fair and reasonable.

The high court made no decision Friday, instead taking the matter under submission.

DeLuca received pushback from the court. Justice Gregory Moeller questioned why an Idaho resident would accept paying more for electricity because of a Washington state policy.

“I don’t see why any Idaho taxpayer wouldn’t be outraged by that,” he added.

DeLuca argued PacifiCorp provides power to Idaho customers and should recover part of what it paid under Washington’s program, noting the company used its Chehalis plant to keep Idaho utility costs lower.

Justice Colleen Zahn stated that the court must first determine whether the commission erred in denying PacifiCorp’s request. She asked whether it was fair, just and reasonable to raise Idahoans’ rates because of a Washington policy and whether the commission acted within its authority.

“Why it that not the regular pursuit of its authority?” the justice added.

DeLuca said the commission’s decision must also be fair and reasonable for his client, noting the average monthly increase for an Idaho customer would climb 54 cents.

PacifiCorp had no other option, he added.

Adam Triplett, deputy attorney general, argued the opposite.

“The commission didn’t say you couldn’t recover these at all,” he said, adding its decision meant PacifiCorp couldn’t recover the costs in Idaho.

Triplett said utility rates cannot exceed the value of the service or be unfairly distributed among customers. He urged the court to see Washington’s Climate Commitment Act as the cause of Idaho’s higher bills — costs residents can’t control and from which they gain no benefit.

“They would just see their bills go up,” Triplett added.

According to Triplett, the commission faced the question of approving a rate hike tied to another state’s policy. He called that unreasonable, and the commission has the authority to turn down PacifiCorp’s request.

Additionally, PacifiCorp will soon have more options, Triplett said. A change occurring in the new year will enable the company to allocate all of the Chehalis plant’s power to Washington state.

“The company is not completely without recourse,” he added. “Moving forward.”

Giving his rebuttal, DeLuca presented an example of five people who each ordered a $5 coffee. However, once delivered, one person must pay only $4.50, a decision made by the coffee shop. That leads the other four to demand the same lower price.

In that example, the coffee shop is in Washington state, and the delivery person is from PacifiCorp. The deliveryman shouldn’t bear the blame for the different price, DeLuca argued, as it didn’t set the price.

PacifiCorp is also involved in a legal battle over the issue at the Ninth Circuit.

In June, it argued before an appeals panel that the Climate Commitment Act discriminates against companies that provide power to out-of-state customers—a violation of the dormant Commerce Clause.

DeLuca at that hearing argued the laws create a barrier to interstate commerce.

The appeals panel has yet to make a decision.