The Bonneville Power Administration decided to permanently eliminate a $5.35 monthly credit that was passed through to Idaho Power Co. residential and small-business customers until May 2007.
The decision follows a 9th U.S. Circuit Court of Appeals decision at that time that said BPA, the region's federal wholesale power marketer, violated the Northwest Power Act when it approved a settlement in 2000 regarding wholesale power rates and credits to customers of Northwest public and private utilities.
The Idaho Public Utilities Commission said it "will pursue all available legal remedies to address this punitive and egregious error."
The court said customers of the region's investor-owned (private) utilities received too much in credits while customers of public co-ops and municipalities were overcharged. Idaho Power had passed through $15 million annually, and Rocky Mountain Power, which serves eastern Idaho customers, previously passed through $10.7 million annually. The latest plan offers no credits to the two utilities' customers.
BPA reduced the credit for customers of Avista Utilities, which serves northern Idaho, from $3.5 million to $1 million.
The BPA sells low-cost electricity generated at 31 dams and a nuclear plant in the Columbia River basin, primarily to consumer-owned public utilities that were given preferential rights to the power when the agency was established in 1937.
The Northwest Power Act, enacted in 1980, allowed residential and small-farm electric customers in the Northwest to share in the benefits of the region's federal hydroelectric projects through one of two ways. Customers of publicly owned utilities, such as rural electric co-ops and municipalities, benefit with preferential access to low-cost federal power available from BPA. Customers of the region's investor-owned utilities - which represent about 85 percent of Idaho customers - received their share of the benefit through the credit since 2001.
"The Northwest Power Act envisioned Residential Exchange Program benefits for all four states - Idaho, Montana, Washington, and Oregon," the Public Utilities Commission said in a news release.
"For the BPA administrator to issue a decision that all but eliminates these benefits for Idaho customers is inconsistent with the act."