Hydro plants are Idaho Power’s least expensive method of generating power. But the amount of hydroelectricity the company is able to generate depends directly on stream flows. Maintaining adequate flows in the Snake River is very important to Idaho Power’s customers. This single factor has a major impact on power production costs and, ultimately, rates.

When lower stream flows reduce hydroelectric generation, Idaho Power needs to draw more on its thermal (coal and gas) generating resources and power purchased from the market. In Idaho, the added cost for this energy is passed on to customers through the annual Power Cost Adjustment (PCA), regulated by the Idaho Public Utilities Commission (IPUC). In years of above-average hydroelectric generation, the company’s power supply costs go down and Idaho customers’ rates are lowered.