by Jamie Hale
It’s a war for the ages, the battle of the century: Hoku Materials Inc. vs. Idaho Power. What would two juggernauts like these fight so fiercely over? Just like the rest of us schmucks, Hoku is fighting Idaho Power over their bill. But unlike the rest of us schmucks, their power bill isn’t for some measly sum of $35 or $50. It’s more in the range of $5.6 million.
This whole issue started when Hoku signed a contract with Idaho Power for their Pocatello manufacturing plant back in 2009. Unfortunately, the company has been having some trouble getting their business off the ground, and by November, they kind of ran out of money for that electricity. Now Hoku owes Idaho Power $1.9 million for their November bill, another $1.9 million for December and an additional $1.8 million to finish off their $5.8 million security deposit.
The math comes out to a total bill of about $5.6 million. Ouch.
In response, Idaho Power threatened to shut off power to the plant. Punching back, Hoku filed a formal complaint with the Idaho Public Utilities Commission. The law states that Idaho Power can’t shut off the electricity to Hoku until after the commission settles the issue, so the PUC will hold a public hearing Wednesday afternoon in Boise, and go from there.
But let’s get to the arguments. Since Hoku is kind of on the ropes at the start of this fight, we’ll start with their side of the debate. In a press release sent out Monday, Hoku said they have been unfairly paying for power for a while now, and this bill is only another example of Idaho Power being unjust. Since the plant has remained largely dormant, they argue that they have only been using about $1,000 of power a day, not the $1.9 million a month Idaho Power is charging them.
They also say that although they signed a contract for the monthly bills, they don’t believe they are contractually obligated to pay the remaining $1.8 million for the deposit, especially since they already paid $4 million of it. That $4 million, they argue, should be used by Idaho Power to pay off the November and December bills and settle the whole thing.
But not so fast. Idaho Power contends that they can’t actually use the money from the deposit due to a tariff that says they have to keep the money until Hoku establishes good credit. Furthermore, they argue, Hoku signed a contract, and a contract is a contract. Stephanie McCurdy, Idaho Power’s media specialist, had some choice words about the whole ordeal.
“We’re not in the business of turning off power to our customers, it’s not something we like to do, but Hoku has not paid their bills,” she said. “There are consequences to those actions.”
But what about Hoku’s struggle to get the plant up and running in America’s poor economy? Doesn’t that count for something? Sympathy points?
“That’s unfortunate, but that doesn’t negate their contract,” said McCurdy. “Hoku signed this willingly. We didn’t twist their arm to sign this contract.”
Idaho Power also contends that without that money from Hoku, other customers could be in “imminent danger” of seeing a rate increase. Those details are wrapped up in some complicated power company lingo, but it should go without saying that Hoku disagrees.
In response, Hoku offered up a list of concessions they want Idaho Power to make, what one could interpret as a giant middle finger to the power company. In their Monday press release they asked Idaho Power to eliminate all minimum monthly payments, lower all the bills to the amount of power the plant actually used, eliminate that $1.8 million, continue all service and, most bold of all, issue a refund for all the power the plant paid for but didn’t use.
The Public Utilities Commission will hear the argument tomorrow at 2 p.m. in Boise. McCurdy said the commission is expected to make a decision soon after the hearing. If Idaho Power wins, and Hoku doesn’t pay its bills, she said, the Pocatello Plant can expect to go dark immediately.