Stepper Driver/Motor Voltage with Regulated Power Supply (Arduino)
The stepper driver does current limiting. You can set the current limit with the dip switches. Just make sure it is set to OFF-ON-OFF (SW1-SW2-SW3) for 1.7A. 

The stepper coils have a resistance of 2 Ohm, so at 1.7A they will require 3.4V. So the math seems to be correct. 

PS. the power supply is actually 24V not 12V.