20240514Public Comment_1.pdf

RECEIVED
Monday, May 13, 2024 4:42PM
IDAHO PUBLIC
UTILITIES COMMISSION
SIERRA
CLUB
13 May 2024
Submitted via email to [e-mail]
Idaho Public Utilities Commission
1331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-24-14; Idaho Power Company's Application for an Order
Authorizing Inclusion in the Bridger Balancing Account of all Non-Fuel Operations
and Maintenance Expenses Associated with Plant Operations
Dear Commissioners Anderson, Hammond, and Lodge:
Thank you for the opportunity to provide these comments in Case No. IPC-E-24-14,
wherein Idaho Power Company("Idaho Power") requests permission to commingle non-fuel
operations and maintenance expenses from the Jim Bridger gas and coal units in a single
balancing account. For the reasons stated below, Sierra Club urges the Commission to deny this
request and direct Idaho Power to maintain separate balancing accounts for costs associated with
the Jim Bridger gas units and Jim Bridger coal units.
Sierra Club is a national environmental organization representing over 650,000 members
across the country and over 2,500 members in Idaho. One of Sierra Club's top priorities is
addressing the climate crisis through the rapid and equitable transition away from fossil fuels to
clean energy. To that end, we have engaged in numerous utility regulatory proceedings across
the country, including before this Commission, and that experience informs our comments here.
I. Background and Idaho Power's Request
The Jim Bridger plant, located in Point of Rocks, Wyoming, is jointly owned by
PacifiCorp (2/3 owner) and Idaho Power(1/3 owner). The plant originally had four, coal-firing
units; however, this year, units 1 and 2 have been undergoing conversion to gas. Units 3 and 4
are expected to remain coal-firing units at least until 2030, when Idaho Power's 2023 IRP
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forecasts converting those units to gas.' However, the future of units 3 and 4 is uncertain, as
PacifiCorp's 2023 IRP Update forecasts installing carbon capture,utilization, and sequestration
on the units and continuing to operate them on coal through 2039.2
As Idaho Power describes in its application, the Bridger balancing account, established in
Case No. IPC-E-21-17, is meant to track"the incremental costs and benefits associated with
Idaho Power ending its participation in coal-fired operations at Bridger. ,3 Here, however, Idaho
Power is requesting authorization to include in that same balancing account costs—specifically
non-fuel operations and maintenance ("O&M") expenses—"associated with the gas-fired
operations [at units 1 and 2] that will commence in 2024." Idaho Power acknowledges that the
non-fuel O&M expenses for the gas units will be different from the non-fuel O&M expenses for
the coal units, even if the total amounts ultimately are similar. Nevertheless, Idaho Power claims
that because the Jim Bridger plant will continue to produce steam for electric generation,under
the Code of Federal Regulations, the Company will be required to record all Bridger expenses in
"steam production accounts" and"will be unable to differentiate non-fuel O&M expenses by
unit."
II. Commingling Coal and Gas Expenses for the Jim Bridger Units is Inappropriate
and Would Frustrate Future Prudency Reviews
With the conversion of units I and 2, Jim Bridger has, for all intents and purposes, been
split into two separate plants: a two-unit gas plant and a two-unit coal plant. The coal units will
have costs, operational profiles, and regulatory requirements that are separate and distinct from
the gas units. For instance, the gas units are expected to operate as peaking resources, whereas
the coal units are expected to operate more regularly. Additionally, Jim Bridger units 3 and 4 are
subject to the newly finalized Clean Air Act I I I(d) carbon dioxide regulations from the U.S.
Environmental Protection Agency(as well as other recently finalized regulations), whereas the
gas units are not. And, of course, the units operate on different fuel types that have very different
associated costs, with coal supplied by the PacifiCorp-owned Bridger mine and gas supplied by
the market subject to global price swings. Differences like these are meaningful, even if total
costs are relatively similar. For instance, with stricter environmental regulations imposing more
costs on operating the Jim Bridger coal units, it will be necessary to closely scrutinize whether
continued investment in those units is in the best interest of ratepayers. Yet, by commingling
costs associated with both the gas and coal units into a single balancing account, Idaho Power
would make it impossible to distinguish between costs incurred on behalf of the coal units from
' Idaho Power 2023 Integrated Resource Plan at 10(Sept. 2023), available at
https://docs.idahopower.com/pdfs/AboutUs/PlanningForFuture/irp/2023/2023-irp-final.pdf.
2 PacifiCorp 2023 Integrated Resource Plan Update at 14 (April 2024), available at
https://www.pacificorp.com/content/dam/pcorp/documents/en/pacificorp/energy/integrated-resource-
plan/2023_IRP_Update.pdf
'In the Matter ofldaho Power Company's Application for Authority to Increase its Rates for Electric
Service to Recover Costs Associated with the Jim Bridger Power Plant, Case No. IPC-E-21-17, Order No.
35423, available at
https://puc.idaho.gov/Fileroom/PublicFiles/ELEC/IPC/IPCE2117/OrdNotc/20220601 Final_Order_No_35
423.pdf.
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costs incurred on behalf of the gas units. This would frustrate a future prudency review, in which
cost recovery will be dependent upon specific characteristics of the units.
Moreover, the Bridger balancing account was never intended to capture costs associated
with Jim Bridger gas units. Instead, in Order No. 35423, the Commission accelerated the
depreciation schedule for the Jim Bridger plant so that the plant would be fully depreciated and
recovered by December 31, 2030 and simultaneously established a balancing account to track the
costs associated with Idaho Power ending its participation in coal-fired operations at Jim
Bridger. Order No. 35423 did not contemplate that Idaho Power would decide to not retire all
four units at Jim Bridger and instead continue operating some of those units on gas.
Finally, while it is true that all four units at Jim Bridger will continue to produce steam
for electricity generation, it is not accurate that all four units must be grouped as a single plant
for accounting purposes. Idaho Power could separate costs for the gas units from the coal units,
as would be appropriate given that these two groupings of units operate as separate generating
resources. Indeed, utilities typically have separate accounts for each individual steam generation
plant.
III. Conclusion
For the reasons stated above, Sierra Club recommends that the Commission deny Idaho
Power's request and direct the Company to maintain accurate and separate accounting of costs
and benefits associated with the Jim Bridger gas units and Jim Bridger coal units.
Respectfully submitted,
Rose Monahan
Staff Attorney*
Sierra Club
2101 Webster Street, Suite 1300
Oakland, California 94612
415-977-5704
[e-mail]
*not barred in Idaho
Lisa Yo g
Idaho Chapter Director
Sierra Club
910 W Main Street#208
Boise, Idaho 83702
208-3 84-1023
[e-mail]
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