20240513Comments.pdf

RECEIVED
Monday, May 13, 2024 5:04PM
IDAHO PUBLIC
UTILITIES COMMISSION
Thomas J. Budge, ISB No. 7465
RACINE OLSON, PLLP
P.O. Box 1391; 201 E. Center St.
Pocatello, Idaho 83204-1391
[phone]
[e-mail]
Attorneys for P4 Production, L.L.C., an affiliate of Bayer Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION CASE NO. PAC-E-24-05
OF ROCKY MOUNTAIN POWER
REQUESTING APPROVAL OF $62.4 COMMENTS OF BAYER
MILLION ECAM DEFERRAL
P4 Production, L.L.C., an affiliate of Bayer Corporation(referred to herein as "Bayer"),
through counsel, submits these comments regarding the April 1, 2024, Application of Rocky
Mountain Power(the "Company") requesting approval of approximately $62.4 million of
deferred costs under the Company's approved energy costs adjustment mechanism ("ECAM").
These comments are submitted pursuant to the Commission's Order No. 36153 issued April 23,
2024, giving notice of the Application, giving notice that this matter will proceed under Modified
Procedure, and inviting written comments by May 14, 2024. Bayer filed a petition to intervene in
this matter on April 11, 2024, which was granted by the Commission's Order No. 36161 issued
May 1, 2024.
Introduction
Bayer owns and operates a plant in Soda Springs, Idaho, that utilizes three electric
furnaces to produce elemental phosphorus. Bayer's Soda Springs' plant is the largest single user
of electricity in Idaho, and the largest single user of electricity on the PacifiCorp system. Bayer
and its predecessor in interest have continuously been a contract customer of the Company since
the Soda Spring plant commenced operations in 1951.
The Company provides electric service to Bayer pursuant to an Electric Service
Agreement effective January 1, 2022 ("Agreement"). Under the Agreement, Bayer receives both
firm and interruptible power. While Bayer's rates are fixed pursuant to the Agreement, they
remain subject to annual ECAM adjustments like all other Idaho customers.
COMMENTS OF BAYER 1

Bayer's Comments
Bayer objects to two particular costs that the Company requests be included in the ECAM
for recovery from customers, namely(1) recovery of costs associated with allowance purchases
for the Washington Climate Commitment Act("CCA"), and(2) costs to comply with the Ozone
Transport Rule ("OTR").
The CCA was passed by the Washington State Legislature in July 2021. The CCA
requires that the Company purchase Greenhouse Gas ("GHG") allowances for any GHG
emissions-output within the state of Washington for export outside the state of Washington.
The only source of GHG emitting plants in the Company's portfolio is the 477 MW Chehalis
gas-fired plant. During the ECAM period(January 1, 2023- December 31, 2023), the Company
made $42 million in allowance purchases. Bayer is opposed to the inclusion of this state specific
compliance cost for recovery from Idaho's ratepayers. These costs are the result of state-specific
actions and should be assigned to the state where these costs have been approved. Notably, the
allowance costs are not applicable to any generation that is internal to the need of Washington
ratepayers. In other words, ratepayers in the state of Washington are exempt from paying for any
allowances.
The Wyoming Public Service Commission determined that the allowance costs from
Washington's Cap and Investment Program("WC&IP") should not be recovered from
Wyoming's ratepayers. The Wyoming Public Service Commission made the following finding in
its Memorandum Opinion, Findings and Order issued January 2, 2024:
211. The Commission concludes RMP shall not recover any costs associated
with the WC&IP in any rates charged to Wyoming customers. The
Commission rejects the Company's argument that these costs are
analogous to the Wyoming wind tax and therefore, subject to allocation
to all states under the 2020 Protocol. The Commission is persuaded by
the intervening parties' argument, as well as its own interpretation of the
2020 Protocol, that the WC&IP is a"State-Specific Initiative."If the
WC&IP is akin to any concept in the 2020 Protocol, it is akin to a
renewable portfolio standard since the explicit legislative objective of
the WC&IP is to reduce the use of fossil fuel generation. There is no
dispute that a resource procurement standard is situs under the 2020
Protocol. Indeed, the character of the WC&IP clearly indicates it is not a
tax. Specifically, the rate of GHG allowances is not set by the
Washington Legislature; they are set at an auction. Finally, the
Washington consumers do not pay for the GHG allowances. As such,
the WC&IP is appropriately situs-assigned to Washington. (Docket No.
COMMENTS OF BAYER 2

20000-633-ER-23, page 43)
The Public Utility Commission of Oregon has also disallowed recovery of the CCA costs
reasoning that the costs are a state-specific initiative that is properly allocated to Washington.
(Direct Testimony of Ramon J. Mitchell, Oregon PUC Docket No. UE 434, page 26.)
The OTR is the Environmental Protection Agency's ("EPA") finalized federal plan on
nitrogen oxides ("NOx") emission limits for 23 states, including Utah and Wyoming. The NOx
limits apply during the ozone season which spans May Ist to September 30th. The final rule was
published in the Federal Register on June 5, 2023 with an effective date of August 4, 2023. On
June 20, 2023, the Utah Attorney General filed a lawsuit against the EPA, seeking to overturn
the OTR. Shortly thereafter, the U.S. Court of Appeals for the Tenth Circuit granted a stay of the
EPA federal plan. In its Application, the Company is seeking recovery of approximately $17
million for the OTR. Bayer is opposed to recovery of any expenses that are not required to meet
the requirements of the OTR. These costs are not related to any operational condition that has
been in effect for addressing NOx emissions. This disallowance is a risk that should be borne by
the shareholders of RMP, not the ratepayers of Idaho.
Furthermore, in the Company's electric rate case in Wyoming, Record No. 17252, RMP
voluntarily removed costs associated with the OTR from its net power cost adjustment.
Based on the foregoing, Bayer respectfully requests that the Commission deny recovery
of costs for compliance with the CCA and the costs associated with the OTR. These costs should
not be charged to the RMP Idaho ratepayers.
DATED this 131h day of May, 2024.
RACINE OLSON, PLLP
By:
THOMAS J. BUDGE
COMMENTS OF BAYER 3

CERTIFICATE OF MAILING
I HEREBY CERTIFY that on this 131h day of May, 2024, 1 served a true, correct and
complete copy of the foregoing document, to each of the following, via the method so indicated:
Idaho Public Utilities Commission
Commission Secretary
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]
PacifiCorp
Data Request Response Center
[e-mail]
Mark Alder
Idaho Regulatory Affairs Manager
[e-mail]
Joe Dallas
Senior Attorney
Rocky Mountain Power
[e-mail]
Idaho Irrigation Pumpers Association
Eric L. Olsen
ECHO HAWK& OLSEN, PLLC
[e-mail]
Lance Kaufinan, Ph.D.
[e-mail]
PIIC
Ronald L. Williams
Williams Bradbury, P.C.
[e-mail]
PIIC Electronic Service Only:
Val Steiner: [e-mail]
Kyle Williams: [e-mail]
Adam Gardner: [e-mail]
THOMAS J. BUDGE
COMMENTS OF BAYER 4