20240531Final_Order_No_36202.pdf

Office of the Secretary
Service Date
May 31,2024
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) CASE NO. IPC-E-24-17
OF IDAHO POWER COMPANY FOR )
AUTHORITY TO IMPLEMENT POWER ) ORDER NO. 36202
COST ADJUSTMENT ("PCA") RATES FOR )
ELECTRIC SERVICE FROM DUNE 1, 2024, )
THROUGH MAY 31, 2025 )
On April 15, 2024, Idaho Power Company ("Company") filed an application
("Application") with the Idaho Public Utilities Commission ("Commission") requesting an order
approving an update to Schedule 55 based on the Company's quantification of the 2024-2025
Power Cost Adjustment("PCA"),to become effective June 1,2024,for the period of June 1,2024,
through May 31, 2025.
BACKGROUND
The PCA mechanism permits the Company to increase or decrease its PCA rates to reflect
the Company's annual "power supply costs." Due to its diverse generation portfolio, the
Company's actual cost of providing electricity varies from year to year depending on changes in
such things as the river streamflow, the amount of purchased power, fuel costs, the market price
of power, and other factors. The annual PCA surcharge or credit is combined with the Company's
"base rates"to produce a customer's overall energy rate.
The PCA quantifies and tracks annual differences between actual Net Power Supply
Expenses("NPSE")and the normalized or"base level"of NPSE recovered in the Company's base
rates, resulting in a credit or surcharge that is updated annually on, June 1. The PCA mechanism
uses a 12-month test period from April through March ("PCA Year") and includes a forecast
component and a Balancing Adjustment. The forecast component represents the difference
between the Company's NPSE forecast from the March Operating Plan and base level NPSE
recovered in the Company's base rates. The Balancing Adjustment includes a backward-looking
tracking of differences between the prior PCA Year's forecast and actual NPSE incurred by the
Company, and also tracks the collection of the prior year's Balancing Adjustment.
Except for Public Utility Regulatory Policies Act of 1978 ("PURPA") expenses and
demand response incentive payments, the PCA allows the Company to pass through to customers
95 percent of the annual differences in actual NPSE as compared with base level NPSE, whether
ORDER NO. 36202 1

positive or negative. With respect to PURPA expenses and demand response incentive payments,
when actual annual expenses deviate from base level NPSE, the Company is allowed to pass 100
percent of the difference for recovery or credit through the PCA. The PCA is also the rate
mechanism used by the Company to provide customer benefits resulting from the revenue sharing
mechanism, approved by the Commission in Order No. 34071.
THE APPLICATION
The Company represented that the update to Schedule 55, based on the Company's
quantification of the 2024-2025 PCA,would result in an overall decrease to current billed revenue
of approximately $35.7 million. Application at 15.
The Company represented that the system-level forecast of NPSE for the 2024-2025 PCA
Year was $509,555,990, which was $24,648,746 higher than the currently approved base level
NPSE of$484,907,244, and $31,943,394 lower than last year's forecast amount of$541,499,384.
Id. at 7-8. The Company stated that the 2024-2025 PCA forecast component to be collected from
Idaho customers was $22,712,031.Id. at 8.
The Company represented that the PCA Balancing Adjustment deferral balance at the end
of March 2024,with interest applied,was approximately$90 million,which represented a decrease
to customers rates in this year's PCA Balancing Adjustment.Id.
The Company represented that the Company's Idaho jurisdictional year-end Return on
Equity ("ROE") was below the 10.0 percent ROE threshold for revenue sharing; therefore, the
2024-2025 PCA did not include a revenue sharing component. Id. at 9.
The Company represented that for the 2024-2025 PCA Year,the Company's uniform PCA
was comprised of. (1) the 0.1501 cents per kilowatt-hour ("kWh") for the 2024-2025 projected
power cost of serving firm loads under the current PCA methodology and 95 percent sharing, and
(2)the 0.5946 cents per kWh for the 2023-2024 Balancing Adjustment, with the sum of these two
components resulting in a 0.7447 cents per kWh charge for all rate classes. Id. at 10-11.
The Company represented that the 2024-2025 total PCA amount, as measured from the
currently approved base level NPSE, was $112.7 million, which represents a decrease in total
billed revenue of$35.7 million, or 2.31 percent, for Idaho customers, effective June 2024 through
May 2025.Id. at 11.
ORDER NO. 36202 2

STAFF COMMENTS
Commission Staff("Staff')reviewed the Application, an audit of sampled transactions,the
testimony and workpapers of Company witness Jessica G. Brady, and the Company responses to
Staffs audit and production requests. Staff examined the Company's sales and expenses for the
historical 2023-2024 PCA Year, forecasting methods, projected revenues, and expenses for the
upcoming 2024-2025 PCA Year. Staff also verified that the Company's filing and methods
complied with prior, relevant Commission Orders.
Based on its review, Staff recommended that the Commission approve the Company's
Application. Staff also believed that:
1. The Company's forecast for the upcoming PCA Year(2024-2025)of electricity sales,
loads, fuel consumption, fuel costs, and purchased power costs were reasonable;
2. The Company should apprise the Commission of how the forecast changes during the
PCA Year; and, if an adjustment to the forecast rate is warranted,the Company should
make an off-cycle filing;
3. The Company's balancing adjustment is accurate and the NPSE is prudent;
4. The NPSE from the previous PCA case is prudent; and
5. The Commission should consider late filed comments by customers.
COMPANY REPLY COMMENTS
The Company supported Staff s recommendation for the Company to keep the
Commission and Staff apprised of changes to the PCA forecast that could warrant an out of-cycle
PCA adjustment. Company Comments at 3.
The Company represented that it manages NPSE risk through the Company's Energy Risk
Management Standards ("ERMS"), which set forth guidelines for setting volumetric and financial
exposure limits that dictate the Company's allowed hedging activity, and the Company agreed to
review these guidelines and discuss potential changes with Staff throughout the 2024-2025 PCA
Year. Id. The Company also indicated that it would include a discussion of those efforts in next
year's PCA filing, and the Company agreed to adjust its annual PCA testimony to focus more on
actual generation and expenses as opposed to the PCA forecast and include a table that contains
actual generation and expenses by resource type. Id.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company's Application and the issues in this
case under Title 61 of the Idaho Code including Idaho Code §§ 61-301 through 303. The
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Commission is empowered to investigate rates, charges,rules,regulations,practices, and contracts
of all public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provisions of law, and to fix the same by order.Idaho Code
§§ 61-501 through 503.
The Commission reviewed the Application, all submitted materials, and all submitted
comments. The Commission notes that there were no late filed comments. Based on its review of
the record, the Commission finds it fair,just, and reasonable to approve the Application.
ORDER
IT IS HEREBY ORDERED that Idaho Power's Application is approved as discussed
above. The Company shall have a uniform PCA rate of 0.7447 cents per kWh, effective June 1,
2024. The Company's proposed Schedule 55 is approved as filed.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon this Order regarding any
matter decided in this Order. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. Idaho Code §§ 61-626
and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this 3 1"day of
May 2024.
ERIC ANDERSON, PRESIDENT
J R. F1AMMOND JR., COMMISSIONER
EDWARD LODGE, COMMISSIONER
ATTEST:
I IJQS�
Mo i . B arri
Commission Secretary
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