20240531Direct Eric Hackett.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF IDAHO POWER COMPANY FOR ) CASE NO. IPC-E-24-07
AUTHORITY TO INCREASE RATES FOR )
ELECTRIC SERVICE TO RECOVER )
COSTS ASSOCIATED WITH )
INCREMENTAL CAPITAL INVESTMENTS )
AND CERTAIN ONGOING OPERATIONS )
AND MAINTENANCE EXPENSES . )
IDAHO POWER COMPANY
DIRECT TESTIMONY
OF
ERIC HACKETT

1 Q. Please state your name, business address, and
2 present position with Idaho Power Company ("Idaho Power" or
3 "Company") .
4 A. My name is Eric Hackett. My business address
5 is 1221 West Idaho Street, Boise, Idaho 83702 . I am
6 employed by Idaho Power as the Projects and Resource
7 Development Director.
8 Q. Please describe your educational background.
9 A. I graduated in 2003 from Boise State
10 University in Boise, Idaho, receiving a Bachelor of Science
11 degree in Civil Engineering. I am a registered professional
12 engineer in the state of Idaho. In 2010, I earned a Master
13 of Business Administration from Boise State University.
14 Q. Please describe your work experience with
15 Idaho Power.
16 A. From 2005 to 2007, I was employed as an
17 engineer in Idaho Power' s Transmission Engineering
18 group. In 2007, I became a Project Manager leading
19 transmission and distribution line and station
20 infrastructure projects . In 2012, I was promoted to
21 Engineering Leader where I managed the Cost and Controls
22 group supporting project management. In 2015, I changed
23 leadership roles and managed the Stations Engineering and
24 Design group as an Engineering Leader. In 2018, I was
25 promoted to Senior Manager of Projects overseeing Project
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Idaho Power Company

I Management and Cost and Controls, which later became
2 Manager of Projects and Design in 2021, adding Power
3 Production Design and Project Management. I was promoted to
4 my current role, Projects and Resource Development Director
5 in 2024 . In addition, I am currently leading a team of
6 internal employees and consultants in development and
7 evaluation of Idaho Power' s Request for Proposals for Peak
8 Capacity and Energy Resources .
9 Q. What is the purpose of your testimony in this
10 matter?
11 A. The purpose of my testimony is to discuss the
12 Company' s generation-related major projects, expected to be
13 complete in 2024 and included in the Company' s request in
14 this case . In my testimony I will discuss the prudent
15 nature of these investments, detailing why they are needed
16 to ensure Idaho Power' s generation fleet is robust and
17 well-positioned to provide continued safe, reliable service
18 to customers .
19 Q. How is your testimony organized?
20 A. My testimony begins with a background of the
21 Company' s generation fleet and the factors that have led to
22 additional generation-related investments required since
23 conclusion of Idaho Power' s last general rate case in 2023,
24 Case No . IPC-E-23-11 . I will then discuss the large capital
25 projects expected to be complete in 2024, detailing the
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Idaho Power Company

1 Company' s investment associated with the addition of
2 utility-scale battery projects and explain why Idaho
3 Power' s investment in these facilities reflects the least-
4 cost, least-risk option to ensure sufficient capacity to
5 meet customer demand in 2024 and beyond. My testimony will
6 conclude with a discussion detailing the renovation of one
7 of the Company' s aging fish hatcheries necessary for
8 licensing of one of Idaho Power' s hydro facilities to
9 ensure it is able to continue to provide safe, clean and
10 reliable energy to customers .
11 I . BACKGROUND
12 Q. Please describe Idaho Power' s current
13 generation fleet.
14 A. The backbone of Idaho Power' s current
15 generation fleet consists of the Company' s 17 hydroelectric
16 projects on the Snake River and its tributaries . Together,
17 these projects comprise the Company' s largest generation
18 source at approximately 1, 800 megawatts ("MW") of nameplate
19 capacity. Additionally, the Company is the sole owner of
20 three gas-fired generation facilities : the Danskin and
21 Bennett Mountain simple-cycle power plants located near
22 Mountain Home, Idaho, and the Langley Gulch combined-cycle
23 power plant located near New Plymouth, Idaho, which
24 collectively provide approximately 762 MW of combined
25 capacity.
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Idaho Power Company

1 The Company also holds a 33 percent ownership share
2 in the Jim Bridger power plant ("Bridger") , consisting of
3 two coal-fired units and two recently converted natural
4 gas-fired units which were placed in service in May 2024 .
5 Idaho Power' s share of current operations at Bridger
6 provides approximately 706 MW of combined net dependable
7 capacity. In addition, the Company has access to 134 MW of
8 net dependable capacity at the coal-fired North Valmy power
9 plant, reflecting 50 percent of the nameplate capacity at
10 Unit 2 of that facility. Recently, Idaho Power added the
11 Hemingway Battery Energy Storage System ("BESS") and the
12 Black Mesa BESS to its generation fleet which together
13 provide 120 MW of operating capacity. Lastly, the Company
14 owns and operates an 8 MW diesel facility near Salmon,
15 Idaho .
16 Q. Does Idaho Power' s request in this case
17 include any generation-related additions?
18 A. Yes . Since 2010, the Company' s actual system
19 peak has grown 1 . 5 percent per year on average, and over
20 the next five years Idaho Power is expecting to experience
21 unprecedented growth with an annual system peak increase of
22 approximately 3 . 7 percent per year, necessitating the
23 addition in 2024 of a BESS providing 60 MW of operating
24 capacity near Rogerson, Idaho and a BESS providing 36 MW of
25 operating capacity at Hemingway Station, which I will
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Idaho Power Company

1 discuss later in my testimony. In addition to growth, Idaho
2 Power continues to replace or refurbish existing
3 infrastructure to maintain safe, reliable operation of the
4 electrical grid, taking a proactive approach to ensuring a
5 robust and reliable generation fleet. In total, the
6 incremental generation-related investments expected to be
7 placed in service in 2024 total approximately $374 . 2
8 million and represent 43 percent of the incremental
9 investments included in the Company' s request in this case.
10 Q. How have the generation-related investments
11 grown since the completion of the last general rate case in
12 2023, Case No . IPC-E-23-11 ("2023 GRC") ?
13 A. Of the $860 million in infrastructure placed
14 in service over this period, the $374 . 2 million reflects
15 growth of 20 . 4 percent in generation-related investments in
16 the Company' s system since the Company' s 2023 GRC.
17 Q. Does the Company have a general procurement
18 policy for which it follows to ensure that all investments
19 Idaho Power makes are the procured in a least cost, least
20 risk manner?
21 A. Yes . The Company has a Procurement Policy and
22 Procurement Standard in place to provide guidance for
23 procurement activities, including competitive bidding
24 practices as well as for the purchase of many minor and
25 ancillary materials and services, and to help ensure that
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Idaho Power Company

1 procurement decisions are made based on the best overall
2 value to Idaho Power and its customers . In addition, many
3 goods are stock items in Idaho Power warehouses and are not
4 bid through a Request for Proposal ("RFP") on a project
5 basis, but rather as wholesale purchases . The Company' s
6 efforts ensure all projects are completed in a least-cost,
7 least-risk manner, including all generation-related
8 investments as well as the transmission and distribution-
9 related investments Mr. Colburn discusses in his testimony.
10 II . 2024 BATTERIES
11 Q. What drove the need for the addition of the
12 utility-scale battery projects for which the Company is
13 seeking a prudence determination in this case?
14 A. As mentioned earlier in my testimony, Idaho
15 Power has experienced and expects sustained load growth
16 thereby requiring the addition of new dispatchable
17 resources to meet system needs . As a result of this growth,
18 as well as limited third-party transmission capacity and a
19 decline in the peak serving effectiveness of certain
20 supply-side and demand-side resources, Idaho Power rapidly
21 moved to a near-term capacity deficiency identifying a
22 near-term capacity deficit in summer 2024 . To meet its
23 obligation to reliably serve customer load and fill the
24 2024 capacity deficiency, as soon as practicable, the
25 Company commenced a competitive solicitation with the
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Idaho Power Company

1 issuance of an RFP, seeking to acquire energy and capacity
2 to help meet Idaho Power' s previously identified capacity
3 needs of 85 MW to be online by June of 2024 and an
4 incremental 115 MW in 2025 ("2022 RFP") . This robust
5 competitive bidding process resulted in the procurement of
6 a 100 MW solar photovoltaic ("PV") plus 60 MW energy
7 storage project, consisting of a 25-year Power Purchase
8 Agreement ("PPA") for a 100 MW solar PV facility that
9 supplies energy to the Company' s system combined with an
10 Idaho Power-owned BESS providing 60 MW of operating
11 capacity ("Franklin BESS") . In addition, Idaho Power
12 procured a second BESS providing 36 MW of operating
13 capacity at the Hemingway station ("Hemingway BESS") . The
14 combined projects were necessary to adequately address 2024
15 capacity deficits .
16 Q. Did the Company file a request for a
17 Certificate of Public Convenience and Necessity ("CPCN")
18 for the 2024 BESS procurements?
19 A. Yes . Idaho Power' s request for a CPCN
20 associated with the Franklin BESS and the Hemingway BESS
21 for a total of 96 MW of operating capacity was presented in
22 two separate proceedings : (1) Case No. IPC-E-23-05 included
23 the request for a CPCN for the Franklin BESS with 60 MW of
24 operating capacity as well as the Hemingway BESS providing
25 12 MW of operating capacity, and (2) Case No. IPC-E-23-20
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Idaho Power Company

1 included the request for a CPCN to acquire an additional 24
2 MW of operating capacity for the Hemingway BESS . Following
3 filing of Case No. IPC-E-23-05 in February 2023, Idaho
4 Power determined that a capacity shortfall still existed in
5 2024 and therefore in May 2023, the Company filed Case No.
6 IPC-E-23-20 requesting approval to economically and
7 efficiently add 24 MW of battery storage to the planned 12
8 MW BESS at Hemingway. The Commission issued Certificate
9 Nos . 5441 and 5472 granting a CPCN for acquisition of 96 MW
10 of new dispatchable energy storage to meet the identified
11 capacity deficiency in 2024 .
12 Q. Did Order Nos . 35900 and 36011 impose any
13 conditions on costs associated with the procurement of the
14 Company-owned battery storage facilities providing 96 MW of
15 operating capacity?
16 A. Yes . With respect to the BESS providing 72 MW
17 of operating capacity approved with Order No. 35900 and the
18 BESS providing an additional 24 MW of operating capacity
19 approved with Order No. 36011, the Commission found it was
20 "fair, just, and reasonable to establish a soft cap"3 of
21 $ and $ , respectively. This
22 equates to a total soft cap of $
1 Case No. IPC-E-23-05, issued on October 27, 2023.
2 IPC-E-23-20, issued on January 4, 2024.
3 Order No. 35900, page 5 and Order No. 36011, page 6.
HACKETT, DI 9
Idaho Power Company

1 Q. Why did the Commission impose a soft cap on
2 the 2024 battery storage investments?
3 A. In both Order No. 35900 and 36011, the
4 Commission adopted Commission Staff' s ("Staff")
5 recommendation to implement the soft cap due to concerns
6 about whether least-cost, least-risk resources were
7 selected. In comments regarding the recommendation for the
8 soft cap on the BESS providing 72 MW of operating capacity,
9 Staff expressed concerns about ownership and resource type
10 restrictions .4 Similarly, in comments regarding the
11 recommendation for the soft cap on the BESS providing 24 MW
12 of operating capacity, Staff indicated they "believed that
13 due to the issues associated with the resource selection
14 process, the bid pool could have been larger and there
15 could have been additional final shortlisted projects with
16 lower costs . "5Neither soft cap foreclosed future requests
17 by Idaho Power for recovery of costs above the soft cap,
18 but rather indicated the Company would have to provide
19 justification for any costs above the soft cap when
20 requesting rate recovery.
21 Q. Was procurement of both the Franklin BESS and
22 the Hemingway BESS least-cost, least-risk?
23
4 Order No. 35900, page 3.
5 Order No. 36011, page 3.
HACKETT, DI 10
Idaho Power Company

1 A. Yes . The Company' s competitive solicitation
2 process was initiated as soon as practicable once the 2024
3 capacity deficiency was identified, with an RFP process
4 that did not restrict bids based on a resource type or
5 ownership structure, allowing bids for all commercially
6 viable resource types as well as third-party ownership of
7 those resources .6 Through the fair and competitive 2022 RFP
8 process, Idaho Power received 17 eligible project
9 submittals, comprising 23 different proposals, from 11
10 developers as potential for meeting the 2024 capacity
11 deficiency. Through qualitative and quantitative
12 evaluations, the RFP evaluation team narrowed the project
13 submittals to a final short list, and ultimately identified
14 a combination of two projects that resulted in the
15 acquisition of least-cost, least-risk resources : (1) the
16 100 MW solar PV facility combined with the Idaho Power-
17 owned Franklin BESS providing 60 MW of operating capacity,
18 and (2) the Hemingway BESS providing 36 MW of operating
19 capacity. The bid pool identified those resources that
20 could be constructed in the short timeframe and did not
21 hinder Idaho Power' s ability to identify the least-cost,
22 least-risk resources for meeting the 2024 capacity
23 deficiency.
24
6 As detailed in Sections 3.1 and 3.4 of the 2022 RFP.
HACKETT, DI 11
Idaho Power Company

1 Q. How do the Franklin BESS and Hemingway BESS
2 costs compare to the Commission' s soft cap?
3 A. The total Franklin BESS and Hemingway BESS
4 costs included in the Company' s request in this case are
5 $194 . 3 million compared to the Commission-established soft
6 cap for the combined Franklin BESS and Hemingway BESS
7 projects of $
8 Q. Should the Commission find project costs above
9 the soft cap are prudent?
10 A. Yes . The Franklin BESS and Hemingway BESS
11 projects represent the least-cost, least-risk resources to
12 meet the Company' s 2024 capacity deficits, and therefore
13 should be considered prudent investments . However, should
14 the Commission wish to evaluate the costs of those projects
15 in relation to the soft cap, it is important to consider
16 several necessary methodological adjustments to the soft
17 cap to make it a reasonable cost-effectiveness threshold.
18 First, I will address the soft cap established by
19 the Commission in Order No. 35900, with respect to the BESS
20 with 72 MW of operating capacity for which a CPCN was
21 granted in Case No . IPC-E-23-05 . In comments supporting its
22 position, Staff indicated they believed it was reasonable
23 to cap the proposed Franklin BESS and Hemingway BESS costs
24 based on the lowest unit price of the BESS facilities bid
25 into the 2022 RFP. However, the BESS that Staff selected as
HACKETT, DI 12
Idaho Power Company

1 the basis for the soft cap computation was not the most
2 cost-effective project identified to meet the 2024 capacity
3 deficit . Rather the most cost-effective project is the
4 project selected, the combined 100 MW solar PV plus 60 MW
5 energy storage facility. Staff' s analysis of the final
6 short list projects only captured the unit price associated
7 with the BESS and failed to account for the benefit
8 associated with the low PPA costs .
9 Q. Please explain how the low PPA costs
10 associated with the combined 100 MW solar PV plus 60 MW
11 energy storage facility result in a more cost-effective
12 project than the standalone energy storage project.
13 A. As part of the evaluation of the 2022 RFP
14 bids, Idaho Power used Energy Exemplar' s AURORA' s Long-Term
15 Capacity Expansion ("LTCE") modeling platform to develop
16 portfolios, through the selection of a variety of supply-
17 and demand-side resource options, that are least-cost,
18 least-risk for a variety of alternative future scenarios
19 while meeting reliability criteria. As a resource addition,
20 AURORA continually selected the combined solar PV and
21 battery storage in the LTCE analysis, indicating the low
22 solar PPA price is contributing to the value the project
23 provides as compared to the other final short list
24 projects . In addition to being a lower cost resource, when
25 compared to standalone battery storage systems, the
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Idaho Power Company

1 combined solar PV plus energy storage better meets the
2 Company' s capacity needs, resulting in a higher Effective
3 Load Carrying Capability than would exist as a standalone
4 energy storage system.
5 This was further evidenced in the additional AURORA
6 modeling scenario runs performed, which included a low
7 carbon/low gas scenario, a planning carbon/planning gas
8 scenario, and a high carbon/high gas scenario. In each of
9 these three futures, the same 2024 resources were selected,
10 confirming the 2024 resources selected reflect the least-
11 cost, least-risk option under a wide range of future
12 assumptions . As such, when computing a soft cap, it is more
13 appropriate to holistically consider the value of the 100
14 MW solar PV plus 60 MW energy storage facility and base the
15 soft cap of the 60 MW BESS on the unit price associated
16 with that project, as it was the least-cost resource
17 selected.
18 Q. How does the holistic evaluation you described
19 impact Staff' s soft cap calculation?
20 A. Under the holistic evaluation, which uses the
21 unit price of the least-cost resource, the soft cap
22 associated with the Franklin BESS would be approximately
23 $ , as opposed to Staff' s $
24 Q. Does the holistic evaluation impact the soft
25 cap established by the Commission for the Hemingway BESS
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Idaho Power Company

1 with 12 MW of operating capacity for which the Company
2 received a CPCN with Order No. 35900?
3 A. No, because Staff' s computation of the soft
4 cap was based on the unit price of the Hemingway BESS bid
5 submitted as part of the 2022 RFP, the 12 MW BESS . Idaho
6 Power believes there was, however, a flaw in Staff' s
7 methodology utilized to calculate the unit price for which
8 the soft cap was founded and ultimately
9 established by the Commission. Because this was the same
10 methodology for which Staff' s soft cap calculation of
11 $ for the BESS providing 24 MW of operating
12 capacity was based, and established by the Commission with
13 Order No . 36011, I will discuss the Company' s methodology
14 as it relates to the combined Hemingway BESS providing a
15 total of 36 MW of operating capacity, as a whole.
16 Q. What is Idaho Power' s underlying concern with
17 Staffs methodology for calculating the soft cap for the
18 Hemingway BESS?
19 A. The Company' s concerns with Staff' s
20 methodology for calculating the soft cap associated with
21 the Hemingway BESS relate to the exclusion of beginning of
22 life costs associated with the energy storage facility.
23 Battery cells within a BESS degrade over time . For example,
24 for illustrative purposes, a 100 MW BESS installation will
25 supply 100 MWs to the system on day one; however, assuming
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Idaho Power Company

1 a 7 percent degradation rate, that same 100 MW BESS will
2 only supply 93 MW to the system after one year. The
3 degradation rate varies and is a function of time and
4 throughput, or megawatt-hours . To mitigate the degradation,
5 additional battery segments are added. The Company believes
6 that when computing the unit price of the Hemingway BESS,
7 the project costs of the Hemingway BESS should include the
8 costs associated with day one batteries that mitigate
9 immediate degradation. By including additional battery
10 segments at the beginning of life, Idaho Power can ensure
11 reliable operation at full nameplate capacity (36 MW) for a
12 minimum of 4 hours through the first five years of
13 operation before necessitating a decision to augment the
14 BESS if the then current capacity is below the nameplate
15 capacity after year five . If the BESS system is not cycled
16 daily, the longevity and assurance of performing above the
17 nameplate capacity beyond five years is likely and thus
18 deferral of future augmentation investments can occur.
19 Q. Does Idaho Power believe the overbuild of the
20 BESS is necessary for day one operations?
21 A. Yes . The overbuild is necessary as it provides
22 for the most efficient plant balancing and cell
23 utilization, extending the guaranteed performance of the
24 entire system and ensuring the Company has the capacity
25 necessary to meet customer demand. Absent overbuild,
HACKETT, DI 16
Idaho Power Company

1 immediately upon the BESS being placed in service, Idaho
2 Power would instantly be placed in a resource deficit
3 relative to the required capacity resources of 36 MW,
4 necessitating additional procurement activities . It is
5 also consistent with the industry and how many other
6 utilities procure batteries .
7 Q. Why did Staff exclude the overbuild costs as a
8 component of their Hemingway BESS unit cost calculation?
9 A. Staff concerns about the overbuild amounts
10 were twofold: uncertainties related to the cost-
11 effectiveness of the projects absent the overbuild costs'
12 and when the batteries associated with the overbuild became
13 used and useful .$ First, Idaho Power' s basis for comparison
14 of BESS proposals was consistent among all projects during
15 evaluation through the RFP process . Because some projects
16 included overbuild in their proposals and some did not, to
17 ensure a consistent basis for comparison, the Company
18 adjusted all proposal prices to exclude overbuild costs for
19 bid evaluation purposes . Because adding battery cells is
20 linear from a cost perspective, the least cost project at a
21 0 overbuild is going to be the least cost project with a 5
22 year overbuild due to the linear nature of adding battery
23 cells . Therefore, the overbuild was appropriately captured
7 Case No. IPC-E-23-05, Staff Comments, pg. 5.
8 Case No. IPC-E-23-20, Staff Comments, pg. 12.
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Idaho Power Company

1 when comparing bids submitted as part of the 2022 RFP; the
2 selection of the Hemingway BESS was a least-cost resource .
3 Q. What concerns did Staff express regarding when
4 the BESS became used and useful?
5 A. Staff suggested the Company did not provide
6 certainty about when the overbuilt capacity would become
7 used and useful due to Idaho Power' s lack of experience
8 owning and operating a BESS, and indicated the manufacturer
9 warranties could be used for the first several years to
10 mitigate excessive degradation. However, manufacturer
11 warranties would only cover the failure of a battery cell,
12 not degradation of the BESS and therefore cannot be relied
13 upon to ensure reliable operation of the BESS at full
14 nameplate capacity.
15 Further, Staff did not recognize Idaho Power' s
16 first-hand, recent experience owning and operating an 80 MW
17 BESS at the Company' s Hemingway substation, placed in
18 service in 2023 . The 80 MW BESS includes overbuild, to
19 ensure reliable operation at full nameplate capacity, that
20 became used and useful immediately upon being placed in
21 service . The additional battery cells, which are cycled
22 along with the rest of the battery cells, result in more
23 time that the BESS can discharge at its nameplate capacity,
24 allowing for approximately 4 . 5 hours of discharging as
25 opposed to only 4 hours of discharging that would occur
HACKETT, DI 18
Idaho Power Company

1 absent the overbuild. The overbuild associated with the 36
2 MW Hemingway BESS will likewise be used, useful, and
3 provide benefits to customers as soon as it is placed in
4 service in 2024 . As such, Idaho Power believes it is
5 appropriate to include the overbuild costs as a component
6 of the unit price calculation of the 36 MW Hemingway BESS .
7 Q. How does the Company' s inclusion of beginning
8 of life costs impact Staff' s soft cap calculation?
9 A. Under the adjusted soft cap methodology to
10 include the beginning of life costs in the unit price
11 calculation, the soft cap associated with the Hemingway
12 BESS would be approximately $ , as opposed to
13 Staff' s $ ($ associated with the
14 12 MW BESS from Case No. IPC-E-23-05 and
15 associated with the 24 MW BESS from Case No. IPC-E-23-20) .
16 Q. In total, how do the Company' s combined
17 Franklin BESS and Hemingway BESS soft cap calculations
18 compare to the soft cap imposed by the Commission?
19 A. As shown in Table 1 below, the total soft cap
20 for the combined Franklin BESS and Hemingway BESS providing
21 96 MW of operating capacity would be $ under
22 Idaho Power' s holistic evaluation compared to $-
23 under Staff' s methodology.
24
25
HACKETT, DI 19
Idaho Power Company

1 Table 1 .
2 BESS Soft Cap Computation
Staff' s Proposal Adjusted
Methodology
Franklin BESS
Hemingway BESS
ANNINU-
Total
3
4 Q. What is the total investment in the 96 MW of
5 Company-owned battery storage included in Idaho Power' s
6 request in this case?
7 A. The Company is requesting in this case to
8 include the revenue requirement associated with an
9 investment amount of $194 . 3 million in rates for the
10 Franklin BESS and Hemingway BESS, which is less than the
11 $ soft cap under Idaho Power' s methodology.
12 Q. Does the information presented in your
13 testimony support Idaho Power' s assertion that the Franklin
14 BESS and Hemingway BESS providing 96 MW of operating
15 capacity in total procured by the Company were the least-
16 cost option to meet the 2024 capacity deficiency?
17 A. Yes . Idaho Power identified a 2024 capacity
18 deficiency in May 2021 and issued an RFP as soon as
19 practicable in December 2021 . This robust competitive
20 process ultimately resulted in the procurement of the
21 Franklin BESS and Hemingway BESS providing 96 MW of
22 operating capacity in total and included in the Company' s
23 request in this case . The final cost of these batteries is
HACKETT, DI 20
Idaho Power Company

1 lower than the soft cap computations proposed by Staff when
2 adjusted for methodological deficiencies . For these
3 reasons, the batteries providing 96 MW of operating
4 capacity and included in this case represent the least-
5 cost, least-risk option for customers .
6 III . FISH HATCHERY RENOVATION
7 Q. Which fish hatchery required renovation?
8 A. Idaho Power' s Oxbow hatchery, located
9 downstream from the Oxbow dam powerhouse at the mouth of
10 Pine Creek, is the holding and spawning facility for adult
11 steelhead migrating up the Snake River above its confluence
12 with the Salmon River. Built in 1961, the Oxbow hatchery
13 was the first hatchery facility constructed by the Company
14 as part of its hatchery mitigation program and is required
15 by the Federal Energy Regulatory Commission ("FERC") as
16 part of Idaho Power' s operating license for the Brownlee,
17 Oxbow, and Hells Canyon dams ("Hells Canyon Complex") . Due
18 to the aging infrastructure and need for modernization, and
19 the license requirement that the Company provide the
20 facility, it was essential the hatchery undergo an
21 extensive renovation.
22 Q. Please describe the Oxbow hatchery and its
23 operations .
24 A. The Oxbow hatchery is an Idaho Power facility,
25 operated by the Idaho Department of Fish and Game, with
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Idaho Power Company

1 facilities that formerly consisted of: (1) a small metal
2 building containing an office and incubation room, (2) two
3 concrete adult fish holding ponds, (3) two small concrete
4 fish-rearing raceways, (4) river water intake structure,
5 (5) a wood-framed hatchery manager' s residence, and (6) a
6 wood-framed bunkhouse .
7 The Oxbow hatchery traps and spawns enough adult
8 steelhead to provide the Niagara Springs hatchery with
9 approximately one million eggs annually. A majority of the
10 steelhead broodstock are trapped in November. These fish
11 are kept in holding ponds at the hatchery over the winter
12 to await spawning the following spring. Another small
13 portion of broodstock is usually collected each spring if
14 river conditions are conducive to operation of the trap.
15 This ensures that fish are collected and spawned from all
16 portions of the run. Spawning of approximately 600 male and
17 female fish begins in mid-March and concludes by late
18 April, with each female producing around 5, 000 eggs . Eggs
19 are then incubated at the hatchery until early May when
20 they are transferred to the Niagara Springs hatchery. In
21 March of the following year, fish have reached smolt size,
22 approximately 8 inches, and are hauled in tankers to the
23 Snake River where they are released below Hells Canyon dam
24 to begin their 570-mile migration to the Pacific Ocean.
25
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Idaho Power Company

1 In addition, hatchery staff operate the trap at the
2 Hells Canyon dam from May through mid-July to collect
3 spring Chinook salmon adults for use as broodstock at the
4 Rapid River hatchery, with the intent of trapping
5 approximately 250 adult salmon to produce 350, 000 smolts
6 annually. When spawning begins at the Rapid River hatchery
7 in August, a portion of the eggs collected there are
8 transferred to Oxbow hatchery for initial incubation.
9 These eggs are incubated for about one month and then
10 shipped back to Rapid River hatchery to complete incubation
11 and rearing.
12 Q. What were the signs the Oxbow hatchery
13 infrastructure was aging and needed renovation?
14 A. The main hatchery building, which contains the
15 office and an incubation room, had aged to the point where
16 water was leaking through the wall in the incubation room
17 and into the office . In addition, the ventilation system
18 was poor, allowing for chemical smells from the incubation
19 room to infiltrate the office . Furthermore, the river water
20 intake structure was severely degraded and at risk of
21 failure .
22 Q. You indicated the Oxbow hatchery was required
23 by FERC to operate the Hells Canyon Complex. What agreement
24 dictates Idaho Power' s requirement to fund the Oxbow
25 hatchery?
HACKETT, DI 23
Idaho Power Company

1 A. While construction of the Oxbow hatchery was
2 first necessitated by the FERC order of December 11, 1963,
3 that amended the Hells Canyon Complex license issued by
4 FERC effective July 31, 1955, a Settlement Agreement
5 entered into on February 14, 1980, between the National
6 Marine Fisheries Service, the Idaho Department of Fish and
7 Game, the Oregon Department of Fish and Wildlife, and the
8 Washington Department of Game ("1980 Settlement
9 Agreement") , dictates the current Oxbow hatchery operations
10 for which the Company is obligated.
11 Q. The Company has been involved in renewing its
12 long-term federal licenses for operating the Hells Canyon
13 Complex since 2003 . Does Idaho Power expect when FERC
14 issues the new license for the Hells Canyon Complex it will
15 include the requirement that the Company maintain the Oxbow
16 hatchery?
17 A. Yes . In fact, the renovation of the Oxbow
18 hatchery is a known requirement of the forthcoming new
19 license, having been identified as a key feature in the
20 2003 license application and further indicated as a project
21 feature by FERC in their 2007 Environmental Impact
22 Statement . However, due to the continued delay in the
23 issuance of a new license by FERC, the significant signs of
24 aging and potential safety issues, and the requirements
25 under the existing 1980 Settlement Agreement, renovation
HACKETT, DI 24
Idaho Power Company

1 and modernization of the Oxbow hatchery was imminent. As
2 such, in an application filed with FERC on October 8, 2021,
3 Idaho Power proposed to rebuild the Oxbow hatchery while
4 also proposing to include the hatchery as a project feature
5 in the existing license, as it inadvertently had not been
6 recognized as a project feature within the existing license
7 when constructed. FERC approved and included the renovated
8 Oxbow hatchery into the FERC license with its Order
9 Amending License, Approving Exhibit M, and Revising Project
10 Description issued January 26, 2023 . In addition to the
11 1980 Settlement Agreement and the existing and future Hells
12 Canyon Complex licenses requiring the Oxbow hatchery, FERC
13 has approved the rebuild of the Oxbow hatchery.
14 Q. Please detail the renovation and modernization
15 of the facility.
16 A. The renovation and modernization of the Oxbow
17 hatchery included the removal of the hatchery building, the
18 adjacent cooling unit, abandoned raceways in the northeast
19 corner of the site, the abandoned raceway west of the
20 existing hatchery building, intake structure, holding
21 ponds, sorting and spawning equipment, and a garage/storage
22 building. The Company will add a larger set of holding
23 ponds with an open-air structure covering them, a masonry
24 sorting and spawning building, a wood-framed hatchery
25 building, a wood-framed shop and storage building, a
HACKETT, DI 25
Idaho Power Company

1 surface water intake structure and aeration tower, and a
2 new visitor kiosk with interpretive and educational
3 information. The new intake structure addresses structural
4 and flood elevation issues that were experienced with the
5 existing intake structure. The rebuilt hatchery also
6 incorporated improved stormwater drainage infrastructure
7 and paved throughways and parking areas, with fill brought
8 in so that the hatchery meets floodplain requirements .
9 Q. Did the Company have to cease hatchery
10 operations while the renovation occurred?
11 A. No. The existing facility continued to operate
12 during construction and met its primary functions as : (1) a
13 sorting and transfer point for fish captured at the Hells
14 Canyon trap, (2) spawning, incubation and broodstock
15 holding for adult steelhead, and (3) incubation of spring
16 Chinook salmon, and short-term holding for adult spring
17 Chinook. No changes occurred to the number of fish held
18 onsite nor any plans to raise fish onsite occurred.
19 Q. Has the Oxbow hatchery renovation been
20 completed?
21 A. No. However, most of the work has been
22 completed, with final work expected to be finished in the
23 fall of 2024 . The facilities related to the majority of the
24 costs are expected to be placed in service in September
25 2024 . The Oxbow hatchery renovation is necessary to
HACKETT, DI 26
Idaho Power Company

1 maintain operations of the Hells Canyon Complex in
2 accordance with the FERC license and the 1980 Settlement
3 Agreement and is necessary for the continued safe, reliable
4 operation of the facility.
5 IV. CONCLUSION
6 Q. Please summarize your testimony.
7 A. Idaho Power experienced unprecedented growth
8 over the past decade, resulting in the need for the Company
9 to procure its first utility-scale resources in over a
10 decade . Idaho Power' s investment in the 2024 batteries
11 reflects the least-cost, least-risk option to meet the
12 Company' s resource need, as identified in the 2024 CPCN
13 cases and affirmed by Commission Order Nos . 35900 and
14 36011 . In addition, the 2024 renovation of one of the
15 Company' s aging fish hatcheries is necessary for licensing
16 of one of Idaho Power' s hydro facilities, ensuring it is
17 able to continue to provide safe, clean and reliable energy
18 to customers .
19 Q. Does this conclude your direct testimony in
20 this case?
21 A. Yes, it does .
22
23
24
25
HACKETT, DI 27
Idaho Power Company

1 DECLARATION OF ERIC HACKETT
2 I, Eric Hackett, declare under penalty of perjury
3 under the laws of the state of Idaho:
4 1 . My name is Eric Hackett. I am employed by
5 Idaho Power Company as the Projects and Resource
6 Development Director.
7 2 . On behalf of Idaho Power, I present this
8 pre-filed direct testimony in this matter.
9 3 . To the best of my knowledge, my pre-filed
10 direct testimony is true and accurate.
11 I hereby declare that the above statement is true to
12 the best of my knowledge and belief, and that I understand
13 it is made for use as evidence before the Idaho Public
14 Utilities Commission and is subject to penalty for perjury.
15 SIGNED this 31st day of May 2024, at Boise, Idaho.
16
17 Signed:
18 ERIC HACKETT
19
20
21
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23
HACKETT, DI 28
Idaho Power Company