20240729IPC to Staff 1-10.pdf

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DONOVAN WALKER
Lead Counsel RECEIVED
dwalker(cDjdahopowerxom Monday, July 29, 2024
IDAHO PUBLIC
July 29, 2024 UTILITIES COMMISSION
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714
Re: Case No. IPC-E-24-22
In The Matter of Idaho Power Company's Compliance Filing to Update the
Customer Surcharge to Collect Incremental Costs of Distribution
Undergrounding of the New 138 kV Transmission Line in the Wood River
Valley and Establish Necessary Regulatory Accounting Treatment
Dear Commission Secretary:
Attached for electronic filing is Idaho Power Company's Response to the First
Production Request of the Commission Staff in the above-entitled matter. The Company is
posting the attachments to these requests to the secure FTP site due to the file size of its
documents. The login information for the non-confidential portion of the FTP site will be
provided to all parties that have intervened to date.
If you have any questions about the attached filing, please do not hesitate to contact
me.
Sincerely,
Donovan Walker
DEW:cd
Enclosures
100351428.DOCX;1}

DONOVAN E. WALKER (ISB No. 5921)
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
dwalkerCcDidahopower.com
mgoicoecheaallenCa�_idahopower.com
Attorneys for Idaho Power Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF IDAHO POWER )
COMPANY'S IN THE MATTER OF IDAHO ) CASE NO. IPC-E-24-22
POWER COMPANY'S COMPLIANCE )
FILING TO UPDATE THE CUSTOMER ) IDAHO POWER COMPANY'S
SURCHARGE TO COLLECT ) RESPONSE TO THE FIRST
INCREMENTAL COSTS OF DISTRIBUTION ) PRODUCTION REQUEST OF THE
UNDERGROUNDING OF THE NEW 138 KV ) COMMISSION STAFF
TRANSMISSION LINE IN THE WOOD )
RIVER VALLEY AND ESTABLISH )
NECESSARY REGULATORY )
ACCOUNTING TREATMENT )
COMES NOW, Idaho Power Company ("Idaho Power" or "Company"), and in
response to the First Production Request of the Commission Staff ("Commission" or
"Staff") dated July 8, 2024, herewith submits the following information:
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO IDAHO POWER COMPANY - 1

STAFF REQUEST FOR PRODUCTION NO. 1: Please provide a detailed
breakdown of the $19,994,550 actual project cost for the distribution project, similar to the
breakdown shown in the Overhead Distribution Alternative Cost Summary in Attachment
3 of the Application. Please provide it in Excel format with formula intact. Also please
provide the following for the breakdown:
a. A short description for each of the costs in the breakdown;
b. How much of each cost item is known, and how much is estimated; and
C. Data for all individual costs, in Excel format, separated into the categories
listed on Attachment 3. For each expense, please provide: the date, invoice number, total
amount, description, and all other useful information.
RESPONSE TO STAFF'S REQUEST FOR PRODUCTION NO. 1:
Please see the Excel file titled "Attachment 1 to Staff Request for Production No.
1 — Dist. Underground Cost Summary," which includes a breakdown of costs that match
the cost categories in Attachment 3 of the Company's Application. Staff's request (a)
above is addressed within the spreadsheet, which breaks down costs by cost category.
Staff's request (b) above is addressed in column C (Actual) and column D (Remaining)
of the spreadsheet, representing known and estimated costs, respectively. For Staff's
request (c), all project costs are provided by the categories listed on Attachment 3 to the
Company's Application. Additionally, invoice numbers and associated amounts are
provided for materials and purchased services in "Attachment 2 to Staff Request for
Production No. 1 — VAR11005 Transaction Details."
The response to this Request is sponsored by Eric Hackett, Projects and Resource
Development Director, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 2

STAFF REQUEST FOR PRODUCTION NO. 2: Please provide an explanation
and workpapers in Excel format showing how the overhead and Allowance for Funds
Used During Construction ("AFUDC") percentages were calculated in Attachment 3.
Please show this for both the actual project expenses and for the "2017 CPCN" baseline
expenses.
RESPONSE TO STAFF'S REQUEST FOR PRODUCTION NO. 2:
In the development of the alternative overhead distribution project cost estimate,
Idaho Power used the current (as of February 2024) AFUDC rate of 7.34 percent and the
Company's distribution overhead rate of 10.5 percent. See Attachment 1 to Staff Request
for Production No. 2. The attachment has two tabs that show the calculation of overheads
and AFUDC for the estimated actual underground distribution project (labeled "Planned
— WRV UG Dist.") and for the alternative overhead distribution project (labeled
"Alternative WRV OH Dist."). Staff asked for the "2017 CPCN" baseline expenses,
however, the 2017 CPCN baseline combined the costs of transmission and distribution
construction. As distribution undergrounding construction has been separated from
transmission construction, the "Alternative WRV OH Dist." estimate is the distribution-only
equivalent of the "2017 CPCN" baseline.
The response to this Request is sponsored by John Wonderlich, Finance Team
Leader II, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 3

STAFF REQUEST FOR PRODUCTION NO. 3: Please provide a breakdown of
the $2 million "Reduced costs from underground construction" shown on line 34 in
Attachment 3 of the Application by the cause for the reduction in cost (i.e. shorter
transmission poles/less steel, fewer foundations, shallower holes) in Excel format with
formula intact. For each cause category, please provide the basis for each of these cost
reductions with a further breakdown by material, labor, purchased services, overhead,
and AFUDC, etc.
RESPONSE TO STAFF'S REQUEST FOR PRODUCTION NO. 3:
Please see the spreadsheet titled "Attachment 1 to Staff Request for Production
No. 3— Reduced Cost Comparison." This spreadsheet compares the pole and steel costs
associated with a transmission project with distribution underbuild ("Original Design") to
a transmission-only construction without any distribution ("New Design"). The New Design
requires shorter and fewer poles, which reduces steel costs for the project. The total
avoided costs of transmission associated with distribution undergrounding are
represented in the amount in cell J10. The Company rounded up $1.97 million to the
estimated $2 million credit identified in line 34 of Attachment 3 of the Company's
Application.
The response to this Request is sponsored by Eric Hackett, Projects and Resource
Development Director, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF -4

STAFF REQUEST FOR PRODUCTION NO. 4: Please explain why the Company
believes it should apply the $2 million credit for avoided transmission tower costs to the
present project, and not to the future transmission project, since the costs have not truly
been avoided yet.
RESPONSE TO STAFFS REQUEST FOR PRODUCTION NO. 4:
The Company has applied the $2 million credit to the distribution project because
the distribution undergrounding created the avoided transmission costs—that is, were it
not for the distribution undergrounding the transmission would cost more. However,
because the benefit will not be realized by all customers until the transmission is in
service, the Company chose to not seek collection of$2 million in actual distribution costs
until the transmission portion of the project is in service. To be clear, Idaho Power is
delaying its request for capital recovery to ensure the timing matches the timing of avoided
costs, consistent with Staff's phrasing.
The response to this Request is sponsored by Alison Williams, Regulatory Policy
and Strategy Leader, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 5

STAFF REQUEST FOR PRODUCTION NO. 5: Please explain how the Company
calculated the 20-year Blaine County surcharge and provide all detailed workpapers used
to derive the calculation of the surcharge in Excel format with all formulas intact. Please
provide the customer data (e.g. billing information) which reflects the up-to-date customer
counts.
RESPONSE TO STAFFS REQUEST FOR PRODUCTION NO. 5:
The method of calculating the Blaine County surcharge was described in the Direct
Testimony of Timothy E. Tatum, Section ll: Surcharge, in the prior Wood River Valley
surcharge case, Docket No. IPC-E-21-25.1 This methodology was approved by the
Commission in Order No. 35452.
Please see "Attachment 1 to Staff Request for Production No. 5 — Surcharge
Model," which is the model used to calculate the distribution-specific surcharge amounts
used in the Company's Application. The tab "2023 Surcharge Calculation" shows the
development of the distribution-only surcharge for applicable residential and non-
residential customers, based on 2023 Blaine County billed revenues (provided in tab
"2023 Billing Data").
The Company's method of developing the surcharge is consistent with the
Commission-authorized method described in Mr. Tatum's testimony. However, because
the project shifted from transmission and distribution to a distribution-only surcharge, the
model was adjusted to account for distribution-only costs and associated surcharge
collection. Specifically, the surcharge rate (based on a percentage of the Company's
In the Matter of Idaho Power Company's Petition for Approval of a Customer Surcharge and Modified
Line Route Configuration for Construction of a New 138 kV Transmission Line I the Wood River Valley,
Direct Testimony of Timothy E. Tatum, pg. 16-25.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 6

annual billed revenue in Blaine County) was reduced from 3 percent (which was for
transmission and distribution) to a distribution-only collection amount of 1 .46 percent,
which results in the necessary collection of $6.2 million for distribution-only incremental
undergrounding costs, as presented in this case and as shown in the "Revenue
Projection" tab. Please note that while the Company originally included a $35,000 annual
administrative fee for managing the surcharge collection in IPC-E-21-15, this amount was
excluded from the Company's request in this case, as the Company seeks to align
collection of administrative costs with completion of the full project. Accordingly, the
Company will seek to include the fee in the transmission surcharge.
The response to this Request is sponsored by Alison Williams, Regulatory Policy
and Strategy Leader, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 7

STAFF REQUEST FOR PRODUCTION NO. 6: Please provide workpapers in
Excel format, for each month, which total the surcharges that will be collected over the
entire 20 years.
RESPONSE TO STAFFS REQUEST FOR PRODUCTION NO. 6:
Please see "Attachment 1 to Staff Request for Production No. 5 — Surcharge
Model." Specifically, the "Revenue Projection" tab shows the annual collection over the
20-year collection period. The total surcharge collection was calculated annually for the
purpose of the surcharge development model, which was based on annual billed revenue.
Revenue collection will be tracked monthly.
The response to this Request is sponsored by Alison Williams, Regulatory Policy
and Strategy Leader, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 8

STAFF REQUEST FOR PRODUCTION NO. 7: Please explain how the Company
will address over-collected or under-collected amounts received from the surcharge after
20 years.
RESPONSE TO STAFF'S REQUEST FOR PRODUCTION NO. 7:
The payment period is expected to be approximately 20 years based on estimated
customer growth, as shown in the surcharge model provided in response to Staff's
Request for Production No. 5. If Blaine County customer growth exceeds the current
estimate, the surcharge collection will be faster than anticipated and the collection
duration will be shorter than 20 years. On the other end, if Blaine County customer growth
lags the current estimate, the duration of the surcharge will be longer than 20 years.
Therefore, Idaho Power will stop applying the surcharge the month at which the
incremental Blaine County cost has been fully paid. Any overage will be refunded to
Blaine County customers.
The response to this Request is sponsored by John Wonderlich, Finance Team
Leader II, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 9

STAFF REQUEST FOR PRODUCTION NO. 8: Please explain how the Company
will address mismatches in the depreciation expense and the surcharge collection from
an accounting perspective. Please provide hypothetical journal entries.
RESPONSE TO STAFF'S REQUEST FOR PRODUCTION NO. 8:
In Order No. 35452, the Commission approved Idaho Power's request for an
accounting order to match the annual depreciation expense with the actual annual
principal payment of the incremental capital paid by Blaine County customers so that the
incremental costs are fully depreciated over the same time period as the surcharge is
collected and ensuring that Idaho Power's broader retail customer base is held harmless
from a revenue requirement perspective. The Company will depreciate an amount equal
to the principal portion of the surcharge revenue collected. Journal entries would be to
debit depreciation expense and credit accumulated depreciation.
The response to this Request is sponsored by John Wonderlich, Finance Team
Leader II, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 10

STAFF REQUEST FOR PRODUCTION NO. 9: Please provide customer counts
by customer schedule (Schedules 1, 3, 5, 6, etc.) over the last ten years (2012-2023) for
customer schedules affected by the Blaine County surcharge.
RESPONSE TO STAFFS REQUEST FOR PRODUCTION NO. 9:
Please see "Attachment 1 to Staff Request for Production No. 9."
The response to this Request is sponsored by Matisse Weigel, ERP Applications
Senior Manager, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 11

STAFF REQUEST FOR PRODUCTION NO. 10: Please describe the likely
impacts if the Commission denies the Company's request to split the surcharge and
requires the Company to complete both the distribution and transmission work before
allowing the surcharge to be implemented.
RESPONSE TO STAFF'S REQUEST FOR PRODUCTION NO. 10:
The surcharge revenue results in a revenue credit to the revenue requirement in
the rate making process eliminating the impact of the incremental Blaine County costs to
the rest of Idaho Power's customers. Absent the surcharge revenue specific to each
segment of the project (distribution and transmission) in the revenue requirement in a rate
case, the incremental Blaine County costs would result in a higher revenue requirement
to all Idaho Power customers. This result would unfairly place incremental costs on the
rest of Idaho Power's customers until the surcharge is implemented and a regulatory
proceeding occurs to adjust the rest of Idaho Power's customers rates to account for the
impact of the surcharge revenues. In the limited scope rate case, the Company has
assumed Blaine County customers are paying for the incremental costs of distribution
undergrounding and therefore offset the project's plant balance by the incremental cost
of the distribution undergrounding that will be recovered from Blaine County customers,
thereby lowering the revenue requirement request. If the surcharge request was denied,
then the revenue requirement in the limited scope rate case should increase or, in the
alternative, the Company would seek to account for short-term lost return of and on the
distribution portion project via a capital deferral request.
The response to this Request is sponsored by John Wonderlich, Finance Team
Leader II, Idaho Power Company.
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 12

Respectfully submitted this 29th day of July 2024.
DONOVAN WALKER
Attorney for Idaho Power Company
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 13

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on the 29t" day of July 2024, 1 served a true and correct
copy of the within and foregoing IDAHO POWER COMPANY'S RESPONSE TO THE
FIRST PRODUCTION REQUEST OF THE COMMISSION STAFF upon the following
named parties by the method indicated below, and addressed to the following:
Dayn Hardie Hand Delivered
Deputy Attorneys General U.S. Mail
Idaho Public Utilities Commission Overnight Mail
11331 W. Chinden Blvd., Bldg. No. 8, FAX
Suite 201-A (83714) X Email
PO Box 83720 dayn.hard ie(a),puc.idaho.gov
Boise, ID 83720-0074
Blaine County Board of County Hand Delivered
Commissioners U.S. Mail
2016 1 st Avenue South, Ste. 300 Overnight Mail
Hailey, ID 83333 FAX
X Email
bcc co.blaine.id.us
Tim Graves, Chief Deputy Blaine Hand Delivered
County Prosecuting Attorney's Office U.S. Mail
2191st Avenue South, Suite 201 Overnight Mail
Hailey, ID 83333 FAX
X Email
tgraves(a)_co.blaine.id.us
Blaine County Land Use Department Hand Delivered
c/o Tom Bergin U.S. Mail
219 1 st Avenue South, Suite 208 Overnight Mail
Hailey, ID 83333 FAX
X Email
tberqinC@.co.bIaine.id.us
Ronald Williams Hand Delivered
HAWLEY TROXELL ENNIS & HAWLEY U.S. Mail
877 West Main Street, Suite 1000 Overnight Mail
Boise, Idaho 83702 FAX
X Email
rwilliams(a)_hawleytroxell.com
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 14

Bradley G. Mullins Hand Delivered
MW Analytics, Energy & Utilities U.S. Mail
Overnight Mail
FAX
X Email
brmullins(a_mwanalytics.com
Kiki Leslie A. Tidwell Hand Delivered
704 N. River St. #1 U.S. Mail
Hailey, ID 83333 Overnight Mail
FAX
X Email
ktidwell2022(@..gmail.com
C. Tom Arkoosh Hand Delivered
Arkoosh Law Offices U.S. Mail
913 W. River Street, Suite 450 Overnight Mail
P.O. Box 2900 FAX
Boise, ID 83701 X Email
tom.arkoosh(a)_arkoosh.com
erin.cecil(D,arkoosh.com
Mark DiNunzio Hand Delivered
U.S. Mail
Overnight Mail
FAX
X Email
mark.DiNunzio(c)-cox.com
Christy Davenport, Legal Assistant
IDAHO POWER COMPANY'S RESPONSE TO THE FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF - 15