Idaho Power Company's Application (9)

 1221 W. Idaho St (83702)
P.O. Box 70
Boise, ID 83707

MEGAN GOICOECHEA ALLEN
Corporate Counsel
[e-mail]

October 7, 2024

Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Boulevard
Building 8, Suite 201-A
Boise, Idaho 83714

Re: Case No. IPC-E-24-38
Idaho Power Company’s Compliance with Order No. 36402 for Authority to
Track Annual Wheeling Revenues in the Power Cost Adjustment

Dear Commission Secretary:

Attached for electronic filing, please find Idaho Power Company’s Application in
the above-entitled matter.

If you have any questions about the attached documents, please do not hesitate
to contact me.

Sincerely,

Megan Goicoechea Allen

MGA:sg
Attachments
APPLICATION - 1
MEGAN GOICOECHEA ALLEN (ISB No. 7623)
LISA D. NORDSTROM (ISB No. 5733)
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: [phone]
[e-mail]
[e-mail]

Attorneys for Idaho Power Company

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF IDAHO POWER COMPANY’S
COMPLIANCE WITH ORDER NO. 36402
FOR AUTHORITY TO TRACK ANNUAL
WHEELING REVENUES IN THE POWER
COST ADJUSTMENT.
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CASE NO. IPC-E-24-38

APPLICATION

Idaho Power Company (“Idaho Power” or “Company) respectfully requests that the
Idaho Public Utilities Commission (“Commission”) issue an Order authorizing the
Company to track third-party transmission wheeling revenues (“wheeling revenues”) in its
Power Cost Adjustment (“PCA”) in compliance with the settlement stipulation approved
by Order No. 36042 issued in the Company’s 2023 General Rate Case, IPC-E-23-11
(“2023 GRC”). In further support of this Application, Idaho Power represents as follows:

APPLICATION - 2
I. BACKGROUND
1. The PCA is a rate mechanism that quantifies and tracks annual differences
between Net Power Supply Expense (“NPSE”) and the normalized or “base level” of
NPSE recovered in the Company’s base rates for recovery or credit through an annual
rate change on June 1.
2. Transmission wheeling revenues are revenues billed according to the
Company’s Open Access Transmission Tariff (“OATT”) rates when a third-party requests
to move power across Idaho Power’s transmission system and capacity is available to do
so. OATT rates, established through an annual formula rate process at the Federal
Energy Regulatory Commission (“FERC”), are intended to recover the cost of owning,
operating, and maintaining Idaho Power’s transmission system. These costs are not
considered power supply costs and therefore have not historically been tracked through
the PCA. In contrast, third-party transmission expenses, which are costs incurred to bring
purchased power into Idaho Power’s system or to allow for surplus sales be made to other
utilities, are power supply costs and are tracked through the PCA.
3. Wheeling revenues are included in customer base rates as an offset, or
credit, to the costs of owning and maintaining the Company’s transmission system and
are addressed in general rate case proceedings.
4. On April 23, 2013, the Commission issued its Notice of Application in Idaho
Power’s 2013 PCA case, inviting the parties to “comment on the issue of whether Idaho
Power’s PCA calculation should continue to include transmission expenses only or
APPLICATION - 3
whether both transmission revenue and expense should be included.”1 Through
comments filed in that case, Commission Staff (“Staff”) supported including wheeling
revenue differences in the PCA. Idaho Power disagreed, asserting that third-party
transmission wheeling revenues are independent of NPSE, as opposed to third-party
transmission expenses that vary directly with the number of purchased power or surplus
sales transactions. Ultimately, the Commission ordered that the Company was to include
wheeling revenue differences in the PCA once a base level of revenue was set in a
general rate case.2
5. On December 23, 2023, the Commission issued Order No. 36042 in Idaho
Power’s 2023 GRC, which approved the settlement stipulation entered into by Idaho
Power, Staff, Clean Energy Opportunities for Idaho, Idaho Irrigation Pumpers Association,
Inc., Industrial Customers of Idaho Power, Idaho Hydroelectric Power Producers Trust
d/b/a IdaHydro, Micron Technology, Idaho Conservation League, the City of Boise, The
United States Department of Energy on behalf of the Federal Executive Agencies, NW
Energy Coalition, and Walmart, Inc. (collectively “the Parties”). In the settlement
stipulation, Parties agreed that the Idaho-jurisdictional amount of $46,361,643 in third-
party point-to-point wheeling revenues would serve as the baseline for potential tracking
of these revenues.
6. Since the conclusion of the 2023 GRC, Idaho Power and Staff have held
informal discussions regarding a methodology to track wheeling revenues in the PCA,

1 In the Matter of the Application of Idaho Power Company for Authority to Implement Power Cost
Adjustment (PCA) Rates for Electric Service From June 1, 2013, Through May 31,2014, Case No. IPC-E-
13-10, Order No. 32796 (April 23, 2013).

2 Id., Order No. 32821, p. 14 (May 31, 2013).
APPLICATION - 4
and based on those discussions, the Company believes that the methodology proposed
in this Application complies with the Commission’s initial order in the 2013 PCA and the
terms of the settlement stipulation approved in the 2023 GRC. A summary of the proposed
methodology is as follows:
II. WHEELING REVENUE TRACKER
7. Based on discussions and input from Staff, Idaho Power proposes to
implement a transmission wheeling revenue tracking mechanism that, if approved, would
measure the difference between actual wheeling revenues and a sales-adjusted baseline
level of wheeling revenues as a component of the PCA Balancing Adjustment effective
April 1, 2024. The base level of wheeling revenues from which variances will be tracked
will be calculated by multiplying the dollar per megawatt-hour (“MWh”) rate of wheeling
revenues embedded in base rates, as established in a general rate case or other
applicable ratemaking proceeding where transmission costs and wheeling revenues are
addressed, by actual Idaho-jurisdictional sales. Based on the wheeling revenues and test
year sales included in the 2023 GRC, a base level rate of $3.11 per MWh ($46,361,643 /
14,907,835 MWh = $3.11/MWh) will be used to calculate base level revenues from which
future variances will be tracked in the PCA.
8. The amount of wheeling revenues credited or charged to customers in the
PCA will be calculated by taking the difference between actual Idaho-jurisdictional
wheeling revenues and base level revenues during each April 1st through March 31st
(“PCA Year”), as described above, multiplied by the sharing percentage of 95 percent.
Actual system wheeling revenues will be apportioned to the Company’s Idaho jurisdiction
APPLICATION - 5
utilizing the Idaho percentage share of actual retail sales in the same manner as system
NPSE.
9. The Company proposes wheeling revenues be tracked in the PCA
beginning April 1, 2024, aligning with the current PCA Year. Calculated differences will
be included in the Balancing Adjustment component of the PCA, and the associated
Balancing Adjustment rate contained in Schedule 55
10. The methodology proposed in this case complies with Commission Order
Nos. 32821 and 36042. However, as the Company has noted in past discussions, third-
party wheeling rates are established through a separate annual formula rate process at
the FERC in accordance with the Company’s OATT. The Company respectfully requests
that the Commission carefully consider that the tracking of wheeling revenues as
proposed in this Application without accounting for ongoing changes in corresponding
transmission system costs could result in an unwarranted and unintended disconnect
between transmission cost recovery and transmission revenues tracked through the
proposed mechanism. This disconnect could arise because transmission cost recovery is
established through distinctly different and separate FERC and state jurisdictional
ratemaking processes. Therefore, it is important that the Company and Staff continue to
monitor the nature of wheeling revenues and associated cost recovery with regard to the
proposed mechanism. In the event of a significant change to the Company’s transmission
system (e.g., the energization of the Boardman-to-Hemingway transmission line or other
large transmission investment) or potential movement to a day-ahead market, this
mechanism may need to be modified or discontinued to avoid any unwarranted financial
harm to the Company or its customers.
APPLICATION - 6
III. MODIFIED PROCEDURE
11. Idaho Power believes that a technical hearing is not necessary to consider
the issues presented herein and respectfully requests that this Application be processed
under Modified Procedure, i.e., by written submissions rather than by hearing. Rule of
Procedures 201, et seq.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
12. Communications and service of pleadings with reference to this Application
should be sent to the following:
Megan Goicoechea Allen
Lisa D. Nordstrom
Regulatory Dockets
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
[e-mail]
[e-mail]
Matthew T. Larkin
Timothy E. Tatum
Jessi Brady
Idaho Power Company
1221 West Idaho Street (83702)
P.O. Box 70
Boise, Idaho 83707
[e-mail]
[e-mail]
[e-mail]

V. REQUEST FOR RELIEF
13. Idaho Power respectfully requests that the Commission issue an order: (1)
authorizing that this matter be processed by Modified Procedure; (2) acknowledging that
the Company’s proposal outlined herein satisfies the relevant Commission directives
pursuant to Order Nos. 32821 and 36042; and (3) authorizing Idaho Power to track
wheeling revenues in the PCA, beginning April 1, 2024, as detailed in this Application.
DATED at Boise, Idaho, this 7th day of October 2024.

________________________________
MEGAN GOICOECHEA ALLEN
Attorney for Idaho Power Company