20241106Direct Jason Talford - Redacted.pdf

RECEIVED
Wednesday, November 6, 2024 2:18:45 PM
IDAHO PUBLIC
UTILITIES COMMISSION
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE )
APPLICATION OF IDAHO POWER ) CASE NO. IPC-E-24-07
COMPANY TO INCREASE RATES )
FOR ELECTRIC SERVICE TO )
RECOVER COSTS ASSOCIATED )
WITH INCREMENTAL CAPITAL )
INVESTMENTS AND CERTAIN )
ONGOING OPERATIONS AND )
MAINTENANCE EXPENSES )
REDACTED DIRECT TESTIMONY OF JASON TALFORD
IDAHO PUBLIC UTILITIES COMMISSION
NOVEMBER 6, 2024

I Q. Please state your name and business address .
2 A. My name is Jason Talford. My business address
3 is 11331 W. Chinden Blvd. , BLDG 8, STE 201-A, Boise, Idaho
4 83714 .
5 Q. By whom are you employed and in what capacity?
6 A. I am employed by the Idaho Public Utilities
7 Commission ("Commission") as a Utilities Analyst 2 on the
8 Technical Analysis team.
9 Q. Please describe your educational background and
10 professional experience .
11 A. I was hired by the Commission in 2022 . My
12 educational background and professional experience are
13 provided in more detail in Exhibit No . 109 .
14 Q. What is the purpose of your testimony in this
15 proceeding?
16 A. The purpose of my testimony in this case is to
17 present recommendations regarding costs related to the
18 interconnection projects for two of the Company' s Battery
19 Energy Storage System ("BESS") projects and the requested
20 recovery of costs associated with a third BESS project .
21 These adjustments were provided to Staff Witness Chandler
22 to incorporate into his calculation of Staff' s proposed
23 revenue requirement . Additionally, while the Franklin
24 and Hemingway BESS projects were not completed by the
25 August 31st cutoff date making it impossible to evaluate
CASE NO. IPC-E-24-07 Talford, J. (Di) 1
11/06/24 STAFF

1 the prudence of final actual cost for this case, my
2 testimony also covers issues revealed through discovery
3 regarding these projects .
4 Q. How is your testimony organized?
5 A. My testimony is subdivided under the following
headings :
7 BESS Interconnection Projects Page 2
8 Black Mesa BESS Page 3
9 Franklin BESS Page 5
10 Hemingway BESS Page 13
11 BESS Interconnection Projects
12 Q. Please describe the Company' s interconnection
13 projects .
14 A. In its request, the Company included two
15 interconnection projects : one for the interconnection of
16 the Company' s Franklin 60 MW BESS project, budget ID:
17 GINT220549, and one for the Hemingway 36 MW BESS
18 expansion, Budget ID: GINT240629 . Both interconnection
19 projects are required to connect the associated resource
20 to the Company' s system.
21 Q. Are the associated resources in-service?
22 A. No . As described in greater detail in the
23 testimony of Staff Witness Mike Louis, the 60 MW Franklin
24 and 36 MW Hemingway BESS projects were not completed by
25 Staff' s proposed cutoff date of August 31, 2024 . Without
CASE NO. IPC-E-24-07 Talford, J. (Di) 2
11/06/24 STAFF

1 the respective BESS projects being in-service, the
2 associated interconnection projects cannot deliver the
3 intended customer benefit from the BESS resources and
4 therefore should not be considered in-service .
5 Q. What is your recommendation?
A. I recommend a $1, 391, 360 .24 adjustment to the
7 Company' s requested plant-in-service, removing costs
8 associated with the Franklin and Hemingway BESS
9 interconnection projects . This value is supported by the
10 confidential fourth Supplemental Response to Staff
11 Production Request No . 5, where the Company lists the
12 plant-in-service amounts as of August 31st, 2024, for the
13 Franklin interconnection project at and the
14 Hemingway interconnection project at As
15 stated earlier, these projects are both necessary to
16 interconnect the respective 60 MW Franklin BESS and 36 MW
17 Hemingway BESS projects . These interconnection projects
18 are not used and useful until the Company' s associated
19 BESS projects are completed and operational .
20 Black Mesa BESS
21 Q. Please describe the Black Mesa BESS Project
22 A. The Black Mesa BESS project is a 40 MW Company-
23 owned capacity resource constructed to address a portion
24 of the Company' s anticipated 2023 capacity deficit . This
25 project was selected as part of the Company' s 2021
CASE NO. IPC-E-24-07 Talford, J. (Di) 3
11/06/24 STAFF

1 Request for Proposal ("RFP") process . The Black Mesa
2 BESS project was granted a Certificate of Public
3 Convenience and Necessity (CPCN") by Commission order No .
4 35643, Case No . IPC-E-22-13 .
5 Q. Is this project in service?
A. No . I do not agree with the Company' s
7 assertion that the Black Mesa resource is in-service as
8 of Staffs August 31, 2024 cut-off date . In its
9 supplemental response to Staff Production Request No . 84,
10 the Company states that the Black Mesa project had not
11 reached its Commissioning milestone by the end of August
12 as anticipated in its original response . Commissioning
13 is defined by the Black Mesa Battery Energy Service
14 Agreement as "Successful completion by Supplier of the
15 Performance Tests, demonstrating that the Performance
16 Guarantees have been met . "' This definition is
17 consistent with various sources that describe
18 commissioning as testing and correcting the operation of
19 the plant to ensure operation with specified parameters .
20 I believe that absent completion of the commissioning
21 milestone, the resource cannot be relied upon to provide
22 consistent and reliable customer benefit . This is
23 supported by the rolling executive summaries provided in
1 Response to Production Request No . 19 (a) - Confidential
Attachment 1 - Franklin BESS BESA at 5 .
CASE NO. IPC-E-24-07 Talford, J. (Di) 4
11/06/24 STAFF

1 response to Staff Production Request No . 19, which
2 describe battery arrays being brought offline and online
3 as the commissioning process' s testing discovered and
4 corrected faults in the battery arrays .
5 Q. What is your recommendation regarding the Black
Mesa Bess project?
7 A. I recommend an adjustment of $58, 541, 605 to the
8 Company' s plant-in-service removing costs associated with
9 the Black Mesa 40 MW BESS project . This value is
10 supported by the confidential fourth supplemental
11 response to Staff Production Request No . 5, where the
12 Company represents that the project is in-service as of
13 June 2024, with project costs as of the end of August
14 2024 totaling , and from the Company' s
15 response to Staff Production Request No . 71, which shows
16 an additional of 2023 costs . Recovery of
17 these costs were considered in the 2023 GRC but
18 determination was delayed in that case . Recovery of
19 these costs should be considered in the Company' s next
20 general rate case if the Black Mesa project is delivering
21 electricity and benefiting customers .
22 Franklin BESS
23 Q. Please summarize the Franklin BESS project .
24 A. The Franklin BESS project is a 60 MW Company-
25 owned capacity resource constructed to address a portion
CASE NO. IPC-E-24-07 Talford, J. (Di) 5
11/06/24 STAFF

1 of the Company' s anticipated 2024 capacity deficit . This
2 project was selected as part of the Company' s 2022 RFP
3 process where it was a component of a two-part bid for a
4 100 MW solar Purchase Power Agreement ("PPA") , ("Franklin
5 Solar") co-located with the Franklin BESS resource . The
Franklin project was granted a CPCN by Commission order
7 No . 35900, Case No . IPC-E-23-05 .
8 Q. Is the project in-service by Staffs cut-off
9 date?
10 A. No . In its fourth supplemental response to
11 Staff Production Request No . 5, the Company' s
12 confidential attachment shows that the Company has not
13 closed any costs associated with the Franklin BESS
14 project to plant-in-service as of August 31, 2024 .
15 Because the project was not completed before the cut-off
16 date, Staff was not able to review the prudence of final
17 actual cost of the project .
18 Q. Is this the only issue with this project?
19 A. No . If the Franklin BESS project had been
20 completed and fully in-service by the established cutoff
21 date, there are additional issues with this project that
22 warrant an adjustment in my opinion.
23 Q. Please describe additional issues discovered
24 during the examination of the Franklin BESS project .
CASE NO. IPC-E-24-07 Talford, J. (Di) 6
11/06/24 STAFF

1 A. I discovered three issues during my review of
2 the Company' s filing and discovery responses : (1) I
3 disagree with the Company' s arguments against the current
4 soft cap; (2) I believe the basis of the Company' s
5 alternative cap is not reasonable; and (3) and
notwithstanding the arguments on the soft cap, I believe
7 that the Company has not built the least-cost resource as
8 supported by its RFP and should not be allowed to recover
9 its full costs .
10 Q. Please explain the Company' s argument against
11 the current soft cap.
12 A. On page 13 of his testimony, Company Witness
13 Hackett states that Staff' s analysis in Case No . IPC-E-
14 23-05 supporting the soft cap does not properly account
15 for the benefit from the low PPA costs of the combined
16 solar Photovoltaic ("PV") facility. In support of this
17 argument, Witness Hackett' s testimony explains that the
18 Company' s Long Term Capacity Expansion ("LTCE") model
19 continually selected the combined solar PV and battery
20 storage project indicating the low solar PPA price
21 contributes to the value of the project and that the
22 combined facility better meets the Company' s needs
23 resulting in a higher Effective Load Carrying Capability
24 ("ELCC") . I believe that it is unnecessary to include
25 the solar PPA because both benefits are realized by the
CASE NO. IPC-E-24-07 Talford, J. (Di) 7
11/06/24 STAFF

I Company' s system, regardless of the arrangement of a BESS
2 resource relative to the solar facility.
3 Regarding the low PPA price, this is because the
4 value of the energy produced by the solar facility is
5 determined by the PPA and is not dependent on the
relation of a BESS resource . Any standalone BESS
7 resource on the Company' s system will be capable of
8 charging when solar facilities, including Franklin solar,
9 are generating. It is likely the most economical time to
10 do so because the solar facility' s low PPA costs reduce
11 the cost to charge the batteries .
12 For meeting the capacity needs, combined solar and
13 BESS resources contribute the same to the Company' s needs
14 as a separate solar and BESS resources . Any standalone
15 BESS resource on the Company' s system is capable of
16 charging when solar production is in abundance shifting
17 that energy to later hours when solar generation is
18 unavailable, thus realizing the higher ELCC. This is
19 supported by the testimony of Ellsworth in the Company' s
20 recent CPCN, Case No . IPC-E-24-16, where the relationship
21 between solar and storage resources is described on a
22 system level .
23 Further, because the BESS system is owned by the
24 Company, the configuration of the Franklin facility does
25 not resemble a traditional solar plus storage system and
CASE NO. IPC-E-24-07 Talford, J. (Di) 8
11/06/24 STAFF

1 should not be considered as part of a combined solar plus
2 battery facility. In the Build Transfer Agreement
3 ("BTA") for the Franklin BESS project, Appendix A at 6
4 describes the Scope of Work for the project as "grid
5 connected. " This is supported by the Company' s response
to Staff Production Request No . 71 (c) , which states that
7 " [t] he BESS can be charged by the solar PV facility or
8 grid-charged, as necessary. " While the project is co-
g located with the 100 MW Franklin solar project, the
10 descriptions provided by the Company suggest
11 functionality like a standalone battery resource .
12 Additionally, when considered as a standalone BESS
13 resource that is co-located with a solar facility, other
14 bids for BESS resources from the Company' s RFP are a
15 direct and appropriate comparison to the incremental 40
16 MW of BESS capacity.
17 Q. Please explain why the Company' s alternative
18 soft cap is not reasonable
19 A. On page 14 of his testimony, Company Witness
20 Hackett describes that the holistic evaluation uses the
21 unit price of what the Company claims is the least-cost
22 resource . This unit price corresponds with the unit
23 price of the original 20 MW Franklin BESS bid of -
24 M/MW scaled by the projects expanded 60 MW
25 capacity. In Witness Hackett' s testimony in Case No .
CASE NO. IPC-E-24-07 Talford, J. (Di) 9
11/06/24 STAFF

1 IPC-E-23-05, it states that the developer of the Franklin
2 BESS project confirmed that it could maintain the pricing
3 per kW for the expanded project . However, this fails to
4 account for potential scales of economy provided by the
5 larger project . While the Company does not have insight
into the $/MW cost conclusions, it also assumes that
7 economies of scale likely influenced the change in unit
8 cost2 . These assumptions are reflected in the lower
9 M M/MW unit cost of the expanded 60 MW Franklin
10 BESS using the initial base purchase price listed in the
11 BTA. Further, as described in greater detail above, the
12 Franklin BESS should be considered as a standalone
13 resource, meaning the appropriate comparison for the unit
14 cost is that of the lowest unit price of the BESS
15 facilities bid into the 2022 RFP. This is the same
16 methodology used to support the original soft cap. The
17 lowest unit price supported by the Company' s RFP provides
18 a baseline for the comparison of /MW,
19 substantially lower than the unit price used by the
20 Company and the unit cost of the initial base purchase
21 price . Regardless of the baseline used, differences
22 between the baseline unit cost and the unit cost used by
23 the Company, suggests that the Company-recommended soft
2 Response to Staff Production Request No . 27 (c) , Case
No . IPC-E-23-05
CASE NO. IPC-E-24-07 Talford, J. (Di) 10
11/06/24 STAFF

1 cap will not result in any need for justification unless
2 the Company' s spending runs substantially over budget .
3 This methodology does not provide an opportunity for
4 meaningful consequence to the Company' s operations .
5 Q. Please explain why the 40 MW expansion of the
Franklin BESS project was not least-cost .
7 A. In support of the Company' s alternative soft
8 cap, Witness Hackett states that AURORA modeling
9 continually selected the Franklin BESS project and is
10 therefore the least-cost resource3. The Company claims
11 that this result supports the holistic value of the
12 combined 100 MW solar and 60 MW BESS facility, however
13 the Company' s statement is inaccurate . The initial bid
14 for the Franklin project was a 100 MW solar PPA with a
15 co-located 20 MW BESS BTA. This is the project that was
16 consistently selected by the Company' s initial LICE
17 analysis to develop the final shortlist from the initial
18 shortlist4 . In response to the 2022 Inflation Reduction
19 Act being signed into law, the Company performed a second
20 LTCE analysis that continued to select the 100MW solar
21 and 20MW BESS bid as the most cost-effective resources.
22 Between the time of the second LTCE analysis and the time
3 Hackett Direct at 13
4 Hackett direct at 19, Case No . IPC-E-23-05
s Hackett direct at 22, Case No . IPC-E-23-05
CASE NO. IPC-E-24-07 Talford, J. (Di) 11
11/06/24 STAFF

1 of contract negotiations, the 2024 capacity deficit had
2 increased from 85 MW to 103 MW6. Instead of contracting
3 with the next least-cost resource identified by the RFP
4 to meet the incremental capacity need, the Company
5 negotiated with the developer of the 20 MW BESS project
beyond the context established by the Commission-mandated
7 RFP process to add an additional 40 MW of BESS capacity' .
8 In doing so the Company incurred costs beyond what can be
9 supported by the fair, transparent, and competitive RFP
10 process and are therefore not prudently incurred.
11 Q. What is your recommendation?
12 A. I recommend that the project not be included in
13 this case because it has not been completed by the cutoff
14 date of August 31, 2024, and therefore Staff did not have
15 an opportunity to review the projects' final costs to
16 provide the Commission a comprehensive recommendation.
17 However, when the final costs of the Franklin BESS
18 project are known, I believe that the Company has
19 incurred costs associated with a project not supported as
20 least-cost by the Company' s 2022 RFP and that the Company
21 should not be allowed to recover any costs associated
22 with the Franklin BESS project beyond the original 20 MW
23 Franklin BESS Bid amount of M
million.
6 Hackett direct at 23, IPC-E-23-05
Hackett direct at 23, IPC-E-23-05
CASE NO. IPC-E-24-07 Talford, J. (Di) 12
11/06/24 STAFF

I Hemingway BESS
2 Q. Please describe the Hemingway BESS project .
3 A. The Hemingway BESS project is a 36 MW Company-
4 owned capacity resource constructed to address a portion
5 of the Company' s anticipated 2024 capacity deficit . This
project was selected as the next least-cost resource in
7 the Company' s 2022 RFP process and was contracted in two
8 parts as the Company' s capacity position evolved. The
9 Hemingway project' s first CPCN for 12 MW of capacity was
10 granted by Commission Order No . 35900, Case No . IPC-E-23-
11 05 . The project' s second CPCN for an additional 24 MW of
12 capacity was granted by Order No . 36011 in Case No . IPC-
13 E-23-20 .
14 Q. Is the project in-service by Staff' s cut-off
15 date?
16 A. No . In its fourth supplemental response to
17 Staff Production Request No . 5, the Company' s
18 confidential attachment shows that the Company has not
19 closed any costs associated with the Hemingway BESS
20 project to plant-in-service as of August 31, 2024 .
21 Because the project has not been completed before the
22 cut-off date, Staff has not been able to review the
23 prudence of final actual cost of the project .
24 Q. Is this the only issue with this project?
CASE NO. IPC-E-24-07 Talford, J. (Di) 13
11/06/24 STAFF

1 A. No . If the Hemingway BESS project had been
2 completed and fully in-service by the established cutoff
3 date, there is an additional issue with this project that
4 warrants adjustment . Witness Hackett states that the
5 capacity of the Hemingway BESS project was overbuilt to
address battery degradation for the first five years of
7 operation. While some amount of overbuild may be
8 reasonable, I believe that five years of overbuilt
9 capacity is excessive as actual battery degradation is
10 not known or measurable . This is supported by the
11 Company' s Response to Staff Production Request 71 (f) ,
12 which states that " [t] he time, scale, and costs of any
13 future augmentation will require analysis of then-current
14 operational characteristics . " Typical battery
15 degradation assumptions are separated by first year and
16 subsequent years . $ Staff believes that a reasonable
17 amount of overbuild should account for only the estimated
18 degradation during the first two years of operation.
19 After this period, actual system degradation can be
20 determined from measurable operational characteristics .
21 Until this time, the remainder of the five-year overbuild
22 capacity should be considered as plant held for future
23 use .
8 Response to Staff Production Request No . 71 (h)
CASE NO. IPC-E-24-07 Talford, J. (Di) 14
11/06/24 STAFF

I In its response to Staff Production Request No .
2 71 (e) , the Company states that the total 36 MW Hemingway
3 project includes 6 . 65 MW of total overbuild. Using the
4 unit price associated with the Hemingway BESS project9 of
5 the estimated total cost of the
6 overbuild is Assuming these costs are
7 evenly distributed across the five-year overbuild period,
8 this results in a total of $ for three years
9 of overbuild that should not be included for recovery
10 until it becomes used and useful .
11 Q. What is your recommendation?
12 A. I recommend that the project not be included
13 for recovery in this case because it has not been
14 completed by the cutoff date of August 31, 2024, and
15 therefore Staff has not had the opportunity to review the
16 prudence of the project' s final actual costs . However,
17 when final costs of the Hemingway BESS are known, I am
18 concerned the that the costs associated with three years
19 of overbuilt capacity may not be used or useful because
20 the degradation is not known or measurable at that time .
21 Q. Does this conclude your testimony?
22 A. Yes, it does .
9 Reference the relevant CPCN case .
CASE NO. IPC-E-24-07 Talford, J. (Di) 15
11/06/24 STAFF

Professional Qualifications
of
Jason Talford
Technical Analyst - Technical Analysis
Idaho Public Utilities Commission
EDUCATION
Mr. Talford graduated from Boise State University in 2020 with a
Bachelor of Mechanical Engineering degree and the University of
Idaho in 2022 with a Master of Engineering in Mechanical
Engineering. His studies concentrated on building energy
efficiency and energy intensive systems . Additionally, he has
attended NARUC rate school in 2023 .
BUSINESS EXPERIENCE
Since joining the commission, Mr. Talford' s primary focus has
been on the demand side management for the three electric and
two natural gas utilities serve Idaho . He has also been
involved with on-site generation, energy limited resource
topics . Mr. Talford has participated in the Energy Efficiency
Advisory Groups, External Stakeholder Advisory Committees, and
Integrated Resource Plan ("IRP") planning groups for Idaho
Power, Avista Utilities, Rocky Mountain Power, and Intermountain
Gas Company.
Exhibit No. 109
No. IPC-E-24-07
J. Talford, Staff
11/6/24

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS DAY OF NOVEMBER 2024,
SERVED THE FOREGOING REDACTED DIRECT TESTIMONY OF JASON
TALFORD, IN CASE NO. IPC-E-24-07, BY E-MAILING A COPY THEREOF TO
THE FOLLOWING:
LISA D. NORDSTROM TIMOTHY TATUM
DONOVAN E WALKER CONNIE ASCHENBRENNER
MEGAN GOICOECHEA ALLEN MATT LARKIN
IDAHO POWER COMPANY IDAHO POWER COMPANY
PO BOX 70 PO BOX 70
BOISE ID 83707-0070 BOISE ID 83707-0070
E-MAIL: lnordstrom( idahopower.com E-MAIL: ttatumcidahopower.com
dwalkercidahopower.com caschenbrenner. �,idahopower.com
mp-oicoecheaallen�idahopower.com mlarkincidahopower.com
docketscidahopower.com
ERIC L OLSEN LANCE KAUFMAN PhD
ECHO HAWK& OLSEN PLLC 2623 NW BLUEBELL PLACE
PO BOX 6119 CORVALLIS OR 97330
POCATELLO ID 83205 E-MAIL: lance(tiae isinsight.com
E-MAIL: elo(c6echohawk.com
PETER J RICHARDSON DR DON READING
RICARDSON ADAMS PLLC 280 S SILVERWOOD WAY
515 N 27TH STREET EAGLE ID 83616
BOISE ID 83702 E-MAIL: dreading c mindspring com
E-MAIL: petercrichardsonadams.com
BRAD HEUSINKVELD
ID CONSERVATION LEAGUE
710 N 6TH STREET
BOISE ID 83702
E-MAIL:
heusinkyeldwidahoconservation.ors
PETER MEIER EMILY W MEDLYN
US DEPT OF ENERGY US DEPT OF ENERGY
1000 INDEPENDENCE AVE SW 1000 INDEPENDENCE AVE SW
WASHINGTON DC 20585 WASHINGTON DC 20585
E-MAIL: peter.meier(cehq.doe. oovv E-MAIL: Emily.medlynL6hq.doe.gov
CERTIFICATE OF SERVICE

JIM SWIER AUSTIN RUESCHHOFF
MICRON TECHNOLOGY INC THORVALD A NELSON
8000 S FEDERAL WAY AUSTIN W JENSEN
BOISE ID 83707 KRISTINE A.K. ROACH
E-MAIL: iswier(ct,micron.com HOLLAND & HART LLP
555 17T" ST STE 3200
DENVER CO 80202
E-MAIL: darueschhofnc hollandhart.com
tnelsonahollandhart.com
awiensen c hollandhart.com
karoach cJhollandhart.com
aclee ahollandhart.com
[e-mail]
ED JEWELL STEVEN HUBBLE
DEPUTY CITY ATTORNEY BOISE CITY DEPT OF PUBLIC WORKS
BOISE CITY ATTORNEY'S PO BOX 500
PO BOX 500 BOISE ID 83701-0500
BOISE ID 83701-0500 E-MAIL: shubblewcityofboise.orR
E-MAIL: eiewell(i cityofboise.org
boisecit aty torneyLwcityofboise.org
PA RICIA JORDA E RETARY
CERTIFICATE OF SERVICE