20241106Direct James Chandler without Confidential Exhibits.pdf

RECEIVED
Wednesday, November 6, 2024 3.36.46 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 )
DIRECT TESTIMONY OF JAMES CHANDLER
IDAHO PUBLIC UTILITIES COMMISSION
NOVEMBER 6, 2024

1 Q. Please state your name and business address for
2 the record.
3 A. My name is James Chandler. My business address
4 is 11331 W. Chinden Blvd. , Ste . 201-A, Boise, ID 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 an Auditor II .
8 Q What is your educational and experience
9 background?
10 A. I graduated from Western Governors University
11 with a bachelor' s degree in accounting in 2022 .
12 Subsequently, I accepted a position with the Commission
13 in 2022 as an Auditor I and have since been promoted to
14 my current position as Auditor II . In May 2023, I
15 attended the training "The Basics, Practical Regulatory
16 Training" conducted by New Mexico State University
17 ("NMSU") . In October 2023, I attended "Utility Rate
18 School" conducted by the National Association of
19 Regulatory Utility Commissioners ("NARUC") .
20 Q. What is the purpose of your testimony in this
21 proceeding?
22 A. The purpose of my testimony is to provide the
23 following information:
24 I . Calculation of Staff' s proposed revenue
25 requirement;
CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 1
11/6/24 STAFF

1 II . Summary of proposed adjustments to Idaho
2 Power Company' s ("Company") requested increase; and
3 III . Explanation of how Staffs proposed rate
4 base in which the Company is authorized a Rate of Return
5 is calculated and also explains adjustments to
6 depreciation and amortization expenses;
7 IV. Explanation of the calculation of the 12-
8 Month Average of Monthly Averages ("AMA") rate base
9 adjustment through August 31, 2024, which is described in
10 the testimony of Witness Louis; and
11 V. Explanation of how the adjustment amounts
12 on a system basis are converted to an Idaho
13 Jurisdictional amount .
14 Q. Are you sponsoring any exhibits with your
15 testimony?
16 A. Yes . I am sponsoring Exhibit Nos . 102 through
17 108 .
18 I . Summary of Staff Adjustments
19 Q. Please Summarize Staff' s position in this
20 proceeding.
21 A. The Company proposes a revenue requirement of
22 $1, 458, 265, 770 . Based on the adjustments provided to me
23 by other Staff witnesses, I have calculated Staff s
24 proposed revenue requirement of $1, 367, 867, 504 which is a
25 $90 . 4 million decrease from the Company' s requested
CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 2
11/6/24 STAFF

1 revenue requirement . Staffs proposed revenue
2 requirement results in a 0 . 65 percent increase in the
3 Company' s base revenues compared to the requested 7 . 31
4 percent increase .
5 Q. Please outline Staff' s adjustments to the
6 Company' s proposed revenue requirement components .
7 A. Staff is recommending 13 adjustments to the
8 Company' s requested revenue requirement . Exhibit No . 103
9 provides a breakdown of the impact of each adjustment on
10 the Company' s revenue requirement, and the Staff Witness
11 sponsoring testimony for each adjustment . In my
12 testimony, I have provided calculations for how each
13 adjustment impacts revenue requirement . Below is a brief
14 summary of each adjustment :
15 • Adjustment No . 1 updates the Company' s calculation
16 of a terminal rate base to a 12-month AMA rate base
17 from using the data from August 31, 2023, through
18 August 31, 2024 . Staff Witness Louis further
19 explains the reasoning behind this methodology.
20 • Adjustment No . 2 removes the costs associated with
21 additional Itron Enterprise Edition (IEE) Licenses
22 that Staff believes will not be used and useful
23 until approximately September 2025 . This adjustment
24 is further explained in the testimony of Staff
25 Witness Loskot .
CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 3
11/6/24 STAFF

1 • Adjustment No . 3 removes plant additions regarding
2 an outage alert system that Staff believes is
3 redundant and thus an imprudent investment . This
4 adjustment is further explained in the testimony of
5 Staff Witness Loskot .
6 • Adjustment No . 4 removes the SharePoint 2024
7 Development which will be deployed in July of 2026
8 when the current SharePoint contract reaches end of
9 life . This adjustment is further explained in the
10 testimony of Staff Witness Loskot .
11 • Adjustment No . 5 removes a plant addition of a lawn
12 mower Staff believes is not necessary and
13 duplicative . Staff believes that the current
14 management of lawn care at the facility is
15 sufficient, rendering the expenditure as imprudent .
16 This adjustment further explained in the testimony
17 of Staff Witness Loskot .
18 • Adjustment No . 6 removes plant additions regarding
19 office furniture that Staff believes was not
20 necessary and the costs should not be recovered from
21 customers . The furniture was replaced for an
22 aesthetical reason and replaced furniture that was
23 still used and useful . This adjustment is further
24 explained in the testimony of Staff Witness Loskot .
25 • Adjustment Nos . 7 and 8 remove plant additions
CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 4
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1 regarding seasonal housing benefits Staff believes
2 should not be recovered from customers . These
3 adjustments are further explained in the testimony
4 of Staff Witness Loskot .
5 • Adjustment No . 9 removes the entirety of the 40 MW
6 BESS at Black MESA plant addition. Because the
7 commissioning was not completed by August 31, 2024,
8 the project was not used and useful for the intended
9 customer benefits as of the preparation of Staff
10 testimony. This adjustment is further explained in
11 the testimony of Staff Witness Talford.
12 • Adjustment Nos . 10 and 11 remove interconnection
13 plant additions for the 36 MW Hemingway BESS and
14 Franklin BESS interconnections . Because these
15 projects were not completed as of August 31, 2024,
16 the interconnections are not used and useful for the
17 intended customer benefits . These adjustments are
18 further explained in the testimony of Staff Witness
19 Talford.
20 • Adjustment No . 12 removes a portion of the requested
21 salary increases . Staff calculated the adjustment
22 using the most recent information provided by the
23 Company, which differs from the Company' s forecast .
24 Staff also removed the proposed 2025 general wage
25 increases, as they are not known and measurable at
CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 5
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1 this point in time . This adjustment is further
2 explained in the testimony of Staff Witness
3 Conilogue .
4 • Adjustment No . 13 adjusts the Company' s revenue due
5 to Staff' s calculation of kilowatt-hour sales . This
6 adjustment is further explained in the testimony of
7 Staff Witness Eldred.
8 Q. Please explain if Staff adjustments are
9 calculated based on a system value or an Idaho
10 Jurisdictional value .
11 A. Adjustments No . 1 through 12 were calculated on
12 a system basis . I have converted the amounts to an Idaho
13 Jurisdictional value . Adjustment Nos . 1 through 11
14 conversions are illustrated on Exhibit Nos . 105 through
15 107 . The system adjustment value calculated by Witness
16 Conilogue of $10, 478, 329 is converted to an Idaho
17 jurisdictional value by using an allocation factor of
18 95 . 8%, for an Idaho jurisdictional value of $10, 037, 804 .
19 Adjustment No . 13, revenue, was calculated by Witness
20 Eldred on an Idaho jurisdictional value, so I did not
21 have to calculate an Idaho jurisdictional conversion.
22 II . Revenue Requirement Calculation
23 Q. Please explain Exhibit No . 102 .
24 A. Exhibit No. 102: Revenue Requirement
25 Calculation provides the calculation of the revenue
CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 6
11/6/24 STAFF

1 deficiency and overall revenue requirement proposed by
2 the Company and the Staff proposed revenue requirement
3 and revenue deficiency.
4 Q. Please explain the purpose of Exhibit No . 103 .
5 A. Exhibit No. 103: Summary of Revenue Requirement
6 Adjustments shows Staffs total calculation of
7 adjustments and the effect it has on the Company' s
8 requested increase . As shown, the Company requests a
9 revenue requirement increase of $99, 293, 220 or 7 . 31% .
10 Staff calculates a revenue requirement increase of
11 $8, 894, 954 or 0 . 65% which is a decrease of $90, 398, 265
12 from the Company' s request .
13 Q. Please further explain calculations in Exhibit
14 No . 103 .
15 A. Rate Base adjustments in Column A are further
16 explained in Exhibit No . 104 . Column B provides the
17 return that would be generated by the rate base
18 adjustment using a Rate of Return of 7 .247% . Revenue
19 adjustments are shown in Column C and Expense adjustments
20 in Column D represent the associated expenses that
21 include depreciation, amortization, federal income taxes
22 and state income taxes . The Gross-Up calculation in
23 Column E calculates the net-to-gross adjustment for each
24 Staff adjustment . The Revenue Requirement effect in
25 Column F is calculated by adding Columns B, D, and E
CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 7
11/6/24 STAFF

1 together and then subtracting Column C. The sum of all
2 adjustments in Column F totals $90, 398, 265 and arrives at
3 an overall recommended revenue requirement decrease of
4 $8, 894, 954 or 0 . 65% .
5 III . Summary of Incremental Rate Base Adjustments
6 Q. Please explain the purpose of Exhibit No . 104 .
7 A. Exhibit No . 104 : Rate Base Summary calculates
8 the Company' s incremental rate base in which they are
9 authorized a Rate of Return. As shown, the Company
10 calculates an incremental rate base of $730, 792, 519 .
11 Staff calculates a total incremental rate base of
12 $101, 895, 640 which is a decrease of $628, 896, 879 from the
13 Company' s request .
14 Q. Please further explain calculations in Exhibit
15 No . 104 .
16 A. Staff calculated a plant-in-service adjustment
17 in Column A, further explained in Exhibit No . 105, and an
18 accumulated depreciation adjustment in Column B, further
19 explained in Exhibit No . 107, for each individual
20 adjustment . These columns are added together in order to
21 calculate the total rate base Adjustment for each
22 individual adjustment . The sum of all adjustments
23 totaling $628, 896, 879 reduces the Company' s incremental
24 rate base request from $730, 792, 519 to $101, 895, 640 .
25 IV. Summary of Plant-In-Service Adjustments
CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 8
11/6/24 STAFF

1 Q. Please explain the purpose of Exhibit No . 105 .
2 A. Exhibit No . 105 : Plant in Service Adjustment
3 Summary shows the calculations for each rate base
4 adjustment to convert the value from a system amount to
5 an Idaho Allocated amount and then to an AMA amount . As
6 shown, the Company calculates an incremental rate base of
7 $823, 945, 114 . Staff calculates an incremental rate base
8 of $217, 433, 900 which is a decrease of $606, 511, 214 .
9 Q. Please further explain the calculation in
10 Exhibit No . 105 .
11 A. Column A is the system adjustment amounts
12 calculated by Staff. August 2024 AMA plant in service in
13 Column A Line 3 is further explained in Exhibit No . 106 .
14 All other adjustment amounts in Column A are further
15 detailed in the testimonies of Staff Witnesses Loskot and
16 Talford. Column B is the subaccount for which I
17 allocated each adjustment . It is notable that the
18 Company, when providing actual plant in service additions
19 through August 31, 2024, in Production No . 62
20 Supplemental Response No . 1, did not provide the details
21 for which subaccounts that individual projects had been
22 added to . Because of this, I have used the subaccount in
23 which I believe a majority of the additions would have
24 been added to . Column C is the Idaho Allocations for the
25 subaccounts listed in Column B. The Idaho jurisdictional
CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 9
11/6/24 STAFF

1 allocation for each adjustment is shown in Column C.
2 Column D calculates the plant-in-service Idaho
3 jurisdictional adjustment value . Column E calculates the
4 monthly value of each plant adjustment . Column F shows
5 the number of months each project has been in service,
6 which can be found in the Company' s response to Staff
7 Production Request No . 3 Supplemental Response No . 4 . ,
8 and Column G provides the Idaho AMA adjustment . The sum
9 off all adjustments totaling $606, 511, 214 reduces the
10 Company' s requested incremental rate base from
11 $823, 945, 114 to $217, 433, 900 .
12 V. Calculation of AMA Rate Base Adjustment
13 Q. Please explain the purpose of Exhibit No . 106 .
14 A. Exhibit No. 106: Calculation of AMA Rate Base
15 Adjustment shows the calculations for adjusting the
16 Company' s filed rate base through end of period December
17 31, 2024, to a Staff' s calculation for a 12-month AMA
18 ending August 31, 2024 . As shown, Staff calculates a
19 rate base of $6, 293, 045, 170, which is a decrease of
20 $591, 179, 754 from the Company' s calculated rate base of
21 $6, 884, 224, 924 .
22 VI . Summary of Accumulated Depreciation and Amortization
23 Adjustments
24 Q. Please explain the purpose of Exhibit No . 107 .
25 A. Exhibit No. 107: Accumulated Depreciation and
CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 10
11/6/24 STAFF

1 Amortization Adjustment Summary shows calculations for
2 adjusting the Company' s filed incremental accumulated
3 depreciation and amortization. As shown, Staff
4 calculates an incremental accumulated depreciation and
5 amortization of $112, 499, 233 which is an increase of
6 $22, 385, 665 from the Company' s filed calculation of
7 $90, 113, 568 .
8 VII . Summary of Accumulated Depreciation Adjustments
9 Q. Please explain the purpose of Exhibit No . 108 .
10 A. Exhibit No. 108: Depreciation and Amortization
11 Expense Adjustment Summary shows the calculations for the
12 adjusting the Company' s filed incremental depreciation
13 and amortization expense . As shown, the Company
14 calculates an incremental depreciation and amortization
15 expense of $22, 397, 921 . Staff calculates an incremental
16 depreciation and amortization expense of $4, 704, 925 which
17 is a decrease of $17, 674, 996 from the Company' s filed
18 incremental depreciation and amortization expense .
19 Q. Does this conclude your testimony?
20 A. Yes .
21
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23
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CASE NO. IPC-E-24-07 CHANDLER, J. (Di) 11
11/6/24 STAFF

CERTIFICATE OF SERVICE
�
I HEREBY CERTIFY THAT I HAVE THIS DAY OF NOVEMBER 2024,
SERVED THE FOREGOING DIRECT TESTIMONY OF JAMES CHANDLER, 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: lnordstromcidahopower.com E-MAIL: ttatum(a idahopower.com
dwalker o,idahopower.com caschenbrennerLaddahopower.com
mgoicoecheaallen,c idahopower.com mlarkincidahopower.com
dockets(cuidahopower.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 cae isinsi hg t.com
E-MAIL: elo:c echohawk.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(a,,mindspring corn
E-MAIL: peter,c richardsonadams.com
BRAD HEUSINKVELD
ID CONSERVATION LEAGUE
710 N 6TH STREET
BOISE ID 83702
E-MAIL:
heusinkveldcidahoconservation.org
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.c hq.doe.gov E-MAIL: Emily.medl, nnghq.doe.goov
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: jswiernmicron.com HOLLAND &HART LLP
555 17TH ST STE 3200
DENVER CO 80202
E-MAIL: darueschhoffEc hollandhart.com
tnelsonkhollandhart.com
awjensen c hollandhart.com
karoach t,hollandhart.com
acleeghollandhart.com
mamcmillen(ct hollandhart.com
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: shubbleLcityoufboise.org
E-MAIL: ejewell a,cityofboise.org
boisecityattorney ,cityofboise.org
ATRICIA JORD , SECRETARY
CERTIFICATE OF SERVICE