HomeMy WebLinkAbout20241127Brian Buckham Rebuttal_Redacted.pdf RECEIVED
Wednesday, November 27, 2024
IDAHO PUBLIC
UTILITIES COMMISSION
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
REBUTTAL TESTIMONY
OF
BRIAN R. BUCKHAM
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 Brian Buckham. My business address
5 is 1221 West Idaho Street, Boise, Idaho 83702 . I am
6 employed by Idaho Power and Idaho Power' s parent company,
7 IDACORP, Inc . ("IDACORP") , as Senior Vice President, Chief
8 Financial Officer, and Treasurer.
9 Q. Please describe your educational background.
10 A. I received a Bachelor of Science in Mining
11 Engineering from the University of Idaho, a Master of
12 Business Administration from Gonzaga University, and a
13 Juris Doctor from the University of Idaho College of Law.
14 Q. Please describe your work experience with
15 Idaho Power.
16 A. I was hired in 2010 as an attorney in Idaho
17 Power' s Legal Department, where I focused on securities
18 compliance and external reporting, capital markets
19 transactions, corporate governance, and commercial
20 transactions, among other areas . This followed several
21 years of private law practice at two global law firms,
22 where my practice areas focused on both domestic and
23 international capital markets transactions, securities,
24 corporate governance, and mergers and acquisitions . In
25 2016, I was appointed as IDACORP' s and Idaho Power' s Vice
BUCKHAM, DI-REB 1
Idaho Power Company
1 President & General Counsel, and in 2017 as Senior Vice
2 President & General Counsel, where in both roles I was
3 responsible for leadership of the legal, corporate
4 governance, compliance, risk management, and physical and
5 cyber security functions at IDACORP and Idaho Power. In
6 2022, I was appointed as IDACORP' s Senior Vice President
7 and Chief Financial Officer, where I oversee the companies'
8 finance, accounting, financial planning and analysis,
9 investor relations, treasury, tax, Sarbanes-Oxley
10 compliance, internal audit, environmental compliance,
11 regulatory compliance, credit risk, risk management, and
12 physical and cyber security functions .
13 Q. What are your duties as Senior Vice President
14 and Chief Financial Officer of Idaho Power as they relate
15 to this proceeding?
16 A. I oversee the direct financial planning and
17 forecasting, capital procurement, financing, and investment
18 of funds for Idaho Power, as well as supervise corporate
19 liquidity management and credit. I also have oversight and
20 responsibility for our financial reporting, both internal
21 and external, our investor relations function, and our
22 capital markets transactions and associated relationships
23 with stakeholders in those forums .
24 My duties and responsibilities include various
25 aspects of the Company' s capital markets transactions,
BUCKHAM, DI-REB 2
Idaho Power Company
1 treasury management, and other financial matters . With
2 respect to long-term financing, sale of debt securities,
3 credit facilities, and sale of equity, my duties include :
4 development of financial plans with senior officers and
5 senior managers; meeting with representatives of current
6 and prospective investment banking firms that underwrite
7 IDACORP and Idaho Power securities, discussions with credit
8 rating agencies; assisting in preparation of financial
9 material (including registration statements and
10 prospectuses filed with the U. S . Securities and Exchange
11 Commission) ; representing IDACORP and Idaho Power in
12 meetings with investment banking firms; assessing
13 information relative to the companies' financings;
14 participating in investor roadshows and other securities
15 marketing events; meeting with current and prospective debt
16 and equity investors; meeting with infrastructure and
17 alternative investment funds; and meeting with investment
18 analysts, New York Stock Exchange representatives, and
19 other members of the investment community. With respect to
20 short-term financing, these duties and responsibilities
21 include negotiation of credit facilities and term loans
22 with commercial banks, overseeing the purchase and sale of
23 commercial paper, and establishing and maintaining the
24 relationships that help facilitate those transactions .
BUCKHAM, DI-REB 3
Idaho Power Company
1 Q. Do your responsibilities include communicating
2 with members of the financial community?
3 A. Yes . I am in regular, and effectively daily,
4 contact with individuals associated with investment and
5 commercial banking firms, credit rating agencies, insurance
6 companies, institutional investment firms, pension funds,
7 infrastructure funds, and other organizations interested in
8 publicly-traded and privately-placed securities, as well as
9 securities analysts, who follow IDACORP and Idaho Power.
10 Along with the Company' s vice President of Finance,
11 Compliance, and Risk, my responsibilities include keeping
12 these representatives of the financial community informed
13 of the Company' s financial condition, arranging and
14 participating in meetings with these individuals and
15 IDACORP' s and Idaho Power' s other senior executive
16 management, and visiting with financial representatives in
17 their respective offices or virtually and at industry
18 events . Many of these members of the investment community
19 have followed the electric utility industry for an extended
20 period of time, have a great deal of expertise in the
21 specific financial risks and prospects of utilities and in
22 the regulatory process, and are highly sophisticated.
23 Through my contact with the financial community and
24 review of investment banking and both buy-side and sell-
25 side analytical reports and publications issued by these
BUCKHAM, DI-REB 4
Idaho Power Company
1 firms and the credit rating agencies, I keep informed on
2 trends, equity valuations, interest rates, debt costs,
3 financing costs, security ratings, financing methodologies
4 and costs, and other financial developments in the public
5 utility industry.
6 Q. Are you a member of any professional societies
7 or associations?
8 A. Yes . I am a current member of the Idaho State
9 Bar, the Oregon State Bar, the Arizona State Bar
10 (inactive) , the Governing Council of the Business &
11 Corporate Law Section of the Idaho State Bar, and the
12 University of Idaho Law Advisory Council, in addition to
13 serving on various non-profit boards, both currently and in
14 the past . Further, I was previously an adjunct professor of
15 law at the University of Idaho College of Law, where I
16 taught the securities regulation course. I also previously
17 held the licensed designation of Registered Investment
18 Advisor Representative as an agent of an SEC-regulated
19 wealth management firm.
20 I also attend numerous conferences and seminars of
21 these and other utility business, law, and finance
22 professional groups, such as the Edison Electric Institute
23 and Western Energy Institute, and an investor-owned utility
24 Chief Financial Officer forum, on a regular basis . I also
25 meet regularly with bankers, lawyers, investment analysts,
BUCKHAM, DI-REB 5
Idaho Power Company
1 investors, debtholders, executive management at peer
2 companies, and other members of the investment community
3 and capital markets, and read numerous sources of analyst
4 and market commentary. Through participation in these
5 areas, I gain additional information and insights into the
6 financial developments affecting IDACORP and Idaho Power,
7 as well as the electric utility industry.
8 Q. What is the purpose of your rebuttal testimony
9 in this proceeding?
10 A. The purpose of my rebuttal testimony is to
11 discuss the importance of addressing regulatory lag within
12 the current case to ensure Idaho Power remains financially
13 healthy and able to provide safe, reliable electric service
14 to customers . Through this discussion I address the
15 criticality of adequate and timely cost recovery and detail
16 why, if approved, Staff' s recommended revenue requirement
17 would result in considerable near- and long-term harm to
18 both Idaho Power and its customers .
19 Q. How is your testimony structured?
20 A. My testimony begins with an overview of the
21 financial makeup of Idaho Power' s business, and why
22 sufficient financing is crucial to meeting the Company' s
23 obligation to serve while keeping financing costs as low as
24 possible for customers . I then discuss the unprecedented
25 growth Idaho Power is currently experiencing and the
BUCKHAM, DI-REB 6
Idaho Power Company
1 expected continued need for incremental financing. My
2 testimony concludes by discussing the impact this case will
3 have on Idaho Power' s ability to obtain financing at a
4 reasonable cost and the significant prolonged harm that
5 would occur to the Company and its customers if the
6 approved revenue requirement does not provide adequate rate
7 recovery that appropriately addresses regulatory lag.
8 I . FINANCING OVERVIEW
9 Q. How is Idaho Power' s business structured?
10 A. Idaho Power is by far the largest component of
11 IDACORP, a holding company publicly traded on the New York
12 Stock Exchange ("NYSE") . IDACORP is the sole owner of
13 Idaho Power. Other components of IDACORP include IDACORP
14 Financial Services, a holder of affordable housing projects
15 and other real estate investments, and Ida-West Energy, an
16 operator of small hydroelectric generation projects . Idaho
17 Power comprises over 99 percent of IDACORP' s annual
18 revenues, meaning the financial health of IDACORP - and its
19 ability to obtain financing - are almost entirely based on
20 the financial health of Idaho Power. As discussed by
21 Company Witness Timothy E. Tatum, over 96 percent of Idaho
22 Power' s retail business resides within the state of Idaho.
23 Q. Generally speaking, how does Idaho Power
24 obtain financing for its operations?
BUCKHAM, DI-REB 7
Idaho Power Company
1 A. Financing of Idaho Power' s operations, beyond
2 what is originated from operating cash flows, comes from a
3 combination of debt transactions conducted at Idaho Power
4 and equity (stock) transactions conducted at the publicly
5 traded IDACORP level .
6 Q. What are the primary costs associated with
7 debt and equity financing?
8 A. Beyond issuance costs, the primary cost of
9 debt financing is the interest rate charged by lenders,
10 similar to the interest rate an individual would pay on a
11 home or car loan. Equity financing costs can be represented
12 by the return investors expect in exchange for their
13 investment, referred to as return on equity, or "ROE" .
14 Q. How do debt financing costs and ROE impact
15 customer rates?
16 A. For ratemaking purposes, the Company' s
17 weighted average cost of debt and equity financing -
18 referred to as the "rate of return" or "ROR" - is applied
19 to the Company' s rate base to determine financing costs
20 allowed in customer rates . With all else held constant,
21 increased financing costs result in higher rates for
22 customers . This relationship between financing and customer
23 rates also works in reverse - lower financing costs result
24 in lower customer rates .
BUCKHAM, DI-REB 8
Idaho Power Company
1 Q. Does a utility' s financial health impact its
2 overall cost of financing?
3 A. Yes . Credit ratings and the outlook for a
4 company' s financial condition and operating cash flow are
5 primary drivers of the interest rates a lender is willing
6 to offer for debt financing. Those credit ratings and
7 financial outlook also significantly impact a company' s
8 stock price. Idaho Power is currently monitored by two
9 credit ratings agencies - Moody' s Investors Service
10 ("Moody' s") and Standard & Poor' s Global Ratings ("S&P") -
11 that issue credit ratings for IDACORP and Idaho Power based
12 on a number of metrics that measure each company' s
13 financial health.
14 Q. Based on the interplay between the financial
15 health of a utility and its overall cost of financing, is
16 it in the public interest that a utility is provided with
17 adequate and timely cost recovery through rates?
18 A. Yes . As discussed by Mr. Tatum and further
19 supported by my testimony, rate recovery that supports more
20 timely cash flows and a financially healthy utility is a
21 direct benefit to customers by ensuring that the utility
22 can, in the lowest cost manner possible, obtain the funds
23 needed to construct, operate, and maintain a safe and
24 reliable electric grid. This is especially important in a
25 period of high growth when exceptionally high levels of
BUCKHAM, DI-REB 9
Idaho Power Company
1 incremental debt and equity financing will certainly be
2 required for the Company to fulfill its legal obligation to
3 serve . The amount of financing necessary, as well as the
4 cost of that financing, correlates closely with the cash
5 flow the utility generates from customer revenues and the
6 timeliness of receipt of those cash flows . Regulatory lag
7 can create pressure on operating cash flows, resulting in a
8 need for greater external financing and at a higher cost to
9 the utility and to its customers .
10 II . CURRENT GROWTH ENVIRONMENT
11 Q. Please describe Idaho Power' s current and
12 future growth in capital expenditures .
13 A. As discussed in Mr. Tatum' s rebuttal
14 testimony, Idaho Power is currently in the midst of its
15 greatest level of capital growth since the construction of
16 the Hells Canyon Complex in the late 1950s .
17 Q. Can you further expand on the significance of
18 this growth?
19 A. Yes . The current expectation for rate base
20 growth exceeds even the most rapid growth period in Idaho
21 Power' s 109-year history. During the 13-year construction
22 of the Hells Canyon dam complex, from its beginning in 1955
23 to its completion in 1968, Idaho Power' s net investment in
24 its utility plant grew by an annual rate of 9 . 2 percent.
25 From 1968, when the Hells Canyon dam was completed, through
BUCKHAM, DI-REB 10
Idaho Power Company
1 2023, Idaho Power' s net investment in its utility plant
2 grew at an annual rate of 4 . 9 percent. To reliably meet
3 forecasted customer load in the coming years, Idaho Power
4 expects its net investment in utility plant to grow at a
5 13 . 4 percent annual rate over the next five years . Idaho
6 Power' s actual rate base is expected to grow even faster,
7 at a 16 . 9 percent annual rate. To my knowledge, and as
8 validated by recent conversations I have held with
9 investment analysts and large institutional investors, this
10 is by far the fastest organic growth rate of any investor-
11 owned utility in the United States, and in the last few
12 decades, is unprecedented.
13 Q. What level of capital expenditures do you
14 anticipate Idaho Power will incur in the next few years?
15 A. On October 31, 2024, Idaho Power updated its
16 capital expenditure estimates for purposes of IDACORP' s
17 third quarter earnings press release and Form 10-Q
18 quarterly report. Those capital expenditures are
19 represented in a chart filed with the U. S . Securities and
20 Exchange Commission on a Form 8-K on October 31, 2024 . The
21 chart was as follows :
BUCKHAM, DI-REB 11
Idaho Power Company
1 Figure 1
2 Capital Expenditures Forecast, 2024-2028
Capital Expenditures ForecastM 010ROORP
2024-2028
-46%increase from previous 5-year forecast
$1 500
$1,400
$13W -$1,165M per year
$1 200 average forecast
--------------------------------- -------- -------------------
$1,100
$ 00
$900
`o $800 -201%
$700 increase
$600
%o0
$400
$300 -$387M actual
$200 per year average,
$ioo previous 5 years
$o
2024 2025 2026 eon 2028
■New capacity&Energy Resources($174M-$529M) ■Distribution($207M-$258M) ■High Voltage Transmission($79M-$409M)
■Transmission($154M-$297M) ■Hydro($71M-$166M) ■General Plant($76M-$105M)
■Thermal($10M-$68M)
3 (�)A fott r31,2 .Uplta i,a,dd,res/o,arterc1-a-llawance for nOs useO during mnsttuttion.hls graphic isa repreunatlon or beS Year capitale penErture lorecart See page 53 of IDAC00.Ysan0 Idaho
Power'sQuanerly Report on Form 1041 forth,quarter ended September 30,2024.for updatesto the 5ryear aphal expenditures For—since February 15,2024,the date of IDAWRW and Idaho Powers 2023 Form 10-1(.
4 As the chart demonstrates, Idaho Power estimates
5 that its five-year capital expenditures will nearly triple
6 from around $387 million per year for the previous five
7 years to a significantly higher approximately $1 . 17 billion
8 per year on average from 2024 to 2028 . The 2024 to 2028
9 amount could also increase.
10 Q. Based on this level of growth and attendant
11 unprecedented capital expenditures, will Idaho Power
12 require incremental debt or equity financing to ensure it
13 has the funds necessary to meet its obligation to serve?
14 A. Yes . Operating cash flows will be grossly
15 inadequate to fund that growth, and it will require
16 substantial debt and equity issuances . Already in 2024
BUCKHAM, DI-REB 12
Idaho Power Company
1 IDACORP has issued around $300 million in equity and Idaho
2 Power has issued $300 million in long-term debt. This is on
3 the heels of 2023, during which Idaho Power issued a record
4 $872 million of long-term debt. From 2025 to 2028, I
5 currently estimate that the Company will need to issue at
6 least $1 . 3 billion in equity securities and over $2 . 0
7 billion in debt securities to fund expected capital
8 expenditures and cover operating costs, which for IDACORP
9 and Idaho Power is an unprecedented amount of financing and
10 very significant relative to the size of the companies'
11 balance sheets . Idaho Power will also need to refinance
12 $140 million in maturing debt during those years .
13 Q. Are debt and equity markets competitive?
14 A. Yes . Ultimately, IDACORP and Idaho Power
15 compete with other companies for debt and equity in the
16 capital markets, including both utility industry peers and
17 the broader market. To attract the capital necessary to
18 fund its operations, IDACORP and Idaho Power must be able
19 to demonstrate to the investment and banking community the
20 likelihood of a reasonable return on investment at an
21 acceptable level of risk and the ability to timely fund its
22 interest and principal debt repayment obligations .
23 Q. Based on your experience with the investment
24 community, what factors impact investors' willingness to
25 provide funding to Idaho Power and IDACORP?
BUCKHAM, DI-REB 13
Idaho Power Company
1 A. Some of the important factors highlighted by
2 the investment community include Idaho Power' s demonstrated
3 history of strong cost management and focus on efficient
4 operations, historic (albeit weakening) balance sheet
5 strength, a historic track record of earning a reasonable
6 return (also weakening) , and a constructive regulatory
7 environment that provides the Company with a reasonable
8 opportunity to earn its authorized rate of return. Because
9 IDACORP is comprised almost entirely of Idaho Power, and
10 because over 96 percent of Idaho Power' s retail
11 jurisdiction resides within Idaho, the Company' s ability to
12 earn a fair rate of return in Idaho is paramount. Based on
13 my discussions with current and prospective investors,
14 analysts, credit rating agencies, and other participants in
15 the capital markets, it is apparent that they are heavily
16 focused on the Company' s ability to maintain balance sheet
17 strength going into and through this heavy period of
18 capital expenditures, as well as the willingness of the
19 Idaho Public Utilities Commission ("Commission") to
20 maintain the financial health of the Company through rates
21 that reduce regulatory lag, increase cash flows, allow
22 access to capital markets at a reasonable amount and cost,
23 and allow the Company an opportunity to earn a reasonable
24 return .
BUCKHAM, DI-REB 14
Idaho Power Company
1 III . NEED FOR ADEQUATE RATE RECOVERY
2 Q. Do Idaho Power' s current rates provide the
3 Company with a reasonable opportunity to earn a fair rate
4 of return in the state of Idaho?
5 A. No.
6 Q. Why not?
7 A. The inadequacy of Idaho Power' s current rates
8 can be demonstrated by the Company' s expected use of
9 accumulated deferred investment tax credits ("ADITC") at
10 year-end 2024 . Per the terms of the settlement stipulation
11 approved in the Company' s 2023 General Rate Case in Case
12 No. IPC-E-23-11 ("2023 GRC") , a revenue sharing mechanism
13 currently exists through which Idaho Power is authorized to
14 accelerate the amortization of ADITC to help increase its
15 earnings to an established ROE threshold reflecting 95
16 percent of its currently authorized ROE of 9 . 6 percent,
17 which equates to 9 . 12 percent. If earnings exceed a certain
18 threshold, 80 percent of the excess amounts would be shared
19 with customers in the form of a rate reduction.
20 Q. What is Idaho Power' s current expectation of
21 ADITC usage in 2024?
22 A. Idaho Power currently projects the need to
23 accelerate the amortization of approximately $30 million in
24 ADITC in 2024 to achieve 95 percent of its currently
25 authorized ROE.
BUCKHAM, DI-REB 15
Idaho Power Company
1 Q. What does this expectation demonstrate?
2 A. This demonstrates that under existing rates,
3 the Company is expected to require approximately $30
4 million in earnings support through the use of accelerated
5 ADITC amortization to achieve an ROE that is considerably
6 lower than the currently authorized 9 . 6 percent. This
7 indicates that current rates, which went into effect just
8 ten months ago, are already insufficient to fund Idaho
9 Power' s operations in the current growth environment, which
10 is notably the result of regulatory lag in timely recovery
11 of those costs . Also, keep in mind that accelerated
12 amortization of ADITCs under the regulatory mechanism does
13 not generate funds to pay operating expenses or for capital
14 expenditures - it is a non-cash item.
15 Q. Have you had discussions with current and
16 prospective IDACORP and Idaho Power investors about that
17 expectation?
18 A. Yes . IDACORP and Idaho Power have many
19 sophisticated and savvy investors, and they recognize that
20 Idaho Power' s announced need to use ADITC in 2024 indicates
21 the Company is unable to earn not only its authorized rate
22 of return, but the lower level of ROE used for purposes of
23 accelerating ADITC amortization under the ADITC mechanism.
24 They also recognize that the ADITCs are a "non-cash"
25 element of Idaho Power' s financial condition, in that
BUCKHAM, DI-REB 16
Idaho Power Company
1 accelerated amortization does not contribute to operating
2 cash flow. Thus, they do not represent funds available to
3 help finance Idaho Power' s capital expenditures .
4 Q. Based on the inadequacy of current rates, do
5 you believe the outcome of the Company' s current filing
6 will impact Idaho Power' s ability to obtain financing at a
7 reasonable cost?
8 A. Yes . The outcome of this case is critical . I
9 believe the outcome of this case will in large part
10 determine the cost and terms of IDACORP' s and Idaho Power' s
11 financing necessary to fund the Company' s operations and
12 capital expenditures over the next several years, and in
13 some cases the ability of Idaho Power to obtain certain
14 types of debt financing under reasonable terms or at all .
15 Q. Does the outcome of this case have the
16 potential to impact the Company' s credit rating?
17 A. Yes . I believe the outcome of this case will
18 have a direct impact on the Company' s credit ratings and
19 outlook. As Mr. Tatum discusses in his direct and rebuttal
20 testimonies, Moody' s recently placed Idaho Power' s current
21 Baal credit rating on "negative outlook, " and a February
22 2023 note from S&P indicated a downgrading of its liquidity
23 assessment of the Company from "strong" to "adequate . " Both
24 S&P and Moody" s note in their evaluations of Idaho Power
25 the unprecedented level of capital expenditures required in
BUCKHAM, DI-REB 17
Idaho Power Company
1 the near future, placing pressure on the Company' s cash
2 flow and financial health metrics .
3 Q. Idaho Power' s revised revenue requirement
4 results in a rate increase of $83 . 2 million in this case .
5 If the Commission approved the Company' s request as
6 revised, do you believe it would improve the Company' s
7 credit ratings?
8 A. No. While there are many factors that
9 influence a Company' s credit rating, with the proposed
10 $83 .2 million increase in revenues I believe it is possible
11 that the Company could potentially maintain, but not
12 improve, its current credit ratings at both Moody' s and
13 S&P, albeit potentially with a negative watch or negative
14 outlook from both S&P and Moody' s . Further, there is still
15 a chance that the credit ratings could be downgraded m
16
17
18
19 Q. Why do you believe Idaho Power could still be
20 downgraded, or at the very least retain the negative watch
21 designation at Moody' s or be put on negative watch at S&P,
22 if the Commission approves Idaho Power' s revised request?
23 A. Credit rating agencies use various ratios to
24 evaluate the financial health of a utility. For Moody' s, a
25 key ratio is referred to as "Cash Flow from Operations
BUCKHAM, DI-REB 18
Idaho Power Company
1 ( `CFO' ) pre-WC to Debt, " which measures the ratio of net
2 cash flow from operations net of changes in working capital
3 to total debt. S&P utilizes a similar metric referred to as
4 "Funds from Operations ("FFO") to Total Debt, " which
5 measures the ratio of funds from operations to a company' s
6 total debt. Moody' s downgrade threshold for Idaho Power for
7 CFO pre-WC to debt is 13 percent, ' while S&P' s downgrade
8 threshold for Idaho Power for FFO to Debt is 14 percent.2 If
9 Idaho Power were to receive a $83 . 2 million increase in
10 revenues as of January 1, 2025, the Company projects its
11 2025 CFO pre-WC to Debt ratio to be _ percent, and its
12 2025 FFO to Debt ratio to be _ percent,
13
14 Also, both Moody' s and S&P have stated that they
15 expect Idaho Power to have a stable and credit supportive
16 regulatory environment. Moody' s has added that without the
17 benefit of more incremental and timelier rate relief, among
18 other factors, Idaho Power' s credit metrics may not improve
19 materially enough to support current ratings, referencing
20 that Idaho Power' s metrics are weaker than most peers .
21 Moody' s also notes that Idaho Power lacks the type of
22 timely relief seen in other states . These were common
' Tatum DI, Exhibit No. 2 at 3.
2 Tatum DI, Exhibit No. 3 at 2.
BUCKHAM, DI-REB 19
Idaho Power Company
1 themes throughout the reports that Mr. Tatum included with
2 his testimony.3
3 Q. Do you have an analysis that further supports
4 the Company' s negative financial outlook if the Commission
5 approves the revised request for an $83 . 2 million increase?
6 A. Yes . Utilizing the revenue sharing mechanism
7 as a measure of expected financial performance, Idaho Power
8 performed an analysis to determine expected revenue sharing
9 or ADITC usage in 2025 if the Company receives a rate
10 increase of $83 . 2 million annually beginning January 1,
11 2025 . Under this analysis, even with the requested rate
12 relief, Idaho Power would still require $_ million in
13 earnings support from the accelerated amortization of ADITC
14 to earn 95 percent of its authorized ROE, let alone its
15 authorized ROE.
16 Q. What level of rate increase did the Commission
17 Staff ("Staff") recommend in their direct testimony?
18 A. Staff Witness Mr. Michael Louis presented
19 Staff' s rate increase recommendation of $8 . 9 million.
20 Q. What would be the impact to the Company' s cost
21 of obtaining financing if the Commission were to approve an
22 $8 . 9 million increase in this case?
3 Tatum DI, Exhibit Nos. 2 and 3.
BUCKHAM, DI-REB 20
Idaho Power Company
1 A. Idaho Power and IDACORP would almost certainly
2 be downgraded by the credit rating agencies; both debt and
3 equity investors' view of IDACORP' s and Idaho Power' s
4 balance sheet strength, financial prospects, and
5 constructive nature of the regulatory environment would all
6 reduce significantly. This would result in increased
7 financing costs for Idaho Power' s debt securities and for
8 credit facilities . IDACORP' s stock price would also suffer
9 dramatically, which would increase the cost of equity
10 financing.
11 Q. Do you have an analysis that demonstrates the
12 impact such an order would have on the Company' s financial
13 outlook?
14 A. Yes . Under Staff' s proposal, the Company
15 projects that Idaho Power' s 2025 CFO pre-WC to Debt ratio
16 would , while the
17 FFO to Debt ratio would drop to _ percent'
18
19 Further, under the revenue sharing mechanism,
20 Idaho Power expects that it would have to accelerate
21 amortization of $_ million in ADITC to achieve 95
22 percent of its authorized ROE.
23
24
25
BUCKHAM, DI-REB 21
Idaho Power Company
1 Q. What would be the impact of a credit
2 downgrade?
3 A. Idaho Power' s debt and equity financing costs
4 would increase commensurate with the severity of the
5 downgrade and investors' perception of the factors I noted
6 previously. As discussed in Mr. Tatum' s testimony, Idaho
7 Power currently holds a Baal issuer credit rating and a
8 negative outlook with Moody' s . Idaho Power currently holds
9 a BBB issuer credit rating with S&P. While any downgrade in
10 a credit rating would result in an increase in financing
11 costs, IDACORP' s and Idaho Power' s corporate ratings are
12 currently at risk of falling even below investment grade
13 into what the investment community refers to as "junk"
14 status . A BBB rating at S&P is just two steps above junk
15 status, while a Baal rating at Moody' s is just three steps
16 above junk status . IDACORP is rated Baa2 at Moody' s, which
17 is also just two steps above junk status . A rating agency
18 can drop a credit rating more than one level at a time .
19 The current ratings and scale are illustrated in the
20 following chart :
BUCKHAM, DI-REB 22
Idaho Power Company
1 Table 1
2 Rating Levels by Agency
S&P Moody' s
AAA Aaaa
AA+ Aal
AA Aa2
AA- Aa3
A+ Al
A A2
A- A3
BBB+ Baal
BBB Baa2
BBB- Baa3
JUNK LINE
BB+ Bal
BB Ba2
BB- Ba3
B+ Bl
B B2
B- B3
3
4 Q. What would be the ramifications if Idaho Power
5 were to fall into junk status?
6 A. Junk status would result in a step change in
7 Idaho Power' s financing costs . On top of the increase in
8 financing costs that comes with any ratings downgrade or
9 even just further negative sentiment, falling below
10 investment grade has especially severe consequences . For
11 example, many investors represent funding sources that
12 expressly prohibit investing in junk bonds, such as pension
13 funds and insurance companies . This means Idaho Power' s
14 ability to obtain financing would be hampered by its
BUCKHAM, DI-REB 23
Idaho Power Company
1 inability to do business with a significant portion of the
2 utility investment market. Further, the commercial paper
3 market for short-term cash needs would also become less
4 available, and any financing would be offered at elevated
5 rates, if available at all, for instruments like commercial
6 paper. Idaho Power would also likely be required to
7 increase the amount of cash collateral it maintains with
8 trading counterparties, resulting in additional financing
9 costs and the need to maintain excess cash on the balance
10 sheet to meet margin and collateral requirements, with the
11 corresponding high cost of doing so. Further, the cost of
12 borrowing under IDACORP' s and Idaho Power' s credit
13 facilities would increase, under the terms of those
14 facilities .
15 Q. Is a credit downgrade and corresponding
16 increase in capital costs impactful when incremental
17 financing is needed?
18 A. Yes, especially so. A credit downgrade during
19 a period of growth would have lasting impacts on customers
20 for years to come and cannot be quickly reversed. As
21 discussed earlier in my testimony, IDACORP expects to issue
22 at least $1 . 3 billion in equity and Idaho Power plans to
23 issue at least $2 billion in debt within the next five
24 years . A credit rating downgrade resulting from this case
25 would mean Idaho Power' s consolidated cost of financing
BUCKHAM, DI-REB 24
Idaho Power Company
I nearly $3 . 5 billion would increase. That increase would
2 remain in the Company' s cost of financing - and ultimately
3 customer rates - throughout the lives of these financial
4 instruments . Idaho Power issues debt instruments with
5 maturities as long as 30 years, and IDACORP' s equity
6 issuances are effectively permanent as stock is generally
7 originally issued only once . Thus, the damage and cost to
8 customers is long-tenured.
9 Q. Have you performed an analysis to determine
10 the impact a credit downgrade could have on Idaho Power' s
11 cost of borrowing?
12 A. Yes . Exhibit No. 11 demonstrates the estimated
13 increase in borrowing costs that could occur in the event
14 of a downgrade.
15 Q. How did Idaho Power determine the potential
16 impact of a downgrade as detailed in Exhibit No. 11?
17 A. To estimate the impact a downgrade could have
18 on the cost of borrowing, Idaho Power compared the A-rated
19 10-year US utility bond yield index from Bloomberg Finance,
20 L. P. , to the BBB-rated 10-year US utility bond yield index
21 from Bloomberg Finance, L. P. , over the past 15 years .
22 Q. You mentioned earlier in your testimony that
23 Idaho Power currently holds a BBB corporate issuer rating
24 at S&P. For the purposes of the analysis presented in
25 Exhibit No. 11, why did Idaho Power choose to compare A-
BUCKHAM, DI-REB 25
Idaho Power Company
I rated debt at utilities to BBB-rated debt at utilities
2 under the utility bond yield index?
3 A. The comparison of yield spreads between A-
4 rated debt at utilities and BBB-rated debt at utilities is
5 commensurate with the expected impact to Idaho Power' s
6 First Mortgage Bonds ("FMB") that could result from a one-
7 notch downgrade in the corporate issuer rating. FMBs are
8 the primary debt instrument Idaho Power issues, and the
9 lowest-cost long-term debt instrument that Idaho Power
10 could issue.
11 While the Company' s corporate issuer ratings,
12 discussed above, are the measures that are used to
13 represent overall corporate risk and a proxy for debt
14 instrument risk, individual securities can have different
15 ratings if there are attributes that warrant it. FMBs have
16 historically carried a higher credit rating than the
17 Company' s corporate issuer rating because they are secured
18 by most assets of the Company and have priority over other
19 debt and equity securities - they are the most senior
20 repayment rights upon distribution of the Company. A one
21 notch downgrade at S&P could move Idaho Power' s secured FMB
22 ratings down to the BBB category.
23 Q. What were the results of the analysis provided
24 in Exhibit No. 11?
BUCKHAM, DI-REB 26
Idaho Power Company
1 A. Over the last 15 years, the rating difference
2 between A and BBB in the US Utility 10-year debt index
3 resulted in an average 44 basis point increase in borrowing
4 costs .
5 Q. Given the expected financing mentioned
6 previously in your testimony, what is the potential impact
7 to borrowing costs of a credit downgrade of Idaho Power' s
8 FMB' s to the BBB category utilizing an assumed 44 basis
9 point spread?
10 A. An increase in borrowing costs of 44 basis
11 points utilizing a 10-year debt instrument for $2 . 0 billion
12 of debt would result in approximately $88 million in
13 increased financing costs over that time period (0 . 0044 x
14 10 x $2, 000, 000, 000 = $88, 000, 000) . While this is a
15 simplified example of the detrimental impact of increased
16 borrowing costs, it demonstrates the magnitude of the
17 impact that could occur from just a single notch downgrade
18 during the current environment of unprecedented growth. It
19 is also important to note that this only quantifies an
20 estimated impact to the Company' s debt financing.
21 Q. Would a credit downgrade also impact IDACORP
22 in the equity market?
23 A. Yes . Equity investors would reassess the risk
24 profile of the Company in light of the downgrade . This
25 would adversely impact IDACORP' s market value and increase
BUCKHAM, DI-REB 27
Idaho Power Company
1 the level of return investors would expect to receive from
2 their investment in IDACORP, increasing the required ROE to
3 attract equity investment, which also ultimately impacts
4 customer rates .
5 Q. Aside from the direct increase to Idaho
6 Power' s financing costs of a credit downgrade, would
7 adoption of Staff' s proposal have lasting effects on Idaho
8 Power' s standing within the investment community?
9 A. Yes . As discussed previously in my testimony,
10 some of the primary factors considered by the investment
11 community when deciding whether to invest in a utility are :
12 1) strong cost management, 2) efficient operations, 3)
13 balance sheet strength, 4) a demonstrated track record of
14 earning a reasonable return, and 5) a constructive
15 regulatory environment. While historic precedent on these
16 factors is important, investors predominately look to
17 future prospects on these factors when making investment
18 decisions .
19 On pages 24-26 of his direct testimony, Mr. Tatum
20 discusses the Company' s stringent cost management and track
21 record for efficient operations, indicating that Idaho
22 Power has been thoughtful in its spending while continuing
23 to maintain a safe and reliable electrical grid.
24 As demonstrated by the previous discussion of the
25 ADITC and revenue sharing mechanism and Idaho Power' s
BUCKHAM, DI-REB 28
Idaho Power Company
1 expected ADITC usage in 2024 and beyond, Idaho Power' s
2 ability to earn a reasonable return is currently in
3 question, as is the strength of its balance sheet, given
4 the regulatory lag it currently experiences and the
5 expected cash outlay in the next five years . I expect that
6 Idaho Power will have significant negative free cash flow
7 for several years, during this period of significant growth
8 to serve customers .
9 The last factor in this list - a constructive
10 regulatory environment - is crucial for Idaho Power due to
11 the concentration of its business in the state of Idaho.
12 Current and potential investors have already expressed
13 concern with Idaho Power' s regulatory lag in light of
14 significant capital expenditures, yet they have noted that
15 Idaho Power has sought to address that regulatory lag in
16 this case. Failure to address Idaho Power' s financial
17 strength in this case would bring into question Idaho
18 Power' s ability to earn a fair and reasonable rate of
19 return for years to come and its ability to maintain an
20 investment grade balance sheet.
21 Q. If approved, would the investment community
22 view a rate increase of $8 . 9 million as indicative of a
23 constructive regulatory environment?
24 A. No . Quite the contrary. For the reasons
25 stated in my testimony, it is clear that Staff' s proposal
BUCKHAM, DI-REB 29
Idaho Power Company
1 would result in significant degradation to Idaho Power' s
2 financial health and make it effectively impossible for
3 Idaho Power to earn anywhere near its authorized rate of
4 return. In my experience, and based on discussions I have
5 had with concerned investors following Staff' s filing of
6 its testimony in this case, investors would interpret an
7 order granting Staff' s proposal as a very negative sea
8 change in Idaho' s regulatory environment, in my opinion
9 likely relegating the ranking of Idaho to one of the least
10 constructive regulatory jurisdictions in the United States .
11 That would have a severe attendant impact on cash flows and
12 debt and equity valuations and make raising necessary
13 capital both more expensive and more difficult .
14 Q. If Idaho Power were unable to obtain financing
15 through its traditional debt and equity sources at a
16 reasonable cost or under reasonable terms, are there other
17 financing options available?
18 A. None other than more "exotic" financing
19 instruments that have high interest rates and high
20 investment return expectations from investors, meaning they
21 are also expensive to the companies and to Idaho Power' s
22 customers, and that I believe investors would view as
23 unusual financing instruments for a utility company like
24 Idaho Power.
BUCKHAM, DI-REB 30
Idaho Power Company
1 Q. What other options to financing Idaho Power' s
2 requirements exist?
3 A. Idaho Power could save cash in the short term
4 by eliminating its dividend and retaining the cash.
5 However, this approach is highly unusual in the utility
6 industry and would be very poorly received by investors,
7 and this amount of funding source would still be grossly
8 inadequate to support the growth expected on Idaho Power' s
9 system, and would result in lasting devastating impacts on
10 IDACORP' s stock price and valuation . This would in turn
11 encumber Idaho Power' s ability to utilize the issuance of
12 new equity to obtain funding in the future, causing Idaho
13 Power to over-lever its balance sheet and diminish its
14 overall balance sheet strength. Effectively, this is not a
15 realistic option.
16 As another option, Idaho Power could enter into a
17 merger or acquisition transaction involving the sale of the
18 Company to a third party. Structurally, IDACORP could seek
19 to engage in a transaction that would involve the sale of
20 all or substantially all of its outstanding equity
21 securities to a third party with a larger balance sheet,
22 after which IDACORP (and Idaho Power as its wholly owned
23 subsidiary) would be wholly or largely owned by a new
24 entity. One form of this is sometimes described as a
25 "take-private transaction, " commonly involving a large
BUCKHAM, DI-REB 31
Idaho Power Company
1 financial or investment entity or larger utility
2 conglomerate acquiring a smaller utility like Idaho Power.
3 It could also take the form of a merger. This is an
4 extreme measure to obtain access to capital, but a
5 potential option if rates do not provide adequate cash flow
6 to support capital expenditure or offer reasonable access
7 to capital in the capital markets . Because it is an extreme
8 measure, with other notable impacts on customers,
9 Commission approval of any such transaction is required
10 under Idaho law. If rate relief is inadequate and Idaho
11 Power' s financial condition thus degrades, particularly
12 with the attendant expected decrease in IDACORP' s stock
13 price, I expect institutional entities and larger
14 corporations could approach IDACORP management or IDACORP' s
15 shareholders directly to seek to effect such a transaction,
16 and under some circumstances IDACORP' s and Idaho Power' s
17 management must bring such a transaction to the Commission
18 for review.
19 Q. You've discussed the Company' s ADITC and
20 revenue sharing mechanism throughout your testimony. Could
21 this mechanism support Idaho Power' s earnings to mitigate
22 the impact if regulatory lag is not addressed in this case?
23 A. No. First, the acceleration of amortization of
24 ADITC provides non-cash support to Idaho Power' s earnings,
25 meaning Idaho Power' s liquidity metrics utilized by ratings
BUCKHAM, DI-REB 32
Idaho Power Company
1 agencies would still suffer, and it would not be a source
2 of operating cash flow to fund the Company' s operations .
3 Second, Idaho Power does not expect sufficient ADITC to be
4 available in 2025 to compensate for even roughly _ of
5 the shortfall that would exist if the Commission authorized
6 an $8 . 9 million increase in revenues .
7 Q. Without access to debt and equity financing at
8 a reasonable cost, and absent the desire to sell to a third
9 party with a larger balance sheet who could potentially
10 finance at a reasonable cost, would Idaho Power be able to
11 fund the growth expected in its service area in the coming
12 years?
13 A. Under those circumstances, if financing costs
14 were too significant or access to capital too limited,
15 Idaho Power would have to request from the Commission
16 relief from its obligation to reliably serve customer
17 growth, as it would not have adequate cash available to
18 construct, operate, and maintain the electrical grid in a
19 safe and reliable manner at the rate customers demand.
20 Through September 30, 2024, Idaho Power' s 2024 operating
21 cash flow was approximately $470 million. With average
22 capital expenditures from 2025 to 2028 estimated at around
23 $1 . 17 billion, Idaho Power would be unable to fund planned
24 operations . Indeed, even with the rate request Idaho Power
25 submitted in this case, its operating cash flow will be
BUCKHAM, DI-REB 33
Idaho Power Company
1 substantially inadequate to fund its operations, and it
2 will require continued access to the capital markets .
3 Q. Several parties in this case cite Commission
4 Order No. 35762 issued in Veolia' s recent general rate case
5 as grounds for rejecting Idaho Power' s proposed rate base
6 methodology. In his rebuttal testimony, Mr. Tatum discusses
7 why Idaho Power should not be compared to Veolia. Do you
8 agree with his assessment?
9 A. Absolutely. Veolia is a large foreign-owned
10 multinational company with annual revenues over 40 times
11 greater than Idaho Power' s and a similarly disproportionate
12 balance sheet, and with relatively small operations in
13 Idaho compared to its global water utility enterprise .
14 While I am not testifying to the regulatory aspects of
15 Veolia' s rate request, from a financial perspective it is
16 not appropriate to compare the financing needs, financing
17 methods, operational complexity and risk, and necessary
18 cost recovery of Idaho Power to those of Veolia.
19 Q. Does Commission Staff at any point in their
20 testimony appear to consider the financial ramifications of
21 their proposed revenue requirement?
22 A. No. Based on my review of the testimony it
23 does not appear that Commission Staff considered the
24 financial ramifications of their revenue requirement
25 proposal, or the impact those financial ramifications would
BUCKHAM, DI-REB 34
Idaho Power Company
1 have on Idaho Power' s customers or the financial viability
2 of the Company.
3 Q. Do you believe Staff' s proposed revenue
4 requirement would result in rates that are fair, just, and
5 reasonable?
6 A. No. While Mr. Tatum testifies to the
7 regulatory history supporting the Company' s request in this
8 case, a utility' s rates must provide a reasonable
9 opportunity to earn a fair rate of return; otherwise it
10 will be unable to compete in the capital markets to attract
11 the capital necessary to fulfill its obligation to serve . A
12 revenue requirement proposal that does not consider the
13 financial ramifications of the underlying rate increase not
14 only ignores a critical consideration in setting rates, but
15 ultimately results in harm to customers in the form of
16 elevated financing costs, loss of utility independence, or
17 simply the inability to obtain funding to fulfill the
18 utility' s mandatory obligation to serve. Fair, just, and
19 reasonable rates must consider this central tenet of
20 ratemaking, and Staff' s proposal does not.
21 IV. CONCLUSION
22 Q. Please summarize your rebuttal testimony.
23 A. Idaho Power is in a period of growth unlike
24 any other it has experienced in the 109-year history of the
25 Company. To fund this growth and fulfill its mandatory
BUCKHAM, DI-REB 35
Idaho Power Company
1 obligation to serve, Idaho Power will need adequate cash
2 flow and must compete in the capital markets to obtain
3 billions of dollars in incremental debt and equity
4 financing. The amount of that financing, and the cost and
5 availability of that financing, depends largely on Idaho
6 Power' s operating cash flows, which are directly related to
7 this case. Moreover, the cost of that financing, which
8 ultimately inures to the benefit or detriment of customers,
9 is directly contingent upon the perceived financial health
10 of the Company, which for Idaho Power means its ability to
11 recover costs in a timely manner in the state of Idaho.
12 Failure to address regulatory lag in this case - as
13 proposed by Staff and some parties - would result in
14 detrimental financial impacts to Idaho Power and its
15 customers for years to come, and in the context of equity,
16 permanently.
17 The Company' s requested rate recovery in this case
18 is necessary to support Idaho Power' s credit rating and
19 ensure sufficient operating cash flows to warrant continued
20 access to the capital markets under reasonable terms and at
21 a reasonable cost to the Company and its customers . The
22 alternative is unpalatable to Idaho Power' s customers, to
23 investors who provide the company with capital to fulfill
24 its mandatory obligations, and to the state of Idaho.
25 Q. Does this conclude your testimony?
BUCKHAM, DI-REB 36
Idaho Power Company
1 A. Yes, it does .
2
3
BUCKHAM, DI-REB 37
Idaho Power Company
1 DECLARATION OF BRIAN R. BUCKHAM
2 I, Brian R. Buckham, declare under penalty of
3 perjury under the laws of the state of Idaho:
4 1 . My name is Brian R. Buckham.
5 2 . On behalf of Idaho Power, I present this
6 pre-filed rebuttal testimony in this matter.
7 3 . To the best of my knowledge, my pre-filed
8 rebuttal testimony is true and accurate.
9 I hereby declare that the above statement is true to
10 the best of my knowledge and belief, and that I understand
11 it is made for use as evidence before the Idaho Public
12 Utilities Commission and is subject to penalty for perjury.
13 SIGNED this 27th day of November 2024, at Boise,
14 Idaho .
15
16 Signed:
17 BRIAN R. BUCKHAM
18
BUCKHAM, DI-REB 38
Idaho Power Company
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. IPC-E-24-07
IDAHO POWER COMPANY
BUCKRAM , DI-REB
TESTIMONY
EXHIBIT NO. 11
Bloomberg US Utilities Monthly 10 Year Yield Curves
Summary of A vs. BBB Spread
Average 0.44
Date IG Utilities BBB Index% IG Utilities A Index% Difference
9/30/2024 4.9645 4.6739 0.2906
8/30/2024 5.1701 4.8684 0.3017
7/31/2024 5.3375 5.0310 0.3065
6/28/2024 5.6877 5.3784 0.3093
5/31/2024 5.7347 5.4343 0.3004
4/30/2024 5.9605 5.6366 0.3239
3/29/2024 5.4904 5.1780 0.3124
2/29/2024 5.6060 5.2815 0.3245
1/31/2024 5.2959 4.9578 0.3381
12/29/2023 5.2164 4.9024 0.3140
11/30/2023 5.7836 5.4600 0.3236
10/31/2023 6.5108 6.1037 0.4071
9/29/2023 6.1393 5.7825 0.3568
8/31/2023 5.6786 5.3491 0.3295
7/31/2023 5.5056 5.1885 0.3171
6/30/2023 5.2585 5.1678 0.0907
5/31/2023 5.2647 5.0094 0.2553
4/28/2023 4.9953 4.6954 0.2999
3/31/2023 5.0720 4.7817 0.2903
2/28/2023 5.5011 5.2484 0.2527
1/31/2023 4.9821 4.7234 0.2587
12/30/2022 5.5131 5.1945 0.3186
11/30/2022 5.3480 5.0476 0.3004
10/31/2022 5.9733 5.6087 0.3646
9/30/2022 5.7694 5.3894 0.3800
8/31/2022 4.9544 4.5960 0.3584
7/29/2022 4.3948 4.0796 0.3152
6/30/2022 4.8369 4.5108 0.3261
5/31/2022 4.4848 4.1759 0.3089
4/29/2022 4.5241 4.2360 0.2881
3/31/2022 3.7890 3.5569 0.2321
2/28/2022 3.3173 3.0927 0.2246
1/31/2022 3.0560 2.8425 0.2135
12/31/2021 2.6801 2.4497 0.2304
11/30/2021 2.6040 2.3777 0.2263
10/29/2021 2.6043 2.3947 0.2096
9/30/2021 2.5365 2.3186 0.2179
8/31/2021 2.3341 2.1266 0.2075
Exhibit No. 11
Case No. IPC-E-24-07
B. Buckham, IPC
Page 1 of 5
7/30/2021 2.2288 2.0400 0.1888
6/30/2021 2.4606 2.2583 0.2023
5/31/2021 2.5856 2.3824 0.2032
4/30/2021 2.6307 2.4219 0.2088
3/31/2021 2.7568 2.5347 0.2221
2/26/2021 2.3567 2.1488 0.2079
1/29/2021 2.0284 1.8284 0.2000
12/31/2020 1.8694 1.6978 0.1716
11/30/2020 1.8709 1.6778 0.1931
10/30/2020 2.0984 1.8599 0.2385
9/30/2020 2.0137 1.7654 0.2483
8/31/2020 1.9590 1.7371 0.2219
7/31/2020 1.8022 1.5726 0.2296
6/30/2020 2.1547 1.9284 0.2263
5/29/2020 2.3761 2.0973 0.2788
4/30/2020 2.4805 2.1572 0.3233
3/31/2020 3.4124 2.9067 0.5057
2/28/2020 2.3834 2.1380 0.2454
1/31/2020 2.6506 2.4029 0.2477
12/31/2019 3.0290 2.7611 0.2679
11/29/2019 2.9731 2.7104 0.2627
10/31/2019 2.8582 2.6218 0.2364
9/30/2019 2.9401 2.6768 0.2633
8/30/2019 2.7998 2.5158 0.2840
7/31/2019 3.2125 2.9303 0.2822
6/28/2019 3.2544 2.9861 0.2683
5/31/2019 3.4806 3.1889 0.2917
4/30/2019 3.7385 3.4365 0.3020
3/29/2019 3.7569 3.4204 0.3365
2/28/2019 4.1177 3.7515 0.3662
1/31/2019 4.0883 3.7228 0.3655
12/31/2018 4.2339 3.8250 0.4089
11/30/2018 4.4607 4.0710 0.3897
10/31/2018 4.4609 4.1036 0.3573
9/28/2018 4.3289 3.9801 0.3488
8/31/2018 4.1619 3.8188 0.3431
7/31/2018 4.2492 3.9250 0.3242
6/29/2018 4.2314 3.9086 0.3228
5/31/2018 4.1408 3.8319 0.3089
4/30/2018 4.2106 3.9051 0.3055
3/30/2018 4.0248 3.7012 0.3236
2/28/2018 4.0063 3.7698 0.2365
1/31/2018 3.7759 3.5562 0.2197
12/29/2017 3.5144 3.2873 0.2271
Exhibit No. 11
Case No. IPC-E-24-07
B. Buckham, IPC
Page 2 of 5
11/30/2017 3.5344 3.3225 0.2119
10/31/2017 3.4618 3.2629 0.1989
9/29/2017 3.4989 3.2464 0.2525
8/31/2017 3.3319 3.0694 0.2625
7/31/2017 3.4511 3.2144 0.2367
6/30/2017 3.5649 3.2759 0.2890
5/31/2017 3.5254 3.2296 0.2958
4/28/2017 3.6335 3.3154 0.3181
3/31/2017 3.7448 3.4195 0.3253
2/28/2017 3.6614 3.3226 0.3388
1/31/2017 3.7006 3.3727 0.3279
12/30/2016 3.6994 3.3710 0.3284
11/30/2016 3.6906 3.3385 0.3521
10/31/2016 3.1499 2.8291 0.3208
9/30/2016 2.9798 2.6667 0.3131
8/31/2016 2.9641 2.6465 0.3176
7/29/2016 2.9240 2.5865 0.3375
6/30/2016 3.0569 2.6988 0.3581
5/31/2016 3.3685 2.9788 0.3897
4/29/2016 3.3508 2.9410 0.4098
3/31/2016 3.5378 3.0263 0.5115
2/29/2016 3.7211 3.1501 0.5710
1/29/2016 3.8496 3.3041 0.5455
12/31/2015 4.0439 3.5955 0.4484
11/30/2015 3.9357 3.5321 0.4036
10/30/2015 3.8512 3.4088 0.4424
9/30/2015 3.7662 3.3881 0.3781
8/31/2015 3.8801 3.5127 0.3674
7/31/2015 3.7314 3.3845 0.3469
6/30/2015 3.8294 3.4857 0.3437
5/29/2015 3.5541 3.1958 0.3583
4/30/2015 3.3560 3.0575 0.2985
3/31/2015 3.0977 2.8158 0.2819
2/27/2015 3.1523 2.8417 0.3106
1/30/2015 2.9555 2.5941 0.3614
12/31/2014 3.4513 3.0515 0.3998
11/28/2014 3.4300 3.0078 0.4222
10/31/2014 3.4753 3.0935 0.3818
9/30/2014 3.6338 3.2665 0.3673
8/29/2014 3.4221 3.0377 0.3844
7/31/2014 3.5512 3.2013 0.3499
6/30/2014 3.5148 3.1691 0.3457
5/30/2014 3.4162 3.1336 0.2826
4/30/2014 3.6268 3.3166 0.3102
Exhibit No. 11
Case No. IPC-E-24-07
B. Buckham, IPC
Page 3 of 5
3/31/2014 3.8019 3.4511 0.3508
2/28/2014 3.7608 3.3837 0.3771
1/31/2014 3.8755 3.3994 0.4761
12/31/2013 4.1730 3.6708 0.5022
11/29/2013 4.0379 3.4631 0.5748
10/31/2013 3.8996 3.3396 0.5600
9/30/2013 4.0513 3.4318 0.6195
8/30/2013 4.1062 3.5296 0.5766
7/31/2013 3.8347 3.2484 0.5863
6/28/2013 3.8946 3.3789 0.5157
5/31/2013 3.3671 2.9192 0.4479
4/30/2013 2.9244 2.3759 0.5485
3/29/2013 3.1271 2.5776 0.5495
2/28/2013 3.1255 2.5776 0.5479
1/31/2013 3.2549 2.6388 0.6161
12/31/2012 3.0861 2.4039 0.6822
11/30/2012 3.0187 2.3491 0.6696
10/31/2012 2.9184 2.2327 0.6857
9/28/2012 3.0984 2.3108 0.7876
8/31/2012 3.2367 2.2826 0.9541
7/31/2012 3.3591 2.3042 1.0549
6/29/2012 3.6628 2.6484 1.0144
5/31/2012 3.4657 2.5434 0.9223
4/30/2012 3.6107 2.6867 0.9240
3/30/2012 3.8816 2.9048 0.9768
2/29/2012 3.6891 2.7380 0.9511
1/31/2012 3.6916 2.7021 0.9895
12/30/2011 3.7703 2.7659 1.0044
11/30/2011 3.9814 2.9436 1.0378
10/31/2011 3.8758 3.1131 0.7627
9/30/2011 4.0086 2.9237 1.0849
8/31/2011 3.8834 3.0977 0.7857
7/29/2011 4.22S4 3.6480 0.5774
6/30/2011 4.6168 4.0194 0.5974
5/31/2011 4.4178 3.7590 0.6588
4/29/2011 4.6611 4.0246 0.6365
3/31/2011 4.8889 4.2594 0.6295
2/28/2011 4.8380 4.1910 0.6470
1/31/2011 4.8047 4.0928 0.7119
12/31/2010 4.8579 4.1116 0.7463
11/30/2010 4.2798 3.6172 0.6626
10/29/2010 4.0960 3.4511 0.6449
9/30/2010 4.1142 3.4100 0.7042
8/31/2010 4.0747 3.1579 0.9168
Exhibit No. 11
Case No. IPC-E-24-07
B. Buckham, IPC
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7/30/2010 4.5270 3.6530 0.8740
6/30/2010 4.7243 3.7303 0.9940
5/31/2010 4.9201 4.0958 0.8243
4/30/2010 4.9728 4.3176 0.6552
3/31/2010 5.2668 4.5170 0.7498
2/26/2010 5.1624 4.5761 0.5863
1/29/2010 5.1604 4.6638 0.4966
12/31/2009 5.4816 4.9014 0.5802
11/30/2009 5.0893 4.4473 0.6420
10/30/2009 5.2669 4.6198 0.6471
9/30/2009 5.1969 4.4011 0.7958
8/31/2009 5.4047 4.6090 0.7957
7/31/2009 5.8455 4.8190 1.0265
6/30/2009 6.3263 5.0658 1.2605
Exhibit No. 11
Case No. IPC-E-24-07
B. Buckham, IPC
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